> SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
[Mark One]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to ________________
Commission File Number 0-27672
NORTH CENTRAL BANCSHARES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Iowa 42-1449849
-------------------------------- ----------------------
(State or Other Jurisdiction of (I. R. S. Employer
Incorporation or Organization) Identification Number)
825 Central Avenue Fort Dodge, Iowa 50501
--------------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code:(515)576-7531
None
- --------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 3, 2001
- --------------------------------------------------------------------------------
Common Stock, $.01 par value 1,833,480
NORTH CENTRAL BANCSHARES, INC.
INDEX
Page
Part I. Financial Information
Item 1. Consolidated Condensed
Financial Statements (Unaudited) 1 to 3
Consolidated Condensed Statements of
Financial Condition at March 31, 2001
(Unaudited) and December 31, 2000 1
Consolidated Condensed Statements of
Income for the three months ended
March 31, 2001 and 2000 (Unaudited) 2
Consolidated Condensed Statements of
Cash Flows for the three months ended
March 31, 2001 and 2000 (Unaudited) 3
Notes to Consolidated Condensed Financial
Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 5 to 9
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 9
Part II. Other Information
Items 1 through 6 10
Signatures 11
Exhibits
PART I. FINANCIAL INFORMATION
ITEM 1.
NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
March 31, December 31,
ASSETS 2001 2000
------------- -------------
(Unaudited)
Cash and due from banks:
Interest-bearing $ 9,559,110 $ 6,330,525
Noninterest-bearing 2,027,359 2,519,201
Securities available-for-sale 37,346,423 43,351,850
Loans receivable, net 314,309,467 318,025,782
Loans held for sale 2,568,519 498,387
Accrued interest receivable 2,091,866 2,257,153
Foreclosed real estate 113,977 63,866
Premises and equipment, net 6,859,981 6,660,783
Rental real estate 1,736,667 1,757,014
Title plant 925,256 925,256
Goodwill 5,325,018 5,443,091
Deferred taxes 407,088 556,913
Income taxes receivable -- 209,995
Prepaid expenses and other assets 490,014 397,970
------------- -------------
Total assets $ 383,760,745 $ 388,997,786
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 266,895,563 $ 261,166,646
Borrowed funds 77,061,498 88,592,226
Advances from borrowers for taxes and insurance 899,226 1,318,069
Dividends payable 284,607 240,235
Income taxes payable 463,801 --
Accrued expenses and other liabilities 1,682,895 1,282,495
------------- -------------
Total liabilities 347,287,590 352,599,671
------------- -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock ($.01 par value, authorized 3,000,000 shares,
issued and outstanding none) -- --
Common stock ($.01 par value, authorized 15,500,000 shares;
issued and outstanding 4,011,057) 40,111 40,111
Additional paid-in capital 38,413,721 38,378,315
Retained earnings, substantially restricted 34,053,069 33,345,852
Accumulated other comprehensive income (loss) 135,869 (247,340)
Less cost of treasury stock, 2001 2,153,677 shares; 2000 2,099,177 shares (35,565,724) (34,471,911)
Unearned shares, employee stock ownership plan (603,891) (646,912)
------------- -------------
Total stockholders' equity 36,473,155 36,398,115
------------- -------------
Total liabilities and stockholders' equity $ 383,760,745 $ 388,997,786
============= =============
See Notes to Consolidated Condensed Financial Statements.
1
NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
2001 2000
-----------------------
Interest income:
Loans receivable $6,373,033 $5,736,906
Securities and cash deposits 667,520 793,355
---------- ----------
7,040,553 6,530,261
---------- ----------
Interest expense:
Deposits 3,132,595 2,951,575
Borrowed funds 1,248,818 834,356
---------- ----------
4,381,413 3,785,931
---------- ----------
Net Interest Income 2,659,140 2,744,330
Provision for loan losses 30,000 30,000
---------- ----------
Net interest income after provision for loan losses 2,629,140 2,714,330
---------- ----------
Noninterest income:
Fees and service charges 408,806 353,826
Abstract fees 302,272 303,774
Mortgage banking fees 108,763 38,564
Gain on sale of securities available for sale, net 800 --
Other income 217,935 259,120
---------- ----------
Total noninterest income 1,038,576 955,284
---------- ----------
Noninterest expense:
Salaries and employee benefits 1,099,846 1,042,815
Premises and equipment 297,145 236,921
Data processing 105,580 113,429
SAIF deposit insurance premiums 12,836 13,825
Goodwill amortization 118,073 118,073
Other expenses 540,379 587,630
---------- ----------
Total noninterest expense 2,173,859 2,112,693
---------- ----------
Income before income taxes 1,493,857 1,556,921
Provision for income taxes 512,719 549,817
---------- ----------
Net Income $ 981,138 $1,007,104
========== ==========
Basic earnings per common share $ 0.53 $ 0.48
========== ==========
Earnings per common share- assuming dilution $ 0.51 $ 0.47
========== ==========
Dividends declared per common share $ 0.15 $ 0.125
========== ==========
Comprehensive income $1,364,347 $ 743,734
========== ==========
See Notes to Consolidated Condensed Financial Statements.
2
NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
2001 2000
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 981,138 $ 1,007,104
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses 30,000 30,000
Depreciation 167,772 138,496
Amortization and accretion 148,295 132,256
Deferred taxes (78,885) 60,990
Effect of contribution to employee stock ownership plan 88,129 71,008
(Gain) on sale of foreclosed real estate and loans, net (18,061) (6,776)
(Gain) on sale of securities available for sale (800) --
(Gain) loss on impairment and disposal of equipment and premises, net 396 (30)
Proceeds from sales of loans held for sale 7,736,192 2,442,334
Originations of loans held for sale (9,806,324) (2,460,030)
Change in assets and liabilities:
Accrued interest receivable 165,287 33,310
Income taxes receivable 209,995 --
Prepaid expenses and other assets (92,044) (347,638)
Income taxes payable 463,801 485,184
Accrued expenses and other liabilities 400,400 167,550
------------ ------------
Net cash provided by operating activities 395,291 1,753,758
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in loans 4,765,257 (3,868,878)
Purchase of loans (1,126,469) (3,561,000)
Proceeds from sales of securities available-for-sale 11,400 --
Purchase of securities available-for-sale (5,499,000) (148,600)
Proceeds from maturities of securities available-for-sale 12,091,001 1,670,549
Purchase of premises and equipment and rental real estate (350,355) (381,867)
Proceeds from sale of equipment 3,336 30
Other -- 5,849
------------ ------------
Net cash provided by (used in) investing activities 9,895,170 (6,283,917)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits 5,728,917 (2,113,805)
(Decrease) in advances from borrowers for taxes and insurance (418,843) (414,192)
Net change in short-term borrowings (5,000,000) 2,000,000
Proceeds from other borrowed funds 3,000,000 7,000,000
Payments of other borrowings (9,530,728) (4,029,159)
Purchase of treasury stock (1,093,813) (3,377,438)
Dividends paid (229,547) (215,664)
Other (9,704) (5,409)
------------ ------------
Net cash (used in) financing activities (7,553,718) (1,155,667)
------------ ------------
Net increase (decrease) in cash 2,736,743 (5,685,826)
CASH
Beginning 8,849,726 12,668,678
------------ ------------
Ending $ 11,586,469 $ 6,982,852
============ ============
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION Cash payments (receipts) for:
Interest paid to depositors $ 3,225,623 $ 2,848,125
Interest paid on borrowings 1,300,368 814,833
Income taxes (82,192) 3,641
3
NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The consolidated condensed financial statements for the three month periods
ended March 31, 2001 and 2000 are unaudited. In the opinion of the management of
North Central Bancshares, Inc. (the "Company" or the "Registrant") these
financial statements reflect all adjustments, consisting only of normal
recurring accruals, necessary to present fairly these consolidated financial
statements. The results of operations for the interim periods are not
necessarily indicative of results which may be expected for an entire year.
Certain information and footnote disclosure normally included in complete
financial statements prepared in accordance with generally accepted accounting
principles have been omitted in accordance with the requirements for interim
financial statements. The financial statements and notes thereto should be read
in conjunction with the Company's 2000 Annual Report on Form 10-K.
The consolidated condensed financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany balances
and transactions have been eliminated in consolidation.
2. EARNINGS PER SHARE
The earnings per share amounts were computed using the weighted average number
of shares outstanding during the periods presented. In accordance with Statement
of Position No. 93-6, Employers' Accounting for Employee Stock Ownership Plans,
issued by the American Institute of Certified Public Accountants, shares owned
by First Federal Savings Bank of Iowa's Employee Stock Ownership Plan that have
not been committed to be released are not considered to be outstanding for the
purpose of computing earnings per share. For the three month period ended March
31, 2001, the weighted average number of shares outstanding for basic and
diluted earnings per share computation were 1,834,939 and 1,921,261,
respectively. For the three month period ended March 31, 2000, the weighted
average number of shares outstanding for basic and diluted earnings per share
computation were 2,090,636 and 2,127,790, respectively.
3. DIVIDENDS
On February 23, 2001, the Company declared a cash dividend on its common stock,
payable on April 6, 2001 to stockholders of record as of March 15, 2001, equal
to $0.15 per share.
4
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
EXPLANATORY NOTE
This Quarterly Report on Form 10-Q contains forward-looking statements
consisting of estimates with respect to the financial condition, results of
operations and business of the Company that are subject to various factors which
could cause actual results to differ materially from these estimates. These
factors include changes in general, economic, market, legislative and regulatory
conditions, and the development of an interest rate environment that adversely
affects the interest rate spread or other income anticipated from the Company's
operations and investments. The Company's actual results may differ from the
results discussed in the forward looking statements.
FINANCIAL CONDITION
Total assets decreased $5.2 million, or 1.3%, to $383.8 million at March 31,
2001 compared to $389.0 million at December 31, 2000. Interest bearing cash
increased $3.2 million, or 51.0% to $9.6 million at March 31, 2001 from $6.3
million at December 31, 2000. Securities available for sale decreased $6.0
million, or 13.9% from $43.4 million at December 31, 2000 to $37.3 million at
March 31, 2001, primarily due to $12.1 million of maturities, calls and sales,
offset in part by increases in fair market value of $612,000 and purchases of
$5.5 million of such securities. Total loans receivable, net, decreased by $3.7
million to $314.3 million at March 31, 2001 from $318.0 million at December 31,
2000, due primarily to originations of $14.0 million of first mortgage loans
secured primarily by one-to four-family residences, purchases of $1.1 million of
first mortgage loans secured primarily by one-to four-family and commercial real
estate and originations of $6.7 million of second mortgage loans. These
originations and purchases were offset in part by payments and prepayments of
loans of approximately $21.1 million. Total deposits increased $5.7 million, or
2.2%, to $266.9 million at March 31, 2001 from $261.2 million at December 31,
2000, reflecting increases primarily in money market savings accounts and
certificates of deposit accounts. Other borrowings, primarily Federal Home Loan
Bank ("FHLB") advances, decreased by $11.5 million from $88.6 million at
December 31, 2000 to $77.1 million at March 31, 2001. Total stockholders' equity
increased $75,000, to $36.5 million at March 31, 2001 from $36.4 million at
December 31, 2000. See "Capital."
CAPITAL
The Company's total stockholders' equity increased by $75,000 to $36.5 million
at March 31, 2001 from $36.4 million at December 31, 2000, primarily due to
earnings and an increase in the accumulated other comprehensive income, which
were offset in part by stock repurchases and dividends declared. The changes in
stockholders' equity were also due to a decrease in the unearned shares from
First Federal Savings Bank of Iowa's Employee Stock Ownership Plan (the "ESOP")
to $604,000 at March 31, 2001 from $647,000 at December 31, 2000. The decrease
in unearned shares resulted from the release of shares by the ESOP to employees
of First Federal Savings Bank of Iowa (the "Bank").
5
The Office of Thrift Supervision (the "OTS") requires that the Bank meet minimum
tangible, leverage (core) and risk-based capital requirements. As of March 31,
2001, the Bank exceeded all of its regulatory capital requirements. The Bank's
required, actual and excess capital levels as of March 31, 2001 were as follows:
Amount Percentage of Assets
-------- --------------------
(dollars in thousands)
Tangible capital:
Capital level $ 28,714 7.63%
Less Requirement 5,643 1.50%
-------- ------
Excess $ 23,071 6.13%
======== ======
Core capital:
Capital level $ 28,714 7.63%
Less Requirement 15,049 4.00%
-------- ------
Excess $ 13,665 3.63%
======== ======
Risk-based capital:
Capital level $ 31,501 14.05%
Less Requirement 17,933 8.00%
-------- ------
Excess $ 13,568 6.05%
======== ======
LIQUIDITY
The Company's primary sources of funds are cash provided by operating activities
(including net income), certain financing activities (including increases in
deposits and proceeds from borrowings) and certain investing activities
(including principal payments on loans and maturities and calls of securities).
During the first three months of 2001 and 2000, principal payments and
repayments on loans totalled $21.1 million and $12.1 million, respectively. The
net increase in deposits during the first three months of 2001 totalled $5.7
million. The proceeds from borrowed funds during the three months ended March
31, 2001 and 2000 totalled $3.0 million and $7.0 million, respectively. The net
change in short-term borrowings during the three months ended March 31, 2000
totalled $2.0 million. During the first three months of 2001 and 2000, the
proceeds from the maturities, calls and sales of securities totalled $12.1
million and $1.7 million, respectively. Cash provided from operating activities
during the first three months of 2001 and 2000 totalled $395,000 and $1,754,000,
respectively, of which $981,000 and $1,007,000, respectively, represented net
income of the Company. The decrease in the cash provided by operations was due
in part to an increase in the originations of loans held for sale for the three
months ended March 31, 2001. The Company's primary use of funds is cash used to
originate and purchase loans, purchase of securities available for sale,
repayment of borrowed funds and other financing activities (including decreases
in deposits). During the first three months of 2001 and 2000, the Company's
gross purchases and origination of loans totalled $24.6 million and $19.1
million, respectively. The purchase of securities available for sale for the
three months ended March 31, 2001 and 2000 totalled $5.5 million and $149,000,
respectively. The net decrease in deposits during the first three months of 2000
totalled $2.1 million. The repayment of borrowed funds during the first three
months of 2001 and 2000 totalled $9.5 million and $4.0 million, respectively.
The net change in short-term borrowings during the three months ended March 31,
2001 totalled $5.0 million. For additional information about cash flows from
the Company's operating, financing and investing activities, see "Statements of
Cash Flows in the Condensed Consolidated Financial Statements."
The OTS regulations require the Company to maintain sufficient liquidity to
ensure its safe and sound operation.
The Company entered into a $2.0 million line of credit agreement on September
21, 2000 with another unaffiliated bank. The Company may use this line of credit
to fund stock repurchases in the future and general corporate purposes. As of
March 31, 2001, there were no borrowings outstanding on this line of credit.
Stockholders' equity totaled $36.5 million at March 31, 2001 compared to $36.4
million at December 31, 2000, reflecting the Company's earnings, stock
repurchases, the amortization of the unallocated portion of shares held by the
ESOP, dividends declared on common stock and the change in the accumulated other
comprehensive loss. The Company repurchased 54,500 shares of common stock during
the three months ended March 31, 2001 at an average price of $20.07.
On January 5, 2001, the Company paid a quarterly cash dividend of $0.125 per
share on common stock outstanding as of the close of business on December 15,
2000, aggregating $240,000. On February 23, 2001, the Company declared a
quarterly cash dividend of $0.15 per share payable on April 6, 2001 to
shareholders of record as of the close of business on March 15, 2001,
aggregating $285,000.
6
Interest Income. Interest income increased by $510,000 to $7.0 million for the
three months ended March 31, 2001 compared to $6.5 million for the three months
ended March 31, 2000. The increase in interest income was primarily due to
increases in the average balance and average yield on interest earning assets.
The average balance of interest earning assets increased $18.4 million to $367.8
million for the three months ended March 31, 2001 from $349.4 million for the
three months ended March 31, 2000. This increase was primarily due to first
mortgage loans, consumer loans and interest bearing cash, offset by a decrease
in securities available for sale. The increase in the average balance of loans
generally reflects an increase over the past twelve months in originations of
first mortgage loans, second mortgage loans and purchases of first mortgage
loans secured primarily by multi-family, one-to four-family residential and
commercial real estate loans, which were offset in part by payments, sales and
prepayments of loans. See "Financial Condition." The decrease in securities
available for sale reflects maturities, calls and sales, offset in part by
increases in fair market value and purchases. The yield on interest earning
assets increased to 7.68% for the three months ended March 31, 2001 from 7.49%
for the three months ended March 31, 2000. The increase in average yields was
due primarily to an increase in the average balance of loans as compared to the
average balance of interest bearing assets, an increase in the average yield on
loans, offset in part by a decrease in the average yield on securities available
for sale. The average yield on loans increased to 8.02% for the three months
ended March 31, 2001 from 7.79% for the three months ended March 31, 2000. The
average yield on securities available for sale decreased to 5.47% for the three
months ended March 31, 2001 from 5.84% for the three months ended March 31,
2000. The decrease in the average yield on securities available for sale was due
in part to a change in the average yield on Federal Home Loan Bank stock. The
average yield on the Federal Home Loan Bank stock for the three months ended
March 31, 2001 and 2000 was 3.63% and 6.54%, respectively.
Interest Expense. Interest expense increased by $595,000 to $4.4 million for the
three months ended March 31, 2001 compared to $3.8 million for the three months
ended March 31, 2000. The increase in interest expense was primarily due to an
increase in the average balance and average cost of interest bearing
liabilities. The average balance of interest bearing liabilities increased $21.4
million to $340.8 million for the three months ended March 31, 2001 from $319.4
million for the three months ended March 31, 2000. This increase was due
primarily to money market savings accounts and borrowed funds, offset by a
decrease in savings accounts and certificates of deposit. The increase in money
market funds was primarily due to the offering of a premium money market
product. The increase in the borrowed funds was in part to fund the
corresponding asset growth and stock repurchases. The decrease in the
certificates of deposit was due in part to a decrease in the deposits of public
funds. The average cost of interest bearing liabilities increased to 5.21% for
the three months ended March 31, 2001 from 4.74% for the three months ended
March 31, 2000. The increase in the average cost of interest bearing liabilities
was due primarily to an increase in the average cost of certificates of deposit
and borrowed funds resulting from the increase in market interest rates and the
offering of a premium money market product.
Net Interest Income. Net interest income before the provision for loan losses
decreased by $85,000 to $2,659,000 for the three months ended March 31, 2001
from $2,744,000 for the three months ended March 31, 2000. The decrease is due
primarily to decreases in the interest rate spread and the ratio of average
interest earning assets to average interest bearing liabilities. The interest
rate spread (i.e., the difference in the average yield on assets and average
cost of liabilities) decreased to 2.47% for the three months ended March 31,
2001 from 2.75% for the three months ended March 31, 2000. The ratio of average
interest earning assets to average interest bearing liabilities for decreased to
107.93% for the three months ended March 31, 2001 from 109.40% for the three
months ended March 31, 2000.
The following table sets forth certain information relating to the Company's
average balance sheets and reflects the average yield on assets and average cost
of liabilities for the three month periods ended March 31, 2001 and 2000,
respectively.
7
RESULTS OF OPERATIONS (Continued)
For the Three Months Ended March 31,
----------------------------------------------------------------------------------
2001 2000
----------------------------------------------------------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
------- -------- ---------- ------- -------- ----------
(Dollars in thousands)
Assets:
Interest-earning assets:
Loans..................................... $ 318,647 $ 6,373 8.02% $ 294,708 $ 5,736 7.79%
Securities available for sale............. 39,732 543 5.47 50,379 736 5.84
Interest bearing cash..................... 9,398 124 5.36 4,297 58 5.36
--------- --------- --------- --------- --------- ---------
Total interest-earning assets........... 367,777 $ 7,040 7.68% 349,384 $ 6,530 7.49%
--------- --------- --------- ---------
Noninterest-earning assets.................. 18,952 17,841
--------- ---------
Total assets............................ $ 386,729 $ 367,225
========= =========
Liabilities and Equity:
Interest-bearing liabilities:
NOW and money market savings.............. $ 56,262 $ 387 2.79% $ 46,751 $ 247 2.12%
Passbook savings.......................... 21,448 97 1.84 25,952 130 2.01
Certificates of deposit................... 179,800 2,648 5.97 189,738 2,575 5.44
Borrowed funds............................ 83,259 1,249 6.08 56,952 834 5.80
--------- --------- --------- --------- --------- ---------
Total interest-bearing liabilities.......... 340,769 $ 4,381 5.21% 319,393 $ 3,786 4.74%
--------- --------- --------- ---------
Noninterest-bearing liabilities............. 9,119 11,009
--------- ---------
Total liabilities....................... 349,888 330,402
Equity...................................... 36,841 36,823
--------- ---------
Total liabilities and equity ........... $ 386,729 $ 367,225
========= =========
Net interest income.......................... $ 2,659 $ 2,744
========= =========
Net interest rate spread..................... 2.47% 2.75%
========= =========
Net interest margin.......................... 2.89% 3.14%
========= =========
Ratio of average interest-earning assets to
average interest-bearing liabilities........ 107.93% 109.39%
========= =========
Provision for Loan Losses. The Company's provision for loan losses was $30,000
for each of the three months ended March 31, 2001 and 2000, respectively. The
Company establishes provisions for loan losses, which are charged to operations,
in order to maintain the allowance for loan losses at a level which is deemed to
be appropriate based upon an assessment of a number of factors. These factors
include prior loss experience, industry standards, past due loans, economic
conditions, the volume and type of loans in the Bank's portfolio, which includes
a significant amount of multi-family and commercial real estate loans,
substantially all of which are purchased and are collateralized by properties
located outside of the Bank's market area, and other factors related to the
collectibility of the Bank's loan portfolio. The net charge offs were $33,000
for the three months ended March 31, 2001 as compared to net charge offs of
$18,000 for the three months ended March 31, 2000. The resulting allowance for
loan losses was $2.8 million at March 31, 2001, December 31, 2000 and March 31,
2000. The level of nonperforming loans increased to $1.1 million at March 31,
2001 from $1.0 million at December 31, 2000 and from $762,000 at March 31, 2000.
The increase in the nonperforming loans is due primarily to one commercial real
estate mortgage loan in the amount of $489,000. Management believes that the
allowance for loan losses is adequate. While management estimates loan losses
using the best available information, such as independent appraisals for
significant collateral properties, no assurance can be made that future
adjustments to the allowance will not be necessary based on changes in economic
and real estate market conditions, further information obtained regarding known
problem loans, identification of additional problem loans, and other factors,
both within and outside of management's control.
Noninterest Income. Total noninterest income increased by $83,000 to $1,039,000
for the three months ended March 31, 2001 from $955,000 for the three months
ended March 31, 2000. The increase is due to increases in fees and services
charges and mortgage banking income, offset in part by decreases in abstract
fees and other income. Fees and services charges increased $55,000, primarily
due to increases in overdraft fees. Mortgage banking income increased $70,000
due to an increase in loan originations. Other income decreased $41,000,
primarily due to decreases in revenues from the sale of annuities and mutual
funds, offset in part by an increase in revenues from the sale of insurance.
Noninterest income for the three months ended March 31, 2001 reflects gains on
the sales of securities available for sale of $800, while the three months ended
March 31, 2000 does not include any gains on the sale of securities available
for sale.
8
RESULTS OF OPERATIONS (Continued)
Noninterest Expense. Total noninterest expense increased by $61,000 to
$2,174,000 for the three months ended March 31, 2001 from $2,113,000 for the
three months ended March 31, 2000. The increase is due primarily to increases in
salaries and employee benefits and premises and equipment, offset in part by a
decrease in other expenses. The increase in salaries and employee benefits were
due in part to normal salary increases, increases as a result of the employee
stock ownership plan and normal cost increases. The increases in premises and
equipment were due in part to increases in utility costs, real estate taxes and
depreciation. The decrease in other expenses were primarily due to a one time
fee paid to the State of Iowa in 2000, not paid in 2001. This fee was
subsequently refunded in the second quarter of 2000. The Company's efficiency
ratio for the three months ended March 31, 2001 and 2000 were 58.79% and 57.11%,
respectively. The Company's ratio of noninterest expense to average assets for
the three months ended March 31, 2001 and 2000 were 2.25% and 2.30%,
respectively.
Income Taxes. Income taxes decreased by $37,000 to $513,000 for the three months
ended March 31, 2001 as compared to $550,000 for the three months ended March
31, 2000, primarily due to a decrease in net income before income taxes.
Net Income. Net income decreased by $26,000 to $981,000 for the three months
ended March 31, 2001, as compared to $1,007,000 for the same period in 2000.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In management's opinion, there has not been a material change in market risk
from December 31, 2000 as reported in Item 7A of the Annual Report on Form 10-K.
9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities and Use of Proceeds
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.1 Amendment number one to the North Central Bancshares, Inc.
Stock Option Plan
Exhibit 99.1 Press Release, dated February 23, 2001 (regarding the
declaration of a dividend).
Exhibit 99.2 Press Release, dated March 30, 2001 (regarding repurchase
program).
Exhibit 99.3 Press Release, dated April 20, 2001 (regarding 2001 1st
Quarter earnings)
(b) Reports on Form 8-K
None
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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 thereunto duly authorized.
NORTH CENTRAL BANCSHARES, INC.
DATE: May 14, 2001 BY: /s/ David M. Bradley
-----------------------------------------
David M. Bradley, Chairman, President and
Chief Executive Officer
DATE: May 14, 2001 /s/ John L. Pierschbacher
----------------------------------------
John L. Pierschbacher, CPA
Principal Financial Officer
11