UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2011

Commission File Number 0-17609

WEST SUBURBAN BANCORP, INC.

(Exact name of registrant as specified in its charter)

Illinois		36-3452469
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

711 South Meyers Road, Lombard, Illinois		60148
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (630) 652-2000

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer x

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of ~~August~~October 531, 2011, 426,850 shares of West Suburban common stock were outstanding.

Table of Contents

WEST SUBURBAN BANCORP, INC.

Form 10-Q Quarterly Report

Table of Contents

		Page
		Number
PART I
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2223
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	37
PART II
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	(Removed and Reserved)	38
Item 5.	Other Information	38
Item 6.	Exhibits	38
~~Form 10-Q Signatures~~	Form 10-Q Signatures	39

Special Note Concerning Forward-Looking Statements

This document (including information incorporated by reference) contains, and future oral and written statements of each of West Suburban Bancorp, Inc. (“West Suburban”) and West Suburban Bank (the “Bank” and collectively with West Suburban and its other direct and indirect subsidiaries, the “Company”) and its management may contain, forward-looking statements, within the meaning of such term in the Private Securities Litigation Reform Act of 1995, with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to, those set forth in the “Risk Factors” section included under Item 1A of Part I of the Company’s most recently filed Annual Report on Form 10-K and under Item 1A in Part II of this report and the following:

· The strength of the U.S. and global economies and financial markets in general and the strength of the local economies in which the Company conducts its operations, including the local residential and commercial real estate markets, which may be less favorable than expected and may result in, among other things, a deterioration in the credit quality and value of the Company’s assets. · The effects of, and changes in, federal, state and local laws, regulations and policies affecting banking, securities, taxation, insurance and monetary and financial matters, as well as any laws and regulations otherwise affecting the Company, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other laws and regulations intended to address stresses in the U.S. and global financial markets, national security and money laundering. · The effects of adverse market conditions and volatility in investment securities generally, which may result in a deterioration in the value of the securities in the Company’s securities portfolio. · The costs, effects and outcomes of existing or future litigation and disputes with third parties, including, but not limited to, claims in connection with intellectual property matters, collection actions and employment matters.

· The effects of, and changes in, federal, state and local laws, regulations and policies affecting banking, securities, taxation, insurance and monetary and financial matters, as well as any laws and regulations otherwise affecting the Company, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and other laws and regulations intended to address stresses in the U.S. and global financial markets, national security and money laundering.

· The effects of adverse market conditions and volatility in investment securities generally, which may result in a deterioration in the value of the securities in the Company’s securities portfolio.

Table of Contents

· The ability of the Company to comply with, and satisfy the requirements of, any informal or formal enforcement actions with its regulators and the consequences that may result from any inability to comply. · The ability of the Company to comply with applicable federal, state and local laws, regulations and policies and the consequences that may result from any inability to comply. · Credit risks and the risks from concentrations (by geographic area or industry) within the Company’s loan portfolio. · The effects of changes in interest rates, including the effects of changes in the rate of prepayments of the Company’s assets, and the policies of the Board of Governors of the Federal Reserve System. · The ability of the Company to compete with other financial institutions as effectively as the Company currently intends due to increases in competitive pressures in the financial services sector. · The ability of the Company to maintain an acceptable net interest margin. · The ability of the Company to obtain new customers and to retain existing customers. · The timely development and acceptance of products and services, including products and services offered through alternative delivery channels such as the Internet. · Technological changes implemented by the Company and by other parties, including third party vendors, which may be more difficult or more expensive than anticipated or which may have unforeseen consequences to the Company and its customers, including technological changes implemented for, or related to, the Company’s website or new products. · The ability of the Company, and certain of its vendors, to develop and maintain secure and reliable electronic systems, including systems developed for the Company’s website or new products. · The ability of the Company to retain directors, executives and key employees, and the difficulty that the Company may experience in replacing directors, executives and key employees in an effective manner. · Consumer spending and saving habits which may change in a manner that affects the Company’s business adversely. · The economic impact of past and any future terrorist attacks, acts of war or threats thereof and the response of the U.S. to any such attacks and threats. · Changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board, the Public Company Accounting Oversight Board and the Securities and Exchange Commission. · The ability of the Company to manage the risks associated with the foregoing as well as anticipated.

~~· The~~These ~~ability~~risks ofand uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company toand ~~comply~~its ~~with~~business, ~~applicable~~including ~~federal~~other factors that could materially affect the Company’s financial results, ~~state~~is included in the Company’s filings with the Securities and ~~local~~Exchange ~~laws~~Commission, ~~regulations~~including ~~and~~the ~~policies~~risk ~~and~~factors disclosed in the ~~consequences~~Company’s ~~that~~most ~~may~~recently ~~result~~filed ~~from~~Annual ~~any~~Report ~~inability~~on toForm 10-K ~~comply~~and under Item 1A in Part II of this report.

· The effects of changes in interest rates, including the effects of changes in the rate of prepayments of the Company’s assets, and the policies of the Board of Governors of the Federal Reserve System.

· The ability of the Company to compete with other financial institutions as effectively as the Company currently intends due to increases in competitive pressures in the financial services sector.

· The ability of the Company to maintain an acceptable net interest margin.

· The ability of the Company to obtain new customers and to retain existing customers.

· The timely development and acceptance of products and services, including products and services offered through alternative delivery channels such as the Internet.

· Technological changes implemented by the Company and by other parties, including third party vendors, which may be more difficult or more expensive than anticipated or which may have unforeseen consequences to the Company and its customers, including technological changes implemented for, or related to, the Company’s website or new products.

· The ability of the Company, and certain of its vendors, to develop and maintain secure and reliable electronic systems, including systems developed for the Company’s website or new products.

· The ability of the Company to retain directors, executives and key employees, and the difficulty that the Company may experience in replacing directors, executives and key employees in an effective manner.

· Consumer spending and saving habits which may change in a manner that affects the Company’s business adversely.

· The economic impact of past and any future terrorist attacks, acts of war or threats thereof and the response of the U.S. to any such attacks and threats.

· The costs, effects and outcomes of existing or future litigation and disputes with third parties, including, but not limited to, claims in connection with collection actions, employment matters and sales of business units.

· Changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the Financial Accounting Standards Board, the Public Company Accounting Oversight Board and the Securities and Exchange Commission.

· Credit risks and the risks from concentrations (by geographic area or industry) within the Company’s loan portfolio.

· The ability of the Company to manage the risks associated with the foregoing as well as anticipated.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including other factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission, including the risk factors disclosed in the Company’s most recently filed Annual Report on Form 10-K.

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS

WEST SUBURBAN BANCORP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	June 30,			December 31,
	September 30,			December 31,
	2011			2010
	(Unaudited)			(Audited)
Assets
Cash and due from banks	$	96130,~~333~~433		$	70,490
Federal funds sold	~~200~~41,159			200
Total cash and cash equivalents	96171,~~533~~592			70,690
Securities
Available for sale (amortized cost of $422,554 in 2011 and $517,589 in 2010)	430,041			518,566
Available for sale (amortized cost of $337,171 in 2011 and $517,589 in 2010)	344,833			518,566
Held to maturity (fair value of $300,583 in 2011 and $222,761 in 2010)	288,884			215,365
Held to maturity (fair value of $292,379 in 2011 and $222,761 in 2010)	277,637			215,365
Federal Home Loan Bank stock	7,599			7,599
Total securities	~~726~~630,~~524~~069			741,530
Loans, less allowance for loan losses of $27,006 in 2011 and $28,072 in 2010	953,566			1,008,272
Loans, less allowance for loan losses of $27,866 in 2011 and $28,072 in 2010	955,301			1,008,272
Bank-owned life insurance	4032,~~106~~432			39,511
Premises and equipment, net	44,~~043~~773			42,201
Other real estate owned, net of valuation allowance	39,~~539~~319			20,479
Accrued interest and other assets	3130,~~386~~970			38,941
Total assets	$	1,~~931~~904,~~697~~456		$	1,961,624
Liabilities and shareholders’ equity
Deposits
Demand-noninterest-bearing	$	~~141~~146,~~612~~562		$	152,064
Prepaid solutions card deposits	2521,~~461~~497			29,161
Interest-bearing	1,~~569~~546,~~913~~488			1,597,202
Total deposits	1,~~736~~714,~~986~~547			1,778,427
Prepaid solutions cards	1214,~~187~~099			8,778
Accrued interest and other liabilities	169,~~293~~287			18,571
Common stock in ESOP subject to contingent repurchase obligation	26,~~375~~081			29,865
Shareholders’ equity
Common stock, no par value; 15,000,000 shares authorized; 426,850 shares issued and outstanding	3,412			3,412
Surplus	35,453			35,453
Retained earnings	123,~~245~~428			116,698
Accumulated other comprehensive income	4,~~121~~230			285
Amount reclassified on ESOP shares	(26,~~375~~081		)	(29,865		)
Total shareholders’ equity	~~139~~140,~~856~~442			125,983
Total liabilities and shareholders’ equity	$	1,~~931~~904,~~697~~456		$	1,961,624

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WEST SUBURBAN BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME

FOR THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(Dollars in thousands, except per share data)

(UNAUDITED)

	2011		2010
Interest income
Loans, including fees	$	2436,~~192~~330	$	2944,~~656~~486
Securities
Taxable	1014,~~038~~135		813,~~486~~119
Exempt from federal income tax	~~551~~875		~~730~~819
Federal funds sold	219		5455
Total interest income	3451,~~783~~359		3858,~~926~~479
Interest expense
Deposits	69,~~237~~117		1014,~~296~~797
Total interest expense	69,~~237~~117		1014,~~296~~797
Net interest income	2842,~~546~~242		2843,~~630~~682
Provision for loan losses	49,~~818~~568		58,~~550~~425
Net interest income after provision for loan losses	2332,~~728~~674		2335,~~080~~257
Noninterest income
Service fees on deposit accounts	2,091		2,659
Net realized gains on securities transactions	7,779		267
Debit card fees	1,068		1,046
Service fees on deposit accounts	3,238		3,924
Bank-owned life insurance	519		221
Debit card fees	1,682		1,554
Net realized gains on securities transactions	4,741		—
Bank-owned life insurance	762		804
Other	23,~~668~~758		13,~~999~~783
Total noninterest income	1117,~~087~~219		510,~~925~~332
Noninterest expense
Salaries and employee benefits	1117,~~256~~116		1117,~~251~~288
Occupancy	2,505		2,556
Other real estate owned expense	5,179		3,047
Furniture and equipment	2,463		2,623
Occupancy	3,782		3,879
FDIC assessments	2,098		2,268
Furniture and equipment	3,664		3,922
Other real estate owned expense	1,536		1,142
FDIC assessments	2,326		3,310
Professional fees	922		1,192
Loan administration	1,537		1,974
Loan administration	843		1,362
Professional fees	1,263		1,727
Advertising and promotion	~~462~~720		~~455~~677
Other	2,858		2,316
VISA cardholder	577		691
Total noninterest expense	24,943		25,165
Other	3,402		3,084
Income before income taxes	9,872		3,840
Total noninterest expense	39,566		39,599
Income tax expense	3,325		949
Income before income taxes	10,327		5,990
Net income	$	6,547	$	2,891
Income tax expense	3,597		1,297
Earnings per share	$	15.34	$	6.77
Net income	$	6,730	$	4,693
Earnings per share	$	15.77	$	10.99
Average shares outstanding	426,850		426,850
Total comprehensive income	$	10,~~383~~675	$	36,~~254~~618

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WEST SUBURBAN BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME

FOR THE THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(Dollars in thousands, except per share data)

(UNAUDITED)

	2011		2010
Interest income
Loans, including fees	$	12,~~000~~138	$	14,~~612~~830
Securities
Taxable	4,~~946~~097		4,~~611~~445
Exempt from federal income tax	~~284~~324		~~275~~277
Federal funds sold	117		91
Total interest income	1716,~~231~~576		19,~~507~~553
Interest expense
Deposits	32,~~002~~878		4,~~928~~501
Total interest expense	32,~~002~~878		4,~~928~~501
Net interest income	1413,~~229~~698		1415,~~579~~052
Provision for loan losses	14,~~818~~750		32,~~175~~875
Net interest income after provision for loan losses	128,~~411~~948		1112,~~404~~177
Noninterest income
Service fees on deposit accounts	1,049		1,330
Net realized gains on securities transactions	3,038		267
Debit card fees	550		540
Service fees on deposit accounts	1,147		1,265
Bank-owned life insurance	1		(193		)
Debit card fees	614		508
Net realized gains on securities transactions	3,642		—
Bank-owned life insurance	243		583
Other	1,~~158~~089		1,~~117~~342
Total noninterest income	6,~~400~~131		23,~~794~~965
Noninterest expense
Salaries and employee benefits	5,~~500~~860		56,~~302~~037
Occupancy	1,037		1,226
Other real estate owned expense	3,643		1,471
Furniture and equipment	1,305		1,275
Occupancy	1,277		1,323
FDIC assessments	999		1,085
Furniture and equipment	1,201		1,300
Professional fees	438		607
FDIC assessments	228		1,042
Other real estate owned expense	1,097		573
Loan administration	694		612
Loan administration	659		796
Professional fees	341		535
Advertising and promotion	~~259~~258		~~287~~222
Other	1,661		1,236
VISA cardholder	164		380
Total noninterest expense	12,955		12,387
Other	958		1,069
Income before income taxes	5,856		1,811
Total noninterest expense	14,624		13,991
Income tax expense	2,099		563
Income before income taxes	455		2,151
Net income	$	3,757	$	1,248
Income tax expense	272		348
Earnings per share	$	8.80	$	2.92
Net income	$	183	$	1,803
Earnings per share	$	0.43	$	4.22
Average shares outstanding	426,850		426,850
Total comprehensive income	$	~~7,944~~292	$	23,~~122~~365

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WEST SUBURBAN BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(Dollars in thousands)

(UNAUDITED)

	Common Stock and Surplus		Retained Earnings		Accumulated Other Comprehensive Income		Amount Reclassified on ESOP Shares			Total Shareholders’ Equity
Balance, January 1, 2010	$	38,865	$	115,544	$	3,584	$	(31,230	)	$	126,763
Comprehensive income
Net income			24,~~891~~693							24,~~891~~693
Change in unrealized gains on available for sale securities, net of reclassification and tax effects					~~351~~1,906					~~351~~1,906
Change in post-retirement obligation, net of tax effects					1219					1219
Total comprehensive income										36,~~254~~618
Reclassification due to change in fair value of common stock in ESOP subject to contingent repurchase obligation							(52,~~733~~501		)	(52,~~733~~501		)
Balance, June 30, 2010	$	38,865	$	118,435	$	3,947	$	(36,963	)	$	124,284
Balance, September 30, 2010	$	38,865	$	120,237	$	5,509	$	(28,729	)	$	135,882

	Common Stock and Surplus		Retained Earnings		Accumulated Other Comprehensive Income		Amount Reclassified on ESOP Shares			Total Shareholders’ Equity
Balance, January 1, 2011	$	38,865	$	116,698	$	285	$	(29,865	)	$	125,983
Comprehensive income
Net income			6,~~547~~730							6,~~547~~730
Change in unrealized gains on available for sale securities, net of reclassification and tax effects					3,~~816~~919					3,~~816~~919
Change in post-retirement obligation, net of tax effects					2026					2026
Total comprehensive income										10,~~383~~675
Reclassification due to change in fair value of common stock in ESOP subject to contingent repurchase obligation							3,~~490~~784			3,~~490~~784
Balance, June 30, 2011	$	38,865	$	123,245	$	4,121	$	(26,375	)	$	139,856
Balance, September 30, 2011	$	38,865	$	123,428	$	4,230	$	(26,081	)	$	140,442

The net change in unrealized gains on available for sale securities for the nine months ended September 30, 2011 consists of an increase in the unrealized gains of $14,464, less $7,779 of gains realized into income, and an increase in the deferred tax liability of $2,766.

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WEST SUBURBAN BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2011 AND 2010

(Dollars in thousands)

(UNAUDITED)

	2011			2010
Cash flows from operating activities
Net income	$	6,~~547~~730		$	24,~~891~~693
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	12,~~443~~164			12,~~566~~300
Provision for loan losses	49,~~818~~568			58,~~550~~425
Net premium amortization of securities	~~880~~1,586			1,~~100~~648
Net realized gains on securities transactions	(47,~~741~~779		)	—(267		)
Earnings on bank-owned life insurance	(~~519~~762		)	(~~221~~804		)
Net (gain) loss on sales of premises and equipment	(210		)	4
Net gain on sales of other real estate owned	(~~236~~239		)	(~~237~~229		)
Write down of other real estate owned	~~724~~3,860			~~516~~1,669
Decrease (increase) in accrued interest and other assets	4,861			(1,318		)
Decrease in accrued interest and other assets	5,198			1,093
(Decrease) increase in accrued interest and other liabilities	(29,~~258~~251		)	2,~~980~~247
Net cash provided by operating activities	11,~~517~~065			1220,~~831~~779
Cash flows from investing activities
Securities available for sale
Sales	~~114~~187,~~712~~893			—964
Maturities, calls and redemptions	5069,~~747~~201			4994,~~573~~713
Purchases	(6670,~~488~~200		)	(~~197~~234,~~567~~315		)
Securities held to maturity
Maturities, calls and redemptions	3647,~~806~~845			4873,~~372~~213
Purchases	(110,400		)	(38,324		)
Net decrease in loans	3,737			32,647
Net (increase) decrease in loans	(6,645		)	49,165
Investment in bank-owned life insurance	(76		)	(118		)
Surrender of bank-owned life insurance policies	7,922			—
Purchases of premises and equipment	(3,288		)	(460		)
Investment in bank-owned life insurance	(81		)	(159		)
Sales of premises and equipment	5			—
Purchases of premises and equipment	(4,746		)	(775		)
Sales of other real estate owned	26,603			5,885
Sales of premises and equipment	20			—
Net cash provided by (used in) investing activities	52,358			(99,992		)
Sales of other real estate owned	27,587			6,818
Net cash provided by (used in) investing activities	148,396			(48,700		)
Cash flows from financing activities
Net (decrease) increase in deposits	(41,441		)	27,029
Net decrease in deposits	(63,880		)	(2,583		)
Net increase in prepaid solutions cards	35,~~409~~321			1,~~825~~943
Net cash (used in) provided by financing activities	(38,032		)	28,854
Net cash used in financing activities	(58,559		)	(640		)
Net increase (decrease) in cash and cash equivalents	25100,~~843~~902			(5828,~~307~~561		)
Beginning cash and cash equivalents	70,690			148,610
Ending cash and cash equivalents	$	96171,~~533~~592		$	90120,~~303~~049
Supplemental disclosures
Cash paid for interest	$	710,~~270~~194		$	1015,~~448~~412
Cash paid for income taxes	2,407			851,650
Other real estate acquired through loan foreclosures or settlements	46,151			2,170
Other real estate acquired through loan foreclosures	50,048			3,674

See accompanying notes to condensed consolidated financial statements.

Table of Contents

WEST SUBURBAN BANCORP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

(UNAUDITED)

Note 1 - Basis of Presentation

The condensed consolidated financial statements include the accounts of West Suburban Bancorp, Inc. (“West Suburban”) and West Suburban Bank (the “Bank” and collectively with West Suburban and its other direct and indirect subsidiaries, the “Company”). Intercompany accounts and transactions have been eliminated. The unaudited interim consolidated financial statements are prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures normally accompanying the annual financial statements have been omitted. The interim financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the latest Annual Report on Form 10-K filed by the Company. The condensed consolidated financial statements include all adjustments (none of which were other than normal recurring adjustments) necessary for a fair presentation of the results for the interim periods. The results for the interim periods are not necessarily indicative of the results to be expected for the entire fiscal year.

The Company’s board of directors has resolved to obtain regulatory approval prior to paying dividends, increasing debt, or redeeming West Suburban common stock in order to preserve capital and maintain the Company’s financial strength given the economic environment and its impact on the Company.

Note 2 - Securities

At ~~June~~September 30, 2011 and December 31, 2010, the amortized cost, unrealized gains and losses and fair value of securities available for sale were as follows:

June 30, 2011

September 30, 2011

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Fair Value

U.S. Treasuries

639,~~435~~859

~~821~~576

—

6410,~~256~~435

U.S. government sponsored enterprises

~~108~~94,~~622~~171

1,~~165~~486

~~(21~~—

)

~~109~~95,~~766~~657

Mortgage-backed: residential

~~217~~203,~~314~~854

4,~~705~~783

(937

)

~~222~~208,~~010~~600

States and political subdivisions

1819,~~018~~118

~~508~~892

(302

)

1820,~~496~~008

Corporate

1510,~~165~~169

~~348~~68

—(104

)

1510,~~513~~133

Total

~~422~~337,~~554~~171

7,~~547~~805

(60143

)

~~430~~344,~~041~~833

	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasuries	$	92,712	$	585	$	(2,141	)	$	91,156
U.S. government sponsored enterprises	99,705		500		(2,061		)	98,144
Mortgage-backed: residential	303,229		5,558		(1,507		)	307,280
States and political subdivisions	11,726		183		(31		)	11,878
Corporate	10,217		—		(109		)	10,108
Total	$	517,589	$	6,826	$	(5,849	)	$	518,566

Mortgage-backed: residential securities consist of residential mortgage-backed securities issued by U.S. government sponsored enterprises and agencies, primarily Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. Corporate securities consist of ~~three~~ investment grade corporate bonds.

Table of Contents

At ~~June~~September 30, 2011 and December 31, 2010, the amortized cost, unrealized gains and losses and fair value of securities held to maturity were as follows:

	June 30, 2011
	September 30, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasuries	$	30,~~000~~003	$	13,~~639~~328	$	—		$	3133,~~639~~331
U.S. government sponsored enterprises	31,~~639~~631		1,~~089~~214		—			32,~~728~~845
Mortgage-backed: residential	~~188~~177,~~280~~007		89,~~655~~492		(373		)	~~196~~186,~~898~~496
States and political subdivisions	38,~~965~~996		~~515~~816		(~~162~~105		)	39,~~318~~707
Total	$	~~288~~277,~~884~~637	$	1114,~~898~~850	$	(~~199~~108	)	$	~~300~~292,~~583~~379
	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasuries	$	9,956	$	353	$	—		$	10,309
U.S. government sponsored enterprises	21,656		566		—			22,222
Mortgage-backed: residential	136,095		6,515		(49		)	142,561
States and political subdivisions	47,658		292		(281		)	47,669
Total	$	215,365	$	7,726	$	(330	)	$	222,761

At June 30, 2011, the amortized cost and fair value of debt securities available for sale and held to maturity by contractual maturity were as follows:

	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasuries	$	9,956	$	353	$	—		$	10,309
U.S. government sponsored enterprises	21,656		566		—			22,222
Mortgage-backed: residential	136,095		6,515		(49		)	142,561
States and political subdivisions	47,658		292		(281		)	47,669
Total	$	215,365	$	7,726	$	(330	)	$	222,761

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in 1 year or less	$	350	$	354	$	889	$	895
Due after 1 year through 5 years	73,323		74,579		51,260		52,816
Due after 5 years through 10 years	120,970		122,234		40,074		41,434
Due after 10 years	10,597		10,864		8,381		8,540
Mortgage-backed: residential	217,314		222,010		188,280		196,898
Total	$	422,554	$	430,041	$	288,884	$	300,583

At September 30, 2011, the amortized cost and fair value of debt securities available for sale and held to maturity by contractual maturity were as follows:

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in 1 year or less	$	350	$	351	$	888	$	891
Due after 1 year through 5 years	68,677		69,564		67,753		69,786
Due after 5 years through 10 years	51,712		53,154		24,186		26,988
Due after 10 years	12,578		13,164		7,803		8,218
Mortgage-backed: residential	203,854		208,600		177,007		186,496
Total	$	337,171	$	344,833	$	277,637	$	292,379

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

Proceeds from sales of securities available for sale totaled $~~114~~187,~~712~~893 and $964 during the ~~six~~nine months ended ~~June~~September 30, 2011. ~~All~~and ~~sales~~2010, ofrespectively. These securities ~~for~~were ~~the~~sold ~~six-month~~in ~~period~~order ~~ended~~to ~~June 30,~~reduce ~~2011~~the ~~resulted~~Company’s interest rate risk in ~~gains~~the securities portfolio. ~~There~~Management’s ~~were~~analysis noof these securities indicated that certain higher yielding securities could be sold at a gain while the reinvested proceeds would continue to be accretive to earnings. All sales of securities ~~during~~for the ~~six~~nine-month period ended ~~June~~September 30, ~~2010~~2011 resulted in gains.

Securities with a carrying value of $8284,~~191~~974 and $94,720 at ~~June~~September 30, 2011 and December 31, 2010, respectively, were pledged to secure public deposits, and fiduciary activities ~~and~~or for other purposes required or permitted by law.

Table of Contents

Securities with unrealized losses at ~~June~~September 30, 2011 and December 31, 2010 are presented below by the length of time the securities have been in a continuous unrealized loss position:

	June 30, 2011
	September 30, 2011
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government sponsored enterprises	$	9,874	$	(21	)	$	—	$	—		$	9,874	$	(21	)
Mortgage-backed: residential	$	5,186	$	(40	)	$	—	$	—		$	5,186	$	(40	)
Mortgage-backed: residential	11,035		(46		)	—		—			11,035		(46		)
States and political subdivisions	391		(2		)	1,132		(105		)	1,523		(107		)
States and political subdivisions	6,264		(192		)	—		—			6,264		(192		)
Corporate	4,980		(104		)	—		—			4,980		(104		)
Total temporarily impaired	$	2710,~~173~~557	$	(~~259~~146	)	$	—1,132	$	—(105	)	$	2711,~~173~~689	$	(~~259~~251	)

	December 31, 2010
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasuries	$	60,937	$	(2,141	)	$	—	$	—		$	60,937	$	(2,141	)
U.S. government sponsored enterprises	80,386		(2,061		)	—		—			80,386		(2,061		)
Mortgage-backed: residential	86,467		(1,507		)	654		(49		)	87,121		(1,556		)
States and political subdivisions	5,863		(292		)	1,227		(20		)	7,090		(312		)
Corporate	10,108		(109		)	—		—			10,108		(109		)
Total temporarily impaired	$	243,761	$	(6,110	)	$	1,881	$	(69	)	$	245,642	$	(6,179	)

Other-Than-Temporary Impairment Evaluation

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Investment securities classified as available for sale or held to maturity are generally evaluated for OTTI under Financial Accounting Standards Board (“FASB”) guidance “Investments in Debt and Equity Securities.”

In determining OTTI on debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost; (2) the financial condition and near-term prospects of the issuer; (3) whether the market decline was affected by macroeconomic conditions; and (4) whether the Company has the intent to sell the debt security or whether it is more likely than not the Company will be required to sell the debt security before its anticipated recovery. The assessment of whether OTTI exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When management determines that OTTI exists, the amount of the OTTI recognized in earnings depends on whether the Company intends to sell the security or whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the OTTI is recognized in earnings in an amount equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the OTTI is separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the portion of the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

The unrealized losses at September 30, 2011 were in state and political subdivision, mortgage-backed: residential and corporate securities. Because the decline in fair value on the debt securities in unrealized losses is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities and management believes it is not more likely than not that the Company will be required to sell

Table of Contents

~~The majority of~~ the ~~unrealized losses at June 30, 2011 were in state and political subdivision~~ securities. Because the decline in fair value on the debt securities in unrealized losses is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities and management believes it is not more likely than not that the Company will be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at ~~June~~September 30, 2011.

The Company held one municipal security ~~from one issuer~~ with a carrying value of $22,000 and $30,000 at ~~June~~September 30, 2011 and December 31, 2010, respectively, that was in excess of 10% of the Company’s shareholders’ equity. The security was issued by a local municipality, is a general obligation bond, and is classified by the Company as held to maturity.

Note 3 - Loans

Major classifications of loans were as follows:

	June 30, 2011			December 31, 2010
	September 30, 2011			December 31, 2010
Commercial	$	~~263~~269,~~384~~870		$	253,746
Commercial real estate	~~269~~278,~~418~~488			272,856
Construction and development	9285,~~875~~806			138,959
Residential real estate:
Mortgage	~~152~~151,~~878~~528			150,248
Home equity	~~190~~184,~~012~~463			206,191
Consumer and other	1213,~~005~~012			14,344
Total	~~980~~983,~~572~~167			1,036,344
Allowance for loan losses	(27,~~006~~866		)	(28,072		)
Loans, net	$	~~953~~955,~~566~~301		$	1,008,272

The Company makes commercial, residential real estate and consumer loans primarily to customers throughout the western suburbs of Chicago. ~~Construction and development loans are primarily made to customers engaged in the construction and development of residential real estate projects within the Company’s market area.~~ From time to time the Company will make loans outside of its market area.

Changes in the allowance for loan losses by portfolio segment for the ~~six~~nine months ended ~~June~~September 30, 2011 were as follows:

	Commercial			Commercial Real Estate			Construction and Development			Residential Real Estate			Consumer and Other			Total
Balance, beginning of year	$	12,638		$	4,179		$	6,243		$	4,308		$	704		$	28,072
Provision for loan losses	34,~~726~~361			(~~889~~899		)	14,~~042~~120			~~974~~1,979			~~(35~~7		)	49,~~818~~568
Loans charged-off	(23,~~986~~891		)	(85		)	(14,~~943~~342		)	(~~799~~1,350		)	(~~170~~261		)	(59,~~983~~929		)
Recoveries	2131			—			—			830			7094			99155
Balance, period-end	$	13,~~399~~139		$	3,~~205~~195		$	56,~~342~~021		$	4,~~491~~967		$	~~569~~544		$	27,~~006~~866

Changes in the allowance for loan losses by portfolio segment for the quarter ended September 30, 2011 were as follows:

	Commercial			Commercial Real Estate			Construction and Development			Residential Real Estate			Consumer and Other			Total
Balance, beginning of quarter	$	13,399		$	3,205		$	5,342		$	4,491		$	569		$	27,006
Provision for loan losses	635			(10		)	3,078			1,005			42			4,750
Loans charged-off	(905		)	—			(2,399		)	(551		)	(91		)	(3,946		)
Recoveries	10			—			—			22			24			56
Balance, period-end	$	13,139		$	3,195		$	6,021		$	4,967		$	544		$	27,866

Table of Contents

Changes in the allowance for loan losses by portfolio segment for the quarter ended June 30, 2011 were as follows:

	Commercial			Commercial Real Estate			Construction and Development			Residential Real Estate			Consumer and Other			Total
Balance, beginning of quarter	$	12,868		$	3,716		$	8,866		$	4,099		$	663		$	30,212
Provision for loan losses	3,175			(426		)	(1,759		)	905			(77		)	1,818
Loans charged-off	(2,648		)	(85		)	(1,765		)	(519		)	(58		)	(5,075		)
Recoveries	4			—			—			6			41			51
Balance, period-end	$	13,399		$	3,205		$	5,342		$	4,491		$	569		$	27,006

The balance of the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method were as follows:

	Commercial		Commercial Real Estate		Construction and Development		Residential Real Estate		Consumer and Other		Total
June 30, 2011
September 30, 2011
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	$	~~1,120~~35	$	~~250~~339	$	~~190~~55	$	—150	$	—	$	~~1,560~~579
Collectively evaluated for impairment	1213,~~279~~104		2,~~955~~856		5,~~152~~966		4,~~491~~817		~~569~~544		2527,~~446~~287
Total ending allowance balance	$	13,~~399~~139	$	3,~~205~~195	$	56,~~342~~021	$	4,~~491~~967	$	~~569~~544	$	27,~~006~~866
Loans:
Individually evaluated for impairment	$	3532,~~579~~895	$	1220,~~467~~059	$	3025,~~043~~729	$	1011,~~107~~757	$	—	$	8890,~~196~~440
Collectively evaluated for impairment	~~227~~236,~~805~~975		~~256~~258,~~951~~429		6260,~~832~~077		~~332~~324,~~783~~234		1213,~~005~~012		892,~~376~~727
Total ending loan balance	$	~~263~~269,~~384~~870	$	~~269~~278,~~418~~488	$	9285,~~875~~806	$	~~342~~335,~~890~~991	$	1213,~~005~~012	$	~~980~~983,~~572~~167
December 31, 2010
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	$	2,137	$	250	$	2,485	$	—	$	—	$	4,872
Collectively evaluated for impairment	10,501		3,929		3,758		4,308		704		23,200
Total ending allowance balance	$	12,638	$	4,179	$	6,243	$	4,308	$	704	$	28,072
Loans:
Individually evaluated for impairment	$	41,184	$	14,372	$	70,513	$	8,937	$	—	$	135,006
Collectively evaluated for impairment	212,562		258,484		68,446		347,502		14,344		901,338
Total ending loan balance	$	253,746	$	272,856	$	138,959	$	356,439	$	14,344	$	1,036,344

Table of Contents

Loans individually evaluated for impairment by class of loans were as follows:

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
June 30, 2011
September 30, 2011
With no related allowance recorded:
Commercial	$	3536,~~791~~967	$	31,~~437~~280	$	—
Commercial real estate	1118,~~658~~877		1118,~~658~~877		—
Construction and development	3230,~~127~~208		2522,~~740~~732		—
Residential real estate:
Mortgage	8,~~795~~613		8,~~620~~459		—
Home equity	~~1,487~~780		~~1,487~~780		—
Consumer and other	—		—		—
With an allowance recorded:
Commercial	61,~~628~~615		41,~~142~~615		~~1,120~~35
Commercial real estate	1,~~081~~454		~~809~~1,182		~~250~~339
Construction and development	74,~~261~~270		42,~~303~~997		~~190~~55
Residential real estate:
Mortgage	—1,789		—1,789		—148
Home equity	—729		—729		—2
Consumer and other	—		—		—
Total	$	105,302	$	90,440	$	579
Total	$	104,828	$	88,196	$	1,560
December 31, 2010
With no related allowance recorded:
Commercial	$	39,142	$	34,740	$	—
Commercial real estate	13,563		13,563		—
Construction and development	56,737		51,871		—
Residential real estate:
Mortgage	8,224		8,164		—
Home equity	773		773		—
Consumer and other	—		—		—
With an allowance recorded:
Commercial	8,799		6,444		2,137
Commercial real estate	1,081		809		250
Construction and development	23,073		18,642		2,485
Residential real estate:
Mortgage	—		—		—
Home equity	—		—		—
Consumer and other	—		—		—
Total	$	151,392	$	135,006	$	4,872

Average impaired loans by class were as follows:

	Three Months Ended		Nine Months Ended
September 30, 2011
Commercial	$	34,687	$	37,341
Commercial real estate	14,293		12,956
Construction and development	28,668		45,461
Residential real estate:
Mortgage	8,888		8,468
Home equity	1,498		1,071
Total	$	88,034	$	105,297

Interest income recognized during impairment was $467 and $1,180 for the three and nine months ended September 30, 2011, respectively.

Table of Contents

Nonperforming loans and loans past due 90 days or more still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans was as follows:

	Nonaccrual		Loans Past Due 90 Days or More Still on Accrual
June 30, 2011
September 30, 2011
Commercial	$	3228,~~890~~269	$	—3
Commercial real estate	~~3,098~~809		~~1,093~~—
Construction and development	3024,~~043~~810		—
Residential real estate:
Mortgage	1,~~743~~989		~~264~~288
Home equity	~~250~~161		—
Consumer and other	~~207~~206		1368
Total	$	6856,~~231~~244	$	~~1,370~~359
December 31, 2010
Commercial	$	22,224	$	4
Commercial real estate	6,586		—
Construction and development	47,951		—
Residential real estate:
Mortgage	1,919		108
Home equity	1,664		—
Consumer and other	—		79
Total	$	80,344	$	191

Loans past due 90 days or more still on accrual ~~were $1.4 million as of June 30, 2011. These loans~~ are considered to be well -collateralized and in the process of collection as of September 30, 2011.

Table of Contents

The aging of the recorded investment in past due loans were as follows:

	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due		Total
June 30, 2011
September 30, 2011
Commercial	$	42,~~063~~731	$	~~1,116~~33	$	3028,~~160~~046	$	3530,~~339~~810	$	~~228~~239,~~045~~060	$	~~263~~269,~~384~~870
Commercial real estate	~~796~~2,847		~~373~~456		~~4,191~~809		54,~~360~~112		~~264~~274,~~058~~376		~~269~~278,~~418~~488
Construction and development	~~4,248~~119		—		2524,~~795~~691		3024,~~043~~810		6260,~~832~~996		9285,~~875~~806
Residential real estate:
Mortgage	2,~~849~~348		~~1,490~~702		2,~~007~~277		65,~~346~~327		146,~~532~~201		~~152~~151,~~878~~528
Home equity	~~405~~1,137		~~188~~113		~~162~~161		~~755~~1,411		~~189~~183,~~257~~052		~~190~~184,~~012~~463
Consumer and other	~~118~~274		~~268~~52		13342		~~399~~668		1112,~~606~~344		1213,~~005~~012
Total	$	129,~~479~~456	$	31,~~435~~356	$	6256,~~328~~326	$	7867,~~242~~138	$	~~902~~916,~~330~~029	$	~~980~~983,~~572~~167
December 31, 2010
Commercial	$	324	$	5,652	$	20,807	$	26,783	$	226,963	$	253,746
Commercial real estate	619		—		6,586		7,205		265,651		272,856
Construction and development	—		—		47,951		47,951		91,008		138,959
Residential real estate:
Mortgage	2,280		1,063		2,026		5,369		144,879		150,248
Home equity	49		237		1,504		1,790		204,401		206,191
Consumer and other	82		97		79		258		14,086		14,344
Total	$	3,354	$	7,049	$	78,953	$	89,356	$	946,988	$	1,036,344

AtDuring ~~June~~the three and nine months ended September 30, 2011, the ~~Company~~terms ~~had $20,535~~ of certain loans ~~considered~~were modified as troubled debt restructurings,. ~~which~~The ~~are~~modification ~~considered~~of ~~impaired~~the terms of such loans, ~~compared~~included toone ~~$21,555~~or asa combination of ~~December 31,~~the ~~2010.~~following: ~~The~~a ~~Company~~reduction ~~has~~of ~~not~~the ~~committed~~stated tointerest ~~lend~~rate ~~additional~~of ~~amounts~~the toloan; ~~customers~~an ~~with~~extension ~~outstanding~~of ~~loans~~the ~~that~~maturity ~~are~~date ~~classified~~at asa ~~troubled~~stated rate of interest lower than the current market rate for new debt ~~restructurings~~with similar risk; or a permanent reduction of the recorded investment in the loan.

~~The~~Modifications ~~Company~~involving ~~categorizes~~a ~~its~~reduction ~~non-homogeneous~~of ~~loans~~the ~~into~~stated ~~risk~~interest ~~categories~~rate ~~based~~of ~~on relevant information about~~ the ~~ability~~loan ofwere ~~borrowers~~for tointerest ~~service~~rates ~~their~~ranging ~~debt~~from ~~such as, among other factors: current financial information; historical payment experience; credit documentation; public information; and current economic trends~~2.0% ~~The Company analyzes loans individually by classifying the loans as~~ to ~~credit risk~~6.0% ~~This~~and ~~analysis~~periods ~~includes~~ranging ~~certain~~from ~~non-homogeneous~~ten ~~loans,~~months ~~such~~to as30 ~~commercial, commercial real estate and construction and development loans~~years. ~~This~~Modifications ~~analysis~~involving isan ~~done~~extension ~~annually~~of onthe amaturity ~~loan~~date bywere ~~loan~~for ~~basis.~~periods ~~The~~ranging ~~Company~~from ~~uses~~two ~~the~~months ~~following~~to ~~definitions~~12 ~~for classified risk ratings:~~months.

~~· Substandard:~~At ~~Loans~~September 30, ~~designated~~2011, asthe ~~substandard~~Company had $35,765 of loans considered troubled debt restructurings, which are ~~inadequately~~considered ~~protected~~impaired byloans, ~~the~~compared ~~current~~to ~~net~~$21,555 ~~worth~~as ~~and~~of ~~paying~~December 31, ~~capacity~~2010. As of September 30, 2011, the ~~obligor~~Company orhas specifically allocated allowance for loan losses of ~~the~~$524 ~~collateral~~on ~~pledged~~$5,315 ifof ~~any~~loans considered to be troubled debt restructurings. ~~Loans~~The remaining $30,450 of troubled debt restructurings did not have aimpaired ~~well-defined~~cash ~~weakness~~flows or ~~weaknesses~~are ~~that~~considered ~~jeopardize~~to ~~the~~be ~~liquidation~~collateral dependent and do not have specific allocations of the ~~debt.~~allowance ~~They~~due ~~are~~to ~~characterized~~partial bycharge-offs and the ~~distinct~~loans ~~possibility~~being ~~that~~well-collateralized. Management ~~the~~has ~~Company~~not ~~will~~committed ~~sustain~~to ~~some~~lend ~~loss~~additional ifamounts ~~the~~to ~~deficiencies~~customers with outstanding loans that are ~~not~~classified ~~corrected~~as troubled debt restructurings.

· Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Table of Contents

The following table presents loans by class modified as troubled debt restructurings during the nine months ended September 30, 2011:

	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
September 30, 2011
Commercial	7	$	3,653	$	3,652
Commercial real estate	7	11,245		11,244
Residential real estate:
Mortgage	11	2,430		2,473
Home equity	1	690		700
Total	26	$	18,018	$	18,069

The following table presents loans by class modified as troubled debt restructurings during the quarter ended September 30, 2011:

	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
September 30, 2011
Commercial	4	$	3,134	$	3,134
Commercial real estate	4	10,240		10,241
Residential real estate: mortgage	6	1,504		1,535
Total	14	$	14,878	$	14,910

The following table presents loans by class modified as troubled debt restructurings during the twelve month period ended September 30, 2011 for which there was a payment default during the nine months ended September 30, 2011:

	Number of Loans	Recorded Investment
September 30, 2011
Commercial real estate	2	$	2,456
Residential real estate: mortgage	2	467
Total	4	$	2,923

There were no loans modified as troubled debt restructurings during the twelve month period ended September 30, 2011 for which there was a payment default during the quarter ended September 30, 2011.

A loan is considered to be in payment default once it is 90 days past due under the modified contractual terms. Additionally, loans less than $100 will not be evaluated for impairment under troubled debt restructuring accounting guidance.

The troubled debt restructurings that subsequently defaulted described above did not increase the allowance for loan losses and did not result in any charge-offs during the three and nine months ended September 30, 2011, as these loans were considered to be collateral dependent and well-collateralized.

The terms of certain other loans were modified during the nine months ended September 30, 2011 that did not meet the definition of a troubled debt restructuring. These loans have a total recorded investment as of September 30,

Table of Contents

2011 of $6,231. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

The Company categorizes its non-homogeneous loans into risk categories based on relevant information about the ability of borrowers to service their debt such as, among other factors: current financial information; historical payment experience; credit documentation; public information; and current economic trends. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes certain non-homogeneous loans, such as commercial, commercial real estate and construction and development loans. This analysis is done annually on a loan by loan basis. The Company uses the following definitions for classified risk ratings:

Substandard: Loans designated as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. The risk categories of loans were as follows:

	Classified		Pass		Total
June 30, 2011
September 30, 2011
Commercial	$	4341,~~887~~310	$	~~219~~228,~~497~~560	$	~~263~~269,~~384~~870
Commercial real estate	715,~~806~~473		~~261~~263,~~612~~015		~~269~~278,~~418~~488
Construction and development	3732,~~195~~898		5552,~~680~~908		9285,~~875~~806
Total	$	8889,~~888~~681	$	~~536~~544,~~789~~483	$	~~625~~634,~~677~~164
December 31, 2010
Commercial	$	56,323	$	197,423	$	253,746
Commercial real estate	15,970		256,886		272,856
Construction and development	77,350		61,609		138,959
Total	$	149,643	$	515,918	$	665,561

The classified construction and development loans decreased to $3732.29 million as of ~~June~~September 30, 2011 from $77.4 million as of December 31, 2010, primarily as a result of atransfers ~~transfer~~ of ~~one~~loans ~~loan relationship of $39.3 million~~ to other real estate owned ~~during the second quarter of 2011~~.

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company evaluates credit quality based on the payment and aging status of the loan. Payment status is reviewed on a daily basis by the Bank’s collection department and on a monthly basis with respect to determining adequacy of the allowance for loan losses.

Table of Contents

Note 4 - Other Real Estate Owned

Activity in other real estate owned was as follows:

	June 30, 2011			December 31, 2010
	September 30, 2011			December 31, 2010
Balance, beginning of year	$	20,479		$	25,994
Acquired through loan foreclosure or settlements	46,151			7,502
Acquired through loan foreclosure	50,048			7,502
Reductions due to sales	(2627,~~367~~348		)	(7,480		)
Write-downs	(~~724~~3,860		)	(5,537		)
Balance, period-end	$	39,~~539~~319		$	20,479

Other real estate owned is reported net of a valuation allowance of $3,625 as of ~~June~~September 30, 2011 and December 31, 2010. There were no changes in the valuation allowance during the three and ~~six~~nine months ended ~~June~~September 30, 2011.

Table of Contents

Note 5 - Financial Instruments with Off-Balance Sheet Risk

Unused lines of credit and other commitments to extend credit not reflected in the financial statements are as follows:

	June 30, 2011						December 31, 2010
	September 30, 2011						December 31, 2010
	Fixed Rate		Variable Rate		Total		Fixed Rate		Variable Rate		Total
Commercial loans and lines of credit	$	2,~~248~~296	$	~~108~~143,~~684~~184	$	~~110~~145,~~932~~480	$	821	$	117,484	$	118,305
Check credit lines of credit	~~907~~880		—		~~907~~880		919		—		919
Mortgage loans	23,~~870~~728		—		23,~~870~~728		5,141		—		5,141
Home equity lines of credit	~~434~~1,404		~~135~~133,~~812~~307		~~136~~134,~~246~~711		654		135,767		136,421
Letters of credit	—		1011,~~168~~115		1011,~~168~~115		—		11,814		11,814
Credit card lines of credit	—		37,~~262~~169		37,~~262~~169		—		37,483		37,483
Total	$	68,~~459~~308	$	~~291~~324,~~926~~775	$	~~298~~333,~~385~~083	$	7,535	$	302,548	$	310,083

Fixed rate commercial loan commitments and lines of credit at ~~June~~September 30, 2011 had interest rates ranging from 4.0% to 7.32% with terms ranging from 1three ~~month~~months to 4five years. Fixed rate mortgage loan commitments at ~~June~~September 30, 2011 had interest rates ranging from 4.40% to 5.31% with terms ranging from 1015 to 30 years. Fixed rate home equity lines of credit at ~~June~~September 30, 2011 had interest rates ranging from 3.0% to 7.0% with terms ranging from 1six months to 5four years. Fixed rate check credit lines of credit at ~~June~~September 30, 2011 had interest rates of 18.0%.

Note 6 - Common Stock in ESOP Subject to Contingent Repurchase Obligation

At ~~June~~September 30, 2011 and December 31, 2010, the Employee Stock Ownership Plan (the “ESOP”) held 9089,~~017~~933 and 90,775 shares of West Suburban common stock, respectively. Upon termination of their employment, participants who elect to receive their benefit distributions in the form of West Suburban common stock may request the Company to purchase, when the Company is legally permitted to purchase its common stock, the common stock distributed at fair market value during two 60-day periods. The first purchase period begins on the date the benefit is distributed and the second purchase period begins on the first anniversary of the distribution date. This contingent repurchase obligation is reflected in the Company’s financial statements as “Common stock in ESOP subject to contingent repurchase obligation” and reduces shareholders’ equity by an amount that represents the independently appraised fair market value of all West Suburban common stock held by the ESOP and allocated to participants, without regard to whether it is likely that the shares would be distributed or that the recipients of the shares would be likely to exercise their right to require the Company to purchase the shares.

~~Note 7 - New Accounting Pronouncements~~19

Recent Accounting Guidance

In July 2010, the FASB issued an Accounting Standards Update (“ASU”), “Receivables: Disclosure about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” The objective of this ASU is for an entity to provide disclosures that facilitate financial statement users’ evaluation of the nature of credit risk inherent in the entity’s portfolio of financing receivables, how that risk is analyzed and assessed in arriving at the allowance for credit losses, and the changes and reasons for those changes in the allowance for credit losses. An entity should provide disclosures on a disaggregated basis on two defined levels: 1) portfolio segment and 2) class of financing receivable. The ASU makes changes to existing disclosure requirements and includes additional disclosure requirements about financing receivables, including credit quality indicators of financing receivables at the end of the reporting period by class of financing receivables, the aging of past due financing receivables at the end of the reporting period by class of financing receivables, and the nature and extent of Troubled Debt Restructurings (“TDRs” ) that occurred during the period by class of financing receivables and their effect on the allowance for credit losses. The Company’s adoption on March 31, 2011 of the disclosures regarding activity in the allowance for loan losses and its adoption on December 31, 2010 of the other

Table of Contents

~~disclosures~~Note in7 ~~this ASU except for those parts pertaining to TDRs, being disclosure~~-~~related~~ ~~only,~~New ~~had~~Accounting ~~no impact on its results of operations. At its January 4, 2011, meeting, the FASB affirmed its decision to temporarily defer the effective date for TDRs.~~Pronouncements

InAdopted ~~April 2011,~~Accounting the FASB issued the ASU, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.” This ASU amends Topic 310 and provides additional guidance to creditors for evaluating whether a modification or restructuring of a receivable is a TDR. The amendments in this update are effective for the first interim or annual period beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual period of adoption. The new guidance will require creditors to evaluate modifications and restructurings of receivables using a more principles-based approach, which may result in more modifications and restructurings being considered troubled debt restructurings. For purposes of measuring impairment of these receivables, an entity should apply the amendments prospectively for the first interim or annual period beginning on or after June 15, 2011. Early adoption is permitted. We do not expect that this accounting standard update will have a material impact on our financial condition, results of operations or financial statement disclosures.Guidance

In April 2011, the FASB issued the ASU, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.” This ASU amended Topic 310 and provides additional guidance to creditors for evaluating whether a modification or restructuring of a receivable is a TDR. The amendments in this update are effective for the first interim or annual period beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual period of adoption. The new guidance requires creditors to evaluate modifications and restructurings of receivables using a more principles-based approach, which may result in more modifications and restructurings being considered troubled debt restructurings. For purposes of measuring impairment of these receivables, an entity should apply the amendments prospectively for the first interim or annual period beginning on or after June 15, 2011. Adoption of this accounting standard update did not have a material impact on our financial condition, results of operations or financial statement disclosures.

Note 8 - Retirement Benefits

The Bank maintains the West Suburban Bank 401(k) Profit Sharing Plan (the “401(k) Plan”), which serves as the Company’s principal retirement plan. The 401(k) Plan was established to address the limited availability of West Suburban common stock for acquisition by the ESOP and to offer participants an avenue to diversify their retirement savings.

The ESOP provides incentives to employees by granting participants an interest in West Suburban common stock, which represents the ESOP’s primary investment. An individual account is established for each participant and the benefits payable upon retirement, termination, disability or death are based upon service, the amount of the employer’s contributions and any income, expenses, gains and losses and forfeitures allocated to the participant’s account.

The Company also maintains a noncontributory postretirement benefit plan covering certain senior executives. The plan provides postretirement medical, dental and long term care coverage for certain executives and their surviving spouses.

The eligible retirement age under the plan is age 62 and the plan is unfunded. Net postretirement benefit costs are summarized in the following ~~table~~tables:

	Six Months Ended
	Nine Months Ended
	June 30,
	September 30,
	2011		2010
Service cost	$	1623	$	1726
Interest cost	2842		2944
Amortization of prior service cost	1016		1116
Recognized net actuarial gain	1117		1016
Net periodic benefit cost	$	6598	$	67102

	Three Months Ended
	June 30,
	September 30,
	2011		2010
Service cost	$	87	$	9
Interest cost	14		1415
Amortization of prior service cost	56		5
Recognized net actuarial gain	56		56
Net periodic benefit cost	$	3233	$	3335

1920

Table of Contents

Note 9 - ~~Income~~Fair ~~Taxes~~Value of Financial Instruments

The Company files income tax returns in the U.S. federal jurisdiction and in Illinois. With certain exceptions, the Company is no longer subject to examination by the U.S. federal tax authorities or by Illinois tax authorities for years prior to 2007.

Income tax expense increased $2.4 million for the first six months of 2011 compared to the first six months of 2010. The effective tax rates for the first six months of 2011 and 2010 were 33.7% and 24.7%, respectively. The increase was due to higher pre-tax net income in 2011. Additionally, a higher blended tax rate in 2011 as compared to 2010 due to an increase in the State of Illinois tax rate also had the effect of increasing the effective tax rate.

Net deferred tax assets are included in accrued interest and other assets. No valuation allowance was considered necessary for net deferred tax assets at June 30, 2011 or December 31, 2010. The Company had net deferred tax assets of $16.9 million and $19.2 million as of June 30, 2011 and December 31, 2010, respectively.

Note 10 - Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 — Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Securities: The fair value of securities is determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair value is calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair value is calculated using discounted cash flows or other market indicators (Level 3). At ~~June~~ September 30, 2011 and December 31, 2010, the Company did not have any securities where the fair value was determined using Level 3 inputs. There were no transfers between Level 1 and Level 2 during the ~~six~~first nine months ~~ended~~of ~~June 30,~~ 2011 and 2010.

Impaired Loans: The fair value of impaired loans secured by real estate with specific allocations of the allowance for loan losses is ~~generally~~ based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Other Real Estate Owned: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are ~~generally~~ based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

2021

Table of Contents

Assets and liabilities measured at fair value on a recurring basis and a non-recurring basis are as follows:

	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
June 30, 2011 Recurring basis
September 30, 2011 Recurring basis
U.S. Treasuries	$	6410,~~256~~435	$	6410,~~256~~435	$	—	$	—
U.S. government sponsored enterprises	~~109~~95,~~766~~657		—		~~109~~95,~~766~~657		—
Mortgage-backed: residential	~~222~~208,~~010~~600		—		~~222~~208,~~010~~600		—
State and political subdivisions	1820,~~496~~008		—		1820,~~496~~008		—
Corporate	1510,~~513~~133		—		1510,~~513~~133		—
Total securities available for sale	$	~~430~~344,~~041~~833	$	6410,~~256~~435	$	~~365~~334,~~785~~398	$	—
December 31, 2010 Recurring basis
U.S. Treasuries	$	91,156	$	91,156	$	—	$	—
U.S. government sponsored enterprises	98,144		—		98,144		—
Mortgage-backed: residential	307,280		—		307,280		—
State and political subdivisions	11,878		—		11,878		—
Corporate	10,108		—		10,108		—
Total securities available for sale	$	518,566	$	91,156	$	427,410	$	—
June 30, 2011 Non-recurring basis
September 30, 2011 Non-recurring basis
Impaired loans:
Commercial	$	31,~~022~~580	$	—	$	—	$	31,~~022~~580
Commercial real estate	~~559~~843		—		—		~~559~~843
Construction and development	42,~~113~~942		—		—		42,~~113~~942
Residential real estate:
Mortgage	1,641		—		—		1,641
Home Equity	727		—		—		727
Other real estate owned:
Construction and development	1113,~~722~~766		—		—		1113,~~722~~766
Commercial real estate	~~890~~873		—		—		~~890~~873
Residential real estate: mortgage	155		—		—		155
December 31, 2010 Non-recurring basis
Impaired loans:
Commercial	$	4,307	$	—	$	—	$	4,307
Commercial real estate	559		—		—		559
Construction and development	16,157		—		—		16,157
Other real estate owned:
Construction and development	10,919		—		—		10,919
Commercial real estate	984		—		—		984

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $98,~~254~~312 with a valuation allowance of $~~1,560~~579 at ~~June~~ September 30, 2011. At December 31, 2010, impaired loans had a carrying value of $25,895 with a valuation allowance of $4,872. Provision for loan losses made for impaired loans during the first ~~six~~nine months ended ~~June~~ September 30, 2011 and ~~June~~ September 30, 2010 was $2,276 and $43,~~253~~334, respectively.

Other real estate owned, which are at fair value less costs to sell, had a net carrying amount of $1214,~~612~~794, which consisted of the outstanding balance of $1618,~~237~~419, net of a valuation allowance of $3,625 at ~~June~~ September 30, 2011. Write-downs on the other real estate owned totaled $~~724~~3,860 and $~~471~~1,669 for the first ~~six~~nine months of 2011 and 2010, ~~respectively.~~

2122

Table of Contents

respectively. At December 31, 2010, other real estate owned had a carrying amount of $11,903, which consisted of the outstanding balance of $15,528, net of a valuation allowance of $3,625.

Carrying values and estimated fair values of the Company’s financial instruments as of ~~June~~ September 30, 2011 and December 31, 2010 are set forth in the table below:

June 30, 2011

December 31, 2010

September 30, 2011

December 31, 2010

Carrying Value

Estimated Fair Value

Carrying Value

Estimated Fair Value

Financial assets

Cash and cash equivalents

96171,~~533~~592

70,690

Securities

Available for sale

~~430~~344,~~041~~833

518,566

Held to maturity

~~288~~277,~~884~~637

~~300~~292,~~583~~379

215,365

222,761

Federal Home Loan Bank stock

7,599

N/A

7,599

N/A

Loans, less allowance for loan losses

~~953~~955,~~566~~301

~~979~~988,~~604~~419

1,008,272

1,018,030

Accrued interest receivable

5,~~626~~660

5,217

Financial liabilities

Deposits

1,~~736~~714,~~986~~547

1,~~748~~724,~~437~~978

1,778,427

1,791,761

Accrued interest payable

2,~~398~~354

3,431

Estimated fair value for cash and cash equivalents, accrued interest receivable and payable, demand deposits and variable rate loans or deposits that reprice frequently and fully are each based on carrying value. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to estimated life and credit. Fair value of debt is based on current rates for similar financing. It was not practical to determine the fair value of FHLB stock due to the restrictions placed on its transferability. The fair value of off-balance- sheet items is not considered material.

Note 1110 - Capital Matters

On January 13, 2011, the Bank agreed with its regulators to maintain minimum capital ratios in excess of the minimum ratios required by applicable federal regulations. The Bank agreed to maintain minimum capital ratios equal to or exceeding 8.00% for Tier 1 capital to average total assets and 12.00% for total capital to risk-weighted assets. As of ~~June~~ September 30, 2011, the Bank was ~~not~~ in compliance with ~~the~~these heightened regulatory capital ~~requirement for Tier 1 capital to average total assets~~requirements. ~~Because~~If the Bank ~~was not in compliance with this heightened regulatory capital requirement at June 30, 2011, and if the Bank~~ is not in compliance with the requirements in the future, the Bank may become subject to additional regulatory actions or restrictions.

At ~~June~~ September 30, 2011, the Bank’s Tier 1 capital to average total assets ratio was 78.8719%, .1319%, or $23.67 million, ~~below~~above the 8.00% level the Bank agreed with its regulators to maintain, and the Bank’s total capital to risk-weighted assets was 13.3382%, 1.3382%, or $1622.98 million, above the 12.00% the Bank agreed with its regulators to maintain.

ITEM 2.

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

Executive Overview

At the end of 2007, the United States economy experienced a downturn that has continued into 2011. During this period, the United States economy has experienced heightened unemployment, depressed home values, historically low levels of liquidity in the debt markets and increased volatility in the equity markets. As a result of these conditions, consumer confidence and spending decreased and asset values declined. Like many other financial institutions, the Company’s financial results inhave ~~recent~~been ~~reporting periods were~~ impacted by these challenging economic conditions.

22The economic downturn has impacted the entire State of Illinois, including the Company’s primary market area, located in the western suburbs of Chicago, Illinois. According to the Bureau of Labor and Statistics, the

~~Table of Contents~~23

~~The~~Table ~~economic downturn has impacted the entire State~~ of Illinois, including the Company’s primary market area, located in the western suburbs of Chicago, Illinois. According to the Bureau of Labor and Statistics, the unemployment rate in the State of Illinois at June 30, 2011, was 9.2%. High levels of unemployment have adversely impacted the ability of certain of the Company’s borrowers to meet their ongoing debt obligations. In addition, real estate demand in the Company’s market area remains weak, resulting in declines in the values of the real estate serving as collateral for certain of the Company’s loans.Contents

Asunemployment arate ~~result of the economic downturn~~ in the ~~national~~State ~~and~~of ~~local~~Illinois ~~economies~~at ~~and~~September ~~depressed real estate values~~30, ~~management~~2011 ~~has~~was ~~focused~~9.9%. ~~its~~High ~~attention~~levels ~~primarily on improving the performance~~ of ~~the~~unemployment ~~Bank’s~~have ~~loan~~adversely ~~portfolio.~~impacted ~~The deterioration in~~ the ~~Bank’s~~ability ~~loan portfolio has forced the Bank to increase its allowance for loan losses to a level higher than historical periods to absorb additional losses in the loan portfolio. The Bank’s Board~~ of ~~Directors~~certain ~~reviews the level~~ of ~~its allowance for loan losses on a monthly basis. The Board responds as promptly as practical to new developments in~~ the ~~Bank~~Company’s ~~loan~~borrowers ~~portfolio, but it often takes time~~ to ~~measure~~meet ~~the~~their ~~effect~~ongoing ondebt ~~the Bank’s allowance~~obligations. Although management has increased the Bank’s allowance for loan losses in response to increasing levels of nonaccrual loans and believes that the allowance for loan losses is a reasonable estimate for probable incurred losses in the loan portfolio, future loan losses in excess of the allowance for loan losses would adversely affect the Bank’s financial condition and results of operations. In addition, ~~as a result of increasing levels of foreclosures, the Bank’s other~~ real estate ~~owned~~demand ~~portfolio has remained at a high level~~ in ~~2011 compared to historical periods, further decreasing~~ the ~~Bank~~Company’s ~~interest~~market ~~income.~~area ~~Management~~remains believes that the level of the Bank’s other real estate owned portfolio will remain at a high level throughout 2011 and may increase. Management has had to focus additional time and effort on selling these propertiesweak, ~~and~~resulting ~~the~~in ~~Bank~~declines ~~has incurred significant costs~~ in ~~connection~~the ~~with~~values ~~maintaining~~of the ~~properties, including~~ real estate ~~taxes,~~serving ~~management~~as ~~fees~~collateral ~~and~~for ~~insurance~~certain ~~costs. Management continues to aggressively pursue sales~~ of the ~~foreclosed assets in the Bank~~Company’s ~~portfolio, but due to weak real estate demand in the Bank’s market area, management is not able to dispose of these properties as promptly as desired~~loans.

~~During~~As ~~this~~a ~~difficult~~result of the economic ~~period~~downturn in the ~~Bank~~national and local economies and depressed real estate values, management has ~~seen~~focused ~~low~~its ~~levels~~attention primarily on improving the performance of ~~quality~~the ~~demand~~Bank’s loan portfolio. The deterioration in the Bank’s loan portfolio has forced the Bank to increase its allowance for ~~credit~~loan losses to a level higher than historical periods to absorb additional losses in the loan portfolio. ~~Although~~The ~~concerns~~Bank’s ~~over~~Board of Directors reviews the ~~credit~~level ~~quality~~of its allowance for loan losses on a monthly basis. The Board responds as promptly as practical to new developments in the Bank’s loan portfolio ~~exist~~, but it often takes time to measure the effect on the Bank’s ~~continues~~allowance. toAlthough bemanagement ~~willing~~has increased the Bank’s allowance for loan losses in response to ~~make~~increasing levels of nonaccrual loans and believes that the allowance for loan losses is a reasonable estimate for probable incurred losses in the loan portfolio, future loan losses in excess of the allowance for loan losses would adversely affect the Bank’s financial condition and results of operations. In addition, as a result of increasing levels of foreclosures, the Bank’s other real estate owned portfolio has remained at a high level in 2011 compared to ~~qualified~~historical ~~applicants~~periods, further decreasing the Bank’s interest income. Management believes that ~~meet~~the ~~its~~level ~~traditional~~of the Bank’s other real estate owned portfolio will remain at a high level throughout 2011. Management has had to focus additional time and effort on selling these properties, ~~prudent~~and ~~lending~~the ~~standards~~Bank has incurred significant costs in connection with maintaining the properties, ~~which~~including ~~have~~real estate taxes, management fees and insurance costs. Management continues to aggressively pursue sales of the foreclosed assets in the Bank’s portfolio, but due to weak real estate demand in the Bank’s market area, management is not ~~changed~~able to dispose of these properties as promptly as desired.

InDuring ~~response~~this todifficult ~~the~~ economic ~~downturn,~~period the ~~Federal~~Bank ~~Reserve~~ has ~~maintained~~seen ~~interest rates at historically~~ low levels ~~and has used various forms~~ of ~~monetary~~quality ~~policy~~demand ~~in an attempt to drive down long-term interest rates. The presence of these historically low interest rates has created net interest challenges~~ for ~~the banking industry in general and the Bank in particular~~credit. ~~This~~Although ~~interest~~concerns ~~rate environment has resulted in low-yielding investment opportunities, adding to the downward pressure on the Bank’s interest income. Because management believes that interest rates will increase~~ over the ~~next~~credit ~~few~~quality ~~years,~~in ~~management has been focused on investments for~~ the Bank’s ~~securities~~loan portfolio ~~that are expected to retain their value in a rising rate environment. Specifically~~exist, the Bank ~~has~~continues ~~invested~~to inbe ~~mortgage-backed~~willing ~~securities~~to ~~issued~~make byloans ~~U.S.~~to ~~government~~qualified ~~sponsored~~applicants ~~enterprises~~that ~~with~~meet ~~average~~its ~~maturities of less than five years. In addition~~traditional, ~~movements~~prudent inlending ~~general market interest rates are a key element in changes in the Bank’s interest rate margin~~standards, ~~and~~which ~~management~~have ~~expects~~not ~~the interest rate environment to remain at historically low levels throughout 2011~~changed.

OnIn ~~January 13,~~response ~~2011,~~to the ~~Bank~~economic ~~agreed~~downturn, ~~with~~the ~~its~~Federal ~~regulators~~Reserve tohas ~~maintain~~maintained ~~minimum~~interest ~~capital~~rates ~~ratios~~at inhistorically ~~excess~~low oflevels ~~the~~and ~~minimum~~has ~~ratios~~used ~~required~~various byforms ~~applicable~~of ~~federal~~monetary ~~regulations.~~policy ~~The~~in ~~Bank~~an ~~agreed~~attempt to ~~maintain~~drive ~~minimum~~down ~~capital~~long-term ~~ratios~~interest ~~equal~~rates. toThe orpresence ~~exceeding~~of ~~8.00%~~these ~~for~~historically ~~Tier~~low 1interest ~~capital~~rates tohas ~~average~~created ~~total~~net ~~assets~~interest ~~and~~challenges ~~12.00%~~ for ~~total~~the ~~capital~~banking toindustry ~~risk-weighted~~in ~~assets.~~general Asand ~~of June 30, 2011~~ the Bank ~~was not~~ in ~~compliance~~particular. ~~with~~This ~~the~~interest ~~heightened~~rate ~~regulatory~~environment ~~capital~~has ~~requirement~~resulted ~~for~~in ~~Tier~~low-yielding 1investment ~~capital~~opportunities, adding to ~~average~~the ~~total~~downward ~~assets.~~pressure ~~Because~~on the Bank’s ~~was~~interest ~~not~~income. inBecause ~~compliance~~management ~~with~~believes ~~this~~that ~~heightened~~interest ~~regulatory~~rates ~~capital~~will ~~requirement~~increase at ~~June 30,~~some ~~2011,~~point ~~and~~over if the ~~Bank~~next isfew ~~not~~years, inmanagement ~~compliance~~has ~~with~~been ~~the~~focused ~~requirements~~on ininvestments ~~the~~for ~~future,~~ the Bank’s ~~may~~securities ~~become~~portfolio ~~subject~~that are expected to ~~additional~~retain ~~regulatory~~their ~~actions~~value orin ~~restrictions~~a rising rate environment. ~~Management~~In ~~currently~~addition, ~~believes~~movements ~~that~~in ~~the~~general ~~Bank~~market ~~will~~interest berates are a key element in ~~compliance~~changes ~~with~~in the ~~heightened~~Bank’s ~~regulatory~~interest ~~capital~~rate ~~requirement~~margin, ~~for~~and ~~Tier~~management 1expects ~~capital~~the interest rate environment to ~~average~~remain ~~total~~at ~~assets~~historically bylow ~~December 31,~~levels throughout 2011.

23On January 13, 2011, the Bank agreed with its regulators to maintain minimum capital ratios in excess of the minimum ratios required by applicable federal regulations. The Bank agreed to maintain minimum capital ratios equal to or exceeding 8.00% for Tier 1 capital to average total assets and 12.00% for total capital to risk-weighted assets. As of September 30, 2011, the Bank was in compliance with these heightened regulatory capital requirements. If the Bank is not in compliance with the requirements in the future, the Bank may become subject to additional regulatory actions or restrictions.

~~Table~~Recent ofRegulatory ~~Contents~~Developments

~~Recent~~On ~~Regulatory~~July ~~Developments~~21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), which is perhaps the most significant financial reform since the Great Depression. While the provisions of the Act receiving the most public attention have generally been those more likely to affect larger institutions, the Act also contains many provisions which will affect smaller institutions such as the Company in substantial and unpredictable ways. Consequently, compliance with the Act’s provisions may curtail the Company’s revenue opportunities, increase its operating costs, require it to hold higher levels of regulatory capital and/or liquidity or otherwise adversely affect the Company’s business or financial results in the future. The Company’s management is actively reviewing the provisions of the Act and assessing its probable impact on the Company’s business, financial condition, and result of operations. However, because many aspects of the Act are subject to

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), which is perhaps the most significant financial reform since the Great Depression. While the provisions of the Act receiving the most public attention have generally been those more likely to affect larger institutions, the Act also contains many provisions which will affect smaller institutions such as the Company in substantial and unpredictable ways. Consequently, compliance with the Act’s provisions may curtail the Company’s revenue opportunities, increase its operating costs, require it to hold higher levels of regulatory capital and/or liquidity or otherwise adversely affect the Company’s business or financial results in the future. The Company’s management is actively reviewing the provisions of the Act and assessing its probable impact on the Company’s business, financial condition, and result of operations. However, because many aspects of the Act are subject to future rulemaking, it is difficult to precisely anticipate its overall financial impact on the Company and the Bank at this time.24

~~Critical~~Table ~~Accounting~~of ~~Policies~~Contents

~~The~~future ~~Company’s financial statements are prepared in conformity with accounting principles generally accepted in the U.S. These accounting principles~~rulemaking, ~~which~~it ~~can~~is bedifficult ~~complex, are significant~~ to ~~our~~precisely ~~financial~~anticipate ~~condition~~its ~~and~~overall our results of operations and require management to apply significant judgment with respect to various accounting, reporting and disclosure matters. Management must use estimates, assumptions and judgments to apply these principles where actual measurements are not possible or practical. These estimates, assumptions and judgments are based on information available as of the date of this report and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial ~~statements. Changes in such estimates may have a significant~~ impact on the financial statements. Management has reviewed the application of these policies with the Audit Committee of West Suburban’s Board of Directors. This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction the Company’s ~~Condensed Consolidated Financial Statements~~ and ~~Notes to~~ the ~~Condensed~~Bank ~~Consolidated~~at ~~Financial Statements included in~~ this ~~quarterly report~~time.

InCritical ~~management’s~~Accounting view, the accounting policies that are critical to the Company are those relating to estimates, assumptions and judgments regarding the determination of the adequacy of the allowance for loan losses, the Company’s federal and state income tax obligations, the determination of the fair value of certain of the Company’s investment securities and the carrying value of other real estate owned.Policies

~~Allowance for Loan Losses.~~ The ~~allowance~~Company’s ~~for~~financial ~~loan~~statements ~~losses~~are isprepared ain ~~valuation~~conformity ~~allowance~~with ~~for~~accounting ~~probable~~principles ~~incurred~~generally ~~credit~~accepted ~~losses~~ in the ~~loan portfolio~~U.S. ~~The~~These ~~allowance~~accounting isprinciples, ~~increased~~which bycan abe ~~provision~~complex, ~~for~~are ~~loan~~significant ~~losses charged~~ to ~~earnings.~~our ~~Loan~~financial ~~losses~~condition ~~are~~and ~~charged~~our ~~against~~results ~~the~~of ~~allowance~~operations ~~when~~and require management ~~believes~~to ~~the~~apply ~~uncollectibility~~significant ofjudgment awith ~~loan~~respect ~~has~~to ~~been~~various ~~established. Subsequent recoveries~~accounting, ifreporting ~~any,~~and ~~are~~disclosure ~~credited to the allowance~~matters. ~~The~~Management ~~allowance~~must ~~consists~~use ofestimates, ~~specific~~assumptions and ~~general~~judgments ~~components.~~to ~~The~~apply ~~specific~~these ~~component~~principles ~~relates~~where toactual ~~specific~~measurements ~~loans that~~ are ~~individually~~not ~~classified~~possible asor ~~impaired~~practical. ~~The~~These ~~allowance~~estimates, ~~for~~assumptions ~~loan~~and ~~losses~~judgments isare ~~evaluated monthly~~ based on ~~management’s~~information ~~periodic~~available ~~review~~as of ~~loan~~the ~~collectibility~~date inof ~~light~~this ofreport ~~historical~~and, ~~loan~~as ~~loss~~this ~~experience~~information changes, ~~the~~actual ~~nature~~results ~~and~~could ~~volume~~differ offrom the ~~loan portfolio~~estimates, ~~information~~assumptions ~~about~~and ~~specific~~judgments ~~borrower~~reflected ~~situations~~in ~~and~~the ~~estimated~~financial ~~collateral~~statements. ~~values~~Changes ~~and~~in ~~prevailing~~such ~~economic~~estimates ~~conditions.~~may ~~Although~~have ~~allocations~~a ofsignificant ~~the~~impact ~~allowance~~on ~~may~~the befinancial ~~made~~statements. ~~for~~Management ~~specific~~has ~~loans,~~reviewed the ~~entire~~application ~~allowance~~of isthese ~~available~~policies ~~for~~with ~~any~~the ~~loan~~Audit ~~that,~~Committee inof ~~management~~West Suburban’s ~~judgment,~~Board ~~should~~of ~~be charged-off~~Directors. This Management’s ~~evaluation~~Discussion and Analysis of ~~loan~~Financial ~~collectibility~~Condition isand ~~inherently~~Results ~~subjective~~of asOperations itshould ~~requires~~be ~~estimates~~read ~~that~~in ~~are~~conjunction ~~subject~~the toCompany’s ~~significant~~Condensed ~~revision~~Consolidated asFinancial ~~more~~Statements ~~information~~and ~~becomes~~Notes ~~available~~to orthe asCondensed ~~relevant~~Consolidated ~~circumstances~~Financial ~~change~~Statements included in this quarterly report.

~~The~~In ~~Company~~management’s ~~evaluates commercial~~view, ~~commercial~~the ~~real~~accounting ~~estate~~policies ~~and~~that ~~construction~~are ~~and~~critical ~~development~~to ~~loans~~the ~~monthly~~Company ~~for~~are ~~impairment.~~those Arelating ~~loan~~to ~~is considered impaired when~~estimates, ~~based~~assumptions ~~on current information~~ and ~~events,~~judgments ~~full~~regarding ~~payment under~~ the ~~loan~~determination ~~terms~~of isthe ~~not~~adequacy ~~expected.~~of ~~Loans~~the allowance for ~~which~~loan losses, the ~~terms~~Company’s ~~have~~federal ~~been~~and ~~modified~~state ~~and~~income ~~for~~tax ~~which~~obligations, the ~~borrower~~determination isof ~~experiencing~~the ~~financial~~fair ~~difficulties~~value ~~are~~of ~~considered~~certain ~~troubled~~of ~~debt~~the ~~restructurings~~Company’s ~~and~~investment ~~classified~~securities asand ~~impaired. Impairment is measured based on~~ the ~~present~~carrying value of ~~expected~~other ~~future~~real ~~cash~~estate ~~flows discounted at the loan’s effective interest rate~~owned.

24Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for probable incurred credit losses in the loan portfolio. The allowance is increased by a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan has been established. Subsequent recoveries, if any, are credited to the allowance. The allowance consists of specific and general components. The specific component relates to specific loans that are individually classified as impaired. The allowance for loan losses is evaluated monthly based on management’s periodic review of loan collectibility in light of historical loan loss experience, the nature and volume of the loan portfolio, information about specific borrower situations and estimated collateral values and prevailing economic conditions. Although allocations of the allowance may be made for specific loans, the entire allowance is available for any loan that, in management’s judgment, should be charged-off. Management’s evaluation of loan collectibility is inherently subjective as it requires estimates that are subject to significant revision as more information becomes available or as relevant circumstances change.

~~Table~~The Company evaluates commercial, commercial real estate and construction and development loans monthly for impairment. A loan is considered impaired when, based on current information and events, full payment under the loan terms is not expected. Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired. Impairment is measured based on the present value of ~~Contents~~expected future cash flows discounted at the loan’s effective interest rate or the fair value of the loan’s collateral, if repayment of the loan is collateral dependent. A valuation allowance is maintained for the amount of impairment. Generally, loans 90 days or more past due and loans classified as nonaccrual status are considered for impairment. Impairment is considered on an entire category basis for smaller-balance loans of similar nature such as residential real estate and consumer loans, and on an individual basis for other loans. In general, consumer and credit card loans are charged-off no later than 120 days after a consumer or credit card loan becomes past due.

orThe ~~the~~general ~~fair~~component ~~value~~covers pools of ~~the~~other ~~loan’s~~loans ~~collateral,~~not ifclassified ~~repayment~~as ofimpaired ~~the~~and ~~loan~~ is ~~collateral~~based ~~dependent~~on historical loss experience adjusted for current factors. AThe ~~valuation~~historical ~~allowance~~loss experience is ~~maintained~~determined ~~for~~by ~~the~~portfolio ~~amount~~segment ofand ~~impairment.~~is ~~Generally,~~based ~~loans~~on 90a ~~days~~rolling orone ~~more~~year ~~past~~net ~~due~~charge-off ~~and~~history. ~~loans~~This ~~classified~~actual asloss ~~nonaccrual~~experience ~~status~~is ~~are~~supplemented ~~considered~~with other economic factors based on the risks present for ~~impairment~~each portfolio segment. ~~Impairment~~These isfactors ~~considered~~include onconsideration anof ~~entire~~the ~~category~~following: ~~basis~~levels ~~for~~and ~~smaller~~trends in past dues; trends in charge-~~balance~~offs and recoveries; trends in volume and terms of loans; effects of ~~similar~~collateral ~~nature~~deterioration; ~~such~~other aschanges ~~residential~~in ~~real~~lending ~~estate~~policies, procedures and ~~consumer~~practices; ~~loans~~experience, ability and ondepth anof ~~individual~~lending ~~basis~~management ~~for~~and other ~~loans.~~relevant Instaff; ~~general,~~national ~~consumer~~ and ~~credit~~local ~~card~~economic ~~loans~~trends; ~~are~~and ~~charged-off~~trends noin ~~later~~impaired ~~than~~loans ~~120~~including ~~days~~impaired ~~after~~loans, awithout ~~consumer~~specific orallowance ~~credit~~for ~~card~~loan losses. The following loan ~~becomes~~portfolio ~~past~~segments ~~due.~~have

The general component covers pools of other loans not classified as impaired and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on a rolling one year net charge-off history. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. These factors include consideration of the following: levels and trends in past dues; trends in charge-offs and recoveries; trends in volume and terms of loans; effects of collateral deterioration; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends; and trends in impaired loans including impaired loans, without specific allowance for loan losses. The following loan portfolio segments have been identified: commercial, commercial real estate, construction and development, residential and consumer and other.25

~~Income~~Table ~~Taxes. The Company is subject to income tax laws~~ of the U.S. and the State of Illinois. These laws are complex and subject to different interpretations by the taxpayer and the various taxing authorities. Management makes certain judgments and estimates about the application of these inherently complex laws when determining the provision for income taxes. Federal and state taxing authorities have recently become increasingly aggressive in challenging tax positions taken by financial institutions, including positions that may be taken by the Company. During the preparation of the Company’s tax returns, management makes reasonable interpretations of the tax laws which are subject to challenge upon audit by the tax authorities. These interpretations are also subject to reinterpretation based on management’s ongoing assessment of facts and evolving case law.Contents

Onbeen aidentified: ~~quarterly basis~~commercial, ~~management~~commercial ~~evaluates~~real ~~the~~estate, ~~reasonableness~~construction ofand ~~its~~development, ~~effective~~residential ~~tax rate based upon its current best estimate of net income~~ and ~~applicable~~consumer ~~taxes expected for the full year. Deferred tax assets~~ and ~~liabilities are evaluated on a quarterly basis, or more frequently if necessary~~other.

~~Temporary~~Income ~~Decline~~Taxes. The inCompany ~~Fair~~is ~~Value~~subject ofto ~~Securities.~~income ~~The~~tax ~~Company~~laws ~~evaluates~~of ~~its~~the ~~debt~~U.S. and ~~equity~~the ~~securities~~State ~~for~~of ~~OTTI~~Illinois. ~~under~~These ~~FASB~~laws ~~guidance~~are ~~“Investments~~complex inand ~~Debt~~subject ~~and~~to ~~Equity~~different ~~Securities.”~~interpretations ~~The~~by ~~guidance~~the ~~applies~~taxpayer toand ~~debt~~the ~~securities,~~various astaxing ~~well~~authorities. asManagement ~~equity~~makes ~~securities~~certain ~~not~~judgments ~~accounted~~and ~~for~~estimates ~~under~~about the ~~equity~~application ~~method~~of ~~(i.e.,~~these ~~cost~~inherently ~~method~~complex ~~investments),~~laws ~~unless~~when determining the ~~investments~~provision ~~are~~for ~~subject~~income totaxes. ~~other~~Federal ~~accounting~~and ~~guidance,~~state ~~such~~taxing asauthorities ~~FASB~~sometimes ~~guidance~~aggressively ~~“Beneficial~~challenge ~~Interest~~tax inpositions ~~Securitized~~taken ~~Financial~~by ~~Assets.”~~financial ~~Investments~~institutions, inincluding ~~securitized~~positions ~~structures~~that ~~such~~may asbe ~~collateralized~~taken ~~mortgage~~by ~~obligations~~the ~~and~~Company. ~~collateralized~~During ~~debt~~the ~~obligations~~preparation ~~that~~of ~~are~~the ~~not~~Company’s ~~high~~tax ~~quality~~returns, ~~investment~~management ~~grade~~makes ~~securities~~reasonable ~~upon~~interpretations ~~acquisition~~of the tax laws which are subject to ~~this~~challenge ~~guidance.~~upon ~~High~~audit ~~quality~~by ~~investment~~the ~~grade~~tax ~~securities~~authorities. These interpretations are ~~defined~~also assubject ~~securities~~to ~~with~~reinterpretation anbased ~~investment~~on ~~grade~~management’s ongoing assessment of ~~“AA”~~facts orand ~~higher~~evolving case law.

InOn ~~accordance~~a ~~with~~quarterly ~~FASB guidance “Investments in Debt and Equity Securities~~basis,” ~~declines in the fair value of securities below their cost that are other-than-temporary are reflected as realized losses. In determining OTTI on debt securities,~~ management ~~considers~~evaluates ~~many factors, including: (1)~~ the ~~length~~reasonableness of ~~time~~its ~~and~~effective ~~the~~tax ~~extent~~rate tobased ~~which~~upon ~~the~~its ~~fair~~current ~~value~~best ~~has~~estimate ~~been less than cost; (2) the financial condition and near-term prospects~~ of ~~the~~net ~~issuer;~~income ~~(3) whether the market decline was affected by macroeconomic conditions;~~ and ~~(4) whether~~applicable ~~the~~taxes ~~Company~~expected ~~has~~for the ~~intent~~full ~~to sell the debt security or whether it is more likely than not the Company will be required to sell the debt security before its anticipated recovery~~year. ~~The~~Deferred ~~assessment~~tax ofassets ~~whether OTTI exists involves a high degree of subjectivity~~ and ~~judgment~~liabilities ~~and~~are isevaluated ~~based~~ on ~~the~~a ~~information~~quarterly ~~available~~basis, toor ~~management~~more atfrequently aif ~~point in time~~necessary.

~~Other~~Temporary ~~Real~~Decline ~~Estate~~in ~~Owned~~Fair Value of Securities. The ~~Assets~~Company ~~acquired~~evaluates ~~through~~its ordebt ~~instead~~and ofequity ~~loan~~securities ~~foreclosure~~for ~~are~~OTTI ~~initially~~under ~~recorded~~FASB atguidance ~~fair~~“Investments ~~value~~in ~~less~~Debt ~~anticipated~~and ~~costs~~Equity toSecurities.” ~~sell~~The ~~when~~guidance ~~acquired~~applies to debt securities, ~~establishing~~as awell ~~new~~as ~~basis~~equity securities not accounted for under the equity method (i.e., Ifcost ~~fair~~method ~~value~~investments), ~~declines~~unless ~~subsequent~~the investments are subject to ~~acquisition~~other accounting guidance, asuch ~~valuation~~as ~~allowance~~FASB isguidance ~~recorded~~“Beneficial ~~through~~Interest ~~expense~~in Securitized Financial Assets.” ~~Operating~~Investments ~~costs~~in ~~after~~securitized structures such as collateralized mortgage obligations and collateralized debt obligations that are not high quality investment grade securities upon acquisition are ~~expensed~~subject to this guidance. High quality investment grade securities are defined as ~~incurred~~securities with an investment grade of “AA” or higher.

25In accordance with FASB guidance “Investments in Debt and Equity Securities,” declines in the fair value of securities below their cost that are other-than-temporary are reflected as realized losses. In determining OTTI on debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost; (2) the financial condition and near-term prospects of the issuer; (3) whether the market decline was affected by macroeconomic conditions; and (4) whether the Company has the intent to sell the debt security or whether it is more likely than not the Company will be required to sell the debt security before its anticipated recovery. The assessment of whether OTTI exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

~~Table~~Other Real Estate Owned. Assets acquired through or instead of ~~Contents~~loan foreclosure are initially recorded at fair value less anticipated costs to sell when acquired, establishing a new basis. If fair value declines subsequent to acquisition, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed as incurred.

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

Through the normal course of operations, the Company has entered into certain contractual obligations and other commitments. These obligations generally relate to the funding of operations through deposits and prepaid solutions cards, as well as leases for premises and equipment. As a financial services provider, the Company routinely enters into commitments to extend credit. While contractual obligations represent future cash requirements of the Company, a significant portion of commitments to extend credit may expire without being drawn upon. Commitments to extend credit are subject to the same credit policies and approval procedures as comparable loans made by the Company.

At ~~June~~ September 30, 2011 and December 31, 2010, the ESOP held 9089,~~017~~933 and 90,775 shares of West Suburban common stock, respectively. Upon termination of their employment, participants who elect to receive their benefit distributions in the form of West Suburban common stock may request the Company to purchase, when the Company is legally permitted to purchase its common stock, the common stock distributed at fair value. A more detailed discussion concerning this obligation is presented in Note 6 to the Company’s Condensed Consolidated Financial Statements included in this report. At ~~June~~ September 30, 2011 and December 31, 2010, this contingent repurchase obligation reduced shareholders’ equity by $26.41 million and $29.9 million, respectively.

~~Balance Sheet Analysis~~26

~~Total~~Table ~~Assets.~~of Total consolidated assets at June 30, 2011 decreased 1.5% compared to December 31, 2010. Increases in cash and cash equivalents and other real estate owned were generally offset by decreases in the securities and loan portfolios.Contents

~~Cash~~Balance ~~and~~Sheet Cash Equivalents. Cash and cash equivalents at June 30, 2011 increased 36.6% from December 31, 2010, due to an increase in cash and due from banks. This increase was due to the Company selling securities during the first six months of 2011 and holding the proceeds in cash and cash equivalents until more attractive investment opportunities present themselves.Analysis

~~Securities.~~Total ~~The Company’s securities portfolio decreased 2~~Assets.0% Total ~~during~~consolidated ~~the~~assets ~~first~~at ~~six~~September ~~months of 2011~~30, ~~primarily due to sales of securities available for sale of $114.7 million during the first six months of~~ 2011 ~~for~~decreased ~~a gain of $4~~2.79% ~~million.~~compared ~~The Company manages its securities portfolio~~ to ~~maximize~~December ~~the return on invested funds within acceptable risk guidelines~~31, ~~to meet pledging and liquidity requirements~~2010, ~~and~~primarily due to ~~adjust~~decreases ~~balance sheet interest rate sensitivity~~ in ~~an effort to insulate net interest income against~~ the ~~impact~~loan ~~of interest rate changes. The Company will continue to monitor its level of available for sale~~ and ~~held to maturity~~ securities ~~and will classify new securities purchased in the appropriate category at the time of purchase. Over the past six months~~portfolios, ~~the Company has taken advantage of the current rate environment and realized gains on sales of available for sale securities with unrealized gain positions~~ which ~~has~~were ~~positively~~effectively ~~impacted~~used ~~net~~to ~~income.~~fund ~~At June 30, 2011,~~ the ~~Company’s~~decrease ~~accumulated~~in ~~other comprehensive income due to unrealized gains and losses on securities available for sale was $4~~deposits.~~4 million compared to $.6 million at December 31, 2010.~~

~~Loans~~Cash and Cash Equivalents. Cash ~~Total~~and ~~loans~~cash ~~outstanding~~equivalents at ~~June~~ September 30, 2011 ~~decreased~~increased 5142.47% from December 31, 2010, ~~primarily~~ due to ~~decreases in the construction and development, commercial real estate and home equity loan portfolios. These decreases were only partially offset by~~ an increase in ~~the~~cash ~~commercial loan portfolio. The decreases in the construction~~ and ~~development and commercial real estate portfolios were primarily~~ due ~~to the transfer of loans to other real estate owned during the period. The decrease in the home equity loan portfolio was primarily due to payoffs resulting~~ from ~~refinancing~~banks activity, as well as a decrease in home equity loan originations. The increase in the commercial loan portfolio was primarily due to the origination of commercial loans totaling approximately $5.9 million to four new relationships. Although the Company experienced growth in the commercial and ~~mortgage~~federal ~~loan~~funds ~~portfolios, overall loan demand in the Company’s market area remains low compared to historical periods~~sold.

26Securities. The Company’s securities portfolio decreased 15.0% during the first nine months of 2011, primarily due to sales of securities available for sale of $187.9 million during the first nine months of 2011 for a gain of $7.8 million. The Company manages its securities portfolio to maximize the return on invested funds within acceptable risk guidelines, to meet pledging and liquidity requirements, and to adjust balance sheet interest rate sensitivity in an effort to insulate net interest income against the impact of interest rate changes. The Company will continue to monitor its level of available for sale and held to maturity securities and will classify new securities purchased in the appropriate category at the time of purchase. Over the past nine months, the Company has taken advantage of the current rate environment and realized gains on sales of available for sale securities with unrealized gain positions which has positively impacted net income and helped fund the decrease in deposits. At September 30, 2011, the Company’s accumulated other comprehensive income due to unrealized gains and losses on securities available for sale was $4.5 million compared to $.6 million at December 31, 2010.

~~Table~~Loans. Total loans outstanding at September 30, 2011 decreased 5.1% from December 31, 2010, primarily due to decreases in the construction and development and home equity loan portfolios. These decreases were only partially offset by increases in the commercial and commercial real estate loan portfolios through originations. The decrease in the construction and development portfolio was primarily due to the transfer of ~~Contents~~loans to other real estate owned during the period. The decrease in the home equity loan portfolio was primarily due to payoffs resulting from refinancing activity, as well as a decrease in home equity loan originations. Although the Company experienced growth in the commercial, commercial real estate and mortgage loan portfolios, overall loan demand in the Company’s market area remains low compared to historical periods.

Balances in the Company’s loans are summarized in the following table (dollars in thousands):

	June 30, 2011			December 31, 2010
	September 30, 2011			December 31, 2010
Commercial	$	~~263~~269,~~384~~870		$	253,746
Commercial real estate	~~269~~278,~~418~~488			272,856
Construction and development	9285,~~875~~806			138,959
Residential real estate:
Mortgage	~~152~~151,~~878~~528			150,248
Home equity	~~190~~184,~~012~~463			206,191
Consumer and other	1213,~~005~~012			14,344
Total	~~980~~983,~~572~~167			1,036,344
Allowance for loan losses	(27,~~006~~866		)	(28,072		)
Loans, net	$	~~953~~955,~~566~~301		$	1,008,272

The Bank does not originate, and it has no current plans to originate, subprime, alt-A, no documentation or stated income loans. Although there is no industry standard definition of “subprime loans,” the Bank categorizes certain loans as subprime for its purposes using a set of factors that the Bank’s management believes are consistent with industry practice, relating to, among other things, credit ratings, ratios of debt to income or assets, ratios of loan to value and loan amounts.

~~Although~~The ~~the~~ Bank held approximately $1716.2 million of residential mortgage loans purchased from third party originators as of ~~June~~ September 30, 2011,. ~~the~~The Bank has not purchased any loans since August 2008. The Bank’s general policy is to originate or purchase only residential mortgage loans that conform to the underwriting standards of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

Allowance for Loan Losses and Asset Quality. The level of the allowance for loan losses is determined by evaluating the general allowance, which is allocated to pools of loans, as well as the specific allowance allocated to impaired loans. The Company utilizes a matrix which tracks changes in various factors that management has determined to have direct effects on the performance of the loan portfolio. These factors include consideration of the following: levels and trends in past dues; trends in charge-offs and recoveries; trends in volume and terms of loans; effects of collateral deterioration; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends; and trends in impaired loans, including impaired loans without a specific allowance for loan losses. The matrix assigns factors to each loan category which is used to determine the amount of the general allowance. The specific allowance allocated to impaired loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the loan’s collateral, if repayment of the loan is collateral dependent. A loan is considered impaired when, based on current information and events, full payment under the loan terms is not expected. Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructurings and classified as impaired.27

AtTable June 30, 2011, the allowance for loan losses was $27.0 million, compared to $28.1 million at December 31, 2010. The decrease in the allowance for loan losses was primarily due to a decrease in the specific allowance allocated to impaired loans and the overall decrease in the loan portfolio. The decrease in the specific allowance was a result of ~~charge-offs of impaired loans during the period.~~Contents

~~Impaired~~Allowance ~~loans~~for ~~totaled~~Loan ~~$88~~Losses and Asset Quality.2 The ~~million~~level atof ~~June 30,~~the ~~2011~~allowance for loan losses is determined by evaluating the general allowance, aswhich ~~compared~~is allocated to ~~$135.0~~pools ~~million~~of ~~at December 31~~loans, ~~2010.~~as ~~The~~well ~~allowance~~as ~~for~~the ~~loan~~specific ~~losses~~allowance allocated to impaired loans. ~~totaled~~The ~~$1.6~~Company ~~million~~utilizes ata ~~June 30,~~matrix ~~2011~~which astracks ~~compared~~changes in various factors that management has determined to $4have direct effects on the performance of the loan portfolio.9 ~~million~~These atfactors ~~December 31~~include consideration of the following: levels and trends in past dues; trends in charge-offs and recoveries; trends in volume and terms of loans; effects of collateral deterioration; other changes in lending policies, ~~2010.~~procedures ~~The~~and ~~relatively~~practices; ~~low~~experience, ~~specific~~ability ~~reserves~~and ondepth of lending management and other relevant staff; national and local economic trends; and trends in impaired loans, isincluding impaired loans without a ~~result~~specific ofallowance for loan losses. The matrix assigns factors to each loan category which is used to determine the ~~majority~~amount of the general allowance. The specific allowance allocated to impaired loans ~~being~~is ~~sufficiently~~based ~~collateralized~~on ~~and~~the ~~due~~present tovalue ~~the~~of ~~Company~~expected ~~recording~~future ~~previous~~cash ~~partial~~flows ~~charge-offs~~discounted onat ~~impaired~~the ~~loans.~~loan’s Aseffective interest rate or the fair value of ~~June 30,~~the ~~2011~~loan’s collateral, if repayment of the loan is collateral dependent. A loan is considered impaired when, based on current information and events, full payment under the loan ~~balance~~terms ofis ~~$88~~not expected.2 ~~million~~Loans for which the terms have been modified and for which the borrower is ~~net~~experiencing offinancial ~~$16.6~~difficulties ~~million~~are ofconsidered ~~partial~~troubled ~~charge-offs~~debt ~~recorded~~restructurings inand ~~previous~~classified ~~periods~~as impaired.

~~The~~At ~~general~~September ~~reserve~~30, as2011, athe ~~percent~~allowance offor ~~non-impaired~~loan ~~loans~~losses was 2$27.9% ~~at June 30~~million, ~~2011, as~~ compared to 2$28.6%1 million at December 31, 2010. The ~~increase~~decrease in the ~~general~~allowance ~~reserve~~for asloan losses was primarily due to a ~~percent~~decrease ofin the specific allowance allocated to impaired loans isand ~~consistent~~the ~~with~~overall decrease in the ~~change~~loan portfolio. The decrease in the specific allowance was a result of charge-offs of impaired loans during the period.

27Impaired loans totaled $90.4 million at September 30, 2011, as compared to $135.0 million at December 31, 2010. The allowance for loan losses allocated to impaired loans totaled $.6 million at September 30, 2011 as compared to $4.9 million at December 31, 2010. The relatively low specific reserves on impaired loans is a result of the majority of the impaired loans being sufficiently collateralized and due to the Company recording previous partial charge-offs on impaired loans. As of September 30, 2011, the impaired loan balance of $90.4 million is net of $14.9 million of partial charge-offs recorded in previous periods.

~~Table~~The general reserve as a percent of ~~Contents~~non-impaired loans was 3.1% at September 30, 2011, as compared to 2.6% at December 31, 2010. The increase in the general reserve as a percent of loans is consistent with the change in the actual historical loss history, management’s review of internal classified loans and management’s expectation of overall economic conditions nationally and in the areas in which the Company operates. Net loan charge-offs were $9.8 million for the nine months ended September 30, 2011 compared to $5.4 million during the same period in 2010.

~~actual~~Nonperforming ~~historical~~loans ~~loss~~(nonaccrual ~~history,~~and ~~management’s~~loans ~~review~~past ofdue ~~internal~~90 ~~classified~~days ~~loans,~~or ~~management’s~~more ~~expectation~~still ofon ~~overall~~accrual) ~~economic~~decreased ~~conditions~~to in$56.6 ~~the~~million ~~areas~~at inSeptember ~~which~~30, ~~the~~2011 ~~Company~~from ~~operates~~$80.5 million at December 31, ~~management’s~~2010. ~~expected~~This ~~losses~~change ~~with~~was ~~the~~primarily ~~overall~~due ~~level~~to decreases in nonaccrual loans as a result of $47.9 million in loans being transferred to other real estate ~~loans~~owned, ~~and~~as ~~management’s~~well ~~expectations~~as of$3.7 ~~future~~million ~~collateral~~in ~~values~~payments ~~within~~on ~~the~~nonaccrual ~~Company’s~~loans ~~portfolio~~and $1.8 ~~Net~~million ~~loan~~in charge-offs ~~were~~of nonaccrual loans during the first nine months of 2011. Additionally, $53.92 million ~~for~~of loans were brought current during the ~~six~~first nine months ~~ended~~of ~~June 30,~~ 2011. ~~compared~~These decreases to nonaccrual loans were partially offset by $235.80 million of loans being classified as nonaccrual during the ~~same~~first ~~period~~nine inmonths ~~2010~~of 2011.

~~Nonperforming~~The ~~loans~~Company’s ~~(nonaccrual~~ratio ~~and~~of nonperforming loans ~~past~~to ~~due~~total 90loans ~~days~~was ~~or more still on accrual) decreased to $69~~5.68% ~~million~~ at ~~June~~ September 30, 2011 ~~from~~and ~~$80~~7.58% ~~million~~ at December 31, 2010. ~~This~~The ~~change~~ratio ~~was~~of ~~primarily~~nonperforming ~~due~~assets to(nonperforming ~~decreases in nonaccrual~~ loans asand ~~a result of five large nonaccrual loan relationships in the amount of approximately $45.9 million being transferred to~~ other real estate owned.) ~~These~~to ~~decreases~~total ~~were~~assets ~~partially~~decreased ~~offset~~to ~~by the classification of four large loan relationships totaling approximately $35~~5.0% ~~million~~at asSeptember ~~nonaccrual~~30, ~~during the first six months of~~ 2011. ~~The~~from ~~largest of the five relationships was $25~~5.01% ~~million~~at ~~and was classified as impaired as of~~ December 31, 2010.

The Company’s ratio of nonperforming loans to total loans was 7.1% at June 30, 2011 and 7.8% at December 31, 2010. The ratio of nonperforming assets (nonperforming loans and other real estate owned) to total assets increased to 5.7% at June 30, 2011 from 5.1% at December 31, 2010.28

~~The~~Table ~~ratio~~ of the allowance for loan losses to total loans was 2.8% at June 30, 2011 and 2.7% at December 31, 2010. The following table presents an analysis of the Company’s nonperforming loans and other real estate owned as of the dates indicated (dollars in thousands):Contents

	June 30, 2011			December 31, 2010
Loans past due 90 days or more still on accrual	$	1,370		$	191
Nonaccrual loans	68,231			80,344
Total nonperforming loans	$	69,601		$	80,535
Nonperforming loans as a percent of total loans	7.1		%	7.8		%
Allowance for loan losses as a percent of nonperforming loans	38.8		%	34.9		%
Other real estate owned	$	39,539		$	20,479
Nonperforming assets as a percent of total assets	5.7		%	5.1		%

The ratio of the allowance for loan losses to total loans was 2.8% at September 30, 2011 and 2.7% at December 31, 2010. The following table presents an analysis of the Company’s nonperforming loans and other real estate owned as of the dates indicated (dollars in thousands):

The following table presents an analysis of the Company’s allowance for loan losses for the periods stated (dollars in thousands):

	September 30, 2011			December 31, 2010
Loans past due 90 days or more still on accrual	$	359		$	191
Nonaccrual loans	56,244			80,344
Total nonperforming loans	$	56,603		$	80,535
Nonperforming loans as a percent of total loans	5.8		%	7.8		%
Allowance for loan losses as a percent of nonperforming loans	49.2		%	34.9		%
Other real estate owned	$	39,319		$	20,479
Nonperforming assets as a percent of total assets	5.0		%	5.1		%

	2011						2010
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr
Provision - quarter	$	1,818		$	3,000		$	10,300		$	2,875		$	3,175
Provision - year to date	4,818			3,000			18,725			8,425			5,550
Net charge-offs - quarter	5,024			860			11,222			2,602			1,619
Net charge-offs - year to date	5,884			860			16,575			5,353			2,751
Allowance at period end	27,006			30,212			28,072			28,994			28,721
Allowance at period end to total loans	2.8		%	3.0		%	2.7		%	2.6		%	2.5		%

The following table presents an analysis of the Company’s allowance for loan losses for the periods stated (dollars in thousands):

Other Real Estate Owned. At June 30, 2011, the Company had $39.5 million in other real estate owned, compared to $20.5 million at December 31, 2010. During the first six months of 2011, the Company acquired properties with an aggregate carrying value of $46.2 million and sold properties with an aggregate carrying value of $26.4 million. These sales produced a net gain of $.2 million. On a monthly basis, the Company evaluates the carrying value of all other real estate owned properties and takes write-downs on these properties as necessary. During the first six months of 2011, the Company recorded aggregate write-downs of $.7 million due to the continued decline in real estate values. The Company is actively marketing the properties it holds in its other real estate owned portfolio in a continuing effort to reduce the size of this portfolio.

	2011									2010
	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr
Provision - quarter	$	4,750		$	1,818		$	3,000		$	10,300		$	2,875
Provision - year to date	9,568			4,818			3,000			18,725			8,425
Net charge-offs - quarter	3,890			5,024			860			11,222			2,602
Net charge-offs - year to date	9,774			5,884			860			16,575			5,353
Allowance at period end	27,866			27,006			30,212			28,072			28,994
Allowance at period end to total loans	2.8		%	2.8		%	3.0		%	2.7		%	2.6		%

~~Deposits~~Other Real Estate Owned. ~~Total~~At ~~deposits~~September ~~at June~~ 30, 2011, ~~decreased~~the 2Company had $39.3% ~~from~~million in other real estate owned, compared to $20.5 million at December 31, 2010. ~~due~~During tothe ~~decreases~~first innine ~~each~~months ~~deposit~~of ~~category~~2011, the Company acquired properties with ~~the~~an ~~exception~~aggregate ofcarrying ~~money~~value ~~market~~of ~~checking~~$50.0 million and ~~savings~~sold ~~deposits~~properties with an aggregate carrying value of $27.3 ~~Management~~million. ~~believes~~These ~~that~~sales ~~due~~produced toa net gain of $.2 million. On a monthly basis, the ~~current~~Company ~~state~~evaluates the carrying value of all other real estate owned properties and takes write-downs on these properties as necessary. During the ~~economy,~~first ~~some~~nine ~~customers~~months ~~have~~of ~~migrated~~2011, ~~from~~the ~~non~~Company recorded aggregate write-~~liquid~~downs ~~time~~of ~~deposits~~$3.9 million due to ~~more~~the ~~liquid~~continued ~~deposit~~decline ~~products~~in ~~such~~real asestate ~~money~~values. ~~market~~The ~~checking~~Company ~~and~~is ~~savings~~actively ~~deposits.~~marketing Inthe ~~general,~~properties ~~management~~it ~~promotes~~holds in its other real estate owned portfolio in a continuing effort to reduce the ~~Company’s~~size of this portfolio.

28Bank-owned Life Insurance. Bank-owned life insurance at September 30, 2011 decreased 17.9% from December 31, 2010. This decrease was primarily due to the Company surrendering $7.9 million of bank-owned life insurance policies in connection with the termination of certain deferred compensation plans.

~~Table~~Deposits. Total deposits at September 30, 2011 decreased 3.6% from December 31, 2010 due to decreases in each deposit category with the exception of ~~Contents~~money market checking and savings deposits. Management believes that due to the current state of the economy, some customers have migrated from non-liquid time deposits to more liquid deposit products such as money market checking and savings deposits. In general, management promotes the Company’s deposit products when it believes appropriate and prices its products in a manner intended to retain the Company’s current customers while maintaining an acceptable net interest margin. As of September 30, 2011, the Company held $21.5 million of deposits related to balances on cards issued by the Bank’s former prepaid solutions group. The Bank is in the process of winding down its issuing bank responsibilities under the prepaid card programs originated by the Bank’s former prepaid solutions group that were transferred, and the Bank expects to reduce the level of, and eventually cease to hold, these deposits. As of September 30, 2011, in accordance with applicable regulatory call report instructions, the Bank reported that it had no brokered deposits.

deposit products when it believes appropriate and prices its products in a manner intended to retain the Company’s current customers while maintaining an acceptable net interest margin. As of June 30, 2011, the Company held $25.5 million of deposits related to balances on cards issued by the Bank’s former prepaid solutions group. The Bank plans to terminate or wind down its issuing bank responsibilities under the prepaid card programs originated by the Bank’s former prepaid solutions group. To the extent the Bank terminates, or winds down, its issuing bank responsibilities under the prepaid card programs originated by the Bank’s former prepaid solutions group, the Bank expects to reduce the level of, and eventually cease to hold, these deposits. As of June 30, 2011, in accordance with applicable regulatory call report instructions, the Bank reported that it had no brokered deposits.29

~~Balances~~Table ~~in the Company’s major categories~~ of ~~deposits are summarized in the following table (dollars in thousands):~~Contents

	June 30, 2011		December 31, 2010		Dollar Change			Percent Change
Demand-noninterest-bearing	$	141,612	$	152,064	$	(10,452	)	(6.9	)%
Prepaid solutions card deposits	25,461		29,161		(3,700		)	(12.7	)%
NOW	337,480		349,246		(11,766		)	(3.4	)%
Money market checking	427,042		422,465		4,577			1.1	%
Savings	368,406		346,539		21,867			6.3	%
Time deposits
Less than $100,000	321,067		348,930		(27,863		)	(8.0	)%
$100,000 and greater	115,918		130,022		(14,104		)	(10.8	)%
Total	$	1,736,986	$	1,778,427	$	(41,441	)	(2.3	)%

Balances in the Company’s major categories of deposits are summarized in the following table (dollars in thousands):

Prepaid Solutions Cards. Outstanding balances on prepaid solutions cards, which represent the total of prepaid solutions card deposits and prepaid solutions card liabilities, decreased 0.8% at June 30, 2011 from December 31, 2010. On December 4, 2009, the Company sold its prepaid solutions card division. The Bank remains the card issuing bank under a number of the card programs transferred, although the Bank plans to terminate or wind down such responsibilities. The outstanding balances on prepaid solutions cards will remain on the Company’s balance sheet for a period of time, however, the Company will no longer record the income and expense associated with the prepaid solutions cards.

	September 30, 2011		December 31, 2010		Dollar Change			Percent Change
Demand-noninterest-bearing	$	146,562	$	152,064	$	(5,502	)	(3.6	)%
Prepaid solutions card deposits	21,497		29,161		(7,664		)	(26.3	)%
NOW	335,966		349,246		(13,280		)	(3.8	)%
Money market checking	430,074		422,465		7,609			1.8	%
Savings	364,620		346,539		18,081			5.2	%
Time deposits
Less than $100,000	309,877		348,930		(39,053		)	(11.2	)%
$100,000 and greater	105,951		130,022		(24,071		)	(18.5	)%
Total	$	1,714,547	$	1,778,427	$	(63,880	)	(3.6	)%

~~CAPITAL~~Prepaid ~~RESOURCES~~Solutions Cards. Outstanding balances on prepaid solutions cards, which represent the total of prepaid solutions card deposits and prepaid solutions card liabilities, decreased 6.2% at September 30, 2011 from December 31, 2010. On December 4, 2009, the Company sold its prepaid solutions card division. The Bank remains the card issuing bank under a number of the card programs transferred, although the Bank is in the process of winding down such responsibilities. The outstanding balances on prepaid solutions cards will remain on the Company’s balance sheet for a period of time. The Company no longer records the income and expense associated with the prepaid solutions cards.

~~Shareholders’~~CAPITAL equity at June 30, 2011 increased 11.0% from December 31, 2010. The increase resulted from net income of $6.5 million, a decrease in the amount reclassified on ESOP shares of $3.5 million and an increase in accumulated other comprehensive income of $3.8 million. On a consolidated basis, West Suburban exceeded minimum regulatory capital requirements as of June 30, 2011. In accordance with applicable regulations, the appraised fair market value of West Suburban common stock owned by the ESOP is included in Tier 1 capital.RESOURCES

~~Banking~~Shareholders’ ~~regulations~~equity ~~require~~at ~~the~~September ~~Company~~30, ~~and~~2011 ~~the~~increased ~~Bank~~11.3% tofrom ~~maintain~~December ~~minimum~~31, ~~capital amounts and ratios~~2010. ~~Regulatory~~The ~~capital~~increase ~~requirements~~resulted ~~call~~from ~~for~~net aincome ~~minimum total risk-based capital ratio~~ of 8%$6.7 ~~for each of the Company and the Bank~~million, a ~~minimum~~decrease ~~Tier~~in 1the ~~risk-based~~amount ~~capital~~reclassified ~~ratio~~on ofESOP 4%shares ~~for each~~ of ~~the Company and the Bank and a minimum leverage ratio (~~$3%.8 ~~for~~million ~~the most highly rated banks~~ and ~~bank~~an ~~holding~~increase ~~companies~~in ~~that~~accumulated ~~do not expect significant growth; all~~ other ~~institutions~~comprehensive ~~are~~income ~~required to maintain a minimum leverage capital ratio~~ of 4%$3.9 tomillion. 5%In ~~depending~~accordance onwith ~~their~~applicable ~~particular~~regulations, ~~circumstances~~the ~~and~~appraised ~~risk~~fair ~~and~~market ~~growth~~value ~~profiles)~~of ~~for~~West ~~each~~Suburban ofcommon ~~the~~stock ~~Company~~owned ~~and~~by the ~~Bank.~~ESOP ~~Bank~~is ~~holding~~included ~~companies~~in ~~and~~Tier ~~their~~1 ~~subsidiaries are generally expected to operate at or above the minimum~~ capital ~~requirements~~.

OnBanking ~~January 13,~~regulations ~~2011,~~require the ~~Bank~~Company ~~agreed~~and ~~with~~the ~~its~~Bank ~~regulators~~ to maintain minimum capital amounts and ratios. inRegulatory ~~excess~~capital ofrequirements ~~the~~call for a minimum ~~ratios~~total ~~required~~risk-based bycapital ~~applicable~~ratio ~~federal~~of ~~regulations.~~8% ~~The~~for ~~Bank~~each ~~agreed~~of tothe ~~maintain~~Company and the Bank, a minimum ~~capital~~Tier ~~ratios~~1 ~~equal~~risk-based tocapital orratio ~~exceeding~~of ~~8.00~~4% for ~~Tier~~each 1of ~~capital~~the toCompany ~~average~~and ~~total~~the ~~assets~~Bank and ~~12.00~~a minimum leverage ratio (3% for ~~total~~the ~~capital~~most tohighly ~~risk-weighted~~rated ~~assets.~~banks Asand ofbank ~~June 30,~~holding ~~2011~~companies ~~the~~that ~~Bank~~do ~~was~~ not inexpect ~~compliance~~significant ~~with~~growth; ~~the~~all ~~heightened~~other ~~regulatory~~institutions ~~capital~~are ~~requirement~~required ~~for~~to ~~Tier~~maintain 1a minimum leverage capital toratio ~~average~~of ~~total~~4% ~~assets.~~to ~~Because~~5% ~~the~~depending ~~Bank~~on ~~was~~their ~~not~~particular incircumstances ~~compliance~~and ~~with~~risk ~~this~~and ~~heightened~~growth ~~regulatory~~profiles) ~~capital~~for ~~requirement~~each atof ~~June 30,~~the ~~2011,~~Company and if the Bank. isOn ~~not~~a inconsolidated ~~compliance~~basis, ~~with~~West ~~the~~Suburban ~~requirement~~exceeded inthese ~~the~~minimum ~~future~~regulatory capital requirements as of September 30, ~~the~~2011. Bank ~~may~~holding ~~become~~companies ~~subject~~and totheir ~~additional~~subsidiaries ~~regulatory~~are ~~actions~~generally orexpected ~~restrictions.~~to ~~Management~~operate ~~currently~~at ~~believes~~or ~~that~~above the minimum capital requirements.

29On January 13, 2011, the Bank agreed with its regulators to maintain minimum capital ratios in excess of the minimum ratios required by applicable federal regulations. The Bank agreed to maintain minimum capital ratios equal to or exceeding 8.00% for Tier 1 capital to average total assets and 12.00% for total capital to risk-weighted assets. As of September 30, 2011 the Bank was in compliance with these heightened regulatory capital requirements. If the Bank is not in compliance with the requirements in the future, the Bank may become subject to additional regulatory actions or restrictions.

~~Table~~At ofSeptember ~~Contents~~30, 2011, the Bank’s Tier 1 capital to average total assets ratio was 8.19%, .19%, or $3.7 million, above the 8.00% level the Bank agreed with its regulators to maintain, and the Bank’s total capital to risk-weighted assets was 13.82%, 1.82%, or $22.8 million, above the 12.00% the Bank agreed with its regulators to maintain.

~~Bank~~As ~~will~~of beSeptember in30, ~~compliance~~2011 ~~with~~and December 31, 2010, the ~~heightened~~Bank ~~regulatory~~exceeded the minimum capital ~~requirement~~ratios required for ~~Tier~~it 1to ~~capital~~qualify toas ~~average~~“well-capitalized” ~~total~~under ~~assets~~the byregulatory ~~December 31~~framework for prompt corrective action. There were no conditions or events since September 30, 2011 that management believes would result in a change of the Bank being considered “well-capitalized.”

~~At June~~ 30, 2011, the Bank’s Tier 1 capital to average total assets ratio was 7.87%, .13%, or $.2.6 million, below the 8.00% level the Bank agreed with its regulators to maintain, and the Bank’s total capital to risk-weighted assets was 13.33%, 1.33%, or $16.9 million, above the 12.00% the Bank agreed with its regulators to maintain.

AsTable of June 30, 2011 and December 31, 2010, the Bank exceeded the minimum capital ratios required for it to qualify as “well-capitalized” under the regulatory framework for prompt corrective action. There were no conditions or events since June 30, 2011 that management believes would result in a change of the Bank being considered “well-capitalized.”Contents

Management has taken, and has the ability to continue to take, various steps to preserve and increase capital and strengthen the capital ratios of the Bank. These steps include the following, among others:

· The Bank intends to continue the suspension of dividends to West Suburban.

· The Bank intends to reduce its assets, including through normal run-offs of deposits and by ceasing to hold deposits on most prepaid solutions cards.

· West Suburban has the ability to inject capital into the Bank as West Suburban had $5.21 million in cash on hand at ~~June~~ September 30, 2011.

The Bank also has agreed not to pay dividends to West Suburban without obtaining prior approval of its bank regulators. In addition, West Suburban’s Board of Directors has resolved to obtain regulatory approval prior to paying dividends or redeeming West Suburban common stock in order to preserve capital and maintain the Company’s financial strength given the economic environment and its impact on the Company.

30The following table sets forth the actual and minimum capital ratios of the Company and the Bank as of the dates indicated (dollars in thousands):

Table of Contents

	Actual				Minimum To Be Well- Capitalized				Excess
	Amount		Ratio		Amount		Ratio		Amount
As of September 30, 2011
Total capital (to risk weighted assets)
Company	$	177,417	14.10	%	N/A		N/A		N/A
Bank (1)	173,818		13.82	%	$	125,816	10.00	%	$	48,002
Tier 1 capital (to risk weighted assets)
Company	161,537		12.84	%	N/A		N/A		N/A
Bank	157,941		12.55	%	75,489		6.00	%	82,452
Tier 1 capital (to average assets)
Company	161,537		8.40	%	N/A		N/A		N/A
Bank (1)	157,941		8.19	%	96,417		5.00	%	61,524

As of December 31, 2010
Total capital (to risk weighted assets)
Company	$	171,452	12.99	%	N/A		N/A		N/A
Bank (1)	160,089		12.22	%	$	130,993	10.00	%	$	29,096
Tier 1 capital (to risk weighted assets)
Company	154,808		11.73	%	N/A		N/A		N/A
Bank	143,570		10.96	%	78,596		6.00	%	64,974
Tier 1 capital (to average assets)
Company	154,808		7.93	%	N/A		N/A		N/A
Bank (1)	143,570		7.39	%	97,124		5.00	%	46,446

(1) The ~~following~~Bank ~~table~~has ~~sets~~agreed ~~forth~~to ~~the~~maintain, ~~actual~~as ~~and~~of ~~minimum~~March ~~capital~~31, ~~ratios~~2011, ofminimum ~~the~~Tier ~~Company~~1 ~~and~~capital ~~the~~to ~~Bank~~average asassets of ~~the~~8.00% ~~dates~~and ~~indicated~~total ~~(dollars~~capital into ~~thousands):~~risk-weighted assets of 12.00%.

	Actual				Minimum To Be Well- Capitalized				Excess
As of June 30, 2011	Amount		Ratio		Amount		Ratio		Amount
Total capital (to risk weighted assets)
Company	$	173,204	13.59	%	N/A		N/A		N/A
Bank (1)	169,758		13.33	%	$	127,347	10.00	%	$	42,411
Tier 1 capital (to risk weighted assets)
Company	157,137		12.33	%	N/A		N/A		N/A
Bank	153,702		12.07	%	76,408		6.00	%	77,294
Tier 1 capital (to average assets)
Company	157,137		8.05	%	N/A		N/A		N/A
Bank (1)	153,702		7.87	%	97,711		5.00	%	55,991
As of December 31, 2010
Total capital (to risk weighted assets)
Company	$	171,452	12.99	%	N/A		N/A		N/A
Bank	160,089		12.22	%	$	130,993	10.00	%	$	29,096
Tier 1 capital (to risk weighted assets)
Company	154,808		11.73	%	N/A		N/A		N/A
Bank	143,570		10.96	%	78,596		6.00	%	64,974
Tier 1 capital (to average assets)
Company	154,808		7.93	%	N/A		N/A		N/A
Bank	143,570		7.39	%	97,124		5.00	%	46,446

LIQUIDITY

~~(1) The~~Effective ~~Bank~~liquidity ~~has~~management ~~agreed~~ensures the availability of funding sources at minimum cost to ~~maintain~~meet fluctuating deposit balances, asloan demand needs and to take advantage of ~~March 31,~~earnings ~~2011~~enhancement opportunities. A large, ~~minimum~~stable ~~Tier~~core 1deposit base and a strong capital toposition ~~average~~are ~~assets~~the solid foundation of 8the Company’s liquidity position.~~00%~~ Liquidity is enhanced by a securities portfolio structured to provide liquidity as needed. The Company also maintains relationships with correspondent banks to purchase federal funds subject to underwriting and ~~total~~collateral ~~capital~~requirements. Additionally, subject to ~~risk-weighted~~credit ~~assets~~underwriting, collateral, capital stock, and other requirements of 12the Federal Home Loan Bank of Chicago (the “FHLB”), the Company is able to borrow from the FHLB on a “same day” basis.~~00%.~~ As of September 30, 2011, the Company could have borrowed up to approximately $152 million from

~~LIQUIDITY~~31

~~Effective~~Table ~~liquidity management ensures the availability~~ of funding sources at minimum cost to meet fluctuating deposit balances, loan demand needs and to take advantage of earnings enhancement opportunities. A large, stable core deposit base and a strong capital position are the solid foundation of the Company’s liquidity position. Liquidity is enhanced by a securities portfolio structured to provide liquidity as needed. The Company also maintains relationships with correspondent banks to purchase federal funds subject to underwriting and collateral requirements. Additionally, subject to credit underwriting, collateral, capital stock, and other requirements of the Federal Home Loan Bank of Chicago (the “FHLB”), the Company is able to borrow from the FHLB on a “same day” basis. As of June 30, 2011, the Company could have borrowed up to approximately $152 million from the FHLB secured by certain of its real estate loans and securities. The Company manages its liquidity position through continuous monitoring of profitability trends, asset quality, interest rate sensitivity and maturity schedules of interest-earning assets and interest-bearing liabilities.Contents

~~Generally,~~ the ~~Company~~FHLB ~~uses~~secured ~~cash~~by ~~and~~certain ~~cash~~of ~~equivalents~~its toreal ~~meet~~estate ~~its~~loans ~~liquidity~~and ~~needs~~securities. IfThe ~~the~~ Company’s ~~cash~~manages ~~and cash equivalents are not sufficient to meet~~ its liquidity ~~needs,~~position ~~the~~through ~~Company~~continuous ~~would~~monitoring ~~access the federal funds available for a short period~~ of ~~time.~~profitability ~~If longer term liquidity is needed~~trends, ~~the~~asset ~~Company would meet those needs using securities available for sale. As of June 30~~quality, ~~2011~~interest ~~and~~rate ~~December 31,~~sensitivity ~~2010, cash~~ and ~~cash~~maturity ~~equivalents~~schedules ~~together~~of ~~with~~interest-earning ~~securities~~assets ~~available for sale collectively represented 27.3%~~ and ~~30.0%~~interest-bearing ~~of total assets, respectively~~liabilities.

~~During~~Generally, the ~~first~~Company ~~six~~uses ~~months~~cash ofand ~~2011,~~cash equivalents to meet its liquidity needs. If the Company’s cash and cash equivalents ~~increased~~are ~~$25.8~~not ~~million;~~sufficient ~~net~~to ~~cash~~meet ~~provided~~its byliquidity ~~operating~~needs, ~~activities~~the ~~was~~Company ~~$11~~would access the federal funds available for a short period of time.5 ~~million;~~If ~~net~~longer ~~cash~~term ~~provided~~liquidity byis ~~investing~~needed, ~~activities~~the ~~was~~Company ~~$52~~would meet those needs using securities available for sale.4 ~~million;~~As of September 30, 2011 and ~~net~~December 31, 2010, cash ~~used~~and incash ~~financing~~equivalents ~~activities~~together ~~was~~with ~~$38~~securities available for sale collectively represented 27.1% and 30.0% ~~million~~of total assets, respectively.

31During the first nine months of 2011, the Company’s cash and cash equivalents increased $100.9 million; net cash provided by operating activities was $11.1 million; net cash provided by investing activities was $148.4 million; and net cash used in financing activities was $58.6 million.

~~Table~~RESULTS ofOF ~~Contents~~OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

~~RESULTS~~Net OFIncome. The ~~OPERATIONS~~Company’s ~~FOR~~net ~~THE~~income ~~SIX~~increased ~~MONTHS~~$2.0 ~~ENDED~~million ~~JUNE~~to ~~30,~~$6.7 million for the first nine months of 2011 ~~AND~~compared to $4.7 million for the first nine months of 2010. The increase was primarily due to an increase in total noninterest income of $6.9 million and was partially offset by an increase in the provision for loan losses of $1.1 million, an increase of income tax expense of $2.3 million and a decrease in net interest income of $1.4 million.

Net Interest Income. ~~The~~ Net ~~Company’s~~interest ~~net~~ income ~~increased~~(on ~~$3.6~~a ~~million~~fully totax-equivalent $6basis, assuming a tax rate of 35.50%) ~~million~~decreased 2.8% for the first ~~six~~nine months of 2011 compared to ~~$2.9 million for~~ the first ~~six~~nine months of 2010. ~~The~~Net ~~increase~~interest ~~was~~income ~~primarily~~is ~~due~~the toprimary ansource ~~increase~~of inincome ~~total~~for ~~noninterest~~the Company. Net interest income ofis ~~$5.2~~the ~~million.~~difference ~~Additionally,~~between ~~total~~interest ~~noninterest~~income earned on interest-earning assets and interest expense ~~decreased~~incurred $on interest-bearing liabilities.2 ~~million~~Net ~~while~~interest ~~provision~~income ~~for~~is ~~loan~~affected ~~losses~~by ~~decreased~~changes $in volume and yield on interest-earning assets and interest-bearing liabilities.7 ~~million~~Interest-earning assets consist of federal funds sold, securities and loans. ~~These~~Interest-bearing ~~changes~~liabilities toprimarily ~~income~~consist ~~were~~of ~~partially~~deposits. ~~offset~~The bynet aninterest ~~increase~~margin tois the percentage of tax-equivalent net interest income to average earning assets. The Company’s net interest margin (on a fully tax-equivalent ~~expense~~basis) ofwas $23.45% ~~million~~for the nine-month periods ended September 30, 2011 and 2010.

~~Net~~Total ~~Interest Income. Net~~ interest income (on a ~~fully~~ tax-equivalent basis, assuming a tax rate of 35.0%) ~~remained~~decreased ~~stable~~11.7% for the first ~~six~~nine months of 2011 compared to the first ~~six~~nine months of 2010., ~~Net~~primarily ~~interest~~due ~~income~~to is the ~~primary~~decrease ~~source~~in oftotal ~~income~~loans ~~for~~and decreasing yields in the Company.’s ~~Net~~securities ~~interest~~portfolio. ~~income~~Average isloan ~~the~~balances ~~difference~~decreased ~~between~~17.4% ~~interest~~for ~~income~~the ~~earned~~first onnine ~~interest-earning~~months ~~assets~~of 2011, and ~~interest~~the ~~expense~~average ~~incurred~~yield on ~~interest-bearing~~the ~~liabilities~~loan portfolio decreased 3 basis points. ~~Net~~Average ~~interest~~securities ~~income~~balances isincreased ~~affected~~27.5% byfor ~~changes~~the infirst ~~volume~~nine months of 2011, and the average yield on ~~interest-earning~~the ~~assets~~securities ~~and~~portfolio ~~interest-bearing~~decreased ~~liabilities~~53 basis points. ~~Interest-earning~~Management ~~assets~~decided ~~consist~~to ofsell ~~federal~~securities ~~funds~~as ~~sold,~~market ~~securities~~rates ~~and~~declined ~~loans.~~during ~~Interest-bearing~~the ~~liabilities~~first ~~primarily~~nine ~~consist~~months of ~~deposits~~2011. ~~The~~A ~~net~~large ~~interest~~portion ~~margin~~of isthese ~~the~~securities ~~percentage~~were ofsold ~~tax-equivalent~~in ~~net~~order to reduce the Company’s interest ~~income~~rate torisk ~~average~~in ~~earning~~the ~~assets~~securities portfolio. ~~The Company~~Management’s ~~net~~analysis ~~interest~~of ~~margin~~these ~~(on~~securities aindicated ~~fully~~that ~~tax-equivalent~~certain ~~basis)~~higher ~~was~~yielding ~~3.5%~~securities could be sold at a gain and ~~3.4%~~over ~~for~~time the ~~six-month~~proceeds ~~periods~~could ~~ended~~be ~~June 30,~~reinvested ~~2011~~at lower yields and ~~2010,~~continue ~~respectively~~to be accretive to earnings.

Total interest ~~income~~expense ~~(on a tax-equivalent basis)~~ decreased 1038.24% for the first ~~six~~nine months of 2011, compared to the first ~~six~~nine months of 2010,. ~~primarily~~Lower ~~due~~interest toon ~~the~~deposits, ~~decrease~~resulting infrom ~~total~~lower ~~loans and decreasing~~ yields inon ~~the~~interest-bearing ~~Company’s~~deposits, ~~securities~~accounted ~~portfolio. Average securities balances increased 36.2%~~ for ~~the~~most ~~first six months~~ of ~~2011,~~the ~~and~~decrease. ~~the~~The average yield on ~~the~~interest-bearing ~~securities~~deposits ~~portfolio~~ decreased 5645 basis points to .8% ~~Average~~for ~~loan~~the ~~balances~~nine ~~decreased~~months 17ended September 30, 2011, from 1.42% for the ~~first~~nine ~~six~~ months ofended ~~2011~~September ~~and~~30, ~~the~~2010. ~~average~~Approximately ~~yield~~56% onof ~~the~~time ~~loan~~deposits ~~portfolio~~are ~~decreased~~scheduled 3to ~~basis~~mature ~~points~~within one year.

Total interest expense decreased 39.4% for the first six months of 2011, compared to the first six months of 2010. Lower interest on deposits, resulting from lower yields on interest-bearing deposits, accounted for most of the decrease. The average yield on interest-bearing deposits decreased 49 basis points to .8% for the six months ended June 30, 2011, from 1.3% for the six months ended June 30, 2010. Approximately 56% of time deposits are scheduled to mature within one year.32

~~The~~Table ~~following table reflects the impact~~ of changes in volume and interest rates on interest-earning assets and interest-bearing liabilities (on a fully tax-equivalent basis) for the first six months ended June 30, 2011 as compared to the same period in 2010 (dollars in thousands):Contents

	Change due to						Total
	Volume			Rate			Change
Interest Income
Federal funds sold	$	(288	)	$	236		$	(52	)
Securities	2,893			(1,517		)	1,376
Loans	(5,148		)	(202		)	(5,350		)
Total interest income	(2,543		)	(1,483		)	(4,026		)
Interest Expense
Interest-bearing deposits	(154		)	(3,905		)	(4,059		)
Total interest expense	(154		)	(3,905		)	(4,059		)
Net interest income	$	(2,389	)	$	2,422		$	33

The following table reflects the impact of changes in volume and interest rates on interest-earning assets and interest-bearing liabilities (on a fully tax-equivalent basis) for the first nine months ended September 30, 2011 as compared to the same period in 2010 (dollars in thousands):

	Change due to						Total
	Volume			Rate			Change
Interest Income
Federal funds sold	$	(45	)	$	9		$	(36	)
Securities	3,335			(2,234		)	1,101
Loans	(7,736		)	(253		)	(7,989		)
Total interest income	(4,446		)	(2,478		)	(6,924		)
Interest Expense
Interest-bearing deposits	(205		)	(5,476		)	(5,681		)
Other interest-bearing liabilities	(41		)	42			1
Total interest expense	(246		)	(5,434		)	(5,680		)
Net interest income	$	(4,200	)	$	2,956		$	(1,244	)

~~Table~~The following table presents an analysis of ~~Contents~~the Company’s year-to-date average interest-earning assets, demand-noninterest-bearing deposits and interest-bearing liabilities as of the dates indicated (dollars in thousands):

The following table presents an analysis of the Company’s year-to-date average interest-earning assets, demand-noninterest-bearing deposits and interest-bearing liabilities as of the dates indicated (dollars in thousands):

	2011						2010
	September 30		June 30		March 31		December 31		September 30
Federal funds sold	$	8,857	$	311	$	205	$	22,517	$	29,962
Securities	719,565		742,770		728,045		582,753		564,574
Loans	925,061		934,552		958,013		1,094,309		1,119,951
Total interest-earning assets	$	1,653,483	$	1,677,633	$	1,686,263	$	1,699,579	$	1,714,487

Demand-noninterest-bearing deposits	$	174,538	$	172,973	$	172,582	$	163,906	$	159,714
Interest-bearing deposits	1,585,176		1,595,997		1,593,572		1,612,782		1,620,743
Total deposits	$	1,759,714	$	1,768,970	$	1,766,154	$	1,776,688	$	1,780,457
Total interest-bearing liabilities	$	1,592,538	$	1,604,634	$	1,602,019	$	1,620,067	$	1,620,743

	2011				2010
	June 30		March 31		December 31		September 30		June 30
Federal funds sold	$	311	$	205	$	22,517	$	29,962	$	45,061
Securities	742,770		728,045		582,753		564,574		545,377
Loans	934,552		958,013		1,094,309		1,119,951		1,131,278
Total interest-earning assets	$	1,677,633	$	1,686,263	$	1,699,579	$	1,714,487	$	1,721,716
Demand-noninterest-bearing deposits	$	172,973	$	172,582	$	163,906	$	159,714	$	157,093
Interest-bearing deposits	1,595,997		1,593,572		1,612,782		1,620,743		1,624,952
Total deposits	$	1,768,970	$	1,766,154	$	1,776,688	$	1,780,457	$	1,782,045
Total interest-bearing liabilities	$	1,604,634	$	1,602,019	$	1,620,067	$	1,620,743	$	1,624,952

Provision for Loan Losses. A provision for loan loss is recorded when the Company’s evaluation of the general and specific reserve categories of the allowance for loan loss are not deemed sufficient to absorb probable incurred credit losses in the loan portfolio. Provision for loan losses increased $1.1 million for the first nine months of 2011 compared to the first nine months of 2010. A more detailed discussion of the allowance for loan losses is presented in the Allowance for Loan Losses and Asset Quality section of this report.

~~Provision~~Noninterest ~~for Loan Losses~~Income. ATotal ~~provision~~noninterest ~~for~~income ~~loan~~increased ~~loss~~66.7% isfor ~~recorded when~~ the ~~Company’s~~first ~~evaluation~~nine months of ~~the~~2011 ~~general~~compared ~~and~~to ~~specific reserve categories of~~ the ~~allowance~~first ~~for~~nine ~~loan~~months ~~loss~~of ~~are~~2010. ~~not~~In ~~deemed~~the ~~sufficient~~first tonine ~~absorb~~months ~~probable~~of ~~incurred~~2011, ~~credit losses in~~ the ~~loan~~Company ~~portfolio.~~recorded ~~Provision for loan losses decreased~~ $.7.8 million ~~for~~in ~~the~~gains ~~first~~on ~~six~~sales ~~months~~ of ~~2011~~investment ~~compared~~securities, towhich ~~the~~accounted ~~first~~for ~~six~~most ~~months~~ of ~~2010~~this increase. A ~~more~~Service ~~detailed~~fees ~~discussion~~on ofdeposit ~~the~~accounts ~~allowance~~decreased ~~for~~$.7 ~~loan~~million ~~losses~~primarily isdue ~~presented~~to indecreased ~~the~~fees ~~Allowance~~associated ~~for~~with ~~Loan~~the ~~Losses~~overdraft ~~and~~honor ~~Asset Quality section of this report~~program.

Noninterest ~~Income~~Expense. Total noninterest ~~income~~expense ~~increased~~remained ~~87.1%~~flat for the first ~~six~~nine months of 2011 compared to the first ~~six~~nine months of 2010. InOther ~~the~~real ~~first~~estate ~~six~~owned ~~months~~expense ofincreased ~~2011, the Company recorded~~ $42.71 million inprimarily ~~gains~~due onto ~~sales~~increased ofwrite-downs ~~investment~~during ~~securities,~~the ~~which~~2011 ~~accounted for most of this increase~~period. ~~Service~~FDIC ~~fees~~assessment onexpense ~~deposit accounts~~ decreased $1.60 million primarily due to ~~decreased~~changes ~~fees~~in ~~associated with~~ the ~~overdraft~~assessment ~~honor program~~calculation. ~~The~~Furniture ~~Company~~and ~~recorded~~equipment ~~Bank-owned~~expense ~~life~~decreased ~~insurance income of~~ $.53 million ~~for~~primarily ~~the~~due ~~first~~to ~~six~~reduced ~~months~~depreciation ofexpense. ~~2011~~Professional ~~compared~~fees toexpense decreased $.25 million ~~for~~primarily ~~the~~due ~~first~~to ~~six~~reduced ~~months~~costs ofassociated ~~2010.~~with ~~This~~regulatory ~~increase~~compliance ~~was~~issues ~~due~~and tolending. anLoan ~~increase~~administration inexpense ~~the~~decreased ~~market~~$.4 ~~value~~million ofdue ~~the~~to ~~underlying~~reduced ~~investments~~expenses ~~with~~incurred ~~specific~~in ~~account~~the ~~assets.~~2011 ~~Other~~period ~~income~~for ~~increased~~real ~~$.7~~estate ~~million~~tax ~~primarily~~payments ~~due to gains~~ on ~~sales~~collateral ofsecuring ~~other~~nonaccrual ~~real~~commercial, ~~estate owned.~~

Noninterest Expense. Total noninterest expense decreased .9% for the first six months of 2011 compared to the first six months of 2010. Furniture and equipment expense decreased $.2 million primarily due to reduced depreciation expense. Professional fees expense decreased $.3 million primarily due to reduced costs associated with regulatory compliance issues. Loan administration expense decreased $.5 million due to reduced expenses incurred in the 2011 period for real estate tax payments on collateral securing nonaccrual commercial, commercial real estate and construction and development loans. Other real estate owned expense increased $.4 million primarily due to increased write-downs during the 2011 period. FDIC assessment expense decreased $.2 million primarily due to a reduced assessment base.33

~~Income~~Table ~~Taxes. Income tax expense increased $2.4 million for the first six months~~ of 2011 compared to the first six months of 2010. The effective tax rates for the first six months of 2011 and 2010 were 33.7% and 24.7%, respectively. The increase was due to the higher pre-tax net income and its impact on the ratio of pre-tax net income to permanent items. Additionally, a higher blended tax rate in 2011 as compared to 2010 due to the increase in the State of Illinois tax rate also had the effect of increasing the effective tax rate.Contents

~~RESULTS~~commercial OFreal ~~OPERATIONS~~estate ~~FOR~~and ~~THE~~construction ~~THREE~~and ~~MONTHS~~development ~~ENDED~~loans. ~~JUNE~~VISA ~~30,~~cardholder ~~2011~~expense ~~AND~~decreased ~~2010~~$.1 million primarily due to reduced cardholder service expense.

~~Net~~ Income Taxes. ~~The~~Income ~~Company’s~~tax ~~net~~expense ~~income~~ increased $2.~~6 million to $~~3.8 million for the ~~second~~first ~~quarter~~nine months of 2011 compared to $1the first nine months of 2010.2 ~~million~~The effective tax rates for the ~~second~~first ~~quarter~~nine months of 2011 and 2010 were 34.8% and 21.7%, respectively. The increase was ~~primarily~~due to the higher pre-tax income and its impact on the ratio of pre-tax income to pre-tax income subject to income taxes. Furthermore, the Company surrendered a portion of the bank-owned life insurance tied to the deferred compensation plan in the third quarter of 2011, which resulted in the Company incurring additional tax expense on the life to date earnings of the surrendered bank-owned life insurance. Additionally, a higher blended tax rate in 2011 as compared to 2010 due to an increase in ~~total~~the State of Illinois income tax rate also had the effect of increasing the effective tax rate.

33RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010

~~Table~~Net Income. The Company’s net income decreased $1.6 million to $.2 million for the third quarter of ~~Contents~~2011 compared to $1.8 million for the third quarter of 2010. The decrease was primarily due to a decrease in net interest income of $1.4 million, an increase in total noninterest expense of $.6 million and an increase in the provision for loan losses of $1.9 million. These changes were partially offset by an increase to total noninterest income of $2.2 million.

~~noninterest~~Net ~~income~~Interest ~~of $3~~Income.6 Net ~~million.~~interest ~~Additionally,~~income ~~provision~~(on ~~for~~a ~~loan~~fully ~~losses~~tax-equivalent basis) decreased $18.43% ~~million.~~for ~~These~~the ~~changes~~third ~~were~~quarter ~~partially~~of ~~offset~~2011 bycompared ~~a decrease~~ to ~~net~~the ~~interest~~third ~~income~~quarter of $2010.4 ~~million~~The ~~and~~Company’s annet ~~increase~~interest tomargin ~~total~~(on ~~noninterest~~a ~~expense~~fully oftax-equivalent $basis) was 3.64% ~~million~~and 3.6% ~~Additionally,~~for ~~income~~the ~~tax~~third ~~expense~~quarter ~~increased~~of ~~$1.5~~2011 ~~million~~and 2010, respectively.

~~Net~~Total ~~Interest Income. Net~~ interest income (on a ~~fully~~ tax-equivalent basis) decreased 114.96% for the ~~second~~third quarter of 2011 compared to the ~~second~~third quarter of 2010., ~~The~~primarily due to the decrease in total loans and decreasing yields in the Company’s ~~net~~securities ~~interest~~portfolio. ~~margin~~Average (securities balances increased 11.9% for the third quarter of 2011, and the average yield on athe ~~fully~~securities ~~tax-equivalent~~portfolio ~~basis)~~decreased ~~was~~50 3basis points.5% ~~and~~Average 3loan balances decreased 16.45% for the ~~second~~third quarter of 2011 and ~~2010,~~the ~~respectively~~average yield on the loan portfolio decreased 8 basis points.

Total interest ~~income~~expense ~~(on a tax-equivalent basis)~~ decreased 1136.21% for the ~~second~~third quarter of 2011, compared to the ~~second~~third quarter of 2010,. ~~primarily~~Lower ~~due~~interest toon ~~the~~deposits, ~~decrease~~resulting infrom ~~total~~lower ~~loans and decreasing~~ yields inon ~~the~~interest-bearing ~~Company’s~~deposits, ~~securities~~accounted ~~portfolio. Average securities balances increased 25.5%~~ for ~~the~~most ~~second quarter~~ of ~~2011,~~the ~~and~~decrease. ~~the~~The average yield on ~~the~~interest-bearing ~~securities~~deposits ~~portfolio~~ decreased 4938 basis points. ~~Average~~to ~~loan balances decreased 19~~.47% for the ~~second~~third quarter of 2011, ~~and~~from ~~the~~1.1% ~~average~~for ~~yield on~~ the ~~loan~~third ~~portfolio~~quarter ~~increased~~of ~~14 basis points~~2010.

~~Total~~The ~~interest~~following ~~expense~~table ~~decreased~~reflects ~~39.1% for~~ the ~~second~~impact ~~quarter~~ of ~~2011,~~changes ~~compared~~in tovolume ~~the~~and ~~second quarter of 2010. Lower~~ interest onrates ~~deposits, resulting from lower yields~~ on interest-~~bearing~~earning ~~deposits,~~assets ~~accounted~~and ~~for most of the decrease. The average yield on~~ interest-bearing ~~deposits~~liabilities ~~decreased~~(on 45a ~~basis~~fully ~~points~~tax-equivalent tobasis) ~~.7%~~ for the ~~second~~third quarter of 2011, ~~from~~as ~~1.2%~~compared ~~for~~to the ~~second~~same ~~quarter~~period ofin 2010. (dollars in thousands):

The following table reflects the impact of changes in volume and interest rates on interest-earning assets and interest-bearing liabilities (on a fully tax-equivalent basis) for the second quarter of 2011 as compared to the same period in 2010 (dollars in thousands):

	Change due to						Total
	Volume			Rate			Change
Interest Income
Federal funds sold	$	99		$	(83	)	$	16
Securities	488			(763		)	(275		)
Loans	(2,418		)	(218		)	(2,636		)
Total interest income	(1,831		)	(1,064		)	(2,895		)
Interest Expense
Interest-bearing deposits	(89		)	(1,534		)	(1,623		)
Total interest expense	(89		)	(1,534		)	(1,623		)
Net interest income	$	(1,742	)	$	470		$	(1,272	)

	Change due to						Total
	Volume			Rate			Change
Interest Income
Federal funds sold	$	53		$	(61	)	$	(8	)
Securities	1,093			(743		)	350
Loans	(2,923		)	367			(2,556		)
Total interest income	(1,777		)	(437		)	(2,214		)
Interest Expense
Interest-bearing deposits	(256		)	(1,670		)	(1,926		)
Total interest expense	(256		)	(1,670		)	(1,926		)
Net interest income	$	(1,521	)	$	1,233		$	(288	)

~~The~~Table ~~following table presents an analysis~~ of ~~the Company’s quarterly average interest-earning assets, demand-noninterest-bearing deposits and interest-bearing liabilities as of the dates indicated (dollars in thousands):~~Contents

	June 30, 2011		June 30, 2010
Federal funds sold	$	415	$	12,260
Securities	757,333		603,511
Loans	901,685		1,118,962
Total interest-earning assets	$	1,659,433	$	1,734,733
Demand-noninterest-bearing deposits	$	173,339	$	159,531
Interest-bearing deposits	1,598,412		1,640,847
Total deposits	$	1,771,751	$	1,800,378
Total interest-bearing liabilities	$	1,607,395	$	1,640,847

The following table presents an analysis of the Company’s quarterly average interest-earning assets, demand-noninterest-bearing deposits and interest-bearing liabilities as of the dates indicated (dollars in thousands):

	September 30, 2011		September 30, 2010
Federal funds sold	$	25,670	$	256
Securities	673,911		602,342
Loans	918,256		1,099,235
Total interest-earning assets	$	1,617,837	$	1,701,833

Demand-noninterest-bearing deposits	$	177,610	$	165,217
Interest-bearing deposits	1,563,896		1,612,464
Total deposits	$	1,741,506	$	1,777,681
Total interest-bearing liabilities	$	1,568,864	$	1,612,464

~~Table~~Provision for Loan Losses. Provision for loan losses increased $1.9 million for the third quarter of ~~Contents~~2011 compared to the third quarter of 2010. The provision for loan losses of $4.8 million for the third quarter of 2011 was a result of the impact of net charge-offs on the general portion of the allowance for loan losses. A more detailed discussion of the allowance for loan losses is presented in the Allowance for Loan Losses and Asset Quality section of this report.

~~Provision~~Noninterest ~~for Loan Losses~~Income. ~~Provision~~Total ~~for~~noninterest ~~loan~~income ~~losses~~increased ~~decreased $1~~54.46% ~~million~~ for the ~~second~~third quarter of 2011 compared to the ~~second~~third quarter of 2010. ~~The~~ ~~provision~~In ~~for~~the ~~loan~~third ~~losses~~quarter of 2011, the Company recorded $13.80 million ~~for~~in ~~the~~gains ~~second~~on ~~quarter~~sales of ~~2011~~investment ~~was~~securities acompared ~~result~~to of$.3 ~~net~~million ~~charge-offs~~in ~~and~~ the ~~impact~~third quarter of ~~the~~2010. ~~charge-offs~~This onincrease ~~the~~accounted ~~general~~for ~~portion~~most of the ~~allowance~~increase ~~for~~to ~~loan~~total ~~losses~~noninterest income. AService ~~more~~fees ~~detailed~~on ~~discussion~~deposit ofaccounts ~~the~~decreased ~~allowance~~$.1 ~~for~~million ~~loan~~primarily ~~losses~~due isto ~~presented~~decreased infees associated with the ~~Allowance~~overdraft honor program. Bank-owned life insurance income decreased $.3 million for ~~Loan~~the ~~Losses~~third ~~and~~quarter ~~Asset~~of ~~Quality~~2011 ~~section~~compared to the third quarter of ~~this~~2010. ~~report~~This fluctuation was due to a reduction in the outstanding bank-owned life insurance balance.

Noninterest ~~Income~~Expense. Total noninterest ~~income~~expense increased ~~129~~4.15% for the ~~second~~third quarter of 2011 compared to the ~~second~~third quarter of 2010. InOther ~~the~~real ~~second~~estate ~~quarter~~owned ofexpense ~~2011,~~increased ~~the Company recorded~~ $32.61 million inprimarily ~~gains~~due onto ~~sales~~increased ofwrite-downs ~~investment~~during ~~securities,~~the ~~which~~2011 ~~accounted~~period. ~~for~~FDIC ~~most~~assessment ofexpense ~~this~~decreased ~~increase~~$.8 ~~Service~~million ~~fees~~primarily ondue ~~deposit~~to ~~accounts~~changes in the assessment calculation. Professional fees expense decreased $.32 million primarily due to ~~decreased~~reduced ~~fees~~costs associated with ~~the~~regulatory ~~overdraft~~compliance ~~honor~~issues ~~program~~and lending. ~~Bank-owned~~Loan ~~life~~administration ~~insurance~~expense ~~income~~ increased $.21 million ~~for~~due ~~the~~to ~~second~~higher ~~quarter~~expenses ofincurred in the 2011 ~~compared~~period tofor ~~the~~real ~~second~~estate ~~quarter~~tax ofpayments ~~2010.~~on ~~This~~collateral ~~fluctuation~~securing ~~was~~nonaccrual ~~due~~commercial, tocommercial areal ~~change~~estate inand ~~the~~construction ~~market~~and ~~value~~development ofloans. ~~the~~VISA ~~underlying~~cardholder ~~investments~~expense ~~with~~decreased ~~specific~~$.2 ~~account~~million ~~assets~~primarily due to reduced cardholder service expense and reduced quarterly accrual expense.

~~Noninterest~~Income ~~Expense~~Taxes. ~~Total~~Income ~~noninterest~~tax expense ~~increased~~remained ~~4.6%~~flat for the ~~second~~third quarter of 2011 compared to the ~~second~~third quarter of 2010. ~~Salaries~~Decreases ~~and~~in ~~employee~~net ~~benefits~~income ~~increased~~were ~~$.2~~offset ~~million~~to ~~primarily~~some ~~due~~extent toby aan ~~change~~increase in the ~~market~~effective ~~value~~tax ofrate. ~~the~~The ~~underlying~~effective ~~investment~~tax ~~associated~~rates ~~with~~for the ~~insurance~~third ~~policies~~quarter ~~that~~of ~~are~~2011 ~~tied~~and to2010 ~~the~~were ~~Company’s~~59.8% ~~deferred~~and ~~compensation~~16.2%, ~~plans~~respectively. ~~Occupancy~~The ~~expense~~increase ~~decreased~~was ~~$.2~~due ~~million~~to ~~primarily~~the ~~due~~higher topre-tax ~~reduced~~income ~~rent~~and ~~expense.~~its ~~Professional~~impact ~~fees~~on ~~expense~~the ~~decreased~~ratio ~~$.2~~of ~~million~~pre-tax ~~primarily~~income ~~due~~to pre-tax income subject to ~~reduced~~income ~~costs~~taxes. ~~associated~~Furthermore, ~~with~~the ~~regulatory~~Company ~~compliance~~surrendered ~~issues.~~a ~~Loan~~portion ~~administration~~of ~~expense~~the ~~decreased~~bank-owned ~~$.1~~life ~~million~~insurance ~~due~~tied to ~~higher~~the ~~expenses~~deferred ~~incurred~~compensation plan in the ~~2010~~third ~~period~~quarter ~~for~~of ~~real~~2011, ~~estate~~which resulted in the Company incurring additional tax ~~payments~~expense on ~~collateral~~the ~~securing~~life ~~nonaccrual~~to ~~commercial,~~date ~~commercial~~earnings ~~real~~of ~~estate~~the ~~and~~surrendered ~~construction~~bank-owned ~~and~~life ~~development loans~~insurance. ~~Other~~Additionally, ~~real~~a ~~estate~~higher ~~owned~~blended ~~expense~~tax ~~increased~~rate ~~$.5~~in ~~million~~2011 ~~primarily~~as compared to 2010 due to ~~increased~~an ~~write-downs~~increase ~~during~~in the ~~2011~~State ~~period~~of Illinois income tax rate also had the effect of increasing the effective tax rate.

Income Taxes. Income tax expense increased $1.5 million for the second quarter of 2011 compared to the second quarter of 2010. The effective tax rates for the second quarter of 2011 and 2010 were 35.8% and 31.1%, respectively. The increase was due to the higher pre-tax net income and its impact on the ratio of pre-tax net income to permanent items. Additionally, a higher blended tax rate in 2011 as compared to 2010 due to the increase in the State of Illinois tax rate also had the effect of increasing the effective tax rate.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company attempts to maintain a conservative posture with regard to interest rate risk by actively managing its asset/liability GAP position and monitoring the direction and magnitude of gaps and risk. The Company attempts to moderate the effects of changes in interest rates by adjusting its asset and liability mix to achieve desired relationships between rate sensitive assets and rate sensitive liabilities. Rate sensitive assets and liabilities are those ~~instruments that reprice within a given time period. An asset or liability reprices when its interest rate is subject to change or upon maturity.~~

Table of Contents

instruments that reprice within a given time period. An asset or liability reprices when its interest rate is subject to change or upon maturity.

Movements in general market interest rates are a key element in changes in the net interest margin. The Company’s policy is to manage its balance sheet so that fluctuations in the net interest margin are minimized regardless of the level of interest rates, although the net interest margin does vary somewhat due to management’s response to increasing competition from other financial institutions.

The Company measures interest rate sensitivity through a net interest income analysis. The net interest income analysis measures the change in net interest income in the event of hypothetical changes in interest rates. This analysis assesses the risk of changes in net interest income in the event of a sudden and sustained 100 to 200 basis point increase or decrease in market interest rates. This analysis is subject to certain assumptions made by the Company, including the following:

· Balance sheet volume reflects the current balances and does not project future growth or changes. This establishes the base case from which all percentage changes are calculated.

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

Table of Contents

· The repricing rate for balance sheet data is determined by utilizing individual account statistics provided by the Company’s data processing systems.

· The maturity and repricing dates for balance sheet data are determined by utilizing individual account statistics provided by the Company’s data processing systems.

Presented below are the Company’s projected changes in net interest income over a twelve-month horizon for the various rate shock levels as of the periods indicated (dollars in thousands):

June 30, 2011	Amount		Dollar Change			Percent Change
September 30, 2011	Amount		Dollar Change			Percent Change
+200 basis points	$	5049,~~731~~935	$	(42,~~483~~111	)	(84.1	)%
+100 basis points	5350,~~176~~215		(21,~~038~~831		)	(3.75	)%
Base	5552,~~214~~046		—			—
-100 basis points	5047,~~189~~427		(54,~~025~~619		)	(98.19	)%
-200 basis points	4645,~~764~~052		(86,~~450~~994		)	(1513.34	)%
December 31, 2010	Amount		Dollar Change			Percent Change
+200 basis points	$	56,061	$	(3,246	)	(5.5	)%
+100 basis points	56,799		(2,508		)	(4.2	)%
Base	59,307		—			—
-100 basis points	53,338		(5,969		)	(10.1	)%
-200 basis points	49,072		(10,235		)	(17.3	)%

In a falling rate environment, the Company is projected to have a decrease in net interest income. However, it is not possible for many of the Company’s deposit rates to fall 100 or 200 basis points due to their current rates already being below 100 basis points at June 30, 2011. The target federal funds rate is currently set by the Federal Reserve at a rate between 0 and 25 basis points. As a result, a 200 basis point decline in overall rates would only have between a 0 and 25 basis point decline in both federal funds and the prime rate. Further, other rates that are currently below 1% or 2% (e.g. U.S. Treasuries and LIBOR) would not fall below 0% with an overall 100 or 200 basis point decrease in rates. Many of the Company’s variable rate loans are set to an index tied to prime, federal funds or LIBOR, and as a result, a further decrease in rates would not have a substantial impact on loan yields. Accordingly, management believes that the analyses resulting from 100 and 200 basis point downward changes are not meaningful in light of current interest rate levels.

December 31, 2010	Amount		Dollar Change			Percent Change
+200 basis points	$	56,061	$	(3,246	)	(5.5	)%
+100 basis points	56,799		(2,508		)	(4.2	)%
Base	59,307		—			—
-100 basis points	53,338		(5,969		)	(10.1	)%
-200 basis points	49,072		(10,235		)	(17.3	)%

In a falling rate environment, the Company is projected to have a decrease in net interest income. However, it is not possible for many of the Company’s deposit rates to fall 100 or 200 basis points due to their current rates already being below 100 basis points at September 30, 2011. The target federal funds rate is currently set by the Federal Reserve at a rate between 0 and 25 basis points. As a result, a 200 basis point decline in overall rates would only have between a 0 and 25 basis point decline in both federal funds and the prime rate. Further, other rates that are currently below 1% or 2% (e.g. U.S. Treasuries and LIBOR) would not fall below 0% with an overall 100 or 200 basis point decrease in rates. Many of the Company’s variable rate loans are set to an index tied to prime, federal funds or LIBOR, and as a result, a further decrease in rates would not have a substantial impact on loan yields. Accordingly, management believes that the analyses resulting from 100 and 200 basis point downward changes are not meaningful in light of current interest rate levels.

Table of Contents

ITEM 4. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chairman of the Board and Chief Executive Officer and the President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of ~~June~~ September 30, 2011. Based on that evaluation, the Company’s Chairman of the Board and Chief Executive Officer and the President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified.

There have been no significant changes to the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Table of Contents

PART II

ITEM 1. LEGAL PROCEEDINGS

~~There~~On ~~are~~September no15, ~~material~~2011, ~~pending~~plaintiff ~~legal~~Joao ~~proceedings~~Bock toTransaction ~~which~~Systems, LLC filed a complaint alleging patent infringement against the ~~Company~~Bank isand a ~~party~~number of other ~~than~~banking ~~ordinary~~institutions. ~~course~~The complaint seeks injunctive relief and unspecified monetary damages. The lawsuit alleges that the Bank and the other defendants infringe on the plaintiff’s patent in connection with certain banking services offered by the banks. As of the date of this filing, ~~routine~~the litigation ~~incidental~~is at a very early stage. Accordingly, although the Bank intends to vigorously contest the allegations in the complaint, the Company’s ~~business~~is not able to provide guidance or any assurances with respect to whether the Bank will be successful in defending the litigation.

Other than as described above, there are no material pending legal proceedings to which the Company is a party other than ordinary course, routine litigation incidental to the Company’s business.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors applicable to the Company from those disclosed in the Company’s 2010 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

The exhibits required by Item 601 of Regulation S-K are included with this Form 10-Q and are listed on the “Index to Exhibits” immediately following the Signatures.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WEST SUBURBAN BANCORP, INC.
	(Registrant)
Date: August 5, 2011
Date: November 2, 2011
	/s/ Kevin J. Acker
	KEVIN J. ACKER
	CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
	/s/ Duane G. Debs
	DUANE G. DEBS
	PRESIDENT AND CHIEF FINANCIAL OFFICER

Table of Contents

INDEX TO EXHIBITS

Exhibit
Number		Description
31.1		Certification of Kevin J. Acker, Chairman of the Board and Chief Executive Officer, Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
31.2		Certification of Duane G. Debs, President and Chief Financial Officer, Pursuant to Rule 13a-14(a) and Rule15d-14(a).
32.1		Certification of Kevin J. Acker, Chairman of the Board and Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Duane G. Debs, President and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets at ~~June~~September 30, 2011 and December 31, 2010; (ii) Condensed Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2011 and ~~June~~September 30, 2010; (iii) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the ~~six~~nine months ended ~~June~~September 30, 2011 and ~~June~~September 30, 2010; (iv) Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2011 and ~~June~~September 30, 2010; and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.

* As provided in Rule 406T of Regulation S-T, this information shall not be deemed “filed” for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, or otherwise subject to liability under those sections.

Filing Compare · WEST SUBURBAN BANCORP INC