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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) October 15, 1996
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 October 15, 1996, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, Dated October 15, 1996, regarding
third quarter 1996 earnings and 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: October 15, 1996 /S/ Joseph A. Graber
----------------------
Joseph A. Graber
President
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EXHIBIT
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NORTH BANCSHARES, INC NEWS RELEASE
RELEASE: IMMEDIATE DATE: October 15, 1996
CONTACT: Joseph A. Graber, President
Victor E. Caputo, Executive Vice-President
(312) 664-4320
NORTH BANCSHARES, INC.
ANNOUNCES
THIRD QUARTER EARNINGS
QUARTERLY DIVIDEND
Chicago, Illinois, October 15, 1996, - North Bancshares, Inc., (NASDAQ-NBSI),
the holding company for North Federal Savings Bank, announced a net loss of
$68,000 or $.06 per primary share for the quarter ended September 30, 1996
compared with $198,000 or $.16 per primary share for the quarter ended
September 30, 1995. The Bank recorded an additional $485,000 in Federal
Deposit Insurance Premium expense related to the anticipated FDIC-SAIF special
assessment that was signed into law on September 30, 1996 and to be paid
prior to the end of the year. There were $71,000 in securities gains
recorded during the quarter ended September 30, 1995 compared with a $1,000
loss during the quarter ended September 30, 1996. Without the FDIC-SAIF
special assessment, securities gains, and their related tax effects, core
income increased by $54,000 or 34.6% from $156,000 for the quarter ended
September 30, 1995 to $210,000 or $.20 per primary share for the quarter
ended September 30, 1996.
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 November 15,
1996 to stockholders of record on November 1, 1996.
Net interest income for the quarter ended September 30, 1996, before provision
for loan losses, increased by $136,000 or 15.6% from $871,000 for the quarter
ended September 30, 1995 to $1.0 million for the quarter ended September 30,
1996. The increase was attributable to a $476,000 increase in interest on
loans receivable, investment securities and other interest earning assets,
offset by a $185,000 decrease in interest on mortgage-backed securities and
mutual funds and a $155,000 increase in total interest expense.
Non-interest income decreased by $50,000 or 44.3% from $113,000 for the
quarter ended September 30, 1995 to $63,000 for the quarter ended September
30, 1996. The decrease was primarily attributable to a $72,000 decrease in
gains on the sale of investment securities partially offset by an increase in
fees and service charges related to an increase in the total number of
checking accounts and interchange fees resulting from foreign ATM transactions
and MasterCard Master Money transactions. Without securities sales, non-
interest income increased by $22,000 or 52.4% for the three months ended
September 30, 1996 compared with the three months ended September 30, 1995.
Non-interest expense increased by $562,000 from $644,000 for the quarter ended
September 30, 1995 to $1.2 million for the quarter ended September 30, 1996.
The increase was primarily attributable to the FDIC-SAIF special assessment.
Total assets increased by $5.2 million or 4.7% from $111.7 million at December
31, 1995 to $116.9 million at September 30, 1996. The increase was primarily
attributable to a $17.2 million increase in net loans receivable and
investment securities partially offset by a $8.4 million decrease in mortgage-
backed securities and a $3.9 million decrease in cash and cash equivalents.
Net loans receivable increased $13.8 million or 24.6% from $56.2 million at
December 31, 1995 to $70.0 million at September 30, 1996. The increase was
attributable to increased mortgage broker activity and the continued marketing
of a mini-jumbo loan product in the Bank's CRA assessment areas. 55% of the
loans originated during the first nine months of 1996 are located within the
Bank's assessment area.
Deposit accounts decreased by $2.7 million or 3.6% from $75.2 million at
December 31, 1995 to $72.5 million at September 30, 1996. The decrease was
primarily attributable to the maturity and withdrawal of $2.6 million in 18
month Anniversary certificates of deposit that were issued with a bonus rate
of interest in February 1995. The total number of checking accounts have
increased by 30.8% since the beginning of the year. The increase was
attributable to the introduction of a "Free Checking" account product, the
modification of the terms of a small business checking account product and the
closing of two competitor Bank's branch offices in the area. Passbook
savings, money market and checking accounts account for 42.8% of total
deposits as of September 30, 1996, compared with 40.2% at December 31, 1995.
Mary Ann Hass, Chairman and Chief Executive Officer, commented:
"We continued to experience core earnings growth during this third quarter and
the new products and services that we have developed and implemented have been
well received by the community. During the fourth quarter we will introduce
our conversant voice response banking system, "EASY RETRIEVE" and implement a
new "Branch Management System," that will provide efficiencies in all
departments. We have declared a regular quarterly dividend of $.10 per share
to be paid November 15th and we began our sixth stock repurchase program.
Assuming interest rates remain stable we should see additional interest cost
savings this quarter and next year as we refinance $6.0 million in FHLB
borrowings, which currently carry a weighted average interest rate of 7.21%.
We will continue to focus on all the elements of our business plan in order to
position the Company for future earnings growth and to be a competitive force
in our marketplace."
"Our new "Free Checking" product and our small business checking account
products have been well received. Since the beginning of the year we have
grown our checking account base of accounts by 30.8%. We have now begun to
shift our liability mix from higher cost certificates of deposit to other
borrowings and lower cost checking accounts that produce fee income. At
December 31, 1995, certificates of deposit totaled 59.8% of total deposits
compared with approximately 57.2% at September 30, 1996. We are also working
on a new equity line of credit program that we plan to introduce during the
first quarter of 1997."
"The proposed FDIC special assessment of approximately 65 basis points
associated with the merging of the BIF and SAIF insurance funds has finally
been passed by both houses of Congress and signed by the President. This
legislation means a charge to the Bank's 1996 earnings of approximately
$285,000, net of tax. Our strong capital position will allow us to absorb
such a charge and a reduction in the FDIC assessment rate from 23 basis
points to approximately 6.5 basis points per $100 of deposits will improve
our short and long term earnings outlook and place us in a more competitive
position with commercial banks."
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 32 consecutive quarters from Bauer Financial
Reports, Inc.
North Bancshares, Inc. common stock is traded on The Nasdaq Stock Market under
the symbol: "NBSI."
(FINANCIAL STATEMENTS ATTACHED)
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<TABLE>
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(IN THOUSANDS)
<CAPTION>
ASSETS SEPT 30, 1996 DEC 31, 1995
(UNAUDITED)
<S> <C> <C>
Cash and due from banks $ 763 $ 607
Interest-bearing deposits 2,084 2,634
Investment in dollar denominated mutual funds 554 1,127
Federal funds sold 975 3,925
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TOTAL CASH AND CASH EQUIVALENTS 4,376 8,293
Investment securities available for sale 31,243 27,882
Investment securities held-to-maturity - 498
Mortgage-backed securities available for sale - 6,927
Mortgage-backed securities held-to-maturity 7,908 9,419
Loans receivable, net of allowance for loan
losses of $208 at September 30, 1996 and
$200 at December 31, 1995 69,994 56,161
Accrued interest receivable 1,255 959
Premises and equipment, net 939 834
Stock in Federal Home Loan Bank of Chicago 1,087 624
Other assets 79 71
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TOTAL ASSETS $116,881 $111,668
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts $ 72,457 $75,169
Borrowed funds 1,255 11,750
Advance payments by borrowers for
taxes and insurance 585 1,079
Amounts due to broker for investments
purchased - 1,000
Other liabilities 2,405 1,642
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TOTAL LIABILITIES 99,195 90,640
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value. 500,000
shares authorized; none outstanding - -
Common stock, $.01 Par value. 3,500,000
shares authorized; 1,437,501 shares issued,
1,072,131 outstanding at September 30, 1996 and
1,232,478 outstanding at December 31, 1995 14 14
Additional paid-in capital 13,625 13,629
Retained earnings, substantially restricted 10,853 10,949
Treasury stock at cost (365,370 shares at
September 30, 1996 and 205,023 shares at
December 31, 1995) (5,110) (2,599)
Unrealized gain (loss) on securities
available for sale, net of tax effect (781) 90
SFAS No. 87 adjustment, net of tax (128) (128)
Common stock acquired by Employee Stock
Ownership Plan (694) (778)
Deferred compensation (93) (149)
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TOTAL STOCKHOLDERS' EQUITY 17,686 21,028
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $116,881 $111,668
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</TABLE>
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<TABLE>
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
(IN THOUSANDS)
<CAPTION>
THREE MONTHS ENDED SEPT 30, NINE MONTHS ENDED SEPT 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable $1,348 $1,068 $3,729 $3,066
Interest-bearing deposits and federal funds sold 94 77 246 234
Investment securities available for sale 593 416 1,748 1,096
Investment securities held-to-maturity - 6 6 131
Mortgage-backed securities available for sale - - 90 -
Mortgage-backed securities held-to-maturity 148 312 440 867
Investment in mutual funds - 21 - 158
Dividends on FHLB of Chicago stock 18 10 47 28
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TOTAL INTEREST INCOME 2,201 1,910 6,302 5,580
INTEREST EXPENSE
Deposit accounts 817 846 2,503 2,469
Borrowed funds 377 193 972 628
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TOTAL INTEREST EXPENSE 1,194 1,039 3,475 3,097
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 1,007 871 2,827 2,483
PROVISION FOR LOAN LOSSES - 9 8 33
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,007 862 2,819 2,450
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NON-INTEREST INCOME
Gain (loss) on sale of investment securities
and mutual funds available for sale (1) 71 7 238
Fees and service charges 46 32 133 89
Other 18 10 30 19
----- ----- ----- -----
TOTAL NON-INTEREST INCOME 63 113 170 346
----- ----- ----- -----
NON-INTEREST EXPENSE
Compensation and benefits 362 329 1,039 1,037
Occupancy expense 106 96 307 292
Professional fees 22 37 125 125
Data processing 31 23 90 71
Advertising and promotion 26 26 123 76
Federal deposit insurance premium 538 50 642 147
Recognition and retention plan 19 18 56 97
Other 102 65 258 210
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TOTAL NON-INTEREST EXPENSE 1,206 644 2,640 2,055
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INCOME (LOSS) BEFORE TAXES (136) 331 349 741
INCOME TAX EXPENSE (BENEFIT) (68) 133 97 179
----- ----- ----- -----
NET INCOME (LOSS) $ (68) $ 198 $ 252 $ 562
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EARNINGS (LOSS) PER SHARE PRIMARY $(.06) $.16 $.22 $.46
EARNINGS (LOSS) PER SHARE FULLY DILUTED $(.06) $.16 $.22 $.46
WEIGHTED AVERAGE SHARES OUTSTANDING 1,065,277 1,215,610 1,119,323 1,229,255
</TABLE>
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT 30, SEPT 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Performance Ratios:
Return on assets (ratio of net income
to average total assets) (1) (.23% .73% .29% .70%
Interest Rate Spread Information:
Average during period (1) 2.68 2.23 2.56 2.09
End of period (1) 2.75 2.38 2.75 2.38
Net interest margin (1) 3.48 3.29 3.35 3.13
Operating expenses to average assets(1) 4.07 2.37 3.04 2.55
Ratio of average interest-earning assets
to average interest-bearing
liabilities 119.60 126.63 119.05 126.51
</TABLE>
SEPT 30, 1996 DEC. 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Asset Quality Ratios:
Non-performing assets to total assets
at end of period N/A 0.02%
Allowance for loan losses to non-performing loans N/A 833.33
Allowance for loan losses to loans receivable (net) 0.30 0.36
Capital ratios:
Stockholders' equity to total assets 15.13 18.83
Average Stockholders' equity to average assets 16.71 19.71
Return on Stockholders' equity (ratio of net
income to average equity) (1) 1.73 3.27
Shares outstanding-actual number 1,072,131 1,232,478
Book value per share $16.50 $17.06
Number of full service offices 2 2
(1) Annualized for the three month and six month periods presented.
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