First Oak Brook Bancshares, Inc. Announces Fourth Quarter and 2001 Earnings Per Share Soar 25%

Business Wire, Jan 22, 2002

Business Editors

OAK BROOK, Ill.--(BUSINESS WIRE)--Jan. 22, 2002

First Oak Brook Bancshares, Inc. Announces Fourth Quarter and 2001 Earnings Per Share Soar 25%

2001 Fourth Quarter Earnings Per Share Jump 25%

(Unaudited)

FIRST OAK BROOK BANCSHARES, INC., (NASDAQ: FOBB) today announced fourth quarter 2001 diluted earnings per share jumped 25% to $.60 for 2001 compared to $.48 for 2000. Profits rose 24% to $3.861 million, up from $3.106 million for fourth quarter 2000.

The return on average shareholders' equity (ROE) increased to 15.46% for the fourth quarter of 2001, up from 14.67% for 2000. The return on average assets (ROA) increased to 1.11% for 2001 compared to .99% for 2000.

Net interest income increased 27% in the fourth quarter. This improvement was due to an 11% spurt in earning assets (including 11% average loan growth) and a 41 basis point rise in the net interest margin. The margin improvement was attributable to the cost of deposits and other borrowings falling faster than loan and investment yields.

Fourth quarter other income shot up 35% driven by growth in the Company's following businesses:

-- Cash Management - up $262,000, or 20%

-- Investment Management and Trust - up $99,000, or 35%

-- Merchant Card Processing - up $351,000, or 51%

-- Fees on Mortgages Sold - up $176,000 or 326%

Fourth quarter other expenses rose by 27% primarily due to higher compensation costs and increased merchant credit card interchange expense.

The annualized fourth quarter efficiency ratio improved to 57.6% from 58.6%. Annualized fourth quarter net overhead expenses as a percentage of average assets increased to 1.4% from 1.3% in 2000.

Year 2001 Earnings Per Share Surge 25%

(Unaudited)

Diluted earnings per share for the full year of 2001 surged 25% to $2.12 from $1.70 in 2000. Net income for 2001 rose to $13.648 million compared to $11.049 million in 2000, a 24% increase.

The return on average shareholders' equity (ROE) shot up to 14.47% for 2001 from 13.58% in 2000. The return on average assets (ROA) for the year 2001 was 1.04% as compared to .90% in 2000.

Net interest income increased 17% in 2001. This improvement was due to a 7% increase in earning assets (including 12% average loan growth) and a 27 basis point rise in the net interest margin. The margin improvement was attributable to the cost of deposits and other borrowings falling faster than loan and investment yields.

Other income shot up 38% driven by growth in the Company's following businesses:

-- Cash Management - up $1,361,000, or 29%

-- Investment Management and Trust - up $285,000, or 25%

-- Merchant Card Processing - up $1,225,000, or 48%

-- Fees on Mortgages Sold - up $466,000, or 263%

Other expenses rose by 18% primarily due to higher compensation costs and increased merchant credit card interchange expense.

The efficiency ratio improved to 59.8% in 2001 from 62.1% in 2000. Net overhead expenses as a percentage of average assets remained constant at 1.4% for 2001 and 2000.

Company President, Richard M. Rieser, said, "It is really gratifying to see the positive results of our long-term growth and performance strategies. This year we earned $13.6 million, more than triple the $4.3 million profit ten years ago. We're currently paying out dividends, annualized, at $.48 per share, over four times the $.11 per share ten years ago. In the fourth quarter, we exceeded our target return on equity of 15%, returning 15.46%.

"Although our stock price increased 37% during the year, our Company apparently remains a well-kept secret. Our stock trades at a price to earnings ratio of just 11.4x trailing earnings and at 1.57x book value, below other market multiples for our peers. Our goal this year is to get the message out about our earnings momentum and growth strategies."

Asset Quality Still Excellent

Nonperforming loans totaled $1.732 million, only .19% of loans outstanding. This is far below peers' non-performing loan ratios averaging .73% at September 30, 2001, the latest information available to us. We had no other nonperforming assets or renegotiated loans.

Net charge-offs of $250,000 for 2001 remained exceptionally low at .03% of average loans, compared to peers .42% at September 30, 2001, the most recent comparative data available. Virtually all net charge-offs relate to our $221.1 million (average balance) indirect auto and motorcycle portfolio. Our loss ratio of .12% within that portfolio is favorable compared to peers.

Because of the downturn in the economy, commercial loan growth and an increase in nonperforming loans, the Company increased its loss provision for 2001 to $1.55 million from $900,000 the year before. Consequently, the Company increased its allowance to $7 million at year-end 2001, up from $5.7 million a year earlier.

Record Asset and Equity at December 31, 2001

(unaudited)

Total assets climbed to a year-end 2001 record of $1.387 billion, up $138 million from prior year end. This growth was entirely internal.

Shareholders' equity also reached a record high of $99.6 million at the end of 2001, up from $87.6 million the year before. This lifted 2001 book value per share 13% to $15.43.