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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 14, 1998
NORTH BANCSHARES, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 0-22800 36-3915073
(State or other (commission file number) (IRS Employer
jurisdiction of Identification
incorporation) number)
100 West North Avenue, Chicago, Illinois 60610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 664-4320
N/A
Former name or former address, if changed since last report)
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Item 5. Other Events
On July 14, 1998, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, Dated July 14, 1998, regarding second quarter 1998
earnings and a regular quarterly dividend.
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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 14, 1998 /S/ Joseph A. Graber
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Joseph A. Graber
President
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EXHIBIT
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NORTH BANCSHARES, INC NEWS RELEASE
RELEASE: IMMEDIATE
CONTACT: Joseph A. Graber, President
Victor E. Caputo, Executive Vice President
(312) 664-4320
NORTH BANCSHARES, INC.
ANNOUNCES
SECOND QUARTER EARNINGS
QUARTERLY DIVIDEND
Chicago, Illinois, July 14, 1998, - North Bancshares, Inc., (NASDAQ-NBSI)
, the holding company for North Federal Savings Bank, announced net income for
the quarter ended June 30, 1998 of $66,000, a decrease of $109,000 from
$175,000 for the quarter ended June 30, 1997. Diluted earnings per share was
$.05 per share, a decrease of $.07 from $.12 per share for the quarter ended
June 30, 1997. The decrease is primarily related to a $107,000 decrease in
net interest income. In addition, there was a $29,000 increase in
professional fees related to shareholder proposals and annual meeting expenses.
Concurrent with this earnings release the Board of Directors of the
Company has declared a quarterly dividend of $.10 per share to be paid on
August 14, 1998 to stockholders of record as of July 31, 1998.
Net interest income declined by $107,000 or 11.0% from $970,000 for the
quarter ended June 30, 1997 to $863,000 for the quarter ended June 30, 1998.
There was a $76,000 decrease in total interest income and a $31,000 increase
in interest on deposit accounts and borrowed funds. Net interest margin
declined from 3.32% for the quarter ended June 30, 1997 to 2.91% for the
quarter ended June 30, 1998, due primarily to mortgage refinance activity and
investment securities which were called prior to their maturity dates.
Non-interest income increased by $23,000 or 33.8% from $68,000 for the
quarter ended June 30, 1997 to $91,000 for the quarter ended June 30, 1998.
The improvement resulted from a $14,000 increase in the gain on the sale of
investment securities and a $9,000 increase in fees and service charges.
Non-interest expense increased by $27,000 from $796,000 for the quarter
ended June 30, 1997 to $823,000 for the quarter ended June 30, 1998. The
increase was primarily attributable to a $29,000 increase in professional
fees related to annual meeting expenses and shareholder proposals.
Net loans receivable decreased $3.4 million or 4.3% from $79.0 million at
December 31, 1997 to $75.6 million at June 30, 1998. The resulted from the
high volume of refinancing that began in the last quarter of 1997 and
continued into the first and second quarters of 1998. At June 30, 1998, the
Bank had $3.7 million in loan applications pending approval or closing.
Total deposits decreased by $2.2 million or 2.9% from $75.0 million at
December 31, 1997 to $72.8 million at June 30, 1998. The decrease was
primarily attributable to a $2.4 million decrease in certificates of deposit
partially offset by a $200,000 net increase in checking, money market and
passbook accounts.
Stockholders' equity decreased by $3.1 million or 18.9% from $16.4
million at December 31, 1997 to $13.3 million at June 30, 1998. The decrease
was primarily attributable to a $3.0 million increase in treasury stock
related to $3.5 million in stock repurchases offset by $438,000 in stock
options exercised.
Joseph A. Graber, President and Chief Operating Officer, commented:
"Although second quarter results were disappointing, there are many
reasons for optimism regarding NBSI's future. We've experienced unusually
high levels of refinancing activity over the last three quarters, along with
many other mortgage lenders. But requests for payoff information, information
on refinancing and modification of loan terms have slowed down and our
pipeline of new loans is expanding. While net loans have declined with the
wave of refinancings, we regard this as an opportunity to redeploy and
diversify our assets into higher yielding consumer and multi-family property
loans. We continue to focus our efforts on shifting deposits from
certificates into less costly checking and money market accounts. On July
1st, we introduced an enhanced version of our Money Market Deposit Account and
as of this date we have attracted close to $1.0 million, a majority of which
are new deposits. During the past three years, shareholder issues and a
hostile takeover attempt have occupied a significant amount of our time and
resources. We believe that a majority of these issues are now behind us and
those resources and our time can now be completely devoted to achieving the
goals in our business plan--especially with regard to improving sharehodler
value."
Graber added, "I personally look forward to assuming the position of
Chief Executive Office on August 1st. I want to thank the Board for their
vote of confidence. In particular, I thank our Chairman, Mary Ann Hass, for
her unfailing support and guidance."
All per share information has been adjusted to reflect a three-for-two
stock split effected in the form of a 50% stock dividend paid on December 29,
1997 to stockholders of record on December 8, 1997.
North Federal Savings Bank primarily serves the North Side of Chicago
from its home office and operates a branch office in Wilmette, Illinois. The
Bank has received a five star rating for 40 consecutive quarters from Bauer
Financial Reports, Inc. and is rated one of the best in nation by Sheshunoff
Information Services, Inc. Visit our Web site at www.northfederal.com to read
previous press releases, examine filings with the SEC, read about our history
, and check out our products, services, and interest rates.
North Bancshares, Inc. common stock is traded on The Nasdaq Stock Market
under the symbol: "NBSI."
(FINANCIAL STATEMENTS ATTACHED)
<PAGE 7>
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS JUNE 30, 1998 DEC 31, 1997
(UNAUDITED)
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Cash and due from banks $ 781 $ 727
Interest-bearing deposits 3,061 2,937
Federal funds sold 5,593 5,976
Investment in dollar denominated mutual funds 178 1,477
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TOTAL CASH AND CASH EQUIVALENTS 9,613 11,117
Investment securities available for sale 29,178 23,250
Mortgage-backed securities held to maturity 5,092 5,841
Stock in Federal Home Loan Bank of Chicago 1,705 1,705
Loans receivable, net of allowance for loan
losses of $208 at June 30, 1998 and
December 31, 1997 75,628 79,031
Accrued interest receivable 1,029 1,060
Premises and equipment, net 1,000 1,043
Other assets 66 31
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TOTAL ASSETS $123,311 $123,078
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposit accounts $ 72,844 $75,041
Borrowed funds 34,100 29,100
Advance payments by borrowers for
taxes and insurance 1,213 1,239
Accrued interest payable and other liabilities 1,811 1,250
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TOTAL LIABILITIES 109,968 106,630
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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 1,914,105 shares 19 19
Additional paid-in capital 13,658 13,767
Retained earnings, substantially restricted 11,090 11,139
Treasury stock at cost (633,827 shares at
June 30, 1998 and 484,293 shares at
December 31, 1997) (10,746) (7,706)
Accumulated other comprehensive income (178) (216)
Common stock acquired by Employee Stock
Ownership Plan (500) (555)
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TOTAL STOCKHOLDERS' EQUITY 13,343 16,448
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $123,311 $123,078
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NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
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INTEREST INCOME:
Loans receivable $1,463 $1,487 $2,957 $2,936
Interest-bearing deposits and federal funds sold 135 34 251 82
Investment securities available for sale 399 512 782 977
Mortgage-backed securities held to maturity 80 121 176 246
Investment in mutual funds 9 18 40 52
Dividends on FHLB stock 33 23 62 45
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TOTAL INTEREST INCOME 2,119 2,195 4,268 4,338
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INTEREST EXPENSE:
Deposit accounts 798 779 1,617 1,552
Borrowed funds 458 446 879 847
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TOTAL INTEREST EXPENSE 1,256 1,225 2,496 2,399
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 863 970 1,772 1,939
PROVISION FOR LOAN LOSSES - - - -
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 863 970 1,772 1,939
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NON-INTEREST INCOME:
Gain on sale of investment securities
available for sale, net 20 6 60 54
Fees and service charges 66 57 125 103
Other 5 5 9 9
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TOTAL NON-INTEREST INCOME 91 68 194 166
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NON-INTEREST EXPENSE:
Compensation and benefits 432 418 884 812
Occupancy expense 127 117 252 230
Professional fees 77 48 153 86
Data processing 49 43 96 85
Advertising and promotion 39 32 63 63
Federal deposit insurance premium 11 11 23 23
Recognition and retention plan - 23 - 42
Other 88 104 151 201
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TOTAL NON-INTEREST EXPENSE 823 796 1,622 1,542
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INCOME BEFORE INCOME TAXES 131 242 344 563
INCOME TAX EXPENSE 65 67 123 159
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NET INCOME 66 175 221 404
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EARNINGS PER SHARE:
Basic .05 .12 .18 .28
Diluted .05 .12 .17 .26
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AVERAGE SHARES OUTSTANDING:
Basic 1,207,513 1,434,162 1,242,091 1,461,655
Diluted 1,272,066 1,509,856 1,308,002 1,532,717
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
PERFORMANCE RATIOS:
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Return on assets (ratio of net income
to average total assets) (1) 0.21% 0.58% 0.36% 0.68%
Interest Rate Spread Information:
Average during period (1) 2.33 2.54 2.36 2.52
End of period (1) 2.49 2.57 2.49 2.57
Net interest margin (1) 2.91 3.32 2.98 3.32
Ratio of operating expenses to average assets (1) 2.69 2.66 2.52 2.59
Ratio of average interest-earning assets
to average interest-bearing liabilities 113.71 118.45 114.84 119.34
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JUNE 30, 1998 DECEMBER 31, 1997
ASSET QUALITY RATIOS:
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Non-performing assets to total assets N/A N/A
Allowance for loan losses to non-performing loans N/A N/A
Allowance for loan losses to loans receivable 0.27 0.26
CAPITAL RATIOS:
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Stockholders' equity to total assets 10.82 13.36
Average Stockholders' equity to average assets 11.75 14.03
Return on Stockholders' equity (ratio of net
income to average equity) (1) 3.07 3.75
Shares outstanding-actual 1,264,694 1,429,812
Book value per share $10.55 $11.50
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Number of full service offices 2 2
(1) Annualized for the three and six month periods presented.