** **

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

**FORM 10-K**

 

| **ý** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR  15(d) OF   THE SECURITIES EXCHANGE ACT OF 1934** |
|------------|---------------------------------------------------------------------------------------------|

**Forfiscal year ended December 31, 2001**

**OR**

| **o** | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15 (d) OF THE   SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]** |
|-------|--------------------------------------------------------------------------------------------------------------------|

**Fortransition period from_______to________**

 

**CommissionFile Number 0 – 17609**

 

| **WEST  SUBURBAN BANCORP, INC.**                        |
|---------------------------------------------------------|
| (Exact name of  Registrant as specified in its charter) |

 

| **Illinois**                                                                         |   | **36-3452469**                           |
|--------------------------------------------------------------------------------------|--------|------------------------------------------|
| (State or other  jurisdiction of incorporation or organization)                      |   | (I.R.S. Employer  Identification Number) |
|                                                                                 |   |                                     |
| **711 South Meyers Road, Lombard,  Illinois**                                        |   | **60148**                                |
| (Address of principal  executive offices)                                            |   | (Zip Code)                               |
|                                                                                 |   |                                     |
| Registrant’s  telephone number, including area code:   **(630)  629-4200** |
|                                                                                 |   |                                     |
|                                                                                 |
|                                                                                      |        |                                          |  |  |

 

Securities registered pursuant to Section 12(b) of the Act:

 
|   | **Title of Each Class** |   |   |   | **Name of Each Exchange on which Registered** |   |
|--------|-------------------------|--------|--------|--------|-----------------------------------------------|--------|
| None   |                    | None   |

 

Securities registered pursuant to Section 12(g) of the Act:

 

|             | **Common Stock, no par value** |   |
|------------------|--------------------------------|--------|
| (Title of Class) |

 

 

Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed bySection 13 or 15 (d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the Registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes  ý  No  o

 

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of Registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this 10-K orany amendment to this form 10-K  ý

 

 

 

 

 

The aggregate market value of voting common stock ofRegistrant held by non-affiliates as of February 6, 2002 was $160,488,882 (1).At December 31, 2001, the total number of shares of Common Stock outstandingwas 432,495.

 

Documents Incorporated by Reference:

 

Portions of the Annual Report to Shareholders for thefiscal year ended December 31, 2001 are incorporated by reference into Parts I,II and IV hereof, to the extent indicated herein. Portions of the ProxyStatement for the Annual Meeting of Shareholders to be held May 8, 2002 areincorporated by reference in Part III hereof, to the extent indicated herein.

 

 

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| (1) | Based on the last independently appraised fair value  of the Registrant’s common stock on February 6, 2002, and reports of  beneficial ownership filed by directors  and executive officers of Registrant and by beneficial owners of more than 5%  of the outstanding shares of common stock of Registrant; however, such  determination of shares owned by affiliates does not constitute an admission  of affiliate status or beneficial interest in shares of common stock of  Registrant. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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**Special Note ConcerningForward-Looking Statements**

 

This document (including information incorporated byreference) contains, and future oral and written statements of the Company andits management may contain, forward-looking statements within the meaning ofsuch term in the Private Securities Litigation Reform Act of 1995 with respectto the financial condition, results of operations, plans, objectives, futureperformance and business of the Company. Forward-looking statements, which maybe based upon beliefs, expectations and assumptions of the Company’s managementand on information currently available to management, are generallyidentifiable by the use of words such as “believe,” “expect,” “anticipate,”“plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” orother similar expressions. Additionally, all statements in this document,including forward-looking statements, speak only as of the date they are made,and the Company undertakes no obligation to update any statement in light ofnew information or future events.

 

The Company’s ability to predict results or the actual effect of futureplans or strategies is inherently uncertain. Factors which could have amaterial adverse effect on the operations and future prospects of the Companyand its subsidiaries include, but are not limited to, the following:

 

•                                          The strength of the United States economyin general and the strength of the local economies in which the Companyconducts its operations which may be less favorable than expected and mayresult in, among other things, a deterioration in the credit quality and valueof the Company’s assets.

 

•                                          The economic impact of the terroristattacks that occurred on September 11th, as well as any futurethreats and attacks, and the response of the United States to any such threatsand attacks.

 

•                                          The effects of, and changes in, federal,state and local laws, regulations and policies affecting banking, securities,insurance and monetary and financial matters.

 

•                                          The effects of changes in interest rates(including the effects of changes in the rate of prepayments of the Company’sassets) and the policies of the Board of Governors of the Federal ReserveSystem.

 

•                                          The ability of the Company to competewith other financial institutions as effectively as the Company currentlyintends due to increases in competitive pressures in the financial servicessector.

 

•                                          The inability of the Company to obtainnew customers and to retain existing customers.

 

•                                          The timely development and acceptance ofproducts and services, including products and services offered throughalternative delivery channels such as the Internet.

 

•                                          Technological changes implemented by theCompany and by other parties, including third party vendors, which may be moredifficult or more expensive than anticipated or which may have unforeseenconsequences to the Company and its customers.

 

•                                          The ability of the Company to develop andmaintain secure and reliable electronic systems.

 

•                                          The ability of the Company to retain keyexecutives and employees and the difficulty that the Company may experience inreplacing key executives and employees in an effective manner.

 

•                                          Consumer spending and saving habits whichmay change in a manner that affects the Company’s business adversely.

 

•                                          Business combinations and the integrationof acquired businesses which may be more difficult or expensive than expected.

 

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•                                          The costs, effects and outcomes ofexisting or future litigation.

 

•                                          Changes in accounting policies andpractices, as may be adopted by state and federal regulatory agencies and theFinancial Accounting Standards Board.

 

•                                          The ability of the Company to manage therisks associated with the foregoing as well as anticipated.

 

These risks and uncertainties should be considered in evaluatingforward-looking statements and undue reliance should not be placed on suchstatements. Additional information concerning the Company and its business,including other factors that could materially affect the Company’s financialresults, is included in the Company’s filings with the Securities and ExchangeCommission.

 

**PARTI**

** **
| **ITEM  1.** |   | **BUSINESS** |
|--------------|--------|--------------|

** **

REGISTRANT AND ITS SUBSIDIARY

 

West Suburban Bancorp, Inc., an Illinois corporation (“West Suburban”),is a bank holding company registered under the Bank Holding Company Act of1956, as amended (the “BHCA”), and the parent company of West Suburban Bank,Lombard, Illinois. West Suburban Bank may be referred to as the “Bank” and,collectively, with West Suburban, may be referred to as the “Company.”

 

The Bank is headquartered in Lombard, Illinois, and, as of December 31,2001, had 31 full service branches, five limited service branches as well asfive departments providing other convenient services throughout the westernsuburbs of Chicago. Due to the nature of the market areas served by the Bank,the Bank provides a wide range of financial services to individuals and smallto medium size businesses. The western suburbs of Chicago have a diversifiedeconomy with many corporate headquarters and numerous small to medium sizeindustrial and non-industrial businesses.

 

The Bank engages in a general full service retail banking business andoffers a broad variety of consumer and commercial products and services. TheBank also offers insurance services through West Suburban Insurance Services,Inc., travel agency services through Travel With West Suburban, land trustservices, safe deposit boxes and extended banking hours including Sunday hoursand 24-hour banking through a proprietary network of 57 automated tellermachines (“ATMs”), Tele-Bank 24 (a bank-by-phone system) and the Bank’s onlinebanking internet site (www.westsuburbanbank.com). Other consumer relatedservices are available, including investment products and a VISA card throughWest Suburban Bank Card Services. The Bank also offers its customers a debitcard called the West Suburban Bank Check Card.

 

The following table sets forth financial and other informationconcerning the Bank as of and for the year ended December 31, 2001 (dollars inthousands):

 
| **Year Formed/Year**            |   | **Number of** |   | **Total**  |      | **Shareholders'** |   | **Net**    |       | **Return on Average** |       |
|---------------------------------|--------|---------------|--------|------------|-----------|-------------------|--------|------------|------------|-----------------------|------------|
| **Affiliated  With the Parent** |   | **Locations** |   | **Assets** |      | **Equity**        |   | **Income** | ** ** | **Assets**            | ** ** | **Equity** |   |
| West Suburban Bank(1962/1988)   |   | 36            |   | $          | 1,462,353 |              | $      | 128,585    |       | $                     | 20,104     |   | 1.40 | % | 15.88 | % |
|                                 |        |               |        |            |           |                   |        |            |            |                       |            |  |  |  |  |  |

 

COMPETITION

 

The Company encounters competition in all areas of its businesspursuits. It competes for loans, deposits, fiduciary and other services withfinancial and other institutions located both within and outside of its marketarea. In order to compete effectively, to develop its market base, to maintainflexibility and to move in pace with changing economic and social conditions,the Company continuously refines and develops its products and services. Theprincipal methods of competition in the financial services industry are price,service and convenience.

 

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Under the Gramm-Leach-Bliley Act of 1999 (the “GLBA”), effective March11, 2000, securities firms and insurance companies that elect to becomefinancial holding companies may acquire banks and other financial institutions.The GLBA may significantly change the competitive environment in which theCompany and the Bank conduct business. The financial services industry is alsolikely to become more competitive as further technological advances enable morecompanies to provide financial services. These technological advances maydiminish the importance of depository institutions and other financialintermediaries.

 

EMPLOYEES

 

The Company employed 639 persons (527 full-time equivalent employees)on December 31, 2001. The Company believes that its relationship with itsemployees is good.

 

SUPERVISION AND REGULATION

 

General

 

Financial institutions and their holding companies are extensivelyregulated under federal and state law. As a result, the growth and earningsperformance of the Company can be affected not only by management decisions andgeneral economic conditions, but also by the requirements of applicable stateand federal statutes and regulations and the policies of various governmentalregulatory authorities, including the Illinois Commissioner of Banks and RealEstate (the “Commissioner”), the Board of Governors of the Federal ReserveSystem (the “Federal Reserve”), the Federal Deposit Insurance Corporation (the“FDIC”), the Securities and Exchange Commission (the “SEC”), the InternalRevenue Service and state taxing authorities. The effect of applicablestatutes, regulations and regulatory policies can be significant, and cannot bepredicted with a high degree of certainty.

 

Federal and state laws and regulations generally applicable tofinancial institutions, such as the Company and its subsidiaries, regulate,among other things, the scope of business, investments, reserves againstdeposits, capital levels relative to operations, the nature and amount ofcollateral for loans, the establishment of branches, mergers, consolidationsand dividends. The system of supervision and regulation applicable to theCompany and its subsidiaries establishes a comprehensive framework for theirrespective operations and is intended primarily for the protection of theFDIC’s deposit insurance funds and the depositors, rather than theshareholders, of financial institutions.

 

The following is a summary of the material elements of the regulatoryframework that applies to the Company and its subsidiaries. It does notdescribe all of the statutes, regulations and regulatory policies that apply tothe Company and its subsidiaries, nor does it restate all of the requirementsof the statutes, regulations and regulatory policies that are described. Assuch, the following is qualified in its entirety by reference to the applicablestatutes, regulations and regulatory policies. Any change in applicable law,regulations or regulatory policies may have a material effect on the businessof the Company and its subsidiaries.

 

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Recent Regulatory Developments

 

The terrorist attacks in September, 2001, have impacted the financialservices industry and have already led to federal legislation that attempts toaddress certain related issues involving financial institutions. On October 26,2001, President Bush signed into law the Uniting and Strengthening America byProviding Appropriate Tools Required to Intercept and Obstruct Terrorism Act of2001 (the “USA PATRIOT Act”). Among its other provisions, the USA PATRIOT Actrequires each financial institution: (i) to establish anti-money launderingpolicies and procedures; (ii) to establish due diligence policies, proceduresand controls with respect to its private banking accounts and correspondentbanking accounts involving foreign individuals and certain foreign banks; and(iii) to avoid establishing, maintaining, administering, or managingcorrespondent accounts in the United States for, or on behalf of, foreign banksthat do not have a physical presence in any country. The USA PATRIOT Act alsorequires the Secretary of the Treasury to prescribe, by regulations to beissued jointly with the federal banking regulators and certain other agencies,minimum standards that financial institutions must follow to verify theidentity of customers, both foreign and domestic, when a customer opens anaccount. In addition, the USA PATRIOT Act contains a provision encouragingcooperation among financial institutions, regulatory authorities and law enforcementauthorities with respect to individuals, entities and organizations engaged in,or reasonably suspected of engaging in, terrorist acts or money launderingactivities. At this time, the Company is unable to determine whether theprovisions of the USA PATRIOT Act will have a material impact on the businessof the Company and its subsidiaries.

 

The Company

 

*General.*  The Company, as the soleshareholder of the Bank, is a bank holding company. As a bank holding company,the Company is registered with, and is subject to regulation by, the FederalReserve under the BHCA. In accordance with Federal Reserve policy, the Companyis expected to act as a source of financial strength to the Bank and to commitresources to support the Bank in circumstances where the Company might nototherwise do so. Under the BHCA, the Company is subject to periodic examinationby the Federal Reserve. The Company is also required to file with the FederalReserve periodic reports of the Company’s operations and such additional informationregarding the Company and its subsidiaries as the Federal Reserve may require.The Company is also subject to regulation by the Commissioner under theIllinois Bank Holding Company Act, as amended.

 

*Investments and Activities.*  Under the BHCA, a bankholding company must notify, and in certain situations, obtain Federal Reserveapproval before: (i) acquiring, directly or indirectly, ownership orcontrol of any voting shares of another bank or bank holding company if, afterthe acquisition, it would own or control more than 5% of the voting shares ofthe other bank or bank holding company (unless it already owns or controls themajority of such shares); (ii) acquiring all or substantially all of theassets of another bank; or (iii) merging or consolidating with anotherbank holding company. Subject to certain conditions (including certain depositconcentration limits established by the BHCA), the Federal Reserve may allow abank holding company to acquire banks located in any state of the United Stateswithout regard to whether the acquisition is prohibited by the law of the statein which the target bank is located. In approving interstate acquisitions,however, the Federal Reserve is required to give effect to applicable state lawlimitations on the aggregate amount of deposits that may be held by theacquiring bank holding company and its insured depository institutionaffiliates in the state in which the target bank is located (provided thatthose limits do not discriminate against out-of-state depository institutionsor their holding companies) and state laws which require that the target bankhave been in existence for a minimum period of time (not to exceed five years)before being acquired by an out-of-state bank holding company.

 

The BHCA also generally prohibits the Company from acquiring direct orindirect ownership or control of more than 5% of the voting shares of anycompany which is not a bank and from engaging in any business other than thatof banking, managing and controlling banks or furnishing services to banks andtheir subsidiaries. This general prohibition is subject to a number ofexceptions. The principal exception allows bank holding companies to engage in,and to own shares of companies engaged in, certain businesses found by the FederalReserve to be “so closely related to banking... as to be a proper incidentthereto.” Under current regulations of the Federal Reserve, this authoritywould permit the Company to engage in a variety of banking-related businesses,including the 

 

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operation of a thrift, sales and consumer finance, equipment leasing,the operation of a computer service bureau (including software development),and mortgage banking and brokerage. Additionally, bank holding companies thatmeet certain eligibility requirements prescribed by the BHCA and elect tooperate as financial holding companies may engage in, or own shares incompanies engaged in, a wider range of nonbanking activities, includingsecurities and insurance activities and any other activity that the FederalReserve, in consultation with the Secretary of the Treasury, determines byregulation or order is financial in nature, incidental to any such financialactivity or complementary to any such financial activity and does not pose asubstantial risk to the safety or soundness of depository institutions or thefinancial system generally. The BHCA generally does not place territorialrestrictions on the domestic activities of non-bank subsidiaries of bankholding companies or financial holding companies. As of the date of thisfiling, the Company has not applied for or received approval to operate as afinancial holding company.

 

Federal law also prohibits any person or company from acquiring“control” of a bank or a bank holding company without prior notice to theappropriate federal bank regulator. “Control” is defined in certain cases asthe acquisition of 10% or more of the outstanding shares of a bank or bankholding company.

 

*Capital Requirements.*  Bank holding companies arerequired to maintain minimum levels of capital in accordance with FederalReserve capital adequacy guidelines. If capital falls below minimum guidelinelevels, a bank holding company, among other things, may be denied approval toacquire or establish additional banks or non-bank businesses.

 

The Federal Reserve’s capital guidelines establish the followingminimum regulatory capital requirements for bank holding companies: arisk-based requirement expressed as a percentage of total risk-weighted assets,and a leverage requirement expressed as a percentage of total average assets.The risk-based requirement consists of a minimum ratio of total capital tototal risk-weighted assets of 8% and a minimum ratio of Tier 1 capital to totalrisk-weighted assets of 4%. The leverage requirement consists of a minimumratio of Tier 1 capital to total average assets of 3% for the most highly ratedcompanies, with a minimum requirement of 4% for all others. For purposes ofthese capital standards, Tier 1 capital consists primarily of permanent shareholders’equity (including common stock in the Bank’s Employee Stock Ownership Plan(“ESOP”) subject to contingent repurchase obligation) less intangible assets(other than certain loan servicing rights and purchased credit cardrelationships). Total capital consists primarily of Tier 1 capital plus certainother debt and equity instruments which do not qualify as Tier 1 capital and aportion of the Company’s allowance for loan and lease losses.

 

The risk-based and leverage standards described above are minimumrequirements. Higher capital levels will be required if warranted by theparticular circumstances or risk profiles of individual banking organizations.For example, the Federal Reserve’s capital guidelines contemplate thatadditional capital may be required to take adequate account of, among otherthings, interest rate risk, or the risks posed by concentrations of credit,nontraditional activities or securities trading activities. Further, anybanking organization experiencing or anticipating significant growth would beexpected to maintain capital ratios, including tangible capital positions (*i.e.*, Tier 1 capital less all intangibleassets), well above the minimum levels.

 

As of December 31, 2001, the Company had regulatory capital inexcess of the Federal Reserve’s minimum requirements.

 

*Dividends.*  The Illinois BusinessCorporation Act, as amended, prohibits the Company from paying a dividend if,after giving effect to the dividend: (i) the Company would be insolvent;or (ii) the net assets of the Company would be less than zero; or(iii) the net assets of the Company would be less than the maximum amountthen payable to shareholders of the Company who would have preferentialdistribution rights if the Company were liquidated. Additionally, the FederalReserve has issued a policy statement with regard to the payment of cashdividends by bank holding companies. The policy statement provides that a bankholding company should not pay cash dividends which exceed its net income orwhich can only be funded in ways that weaken the bank holding company’sfinancial health, such as by borrowing. The Federal Reserve also possessesenforcement powers over bank holding companies and their non-bank subsidiariesto prevent or remedy actions that represent unsafe or unsound practices orviolations of 

 

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applicable statutes and regulations. Among these powers is the abilityto proscribe the payment of dividends by banks and bank holding companies.

 

*Federal Securities Regulation.*  The Company’s common stock isregistered with the SEC under the Securities Act of 1933, as amended, and theSecurities Exchange Act of 1934, as amended (the “1934 Act”). Consequently, theCompany is subject to the information, proxy solicitation, insider trading andother restrictions and requirements of the SEC under the Exchange Act.

 

The Bank

 

*General.*  The Bank is anIllinois-chartered bank, the deposit accounts of which are insured by theFDIC’s Bank Insurance Fund (“BIF”). As a BIF-insured, Illinois-chartered bank,the Bank is subject to the examination, supervision, reporting and enforcementrequirements of the Commissioner, as the chartering authority for Illinoisbanks, and the FDIC, which under federal law is designated as the primaryfederal regulator of state-chartered, FDIC-insured banks that are not membersof the Federal Reserve System.

 

*Deposit Insurance.*  As an FDIC-insuredinstitution, the Bank is required to pay deposit insurance premium assessmentsto the FDIC. The FDIC has adopted a risk-based assessment system under whichall insured depository institutions are placed into one of nine categories andassessed insurance premiums based upon their respective levels of capital andresults of supervisory evaluations. Institutions classified as well-capitalized(as defined by the FDIC) and considered healthy pay the lowest premium whileinstitutions that are less than adequately capitalized (as defined by the FDIC)and considered to be of substantial supervisory concern pay the highestpremium. Risk classification of all insured institutions is made by the FDICfor each semi-annual assessment period.

 

During the year ended December 31, 2001, BIF assessments rangedfrom zero to 0.27% of deposits. Rates will remain unchanged for the semi-annualassessment period beginning January 1, 2002.

 

The FDIC may terminate the deposit insurance of any insured depositoryinstitution if the FDIC determines, after a hearing, that the institution:(i) has engaged or is engaging in unsafe or unsound practices;(ii) is in an unsafe or unsound condition to continue operations; or(iii) has violated any applicable law, regulation, order or any conditionimposed in writing by, or written agreement with, the FDIC. The FDIC may alsosuspend deposit insurance temporarily during the hearing process for a permanenttermination of insurance if the institution has no tangible capital. Managementof the Bank is not aware of any activity or condition that could result intermination of the deposit insurance of the Bank.

 

*FICO Assessments.*  Since 1987, a portion of thedeposit insurance assessments paid by members of the FDIC’s Savings AssociationInsurance Fund (“SAIF”) has been used to cover interest payments due on theoutstanding obligations of the Financing Corporation (“FICO”). FICO was createdin 1987 to finance the recapitalization of the Federal Savings and LoanInsurance Corporation, the SAIF’s predecessor insurance fund. As a result offederal legislation enacted in 1996, beginning as of January 1, 1997, bothSAIF members and BIF members became subject to assessments to cover theinterest payments on outstanding FICO obligations until the final maturity ofthe outstanding FICO obligations in 2019. During the year endedDecember 31, 2001, the FICO assessment rate for BIF and SAIF members wasapproximately 0.02% of deposits.

 

*Supervisory Assessments.*  All Illinois banks arerequired to pay supervisory assessments to the Commissioner to fund theoperations of the Commissioner. The amount of the assessment is calculatedbased on the institution’s total assets, including consolidated subsidiaries,as reported to the Commissioner. During the year ended December 31, 2001,the Bank paid supervisory assessments to the Commissioner totaling$.13 million.

 

*Capital Requirements.*  The FDIC has established thefollowing minimum capital standards for state-chartered insured non-memberbanks, such as the Bank: (i) a leverage requirement consisting of aminimum ratio of Tier 1 capital to total assets of 3% for the

 

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most highly-rated banks with a minimum requirement of at least 4% forall others; and (ii) a risk-based capital requirement consisting of aminimum ratio of total capital to total risk-weighted assets of 8% and aminimum ratio of Tier 1 capital to total risk-weighted assets of 4%. Forpurposes of these capital standards, Tier 1 capital and total capital consistof substantially the same components as Tier 1 capital and total capital underthe Federal Reserve’s capital guidelines for bank holding companies (*see* “-The Company-Capital Requirements”).

 

The capital requirements described above are minimum requirements.Higher capital levels will be required if warranted by the particularcircumstances or risk profiles of individual institutions. For example, theregulations of the FDIC provide that additional capital may be required to takeadequate account of, among other things, interest rate risk or the risks posedby concentrations of credit, nontraditional activities or securities tradingactivities.

 

Further, federal law and regulations provide various incentives tofinancial institutions to maintain regulatory capital at levels in excess ofminimum regulatory requirements. For example, a financial institution that is“well-capitalized” may qualify for exemptions from prior notice or applicationrequirements otherwise applicable to certain types of activities and mayqualify for expedited processing of other required notices or applications.Additionally, one of the criteria which determines a bank holding company’seligibility to operate as a financial holding company is a requirement that allof its financial institution subsidiaries be “well-capitalized”. Under FDICregulations, in order to be “well-capitalized”, a financial institution mustmaintain a ratio of total capital to total risk-weighted assets of 10% orgreater, a ratio of Tier 1 capital to total risk-weighted assets of 6% orgreater and a ratio of Tier 1 capital to total average assets of 5% or greater.

 

Federal law also provides the federal banking regulators with broadpower to take prompt corrective action to resolve the problems ofundercapitalized institutions. The extent of the regulators’ powers depends onwhether the institution in question is “adequately capitalized,”“undercapitalized,” “significantly undercapitalized” or “criticallyundercapitalized,” in each case as defined by regulation. Depending upon thecapital category to which an institution is assigned, the regulators’corrective powers include: (i) requiring the institution to submit acapital restoration plan; (ii) limiting the institution’s asset growth andrestricting its activities; (iii) requiring the institution to issueadditional capital stock (including additional voting stock) or to be acquired;(iv) restricting transactions between the institution and its affiliates;(v) restricting the interest rate the institution may pay on deposits;(vi) ordering a new election of directors of the institution;(vii) requiring that senior executive officers or directors be dismissed;(viii) prohibiting the institution from accepting deposits from correspondentbanks; (ix) requiring the institution to divest certain subsidiaries;(x) prohibiting the payment of principal or interest on subordinated debt;and (xi) ultimately, appointing a receiver for the institution.

 

As of December 31, 2001: (i) the Bank was not subject to a directivefrom the FDIC to increase its capital to an amount in excess of the minimumregulatory capital requirements; (ii) the Bank exceeded its minimum regulatorycapital requirements under the FDIC’s capital adequacy guidelines; and (iii)the Bank was “well-capitalized”, as defined by FDIC regulations.

 

*Dividends.*  Under the Illinois BankingAct, Illinois-chartered banks generally may not pay dividends in excess oftheir net profits. The payment of dividends by any financial institution or itsholding company is affected by the requirement to maintain adequate capitalpursuant to applicable capital adequacy guidelines and regulations, and afinancial institution generally is prohibited from paying any dividends if,following payment thereof, the institution would be undercapitalized. Asdescribed above, the Bank exceeded its minimum capital requirements underapplicable guidelines as of December 31, 2001. As of December 31,2001, approximately $4.3 million was available to be paid as dividends tothe Company by the Bank. Notwithstanding the availability of funds fordividends, however, the FDIC may prohibit the payment of any dividends by theBank if the FDIC determines such payment would constitute an unsafe or unsoundpractice.

 

*Insider Transactions.*  The Bank is subject tocertain restrictions imposed by federal law on extensions of credit to theCompany and its subsidiaries, on investments in the stock or other securitiesof the Company and its subsidiaries and the acceptance of the stock

 

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or other securities of the Company or its subsidiaries as collateralfor loans. Certain limitations and reporting requirements are also placed onextensions of credit by the Bank to its directors and officers, to directorsand officers of the Company and its subsidiaries, to principal shareholders ofthe Company and to “related interests” of such directors, officers andprincipal shareholders. In addition, federal law and regulations may affect theterms upon which any person becoming a director or officer of the Company orone of its subsidiaries or a principal shareholder of the Company may obtaincredit from banks with which the Bank maintains a correspondent relationship.

 

*Safety and Soundness Standards.*  The federal banking agencieshave adopted guidelines which establish operational and managerial standards topromote the safety and soundness of federally insured depository institutions.The guidelines set forth standards for internal controls, information systems,internal audit systems, loan documentation, credit underwriting, interest rateexposure, asset growth, compensation, fees and benefits, asset quality andearnings.

 

In general, the safety and soundness guidelines prescribe the goals tobe achieved in each area, and each institution is responsible for establishingits own procedures to achieve those goals. If an institution fails to complywith any of the standards set forth in the guidelines, the institution’sprimary federal regulator may require the institution to submit a plan forachieving and maintaining compliance. If an institution fails to submit anacceptable compliance plan, or fails in any material respect to implement acompliance plan that has been accepted by its primary federal regulator, theregulator is required to issue an order directing the institution to cure thedeficiency. Until the deficiency cited in the regulator’s order is cured, theregulator may restrict the institution’s rate of growth, require theinstitution to increase its capital, restrict the rates the institution pays ondeposits or require the institution to take any action the regulator deemsappropriate under the circumstances. Noncompliance with the standardsestablished by the safety and soundness guidelines may also constitute groundsfor other enforcement action by the federal banking regulators, including ceaseand desist orders and civil money penalty assessments.

 

*Branching Authority.*  Illinois banks, such as theBank, have the authority under Illinois law to establish branches anywhere inthe State of Illinois, subject to receipt of all required regulatory approvals.

 

Under the Riegle-Neal Interstate Banking and Branching Efficiency Actof 1994 (the “Riegle-Neal Act”), both state and national banks are allowed toestablish interstate branch networks through acquisitions of other banks,subject to certain conditions, including certain limitations on the aggregateamount of deposits that may be held by the surviving bank and all of itsinsured depository institution affiliates. The establishment of new interstatebranches or the acquisition of individual branches of a bank in another state(rather than the acquisition of an out-of-state bank in its entirety) isallowed by the Riegle-Neal Act only if specifically authorized by state law.The legislation allowed individual states to “opt-out” of certain provisions ofthe Riegle-Neal Act by enacting appropriate legislation prior to June 1,1997. Illinois permits interstate mergers subject to certain conditions,including a prohibition against interstate mergers involving any Illinois bankthat has been in existence and continuous operation for fewer than five years.

 

*State Bank Activities.*  Under federal law and FDICregulations, FDIC insured state banks are prohibited, subject to certainexceptions, from making or retaining equity investments of a type, or in anamount, that are not permissible for a national bank. Federal law and FDICregulations also prohibit FDIC insured state banks and their subsidiaries,subject to certain exceptions, from engaging as principal in any activity thatis not permitted for a national bank or its subsidiary, respectively, unlessthe bank meets, and continues to meet, its minimum regulatory capitalrequirements and the FDIC determines the activity would not pose a significantrisk to the deposit insurance fund of which the bank is a member. Theserestrictions have not had, and are not currently expected to have, a materialimpact on the operations of the Bank.

 

*Federal Reserve System.*  Federal Reserve regulations,as presently in effect, require depository institutions to maintainnon-interest earning reserves against their transaction accounts (primarily NOWand regular checking accounts), as follows: for transaction accountsaggregating $41.3 million or less, the reserve requirement is 3% of totaltransaction accounts; and for transaction accounts aggregating in excess of$41.3 million, the reserve requirement is $1.239 million plus 10% ofthe aggregate amount of total

 

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transaction accounts in excess of $41.3 million. The first$5.7 million of otherwise reservable balances are exempted from thereserve requirements. These reserve requirements are subject to annualadjustment by the Federal Reserve. The Bank is in compliance with the foregoingreserve requirements.

 

The Insurance Subsidiary

 

The Bank is the sole shareholder of West Suburban InsuranceServices, Inc. (“WSIS”), an Illinois corporation licensed as a generalinsurance agency by the Illinois Department of Insurance (the “Department”).WSIS is subject to supervision and regulation by the Department with regard tocompliance with the laws and regulations governing insurance agents and by theCommissioner and the FDIC with regard to compliance with banking laws andregulations applicable to subsidiaries of Illinois-chartered, FDIC insuredbanks.

 

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EXECUTIVE OFFICERS OF THE COMPANY

 

The names and ages of the executive officers of West Suburban, alongwith a brief description of the business experience of each person, during thepast five years, and certain other information is set forth below:

 
| **Name (Age)  and Position and Offices with West Suburban (year first elected to office)** |   | **Principal  Occupations and Employment for Past Five Years and Other Information**                                                                                                                                                                                                                                         |
|--------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                       |   |                                                                                                                                                                                                                                                                                                                        |
| Kevin J. Acker  (52)

Chairman of the Board  (1993) and 

Vice President (1986)            |   | Senior Vice President - Marketing of the Bank 

since 1997; and  Director and President of 

West Suburban Bank of  Carol 

Stream/Stratford Square  from 1982 through 

May 1997                                                                                                                                           |
|                                                                                       |   |                                                                                                                                                                                                                                                                                                                        |
| Keith W. Acker (52) 

Chief Operations  Officer (1996)                                     |   | Director and President of the Bank since 1986; 

and Chairman of the  Board of West 

Suburban Bank from 1986  through May 1997                                                                                                                                                                                             |
|                                                                                       |   |                                                                                                                                                                                                                                                                                                                        |
| Duane G. Debs (45) 

President (1997) and  Chief Financial 

Officer (1993)                |   | Senior Vice President since 1997 and 

Comptroller of the Bank  since 1987; 

President of West  Suburban Bank of 

Downers Grove/Lombard  from 1996 through 

May 1997; Director of  West Suburban Bank 

of Downers  Grove/Lombard from 1993 

through May 1997; and  Vice President of the 

Bank 1987 through May  1997 |
|                                                                                       |   |                                                                                                                                                                                                                                                                                                                        |
| Michael P. Brosnahan (52) 

Vice President (1997)                                          |   | Senior Vice President - Lending of the Bank 

since 1989; and  Director of West Suburban 

Bank of Aurora from  1990 through May 1997                                                                                                                                                                                       |

 

----

 

STATISTICAL DATA

 

The statistical data required by Securities and Exchange Act of 1934,as amended (the “1934 Act”), Industry Guide 3, “Statistical Disclosure By BankHolding Companies,” has been incorporated by reference from the Company’s 2001Annual Report to Shareholders (attached as Exhibit 13 hereto) or is set forth below.This data should be read in conjunction with the Company’s 2001 ConsolidatedFinancial Statements and related notes, and the discussion included inManagement’s Discussion and Analysis of Financial Condition and Results ofOperations as set forth in the Company’s 2001 Annual Report to Shareholders.

 

Securities

 

The following table sets forth by category the amortized cost ofsecurities at December 31 (dollars in thousands):

 

|                                        |   | **2001** |    | **2000** |   | **1999** |   |
|---------------------------------------------|--------|----------|---------|----------|--------|----------|--------|
| Available for sale                          |   |     |    |     |   |     |   |
| Corporate                                   |   | $        | 124,811 |     | $      | 97,390   |   | $ | 130,538 |   |
| U.S. government agencies and corporations   |   | 9,280    |    | 26,806   |   | 26,809   |   |
| U.S. Treasury                               |   | —   |    | —   |   | 500      |   |
| States and political subdivisions           |   | 405      |    | 908      |   | 1,048    |   |
| Preferred stock and other equity securities |   | 12,685   |    | 8,390    |   | 8,173    |   |
| Total securities available for sale         |   | 147,181  |    | 133,494  |   | 167,068  |   |
| Held to maturity                            |   |     |    |     |   |     |   |
| U.S. government agencies and corporations   |   | 93,524   |    | 135,490  |   | 141,798  |   |
| States and political subdivisions           |   | 27,444   |    | 28,490   |   | 32,577   |   |
| Total securities held to maturity           |   | 120,968  |    | 163,980  |   | 174,375  |   |
| Total securities                            |   | $        | 268,149 |     | $      | 297,474  |   | $ | 341,443 |   |

 

The following table sets forth, by contractual maturity, the amortizedcost and weighted average yield of securities available for sale at December31, 2001. Yields on tax-exempt securities represent actual coupon yields, netof premium amortization and discount accretion (dollars in thousands):

 
|                               |   | **Corporate**      |    | **U.S. Government Agencies and Corporations** |   | **States and Political  Subdivisions** |   |
|------------------------------------|--------|--------------------|---------|-----------------------------------------------|--------|----------------------------------------|--------|
|                               |   | **Amortized Cost** |    | **Weighted Average Yield**                    |   | **Amortized Cost**                     |   | **Weighted Average Yield** |   | **Amortized Cost** |   | **Weighted Average Yield** |   |
| Within 1 year                      |   | $                  | 24,805  |                                          | 5.23   | %                                      | $      | 4,419 |   | 5.56 | % | $ | 200 |   | 5.50 | % |
| After 1 year  but within 5 years   |   | 93,773             |    | 6.78                                          |   | 4,801                                  |   | 5.87 |   | 205 |   | 5.60 |   |
| After 5 years  but within 10 years |   | 6,233              |    | 9.95                                          |   | —                                 |   | — |   | — |   | — |   |
| After 10 years                     |   | —             |    | —                                        |   | 60                                     |   | — |   | — |   | — |   |
| Total                              |   | $                  | 124,811 |                                          | 6.64   | %                                      | $      | 9,280 |   | 5.72 | % | $ | 405 |   | 5.55 | % |

 

----

 

The following table sets forth, by contractual maturity, the amortizedcost and weighted average yield of securities held to maturity at December 31,2001 (dollars in thousands).  Yields ontax-exempt securities represent actual coupon yields, net of premiumamortization and discount accretion:

 

|                              |   | **U.S. Government Agencies and  Corporations** |   | **States and Political  Subdivisions** |   |
|-----------------------------------|--------|------------------------------------------------|--------|----------------------------------------|--------|
|                              |   | **Amortized  Cost**                            |   | **Weighted Average  Yield**            |   | **Amortized  Cost** |   | **Weighted Average  Yield** |   |
| Within 1 year                     |   | $                                              | 5,000  |                                   | 5.80   | % | $ | 4,182 |   | 4.15 | % |
| After 1 year but within   5 years |   | 81,086                                         |   | 4.79                                   |   | 7,913 |   | 4.53 |   |
| After 5 years but within 10 years |   | 4,008                                          |   | 5.42                                   |   | 12,102 |   | 5.57 |   |
| After 10 years                    |   | 3,430                                          |   | 5.38                                   |   | 3,247 |   | 5.03 |   |
| Total                             |   | $                                              | 93,524 |                                   | 4.89   | % | $ | 27,444 |   | 4.99 | % |

 

No securities holdings of a single issuer exceed 10% of theshareholders’ equity of the Company at December 31, 2001. Approximately $74.6 millionof securities are callable in 2002. Most of these callable securities wereissued by U.S. government agencies and corporations.

 

During 2001, the Company wrote down its investments in debt securitiesissued by Comdisco, Inc., FINOVA Group, Inc. and Enron Corp. after it made adetermination that the value of the debt securities had become impaired. Theseimpairment losses totaled $3.0 million in 2001. The carrying value of theComdisco, Inc., FINOVA Group, Inc. and Enron Corp. securities totaled $4.8 millionat December 31, 2001. At December 31, 2001, $3.9 million of Comdisco, Inc. and$.4 million of Enron Corp. securities were on nonaccrual status. In the firstquarter of 2002, the Company sold the Comdisco, Inc. securities and recorded aloss of $.3 million.

 

The Company made a nominal equity investment in an ATM network yearsago. In 2001, the Company surrendered its stock in the ATM network inconnection with the merger of the network with another organization andreceived $1.4 million and recorded a gain for the same amount.

 

Gains on securities in 2001 also include $.7 million of recoveries onsecurities written off in 1998.

 

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Loan Portfolio

 

The following table sets forth the major loan categories at December 31(dollars in thousands):

 

|                      |   | **2001**  |      | **2000**  |   | **1999**  |   | **1998** |    | **1997** |   |
|---------------------------|--------|-----------|-----------|-----------|--------|-----------|--------|----------|---------|----------|--------|
| Commercial (1)            |   | $         | 323,036   |      | $      | 276,519   |   | $        | 212,505 |     | $      | 225,774 |   | $ | 233,343 |   |
| Consumer (1)(2)           |   | 10,514    |      | 9,101     |   | 10,451    |   | 16,468   |    | 21,015   |   |
| Indirect automobile       |   | 102,183   |      | 100,847   |   | 81,782    |   | 31,625   |    | —   |   |
| Real estate               |   |      |      |      |   |      |   |     |    |     |   |
| Residential               |   | 152,495   |      | 180,089   |   | 169,035   |   | 174,328  |    | 190,116  |   |
| Commercial                |   | 195,800   |      | 183,899   |   | 160,522   |   | 127,655  |    | 102,559  |   |
| Home equity (2)           |   | 145,972   |      | 133,609   |   | 126,496   |   | 111,446  |    | 127,587  |   |
| Construction              |   | 157,328   |      | 129,316   |   | 79,526    |   | 69,640   |    | 72,415   |   |
| Held for sale             |   | 5,840     |      | 160       |   | 338       |   | 4,465    |    | 4,491    |   |
| VISA - credit card        |   | 10,437    |      | 12,037    |   | 12,960    |   | 14,210   |    | 16,235   |   |
| Other                     |   | 2,033     |      | 1,962     |   | 2,850     |   | 6,748    |    | 4,549    |   |
| Total                     |   | 1,105,638 |      | 1,027,539 |   | 856,465   |   | 782,359  |    | 772,310  |   |
| Allowance for loan losses |   | (12,262   | )         | (11,399   | )      | (10,759   | )      | (9,998   | )       | (9,772   | )      |
| Loans, net                |   | $         | 1,093,376 |      | $      | 1,016,140 |   | $        | 845,706 |     | $      | 772,361 |   | $ | 762,538 |   |

 

----

(1)   In early 1998, installment loans ($20million) for commercial loan customers were reclassified for the years 1998 and1997 to commercial loans.

(2)   In 1999, consumer loans ($10 million) forhome equity loan customers were reclassified for 1999 from consumer loans toreal estate-home equity. Balances prior to 1999 were not reclassified.

 

The following table sets forth the maturity and interest ratesensitivity of selected loan categories at December 31, 2001 (dollars inthousands):

 

|                     |   | **Remaining Maturity** |    |
|--------------------------|--------|------------------------|---------|
|                     |   | **One year or less**   |    | **One to five years** |   | **Over five years** |   | **Total** |   |
| Real estate-construction |   | $                      | 154,301 |   | $ | 3,027 |   | $ | — |   | $ | 157,328 |   |
| Other loans              |   | 432,812                |    | 400,569 |   | 114,929 |   | 948,310 |   |
| Total                    |   | $                      | 587,113 |   | $ | 403,596 |   | $ | 114,929 |   | $ | 1,105,638 |   |
|                     |   |                   |    |   |   |   |   |   |   |
| Variable rate            |   | $                      | 574,349 |   | $ | 185,193 |   | $ | 3,293 |   | $ | 762,835 |   |
| Fixed rate               |   | 12,764                 |    | 218,403 |   | 111,636 |   | 342,803 |   |
| Total                    |   | $                      | 587,113 |   | $ | 403,596 |   | $ | 114,929 |   | $ | 1,105,638 |   |

 

Nonperforming Loans

 

The following table sets forth the aggregate amount of nonperformingloans and selected ratios at December 31 (dollars in thousands):

 

|                                          |   | **2001** |   | **2000** |   | **1999** |   | **1998** |   | **1997** |   |
|-----------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| Loans past due over 90 days still on accrual  |   | $        | 11,338 |     | $      | 491      |   | $        | 1,184  |     | $      | 3,621 |   | $ | 4,829 |   |
| Nonaccrual loans                              |   | 3,945    |   | 1,064    |   | 3,544    |   | 14,979   |   | 3,042    |   |
| Total nonperforming loans                     |   | 15,283   |   | 1,555    |   | 4,728    |   | 18,600   |   | 7,871    |   |
| Other real estate                             |   | 1,410    |   | 1,940    |   | 3,488    |   | 1,742    |   | 2,450    |   |
| Total nonperforming assets                    |   | $        | 16,693 |     | $      | 3,495    |   | $        | 8,216  |     | $      | 20,342 |   | $ | 10,321 |   |
| Ratio of nonperforming loans to total loans   |   | 1.4      | %      | 0.2      | %      | 0.6      | %      | 2.4      | %      | 1.0      | %      |
| Ratio of nonperforming assets to total assets |   | 1.1      | %      | 0.2      | %      | 0.6      | %      | 1.6      | %      | 0.8      | %      |

 

The Company’s policy is to discontinue accruing interest on a loan whenit becomes 90 days past due or when management believes, after consideringeconomic and business conditions and collection efforts, that the borrower’sfinancial condition is such that collection of principal or interest isdoubtful. In some circumstances a loan that is more than 90 days past due canremain on accrual status if it can be established that payment will be receivedwithin another 90 days or if it is fully secured and in process of 

 

----

 

collection. When a loan has been placed on nonaccrual, interest earnedbut not collected is charged back to interest income. When payments arereceived on nonaccrual loans they are first applied to principal, then tointerest income and finally to expenses incurred for collection. Interestincome on nonaccrual loans was immaterial for the years presented above. As ofthe date of the Form 10-K, management does not believe that there are potentialproblem loans that are not included in the disclosure above.

 

Allowance for Loan Losses

 

The allowance for loan losses is evaluated quarterly based onmanagement’s periodic review of loan collectibility in light of historical loanloss experience, the nature and volume of the loan portfolio, information aboutspecific borrower situations and estimated collateral values, and prevailingeconomic conditions. The Company has historically evaluated the adequacy of theallowance for loan losses on an overall basis, and the resulting provisioncharged to expense has similarly been determined in relation to management’s evaluationof the entire loan portfolio. This evaluation is inherently subjective as itrequires estimates that are susceptible to significant revision as moreinformation becomes available or as future events change.

 

Management monitors identified problem loans by the use of a “watchlist” which includes nonaccrual, delinquent and other nonperforming loans. Thisanalysis of the adequacy of the allowance for loan losses also includesallocations of the allowance, such as for pools of loans, that are primarilybased upon historical loan loss experience, the changing nature and volume ofthe loan portfolio, and prevailing economic conditions. The aggregate requiredallowance for loan losses for the entire loan portfolio is maintained throughprovisions charged to earnings.

 

----

 

The following table sets forth the activity in the allowance for loanlosses for the years ended and at December 31 (dollars in thousands):

 

|                                              |   | **2001** |   | **2000** |   | **1999** |   | **1998** |   | **1997** |   |
|---------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| Allowance for loan losses at beginning of  period |   | $        | 11,399 |     | $      | 10,759   |   | $        | 9,998  |     | $      | 9,772 |   | $ | 9,603 |   |
| Loan charge-offs                                  |   |     |   |     |   |     |   |     |   |     |   |
| Commercial                                        |   | 1,789    |   | 1,132    |   | 2,109    |   | 1,868    |   | 692      |   |
| Consumer                                          |   | 6        |   | 50       |   | 9        |   | 77       |   | 213      |   |
| Indirect automobile                               |   | 171      |   | 101      |   | 51       |   | —   |   | —   |   |
| Real estate                                       |   |     |   |     |   |     |   |     |   |     |   |
| Residential                                       |   | 45       |   | 7        |   | 88       |   | 237      |   | 13       |   |
| Commercial                                        |   | —   |   | —   |   | —   |   | —   |   | 309      |   |
| Home equity                                       |   | 30       |   | —   |   | —   |   | 37       |   | 31       |   |
| Construction                                      |   | —   |   | —   |   | 23       |   | —   |   | —   |   |
| VISA - credit card                                |   | 217      |   | 208      |   | 304      |   | 483      |   | 452      |   |
| Other                                             |   | 47       |   | 4        |   | 2        |   | 30       |   | 22       |   |
| Total loan charge-offs                            |   | 2,305    |   | 1,502    |   | 2,586    |   | 2,732    |   | 1,732    |   |
| Loan recoveries                                   |   |     |   |     |   |     |   |     |   |     |   |
| Commercial                                        |   | 113      |   | 520      |   | 138      |   | 124      |   | 48       |   |
| Consumer                                          |   | 8        |   | 14       |   | 13       |   | 58       |   | 65       |   |
| Indirect automobile                               |   | 22       |   | 6        |   | 10       |   | —   |   | —   |   |
| Real estate                                       |   |     |   |     |   |     |   |     |   |     |   |
| Residential                                       |   | 4        |   | 8        |   | 1        |   | 91       |   | 6        |   |
| Commercial                                        |   | —   |   | —   |   | —   |   | —   |   | —   |   |
| Home equity                                       |   | 9        |   | —   |   | —   |   | —   |   | —   |   |
| Construction                                      |   | —   |   | —   |   | —   |   | —   |   | —   |   |
| VISA - credit card                                |   | 62       |   | 94       |   | 97       |   | 114      |   | 153      |   |
| Other                                             |   | —   |   | —   |   | 4        |   | 8        |   | 6        |   |
| Total loan recoveries                             |   | 218      |   | 642      |   | 263      |   | 395      |   | 278      |   |
| Net loan charge-offs                              |   | 2,087    |   | 860      |   | 2,323    |   | 2,337    |   | 1,454    |   |
| Provision for loan losses                         |   | 2,950    |   | 1,500    |   | 3,084    |   | 2,563    |   | 1,623    |   |
| Allowance for loan losses at end of period        |   | $        | 12,262 |     | $      | 11,399   |   | $        | 10,759 |     | $      | 9,998 |   | $ | 9,772 |   |
| Allowance for loan losses to total loans          |   | 1.11     | %      | 1.11     | %      | 1.26     | %      | 1.28     | %      | 1.27     | %      |
| Net charge-offs to average total loans            |   | 0.20     | %      | 0.09     | %      | 0.29     | %      | 0.31     | %      | 0.19     | %      |

 

The amount of the additions to the allowance for loan losses charged toexpense for the periods indicated were based on a variety of factors, includingactual loans charged-off during the respective year, historical lossexperience, changes in the nature and volume of the loan portfolio includingnonperforming loans, specific loss allocations for individual loans and anevaluation of current economic conditions.

 

The allocation shown in the following table, encompassing the majorsegments of the loan portfolio, represents only an estimate for each categoryof loans based on historical loss experience and management’s judgement ofamounts deemed reasonable to provide for probable losses within each category.The allocation of estimated losses for commercial loans includes specificamounts for individual problem loans.

 

----

 

Estimated losses for categories of homogeneous loan types are generallymade on an aggregate basis (dollars in thousands).

 
|                |   | **2001**   |   | **2000**                                                  |   | **1999**   |   | **1998**                                                 |   | **1997**   |   |
|---------------------|--------|------------|--------|-----------------------------------------------------------|--------|------------|--------|----------------------------------------------------------|--------|------------|--------|
|                |   | **Amount** |   | **Percent  of Loans  in Each  Category  to Total  Loans** |   | **Amount** |   | **Percent  of Loans  in Each  Category to Total  Loans** |   | **Amount** |   | **Percent   of Loans in Each Category to Total Loans** |   | **Amount** |   | **Percent   of Loans in Each Category to Total Loans** |   | **Amount** |   | **Percent of Loans in Each Category to  Total Loans** |   |
| Commercial          |   | $          | 5,619  |                                                      | 29.2   | %          | $      | 4,339                                                    |   | 26.9       | %      | $ | 3,729 |   | 24.8 | % | $ | 4,025 |   | 28.9 | % | $ | 2,552 |   | 30.2 | % |
| Consumer (1)        |   | 60         |   | 1.1                                                       |   | 79         |   | 1.1                                                      |   | 96         |   | 1.6 |   | 170 |   | 3.0 |   | 331 |   | 3.3 |   |
| Indirect automobile |   | 479        |   | 9.3                                                       |   | 491        |   | 9.8                                                      |   | 409        |   | 9.5 |   | 152 |   | 4.0 |   | — |   | — |   |
| Real estate         |   |       |   |                                                      |   |       |   |                                                     |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Residential (2)     |   | 491        |   | 14.3                                                      |   | 900        |   | 17.5                                                     |   | 845        |   | 19.7 |   | 872 |   | 22.9 |   | 951 |   | 25.2 |   |
| Commercial          |   | 1,880      |   | 17.7                                                      |   | 1,808      |   | 17.9                                                     |   | 1,581      |   | 18.8 |   | 1,269 |   | 16.3 |   | 1,042 |   | 13.3 |   |
| Home equity         |   | 526        |   | 13.2                                                      |   | 668        |   | 13.0                                                     |   | 632        |   | 14.8 |   | 557 |   | 14.2 |   | 638 |   | 16.5 |   |
| Construction        |   | 2,946      |   | 14.2                                                      |   | 2,586      |   | 12.6                                                     |   | 1,590      |   | 9.3 |   | 1,393 |   | 8.9 |   | 1,448 |   | 9.4 |   |
| VISA - credit card  |   | 245        |   | 1.0                                                       |   | 324        |   | 1.2                                                      |   | 327        |   | 1.5 |   | 333 |   | 1.8 |   | 440 |   | 2.1 |   |
| Unallocated         |   | 16         |   | —                                                    |   | 204        |   | —                                                   |   | 1,550      |   | — |   | 1,227 |   | — |   | 2,370 |   | — |   |
| Total               |   | $          | 12,262 |                                                      | 100.0  | %          | $      | 11,399                                                   |   | 100.0      | %      | $ | 10,759 |   | 100.0 | % | $ | 9,998 |   | 100.0 | % | $ | 9,772 |   | 100.0 | % |
|                     |        |            |        |                                                           |        |            |        |                                                          |        |            |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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(1)     Consumer loans include consumer and otherloans.

(2)     Residential real estate loans includereal estate - held for sale.

 

Deposits

 

The following table sets forth by category average daily deposits andrates for the years ended December 31 (dollars in thousands):

 

|                       |   | **2001**             |      | **2000** |   | **1999**             |   |
|----------------------------|--------|----------------------|-----------|----------|--------|----------------------|--------|
|                       |   | **Average  Balance** |      | **Rate** |   | **Average  Balance** |   | **Rate** |   | **Average  Balance** |   | **Rate** |   |
| Demand-noninterest-bearing |   | $                    | 134,219   |     | — | %                    | $      | 130,420 |   | — | % | $ | 118,387 |   | — | % |
| NOW                        |   | 233,765              |      | 0.8      |   | 217,982              |   | 1.3 |   | 206,896 |   | 1.1 |   |
| Money market checking      |   | 192,587              |      | 3.6      |   | 137,260              |   | 5.2 |   | 112,239 |   | 4.3 |   |
| Savings                    |   | 291,569              |      | 2.6      |   | 284,240              |   | 3.4 |   | 316,304 |   | 2.6 |   |
| Time deposits              |   |                 |      |     |   |                 |   |   |   |   |   |   |   |
| Less than $100,000         |   | 320,397              |      | 5.6      |   | 341,035              |   | 5.8 |   | 315,564 |   | 5.3 |   |
| $100,000  and over         |   | 103,327              |      | 5.4      |   | 106,736              |   | 6.1 |   | 90,798 |   | 5.4 |   |
| Total                      |   | $                    | 1,275,864 |     | 3.2    | %                    | $      | 1,217,673 |   | 3.8 | % | $ | 1,160,188 |   | 3.2 | % |

 

 

The following table sets forth by maturity time deposits $100,000 andover at December 31 (dollars in thousands):

 

|                                |   | **2001** |   |
|-------------------------------------|--------|----------|--------|
| Within 3 months                     |   | $        | 23,514 |   |
| After 3 months but within 6 months  |   | 11,949   |   |
| After 6 months but within 12 months |   | 39,188   |   |
| After 1 year but within 5 years     |   | 9,487    |   |
| Total                               |   | $        | 84,138 |   |

 

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Return on Equity and Assets and Other Financial Ratios

 

The following table sets forth selected financial ratios at and for theyears ended December 31:

 

|                                                    |   | **2001** |   | **2000** |   | **1999** |   |
|---------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| Return on average total assets                          |   | 1.40     | %      | 1.53     | %      | 1.52     | %      |
| Return on average shareholders' equity (1)              |   | 13.73    |   | 14.96    |   | 14.36    |   |
| Cash dividends declared to net income                   |   | 85.72    |   | 81.34    |   | 80.91    |   |
| Average sharholders' equity to average total assets (1) |   | 10.21    |   | 10.22    |   | 10.61    |   |

 

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(1)     Shareholders’ equity includes commonstock in ESOP subject to contingent repurchase obligation.

 

 

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| **ITEM 2.** |   | **PROPERTIES** |
|-------------|--------|----------------|

 

West Suburban and the Bank occupy a total of approximately 252,200square feet in 31 full service branches, five limited service branches as wellas five departments. West Suburban’s principal office is located inapproximately 32,500 square feet of office space at 711 South Meyers Road,Lombard, Illinois. As indicated below, the Bank also operates its principal officeas a branch. Travel with West Suburban, West Suburban Bank Land Trust, WestSuburban Financial Services and West Suburban Insurance Services, Inc. areincluded in 711 South Meyers Road. West Suburban Bank VISA is included in 701South Meyers Road.

 

The following table sets forth certain information concerning thebranches of the Bank as of December 31, 2001:

 

| **Location of Branches**                                        |   | **Approximate  Square Feet** |   | **Status** |   |
|-----------------------------------------------------------------|--------|------------------------------|--------|------------|--------|
| 711 South Meyers Road  Lombard, Illinois                        |   | 32,500                       |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 701 South Meyers Road  Lomard, Illinois                         |   | 5,200                        |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 717 South Meyers Road  Lombard, Illinois                        |   | 7,100                        |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 100 South Main Street  Lombard, Illinois                        |   | 700                          |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| Mr. Z's (ATM only)  401 South Main Street  Lombard, Illinois    |   | 100                          |   | Leased     |   |
|                                                            |   |                         |   |       |   |
| 707 North Main Street  Lombard, Illinois                        |   | 4,100                        |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 40 East St. Charles Road  Villa Park, Illinois                  |   | 2,700                        |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 17W754 22nd Street  Oakbrook Terrace, Illinois                  |   | 6,100                        |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| Lexington Square  400 West Butterfield Road  Elmhurst, Illinois |   | 100                          |   | Leased     |   |
|                                                            |   |                         |   |       |   |
| 2020 Feldott Lane  Naperville, Illinois                         |   | 4,500                        |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 879 East Geneva Road  Carol Stream, Illinois                    |   | 3,600                        |   | Leased     |   |
|                                                            |   |                         |   |       |   |
| 6400 South Cass Avenue  Westmont, Illinois                      |   | 3,100                        |   | Leased     |   |
|                                                            |   |                         |   |       |   |
| 221 South West Street  Wheaton, Illinois                        |   | 800                          |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 1104 West Boughton Road  Bolingbrook, Illinois                  |   | 4,500                        |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 295 West Loop Road  Wheaton, Illinois                           |   | 4,500                        |   | Owned      |   |
|                                                            |   |                         |   |       |   |
| 2800 Finley Road  Downers Grove, Illinois                       |   | 10,700                       |   | Owned      |   |

 

 

----

 

| **Location  of Branches**                                   |   | **Approximate  Square Feet** |   | **Status** |   |
|-------------------------------------------------------------|--------|------------------------------|--------|------------|--------|
| 3S041 Route 59  Warrenville, Illinois                       |   | 3,700                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 5330 Main Street  Dowers Grove, Illinois                    |   | 10,500                       |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| Beacon Hill  2400 South Finley Road  Lombard, Illinois      |   | 100                          |   | Leased     |   |
|                                                        |   |                         |   |       |   |
| Lexington Square  555 Foxworth Boulevard  Lombard, Illinois |   | 100                          |   | Leased     |   |
|                                                        |   |                         |   |       |   |
| 1122 South Main Street  Lombard, Illinois                   |   | 6,400                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 8001 South Cass Avenue  Darien, Illinois                    |   | 17,800                       |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 672 East Boughton Road  Bolingbrook, Illinois               |   | 7,100                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 1005 75th Street  Darien, Illinois                          |   | 1,000                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 505 North Weber Road  Romeoville, Illinois                  |   | 4,400                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 355 West Army Trail Road  Bloomingdale, Illinois            |   | 10,700                       |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 401 North Gary Avenue  Carol Stream, Illinois               |   | 6,400                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 1380 Army Trail Road  Carol Stream, Illinois                |   | 2,300                        |   | Leased     |   |
|                                                        |   |                         |   |       |   |
| 1657 Bloomingdale Road  Glendale Heights, Illinois          |   | 4,100                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 1061 West Stearns Road  Bartlett, Illinois                  |   | 3,400                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 315 South Randall Road  St. Charles, Illinois               |   | 1,400                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 3000 East Main Street  St. Charles, Illinois                |   | 4,200                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 1870 McDonald Road  South Elgin, Illinois                   |   | 4,600                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 101 North Lake Street  Aurora, Illinois                     |   | 19,000                       |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 2000 West Galena Boulevard  Aurora, Illinois                |   | 48,000                       |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 1830 Douglas Road  Montgomery, Illinois                     |   | 2,500                        |   | Owned      |   |
|                                                        |   |                         |   |       |   |
| 335 North Eola Road  Aurora, Illinois                       |   | 4,200                        |   | Owned      |   |

 

----

 
| **ITEM  3.** |   | **LEGAL  PROCEEDINGS** |
|--------------|--------|------------------------|

 

There are no material pending legal proceedings to which West Suburbanor the Bank is a party to other than ordinary routine litigation incidental totheir respective businesses.

 
| **ITEM 4.** |   | **SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS** |
|-------------|--------|---------------------------------------------------------|

 

None.

 

----

 

**PART II**

 
| **ITEM 5.** |   | **MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS** |
|-------------|--------|--------------------------------------------------------------------------------|

 

West Suburban’s authorized and outstanding equity securities consist ofCommon Stock, no par value.

 

West Suburban hereby incorporates by reference the information calledfor by Item 5 of this Form 10-K from the section entitled “Common Stock, BookValue and Dividends” on page 3 of West Suburban’s Annual Report to Shareholdersfor the fiscal year ended December 31, 2001 (attached as Exhibit 13 hereto).

 

West Suburban’s Common Stock is not traded on any national or regionalexchange. While there is no established trading market for West Suburban’sCommon Stock, West Suburban is aware that from time to time limited orinfrequent quotations are made with respect to West Suburban’s Common Stock andthat there occurs limited trading in West Suburban’s Common Stock resultingfrom private transactions not involving brokers or dealers. Transactions inWest Suburban’s Common Stock have been infrequent. As of February 6, 2002, WestSuburban had 432,495 shares of Common Stock outstanding held by 985shareholders of record. Management is aware of 21 transactions during 2001involving the sale, in the aggregate, of 768 shares of Common Stock. Theaverage sale price in such transactions was $512.92 per share.

 
| **ITEM 6.** |   | **SELECTED FINANCIAL DATA** |
|-------------|--------|-----------------------------|

 

West Suburban hereby incorporates by reference the information calledfor by Item 6 of this Form 10-K from the section entitled “Selected FinancialData” on page 23 of West Suburban’s Annual Report to Shareholders for thefiscal year ended December 31, 2001 (attached as Exhibit 13 hereto).

 
| **ITEM 7.** |   | **MANAGEMENT’S DISCUSSION AND  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF** |
|-------------|--------|--------------------------------------------------------------------------------------|
|        |   | **OPERATIONS**                                                                       |

 

West Suburban hereby incorporates by reference the information calledfor by Item 7 of this Form 10-K from the section entitled “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” onpages 25 through 31 of West Suburban’s Annual Report to Shareholders for thefiscal year ended December 31, 2001 (attached as Exhibit 13 hereto).

 
| **ITEM 7A.** |   | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET  RISK** |
|--------------|--------|-----------------------------------------------------------------|

 

West Suburban hereby incorporates by reference the information calledfor by Item 7A of this Form 10-K from the Interest Rate Sensitivity sectionincluded in “Management’s Discussion and Analysis of Financial Condition andResults of Operations” on pages 30 and 31 of West Suburban’s Annual Report toShareholders for the fiscal year ended December 31, 2001 (attached as Exhibit13 hereto).

 
| **ITEM 8.** |   | **FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA** |
|-------------|--------|-------------------------------------------------|

 

West Suburban hereby incorporates by reference the information calledfor by Item 8 of this Form 10-K from the Consolidated Financial Statements onpages 5 through 22 of West Suburban’s Annual Report to Shareholders for thefiscal year ended December 31, 2001 (attached as Exhibit 13 hereto).

 

 

----

 
| **ITEM 9.** |   | **CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING AND FINANCIAL** |
|-------------|--------|--------------------------------------------------------------------------------|
|        |   | **MATTERS**                                                                    |

 

None.

 

**PART III**

 
| **ITEM 10.** |   | **DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT** |
|--------------|--------|--------------------------------------------------------|

 

West Suburban hereby incorporates by reference the information calledfor by Item 10 of this Form 10-K regarding directors of West Suburban from thesection entitled “Election of Directors” of West Suburban’s 2002 ProxyStatement.

 

Section 16(a) of the 1934 Act requires that the Company’s executiveofficers and directors and persons who own more than 10% of the Company’sCommon Stock file reports of ownership and changes in ownership with theSecurities and Exchange Commission and with the exchange on which WestSuburban’s shares of Common Stock are traded. Such persons are also required tofurnish the Company with copies of all Section 16(a) forms they file. Basedsolely on the Company’s review of the copies and forms furnished to the Companyand, if appropriate, representations made to the Company by any such reportingperson concerning whether a Form 5 was required to be filed for the 2001 fiscalyear, the Company is not aware that any of its directors and executive officersor 10% shareholders failed to comply with the filing requirements of Section16(a) during 2001.

 
| **ITEM 11.** |   | **EXECUTIVE COMPENSATION** |
|--------------|--------|----------------------------|

 

West Suburban hereby incorporates by reference the information calledfor by Item 11 of this Form 10-K from the section entitled “ExecutiveCompensation” of West Suburban’s 2002 Proxy Statement; provided, however,Report of the Board of Directors on Executive Compensation is specifically notincorporated into this Form 10-K.

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

 

West Suburban hereby incorporates by reference the information calledfor by Item 12 of this Form 10-K from the section entitled “Security Ownershipof Certain Beneficial Owners” of West Suburban’s 2002 Proxy Statement.

 
| **ITEM 13.** |   | **CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS** |
|--------------|--------|----------------------------------------------------|

 

West Suburban hereby incorporates by reference the information calledfor by Item 13 of this Form 10-K from the section entitled “Transactions withDirectors, Officers and Associates” of West Suburban’s 2002 Proxy Statement.

 

----

 

Part IV

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

 

Item (a) 1 and 2. Financial Statements

 

WEST SUBURBAN BANCORP,INC. AND SUBSIDIARIES

LIST OF FINANCIALSTATEMENTS AND

FINANCIAL STATEMENTSCHEDULES

 

The following audited Consolidated Financial Statements of WestSuburban and its subsidiaries and related notes and report of independentauditors are incorporated by reference from West Suburban’s Annual Report toShareholders for the fiscal year ended December 31, 2001 (attached as Exhibit13 hereto).

 
|                                                                                                                  | **Annual Report Page No.** |
|-----------------------------------------------------------------------------------------------------------------------|----------------------------|
| Report of  Independent Auditors                                                                                       | 4                          |
|                                                                                                                  |                       |
| Consolidated  Balance Sheets – December 31, 2001 and 2000                                                        | 5                          |
|                                                                                                                  |                       |
| Consolidated  Statements of Income – Years Ended December 31, 2001, 2000 and 1999                                | 6                          |
|                                                                                                                  |                       |
| Consolidated  Statements of Changes in Shareholders’ Equity – Years Ended December 31,  2001, 2000 and 1999 | 7                          |
|                                                                                                                  |                       |
| Consolidated  Statements of Cash Flows – Years Ended December 31, 2001, 2000 and 1999                            | 8                          |
|                                                                                                                  |                       |
| Notes to  Consolidated Financial Statements                                                                           | 9                          |

 

The following Condensed Financial Information-Parent Only isincorporated by reference from Note 15 to West Suburban’s audited ConsolidatedFinancial Statements as set forth in West Suburban’s Annual Report toShareholders for the fiscal year ended December 31, 2001 (attached as Exhibit13).

 
|                                                                                    | **Annual Report Page No.** |
|-----------------------------------------------------------------------------------------|----------------------------|
| Condensed  Balance Sheets – December 31, 2001 and 2000                             | 20                         |
|                                                                                    |                       |
| Condensed  Statements of Income – Years Ended December 31, 2001, 2000 and 1999     | 21                         |
|                                                                                    |                       |
| Condensed  Statements of Cash Flows – Years Ended December 31, 2001, 2000 and 1999 | 21                         |

 

Schedules

 

Schedules other than those listed above are omitted for the reason thatthey are not required or are not applicable or the required information isincluded in the financial statements incorporated by reference or notesthereto.

 

----

 

Item 14(a)3. Exhibits

 

The exhibits required by Item 601 of Regulation S-K are included withthis Form 10-K and are listed on the “Index to Exhibits” immediately followingthe signature page.

 

Item 14(b).   Reports on Form 8-K

 

None.

 

***

Upon written request to the President and Chief Financial Officer ofWest Suburban Bancorp, Inc., 2800 Finley Road, Downers Grove, Illinois, 60515,copies of the exhibits listed above are available to shareholders of WestSuburban by specifically identifying each exhibit desired in the request. 

 

 

----

 

**FORM10-K SIGNATURE PAGE**

 

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

 
|   | **WEST  SUBURBAN BANCORP, INC.** |
|--------|----------------------------------|
|   | (Registrant)                     |
|   |                             |   |
|   | By                               | /s/  Duane G. Debs |   |
|   |                             | Duane  G. Debs |
|   |                             | President  and Chief Financial Officer |

 

Date: March 27, 2002

 

Pursuant to the requirements of the Securities Exchange Act of 1934,this report has been signed below by the following persons on behalf of theRegistrant and in the capacities indicated on the 27th day of March, 2002.

 
| **SIGNATURE**          |   |      |   | **TITLE**                                        |
|------------------------|--------|-----------|--------|--------------------------------------------------|
|                   |   |      |   |                                             |
| /s/  Kevin J. Acker    |   | 3/27/2002 |   | Chairman  of the Board and Director              |
| Kevin  J. Acker        |   | Date      |   |                                             |
|                   |   |      |   |                                             |
|                   |   |      |   |                                             |
| /s/  Duane G. Debs     |   | 3/27/2002 |   | President,  Chief Financial Officer and Director |
| Duane  G. Debs         |   | Date      |   |                                             |
|                   |   |      |   |                                             |
|                   |   |      |   |                                             |
| /s/  David S. Bell     |   | 3/27/2002 |   | Director                                         |
| David  S. Bell         |   | Date      |   |                                             |
|                   |   |      |   |                                             |
|                   |   |      |   |                                             |
| /s/  Peggy P. LoCicero |   | 3/27/2002 |   | Director                                         |
| Peggy  P. LoCicero     |   | Date      |   |                                             |
|                   |   |      |   |                                             |
|                   |   |      |   |                                             |
| /s/  Charles P. Howard |   | 3/27/2002 |   | Director                                         |
| Charles  P. Howard     |   | Date      |   |                                             |
|                   |   |      |   |                                             |

 

The foregoing includesall of the Board of Directors of West Suburban.

 

----

 

INDEX TO EXHIBITS

 
| **Exhibit  Number** |   | **Description**                                                                                                                                                                                                                  |
|---------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                             |
| 3.1                 |   | Articles of Incorporation – Incorporated by  reference from Exhibits 3.1 of Form S-1 of West Suburban dated November 10,  1988, under Registration No. 33-25225                                                             |
|                |   |                                                                                                                                                                                                                             |
| 3.2                 |   | Form of Certificate of Amendment to Article of  Incorporation – Incorporated by reference from Exhibit 3.2 of Form S-1 of  West Suburban dated November 10, 1988, under Registration No. 33-25525                           |
|                |   |                                                                                                                                                                                                                             |
| 3.3                 |   | Certificate of Amendment to Articles of  Incorporation dated May 10, 1990 – Incorporated by reference from Exhibit 3.3  of the Form 10-K of West Suburban dated March 28, 1991, Commission file No.  0-17609                |
|                |   |                                                                                                                                                                                                                             |
| 3.4                 |   | Certificate of Amendment to Articles of Incorporation  dated June 8, 1998 – Incorporated by reference from Exhibit 3.4 of the Form  10-K of West Suburban dated March 29, 1999, Commission file No. 0-17609                 |
|                |   |                                                                                                                                                                                                                             |
| 3.5                 |   | By-laws – Incorporated by reference from Exhibit 3.3  of Form S-1 of West Suburban dated November 10, 1988, Registration No.  33-25225                                                                                      |
|                |   |                                                                                                                                                                                                                             |
| 4.1                 |   | Specimen of Common Stock certificate – Incorporated  by reference from Exhibit 4.1 of the Form 10-K of West Suburban dated March  29, 1999, Commission file No. 0-17609                                                     |
|                |   |                                                                                                                                                                                                                             |
| 4.2                 |   | Articles of Incorporation of West Suburban (see  Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5 above)                                                                                                                                      |
|                |   |                                                                                                                                                                                                                             |
| 4.3                 |   | By-laws of West Suburban (see Exhibit 3.5 above)                                                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                             |
| 10.1                |   | Employment Agreement dated May 1, 1997 between West  Suburban and Mr. Kevin J. Acker – Incorporated by reference from Exhibit 10.2  of Form 10-Q of West Suburban dated August 14, 1997, Commission File No.  0-17609       |
|                |   |                                                                                                                                                                                                                             |
| 10.2                |   | Employment Agreement dated May 1, 1997 between West  Suburban and Mr. Keith W. Acker – Incorporated by reference from Exhibit 10.2  of Form 10-Q of West Suburban dated August 14, 1997, Commission File No.  0-17609       |
|                |   |                                                                                                                                                                                                                             |
| 10.3                |   | Employment Agreement dated May 1, 1997 between West  Suburban and Mr. Duane G. Debs – Incorporated by reference from Exhibit 10.2  of Form 10-Q of West Suburban dated August 14, 1997, Commission File No.  0-17609        |
|                |   |                                                                                                                                                                                                                             |
| 10.4                |   | Employment Agreement dated May 1, 1997 between West  Suburban and Mr. Michael P. Brosnahan – Incorporated by reference from  Exhibit 10.2 of Form 10-Q of West Suburban dated August 14, 1997, Commission  File No. 0-17609 |

 

 

----

 
| **Exhibit**

**Number** |   | **Description**                                                                                                                                                                                                                                                                                                  |
|-------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                    |   |                                                                                                                                                                                                                                                                                                             |
| 10.5                    |   | Form  of Amended Deferred Compensation Agreement between West Suburban and Messrs.  Kevin J. Acker, Keith W. Acker, Duane G. Debs and Michael P. Brosnahan –  Incorporated by reference from Exhibit 10.5 of Form 10-Q of West Suburban  dated August 14, 1997, Commission File No. 0-17609                 |
|                    |   |                                                                                                                                                                                                                                                                                                             |
| 10.6                    |   | Employment  Agreement dated December 24, 1998 between West Suburban and Mr. James Chippas  – Incorporated by reference from Exhibit 10.6 of Form 10-K of West Suburban  dated March 29, 1999, Commission File No. 0-17609                                                                                   |
|                    |   |                                                                                                                                                                                                                                                                                                             |
| 10.7                    |   | Form  of Amendment to Employment Agreement dated January 21, 1999 between West  Suburban and Messrs. Kevin J. Acker, Keith W. Acker, Duane G. Debs and  Michael P. Brosnahan – Incorporated by reference from Exhibit 10.7 of Form  10-K of West Suburban dated March 29, 1999, Commission File No. 0-17609 |
|                    |   |                                                                                                                                                                                                                                                                                                             |
| 10.8                    |   | Employment  Agreement dated January 1, 2001 between West Suburban and Mr. Daniel P.  Grotto                                                                                                                                                                                                                      |
|                    |   |                                                                                                                                                                                                                                                                                                             |
| 13                      |   | Annual  Report to Shareholders of West Suburban for fiscal year ended December 31,  2001                                                                                                                                                                                                                         |
|                    |   |                                                                                                                                                                                                                                                                                                             |
| 21                      |   | Subsidiaries  of Registrant                                                                                                                                                                                                                                                                                      |

 

 

 

----