Item 1
Business
Item 1A
Item 1A
Risk Factors
Item 1B
Item 1B
Unresolved Staff Comments
Item 2
Item 2. Properties
The Company’s main office is located at 701-705 LaSalle Street, Ottawa, Illinois. The building is comprised of approximately 15,000 square feet. The main office building is a two-story structure constructed principally of masonry which was opened in 1865. The Company also operates eight branch office facilities. A limited service branch, which contains eight drive-in lanes, is located at 300 West Madison Street, Ottawa, Illinois, a loan production office located at 426 Mondamin Street, Unit 1, Minooka, Illinois, and six full-service branches are located at 601 State Street, Ottawa, Illinois; 2771 North Columbus Street, Ottawa, Illinois; 1771 North Division Street, Morris, Illinois; 2324 North Bloomington Street, Streator, Illinois; 401 East Main Street, Streator, Illinois; and 1459 Cannonball Trail, Yorkville, Illinois. The main banking office and branch offices are owned by the Company in fee and are unencumbered. The loan production office space is leased for a three year term with renewal options for years four and five.
Item 3.
Item 3. Legal Proceedings
The Company is from time to time a party to legal proceedings in the ordinary course of business that are incidental to the business of banking. The Company is not engaged in any legal proceedings of a material nature at the present time.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the quarter ended December 31, 2007.
PART II
Item 5.
Item 5. Market For Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The information set forth under the caption “Price Range of Common Stock” on page 44 of the 2007 Annual Report to Stockholders (filed as Exhibit 13.1 of this report) which is incorporated herein by reference.
The Company’s ability to pay dividends to stockholders is largely dependent upon the dividends it receives from the Bank, and the Bank is subject to regulatory limitations on the amount of cash dividends it may pay. See “Business - Supervision and Regulation - The Company - Dividend Payments” and “Business - Supervision and Regulation - The Bank - Dividends” for a more detailed description of these limitations.
(1) Repurchased by the Company in open market purchases with third parties.
Item 6.
Item 6. Selected Financial Data
The information set forth under the caption “Selected Consolidated Financial Information” on page 1 of the 2007 Annual Report to Stockholders (filed as Exhibit 13.1 of this report) is incorporated herein by reference.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The information set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 2 through 12 of the 2007 Annual Report to Stockholders (filed as Exhibit 13.1 of this report) is incorporated herein by reference.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The information set forth under the caption “Quantitative and Qualitative Disclosures about Market Risk” on page 13 of the 2007 Annual Report to Stockholders (filed as Exhibit 13.1 of this report) is incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements of the Company and the Report of Independent Registered Public Accounting Firm as set forth on pages 17 through 43 of the 2007 Annual Report to Stockholders (filed as Exhibit 13.1 of this report) are incorporated herein by reference:
Annual Report to
Stockholders Page
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2007 and 2006
Consolidated Statements of Income for the years ended
December 31, 2007, 2006, and 2005
Consolidated Statements of Stockholders’ Equity for the
years ended December 31, 2007, 2006, and 2005
Consolidated Statements of Cash Flows for the years ended
December 31, 2007, 2006, and 2005
Notes to the Consolidated Financial Statements
The portions of the 2007 Annual Report to Stockholders which are not specifically incorporated by reference as a part of this Form 10-K are not deemed to be a part of this report.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act) as of December 31, 2007. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods indicated.
Management’s Report on Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a - 15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
As of December 31, 2007, management assessed the effectiveness of the Company’s internal control over financial reporting based on the framework established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has determined that the Company’s internal control over financial reporting was effective as of December 31, 2007 based on the criteria specified.
This Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Form 10-K.
Item 9B.
Item 9B. Other Information
None
PART III
Item 10.
Item 10. Directors and Executive Officers and Corporate Governance
The information set forth under the captions “Election of Directors”, “Corporate Governance and the Board of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” of the Company’s Proxy Statement, relating to the 2008 Annual Meeting of Stockholders is incorporated herein by reference.
Item 11.
Item 11. Executive Compensation
The information set forth under the caption “Executive Compensation” of the Company’s Proxy Statement, relating to the 2008 Annual Meeting of Stockholders is incorporated herein by reference, except for the “Stockholder Return Performance Graph,” which is not hereby incorporated.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information set forth under the caption “Security Ownership of Certain Beneficial Owners” of the Company’s Proxy Statement, relating to the 2008 Annual Meeting of Stockholders is incorporated herein by reference.
Equity Compensation Plan Information
The table below sets forth the following information as of December 31, 2007 for (i) all compensation plans previously approved by the Company’s stockholders and (ii) all compensation plans not previously approved by the Company’s stockholders:
(a)
the number of securities to be issued upon the exercise of outstanding options, warrants and rights;
(b)
the weighted-average exercise price of such outstanding options, warrants and rights; and
(c)
other than securities to be issued upon the exercise of such outstanding options, warrants and rights, the number of securities remaining available for future issuance under the plans.
Item 13.
Item 13. Certain Relationships and Related Transactions and Director Independence
The information set forth under the caption “Certain Relationships and Related Transactions and Director Independence” of the Company’s Proxy Statement, relating to the 2008 Annual Meeting of Stockholders is incorporated herein by reference.
Item 14.
Item 14. Principal Accounting Fees and Services
The information set forth under the caption “Independent Registered Public Accounting Firm” of the Company’s Proxy Statement relating to the 2008 Annual Meeting of Stockholders is incorporated herein by reference.
PART IV
Item 15.
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Financial Statements
All financial statements of the Registrant are incorporated herein by reference as set forth under Item 8, Part II of this report on Form 10-K.
2. Financial Statement Schedules
Not applicable.
3. Exhibits (Numbered in accordance with Item 601 of Regulation S-K)
The following exhibits are filed as part of this report:
3(i) Certificate of Incorporation of First Ottawa Bancshares, Inc.
3(ii) By-Laws of First Ottawa Bancshares, Inc.
10.1 Employment Agreement for J. Brown*
10.2 Executive Officer Bonus Plan*
10.3 Employment Agreements for Executive Officers*
10.4 Stock Incentive Plan
10.5 Summary of Director Fees
10.6 Form of Supplemental Nonqualified Retirement Agreement
10.7 Employment Agreement for Vincent Easi*
13.1 2007 Annual Report to Stockholders
21.1 Subsidiaries
31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
* Indicates management contract or compensation plan or arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 25,
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Joachim Brown
Director and President/
March 25,
Joachim Brown
Chief Executive Officer
/s/ Bradley J. Armstrong
Director
March 25,
Bradley J. Armstrong
/s/ John L. Cantlin
Director
March 25,
John L. Cantlin
/s/ Patty P. Godfrey
Director
March 25,
Patty P. Godfrey
/s/ Thomas E. Haeberle
Director
March 25,
Thomas E. Haeberle
/s/ Donald J. Harris
Director and Executive
March 25,
Donald J. Harris
Vice President, Chief Operating
Officer
/s/ Thomas P. Rooney
Director
March 25,
Thomas P. Rooney
/s/ William J. Walsh
Director
March 25,
William J. Walsh
/s/ Brian P. Zabel
Director
March 25,
Brian P. Zabel
EXHIBIT INDEX
Exhibit
Number
Description
Incorporated
by Reference to
Attached
Hereto
3(i)
Certificate of Incorporation of First Ottawa Bancshares, Inc. (as amended)
Form 10K for the year ended 12/31/2002
3(ii)
By-Laws of First Ottawa Bancshares, Inc.
Form 10K for the year ended 12/31/2003
10.1
Employment Agreement for J. Brown
Form 10K for the year ended 12/31/2002
10.2
Executive Officer Bonus Plan
Form 10K for the year ended 12/31/2002
10.3
Employment Agreements for Executive Officers
Form 8K dated 6/10/05
10.4
Stock Incentive Plan
Form S-8 dated 8/1/03
10.5
Summary of Director Fees
Form 10K for the year ended 12/31/2004
10.6
Form of Supplemental Nonqualified Retirement Agreement
Form 10K for the year ended 12/31/2004
10.7
Employment Agreement for Vincent Easi
Form 8K dated 10/10/2007
13.1
2007 Annual Report to Stockholders
X
21.1
Subsidiaries
X
31.1
Certification of Chief Executive Officer
X
31.2
Certification of Chief Financial Officer
X
32.1
Certification of Chief Executive Officer
X
32.2
Certification of Chief Financial Officer
X