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) April 15, 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 April 15, 2004.
Item 9. Regulation FD Disclosure (Information furnished in this Item 9 is
furnished pursuant to Item 12)
On April 15, 2004, the Registrant issued the attached press release regarding
first quarter 2004 earnings and the declaration of a 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.
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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: April 15, 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 Street - Chicago, Illinois 60610 - (312) 664-4320
RELEASE: IMMEDIATELY
CONTACTS: Joseph A. Graber or Victor E. Caputo or Martin W. Trofimuk
(312) 664-4320
NORTH BANCSHARES ANNOUNCES
FIRST QUARTER EARNINGS
QUARTERLY DIVIDEND DECLARED
CHICAGO, IL, APRIL 15, 2004, - North Bancshares, Inc., (NASDAQ-NBSI),
the holding company of North Federal Savings Bank today announced both basic and
diluted earnings per share increased to $.07 for the quarter ended March 31,
2004 compared with $.06 per share for the quarter ended March 31, 2003. Net
income for the quarter ended March 31, 2004 increased by $9,000 and amounted to
$75,000 compared with $66,000 for the quarter ended March 31, 2003. The increase
was primarily attributable to a $38,000 increase in non-interest income, offset
by a $20,000 decrease in net interest income, and an $11,000 increase in total
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 May
14, 2004 to stockholders of record as of April 30, 2004.
Net interest income, before provision for loan losses, decreased by
$13,000 to $834,000 for the quarter ended March 31, 2004, compared with $847,000
for the quarter ended March 31, 2003. The decrease was attributable to a
$158,000 decrease in total interest income offset by a $145,000 decrease in
total interest expense. The decrease in interest income was primarily
attributable to a decrease in the average yield on interest earning assets.
Non-interest income increased by $38,000 to $161,000 for the quarter
ended March 31, 2004, compared with $123,000 for the quarter ended March 31,
2003. The increase was primarily attributable to a $50,000 increase in other
non-interest income partially offset by a $27,000 decrease in gains on sale of
investment securities available for sale. The increase in other non-interest
income was due primarily to a recovery of an employee embezzlement that was
charged to non-interest expense in a prior year. In addition, there was a
$15,000 increase in gain on the sale of mortgage loans held for sale.
Non-interest expense increased by $11,000 to $879,000 for the quarter
ended March 31, 2004 compared with $868,000 for the quarter ended March 31,
2003. The increase was primarily attributable to a $55,000 increase in
professional fees related to the hiring of an investment banking firm and
attorneys to review the company's strategic alternatives. Other non-interest
expense decreased by $56,000 which was related to a charge for an employee
embezzlement which was recorded during the first quarter of 2003.
Total assets decreased slightly to $133.3 million at March 31, 2004
from $133.7 million at December 31, 2003. Investment securities available for
sale decreased by $1.6 million to $17.0 million which was partially offset by a
$1.3 million increase in net loans receivable.
Net loans receivable increased by $1.3 million and amounted to $96.8
million at March 31, 2004 compared with $95.5 million at December 31, 2003.
Equity line of credit loans, that adjust to the prime rate or prime rate plus a
margin increased to $21.9 million at March 31, 2004 from $20.5 million at
December 31, 2003. The Bank originated $11.2 million in loans during the quarter
ended March 31, 2004 and recorded $8.3 million in repayments and $1.6 million in
loan sales compared with $8.3 million in loans originated, $14.2 million in
repayments and $180,000 in loan sales during the quarter ended March 31, 2003.
At March 31, 2004, the Bank had $4.1 million in loan applications pending
approval or closing and $15.5 million in unused lines of credit. The Company
added $7,500 to the allowance
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for loan losses during the quarter ended March 31, 2004, due primarily to growth
in the consumer and commercial loan portfolio during the quarter. The total
allowance for loan losses amounted to $354,000 or 0.36% of loans receivable at
March 31, 2004 compared with $347,000 and 0.36% of loans receivable at December
31, 2003.
Total deposits increased by $1.3 million and amounted to $92.2 million
at March 31, 2004 compared with $90.9 million at December 31, 2003. The increase
was due primarily to a $2.1 million increase in certificates of deposit. The
weighted average cost of deposits decreased to 2.25% at March 31, 2004 from
2.47% at December 31, 2003.
Borrowed funds decreased by $2.5 million and amounted to $25.0 million
at March 31, 2004 compared with $27.5 million at December 31, 2003. The decrease
is attributable to repayment of a higher cost FHLB advance that matured during
the quarter.
Stockholders' equity was $13.6 million at March 31, 2004 compared with
$13.5 million at December 31, 2003. The increase was primarily attributable to a
$74,000 decrease in accumulated other comprehensive loss due primarily to a
decrease in interest rates that occurred during the quarter and the resulting
positive effect on the available for sale securities portfolio. Retained
earnings increased by net income of $75,000 which was offset by $91,000 in
dividend payments. Book value per share increased to $11.84 at March 31, 2004
compared with $11.77 at December 31, 2003.
Joseph A. Graber, President and Chief Executive Officer, commented:
"On April 8, 2004, we announced the signing of a definitive agreement
with Diamond Bancorp, Inc., a wholly owned subsidiary of Northbrook Investments,
LLC, for the sale of all the outstanding shares of common stock of North
Bancshares, Inc., which are not currently owned by Northbrook Investments, LLC
for $22.75 per diluted share in cash. The total transaction value amounts to
approximately $26.4 million with a price to tangible book value as of December
31, 2003, of approximately 193% and a premium over core deposits of
approximately 17.2%. The transaction is subject to regulatory approvals and
approval by a majority of the holders of North Bancshares's common stock and is
anticipated to close in the fourth quarter of 2004." He added, "The transaction
not only provides extraordinary value to our shareholders but also maintains the
name North Federal Savings Bank, continues the proud 118 year tradition of
providing community banking services, offers new leadership and I look forward
to working with the purchasers to ensure a smooth transition."
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 63
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 MARCH 31, 2004 DECEMBER 31, 2003
Cash and due from banks $2,322 $2,003
Interest-bearing deposits 2,999 2,767
Federal funds sold 7,408 8,166
Investment in dollar denominated mutual funds 63 95
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TOTAL CASH AND CASH EQUIVALENTS 12,792 13,031
Securities available for sale 16,974 18,612
Stock in Federal Home Loan Bank (FHLB) of Chicago 4,252 4,252
Loans receivable, net of allowance for loan losses
of $354 at March 31, 2004 and $347 at December 31, 2003 96,758 95,471
Accrued interest receivable 539 558
Premises and equipment, net 845 849
Other assets 1,164 973
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TOTAL ASSETS 133,324 133,746
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits
Interest-bearing 86,227 85,392
Non-interest-bearing 5,993 5,560
Borrowed funds 25,000 27,500
Advance payments by borrowers for taxes and insurance 375 657
Accrued interest payable and other liabilities 2,174 1,143
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TOTAL LIABILITIES 119,769 120,252
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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
March 31, 2004 and December 31, 2003 19 19
Additional paid in capital 13,179 13,179
Retained earnings, substantially restricted 12,059 12,075
Treasury stock, at cost (769,380 shares at March 31,
2003 and December 31, 2003) (11,625) (11,625)
Accumulated other comprehensive loss (41) (115)
Unearned stock awards (36) (39)
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TOTAL STOCKHOLDERS' EQUITY 13,555 13,494
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $133,324 $133,746
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NORTH BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2004 2003
INTEREST INCOME:
Loans receivable $1,396 $1,431
Interest-bearing deposits and federal funds sold 27 56
Securities available for sale 185 298
Dividend on FHLB stock and other interest income 69 50
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TOTAL INTEREST INCOME 1,677 1,835
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INTEREST EXPENSE:
Deposit accounts 479 587
Borrowed funds 364 401
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TOTAL INTEREST EXPENSE 843 988
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 834 847
PROVISION FOR LOAN LOSSES 7 -
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 827 847
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NON-INTEREST INCOME:
Gain on sale of securities available for sale - 27
Gain on sale of mortgage loans held for sale 22 7
Other non-interest income 139 89
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TOTAL NON-INTEREST INCOME 161 123
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NON-INTEREST EXPENSE:
Compensation and benefits 418 413
Occupancy expense 127 123
Professional fees 95 40
Data processing 71 72
Advertising and promotion 33 29
Other non-interest expense 135 191
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TOTAL NON-INTEREST EXPENSE 879 868
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INCOME BEFORE INCOME TAXES 109 102
INCOME TAX EXPENSE 34 36
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NET INCOME $ 75 $ 66
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EARNINGS PER SHARE:
Basic $.07 $.06
Diluted $.07 $.06
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AVERAGE SHARES OUTSTANDING:
Basic 1,142,545 1,138,681
Diluted 1,148,230 1,148,354
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COMPREHENSIVE INCOME $149 $8
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
THREE MONTHS ENDED
MARCH 31,
2004 2003
PERFORMANCE RATIOS:
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Return on assets (ratio of net income to average
total assets) (1) 0.22% 0.19%
Return on Stockholders' equity (ratio of net income
to average equity) (1) 2.22 1.89
Interest rate spread information:
Average during period (1) 2.18 2.09
End of period (1) 2.24 1.97
Net interest margin (1) 2.57 2.53
Ratio of operating expenses to average assets (1) 2.62 2.51
Efficiency ratio (2) .89 .89
Ratio of average interest-earning assets to average
interest-bearing liabilities 114.84 115.17
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MARCH 31, 2004 DECEMBER 31, 2003
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 0.36
CAPITAL RATIOS:
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Stockholders' equity to total assets 10.17 10.09
Average Stockholders' equity to average assets 10.07 10.16
Shares outstanding-actual 1,144,695 1,144,695
Book value per share (3) 11.84 11.79
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.
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