<PAGE>   1

                         SELECTED FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
                                                        ----------------------------------------------------------------
                                                                            Year Ended December 31,
                                                        ----------------------------------------------------------------
                                                            2000          1999          1998          1997          1996
                                                        ----------------------------------------------------------------
<S>                                                     <C>           <C>           <C>           <C>           <C>

(Dollars in thousands, except per share data)
 STATEMENT OF INCOME DATA:
Interest income                                         $ 41,874      $ 34,657      $ 32,459      $ 24,912      $ 19,850
Interest expense                                          23,733        17,422        17,184        12,861        10,020
------------------------------------------------------------------------------------------------------------------------
  Net interest income                                     18,141        17,235        15,275        12,051         9,830
Provision for loan losses                                    950         1,180         1,943           766           310
Other income                                               3,417         3,160         3,275         2,650         2,136
Other expenses                                            19,151        16,800        15,690        12,349        10,640
------------------------------------------------------------------------------------------------------------------------
  Net income before taxes                                  1,457         2,415           917         1,586         1,016
Income tax expense (benefit)                                 253           687          (287)          499           233
------------------------------------------------------------------------------------------------------------------------
  Net income                                            $  1,204      $  1,728      $  1,204      $  1,087      $    783
========================================================================================================================

COMMON SHARE DATA:
Earnings per common share:
  Basic                                                 $   0.48      $   0.60      $   0.41      $   0.68      $   0.66
  Diluted                                               $   0.48      $   0.60      $   0.40      $   0.65      $   0.63
Book value per common share                             $  12.07      $  11.29      $  10.95      $  10.30      $   8.99
Weighted average common shares outstanding                 2,520         2,879         2,938         1,531         1,061

BALANCE SHEET DATA:
Cash and cash equivalents                               $ 63,114      $ 17,057      $ 38,824      $ 23,901      $ 13,833
Securities                                                35,366        36,329        41,037        53,754        47,707
Loans, net                                               480,711       424,668       371,263       287,025       203,299
Total assets                                             601,321       497,145       470,478       378,719       276,349

Deposits                                                 490,718       394,290       398,735       329,424       245,105
Borrowings, including repurchase agreements               59,679        54,063        21,513        16,163        18,975
Trust preferred securities                                15,000        15,000        15,000             -             -
Shareholders' equity                                    $ 29,378      $ 30,850      $ 32,324      $ 30,070      $ 10,100

PERFORMANCE DATA:
Net interest margin                                        3.70%         4.07%         3.95%         4.17%         4.25%
Return on average assets                                   0.23%         0.37%         0.28%         0.34%         0.31%
Return on average equity                                   4.11%         5.44%         3.80%         7.76%         8.33%
Loans to deposits                                         97.96%       107.70%        93.11%        87.13%        82.94%

ASSET QUALITY RATIOS:
Nonperforming loans to total loans(1)                      0.40%         0.40%         0.09%         0.63%         0.06%
Nonperforming assets to total assets                       0.51%         0.35%         0.17%         0.56%         0.04%
Allowance for loan losses to total loans                   1.00%         1.00%         1.02%         0.72%         0.70%
Nonperforming loans to allowance for loan losses          40.07%        40.01%         9.13%        87.54%         8.28%
Net loan charge-offs to average loans                      0.08%         0.19%         0.06%         0.05%         0.04%

CAPITAL RATIOS:
Risk-based capital                                        10.88%        13.18%        15.23%        12.37%         8.00%
Leverage capital(2)                                        7.32%         8.87%         9.96%         9.69%         4.37%

OTHER:
Branch offices (including headquarters)                        8             9            11             9             7
Full-time equivalent employees                               163           185           196           162           144
</TABLE>

(1) Nonperforming loans consist of non-accrual loans and loans contractually
    past due 90 days or more.
(2) The leverage ratio is defined as the ratio of Tier 1 risk-based capital to
    adjusted total assets.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        13
<PAGE>   2

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

 GENERAL

The following discussion is intended to assist in understanding the financial
condition, changes in financial condition and results of operation of the
Company. The information contained in this section should be read in conjunction
with the Company's Financial Statements and the accompanying Notes to Financial
Statements and the other sections contained in this annual report.

The Company's principal business is conducted by its wholly owned subsidiary,
Success National Bank (the "Bank"), and consists of full service community
banking. The Company's results of operations depend primarily on its net
interest income, which is the difference between the income the Company receives
on its interest earning assets, consisting primarily of loans and investment
securities, and the interest expense associated with its deposits and
borrowings. The Company's results of operations are also affected by its
provision for loan losses, the level of its noninterest income and expenses, and
income tax expense.

Net interest income is dependent on the amounts of and yields on interest
earning assets as compared to the amounts of and rates on interest bearing
liabilities. Net interest income is sensitive to changes in market rates of
interest and is impacted by the Company's asset/liability management procedures
in coping with such changes. The provision for loan losses is dependent on
growth in the loan portfolio, management's assessment of the collectibility of
the loan portfolio, as well as economic and market factors. The Company's
noninterest income is primarily comprised of service charges on deposit
accounts. The Company's noninterest expense consists principally of compensation
and benefits, occupancy and equipment expense and data processing expense.
Additionally, growth in the number of account relationships directly affects
expenses such as supplies, postage and other miscellaneous expenses.

 LIQUIDITY AND CAPITAL RESOURCES

Shareholders' Equity and Capital Standards
The Company and the Bank are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements could result in certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Company's growth and financial condition. The regulations
require the Company and the Bank to meet specific capital adequacy guidelines
that involve quantitative measures of assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting principles.
The capital classifications are also subject to qualitative judgments by the
regulators about risk weightings and other factors.

Quantitative measures established by Federal Reserve, Office of the Comptroller
of the Currency ("OCC") and Federal Deposit Insurance Corporation ("FDIC")
regulations to ensure capital adequacy require the Company and the Bank to
maintain minimum ratios of Tier 1 capital (as defined in such regulations) to
total average assets (as defined in such regulations) ("leverage ratio") and
minimum ratios of Tier 1 capital and total capital (as defined in such
regulations) to risk weighted assets (as defined in such regulations) ("Tier 1
Ratio" and "Total Risk-Based Capital Ratio," respectively). As of December 31,
2000, the Company and Bank were in compliance with all applicable regulatory
capital requirements. However, there can be no assurance that the Company or the
Bank will continue to be in compliance with such regulatory capital
requirements.

During 2000, as part of its Stock Repurchase Program, the Company purchased
311,535 shares of its common stock on the open market at a cost of $3.3 million,
an average cost per share of $10.40. Repurchased shares are transferred to the
Company's treasury stock account for issuance in connection with the exercise of
stock options, the Company's Employee Stock Purchase Program or other lawful
corporate purposes.

Operating, Investing and Financing Activities
Liquidity management at both the Company and the Bank involves planning to
provide steady sources of funds for loan commitments and investment activities,
as well as to provide sufficient funds to cover deposit withdrawals and payment
of debt, off-balance sheet obligations and operating obligations. Liquidity
management is both a daily and long-term function and is guided by policies
formulated and monitored by the Company's senior management and the Bank's
asset/liability committee, which take into account the marketability of assets,
the sources and stability of funding and the level of unfunded commitments. The
Bank's principal sources of funds are deposits, short-term borrowings and
capital contributions by the Company. Borrowings by the Bank from the Federal
Reserve Bank of Chicago and Federal Home Loan Bank of Chicago provide additional
available sources of liquidity. The Company's primary source of liquidity is a
line of credit secured by the common stock of the Bank.

The Bank's core deposits, the most stable source of liquidity for community
banks due to the nature of long-term relationships generally established with
depositors and the security of deposit insurance provided by the FDIC, are
available to provide long-term liquidity. At December 31, 2000 and 1999, 30.49%
and 36.83%, respectively, of the Company's total assets were funded by demand
and NOW deposits.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        14
<PAGE>   3
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

Liquid assets refer to money market assets such as cash and due from banks,
federal funds sold and interest bearing time deposits with financial
institutions, as well as securities available-for-sale with a remaining maturity
less than one year. Net liquid assets represent the sum of the liquid asset
categories less the amount of assets pledged to secure public funds. As of
December 31, 2000 and 1999, net liquid assets totaled approximately $68.7
million and $22.7 million, respectively.

The Company's cash flows are composed of three classifications: cash flows from
operating activities, cash flows from investing activities, and cash flows from
financing activities. Net cash provided by operating activities, consisting
primarily of earnings, was $3.6 million for the year ended December 31, 2000,
and $4.0 million for the year ended December 31, 1999. Net cash used in
investing activities, consisting primarily of loan and investment funding, was
$56.6 million and $51.2 million for the years ended December 31, 2000 and 1999,
respectively. Net cash provided by financing activities, consisting of deposit
growth and increased borrowings, was $99.0 million and $25.4 million for the
years ended December 31, 2000 and 1999, respectively. For the year ended
December 31, 2000 interest bearing deposits increased $91.9 million as compared
to a decrease of $11.5 million for the prior year.

 ASSET/LIABILITY MANAGEMENT

As a continuing part of its financial strategy, the Company attempts to manage
the impact of fluctuations in market interest rates on its net interest income.
This effort entails providing a reasonable balance between interest rate risk,
credit risk, liquidity risk and maintenance of yield. Asset/Liability management
policies are established and monitored by management in conjunction with the
Board of Directors of the Bank, subject to general oversight by the Company's
Board of Directors. The policies establish guidelines for acceptable limits on
the sensitivity of the market value of assets and liabilities to changes in
interest rates.

The Company's net income is largely dependent on its net interest income. Net
interest income is susceptible to interest rate risk to the degree that interest
bearing liabilities mature or reprice on a different basis than interest earning
assets. When interest bearing liabilities mature or reprice more quickly than
interest earning assets in a given period, a significant increase in market
rates of interest could adversely affect net interest income. Similarly, when
interest earning assets mature or reprice more quickly than interest bearing
liabilities, falling interest rates could result in a decrease in net income.

The following table illustrates the Company's estimated interest rate
sensitivity and periodic and cumulative gap positions as calculated as of
December 31, 2000.

<TABLE>
<CAPTION>
                                                  -------------------------------------------------------------------------
                                                                        Time to Maturity or Repricing
                                                  -------------------------------------------------------------------------
                                                  0-90 Days      91-365 Days      1-5 Years      Over 5 Years         Total
                                                  -------------------------------------------------------------------------
<S>                                               <C>            <C>              <C>            <C>               <C>

(Dollars in thousands)
 RATE SENSITIVE ASSETS (RSA):
Loans                                             $ 202,239      $    38,526      $166,807       $     78,000      $485,572
Securities                                            2,552            9,406        16,091              7,317        35,366
Interest bearing deposits with financial
  institutions                                       22,418                -             -                  -        22,418
Federal funds sold                                   18,400                -             -                  -        18,400
---------------------------------------------------------------------------------------------------------------------------
  Total RSA                                       $ 245,609      $    47,932      $182,898       $     85,317      $561,756
===========================================================================================================================

RATE SENSITIVE LIABILITIES (RSL):
NOW and money market accounts                     $ 176,169      $         -      $      -       $          -      $176,169
Time deposits                                        33,708           90,983        53,220                719       178,630
Borrowings                                            5,692            5,000        48,987             15,000        74,679
---------------------------------------------------------------------------------------------------------------------------
  Total RSL                                       $ 215,569      $    95,983      $102,207       $     15,719      $429,478
===========================================================================================================================

GAP (GAP = RSA - RSL)                             $  30,040      $   (48,051)     $ 80,691       $     69,598      $132,278
Cumulative GAP                                    $  30,040      $   (18,011)     $ 62,680       $    132,278      $132,278

RSA/Total assets                                     40.84%            7.97%        30.42%             14.19%        93.42%
RSL/Total assets                                     35.85%           15.96%        17.00%              2.61%        71.42%

GAP/Total assets                                      5.00%           (7.99%)       13.42%             11.57%        22.00%
GAP/RSA                                              12.23%         (100.25%)       44.12%             81.58%        23.55%
Cumulative GAP/Total Assets                           5.00%           (3.00%)       10.42%             22.00%        22.00%
Cumulative GAP/RSA                                   12.23%          (37.58%)       34.27%            155.04%        23.55%
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        15
<PAGE>   4
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

While the gap position illustrated above is a useful tool that management can
utilize for general positioning of the Company's balance sheet, management uses
an additional measurement tool to evaluate its asset/liability sensitivity which
determines exposure to changes in interest rates by measuring the percentage
change in net interest income due to changes in rates over a one-year time
horizon. Management measures such percentage change assuming an instantaneous
permanent parallel shift in the yield curve of 100 and 200 basis points, both
upward and downward. The model uses an option-based pricing approach to estimate
the sensitivity of mortgage loans. The most significant embedded option in these
types of assets is the prepayment option of the borrowers. The model uses
various prepayment assumptions depending upon the type of mortgage instrument
(residential mortgages, commercial mortgages, mortgage-backed securities, etc.).
Prepayment rates for mortgage instruments ranged from 5 to 45 CPR (Constant
Prepayment Rate) as of December 31, 2000 and 1999.

Utilizing this measurement concept, the interest rate risk of the Company,
expressed as a percentage change in net interest income over a one-year time
horizon due to changes in interest rates, at December 31, 2000 and 1999, was as
follows:

<TABLE>
<CAPTION>
                                                               ------------------------------------
                                                                        Basis Point Change
                                                               ------------------------------------
                                                                +200       +100      -100      -200
                                                               ------------------------------------
<S>                                                            <C>        <C>        <C>       <C>

AT DECEMBER 31, 2000                                           (4.6%)     (2.3%)     0.8%      0.7%
At December 31, 1999                                           (8.8%)     (4.4%)     4.6%      7.8%
</TABLE>

Although the Company's 12 month interest rate risk position at December 31, 2000
continues as one in which rate-sensitive liabilities exceed rate sensitive
assets, balance sheet restructuring during 2000 has reduced the exposure from
that identified at December 31, 1999. The Company's position at December 31,
2000 would be expected, for example, to result in an 4.6% decrease in net
interest income should interest rates immediately increase by 200 basis points
for a one year period. Conversely, a decline in interest rates of 200 basis
points would result in an increase of 0.7% of net interest income. The positive
shift in the rate sensitive position of the Company between December 31, 2000
and December 31, 1999 was in part due to the emphasis placed upon the generation
of floating rate loans versus fixed rate loans and the design of a prime rate
indexed money market deposit account.

The Company does not currently engage in trading activities or use derivative
instruments to control interest rate risk. Although such activities may be
permitted with the approval of the Board of Directors of the Bank, the Company
does not intend to engage in such activities in the immediate future.

Interest rate risk is the most significant market risk affecting the Company.
Other types of market risk, such as foreign currency exchange rate risk and
commodity price risk, do not arise in the normal course of the Company's
business activities.

 EFFECTS OF INFLATION

The financial statements and related financial data concerning the Company
presented herein have been prepared in accordance with generally accepted
accounting principles, which require the measurement of financial position and
operating results in terms of historical dollars without considering changes in
the relative purchasing power of money over time due to inflation. Inflation can
have a significant effect on the operating results of all industries. However,
the effects of inflation in the local economy and on the Company's operating
results have been relatively modest for the past several years. Since
substantially all of the Company's assets and liabilities are monetary in
nature, such as cash, securities, loans and deposits, their values are less
sensitive to the effects of inflation than to changing interest rates, which do
not necessarily change in accordance with inflation rates.

The primary impact of inflation on the operations of the Company is reflected in
increased operating costs. Furthermore, inflation can directly affect the value
of loan collateral in general, and real estate collateral in particular. These
factors are taken into account in the initial underwriting process and over the
life of the loans. Management believes that it has systems in place to continue
to manage the rates, liquidity and interest rate sensitivity of the Company's
assets and liabilities.

 CONSOLIDATED RESULTS OF OPERATIONS
COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND DECEMBER 31, 1999

General
The Company reported net income of $1.2 million, or $0.48 per diluted share, for
the year ended December 31, 2000, a 30.3% decrease from net income of $1.7
million, or $0.60 per diluted share, for 1999. For the year 2000, net interest
income increased $906 thousand, or 5.3%, from the prior year. The Company's
provision for loan losses was $950 thousand in 2000 as compared to $1.2 million
for 1999, a decrease of $230 thousand or 19.5%. For the year ended December 31,
2000 the Company's other operating

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        16
<PAGE>   5
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

income was $3.4 million, an increase of $257 thousand, or 8.1%, from $3.2
million for the year ended December 31, 1999. Other operating expenses for the
year 2000 were $19.2 million, an increase of $2.4 million, or 14.0%, from 1999.
These and other significant fluctuations in the Company's results of operations
are discussed below.

Net interest income
For the year ended December 31, 2000 net interest income increased to $18.1
million from $17.2 million for 1999. This increase in net interest income of
$906 thousand, or 5.3%, was attributable to a $7.2 million increase in interest
income resulting from a 16.2% increase in average interest earning assets in the
year ended December 31, 2000 compared to the year ended December 31, 1999.
Partially offsetting this increase in interest income was a $6.3 million
increase in interest expense for the year ended December 31, 2000 resulting from
a 17.4% increase in average interest bearing liabilities during 2000 as compared
to 1999. The Company's net interest margin declined to 3.70% for 2000 compared
to 4.07% in 1999 largely as a result of the Company's negative short-term gap
position in a rising rate environment, as experienced by the Company in late
1999 and 2000. The ratio of interest earning assets to total assets at December
31, 2000 remained relatively unchanged at 93.4% as compared to 93.6% at December
31, 1999. The average rate, on a tax equivalent basis, for all interest earning
assets for 2000 was 8.43% as compared to 8.11% for 1999. The average rate in
2000 for all interest bearing liabilities was 5.40% as compared to 4.65% for
1999.

Provision for loan losses
The provision for loan losses decreased $230 thousand to $950 thousand in 2000
from $1.2 million in the prior year. At December 31, 2000, the allowance for
loan losses represented 1.00% of gross loans outstanding, which management
believed was adequate to cover potential losses in the portfolio. There can be
no assurance that future losses will not exceed the amounts provided for,
thereby affecting future results of operations. The amount of future additions
to the allowance for loan losses will be dependent upon the economy, changes in
real estate values, interest rates, the view of regulatory agencies toward
adequate reserve levels, and past due and non-performing loan levels.

Other operating income
For the year ended December 31, 2000, other operating income was $3.4 million,
an increase of $257 thousand, or 8.1% over the $3.2 million reported for 1999.
Service charges on deposit accounts were $2.5 million for the year ended
December 31, 2000 as compared to $2.1 million for 1999. The increase in service
charges on deposit accounts is primarily associated with an improvement in the
collection of overdraft fees. Gains on sales of loans were $64 thousand for the
year ended December 31, 2000 as compared to $200 thousand for 1999. The decrease
in 2000 in gains on sales of residential 1-4 family loans was primarily the
result of increased loan rates and a corresponding reduction in volume early in
the year. In 2000, the Company sold its shares of Concord EFS common stock and
recognized a gain of $395 thousand. The Concord EFS common stock was acquired in
an exchange of the Company's Cash Station common stock in connection with
Concord's acquisition of Cash Station. For the year ended December 31, 2000
other noninterest income was $397 thousand versus $791 thousand for 1999, a
decrease of $394 thousand or 49.8%. The year over year decrease is primarily the
result of the recognition of, during the first quarter of 1999, $295 thousand in
nonrecurring income including the receipt of a lawsuit settlement of $70
thousand and the settlement of monthly billing claims and conversion related
charges with the Bank's service provider and the reduction of previously accrued
expenses by $94 thousand.

Other operating expenses
Total other operating expenses were $19.2 million for the year ended December
31, 2000, an increase of $2.4 million or 14.0% from the $16.8 million reported
in 1999. For the year, salaries and benefits expense was held relatively flat at
$8.9 million compared to $9.0 million for 1999. In the last quarter of 2000 the
Company recorded charges of $1.4 million relating to the closures of three
branch offices and the disposition of one unopened branch site under lease. The
$1.4 million charge was comprised of lease buyout settlements, leasehold
improvement write-offs, lease payments, equipment write-offs, estimated
commissions and an estimate of future lease costs reduced by estimated future
sublease income. Largely as a result of the branch closing charges, occupancy
expense for the year ended December 31, 2000 increased $1.9 million, or 56.3%,
to $5.3 million over 1999. Other noninterest expense was $4.1 million for the
year ended December 31, 2000, an increase of $487 thousand or 13.5% from $3.6
million for 1999. The year over year increase in other noninterest expense is
primarily the result of increases in legal expense and advertising and marketing
expense. Legal expenses were $398 thousand in 2000, an increase of $111 thousand
over the $287 thousand recorded for 1999. Advertising and marketing expenses
were $519 thousand in 2000, an increase of $153 thousand from the $366 thousand
recorded in 1999.

Income taxes
The Company recorded income tax expense of $253 thousand for 2000, compared to
an income tax expense of $687 thousand for 1999. The effective tax rate for 2000
has declined to 17.4% from 28.5% for 1999 due primarily to a reduction in net
income before tax and an increase in tax-exempt interest income.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        17
<PAGE>   6
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 31, 1999 AND DECEMBER 31, 1998

General
The Company reported net income of $1.7 million for the year ended December 31,
1999 compared to net income of $1.2 million for the year ended December 31,
1998, an increase of $524 thousand, or 43.5%. For the year, net interest income
increased $2.0 million or 12.8% over 1998. In addition, for the year 1999 as
compared to 1998, the provision for loan losses decreased $763 thousand to $1.2
million, other operating income decreased $115 thousand to $3.2 million and
other operating expense increased $1.1 million to $16.8 million. For the year
ended December 31, 1999, the Company's provision for income taxes was $687
thousand, an increase of $974 thousand over the benefit of $287 thousand
recorded in 1998. These and other significant fluctuations in the Company's
results of operation are discussed below.

Net interest income
Net interest income increased to $17.2 million for the year ended December 31,
1999 from $15.2 million for 1998. This increase in net interest income of $2.0
million, or 12.8%, was attributable to a $2.2 million increase in interest
income resulting from the 9.2% increase in average interest earning assets in
the year ended December 31, 1999 compared to the year ended December 31, 1998.
Partially offsetting this increase in interest income was a $238 thousand
increase in interest expense for the year ended December 31, 1999 resulting from
an 8.7% increase in average interest bearing liabilities during 1999 as compared
to 1998. The Company's net interest margin increased to 4.07% for 1999 compared
to 3.95% in 1998 as a result of the Company's continued efforts to convert
noninterest-earning assets into interest earning assets. The ratio of interest
earning assets to total assets increased from 91.4% at December 31, 1998 to
93.6% at December 31, 1999. In addition, the Company reduced the cost associated
with its average interest bearing liabilities from 4.98% for 1998 to 4.65% for
1999.

Provision for loan losses
The provision for loan losses decreased to $1.2 million in 1999 from $1.9
million in the prior year. At December 31, 1999, the allowance for loan losses
represented 1.00% of gross loans outstanding which management believed was
adequate to cover potential losses in the portfolio. There can be no assurance
that future losses will not exceed the amounts provided for, thereby affecting
future results of operations. The amount of future additions to the allowance
for loan losses will be dependent upon the economy, changes in real estate
values, interest rates, the view of regulatory agencies toward adequate reserve
levels, and past due and non-performing loan levels.

Other operating income
Total other operating income decreased $115 thousand, or 3.5%, to $3.2 million
for 1999, compared to $3.3 million for 1998. In 1998, the Company included in
other noninterest income $1.0 million of life insurance proceeds related to the
death of the Company's President and CEO, Saul D. Binder. Excluding the life
insurance proceeds, other noninterest income increased $584 thousand to $796
thousand in 1999 as compared to 1998. The increase in 1999 is largely the result
of the Company having received a lawsuit settlement of $70 thousand and having
settled monthly billing claims and conversion related charges with its service
provider and reduced previously accrued expenses by $94 thousand. Service
charges on deposit accounts increased by $115 thousand, or 8.2%, to $2.1 million
for the year ended December 31, 1999, from $2.0 million in 1998. The majority of
service charges on deposit accounts consisted of fees charged for overdrafts and
failure to maintain required balances. In 1999, the Company recognized $200
thousand related to gains on the sale of loans, an increase of $41 thousand, or
25.8%, over 1998.

Other operating expenses
Total other operating expenses increased $1.1 million, or 7.1%, to $16.8 million
for 1999, as compared to $15.7 million in 1998. This increase reflects the
higher level of expenditures required to support the Company's growth. Salaries
and employee benefits increased $829 thousand, or 10.1%, to $9.0 million for the
year ended December 31, 1999, as compared to $8.2 million for the prior year.
The increase in salary and benefits expense reflects higher staffing levels to
support new locations and the growth in deposit and loan accounts at existing
banking locations. Occupancy and equipment expenses increased to $3.4 million
for 1999 from $2.7 million for 1998, primarily due to the higher level of
expense associated with the May 1998 opening of the downtown Chicago branch
location, the August 1998 opening of the Skokie/Oakton Street branch location
and the March 1999 opening of the North Libertyville branch office. Data
processing expense increased to $802 thousand for the year ended December 31,
1999, compared to $739 thousand for 1998, primarily as a result of higher
transaction volume levels.

Income taxes
The Company recorded income tax expense of $687 thousand for 1999, compared to
an income tax benefit of $287 thousand in 1998. The increase is attributable to
both an increase in net income before tax and to a decrease in income not
subject to federal tax.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        18
<PAGE>   7
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

In 1998, the Company received $1.0 million of life insurance proceeds related to
the death of the Company's President and CEO, Saul D. Binder, which were exempt
from tax.

 FORWARD LOOKING STATEMENTS

Statements made about the Company's future financial performance, strategic
plans or objectives, revenues or earnings projections, or other financial items
and similar statements are not guarantees of future performance, but are forward
looking statements. By their nature, these statements are subject to numerous
uncertainties that could cause actual results or events to differ materially
from those predicted 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;

- Changes in management's estimate of the adequacy of the allowance for loan
  losses;

- Increases in loan delinquencies or write-offs;

- Interest rate movements and their impact on customer behavior and the
  Company's net interest margin;

- The impact of interest rate sensitivity restructuring activities;

- 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.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        19
<PAGE>   8

[McGLADREY & PULLEN, LLP LETTERHEAD]

                          INDEPENDENT AUDITOR'S REPORT

Board of Directors and Shareholders
Success Bancshares, Inc.
Lincolnshire, Illinois

We have audited the accompanying consolidated balance sheets of Success
Bancshares, Inc. and Subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Success Bancshares,
Inc. and Subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2000.

                                         [McGLADREY & PULLEN LLP SIGNATURE]

Schaumburg, Illinois
February 7, 2001

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        20
<PAGE>   9

                          CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                   2000          1999
                                                               ----------------------
<S>                                                            <C>           <C>

(In thousands)
 ASSETS
Cash and cash equivalents                                      $ 63,114      $ 17,057
Securities available-for-sale                                    35,366        36,329
Real estate loans held-for-sale                                     493             -
Loans, less allowances for loan losses of $4,861 at 2000 and
  $4,269 at 1999                                                480,711       424,668
Premises and equipment, net                                       9,438        10,684
Interest receivable                                               3,736         2,876
Other real estate owned                                           1,100            50
Other assets                                                      7,363         5,481
-------------------------------------------------------------------------------------
    Total assets                                               $601,321      $497,145
=====================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
  Non-interest bearing deposits                                $ 65,075      $ 60,571
  Interest bearing deposits                                     425,643       333,719
-------------------------------------------------------------------------------------
    Total deposits                                              490,718       394,290
Note Payable                                                      2,500             -
Federal Home Loan Bank advances                                  53,987        45,946
Securities sold under repurchase agreements                       1,717         5,002
Demand notes payable to U.S. Government                           1,475         3,115
Trust preferred securities                                       15,000        15,000
Interest payable and other liabilities                            6,546         2,942
-------------------------------------------------------------------------------------
    Total liabilities                                           571,943       466,295

Shareholders' equity
Preferred stock, $0.001 par value, 1,000,000 shares
  authorized, none issued                                             -             -
Common stock, $0.001 par value 7,500,000 shares authorized,
  At December 31, 2000: 3,074,326 issued and 2,433,461
    shares outstanding
  At December 31, 1999: 3,074,326 issued and 2,732,190
    shares outstanding                                                3             3
Additional paid-in capital                                       25,399        25,362
Retained earnings                                                10,467         9,284
Treasury stock                                                   (6,674)       (3,563)
Loan to Employee Stock Ownership Plan                               (33)          (74)
Unearned compensation                                                 -           (36)
Accumulated other comprehensive income (loss)                       216          (126)
-------------------------------------------------------------------------------------
    Total shareholders' equity                                   29,378        30,850
-------------------------------------------------------------------------------------
    Total liabilities and shareholders' equity                 $601,321      $497,145
=====================================================================================
</TABLE>

See accompanying notes to Consolidated Financial Statements

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        21
<PAGE>   10

                       CONSOLIDATED STATEMENTS OF INCOME

                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                  2000         1999         1998
                                                               ---------------------------------
<S>                                                            <C>          <C>          <C>

(In thousands, except per share data)
 INTEREST INCOME
Loans (including fee income)                                   $39,603      $31,976      $28,938
Investment securities
  Taxable                                                        1,545        1,548        2,317
  Exempt from federal income tax                                   533          609          620
Other interest income                                              193          524          584
------------------------------------------------------------------------------------------------
    Total interest income                                       41,874       34,657       32,459

INTEREST EXPENSE
Deposits                                                        19,638       14,729       15,265
Note payable                                                        93            -            -
Federal Home Loan Bank                                           2,132          951          772
Other borrowings                                                   527          399          319
Trust preferred securities                                       1,343        1,343          828
------------------------------------------------------------------------------------------------
    Total interest expense                                      23,733       17,422       17,184

Net interest income                                             18,141       17,235       15,275
Provision for loan losses                                          950        1,180        1,943
------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses             17,191       16,055       13,332

OTHER OPERATING INCOME
Service charges on deposit accounts                              2,522        2,148        2,033
Gains on sale of loans                                              64          200          159
Gain (loss) on sale of securities, net                             395            5         (200)
Gain on sale of fixed assets                                        33            -            -
Net credit card processing income                                    6           16           71
Other noninterest income                                           397          791        1,212
------------------------------------------------------------------------------------------------
    Total other operating income                                 3,417        3,160        3,275

OTHER OPERATING EXPENSES
Salaries and employee benefits                                   8,930        9,001        8,172
Occupancy and equipment expenses                                 5,299        3,391        2,688
Data processing                                                    829          802          739
Other noninterest expenses                                       4,093        3,606        4,091
------------------------------------------------------------------------------------------------
    Total other operating expenses                              19,151       16,800       15,690
------------------------------------------------------------------------------------------------
Income before income taxes                                       1,457        2,415          917

Income tax expense (benefit)                                       253          687         (287)
------------------------------------------------------------------------------------------------
NET INCOME                                                     $ 1,204      $ 1,728      $ 1,204
================================================================================================
  Basic earnings per share                                     $  0.48      $  0.60      $  0.41
  Diluted earnings per share                                   $  0.48      $  0.60      $  0.40
</TABLE>

See accompanying notes to Consolidated Financial Statements

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        22
<PAGE>   11

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                        DECEMBER 31, 2000, 1999 AND 1998
<TABLE>
<CAPTION>

                                                        Additional
                                  Preferred    Common      Paid-In   Retained   Treasury
                                      Stock     Stock      Capital   Earnings      Stock
                                  ------------------------------------------------------
<S>                               <C>          <C>      <C>          <C>        <C>

(In thousands)
BALANCE AT DECEMBER 31, 1997      $       0    $    3    $ 24,151    $  6,352   $      -

Comprehensive Income:
Net income                                -         -           -       1,204          -
 Other comprehensive income, net
   of tax:                                -         -           -           -          -
   Unrealized gains on
     securities available for
     sale arising during the
     period, net of taxes of
     $533                                 -         -           -           -          -
     Reclassification
       adjustment, net of
       benefit of $78                     -         -           -           -          -
----------------------------------------------------------------------------------------
Total comprehensive income                -         -           -       1,204          -
Issuance of shares of common
 stock, through option exercise           -         -         131           -          -
Issuance of restricted stock              -         -          92           -          -
Conversion of subordinated
 debentures into common stock             -         -         100           -          -
ESOP shares released                      -         -          54           -          -
----------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998              -         3      24,528       7,556          -

Comprehensive Income:
Net income                                -         -           -       1,728          -
 Other comprehensive income, net
   of tax:                                -         -           -           -          -
   Unrealized loss on securities
     available for sale arising
     during the period, net of
     tax benefit of $293                  -         -           -           -          -
----------------------------------------------------------------------------------------
Total comprehensive Income                -         -           -       1,728          -
Issuance of shares of common
 stock, through option exercise           -         -         823           -          -
Issuance of restricted stock              -         -           -           -          -
Reissuance of treasury shares             -         -          (5)          -         57
Purchase of treasury shares               -         -           -           -     (3,620)
ESOP shares released                      -         -          16           -          -
----------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999              -         3      25,362       9,284     (3,563)

Comprehensive Income:
Net income                                -         -           -       1,204          -
 Other comprehensive income, net
   of tax:                                -         -           -           -          -
   Unrealized gains on
     securities available for
     sale arising during the
     period, net of taxes of
     $216                                 -         -           -           -          -
----------------------------------------------------------------------------------------
Total comprehensive Income                -         -           -       1,204          -
Issuance of restricted stock              -         -           -           -          -
Reissuance of treasury shares             -         -           5         (21)       129
Purchase of treasury shares               -         -           -           -     (3,240)
ESOP shares released                      -         -          32           -
----------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2000      $       -    $    3    $ 25,399    $ 10,467   $ (6,674)
========================================================================================
</TABLE>
<PAGE>   12

<TABLE>
<CAPTION>
                                                              Accumulated
                                                                    Other            Total
                                    ESOP        Unearned    Comprehensive    Shareholders'
                                    Loan    Compensation    Income (Loss)           Equity
                                  --------------------------------------------------------
<S>                               <C>       <C>             <C>              <C>
(In thousands)
BALANCE AT DECEMBER 31, 1997      $ (158)   $          -    $        (278)   $      30,700
Comprehensive Income:
Net income                             -               -                -            1,204
 Other comprehensive income, net
   of tax:                             -               -                -
   Unrealized gains on
     securities available for
     sale arising during the
     period, net of taxes of
     $533                              -                              842              842
     Reclassification
       adjustment, net of
       benefit of $78                  -               -             (122)            (122)
------------------------------------------------------------------------------------------
Total comprehensive income             -               -              720            1,924
Issuance of shares of common
 stock, through option exercise        -               -                -              131
Issuance of restricted stock           -             (92)               -                0
Conversion of subordinated
 debentures into common stock          -               -                -              100
ESOP shares released                  45               -                -               99
------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1998        (113)            (92)             442           32,324
Comprehensive Income:
Net income                             -               -                -            1,728
 Other comprehensive income, net
   of tax:                             -               -                -                -
   Unrealized loss on securities
     available for sale arising
     during the period, net of
     tax benefit of $293               -               -             (568)            (568)
------------------------------------------------------------------------------------------
Total comprehensive Income             -               -             (568)           1,160
Issuance of shares of common
 stock, through option exercise        -               -                -              823
Issuance of restricted stock           -              56                -               56
Reissuance of treasury shares          -               -                -               52
Purchase of treasury shares            -               -                -           (3,620)
ESOP shares released                  39               -                -               55
------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1999         (74)            (36)            (126)          30,850
Comprehensive Income:
Net income                             -               -                -            1,204
 Other comprehensive income, net
   of tax:                             -               -                -                -
   Unrealized gains on
     securities available for
     sale arising during the
     period, net of taxes of
     $216                              -               -              342              342
------------------------------------------------------------------------------------------
Total comprehensive Income             -               -              342            1,546
Issuance of restricted stock           -              36                -               36
Reissuance of treasury shares          -               -                -              113
Purchase of treasury shares            -               -                -           (3,240)
ESOP shares released                  41               -                -               73
------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2000      $  (33)   $          -    $         216    $      29,378
==========================================================================================
</TABLE>

See accompanying notes to Consolidated Financial Statements

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        23
<PAGE>   13

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                   2000          1999          1998
                                                               ------------------------------------
<S>                                                            <C>           <C>           <C>
(In thousands)
 CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                     $  1,204      $  1,728      $  1,204
Adjustments to reconcile net income to net cash provided by
  operating activities
Premium amortization on securities, net of discount
  accretion                                                         (39)          (71)          122
Provision for loan losses                                           950         1,180         1,943
Depreciation and amortization                                     1,764         1,698         1,191
Provision for deferred taxes                                       (374)          (59)         (737)
Net (gains) loss on sales of securities                            (395)           (5)          200
Loans originated for sale                                        (6,859)      (16,272)      (10,569)
Proceeds from sales of loans                                      6,923        17,478         9,787
Net gains on sales of loans                                         (64)         (200)         (159)
Accretion of loan discount                                         (204)          (59)         (110)
Deferred loan fees                                                 (189)          (70)         (322)
Change in interest receivables and other assets                  (2,663)       (1,806)       (1,419)
Change in interest payable and other liabilities                  3,604            36            14
Other                                                                 3           421           227
---------------------------------------------------------------------------------------------------
  Net cash provided by operating activities                       3,661         3,999         1,372

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of available-for-sale securities           $    395      $     39      $     35
Proceeds from sales of held-to-maturity securities                    -             -         2,835
Proceeds from maturities of available-for-sale securities         5,566        11,844        14,571
Purchases of available-for-sale securities                       (3,939)       (8,062)      (11,902)
Proceeds from maturities of held-to-maturity securities               -             -        11,333
Purchases of held-to-maturity securities                              -             -        (3,000)
Loans made to customers, net                                    (58,193)      (54,506)      (86,178)
Purchase of other real estate owned                                   -             -        (1,430)
Proceeds from sales of other real estate                             43           440         1,638
Proceeds from sales of premises and equipment                       482           680             -
Premises and equipment expenditures                                (916)       (1,600)       (3,762)
Purchase of subsidiary bank common stock                              -             -          (580)
---------------------------------------------------------------------------------------------------
  Net cash used in investing activities                         (56,562)      (51,165)      (76,440)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in non-interest bearing deposits                      $  4,504      $  7,014      $  8,332
Increase (decrease) in interest bearing deposits                 91,924       (11,459)       60,979
Increase (decrease) in demand notes payable to US Government     (1,640)        2,229          (543)
Increase (decrease) in securities sold under agreements to
  repurchase                                                     (3,285)         (134)        1,322
Proceeds from notes payable                                       2,500             -             -
Proceeds from Federal Home Loan Bank advances                    45,000        36,700         9,000
Repayment of Federal Home Loan Bank advances                    (36,959)       (6,245)       (4,229)
Repayment of convertible subordinated debentures                      -             -          (100)
Purchase of common shares for treasury                           (3,240)       (3,620)            -
Proceeds from issuance of treasury shares                           113            52             -
Issuance of Trust Preferred securities                                -             -        15,000
Issuance of common stock                                              -           823           185
Principal payment on ESOP loan                                       41            39            45
---------------------------------------------------------------------------------------------------
  Net cash provided by financing activities                      98,958        25,399        89,991
---------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                (46,057)      (21,767)       14,923

Cash and cash equivalents at beginning of year                   17,057        38,824        23,901
---------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                       $ 63,114      $ 17,057      $ 38,824
===================================================================================================

Supplemental disclosures of cash flow information
Cash paid during the year for:
  Interest on deposits                                         $ 19,376      $ 14,768      $ 15,208
  Interest on borrowings                                          4,010         2,638         1,877
  Income taxes                                                      965           659           627

Selected noncash investing activities
Other real estate acquired in settlement of loans              $  1,100      $     50      $    671
</TABLE>

See accompanying notes to Consolidated Financial Statements

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        24
<PAGE>   14

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Success Bancshares, Inc. (the Company), through its subsidiary, Success National
Bank (the Bank), provides a full range of financial services to customers
through its locations in the Chicago metropolitan area.

(a) Basis of Presentation:
The consolidated financial statements of Success Bancshares, Inc. include the
accounts of the Company and its wholly owned subsidiaries: Success National Bank
and Success Capital Trust I ("Trust"). Significant intercompany accounts and
transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Significant estimates, which are particularly susceptible to change in a short
period of time, include the determination of the allowance for possible loan
losses. Actual results could differ from those estimates.

(b) Cash and Cash Equivalents:
Cash and cash equivalents include cash on hand, noninterest-bearing amounts due
from banks, interest-bearing demand balances with banks, and federal funds sold.
Generally, federal funds are sold or purchased for one-day periods. Cash flows
from loans originated by the Bank, deposits, securities sold under agreements to
repurchase and demand notes payable to U.S. Government are reported net.

(c) Securities:
Securities classified as available-for-sale are those debt securities that the
Company intends to hold for an indefinite period of time, but not necessarily to
maturity. Any decision to sell a security classified as available-for-sale would
be based on various factors, including significant movements in interest rates,
changes in the maturity mix of the Company's assets and liabilities, liquidity
needs, regulatory capital considerations and other similar factors. Securities
available for sale are carried at fair value. The difference between fair value
and amortized cost results in an unrealized gain or loss. Unrealized gains or
losses are reported as increases or decreases in shareholders' equity, net of
the related deferred tax effect. Realized gains or losses, determined on the
basis of the cost of specific securities sold, are included in earnings.
Premiums and discounts are recognized in interest income using the interest
method over their contractual lives.

(d) Real Estate Loans Held-for-Sale:
Real estate loans held-for-sale are carried at the lower of cost, net of loan
fees collected, or fair value in the aggregate. Loans are sold without recourse
generally with servicing released. Gains and losses from the sale of loans are
determined based upon the net proceeds and the carrying value of the loans sold
after allocating cost to servicing rights, if retained. Net unrealized losses
are recognized in a valuation allowance by charges to income.

Transfer of loans held-for-sale to portfolio is accounted for at the lower of
cost or fair value at the date of transfer. The excess of the carrying value
over the fair value as of the transfer date is accreted into interest income
over the remaining estimated lives of the transferred loans. As of December 31,
2000, the Company had $493 thousand of loans categorized as held-for-sale with
cost approximating fair value. At December 31, 1999, the Company had no loans
categorized as held-for-sale.

(e) Loans:
Loans that management has the intent and ability to hold for the foreseeable
future or until maturity or payoff ("portfolio" loans) are stated net of
unearned income, deferred loan fees, unaccreted discounts and the allowance for
loan losses. Interest on loans is accrued over the term of the loan based on the
amount of principal outstanding. For impaired loans, accrual of interest is
discontinued on a loan when management believes, after considering collection
efforts and other factors, that the borrower's financial condition is such that
collection of interest is doubtful. Additionally, interest income is reduced for
any amounts previously accrued. Interest income is subsequently recognized only
to the extent cash payments are received and the principal is considered fully
collectible. Discounts are accreted into income over the estimated lives of the
loans on a method that approximates the interest method. This statement requires
that loan origination fees and direct loan origination costs for a completed
loan are netted and then deferred and amortized into interest income as an
adjustment of yield over the contractual life of the loan.

Loans are considered impaired when, based on current information and events, it
is probable that the Company will not be able to collect all amounts due
according to the contractual terms of the loan agreement. The impairment is
measured based on the present value of expected future cash flows, or
alternatively, the observable market price of the loans or the fair value of the
collateral. However, for those loans that are collateral-dependent and for which
management has determined foreclosure is probable, the measure of impairment of
those loans is to be based on the fair value of the collateral. The amount of
impairment, if any, and any subsequent changes are included in the allowance for
loan losses. Commercial loans less than $100,000, residential real estate
mortgages, home equity loans, and installment loans are considered small balance
homogenous loan pools and are not evaluated for purposes of impairment. All
other loans are specifically evaluated for impairment.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        25
<PAGE>   15
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Because some loans may not be paid in full, an allowance for loan losses is
recorded. Increases to the allowance are recorded by a provision for loan losses
charged to expense. Estimating the risk of loss and the amount of loss on any
loan is necessarily subjective. Accordingly, the allowance is maintained at a
level considered adequate to cover possible losses that are currently
anticipated based on past loss experience, general economic conditions,
information about specific borrower situations including their financial
position and collateral values, and other factors and estimates which are
subject to change over time. A loan is charged-off by management as a loss when
deemed uncollectible, although collection efforts continue and future recoveries
may occur. While management uses the best information available to make its
evaluation, future adjustments to the allowance may be necessary if there are
any significant changes in economic indicators. In addition, various regulatory
agencies periodically review the allowance for loan losses. These agencies may
require the Company to make additions to the allowance based upon their
judgement of collectibility after reviewing information available to them at the
time of their examination.

(f) Premises and Equipment:
Buildings, leasehold improvements, furniture, and equipment are stated at cost
less accumulated depreciation and amortization. Depreciation and amortization
are provided on the straight-line method over estimated useful lives of the
related assets.

(g) Other Real Estate Owned:
Other real estate owned (OREO) represents properties acquired through
foreclosure or other proceedings and is initially recorded at fair value at the
date of foreclosure, which establishes a new cost. After foreclosure, OREO is
held for sale and is carried at the lower of cost or fair value less estimated
costs of disposal. Any write-down to fair value at the time of transfer to OREO
is charged to the allowance for loan losses. Property is evaluated regularly to
ensure the recorded amount is supported by its current fair value and valuation
allowances to reduce the carrying amount to fair value less estimated costs to
dispose are recorded as necessary. Revenue and expense from the operations of
OREO and changes in the valuation allowance are included in the results of
operations.

(h) Income Taxes:
Deferred taxes are provided using the liability method to recognize deferred tax
assets for deductible temporary differences and operating loss and tax credit
carryforwards and deferred tax liabilities are recognized for taxable temporary
differences. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.

(i) Earnings Per Share:
Basic earnings per share (EPS) excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity.

(j) Recent Accounting Developments:
In June 1999, The Financial Accounting Standards Board (FASB) issued SFAS No.
137, "Accounting for Derivative instruments and Hedging Activities -- Deferral
of the Effective Date of FASB Statement No. 133" which delayed the effective
date of SFAS No. 133 to periods beginning after June 15, 2000. In addition, in
June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities -- an amendment of FASB Statement No.
133" which amends and/or supersedes various sections of SFAS No. 133. Since the
Company has no derivative or hedging activities, adoption of either SFAS No. 133
or SFAS No. 138 is not currently expected to impact the Company's financial
statements.

In June 2000, the FASB issued SFAS No. 139, "Rescission of FASB Statement No. 53
and amendments to FASB Statements No. 63, 89 and 121" effective for periods
beginning after December 15, 2000. The application of SFAS No. 139 will not
impact the Company's financial statements.

In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities -- a
replacement of FASB Statement No. 12." SFAS No. 140 replaces SFAS No. 1255,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities" and revises the standards for accounting for securitizations and
other transfers of financial assets and collateral and requires certain
disclosures, but it carries over most of SFAS No. 125's provisions without
reconsideration. SFAS No. 140 is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001. This Statement is effective for recognition and reclassification of
collateral and for disclosures relating to securitization transactions and
collateral for fiscal years ending after December 15, 2000. Disclosures about
securitization and collateral accepted need not be reported for periods ending
on or before December 15, 2000, for which financial statements are presented for
comparative purposes. The application of SFAS No. 140 does not impact the
Company's financial statements.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        26
<PAGE>   16
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(k) Prior Year Reclassifications:
Certain reclassifications were made to make the 1998 and 1999 financial
statements comparable with the 2000 presentation.

 NOTE 2 - CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised of the following at December 31:

<TABLE>
<CAPTION>
                                                                  2000         1999
                                                               --------------------
<S>                                                            <C>          <C>

(In thousands)
Cash and due from banks                                        $22,296      $17,057
Interest-bearing demand balances with banks                     22,418            -
Federal funds sold                                              18,400            -
-----------------------------------------------------------------------------------
                                                               $63,114      $17,057
===================================================================================
</TABLE>

At December 31, 2000 and 1999, reserves of $500 thousand were required to be
held as cash or on deposit with the Federal Reserve Bank of Chicago. These
reserves do not earn interest.

 NOTE 3 - SECURITIES

The amortized cost, gross unrealized gains and losses, and fair values of
securities at December 31, 2000 are as follows:

<TABLE>
<CAPTION>
                                                                                   Gross           Gross
                                                               Amortized      Unrealized      Unrealized         Fair
                                                                    Cost           Gains          Losses        Value
                                                               ------------------------------------------------------
<S>                                                            <C>            <C>             <C>             <C>

(In thousands)
 SECURITIES AVAILABLE-FOR-SALE
U.S. Treasury                                                  $   2,000      $        -      $       (7)     $ 1,993
U.S. Government sponsored entities                                 9,908              45             (22)       9,931
States and political subdivisions
  Taxable                                                          1,604              50               -        1,654
  Exempt from federal income taxes                                10,515              56             (52)      10,519
Mortgage-backed securities                                         5,927               1             (25)       5,903
SBA guaranteed loan participation certificates                       781               -             (17)         764
Other securities                                                   4,279             343             (20)       4,602
---------------------------------------------------------------------------------------------------------------------
                                                               $  35,014      $      495      $     (143)     $35,366
=====================================================================================================================
</TABLE>

The amortized cost and fair value of securities at December 31, 2000, by
contractual maturity, are shown below. Expected maturities of mortgage-backed
securities and SBA guaranteed loan participation certificates will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties. Therefore, these
securities are not included in the maturity categories in the following maturity
summary.

<TABLE>
<CAPTION>
                                                               ----------------------
                                                                 Available-for-sale
                                                               ----------------------
                                                               Amortized         Fair
                                                                    Cost        Value
                                                               ----------------------
<S>                                                            <C>            <C>

(In thousands)
Due in one year or less                                        $   7,246      $ 7,251
Due after one year through five years                             10,206       10,273
Due after five years through ten years                             4,425        4,422
Due after ten years                                                6,429        6,753
Mortgage-backed securities and SBA guaranteed loan
  participation certificates                                       6,708        6,667
-------------------------------------------------------------------------------------
                                                               $  35,014      $35,366
=====================================================================================
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        27
<PAGE>   17
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amortized cost, gross unrealized gains and losses, and fair values of
securities at December 31, 1999 are as follows:

<TABLE>
<CAPTION>
                                                                                   Gross           Gross
                                                               Amortized      Unrealized      Unrealized         Fair
                                                                    Cost           Gains          Losses        Value
                                                               ------------------------------------------------------
<S>                                                            <C>            <C>             <C>             <C>

(In thousands)
 SECURITIES AVAILABLE-FOR-SALE
U.S. Treasury                                                  $   4,989      $        -      $      (49)     $ 4,940
U.S. Government sponsored entities                                 6,926               -             (95)       6,831
States and political subdivisions
  Taxable                                                          1,668              22               -        1,690
  Exempt from federal income taxes                                11,138              52            (201)      10,989
Mortgage-backed securities                                         7,197               -            (125)       7,072
SBA guaranteed loan participation certificates                       850               -             (21)         829
Other securities                                                   3,767             223             (12)       3,978
---------------------------------------------------------------------------------------------------------------------
                                                               $  36,535      $      297      $     (503)     $36,329
=====================================================================================================================
</TABLE>

Proceeds from sales of securities available-for-sale and realized gross gains
and losses in 2000, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                                  2000      1999        1998
                                                                  --------------------------
<S>                                                               <C>       <C>       <C>

(In thousands)
 SECURITIES AVAILABLE-FOR-SALE
Proceeds from sales                                               $395      $ 39      $2,815
Gross gains                                                        395         5           4
Gross losses                                                         -         -        (204)
</TABLE>

Securities with a carrying value of approximately $17.6 and $23.7 million at
December 31, 2000 and 1999, respectively, were pledged to secure public deposits
and for other purposes as required or permitted by law.

In 2000 the Company sold its entire investment in Concord, EFS Inc. common stock
at a gain of $395 thousand. The Concord, EFS Inc. stock was received in an
exchange of the Company's Cash Station common stock in connection with Concord's
acquisition of Cash Station.

 NOTE 4 - LOANS

Loans at December 31, 2000 and 1999 consisted of the following:

<TABLE>
<CAPTION>
                                                                   2000          1999
                                                               ----------------------
<S>                                                            <C>           <C>

(In thousands)
Commercial                                                     $123,422      $103,486
Real estate - mortgage                                          247,840       229,036
Real estate - construction                                       30,843        17,758
Home equity                                                      80,498        75,919
Installment                                                       2,953         2,737
-------------------------------------------------------------------------------------
  Total gross loans                                            $485,556      $428,936
-------------------------------------------------------------------------------------
Net deferred loan fees                                              171           205
Unaccreted discount resulting from loss on transfer of loans
  from held for sale to portfolio                                  (155)         (204)
Allowance for loan losses                                        (4,861)       (4,269)
-------------------------------------------------------------------------------------
  Net loans                                                    $480,711      $424,668
=====================================================================================
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        28
<PAGE>   18
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Activity in the allowance for loan losses is summarized below:

<TABLE>
<CAPTION>
                                                                 2000        1999        1998
                                                               ------------------------------
<S>                                                            <C>         <C>         <C>

(In thousands)
Balance at beginning of year                                   $4,269      $3,824      $2,079
Provision for loan losses                                         950       1,180       1,943
Recoveries on loans previously charged-off                         52         107           9
Loans charged-off                                                (410)       (842)       (207)
---------------------------------------------------------------------------------------------
  Balance at end of year                                       $4,861      $4,269      $3,824
=============================================================================================
</TABLE>

Impaired loan information as of and for the years ended December 31, 2000 and
1999 is as follows:

<TABLE>
<CAPTION>
                                                                 2000        1999
                                                               ------------------
<S>                                                            <C>         <C>

(In thousands)
Impaired loans for which no allowance has been provided        $1,948      $1,486
Impaired loans for which an allowance has been provided             -           -
---------------------------------------------------------------------------------
Total loans determined to be impaired                          $1,948      $1,486
=================================================================================
Allowance provided for impaired loans, included in the
  allowance for loan losses                                    $    -      $    -
=================================================================================
Interest income recognized from impaired loans                 $   67      $  100
Cash basis interest income recognized from impaired loans      $    -      $    -
</TABLE>

Mortgage loans serviced for the Federal Home Loan Mortgage Corporation by the
Company are not included in the accompanying consolidated balance sheets. The
unpaid principal balances of these loans were approximately $46.4 and $50.6
million at December 31, 2000 and 1999, respectively.

 NOTE 5 - PREMISES AND EQUIPMENT

Premises and equipment consisted of the following at December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                  2000         1999
                                                               --------------------
<S>                                                            <C>          <C>

(In thousands)
Land                                                           $ 2,854      $ 2,904
Building and leasehold improvements                              7,026        7,500
Furniture and equipment                                          6,424        6,755
-----------------------------------------------------------------------------------
  Total cost                                                    16,304       17,159
Less accumulated depreciation and amortization                   6,866        6,475
-----------------------------------------------------------------------------------
  Net book value                                               $ 9,438      $10,684
===================================================================================
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        29
<PAGE>   19
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 6 - DEPOSITS

Deposits at December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                   2000          1999
                                                               ----------------------
<S>                                                            <C>           <C>

(In thousands)
Demand deposits                                                $ 65,075      $ 60,571
NOW                                                             118,255       122,509
Savings                                                          20,927        21,359
Money market                                                    107,831        40,779
Time:
  Due within one year                                           124,303       127,029
  Due within one to two years                                    27,059        17,183
  Due within two to three years                                  14,724         2,734
  Due within three to four years                                  2,522           584
  Due thereafter                                                 10,022         1,542
-------------------------------------------------------------------------------------
    Total time deposits                                         178,630       149,072
-------------------------------------------------------------------------------------
    Total deposits                                             $490,718      $394,290
=====================================================================================
</TABLE>

Time deposits in amounts of $100,000 or more were approximately $66.7 million
and $44.5 million at December 31, 2000 and 1999, respectively.

Interest expense on deposits for the years ending December 31 is summarized as
follows:

<TABLE>
<CAPTION>
                                                                  2000         1999         1998
                                                               ---------------------------------
<S>                                                            <C>          <C>          <C>

(In thousands)
NOW                                                            $ 4,707      $ 5,166      $ 3,211
Savings                                                            410          459          667
Money market                                                     4,264        1,428        1,934
Time                                                            10,257        7,676        9,453
------------------------------------------------------------------------------------------------
                                                               $19,638      $14,729      $15,265
================================================================================================
</TABLE>

 NOTE 7 - BORROWING ARRANGEMENTS

The Bank is permitted to borrow from the Federal Reserve Bank ("FRB") up to 75%
of loans pledged to the FRB. As of December 31, 2000 and 1999, there were no
loans pledged to the FRB and there were no borrowings outstanding at either
date.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        30
<PAGE>   20
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 8 - FEDERAL HOME LOAN BANK ADVANCES

At December 31, 2000 and 1999, advances from the Federal Home Loan Bank of
Chicago ("FHLB") were as follows:

<TABLE>
<CAPTION>
                                                                                                  --------------------
                                                                                                     Advance Amount
                                                               Interest         Frequency of      --------------------
Maturity Date                                                      Rate      Rate Adjustment         2000         1999
----------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>           <C>                  <C>          <C>

(In thousands)
Overnight advance                                                 4.74%                Daily      $     -      $21,700
October, 2001                                                     4.75%                Fixed        5,000        5,000
May, 2002(1)                                                      6.83%                Fixed        1,483        1,590
February, 2003(1)                                                 5.65%                Fixed        1,022        1,092
July, 2004(1)                                                     6.38%                Fixed        1,482        1,564
November, 2004(2)                                                 5.26%                Fixed            -        5,000
May, 2005(3)                                                      6.65%                Fixed       10,000            -
July, 2005(4)                                                     6.79%                Fixed       10,000            -
December, 2005(5)                                                 5.81%                Fixed       25,000            -
October, 2009(6)                                                  5.20%                Fixed            -       10,000
----------------------------------------------------------------------------------------------------------------------
                                                                                                  $53,987      $45,946
======================================================================================================================
</TABLE>

(1) 15 year amortizing advance with a seven year balloon
(2) Called at six months
(3) 5 year advance, 2 year term lock, quarterly call
(4) 5 year advance, 2 year term lock, quarterly call
(5) 5 year advance
(6) Called at six months

The Bank maintains a blanket lien agreement with the FHLB covering secured
advances. Under this agreement, 60% of the outstanding balances of first
mortgages secured by improved residential property not more than 90 days
delinquent are considered pledged as collateral. In addition, the Bank pledged
U.S. Government and Agency Securities as collateral for the advances. As of
December 31, 2000, the Bank reported approximately $86.0 million of loan
balances and $1.3 million of securities pledged as collateral.

 NOTE 9 - 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, 2000, no material amount of agreements to repurchase securities
sold were outstanding with any individual customer. Securities sold under
agreements to repurchase averaged $3.7 million and $5.4 million in 2000 and
1999, respectively, and the maximum amounts outstanding at any month-end during
2000 and 1999 were $6.0 million and $7.1 million, respectively. The weighted
average rate paid during 2000 and 1999 was 5.07% and 4.65%, respectively, and
the weighted average rate at the end of 2000 and 1999 was 5.40% and 4.43%,
respectively.

 NOTE 10 - TRUST PREFERRED SECURITIES

On May 19, 1998, the Company issued $15 million of Trust Preferred Securities
("Securities") through Success Capital Trust I ("Trust"), a statutory business
trust and wholly owned subsidiary of the Company. The Securities pay cumulative
cash distributions quarterly at an annual rate of 8.95%. Proceeds from the sale
of the Securities were invested by the Trust in 8.95% Junior Subordinated
Deferrable Interest Debentures issued by the Company which represents all of the
assets of the Trust. The Securities are subject to mandatory redemption, in
whole or in part, upon repayment of the Junior Subordinated Debentures at the
stated maturity or their earlier redemption, in each case at a redemption price
equal to the aggregate liquidation preference of the Securities plus any
accumulated and unpaid distributions thereon to the date of redemption. Prior
redemption is permitted under certain circumstances such as changes in tax and
investment company regulations. The Company fully and unconditionally guarantees
the Securities through the combined operation of the debentures and other
related documents. The Company's obligations under the guarantee are unsecured
and subordinate to senior and subordinated indebtedness of the Bank.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        31
<PAGE>   21
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 11 - NOTE PAYABLE

The Company entered into a revolving line of credit agreement with American
National Bank on June 5, 2000. The line is in the amount of $10.0 million with
interest payable at the 90 day LIBOR rate, plus 175 basis points. The interest
rate on the line resets quarterly and interest is payable quarterly. At December
31, 2000, the interest rate on the line was 8.15%. The revolving line is secured
by the common stock of the Bank and matures June 30, 2002.

 NOTE 12 - SHAREHOLDERS' EQUITY AND CAPITAL STANDARDS

On May 27, 1998, the Board of Directors of the Company approved implementation
of a Shareholder Rights Plan. The Board declared distribution of one right (a
"Right") for each share of the Company's common stock which was outstanding on
August 10, 1998 (the "Record Date"). Each share of common stock issued after the
Record Date will be issued with an attached Right. The Rights will not be
immediately exercisable or detachable from the common stock. The Rights will
become exercisable and detachable only following the acquisition by a person or
a group of 15% or more of the outstanding common stock of the Company or
following the announcement of a tender or exchange offer for 15% or more of the
outstanding common stock.

The Rights will, if they become exercisable, permit the holders of the Rights to
purchase a certain amount of preferred stock of the Company, or to exchange the
Rights for common stock, if the Board permits, at a 50% discount. Where an
acquiring company effects a merger or other control transaction with the
Company, the Rights may also entitle the holders of such Rights to acquire stock
of the acquiring company at a 50% discount. If a person or group acquires 15% or
more of the common stock (or announces a tender or exchange offer for 15% or
more of the common stock), the acquiring person's or group's Rights become void.
In certain circumstances, the Rights may be redeemed by the Company at an
initial redemption price of $.01 per Right. If not redeemed, the Rights will
expire ten years after the Record Date.

The Company and the Bank are subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Company's growth and financial condition. The regulations
require the Company and the Bank to meet specific capital adequacy guidelines
that involve quantitative measures of assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting principles.
The capital classifications are also subject to qualitative judgments by the
regulators about risk weightings and other factors.

Quantitative measures established by Federal regulations to ensure capital
adequacy require the Company and the Bank to maintain minimum ratios (set forth
in the table below) of Tier I capital (as defined in the regulations) to total
average assets (as defined in the regulations). As of December 31, 2000, the
Company's actual total capital to risk-weighted assets ratio was 10.88%. As of
December 31, 2000, the ratio of the Bank's total capital to risk-weighted assets
was 11.09% indicating that the Bank is considered "well capitalized."

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        32
<PAGE>   22
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The required ratios and the Company's actual ratios at December 31, 2000 and
1999, are presented below:

<TABLE>
<CAPTION>
                                                   --------------------------------------------------------------------
                                                                                                        To Be Well
                                                                                                     Capitalized Under
                                                                               For Capital           Prompt Corrective
                                                         Actual             Adequacy Purposes        Action Provisions
                                                   --------------------------------------------------------------------
                                                    Amount       Ratio       Amount      Ratio       Amount       Ratio
                                                   --------------------------------------------------------------------
<S>                                                <C>          <C>         <C>          <C>        <C>          <C>

(In thousands)
 AS OF DECEMBER 31, 2000
TOTAL CAPITAL (TO RISK WEIGHTED ASSETS):
  CONSOLIDATED                                     $49,022      10.88%      $36,041      8.00%        NOT APPLICABLE
  BANK                                              49,558      11.09%       35,749      8.00%      $44,686       10.0%
TIER 1 CAPITAL (TO RISK WEIGHTED ASSETS):
  CONSOLIDATED                                      38,881       8.63%       18,021      4.00%        NOT APPLICABLE
  BANK                                              44,697      10.00%       17,875      4.00%       26,812       6.00%
TIER 1 CAPITAL (TO AVERAGE ASSETS):
  CONSOLIDATED                                      38,881       7.32%       21,246      4.00%        NOT APPLICABLE
  BANK                                              44,697       8.45%       21,164      4.00%       26,455       5.00%

AS OF DECEMBER 31, 1999
Total Capital (to Risk Weighted Assets):
  Consolidated                                     $50,245      13.18%      $30,509      8.00%        Not Applicable
  Bank                                              41,485      10.95%       30,307      8.00%      $37,884       10.0%
Tier 1 Capital (to Risk Weighted Assets):
  Consolidated                                      41,301      10.83%       15,254      4.00%        Not Applicable
  Bank                                              37,217       9.82%       15,254      4.00%       22,730       6.00%
Tier 1 Capital (to Average Assets):
  Consolidated                                      41,301       8.87%       18,632      4.00%        Not Applicable
  Bank                                              37,216       8.00%       18,600      4.00%       23,251       5.00%
</TABLE>

The Bank may not declare or pay cash dividends on any of its shares of common
stock if the effect thereof would cause shareholders' equity to be reduced below
applicable regulatory capital maintenance requirements or if such declaration
and payment would otherwise violate regulatory requirements.

Unlike the Bank, the Company is not subject to these regulatory restrictions on
the payment of dividends to its stockholders. However, the Company's source of
funds for future dividends may depend upon dividends received by the Company
from the Bank.

 NOTE 13 - EMPLOYEE BENEFIT PLANS

The Company maintains an Employee Stock Ownership Plan ("ESOP"), which also has
a 401(k) feature. The ESOP, which is internally leveraged, covers substantially
all employees of the Bank. Loans from the Company to the ESOP to acquire Company
stock are recorded as a reduction of shareholders' equity. At December 31, 2000
and 1999, the fair value of unearned ("suspense") ESOP shares was approximately
$64,000 and $118,000, respectively. Suspense shares are released and allocated
to participants as the ESOP's debt to the Company is repaid. Employer
contributions, including any matching contribution for the 401(k) provision, are
made at the discretion of the Bank's Board of Directors. For the year ended
December 31, 2000, the Company recorded 401(k) expense of $54,000 and ESOP
expense of $75,000 as compared with $64,000 of 401(k) expense and $70,000 of
ESOP expense for 1999.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        33
<PAGE>   23
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shares of the Company's stock held by the ESOP as of December 31, 2000 and 1999,
are shown in the following table. The allocated and unallocated common shares as
of December 31, 2000 are approximations, as the 2000 participant allocation has
not yet been completed.

<TABLE>
<CAPTION>
                                                                 2000        1999
                                                               ------------------
<S>                                                            <C>         <C>

(In thousands)
Shares allocated to participants                               52,967      56,298
Suspense (unallocated) shares                                   5,300      11,846
---------------------------------------------------------------------------------
  Total ESOP Shares                                            58,267      68,144
=================================================================================
</TABLE>

In addition, on December 1, 1998, the Board of Directors of the Company adopted
the 1998 Employee Stock Purchase Plan (the "Plan") and authorized the Company to
reserve for issuance under the Plan an aggregate of 200,000 shares of common
stock. The Plan is intended to provide employees with an opportunity to purchase
common stock of the Company through accumulated payroll deductions. The Plan
will be effective for a period of 10 years, unless terminated by the Board prior
to such time. The Board may amend the Plan at any time and for any reason
without shareholder approval except to change the number of shares reserved for
issuance under the Plan.

Employees who elect to participate in the Plan do so by means of a payroll
deduction. An employee's purchase under the Plan may not be less than 2% or more
than 12% percent of his or her salary and no employee may purchase common stock
under the Plan during any one calendar year with an aggregate fair market value
of more than $25,000. The purchase price for shares purchased pursuant to the
Plan will be 85% of the fair market value of a share of common stock.

 NOTE 14 - STOCK OPTIONS AND RESTRICTED STOCK AWARD

In 1995, the Company adopted a qualified incentive stock option plan for senior
officers and directors of the Company with options to be granted at the fair
value of the stock at the date of grant. Under this plan, 170,000 shares of
authorized but unissued common stock are reserved for the granting of options.
Vesting of the options is determined by the Board of Directors and typically is
over a period not exceeding four years. Options must be exercised within ten
years after the date of grant.

In 1999, the Company adopted and shareholders approved the 1999 Stock Option
Plan ("Plan") for the officers, directors and employees of the Company and the
Bank. The Plan permits the grant of stock options as incentive stock options
within the meaning of Section 422 of the Internal Revenue Code or as
non-qualified stock options. Up to 200,000 shares of common stock may be issued
under the Plan, subject to increases and adjustments as provided in Plan
documents. The exercise price of any stock option granted under the Plan is
determined by the Plan Administrator at the time of grant, but may not be less
than fair market value of the common stock at the date of grant in the case of
incentive stock options. The term of each stock option is fixed by the Plan
Administrator, or, if not established, will be 10 years from the date of grant
(five years in the case of a 10% shareholder for incentive stock options). The
stock options are exercisable at such time(s) and subject to such terms and
conditions as determined by the Plan Administrator. If no such time is
established, the shares subject to option will vest in increments of 25% per
year over a four year period during which the holder of the option provides
continuous service to the Company, commencing on the second anniversary of the
date of grant.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        34
<PAGE>   24
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes data concerning stock options:

<TABLE>
<CAPTION>
                                                                     Common                                 Weighted
                                                               Shares Under         Option Price             Average
                                                                     Option            Per Share      Exercise Price
                                                               -----------------------------------------------------
<S>                                                            <C>               <C>                  <C>

Outstanding at December 31, 1997                                    153,340      $ 1.82 - $ 6.18      $         5.02
Exercised                                                           (21,250)     $ 6.18 - $10.15      $         7.04
Cancelled                                                           (17,000)              $ 6.18      $         6.18
Issued                                                              116,500      $11.50 - $14.50      $        13.91
--------------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1998                                    231,590      $ 1.82 - $14.50      $         9.22
Exercised                                                          (113,390)     $ 1.82 - $ 6.09      $         4.61
Cancelled                                                           (30,700)     $ 6.09 - $14.50      $        12.93
Issued                                                               60,500      $10.13 - $11.94      $        10.84
--------------------------------------------------------------------------------------------------------------------
Outstanding at December 31, 1999                                    148,000      $10.13 - $14.50      $        12.77
Exercised                                                                 -                    -                   -
Cancelled                                                           (25,500)     $10.75 - $14.50      $        13.88
Issued                                                              125,500      $11.00 - $12.00      $        11.38
--------------------------------------------------------------------------------------------------------------------
OUTSTANDING AT DECEMBER 31, 2000                                    248,000      $10.13 - $14.50      $        11.87
====================================================================================================================
</TABLE>

At December 31, 2000, there are options exercisable for 113,125 shares at a
weighted average price of $12.16.

Grants under the both plans are accounted for following Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. Accordingly, no compensation cost has been recognized for
incentive stock option grants under the stock option plan. Had compensation cost
for the stock-based compensation plan been determined consistent with SFAS No.
123, based on the grant date fair values of awards, reported income and earnings
per common share would have been reduced to the pro forma amounts shown below:

<TABLE>
<CAPTION>
                                                                 2000        1999        1998
                                                               ------------------------------
<S>                                                            <C>         <C>         <C>

(In thousands, except per share amounts)
 NET INCOME APPLICABLE TO COMMON STOCK:
As reported                                                    $1,204      $1,728      $1,204
Pro forma                                                      $1,020      $1,716      $1,094
 BASIC EARNINGS PER COMMON SHARE:
As reported                                                    $ 0.48      $ 0.60      $ 0.41
Pro forma                                                      $ 0.40      $ 0.59      $ 0.37
 DILUTED EARNINGS PER COMMON SHARE:
As reported                                                    $ 0.48      $ 0.60      $ 0.40
Pro forma                                                      $ 0.40      $ 0.59      $ 0.36
</TABLE>

The fair value of each option grant was estimated using the Black-Scholes
option-pricing model with the following weighted average assumptions used for
grants during the year ended December 31, 2000: dividend yield of 0% for the
period; expected volatility of 5.00% for the period; risk free rate of return of
5.00%; and expected life of 7.5 years. For the year ended December 31, 1999 each
option grant was estimated using the following assumptions: dividend yield of 0%
for the period; expected volatility of 5% for the period; risk free rate of
return of 5.00%; and an expected life of 9.5 years. For the year ended December
31, 1998, the assumptions included a dividend yield of 0% for the period,
expected volatility of 0% for the period; a risk free rate of return of 4.5% and
an expected life of 9.5 years.

In December 1998 the Company granted its President, Wilbur G. Meinen, a total of
8,000 restricted shares of the Company's common stock. Under terms of the
original grant, 2,667 shares of the restricted stock vested on December 31,
1999, 2,667 shares vested on December 31, 2000 and 2,666 shares were to vest on
December 31, 2001. However, in July 2000 the grant was modified to provide full
vesting of all shares on December 31, 2000. Unearned compensation of $92
thousand was recognized at December 31, 1998 and was amortized to compensation
expense over the vesting period. Compensation expense of $36 thousand and $56
thousand related to the restricted stock was recorded by the Company in 2000 and
1999, respectively.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        35
<PAGE>   25
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 15 - INCOME TAXES

The Company's deferred tax assets and liabilities consist of the following
components as of December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                 2000        1999
                                                               ------------------
<S>                                                            <C>         <C>

(In thousands)
 DEFERRED TAX ASSETS:
Allowance for loan losses                                      $1,859      $1,599
Securities available-for-sale                                       -          80
Premises and equipment                                            335         202
Branch closing reserve                                            411           -
Alternative minimum tax credit carry forward                       15         126
Loans                                                               -          84
---------------------------------------------------------------------------------
                                                                2,620       2,091
---------------------------------------------------------------------------------
 DEFERRED TAX LIABILITIES:
State income taxes                                             $  128      $   97
Securities available-for-sale                                     136           -
Deferred loan fees                                                236          48
Mortgage servicing rights                                         141         148
Other                                                              80          57
---------------------------------------------------------------------------------
                                                                  721         350
---------------------------------------------------------------------------------
Net deferred tax assets                                        $1,899      $1,741
=================================================================================
</TABLE>

No valuation allowance was considered necessary.

Income tax expense for the years ended December 31, 2000, 1999 and 1998,
consists of the following:

<TABLE>
<CAPTION>
                                                                2000      1999       1998
                                                               --------------------------
<S>                                                            <C>        <C>       <C>

(In thousands)
Current                                                        $ 627      $746      $ 450
Deferred                                                        (374)      (59)      (737)
-----------------------------------------------------------------------------------------
Total                                                          $ 253      $687      $(287)
=========================================================================================
</TABLE>

Reconciliations of income tax expense computed at the statutory federal income
tax rate to the Company's income tax expense for the years ended December 31,
2000, 1999, and 1998, are as follows:

<TABLE>
<CAPTION>
                                                                2000       1999       1998
                                                               ---------------------------
<S>                                                            <C>        <C>        <C>

(In thousands)
Income tax expense at statutory rate                           $ 496      $ 821      $ 312
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal tax benefit                   (39)       (64)       (28)
Nontaxable interest income (net of disallowed expenses)         (251)      (213)      (195)
Officer's life insurance proceeds                                  8          -       (340)
Other                                                             39        142        (36)
------------------------------------------------------------------------------------------
                                                               $ 253      $ 687      $(287)
==========================================================================================
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        36
<PAGE>   26
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 16 - COMPUTATION OF EARNINGS PER SHARE

The table following summarizes the computation of earnings per share for the
years indicated:
<TABLE>
<CAPTION>
                      ----------------------------------------------------------------------------------
                                               For the Year Ended December 31,
                      ----------------------------------------------------------------------------------
                                       2000                                       1999
                      ----------------------------------------------------------------------------------
                           INCOME           SHARE   PER-SHARE         INCOME           SHARE   PER-SHARE
                      (NUMERATOR)   (DENOMINATOR)      AMOUNT    (NUMERATOR)   (DENOMINATOR)      AMOUNT
                      ----------------------------------------------------------------------------------
<S>                   <C>           <C>             <C>          <C>           <C>             <C>

(In thousands, except per share amounts)
 BASIC EPS
Net income available
 to common
 stockholders         $     1,204           2,520   $    0.48    $     1,728           2,879   $    0.60

EFFECT OF DILUTIVE SECURITIES
Options                                         3                                          1
-------------------------------------------------                ---------------------------

DILUTED EPS
Income available to
 common stockholders
 and assumed
 conversions          $     1,204           2,523   $    0.48    $     1,728           2,880   $    0.60
========================================================================================================

<CAPTION>
                       ---------------------------------------
                           For the Year Ended December 31,
                       ---------------------------------------
                                        1998
                       ---------------------------------------
                            INCOME           SHARE   PER-SHARE
                       (NUMERATOR)   (DENOMINATOR)      AMOUNT
                       ---------------------------------------
<S>                    <C>           <C>             <C>
(In thousands, except
 BASIC EPS
Net income available
 to common
 stockholders          $     1,204           2,938   $    0.41
EFFECT OF DILUTIVE SE
Options                                         88
--------------------------------------------------
DILUTED EPS
Income available to
 common stockholders
 and assumed
 conversions           $     1,204           3,026   $    0.40
==============================================================
</TABLE>

 NOTE 17 - COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Credit risk:
The Company makes loans to, and obtains deposits from, customers primarily in
Lake County, Cook County, DuPage County, and McHenry County, Illinois and
surrounding areas. Most loans are secured by specific items of collateral,
including residential and commercial real estate and other business and consumer
assets. Collateral held varies but may include deposits held in financial
institutions; U.S. Treasury securities; other marketable securities;
income-producing commercial properties; residential real estate; accounts
receivable; and property, plant and equipment.

Financial instruments with credit risk:
The Company is a party to financial instruments with credit risk in the normal
course of business to meet financing needs of its customers. These financial
instruments include commitments to make loans, standby letters of credit, and
unused lines of credit. The Company's exposure to credit loss in the event of
nonperformance by the other parties is represented by the contractual amounts of
the instruments. The Company uses the same credit policy to make such
commitments as it uses for on-balance-sheet items.

<PAGE>   27
At December 31, 2000 and 1999, the contract amount of these financial
instruments is summarized as follows:

<TABLE>
<CAPTION>
                                                                   2000          1999
                                                               ----------------------
<S>                                                            <C>           <C>

(In thousands)
 FINANCIAL INSTRUMENTS WHOSE CONTRACT AMOUNT REPRESENTS CREDIT RISK
Unused home equity lines of credit                             $100,102      $108,486
Unused commercial and other consumer lines of credit             30,292        38,293
Standby letters of credit                                         2,029         1,725
Commitments to make loans                                         2,138        12,069
</TABLE>

Since many commitments to make loans expire without being used, the amounts
above do not necessarily represent future cash commitments. Collateral obtained
upon exercise of the commitment is determined using management's credit
evaluation of the borrower, and may include commercial and residential real
estate and other business and consumer assets.

Litigation:
From time to time, the Company and the Bank are involved in litigation, both as
a defendant and as a plaintiff. Management believes that the ultimate liability
from such actions, if any, will not have a material effect on the financial
condition of the Company or the Bank.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        37
<PAGE>   28
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease Commitments:
The Bank leases branch facilities under noncancelable operating lease
agreements. Rent expense for branch facilities was $2.4 million, $748 thousand,
and $434 thousand in 2000, 1999 and 1998, respectively, excluding taxes,
insurance and maintenance. In the fourth quarter of 2000 the Company recorded a
$1.4 million charge related to the closure of three branch offices and disposal
of one unopened branch site. The four locations were under various leasing
arrangements. In the fourth quarter of 2000 the Company finalized lease buyout
agreements for the Lincolnwood Mall and the unopened Skokie branch locations and
accrued the final three lease payments for the existing Skokie office. While the
Company continues to explore possible subtenant and lease buyout arrangements
for the Loop branch, it has recorded a charge equal to the remaining lease cost
reduced by estimated future sublease income. The $1.4 million charge is
comprised of lease buyout settlements, leasehold improvement depreciation, lease
payments, equipment write-offs, estimated commissions and an estimate of future
lease costs reduced by estimated future sublease income. For the year ended
December 31, 2000, occupancy expenses related to the four locations were
approximately $1.9 million. The branch facilities are charged for their
proportionate share of taxes, insurance and maintenance costs plus monthly rent.
The minimum rental commitments, not including taxes, insurance and maintenance,
at December 31, 2000 under the leases are summarized below (in thousands):

<TABLE>
<S>                                                            <C>
2001                                                           $  673
2002                                                              689
2003                                                              595
2004                                                              249
2005                                                              254
2006 and thereafter                                               671
---------------------------------------------------------------------
Total                                                          $3,131
=====================================================================
</TABLE>

 NOTE 18 - RELATED PARTY TRANSACTIONS

In the normal course of business, certain executive officers, directors, and
companies with which they are affiliated have borrowed funds from the Bank. In
the opinion of management, these loans were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with unrelated parties. The activities in total
loans during 2000 is as follows (in thousands):

<TABLE>
<S>                                                            <C>
Balance as of January 1, 2000                                  $1,661
New loans                                                         667
Repayments                                                       (660)
---------------------------------------------------------------------
Balance as of December 31, 2000                                $1,668
=====================================================================
</TABLE>

 NOTE 19 - FAIR VALUES OF FINANCIAL INSTRUMENTS

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

Cash and cash equivalents:
The carrying amounts reported in the balance sheet for cash and these short-term
instruments approximate their fair values.

Securities:
Fair values for investment securities are based on quoted market prices, where
available. If quoted market prices are not available, fair values are based on
quoted market prices of comparable instruments.

Loans:
For variable-rate loans that reprice frequently and with no significant change
in credit risk, fair values are based on carrying values. The fair values for
other loans are determined using estimated future cash flows, discounted at the
interest rates currently being offered for loans with similar terms to borrowers
with similar credit quality.

Deposit liabilities:
The fair value of deposits with no stated maturity, such as noninterest bearing
deposits, savings, NOW accounts, and money market accounts, is equal to the
amount payable on demand (i.e. the carrying value.) Fair values for fixed rate
certificates of deposit are estimated using a discounted cash flow calculation
that applies interest rates currently being offered on certificates to a
schedule of aggregated expected monthly maturities on time deposits.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        38
<PAGE>   29
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Borrowed funds:
The fair value is estimated using a discounted cash flow calculation using the
rate currently available for similar term borrowings.

Accrued interest receivable and payable:
The carrying amounts reported in the balance sheet approximate their fair
values.

Off-balance-sheet instruments:
Fair values for the Company's off-balance-sheet instruments are based on fees
currently charged to enter into similar agreements, taking into account the
remaining term of the agreements and the counterparties' credit standing. There
is no material difference between the stated amount and the estimated fair value
of off-balance sheet items which are primarily comprised of commitments to
extend credit which are generally priced at market at the time of funding.

The carrying amount and estimated fair value of financial instruments at
December 31, 2000 and 1999, are as follows:

<TABLE>
<CAPTION>
                                                               --------------------------------------------------
                                                                        2000                        1999
                                                               --------------------------------------------------
                                                               CARRYING          FAIR      CARRYING          FAIR
                                                                 AMOUNT         VALUE        AMOUNT         VALUE
                                                               --------------------------------------------------
<S>                                                            <C>           <C>           <C>           <C>

(In thousands)
 FINANCIAL ASSETS:
Cash and cash equivalents                                      $ 63,114      $ 63,114      $ 17,057      $ 17,057
Investment securities                                            35,366        35,366        36,329        36,329
Loans held-for-sale                                                 493           493
Loans                                                           480,711       481,493       424,668       428,811
Accrued interest receivable                                       3,736         3,736         2,876         2,876

FINANCIAL LIABILITIES:
Deposits                                                       $490,718      $493,012      $394,290      $394,650
Borrowed funds                                                   74,679        73,057        69,063        66,599
Accrued interest payable                                            981           981           635           635
</TABLE>

Loan commitments on which the committed interest rate is less than the current
market rate are insignificant at December 31, 2000.

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        39
<PAGE>   30
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 20 - PARENT COMPANY FINANCIAL INFORMATION

Presented below are the condensed balance sheets as of December 31, 2000 and
1999 and statements of income and statements of cash flows for the years ended
December 31, 2000, 1999, and 1998 for Success Bancshares, Inc.:

CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  2000         1999
                                                               --------------------
<S>                                                            <C>          <C>

(In thousands)
 ASSETS
Cash on deposit with subsidiary bank                           $   462      $ 7,446
Securities available-for-sale                                      109          116
Investment in subsidiaries                                      45,391       37,464
Other assets                                                     3,192        2,271
-----------------------------------------------------------------------------------
                                                               $49,154      $47,297
===================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Note payable                                                   $ 2,500      $   105
Jr. subordinated debentures                                     15,464       15,464
Other liabilities                                                1,812          878
-----------------------------------------------------------------------------------
  Total liabilities                                             19,776       16,447
Shareholders' equity                                            29,378       30,850
-----------------------------------------------------------------------------------
Total liabilities and shareholders' equity                     $49,154      $47,297
===================================================================================
</TABLE>

CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                  2000         1999        1998
                                                               --------------------------------
<S>                                                            <C>          <C>          <C>

(In thousands)
 OPERATING INCOME
Dividends from subsidiary bank                                 $     0      $     0      $1,776
Interest and other income                                          152          508       1,561
-----------------------------------------------------------------------------------------------
                                                                   152          508       3,337

OPERATING EXPENSES
Interest                                                         1,484        1,395         872
Other expense                                                      826          721       1,043
-----------------------------------------------------------------------------------------------
                                                                 2,310        2,116       1,915
-----------------------------------------------------------------------------------------------
Income before income taxes                                      (2,158)      (1,608)      1,422
Income tax benefit                                                 833          621         536
-----------------------------------------------------------------------------------------------
Income (loss) before equity in undistributed income             (1,325)        (987)      1,958
 EQUITY IN UNDISTRIBUTED EARNINGS                                2,529        2,715        (754)
-----------------------------------------------------------------------------------------------
Net income                                                     $ 1,204      $ 1,728      $1,204
===============================================================================================
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        40
<PAGE>   31
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                  2000         1999         1998
                                                               ---------------------------------
<S>                                                            <C>          <C>          <C>

(In thousands)
 CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                     $ 1,204      $ 1,728      $ 1,204
Adjustments to reconcile net income to net cash from
  operating activities
Equity in undistributed income of subsidiaries                  (2,529)      (2,715)         754
Change in other assets and liabilities                              13           55       (1,455)
Other                                                                3         (236)         404
------------------------------------------------------------------------------------------------
    Net cash (used in) provided by operating activities         (1,309)      (1,168)         907

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of available-for-sale securities            -            -        2,000
Proceeds from sales of available-for-sale securities                 -           39            -
Investment in equity of subsidiaries                            (5,000)      (2,000)           -
Purchase of subsidiary bank stock                                    -            -       (5,557)
------------------------------------------------------------------------------------------------
    Net cash used in investing activities                       (5,000)      (1,961)      (3,556)

CASH FLOWS FROM FINANCING ACTIVITIES
Net change in:
  Subordinated debt                                                  -            -         (200)
  Repayment of note payable                                       (105)           -            -
  Proceeds from note payable                                     2,500            -            -
  Issuance of Jr. subordinated debentures                            -            -       15,000
  Payment from (loan to) ESOP, net                                  41           39           45
Purchase of common share for treasury                           (3,240)      (3,620)           -
Issuance of treasury stock                                         129           52            -
Issuance of common stock                                             -          823          285
------------------------------------------------------------------------------------------------
    Net cash (used in) provided by financing activities           (675)      (2,706)      15,130
------------------------------------------------------------------------------------------------

Increase (decrease) in cash                                     (6,984)      (5,835)      12,481
Cash at beginning of year                                        7,446       13,281          800
------------------------------------------------------------------------------------------------
Cash at end of year                                            $   462      $ 7,446      $13,281
================================================================================================
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        41
<PAGE>   32
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 21 - SELECTED QUARTERLY FINANCIAL DATA

Selected unaudited quarterly financial data for the Company is provided in the
following table:

<TABLE>
<CAPTION>
                                                          ------------------------------------------------------------
                                                                                 QUARTER ENDED
                                                          ------------------------------------------------------------
                                                          MARCH 31,      JUNE 30,      SEPTEMBER 30,      DECEMBER 31,
                                                               2000          2000               2000              2000
                                                          ------------------------------------------------------------
<S>                                                       <C>            <C>           <C>                <C>

(In thousands, except per share amounts)
 INTEREST INCOME
Loans (including fee income)                              $   8,948      $  9,809      $      10,265      $     10,581
Investment securities
  Taxable                                                       383           379                369               414
  Exempt from federal income tax                                134           133                132               130
Other interest income                                             2             -                 42               153
----------------------------------------------------------------------------------------------------------------------
                                                              9,467        10,321             10,808            11,278

INTEREST EXPENSE
Deposits                                                      4,099         4,643              5,183             5,713
Note payable                                                      -             2                 44                47
Federal Home Loan Bank advances                                 570           534                514               514
Other borrowings                                                142           237                 86                62
Trust preferred securities                                      336           335                336               336
----------------------------------------------------------------------------------------------------------------------
                                                              5,147         5,751              6,163             6,672
----------------------------------------------------------------------------------------------------------------------

Net interest income                                           4,320         4,570              4,645             4,606
Provision for loan losses                                       100           475                150               225
----------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses           4,220         4,095              4,495             4,381

OTHER OPERATING INCOME
Service charges on deposit accounts                             595           675                609               643
Gain (loss) on sale of loans                                      5            (4)                35                28
Gain on sale of securities, net                                   -             -                  -               395
Gain on sale of fixed assets                                     53             -                  -               (20)
Net credit card processing income                                 5             -                  2                (1)
Other noninterest income                                         88            81                135                93
----------------------------------------------------------------------------------------------------------------------
                                                                746           752                781             1,138

OTHER OPERATING EXPENSES
Salaries and employee benefits                                2,232         2,165              2,178             2,355
Occupancy and equipment expense                                 999         1,008              1,044             2,248
Data processing                                                 210           217                190               212
Other noninterest expenses                                      991           932                930             1,240
----------------------------------------------------------------------------------------------------------------------
                                                              4,432         4,322              4,342             6,055
----------------------------------------------------------------------------------------------------------------------
Income before income taxes                                      534           525                934              (536)

Income tax expense (benefit)                                    139           131                289              (306)
----------------------------------------------------------------------------------------------------------------------
NET INCOME                                                      395           394                645              (230)
======================================================================================================================
  Basic earnings per share                                $    0.15      $   0.15      $        0.26      $      (0.08)
  Diluted earnings per share                              $    0.15          0.15      $        0.26      $      (0.08)
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        42
<PAGE>   33
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                            ------------------------------------------------------------
                                                                                   Quarter ended
                                                            ------------------------------------------------------------
                                                            March 31,      June 30,      September 30,      December 31,
                                                                 1999          1999               1999              1999
                                                            ------------------------------------------------------------
<S>                                                         <C>            <C>           <C>                <C>

(In thousands, except per share amounts)
 INTEREST INCOME
Loans (including fee income)                                $   7,621      $  7,587      $       7,902      $      8,866
Investment securities
  Taxable                                                         391           375                374               408
  Exempt from federal income tax                                  156           155                151               147
Other interest income                                              97            73                320                34
------------------------------------------------------------------------------------------------------------------------
                                                                8,265         8,190              8,747             9,455

INTEREST EXPENSE
Deposits                                                        3,738         3,540              3,700             3,751
Federal Home Loan Bank advances                                   210           211                184               346
Other borrowings                                                   73            83                 80               163
Trust preferred securities                                        336           336                336               335
------------------------------------------------------------------------------------------------------------------------
                                                                4,357         4,170              4,300             4,595
------------------------------------------------------------------------------------------------------------------------

Net interest income                                             3,908         4,020              4,447             4,860
Provision for loan losses                                         150           150                150               730
------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses             3,758         3,870              4,297             4,130

OTHER OPERATING INCOME
Service charges on deposit accounts                               489           521                567               571
Gain (loss) on sale of loans                                       95            53                 34                18
Gain on sale of securities, net                                     -             -                  -                 5
Net credit card processing income                                  (7)           (8)               (13)               44
Other noninterest income                                          323            83                224               161
------------------------------------------------------------------------------------------------------------------------
                                                                  900           649                812               799

OTHER OPERATING EXPENSES
Salaries and employee benefits                                  2,184         2,214              2,324             2,279
Occupancy and equipment expense                                   815           825                816               935
Data processing                                                   190           214                199               199
Other noninterest expenses                                        845           884                931               946
------------------------------------------------------------------------------------------------------------------------
                                                                4,034         4,137              4,270             4,359
------------------------------------------------------------------------------------------------------------------------
Income before income taxes                                        624           382                839               570

Income tax expense (benefit)                                      183            90                273               141
========================================================================================================================
NET INCOME                                                        441           292                566               429
========================================================================================================================
  Basic earnings per share                                  $    0.15      $   0.10      $        0.20      $       0.15
  Diluted earnings per share                                $    0.15          0.10      $        0.20      $       0.15
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        43
<PAGE>   34

                             DIRECTORS AND OFFICERS

DIRECTORS OF SUCCESS BANCSHARES, INC.
WILBUR G. MEINEN, JR., Chairman, President and CEO
  Success Bancshares, Inc. and Success National Bank

JOSEPH A. CARI, JR., Attorney
  Ungaretti & Harris

AVROM H. GOLDFEDER, Managing Director
  I N G Securities Futures and Options Clearing Services

SHERWIN KOOPMANS, Retired Associate Director
  Federal Deposit Insurance Corporation

NORMAN D. RICH, C.P.A., Former Partner
  Veatch, Rich & Nadler, Chtd.

GLEN R. WHERFEL, C.P.A.
  Wherfel and Associates

DIRECTORS OF SUCCESS NATIONAL BANK
WILBUR G. MEINEN, JR., Chairman, President and CEO
  Success Bancshares, Inc. and Success National Bank

FRANK L. BAASCH, Past President
  BDL Inc.

AVROM GOLDFEDER, Managing Director
  I N G Barings Futures and Options Clearing Services

NORMAN D. RICH, C.P.A., Former Partner
  Veatch, Rich & Nadler, Chtd.

GLEN R. WHERFEL, C.P.A.
  Wherfel and Associates

OFFICERS OF SUCCESS BANCSHARES, INC.
WILBUR G. MEINEN, JR., Chairman, President and CEO

KURT C. FELDE, C.P.A., Executive Vice President and
  Chief Financial Officer

LAURIE K. BREITENSTEIN, Senior Vice President,
  General Counsel and Secretary

RONALD W. TRAGASZ, Assistant Secretary & Assistant Treasurer

SUSAN J. CHERF, Controller and Assistant Treasurer

OFFICERS OF SUCCESS NATIONAL BANK
WILBUR G. MEINEN, JR., Chairman, President and CEO

CHRISTA N. CALABRESE, Executive Vice President and
  Chief Lending Officer

KURT C. FELDE, C.P.A., Executive Vice President and
  Chief Financial Officer

CRAIG J. LOVE, Executive Vice President and
  Chief Operating Officer

JOSEPH J. BAUER, Senior Vice President Retail Banking

LAURIE K. BREITENSTEIN, Senior Vice President,
  General Counsel and Corporate Secretary

KEVIN M. COOK, Senior Vice President, Commercial Banking

PAMELA JACKSON, Senior Vice President and
  Human Resources Director

PATRICIA MCGROUARY, Senior Vice President and
  MIS Director

MARY PURCELL, Senior Vice President/Internal Audit and
  Compliance Manager

RONALD W. TRAGASZ, Senior Vice President and Cashier

MARTIN A. WAIDE, Senior Vice President and
  Chief Credit Officer

WALTER ADREANI, Vice President, Commercial Banking

JANIS A. ANDERSON, Vice President, Credit Administration

PAUL BAILEY, Vice President, Commercial Banking

SUSAN J. CHERF, Vice President and Controller

DAWN COOPER, Vice President, Commercial Banking

REGINA HIRN, Vice President, Commercial Banking

CANDY S. LOGIURATO, Vice President, Commercial Banking

ANNA LONG, Vice President, Merchant Card Services

LOU MARGAGLIONE, Vice President, Commercial Banking

CHIWIN NILAPANT, Vice President, Commercial Banking

MARY WAYMAN, Vice President, Commercial Loan
  Documentation

LARRY D. YOUNG, Vice President, Commercial Banking

CHRIS BOYCE, Assistant Vice President, MIS

MELISSA DALBERG, Assistant Vice President, Retail Lending

KATHY UNTERSCHUETZ, Assistant Vice President, Operations

                           EQUAL OPPORTUNITY EMPLOYER

It is the policy of Success National Bank to provide equal opportunity
employment to all employees and applicants without regard to race, age,
religion, color, sex, national origin, sexual orientation or physical
disability, judging each individual solely on functional qualifications for the
position or task to be assigned. This policy includes all facets of employment,
work relationships, and work conditions including, but not restricted to hiring,
recruitment, placement, compensation, promotion and employee benefits.

<TABLE>
<S>           <C>

M E M B E R   [HOUSE LOGO]
-------       EQUAL HOUSING
FDIC          L E N D E R
-------
</TABLE>

                   SUCCESS BANCSHARES, INC. AND SUBSIDIARIES

                                        44
<PAGE>   35
                            SHAREHOLDER INFORMATION

CORPORATE OFFICE
100 Tri State International
P.O. Box 1499
Lincolnshire, IL   60069-1499
(847) 279-9000 - FAX (847) 279-9049

ANNUAL REPORT ON FORM 10-K
A copy of Success Bancshares, Inc.'s Annual Report on Form 10-K as filed with
the Securities and Exchange Commission may be obtained without charge upon
written request to Kurt C. Felde, Executive Vice President and Chief Financial
Officer, Success Bancshares, Inc., 100 Tri State International, P.O. Box 1499,
Lincolnshire, IL 60069-1499, or by calling (847) 279-5069.

REGISTRAR/TRANSFER AGENT

Communications regarding change of address, transfer of stock and lost
certificates should be sent to:
Computershare Investor Services, LLC
311 West Monroe Street, Floor 14
Chicago, IL 60606 (312) 461-6829

CORPORATE COUNSEL
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, IL 60601

ACCOUNTANTS
McGladrey & Pullen, LLP
1699 East Woodfield Road, #300
Schaumburg, IL  60173

DIVIDENDS
The Company has not paid, and does not intend to pay in the foreseeable future,
any dividends on its common stock. The Board of Directors will consider the
payment of future cash dividends, dependent on the results of operations and
financial condition of the Company, tax considerations, industry standards,
economic conditions, regulatory restrictions, general business practices and
other factors. The Company's ability to pay dividends may be dependent on the
dividend payments it receives from its subsidiary, Success National Bank, which
are subject to regulations and the Bank's continued compliance with all
regulatory capital requirements. See Note 12 of the Notes to the Consolidated
Financial Statements for information regarding limitations of the ability of
Success National Bank to pay dividends to the Company.

STOCK LISTING
Success Bancshares, Inc.'s common stock is traded on the Nasdaq National Market
System under the symbol "SXNB." At February 15, 2001, there were 3,074,326
shares of Success Bancshares, Inc. common stock issued and 2,439,180 shares
outstanding and there were approximately 459 holders of record. The table below
shows the high and low sales price on the common stock for each quarter during
2000 and 1999.

<TABLE>
<CAPTION>
                              --------------------
                                  Sales Price
--------------------------------------------------
QUARTER ENDED                   HIGH         LOW
--------------------------------------------------
<S>                           <C>          <C>
March 31, 1999                $ 11.75      $  9.75
June 30, 1999                 $ 11.31      $  9.75
September 30, 1999            $ 11.13      $ 10.50
December 31, 1999             $ 12.00      $  9.88
March 31, 2000                $ 11.00      $  9.00
June 30, 2000                 $ 12.13      $  9.50
September 30, 2000            $ 14.00      $ 10.63
December 31, 2000             $ 12.75      $ 11.50
</TABLE>


The stock price information set forth in the table above was provided by the
National Association of Securities Dealers, Inc. High, low and closing prices
and daily trading volume are reported in most major newspapers.

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