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 16, 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 July 16, 2004.
Item 9. Regulation FD Disclosure (Information furnished in this Item 9 is
furnished pursuant to Item 12)
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On July 16, 2004, the Registrant issued the attached press release regarding
second 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: July 16, 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
SECOND QUARTER EARNINGS
QUARTERLY DIVIDEND DECLARED
CHICAGO, IL, JULY 16, 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 a net loss of $.11 for the quarter ended
June 30, 2004 compared with net income of $.06 per share for the quarter ended
June 20, 2003. Net income for the quarter ended June 30, 2004 decreased by
$196,000 and amounted to a loss of $126,000 compared with net income of $70,000
for the quarter ended June 30, 2003. The decrease was primarily attributable to
a $134,000 increase in professional fees and other non-interest expense that are
not tax deductible and are related to the acquisition and merger agreement
signed on April 8, 2004.
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
16, 2004 to stockholders of record as of August 2, 2004.
Net interest income, before provision for loan losses, increased by
$36,000 to $826,000 for the quarter ended June 30, 2004, compared with $790,000
for the quarter ended June 30, 2003. The increase was primarily attributable to
a $94,000 decrease in total interest expense partially offset by a $58,000
decrease in total interest income. The decrease in interest expense was
primarily attributable to the decrease in interest rates.
Non-interest income decreased by $167,000 to $20,000 for the quarter
ended June 30, 2004, compared with $187,000 for the quarter ended June 30, 2003.
The decrease was primarily attributable to a $101,000 decrease in gains on the
sale of investment securities available for sale and a $52,000 decrease in gains
on sale of mortgage loans held for sale.
Non-interest expense increased by $110,000 to $983,000 for the quarter
ended June 30, 2004 compared with $873,000 for the quarter ended June 30, 2003.
The increase was primarily attributable to a $103,000 increase in professional
fees related to expenses associated with signing of a definitive agreement and
plan of merger on April 8, 2004.
Total assets remained stable at $133.7 million at June 30, 2004 and at
December 31, 2003. There was a $9.3 million increase in cash and cash
equivalents which was offset by a $7.2 million decrease in investment securities
available for sale and a $2.3 million decrease in net loans receivable.
Cash and cash equivalents increased by $9.3 million from $13.0 million
at December 31, 2003 to $22.3 million at June 30, 2004. The increase was
primarily attributable to slower loan demand. In addition, management
anticipates that interest rates will trend higher in future periods and
investments will yield higher returns as short and longer term rates increase.
Net loans receivable decreased by $2.3 million and amounted to $93.2
million at June 30, 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 $21.7 million at June 30, 2004 from $20.5 million at
December 31, 2003. The Bank originated $20.8 million in loans during the six
months ended June 30, 2004 and recorded $22.9 million in repayments and $180,000
in loan sales compared with $25.8 million in loans originated, $29.4 million in
repayments and $1.5 million in loan sales during the six months ended June 30,
2003. At June 30, 2004, the Bank had $4.2 million in loan applications pending
approval or closing and $15.4 million in unused lines of credit. The Company did
not add to the allowance for loan losses during the quarter ended June 30, 2004,
due primarily to a decrease in the loan portfolio during the quarter. The total
allowance for loan losses amounted to $354,700 or 0.38% of loans receivable at
June 30, 2004 compared with $347,000 and 0.36% of loans receivable at December
31, 2003.
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Total deposits increased by $1.8 million and amounted to $92.7 million
at June 30, 2004 compared with $90.9 million at December 31, 2003. The increase
was due primarily to a $2.5 million increase in money market deposit accounts.
The weighted average cost of deposits decreased to 2.20% at June 30, 2004 from
2.47% at December 31, 2003.
Borrowed funds decreased by $2.4 million and amounted to $25.1 million
at June 30, 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 first quarter.
Stockholders' equity was $13.2 million at June 30, 2004 compared with
$13.5 million at December 31, 2003. The decrease was primarily attributable to a
$234,000 decrease in retained earnings as a result of a net loss of $51,000 and
$183,000 in dividend payments. In addition, there was a $66,000 increase in
accumulated other comprehensive loss due primarily to an increase in interest
rates that occurred during the quarter and the resulting negative effect on the
available for sale securities portfolio. Book value per share decreased to
$11.53 at June 30, 2004 compared with $11.77 at December 31, 2003.
Joseph A. Graber, President and Chief Executive Officer, commented: "We
have set August 6, 2004 at 3:00 P.M. as the date and time for the special
shareholders meeting to vote on the agreement and plan of merger transaction
with Diamond Bancorp, Inc. The meeting will be held at our office in Chicago at
100 West North Avenue. The regulatory approval process is moving forward and we
look forward to a positive vote and completing the transaction this quarter or
early in the fourth quarter."
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 64
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, 2004 DECEMBER 31, 2003
Cash and due from banks $2,442 $2,003
Interest-bearing deposits 3,230 2,767
Federal funds sold 16,599 8,166
Investment in dollar denominated mutual funds 63 95
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TOTAL CASH AND CASH EQUIVALENTS 22,334 13,031
Securities available for sale 11,461 18,612
Stock in Federal Home Loan Bank (FHLB) of Chicago 4,252 4,252
Loans receivable, net of allowance for loan losses
of $355 at June 30, 2004 and $347 at December 31, 2003 93,153 95,471
Accrued interest receivable 529 558
Premises and equipment, net 827 849
Other assets 1,113 973
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TOTAL ASSETS 133,669 133,746
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposits
Interest-bearing 86,839 85,392
Non-interest-bearing 5,852 5,560
Borrowed funds 25,100 27,500
Advance payments by borrowers for taxes and insurance 653 657
Accrued interest payable and other liabilities 2,024 1,143
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TOTAL LIABILITIES 120,468 120,252
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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
June 30, 2004 and December 31, 2003 19 19
Additional paid in capital 13,179 13,179
Retained earnings, substantially restricted 11,841 12,075
Treasury stock, at cost (769,380 shares at June 30,
2004 and December 31, 2003) (11,625) (11,625)
Accumulated other comprehensive loss (181) (115)
Unearned stock awards (32) (39)
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TOTAL STOCKHOLDERS' EQUITY 13,201 13,494
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $133,669 $133,746
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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,
2004 2003 2004 2003
INTEREST INCOME:
Loans receivable $1,407 $1,306 2,803 2,737
Interest-bearing deposits and federal funds sold 36 61 63 117
Securities available for sale 137 271 322 569
Dividend on FHLB stock and other interest income 64 64 133 114
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TOTAL INTEREST INCOME 1,644 1,702 3,321 3,537
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INTEREST EXPENSE:
Deposit accounts 474 528 953 1,115
Borrowed funds 344 384 708 785
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TOTAL INTEREST EXPENSE 818 912 1,661 1,900
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 826 790 1,660 1,637
PROVISION FOR LOAN LOSSES - - 7 -
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 826 790 1,653 1,637
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NON-INTEREST INCOME:
Gain (loss) on sale of securities available for sale (64) 37 (64) 64
Gain on sale of mortgage loans held for sale - 52 22 59
Other non-interest income 84 98 223 187
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TOTAL NON-INTEREST INCOME 20 187 181 310
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NON-INTEREST EXPENSE:
Compensation and benefits 460 469 878 882
Occupancy expense 122 119 249 242
Professional fees 149 46 244 86
Data processing 67 74 138 146
Advertising and promotion 23 34 56 63
Other non-interest expense 162 131 297 322
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TOTAL NON-INTEREST EXPENSE 983 873 1,862 1,741
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INCOME (LOSS) BEFORE INCOME TAXES (137) 104 (28) 206
INCOME TAX EXPENSE (BENEFIT) (11) 34 23 70
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NET INCOME (LOSS) $(126) $70 (51) 136
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EARNINGS (LOSS) PER SHARE:
Basic $(.11) $.06 (.04) .12
Diluted $(.11) $.06 (.04) .12
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WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 1,143,112 1,140,427 1,143,112 1,139,683
Diluted 1,158,157 1,151,936 1,154,387 1,150,234
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COMPREHENSIVE LOSS $(276) $(61) (117) (53)
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2004 2003 2004 2003
PERFORMANCE RATIOS:
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Return on assets (ratio of net income to average
total assets) (1) (0.38)% 0.21% (0.08)% 0.20%
Return on Stockholders' equity (ratio of net income
to average equity) (1) (3.79) 2.06 (0.76) 1.98
Interest rate spread information:
Average during period (1) 2.19 1.98 2.18 2.03
End of period (1) 2.12 1.93 2.12 1.93
Net interest margin (1) 2.57 2.42 2.56 2.48
Ratio of operating expenses to average assets (1) 2.94 2.58 2.78 2.55
Efficiency ratio (2) 1.16 .89 1.01 .89
Ratio of average interest-earning assets to average
interest-bearing liabilities 115.06 115.82 115.04 115.58
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JUNE 30, 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 0.38 0.36
CAPITAL RATIOS:
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Stockholders' equity to total assets 9.88 10.09
Average Stockholders' equity to average assets 10.00 10.16
Shares outstanding-actual 1,144,695 1,144,695
Book value per share (3) 11.53 11.79
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
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