Exhibit 13

Profile

West Suburban Bancorp, Inc. (“West Suburban”) is the parent bank holding company of West Suburban Bank, Lombard, Illinois (the “Bank” and, together with West Suburban, the “Company”). The Company had total assets at December 31, 2011 of approximately $1.9 billion. The Bank is one of the largest independent banks headquartered in DuPage County, Illinois.

West Suburban Bancorp, Inc.

Financial Highlights

	Years Ended December 31,
	(Dollars in thousands, except per share data)
	2011		2010		2009			2008			2007
Net income (loss) from continuing operations	$	7,816	$	1,154	$	(4,244	)	$	17,242		$	22,814
Net income (loss) from discontinued operations	—		—		3,409			(426		)	599
Net income (loss)	7,816		1,154		(835		)	16,816			23,413
Per share data
Earnings (loss) from continuing operations	18.31		2.70		(9.89		)	39.87			52.75
Earnings (loss) from discontinued operations	—		—		7.94			(0.99		)	1.38
Earnings (loss) per share	18.31		2.70		(1.95		)	38.88			54.13
Book value (GAAP)	336.71		295.15		296.97			264.12			241.76
Book value (non-GAAP) (1)	391.13		365.11		370.14			372.03			373.34
Net loans	956,559		1,008,272		1,167,675			1,233,595			1,226,571
Total assets	1,928,684		1,961,624		1,938,583			1,867,420			1,851,357
Total deposits	1,739,544		1,778,427		1,756,987			1,625,925			1,637,714

(1) Book value per share (non-GAAP) represents the aggregate amount of shareholders’ equity and common stock in Employee Stock Ownership Plan (“ESOP”) subject to contingent repurchase obligation divided by the number of outstanding shares. See Note 8 to the Company’s consolidated financial statements and “NON-GAAP FINANCIAL MEASURES.” This presentation is consistent with the Company’s belief that it is unlikely that the Company would be required to satisfy the contingent repurchase obligation.

Table of Contents

Profile	1
Special Note Concerning Forward-Looking Statements and Risk Factors	2
Letter to Our Shareholders, Customers and Friends	3
Common Stock, Book Value and Dividends	4
Business Review	4
Management’s Report on Internal Control Over Financial Reporting	5
Report of Independent Registered Public Accounting Firm	6
Consolidated Financial Statements	7
Notes to Consolidated Financial Statements	12
Stock Performance Presentation	40
Selected Financial Data	41
Non-GAAP Financial Measures	42
Average Balance Sheets, Net Interest Income and Average Rates and Yields on a Tax Equivalent Basis	43
Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Boards of Directors and Officers	56
Addresses of West Suburban Facilities	59
Map of Facilities	61
Shareholder Information	62

1

Special Note Concerning Forward-Looking Statements and Risk Factors

This document (including information incorporated by reference) contains, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of 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.

A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) 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; (ii) 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 recent stresses in the U.S. and global financial markets, national security and money laundering; (iii) 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; (iv) 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;(v) credit risks and the risks from concentrations (by geographic area or industry) within the Company’s loan portfolio; (vi) 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; (vii) 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; (viii) the ability of the Company to compete with other financial institutions as effectively as the Company currently intends due to the competitive pressures in the financial services sector; (ix) the ability of the Company to maintain an acceptable net interest margin; (x) the ability of the Company to obtain new customers and retain existing customers; (xi) the timely development and acceptance of products and services, including products and services offered through alternative delivery channels such as the Internet; (xii) 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; (xiii) 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; (xiv) 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; (xv) consumer spending and saving habits which may change in a manner that affects the Company’s business adversely; (xvi) 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; (xvii) the costs, effects and outcomes of existing or future litigation and disputes with third parties, including claims in connection with collection actions, employment matters and sales of business units; (xviii) 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; and (xix) the ability of the Company to manage the risks associated with the foregoing as well as anticipated.

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

2

To Our Shareholders, Customers and Friends

The challenges presented by the economic turmoil that we have experienced since 2009 continued throughout our markets during 2011. Although the level of unemployment improved slightly, it remains very high at 7.7% throughout DuPage County. Banks continued to fail in significant numbers throughout the U.S., including nine failures in Illinois during 2011 (and 49 failures in Illinois since 2008). While the broad U.S. financial markets began to demonstrate stability and regained some losses from prior years, our local markets appear to be trailing.  In fact, real estate values in our markets continued to decline in 2011.

Notwithstanding the challenges that we faced during 2011, we are pleased to report that our net income for the year increased to $7.8 million, which is a 577% increase over the 2010 net income of $1.2 million. These earnings represent net income per share of $18.31 in 2011 compared to $2.70 per share in 2010. Although our 2011 earnings are well below our historical performance levels, the trend is clearly moving in the right direction. We were also successful in our efforts to reduce our non-performing assets during 2011.  Non-performing assets decreased from $101.0 million (5.2% of total assets) as of December 31, 2010 to $76.8 million (4.0% of total assets) as of December 31, 2011. In addition, we reduced our net loan charge-offs from $16.6 million in 2010 to $12.4 million in 2011.

As you are aware, our 2011 earnings were not distributed to our shareholders.  Our earnings were retained and increased our GAAP book value to $336.71 per share at December 31, 2011 from $295.15 per share at December 31, 2010 — a 12.0% increase.  As of the date of this report, we do not anticipate paying dividends during 2012, as we continue to focus on building our regulatory capital levels and addressing our remaining problem loans.

Please be assured that it is our highest priority to protect your investment by continuing to evaluate, refine and improve all areas of our business and to react appropriately to changes in the local and national economies, as well as to changes in banking regulations. Although we continue to focus our efforts on reducing or freezing operating costs, including salaries and discretionary benefits, we remain committed to building the necessary infrastructure to implement the many changes required by regulatory reform.

We would like to express our appreciation to everyone for the support that has allowed us to become and remain one of the largest independent banks headquartered in DuPage County, and we welcome your comments and suggestions. We could not have achieved our success without the support of our shareholders, customers, communities, friends and employees. We are mindful that providing high quality, responsive service is one element that distinguishes us from our competition and we will take great care to ensure that we do not sacrifice this important advantage.

As we enter 2012, we are delighted to announce that we are celebrating our 50th year as your local community bank. We would like to express our sincere gratitude to everyone that has played a role in writing our story — which began on April 27, 1962. You have enabled us to reach almost $2 billion in assets and expand to 36 branches within the four counties that we serve. We look forward to celebrating our golden anniversary with you and celebrating many other successes in the years to come.

Thank you for your continued support and understanding.

Sincerely,

Kevin J. Acker	Duane G. Debs
Chairman of the Board	President
and Chief Executive Officer	and Chief Financial Officer

3

Common Stock, Book Value and Dividends

West Suburban has a single class of common stock issued and outstanding. The common stock is not traded on any stock exchange or on the over-the-counter market. West Suburban’s per share book value as of the end of each quarter and dividends declared for the last two years are set forth below:

Year	Quarter	BookValue GAAP		BookValue Non-GAAP (1)		Dividends Declared
2011	4th	$	336.71	$	391.13	$	—
	3rd	329.02		390.12		—
	2nd	327.65		389.44		—
	1st	306.93		370.83		—
2010	4th	$	295.15	$	365.11	$	—
	3rd	318.34		385.64		—
	2nd	291.17		377.76		—
	1st	290.85		372.79		—

(1)Book value per share (non-GAAP) represents the aggregate amount of shareholders’ equity and common stock in ESOP subject to contingent repurchase obligation divided by the number of outstanding shares. See Note 8 to the Company’s consolidated financial statements and “NON-GAAP FINANCIAL MEASURES.” This presentation is consistent with the Company’s belief that it is unlikely that the Company would be required to satisfy the contingent repurchase obligation.

Business Review

As of December 31, 2011, the Company had total assets of approximately $1.9 billion and maintained 36 full-service branches, six limited-service branches and four departments providing insurance, financial and other services for the convenience of the customers of the Bank throughout DuPage, Kane, Kendall and Will Counties in Illinois. The Bank focuses on providing retail and commercial banking products and services in its market area. The Company had 474 full-time equivalent employees at December 31, 2011.

4

MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING

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

Management assessed the Company’s systems of internal control over financial reporting as of December 31, 2011. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as of December 31, 2011, the Company maintained effective internal control over financial reporting based on those criteria.

The Company’s independent auditors have issued an audit report on the effectiveness of the Company’s internal control over financial reporting.

March 13, 2012

Kevin J. Acker

Chairman of the Board and Chief Executive Officer

Duane G. Debs

President and Chief Financial Officer

5

	Crowe Horwath LLP Independent Member Crowe Horwath International

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

West Suburban Bancorp, Inc.

Lombard, Illinois

We have audited the accompanying consolidated balance sheets of West Suburban Bancorp, Inc. (the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2011. We also have audited the Company’s internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Oak Brook, Illinois
March 13, 2012

6

WEST SUBURBAN BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2011 AND 2010

(Dollars in thousands)

	2011			2010
Assets
Cash and due from banks	$	116,039		$	70,490
Federal funds sold	286			200
Total cash and cash equivalents	116,325			70,690
Securities
Available for sale (amortized cost of $447,496 in 2011 and $517,589 in 2010)	454,125			518,566
Held to maturity (fair value of $271,601 in 2011 and $222,761 in 2010)	259,035			215,365
Federal Home Loan Bank stock	7,599			7,599
Total securities	720,759			741,530
Loans, less allowance for loan losses of $27,584 in 2011 and $28,072 in 2010	956,559			1,008,272
Bank-owned life insurance	32,618			39,511
Premises and equipment, net	45,130			42,201
Other real estate owned, net	23,505			20,479
Accrued interest and other assets	33,788			38,941
Total assets	$	1,928,684		$	1,961,624
Liabilities and shareholders’ equity
Deposits
Demand-noninterest-bearing	$	152,955		$	152,064
Prepaid solutions card deposits	5,810			29,161
Interest-bearing	1,580,779			1,597,202
Total deposits	1,739,544			1,778,427
Prepaid solutions cards	9,980			8,778
Accrued interest and other liabilities	12,207			18,571
Common stock in ESOP subject to contingent repurchase obligation	23,230			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	124,514			116,698
Accumulated other comprehensive income	3,574			285
Amount reclassified on ESOP shares	(23,230		)	(29,865		)
Total shareholders’ equity	143,723			125,983
Total liabilities and shareholders’ equity	$	1,928,684		$	1,961,624

See accompanying notes to consolidated financial statements.

7

WEST SUBURBAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009

(Dollars in thousands, except per share data)

	2011		2010			2009
Interest income
Loans, including fees	$	48,600	$	57,437		$	62,818
Securities
Taxable	18,061		17,608			17,985
Exempt from federal income tax	1,213		1,089			1,135
Federal funds sold	28		56			162
Total interest income	67,902		76,190			82,100
Interest expense
Deposits	11,828		18,429			24,944
Other	1		—			43
Total interest expense	11,829		18,429			24,987
Net interest income	56,073		57,761			57,113
Provision for loan losses	11,928		18,725			24,925
Net interest income after provision for loan losses	44,145		39,036			32,188
Noninterest income
Service fees on deposit accounts	4,341		5,115			5,941
Debit card fees	2,259		2,123			2,052
Bank-owned life insurance	948		1,712			2,030
Net gain on sales of loans originated for sale	4		—			553
Net gain on sale of portfolio loans	—		2,803			—
Net realized gains on securities transactions	7,982		267			109
Impairment of trust preferred securities	—		—			(8,320		)
Other	4,661		4,296			3,421
Total noninterest income	20,195		16,316			5,786
Noninterest expense
Salaries and employee benefits	23,348		23,703			24,671
Other real estate owned expense	8,078		6,885			909
Occupancy	5,022		5,246			5,038
Furniture and equipment	4,907		5,177			5,707
FDIC assessments	3,033		4,236			3,647
Loan administration	2,325		2,830			1,252
Professional fees	1,601		2,194			3,492
Advertising and promotion	1,083		997			727
Other	5,179		5,028			4,577
Total noninterest expense	54,576		56,296			50,020
Income (loss) from continuing operations before income taxes	9,764		(944		)	(12,046		)
Income tax expense (benefit)	1,948		(2,098		)	(7,802		)
Net income (loss) from continuing operations	7,816		1,154			(4,244		)
Discontinued operations
Gain on sale of prepaid solutions group, net of tax	—		—			3,313
Discontinued operations, net of tax	—		—			96
Net income from discontinued operations	—		—			3,409
Net income (loss)	$	7,816	$	1,154		$	(835	)
Earnings (loss) from continuing operations per share	$	18.31	$	2.70		$	(9.89	)
Earnings from discontinued operations per share	$	—	$	—		$	7.94
Earnings (loss) per share	$	18.31	$	2.70		$	(1.95	)
Average shares outstanding	426,850		426,850			429,137

See accompanying notes to consolidated financial statements.

8

WEST SUBURBAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009

(Dollars in thousands, except per share data)

	Common Stock and Surplus			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Amount Reclassified on ESOP Shares			Total Shareholders’ Equity
Balance, January 1, 2009	$	41,523		$	120,676		$	(1,300	)	$	(46,670	)	$	114,229
Repurchase and retirement of 5,645 shares of common stock	(2,658		)										(2,658		)
Comprehensive income
Net loss				(835		)							(835		)
Change in unrealized loss on available for sale securities, net of reclassification and tax effects							4,813						4,813
Change in postretirement obligations, net of reclassificaton and tax effects							71						71
Total comprehensive income													4,049
Cash dividends declared - $10.00 per share				(4,297		)							(4,297		)
Reclassification due to change in fair value of common stock in ESOP subject to contingent repurchase obligation										15,440			15,440
Balance, December 31, 2009	38,865			115,544			3,584			(31,230		)	126,763
Comprehensive income
Net income				1,154									1,154
Change in unrealized gain on available for sale securities, net of reclassification and tax effects							(3,310		)				(3,310		)
Change in postretirement obligations, net of reclassificaton and tax effects							11						11
Total comprehensive loss													(2,145		)
Reclassification due to change in fair value of common stock in ESOP subject to contingent repurchase obligation										1,365			1,365
Balance, December 31, 2010	38,865			116,698			285			(29,865		)	125,983
Comprehensive income
Net income				7,816									7,816
Change in unrealized gain on available for sale securities, net of reclassification and tax effects							3,312						3,312
Change in postretirement obligations, net of reclassificaton and tax effects							(23		)				(23		)
Total comprehensive income													11,105
Reclassification due to change in fair value of common stock in ESOP subject to contingent repurchase obligation										6,635			6,635
Balance, December 31, 2011	$	38,865		$	124,514		$	3,574		$	(23,230	)	$	143,723

See accompanying notes to consolidated financial statements.

9

WEST SUBURBAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009

(Dollars in thousands)

	2011			2010			2009
Cash flows from operating activities
Net income (loss)	$	7,816		$	1,154		$	(835	)
Adjustments to reconcile net income (loss) to net cash provided by continuing operating activities
Depreciation	2,930			3,025			3,246
Provision for loan losses	11,928			18,725			24,925
Deferred income tax provision (benefit)	1,504			(4,157		)	(5,603		)
Net premium amortization of securities	2,536			2,161			673
Net realized gain on securities transactions	(7,982		)	(267		)	(109		)
Impairment of trust preferred securities	—			—			8,320
Earnings on bank-owned life insurance	(948		)	(1,712		)	(2,030		)
Net gain on sales of loans originated for sale	(4		)	—			(553		)
Sales of loans originated for sale	338			—			53,168
Origination of loans held for sale	(1,526		)	—			(50,847		)
Net (gain) loss on sales of premises and equipment	(10		)	4			19
Net loss (gain) on sales of other real estate owned	187			(159		)	3
Write down of other real estate owned	5,908			5,537			449
Net gain on sale of portfolio loans	—			(2,803		)	—
Distribution of deferred compensation benefits	(6,077		)	—			—
Decrease (increase) in accrued interest and other assets	1,337			3,211			(13,893		)
(Decrease) increase in accrued interest and other liabilities	(338		)	1,302			(7,288		)
Net cash provided by discontinued operating activities	—			—			4,768
Net cash provided by operating activities	17,599			26,021			14,413
Cash flows from investing activities
Securities available for sale
Sales	190,505			964			19,777
Maturities, calls and redemptions	114,108			115,777			83,762
Purchases	(228,603		)	(436,754		)	(85,592		)
Securities held to maturity and FHLB stock
Maturities, calls and redemptions	66,259			118,536			79,754
Purchases	(110,400		)	(68,324		)	(105,520		)
Net (increase) decrease in loans	(14,409		)	68,459			13,520
Sales of portfolio loans	—			67,519			—
Surrender of bank-owned life insurance	7,922			—			—
Investment in bank-owned life insurance	(81		)	(198		)	(129		)
Purchases of premises and equipment	(5,869		)	(1,462		)	(2,616		)
Sales of premises and equipment	20			—			731
Sales of other real estate owned	46,265			7,639			3,919
Net cash used in discontinued investing activities	—			—			(701		)
Net cash provided by (used in) investing activities	$	65,717		$	(127,844	)	$	6,905

See accompanying notes to consolidated financial statements.

10

WEST SUBURBAN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009

(continued)

(Dollars in thousands)

	2011			2010			2009
Cash flows from financing activities
Net (decrease) increase in deposits	$	(38,883	)	$	21,440		$	131,062
Net decrease in federal funds purchased	—			—			(55,000		)
Repurchase and retirement of common stock	—			—			(2,658		)
Net increase in prepaid solutions cards	1,202			2,463			2,711
Dividends paid	—			—			(4,297		)
Net cash (used in) provided by financing activities	(37,681		)	23,903			71,818
Net increase (decrease) in cash and cash equivalents	45,635			(77,920		)	93,136
Beginning cash and cash equivalents	70,690			148,610			55,474
Ending cash and cash equivalents	$	116,325		$	70,690		$	148,610
Supplemental disclosures
Cash paid for interest	$	12,789		$	19,992		$	25,000
Cash paid for income taxes	3,573			3,503			1,918
Other real estate acquired through or instead of loan foreclosure	55,386			7,502			25,707
Loans originated from the sale of other real estate owned	797			472			960

See accompanying notes to consolidated financial statements.

11

WEST SUBURBAN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Note 1 - Nature of Business and Summary of Significant Accounting Policies

West Suburban Bancorp, Inc. (“West Suburban”) through the branch network of its subsidiary, West Suburban Bank (the “Bank” and, together with West Suburban, the “Company”), operates 36 full-service branches, six limited-service branches and four departments providing insurance, financial and other services for the convenience of the customers of the Bank throughout DuPage, Kane, Kendall and Will Counties in Illinois. Customers in these areas are the primary consumers of the Company’s loan and deposit products and services. Although borrower cash flow is expected to be the primary source of repayment, the Company’s loans are generally secured by various forms of collateral or security, including real estate, business assets, consumer goods, personal guarantees and other items.

Operating Segments

While the Company’s senior management monitors the revenue streams derived from various individual and groups of products and services, operations are managed and financial performance is evaluated on a company-wide basis. Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable operating segment. Discrete financial information is not available other than on a company-wide basis.

Principles of Consolidation

The consolidated financial statements include the accounts of West Suburban and the Bank. Significant intercompany accounts and transactions have been eliminated.

Use of Estimates

To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions, which are subject to change, based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, fair values of financial instruments, fair value of common stock in ESOP subject to contingent repurchase obligation and carrying values of other real estate owned are particularly subject to change.

Securities

Debt and marketable equity securities are classified into two categories: “available for sale” and “held to maturity.” Available for sale securities are carried at fair value with net unrealized gains and losses (net of deferred tax) reported in accumulated other comprehensive income (loss) as a separate component of shareholders’ equity. Held to maturity securities are carried at amortized cost as the Company has both the ability and positive intent to hold them to maturity. Other securities such as Federal Home Loan Bank stock are carried at cost. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. The Company does not engage in trading activities.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, whether the market decline was affected by macroeconomic conditions, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement, and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

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Loans and Allowance for Loan Losses

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs and an allowance for loan losses. Interest income is accrued on the unpaid balance of the Company’s loans and includes amortization of net deferred loan fees and costs over the loan term. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. Accrual of interest is generally discontinued on loans 90 days past due, or on an earlier date, if management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of principal or interest is doubtful. In some circumstances, a loan more than 90 days past due may continue to accrue interest if it is fully secured and in the process of collection. When a loan is classified as nonaccrual, interest previously accrued but not collected is charged back to interest income. When payments are received on nonaccrual loans they are first applied to principal, then to interest income and finally to expenses incurred for collection.

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.

The Company evaluates commercial, commercial real estate, construction and development and residential real estate (mortgage and home equity) 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 (“TDRs”) and classified as impaired. Impairment is measured 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 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.

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 portfolio segments have been identified: commercial, residential, commercial real estate, construction and development and consumer and other loans.

Commercial loans are made based primarily on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. Most often, this collateral is accounts receivable, inventory, equipment or real estate. Repayment is primarily dependent upon the borrower’s ability to service the debt based upon the cash flows generated from the underlying business. Secondary support involves liquidation of the pledged collateral and enforcement of a personal guarantee, if a guarantee is obtained.

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Residential real estate (mortgage and home equity) lending consists primarily of loans secured by first or second mortgages on primary residences. The loans are collateralized by owner-occupied properties located in the Company’s market area. Mortgage title insurance is normally required on first mortgages and second mortgages $100,000 and greater. Hazard insurance is normally required on first and second mortgages.

Commercial real estate lending typically involves higher loan principal amounts, and the repayment of the loans generally is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Economic events or governmental regulations outside of the control of the borrower or the Company may negatively impact the future cash flow and market values of the affected properties.

Construction and development lending involves additional risks because funds are advanced based upon values associated with the completed project, which are uncertain. Because of the uncertainties inherent in evaluating the construction cost estimates that the Company receives from its customers and other third parties, as well as the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio. As a result, construction and development loans often involve the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project and the ability of the borrower to sell or lease the property, rather than the ability of the borrower or guarantor to repay principal and interest.

The Company’s consumer and other loans are primarily made up of credit card lines, indirect dealer loans and installment loans. Credit card lines present inherent risk due to the unsecured nature of the product. The indirect dealer and installment loan portfolios represent a relatively small portion of the Company’s loan portfolio and are primarily secured by automobiles.

Loans Held for Sale

Loans are identified as either held for investment or held for sale upon origination. Loans held for sale are recorded at the lower of amortized cost or fair value, as determined by outside commitments from investors. Unrealized losses, if any, are recognized on a current basis by charges to earnings. Mortgage loans held for sale have historically been sold with servicing released.

Bank-Owned Life Insurance (“BOLI”)

The Company has purchased life insurance policies on certain officers and directors. BOLI is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Premises and Equipment

Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is generally computed on the straight-line method over the estimated useful lives of the assets ranging from eight to 50 years for premises and from three to 15 years for furniture and equipment.

Other Real Estate Owned

Other real estate owned includes properties acquired in partial or total settlement of problem loans. Assets acquired through or instead of 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.

Long-term Assets

Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Loan Commitments and Related Financial Instruments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are issued.

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Discontinued Operations

On December 4, 2009, the Company sold its group. The operating results related to the prepaid solutions group have been reflected as discontinued operations for 2009.

Income Taxes

Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a greater than 50% likelihood of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense. During 2011, the Company did not record any interest or penalties related to income tax matters in income tax expense.

401(k) Profit Sharing Plan, ESOP and Other Retirement Plans

The West Suburban Bank 401(k) Profit Sharing Plan was established to assist the Company in recruiting and retaining its personnel. Participation in the plan is subject to certain age and service requirements. Although the Company currently intends to match a percentage of the contributions that each employee voluntarily makes to the plan, all contributions by the Company are discretionary and subject to review by the Board of Directors from time to time. The plan is also intended to enable long time employees of the Company that also participate in the ESOP to diversify their retirement savings.

The Bank also maintains an ESOP, which is a noncontributory tax qualified retirement plan that covers employees who have satisfied specific service requirements. Subject to review by the Board of Directors, the Bank may make contributions to the ESOP for the benefit of the participants from time to time. Dividends declared on common stock owned by the ESOP are charged against retained earnings. Dividends paid on ESOP shares are passed through to participants. Earned and allocated ESOP shares are voted by the respective participants. The appraised fair market value of all earned and allocated ESOP shares is reclassified from shareholders’ equity because participants may request that the Company, when the Company is legally permitted, purchase their ESOP shares upon termination of their employment.

The Company has a postretirement heathcare plan covering certain executives. Postretirement benefit costs are net of service and interest costs and amortization of gains and losses not immediately recognized.

The Company has deferred compensation arrangements with certain former and current executive officers and directors. Deferred compensation expense allocates the benefits over years of service.

Earnings Per Share

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

Cash Flows

For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks and federal funds sold. Generally, federal funds are sold for one-day periods. Net cash flows are reported for customer loan, deposit, federal funds purchased and prepaid solutions card transactions.

Comprehensive Income

Comprehensive income includes net income and other comprehensive income. The Company’s other comprehensive income consists of the change in unrealized gains and losses on available for sale securities and change in postretirement obligations, net of reclassification adjustments and deferred tax effects.

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Legal Proceedings

Legal proceedings, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.

Restrictions on Cash

Cash on hand or on deposit with the Federal Reserve Bank of $11,559 and $10,225 was required to meet regulatory reserve and clearing requirements at year-end 2011 and 2010, respectively.

Dividend Restrictions

Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to West Suburban or by West Suburban to shareholders. (See Note 12 in the Consolidated Financial Statements for more specific disclosure.)

Fair Value of Financial Instruments

Fair value of financial instruments are estimated using relevant market information and other assumptions. (See Note 10 in the Consolidated Financial Statements for more specific disclosure.) Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Reclassifications

Certain reclassifications have been made in prior years’ financial statements to conform to the current year’s presentation.

Adopted Accounting Guidance

In April 2011, the Financial Accounting Standards Board (“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 were effective for the first interim or annual period beginning on or after June 15, 2011 and were 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 TDRs. 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.

Issued But Not Yet Effective Accounting Guidance

In June 2011, the FASB amended existing guidance and eliminated the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity. The amendment requires that comprehensive income be presented in either a single continuous statement or in two separate consecutive statements. Early adoption is permitted. The adoption of this amendment will change the presentation of the components of comprehensive income for the Company as part of the consolidated statement of shareholders’ equity.

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Note 2 - Securities

The amortized cost, unrealized gains and losses and fair value of securities available for sale are as follows at December 31:

	2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasuries	$	9,865	$	555	$	—		$	10,420
U.S. government sponsored enterprises	65,784		1,101		—			66,885
Mortgage-backed: residential	298,324		3,988		(106		)	302,206
States and political subdivisions	49,733		1,284		(58		)	50,959
Corporate	23,790		142		(277		)	23,655
Total	$	447,496	$	7,070	$	(441	)	$	454,125

	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 investment grade corporate bonds.

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The amortized cost, unrecognized gains and losses and fair value of securities held to maturity are as follows at December 31:

	2011
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
U.S. Treasuries	$	30,005	$	3,111	$	—		$	33,116
U.S. government sponsored enterprises	31,623		1,034		—			32,657
Mortgage-backed: residential	163,926		7,686		(4		)	171,608
States and political subdivisions	33,481		832		(93		)	34,220
Total	$	259,035	$	12,663	$	(97	)	$	271,601

	2010
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized 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

The amortized cost and fair value of debt securities available for sale and held to maturity at December 31, 2011 by contractual maturity are as follows:

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in 1 year or less	$	284	$	284	$	292	$	298
Due after 1 year through 5 years	100,521		101,107		64,287		66,161
Due after 5 years through 10 years	33,894		35,278		25,040		27,736
Due after 10 years	14,473		15,250		5,490		5,798
Mortgage-backed: residential	298,324		302,206		163,926		171,608
Total	$	447,496	$	454,125	$	259,035	$	271,601

Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Approximately $57,120 of securities are callable in 2012. Most of these callable securities were issued by U.S. government sponsored enterprises.

Sales of securities available for sale were as follows:

	2011		2010		2009
Proceeds from sales	$	190,505	$	964	$	19,777
Gross realized gains	7,982		267		245
Gross realized losses	—		—		(136		)

Securities with a carrying value of approximately $85,413 and $94,720 at December 31, 2011 and 2010, respectively, were pledged to secure public deposits, fiduciary activities and for other purposes required or permitted by law.

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Securities with unrealized losses at year-end 2011 and 2010 not recognized in income are presented below by the length of time the securities have been in a continuous unrealized loss position:

	2011
	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Mortgage-backed: residential	$	29,707	$	(106	)	$	282	$	(4	)	$	29,989	$	(110	)
States and political subdivisions	15,350		(58		)	1,157		(93		)	16,507		(151		)
Corporate	18,434		(277		)	—		—			18,434		(277		)
Total temporarily impaired	$	63,491	$	(441	)	$	1,439	$	(97	)	$	64,930	$	(538	)

	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 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 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 December 31, 2011 were in states and political subdivisions, 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

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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 December 31, 2011.

The Company held one municipal security with a carrying value of $19,000 and $30,000 at December 31, 2011 and 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 at December 31:

	2011			2010
Commercial	$	278,969		$	253,746
Commercial real estate	284,065			272,856
Construction and development	79,197			138,959
Residential real estate:
Mortgage	151,378			150,248
Home equity	178,819			206,191
Consumer and other	11,715			14,344
Total	984,143			1,036,344
Allowance for loan losses	(27,584		)	(28,072		)
Loans, net	$	956,559		$	1,008,272

The Company makes commercial, residential real estate and consumer loans primarily to customers throughout the western suburbs of Chicago. From time to time, the Company will make loans outside of its market area. There were $1,192 of loans held for sale at December 31, 2011, which were included in the residential real estate: mortgage classification. There were no loans held for sale at December 31, 2010.

Changes in the allowance for loan losses by portfolio segment for the year ended December 31, 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	8,349			(1,104		)	2,536			2,020			127			11,928
Loans charged-off	(5,817		)	(85		)	(5,036		)	(1,783		)	(413		)	(13,134		)
Recoveries	34			—			527			36			121			718
Balance, end of year	$	15,204		$	2,990		$	4,270		$	4,581		$	539		$	27,584

Changes in the allowance for loan losses were as follows for the years ended December 31:

	2010			2009
Balance, beginning of year	$	25,922		$	15,578
Provision for loan losses	18,725			24,925
Loans charged-off	(16,820		)	(14,952		)
Recoveries	245			371
Balance, end of year	$	28,072		$	25,922

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The balance of the allowance for loan losses and the recorded investment (which does not include accrued interest) 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
December 31, 2011
Allowance for loan losses attributable to loans:
Individually evaluated for impairment	$	5,568	$	805	$	—	$	331	$	—	$	6,704
Collectively evaluated for impairment	9,636		2,185		4,270		4,250		539		20,880
Total ending allowance balance	$	15,204	$	2,990	$	4,270	$	4,581	$	539	$	27,584
Loans:
Individually evaluated for impairment	$	36,272	$	20,066	$	21,099	$	13,130	$	—	$	90,567
Collectively evaluated for impairment	242,697		263,999		58,098		317,067		11,715		893,576
Total ending loan balance	$	278,969	$	284,065	$	79,197	$	330,197	$	11,715	$	984,143
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

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

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
December 31, 2011
With no related allowance recorded:
Commercial	$	31,667	$	25,062	$	—
Commercial real estate	11,154		11,154		—
Construction and development	25,175		21,099		—
Residential real estate:
Mortgage	9,021		8,844		—
Home equity	1,544		1,508		—
With an allowance recorded:
Commercial	11,211		11,211		5,568
Commercial real estate	9,183		8,911		805
Residential real estate:
Mortgage	2,778		2,778		331
Total	$	101,733	$	90,567	$	6,704
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		—
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
Total	$	151,392	$	135,006	$	4,872

Impaired loans were summarized as follows at December 31, 2009:

Year-end loans with no allocated allowance for loan losses	$	30,754
Year-end loans with allocated allowance for loan losses	14,636
Total	$	45,390
Amount of the allowance for loan losses allocated to impaired loans at year-end	$	1,527

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Average impaired loans by class were as follows at December 31:

	2011
Commercial	$	36,813
Commercial real estate	14,597
Construction and development	40,450
Residential real estate:
Mortgage	9,072
Home equity	1,172
Total	$	102,104

Average impaired loans at December 31, 2010 and 2009 were $64,852 and $47,768, respectively.

Interest income recognized during impairment was $1,552, $1,325 and $301 for the years ended December 31, 2011, 2010 and 2009, respectively.

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
December 31, 2011
Commercial	$	27,141	$	—
Commercial real estate	1,115		—
Construction and development	22,197		—
Residential real estate:
Mortgage	2,232		72
Home equity	161		205
Consumer and other	212		9
Total	$	53,058	$	286
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 are considered to be well-collateralized and in the process of collection as of December 31, 2011.

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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
December 31, 2011
Commercial	$	1,030	$	471	$	26,903	$	28,404	$	250,565	$	278,969
Commercial real estate	1,118		2,790		809		4,717		279,348		284,065
Construction and development	1,099		2,070		19,028		22,197		57,000		79,197
Residential real estate:
Mortgage	2,310		1,203		2,304		5,817		145,561		151,378
Home equity	1,048		526		365		1,939		176,880		178,819
Consumer and other	143		39		222		404		11,311		11,715
Total	$	6,748	$	7,099	$	49,631	$	63,478	$	920,665	$	984,143
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

During the year ended December 31, 2011, the terms of certain loans were modified as TDRs. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan.

Modifications involving a reduction of the stated interest rate of the loan were for interest rates ranging from 2.0% to 7.1% and periods ranging from six months to 30 years. Modifications involving an extension of the maturity date were for periods ranging from one month to 12 months.

At December 31, 2011, the Company had $37,711 of loans considered TDRs, which are considered impaired loans, compared to $21,555 as of December 31, 2010. As of December 31, 2011, the Company has specifically allocated allowance for loan losses of $1,584 on $14,375 of loans considered to be TDRs. The remaining $23,336 of TDRs did not have impaired cash flows or are considered to be collateral dependent and do not have specific allocations of the allowance due to partial charge-offs and the loans being well-collateralized. Management has not committed to lend additional amounts to customers with outstanding loans that are classified as TDRs.

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The following table presents loans by class modified as TDRs during the year ended December 31, 2011:

	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	9	$	4,087	$	4,086
Commercial real estate	11	12,791		12,810
Residential real estate:
Mortgage	18	4,088		4,217
Home equity	2	949		989
Total	40	$	21,915	$	22,102

The following table presents loans by class modified as TDRs during the year ended December 31, 2011 for which there was a payment default during the year ended December 31, 2011:

	Number of Loans	Recorded Investment
Commercial real estate	3	$	1,742
Residential real estate: mortgage	5	927
Total	8	$	2,669

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

The TDRs that subsequently defaulted described above did not increase the allowance for loan losses and did not result in any charge-offs during the year ended December 31, 2011, as these loans were considered to be collateral dependent and well-collateralized.

The terms of certain other loans were modified during the year ended December 31, 2011 that did not meet the definition of a TDR. These loans have a total recorded investment as of December 31, 2011 of $17,425. 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.

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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
December 31, 2011
Commercial	$	43,143	$	235,826	$	278,969
Commercial real estate	29,666		254,399		284,065
Construction and development	28,493		50,704		79,197
Total	$	101,302	$	540,929	$	642,231
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 $28.5 million as of December 31, 2011 from $77.4 million as of December 31, 2010, primarily as a result of transfers of loans to other real estate owned.

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.

The Company generally sells mortgage loans with servicing rights released. Activity in mortgage loans originated for sale was as follows:

	2011		2010		2009
Origination of loans originated for sale	$	1,526	$	—	$	50,847
Proceeds from sales of loans originated for sale	338		—		53,168
Net gains on sales of loans originated for sale	4		—		553

As part of an overall strategy to improve the Bank’s interest rate risk and to maintain strong regulatory capital in the present economic environment, the Company sold $64,716 of portfolio residential loans during the fourth quarter of 2010 at a gain of $2,803. The loans sold were fully amortizing first mortgage loans that had a lower yield, yet above the market rates at the time of sale. The sale was on a non-recourse basis, with servicing retained by the Company. The Company does not currently expect that portfolio loan sales will be part of management’s strategy, and therefore the Company does not expect that additional loans will be classified as held for sale.

At December 31, 2011, the outstanding balance of these serviced loans totaled $46,397. The related mortgage servicing rights and amortization of the mortgage servicing rights was not material.

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Note 4 - Premises and Equipment

Major classifications of assets comprising premises and equipment are summarized as follows at December 31:

	2011			2010
Land	$	15,740		$	15,263
Premises	51,810			48,168
Furniture and equipment	51,802			50,671
Total	119,352			114,102
Less accumulated depreciation	(74,222		)	(71,901		)
Premises and equipment, net	$	45,130		$	42,201

The Company leases certain branch properties and equipment under operating leases. Rent expense was $632, $649 and $454 for 2011, 2010 and 2009, respectively. Rent commitments before considering renewal options that generally are present, are summarized as follows:

2012	$	402
2013	300
2014	298
2015	235
2016	151
Total	$	1,386

Note 5 - Other Real Estate Owned

Activity in other real estate owned was as follows at December 31:

	2011			2010
Beginning balance	$	20,479		$	25,994
Acquired through or instead of loan foreclosure	55,386			7,502
Reductions from sales	(46,452		)	(7,480		)
Write-downs	(5,908		)	(5,537		)
Ending balance	$	23,505		$	20,479

Other real estate owned is reported net of a valuation allowance of $3,625 as of December 31, 2011 and 2010. There were no changes in the valuation allowance during the year ended December 31, 2011. Expenses, excluding write-downs relating to other real estate owned, for 2011, 2010 and 2009 were $2,170, $1,348 and $460, respectively.

Activity in the valuation allowance on other real estate owned was as follows:

	2011		2010
Beginning balance	$	3,625	$	—
Additions charged to expense	—		3,625
Write-downs	—		—
Ending balance	$	3,625	$	3,625

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Note 6 - Deposits

The major categories of deposits are summarized as follows at December 31:

	2011		2010
Demand-noninterest-bearing	$	152,955	$	152,064
Prepaid solutions card deposits	5,810		29,161
NOW	357,351		349,246
Money market checking	444,942		422,465
Savings	372,067		346,539
Time deposits
Less than $100,000	301,154		348,930
$100,000 and greater	105,265		130,022
Total	$	1,739,544	$	1,778,427

At December 31, 2011, the scheduled maturities of time deposits were as follows:

2012	$	235,929
2013	103,416
2014	26,270
2015	29,976
2016	10,660
Thereafter	168
Total	$	406,419

At December 31, 2011 and 2010, the Company did not have brokered deposits.

Note 7 - Income Taxes

Income tax expense (benefit) is as follows for the years ended December 31:

	2011		2010			2009
Current tax expense (benefit)
Federal	$	444	$	2,059		$	(2,199	)
State	—		—			—
Deferred tax expense (benefit)	1,504		(4,157		)	(5,603		)
Total	$	1,948	$	(2,098	)	$	(7,802	)

A reconciliation between taxes computed at the statutory federal income tax rate and the consolidated effective tax rates follows:

	2011		2010		2009
Statutory federal income tax rate	35.0	%	(35.0	)%	(35.0	)%
(Decrease) increase in taxes resulting from:
Tax-exempt income	(7.6	)%	(61.8	)%	(8.8	)%
State income taxes, net of federal tax benefit	4.2	%	(24.0	)%	(10.1	)%
Dividends on ESOP shares	(0.9	)%	(41.8	)%	(22.0	)%
Bank-owned life insurance	4.0	%	(63.5	)%	(11.1	)%
Change in tax rates	(11.6	)%	—		—
Other items, net	(3.1	)%	3.9	%	0.1	%
Effective tax rate	20.0	%	(222.2	)%	(86.9	)%

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The temporary differences which created deferred tax assets and liabilities at December 31 are summarized below:

	2011		2010
Deferred tax assets
Allowance for loan losses	$	11,358	$	11,157
Deferred compensation	1,125		3,369
Nonaccrual loan interest income	—		2,352
Bad debt conformity recoveries	2,176		—
Pension obligation adjustment	706		200
State net operating loss	1,906		1,763
Other real estate owned	2,879		2,110
AMT credit	119		—
Other	—		210
Total deferred tax assets	20,269		21,161
Deferred tax liabilities
Net unrealized gain on securities available for sale	2,730		389
Depreciation	725		343
Federal Home Loan Bank stock dividends	633		611
Deposit base intangible	302		286
Qualified prepaid expenses	413		352
Other	104		—
Total deferred tax liabilities	4,907		1,981
Net deferred tax assets	$	15,362	$	19,180

In 2010, the State of Illinois passed new tax legislation that restricts companies from utilizing state net operating loss carry forwards to offset state income tax expense for the years 2011-2013. At December 31, 2011, the Company had state net operating loss carry forwards totaling approximately $37,832, which expire at various dates beginning in 2021. As of December 31, 2011, the Company believes that it will generate sufficient taxable income to utilize the net operating loss carry forwards prior to expiration, and therefore, no valuation allowance has been established.

Based on the carry back available and expected future taxable income, management believes it is more likely than not that the remaining deferred tax asset as of December 31, 2011 and 2010, will be realized. Therefore, no valuation allowance has been established.

There were no unrecognized tax benefits as of December 31, 2011 and 2010. The Company does not expect a significant change in the unrecognized tax benefit in the next twelve months.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the State of Illinois. The Company is no longer subject to examination by taxing authorities for years before 2008.

Note 8 - Benefit Plans

The Bank maintains the West Suburban Bank 401(k) Profit Sharing Plan (the “401(k) Plan”), which currently 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 Company recorded expenses totaling $649, $625 and $668 during 2011, 2010 and 2009, respectively, for contributions to the 401(k) Plan.

The Bank also maintains an ESOP, which is a noncontributory tax qualified retirement plan that covers employees who have satisfied specific service requirements. The ESOP provides incentives to employees by granting participants an interest in West Suburban common stock, which represents the ESOP’s primary investment.

29

At December 31, 2011 and 2010, the ESOP held 89,348 and 90,775 shares of West Suburban common stock, respectively, that were allocated to ESOP participants. 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 the appraised 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.

During 2011 and 2010, the ESOP distributed $137 and $434, respectively, in cash representing the interests of participants. In addition, the ESOP distributed 1,427 shares of West Suburban common stock in 2011 and 542 shares in 2010.

An individual account is established for each participant under the 401(k) Plan and the ESOP, and the benefits payable upon retirement, termination, disability or death are based upon service, the amount of the employer’s, and for the 401(k) Plan, an employee’s, contributions and any income, expenses, gains and losses and forfeitures allocated to the participant’s account.

The Company maintains deferred compensation arrangements with certain former and current executive officers and certain members of the Board of Directors. The deferred compensation expense was $100, $150 and $165 for the years ended December 31, 2011, 2010 and 2009, respectively. Executive officers can elect to defer the payment of a percentage of their salaries and cash bonuses, if any, and members of the Board of Directors can elect to defer the payment of their directors’ fees. In addition, the Company can elect to make annual contributions for the benefit of current participants in the Company’s deferred compensation arrangements. The annual contributions for certain senior executive officers in 2011, 2010 and 2009 were $25 per officer. There were no annual contributions for certain other executive officers in 2011 and 2010 and $5 in annual contributions in 2009. An additional $50 was contributed to the plan in 2010 for the benefit of a former senior executive officer in conjunction with a severance payment.

The total accumulated liability for all deferred compensation arrangements was $2,733 and $8,478 at December 31, 2011 and 2010, respectively. These amounts are included in accrued interest and other liabilities in the consolidated balance sheets. During 2011, the Company disbursed $6,077 to certain participants of its deferred compensation plan in connection with the termination of a portion of the deferred compensation plan.

The Company 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. The Company used a December 31 measurement date for its postretirement benefit plan. The plan is unfunded.

30

Information about changes during 2011 and 2010 in obligations of the postretirement benefit plan follows:

	2011			2010
Change in benefit obligation:
Beginning benefit obligation	$	1,088		$	993
Service cost	31			34
Interest cost	57			58
Actuarial loss (gain)	93			23
Benefits paid	(21		)	(20		)
Ending benefit obligation	1,248			1,088
Change in plan assets, at fair value:
Beginning plan assets	—			—
Employer contributions	21			20
Benefits paid	(21		)	(20		)
Ending plan assets	—			—
Unfunded status at December 31	$	1,248		$	1,088

Amounts recognized in accumulated other comprehensive loss at December 31 consist of:

	2011		2010
Net actuarial loss	$	363	$	293
Prior service cost	190		211
Total	$	553	$	504

The accumulated benefit obligation was $1,248 and $1,088 at December 31, 2011 and 2010, respectively.

Net postretirement benefit costs included the following components for the years ended December 31:

	2011			2010			2009
Service cost	$	31		$	34		$	41
Interest cost	57			58			61
Amortization of unrecognized prior service cost	21			21			21
Amortization of net loss	22			21			27
Net periodic postretirement benefit cost	131			134			150
Net loss (gain)	93			23			(70		)
Prior service cost	—			—			—
Amortization of net loss	(22		)	(21		)	(27		)
Amortization of prior service cost	(21		)	(21		)	(21		)
Total recognized in other comprehensive income	50			(19		)	(118		)
Postretirement benefit cost and other comprehensive loss	$	181		$	115		$	32

The estimated net loss and the prior service cost for the defined postretirement benefit plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $33 and $21, respectively.

The discount rate used to determine the benefit obligations in 2011 and 2010 was 4.50% and 5.25%, respectively. The discount rate used to determine the net periodic benefit costs in 2011, 2010 and 2009 was 5.25%, 5.95% and 6.25%, respectively.

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For measurement purposes, an 8% annual rate of increase in the per capita premium cost of covered health care benefits was assumed for 2012, with the rate of increase reducing .5% per annum to an ultimate rate of increase of 5% in 2018. Dental benefits were assumed to increase 5% for 2012, which rate of increase is assumed to apply to future periods.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One-Percentage-Point Increase		One-Percentage-Point Decrease
Effect on total service and interest cost	$	13	$	(11	)
Effect on accumulated postretirement benefit obligation	191		(160		)

The Company expects to contribute amounts in 2012 to satisfy its obligations. The following benefit payments, which reflect expected future service, are expected for the years indicated:

2012	$	13
2013	21
2014	28
2015	37
2016	48
Following 5 Years	330

Note 9 - Off-Balance Sheet Risk, Contingent Liabilities and Guarantees

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

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the agreement. These commitments primarily consist of unused lines of credit, undrawn portions of construction and development loans and commitments to make new loans. Commitments generally have fixed expiration dates or other termination provisions and may require the payment of a fee. Since many of the commitments are expected to expire without being exercised or drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

The Company’s exposure to credit risk in connection with commitments to extend credit and standby letters of credit is the contractual amount of those instruments before considering customer collateral or ability to repay. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The Company generally requires collateral or other security to support financial instruments with credit risk. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, is based on management’s credit evaluation of the customer. Collateral held varies and may include accounts receivable, inventory and equipment or commercial or residential properties.

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A summary of the contractual exposure to off-balance sheet risk as of December 31 follows:

	2011						2010
	Fixed Rate		Variable Rate		Total		Fixed Rate		Variable Rate		Total
Commercial loans and lines of credit	$	2,522	$	120,710	$	123,232	$	821	$	117,484	$	118,305
Check credit lines of credit	867		—		867		919		—		919
Mortgage loans	5,258		—		5,258		5,141		—		5,141
Home equity lines of credit	1,379		129,021		130,400		654		135,767		136,421
Letters of credit	—		6,537		6,537		—		11,814		11,814
Credit card lines of credit	—		29,349		29,349		—		37,483		37,483
Total	$	10,026	$	285,617	$	295,643	$	7,535	$	302,548	$	310,083

Fixed rate commercial loan commitments at December 31, 2011 had interest rates ranging from 4.0% to 7.2% with terms ranging from one month to five years. Fixed rate check credit lines of credit at December 31, 2011 had interest rates of 18.0%. Fixed rate mortgage loan commitments at December 31, 2011 had interest rates ranging from 3.5% to 5.0% with terms ranging from 10 to 30 years. Fixed rate home equity lines of credit at December 31, 2011 had interest rates ranging from 3.0% to 7.0% with terms ranging from three months to four years.

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 other 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 December 31, 2011, the Company had one municipal security where the fair value was determined using Level 3 inputs. This security was purchased during 2011. There were no such securities at December 31, 2010. There were no transfers between Level 1 and Level 2 during 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 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.

33

Fair values are 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.

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

	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
2011 Recurring basis
U.S. Treasuries	$	10,420	$	10,420	$	—	$	—
U.S. government sponsored enterprises	66,885		—		66,885		—
Mortgage-backed: residential	302,206		—		302,206		—
State and political subdivisions	50,959		—		50,382		577
Corporate	23,655		—		23,655		—
Total securities available for sale	$	454,125	$	10,420	$	443,128	$	577
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	$	—
2011 Non-recurring basis
Impaired loans:
Commercial	$	8,697	$	—	$	—	$	8,697
Commercial real estate	8,106		—		—		8,106
Construction and development	4,840		—		—		4,840
Residential real estate	2,447		—		—		2,447
Other real estate owned:
Construction and development	8,560		—		—		8,560
Commercial real estate	3,484		—		—		3,484
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 $30,795 with a valuation allowance of $6,704 at December 31, 2011. At December 31, 2010, impaired loans had a carrying amount of $25,895, with a valuation allowance of $4,872. Provision for loan losses made for these loans for 2011 and 2010 was $7,588 and $4,872, respectively.

34

Other real estate owned, which are at fair value less costs to sell, had a net carrying amount of $12,044, which consisted of the outstanding balance of $15,669, net of a valuation allowance of $3,625 at December 31, 2011. Write-downs on the other real estate owned totaled $5,908 and $5,537 during 2011 and 2010, 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 December 31 are set forth in the table below:

	2011				2010
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets
Cash and cash equivalents	$	116,325	$	116,325	$	70,690	$	70,690
Securities
Available for sale	454,125		454,125		518,566		518,566
Held to maturity	259,035		271,601		215,365		222,761
Federal Home Loan Bank stock	7,599		N/A		7,599		N/A
Loans, less allowance for loan losses	956,559		994,934		1,008,272		1,018,030
Accrued interest receivable	5,342		5,342		5,217		5,217
Financial liabilities
Deposits	1,739,544		1,748,988		1,778,427		1,791,761
Accrued interest payable	2,471		2,471		3,431		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 11 - Related Party Transactions

Certain executive officers and directors of the Company, their affiliates and companies in which they have 10% or more beneficial ownership, are customers of the Bank and received loans from the Bank with outstanding balances totaling $20,277 and $21,574 at December 31, 2011 and 2010, respectively. During 2011, $1,157 in new loans and $2,454 in principal payments were made. Related parties maintained deposits at the Bank totaling $18,191 and $32,492 at December 31, 2011 and 2010, respectively.

Note 12 - Capital Requirements

As of December 31, 2011 and 2010, the Bank exceeded the minimum capital ratios required for it to qualify as “well-capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well-capitalized”, the Bank must maintain minimum ratios for total capital to risk-weighted assets, Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets as set forth in the table below. There were no conditions or events since December 31, 2011, that management believes would result in a change of the category.

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. Specifically, 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 December 31, 2011, the Bank was in compliance with these heightened regulatory capital requirements. If the Bank is not in compliance with these requirements in the future, the Bank may become subject to additional regulatory actions or restrictions.

35

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.

The capital amounts and ratios of the Company and the Bank for purposes of the prompt corrective action framework are presented in the table below:

	Actual				Minimum For Capital Adequacy Purposes				Minumum To Be Well- Capitalized
	Amount		Ratio		Amount		Ratio		Amount	Ratio
As of December 31, 2011
Total capital (to risk-weighted assets)
Company	$	174,107	13.72	%	$	101,540	8.00	%	N/A	N/A
Bank (1)	170,781		13.46	%	101,540		8.00	%	126,925	10.00	%
Tier 1 capital (to risk-weighted assets)
Company	158,097		12.46	%	50,770		4.00	%	N/A	N/A
Bank	154,771		12.19	%	50,770		4.00	%	76,155	6.00	%
Tier 1 capital (to average assets)
Company	158,097		8.31	%	76,099		4.00	%	N/A	N/A
Bank (1)	154,771		8.11	%	76,290		4.00	%	95,362	5.00	%
As of December 31, 2010
Total capital (to risk-weighted assets)
Company	$	171,452	12.99	%	$	105,608	8.00	%	N/A	N/A
Bank	160,089		12.22	%	104,795		8.00	%	130,993	10.00	%
Tier 1 capital (to risk-weighted assets)
Company	154,808		11.73	%	52,804		4.00	%	N/A	N/A
Bank	143,570		10.96	%	52,397		4.00	%	78,596	6.00	%
Tier 1 capital (to average assets)
Company	154,808		7.93	%	78,101		4.00	%	N/A	N/A
Bank	143,570		7.39	%	77,699		4.00	%	97,124	5.00	%

(1) The Bank has agreed to maintain minimum Tier 1 capital to average assets of 8.00% and total capital to risk-weighted assets of 12.00%.

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

36

Note 13 - Other Comprehensive Income

Other comprehensive income components and related taxes were as follows:

	2011			2010			2009
Net unrealized holding gain (loss) on available for sale securities	$	13,635		$	(5,227	)	$	8,098
Reclassification adjustments for losses and gains later recognized in income	(7,982		)	(267		)	(109		)
Tax effect	(2,341		)	2,184			(3,176		)
Net unrealized gain (loss) on available for sale securities	3,312			(3,310		)	4,813
Change in postretirement obligation, (loss) gain	(50		)	19			118
Tax effect	27			(8		)	(47		)
Net change in postretirement obligation, (loss) gain	(23		)	11			71
Other comprehensive income (loss)	$	3,289		$	(3,299	)	$	4,884

A summary of the accumulated other comprehensive income balances, net of tax were as follows:

	Balance at 12/31/10			Current Period Change			Balance at 12/31/11
Unrealized gains on securities available for sale	$	588		$	3,312		$	3,900
Unrealized loss on postretirement obligation	(303		)	(23		)	(326		)
Total	$	285		$	3,289		$	3,574

Note 14 - Condensed Financial Information - Parent Only

Condensed Balance Sheets

December 31, 2011 and 2010

	2011		2010
Assets
Cash	$	5,050	$	3,789
Investment in subsidiary	162,690		151,354
Other assets	988		2,995
Total assets	$	168,728	$	158,138
Liabilities and shareholders’ equity
Other liabilities	$	1,775	$	2,290
Common stock in ESOP subject to contingent repurchase obligation	23,230		29,865
Shareholders’ equity	143,723		125,983
Total liabilities and shareholders’ equity	$	168,728	$	158,138

37

Condensed Statements of Income

Years Ended December 31, 2011, 2010 and 2009

	2011			2010			2009
Income
Dividends from subsidiary	$	—		$	—		$	3,262
Interest income
Deposits	17			34			78
Securities	—			158			211
Other	—			5			—
Total income	17			197			3,551
Expense
Other	432			406			452
Total expense	432			406			452
(Loss) income before income taxes	(415		)	(209		)	3,099
Income tax benefit	(184		)	(144		)	(143		)
(Loss) income before equity in undistributed net income of subsidiary	(231		)	(65		)	3,242
Equity in undistributed net income (loss) of subsidiary	8,047			1,219			(4,077		)
Net income (loss)	$	7,816		$	1,154		$	(835	)

Condensed Statements of Cash Flows

Years Ended December 31, 2011, 2010 and 2009

	2011			2010			2009
Cash flows from operating activities
Net income (loss)	$	7,816		$	1,154		$	(835	)
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed net (income) loss of subsidiary	(8,047		)	(1,219		)	4,077
Net discount accretion of securities	—			(104		)	(139		)
Decrease (increase) in other assets	2,007			(2,037		)	19
(Decrease) increase in other liabilities	(515		)	2,135			25
Net cash provided by (used in) operating activities	1,261			(71		)	3,147
Cash flows from investing activities
Investments in subsidiary	—			(3,024		)	—
Securities held to maturity
Maturities and calls	—			40			—
Net cash used in investing activities	—			(2,984		)	—
Cash flows from financing activities
Repurchase and retirement of common stock	—			—			(2,658		)
Cash dividends paid	—			—			(8,622		)
Net cash used in financing activities	—			—			(11,280		)
Net increase (decrease) in cash	1,261			(3,055		)	(8,133		)
Beginning cash	3,789			6,844			14,977
Ending cash	$	5,050		$	3,789		$	6,844

38

Note 15 - Quarterly Results of Operations (Unaudited)

The following table sets forth certain unaudited income, expense and per share data on a quarterly basis for the three-month periods indicated:

	Fourth Quarter			Third Quarter		Second Quarter		First Quarter
Year Ended December 31, 2011
Interest income	$	16,544		$	16,576	$	17,231	$	17,551
Interest expense	2,714			2,878		3,002		3,235
Net interest income	13,830			13,698		14,229		14,316
Provision for loan losses	2,360			4,750		1,818		3,000
Net interest income after provision for loan losses	11,470			8,948		12,411		11,316
Noninterest income	2,976			6,131		6,400		4,688
Noninterest expense	15,009			14,624		12,955		11,988
(Loss) income before income taxes	(563		)	455		5,856		4,016
Income tax (benefit) expense	(1,649		)	272		2,099		1,226
Net income	$	1,086		$	183	$	3,757	$	2,790
Earnings per share	$	2.54		$	0.43	$	8.80	$	6.54
Year Ended December 31, 2010
Interest income	$	17,710		$	19,553	$	19,507	$	19,420
Interest expense	3,632			4,501		4,928		5,368
Net interest income	14,078			15,052		14,579		14,052
Provision for loan losses	10,300			2,875		3,175		2,375
Net interest income after provision for loan losses	3,778			12,177		11,404		11,677
Noninterest income	7,662			2,730		2,794		3,130
Noninterest expense	18,375			12,756		12,387		12,778
(Loss) income before income taxes	(6,935		)	2,151		1,811		2,029
Income tax (benefit) expense	(3,395		)	348		563		386
Net (loss) income	$	(3,540	)	$	1,803	$	1,248	$	1,643
(Loss) earnings per share	$	(8.29	)	$	4.22	$	2.92	$	3.85

During the fourth quarter of 2011, the Company experienced a decrease in the provision for loan losses of $2,390 compared to the third quarter of 2011. The Company determined that the allowance for loan losses was deemed adequate with a reduced provision for loan losses due to a drop in the historical charge-off averages for construction and development and commercial loans. Noninterest income decreased $3,155 compared to the third quarter of 2011 primarily due to reduced gains on securities available for sale. Income tax expense decreased $1,921 compared to the third quarter of 2011, primarily due to an adjustment to deferred taxes from changes in the state and federal effective tax rate.

During the fourth quarter of 2010, the Company recognized a provision for loan losses of $10,300 due to increased charge-offs of $11,314 during the quarter primarily as a result of identification of newly impaired loans and updated valuations received on other impaired loans during the quarter. Noninterest income increased $4,932 compared to the third quarter of 2010 primarily due to the Company recording a gain on sale of loans of $2,803 along with an increase in BOLI income. Noninterest expense increased $5,619 compared to the third quarter of 2010, the majority of which was due to write-downs on other real estate owned.

39

STOCK PERFORMANCE PRESENTATION

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

The Securities and Exchange Commission requires that West Suburban include a line-graph presentation comparing cumulative, five-year shareholder returns on an indexed basis with the Standard & Poor’s 500 Stock Index (“S&P 500”) and either a nationally recognized industry standard or an index of peer companies selected by West Suburban. The Board of Directors has elected to compare an investment in its stock to a peer group index rather than a published industry index because it believes the peer group index includes companies whose businesses are more similar to that of the Company than any published index. The peer group index is comprised of the following companies selected by West Suburban (based on their similarity in size, loan portfolios and business markets): 1st Source Corporation; MB Financial Inc.; Old Second Bancorp, Inc.; PrivateBancorp, Inc.; Taylor Capital Group, Inc.; and Wintrust Financial Corporation. The peer group index previously included AMCORE Financial Inc., Corus Bankshares Inc. and Midwest Banc Holdings Inc., the banking subsidiaries of which failed during the course of 2010.

The following table sets forth the dollar amounts of the annual Total Returns (as defined below) for the Company, the S&P 500 and the peer group, which are plotted on the line graph on the previous page. “Total Return” means the sum of dividends received, assuming dividend reinvestment, and the increase (or decrease) in the share price at the end of the period compared to the beginning of the period, divided by the share price at the beginning of the period.

	Total Return Based on Initial Investment of $100.00
	2006		2007		2008		2009		2010		2011
The Company	$	100.00	$	100.73	$	85.77	$	57.86	$	55.66	$	43.99
S&P 500	100.00		105.49		66.46		84.05		96.71		98.75
Peer Group	100.00		73.82		62.87		44.45		50.31		45.85

The Total Returns of the companies included in the above peer groups have been assigned various weights based on their relative market capitalizations.

40

SELECTED FINANCIAL DATA

(Dollars in thousands, except per share data)

The following information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Company’s Consolidated Financial Statements and Notes to Consolidated Financial Statements included in this annual report. All periods reported have been reclassified, as appropriate, for discontinued operations comparative purposes.

	Years Ended December 31,
	2011			2010			2009			2008			2007
Selected operating data
Interest income	$	67,902		$	76,190		$	82,100		$	95,060		$	108,462
Interest expense	11,829			18,429			24,987			33,972			48,206
Net interest income	56,073			57,761			57,113			61,088			60,256
Provision for loan losses	11,928			18,725			24,925			10,360			375
Net interest income after provision for loan losses	44,145			39,036			32,188			50,728			59,881
Noninterest income (1)	20,195			16,316			5,786			12,464			13,684
Noninterest expense	54,576			56,296			50,020			40,870			42,648
Income (loss) from continuing operations before income taxes	9,764			(944		)	(12,046		)	22,322			30,917
Income tax expense (benefit)	1,948			(2,098		)	(7,802		)	5,080			8,103
Net income (loss) from continuing operations	7,816			1,154			(4,244		)	17,242			22,814
Gain on sale of prepaid solutions group, net of tax	—			—			3,313			—			—
Discontinued operations, net of tax	—			—			96			(426		)	599
Net income (loss) from discontinued operations	—			—			3,409			(426		)	599
Net income (loss)	$	7,816		$	1,154		$	(835	)	$	16,816		$	23,413
Per share data
Earnings (loss) from continuing operations per share	$	18.31		$	2.70		$	(9.89	)	$	39.87		$	52.75
Earnings (loss) from discontinued operations per share	—			—			7.94			(0.99		)	1.38
Earnings (loss) per share	18.31			2.70			(1.95		)	38.88			54.13
Cash dividends declared	—			—			10.00			40.00			50.00
Book value (2)	391.13			365.11			370.14			372.03			373.34
Selected balances, end of year
Securities	$	720,759		$	741,530		$	479,117		$	472,192		$	488,739
Loans, less allowance for loan losses	956,559			1,008,272			1,167,675			1,233,595			1,226,571
Total assets	1,928,684			1,961,624			1,938,583			1,867,420			1,851,357
Deposits	1,739,544			1,778,427			1,756,987			1,625,925			1,637,714
Shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation (2)	166,953			155,848			157,993			160,899			161,468
Ratios
Return on average total assets	0.40		%	0.06		%	(0.04		)%	0.90		%	1.26		%
Return on average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation (2)	4.80		%	0.71		%	(0.52		)%	10.40		%	14.83		%
Cash dividends declared to net income	0.00		%	0.00		%	(514.61		)%	102.88		%	92.36		%
Average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation to average total assets (2)	8.41		%	8.25		%	8.57		%	8.67		%	8.49		%
Net interest margin (3)	3.49		%	3.45		%	3.39		%	3.58		%	3.50		%

(1)	Noninterest income includes gain on sale of portfolio residential real estate loans of $2,803 in 2010. Noninterest income for 2009 includes $(8,320) for the impairment of pooled trust preferred securities and for 2007 includes the impairment of FHLMC stock of $(381).
(2)	See Note 8 to the Company’s consolidated financial statements and “NON-GAAP FINANCIAL MEASURES.” This presentation is consistent with the Company’s belief that it is unlikely that the Company would be required to satisfy the contingent repurchase obligation.
(3)	Net interest margin is presented on a tax equivalent basis, assuming a federal income tax rate of 35%.

41

NON-GAAP FINANCIAL MEASURES

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States (“GAAP”). However, management uses certain non-GAAP measures and ratios to evaluate and measure the Company’s performance. These measures and ratios include book value per share, return on average shareholders’ equity and average shareholders’ equity to average total assets. For each of these measures and ratios, the Company adds to shareholders’ equity the amount in “common stock in ESOP subject to contingent repurchase obligation.” Under the ESOP, the Company has certain contingent repurchase obligations to buy back common stock distributed to participants, as described in more detail in Note 8 to the Company’s audited financial statements. This contingent repurchase obligation is reflected in the Company’s financial statements as “common stock in ESOP subject to contingent repurchase obligation” and, in accordance with GAAP, reduces shareholders’ equity. The Company believes that it is unlikely that the Company would be required to satisfy its contingent repurchase obligation and therefore believes that adjusting shareholders’ equity by adding “common stock in ESOP subject to contingent repurchase obligation” to that amount provides a more meaningful view of the applicable measures and ratios. In addition, management believes that the return on average shareholders’ equity, a financial measure frequently considered to evaluate the performance of bank holding companies, would be significantly overstated.

The following table presents a reconciliation of certain non-GAAP performance measures and ratios used by the Company to the most directly comparable GAAP financial measures for the years ended December 31 (dollars in thousands, except per share data):

	2011			2010			2009			2008			2007
Shareholders’ equity (GAAP)	$	143,723		$	125,983		$	126,763		$	114,229		$	104,561
Shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation (non-GAAP)	166,953			155,848			157,993			160,899			161,468
Book Value Per Share (GAAP) (1)	336.71			295.15			296.97			264.12			241.76
Book Value Per Share (non-GAAP) (2)	391.13			365.11			370.14			372.03			373.34
Return on average shareholders’ equity (GAAP) (3)	5.78		%	0.90		%	(0.70		)%	16.01		%	24.04		%
Return on average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation (non-GAAP) (4)	4.80		%	0.71		%	(0.52		)%	10.40		%	14.83		%
Average shareholders’ equity to average total assets (GAAP) (5)	6.99		%	6.52		%	6.34		%	5.63		%	5.24		%
Average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation to average total assets (non-GAAP) (6)	8.41		%	8.25		%	8.57		%	8.67		%	8.49		%

(1)	Book Value Per Share (GAAP) equals shareholders’ equity divided by the number of outstanding shares.
(2)	Book Value Per Share (non-GAAP) equals shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation divided by the number of outstanding shares.
(3)	Return on average shareholders’ equity (GAAP) equals net income divided by average shareholders’ equity.
(4)	Return on average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation (non-GAAP) equals net income divided by average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation.
(5)	Average shareholders’ equity to average total assets (GAAP) equals average shareholders’ equity divided by average total assets.
(6)	Average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation to average total assets (non-GAAP) equals average shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation divided by average total assets.

42

AVERAGE BALANCE SHEETS, NET INTEREST INCOME AND

AVERAGE RATES AND YIELDS ON A TAX EQUIVALENT BASIS

(Dollars in thousands)

The following table presents for the years indicated the total dollar amount of interest income from average interest-earning assets and their yields, as well as the interest expense on average interest-bearing liabilities and their costs, expressed both in dollars and rates. All average balances are daily average balances. To the extent received, interest on nonaccruing loans has been included in the table.

	Years Ended December 31,
	2011							2010							2009
	Average Balance			Interest		Rate		Average Balance			Interest		Rate		Average Balance			Interest		Rate
Assets
Federal funds sold	$	9,543		$	28	0.3	%	$	22,517		$	56	0.2	%	$	61,280		$	162	0.3	%
Securities
Taxable	673,778			18,061		2.7	%	553,802			17,608		3.2	%	420,986			17,985		4.3	%
Exempt from federal income tax (1)	34,196			1,866		5.5	%	28,951			1,676		5.8	%	28,253			1,730		6.1	%
Total securities (1)	707,974			19,927		2.8	%	582,753			19,284		3.3	%	449,239			19,715		4.4	%
Loans (1)(2)	921,757			49,121		5.3	%	1,094,309			57,774		5.3	%	1,201,646			63,131		5.3	%
Total interest-earning assets (1)(2)	1,639,274			69,076		4.2	%	1,699,579			77,114		4.5	%	1,712,165			83,008		4.8	%
Cash and due from banks	100,727							100,779							39,982
Premises and equipment, net	43,851							42,882							45,448
Other real estate owned	40,401							24,161							10,426
Allowance for loan losses	(28,341		)					(27,961		)					(19,859		)
Accrued interest and other assets (2)	140,394							122,427							82,489
Total assets	$	1,936,306						$	1,961,867						$	1,870,651
Liabilities and shareholders’ equity
Interest-bearing deposits
NOW	$	341,840		194		0.1	%	$	326,489		215		0.1	%	$	314,199		275		0.1	%
Money market checking	430,477			2,291		0.5	%	419,385			3,516		0.8	%	370,914			6,507		1.8	%
Savings	365,543			1,014		0.3	%	342,602			993		0.3	%	333,243			1,392		0.4	%
Time deposits
Less than $100,000	322,463			5,757		1.8	%	381,132			9,625		2.5	%	372,061			12,079		3.2	%
$100,000 and greater	115,999			2,572		2.2	%	143,174			4,080		2.8	%	135,242			4,691		3.5	%
Total interest-bearing deposits	1,576,322			11,828		0.8	%	1,612,782			18,429		1.1	%	1,525,659			24,944		1.6	%
Other interest-bearing liabilities	6,160			1		0.0	%	7,285			—		0.0	%	8,468			43		0.5	%
Total interest-bearing liabilities	1,582,482			11,829		0.7	%	1,620,067			18,429		1.1	%	1,534,127			24,987		1.6	%
Demand-noninterest-bearing deposits	174,795							163,906							152,332
Accrued interest and other liabilities	16,191							15,950							23,953
Shareholders’ equity plus common stock in ESOP subject to contingent repurchase obligation (3)	162,838							161,944							160,239
Total liabilities and shareholders’ equity	$	1,936,306						$	1,961,867						$	1,870,651
Net interest income				$	57,247						$	58,685						$	58,021
Interest rate spread						3.5	%						3.4	%						3.2	%
Net interest margin (1)						3.5	%						3.5	%						3.4	%

(1)	Interest income, net interest margin and yields are presented on a tax equivalent basis, assuming a federal income tax rate of 35%.
(2)	The average balances of nonaccrual loans are included in accrued interest and other assets.
(3)	See Note 8 to the Company’s consolidated financial statements and “NON-GAAP FINANCIAL MEASURES.” This presentation is consistent with the Company’s belief that it is unlikely that the Company would be required to satisfy the contingent repurchase obligation.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion and analysis provides information regarding the Company’s financial condition as of December 31, 2011 and 2010, and the results of operations for each of the three years in the period ended December 31, 2011. This discussion and analysis should be read in conjunction with the Company’s Consolidated Financial Statements and Notes to Consolidated Financial Statements included in this annual report. The financial information provided below is rounded in order to simplify the presentation of management’s discussion and analysis. However, the ratios and percentages provided below are calculated using the more detailed financial information contained in the financial statements, notes and tables included elsewhere in this annual report.

Executive Overview

At the end of 2007, the United States economy experienced a downturn, the effects of which have continued into 2011. During this period, the United States economy experienced high levels of unemployment, depressed home values, extremely low liquidity in the debt markets and lower values and high volatility in the equity markets. As a result of these conditions, consumer confidence and spending decreased substantially and asset values declined. Like many other financial institutions, the Company’s financial results in recent reporting periods, including 2011, were impacted by the continuing economic downturn.

The 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 December 31, 2011, was 9.8%. 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.

As a result of the continuing economic situation in the national and local economies and low real estate values, management has focused its attention primarily on improving the performance of the Bank’s loan portfolio. Although the Bank’s nonaccrual loans decreased during 2011 compared to 2010, the level of nonaccrual loans remained at a historically high level, which adversely impacted its interest income. The deterioration in the Bank’s loan portfolio has forced the Bank to increase its allowance for loan losses to absorb additional losses in the loan portfolio. The Bank’s Board of Directors 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’s loan portfolio. Although management has maintained a higher level of allowance for loan losses compared to historical levels in response to heightened 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 and acquisitions made in lieu of foreclosures, the Bank’s other real estate owned portfolio remained at a high level in 2011, further decreasing the Bank’s interest income. Management believes that the level of the Bank’s other real estate owned portfolio will remain at a high level in 2012 and may increase. Management has had to focus additional time and effort on selling these properties, and the Bank has incurred significant costs in connection with maintaining the properties, including real estate taxes, management fees and insurance costs. Management continues to aggressively pursue sales of the properties in the Bank’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.

During this difficult economic period the Bank has seen low levels of quality demand for credit. Although concerns over the credit quality in the Bank’s loan portfolio exist, the Bank continues to be willing to make loans to qualified applicants that meet its traditional, prudent lending standards, which have not changed.

In response to the economic downturn, the Federal Reserve has maintained and has indicated that it will hold interest rates at historically low levels through the next several years. Additionally, the Federal Reserve has used various forms of monetary policy in an attempt to drive down long-term interest rates during this economic downturn. The presence of these historically low interest rates has created net interest challenges for the banking industry in general

44

and the Bank in particular. This interest rate environment has resulted in low-yielding investment opportunities, adding to the downward pressure on the Bank’s interest income. Management has been focused on investments for the Bank’s securities portfolio that are expected to retain their value in the event of an unexpected increase in market interest rates over the next few years. Specifically, the Bank has invested in mortgage-backed securities issued by U.S. government sponsored enterprises with average maturities of less than five years. In addition, movements in general market interest rates are a key element in changes in the Bank’s interest rate margin, and management expects the interest rate environment to remain at historically low levels throughout 2012.

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. Specifically, 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 December 31, 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.

At December 31, 2011, the Bank’s Tier 1 capital to average total assets ratio was 8.11%, .11%, or $2.2 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 13.46%, 1.46%, or $18.5 million, above the 12.00% the Bank agreed with its regulators to maintain.

Critical Accounting Policies

The Company’s financial statements are prepared in conformity with accounting principles generally accepted in the U.S. These accounting principles, which can be complex, are significant to our financial condition and 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 Consolidated Financial Statements and Notes to Consolidated Financial Statements included in this annual report.

In management’s 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, the fair value of common stock subject to contingent repurchase obligation and the carrying value of other real estate owned.

Allowance 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.

The Company evaluates commercial, construction and development and commercial real estate 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

45

experiencing financial difficulties are considered TDRs and classified as impaired. Impairment is measured 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 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.

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 a specific allowance for loan losses. The following portfolio segments have been identified: commercial, residential, commercial real estate, construction and development and consumer and other loans.

Income 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.

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

Temporary Decline in Fair Value of Securities. The Company evaluates its debt and equity securities for OTTI under FASB guidance “Investments in Debt and Equity Securities.” The guidance applies to debt securities, as well as equity securities not accounted for under the equity method (i.e., cost method investments), unless the investments are subject to other accounting guidance, such as FASB guidance “Beneficial Interest in Securitized Financial Assets.” Investments in securitized structures such as collateralized mortgage obligations and collateralized debt obligations that are not high quality investment grade securities upon acquisition are subject to this guidance. High quality investment grade securities are defined as securities with an investment grade of “AA” or higher.

In 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.

Other Real Estate Owned. Assets acquired through or instead of 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.

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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. Such obligations generally relate to the funding of operations through deposits, 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. Such commitments are subject to the same credit policies and approval as comparable loans made by the Company.

At December 31, 2011 and 2010, the ESOP held 89,348 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 8 to the Company’s Consolidated Financial Statements included in this report. At December 31, 2011 and 2010, this contingent repurchase obligation reduced shareholders’ equity by $23.2 million and $29.9 million, respectively.

The following table presents the Company’s significant fixed and determinable contractual obligations and significant commitments by payment date as of December 31, 2011 (dollars in thousands). The payment amounts represent those amounts contractually due to the recipient and do not include any carrying value adjustments. Further discussion of the nature of each obligation is included in the referenced Note to the Company’s Consolidated Financial Statements included in this annual report.

	Note Reference	One Year or Less		Over One Year to Three Years		Over Three Years to Five Years		Over Five Years		Total
Deposits without a stated maturity	6	$	1,327,315	$	—	$	—	$	—	$	1,327,315
Time deposits	6	235,929		129,686		40,636		168		406,419
Prepaid solutions card deposits	6	5,810		—		—		—		5,810
Operating leases	4	401,815		598,321		385,508		—		1,385,644
Commitments to extend credit
Fixed rate	9									10,026
Variable rate	9									285,617
Deferred compensation	8									2,733
Postretirement benefit plan	8									1,248

Balance Sheet Analysis

Total Assets. Total consolidated assets at December 31, 2011 decreased 1.7% from the prior year-end. This decrease was primarily due to decreases in the loan and securities portfolios, partially offset by increases in cash and due from banks. Total average assets in 2011 decreased 1.3% from the prior year primarily due to a decrease in average loans.

Cash and Cash Equivalents. Cash and cash equivalents at December 31, 2011 increased 64.6% from the prior year-end due to an increase in cash and due from banks. This increase was driven by decreases in the loan and securities portfolios partially offset by a decrease in deposits.

Securities. The Company’s securities portfolio decreased 2.8% at December 31, 2011 from the prior year-end, primarily due to sales of securities available for sale of $190.5 million during 2011 for a gain of $8.0 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

47

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. 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 provide liquidity to fund the decrease in deposits.

Securities available for sale are carried at fair value, while securities held to maturity and Federal Home Loan Bank stock are carried at cost. The securities available for sale portfolio had gross unrealized gains of $7.1 million, which were offset by gross unrealized losses of $.4 million as of December 31, 2011, as compared with gross unrealized gains of $6.8 million and gross unrealized losses of $5.8 million as of December 31, 2010.

Loans. Total loans outstanding at December 31, 2011 decreased 5.0% from the prior year-end, primarily due to decreases in the construction and development and home equity loan portfolios. These decreases were 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 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 and commercial real estate loan portfolios, overall loan demand in the Company’s market area remains low compared to historical periods.

Allowance for Loan Losses and Asset Quality. The ratio of the allowance for loan losses to total loans outstanding was 2.80% and 2.71% at December 31, 2011 and 2010, respectively. The following table is an analysis of the Company’s nonperforming loans and other real estate owned at December 31 (dollars in thousands):

	2011			2010			2009
Loans past due 90 days or more still on accrual	$	286		$	191		$	790
Nonaccrual loans	53,058			80,344			38,038
Total nonperforming loans	$	53,344		$	80,535		$	38,828
Nonperforming loans as a percent of total loans	5.42		%	7.77		%	3.25		%
Allowance for loan losses as a percent of nonperforming loans	52		%	35		%	67		%
Other real estate owned	$	23,505		$	20,479		$	25,994
Nonperforming assets as a percent of total assets	3.98		%	5.15		%	3.34		%

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 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 TDRs and classified as impaired.

Net loan charge-offs were $12.4 million and $16.6 million in 2011 and 2010, respectively. This decrease was primarily due to the decrease in the level of nonperforming loans. Nonperforming loans (nonaccrual and loans past due 90 days or more still on accrual) decreased to $53.3 million at December 31, 2011, from $80.5 million at December 31, 2010. This change was primarily due to decreases in nonaccrual loans as a result of $55.4 million in loans being transferred to other real estate owned, as well as $5.3 million in payments on nonaccrual loans and $2.4 million in charge-offs of nonaccrual loans during 2011. Despite the transfer of a significant amount of nonaccrual loans, other real estate owned increased only by $3.0 million as a result of sales of properties during 2011.

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Additionally, $3.2 million of loans were brought current during 2011. These decreases to nonaccrual loans were partially offset by $35.0 million of loans being classified as nonaccrual during 2011.

The provision for loan losses was $11.9 million and $18.7 million for 2011 and 2010, respectively. Based on the above discussions on nonperforming loans, impaired loans and overall decline in total loans of $52.2 million, the Company determined that the provision for loan losses of $11.9 million was appropriate to maintain the allowance for loan losses at an adequate level for probable incurred losses inherent in the loan portfolio as of December 31, 2011. The provision for loan losses during 2011 was net of a negative provision of $1.1 million for commercial real estate. This negative provision was a result of reductions in the historical loss factors used in the general component of the allowance for loan losses.

Bank-Owned Life Insurance (“BOLI”). The carrying value of BOLI decreased to $32.6 million at December 31, 2011 from $39.5 million at 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 a portion of the deferred compensation plan.

Other Real Estate Owned. At December 31, 2011, the Company had $23.5 million in other real estate owned, compared to $20.5 million at December 31, 2010. During 2011, the Company acquired properties with an aggregate carrying value of $55.4 million, and the Company sold properties with an aggregate carrying value of $46.5 million. These sales produced a net loss 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 2011, the Company recorded aggregate write-downs of $5.9 million due to continued declines 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.

Deposits.Total deposits at December 31, 2011 decreased 2.2% from the prior year-end due to decreases in certificates of deposit and prepaid solutions deposits. These decreases were partially offset by continued increases in all other non-maturity deposits components. 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 December 31, 2011, the Company held $5.8 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 December 31, 2011, the Bank had no brokered deposits.

Prepaid Solutions Cards. Outstanding balances on prepaid solutions cards, which represent the total of prepaid solution cards deposits and prepaid solutions cards liabilities, decreased 58.4% at December 31, 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.

Capital Resources

Shareholders’ equity at December 31, 2011 increased 14.1% from December 31, 2010. The increase resulted from net income of $7.8 million, a change in the amount reclassified on ESOP shares of $6.6 million and an increase in accumulated other comprehensive income of $3.3 million. 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.

Banking regulations require the Company and the Bank to maintain minimum capital amounts and ratios. Regulatory capital requirements call for a minimum total risk-based capital ratio of 8% for each of the Company and the Bank, a minimum Tier 1 risk-based capital ratio of 4% for each of the Company and the Bank and a minimum leverage ratio (3% for the most highly rated banks and bank holding companies that do not expect significant growth; all other institutions are required to maintain a minimum leverage capital ratio of 4% to 5% depending on

49

their particular circumstances and risk and growth profiles) for each of the Company and the Bank. On a consolidated basis, the Company exceeded these minimum regulatory capital requirements as of December 31, 2011. Bank holding companies and their subsidiaries are generally expected to operate at or above the minimum capital requirements.

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 December 31, 2011 the Bank was in compliance with these heightened regulatory capital requirements. If the Bank is not in compliance with these requirements in the future, the Bank may become subject to additional regulatory actions or restrictions.

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.

As of December 31, 2011, the Bank’s Tier 1 capital to average total assets ratio was 8.11%, .11%, or $2.2 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 13.46%, 1.46%, or $18.5 million, above the 12.00% the Bank agreed with its regulators to maintain.

As of December 31, 2011 and 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 December 31, 2011, that management believes would result in a change of the Bank being considered “well-capitalized.”

Liquidity

Effective 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 for 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 December 31, 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.

Generally, the Company uses cash and cash equivalents to meet its liquidity needs. As of December 31, 2011 and 2010, these liquid assets represented 29.6% and 30.0% of total assets, respectively. If the Company’s cash and cash equivalents are not sufficient to meet its liquidity needs, the Company would access the federal funds available for a short period of time. If longer term liquidity is needed, the Company would meet those needs by using securities available for sale.

Net cash provided by operating activities during 2011 was $17.6 million. Net cash provided by investing activities was $65.7 million, while net cash used in financing activities for this period was $37.7 million.

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Income Statement Analysis — 2011 Compared to 2010

General. The Company’s net income increased $6.6 million to $7.8 million at December 31, 2011 from $1.2 million at December 31, 2010. This increase was primarily due to a decrease in the provision for loan losses expense of $6.8 million. Additionally, total noninterest income increased $3.9 million. Income tax expense increased $4.0 million, partially offsetting these increases to income.

Net Interest Income. Net interest income (on a fully tax-equivalent basis, assuming a tax rate of 35.0%) decreased 2.5% compared to 2010. Net interest income is the primary source of income for the Company. Net interest income is the difference between interest income earned on interest-earning assets and interest expense incurred on interest-bearing liabilities. Net interest income is affected by changes in volume and yield on interest-earning assets and interest-bearing liabilities. Interest-earning assets consist of federal funds sold, securities and loans. Interest-bearing liabilities primarily consist of deposits. The net interest margin is the percentage of tax-equivalent net interest income to average earning assets. The Company’s net interest margin (on a fully tax-equivalent basis) was 3.5% for the years ended December 31, 2011 and 2010.

Total interest income (on a tax-equivalent basis, assuming a tax rate of 35.0%) decreased 10.4% during 2011 compared to 2010, primarily due to the decrease in total loans and decreasing yields in the Company’s securities portfolio. Average loan balances decreased 15.8% during 2011 while the average yield on the loan portfolio increased five basis points. Average securities balances increased 21.5% during 2011, and the average yield on the securities portfolio decreased 50 basis points. Management decided to sell securities as market rates declined during 2011. A large portion of these securities were sold in order to reduce the Company’s interest rate risk in the securities portfolio. Management’s analysis of these securities indicated that certain higher yielding securities could be sold at a gain and over time the proceeds could be reinvested at lower yields and continue to be accretive to earnings.

Total interest expense decreased 35.8% during 2011 compared to 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 39 basis points to .7% during 2011 from 1.1% during 2010. Approximately 58.1% of time deposits are scheduled to mature within one year.

The following table reflects the impact of changes in volume and rates of interest-earning assets and interest-bearing liabilities on a tax equivalent basis for the years ended December 31, 2011 and 2010 (dollars in thousands):

	2011 compared to 2010									2010 compared to 2009
	Change due to						Total			Change due to						Total
	Volume			Rate			Change			Volume			Rate			Change
Interest Income
Federal funds sold	$	(38	)	$	10		$	(28	)	$	(96	)	$	(10	)	$	(106	)
Securities	3,525			(2,882		)	643			4,418			(4,849		)	(431		)
Loans	(9,195		)	542			(8,653		)	(5,667		)	310			(5,357		)
Total interest income	(5,708		)	(2,330		)	(8,038		)	(1,345		)	(4,549		)	(5,894		)
Interest Expense
Interest-bearing deposits	(274		)	(6,327		)	(6,601		)	996			(7,511		)	(6,515		)
Other interest-bearing liabilities	(42		)	43			1			(42		)	(1		)	(43		)
Total interest expense	(316		)	(6,284		)	(6,600		)	954			(7,512		)	(6,558		)
Net interest income	$	(5,392	)	$	3,954		$	(1,438	)	$	(2,299	)	$	2,963		$	664

Provision for Loan Losses. The provision for loan losses decreased $6.8 million in 2011. A more detailed discussion concerning the allowance for loan losses is presented in the Allowance for Loan Losses and Asset Quality section of this annual report.

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Noninterest Income.Total noninterest income increased $3.9 million during 2011 compared to 2010. During 2011, the Company sold $190.5 million of investment securities resulting in an increase in gains on sales of investment securities of $7.7 million. The Company also experienced an increase in other income of $.4 million primarily due to increased servicing fees on sold loans and mortgage loan application fees. During 2010, the Company recorded a gain on sale of portfolio loans held for sale of $2.8 million. The Company experienced a decrease in BOLI income of $.8 million primarily due to the surrendering of $7.9 million of BOLI policies in connection with the termination of a portion of the deferred compensation plan. Service fees on deposit accounts decreased $.8 million primarily due to decreased fees associated with the overdraft honor program.

Noninterest Expense. Total noninterest expense decreased 3.1% during 2011 compared to 2010. FDIC assessment expense decreased $1.2 million primarily due to changes in the assessment calculation implemented by the FDIC during 2011. Furniture and equipment expense decreased $.3 million primarily due to reduced depreciation expense. Professional fees expense decreased $.6 million primarily due to reduced costs associated with regulatory compliance issues and lending. Loan administration expense decreased $.5 million due to reduced expenses incurred in 2011 for real estate tax payments on collateral securing nonaccrual commercial, commercial real estate and construction and development loans. Occupancy expense decreased $.2 million primarily due to reduced rent expense net of rental income. This decrease was partially offset by increased maintenance building costs. Salaries and employee benefits expense decreased $.4 million primarily due to the surrendering of $7.9 million of BOLI policies in connection with the termination of a portion of the deferred compensation plan. Other real estate owned expense increased $1.2 million primarily due to increased property management expenses and increased write-downs during 2011.

Income Taxes. Income tax expense increased $4.0 million during 2011 compared to 2010. The effective tax rates for 2011 and 2010 were 20.0% and (222.2%), respectively. The increase was 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 on the BOLI tied to the portion of the deferred compensation plan terminated in the third quarter of 2011, which resulted in the Company incurring additional tax expense on the life-to-date earnings of the surrendered BOLI. Additionally, a higher blended tax rate in 2011 as compared to 2010 is due to an increase in the State of Illinois and the federal effective tax rate. During 2011, the Company adjusted the deferred tax assets using the higher state and federal effective tax rates resulting in a decrease in the income tax expense of $1.1 million.

Income Statement Analysis — 2010 Compared to 2009

General. The Company had net income in 2010 of $1.2 million compared to a net loss of $.8 million in 2009. The net loss in 2009 resulted primarily from an $8.3 million write-down of pooled trust preferred securities during 2009, while no similar write-downs were taken in 2010. Additionally, the Company recorded a $24.9 million provision for loan losses in 2009 compared to $18.7 million in 2010.

Net Interest Income. Net interest income in 2010 (on a fully tax-equivalent basis) increased 1.1% compared to 2009. Net interest income is the primary source of income for the Company. Net interest income is the difference between interest income earned on interest-earning assets and interest expense incurred on interest-bearing liabilities. Net interest income is affected by changes in volume and yield on interest-earning assets and the volume and rates on interest-bearing liabilities. Interest-earning assets consist of federal funds sold, securities and loans. Interest-bearing liabilities primarily consist of deposits. The net interest margin is the percentage of tax-equivalent net interest income to average earning assets. The Company’s net interest margin (on a fully tax-equivalent basis) increased to 3.5% at December 31, 2010 compared to 3.4% at December 31, 2009.

Total interest income (on a tax-equivalent basis) decreased 7.1% in 2010 primarily due to decreased balances in the Company’s loan portfolio and an increase in loans classified as nonaccrual. Average loan balances decreased 8.9% during this period while the average yield on the loan portfolio increased 3 basis points. Securities average balances increased 29.7% in 2010, and the average yield on the securities portfolio decreased 108 basis points due to the purchased securities in 2010 being lower yielding than existing securities in the portfolio.

Total interest expense decreased 26.2% in 2010. The decline was primarily due to lower cost of funds on interest-bearing deposits which decreased 49 basis points to 1.14% in 2010 from 1.63% in 2009. Approximately 61% of the

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Company’s time deposits are scheduled to mature in 2011, which will reduce the cost of funds as management expects that the time deposits will be either renewed at a substantially lower rate or replaced with lower costing alternative funding sources.

Provision for Loan Losses. The provision for loan losses decreased $6.2 million in 2010. A more detailed discussion concerning the allowance for loan losses is presented in the Allowance for Loan Losses and Asset Quality section of this annual report.

Noninterest Income.Total noninterest income increased $10.5 million during 2010 compared to 2009. Although the Company did not record any OTTI on its securities portfolio in 2010, during 2009, the Company recorded OTTI on its pooled trust preferred securities in the amount of $8.3 million, which reduced noninterest income. The Company recorded a gain on sale of portfolio loans held for sale of $2.8 million. A more detailed discussion concerning this transaction is presented in the Balance Sheet Analysis of this annual report. The Company recorded BOLI income of $1.7 million for 2010, compared to $2.0 million for 2009. This decrease in BOLI income was primarily due to a smaller increase, in 2010 compared to 2009, in the market value of the underlying investments with specific account assets. The Company experienced an increase in net realized gains on securities transactions of $.2 million primarily due to a one-time sale of Mastercard stock. Service fees on deposit accounts decreased $.8 million primarily due to decreased fees associated with the overdraft honors program.

Noninterest Expense. Total noninterest expense increased 12.5% during 2010 compared to 2009. Salaries and employee benefits decreased $1.0 million primarily due to a smaller increase in 2010, compared to 2009, in the market value of the underlying investments associated with the insurance policies that are tied to the Company’s deferred compensation plans. Other real estate owned expense increased primarily due to $5.5 million of write-downs on other real estate owned in 2010 compared to write-downs on other real estate owned of $.4 million in 2009. Occupancy expense increased $.2 million primarily due to increased rent and real estate taxes. Furniture and equipment expense decreased $.5 million primarily due to reduced depreciation and maintenance expense. FDIC assessments increased $.6 million due to several factors, including increased assessments issued by the FDIC in support of the deposit insurance fund as well as the Temporary Liquidity Guarantee Program and the Company’s participation in the FDIC’s Transaction Account Guarantee Program. Loan administration expense increased $1.6 million primarily due to real estate tax payments on several nonaccrual commercial, commercial real estate and construction and development loans along with expenses incurred in connection with the collection of lease payments from a nonaccrual commercial loan. Professional fees decreased $1.3 million primarily due to reduced costs associated with the Company’s compliance with the enforcement actions related to the Bank Secrecy Act and other regulatory compliance related matters. Advertising and promotion expense increased $.3 million primarily due to increased advertising on cable television in 2010. Other expense increased $.5 million due to increased regulatory examination fees as a rebate occurred in the 2009 period. Additionally, Visa cardholder expense increased due to the increase in the accrual for quarterly Visa costs.

Income Taxes. The Company recorded an income tax benefit of $2.1 million for 2010 as compared to an income tax benefit of $7.8 million for 2009. The effective tax rates for 2010 and 2009 were (222.2%) and (86.9%), respectively. The decrease in the income tax benefit in 2010 from 2009 was a result of a lower loss before income taxes. The Company recorded a larger income tax benefit than pre-tax net loss for 2010 due to the impact of large permanent differences resulting from tax-exempt income, BOLI income and ESOP dividends.

Interest Rate Sensitivity

The primary market risk faced by the Company is interest rate 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.

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

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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 the Company’s assumptions, which include the following:

·Balance sheet volume reflects the current balances and does not project future growth or changes. The current balances establish the base case from which all percent 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.

·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.

Listed 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):

	Amount		Dollar Change			Percent Change
December 31, 2011
+200 basis points	$	51,420	$	(2,637	)	(4.9	)%
+100 basis points	50,949		(3,108		)	(5.7	)%
Base	54,057
-100 basis points	48,215		(5,842		)	(10.8	)%
-200 basis points	45,876		(8,181		)	(15.1	)%
December 31, 2010
+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 December 31, 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.

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Effects of Inflation

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

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BOARDS OF DIRECTORS

West Suburban Bancorp, Inc.

Kevin J. Acker	Chairman of the Board
David S. Bell	Certified Public Accountant
Duane G. Debs	President and Chief Financial Officer
Charles P. Howard	Parkview Community Church, Administrative Pastor
Peggy P. LoCicero	Former Bank Officer

West Suburban Bank

Keith W. Acker	Chairman of the Board, President
Craig R. Acker	Former Bank Officer
David S. Bell	Certified Public Accountant
Keith J. Kotche	Levato & Kotche, Partner
William L. Smith, Jr.	Taslitz, Smith and Hemmesch, Partner
John G. Williams	Bracing Systems, Vice President

OFFICERS

West Suburban Bancorp, Inc.

Kevin J. Acker	Chief Executive Officer
Duane G. Debs	President and Chief Financial Officer
Keith W. Acker	Chief Operations Officer
Michael P. Brosnahan	Vice President
Timothy W. Clifford	Vice President, Director of Internal Audit
George E. Ranstead	Secretary to the Board and Treasurer

West Suburban Bank

Senior Officers
Keith W. Acker	President, Trust Officer
Kevin J. Acker	Senior Vice President, Marketing
Michael P. Brosnahan	Senior Vice President, Lending
Duane G. Debs	Senior Vice President, Comptroller and Trust Officer
Bank Secrecy Act
Matthew Beckmann	Bank Secrecy Act Officer
Cash Management
Gary Raczek	Vice President, Cash Management Manager
Commercial Loans
Stanley C. Celner, Jr.	Vice President, Commercial Loans
Grant O. Cowen	Vice President, Commercial Loans

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Timothy P. Dineen	Vice President, Commercial Real Estate Loans
Michael F. Moone	Vice President, Commercial Real Estate Loans
David B. Lahl	Vice President, Commercial Loans
David S. Orr	Vice President, Commercial Loans
John J. Schroeder	Vice President, Commercial Loans
Edwin S. Stephens IV	Vice President, Commercial Loans
Gregory L. Young	Vice President, Commercial Loans
Comptroller
Jay J.P. Greifenkamp	Vice President, Senior Financial Analyst, Investment Officer and Secretary to the Board
George E. Ranstead	Vice President, Assistant Comptroller and Investment Officer
Consumer Loans
Charles J. Svoboda	Vice President, Consumer Loans - Department Head
David J. Wanek	Vice President, Consumer Loans
Facilities Management
Edward J. Garvey	Vice President, Facilities Management
Matthew R. Acker	Property and OREO Manager
Financial Services
Michael Abbatacola	Vice President, Financial Services
Human Resources
Mary Ellen Condon	Vice President, Human Resources
Information Systems
Steven A. Jennrich	Vice President, Information Systems
Jacqueline R. Weigand	Vice President, Project Manager
Internal Audit
Timothy W. Clifford	Vice President, Director of Internal Audit
Loan Operations
Kevin G. Carani	Vice President, Mortgage Processing, Loan Servicing
Sandra C. Boyce	Vice President, Residential Mortgage Loan Processing
Kevin Bussey	Vice President, Collections
Debra H. Crowley	Vice President, Commercial Loan Operations
Lawrence J. Ortman	Vice President, Credit Analysis and Loan Review
Marketing
Denise M. Zatarski	Director of Marketing
Operations
Danielle Budig	Vice President, Corporate Operations and Visa
Regulatory Compliance and Community Reinvestment Act
Alice Ann Gaultney	Vice President, Director of Regulatory Compliance and Community Reinvestment Act Officer
Retail Banking
William J. Jennrich	Vice President, Retail Branch Banking
Barbara D. Darden	Vice President, Regional Manager - Central Region
Marc L. DiNatale	Vice President, Regional Manager - East Region

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Kirsten L. Erickson	Vice President, Regional Manager - West Region, Acting Branch Manager - Bartlett and Montgomery
Marcia K. Worobec	Vice President, Branch Operations and Branch Manager - Westmore
Jennifer Bentson	Assistant Vice President, Branch Manager - Oswego, Oswego West
Kathleen M. Brockman	Assistant Vice President, Branch Manager - Eola Road
John Bruner	Assistant Vice President, Branch Manager - South Main
Jill E. Castillo	Assistant Vice President, Branch Manager - Oakbrook Terrace
Maribel Colon	Assistant Vice President, Branch Manager - Lake Street
Beverly D. Cornelious	Assistant Vice President, Branch Manager - Bolingbrook East
Gina M. Corral	Assistant Vice President, Branch Manager - Bolingbrook West
Robert G. Dover, Jr.	Assistant Vice President, Branch Manager - Gary Avenue
Nansi E. Eivaz	Assistant Vice President, Branch Manager - Chicago Avenue, Naperville
Sharon A. Fonte	Assistant Vice President, Branch Manager - Glendale Heights
James R. Graziano	Assistant Vice President, Branch Manager - Finley Road, Downtown Downers
Jacqueline Green	Assistant Vice President, Branch Manager - Warrenville
Priya Hira	Assistant Vice President, Branch Manager - Danada, Wheaton
Desiree King	Assistant Vice President, Branch Manager - Fair Oaks
Terry Leitner	Assistant Vice President, Branch Manager - Cass Avenue, 75th Street
Jeffery W. Miska	Assistant Vice President, Branch Manager - North Main
Brian S. Nickleski	Assistant Vice President, Branch Manager - Westmont
Sandra Ochoa	Assistant Vice President, Branch Manager - Randall Road
Gwen B. O’Loughlin	Assistant Vice President, Branch Manager - Villa Park
Robert L. Pauling	Assistant Vice President, Branch Manager - Stratford Square
Cynthia A. Picton	Assistant Vice President, Branch Manager - West Galena
Michelle Rashad	Assistant Vice President, Branch Manager - Romeoville
Matthew Remus	Assistant Vice President, Branch Manager - Sugar Grove, Yorkville
Lisa M. Schmidt	Assistant Vice President, Branch Manager - South Elgin
Ann M. Talavera	Assistant Vice President, Branch Manager - President Street
Patience K. Tannenbaum	Assistant Vice President, Branch Manager - Charlestowne
Mihaela Tonchevici	Assistant Vice President, Branch Manager - River Run
Security and Loss Prevention
Jack Buscemi	Vice President, Security and Loss Prevention
Trust
Christine H. Pawlak	Trust Officer
West Suburban Insurance Services
Patricia Falstrom	Insurance Agent

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ADDRESSES OF WEST SUBURBAN FACILITIES

(630) 652 - 2000

Aurora

Eola Road Branch: 335 North Eola Road, Aurora, Illinois 60504

West Galena Branch: 2000 West Galena Boulevard, Aurora, Illinois 60506

Lake Street Branch: 101 North Lake Street, Aurora, Illinois 60506

Bartlett

Bartlett Branch: 1061 West Stearns Road, Bartlett, Illinois 60103

Bloomingdale

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

Bolingbrook

Bolingbrook East Branch: 672 East Boughton Road, Bolingbrook, Illinois 60440

Bolingbrook West Branch: 1104 West Boughton Road, Bolingbrook, Illinois 60440

Carol Stream

Gary Avenue Branch: 401 North Gary Avenue, Carol Stream, Illinois 60188

Fair Oaks Branch: 1380 West Army Trail Road, Carol Stream, Illinois 60188

President Street Branch: 895 East Geneva Road, Carol Stream, Illinois 60188

Darien

75th Street Branch: 1005 75th Street, Darien, Illinois 60561

Cass Avenue Branch: 8001 South Cass Avenue, Darien, Illinois 60561

Downers Grove

Downtown Downers Branch: 5330 Main Street, Downers Grove, Illinois 60515

Finley Road Branch: 2800 Finley Road, Downers Grove, Illinois 60515

Glendale Heights

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

Lombard

North Main Branch: 707 North Main Street, Lombard, Illinois 60148

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

Westmore Branch: 711 South Meyers Road, Lombard, Illinois 60148 (Headquarters)

Montgomery

Montgomery Branch: 1830 Douglas Road, Montgomery, Illinois 60538

Naperville

Chicago Avenue Branch: 1296 East Chicago Avenue, Naperville, Illinois 60540

Naperville Branch: 2020 Feldott Lane, Naperville, Illinois 60540

River Run Branch: 1004 104th Street, Naperville, IL 60564

Oakbrook Terrace

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

Oswego

Oswego Branch: 2830 Route 34, Oswego, Illinois 60543

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

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Romeoville

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

South Elgin

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

St. Charles

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

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

Sugar Grove

Sugar Grove Branch: 522 Route 47, Sugar Grove, Illinois 60554

Villa Park

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

Warrenville

Warrenville Branch: 3S041 Route 59, Warrenville, Illinois 60555

Westmont

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

Wheaton

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

Wheaton Branch: 221 South West Street, Wheaton, Illinois 60187

Yorkville

Yorkville Branch: 10 Saravanos Drive, Yorkville, Illinois 60560

ATMs are available at all of the above banking branches.

Limited-Service Branches

Beacon Hill Retirement Community: Lombard, Illinois 60148

Clare Oaks: Bartlett, Illinois 60103

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

Lexington Health Care Center of Elmhurst: Elmhurst, Illinois 60126

Lexington Health Care Center of Lombard: Lombard, Illinois 60148

Villa St. Benedict: Lisle, Illinois 60532

Other Services

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

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

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

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

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[MAP OF MARKET AREA THAT INDICATES LOCATION OF FACILITIES]

Unlike Any Other Bank

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SHAREHOLDER INFORMATION

Annual Report on Form 10-K

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

Duane G. Debs

President and Chief Financial Officer

West Suburban Bancorp, Inc.

2800 Finley Road

Downers Grove, Illinois 60515

(630) 652-2801

Annual Meeting of Shareholders

The annual meeting of shareholders of West Suburban Bancorp, Inc. will be held at West Suburban Bank, 711 South Meyers Road, Lombard, Illinois on Wednesday, May 9, 2012 at 8:00 a.m. All shareholders are cordially invited to attend.

Stock Transfer Agent and Registrar

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

George E. Ranstead

Secretary to the Board and Treasurer

West Suburban Bancorp, Inc.

2800 Finley Road

Downers Grove, Illinois 60515

(630) 652-2802

Community Reinvestment Act

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

Alice Ann Gaultney

Community Reinvestment Act Officer

West Suburban Bank

711 South Meyers Road

Lombard, Illinois 60148

(630) 652-2193

Independent Registered Public Accounting Firm

Crowe Horwath LLP

One Mid America Plaza, Suite 700

Post Office Box 3697

Oak Brook, Illinois 60522

Corporate Counsel

Barack Ferrazzano Kirschbaum & Nagelberg LLP

200 West Madison Street, Suite 3900

Chicago, Illinois 60606

MEMBER FDIC

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