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) October 20, 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)
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Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1. Press release, dated October 20, 2003.
Item 9. Regulation FD Disclosure (Information furnished in this Item 9 is
furnished pursuant to Item 12)
On October 20, 2003, the Registrant issued the attached press release regarding
third quarter 2003 earnings. 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.
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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)
Date: October 20, 2003 /S/ Joseph A. Graber
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Joseph A. Graber
President and
Chief Executive Officer
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EXHIBIT
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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
THIRD QUARTER EARNINGS
CHICAGO, IL, OCTOBER 20, 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 $.08 for the quarter ended September 30,
2003 compared with $.21 per share for the quarter ended September 30, 2002. Net
income for the quarter ended September 30, 2003 decreased by $149,000 and
amounted to $93,000 compared with $242,000 for the quarter ended September 30,
2002. The decrease was primarily attributable to a $253,000 decrease in net
interest income. These items were partially offset by a $105,000 decrease in
total non-interest expense.
Net interest income, before provision for loan losses, decreased by
$253,000 to $798,000 for the quarter ended September 30, 2003, compared with
$1.1 million for the quarter ended September 30, 2002. The decrease was
attributable to a $493,000 reduction in total interest income offset by a
$240,000 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 to
reflect lower interest rates.
Non-interest income decreased by $106,000 to $96,000 for the quarter
ended September 30, 2003 compared with $202,000 for the quarter ended September
30, 2002. The decrease was primarily attributable to a $101,000 decrease in gain
on sale of securities available for sale.
Non-interest expense decreased by $105,000 to $741,000 for the quarter
ended September 30, 2003 compared with $846,000 for the quarter ended September
30, 2002. The decrease was primarily attributable to decreases in compensation
and benefits expense, professional fees and other non-interest expense resulting
from the absence of the Company's ESOP plan, a reduction in staff and expense
control measures implemented during the first and second quarters of the year.
Cash and cash equivalents decreased by $9.3 million to $9.0 million at
September 30, 2003 compared with $18.3 million at December 31, 2002. The
decrease was primarily due to a decrease in federal funds sold. The funds were
reinvested into higher yielding loans and in part to repay FHLB advances and a
brokered certificate of deposit.
Net loans receivable increased by $3.1 million and amounted to $89.6
million at September 30, 2003 compared with $86.5 million at December 31, 2002.
The $3.1 million increase was due primarily to a $6.3 increase in outstanding
equity lines of credit partially offset by a $2.2 million decrease in one to
four family loans and a $1.0 million decrease in multi-family loans. Equity line
of credit loans, that adjust to the prime rate or prime rate plus a margin
increased to $18.6 million at September 30, 2003 from $12.3 million at December
31, 2002. The Bank originated $47.0 million in loans during the nine month
period ended September 30, 2003 and recorded $42.1 million in repayments and
$1.5 million in loan sales compared with $32.4 million in originations, $31.1
million in repayments and $2.1 million in loan sales during the nine month
period ended September 30, 2002. At September 30, 2003, the Bank had $9.2
million in loan applications pending approval or closing and $14.0 million in
unused lines of credit. The Company did not add to the allowance for loan losses
during the quarter ended September 30, 2003 or September 30, 2002, due primarily
to a decrease in total loans receivable. The total allowance for loan losses
amounted to $326,000 or 0.36% of loans receivable at September 30, 2003 compared
with $326,000 and 0.35% of loans receivable at September 30, 2002.
Total deposits decreased by $3.9 million and amounted to $86.3 million
at September 30, 2003 compared with
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$90.2 million at December 31, 2002. The decrease was due primarily to a $4.5
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 $500,000 increase in checking and money
market accounts. The weighted average cost of deposits decreased to 2.30% at
September 30, 2003 from 3.06% at September 30, 2002.
Borrowed funds decreased by $3.5 million and amounted to $27.5 million
at September 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 nine month period.
Stockholders' equity was $13.6 million at September 30, 2003 compared
with $13.9 million at December 31, 2002. The slight decrease was primarily
attributable to a $299,000 decrease in accumulated other comprehensive income
due primarily to the increase in interest rates that occurred during the third
quarter and the resulting negative effect on the available for sale securities
portfolio. Treasury stock decreased by $222,000 primarily due to the exercise of
stock options. In addition, there was a $114,000 decrease in retained earnings
due to net income of $229,000 that was offset by $343,000 in dividend payments.
Book value per share decreased to $11.81 at September 30, 2003 compared with
$12.22 at December 31, 2002.
Joseph A. Graber, President and Chief Executive Officer, commented:
"We have seen a slowdown in the number of loans being refinanced during
the last few months due primarily to the increase in interest rates and as a
result we have been able to reduce our liquidity and increase our loans
receivable. Our lending has been focused on products that have shorter terms and
that adjust to the prime rate." He added, "We still 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, although our interest
rate spread at the end of September has increased to 2.25% from 1.93% at the end
of June."
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 60
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 SEPTEMBER 30, 2003 DECEMBER 31, 2002
Cash and due from banks $2,986 $ 1,629
Interest-bearing deposits 2,516 4,338
Federal funds sold 3,410 12,253
Investment in dollar denominated mutual funds 95 83
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TOTAL CASH AND CASH EQUIVALENTS 9,007 18,303
Securities available for sale 24,888 26,875
Stock in Federal Home Loan Bank (FHLB) of Chicago 4,179 3,999
Loans receivable, net of allowance for loan losses of
$326 at September 30, 2003 and December 31, 2002 89,623 86,464
Accrued interest receivable 452 503
Premises and equipment, net 877 850
Other assets 955 799
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TOTAL ASSETS 129,981 137,793
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits
Interest-bearing 80,772 85,074
Non-interest-bearing 5,515 5,076
Borrowed funds 27,500 31,000
Advance payments by borrowers for taxes and insurance 305 871
Accrued interest payable and other liabilities 2,286 1,867
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TOTAL LIABILITIES 116,378 123,888
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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 1,151,995 at September 30, 2003
and 1,138,029 at December 31, 2002 19 19
Additional paid in capital 13,163 13,284
Retained earnings, substantially restricted 12,026 12,140
Treasury stock, at cost (762,080 shares at September 30, 2003
and 776,046 shares at December 31, 2002) (11,523) (11,745)
Accumulated other comprehensive (loss)income (40) 259
Unearned stock awards (42) (52)
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TOTAL STOCKHOLDERS' EQUITY 13,603 13,905
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $129,981 $137,793
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NORTH BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT 30, SEPT 30,
2003 2002 2003 2002
INTEREST INCOME:
Loans receivable $1,309 $1,688 4,046 5,097
Interest-bearing deposits and federal funds sold 35 42 152 136
Securities available for sale 245 369 814 1,031
Dividend on FHLB stock and other interest income 67 50 181 132
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TOTAL INTEREST INCOME 1,656 2,149 5,193 6,396
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INTEREST EXPENSE:
Deposit accounts 478 655 1,593 2,063
Borrowed funds 380 443 1,165 1,311
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TOTAL INTEREST EXPENSE 858 1,098 2,758 3,374
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 798 1,051 2,435 3,022
PROVISION FOR LOAN LOSSES - - - 28
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 798 1,051 2,435 2,994
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NON-INTEREST INCOME:
Gain (loss) on sale of securities available for sale (3) 98 61 118
Gain on sale of mortgage loans held for sale - 16 59 41
Other non-interest income 99 88 286 241
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TOTAL NON-INTEREST INCOME 96 202 406 400
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NON-INTEREST EXPENSE:
Compensation and benefits 404 476 1,286 1,372
Occupancy expense 101 110 343 336
Professional fees 38 56 124 176
Data processing 67 66 213 190
Advertising and promotion 20 18 83 73
Other non-interest expense 111 120 433 380
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TOTAL NON-INTEREST EXPENSE 741 846 2,482 2,527
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INCOME BEFORE INCOME TAXES 153 407 359 867
INCOME TAX EXPENSE 60 165 130 335
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NET INCOME $93 $242 229 532
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EARNINGS PER SHARE:
Basic $.08 $.21 .20 .46
Diluted $.08 $.21 .20 .46
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 1,143,123 1,150,321 1,140,908 1,152,765
Diluted 1,144,048 1,170,468 1,147,646 1,168,263
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COMPREHENSIVE (LOSS) INCOME $(18) $409 (70) 833
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT 30, SEPT 30,
2003 2002 2003 2002
PERFORMANCE RATIOS:
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Return on assets (ratio of net income to average total assets) (1) 0.28% 0.69% 0.23% 0.51%
Return on Stockholders' equity (ratio of net income to average
equity) (1) 2.74 7.03 2.23 5.87
Interest rate spread information:
Average during period (1) 2.06 2.57 2.04 2.49
End of period (1) 2.25 2.60 2.25 2.60
Net interest margin (1) 2.51 3.06 2.49 2.99
Ratio of operating expenses to average assets (1) 2.25 2.39 2.45 2.43
Efficiency ratio (2) .83 .68 .87 .74
Ratio of average interest-earning assets to average interest-bearing
liabilities 116.62 115.38 115.80 114.88
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SEPTEMBER 30, 2003 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 0.36 0.38
CAPITAL RATIOS:
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Stockholders' equity to total assets 10.47 10.09
Average Stockholders' equity to average assets 10.14 9.83
Shares outstanding-actual 1,151,995 1,138,029
Book value per share (3) 11.81 12.22
Number of full service offices 2 2
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(1) Annualized for the three and nine month periods presented.
(2) Includes gains on sales.
(3) Includes other comprehensive income
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