UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 15, 2003
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NORTH BANCSHARES, INC.
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(Exact name of registrant as specified in its Charter)
Delaware 0-22800 36-3915073
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(State or other (commission file number) (IRS Employer
jurisdiction of Identification
incorporation) number)
100 West North Avenue, Chicago, Illinois 60610
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 664-4320
N/A
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(Former name or former address, if changed since last report)
1.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1. Press release, dated July 15, 2003.
Item 9. Regulation FD Disclosure (Information furnished in this Item 9 is
furnished pursuant to Item 12)
On July 15, 2003, the Registrant issued the attached press release regarding
second quarter 2003 earnings and the declaration of a regular quarterly
dividend. The press release is attached as Exhibit 99.1 to this current report
on Form 8-K and is being furnished pursuant to Item 12 of Form 8-K.
2.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTH BANCSHARES, INC.
(Registrant)
/S/ Joseph A. Graber
Date: July 15, 2003 -------------------------------
Joseph A. Graber
President and
Chief Executive Officer
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EXHIBIT
4.
NORTH BANCSHARES, INC. NEWS
100 West North Avenue - Chicago, Illinois 60610 312-664-4320
RELEASE: IMMEDIATELY
CONTACT: Joseph A. Graber or Victor E. Caputo or Martin W. Trofimuk
(312) 664-4320
NORTH BANCSHARES ANNOUNCES
SECOND QUARTER EARNINGS
QUARTERLY DIVIDEND DECLARED
CHICAGO, IL, JULY 15, 2003, - North Bancshares, Inc., (NASDAQ-NBSI),
the holding company of North Federal Savings Bank today announced both basic and
diluted earnings per share decreased to $.06 for the quarter ended June 30, 2003
compared with $.11 per share for the quarter ended June 30, 2002. Net income for
the quarter ended June 30, 2003 decreased by $63,000 and amounted to $70,000
compared with $133,000 for the quarter ended June 30, 2002. The decrease was
primarily attributable to a $213,000 decrease in net interest income. These
items were partially offset by a $74,000 increase in non-interest income and a
$51,000 decrease in income tax expense.
Concurrent with this earnings release the Board of Directors of the
Company has declared a quarterly dividend of $.08 per share to be paid on August
15, 2003 to stockholders of record as of August 1, 2003. The dividend of $.08
per share represents a 27% decrease over the previous quarterly dividend of $.11
per share and reflects results of operations for the first quarter of 2003.
Net interest income, before provision for loan losses, decreased by
$213,000 to $790,000 for the quarter ended June 30, 2003, compared with $1.0
million for the quarter ended June 30, 2002. The decrease was attributable to a
$431,000 reduction in total interest income offset by a $218,000 decrease in
total interest expense. The decrease was primarily attributable to the low
interest rate environment and the large number of loans that have been prepaid,
refinanced or have had their loan terms modified.
Non-interest income increased by $74,000 to $187,000 for the quarter
ended June 30, 2003 compared with $113,000 for the quarter ended June 30, 2002.
The increase was primarily attributable to a $38,000 increase in gain on sale of
mortgages and a $17,000 increase in the gain on sale of securities available for
sale.
Non-interest expense decreased by $15,000 to $873,000 for the quarter
ended June 30, 2003 compared with $888,000 for the quarter ended June 30, 2002.
The decrease was primarily attributable to decreases in other non-interest
expense and professional fees.
Cash and cash equivalents increased by $3.3 million to $21.6 million at
June 30, 2003 compared with $18.3 million at December 31, 2002. The increase was
primarily due to loan prepayments not reinvested into loans or securities
available for sale at the end of the quarter.
Net loans receivable decreased by $4.9 million and amounted to $81.6
million at June 30, 2003 compared with $86.5 million at December 31, 2002. The
$4.9 million decrease was due primarily to greater than normal prepayments of
loans due to the low interest rate environment. Equity line of credit loans
increased by $4.1 million to $16.4 million at June 30, 2003 from $12.3 million
at December 31, 2002. The Bank originated $25.8 million in loans during the six
month period ended June 30, 2003 and recorded $29.4 million in repayments and
$1.5 million in loan sales compared with $24.1 million in originations, $20.1
million in repayments and $1.7 million in loan sales during the six month period
ended June 30, 2002. At June 30, 2003, the Bank had $10.2 million in loan
applications pending approval or closing and $12.1 million in unused lines of
credit. The Company did not add to the allowance for loan losses during the
quarter ended June 30, 2003 compared with an allocation of $10,000 to the
allowance for loan losses during the quarter ended June 30, 2002, due primarily
to a decrease in total loans receivable. The total allowance for loan losses
amounted to $326,000 or 0.40% of loans receivable at June 30, 2003 compared with
$326,000 and 0.34% of loans receivable at June 30, 2002. There was one mortgage
loan delinquent 60 days or more at June 30, 2003 that amounted to $159,000.
Total deposits decreased by $1.6 million and amounted to $88.6 million
at June 30, 2003 compared with $90.2 million at December 31, 2002. The decrease
was due primarily to a $4.3 million decrease in certificates of deposit
primarily attributable to the repayment of a higher cost $2.5 million brokered
certificate of Deposit. This decrease was partially offset by a $2.2 million
increase in checking and money market accounts. The weighted average cost of
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deposits decreased to 2.51% at June 30, 2003 from 3.25% at June 30, 2002.
Borrowed funds decreased by $3.5 million and amounted to $27.5 million
at June 30, 2003 compared with $31.0 million at December 31, 2002. The decrease
is attributable to repayment of higher cost FHLB advances that matured during
the six month period.
Stockholders' equity was $13.6 million at June 30, 2003 compared with
$13.9 million at December 31, 2002. The slight decrease was primarily
attributable to a $189,000 decrease in accumulated other comprehensive income
due primarily to the sale of investment securities available for sale and a
$115,000 decrease in retained earnings. The decrease in retained earnings was
due to net income of $136,000 that was offset by $251,000 in dividend payments.
Book value per share decreased to $11.92 at June 30, 2003 compared with $12.22
at December 31, 2002.
Joseph A. Graber, President and Chief Executive Officer, commented:
"Mortgage loans continue to be refinanced at record rates, continuing a
trend that began in 2001, with the result being a decrease in our interest rate
spread and a decrease in net income for the quarter. We remain cautious about
investing long term at such low rates and therefore have maintained excess
liquidity which has had a negative impact on our spreads. We will continue to
focus our lending on products that will adjust to the prime rate and sell
qualifying fixed rate loans into the secondary market." He added, "We have
initiated a number of cost reduction measures that will take effect during the
second half of the year which will help to offset the margin compression."
North Bancshares, Inc. is the holding company for North Federal Savings
Bank. Its common stock is traded on the Nasdaq Stock Market under the symbol
"NBSI." North Federal has served the north side of Chicago from its home office
in Old Town since 1886. It also operates a branch office in Wilmette IL. For 59
consecutive quarters, the bank has received a five-star superior rating for
safety from Bauer Financial Reports, Inc., and is rated one of the best in the
nation for safety and soundness by Sheshunoff Information Services, Inc. North
Federal is proud to support local service and non-profit organizations. Its
executives serve or have served on the boards of a variety of local community
organizations. Further information is available on its website at
www.northfederal.com including prior press releases, SEC filings, company
history, and current products, services and interest rates.
When used in this press release the words or phrases "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. 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.
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.
(FINANCIAL STATEMENTS ATTACHED)
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NORTH BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
ASSETS JUNE 30, 2003 DECEMBER 31, 2002
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Cash and due from banks $2,460 $ 1,629
Interest-bearing deposits 6,219 4,338
Federal funds sold 12,830 12,253
Investment in dollar denominated mutual funds 87 83
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TOTAL CASH AND CASH EQUIVALENTS 21,596 18,303
Securities available for sale 23,673 26,875
Stock in Federal Home Loan Bank (FHLB) of Chicago 4,113 3,999
Loans receivable, net of allowance for loan losses of $326
at June 30, 2003 and December 31, 2002 81,565 86,464
Accrued interest receivable 403 503
Premises and equipment, net 895 850
Other assets 831 799
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TOTAL ASSETS 133,076 137,793
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits
Interest-bearing 82,260 85,074
Non-interest-bearing 6,354 5,076
Borrowed funds 27,500 31,000
Advance payments by borrowers for taxes and insurance 744 871
Accrued interest payable and other liabilities 2,594 1,867
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TOTAL LIABILITIES 119,452 123,888
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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
1,914,075; outstanding 1,142,927 at June 30, 2003 and 1,138,029
at December 31, 2002 19 19
Additional paid in capital 13,224 13,284
Retained earnings, substantially restricted 12,025 12,140
Treasury stock, at cost (771,148 shares at June 30, 2003 and
776,046 shares at December 31, 2002) (11,668) (11,745)
Accumulated other comprehensive income 70 259
Unearned stock awards (46) (52)
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TOTAL STOCKHOLDERS' EQUITY 13,624 13,905
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $133,076 $137,793
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NORTH BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2003 2002 2003 2002
INTEREST INCOME:
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Loans receivable $1,306 $1,690 2,737 3,409
Interest-bearing deposits and federal funds sold 61 36 117 94
Securities available for sale 271 359 569 662
Dividend on FHLB stock and other interest income 64 48 114 82
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TOTAL INTEREST INCOME 1,702 2,133 3,537 4,247
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INTEREST EXPENSE:
Deposit accounts 528 687 1,115 1,407
Borrowed funds 384 443 785 869
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TOTAL INTEREST EXPENSE 912 1,130 1,900 2,276
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 790 1,003 1,637 1,971
PROVISION FOR LOAN LOSSES - 10 - 28
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 790 993 1,637 1,943
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NON-INTEREST INCOME:
Gain on sale of securities available for sale 37 20 64 20
Gain on sale of mortgage loans held for sale 52 14 59 25
Other non-interest income 98 79 187 153
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TOTAL NON-INTEREST INCOME 187 113 310 198
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NON-INTEREST EXPENSE:
Compensation and benefits 469 459 882 896
Occupancy expense 119 116 242 226
Professional fees 46 64 86 120
Data processing 74 69 146 124
Advertising and promotion 34 31 63 55
Other non-interest expense 131 149 322 260
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TOTAL NON-INTEREST EXPENSE 873 888 1,741 1,681
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INCOME BEFORE INCOME TAXES 104 218 206 460
INCOME TAX EXPENSE 34 85 70 170
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NET INCOME $70 $133 136 290
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EARNINGS PER SHARE:
Basic $.06 $.11 .12 .25
Diluted $.06 $.11 .12 .25
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 1,140,177 1,148,605 1,139,285 1,150,732
Diluted 1,151,724 1,164,359 1,141,534 1,166,191
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COMPREHENSIVE (LOSS) INCOME $(61) $519 (53) 424
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2003 2002 2003 2002
PERFORMANCE RATIOS:
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Return on assets (ratio of net income to average total assets) (1) 0.21% 0.38% 0.20% 0.42%
Return on Stockholders' equity (ratio of net income to average
equity) (1) 2.06 3.92 1.98 4.28
Interest rate spread information:
Average during period (1) 1.98 2.49 2.03 2.45
End of period (1) 1.93 2.53 1.93 2.53
Net interest margin (1) 2.42 2.97 2.48 2.95
Ratio of operating expenses to average assets (1) 2.58 2.55 2.55 2.44
Efficiency ratio (2) .89 .80 .89 .78
Ratio of average interest-earning assets to average interest-bearing
liabilities 115.82 114.34 115.58 114.61
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JUNE 30, 2002 DECEMBER 31, 2002
ASSET QUALITY RATIOS:
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Non-performing assets to total assets 0.00 0.00
Allowance for loan losses to non-performing loans N/A N/A
Allowance for loan losses to loans receivable 0.40 0.38
CAPITAL RATIOS:
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Stockholders' equity to total assets 10.24 10.09
Average Stockholders' equity to average assets 10.17 9.83
Shares outstanding-actual 1,142,927 1,138,029
Book value per share (3) 11.92 12.22
Number of full service offices 2 2
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(1) Annualized for the three and six month periods presented.
(2) Includes gains on sales.
(3) Includes other comprehensive income.