# **Exhibit 13**

# **Profile**

West Suburban Bancorp, Inc. (“West Suburban”) isthe parent bank holding company of West Suburban Bank, Lombard, Illinois (the “Bank”and, together with West Suburban, the “Company”). The Company had total assetsat December 31, 2006 of approximately $1.9 billion. The Bank is one of thelargest independent banks headquartered in DuPage County.

 

**West Suburban Bancorp, Inc.Financial Highlights**
| ** **                 | ** ** |
|----------------------------|------------|
| ** **                 | ** ** | ** ** | ** ** |
| ** **                 | ** ** | **Years Ended December 31,** | ** ** |
| ** **                 | ** ** | **(Dollars in thousands, except per share data)** | ** ** |
| ** **                 | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
| Net income                 |       | $ | 25,351 |   | $ | 25,486 |   | $ | 23,658 |   | $ | 25,908 |   | $ | 17,932 |   |
| Per share data             |       |   |   |   |   |   |   |   |   |   |   |
| Earnings                   |       | 58.62 |   | 58.93 |   | 54.82 |   | 59.90 |   | 41.46 |   |
| Book value  (GAAP) (1)     |       | 220.43 |   | 218.87 |   | 223.60 |   | 227.85 |   | 248.43 |   |
| Book value  (non-GAAP) (1) |       | 359.18 |   | 344.60 |   | 347.87 |   | 346.62 |   | 341.47 |   |
| Net loans                  |       | 1,153,885 |   | 1,091,747 |   | 1,046,125 |   | 1,074,215 |   | 1,128,816 |   |
| Total assets               |       | 1,876,643 |   | 1,827,191 |   | 1,748,049 |   | 1,710,695 |   | 1,586,063 |   |
| Total deposits             |       | 1,677,844 |   | 1,639,666 |   | 1,569,742 |   | 1,529,931 |   | 1,420,256 |   |
|                            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

(1)             Book value per share represents the aggregate amountof shareholders’ equity and common stock in ESOP subject to contingentrepurchase obligation divided by the number of outstanding shares.  See Note 7 to the Company’s consolidatedfinancial statements and “Non-GAAP Financial Measures.”  This presentation is consistent with theCompany’s belief that it is unlikely that the Company would be required tosatisfy the contingent repurchase obligation.
| Table of Contents                                                                                     | ** ** | ** ** |
|-------------------------------------------------------------------------------------------------------|------------|------------|
|                                                                                                  |       |       |
| Profile                                                                                               |       | 1          |
| Special Note Concerning Forward-Looking Statements and  Risk Factors                                  |       | 2          |
| Letter to Our Shareholders, Customers and Friends                                                     |       | 3          |
| Common Stock, Book Value and Dividends                                                                |       | 4          |
| Business Review                                                                                       |       | 4          |
| Report of Independent Registered Public Accounting  Firm                                              |       | 5          |
| Consolidated Financial Statements                                                                     |       | 6          |
| Notes to Consolidated Financial Statements                                                            |       | 10         |
| Management’s Report on Internal Control Over Financial  Reporting                                |       | 30         |
| Report of Independent Registered Public Accounting  Firm on Internal Control Over Financial Reporting |       | 31         |
| Stock Performance Presentation                                                                        |       | 33         |
| Selected  Financial Data                                                                              |       | 34         |
| Non-GAAP  Financial Measures                                                                          |       | 35         |
| Average Balance Sheets, Net Interest Income and  Average Rates and Yields on a Tax Equivalent Basis   |       | 36         |
| Management’s Discussion and Analysis of Financial  Condition and Results of Operations           |       | 37         |
| Boards of Directors and Officers                                                                      |       | 46         |
| Addresses of West Suburban Facilities                                                                 |       | 49         |
| Map of Facilities                                                                                     |       | 51         |
| Shareholder  Information                                                                              |       | 52         |

 

1

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***SpecialNote Concerning Forward-Looking Statements and Risk Factors***

*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 ofthe Private Securities Litigation Reform Act of 1995 with respect to thefinancial 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” or othersimilar expressions. Additionally, all statements in this document, includingforward-looking statements, speak only as of the date they are made, and theCompany undertakes no obligation to update any statement in light of newinformation or future events.*

*A number of factors,many of which are beyond the ability of the Company to control or predict,could cause actual results to differ materially from those in itsforward-looking statements. These factors include, among others, the following:(i) the strength of the local and national economy, including the localreal estate markets; (ii) the timely development and acceptance of new productsand services, including products and services offered through alternativedelivery channels such as the Internet; (iii) changes in federal, stateand local laws, regulations and governmental policies (including laws,regulations and government policies relating to taxation) concerning theCompany’s general business; (iv) changes in interest rates and prepayment ratesof the Company’s assets; (v) increased competition in the financialservices sector and the inability to maintain an acceptable net interest margin;(vi) the inability to attract new customers and retain existing customers;(vii) changes in technology implemented by the Company and by other partiesincluding technological changes implemented for, or related to, the Company’swebsite or new products such as prepaid solutions cards, payroll cards andother similar products and services; (viii) the inability to develop andmaintain secure and reliable electronic systems including systems developed forthe Company’s website or new products such as prepaid solutions cards, payrollcards and other similar products and services; (ix) the loss of keyexecutives or employees and the difficulty in replacing them; (x) changes inconsumer spending and saving; (xi) the economic impact of terrorist activitiesand military actions; (xii) unexpected results of acquisitions; (xiii)unexpected outcomes of existing or new litigation involving the Company;(xiv) changes in accounting policies and practices; and (xv) the inabilityof the Company to manage the risks associated with the foregoing as well asanticipated.**These risks anduncertainties should be considered in evaluating forward-looking statements andundue reliance should not be placed on such statements.*

*Additional information concerning the Company and its business,including risk factors that could materially affect the Company’s results ofoperations and financial condition, is included in the Company’s filings withthe Securities and Exchange Commission including the Company’s most recentAnnual Report on Form 10-K.*

2

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**To OurShareholders, Customers and Friends**

During 2007, wewill be celebrating our 45th Anniversary. Overthe years we have continually strived to expand our presence in the westernsuburbs of Chicago and beyond. West Suburban Bank began 45 years ago as a smallone facility store-front and now we have 34 full service facilities offering awide variety of innovative products. Consistent with our mission of being aprogressive, high performing community bank, we opened our first facility inYorkville in 2006 and in early 2007 we opened our second facility in Oswego.

During 2006, totalloans grew 5.6% while nonperforming loans decreased 34%. We also experiencedgrowth of over 2% in total deposits. Our strong core deposit base continues tobe a significant contributor to our success and reflects our strong commitmentto the communities in the markets we serve. Earnings per share decreased by .5%on total net income of $25.4 million.

At West Suburban,we have a strong commitment to the communities we serve as evidenced by thevarious programs and organizations in which our employees are involved. Theseprograms and organizations include Christmas in April, DuPage Pads, DuPageCounty Homeless Continuum of Care, Exchange Club — Prevention of Child and AdultAbuse, Hessed House, Kane County Homeless Continuum of Care as well asparticipation in various capacities at churches, fraternal organizations,chambers of commerce and local school boards.

As in the past, wecontinue to provide our customers traditional banking products such aschecking, savings and certificate of deposit accounts as well as competitivehome equity, residential mortgage and commercial loans. We will continue toenhance our online banking services at *www.westsuburbanbank.com*in order to offer our customers improved accessibility 24 hours a day, sevendays a week. Our new consumer banking initiatives will not distract us from ourcommitment to our business customers. We value these relationships andappreciate that our future success depends upon our ability to continue to be agood partner to business throughout the communities we serve.

We would like toexpress our appreciation to everyone for the support that has allowed us tobecome and remain one of the largest independent banks headquartered in DuPageCounty and we welcome your comments, criticisms and suggestions. We could nothave achieved our success without the support of our shareholders, customers,communities, friends and employees.

Sincerely,
| /s/ Kevin J. Acker     |   | /s/ Duane G. Debs                     |
|------------------------|--------|---------------------------------------|
| Kevin J. Acker         |   | Duane G. Debs                         |
| Chairman of the  Board |   | President and Chief Financial Officer |

3

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**Common Stock, Book Value and Dividends**

West Suburban hasa single class of common stock issued and outstanding. The common stock is nottraded on any stock exchange or on the over-the-counter market. West Suburban’sper share book value as of the end of each quarter and dividends declared forthe last two years are set forth below:

| Quarter | ** ** | **BookValue  GAAP (1)** | ** ** | **BookValue  Non-GAAP (1)** | ** ** | **Dividends  Declared** | ** ** |
|---------|------------|------------------------------|------------|----------------------------------|------------|-------------------------|------------|
| 4th     |       | $                            | 220.43     |                             | $          | 359.18                  |       | $ | 20.00 |   |
| 3rd     |       | 223.24                       |       | 362.46                           |       | 10.00                   |       |
| 2nd     |       | 215.43                       |       | 347.81                           |       | 10.00                   |       |
| 1st     |       | 217.33                       |       | 347.07                           |       | 10.00                   |       |
|    |       |                         |       |                             |       |                    |       |
| 4th     |       | $                            | 218.87     |                             | $          | 344.60                  |       | $ | 20.00 |   |
| 3rd     |       | 226.21                       |       | 355.08                           |       | 10.00                   |       |
| 2nd     |       | 227.64                       |       | 353.07                           |       | 10.00                   |       |
| 1st     |       | 220.40                       |       | 341.73                           |       | 10.00                   |       |

 
| (1) |   | Book value per share represents the aggregate amount  of shareholders’ equity and common stock in ESOP subject to contingent  repurchase obligation divided by the number of outstanding shares. See Note 7  to the Company’s consolidated financial statements and “Non-GAAP Financial  Measures.” This presentation is consistent with the Company’s belief that it  is unlikely that the Company would be required to satisfy the contingent  repurchase obligation. |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

The dividendsdeclared during the fourth quarter of 2006 included a special $10.00 per sharedividend payable on December 15, 2006 to shareholders of record as of December1, 2006. Similarly, the dividends declared during the fourth quarter of 2005included a special $10.00 per share dividend payable on December 15, 2005 toshareholders of record as of December 1, 2005.

# **BusinessReview**

Asof December 31, 2006, the Company had total assets of approximately $1.9billion and maintained 34 full-service branches, four limited-service branchesand six departments providing insurance, financial and other services for theconvenience of the customers of the Bank throughout DuPage, Kane, Kendall andWill Counties in Illinois. The Bank focuses on providing retail and commercialbanking products and services in its market area. The Company had 510 full-timeequivalent employees at December 31, 2006.

# 

 

4

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# **REPORT OFINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Board of Directorsand Shareholders

West SuburbanBancorp, Inc.

Lombard, Illinois

We have auditedthe accompanying consolidated balance sheets of West Suburban Bancorp, Inc.(the “Company”) as of December 31, 2006 and 2005, and the related consolidatedstatements of income, changes in shareholders’ equity, and cash flows for eachof the three years in the period ended December 31, 2006. These financialstatements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based onour audits.

We conducted ouraudits in accordance with standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

In our opinion,the consolidated financial statements referred to above present fairly, in allmaterial respects, the financial position of the Company at December 31, 2006and 2005, and the results of its operations and its cash flows for each of thethree years in the period ended December 31, 2006 in conformity with U.S.generally accepted accounting principles.

As disclosed inNote 1 to the consolidated financial statements, on December 31, 2006 theCompany changed its method of accounting for postretirement benefits to complywith new accounting guidance.

We also haveaudited, in accordance with the standards of the Public Company AccountingOversight Board (United States), the effectiveness of the Company’s internalcontrol over financial reporting as of December 31, 2006, based on criteriaestablished in Internal Control—Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission and our report dated March9, 2007 expressed an unqualified opinion thereon.

 
|        |   | /s/ Crowe Chizek and Company LLC |
|--------|--------|----------------------------------|
|   |   | Crowe Chizek and Company LLC     |

 

Oak Brook, Illinois

March 9, 2007

5

 

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**WEST SUBURBAN BANCORP, INC.**

# **CONSOLIDATED BALANCE SHEETS**

## **DECEMBER 31, 2006 AND 2005**

(Dollars inthousands)
| ** **                                                                                        | ** ** | **2006**  | ** ** | **2005**   | ** ** |
|---------------------------------------------------------------------------------------------------|------------|-----------|------------|------------|------------|
| **Assets**                                                                                        |       |      | ** ** | ** ** | ** ** |
| Cash and due  from banks                                                                          |       | $         | 56,956     |       | $          | 54,935 |   |
| Federal  funds sold                                                                               |       | 67,073    |       | 50,859     |       |
| Total cash and  cash equivalents                                                                  |       | 124,029   |       | 105,794    |       |
| Securities                                                                                        |       |      |       |       |       |
| Available for  sale (amortized cost of $462,147 in 2006 and $479,625 in 2005)                     |       | 453,097   |       | 465,798    |       |
| Held to maturity  (fair value of $44,728 in 2006 and $64,074 in 2005)                             |       | 45,013    |       | 64,945     |       |
| Federal Home  Loan Bank stock                                                                     |       | 5,091     |       | 5,619      |       |
| Total securities                                                                                  |       | 503,201   |       | 536,362    |       |
| Loans, less  allowance for loan losses of $10,650 in 2006 and $10,681 in 2005                     |       | 1,153,885 |       | 1,091,747  |       |
| Cash surrender  value of bank-owned life insurance                                                |       | 34,422    |       | 32,225     |       |
| Premises and  equipment, net                                                                      |       | 39,965    |       | 40,179     |       |
| Other real  estate                                                                                |       | 351       |       | 210        |       |
| Accrued interest  and other assets                                                                |       | 20,790    |       | 20,674     |       |
| **Total  assets**                                                                                 |       | $         | 1,876,643  |       | $          | 1,827,191 |   |
|                                                                                              |       |      |       |       |       |
| **Liabilities and shareholders’  equity**                                                    |       |      |       |       |       |
| Deposits                                                                                          |       |      |       |       |       |
| Demand-noninterest-bearing                                                                        |       | $         | 155,041    |       | $          | 165,413 |   |
| Interest-bearing                                                                                  |       | 1,522,803 |       | 1,474,253  |       |
| Total deposits                                                                                    |       | 1,677,844 |       | 1,639,666  |       |
| Prepaid  solutions cards                                                                          |       | 21,105    |       | 19,907     |       |
| Accrued interest  and other liabilities                                                           |       | 22,350    |       | 18,580     |       |
| ** **                                                                                        |       |      |       |       |       |
| Common stock in  ESOP subject to contingent repurchase obligation                                 |       | 60,009    |       | 54,378     |       |
| ** **                                                                                        |       |      |       |       |       |
| Shareholders’  equity                                                                        |       |      |       |       |       |
| Common stock, no  par value; 15,000,000 shares authorized; 432,495 shares issued and  outstanding |       | 3,457     |       | 3,457      |       |
| Surplus                                                                                           |       | 38,066    |       | 38,066     |       |
| Retained  earnings                                                                                |       | 119,572   |       | 115,846    |       |
| Accumulated  other comprehensive loss                                                             |       | (5,751    | )          | (8,331     | )          |
| Amount  reclassified on ESOP shares                                                               |       | (60,009   | )          | (54,378    | )          |
| **Total  shareholders’ equity**                                                              |       | 95,335    |       | 94,660     |       |
| **Total liabilities and shareholders’  equity**                                              |       | $         | 1,876,643  |       | $          | 1,827,191 |   |

* *

* *

* *

* *

*Seeaccompanying notes to consolidated financial statements.*

6

 

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**WESTSUBURBAN BANCORP, INC.**

### **CONSOLIDATED STATEMENTS OF INCOME**

## **YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004**

(Dollars inthousands, except per share data)
| ** **                                               | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|----------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| **Interest income**                                      |       |     |       |     |       |     |       |
| Loans, including  fees                                   |       | $        | 82,542     |     | $          | 68,459   |       | $ | 59,204 |   |
| Securities                                               |       |     |       |     |       |     |       |
| Taxable                                                  |       | 19,222   |       | 19,235   |       | 18,158   |       |
| Exempt from  federal income tax                          |       | 1,040    |       | 963      |       | 1,601    |       |
| Federal funds  sold                                      |       | 2,932    |       | 732      |       | 363      |       |
| Total interest  income                                   |       | 105,736  |       | 89,389   |       | 79,326   |       |
|                                                     |       |     |       |     |       |     |       |
| **Interest expense**                                     |       |     |       |     |       |     |       |
| Deposits                                                 |       | 45,303   |       | 30,220   |       | 21,805   |       |
| Other                                                    |       | 31       |       | 49       |       | 34       |       |
| Total interest  expense                                  |       | 45,334   |       | 30,269   |       | 21,839   |       |
| **Net interest income**                                  |       | 60,402   |       | 59,120   |       | 57,487   |       |
| **Provision for loan losses**                            |       | 150      |       | 1,375    |       | 200      |       |
| **Net interest income after  provision for loan losses** |       | 60,252   |       | 57,745   |       | 57,287   |       |
| ** **                                               |       |     |       |     |       |     |       |
| **Noninterest income**                                   |       |     |       |     |       |     |       |
| Prepaid  solutions cards                                 |       | 8,295    |       | 7,774    |       | 5,734    |       |
| Service fees on  deposit accounts                        |       | 6,978    |       | 7,441    |       | 7,808    |       |
| Debit card fees                                          |       | 1,970    |       | 2,027    |       | 1,751    |       |
| Bank-owned life  insurance                               |       | 1,462    |       | 1,361    |       | 967      |       |
| Net gain on  sales of loans held for sale                |       | 124      |       | 109      |       | 230      |       |
| Net realized  gains (losses) on securities transactions  |       | 85       |       | 206      |       | (2,004   | )          |
| Other                                                    |       | 3,951    |       | 4,653    |       | 3,921    |       |
| Total  noninterest income                                |       | 22,865   |       | 23,571   |       | 18,407   |       |
|                                                     |       |     |       |     |       |     |       |
| **Noninterest expense**                                  |       |     |       |     |       |     |       |
| Salaries and  employee benefits                          |       | 23,621   |       | 22,449   |       | 21,513   |       |
| Prepaid  solutions cards                                 |       | 5,767    |       | 5,459    |       | 3,975    |       |
| Furniture and  equipment                                 |       | 4,759    |       | 4,851    |       | 4,644    |       |
| Occupancy                                                |       | 4,581    |       | 4,073    |       | 4,011    |       |
| Advertising and  promotion                               |       | 1,916    |       | 1,824    |       | 1,459    |       |
| Professional  fees                                       |       | 1,217    |       | 1,313    |       | 1,292    |       |
| Other                                                    |       | 5,995    |       | 5,538    |       | 6,213    |       |
| Total  noninterest expense                               |       | 47,856   |       | 45,507   |       | 43,107   |       |
|                                                     |       |     |       |     |       |     |       |
| **Income before income taxes**                           |       | 35,261   |       | 35,809   |       | 32,587   |       |
| **Income tax expense**                                   |       | 9,910    |       | 10,323   |       | 8,929    |       |
| **Net income**                                           |       | $        | 25,351     |     | $          | 25,486   |       | $ | 23,658 |   |
|                                                     |       |     |       |     |       |     |       |
| **Earnings per share**                                   |       | $        | 58.62      |     | $          | 58.93    |       | $ | 54.82 |   |
| **Average shares outstanding**                           |       | 432,495  |       | 432,495  |       | 431,546  |       |

 

 

 

*Seeaccompanying notes to consolidated financial statements.*

7

 

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**WESTSUBURBAN BANCORP, INC.**

#### **CONSOLIDATED STATEMENTS OF CHANGES INSHAREHOLDERS’ EQUITY**

**YEARSENDED DECEMBER 31, 2006, 2005 AND 2004**

(Dollars inthousands, except per share data)
| ** **                                                                                                         | ** ** | **Common  Stock  and  Surplus** | ** ** | **Retained  Earnings** | ** ** | **Accumulated  Other  Compre-  hensive  Income  (Loss)** | ** ** | **Unearned  ESOP  Shares** | ** ** | **Amount  Reclassified  on ESOP  Shares** | ** ** | **Total  Shareholders’  Equity** | ** ** |
|--------------------------------------------------------------------------------------------------------------------|------------|---------------------------------|------------|------------------------|------------|----------------------------------------------------------|------------|----------------------------|------------|------------------------------------------------|------------|---------------------------------------|------------|
| Balance, January 1,  2004                                                                                          |       | $                               | 41,523     |                   | $          | 109,952                                                  |       | $                          | (363       | )                                              | $          | (1,200                                | )          | $ | (51,371 | ) | $ | 98,541 |   |
|                                                                                                               |       |                            |       |                   |       |                                                     |       |                       |       |                                           |       |                                  |       |
| Comprehensive income                                                                                               |       |                            |       |                   |       |                                                     |       |                       |       |                                           |       |                                  |       |
| Net income                                                                                                         |       | —                          |       | 23,658                 |       | —                                                   |       | —                     |       | —                                         |       | 23,658                                |       |
| Change in  unrealized loss on available for sale securities, net of reclassification and  tax effects              |       | —                          |       | —                 |       | (2,691                                                   | )          | —                     |       | —                                         |       | (2,691                                | )          |
| Total  comprehensive income                                                                                        |       | —                          |       | —                 |       | —                                                   |       | —                     |       | —                                         |       | 20,967                                |       |
| Cash dividends  declared - $50.00 per share                                                                        |       | —                          |       | (21,625                | )          | —                                                   |       | —                     |       | —                                         |       | (21,625                               | )          |
| Reclassification  due to change in fair value of common stock in ESOP subject to contingent  repurchase obligation |       | —                          |       | —                 |       | —                                                   |       | —                     |       | (2,588                                         | )          | (2,588                                | )          |
| ESOP shares  released                                                                                              |       | —                          |       | —                 |       | —                                                   |       | 1,200                      |       | —                                         |       | 1,200                                 |       |
| Balance, December 31,  2004                                                                                        |       | 41,523                          |       | 111,985                |       | (3,054                                                   | )          | —                     |       | (53,959                                        | )          | 96,495                                |       |
|                                                                                                               |       |                            |       |                   |       |                                                     |       |                       |       |                                           |       |                                  |       |
| Comprehensive income                                                                                               |       |                            |       |                   |       |                                                     |       |                       |       |                                           |       |                                  |       |
| Net income                                                                                                         |       | —                          |       | 25,486                 |       | —                                                   |       | —                     |       | —                                         |       | 25,486                                |       |
| Change in  unrealized loss on available for sale securities, net of reclassification and  tax effects              |       | —                          |       | —                 |       | (5,277                                                   | )          | —                     |       | —                                         |       | (5,277                                | )          |
| Total  comprehensive income                                                                                        |       | —                          |       | —                 |       | —                                                   |       | —                     |       | —                                         |       | 20,209                                |       |
| Cash dividends  declared - $50.00 per share                                                                        |       | —                          |       | (21,625                | )          | —                                                   |       | —                     |       | —                                         |       | (21,625                               | )          |
| Reclassification  due to change in fair value of common stock in ESOP subject to contingent  repurchase obligation |       | —                          |       | —                 |       | —                                                   |       | —                     |       | (419                                           | )          | (419                                  | )          |
| Balance, December 31,  2005                                                                                        |       | 41,523                          |       | 115,846                |       | (8,331                                                   | )          | —                     |       | (54,378                                        | )          | 94,660                                |       |
|                                                                                                               |       |                            |       |                   |       |                                                     |       |                       |       |                                           |       |                                  |       |
| Comprehensive income                                                                                               |       |                            |       |                   |       |                                                     |       |                       |       |                                           |       |                                  |       |
| Net income                                                                                                         |       | —                          |       | 25,351                 |       | —                                                   |       | —                     |       | —                                         |       | 25,351                                |       |
| Change in  unrealized loss on available for sale securities, net of reclassification and  tax effects              |       | —                          |       | —                 |       | 2,878                                                    |       | —                     |       | —                                         |       | 2,878                                 |       |
| Total  comprehensive income                                                                                        |       | —                          |       | —                 |       | —                                                   |       | —                     |       | —                                         |       | 28,229                                |       |
| Adjustment to  initially apply SFAS No. 158, net of tax (Note 7)                                                   |       | —                          |       | —                 |       | (298                                                     | )          | —                     |       | —                                         |       | (298                                  | )          |
| Cash dividends  declared - $50.00 per share                                                                        |       | —                          |       | (21,625                | )          | —                                                   |       | —                     |       | —                                         |       | (21,625                               | )          |
| Reclassification  due to change in fair value of common stock in ESOP subject to contingent  repurchase obligation |       | —                          |       | —                 |       | —                                                   |       | —                     |       | (5,631                                         | )          | (5,631                                | )          |
| **Balance, December 31, 2006**                                                                                     |       | $                               | 41,523     |                   | $          | 119,572                                                  |       | $                          | (5,751     | )                                              | $          | —                                |       | $ | (60,009 | ) | $ | 95,335 |   |

 

*Seeaccompanying notes to consolidated financial statements.*

8

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**WESTSUBURBAN BANCORP, INC.**

**CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

**YEARSENDED DECEMBER 31, 2006, 2005 AND 2004**

(Dollars inthousands)
| ** **                                                                        | ** ** | **2006**   | ** ** | **2005**   | ** ** | **2004** | ** ** |
|-----------------------------------------------------------------------------------|------------|------------|------------|------------|------------|----------|------------|
| **Cash flows from operating  activities**                                         | ** ** | ** ** | ** ** | ** ** |       |     |       |
| Net income                                                                        |       | $          | 25,351     |       | $          | 25,486   |       | $ | 23,658 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities |       |       |       |       |       |     |       |
| Depreciation                                                                      |       | 3,607      |       | 3,284      |       | 3,648    |       |
| Provision for  loan losses                                                        |       | 150        |       | 1,375      |       | 200      |       |
| Deferred income  tax (benefit) provision                                          |       | (1,701     | )          | 1,239      |       | 755      |       |
| Net premium  amortization of securities                                           |       | 564        |       | 1,140      |       | 1,863    |       |
| Net realized  (gains) losses on securities transactions                           |       | (85        | )          | (206       | )          | 2,004    |       |
| Federal Home  Loan Bank stock dividends                                           |       | —     |       | (267       | )          | (313     | )          |
| Increase in cash  surrender value of bank-owned life insurance                    |       | (1,462     | )          | (1,361     | )          | (967     | )          |
| Amortization of  deferred loan fees                                               |       | 100        |       | 185        |       | 326      |       |
| Net gain on  sales of loans held for sale                                         |       | (124       | )          | (109       | )          | (230     | )          |
| Sales of loans  held for sale                                                     |       | 9,730      |       | 6,943      |       | 16,267   |       |
| Origination of  loans held for sale                                               |       | (9,466     | )          | (6,645     | )          | (15,435  | )          |
| Net (gain) loss  on sales of premises and equipment                               |       | (7         | )          | —     |       | 11       |       |
| Net (gain) loss  on sales of other real estate                                    |       | (99        | )          | (223       | )          | 144      |       |
| ESOP  compensation expense                                                        |       | —     |       | —     |       | 1,200    |       |
| (Increase)  decrease in accrued interest and other assets                         |       | (117       | )          | (883       | )          | 652      |       |
| Increase in  accrued interest and other liabilities                               |       | 3,275      |       | 2,373      |       | 2,404    |       |
| **Net  cash provided by operating activities**                                    |       | 29,716     |       | 32,331     |       | 36,187   |       |
| **Cash flows from investing  activities**                                         | ** ** | ** ** | ** ** | ** ** |       |     |       |
| Securities  available for sale                                                    |       |       |       |       |       |     |       |
| Sales                                                                             |       | —     |       | 22,612     |       | 250,225  |       |
| Maturities,  calls and redemptions                                                |       | 104,658    |       | 61,864     |       | 130,711  |       |
| Purchases                                                                         |       | (87,250    | )          | (78,426    | )          | (412,771 | )          |
| Securities held  to maturity                                                      |       |       |       |       |       |     |       |
| Maturities and  calls                                                             |       | 22,851     |       | 9,584      |       | 12,685   |       |
| Purchases                                                                         |       | (2,800     | )          | (2,539     | )          | (55,375  | )          |
| Net (increase)  decrease in loans                                                 |       | (63,252    | )          | (48,808    | )          | 21,315   |       |
| Investment in  bank-owned life insurance policies                                 |       | (735       | )          | (568       | )          | (15,913  | )          |
| Purchases of  premises and equipment                                              |       | (3,435     | )          | (2,822     | )          | (1,408   | )          |
| Sales of  premises and equipment                                                  |       | 49         |       | —     |       | 4        |       |
| Sales of other  real estate                                                       |       | 682        |       | 4,606      |       | 3,613    |       |
| **Net  cash used in investing activities**                                        |       | (29,232    | )          | (34,497    | )          | (66,914  | )          |
| **Cash flows from financing  activities**                                         | ** ** | ** ** | ** ** | ** ** |       |     |       |
| Net increase in  deposits                                                         |       | 38,178     |       | 69,924     |       | 39,811   |       |
| Increase  (decrease) in prepaid solutions cards                                   |       | 1,198      |       | 8,261      |       | (5,403   | )          |
| Dividends paid                                                                    |       | (21,625    | )          | (21,625    | )          | (21,625  | )          |
| **Net  cash provided by financing activities**                                    |       | 17,751     |       | 56,560     |       | 12,783   |       |
| **Net increase (decrease) in cash  and cash equivalents**                         |       | 18,235     |       | 54,394     |       | (17,944  | )          |
| **Beginning cash and cash  equivalents**                                          |       | 105,794    |       | 51,400     |       | 69,344   |       |
| **Ending cash and cash  equivalents**                                             |       | $          | 124,029    |       | $          | 105,794  |       | $ | 51,400 |   |
| **Supplemental disclosures**                                                      | ** ** | ** ** | ** ** | ** ** |       |     |       |
| Cash paid for                                                                     |       |       |       |       |       |     |       |
| Interest                                                                          |       | $          | 43,976     |       | $          | 29,026   |       | $ | 20,750 |   |
| Income taxes                                                                      |       | 11,270     |       | 9,907      |       | 8,090    |       |
| Other real estate  acquired through loan foreclosures                             |       | 724        |       | 1,437      |       | 5,647    |       |

 

*See accompanying notes toconsolidated financial statements*

9

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**WEST SUBURBAN BANCORP, INC.**

## **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

(Dollars inthousands, except per share data)

# **Note 1 —Nature of Business and Summary of Significant Accounting Policies**

West SuburbanBancorp, Inc. (“West Suburban”) through the branch network of its subsidiary,West Suburban Bank (the “Bank” and, together with West Suburban, the “Company”),operates 34 full-service branches, four limited-service branches and sixdepartments providing insurance, financial and other services for theconvenience of the customers of the Bank throughout DuPage, Kane, Kendall andWill Counties in Illinois. Customers in these areas are the primary consumersof the Company’s loan and deposit products and services. Although borrower cashflow is expected to be the primary source of repayment, the Company’s loans aregenerally secured by various forms of collateral including real estate,business assets, consumer goods, personal guarantees and other items.

***OperatingSegments***

While the Company’ssenior management monitors the revenue streams derived from various individualand groups of products and services, any identifiable segments are notmaterial. Moreover, operations are managed and financial performance isevaluated on a Company-wide basis. Accordingly, all of the Company’s operationsare considered by management to be aggregated in one reportable operatingsegment.

***Principlesof Consolidation***

Theconsolidated financial statements include the accounts of West Suburban and theBank. Significant intercompany accounts and transactions have been eliminated.

***Useof Estimates***

To preparefinancial statements in conformity with accounting principles generallyaccepted in the United States of America, management makes estimates and assumptions,which are subject to change, based on available information. These estimatesand assumptions affect the amounts reported in the financial statements and thedisclosures provided, and future results could differ. The allowance for loanlosses, fair values of financial instruments, impairment of securities andstatus of contingencies are particularly subject to change.

***Securities***

Debt andmarketable equity securities are classified into two categories, “available forsale” and “held to maturity.” Available for sale securities are carried at fairvalue with net unrealized gains and losses (net of deferred tax) reported inaccumulated other comprehensive loss as a separate component of shareholders’equity. Held to maturity securities are carried at amortized cost as theCompany has both the ability and positive intent to hold them to maturity.Other securities such as Federal Home Loan Bank stock are carried at cost.Interest income includes amortization of purchase premium and accretion ofpurchase discount. Gains or losses on disposition are based on the net proceedsand the adjusted carrying amount of the specific securities sold. The Companydoes not engage in trading activities.

Declinesin the fair value of securities below their cost that are other than temporaryare reflected as realized losses.  Inestimating other-than-temporary losses, management considers: (1)the length of time and extent that fair value has been less than cost, (2) thefinancial condition and near term prospects of the issuer, and (3) the Company’sability and intent to hold the security for a period sufficient to allow forany anticipated recovery in fair value.

***Loansand Allowance for Loan Losses***

Loans thatmanagement has the intent and ability to hold for the foreseeable future oruntil maturity or payoff are reported at the principal balance outstanding, netof unearned interest, deferred loan fees and costs and an allowance for loanlosses. Interest income is accrued on the unpaid balance of the Company’s loansand includes amortization of net deferred loan fees and costs over the loanterm. Loan origination fees, net of certain direct origination costs, aredeferred and recognized in interest income using the level-yield method withoutanticipating prepayments. Accrual of interest is generally discontinued onloans 90 days past due, or on an earlier date, if management believes, afterconsidering economic and business conditions and collection efforts, that theborrower’s financial 

10

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condition is suchthat collection of principal or interest is doubtful. In some circumstances, aloan more than 90 days past due may continue to accrue interest if it is fullysecured and in the process of collection. When a loan is classified asnonaccrual, interest previously accrued but not collected is charged back tointerest income. When payments are received on nonaccrual loans they are firstapplied to principal, then to interest income and finally to expenses incurredfor collection.

The allowance forloan losses is a valuation allowance for probable incurred credit losses in theloan portfolio. The allowance is increased by a provision for loan lossescharged to earnings. Loan losses are charged against the allowance whenmanagement believes the uncollectibility of a loan has been established.Subsequent recoveries, if any, are credited to the allowance. The allowanceconsists of specific and general components. The specific component relates tospecific loans that are individually classified as impaired. The generalcomponent covers pools of other loans and is based on historical lossexperience adjusted for current factors. The allowance for loan losses isevaluated monthly based on management’s periodic review of loan collectibilityin light of historical loan loss experience, the nature and volume of the loanportfolio, information about specific borrower situations and estimatedcollateral values and prevailing economic conditions. Although allocations ofthe allowance may be made for specific loans, the entire allowance is availablefor any loan that, in management’s judgment, should be charged-off. Management’sevaluation of loan collectibility is inherently subjective as it requiresestimates that are subject to significant revision as more information becomesavailable or as relevant circumstances change.

The Companyevaluates commercial, real estate construction and commercial mortgage loansmonthly for impairment. A loan is considered impaired when, based on currentinformation and events, full payment under the loan terms is not expected.Impairment is measured based on the present value of expected future cash flowsdiscounted at the loan’s effective interest rate or the fair value of the loan’scollateral, if repayment of the loan is collateral dependent. A valuationallowance is maintained for the amount of impairment. Generally, loans 90 daysor more past due and all loans classified as nonaccrual status are consideredfor impairment. Impairment is considered on an entire category basis forsmaller-balance loans of similar nature, such as residential real estate andconsumer loans, and on an individual basis for other loans.  In general, consumer and credit card loansare charged-off no later than 180 days after a consumer or credit card loanbecomes past due.

***LoansHeld for Sale***

Loans areidentified as either held for investment or held for sale upon origination.Loans held for sale are recorded at the lower of amortized cost or marketvalue, determined on an aggregate basis. Unrealized losses, if any, arerecognized on a current basis by charges to earnings. There were no loans heldfor sale at December 31, 2006. At December 31, 2005, the cost and market valueof loans held for sale were approximately the same. Mortgage loans held forsale are generally sold with servicing released.

***Bank-OwnedLife Insurance (“BOLI”)***

The Company haspurchased life insurance policies on certain officers and directors. BOLI isrecorded at its cash surrender value, or the amount that can be realized.

***Premisesand Equipment***

Land is carried atcost. Premises and equipment are stated at cost less accumulated depreciation.Depreciation is generally computed on the straight-line method over theestimated useful lives of the assets ranging from 8 to 50 years for premisesand from 3 to 15 years for furniture and equipment. Leasehold improvements areamortized on a straight-line basis over the estimated useful lives of theimprovements or the remaining term of the leases, whichever is shorter.

***OtherReal Estate***

Other real estateincludes properties acquired in partial or total settlement of problem loans.The properties are recorded at the lower of cost or fair value less estimatedselling costs at the date acquired. Losses recognized at the time ofacquisition of such properties are charged to the allowance for loan losses.Any subsequent decline in value is charged to current operations. The revenuereceived from and expenses incurred in maintaining such properties are alsoincluded in current operations.

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***Long-termAssets***

Premises andequipment and other long-term assets are reviewed for impairment when eventsindicate their carrying amount may not be recoverable from future undiscountedcash flows. If impaired, the assets are recorded at fair value.

***LoanCommitments and Related Financial Instruments***

Financialinstruments include off-balance sheet credit instruments, such ascommitments to make loans and commercial letters of credit, issued to meetcustomer financing needs.  The faceamount for these items represents the exposure to loss, before consideringcustomer collateral or ability to repay. Such financial instruments are recorded when they are funded.

***PrepaidSolutions Cards***

Prepaid solutionscard revenues are recognized when services are performed. These revenues arecomprised primarily of service and transaction fees. Service fees representpayments associated with card preparation, customization, usage, non-usage andprocessing. Transaction fees primarily represent interchange fees generated astransactions are made by cardholders. These fees are recognized as revenue inthe same period the related transactions occur or services are rendered.

Prepaid solutionscard expenses are recognized as incurred. These expenses generally includecosts associated with the card preparation and customization, data processingfees associated with the card transaction processing, and other expensesdirectly associated with the Bank’s prepaid solutions card customers. Generaland administrative expenses, such as salaries and benefits, furniture andequipment, advertising and promotion, and professional fees are not included inthe prepaid solutions card expense category, but rather are included in theappropriate expense classification in the Company’s consolidated statements ofincome.

***IncomeTaxes***

Income tax expenseis the total of the current year income tax due or refundable and the change indeferred tax assets and liabilities. Deferred tax assets and liabilities arethe expected future tax consequences of temporary differences between thecarrying amounts and the tax basis of assets and liabilities, computed usingenacted tax rates. A valuation allowance, if needed, reduces deferred taxassets to the amount expected to be realized.

***EmployeeStock Ownership Plan (“ESOP”) and Other Retirement Plans***

TheBank maintains an ESOP, which is a noncontributory tax qualified retirementplan that covers employees who have satisfied specific service requirements.The Bank makes contributions to the ESOP for the benefit of the participants.On December 30, 2003, the ESOP became leveraged for the first time since itsinception. The ESOP borrowed $1.2 million from West Suburban to facilitate thepurchase of a large block of common stock from one shareholder. The ESOPretired the indebtedness on January 2, 2004. Dividends declared on common stockowned by the ESOP are charged against retained earnings.

Dividendspaid on ESOP shares are passed through to participants. Earned and allocatedESOP shares are voted by the respective participants. Because participants mayrequire the Company to purchase their ESOP shares upon termination of theiremployment, the appraised fair value of all earned and allocated ESOP shares isreclassified from shareholders’ equity. ESOP shares committed to be releasedare reported as a reduction of shareholders’ equity. Once the shares have beenreleased they are added to shareholders’ equity.

The Company has apostretirement heathcare plan covering certain executives. Postretirementbenefit costs are net of service and interest costs and amortization of gainsand losses not immediately recognized.

The Company hasdeferred compensation arrangements with certain former and current executiveofficers. Deferred compensation expense allocates the benefits over years ofservice.

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***EarningsPer Share***

Earnings per shareis calculated on the basis of the daily weighted average number of sharesoutstanding. ESOP shares are considered outstanding for this calculation unlessunearned.

***CashFlows***

For purposes ofreporting cash flows, cash and cash equivalents include cash and due from banksand federal funds sold. Generally, federal funds are sold for one-dayperiods.  Net cash flows are reported forcustomer loan, deposit and prepaid solutions card transactions.

***ComprehensiveIncome***

Comprehensiveincome includes net income and other comprehensive income. The Company’s othercomprehensive income consists of the change in unrealized gains and losses onavailable for sale securities, net of reclassification adjustments and deferredtax effects.

***LegalProceedings***

Legalproceedings, including claims and legal actions arising in the ordinary courseof business, are recorded as liabilities when the likelihood of loss isprobable and an amount or range of loss can be reasonably estimated.  The Company is not aware of any proceedings thatwill have a material effect on the financial statements.

***Restrictionson Cash***

Cashon hand or on deposit with the Federal Reserve Bank of $12,705 and $14,486 wasrequired to meet regulatory reserve and clearing requirements at year end 2006and 2005, respectively.  These balancesdo not earn interest.

***DividendRestriction***

Bankingregulations require maintaining certain capital levels and may limit thedividends paid by the Bank to West Suburban or by West Suburban toshareholders.  These restrictions pose nopractical limit on the ability of the Bank or West Suburban to pay dividends athistorical levels.  (See Note 11 for morespecific disclosure.)

***FairValue of Financial Instruments***

Fair value offinancial instruments are estimated using relevant market information and otherassumptions. (See Note 9 for more specific disclosure.)  Fair value estimates involve uncertaintiesand matters of significant judgment regarding interest rates, credit risk,prepayments, and other factors, especially in the absence of active markets forparticular items.  Changes in assumptionsor in market conditions could significantly affect the estimates.

***Reclassifications***

Certainreclassifications have been made in prior years’ financial statements toconform to the current year’s presentation.

***RecentAccounting Pronouncements***

In February 2006, the Financial Accounting Standards Board (“FASB”)issued Statement of Financial Accounting Standards (“SFAS”) 155, “Accountingfor Certain Hybrid Financial Instruments,” which permits, but does not require,fair value accounting for any hybrid financial instrument that contains anembedded derivative that would otherwise require bifurcation in accordance withSFAS 133, “Accounting for Derivative Instruments and Hedging Activities.” Thisstatement also subjects beneficial interests in securitized financial assets tothe requirements of SFAS 133. This statement is effective for all financialinstruments acquired, issued, or subject to re-measurement after the beginningof the first fiscal year that begins after September 15, 2006 or January 1,2007 for calendar-year companies, with earlier adoption permitted. The FASBsubsequently issued on January 17, 2007, SFAS 133 Implementation Issue No. B40(“DIG B40”) to exempt certain securitized financial assets that are prepayableand purchased at a discount after the adoption of SFAS 155 from the bifurcationrules. DIG B40 exempts companies from applying fair value accounting to certainsecuritized financial instruments, including collateralized mortgageobligations and mortgage backed securities purchased at a discount on and afterJune 30, 2007. The Company does not currently believe that the adoption of SFAS155 (as amended by DIG B40) will have a material impact on the financialcondition or results of operations.

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In March 2006, the FASB issued SFAS 156, “Accountingfor Servicing of Financial Assets,” which requires all separately recognizedservicing assets and liabilities to be initially measured at fair value, ifpractical. An entity can elect either (1) subsequently to measure servicingrights at fair value and report changes in fair value in earnings, or (2)continue the current practice of amortizing servicing rights in proportion to,and over the expected period of, servicing income or loss. The statement alsopermits entities, at the date of adoption, a one-time option to reclassifycertain available-for-sale (“AFS”) securities to trading securities, withoutcalling into question the classification of other AFS securities under SFAS115, “Accounting for Certain Investments in Debt and Equity Securities,”provided that the AFS securities are identified in some manner as offsettingthe entity’s exposure to changes in fair value of servicing assets orliabilities that the entity has elected to subsequently measure at fair value.This statement is effective for fiscal years beginning after September 15,2006, or at January 1, 2007 for calendar-year companies. The adoption of SFAS156 will not have a material impact on the financial condition or results ofoperations.

In July 2006, the FASB issued FASB Interpretation (“FIN”) 48, “Accountingfor Uncertainty in Income Taxes”, which was issued to require that all taxpositions be evaluated using consistent criteria and measurement and furthersupplemented by enhanced disclosure. FIN 48, an interpretation of SFAS 109, “Accountingfor Income Taxes,” prescribes the minimum recognition threshold a tax positionis required to meet before being recognized in the financial statements. Thisinterpretation provides clear criteria for subsequently recognizing,derecognizing, and measuring such tax positions for financial statementpurposes, as well as provides guidance on accrual of interest and penalties,accounting in interim periods, disclosure, and transition. FIN 48 is effectivefor fiscal years beginning after December 15, 2006, or January 1, 2007 forcalendar year-end companies. Differences between the amounts recognized in thestatements of financial position prior to the adoption of FIN 48 and theamounts reported after adoption would be accounted for as a cumulative-effectadjustment recorded to the beginning balance of retained earnings. Thecumulative-effect adjustment would not apply to those items that would not havebeen recognized in earnings, such as the effect of adopting FIN 48 on taxpositions related to business combinations. The adoption of FIN 48 willnot have a material impact on the financial condition or results of operations.

In September 2006,the FASB issued SFAS 157, “Fair Value Measurements,” to provide guidance on howto measure fair value, which would apply broadly to financial and non-financialassets and liabilities that are measured at fair value under otherauthoritative accounting pronouncements. The statement defines fair value, providesa hierarchy that prioritizes inputs that should be used in valuation techniquesused to measure fair value, and expands current disclosures about the use offair value to measure assets and liabilities. The disclosures focus on themethods used for the measurements and their effect on earnings and would applywhether the assets were measured at fair value in all periods, such as fortrading securities, or in only some periods, such as for impaired assets. Atransition adjustment would be recognized as a cumulative-effect adjustment tobeginning retained earnings for the fiscal year in which the statement isinitially adopted. This adjustment is measured as the difference between thecarrying amounts and the fair values of those financial instruments at the dateof adoption. The statement is effective for fiscal years beginning afterNovember 15, 2007, or January 1, 2008 for calendar-year companies, and interimperiods within those fiscal years. The Company will adopt the statement onJanuary 1, 2008. The fair value disclosures required by this statement will beeffective for the first interim period in which the statement is adopted. TheCompany is currently evaluating the impact of this statement on its financialcondition and results of operations.

In September 2006,the FASB issued SFAS 158, “Employers’ Accounting for Defined Benefit Pensionand Other Postretirement Plans,” that requires companies to recognize thefunded status of its defined benefit pension and postretirement plans as anasset or liability on the balance sheet rather than being disclosed in thenotes to the financial statements. The over-funded or under-funded status(asset or liability) would be measured as the difference between the fair valueof plan assets and the projected benefit obligation for pensions and theaccumulated postretirement benefit obligation for other postretirementbenefits. Actuarial gains and losses and prior service costs and credits thatarise subsequent to the effective date would be recognized, net of tax, as acomponent of other comprehensive income and would continue to be amortized intoearnings in future periods as a component of net periodic benefit cost. Inaddition, employers are required to set the measurement date as of the balancesheet date, rather than having the option of any date up to three months priorto the fiscal year-end. Plan assets and obligations would not be required to beremeasured for interim period reporting. The requirement to recognize thefunded status in the balance sheet is effective for fiscal years ending afterDecember 15, 2006 and the requirement to measure plan assets and benefitobligations as of the balance sheet date is not effective until fiscal yearsending after December 15, 2008. The adoption had the following effect on the individual line items in the2006 balance sheet.

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|                                        | ** ** | **Before  Adoption of  SFAS 158** | ** ** | **Adjustments** | ** ** | **After  Adoption of  SFAS 158** | ** ** |
|----------------------------------------|------------|---------------------------------------------|------------|-----------------|------------|--------------------------------------------|------------|
| Liability for  postretirement benefits |       | $                                           | 156        |            | $          | 495                                        |       | $ | 651 |   |
| Deferred income  tax assets            |       | 11,779                                      |       | 197             |       | 11,976                                     |       |
| Total  liabilities                     |       | 1,720,804                                   |       | 495             |       | 1,721,299                                  |       |
| Accumulated  other comprehensive loss  |       | (5,453                                      | )          | (298            | )          | (5,751                                     | )          |
| Total shareholders’  equity       |       | 95,633                                      |       | (298            | )          | 95,335                                     |       |
|                                        |            |                                             |            |                 |            |                                            |            |  |  |  |

 

Under EmergingIssues Task Force (“EITF”) Issue No. 06-4: Accounting for Deferred Compensationand Postretirement Benefit Aspects of Endorsement Split-Dollar Life InsuranceArrangements, the EITF reached a consensus that requires the recognition of aliability related to the postretirement benefits covered by an endorsementsplit-dollar life insurance arrangement. The consensus highlights that theemployer who is the policy holder has a liability for the benefit it isproviding to the employee. When the employer has agreed to maintain theinsurance policy in force for the employee’s benefit during his retirement,then the liability recognized during the employee’s active service periodshould be based on the future cost of insurance to be incurred during theemployee’s retirement. Also, if the employer has agreed to provide the employeewith a death benefit, then the liability for the future death benefit should berecognized under SFAS 106. EITF Issue No. 06-4 is effective for fiscal yearsbeginning after December 15, 2007, or January 1, 2008 for calendar-yearcompanies. The Company is required to adopt EITF Issue No. 06-4 on January 1,2008 through a cumulative effect adjustment to retained earnings as of thebeginning of the year of adoption. The Company is currently evaluating the impact of this interpretation onits financial condition and results of operations.

Under EITF IssueNo. 06-5: Accounting for Purchases of Life Insurance - Determining the AmountThat Could be Realized in Accordance with FASB Technical Bulletin No. 85-4, “Accountingfor Purchases of Life Insurance,” the EITF reached a consensus that apolicyholder should consider any additional amounts included in the contractualterms of the policy in determining the amount that could be realized under theinsurance contract. The EITF agreed that contractual limitations should beconsidered when determining the realizable amounts. Those amounts that arerecoverable by the policyholder at the discretion of the insurance companyshould be excluded from the amount that could be realized. The EITF also agreedthat fixed amounts that are recoverable by the policyholder in future periodsin excess of one year from the surrender of the policy should be recognized attheir present value. The EITF also reached a consensus that a policyholdershould determine the amount that could be realized under the life insurancecontract assuming the surrender of an individual-life by individual-lifepolicy. The EITF also noted that any amount that is ultimately realized by thepolicyholder upon the assumed surrender of the final policy shall be includedin the amount that could be realized under the insurance contract. The issueshould be effective for fiscal years beginning after December 15, 2006, butearly adoption is permitted. The adoption of EITF Issue No. 06-5 will not have a material impacton the financial condition or results of operations.

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##### **Note2 - Securities**

The amortized cost andfair value of securities available for sale are as follows at December 31:
| ** **                          | ** ** | **2006**            | ** ** |
|-------------------------------------|------------|---------------------|------------|
| ** **                          | ** ** | **Amortized  Cost** | ** ** | **Gross  Unrealized  Gains** | ** ** | **Gross  Unrealized  Losses** | ** ** | **Fair  Value** | ** ** |
| Corporate                           |       | $                   | 46,384     |   | $ | 193 |   | $ | (1,203 | ) | $ | 45,374 |   |
| U.S. government  sponsored entities |       | 224,276             |       | — |   | (5,682 | ) | 218,594 |   |
| Mortgage-backed                     |       | 176,784             |       | 347 |   | (2,419 | ) | 174,712 |   |
| States and political  subdivisions  |       | 13,700              |       | 33 |   | (186 | ) | 13,547 |   |
| Total debt  securities              |       | 461,144             |       | 573 |   | (9,490 | ) | 452,227 |   |
| Preferred stock                     |       | 1,003               |       | — |   | (133 | ) | 870 |   |
| Total                               |       | $                   | 462,147    |   | $ | 573 |   | $ | (9,623 | ) | $ | 453,097 |   |

 
| ** **                          | ** ** | **2005**            | ** ** |
|-------------------------------------|------------|---------------------|------------|
| ** **                          | ** ** | **Amortized  Cost** | ** ** | **Gross  Unrealized  Gains** | ** ** | **Gross  Unrealized  Losses** | ** ** | **Fair  Value** | ** ** |
| Corporate                           |       | $                   | 45,417     |   | $ | 260 |   | $ | (1,658 | ) | $ | 44,019 |   |
| U.S. government  sponsored entities |       | 277,326             |       | — |   | (8,278 | ) | 269,048 |   |
| Mortgage-backed                     |       | 145,289             |       | — |   | (3,749 | ) | 141,540 |   |
| States and political  subdivisions  |       | 10,590              |       | — |   | (225 | ) | 10,365 |   |
| Total debt  securities              |       | 478,622             |       | 260 |   | (13,910 | ) | 464,972 |   |
| Preferred stock                     |       | 1,003               |       | — |   | (177 | ) | 826 |   |
| Total                               |       | $                   | 479,625    |   | $ | 260 |   | $ | (14,087 | ) | $ | 465,798 |   |

 

The amortized cost andfair value of securities held to maturity are as follows at December 31:
| ** **                          | ** ** | **2006**            | ** ** |
|-------------------------------------|------------|---------------------|------------|
| ** **                          | ** ** | **Amortized  Cost** | ** ** | **Gross  Unrealized  Gains** | ** ** | **Gross  Unrealized  Losses** | ** ** | **Fair  Value** | ** ** |
| U.S. government  sponsored entities |       | $                   | 17,597     |   | $ | — |   | $ | (126 | ) | $ | 17,471 |   |
| Mortgage-backed                     |       | 13,882              |       | 11 |   | (347 | ) | 13,546 |   |
| States and political  subdivisions  |       | 13,534              |       | 213 |   | (36 | ) | 13,711 |   |
| Total                               |       | $                   | 45,013     |   | $ | 224 |   | $ | (509 | ) | $ | 44,728 |   |

 
| ** **                          | ** ** | **2005**            | ** ** |
|-------------------------------------|------------|---------------------|------------|
| ** **                          | ** ** | **Amortized  Cost** | ** ** | **Gross  Unrealized  Gains** | ** ** | **Gross  Unrealized  Losses** | ** ** | **Fair  Value** | ** ** |
| U.S. government  sponsored entities |       | $                   | 37,347     |   | $ | 2 |   | $ | (469 | ) | $ | 36,880 |   |
| Mortgage-backed                     |       | 13,018              |       | 5 |   | (496 | ) | 12,527 |   |
| States and political  subdivisions  |       | 14,580              |       | 178 |   | (91 | ) | 14,667 |   |
| Total                               |       | $                   | 64,945     |   | $ | 185 |   | $ | (1,056 | ) | $ | 64,074 |   |

 

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Securities with unrealizedlosses at year end 2006 and 2005 not recognized in income are presented belowby the length of time the securities have been in a continuous unrealized lossposition:
| ** **                          | ** ** | **2006**                               | ** ** |
|-------------------------------------|------------|----------------------------------------|------------|
| ** **                          | ** ** | **Less than 12 months** | ** ** | **12 months or more** | ** ** | **Total** | ** ** |
| ** **                          | ** ** | **Fair Value**                    | ** ** | **Unrealized  loss** | ** ** | **Fair Value** | ** ** | **Unrealized  loss** | ** ** | **Fair Value** | ** ** | **Unrealized  loss** | ** ** |
| Corporate                           |       | $                                      | 2,497      |   | $ | 3 |   | $ | 40,184 |   | $ | 1,200 |   | $ | 42,681 |   | $ | 1,203 |   |
| U.S. government  sponsored entities |       | —                                 |       | — |   | 236,065 |   | 5,808 |   | 236,065 |   | 5,808 |   |
| Mortgage-backed                     |       | 11,959                                 |       | 34 |   | 117,748 |   | 2,733 |   | 129,707 |   | 2,767 |   |
| States and  political subdivisions  |       | 754                                    |       | 6 |   | 11,412 |   | 215 |   | 12,166 |   | 221 |   |
| Preferred stock                     |       | —                                 |       | — |   | 870 |   | 133 |   | 870 |   | 133 |   |
| Total  temporarily impaired         |       | $                                      | 15,210     |   | $ | 43 |   | $ | 406,279 |   | $ | 10,089 |   | $ | 421,489 |   | $ | 10,132 |   |

 
| ** **                          | ** ** | **2005**                               | ** ** |
|-------------------------------------|------------|----------------------------------------|------------|
| ** **                          | ** ** | **Less than 12 months** | ** ** | **12 months or more** | ** ** | **Total** | ** ** |
| ** **                          | ** ** | **Fair Value**                    | ** ** | **Unrealized  loss** | ** ** | **Fair Value** | ** ** | **Unrealized  loss** | ** ** | **Fair Value** | ** ** | **Unrealized  loss** | ** ** |
| Corporate                           |       | $                                      | 12,917     |   | $ | 292 |   | $ | 28,342 |   | $ | 1,366 |   | $ | 41,259 |   | $ | 1,658 |   |
| U.S. government  sponsored entities |       | 172,874                                |       | 3,443 |   | 131,053 |   | 5,304 |   | 303,927 |   | 8,747 |   |
| Mortgage-backed                     |       | 137,356                                |       | 3,237 |   | 16,202 |   | 1,008 |   | 153,558 |   | 4,245 |   |
| States and  political subdivisions  |       | 10,693                                 |       | 168 |   | 3,942 |   | 148 |   | 14,635 |   | 316 |   |
| Preferred stock                     |       | —                                 |       | — |   | 825 |   | 177 |   | 825 |   | 177 |   |
| Total  temporarily impaired         |       | $                                      | 333,840    |   | $ | 7,140 |   | $ | 180,364 |   | $ | 8,003 |   | $ | 514,204 |   | $ | 15,143 |   |

 

In accordance withgenerally accepted accounting principles, unrealized losses on debt securitiesare not recognized if management has the intent and ability to hold thesecurities until their maturity date and no concerns exist with respect to theability of the issuer to satisfy its obligations at maturity. Managementbelieves that the fair value of these debt securities with unrealized losseswill recover as the securities approach their maturity date or repricing date.At December 31, 2006, preferred stock with an amortized cost of $1.0 millionhad unrealized losses for a continuous period of twelve months or more and theamount of the unrealized losses as of that date was $.1 million. The Companyhas determined this unrealized loss to be temporary as management expects thesecurity to recover its original cost as interest rates increase as thesecurity approaches its reprice date. The Company has both the intent andability to hold the investment until such recovery occurs. Thepreferred stock is issued by the Federal Home Loan Mortgage Corporation.Management does not believe any individual unrealized loss as of December 31,2006 represents other than temporary impairment.

The amortized cost andfair value of debt securities available for sale and held to maturity atDecember 31, 2006 by contractual maturity are as follows:
| ** **                          | ** ** | **Available for Sale** | ** ** | **Held to Maturity** | ** ** |
|-------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                          | ** ** | **Amortized  Cost**              | ** ** | **Fair Value**            | ** ** | **Amortized  Cost** | ** ** | **Fair Value** | ** ** |
| Due in 1 year or  less              |       | $                                | 34,951     |                           | $          | 34,549 |   | $ | 18,300 |   | $ | 18,180 |   |
| Due after 1 year  through 5 years   |       | 233,758                          |       | 227,588                        |       | 7,063 |   | 7,070 |   |
| Due after 5  years through 10 years |       | 7,255                            |       | 6,951                          |       | 2,876 |   | 3,008 |   |
| Due after 10  years                 |       | 8,396                            |       | 8,427                          |       | 2,892 |   | 2,924 |   |
| Mortgage-backed                     |       | 176,784                          |       | 174,712                        |       | 13,882 |   | 13,546 |   |
| Total                               |       | $                                | 461,144    |                           | $          | 452,227 |   | $ | 45,013 |   | $ | 44,728 |   |

 

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Expected maturities willdiffer from contractual maturities because issuers may have the right to callor prepay obligations with or without call or prepayment penalties.Approximately $144,560 of securities are callable in 2007. Most of thesecallable securities were issued by U.S. government sponsored entities.

Securities with a carrying value ofapproximately $56,526 and $53,938 at December 31, 2006 and 2005, respectively,were pledged to secure public deposits, fiduciary activities and for otherpurposes required or permitted by law.

Sales of securitiesavailable for sale were as follows:
| ** **            | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|-----------------------|------------|----------|------------|----------|------------|----------|------------|
| Proceeds from sales   |       | $        | —     |     | $          | 22,612   |       | $ | 250,225 |   |
| Gross realized gains  |       | —   |       | 185      |       | 751      |       |
| Gross realized losses |       | —   |       | (3       | )          | (2,755   | )          |
|                       |            |          |            |          |            |          |            |  |  |  |

*Net gains on securitiestransactions in 2006 and 2005 include recoveries of $85 and $24, respectively,on securities written down in 2001.*

**Note 3 -Loans**

Majorclassifications of loans were as follows at December 31:
| ** **                 | ** ** | **2006**   | ** ** | **2005**   | ** ** |
|----------------------------|------------|------------|------------|------------|------------|
| Commercial                 |       | $282,826   |       | $276,898   |       |
| Consumer                   |       | 6,821      |       | 7,501      |       |
| Indirect automobile        |       | 13,855     |       | 24,939     |       |
| Real estate                |       |       |       |       |       |
| Residential                |       | 177,885    |       | 160,902    |       |
| Commercial                 |       | 232,865    |       | 225,794    |       |
| Home equity                |       | 240,720    |       | 229,514    |       |
| Construction               |       | 197,528    |       | 165,484    |       |
| Held for sale              |       | —     |       | 140        |       |
| Credit card                |       | 10,375     |       | 10,545     |       |
| Other                      |       | 1,660      |       | 711        |       |
| Total                      |       | 1,164,535  |       | 1,102,428  |       |
| Allowance for loan  losses |       | (10,650    | )          | (10,681    | )          |
| Loans, net                 |       | $1,153,885 |       | $1,091,747 |       |

TheCompany makes commercial, personal and residential loans primarily to customersthroughout the western suburbs of Chicago. Construction loans are primarilymade to customers engaged in the development and construction of residentialreal estate projects within the Company’s market area.

Changes in the allowancefor loan losses were as follows for the years ended December 31:
| ** **                  | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|-----------------------------|------------|----------|------------|----------|------------|----------|------------|
| Balance, beginning of  year |       | $10,681  |       | $10,527  |       | $14,420  |       |
| Provision for  loan losses  |       | 150      |       | 1,375    |       | 200      |       |
| Loans  charged-off          |       | (418     | )          | (1,589   | )          | (4,564   | )          |
| Recoveries                  |       | 237      |       | 368      |       | 471      |       |
| Balance, end of year        |       | $10,650  |       | $10,681  |       | $10,527  |       |

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Impaired loans are summarized as follows atDecember 31:
|                                                                                  | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|----------------------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Year-end loans with no  allocated allowance   for loan losses                    |       | $        | 12         |     | $          | 904      |       | $ | 664 |   |
| Year-end loans  with allocated allowance   for loan losses                       |       | 9,222    |       | 5,403    |       | 6,613    |       |
| Total                                                                            |       | $        | 9,234      |     | $          | 6,307    |       | $ | 7,277 |   |
|                                                                             |       |     |       |     |       |     |       |
| Amount of the allowance for  loan losses allocated to impaired loans at year-end |       | $        | 4,689      |     | $          | 3,497    |       | $ | 2,317 |   |
| Average impaired  loans during the year                                          |       | 7,060    |       | 4,962    |       | 15,606   |       |
| Interest income recognized  during impairment                                    |       | 1,096    |       | 306      |       | 317      |       |
|                                                                             |       |     |       |     |       |     |       |
| Nonperforming  loans were as follows at December 31:                             |       |     |       |     |       |     |       |
|                                                                             |       |     |       |     |       |     |       |
| Loans past due 90 days or  more still on accrual                                 |       | $        | 319        |     | $          | 1,665    |       | $ | 1,036 |   |
| Nonaccrual loans                                                                 |       | 1,131    |       | 533      |       | 3,815    |       |
| Total                                                                            |       | $        | 1,450      |     | $          | 2,198    |       | $ | 4,851 |   |

Mortgage loansserviced for others are not included in the accompanying consolidated balancesheets. At December 31, 2006 and 2005, the Company serviced mortgage loans forthe benefit of others with aggregate unpaid principal balances of $4,606 and$5,960, respectively. Accordingly, retained and acquired mortgage servicingrights are not material and are not presented as a separate asset. The Company generallysells mortgage loans with servicing rights released.
| ** **                                 | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|--------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Activity during  the year:                 |       |     |       |     |       |     |       |
| Origination of loans held for sale         |       | $        | 9,466      |     | $          | 6,645    |       | $ | 15,435 |   |
| Proceeds from sales of loans held for sale |       | 9,730    |       | 6,943    |       | 16,267   |       |
| Net gains on sales of loans held for sale  |       | 124      |       | 109      |       | 230      |       |
| Loan servicing  fees                       |       | 16       |       | 24       |       | 34       |       |
|                                            |            |          |            |          |            |          |            |  |  |  |

# **Note 4 - Premises and Equipment**

Major classifications ofassets comprising premises and equipment are summarized as follows at December31:
| ** **                     | ** ** | **2006** | ** ** | **2005** | ** ** |
|--------------------------------|------------|----------|------------|----------|------------|
| Land                           |       | $        | 11,671     |     | $          | 11,571 |   |
| Premises                       |       | 42,006   |       | 42,355   |       |
| Furniture and  equipment       |       | 45,681   |       | 44,202   |       |
| Total                          |       | 99,358   |       | 98,128   |       |
| Less accumulated  depreciation |       | (59,393  | )          | (57,949  | )          |
| Premises and  equipment, net   |       | $        | 39,965     |     | $          | 40,179 |   |

 

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##### **Note5 - Deposits**

The major categories ofdeposits are summarized as follows at December 31:
| ** **                 | ** ** | **2006** | ** ** | **2005** | ** ** |
|----------------------------|------------|----------|------------|----------|------------|
| Demand-noninterest-bearing |       | $        | 155,041    |     | $          | 165,413 |   |
| NOW                        |       | 325,415  |       | 331,420  |       |
| Money market checking      |       | 271,209  |       | 219,433  |       |
| Savings                    |       | 374,484  |       | 413,860  |       |
| Time deposits              |       |     |       |     |       |
| Less than  $100,000        |       | 389,196  |       | 365,166  |       |
| $100,000 and  greater      |       | 162,499  |       | 144,374  |       |
| Total                      |       | $        | 1,677,844  |     | $          | 1,639,666 |   |

At December 31, 2006, the scheduled maturities of timedeposits were as follows:
| 2007       |   | $      | 394,837 |   |   |   |
|------------|--------|--------|---------|--------|--------|--------|
| 2008       |   | 78,614 |    |   |   |
| 2009       |   | 39,958 |    |   |   |
| 2010       |   | 24,536 |    |   |   |
| 2011       |   | 13,717 |    |   |   |
| Thereafter |   | 33     |    |   |   |
| Total      |   | $      | 551,695 |   |   |   |

##### **Note 6 - Income Taxes**

Income tax expense is as follows for the yearsended December 31:
| ** **                       | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|----------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Currently payable tax            |       |     |       |     |       |     |       |
| Federal                          |       | $        | 11,611     |     | $          | 9,181    |       | $ | 8,595 |   |
| State                            |       | —   |       | (97      | )          | (421     | )          |
| Deferred tax (benefit)  provison |       | (1,701   | )          | 1,239    |       | 755      |       |
| Total                            |       | $        | 9,910      |     | $          | 10,323   |       | $ | 8,929 |   |

Areconciliation between taxes computed at the statutory federal income tax rateand the consolidated effective tax rates follows:
| ** **                                      | ** ** | **2006**                           | ** ** | **2005**                           | ** ** | **2004**                           | ** ** |
|-------------------------------------------------|------------|------------------------------------|------------|------------------------------------|------------|------------------------------------|------------|
| Statutory federal  income tax rate              |       |      35.0 | %          |      35.0 | %          |      35.0 | %          |
| (Decrease) increase in  taxes resulting from:   |       |                               |       |                               |       |                               |       |
| Tax-exempt  income                              |       | (1.1                               | )%         | (1.0                               | )%         | (1.8                               | )%         |
| State income  taxes, net of federal tax benefit |       | (1.3                               | )%         | (0.2                               | )%         | (0.6                               | )%         |
| Dividends on  ESOP shares                       |       | (2.7                               | )%         | (3.7                               | )%         | (2.9                               | )%         |
| Other items, net                                |       | (1.8                               | )%         | (1.3                               | )%         | (2.3                               | )%         |
| Effective tax rate                              |       | 28.1                               | %          | 28.8                               | %          | 27.4                               | %          |

 

20

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The temporary differenceswhich created deferred tax assets and liabilities at December 31 are summarizedbelow:
| ** **                                       | ** ** | **2006**   | ** ** | **2005** | ** ** |
|--------------------------------------------------|------------|------------|------------|----------|------------|
| Deferred tax  assets                             | ** ** | ** ** |       |     |       |
| Allowance for loan losses                        |       | $          | 4,134      |     | $          | 4,246 |   |
| Deferred compensation                            |       | 2,846      |       | 2,409    |       |
| Unrealized loss on securities available for sale |       | 3,597      |       | 5,496    |       |
| Nonaccrual loan interest income                  |       | 56         |       | 141      |       |
| SFAS 158 adjustment                              |       | 197        |       | —   |       |
| State net operating loss                         |       | 844        |       | 402      |       |
| Other                                            |       | 302        |       | —   |       |
| Total deferred tax assets                        |       | 11,976     |       | 12,694   |       |
| Deferred tax  liabilities                        |       |       |       |     |       |
| Depreciation                                     |       | 555        |       | 653      |       |
| Federal Home Loan Bank stock dividends           |       | 611        |       | 674      |       |
| Undistributed REIT income                        |       | 32         |       | 309      |       |
| Deposit base intangible                          |       | 234        |       | 212      |       |
| Qualified prepaid expenses                       |       | 273        |       | 281      |       |
| Other                                            |       | —     |       | 293      |       |
| Total deferred tax liabilities                   |       | 1,705      |       | 2,422    |       |
| Net deferred tax  assets                         |       | $          | 10,271     |     | $          | 10,272 |   |

Netdeferred tax assets are included in accrued interest and other assets. No valuationallowance was considered necessary for net deferred tax assets. At December 31,2006, the Company had a net operating loss carryforward for state tax purposestotaling approximately $18.0 million, which expire at various dates beginningin 2018.

# **Note 7 -ESOP and Other Benefit Plans**

The ESOP provides incentives to employees bygranting participants an interest in West Suburban’s common stock, whichrepresents the ESOP’s primary investment. An individual account is establishedfor each participant and the benefits payable upon retirement, termination,disability or death are based upon service, the amount of the employer’scontributions and any income, expenses, gains and losses and forfeituresallocated to the participant’s account. Contributions, which are determined bythe board of directors of the Bank, are paid by the Bank and were $2,062 in2006, $1,951 in 2005 and $1,879 in 2004.

At December 31, 2006 and 2005, the ESOP held85,727 and 83,530, respectively, shares of West Suburban common stock that wereallocated to ESOP participants. Upon termination of their employment,participants who elect to receive their benefit distributions in the form ofWest Suburban common stock may require the Company to purchase the common stockdistributed at fair value during two 60-day periods. The first purchase periodbegins on the date the benefit is distributed and the second purchase periodbegins on the first anniversary of the distribution date. This contingentrepurchase obligation is reflected in the Company’s financial statements as “Commonstock in ESOP subject to contingent repurchase obligation” and reducesshareholders’ equity by an amount that represents the independently appraisedfair value of all West Suburban common stock held by the ESOP and allocated toparticipants, without regard to whether it is likely that the shares would bedistributed or that the recipients of the shares would be likely to exercisetheir right to require the Company to purchase the shares.

During 2006 and 2005, the ESOP distributed $764and $541, respectively, in cash representing the interests of participants. Inaddition, the ESOP distributed 292 shares in 2006 and 650 shares in 2005 ofWest Suburban common stock.

The Companymaintains deferred compensation arrangements with certain former and currentexecutive officers. The deferred compensation expense was $190 for each of theyears ended December 31, 2006, 2005 and 2004. Executive officers can elect todefer the payment of a percentage of their salaries and cash bonuses andmembers of the board of directors can elect to defer the payment of theirdirectors’ fees. In addition, the Company makes annual

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contributions forthe benefit of participants ($25 for certain senior executive officers and $5for other executive officers) in the Company’s deferred compensationarrangements. As of December 31, 2006, 14 executive officers participated inthe deferred compensation plan.

The totalaccumulated liability for all deferred compensation arrangements was $7,160 and$6,061 at December 31, 2006 and 2005, respectively. These amounts are includedin accrued interest and other liabilities in the consolidated balance sheets.

In March 2004, theCompany established a noncontributory postretirement benefit plan coveringcertain senior executives. The plan provides postretirement medical, dental andlong term care coverage for certain executives and their surviving spouses. Theeligible retirement age under the plan is age 62. The plan is unfunded.

TheCompany recognizes the cost of providing postretirement benefits over theemployee’s active service period. Net periodic postretirement benefit cost was$81 in 2006 and immaterial in both 2005 and 2004.

The Company used aDecember 31 measurement date for its postretirement benefit plan. Net postretirementbenefit costs for 2006 included the following components:
|                                                  | ** ** | **2006** | ** ** |
|--------------------------------------------------|------------|----------|------------|
| Service cost                                     |       | $        | 26         |   |
| Interest cost                                    |       | 30       |       |
| Amortization of  unrecognized prior service cost |       | 21       |       |
| Amortization of  net loss                        |       | 4        |       |
| Net periodic  postretirement benefit cost        |       | $        | 81         |   |

The estimated net loss and prior service costs for thedefined postretirement benefit plan that will be amortized from accumulatedother comprehensive income into net periodic benefit cost over the next fiscalyear are $9 and $21, respectively.

Information aboutchanges in obligations of the postretirement benefit plan follows:
|                                | ** ** | **2006** | ** ** |
|--------------------------------|------------|----------|------------|
| Change in  benefit obligation: |       |     |       |
| Beginning benefit obligation   |       | $        | 515        |   |
| Service cost                   |       | 26       |       |
| Interest cost                  |       | 30       |       |
| Actuarial loss                 |       | 80       |       |
| Benefits paid                  |       | —   |       |
| Ending benefit  obligation     |       | $        | 651        |   |

The funded status (the benefit obligation at end ofthe year) of the postretirement benefit plan is reconciled to the accruedbenefit costs at December 31, 2006 and 2005, as follows:
|                                  | ** ** | **2006** | ** ** | **2005** | ** ** |
|----------------------------------|------------|----------|------------|----------|------------|
| Funded status at  end of year    |       | $        | (651       | )        | $          | (515 | ) |
| Unrecognized net  actuarial loss |       | 200      |       | 125      |       |
| Unrecognized  prior service cost |       | 295      |       | 315      |       |
| Net amount  recognized           |       | $        | (156       | )        | $          | (75 | ) |

Prior to adoption of FAS Statement 158, amountsrecognized in the balance sheet at December 31, 2005 consist of an accruedbenefit of $75.

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Amounts recognizedin accumulated other comprehensive loss at December 31, 2006 consist of:
| Net actuarial loss  |   | $   | 200    |   |
|---------------------|--------|-----|--------|--------|
| Prior service  cost |   | 295 |   |
| Total               |   | $   | 495    |   |

The accumulated benefit obligation was $651 and $515at year-end 2006 and 2005.

The discount rateused to determine net periodic benefit costs and benefit obligations in 2006was 6.00%.

The assumed rateof increase in 2007 in per capita costs of covered benefits is 10% for medicalbenefits and 7% for dental benefits. The rate of benefits was assumed todecrease gradually to 5% in 2017.

Assumed healthcare cost trend rates have a significant effect on the amounts reported for thehealth care plans.  A one-percentage-point change in assumed health carecost trend rates would have the following effects:
| ** **                                               | ** ** | **One-Percentage-Point  Increase** | ** ** | **One-Percentage-Point  Decrease** | ** ** |
|----------------------------------------------------------|------------|------------------------------------|------------|------------------------------------|------------|
| Effect on total  service and interest cost               |       | $                                  | 14         |                               | $          | (11 | ) |
| Effect on accumulated  postretirement benefit obligation |       | 120                                |       | (97                                | )          |
|                                                          |            |                                    |            |                                    |            |  |  |

The Company expects to contribute amounts in 2007 tomeet the benefits to be paid. The following benefit payments, which reflectexpected future service, are expected:
| 2007              |   | $  | 19     |   |
|-------------------|--------|----|--------|--------|
| 2008              |   | 21 |   |
| 2009              |   | 18 |   |
| 2010              |   | 20 |   |
| 2011              |   | 21 |   |
| Following 5 Years |   | 75 |   |

# **Note 8 -Financial Instruments with Off-Balance-Sheet Risk**

The Company is a party to off-balance-sheetfinancial instruments to meet the financing needs of its customers. Thesefinancial instruments include commitments to extend credit and standby lettersof credit. These financial instruments involve, to varying degrees, elements ofcredit and interest rate risks. Such financial instruments are recorded whenfunded.

Commitmentsto extend credit are agreements to lend to a customer as long as there is noviolation of any condition established in the agreement. These commitmentsprimarily consist of unused lines of credit, undrawn portions of constructionloans and commitments to make new loans. Commitments generally have fixedexpiration dates or other termination provisions and may require the payment ofa fee. Since many of the commitments are expected to expire without beingexercised or drawn upon, the total commitment amounts do not necessarilyrepresent future cash requirements.

The Company’s exposure tocredit risk in connection with commitments to extend credit and standby lettersof credit is the contractual amount of those instruments before consideringcustomer collateral or ability to repay. The Company uses the same creditpolicies in making commitments and conditional obligations as it does foron-balance-sheet instruments. The Company generally requires collateral orother security to support financial instruments with credit risk. The Companyevaluates each customer’s creditworthiness on a case-by-case basis. The amountof collateral obtained, if deemed necessary by the Company, is based onmanagement’s credit evaluation of the customer. Collateral held varies and mayinclude accounts receivable, inventory and equipment or commercial orresidential properties.

 

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A summary of thecontractual exposure to off-balance-sheet risk as of December 31 follows:
| ** **                            | ** ** | **2006**         | ** ** | **2005**           | ** ** |
|---------------------------------------|------------|------------------|------------|--------------------|------------|
|                                  |       | **Fixed   Rate** | ** ** | **Variable  Rate** | ** ** | **Total** | ** ** | **Fixed  Rate** | ** ** | **Variable   Rate** | ** ** | **Total** |   |
| Commercial loans and  lines of credit |       | $                | 2,336      |               | $          | 172,361 |   | $ | 174,697 |   | $ | 1,230 |   | $ | 194,842 |   | $ | 196,072 |   |
| Check credit lines of  credit         |       | 1,133            |       | —             |       | 1,133 |   | 1,219 |   | — |   | 1,219 |   |
| Mortgage loans                        |       | 8,991            |       | 7,722              |       | 16,713 |   | 5,411 |   | 1,060 |   | 6,471 |   |
| Home equity lines of  credit          |       | —           |       | 179,009            |       | 179,009 |   | — |   | 179,072 |   | 179,072 |   |
| Letters of credit                     |       | —           |       | 34,660             |       | 34,660 |   | — |   | 34,913 |   | 34,913 |   |
| Credit card lines of credit           |       | —           |       | 40,708             |       | 40,708 |   | — |   | 41,014 |   | 41,014 |   |
| Total                                 |       | $                | 12,460     |               | $          | 434,460 |   | $ | 446,920 |   | $ | 7,860 |   | $ | 450,901 |   | $ | 458,761 |   |

Fixedrate commercial loan commitments at December 31, 2006 generally had interestrates ranging from 5.75% to 9.00% with remaining terms ranging from 1 month to10 years. Fixed rate mortgage loan commitments at December 31, 2006 generallyhad interest rates ranging from 5.625% to 6.125% with terms ranging from 10 to30 years. Fixed rate check credit lines of credit had an interest rate of18.00% as of December 31, 2006.

# **Note 9 -Fair Value of Financial Instruments**

The methods andassumptions used to estimate the fair value of financial instruments are asfollows. For short-term assets (i.e., cash and due from banks and federal fundssold), their estimated fair value approximate their carrying value. Fordeposits with variable interest rates, it has been assumed that their estimatedfair value approximates their carrying value. Because of their short terms, thecarrying values of accrued interest receivable and payable approximates theirfair values.

The fair value forsecurities was derived from quoted market values or, when quotes were notavailable, the fair value was estimated based on the rate and term of thesecurity and information about the issuer. The fair value for loans wasestimated by discounting the future expected cash flows from loan repaymentsusing current interest rates for loans having comparable maturities and creditrisk. The fair value for time deposits was estimated by discounting expectedcash flows at discount rates comparable to current market rates for similarmaturing liabilities.

Off-balance-sheetfinancial instruments are comprised of letters of credit and commitments to extendcredit. The estimated fair value of off-balance-sheet financial instruments isnot considered material.

While these estimates offair value are based on management’s judgment of the most appropriate factorsas of the balance sheet date, there is no assurance that the estimated fairvalue would have been realized if the assets would have been disposed of or theliabilities settled at that date, since market value may differ depending onvarious factors. In addition, the estimated fair value would not apply tosubsequent dates.

24

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The estimated fair valueof the Company’s financial instruments as of December 31 is set forth in thetable below:
| ** **                             | ** ** | **2006**             | ** ** | **2005**                   | ** ** |
|----------------------------------------|------------|----------------------|------------|----------------------------|------------|
|                                   |       | **Carrying   Value** | ** ** | **Estimated   Fair Value** | ** ** | **Carrying   Value** | ** ** | **Estimated   Fair Value** |   |
| Financial assets                       |       |                 |       |                       |       |   |   |   |   |
| Cash and cash  equivalents             |       | $                    | 124,029    |                       | $          | 124,029 |   | $ | 105,794 |   | $ | 105,794 |   |
| Securities                             |       |                 |       |                       |       |   |   |   |   |
| Available for sale                     |       | 453,097              |       | 453,097                    |       | 465,798 |   | 465,798 |   |
| Held to maturity                       |       | 45,013               |       | 44,728                     |       | 64,945 |   | 64,074 |   |
| Federal  Home Loan  Bank stock         |       | 5,091                |       | 5,091                      |       | 5,619 |   | 5,619 |   |
| Loans, less  allowance for loan losses |       | 1,153,885            |       | 1,163,694                  |       | 1,091,747 |   | 1,096,505 |   |
| Accrued interest                       |       | 8,129                |       | 8,129                      |       | 7,846 |   | 7,846 |   |
|                                   |       |                 |       |                       |       |   |   |   |   |
| Financial  liabilities                 |       |                 |       |                       |       |   |   |   |   |
| Deposits                               |       | 1,677,844            |       | 1,676,881                  |       | 1,639,666 |   | 1,637,346 |   |
| Accrued interest                       |       | 6,676                |       | 6,676                      |       | 5,318 |   | 5,318 |   |
|                                        |            |                      |            |                            |            |  |  |  |  |  |  |  |  |

# **Note 10 -Related Party Transactions**

Certain executiveofficers and directors of the Company, their affiliates and companies in whichthey have 10% or more beneficial ownership, are customers of the Bank andreceived loans from the Bank totaling $25,595 and $32,611 at December 31, 2006and 2005, respectively. During 2006, $19,017 in loans and $26,033 in principalpayments were made. Related parties maintained deposits at the Bank totaling$46,908 and $46,084 at December 31, 2006 and 2005, respectively.

# **Note 11 -Capital Requirements**

The Company and the Bankare subject to various regulatory capital requirements administered by federalbanking agencies. Failure to meet minimum capital requirements may result inthe initiation of actions by regulators that could have direct material effectson the financial statements. Under capital adequacy guidelines and theregulatory framework for prompt corrective action, each entity must meetspecific capital guidelines that involve quantitative measures of assets,liabilities and certain off-balance-sheet items as calculated under regulatoryaccounting practices. Capital amounts and classifications are also subject toqualitative judgements by the regulators about components, risk weightings andother factors.

Regulations require theCompany and the Bank to maintain minimum capital amounts and ratios (set forthin the following table). Management believes that as of December 31, 2006, theCompany and the Bank exceeded all capital adequacy requirements.

Management’s presentpolicy is to limit dividends from the Bank so that the Bank qualifies as a “well-capitalized”institution as defined by the Federal Deposit Insurance Corporation ImprovementAct of 1991. This policy minimizes the amount of Federal Deposit InsuranceCorporation (“FDIC”) insurance premiums paid by the Bank and provides capitalto fund growth. As of December 31, 2006, the Bank could pay, in the aggregate,dividends of approximately $4,200 to West Suburban while remaining a “well-capitalized”institution. Dividends from the Bank are West Suburban’s primary source of cashflow.

Asof December 31, 2006 and 2005, the most recent notifications from the FDICcategorized the Bank as “well- capitalized” under the regulatory framework forprompt corrective action. To be categorized as “well-capitalized” the Bank mustmaintain minimum ratios for total capital to risk weighted assets, Tier 1capital to risk weighted assets and Tier 1 capital to average assets as setforth in the following table. There are no conditions or events since thatnotification that management believes would result in a change of the category.

25

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Thecapital amounts and ratios of the Company and the Bank for purposes of theprompt corrective action framework are presented in the table below:
|                                                 | ** ** | **Actual** | ** ** | **Minimum For  Capital Adequacy  Purposes** | ** ** | **Minumum  To Be Well-  Capitalized** | ** ** |
|-------------------------------------------------|------------|------------|------------|-------------------------------------------------------|------------|-------------------------------------------------|------------|
| ** **                                      | ** ** | **Amount** | ** ** | **Ratio**                                             | ** ** | **Amount**                                      | ** ** | **Ratio** | ** ** | **Amount** | ** ** | **Ratio** | ** ** |
| **As of December 31, 2006** |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| Total capital (to risk weighted assets)         |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| Company                                         |       | $          | 170,952    |                                                  | 11.8       | %                                               | $          | 116,191 |   | 8.0 | % | N/A |   | N/A |   |
| Bank                                            |       | 149,312    |       | 10.3                                                  | %          | 116,054                                         |       | 8.0 | % | 145,067 |   | 10.0 | % |
| Tier 1 capital (to risk  weighted assets)       |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| Company                                         |       | 160,302    |       | 11.0                                                  | %          | 58,096                                          |       | 4.0 | % | N/A |   | N/A |   |
| Bank                                            |       | 138,662    |       | 9.6                                                   | %          | 58,027                                          |       | 4.0 | % | 87,040 |   | 6.0 | % |
| Tier 1 capital (to average assets)              |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| Company                                         |       | 160,302    |       | 8.7                                                   | %          | 73,947                                          |       | 4.0 | % | N/A |   | N/A |   |
| Bank                                            |       | 138,662    |       | 7.5                                                   | %          | 73,828                                          |       | 4.0 | % | 92,285 |   | 5.0 | % |
|                             |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| As of December  31, 2005                        |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| Total capital (to risk  weighted assets)        |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| Company                                         |       | $          | 167,230    |                                                  | 11.9       | %                                               | $          | 112,520 |   | 8.0 | % | N/A |   | N/A |   |
| Bank                                            |       | 145,139    |       | 10.3                                                  | %          | 112,385                                         |       | 8.0 | % | 140,481 |   | 10.0 | % |
| Tier 1 capital (to risk weighted assets)        |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| Company                                         |       | 156,549    |       | 11.1                                                  | %          | 56,260                                          |       | 4.0 | % | N/A |   | N/A |   |
| Bank                                            |       | 134,458    |       | 9.6                                                   | %          | 56,192                                          |       | 4.0 | % | 84,288 |   | 6.0 | % |
| Tier 1 capital (to average  assets)             |       |       |       |                                                  |       |                                            |       |   |   |   |   |   |   |
| Company                                         |       | 156,549    |       | 8.7                                                   | %          | 71,768                                          |       | 4.0 | % | N/A |   | N/A |   |
| Bank                                            |       | 134,458    |       | 7.5                                                   | %          | 71,517                                          |       | 4.0 | % | 89,396 |   | 5.0 | % |

The appraised fair value of West Suburban common stockowned by the ESOP is included in Tier 1 capital.

**Note 12 -Other Comprehensive Income**

Other comprehensiveincome components and related taxes were as follows:
| ** **                                                                        | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|-----------------------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Net unrealized  holding gain (loss) on available for sale securities              |       | $        | 4,862      |     | $          | (8,553   | )          | $ | (6,472 | ) |
| Reclassification  adjustments for (gains) and losses later   recognized in income |       | (85      | )          | (206     | )          | 2,004    |       |
| Net unrealized  gain (loss)                                                       |       | 4,777    |       | (8,759   | )          | (4,468   | )          |
| Tax effect                                                                        |       | (1,899   | )          | 3,482    |       | 1,777    |       |
| Other  comprehensive gain (loss)                                                  |       | $        | 2,878      |     | $          | (5,277   | )          | $ | (2,691 | ) |

 

 

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# **Note 13 -Condensed Financial Information - Parent Only**

**CondensedBalance Sheets**

## **December 31, 2006 and 2005**

| ** **                                                                             | ** ** | **2006** | ** ** | **2005** | ** ** |
|----------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|
| **Assets**                                                                             |       |     |       |     |       |
| Cash,  substantially all on deposit in subsidiary                                      |       | $        | 18,468     |     | $          | 19,026 |   |
| Securities  available for sale (amortized cost of $2,966 in 2006 and   $2,984 in 2005) |       | 2,883    |       | 2,877    |       |
| Securities held  to maturity (fair value of $4,421 in 2006 and   $4,197 in 2005)       |       | 4,426    |       | 4,287    |       |
| Investment in  subsidiary                                                              |       | 133,167  |       | 126,424  |       |
| Goodwill                                                                               |       | 712      |       | 712      |       |
| Other assets                                                                           |       | 272      |       | 247      |       |
| **Total  assets**                                                                      |       | $        | 159,928    |     | $          | 153,573 |   |
| **Liabilities and shareholders’  equity**                                         |       |     |       |     |       |
| Dividends  payable                                                                     |       | $        | 4,325      |     | $          | 4,325 |   |
| Other  liabilities                                                                     |       | 259      |       | 210      |       |
| ** **                                                                             |       |     |       |     |       |
| Common stock in  ESOP subject to contingent repurchase   obligation                    |       | 60,009   |       | 54,378   |       |
| Shareholders’  equity                                                             |       | 95,335   |       | 94,660   |       |
| **Total liabilities and  shareholders’ equity**                                   |       | $        | 159,928    |     | $          | 153,573 |   |

**CondensedStatements of Income**

**YearsEnded December 31, 2006, 2005 and 2004**
| ** **                                                          | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|---------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| **Income**                                                          |       |     |       |     |       |     |       |
| Dividends from  subsidiary                                          |       | $        | 20,755     |     | $          | 24,907   |       | $ | 22,633 |   |
| Interest income                                                     |       |     |       |     |       |     |       |
| Deposits                                                            |       | 573      |       | 259      |       | 140      |       |
| Securities                                                          |       | 291      |       | 293      |       | 331      |       |
| Net realized gains  (losses) on securities transactions             |       | —   |       | 162      |       | (47      | )          |
| Other                                                               |       | 56       |       | —   |       | —   |       |
| Total income                                                        |       | 21,675   |       | 25,621   |       | 23,057   |       |
|                                                                |       |     |       |     |       |     |       |
| **Expense**                                                         |       |     |       |     |       |     |       |
| Other                                                               |       | 382      |       | 359      |       | 403      |       |
| Total expense                                                       |       | 382      |       | 359      |       | 403      |       |
| **Income before income taxes**                                      |       | 21,293   |       | 25,262   |       | 22,654   |       |
| **Income tax expense (benefit)**                                    |       | 120      |       | 14       |       | (100     | )          |
| **Income before equity in  undistributed net income of subsidiary** |       | 21,173   |       | 25,248   |       | 22,754   |       |
| **Equity in undistributed net  income of subsidiary**               |       | 4,178    |       | 238      |       | 904      |       |
| **Net income**                                                      |       | $        | 25,351     |     | $          | 25,486   |       | $ | 23,658 |   |

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**CondensedStatements of Cash Flows**

**YearsEnded December 31, 2006, 2005 and 2004**
| ** **                                                                          | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|-------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| **Cash flows from operating  activities**                                           |       |     |       |     |       |     |       |
| Net income                                                                          |       | $        | 25,351     |     | $          | 25,486   |       | $ | 23,658 |   |
| Adjustments  to reconcile net income to net cash provided by   operating activities |       |     |       |     |       |     |       |
| Deferred income  tax provison (benefit)                                             |       | 8        |       | (41      | )          | (26      | )          |
| Equity in  undistributed net income of subsidiary                                   |       | (4,178   | )          | (238     | )          | (904     | )          |
| Net discount  accretion of securities                                               |       | (121     | )          | (120     | )          | (90      | )          |
| Net realized  (gains) losses on securities transactions                             |       | —   |       | (162     | )          | 47       |       |
| (Increase)  decrease in other assets                                                |       | (42      | )          | 438      |       | (441     | )          |
| Increase  (decrease) in other liabilities                                           |       | 49       |       | 19       |       | (22      | )          |
| **Net  cash provided by operating activities**                                      |       | 21,067   |       | 25,382   |       | 22,222   |       |
| **Cash flows from investing  activities**                                           |       |     |       |     |       |     |       |
| Securities  available for sale                                                      |       |     |       |     |       |     |       |
| Sales                                                                               |       | —   |       | 1,535    |       | 3,170    |       |
| Purchases                                                                           |       | —   |       | (500     | )          | (4,820   | )          |
| Securities held  to maturity                                                        |       |     |       |     |       |     |       |
| Purchases                                                                           |       | —   |       | —   |       | (4,038   | )          |
| **Net  cash provided by (used in) by investing activities**                         |       | —   |       | 1,035    |       | (5,688   | )          |
| **Cash flows from financing  activities**                                           |       |     |       |     |       |     |       |
| Loan to ESOP to  acquire West Suburban common stock                                 |       | —   |       | —   |       | 1,200    |       |
| Cash dividends  paid                                                                |       | (21,625  | )          | (21,625  | )          | (21,625  | )          |
| **Net  cash used in financing activities**                                          |       | (21,625  | )          | (21,625  | )          | (20,425  | )          |
| **Net (decrease) increase in cash**                                                 |       | (558     | )          | 4,792    |       | (3,891   | )          |
| **Beginning cash**                                                                  |       | 19,026   |       | 14,234   |       | 18,125   |       |
| **Ending cash**                                                                     |       | $        | 18,468     |     | $          | 19,026   |       | $ | 14,234 |   |

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**Note 14 - Quarterly Results ofOperations (Unaudited)**

The following table sets forth certain unauditedincome, expense and per share data on a quarterly basis for the three-monthperiods indicated:
| **Year Ended December 31, 2006** | ** ** | **Fourth  Quarter** | ** ** | **Third  Quarter** | ** ** | **Second  Quarter** | ** ** | **First  Quarter** | ** ** |
|------------------------------------------------------|------------|---------------------|------------|--------------------|------------|---------------------|------------|--------------------|------------|
| Interest income                                      |       | $                   | 27,292     |               | $          | 27,253              |       | $                  | 26,401     |   | $ | 24,790 |   |
| Interest expense                                     |       | 12,580              |       | 11,996             |       | 10,974              |       | 9,784              |       |
| Net interest  income                                 |       | 14,712              |       | 15,257             |       | 15,427              |       | 15,006             |       |
| Provision for  loan losses                           |       | —              |       | —             |       | 150                 |       | —             |       |
| Net interest  income after provision for loan losses |       | 14,712              |       | 15,257             |       | 15,277              |       | 15,006             |       |
| Noninterest  income                                  |       | 6,230               |       | 5,802              |       | 5,044               |       | 5,789              |       |
| Noninterest  expense                                 |       | 12,398              |       | 11,521             |       | 11,487              |       | 12,450             |       |
| Income before  income taxes                          |       | 8,544               |       | 9,538              |       | 8,834               |       | 8,345              |       |
| Income tax  expense                                  |       | 2,380               |       | 2,790              |       | 2,351               |       | 2,389              |       |
| Net income                                           |       | $                   | 6,164      |               | $          | 6,748               |       | $                  | 6,483      |   | $ | 5,956 |   |
| Earnings per  share                                  |       | $                   | 14.25      |               | $          | 15.60               |       | $                  | 14.99      |   | $ | 13.77 |   |
|                                                 |       |                |       |               |       |                |       |               |       |
| **Year Ended December 31, 2005**                     |       |                |       |               |       |                |       |               |       |
| Interest income                                      |       | $                   | 23,961     |               | $          | 23,103              |       | $                  | 21,878     |   | $ | 20,447 |   |
| Interest expense                                     |       | 8,864               |       | 7,834              |       | 7,077               |       | 6,494              |       |
| Net interest  income                                 |       | 15,097              |       | 15,269             |       | 14,801              |       | 13,953             |       |
| Provision for  loan losses                           |       | —              |       | 750                |       | 625                 |       | —             |       |
| Net interest  income after provision for loan losses |       | 15,097              |       | 14,519             |       | 14,176              |       | 13,953             |       |
| Noninterest  income                                  |       | 6,456               |       | 5,626              |       | 5,687               |       | 5,802              |       |
| Noninterest  expense                                 |       | 11,556              |       | 11,299             |       | 11,324              |       | 11,328             |       |
| Income before  income taxes                          |       | 9,997               |       | 8,846              |       | 8,539               |       | 8,427              |       |
| Income tax  expense                                  |       | 2,848               |       | 2,667              |       | 2,179               |       | 2,629              |       |
| Net income                                           |       | $                   | 7,149      |               | $          | 6,179               |       | $                  | 6,360      |   | $ | 5,798 |   |
| Earnings per share                                   |       | $                   | 16.52      |               | $          | 14.29               |       | $                  | 14.71      |   | $ | 13.41 |   |

During the fourth quarter of 2006, the Companyexperienced an increase in total noninterest expense of $877. This was due tovarious factors including increased advertising and promotional costs forretail banking and the prepaid solutions group. The Company also incurredincreased professional fees expense for issues related to the prepaid solutionsgroup.

During the fourthquarter of 2005, the Company experienced an increase of $830 in noninterestincome compared to the previous quarter. This was primarily the result ofincreases in prepaid solutions card income relating primarily to the additionof one new large client and increased gift card sales.

 

29

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#  

# 

# **MANAGEMENT’SREPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**

Management of theCompany is responsible for establishing and maintaining an effective system ofinternal control over financial reporting. The Company’s system of internal control over financial reporting isdesigned to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles.  There are inherent limitations in theeffectiveness of any system of internal control over financial reporting,including the possibility of human error and the circumvention or overriding ofcontrols.  Accordingly, even an effectivesystem of internal control over financial reporting can provide only reasonableassurance with respect to financial statement preparation.  Projections of any evaluation ofeffectiveness to future periods are subject to the risks that controls maybecome inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Managementassessed the Company’s systems of internal control over financial reporting asof December 31, 2006.  This assessmentwas based on criteria for effective internal control over financial reportingdescribed in Internal Control—Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission.  Based on this assessment, management believesthat, as of December 31, 2006, the Company maintained effective internalcontrol over financial reporting based on those criteria.

The Company’sindependent auditors have issued an audit report on management’s assessment ofthe Company’s internal control over financial reporting.

March 9, 2007
| /s/ Kevin J. Acker                    |   |   |
|---------------------------------------|--------|--------|
| Kevin J. Acker                        |   |   |
| Chairman and Chief Executive Officer  |   |   |
|                                  |   |   |
|                                  |   |   |
| /s/ Duane G. Debs                     |   |   |
| Duane G. Debs                         |   |   |
| President and Chief Financial Officer |   |   |

 

30

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# **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING**

We have audited management’sassessment, included in the accompanying Management’s Report on InternalControl Over Financial Reporting, that West Suburban Bancorp, Inc. maintainedeffective internal control over**financialreporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued bythe Committee of Sponsoring Organizations of the Treadway Commission (COSO).  West Suburban Bancorp, Inc.’s management isresponsible for maintaining effective internal control over financial reportingand for its assessment of the effectiveness of internal control over financialreporting.  Our responsibility is toexpress an opinion on management’s assessment and an opinion on the effectivenessof the company’s internal control over financial reporting based on our audit.

We conducted our audit inaccordance with the standards of the Public Company Accounting Oversight Board(United States).  Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whethereffective internal control over financial reporting was maintained in allmaterial respects.  Our audit includedobtaining an understanding of internal control over financial reporting,evaluating management’s assessment, testing and evaluating the design andoperating effectiveness of internal control, and performing such otherprocedures as we considered necessary in the circumstances.  We believe that our audit provides areasonable basis for our opinion.

A company’s internal controlover financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generallyaccepted accounting principles.  Acompany’s internal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, in reasonabledetail, accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’s assets that could have amaterial effect on the financial statements.

Because of its inherentlimitations, internal control over financial reporting may not prevent ordetect misstatements.  Also, projectionsof any evaluation of effectiveness to future periods are subject to the riskthat controls may become inadequate because of changes in conditions, or thatthe degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’sassessment that West Suburban Bancorp, Inc. maintained effective internalcontrol over financial reporting as of December 31, 2006, is fairly stated, inall material respects, based on criteriaestablished in InternalControl—Integrated Framework issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO). Also in our opinion, West Suburban Bancorp, Inc. maintained, in allmaterial respects, effective internal control over financial reporting as ofDecember 31, 2006, based on criteriaestablished in Internal Control—Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO).

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We have also audited, inaccordance with the standards of the Public Company Accounting Oversight Board(United States), the consolidatedbalance sheets of West Suburban Bancorp, Inc. as of December 31, 2006and 2005, and the related consolidated statements of income, changes inshareholders’ equity, and cash flows for each of the three years in the periodended December 31, 2006, and our report dated March 9, 2007 expressed an unqualified opinion on thoseconsolidated financial statements.
|        | /s/ Crowe Chizek and Company LLC |
|--------|----------------------------------|
|   | Crowe Chizek and Company LLC     |

 

Oak Brook, IllinoisMarch 9, 2007

32

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# **STOCK PERFORMANCE PRESENTATION**

*The stockperformance graph below shall not be deemed incorporated by reference by anygeneral statement incorporating by reference this annual report into any filingunder the Securities Act of 1933 or under the Securities Exchange Act of 1934,except to the extent West Suburban specifically incorporates this informationby reference, and shall not otherwise be deemed filed under such Acts.*

TheSecurities and Exchange Commission requires that West Suburban include aline-graph presentation comparing cumulative, five-year shareholder returns onan indexed basis with the Standard & Poor’s 500 Stock Index (“S&P 500”)and either a nationally recognized industry standard or an index of peercompanies selected by West Suburban. The Board of Directors has elected tocompare an investment in its stock to a peer group index rather than apublished industry index because it believes the peer group index includescompanies whose businesses are more similar to that of the Company than anypublished index. The peer group index is comprised of the following companiesselected by West Suburban (based on their similarity in size, loan portfoliosand business markets):****1st SourceCorporation; AMCORE Financial Inc.; Corus Bankshares Inc.; First Oak BrookBancshares Inc.; MB Financial Inc.; Midwest Banc Holdings Inc.; Old SecondBancorp, Inc.; PrivateBancorp, Inc.; State Financial Services Corporation (1);and Wintrust Financial Corporation.

**COMPARISON OF 5 YEAR CUMULATIVETOTAL RETURN***

Among West Suburban Bancorp, Inc., The S& P 500 Index

And A Peer Group

* $100 invested on 12/31/01 in stock orindex-including reinvestment of dividends. Fiscal year ending December 31.

Copyright© 2007, Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.All rights reserved.

www.researchdatagroup.com/S&P.htm

______________________________________

(1)                                  StateFinancial Services Corporation was acquired by Associated Banc-Corp, Inc. andderegistered as a public company during the fourth quarter of 2005.

The following table setsforth the dollar amounts of the annual Total Returns (as defined below) for theCompany, the S&P 500 and the peer group, which are plotted on the linegraph on the previous page. “Total Return” means the sum of dividends received,assuming dividend reinvestment, and the increase (or decrease) in the shareprice at the end of the period compared to the beginning of the period, dividedby the share price at the beginning of the period.
| ** **  | ** ** | **Total Return Based on Initial Investment of $100.00** | ** ** |
|-------------|------------|--------------------------------------------------------------------------------------------|------------|
| ** **  | ** ** | **2001**                                                                                   | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| The Company |       | $                                                                                          | 100.00     |   | $ | 107.94 |   | $ | 133.57 |   | $ | 144.98 |   | $ | 154.83 |   | $ | 176.62 |   |
| S&P 500 |       | $                                                                                          | 100.00     |   | $ | 77.90 |   | $ | 100.24 |   | $ | 111.15 |   | $ | 116.61 |   | $ | 135.03 |   |
| Peer Group  |       | $                                                                                          | 100.00     |   | $ | 115.54 |   | $ | 165.86 |   | $ | 211.38 |   | $ | 215.07 |   | $ | 222.92 |   |

 

# The Total Returns of the companies included in theabove peer group have been assigned various weights based on their relativemarket capitalizations.

33

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# **SELECTEDFINANCIAL DATA**(Dollars in thousands, except per share data)

Thefollowing information should be read in conjunction with Management’sDiscussion and Analysis of Financial Condition and Results of Operations andthe Company’s Consolidated Financial Statements and Notes to ConsolidatedFinancial Statements included in this annual report.
| ** **                                                                                                                           | ** ** | **Years Ended December 31,** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                                                                                                           | ** ** | **2006**                                    | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
| **Selected  operating data**                                                                                                         | ** ** | ** **                                  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Interest income                                                                                                                      |       | $                                           | 105,736    |   | $ | 89,389 |   | $ | 79,326 |   | $ | 80,801 |   | $ | 85,394 |   |
| Interest expense                                                                                                                     |       | 45,334                                      |       | 30,269 |   | 21,839 |   | 21,986 |   | 27,803 |   |
| Net interest income                                                                                                                  |       | 60,402                                      |       | 59,120 |   | 57,487 |   | 58,815 |   | 57,591 |   |
| Provision for loan losses                                                                                                            |       | 150                                         |       | 1,375 |   | 200 |   | 2,150 |   | 8,125 |   |
| Net interest income after provision for loan losses                                                                                  |       | 60,252                                      |       | 57,745 |   | 57,287 |   | 56,665 |   | 49,466 |   |
| Noninterest income (1)                                                                                                               |       | 22,865                                      |       | 23,571 |   | 18,407 |   | 22,924 |   | 13,989 |   |
| Noninterest expense                                                                                                                  |       | 47,856                                      |       | 45,507 |   | 43,107 |   | 41,715 |   | 37,051 |   |
| Income before income taxes                                                                                                           |       | 35,261                                      |       | 35,809 |   | 32,587 |   | 37,874 |   | 26,404 |   |
| Income tax expense                                                                                                                   |       | 9,910                                       |       | 10,323 |   | 8,929 |   | 11,966 |   | 8,472 |   |
| Net income                                                                                                                           |       | $                                           | 25,351     |   | $ | 25,486 |   | $ | 23,658 |   | $ | 25,908 |   | $ | 17,932 |   |
|                                                                                                                                 |       |                                        |       |   |   |   |   |   |   |   |   |
| **Per  share data**                                                                                                                  | ** ** | ** **                                  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Earnings                                                                                                                             |       | $                                           | 58.62      |   | $ | 58.93 |   | $ | 54.82 |   | $ | 59.90 |   | $ | 41.46 |   |
| Cash dividends declared                                                                                                              |       | 50.00                                       |       | 50.00 |   | 50.00 |   | 44.00 |   | 41.50 |   |
| Book value (2)                                                                                                                       |       | 359.18                                      |       | 344.60 |   | 347.87 |   | 346.62 |   | 341.47 |   |
|                                                                                                                                 |       |                                        |       |   |   |   |   |   |   |   |   |
| **Selected  balances, end of year**                                                                                                  | ** ** | ** **                                  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Securities                                                                                                                           |       | $                                           | 503,201    |   | $ | 536,362 |   | $ | 558,883 |   | $ | 492,380 |   | $ | 328,300 |   |
| Loans, less allowance for loan losses                                                                                                |       | 1,153,885                                   |       | 1,091,747 |   | 1,046,125 |   | 1,074,215 |   | 1,128,816 |   |
| Total assets                                                                                                                         |       | 1,876,643                                   |       | 1,827,191 |   | 1,748,049 |   | 1,710,695 |   | 1,586,063 |   |
| Deposits                                                                                                                             |       | 1,677,844                                   |       | 1,639,666 |   | 1,569,742 |   | 1,529,931 |   | 1,420,256 |   |
| Shareholders’ equity plus common stock in ESOP  subject to contingent repurchase obligation (2)                                 |       | 155,344                                     |       | 149,038 |   | 150,454 |   | 149,912 |   | 147,685 |   |
|                                                                                                                                 |       |                                        |       |   |   |   |   |   |   |   |   |
| **Ratios**                                                                                                                           | ** ** | ** **                                  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Return on average total assets                                                                                                       |       | 1.38                                        | %          | 1.43 | % | 1.36 | % | 1.55 | % | 1.17 | % |
| Return on average shareholders’ equity plus common  stock in ESOP subject to contingent repurchase obligation (2)               |       | 16.83                                       | %          | 17.05 | % | 15.58 | % | 16.94 | % | 12.01 | % |
| Cash dividends declared to net income                                                                                                |       | 85.30                                       | %          | 84.85 | % | 91.41 | % | 73.45 | % | 100.09 | % |
| Average shareholders’ equity plus common stock in  ESOP subject to contingent repurchase obligation to average total assets (2) |       | 8.18                                        | %          | 8.40 | % | 8.73 | % | 9.16 | % | 9.76 | % |
| Net interest margin (3)                                                                                                              |       | 3.54                                        | %          | 3.59 | % | 3.60 | % | 3.81 | % | 4.07 | % |

----

(1)    Noninterest income includes a litigation settlement of$1,085 in 2003 for the settlement of a claim related to an investment that theCompany made in prior years. Noninterest income also includes gains (losses) onsales on securities of $85 in 2006, $206 in 2005, ($2,004) in 2004, $2,330 in2003 and $1,017 in 2002.

(2)    See Note 7 to the Company’s consolidated financialstatements and “Non-GAAP Financial Measures.” This presentation is consistent with the Company’s belief that it isunlikely that the Company would be required to satisfy the contingent repurchaseobligation.

(3) Net interestmargin is presented on a tax equivalent basis, assuming a federal income taxrate of 35%.

34

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# **NON-GAAP FINANCIAL MEASURES**

The accounting andreporting policies of the Company conform to accounting principles generallyaccepted in the United States (“GAAP”). However, management uses certainnon-GAAP measures and ratios to evaluate and measure the Company’s performance.These measures and ratios include book value per share, return on shareholders’equity and average shareholders’ equity to average total assets. For each ofthese measures and ratios, the Company adds to shareholders’ equity the amountin “common stock in ESOP subject to contingent repurchase obligation.” Underthe ESOP, the Company has certain contingent repurchase obligations to buy backcommon stock distributed to participants, as described in more detail in Note 7to the Company’s audited financial statements. This contingent repurchaseobligation is reflected in the Company’s financial statements as “common stockin ESOP subject to contingent repurchase obligation” and, in accordance withGAAP, reduces shareholders’ equity. The Company believes that it is unlikelythat the Company would be required to satisfy its contingent repurchaseobligation and therefore believes that adjusting shareholders’ equity by adding“common stock in ESOP subject to contingent repurchase obligation” to thatamount provides a more meaningful view of the applicable measures and ratios.In addition, management believes that the return on average shareholders’equity, a financial measure frequently considered to evaluate the performanceof bank holding companies, would be significantly overstated.

The followingtable presents a reconciliation of certain non-GAAP performance measures andratios used by the Company to the most directly comparable GAAP financialmeasures for the years ended December 31:
| ** **                                                                                                                                        | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|
| Shareholders’  equity (GAAP)                                                                                                                 |       | $        | 95,335     |     | $          | 94,660   |       | $        | 96,495     |     | $          | 98,541 |   | $ | 107,444 |   |
| Shareholders’  equity plus common stock in ESOP subject to contingent repurchase obligation  (non-GAAP)                                      |       | 155,344  |       | 149,038  |       | 150,454  |       | 149,912  |       | 147,685  |       |
| Book Value Per  Share (GAAP) (1)                                                                                                                  |       | 220.43   |       | 218.87   |       | 223.60   |       | 227.85   |       | 248.43   |       |
| Book Value Per  Share (non-GAAP) (2)                                                                                                              |       | 359.18   |       | 344.60   |       | 347.87   |       | 346.62   |       | 341.47   |       |
| Return on  average shareholders’ equity (GAAP) (3)                                                                                           |       | 27.05    | %          | 26.62    | %          | 23.64    | %          | 23.46    | %          | 16.52    | %          |
| Return on  average shareholders’equity plus common stock in ESOP subject to contingent  repurchase obligation (non-GAAP) (4)                 |       | 16.83    | %          | 17.05    | %          | 15.58    | %          | 16.94    | %          | 12.01    | %          |
| Average  shareholders’ equity to average total assets (GAAP) (5)                                                                             |       | 5.09     | %          | 5.38     | %          | 5.75     | %          | 6.61     | %          | 7.09     | %          |
| Average shareholders’  equity plus common stock in ESOP subject to contingent repurchase obligation  to average total assets  (non-GAAP) (6) |       | 8.18     | %          | 8.40     | %          | 8.73     | %          | 9.16     | %          | 9.76     | %          |
|                                                                                                                                                   |            |          |            |          |            |          |            |          |            |          |            |  |  |  |  |  |

----

(1)    Book Value Per Share (GAAP) equals shareholders’ equity divided by thenumber of outstanding shares.

(2)    Book Value Per Share (non-GAAP) equals shareholders’ equity plus commonstock in ESOP subject to contingent repurchase obligation divided by the numberof outstanding shares.

(3)    Return on average shareholders’ equity (GAAP) equals net income dividedby average shareholders’ equity.

(4)    Return on average shareholders’ equity plus common stock in ESOP subjectto contingent repurchase obligation (non-GAAP) equals net income divided byaverage shareholders’ equity plus common stock in ESOP subject to contingentrepurchase obligation.

(5)    Average shareholders’ equity to average total assets (GAAP) equalsaverage shareholders’ equity divided by average total assets.

(6)    Average shareholders’ equity plus common stockin ESOP subject to contingent repurchase obligation to average total assets(non-GAAP) equals average shareholders’ equity plus common stock in ESOP subjectto contingent repurchase obligation divided by average total assets.

35

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**AVERAGE BALANCE SHEETS, NET INTEREST INCOME ANDAVERAGE RATES AND YIELDS ON A TAX EQUIVALENT BASIS**(Dollars in thousands)

The following table presents for the yearsindicated the total dollar amount of interest income from averageinterest-earning assets and their yields, as well as the interest expense onaverage interest-bearing liabilities and their costs, expressed both in dollarsand rates. All average balances are daily average balances. To the extentreceived, interest on nonaccruing loans has been included in the table.Interest income on nonaccrual loans was not material in 2006, 2005 and 2004.
| ** **                                                                                            | ** ** | **Years Ended December 31,** | ** ** |
|-------------------------------------------------------------------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                                                                            | ** ** | **2006**                                    | ** ** | **2005** | ** ** | **2004** | ** ** |
| ** **                                                                                            | ** ** | **Average  Balance**                        | ** ** | **Interest** | ** ** | **Rate** | ** ** | **Average  Balance** | ** ** | **Interest** | ** ** | **Rate** | ** ** | **Average  Balance** | ** ** | **Interest** | ** ** | **Rate** | ** ** |
| **Assets**                                                                                            | ** ** | ** **                                  | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Federal funds sold                                                                                    |       | $                                           | 58,208     |   | $ | 2,932 |   | 5.0 | % | $ | 22,962 |   | $ | 732 |   | 3.2 | % | $ | 24,838 |   | $ | 363 |   | 1.5 | % |
| Securities                                                                                            |       |                                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                               |       | 503,161                                     |       | 19,222 |   | 3.8 | % | 547,119 |   | 19,235 |   | 3.5 | % | 494,397 |   | 18,158 |   | 3.7 | % |
| Exempt from federal income tax (1)                                                                    |       | 25,684                                      |       | 1,600 |   | 6.2 | % | 22,984 |   | 1,482 |   | 6.4 | % | 40,165 |   | 2,463 |   | 6.1 | % |
| Total securities (1)                                                                                  |       | 528,845                                     |       | 20,822 |   | 3.9 | % | 570,103 |   | 20,717 |   | 3.6 | % | 534,562 |   | 20,621 |   | 3.9 | % |
| Loans (1)(2)                                                                                          |       | 1,136,102                                   |       | 82,574 |   | 7.3 | % | 1,069,549 |   | 68,489 |   | 6.4 | % | 1,061,218 |   | 59,236 |   | 5.6 | % |
| Total interest-earning  assets (1)(2)                                                                 |       | 1,723,155                                   |       | 106,328 |   | 6.2 | % | 1,662,614 |   | 89,938 |   | 5.4 | % | 1,620,618 |   | 80,220 |   | 4.9 | % |
| Cash and due from banks                                                                               |       | 40,142                                      |       |   |   |   |   | 40,450 |   |   |   |   |   | 39,829 |   |   |   |   |   |
| Premises and equipment, net                                                                           |       | 40,124                                      |       |   |   |   |   | 40,018 |   |   |   |   |   | 41,644 |   |   |   |   |   |
| Other real estate                                                                                     |       | 550                                         |       |   |   |   |   | 1,472 |   |   |   |   |   | 3,913 |   |   |   |   |   |
| Allowance for loan losses                                                                             |       | (10,721                                     | )          |   |   |   |   | (10,977 | ) |   |   |   |   | (13,309 | ) |   |   |   |   |
| Accrued interest and other   assets (2)                                                               |       | 47,808                                      |       |   |   |   |   | 46,180 |   |   |   |   |   | 46,491 |   |   |   |   |   |
| **Total assets**                                                                                      |       | $1,841,058                                  |       |   |   |   |   | $1,779,757 |   |   |   |   |   | $1,739,186 |   |   |   |   |   |
| **Liabilities  and shareholders’ equity**                                                        |       |                                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits                                                                             |       |                                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW                                                                                                   |       | $                                           | 315,209    |   | 2,873 |   | 0.9 | % | $ | 320,357 |   | 1,333 |   | 0.4 | % | $ | 313,023 |   | 795 |   | 0.3 | % |
| Money market checking                                                                                 |       | 254,492                                     |       | 10,642 |   | 4.2 | % | 230,527 |   | 5,982 |   | 2.6 | % | 232,431 |   | 3,271 |   | 1.4 | % |
| Savings                                                                                               |       | 398,013                                     |       | 8,920 |   | 2.2 | % | 435,022 |   | 6,792 |   | 1.6 | % | 447,583 |   | 5,202 |   | 1.2 | % |
| Time deposits                                                                                         |       |                                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less than $100,000                                                                                    |       | 381,062                                     |       | 16,005 |   | 4.2 | % | 341,123 |   | 11,711 |   | 3.4 | % | 318,447 |   | 9,510 |   | 3.0 | % |
| $100,000 and greater                                                                                  |       | 154,178                                     |       | 6,863 |   | 4.5 | % | 121,928 |   | 4,402 |   | 3.6 | % | 99,208 |   | 3,027 |   | 3.1 | % |
| Total interest-bearing deposits                                                                       |       | 1,502,954                                   |       | 45,303 |   | 3.0 | % | 1,448,957 |   | 30,220 |   | 2.1 | % | 1,410,692 |   | 21,805 |   | 1.5 | % |
| Other interest-bearing liabilities                                                                    |       | 738                                         |       | 31 |   | 4.2 | % | 1,341 |   | 49 |   | 3.7 | % | 2,584 |   | 34 |   | 1.3 | % |
| Total interest-bearing liabilities                                                                    |       | 1,503,692                                   |       | 45,334 |   | 3.0 | % | 1,450,298 |   | 30,269 |   | 2.1 | % | 1,413,276 |   | 21,839 |   | 1.5 | % |
| Demand-noninterest-bearing deposits                                                                   |       | 152,423                                     |       |   |   |   |   | 150,280 |   |   |   |   |   | 147,130 |   |   |   |   |   |
| Accrued interest and other liabilities                                                                |       | 34,315                                      |       |   |   |   |   | 29,729 |   |   |   |   |   | 26,909 |   |   |   |   |   |
| Shareholders’ equity plus common stock in ESOP  subject to contingent repurchase  obligation (3) |       | 150,628                                     |       |   |   |   |   | 149,450 |   |   |   |   |   | 151,871 |   |   |   |   |   |
| **Total liabilities and shareholders’ equity**                                                   |       | $1,841,058                                  |       |   |   |   |   | $1,779,757 |   |   |   |   |   | $1,739,186 |   |   |   |   |   |
| Net interest income                                                                                   |       |                                        |       | $60,994 |   |   |   |   |   | $59,669 |   |   |   |   |   | $58,381 |   |   |   |
| Interest rate spread                                                                                  |       |                                        |       |   |   | 3.2 | % |   |   |   |   | 3.3 | % |   |   |   |   | 3.4 | % |
| Net interest  margin (1)                                                                              |       |                                        |       |   |   | 3.5 | % |   |   |   |   | 3.6 | % |   |   |   |   | 3.6 | % |
|                                                                                                       |            |                                             |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

----

(1)    Interest income, net interestmargin and yields are presented on a tax equivalent basis, assuming a federalincome tax rate of 35%.

(2)    Theaverage balances of nonaccrual loans are included in accrued interest and otherassets.

(3)    See Note 7 to the Company’s consolidated financialstatements and “Non-GAAP Financial Measures.” This presentation is consistent with the Company’s belief that it isunlikely that the Company would be required to satisfy the contingentrepurchase obligation.

36

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## **MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITIONAND RESULTS OF OPERATIONS**

The following discussionand analysis provides information regarding the Company’s financial conditionas of December 31, 2006 and 2005, and the results of operations for each of thethree years in the period ended December 31, 2006. This discussion and analysisshould be read in conjunction with the Company’s Consolidated FinancialStatements and Notes to Consolidated Financial Statements included in thisannual report. The financial information provided below is rounded in order tosimplify the presentation of management’s discussion and analysis. However, theratios and percentages provided below are calculated using the more detailedfinancial information contained in the financial statements, notes and tablesincluded elsewhere in this annual report.

###### **Critical Accounting Policies**

*TheCompany’s financial statements are prepared in conformity with accountingprinciples generally accepted in the United States of America. These accountingprinciples, which can be complex, are significant to our financial conditionand our results of operations and require management to apply significantjudgment with respect to various accounting, reporting and disclosure matters.Management must use estimates, assumptions and judgments to apply these principleswhere actual measurements are not possible or practical. These estimates,assumptions and judgments are based on information available as of the date ofthis report and, as this information changes, actual results could differ fromthe estimates, assumptions and judgments reflected in the financial statements.Changes in such estimates may have a significant impact on the financialstatements. Management has reviewed the application of these policies with theAudit Committee of West Suburban’s Board of Directors. This Management’sDiscussion and Analysis of Financial Condition and Results of Operations shouldbe read in conjunction*theCompany’s Consolidated Financial Statements and Notes to Consolidated FinancialStatements included in this annual report.

In management’s view, the accounting policies thatare critical to the Company are those relating to estimates, assumptions andjudgments regarding the determination of the adequacy of the allowance for loanlosses.

**Allowance for Loan Losses.**  The Company maintains an allowance for loanlosses at a level management believes is sufficient to absorb probable incurredcredit losses in the loan portfolio. The allowance for loan losses representsthe Company’s estimate of probable incurred credit losses in the loan portfolioat each balance sheet date and is based on the review of available and relevantinformation. The allowance contains allocations for probable incurred creditlosses that have been identified relating to specific borrowing relationshipsas well as probable incurred credit losses for pools of loans. The allowancefor loan losses is reassessed monthly by the Company to determine theappropriate level of the allowance. The amount of the allowance for loan lossesis determined based on a variety of factors, including assessment of the creditrisk of the loans in the loan portfolio, volume of the loans, delinquent loans,evaluation of current economic conditions in the market area, actualcharge-offs during the period and historical loss experience. Loan quality iscontinually monitored by management and reviewed by the loan committee on amonthly basis.

Allcategories of loans are evaluated on a category by category basis. In addition,individual commercial, construction and commercial mortgage loans are evaluatedto determine if a specific loss allocation is needed for problem loans deemedto have a shortfall in collateral. Management also considers the borrower’scurrent economic status including liquidity and future business viability.Other factors used in the allocation of the allowance include levels and trendsof past dues and charge-offs along with concentrations of credit within thecommercial and commercial real estate loan portfolios. This evaluation isinherently subjective as it requires estimates that are susceptible tosignificant revision as more information becomes available or as developmentsoccur. Along with the allocation of the allowance on a category by categorybasis and the specific allocations for individual borrowing relationships, theallowance includes a relatively small portion that remains unallocated. Management adjusts the allowance for loanlosses by an amount sufficient to maintain the allowance at the leveldetermined appropriate. Loans are charged-off when deemed to be uncollectibleby management. The Company believes that the allowance for loan losses isadequate to provide for estimated probable incurred credit losses in the loanportfolio.

37

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**IncomeTaxes.**  The Company issubject to income tax laws of the United States and the State of Illinois.These laws are complex and subject to different interpretations by the taxpayerand the various taxing authorities. Management makes certain judgments andestimates about the application of these inherently complex laws when determiningthe provision for income taxes. Federal and state taxing authorities haverecently become increasingly aggressive in challenging tax positions taken byfinancial institutions, including positions that may be taken by the Company.During the preparation of the Company’s tax returns, management makesreasonable interpretations of the tax laws which are subject to challenge uponaudit by the tax authorities. These interpretations are also subject toreinterpretation based on management’s ongoing assessment of facts and evolvingcase law.

On a quarterlybasis, management evaluates the reasonableness of its effective tax rate basedupon its current best estimate of net income and applicable taxes expected forthe full year. Deferred tax assets and liabilities are evaluated on a quarterlybasis, or more frequently if necessary.

**Temporary Decline in Fair Value of Securities.** Under current accounting rules, declines in the fair value of securitiesbelow their cost that are other-than-temporary are reflected as realizedlosses.  In determining whether an unrealized loss is consideredother-than-temporary, management considers:  the length of time and extentthat fair value has been less than cost; the financial condition and near termprospects of the issuer; and the Company’s ability and intent to hold thesecurity for a period sufficient to allow for any anticipated recovery in fairvalues.  In management’s view, the decline in market value of thesecurities that were below amortized cost at December 31, 2006 does notrepresent other-than-temporary impairment, and thus no loss was recognized onthe income statement. Additional information regarding these securities can befound in Note 2, “Securities” to the notes to consolidated financialstatements.

**Contractual Obligations, Commitments, Off-Balance Sheet Arrangements,and Contingent Liabilities**

Through the normalcourse of operations, the Company has entered into certain contractualobligations and other commitments. Such obligations generally relate to thefunding of operations through deposits, as well as leases for premises andequipment. As a financial services provider, the Company routinely enters intocommitments to extend credit. While contractual obligations represent futurecash requirements of the Company, a significant portion of commitments toextend credit may expire without being drawn upon. Such commitments are subjectto the same credit policies and approval as comparable loans made by theCompany.

The followingtable presents the Company’s significant fixed and determinable contractualobligations and significant commitments by payment date as of December 31, 2006(dollars in thousands). The payment amounts represent those amountscontractually due to the recipient and do not include any carrying valueadjustments. Further discussion of the nature of each obligation is included inthe referenced Note to the Company’s Consolidated Financial Statements includedin this annual report.
| ** **                          | ** ** | **Note  Reference** | ** ** | **One Year  or Less** | ** ** | **Over One  Year to  Three Years** | ** ** | **Over Three  Years to  Five Years** | ** ** | **Over  Five Years** | ** ** | **Total** | ** ** |
|-------------------------------------|------------|---------------------|------------|---------------------------------|------------|---------------------------------------------------|------------|-----------------------------------------------------|------------|---------------------------|------------|-----------|------------|
| Deposits without  a stated maturity |       | 5                   |       | $                               | 1,126,149  |                                              | $          | —                                              |       | $                         | —     |      | $          | — |   | $ | 1,126,149 |   |
| Time deposits                       |       | 5                   |       | 394,837                         |       | 118,572                                           |       | 38,253                                              |       | 33                        |       | 551,695   |       |
| Prepaid  solutions cards            |       |                |       | 21,105                          |       | —                                            |       | —                                              |       | —                    |       | 21,105    |       |
| Operating leases                    |       |                |       | 342                             |       | 603                                               |       | 488                                                 |       | 1,022                     |       | 2,455     |       |
| Commitments to  extend credit       |       |                |       |                            |       |                                              |       |                                                |       |                      |       |      |       |
| Fixed rate                          |       | 8                   |       |                            |       |                                              |       |                                                |       |                      |       | 12,460    |       |
| Variable rate                       |       | 8                   |       |                            |       |                                              |       |                                                |       |                      |       | 434,460   |       |
|                                     |            |                     |            |                                 |            |                                                   |            |                                                     |            |                           |            |           |            |  |  |  |  |  |

 

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**Balance Sheet Analysis**

***TotalAssets.***  Totalconsolidated assets of the Company at December 31, 2006 increased 2.7% from theprior year-end. This increase was primarily due to the growth in the loanportfolio, which was funded by growth in interest-bearing deposits. The Companyalso experienced an increase in federal funds sold. These increases werepartially offset by decreases in the securities portfolio. Total average assetsin 2006 increased 3.4% from the prior year primarily due to an increase inaverage loans outstanding. Asset growth was funded primarily by higher levelsof deposits.

***Cashand Cash Equivalents.*** Cash and cash equivalents at December 31, 2006 increased 17.2% from theprior year-end primarily due to increases in federal funds sold. The increasein federal funds sold reflects the Company’s decision to invest funds for ashort duration in order to ensure the availability of funds necessary for thegrowth in the loan portfolio. The Company will continue to monitor the level ofits cash and cash equivalents as it is generally the Company’s practice toredeploy its cash and cash equivalents into higher earning assets.

***Securities.***  The Company’s securities portfolio decreased6.2% at December 31, 2006 from the prior year-end primarily due to the Company’sdecision to invest its funds in short duration instruments for the reasondescribed in the previous paragraph. The Company continued to make investmentsin mortgaged-backed securities during 2006. Investing in amortizing securities(such as mortgage-backed securities) as compared to securities with a singlepayment at maturity is an important element in the Company’s liquiditymanagement. The Company considers monthly paydowns on mortgage-backedsecurities a consistent source of cash flows. Additionally, the Company managesits investment portfolio to maximize the return on invested funds withinacceptable risk guidelines, to meet pledging and liquidity requirements, and toadjust balance sheet interest rate sensitivity to insulate net interest incomeagainst the impact of interest rate changes. During 2006, the Company’saccumulated other comprehensive loss decreased $2.6 million primarily due to achange in unrealized losses on securities available for sale, net ofreclassification and tax effects. The Company will continue to monitor itslevel of available for sale and held to maturity securities and will classifynew securities in the appropriate category at the time of purchase.

***Loans.*** Total loans outstanding at December 31, 2006increased 5.6% from the prior year-end. This increase was primarily due toincreases in the construction, residential real estate and home equity loanportfolios. The increase in the construction loan portfolio was primarily dueto the financing of properties for commercial homebuilders along with thedevelopment of three condominium projects. The increase in the residential realestate portfolio was primarily due to purchases of variable rate residentialreal estate loans. The increase in the home equity loan portfolio was due toincreased balances in second mortgages and a promotional rate home equityprogram. The Company intends to continue to aggressively market home equityloan products. Increases in the commercial real estate and commercial loanportfolios were primarily offset by continued decreases in the indirectautomobile portfolio. The Company anticipates a continuing decline in theindirect automobile loan portfolio primarily due to lower lending volumes,prepayments, and scheduled repayments, as well as the promotions that arelikely to continue to be offered by automobile dealers.

***Allowancefor Loan Losses and Asset Quality.***  Net loan charge-offs were $.2 million and$1.2 million in 2006 and 2005, respectively. Nonperforming loans (nonaccrualand loans past due 90 days or more still on accrual) declined to $1.5 millionat December 31, 2006 from $2.2 million at December 31, 2005. Nonaccrual loansincreased $.6 million in 2006, as a result of developments in three small loanrelationships. See Note 1 to the Company’s audited financial statements foradditional information concerning the Company’s accounting policies relating toloans and the allowance for loan losses. The Company’s loans past due 90 daysor more still on accrual decreased $1.3 million in 2006. This decrease was dueto developments in four small loan relationships.

Theprovision for loans losses decreased $1.2 million in 2006. Although thespecific reserve allocations to impaired loans were higher at December 31, 2006as compared to December 31, 2005, this increase was offset by continualimprovement in charge-off and delinquency trends. These trends are an integralpart of the Company’s general component of its allowance for loan lossmethodology.

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Theratio of the allowance for loan losses to total loans outstanding was 0.91% and0.97% at December 31, 2006 and 2005, respectively. The following table is ananalysis of the Company’s nonperforming loans and other real estate at December31 (dollars in thousands):

|                                                                | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|----------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Loans past due  90 days or more still on accrual               |       | $        | 319        |     | $          | 1,665    |       | $ | 1,036 |   |
| Nonaccrual loans                                               |       | 1,131    |       | 533      |       | 3,815    |       |
| Total nonperforming loans                                      |       | $        | 1,450      |     | $          | 2,198    |       | $ | 4,851 |   |
| Nonperforming  loans as a percent of total loans               |       | 0.12     | %          | 0.20     | %          | 0.46     | %          |
| Allowance for  loan losses as a percent of nonperforming loans |       | 734      | %          | 486      | %          | 217      | %          |
| Other real  estate                                             |       | $        | 351        |     | $          | 210      |       | $ | 3,156 |   |
| Nonperforming assets as  a percent of total assets             |       | 0.10     | %          | 0.13     | %          | 0.46     | %          |

 

***Bank-OwnedLife Insurance.*** The cash surrender value of BOLIincreased to $34.4 million at December 31, 2006 from $32.2 million at December31, 2005.

***OtherReal Estate.*** During 2006, the Company acquired properties with an aggregate carryingvalue of $.7 million and sold properties with an aggregate carrying value of$.6 million representing a net increase in other real estate for the year of$.1 million. The Company recorded a gain of $.1 million as a result of thesesales.

***Deposits.***  Total deposits at December 31, 2006 increased2.3% from the prior year-end. The increase in total deposits resulted fromincreases in money market checking accounts and time deposits. The increase inmoney market checking accounts was primarily due to growth in the balances ofpersonal accounts along with an increased balance of one corporate customer.This growth offset decreases in demand-noninterest-bearing deposits, NOWaccounts and savings accounts. The Company also experienced increases in timedeposits resulting from promotional efforts. The Company believes time depositswill continue to increase due to its promotional efforts and as customersmigrate to time deposits from lower yielding more liquid deposits. In general,the Company engages in promotional efforts when management believes appropriateand prices the Company’s products in a manner intended to maintain currentaccounts and attract new customers while maintaining an acceptable net interestmargin.

***PrepaidSolutions Cards.*** Outstanding balances on prepaid solutionscards increased 6.0% from the prior year-end. This increase was primarily dueto growth in one prepaid card program along with the Company’s gift card programduring 2006. The Company will continue to attempt to increase volume byentering into additional programs with new and existing customers.

# **CapitalResources**

Shareholders’ equity atDecember 31, 2006 increased 0.7% from December 31, 2005 as a result of $25.4million of net income, reduced by dividends declared of $21.6 million, adecrease in accumulated other comprehensive loss of $2.6 million and anincrease of $5.6 million in the amount reclassified on ESOP shares.

All capital ratios are in excess of the regulatorycapital requirements which call for a minimum total risk-based capital ratio of8% for each of the Company and the Bank, a minimum Tier 1 risk-based capitalratio of 4% for each of the Company and the Bank and a minimum leverage ratio(3% for the most highly rated banks and bank holding companies that do notexpect significant growth; all other institutions are required to maintain aminimum leverage capital ratio of 4% to 5% depending on their particularcircumstances and risk and growth profiles) for each of the Company and theBank. Bank holding companies and their subsidiaries are generally expected tooperate at or above the minimum capital requirements. All capital ratios are inexcess of regulatory minimums and should allow the Company and the Bank tooperate without significant capital adequacy concerns. In addition, the Bankformed a subsidiary in 2004 that participates in the Bank’s real estate lendingbusiness and is intended to qualify as a real estate investment trust. Thissubsidiary is also intended to facilitate capital raising efforts, if suchefforts become necessary, by enabling the Bank to access the capital marketsthrough the subsidiary.

 

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Managementhas been advised that as of December 31, 2006 and 2005, the Bank qualified as a“well-capitalized” institution as defined by the Federal Deposit InsuranceCorporation Improvement Act of 1991, as amended. On a consolidated basis, theCompany also exceeded regulatory capital requirements. In accordance withapplicable regulations, the appraised fair value of West Suburban common stockowned by the ESOP is included in Tier 1 capital.

# **Liquidity**

*Effective liquidity managementensures the availability of funding sources at minimum cost to meet fluctuatingdeposit balances, loan demand needs and to take advantage of earningsenhancement opportunities. A large stable core deposit base and a strongcapital position are the solid foundation for the Company’s liquidity position.Liquidity is enhanced by a securities portfolio structured to provide liquidityas needed. The Company also maintains relationships with correspondent banks topurchase federal funds subject to underwriting and collateral requirements.Additionally, subject to credit underwriting, collateral, capital stock, andother requirements of the Federal Home Loan Bank of Chicago (“FHLB”), theCompany is able to borrow from the FHLB on a “same day” basis. As of December31, 2006, the Company could have borrowed up to approximately $102 million fromthe FHLB secured by certain of its real estate loans and securities.Furthermore, the Company has agreements in place to borrow up to $50 million infederal funds. The Company manages its liquidity position through continuousmonitoring of profitability trends, asset quality, interest rate sensitivityand maturity schedules of interest-earning assets and interest-bearingliabilities.*

Generally,the Company uses cash and cash equivalents and securities available for sale tomeet its liquidity needs. As of December 31, 2006 and December 31, 2005, theseliquid assets represented 30.8% and 31.3% of total assets, respectively. During2006, the Company’s cash and cash equivalents increased $18.2 million. Net cashprovided by operating activities was $29.7 million, while net cash used ininvesting activities was $29.2 million. Net cash flows provided by financingactivities were $17.8 million, resulting primarily from deposit growth.Management expects operating and financing activities to be a continuing sourceof cash flow in the future.

**Income Statement Analysis — 2006 Compared to 2005**

***General*****.** The Company’s net income decreased 0.5% in 2006. Net incomewas positively affected by an increase in net interest income of $1.3 millionand a decrease in the provision for loan losses of $1.2 million. Additionally,there was a decrease in income tax expense of $.4 million. Net income wasnegatively affected by a decrease in total noninterest income of $.7 millionand an increase in total noninterest expense of $2.3 million.

***Net Interest Income.*** Netinterest income in 2006 increased 2.2% compared to 2005. Net interest income isthe primary source of income for the Company. Net interest income is thedifference between interest income earned on interest-earning assets andinterest expense incurred on interest-bearing liabilities. Net interest incomeis affected by changes in volume and yield on interest-earning assets and thevolume and rates on interest-bearing liabilities. Interest-earning assetsconsist of federal funds sold, securities and loans. Interest-bearingliabilities primarily consist of deposits. The net interest margin is thepercentage of tax-equivalent net interest income to average earning assets. TheCompany’s net interest margin (on a fully tax-equivalent basis) was 3.5% in2006 and 3.6% in 2005.

Total interest income (on a fully tax-equivalentbasis) increased 18.2% in 2006 primarily due to increasing yields and balancesin the Company’s loan portfolio. Average loans in 2006 increased 6.2% while theyield on the portfolio increased 87 basis points. Yields on the Company’s homeequity loan portfolio increased 96 basis points during this period. Thisincrease was primarily due to increases in the interest rate charged for homeequity lines of credit that adjusted as a result of increases in the primerate. The prime rate increased due to increases in interest rates initiated bythe Federal Reserve. The average prime rate for 2006 was 7.96% compared to6.19% for 2005. Yields on the commercial loans portfolio increased 156 basispoints during this period. The majority of the Company’s commercial loans haveadjustable rates that are tied to the prime rate. Additionally, yields onfederal funds sold increased 185 basis points primarily due to rising marketinterest rates.

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Total interest expense increased 49.8% in 2006.Interest rates on deposits accounted for predominantly all of the increase. Theyield on interest-bearing deposits increased 92 basis points to 3.01% in 2006from 2.09% in 2005. As market interest rates increased, the Company increasedthe rates that it pays on deposits in order to maintain its current accountsand attract new customers.

The following table reflects the impact ofchanges in volume and rates of interest-earning assets and interest-bearingliabilities on a tax equivalent basis for the years ended December 31, 2006 and2005 (dollars in thousands):
| ** **                         | ** ** | **2006 compared to 2005** | ** ** | **2005 compared to 2004** | ** ** |
|------------------------------------|------------|------------------------------------------|------------|------------------------------------------|------------|
| ** **                         | ** ** | **Change due to**              | ** ** | ** **                               | ** ** | **Change due to** | ** ** | ** ** | ** ** |
| ** **                         | ** ** | **Volume**                               | ** ** | **Rate**                                 | ** ** | **Total  Change** | ** ** | **Volume** | ** ** | **Rate** | ** ** | **Total  Change** | ** ** |
| **Interest  Income**               |       |                                     |       |                                     |       |   |   |   |   |   |   |   |   |
| Federal funds sold                 |       | $                                        | 1,775      |                                     | $          | 425 |   | $ | 2,200 |   | $ | (61 | ) | $ | 430 |   | $ | 369 |   |
| Securities                         |       | (1,624                                   | )          | 1,729                                    |       | 105 |   | 1,291 |   | (1,195 | ) | 96 |   |
| Loans                              |       | 4,837                                    |       | 9,248                                    |       | 14,085 |   | 533 |   | 8,720 |   | 9,253 |   |
| Total interest income              |       | 4,988                                    |       | 11,402                                   |       | 16,390 |   | 1,763 |   | 7,955 |   | 9,718 |   |
|                               |       |                                     |       |                                     |       |   |   |   |   |   |   |   |   |
| **Interest  Expense**              |       |                                     |       |                                     |       |   |   |   |   |   |   |   |   |
| Interest-bearing deposits          |       | 1,628                                    |       | 13,455                                   |       | 15,083 |   | 799 |   | 7,616 |   | 8,415 |   |
| Other interest-bearing liabilities |       | (25                                      | )          | 7                                        |       | (18 | ) | (45 | ) | 60 |   | 15 |   |
| Total interest expense             |       | 1,603                                    |       | 13,462                                   |       | 15,065 |   | 754 |   | 7,676 |   | 8,430 |   |
| Net interest  income               |       | $                                        | 3,385      |                                     | $          | (2,060 | ) | $ | 1,325 |   | $ | 1,009 |   | $ | 279 |   | $ | 1,288 |   |

 

***Provisionfor Loan Losses.***The provision for loans losses decreased$1.2 million in 2006. This was primarily due to the decrease in net loancharge-offs and nonperforming loans during 2006. A more detailed discussionconcerning the allowance for loans losses is presented in the Allowance forLoan Losses and Asset Quality section of this annual report.

***Noninterest Income.***Total noninterest incomedecreased 3.0% during 2006 compared to 2005. Prepaid solutions card incomeincreased $.5 million primarily due to growth in gift card programs. Servicefees on deposit accounts decreased $.5 million primarily due to decreases in feerevenue related to the Company’s overdraft honors program. Although managementbelieves the income from the overdraft honors program may vary from period toperiod, the program is intended to provide continuing fee income. Additionally,the Company experienced decreases in other service charges on deposit accountsprimarily due to higher earnings credit on commercial accounts in the 2006period. Other noninterest income decreased $.7 million primarily due to adecline in travel agency income and higher gains on sales of other real estateoccurring in 2005.

***NoninterestExpense.*** Total noninterest expense increased 5.2% during2006 compared to 2005. Salaries and employee benefits increased $1.2 milliondue to normal salary increases along with increased medical insurance costs.Occupancy expense increased $.5 million due to increased building depreciationexpense which resulted from management’s decision in January 2006 to close theMetra Main facility and the acceleration of the building depreciation associatedwith that facility. Prepaid solutions cards expense increased $.3 millionprimarily due to expenses associated with the production and processing ofcards and postage associated with the issuance of new cards. Furniture andequipment expense decreased $.1 million primarily due to reduced depreciationand maintenance expense partially offset by increased data processing expense.Advertising and promotion expense increased $.1 million primarily due toincreased costs associated with the prepaid solution group. Professional feesexpense decreased $.1 million primarily due to the reduced needs of the prepaidsolutions group for professional services. Other expense increased $.5 millionprimarily due to increased costs for call center services to answer card relatedquestions for the prepaid solutions group. The Company’s efficiency ratio, ameasure of the amount of expense needed to generate each dollar of income was57% in 2006 and 55% in 2005.

***IncomeTaxes.*** Income tax expense decreased 4.0% in 2006,primarily due to lower pre-tax income. The effective tax rates for the yearsended December 31, 2006 and 2005 were 28.1% and 28.8%, respectively.

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**Income Statement Analysis — 2005 Compared to 2004**

***General*****.** The Company’s net income increased 7.7% in 2005, primarily dueto an increase in total noninterest income of $5.2 million. Net income was alsopositively affected by an increase in net interest income of $1.6 million. Netincome was negatively affected by an increase in total noninterest expense of$2.4 million, an increase in provision for loan losses of $1.2 million and anincrease in income tax expense of $1.4 million.

***Net Interest Income.*** Netinterest income in 2005 increased 2.8% compared to 2004. The Company’s netinterest margin (on a fully tax-equivalent basis) was 3.6% in 2005 and 2004.

Total interest income (on a fully tax-equivalentbasis) increased 12.1% in 2005 primarily due to increased yields from assets inthe Company’s loan portfolio. Average loans in 2005 increased .8% while theyield on the portfolio increased 82 basis points. Yields on the Company’s homeequity loan portfolio increased 77 basis points during this period. Thisincrease was primarily due to increases in the interest rate charged for homeequity lines of credit that adjusted as a result of increases in the primerate. Beginning in 2004, the prime rate rose due to increases in interest ratesinitiated by the Federal Reserve. The average prime rate for 2005 was 6.19%compared to 4.35% for 2004. Yields on the commercial loan portfolio increased160 basis points during this period. The majority of commercial loans haveadjustable rates that are tied to the prime rate. Yields on investmentsecurities decreased 23 basis points during this period. This was primarily dueto actions taken in the third quarter of 2004 to reposition the investmentportfolio, which was intended to shorten the duration and reduce the interestrate risk of the portfolio.

Total interest expense increased 38.6% in 2005.Interest on deposits, which accounted for substantially all of this increase,increased due to higher rates paid on deposits. The yield on interest-bearingdeposits increased 54 basis points to 2.09% in 2005 from 1.55% in 2004. TheCompany increased rates in order to retain its current deposit accounts andattract new deposit customers while maintaining the Company’s net interestmargin.

***Provisionfor Loan Losses.*** The provision for loan losses increased$1.2 million in 2005. This was primarily due to a $45.8 million increase intotal loans and a $1.2 million increase in the specific reserve allocation toimpaired loans during 2005. At December 31, 2005, there was $3.5 million ofspecific reserves allocated for $5.4 million of impaired loans compared to $2.3million of specific reserves allocated for $6.6 million of impaired loans atDecember 31, 2004. A more detailed discussion concerning the allowance for loanlosses is presented in the Allowance for Loan Losses and Asset Quality sectionof this annual report.

***Noninterest Income.***Total noninterest income increased28.1% during 2005 compared to 2004. Prepaid solutions card income increased$2.0 million, or 35.6%, primarily due to an increase in the number of programsimplemented during 2005. Service fees on deposit accounts decreased $.4 millionprimarily from a decline in service charges associated with the overdrafthonors program. BOLI income increased $.4 million primarily due to an increasein the Company’s investment in this asset initiated in the third and fourthquarters of 2004. Net realized gain on securities transactions increased $2.2million to a gain position of $.2 million at December 31, 2005 from a lossposition of $2.0 million at December 31, 2004. During the third quarter of2004, the Company undertook transactions to reposition the investment portfoliointended to shorten the duration and reduce the interest rate risk of theportfolio. The Company also experienced a decrease in net gains on sales ofloans held for sale of $.1 million as the Company elected to hold certain30-year fixed rate mortgage loans, which was a change from its prior practiceof selling these loans into the secondary market. The Company anticipates thatthis change and additional increases in interest rates will have a continuingnegative impact on the amount of gains on the sales of loans that itrecognizes. Other noninterest income increased $.7 million primarily due togains on the sales of other real estate and increased travel agency income.

***NoninterestExpense.***  Totalnoninterest expense increased 5.6% during 2005 compared to 2004. Salaries andemployee benefits increased $.9 million due to normal salary increases. Prepaidsolutions card expense, including expenses related to the production of cards,postage and processing services, increased $1.5 million, or 37.3%, during thisperiod. This increase was driven by increases in volume for existing programsand the implementation of new programs. The Company anticipates that thisexpense will continue to increase as new programs continue to be implemented.Management also believes that over time the Company will achieve some economiesof scale as the need to make significant investments in development of newproducts and programs begin to slow. Furniture and 

43

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equipment expenseincreased $.2 million primarily due to increased data processing costsassociated with the Company’s online banking products and services. Advertisingand promotion increased $.4 million due to increased expenses associated withthe promotion of the Company’s prepaid solutions products. Additionally, theCompany incurred increased expenses associated with the promotion of itscommercial and home equity loan products. Other noninterest expense decreased$.7 million primarily due to decreased loan expense from lower appraisal costsand recording fees. Additionally, other losses expense, postage and freightexpense and Visa® card holder expense decreased during 2005 compared to 2004.The Company’s efficiency ratio, a measure of the amount of expense needed togenerate each dollar of income was 55% in 2005 and 57% in 2004. The ratioimproved primarily due to the Company experiencing a $.2 million gain on saleof securities in 2005 compared to a $2.0 million loss in 2004.

***IncomeTaxes.*** Income tax expense increased 15.6% in 2005,primarily due to higher pre-tax income. The effective tax rates for the yearsended December 31, 2005 and 2004 were 28.8% and 27.4%, respectively.

# **Interest Rate Sensitivity**

The Company attempts to maintain a conservative posturewith regard to interest rate risk by actively managing its asset/liability GAPposition and monitoring the direction and magnitude of gaps and risk. TheCompany attempts to moderate the effects of changes in interest rates byadjusting its asset and liability mix to achieve desired relationships betweenrate sensitive assets and rate sensitive liabilities. Rate sensitive assets andliabilities are those instruments that reprice within a given time period. Anasset or liability reprices when its interest rate is subject to change or uponmaturity.

Movements in general market interest rates are a keyelement in changes in the net interest margin. The Company’s policy is tomanage its balance sheet so that fluctuations in the net interest margin areminimized regardless of the level of interest rates, although the net interestmargin does vary somewhat due to management’s response to increasingcompetition from other financial institutions.

The Company measuresinterest rate sensitivity through a net interest income analysis. The netinterest income analysis measures the change in net interest income in theevent of hypothetical changes in interest rates. This analysis assesses therisk of changes in net interest income in the event of a sudden and sustained100 to 200 basis point increase or decrease in market interest rates. Thisanalysis is subject to the Company’s assumptions, which include the following:

·                  Balancesheet volume reflects the current balances and does not project future growthor changes. The current balances establish the base case from which all percentchanges are calculated.

·                  Thereplacement rate for loan and deposit items that mature is the current rateoffered by the Company as adjusted for the assumed rate increase or decrease.The replacement rate for securities is the current market rate as adjusted forthe assumed rate increase or decrease.

·                  Therepricing rate for balance sheet data is determined by utilizing individualaccount statistics provided by the Company’s data processing systems.

·                  Thematurity and repricing dates for balance sheet data are determined by utilizingindividual account statistics provided by the Company’s data processingsystems.

44

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Listed below arethe Company’s projected changes in net interest income over a twelve-monthhorizon for the various rate shock levels as of the periods indicated (dollarsin thousands):

| December 31, 2006 | ** ** | **Amount** | ** ** | **Dollar  Change** | ** ** | **Percent  Change** | ** ** |
|-----------------------------|------------|------------|------------|--------------------|------------|---------------------|------------|
| +200 basis  points          |       | $          | 62,974     |               | $          | 3,818               |       | 6.5 | % |
| +100 basis  points          |       | 61,154     |       | 1,998              |       | 3.4                 | %          |
| Base                        |       | 59,156     |       |               |       |                |       |
| -100 basis  points          |       | 61,664     |       | 2,508              |       | 4.2                 | %          |
| -200 basis  points          |       | 59,787     |       | 631                |       | 1.1                 | %          |
|                        |       |       |       |               |       |                |       |
| December 31,  2005          |       |       |       |               |       |                |       |
| +200 basis  points          |       | $          | 63,379     |               | $          | 3,853               |       | 6.5 | % |
| +100 basis  points          |       | 61,479     |       | 1,953              |       | 3.3                 | %          |
| Base                        |       | 59,526     |       |               |       |                |       |
| -100 basis  points          |       | 61,178     |       | 1,652              |       | 2.8                 | %          |
| -200 basis points           |       | 58,644     |       | (882               | )          | (1.5                | )%         |

 

# **Effects of Inflation**

Unlike industrialcompanies, nearly all of the assets and liabilities of the Company are monetaryin nature. As a result, interest rates have a more significant impact on theCompany’s performance than do the effect of general levels of inflation.Interest rates do not necessarily move in the same direction or experience thesame magnitude of change as goods and services, since such prices are affectedby inflation. In the current economic environment, liquidity and interest rateadjustments are features of the Company’s asset/liability management, which areimportant to the maintenance of acceptable performance levels. The Companyattempts to maintain a balance between monetary assets and monetary liabilities,over time, to offset the potential effects of changing interest rates.

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## ** **

## **BOARDS OF DIRECTORS**

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|                    | **West Suburban Bancorp, Inc.**                                      |
|--------------------|----------------------------------------------------------------------|
| ** **         | ** **                                                           |
| Kevin J. Acker     | Chairman of the Board                                                |
| David S. Bell      | Certified Public Accountant                                          |
| Duane G. Debs      | President and Chief Financial Officer                                |
| Charles P.  Howard | Parkview Community Church, Business Administrator                    |
| Peggy P.  LoCicero | Former Banker                                                        |
|               |                                                                 |
| ** **         | **West  Suburban Bank**                                              |
| ** **         | ** **                                                           |
| Robert W. Schulz   | Chairman; Oliver Hoffmann Corporation, Vice  President and Treasurer |
| Keith W. Acker     | President                                                            |
| Craig R. Acker     | Former Banker                                                        |
| Earl K. Harbaugh   | Ditch Witch Midwest, President                                       |
| Ronald J. Kuhn     | Harry W. Kuhn, Inc., Chairman, Secretary and  Treasurer              |
| Paul J. Lehman     | The Macom Corporation, President                                     |
| John G. Williams   | Bracing Systems, Vice President                                      |

 

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## **OFFICERS**

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|                           | **West Suburban Bancorp, Inc.**                                                                 |
|---------------------------|-------------------------------------------------------------------------------------------------|
| ** **                | ** **                                                                                      |
| Kevin J. Acker            | Chief Executive Officer                                                                         |
| Duane G. Debs             | President and Chief Financial Officer                                                           |
| Keith W. Acker            | Chief Operations Officer                                                                        |
| Michael P. Brosnahan      | Vice President                                                                                  |
| Michael J. Lynch          | Director of Internal Audit                                                                      |
| David J. Mulkerin         | Chief Compliance Officer                                                                        |
| George E. Ranstead        | Secretary to the Board and Treasurer                                                            |
|                      |                                                                                            |
|                      | **West Suburban Bank**                                                                          |
|                      | ** **                                                                                      |
| **Senior  Officers**      |                                                                                            |
| Keith W. Acker            | President, Trust Officer                                                                        |
| Kevin J. Acker            | Senior Vice President, Marketing                                                                |
| Michael P. Brosnahan      | Senior Vice  President, Commercial and Consumer Lending and Community Reinvestment Act  Officer |
| Duane G. Debs             | Senior Vice President, Comptroller and Trust Officer                                            |
| Daniel P. Grotto          | Senior Vice President, Business Development, Prepaid  Solutions and Residential Lending         |
|                      |                                                                                            |
| **Building  Management**  |                                                                                            |
| Edward J. Garvey          | Vice President, Building Management                                                             |
|                      |                                                                                            |
| **Business  Development** |                                                                                            |
| Doug R. Bobenhouse        | Business Development and Sales Manager - Prepaid  Solutions                                     |
|                      |                                                                                            |

 

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| **Cash Management**      |                                                                              |
|--------------------------|-----------------------------------------------------------------------------------|
| Gary Raczek              | Vice President, Cash Management Manager                                           |
|                     |                                                                              |
| **Commercial  Loans**    |                                                                              |
| Stanley C. Celner, Jr.   | Vice President, Commercial Loans                                                  |
| Grant O. Cowen           | Vice President, Commercial Loans                                                  |
| Timothy P. Dineen        | Vice President, Commercial Real Estate Loans                                      |
| Michael F. Moone         | Vice President, Commercial Real Estate Loans                                      |
| David S. Orr             | Vice President, Commercial Loans                                                  |
| John J. Schroeder        | Vice President, Commercial Loans                                                  |
| Edwin S. Stephens IV     | Vice President, Commercial Loans                                                  |
| Gregory L. Young         | Vice President, Commercial Loans                                                  |
| David Roth               | Assistant Vice President, Commercial Loans                                        |
| Matthew Acker            | Calling Officer                                                                   |
|                     |                                                                              |
| **Compliance**           |                                                                              |
| David J. Mulkerin        | Chief Compliance Officer                                                          |
|                     |                                                                              |
| **Comptroller**          |                                                                              |
| George E. Ranstead       | Vice President, Assistant Comptroller and Investment  Officer                     |
| Jay J.P. Greifenkamp     | Vice President, Financial Analyst, Investment  Officer and Secretary to the Board |
|                     |                                                                              |
| **Consumer  Loans**      |                                                                              |
| Charles J. Svoboda       | Vice President, Consumer Loans - Department Head                                  |
| William H. Hunter        | Vice President, Consumer Loans                                                    |
| Keith J. Larson          | Vice President, Consumer Loans                                                    |
| Cynthia A. Meredith      | Vice President, Consumer Loans                                                    |
| David J. Wanek           | Vice President, Consumer Loans                                                    |
|                     |                                                                              |
| **Financial  Services**  |                                                                              |
| Michael Abbatacola       | Vice President, Financial Services                                                |
|                     |                                                                              |
| **Human  Resources**     |                                                                              |
| Mary Ellen Condon        | Vice President, Human Resources                                                   |
|                     |                                                                              |
| **Information  Systems** |                                                                              |
| Steven A. Jennrich       | Vice President, Information Systems                                               |
| Jacqueline R. Weigand    | Vice President, Project Manager                                                   |
|                     |                                                                              |
| **Internal  Audit**      |                                                                              |
| Michael J. Lynch         | Vice President, Director of Internal Audit                                        |
|                     |                                                                              |
| **Loan  Operations**     |                                                                              |
| Sandra C. Boyce          | Vice President, Residential Mortgage Loan Processing                              |
| Gary H. Brandes          | Vice President, Consumer Loan Operations                                          |
| Kevin Bussey             | Vice President, Collections                                                       |
| Debra H. Crowley         | Vice President, Commercial Loan Operations                                        |
| Lawrence J. Ortman       | Vice President, Credit Analysis and Loan Review                                   |
|                     |                                                                              |
| **Loss Prevention**      |                                                                              |
| Craig Kelbus             | Vice President, Security and Loss Prevention                                      |
|                     |                                                                              |
| **Marketing**            |                                                                              |
| Denise M.  Zatarski      | Director of Marketing                                                             |
|                     |                                                                              |
|                          |                                                                                   |  |

 

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| **Operations**                        |                                                                   |
|---------------------------------------|------------------------------------------------------------------------|
| Danielle Budig                        | Vice President, Operations and Visa                                    |
|                                  |                                                                   |
| **Purchasing**                        |                                                                   |
| Helen G. Schmitt                      | Assistant Vice President, Purchasing                                   |
|                                  |                                                                   |
| **Retail  Banking**                   |                                                                   |
| William J.  Jennrich                  | Vice President, Retail Branch Banking                                  |
| Jack Buscemi                          | Vice President, Regional Manager - Central Region                      |
| Marc L. DiNatale                      | Vice President, Regional Manager - East Region                         |
| Kirsten L.  Jensen                    | Vice President, Regional Manager - West Region                         |
| Marcia K.  Worobec                    | Vice President, Branch Operations and Branch Manager  - Westmore       |
| Kathleen M.  Brockman                 | Assistant Vice President, Branch Manager - Lake  Street                |
| Jeanne L.  Carlisle                   | Assistant Vice President, Branch Manager -  Bolingbrook West           |
| Beverly D.  Cornelious                | Assistant Vice President, Branch Manager -  Bolingbrook East           |
| Gina M. Corral                        | Assistant Vice President, Staff Manager                                |
| Barbara D.  Darden                    | Assistant Vice President, Branch Manager - Chicago  Avenue, Naperville |
| Robert G. Dover,  Jr.                 | Assistant Vice President, Branch Manager - North  Main                 |
| Yolanda V. Dunn                       | Assistant Vice President, Branch Manager - Eola Road                   |
| Nansi E. Eivaz                        | Assistant Vice President, Branch Manager -  Romeoville                 |
| Joyce M. Fedele                       | Assistant Vice President, Branch Manager - Bartlett                    |
| Sharon A. Fonte                       | Assistant Vice President, Branch Manager - Glendale  Heights           |
| James R.  Graziano                    | Assistant Vice President, Branch Manager - Downtown  Downers           |
| Kenneth J.  Hannah                    | Assistant Vice President, Branch Manager -  Charlestown                |
| Steven C. Harry                       | Assistant Vice President, Branch Manager -  Yorkville, Oswego West     |
| Priya Hira                            | Assistant Vice President, Branch Manager - Danada,  Wheaton            |
| Jason M. Knapp                        | Assistant Vice President, Branch Manager - Gary  Avenue                |
| Terry Leitner                         | Assistant Vice President, Branch Manager - 75th Street, Westmont       |
| Diane C. Macauda                      | Assistant Vice President, Branch Manager - Oakbrook  Terrace           |
| Jeffery W. Miska                      | Assistant Vice President, Branch Manager - Cass  Avenue                |
| Brian S.  Nickleski                   | Assistant Vice President, Branch Manager - South  Main                 |
| Dawn M. Oles                          | Assistant Vice President, Branch Manager -  Montgomery                 |
| Gwen B.  O’Loughlin              | Assistant Vice President, Branch Manager - Villa  Park                 |
| Robert L.  Pauling                    | Assistant Vice President, Branch Manager - Stratford  Square           |
| Cynthia A.  Picton                    | Assistant Vice President, Branch Manager - West  Galena                |
| Kay J.  Piotrowski                    | Assistant Vice President, Branch Manager - Fair Oaks                   |
| Jacintha  Riley-Galloway              | Assistant Vice President, Branch Manager -  Warrenville                |
| Lisa M. Schmidt                       | Assistant Vice President, Branch Manager - South  Elgin                |
| Jerome F.  Sheeman                    | Assistant Vice President, Branch Manager - Finley  Road                |
| Jose L. Valdez                        | Assistant Vice President, Branch Manager - Oswego  East                |
| Timothy C.  Voreis                    | Assistant Vice President, Branch Manager - St.  Charles                |
| Michael C.  Ramirez                   | Assistant Branch Manager - President Street                            |
|                                  |                                                                   |
| **Travel  with West Suburban**        |                                                                   |
| Dennis A.  Woodyatt                   | Travel Agent                                                           |
|                                  |                                                                   |
| **Trust**                             |                                                                   |
| Christine H.  Pawlak                  | Trust Officer                                                          |
|                                  |                                                                   |
| **West  Suburban Insurance Services** |                                                                   |
| Patricia  Falstrom                    | Insurance Agent                                                        |

 

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## **Addresses of West Suburban Facilities(630) 652 - 2000**

**Aurora**Eola Road Branch: 335 North Eola Road, Aurora, Illinois 60504Galena Branch: 2000 West Galena Boulevard, Aurora, Illinois 60506Lake Street Branch: 101 North Lake Street, Aurora, Illinois 60506

**Bartlett**Bartlett Branch: 1061 West Stearns Road, Bartlett, Illinois60103

**Bloomingdale**Stratford Square Branch: 355 West Army Trail Road,Bloomingdale, Illinois 60108

**Bolingbrook**Bolingbrook East Branch: 672 East Boughton Road, Bolingbrook,Illinois 60440Bolingbrook West Branch: 1104 West Boughton Road, Bolingbrook, Illinois 60440

**CarolStream**Gary Avenue Branch: 401 North Gary Avenue, Carol Stream,Illinois 60188Fair Oaks Branch: 1380 West Army Trail Road, Carol Stream, Illinois 60188President Street Branch: 895 East Geneva Road, Carol Stream, Illinois 60188

**Darien**75th Street Branch: 1005 75th Street, Darien, Illinois 60561Cass Avenue Branch: 8001 South Cass Avenue, Darien, Illinois 60561

**DownersGrove**Downtown Downers Branch: 5330 Main Street, Downers Grove,Illinois 60515Finley Road Branch: 2800 Finley Road, Downers Grove, Illinois 60515

**GlendaleHeights**Glendale Heights Branch: 1657 Bloomingdale Road, GlendaleHeights, Illinois 60139

**Lombard**North Main Branch: 707 North Main Street, Lombard, Illinois60148

South Main Branch: 1122 South Main Street, Lombard, Illinois 60148

*WestmoreBranch: 711 South Meyers Road, Lombard, Illinois 60148 (Headquarters)*

**Montgomery**

Montgomery Branch: 1830Douglas Road, Montgomery, Illinois 60538

**Naperville**

Chicago Avenue Branch: 1296 East Chicago Avenue, Naperville, Illinois60540

Naperville Branch: 2020Feldott Lane, Naperville, Illinois 60540

**Oakbrook Terrace**

Oakbrook Terrace Branch:17W754 22nd Street, Oakbrook Terrace, Illinois 60181

**Oswego**

Oswego East Branch: 2830 Route 34, Oswego, Illinois 60543

Oswego West Branch: 1071Station Drive, Oswego, Illinois 60543

**Romeoville**

Romeoville Branch: 505North Weber Road, Romeoville, Illinois 60446

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**South Elgin**

South Elgin Branch: 1870McDonald Road, South Elgin, Illinois 60177

**St. Charles**

Charlestowne Branch: 3000 East Main Street, St. Charles, Illinois 60174

St. Charles Branch: 315South Randall Road, St. Charles, Illinois 60174

**Villa Park**

Villa Park Branch: 40East St. Charles Road, Villa Park, Illinois 60181

**Warrenville**

Warrenville Branch: 3S041Route 59, Warrenville, Illinois 60555

**Westmont**

Westmont Branch: 6400South Cass Avenue, Westmont, Illinois 60559

**Wheaton**

Danada Branch: 295 West Loop Road, Wheaton, Illinois 60187

Wheaton Branch: 221 SouthWest Street, Wheaton, Illinois 60187

**Yorkville**

Yorkville Branch: 10Saravanos Drive, Yorkville, Illinois 60560

ATMs are available at allof the above banking branches.

**Limited-Service Branches**

*Beacon Hill Retirement Community: Lombard, Illinois60148*

*Financial Center: 717 South Meyers Road, Lombard,Illinois 60148*

*Lexington Health Care Center of Elmhurst: Elmhurst,Illinois 60126*

*Lexington Health Care Center ofLombard: Lombard, Illinois 60148*

**OtherServices**

*Prepaid Solutions Group: 17W754 22**nd Street, Oakbrook Terrace, Illinois 60181 - (630)652-2000*

*Travel with West Suburban: 711 South Meyers Road,Lombard, Illinois 60148 - (630) 495-1400*

*West Suburban Bank Land Trust: 711 South MeyersRoad, Lombard, Illinois 60148 - (630) 652-2225*

*West Suburban Bank Visa: 701 South Meyers Road,Lombard, Illinois 60148 - (630) 652-2000 extension 2903*

*West Suburban Financial Services: 711 South MeyersRoad, Lombard, Illinois 60148 - (630) 652-2232*

*West Suburban Insurance Services, Inc.: 711 SouthMeyers Road, Lombard, Illinois 60148 - (630) 652-2550*

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## **[MAP OF MARKET AREA THAT INDICATES LOCATIONOF FACILITIES]**

 

 

 

 

 

 

 

 

**[WSBLOGO]**

**Wherestrength is matched by service**

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# **ShareholderInformation**

# **AnnualReport on Form 10-K**

A copy of West Suburban Bancorp, Inc.’s AnnualReport on Form 10-K, filed with the Securities and Exchange Commission, isavailable on their web site at www.sec.gov or without charge to shareholders bywriting to:

Duane G.Debs

Presidentand Chief Financial Officer

WestSuburban Bancorp, Inc.

2800Finley Road

DownersGrove, Illinois 60515

(630) 652-2801

# **AnnualMeeting of Shareholders**

The annual meeting of shareholders of WestSuburban Bancorp, Inc. will be held at West Suburban Bank, 711 South MeyersRoad, Lombard, Illinois on Wednesday, May 9, 2007 at 8:00 a.m. All shareholdersare cordially invited to attend.

# **StockTransfer Agent and Registrar**

Inquiries regarding stock transfers,registration, lost certificates and changes of name and address should bedirected to the stock transfer agent and registrar by writing to:

George E.Ranstead

Secretaryto the Board and Treasurer

WestSuburban Bancorp, Inc.

2800Finley Road

DownersGrove, Illinois 60515

(630) 652-2802

# **CommunityReinvestment Act**

West Suburban Bank adheres to a well-establishedpolicy of helping to meet the credit needs of our local communities, consistentwith safe and sound lending practices, in accordance with the CommunityReinvestment Act. For additional information, contact:

Michael P. Brosnahan

Senior Vice President,Commercial Lending and Community Reinvestment Act Officer

West Suburban Bank

717 South Meyers Road

Lombard, Illinois 60148

(630)652-2308

# **IndependentRegistered Public Accounting Firm**

Crowe Chizek andCompany LLC

One Mid AmericaPlaza, Suite 700

Post Office Box3697

Oak Brook,Illinois 60522

# **CorporateCounsel**

Barack FerrazzanoKirschbaum Perlman & Nagelberg LLP

333 West WackerDrive, Suite 2700

Chicago, Illinois60606

**MEMBER FDIC**

**[EQUALHOUSING LENDER LOGO]**

 

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