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) January 20, 2004
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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 January 20, 2004.
Item 9. Regulation FD Disclosure (Information furnished in this Item 9 is
furnished pursuant to Item 12
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On January 20, 2004, the Registrant issued the attached press release regarding
fourth quarter 2003 earnings, the declaration of a quarterly dividend and the
date of the annual meeting of stockholders. 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: January 20, 2004 /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 at Clark - 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
FOURTH QUARTER EARNINGS
QUARTERLY DIVIDEND DECLARED
ANNUAL MEETING DATE
CHICAGO, IL, JANUARY 20, 2004, - North Bancshares, Inc., (NASDAQ-NBSI),
the holding company of North Federal Savings Bank today announced both basic and
diluted earnings per share decreased to $.12 for the quarter ended December 31,
2003 compared with $.17 per share for the quarter ended December 31, 2002. Net
income for the quarter ended December 31, 2003 decreased by $47,000 and amounted
to $141,000 compared with $188,000 for the quarter ended December 31, 2002. The
decrease was primarily attributable to a $92,000 decrease in net interest income
before provision for loan losses, partially offset by a $16,000 decrease in
non-interest 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
February 16, 2004 to stockholders of record as of February 2, 2004 and set
Friday, April 23, 2004 at 3:00 PM at the main office of the Bank as the date,
time and place of the Company's annual meeting of stockholders.
Net interest income, before provision for loan losses, decreased by
$92,000 to $856,000 for the quarter ended December 31, 2003, compared with
$948,000 for the quarter ended December 31, 2002. The decrease was attributable
to a $295,000 reduction in total interest income offset by a $203,000 decrease
in total interest expense. The decrease in interest income 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 increased by $6,000 to $188,000 for the quarter
ended December 31, 2003 compared with $182,000 for the quarter ended December
31, 2002. The increase was primarily attributable to the receipt of a $46,000
settlement resulting from a class action lawsuit related to common stock the
Company owned in Reliance Acceptance Corporation and sold at a loss in a prior
period, partially offset by a $28,000 decrease in the gain on sale of mortgage
loans held for sale.
Non-interest expense decreased by $16,000 to $801,000 for the quarter
ended December 31, 2003 compared with $817,000 for the quarter ended December
31, 2002. The decrease was primarily attributable to decreases in compensation
and benefits 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 $5.3 million to $13.0 million at
December 31, 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 $9.0 million and amounted to $95.5
million at December 31, 2003 compared with $86.5 million at December 31, 2002.
Equity line of credit loans, that adjust to the prime rate or prime rate plus a
margin increased to $20.5 million at December 31, 2003 from $12.3 million at
December 31, 2002. The Bank originated $64.8 million in loans during the fiscal
year ended December 31, 2003 and recorded $54.1 million in repayments and $1.9
million in loan sales compared with $46.0 million in originations, $49.0 million
in repayments and $3.9 million in loan sales during the fiscal year ended
December 31, 2002. At December 31, 2003, the Bank had $6.4 million in loan
applications pending approval or closing and $14.5 million in unused lines of
credit. The Company added $21,400 to
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the allowance for loan losses during the quarter ended December 31, 2003, due
primarily to growth in the loan portfolio during the quarter. The total
allowance for loan losses amounted to $347,400 or 0.36% of loans receivable at
December 31, 2003 compared with $326,000 and 0.38% of loans receivable at
December 31, 2002.
Total deposits increased by $800,000 and amounted to $91.0 million at
December 31, 2003 compared with $90.2 million at December 31, 2002. The increase
was due primarily to a $1.5 million increase in checking, money market accounts
and passbook accounts partially offset by a $600,000 decrease in certificates of
deposit. The weighted average cost of deposits decreased to 2.47% at December
31, 2003 from 3.18% at December 31, 2002.
Borrowed funds decreased by $3.5 million and amounted to $27.5 million
at December 31, 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 fiscal year.
Stockholders' equity was $13.5 million at December 31, 2003 compared
with $13.9 million at December 31, 2002. The decrease was primarily
attributable to a $374,000 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 $120,000 primarily due to the exercise of
stock options. Book value per share decreased to $11.77 at December 31, 2003
compared with $12.22 at December 31, 2002.
Joseph A. Graber, President and Chief Executive Officer, commented:
"We put a lot of effort into moving funds out of cash and into loans
during the third and fourth quarters as loan interest rates have increased. As a
result we have made some progress on improving our margins and efficiency." He
added, "Our lending continues to be focused on products that have shorter terms
and that adjust to the prime rate which will help to improve performance in the
future as the economy improves and likely interest rate increases follow."
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 61
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 DECEMBER 31, 2003 DECEMBER 31, 2002
Cash and due from banks $2,003 $ 1,629
Interest-bearing deposits 2,767 4,338
Federal funds sold 8,166 12,253
Investment in dollar denominated mutual funds 95 83
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TOTAL CASH AND CASH EQUIVALENTS 13,031 18,303
Securities available for sale 18,612 26,875
Stock in Federal Home Loan Bank (FHLB) of Chicago 4,252 3,999
Loans receivable, net of allowance for loan losses of
$347 at December 31, 2003 and $326 at December 31, 2002 95,471 86,464
Accrued interest receivable 558 503
Premises and equipment, net 849 850
Other assets 973 799
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TOTAL ASSETS 133,746 137,793
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits
Interest-bearing 85,392 85,074
Non-interest-bearing 5,560 5,076
Borrowed funds 27,500 31,000
Advance payments by borrowers for taxes and insurance 657 871
Accrued interest payable and other liabilities 1,159 1,867
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TOTAL LIABILITIES 120,268 123,888
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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 1,144,695 at December 31, 2003
and 1,138,029 at December 31, 2002 19 19
Additional paid in capital 13,163 13,284
Retained earnings, substantially restricted 12,075 12,140
Treasury stock, at cost (769,380 shares at December 31, 2003
and 776,046 shares at December 31, 2002) (11,625) (11,745)
Accumulated other comprehensive(loss)income (115) 259
Unearned stock awards (39) (52)
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TOTAL STOCKHOLDERS' EQUITY 13,478 13,905
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $133,746 $137,793
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NORTH BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED FISCAL YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
INTEREST INCOME:
Loans receivable $1,485 $1,544 5,531 6,641
Interest-bearing deposits and federal funds sold 16 59 168 195
Securities available for sale 125 332 939 1,363
Dividend on FHLB stock and other interest income 73 59 254 191
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TOTAL INTEREST INCOME 1,699 1,994 6,892 8,390
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INTEREST EXPENSE:
Deposit accounts 463 624 2,056 2,687
Borrowed funds 380 422 1,545 1,733
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TOTAL INTEREST EXPENSE 843 1,046 3,601 4,420
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 856 948 3,291 3,970
PROVISION FOR LOAN LOSSES 21 - 21 28
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 835 948 3,270 3,942
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NON-INTEREST INCOME:
Gain (loss) on sale of securities available for sale 39 64 100 181
Gain on sale of mortgage loans held for sale 6 34 65 75
Other non-interest income 143 84 429 326
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TOTAL NON-INTEREST INCOME 188 182 594 582
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NON-INTEREST EXPENSE:
Compensation and benefits 425 476 1,711 1,848
Occupancy expense 120 106 463 442
Professional fees 40 40 164 216
Data processing 71 78 284 268
Advertising and promotion 20 25 103 98
Other non-interest expense 125 92 558 472
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TOTAL NON-INTEREST EXPENSE 801 817 3,283 3,344
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INCOME BEFORE INCOME TAXES 222 313 581 1,180
INCOME TAX EXPENSE 81 125 211 460
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NET INCOME $141 188 370 720
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EARNINGS PER SHARE:
Basic $.12 .17 .32 .62
Diluted $.12 .17 .32 .62
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 1,144,437 1,134,029 1,141,798 1,154,492
Diluted 1,149,377 1,144,355 1,147,728 1,164,472
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COMPREHENSIVE (LOSS) INCOME $66 188 (4) 1,021
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
THREE MONTHS ENDED FISCAL YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
PERFORMANCE RATIOS:
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Return on assets (ratio of net income to average total assets) (1) 0.43% 0.54% 0.28% 0.52%
Return on Stockholders' equity (ratio of net income to average
equity) (1) 4.19 5.45 2.71 5.28
Interest rate spread information:
Average during period (1) 2.28 2.33 2.09 2.45
End of period (1) 2.20 2.21 2.20 2.21
Net interest margin (1) 2.70 2.82 2.54 2.95
Ratio of operating expenses to average assets (1) 2.45 2.35 2.45 2.41
Efficiency ratio (2) .77 .72 .85 .74
Ratio of average interest-earning assets to average
interest-bearing liabilities 115.64 115.68 115.86 115.05
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DECEMBER 31, 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 10.08 10.09
Average Stockholders' equity to average assets 10.17 9.83
Shares outstanding-actual 1,144,695 1,138,029
Book value per share (3) 11.77 12.22
Number of full service offices 2 2
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(1) Annualized for the three month periods presented.
(2) Includes gains on sales.
(3) Includes other comprehensive income.