U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 2001
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
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Commission File Number 0-22800
NORTH BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 36-3915073
- -------- ----------
(State or other jurisdiction (I.R.S. Employer
of Incorporation or organization) Identification Number)
100 West North Avenue, Chicago, Illinois 60610-1399
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(312) 664-4320
(Registrant's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes (X) No ( )
As of April 30, 2001, there were 1,160,074 outstanding shares of the
Registrant's Common Stock.
Transitional Small Business Disclosure Format (Check one): Yes ( ) No (X)
1
NORTH BANCSHARES, INC.
Table of Contents
Part I - FINANCIAL INFORMATION (UNAUDITED)
Item 1. Consolidated Financial Statements 3
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II - OTHER INFORMATION 11
Item 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 11
FORM 10-QSB SIGNATURE PAGE 12
2
Part I. Financial Information
Item 1. Consolidated Financial Statements
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
ASSETS MARCH 31, 2001 DEC 31, 2000
Cash and due from Banks $ 2,034 $ 1,903
Interest-bearing deposits 3,234 2,006
Federal funds sold 7,729 4,245
Investment in dollar denominated mutual funds 365 903
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TOTAL CASH AND CASH EQUIVALENTS 13,362 9,084
Securities available for sale at fair value 16,320 16,961
Mortgage-backed securities available for sale at fair value 13,447 13,580
Stock in Federal Home Loan Bank of Chicago 2,155 1,905
Loans receivable, net of allowance for loan losses of $266 at March
31, 2001 and $262 at December 31, 2000 88,629 90,765
Accrued interest receivable 895 967
Premises and equipment, net 782 803
Amounts due from brokers - 376
Other assets 156 140
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TOTAL ASSETS 135,746 134,581
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposit accounts 81,789 81,317
Borrowed Funds 38,100 38,200
Advance payments by borrowers for taxes and insurance 663 1,068
Accrued interest payable and other liabilities 2,280 1,213
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TOTAL LIABILITIES 122,832 121,798
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Preferred stock, $.01 par value. Authorized 500,000 shares; none
outstanding - -
Common stock, $.01 par value. Authorized 3,500,000 shares; issued
and outstanding 1,162,253 at March 31, 2001 and 1,181,253 at
December 31, 2000 19 19
Additional paid in capital 13,253 13,242
Retained earnings, substantially restricted 11,958 11,955
Treasury stock, at cost (751,822 shares at March 31, 2001 and
732,822 shares at December 31, 2000) (11,518) (11,316)
Accumulated other comprehensive loss, net of tax (604) (895)
Common stock acquired by Employee Stock Ownership Plan (194) (222)
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TOTAL STOCKHOLDERS' EQUITY 12,914 12,783
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $135,746 $134,581
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See accompanying notes to unaudited consolidated financial statements.
3
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
2001 2000
INTEREST INCOME:
Loans receivable $1,707 1,657
Interest-bearing deposits and federal funds sold 128 39
Securities available for sale 286 302
Mortgage-backed securities available for sale 211 230
Other interest income 43 47
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TOTAL INTEREST INCOME 2,375 2,275
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INTEREST EXPENSE:
Deposit accounts 922 840
Borrowed funds 580 558
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TOTAL INTEREST EXPENSE 1,502 1,398
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 873 877
PROVISION FOR LOAN LOSSES 4 4
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 869 873
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NON-INTEREST INCOME:
Gain on sale of securities available for sale 9 -
Gain on sale of loans 35 -
Fees and service charges 68 79
Other 6 4
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TOTAL NON-INTEREST INCOME 118 83
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NON-INTEREST EXPENSE:
Compensation and benefits 455 421
Occupancy expense 124 130
Professional fees 28 49
Data processing 49 49
Advertising and promotion 23 44
Other 91 93
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TOTAL NON-INTEREST EXPENSE 770 786
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INCOME BEFORE INCOME TAXES 217 170
INCOME TAX EXPENSE 84 57
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NET INCOME $133 113
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EARNINGS PER SHARE:
Basic $.12 .10
Diluted $.11 .09
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AVERAGE SHARES OUTSTANDING:
Basic 1,150,440 1,187,579
Diluted 1,163,381 1,198,768
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COMPREHENSIVE INCOME $424 56
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See accompanying notes to unaudited consolidated financial statements.
4
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED MARCH 31, 2000 AND 2001
(UNAUDITED)
Accumulated Common
Additional other stock
Common paid in Retained Treasury comprehensive acquired
Stock capital earnings stock income (loss) by ESOP Total
Balance at December 31, 1999 $19 13,393 11,115 (11,025) (1,916) (333) 11,253
Net income - - 113 - - - 113
Change in accumulated other
comprehensive loss - - - - (57) - (57)
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Total comprehensive income - - - - - - 56
ESOP shares earned - 11 - - - 28 39
Purchase of treasury stock, 32,451 shares - - - (287) - - (287)
Cash dividend ($.11 per share) - - (135) - - - (135)
Options exercised and reissuance of treasury
stock,12,614 shares - (113) - 203 - - 90
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Balance at March 31, 2000 19 13,291 11,093 (11,109) (1,973) (305) 11,016
============================================================================================================================
Balance at December 31, 2000 19 13,242 11,955 (11,316) (895) (222) 12,783
Net income - - 133 - - - 133
Change in accunulated other
comprehensive loss - - - - 291 - 291
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Total comprehensive income - - - - - - 424
ESOP shares earned - 11 - - - 28 39
Purchase of treasury stock, 19,000 shares - - - (202) - - (202)
Cash dividend ($.11 per share) - - (130) - - - (130)
Options exercised and reissuance of treasury
stock, none - - - - - - -
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Balance at March 31, 2001 $19 13,253 11,958 (11,518) (604) (194) 12,914
=============================================================================================================================
See accompanying notes to unaudited consolidated financial statements.
5
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
FOR THE THREE MONTHS ENDED MARCH 31,
2001 2000
Cash flows from operating activities:
Net Income $ 133 113
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 21 22
Deferred loan costs, net of amortization 22 9
Amortization of premiums and discounts, net (26) (1)
ESOP expense 39 39
Provision for loan losses 4 4
Gain on sale of securities available for sale (9) -
Gain on sale of loans (2) -
Proceeds from sale of loans 319 -
Changes in assets and liabilities:
Decrease (increase) in accrued interest receivable 121 (30)
Decrease (increase) in due from broker 376 (1,254)
Increase in other assets, net (65) (30)
Increase in other liabilities 926 490
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Net cash provided by (used in) operating activities 1,859 (638)
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Cash flows from investing activities:
Maturities of securities available for sale 1,000 -
Purchase of mortgage-backed securities available for sale (986) -
Proceeds from sales of mortgage-backed securities available for sale 924 -
Repayment of mortgage-backed securities available for sale 303 258
Purchase of Federal Home Loan Bank stock (250) -
Loan originations (5,293) (4,389)
Loan repayments 7,086 2,619
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Net cash provided by (used in) investing activities 2,784 (1,512)
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Cash flows from financing activities:
Increase in deposit accounts 472 1,775
Decrease in borrowed funds (100) (265)
Decrease in advance payments by borrowers for taxes and insurance (405) (406)
Payment of cash dividend (130) (135)
Proceeds from stock options exercised - 90
Purchase of treasury stock (202) (287)
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Net cash (used in) provided by financing activities (365) 772
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Net increase (decrease) in cash and cash equivalents 4,278 (1,378)
Cash and cash equivalents at beginning of period 9,084 5,877
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Cash and cash equivalents at end of period $13,362 4,499
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Supplemental disclosures of cash flow information:
Cash payments during the period for:
Interest $1,052 1,057
Taxes 275 25
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See accompanying notes to unaudited consolidated financial statements.
6
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1) Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10- QSB and Article 10
of Regulation S-B. Accordingly, they do not include all the information and
notes required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, the unaudited consolidated financial
statements contain all adjustments which are normal and recurring in nature and
necessary for a fair presentation of the financial condition as of March 31,
2001 and results of operations for the three month periods ended March 31, 2001
and March 31, 2000, but are not necessarily indicative of the results which may
be expected for the entire year.
(2) Principles of Consolidation
The accompanying unaudited consolidated financial statements include
the accounts of North Bancshares, Inc. (the "Company"), its wholly-owned
subsidiary, North Federal Savings Bank (the "Bank"), and the Bank's subsidiary
North Financial Corporation. All significant intercompany accounts and
transactions have been eliminated in consolidation.
(3) Earnings Per Share
The following table sets forth the computation of basic and diluted
earnings per share for the periods indicated.
For the three months
ended March 31,
(In thousands, except share data) 2001 2000
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Numerator:
Net Income $133 113
Denominator:
Basic earnings per share-weighted average
shares outstanding 1,150,440 1,187,579
Effect of dilutive stock options outstanding 12,941 11,189
Diluted earnings per share-adjusted weighted
average shares outstanding 1,163,381 1,198,768
Basic earnings per share .12 .10
Diluted earnings per share .11 .09
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Only options where the exercise price is below the current market
price are included in diluted earnings per share.
4) Comprehensive income
The Company's comprehensive income includes net income and other
comprehensive income (loss) comprised of unrealized gains or losses on
securities available for sale, net of tax effect, which are also recognized as
separate components of equity.
(5) Stock Repurchase Program
On September 14, 2000, the Company announced the beginning of another
stock repurchase program. The new repurchase program amounts to 50,000 shares or
approximately 4.0% of the outstanding shares of the Company. The Company intends
to repurchase shares in open market transactions or in privately negotiated
transactions over a one year period. At March 31, 2001, 29,689 shares had been
repurchased under the new program at an average cost of $9.94 per share.
Management continues to believe that stock repurchase programs provide enhanced
value to both the Company and its stockholders.
7
(6) Dividend Declaration
On January 19, 2001, the Company announced that the Board of Directors
declared a quarterly dividend of $.11 per share, which was paid on February 15,
2001 to stockholders of record on February 1, 2001. On April 16, 2001, the
Company announced that the Board of Directors declared a quarterly dividend of
$.11 per share, to be paid on May 15, 2001 to stockholders of record on May 1,
2001.
(7) Commitments and Contingencies
At March 31, 2001, the Bank had outstanding commitments to originate
loans or fund participations in the amount of $5.0 million at an average rate of
8.13% and unused equity lines of credit totaling $3.0 million, which are priced
at the prime rate.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
The primary business of the Company is that of an independent
community-oriented financial institution offering a variety of financial
services to meet the needs of the communities it serves. The Company attracts
deposits from the general public or borrows funds and uses such funds to
originate or acquire one-to-four family residential mortgages, loans secured by
small apartment buildings or mixed use properties, equity lines of credit
secured by real estate and commercial real estate loans. The Company also
invests in U.S. Government and agency securities, federal agency mortgage-backed
securities, investment grade securities, common stocks of other financial
institutions and money market accounts.
The Company's consolidated results of operations are primarily
dependent on net interest income, which is the difference between the interest
income earned on interest-earning assets and the interest paid on deposits and
other borrowings, loan loss provisions and to a lesser degree on non-interest
income less non- interest expense and income taxes. The Company's operating
expenses consist principally of employee compensation and benefits, occupancy
expenses, and other non-interest expenses. The Company's results of operations
are also significantly affected by general economic and competitive conditions,
particularly changes in market interest rates, government policies and actions
of regulatory authorities.
Forward-Looking Statements
When used in this Form 10-QSB, and in other filings by the Company with
the SEC, in the Company's press releases or other public or shareholder
communications, and in oral statements made with the approval of an authorized
executive officer, the words or phrases "such as", "will likely result", "are
expected to", "will continue", "is anticipated", "estimate", "project" or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties including changes in
economic conditions in the Company's market area, changes in policies by
regulatory agencies, fluctuations in interest rates, demand for loans in the
Company's market area and competition, that could cause actual results to differ
materially from historical earnings and those presently anticipated or projected
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements which speak only as of the date made. The Company
wishes to advise readers that the factors listed above could affect the
Company's financial performance and could cause the Company's actual results for
future periods to differ materially from any opinions or statements expressed
with respect to future periods in any current statements.
The Company does not undertake -- and specifically disclaims any
obligation -- to publicly release the results of any revisions which may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
Liquidity and Capital Resources
The Bank's primary sources of funds are deposits, borrowings from the
FHLB of Chicago, amortization and prepayment of loans and mortgage-backed
securities, sales and maturities of investment and mortgage- backed securities
and occasionally the use of reverse repurchase agreements. The Bank can also
8
borrow from its correspondent banks. The Bank uses its liquid resources to fund
loan commitments, to meet operating expenses, and to invest and to fund deposit
withdrawals. Management believes that loan repayments and the Bank's other
sources of funds will be adequate to meet the liquidity needs of the Bank.
The OTS requires minimum levels of liquid assets. OTS regulations
currently require the Bank to maintain an average daily balance of liquid assets
equal to at least 4% of the sum of its average daily balance of net withdrawable
accounts and borrowings payable in one year or less. The OTS has implemented an
interim rule effective March 15, 2001 which requires institutions to maintain
sufficient liquidity to ensure its safe and sound operation. Comments are being
accepted on this interim rule through May 14, 2001. At March 31, 2001, the
Bank's liquidity ratio was 11.5% compared with 4.0% at March 31, 2000. The
increase in liquidity was primarily due to funds allocated for loan closings
scheduled in the second quarter.
Current regulatory standards impose the following capital requirements
on the Bank and other thrifts: a tangible capital ratio expressed as a
percentage of total adjusted assets, a leverage ratio of core capital to total
adjusted assets and a risk-based capital standard expressed as a percentage of
risk-adjusted assets. At March 31, 2001, the Bank exceeded all of its regulatory
capital requirements. At such date, the Bank's tangible capital, core capital
and risk-based capital of $12.7 million, $12.7 million and $13.0 million,
respectively, exceeded the applicable minimum requirements by $10.7 million or
7.9%, $8.7 million or 6.4%, and $8.3 million or 14.0%, respectively.
Changes In Financial Condition
Total assets increased by $1.1 million and amounted to $135.7 million
at March 31, 2001 from $134.6 million at December 31, 2000. The increase was
primarily attributable to a $4.3 million increase in cash and cash equivalents
partially offset by a $2.2 million decrease in net loans receivable.
Net loans receivable decreased by $2.2 million and amounted to $88.6
million at March 31, 2001 from $90.8 million at December 31, 2000. The decrease
was primarily attributable to increased refinance activity due to the decline in
interest rates. The Company originated $5.3 million in residential mortgage,
consumer and commercial real estate loans during the three months ended March
31, 2001 compared with $4.4 million during the three months ended March 31,
2000. Repayments totaled $7.1 million and loan sales totaled $319,000 during the
three months ended March 31, 2001 compared with $2.6 million in repayments and
no loan sales during the three months ended March 31, 2000.
Total deposits increased by $500,000 and amounted to $81.8 million at
March 31, 2001 compared with $81.3 million at December 31, 2000. There was a
$1.9 million increase in money market deposit accounts and non-interest bearing
checking accounts during the three months ended March 31, 2001, which was
partially offset by an $1.0 million decrease in NOW checking accounts and
certificates of deposit.
Accrued interest payable and other liabilities increased by $1.1
million and amounted to $2.3 million at March 31, 2001 compared with $1.2
million at December 31, 2000. The increase was primarily attributable to an
increase in outstanding checks and accrued interest on certificates of deposit
that pay interest in December of each year.
Stockholders' equity was $12.9 million at March 31, 2001 compared with
$12.8 million at December 31, 2000. The increase was primarily attributable to a
$291,000 improvement in other comprehensive loss primarily attributable to a
decline in interest rates and the positive effect on securities that are
classified available for sale. The increase was partially offset by a $202,000
increase in treasury stock related to stock repurchases. Book value per share
increased to $11.11 at March 31, 2001 from $10.82 at December 31, 2000.
9
Average Balance Sheet
The following table presents certain information relating to the
Company's average balance sheet and reflects the average yield in assets and
average cost of liabilities for the periods indicated. Such yields and costs are
derived by dividing income or expense by the average balance of assets or
liabilities, respectively for the periods shown. Average balances are derived
from average monthly balances. The yields and costs include fees which are
considered adjustments to yield.
Three Months Ended March 31,
2001 2000
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Interest Average Interest Average
Average Earned\ Yield\ Average Earned\ Yield\
Balance Paid Cost(3) Balance Paid Cost(3)
---------------------------------------------------------------------
(Dollars in thousands)
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Interest-earnings assets:
Loans receivable $89,552 $1,707 7.62% $89,451 $1,657 7.41%
Investment securities 17,656 291 6.59 18,350 302 6.58
Mortgage-backed securities 13,842 211 6.10 15,196 230 6.05
Federal funds sold 7,578 106 5.60 1,870 25 5.35
Other 4,158 60 5.77 3,760 61 6.49
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Total interest-earning assets 132,786 2,375 7.15 128,627 2,275 7.07
Non-interest-earning assets 3,125 2,237
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Total Assets $135,911 $130,864
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Interest-bearing liabilities:
MMDA & NOW accounts 24,351 246 4.04 23,932 234 3.91
Passbook accounts 12,344 84 2.72 13,025 89 2.73
Certificate accounts 41,175 592 5.75 37,804 516 5.46
Borrowed funds 39,400 580 5.89 40,534 559 5.52
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Total interest-bearing liabilities 117,270 1,502 5.12 115,295 1,398 4.85
Non-interest bearing deposits 3,085 2,442
Other liabilities 2,661 1,942
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Total liabilities 123,016 119,678
Stockholders' equity 12,895 11,186
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Total liabilities and stockholders' equity $135,911 $130,864
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Net interest income/interest rate
spread (1) 873 2.03% 877 2.22%
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Net earning assets/net interest margin (2)
$15,516 2.63% $13,332 2.73%
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Percentage of interest-earning assets to
interest-bearing liabilities 113.23% 111.56%
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1. Interest rate spread represents the difference between the average rate on
interest-earning assets and the average cost of interest-bearing
liabilities.
2. Net interest margin represents net interest income divided by average interest-earning assets.
3. Average yields and costs for the three month period presented are annualized for presentation purposes.
Comparison Of Operating Results For The Three Months Ended March 31, 2001 And
March 31, 2000
General. Net income increased by $20,000 and amounted to $133,000 for
the three months ended March 31, 2001 from $113,000 for the three months ended
March 31, 2000. Diluted earnings per share increased by $.02 and amounted to
$.11 for the three months ended March 31, 2001 from $.09 per share for the three
months ended March 31, 2000. The increase in net income and earnings per share
was primarily related to a $35,000 increase in non-interest income and a $16,000
decrease in non-interest expenses partially offset by a $27,000 increase in
income tax expense.
Interest Income. Interest income increased by $100,000 and amounted to
$2.4 million for the three months ended March 31, 2001 from $2.3 million for the
three months ended March 31, 2000. There was an increase in the annualized yield
on average interest-earning assets to 7.15% for the three months ended March 31,
2001 from 7.07% for the three months ended March 31, 2000. The increase was
primarily attributable to an increase in the average yield on loans receivable
to 7.62% for the three months ended March 31, 2001 from 7.41% for the three
months ended March 31, 2000. In addition, there was an increase in average
interest-earning assets to $132.8 million for the three months ended March 31,
2001 compared with $128.6 million for the three months ended March 31, 2000.
10
Interest Expense. Interest expense increased $100,000 and amounted to
$1.5 million for the three months ended March 31, 2001 from $1.4 million for the
three months ended March 31, 2000. The annualized average cost of
interest-bearing liabilities increased to 5.12% for the three months ended March
31, 2001 from 4.85% for the three months ended March 31, 2000. The increase was
due primarily to an increase in the average cost of borrowed funds to 5.89% for
the three months ended March 31, 2001 from 5.52% for the three months ended
March 31, 2000. In addition, there was an increase in average interest-bearing
liabilities to $117.3 million for the three months ended March 31, 2001 from
$115.3 million for the three months ended March 31, 2000. The company
anticipates a lower average cost of borrowed funds for the balance of the year
due to refinancing shorter term higher-rate FHLB advances at lower rates for
longer tems. The Company also anticipates a lower average cost of money market
and certificate accounts due to the general decline in interest rates that began
in January 2000.
Provision For Loan Losses. The Company added $4,000 to its allowance
for loan losses for the three months ended March 31, 2001 and March 31, 2000.
The allowance for loan losses was $266,000 at March 31, 2001 compared with
$235,000 at March 31, 2000. The allowance for loan losses amounted to .30% of
loans receivable at March 31, 2001 and .26% at March 31, 2000. There were no
loans were delinquent 90 days or more at March 31, 2001. The increase was
primarily due to increased consumer and commercial real estate lending activity.
On a quarterly basis,management of the Bank meets to review the adequacy
of the allowance for loan losses. Management classifies loans in compliance with
regulatory classifications. Classified loans are individually reviewed to arrive
at specific reserves for those loans. Once the specific portion of the allowance
is calculated, management calculates a historical portion for each loan category
based on loan loss history, peer data, current economic conditions and trends in
the portfolio, including delinquencies and impairments, as well as changes in
the composition of the loan portfolio. Although management believes the
allowance for loan losses was at a level adequate to absorb probable incurred
losses on existing loans at March 31, 2001, there can be no assurance that such
losses will not exceed estimated amounts.
Non-Interest Income. Non-interest income increased by $35,000 and
amounted to $118,000 for the three months ended March 31, 2001 compared with
$83,000 for the three months ended March 31, 2000. The increase was primarily
attributable to $35,000 in mortgage servicing rights related to sales of long
term fixed rate mortgage loans. In addition there was an $9,000 increase in
gain on the sale of investment securities available for sale which was offset by
an $11,000 decrease in fees and service charges.
Non-Interest Expense. Non-interest expense decreased by $16,000 and
amounted to $770,000 for the three months ended March 31, 2001 from $786,000 for
the three months ended March 31, 2000. The decrease was primarily attributable
to a $42,000 decrease in advertising expense and professional fees partially
offset by a $34,000 increase in compensation and benefits expense primarily
related to increased salaries, a result of cost of living and annual salary
increases and increased benefit costs .
Income Tax Expense. Income tax expense increased by $27,000 and
amounted to $84,000 for the three months ended March 31, 2001 from $57,000 for
the three months ended March 31, 2000. The increase in expense was primarily
related to an increase in income before taxes.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings pending to which the Company or
any of its subsidiaries is a party other than ordinary routine litigation
incidental to their respective businesses.
Item 6. Exhibits and Reports on Form 8-K
(A) 1. Form 8-K dated March 27, 2001, Registrant issued a press release
dated March 27, 2001 regarding a move from the Nasdaq National
Market to the Nasdaq SmallCap Market.
2. Form 8-K dated April 17, 2001, Registrant issued a press release
dated April 17, 2001 regarding first quarter 2001 earnings and a
regular quarterly dividend.
11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NORTH BANCSHARES, INC.
----------------------
(Registrant)
Date May 10, 2001 /S/ Joseph A. Graber
---------------------- -----------------------
Joseph A. Graber
President and Chief Executive Officer
Date May 10, 2001 /S/ Martin W. Trofimuk
---------------------- ------------------------
Martin W. Trofimuk
Vice President and Treasurer
12