<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                   FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                      The Securities Exchange Act of 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
    For the fiscal year ended     December 31, 1996
                              ------------------------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
    For the transition period from __________ to ___________

    Commission file number 0-14468.
                           --------

                       First Oak Brook Bancshares, Inc.
          -----------------------------------------------------------
            (Exact name of registrant as specified in its charter)

           Delaware                                    36-3220778
-------------------------------                    -------------------
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                     Identification No.)

1400 Sixteenth Street, Oak Brook, Illinois                       60521
-------------------------------------------                    ---------
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code (630) 571-1050
                                                   --------------

Securities registered pursuant to Section 12(b) of the Act:  None
                                                             ----

Securities registered pursuant to Section 12(g) of the Act:
              Class A Common Stock ($2 par value)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ((S)229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 15, 1997 was: $56,789,649 based upon the last sales price
of the registrant's Class A Common stock at $25.25 per share as reported by the
National Association of Securities Dealers Automated Quotation System.

The number of shares outstanding of each of the registrant's classes of common
stock as of March 15, 1997: 1,522,772 shares of Common Stock and 1,739,851
shares of Class A Common Stock.

Documents incorporated by reference:  Portions of the Company's Annual Report to
Shareholders for the fiscal year ended December 31, 1996, and Proxy Statement
for its 1997 Annual Meeting of Shareholders to be filed on or about April 1,
1997 are incorporated by reference into Parts I., II. and III. hereof, to the
extent indicated in the Form 10-K Cross-Reference Index.
<PAGE>
 
                        Form 10-K Cross-Reference Index

Certain information required to be included in Form 10-K is also included in the
1996 Annual Report to Shareholders or in the Proxy Statement used in connection
with the 1997 Annual Meeting of Shareholders to be held on May 6, 1997.  The
following Cross-Reference Index shows the page location in the 1996 Annual
Report or in the Proxy Statement of only that information which is to be
incorporated by reference into Form 10-K.  All other sections of the 1996 Annual
Report or the Proxy Statement are not required in Form 10-K and should not be
considered a part thereof.
<TABLE>
<CAPTION>
                                                              1996   1996     1997
                                                              FORM  ANNUAL    PROXY
Item No.                  Part I                              10-K  REPORT  STATEMENT
                                                              ----  ------  ---------
<S>                                                           <C>   <C>     <C>
1.  Business................................................  2-11
      Statistical Disclosure by Bank Holding Companies  ....        6-18

2.  Properties.............................................  11-13

3.  Legal Proceedings.......................................    13

4.  Submission of Matters to a Vote of Security Holders ....    13

                          Part II

5.  Market for Registrant's Common Equity
      and Related Stockholder Matters.......................        29-32,
                                                                       34
6.  Selected Financial Data.................................            6

7.  Management's Discussion and Analysis of
      Financial Condition and Results of Operation..........         6-18

8.  Financial Statements and Supplementary Data.............        19-33

9.  Changes in and Disagreements with Accountants on
      Accounting and Financial Disclosure...................    14

                          Part III

10. Directors and Executive Officers of the Registrant  ....                        5

11. Executive Compensation..................................                     9-13

12. Security Ownership of Certain Beneficial
      Owners and Management.................................                      2-3

13. Certain Relationships and Related Transactions..........                        6

                          Part IV

14. Exhibits, Financial Statement Schedules
      and Reports on Form 8-K............................... 16-19

    Signatures..............................................    20
</TABLE>

                                       1
<PAGE>
 
                                     PART I
ITEM 1.  BUSINESS

General
-------

First Oak Brook Bancshares, Inc. ("the Company") was organized under Delaware
law on March 3, 1983, as a bank holding company under the Bank Holding Company
Act of 1956, as amended.  The Company owns all of the outstanding capital stock
of Oak Brook Bank ("the Bank"), Oak Brook, Illinois, which is an Illinois state-
chartered bank.  The bank has seven locations in DuPage County and two locations
in Cook County.  A tenth location is under development in Aurora, Illinois,
located in DuPage County.

The Company has two classes of common stock, Class A Common stock and Common
stock.  The Common stock is convertible into Class A Common at any time on a
one-for-one basis.  The Company has authorized shares of Class A Common and
Common stock of 4,000,000 and 3,000,000, respectively.

As of December 31, 1996, the Company had total assets of $768,655,000; loans of
$420,164,000, deposits of $648,303,000, and shareholders' equity of $59,553,000.

The business of the Company consists primarily of the ownership, supervision and
control of its subsidiary bank.  The Company provides its subsidiary bank with
advice, counsel and specialized services in various fields of financial, audit,
legal and banking policy and operations.  The Company also engages in
negotiations designed to lead to the acquisition of other banks and closely
related businesses.

The Bank is engaged in the general retail and commercial banking business.  The
services offered include demand, savings, and time deposits, corporate cash
management services, and commercial and personal lending products.  In addition,
related products and services are offered including discount brokerage, mutual
funds and annuity sales, and foreign currency and precious metal sales. Oak
Brook Bank has a full service trust and land trust department.

The Bank originates the following types of loans: commercial, real estate (land
acquisition, development & construction, commercial mortgages, residential
mortgages and home equity), credit card and consumer installment loans.  The
extension of credit inherently involves certain levels and types of risk
(general economic conditions, industry and concentration risk, interest rate
risk, and credit and default risk) which the Company prudently manages through
the establishment of lending, credit and asset/liability management policies and
procedures.

                                       2
<PAGE>
 
Loans originated comply with the Bank's loan policies and governmental rules,
regulations and laws.  While the subsidiary bank's loan policy varies for
different loan products, the policy generally covers such items as: percentages
to be advanced against collateral, blanket or specific liens, insurance
requirements, maximum terms, down payment requirements, debt-to-income ratio,
credit history and other matters of credit concern.

The Bank's loan policy grants limited loan approval authority to designated loan
officers.  Where a credit request exceeds the loan officer's approval authority,
approval by a more senior lending officer and/or bank loan committee is
required.  The loan policy sets forth those credit requests that, either because
of the amount and/or type, require the approval of the bank loan committee.

The chart that follows sets forth the credit risks, loan origination procedures,
underwriting standards and lien position generally associated with the Bank's
lending in each major loan category.  The major loan categories are residential
real estate, including purchase money, refinance and home equity loans;
commercial real estate, including land acquisition, development and construction
loans; commercial loans; auto loans (direct and indirect); credit card loans and
student loans.  These loans, except for credit cards, are made generally in the
Chicago Metropolitan area and are generally secured by collateral located in the
Chicago Metropolitan area.

The chart sets forth the information generally considered in approving each
category of loans.  The collateral stated for each category is the collateral
generally required for these loans. Each loan is reviewed on its own merits and
the information set forth in the chart does not necessarily apply to each loan
within a category.  The lien position (if any) and collateral documentation for
commercial loans, commercial real estate and construction loans are structured
specifically for each loan.

                                       3
<PAGE>

<TABLE>
<CAPTION>
    LOAN TYPE
  YEAR END BAL.         PRINCIPAL              SIGNIFICANT                  MAJOR
     (000's)             CREDIT              LOAN ORIGINATION           UNDERWRITING
    % OF LOANS            RISKS               DOCUMENTATION              STANDARDS                            LIEN POSITION
----------------------------------------------------------------------------------------------------------------------------------
<C>                 <S>                     <C>                   <C>                                   <C>
Commercial          Borrower default        Personal              Determination of eligible and         Unsecured:
-Working capital    Industry change          financial             ineligible receivables                Companies  with
-Term               General economic         statements of        Advances generally not to exceed       significant net
                    conditions               guarantors            80% of  eligible collateral           worth
Balance  $40,895                            Personal tax          Annual credit review                   relative to debt
%            9.7%                            returns of           Debt to tangible net worth normally    and
                                             guarantors            less than  4 to 1                     solid operating
                                            Business              Assessment of company's cash flow      history
                                             financial             -net annual cash flow should be      Secured:
                                             statements, or tax    120% of  the total estimated          Blanket first lien
                                             returns (if           annual debt service (with a 100%      on all
                                             applicable)           floor)                                business assets
                                            Cash flow             Maximum length of term loans           (unmonitored or
                                             projections           generally 7  years                    with
                                            Credit history        Personal guaranties of owners of       limited monitoring)
                                            Mercantile reports     closely held companies (full or      Secured:
                                            Supplier               partial)                              Specific first
                                             references           Periodic monitoring of A/R             lien on
                                            Customer              Periodic audit for asset based         assets being
                                             references            loans                                 financed
                                            If applicable         Loan covenant restrictions             (including leases)
                                            -Collateral           -Other borrowings
                                             valuation            -Payment of dividends
                                            -A/R, A/P listing     -Limit on owner withdrawals
                                             and aging            -Sale of company
                                            -Machinery,           -Capital expenditures
                                             furniture,           -Debt to net worth limits
                                             fixtures and         -Minimum tangible net worth
                                             equipment,           Evidence of insurance
                                             inventory lists
                                            -Pre-loan audit
----------------------------------------------------------------------------------------------------------------------------------
Commercial          Borrower default        Personal              Loans to appraised value generally     Secured:
Mortgages           Industry change          financial             not to  exceed 80% (with a ceiling    First mortgages
                    General economic         statements of         of 85%)                               Assignment of
Balance  $63,394     conditions              guarantors           Assessment of property's cash flow      rents/leases
%           15.1%                           Personal tax           -net annual cash flow should be       Security agreement
                                             returns of            120% of  the total estimated           on fixtures
                                             guarantors            annual debt service (with a 100%      Environmental
                                            Business               floor)                                 indemnity agreement
                                             financial            Personal guaranties of owners (full
                                             statements, or tax    or partial)
                                             returns (if           Evidence of insurance
                                             applicable)           Tax and insurance reserves (if
                                            Cash flow              applicable)
                                             projections
                                            Credit history
                                            Lender references
                                            Appraisals
                                            Environmental
                                             assessments
                                            Credit history of
                                             tenants
                                            Financial
                                             information on
                                             tenants
                                            Review of leases
                                            Market trends and
                                             conditions
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       4
<PAGE>
 
<TABLE>
<CAPTION>

    LOAN TYPE
  YEAR END BAL.        PRINCIPAL              SIGNIFICANT                            MAJOR
     (000's)             CREDIT             LOAN ORIGINATION                     UNDERWRITING
   % OF LOANS            RISKS               DOCUMENTATION                         STANDARDS                      LIEN POSITION
----------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                 <C>                           <C>                                      <C>
Land acquisition,   Project             Personal financial            Land acquisition loan to value           Secured:
development          completion          statements of guarantors      generally not exceed 50% (with a        First mortgages
and construction    Borrower default    Personal tax returns of        ceiling of 65%)                         Assignment of
                    Industry change      guarantors                   Land development loan to value            rents/leases
Balance  $35,902                        Business financial             generally not exceed 75%                Assignment of unit
%            8.5%                        statements or tax returns    Construction loan to value generally      sale contracts
                                         (if applicable)               not exceed 75% (with a ceiling of       Assignment of
                                        Cash flow projections          85%) of retail value                     plans,
                                        Credit history                Assessment of project cash flow           specifications
                                        Industry experience and       Disbursement escrows                      construction and
                                         reputation                   Personal guaranties (full or partial)     service contracts
                                        Contractor references         Evidence of insurance                    Assignment of
                                        Lender references             Inspection                                developers rights
                                        Market trends and conditions                                           Environmental
                                        Project feasibility           Residential subdivision projects          indemnity agreement
                                        -Market acceptance            - Minimum unit release
                                        -Project marketing strategy     requirements for accelerated
                                        -Engineering review             payback
                                        Appraisals                    - Interest reserves (if applicable)
                                        Environmental assessments   
                                                                   
                                        Review of other current     
                                         projects by developer     
----------------------------------------------------------------------------------------------------------------------------------
Residential Real                                                   
Estate                                                             
                                                                   
A) Portfolio        Borrower default    Application (including        Debt to income generally not to          Secured:
 1) Purchase money  -Reduction of        financials)                   exceed 39% gross annual income           -First mortgages
 2) Refinance        income             Verification of employment    Principal/interest/taxes/insurance
                    -Excessive debt      and income                    less than 28% of gross annual
                    -Future death,      Verification of deposits       income
                     disability or        (excluding home equity)     Loan to value
B) Secondary         divorce            Collateral appraisal,          -generally not to exceed 80% for
   Market           Decline in market    generally two appraisals       loans under $500,000
 1) Purchase money   value               for property values in        -generally not to exceed 65%
 2) Refinance       Completion of        excess of $500,000             (ceiling of 75%) for loans
                     construction      Credit history                   greater than $500,000
                                                                    
                                                                      Insurance (flood, hazard)
Balance  $93,730                                                      Two year job history or employment
%           22.3%                                                      in related field.
                                                                      No serious prior derogatory credit
                                                                       history
                                                                      No current delinquencies
                                                                   
                                                                      Secondary market loans (additional
                                                                       to above):
                                                                      -Loan to value which exceed 80%
                                                                       require private mortgage insurance
                                                                      -Investor approval
                                                                   
C) Home equity      Same as above       Same as above                 Same as above                            -Primarily Second
                                                                                                                mortgages
Balance  $55,297                                                   
%           13.1%                       
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       5
<PAGE>
 
<TABLE>
<CAPTION>

    LOAN TYPE
  YEAR END BAL.        PRINCIPAL              SIGNIFICANT                            MAJOR
     (000's)             CREDIT             LOAN ORIGINATION                     UNDERWRITING
   % OF LOANS            RISKS               DOCUMENTATION                         STANDARDS                      LIEN POSITION
----------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>                 <C>                           <C>                                      <C>
Credit card         Borrower default   Application (with financials)  Debt to income generally not to          Unsecured
                    -Reduction of      Credit history                  exceed 39% gross annual income
Balance  $58,114     income            Verification of employment     No serious prior derogatory credit
%           13.8%   -Excessive debt     and income                     history
                    -Future death,     Tax returns (if self           No current delinquencies
                     disability or      employed)                     Established credit
                     divorce                                          Stable employment and residence
                    Fraud                                             No excessive debt
                                                                      No more than 9 active bank cards
                                                                      Approved credit line proportionate to
                                                                       income
                                                                      Minimum income requirement
                                                                      Student cards only:
                                                                      No minimum income requirement
                                                                      Established credit not required
                                                                      No derogatory credit
                                                                      No more than three active bank
                                                                       cards
                                                                      No more than $10,000 available in
                                                                       credit lines
----------------------------------------------------------------------------------------------------------------------------------
Consumer                                                          
 Installment                                                      
Auto (primarily     Borrower default   Application (with financials)  Debt to income ratio generally not to    Secured, recorded
 indirect)          -Reduction of      Verification of employment      exceed 45% of gross annual income        lien on title
                     income            Credit history                 No serious prior derogatory credit       Single interest
Balance  $59,211    -Excessive debt    Evidence of insurance           history                                  insurance      
%           14.1%   -Future death,                                    No current delinquencies                                 
                     disability or                                    Stable employment and residence     
                     divorce                                          Established credit unless down       
                    Collateral value                                   payment (greater than) 25%                       
                     decline                                                                               
                    Casualty                                      
                                                                  
                    Dealer             New dealerships are submitted  Direct:
                    -Business decline   for credit approval           New cars - loans generally not to
                    -Industry decline  -Review dealers trade and       exceed 80% of purchase price
                    -General            references                    Used cars (generally not older than 4
                     economic          -Review dealer financial        years)-loans limited to 100% of
                     conditions         statements                     NADA loan value
                    -Fraud             -Mercantile report          
                                       -Annual review                Indirect:
                                       -Signed dealer agreement      New cars-
                                                                      -invoice up to $18,000, will finance
                                                                       up to $500 over invoice
                                                                      -invoice over $18,000, will finance
                                                                       up to $1,000 over invoice
                                                                      Used cars (generally not older than 4
                                                                       years)-loans limited to 100% of
                                                                       NADA loan
Student                                                           
                    Loss of            Application                                                             Unsecured,          
Balance  $6,195      Government                                                                                 Government guaranty 
%           1.5%     guaranty                                                                                                       
                                                                  
Other               Various            Various                        Various                                  Various
                                                                  
Balance  $8,165                                                   
%           1.9%                                                  

</TABLE>

                                       6
<PAGE>
 
Competition
-----------

The Company and its subsidiary bank operate primarily in DuPage County,
Illinois, with seven locations, and two locations in Cook County, Illinois, one
of which is located in western Cook County and the other on Chicago's North
Shore.

At June 30, 1996, the Company's seven DuPage County, Illinois, offices held $528
million in deposits for an approximate 5.3% market share in relation to the
total deposits in DuPage County commercial banks.  The Company's two offices in
Cook County, Illinois, contained $77 million in deposits for an approximate .1%
market share of Cook County.  The Company's offices are part of the Chicago
banking market, as defined by the Federal Reserve Bank of Chicago, consisting of
Cook, DuPage and Lake Counties, which at June 30, 1996, had $98.0 billion in
deposits.

The Company's subsidiary bank is located in a highly competitive market facing
competition for deposits, loans and other banking services from many financial
intermediaries, including savings and loan associations, finance companies,
credit unions, mortgage companies, retailers, stockbrokers, insurance companies,
mutual funds and investment companies, many of which have greater assets and
resources than the Company.


Regulation and Supervision
--------------------------

General
-------

The Company is a bank holding company subject to the restrictions and
regulations adopted under the Bank Holding Company Act of 1956, as amended (the
"BHCA"), and interpreted by the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), and the Company is also subject to Federal
Securities Laws and Delaware Law.  The BHCA requires every bank holding company
to obtain the prior approval of the Federal Reserve Board before acquiring
direct or indirect ownership or control of 5% or more of the voting shares of
any bank or bank holding company. However, no acquisition may be approved if it
is prohibited by applicable state law.  The Company is examined by the Federal
Reserve Bank of Chicago.

The subsidiary bank is subject to extensive governmental regulation and periodic
regulatory reporting requirements.  The regulations by various governmental
entities, as well as Federal and State laws of general application affect the
Company and the subsidiary bank in many ways including but not limited to:
requirements to maintain reserves against deposits, payment of FDIC insurance,
restrictions on investments, establishment of lending limits and payment of
dividends.  The subsidiary bank is primarily supervised and examined by the
Illinois Office of Banks

                                       7
<PAGE>
 
and Real Estate and the Federal Deposit Insurance Corporation ("FDIC").

The Federal Reserve Bank examines and supervises bank holding companies pursuant
to risk-based capital adequacy guidelines. These guidelines establish a uniform
capital framework that is sensitive to risk factors, including off-balance sheet
exposures, for all federally supervised banking organizations.  This can impact
a bank holding company's ability to pay dividends and expand its business
through the acquisition of subsidiaries if capital falls below the levels
established by these guidelines. As of December 31, 1996 the Company's Tier 1,
total risk-based capital and leveraged ratios were in excess of minimum
regulatory guidelines and also exceed the FDIC criteria for "well capitalized"
banks.  See the Company's Annual Report at page 30 for a more detailed
discussion of the Risk Based Assessment System and the impact upon the Company
and its subsidiary bank.

Federal Deposit Insurance
-------------------------

Under Federal law, the FDIC has authority to impose special assessments on
insured depository institutions, to repay FDIC borrowings from the United States
Treasury or other sources, and to establish semi-annual assessment rates for
Bank Insurance Fund ("BIF") member banks to maintain the BIF at the designated
reserve ratio required by law.  Effective January 1, 1997 the FDIC Assessment
Rate Schedule for BIF members ranged from zero for "well capitalized"
institutions to $.27 per $100 for "undercapitalized" institutions as set forth
in the following table:

<TABLE>
<CAPTION>
                             BIF RATES
     ------------------------------------------------------------
                                      Supervisory Subgroup
     Capital                   ----------------------------------
      Group                        A           B            C
     -------                   ---------   ---------    ---------
<S>                            <C>         <C>          <C>
 
     Well capitalized           0(c)        3(c)        17(c)
     Adequate                   3          10           24
     Under capitalized         10          24           27

</TABLE>

Pursuant to the Deposit Insurance Fund Act of 1996 ("Funds Act"), the FDIC
eliminated the $2,000 minimum annual assessment and in 1996 refunded to BIF
institutions the fourth quarter minimum assessment.

The Funds Act also authorized the Financing Corporation ("FICO") to levy annual
assessments of BIF-assessable deposits to service FICO bond obligations.  On
January 2, 1997 the Company's subsidiary bank was assessed $19,400 for its
semiannual FICO payment.  The BIF assessment must equal 1/5 of the FICO
assessment rate that is applied to deposits assessable by the Savings
Association Insurance Fund ("SAIF").  The annual assessment rates for FICO were
determined from the September 30,

                                       8
<PAGE>
 
1996 call reports and for BIF institutions the rate was 1.296c per $100.

The subsidiary bank is not restricted by the limitations on Brokered Deposits
and can pass-through the $100,000 FDIC insurance coverage to each participant in
or beneficiary of a qualified employee benefit plan.

The Riegle/Neal Interstate Banking and Branching Efficiency Act of 1994 ("The
-----------------------------------------------------------------------------
Interstate Banking Act")
------------------------

The Interstate Banking Act allowed "adequately capitalized" and "adequately
managed" bank holding companies to acquire banks in any state as of September
29, 1995.  The Act also allows interstate merger transactions after June 1,
1997.

The Interstate Banking Act amends Section (d) of the Bank Holding Company Act of
1956 authorizing the Federal Reserve to approve a bank holding company's
application to acquire either control or substantial assets of a bank located
outside of the bank holding company's home state regardless of whether the
acquisition would be prohibited by state law.  The Federal Reserve may approve
these transactions only for "adequately capitalized" and "adequately managed"
bank holding companies.

The Interstate Banking Act also amended the Federal Deposit Insurance Act and
beginning June 1, 1997 responsible agencies may approve merger transactions
between insured banks with different home states regardless of whether the
transaction is prohibited under state law.  Through interstate merger
transactions, banks will be able to acquire branches of out of state banks by
converting their offices into branches of the resulting bank. The Act provides
that it will be the exclusive means for bank holding companies to obtain
interstate branches.  In these transactions, the resulting bank must remain
"adequately capitalized" and "adequately managed" upon completion of the merger.
The Act also states that a home state may enact a law preventing these
transactions; Illinois will allow these transactions effective June 1, 1997.

Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA")
------------------------------------------------------------------------------

The FIRREA has broadened the regulatory powers of federal bank regulatory
agencies.  One of the provisions of FIRREA contains a "cross-guarantee"
provision which could impose liability on the Company for losses incurred by the
FDIC in connection with assistance provided to or the failure of any of the
Company's insured depository institutions.  The U.S. Court of Appeals Second
Circuit recently upheld the FDIC's power to charge losses from a bank failure to
another bank in the same corporate organization.  The Company, under Federal
Reserve Board policy,

                                       9
<PAGE>
 
is a source of financial strength to its subsidiary bank and is expected to
commit resources to support the subsidiary bank.  As a result, the Company could
be required to commit resources to its subsidiary bank in circumstances where it
might not do so absent such policies.

Comprehensive Environmental Response Compensation and Liability Act ("CERCLA")
------------------------------------------------------------------------------

In 1992 the U.S. Environmental Protection Agency ("USEPA") adopted the CERCLA
which provided lenders with an exemption from liability if the lender did not
participate in the management of the contaminated property.  The Secured Lender
Exemption Rule protected secured lenders from CERCLA liability if they did not
exercise significant control over the borrowers day-to-day operations and did
not fail to foreclose and promptly dispose of the contaminated property.
However, the Third Circuit Court of Appeals decision in Frank J. Kelley,
Attorney General for the State of Michigan, v. Environmental Protection Agency,
Chemical Manufactures Association v. Environmental Protection Agency, 15 F. 3d
1100 (D.C. Cir. 1994) ("Kelley") invalidated the secured lender exemption, and
the U.S. Supreme Court denied the appeal.

In response to the Kelley decision, CERCLA was amended by The Economic Growth
and Regulatory Paperwork Reduction Act of 1996. The CERCLA amendment excludes
lenders that hold ownership to property primarily to protect a security interest
(unless the lender actually participates in the management or operational
affairs of the property instead of merely having the capacity to influence or
has unexercised rights to control property operations) from the definition of
"owner or operator" and are therefore exempt from liability for environmental
cleanups.

The state of Illinois amended its Innocent Landowner Law to protect lenders and
purchasers from environmental clean up liabilities.  The law provides "innocent
landowner" protection for lenders and purchasers who perform Phase I and Phase
II environmental assessments or audits meeting the statutory requirements.  This
law will protect the banks from prosecution by the Illinois Environmental
Protection Agency.

The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
----------------------------------------------------------------------------

The FDICIA significantly expanded the regulatory and enforcement powers of
federal banking regulators.  FDICIA gives federal banking regulators
comprehensive directions to promptly direct or require the correction of
problems of inadequately capitalized banks in a manner that is least costly to
the Federal Deposit Insurance Fund.  The degree of corrective regulatory
involvement in the operations and management of banks and their holding
companies will be largely determined by the actual or anticipated

                                       10
<PAGE>
 
capital position of the institution.  See the Company's Annual Report pages 18
and 30 detailing the Company's capital position.

FDICIA also directs federal banking regulatory agencies to issue new safety and
soundness standards governing operational and managerial activities of banks and
their holding companies particularly in regard to internal controls, loan
documentation, credit underwriting, interest rate exposure, asset growth and
executive compensation.  The following regulations were passed to implement some
of the above objectives:

 .    In September, 1996, the Federal Banking Agencies amended the Uniform
     Financial Institutions Rating System, effective January 1, 1997, to include
     sensitivity to market risks. Market risks reflect the degree to which
     changes in interest rates and other market rates can affect a financial
     institution's assets, earnings, liabilities and capital values. If the
     regulators determine a bank is in a high risk position, additional capital
     may be required. The Company and its subsidiary bank, on a regular basis,
     monitor and establish policy limits on interest rate risk.

Other Laws and Regulations
--------------------------

Proposals that change the laws and regulations governing banks, bank holding
companies and other financial institutions are discussed in Congress, the state
legislatures and before the various bank regulatory agencies.  Banks are subject
to a number of federal and state laws and regulations which have a material
impact on their business.  These include, among others, state usury laws,
consumer protection laws and regulations, (e.g., the Truth in Lending Act, the
Equal Credit Opportunity Act, the Expedited Funds Availability Act, the
Community Reinvestment Act, the Truth in Savings Act), as well as the electronic
funds transfer laws, Bank Secrecy Act, environmental laws and privacy laws.

Statistical Disclosure by Bank Holding Companies
------------------------------------------------

See "Financial Review" on pages 6 through 18, inclusive, of the Company's 1996
Annual Report to Shareholders, which is incorporated herein by reference for the
statistical disclosure by bank holding companies.


ITEM 2.  PROPERTIES

The Company's offices are located in Oak Brook, Illinois.  The subsidiary bank
and its branches conduct business in both owned and leased premises.  The
Company believes its facilities are suitable and adequate to operate its banking
business.  For information concerning lease obligations, see Note 6 of the Notes

                                       11
<PAGE>
 
to Consolidated Financial Statements and lease exhibits previously filed and
incorporated by reference.

The Company and Oak Brook Bank occupy space in a five-year old, three-story,
100,000 square foot, modern office building located at 1400 Sixteenth Street,
Oak Brook, Illinois, which is owned and operated by Oak Brook Bank.  The first
and second floors and portions of the third floor and lower level are occupied
by Oak Brook Bank.  The Company leases a small portion (1,700 square feet) from
Oak Brook Bank.  A portion of the third floor is rented to third parties.

Oak Brook Bank began developing a new branch in Aurora, Illinois during the
first quarter of 1997.  The traditional style building will be approximately
4,400 square feet, constructed of brick with a slate roof and accentuated by a
clock tower.  This location will offer a drive-up facility and is expected to
open in the first quarter of 1998.

In addition, Oak Brook Bank operates the following branches:

     Addison - A 25 year old, 14,500 square foot, two-story brick, colonial
     building including a full basement and attached drive-up facility in
     Addison, Illinois. The second floor is rented to third parties. This
     facility and real estate are owned by Oak Brook Bank and was formerly the
     Heritage Bank of Addison, acquired September, 1974.

     Bensenville - Approximately 2,000 square feet of leased space in a modern,
     two-story glass bui lding in Bensenville, Illinois.  Opened in May, 1986.

     Broadview - A 43 year old, 6,955 square foot, one-story brick building in
     Broadview, Illinois. This facility and real estate are owned by Oak Brook
     Bank. Formerly Liberty Bank acquired March, 1991.

     Broadview Drive-up - Oak Brook Bank also owns a detached one-story drive-up
     facility across the street from the Broadview location.

     Burr Ridge - Approximately 6,600 square feet of leased space in a one-
     story contemporary building located in Burr Ridge, Illinois. A portion of
     this space is used for record storage. Opened in October, 1988.

     Glenview - Approximately 1,800 square feet of leased space in a strip
     shopping center in Glenview, Illinois. Opened in March, 1990.

                                       12
<PAGE>
 
     Lisle - Approximately 1,300 square feet of leased space in a neighborhood
     shopping center in a primarily residential section of Lisle, Illinois. A
     detached drive-up automated teller machine is also operated at this
     location. Opened in October, 1985.

     Naperville - A 2,400 square foot, two-story contemporary Palladian-style
     building with a full basement and attached drive-up facility in Naperville,
     Illinois. This facility is owned by Oak Brook Bank. Opened in June, 1988.

     Warrenville - Approximately 4,400 square feet of leased space on the first
     floor of a two-story tudor-style building with a full basement and attached
     drive-up facility in Warrenville, Illinois. Formerly Warrenville Bank &
     Trust acquired April, 1983.

ITEM 3.  LEGAL PROCEEDINGS

The Company and its subsidiary bank were not subject to any pending or
threatened legal actions as of December 31, 1996.  No such actions have arisen
subsequent to year-end.

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

There were no matters submitted to a vote of shareholders during the fourth
quarter of this year.

                                      13
<PAGE>
 
                                    PART II

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

See page 34 and Notes 9, 12 and 13 of the Notes to Consolidated Financial
Statements on pages 29 through 32, inclusive, of the Company's 1996 Annual
Report to Shareholders which is incorporated herein by reference.

ITEM 6.  SELECTED FINANCIAL DATA

See "Earnings Summary and Selected Consolidated Financial Data" on page 6 of the
Company's 1996 Annual Report to Shareholders, which is incorporated herein by
reference.

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

See "Financial Review" on pages 6 through 18, inclusive, of the Company's 1996
Annual Report to Shareholders, which is incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements and related notes are on pages 19 through
33, inclusive, of the Company's 1996 Annual Report to Shareholders, which is
incorporated herein by reference.

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

None.

                                       14
<PAGE>
 
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

See "Directors and Executive Officers" on page 5 of the Company's Proxy
Statement to be filed on or before April 1, 1997, which is incorporated herein
by reference.

ITEM 11.  EXECUTIVE COMPENSATION

See "Summary Compensation Table" and footnotes, "Five Year Performance
Comparison" and "Aggregated Option Exercises and Year-End Option Values Table"
and "Option Grants Table" on pages 9 through 14, inclusive, of the Company's
Proxy Statement to be filed on or before April 1, 1997, which is incorporated
herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See "Information Concerning Security Ownership of Certain Beneficial Owners and
Management" on pages 2 and 3 of the Company's Proxy Statement to be filed on or
before April 1, 1997, which is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See "Certain Transactions" on page 6 of the Company's Proxy Statement to be
filed on or before April 1, 1997, which is incorporated herein by reference.

                                       15
<PAGE>
 
                                    PART IV

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

                                                          ANNUAL REPORT
                                                              PAGE
                                                              ----
(a)  1. The following financial statements are
        filed as part of this report:
 
        Annual Report to Shareholders -
          Report of Independent Auditors                        19
          Consolidated Balance Sheets - December 31, 1996
            and 1995                                            20
          Consolidated Statements of Income for the Three
            Years Ended December 31, 1996                       21
          Consolidated Statements of Changes in
            Shareholders' Equity for The Three Years Ended
            December 31, 1996                                   22
          Consolidated Statements of Cash Flows for the
            Three Years Ended December 31, 1996                 23
          Notes to Consolidated Financial Statements         24-33

     2. Financial statement schedules: All schedules are omitted as they are not
        applicable or information is included in the consolidated financial
        statements or the notes thereto.

(b)  The following Reports on Form 8-K were filed during the last quarter of the
     period covered by this report: None

(c)  The following exhibits are included herein:

        Exhibit (3)      Articles of Incorporation including Amendments thereto
                         and By Laws of First Oak Brook Bancshares, Inc.
                         (Exhibit 3 to the Company's Form 10-K Annual Report for
                         the year ended December 31, 1994, incorporated herein
                         by reference).

        Exhibit (10.1)   Loan Agreement between First Oak Brook Bancshares, Inc.
                         and LaSalle National Bank dated December 1, 1991 and
                         amendments dated January 31, 1993 and March 31, 1994.
                         (Exhibit 10.1 to the Company's Form 10-K Annual Report
                         for the year ended December 31, 1994, incorporated
                         herein by reference).

                                       16
<PAGE>
 
        Exhibit (10.2)   Lease Agreement between First Oak Brook Bancshares,
                         Inc. and Oak Brook Bank dated November 8, 1991.
                         (Exhibit 10.2 to the Company's Form 10-K Annual Report
                         for the year ended December 31, 1994, incorporated
                         herein by reference).

        Exhibit (10.3)   Data Processing Agreement between First Data Resources
                         Inc. and Oak Brook Bank dated November 22, 1991.
                         (Exhibit 10.3 to the Company's Form 10-K Annual Report
                         for the year ended December 31, 1994, incorporated
                         herein by reference.) Amendment thereto dated June 19,
                         1996, filed herewith.

        Exhibit (10.4)   First Oak Brook Bancshares, Inc. Employees' Stock Bonus
                         Plan as amended and restated effective July 19, 1994.
                         (Exhibit 10.4 to the Company's Form 10-K Annual Report
                         for the year ended December 31, 1994, incorporated
                         herein by reference).

        Exhibit (10.5)   First Oak Brook Bancshares, Inc. Amended and Restated
                         1987 Stock Option Plan effective September 21, 1987.
                         (Exhibit 10.5 to the Company's Form 10-K Annual Report
                         for the year ended December 31, 1994, incorporated
                         herein by reference).

        Exhibit (10.6)   Lease Agreement between Oak Brook Bank, not personally,
                         but solely as Trustee under Trust Agreement dated
                         August 1, 1989 and known as Trust Number 2200 and Life
                         Investors Insurance Co. of America, an Iowa
                         Corporation, for Suite 300 of the Oak Brook Bank
                         Building. (Exhibit 10.6 to the Company's Form 10-K
                         Annual Report for the year ended December 31, 1994,
                         incorporated herein by reference).

                                       17
<PAGE>
 
        Exhibit (10.7)   Lease Agreement between Oak Brook Bank, not personally,
                         but solely as Trustee under Trust Agreement dated
                         August 1, 1989 and known as Trust Number 2200 and CB
                         Commercial Real Estate Group, Inc., a Delaware
                         Corporation, for Suite 301 of the Oak Brook Bank
                         Building. (Exhibit 10.7 to the Company's Form 10-K
                         Annual Report for the year ended December 31, 1994,
                         incorporated herein by reference).

        Exhibit (10.8)   License Agreement, between Jack Henry & Associates,
                         Inc. and First Oak Brook Bancshares, Inc. dated March
                         10, 1993. (Exhibit 10.8 to the Company's Form 10-K
                         Annual Report for the year ended December 31, 1994,
                         incorporated herein by reference).

        Exhibit (10.9)   Form of Transitional Employment Agreement for Eugene P.
                         Heytow, Richard M. Rieser, Jr. and Frank M. Paris.
                         (Exhibit 10.9 to the Company's Form 10-K Annual Report
                         for the year ended December 31, 1994, incorporated
                         herein by reference).

        Exhibit (10.10)  Form of Transitional Employment Agreement for Senior
                         Officers. (Exhibit 10.10 to the Company's Form 10-K
                         Annual Report for the year ended December 31, 1994,
                         incorporated herein by reference).

        Exhibit (10.11)  Form of Agreement Regarding Post-Employment Restrictive
                         Covenants for Eugene P. Heytow, Richard M. Rieser, Jr.
                         and Frank M. Paris. (Exhibit 10.11 to the Company's
                         Form 10-K Annual Report for the year ended December 31,
                         1994, incorporated herein by reference).

        Exhibit (10.12)  Form of Supplemental Pension Benefit Agreement for
                         Eugene P. Heytow. (Exhibit 10.12 to the Company's Form
                         10-K Annual Report for the year ended December 31,
                         1994, incorporated herein by reference).

                                       18
<PAGE>
 
        Exhibit (10.13)  Form of Supplemental Pension Benefit Agreement for
                         Richard M. Rieser, Jr. (Exhibit 10.13 to the Company's
                         Form 10-K Annual Report for the year ended December 31,
                         1994, incorporated herein by reference).

        Exhibit (10.14)  Senior Executive Insurance Plan. (Exhibit 10.14 to the
                         Company's Form 10-K Annual Report for the year ended
                         December 31, 1995, incorporated herein by reference).

        Exhibit (10.15)  First Oak Brook Bancshares, Inc. Performance Bonus Plan
                         (Amended and Restated).

        Exhibit (13)     Annual Report to Shareholders.

        Exhibit (21)     Subsidiary of the Registrant.

        Exhibit (23)     Consent of Ernst & Young LLP.

        Exhibit (27)     Financial Data Schedule.


Exhibits 10.9 through 10.15 are management contracts or compensatory plans or
arrangements required to be filed as an Exhibit to this Form 10-K pursuant to
Item 14(c) hereof.

                                       19
<PAGE>
 
                                 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                 FIRST OAK BROOK BANCSHARES, INC.
                                 --------------------------------
                                           (Registrant)

                                 BY: /S/EUGENE P. HEYTOW
                                     ------------------------------
                                      (Eugene P. Heytow,
                                      Chairman of the Board and
                                      Chief Executive Officer)

                                 DATE:     March 17, 1997
                                      ------------------------------


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Signature                     Title                     Date
---------                     -----                     ----

/S/EUGENE P. HEYTOW           Chairman of the Board     March 17, 1997
---------------------------   and Chief Executive
   Eugene P. Heytow           Officer


/S/FRANK M. PARIS             Vice Chairman of          March 17, 1997
---------------------------   the Board
   Frank M. Paris


/S/RICHARD M. RIESER, JR.     President,                March 17, 1997
---------------------------   Assistant Secretary,
   Richard M. Rieser, Jr.     and Director


/S/ALTON WITHERS              Director                  March 17, 1997
---------------------------
   Alton Withers

/S/MIRIAM LUTWAK FITZGERALD   Director                  March 17, 1997
---------------------------
   Miriam Lutwak Fitzgerald

/S/GEOFFREY R. STONE          Director                  March 17, 1997
---------------------------
   Geoffrey R. Stone

/S/ROBERT WROBEL              Director                  March 17, 1997
---------------------------
   Robert Wrobel

/S/ROSEMARIE BOUMAN           Vice President, Chief     March 17, 1997
---------------------------   Financial Officer,
   Rosemarie Bouman           Treasurer (Principal
                              Accounting Officer)


                                       20