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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 15, 1999
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 15, 1999, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, Dated July 15, 1999, regarding second quarter 1999
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 15, 1999 /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 RELEASE
RELEASE: IMMEDIATE
CONTACT: Joseph A. Graber or Victor E. Caputo or Martin W. Trofimuk
(312) 664-4320
NORTH BANCSHARES ANNOUNCES
SECOND QUARTER EARNINGS PER SHARE INCREASES 140%
SECOND QUARTER NET INCOME INCREASES 127%
QUARTERLY DIVIDEND DECLARED
CHICAGO, IL, JULY 15, 1999, - North Bancshares, Inc., the holding
company of North Federal Savings Bank today announced diluted earnings per
share of $.12 for the quarter ended June 30, 1999, an improvement of $.07 per
or 140%, from $.05 per share for the quarter ended June 30, 1998. Net income
for the quarter ended June 30, 1999 amounted to $150,000, an increase of
$84,000, or 127%, from $66,000 for the quarter ended June 30, 1998. The
improvement in earnings per share was primarily related to a $80,000
reduction in non-interest expenses, a $28,000 increase in non-interest income
and a $13,000 increase in net interest income. These improvements were offset
by a $29,000 increase in income tax expense and an $8,000 increase in the
provision for loan losses.
Concurrent with this earnings release the Board of Directors of the
Company has declared a quarterly dividend of $.11 per share to be paid on
August 16, 1999 to stockholders of record as of August 2, 1999.
Net interest income, before provision for loan losses, increased to
$876,000 for the quarter ended June 30, 1999, compared with $863,000 for the
quarter ended June 30, 1998. The interest rate spread increased from 2.38% at
March 31, 1999 to 2.47% at June 30, 1999.
Non-interest income amounted to $119,000 for the quarter ended June 30,
1999 compared with $91,000 for the quarter ended June 30, 1998. The increase
was primarily attributable to a $29,000 increase in gain on the sale of
investment securities available for sale.
Non-interest expense decreased by $80,000, or 9.7%, to $743,000 for the
quarter ended June 30, 1999, compared with $823,000 for the quarter ended
June 30, 1998. The improvement was primarily attributable to a $37,000
decrease in compensation and benefits expense related to lower payroll and
benefits expense and a $28,000 reduction in professional fees related to a
decline in the number of shareholder proposals that required review by counsel
and a reduction in tax accounting expense. In addition, there was a $20,000
decrease in office occupancy expense.
Income tax expense amounted to $94,000 for the quarter ended June 30,
1999 compared with $65,000 for the quarter ended June 30, 1998. The increase
in income tax expense was primarily due to increased income before taxes.
Net loans receivable totaled $85.3 million at June 30, 1999, compared
with $82.1 million at December 31, 1998. The $3.2 increase was due primarily
to $2.5 million in multi-family, commercial real estate and equity lines of
credit closed during the period. At June 30, 1998, the Bank had $4.7 million
in loan applications pending approval or closing.
Total deposits amounted to $75.5 million at June 30, 1999, compared with
$76.2 million at December 31, 1998. The $700,000 decrease was primarily
attributable to a $4.5 million decrease in certificates of deposit partially
offset by a $3.8 million increase in money market and checking accounts. Non
- -interest bearing checking account balances increased 17% to $2.1 million at
June 30, 1999 from $1.8 million at December 31, 1998 and money market deposit
account balances have increased 41% to $14.2 million at June 30, 1999 from
$10.1 million at December 31, 1998.
Borrowed funds increased $3.5 million to $37.6 million at June 30, 1999
from $34.1 million at December 31, 1998. The additional borrowings were used
to fund new loan originations during the period.
Stockholders' equity was $12.1 million at June 30, 1999 compared with
$13.3 million at December 31, 1998. The decrease was primarily attributable
to a $995,000 million increase in other comprehensive loss which is related
to an increase in medium and long term interest rates and their effect on the
market value of the available for sale securities portfolio. Retained
earnings incerased by $50,000 to $11.2 million. The increase was
attributable to $326,000 in net income offset by $276,000 in dividend payments
Joseph A. Graber, President and Chief Executive Officer, commented:
"We continue to realize improvement in our quarterly results. The
restructuring of our loan portfolio to include more higher yielding
residential investor property loans, commercial real estate loans and the
expansion of product lines for both loans and deposits is creating the type
of asset and liabilty mix which we have been targeting." He added, "We are
continuing to focus on reducing our non-interest expenses and increasing our
non-interest income. We anticipate additional quarter to quarter improvement
in earnings per share for the balance of 1999."
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 seved the north side of Chicago from its office in
Old Town since 1886. It also opeates a branch office in wilmette, Il. For 43
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 Informaiton Services, Inc.
North Federal is proud to support local service and non-profit organizations.
Its executives serve on the boards of the Lincoln Park Chamber of Commerce, the
Old Town Chamber of Commerce and the Human Capital Council. 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 revision which may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the ocourrence of anticipated or
unanticipated events.
(FINANCIAL STATEMENTS ATTACHED)
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NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
ASSETS JUNE 30, 1999 DEC 31, 1998
(UNAUDITED)
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Cash and due from banks $ 1,319 $ 810
Interest-bearing deposits 1,839 2,413
Federal funds sold 1,457 5,722
Investment in dollar-denominated mutual funds 410 801
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TOTAL CASH AND CASH EQUIVALENTS 5,025 8,746
Investment securities available for sale 17,990 14,880
Mortgage-backed securities held to maturity - 4,478
Mortgage-backed securities available for sale 15,587 10,884
Stock in Federal Home Loan Bank of Chicago 1,855 1,705
Loans receivable, net of allowance for loan
losses of $222 at June 30, 1999 and $214 at
December 31, 1998 85,258 82,123
Accrued interest receivable 930 849
Premises and equipment, net 1,029 1,021
Other assets 265 146
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TOTAL ASSETS $127,939 $125,832
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposit accounts $ 75,531 $76,222
Borrowed funds 37,600 34,100
Advance payments by borrowers for
taxes and insurance 1,148 1,036
Accrued interest payable and other liabilities 1,580 1,152
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TOTAL LIABILITIES 115,859 112,510
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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 13,398 13,437
Retained earnings, substantially restricted 11,177 11,127
Treasury stock at cost (678,040 shares at
June 30, 1999 and 651,182 shares at
December 31, 1998) (10,977) (10,664)
Accumulated other comprehensive loss (1,148) (153)
Common stock acquired by Employee Stock
Ownership Plan (389) (444)
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TOTAL STOCKHOLDERS' EQUITY 12,080 13,322
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $127,939 $125,832
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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,
1999 1998 1999 1998
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INTEREST INCOME:
Loans receivable $1,556 $1,463 $3,084 $2,957
Interest-bearing deposits and federal funds sold 51 135 131 251
Investment securities available for sale 304 399 556 782
Mortgage-backed securities held to maturity - 80 - 176
Mortgage-backed securities available for sale 242 - 472 -
Investment in mutual funds 3 9 16 40
Dividends on FHLB stock 31 33 60 62
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TOTAL INTEREST INCOME 2,187 2,119 4,319 4,268
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INTEREST EXPENSE:
Deposit accounts 804 798 1,601 1,617
Borrowed funds 507 458 977 879
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TOTAL INTEREST EXPENSE 1,311 1,256 2,578 2,496
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 876 863 1,741 1,772
PROVISION FOR LOAN LOSSES 8 - 8 -
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 868 863 1,733 1,772
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NON-INTEREST INCOME:
Gain on sale of investment securities
available for sale 49 20 82 60
Fees and service charges 65 66 142 125
Other 5 5 9 9
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TOTAL NON-INTEREST INCOME 119 91 233 194
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NON-INTEREST EXPENSE:
Compensation and benefits 395 432 795 884
Occupancy expense 107 127 219 252
Professional fees 49 77 92 153
Data processing 52 49 103 96
Advertising and promotion 38 39 61 63
Federal deposit insurance premium 2 11 11 23
Other 100 88 170 151
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TOTAL NON-INTEREST EXPENSE 743 823 1,451 1,622
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INCOME BEFORE INCOME TAXES 244 131 515 344
INCOME TAX EXPENSE 94 65 189 123
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NET INCOME 150 66 326 221
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EARNINGS PER SHARE:
Basic .12 .05 .27 .18
Diluted .12 .05 .26 .17
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AVERAGE SHARES OUTSTANDING:
Basic 1,196,851 1,207,513 1,204,731 1,242,091
Diluted 1,248,706 1,272,066 1,254,032 1,308,002
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
PERFORMANCE RATIOS:
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Return on assets (ratio of net income
to average total assets) (1) 0.47% 0.22% 0.51% 0.36%
Interest Rate Spread Information:
Average during period (1) 2.26 2.33 2.28 2.36
End of period (1) 2.47 2.49 2.47 2.49
Net interest margin (1) 2.80 2.91 2.81 2.98
Ratio of operating expenses to average assets (1) 2.31 2.69 2.28 2.65
Efficiency ratio 74.67 86.27 73.51 82.50
Ratio of average interest-earning assets
to average interest-bearing liabilities 112.87 113.71 112.84 114.84
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JUNE 30, 1999 DECEMBER 31, 1998
ASSET QUALITY RATIOS:
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Non-performing assets to total assets 0.00 0.02
Allowance for loan losses to non-performing loans N/A 891.67
Allowance for loan losses to loans receivable 0.26 0.26
CAPITAL RATIOS:
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Stockholders' equity to total assets 9.44 10.46
Average Stockholders' equity to average assets 10.13 11.18
Return on Stockholders' equity (ratio of net
income to average equity) (1) 5.06 3.70
Shares outstanding-actual 1,236,035 1,262,893
Book value per share 9.77 10.42
Number of full service offices 2 2
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(1) Annualized for the three and six month periods presented.