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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 16, 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 July 16, 1996, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, dated July 16, 1996, regarding
second quarter 1996 earnings, declaration of 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 16, 1996 /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 DATE: July 16, 1996
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 16, 1996, - North Bancshares, Inc., (NASDAQ-NBSI), the
holding company for North Federal Savings Bank, announced net income of
$133,000 or $.12 per primary share for the quarter ended June 30, 1996
compared with $106,000 or $.09 per primary share for the quarter ended June
30, 1995, an increase of 25.5%.
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 15,
1996 to stockholders of record on August 1, 1996.
Net interest income for the quarter ended June 30, 1996, before provision for
loan losses, increased by $126,000 or 15.9% from $794,000 for the quarter
ended June 30, 1995 to $920,000 for the quarter ended June 30, 1996. The
increase was attributable to a $459,000 increase in interest on investment
securities and loans receivable, partially offset by a $219,000 decrease in
interest on mortgage-backed securities and other interest earning assets and a
$114,000 increase in total interest expense.
Non-interest income increased by $25,000 or 78.1% from $32,000 for the quarter
ended June 30, 1995 to $57,000 for the quarter ended June 30, 1996. The
increase was primarily attributable to a $14,000 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.
Non-interest expense increased by $66,000 or 9.4% from $702,000 for the
quarter ended June 30, 1995 to $768,000 for the quarter ended June 30, 1996.
The increase was primarily attributable to a $39,000 increase in advertising
and promotion expense associated with the Banks 110th anniversary celebration
and the introduction of a "Free Checking" account product. In addition,
there was a $17,000 increase in professional fees related to the Company's
annual meeting and shareholder issues.
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Total assets increased by $7.7 million or 6.9% from $111.7 million at December
31, 1995 to $119.4 million at June 30, 1996. The increase was primarily
attributable to a $15.9 million increase in net loans receivable and
investment securities partially offset by a $8.1 million decrease in
mortgage-backed securities and a $1.9 million decrease in cash and cash
equivalents.
Net loans receivable increased $10.1 million or 18.0% from $56.2 million at
December 31, 1995 to $66.3 million at June 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. 56% of the
loans originated during the first six months of 1996 are located within the
Bank's assessment area.
Deposit accounts increased by $378,000 or .50% from $75.2 million at December
31, 1995 to $75.4 million at June 30, 1996. The total number of checking
accounts increased by 21.4% during the quarter. 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 recent closing
of two competitor Bank's branch offices in the area.
Mary Ann Hass, Chairman and Chief Executive Officer, commented: "We are
pleased with the continued core earnings growth we have achieved during
this second quarter and are continuing to develop new products and services
that will supplement that growth. In this regard, we have entered into
agreements to install a new "Branch Management System" and a "Conversant Voice
Response Banking System," that will provide efficiencies in all departments.
We have declared a regular quarterly dividend of $.10 per share to be paid
August 15th and we completed our fifth stock repurchase program. We will
continue to focus on all the elements of our business plan in order to
continue to improve per share earnings and our return on equity."
"The closing of the branch office of Old Kent Bank at Germania Place in May
and First Chicago at Eugenie and LaSalle streets this month have provided us
with a great opportunity to expand our lower cost core deposit account base.
Our redesigned small business checking account program has generated a good
deal of new business which should provide additional fee income and our "Free
Checking" account product has provided us with a new source of low cost funds.
Since the beginning of the year we have grown our checking account base of
accounts by over 21%."
"The proposed FDIC special assessment of approximately 80 to 90 basis points
associated with the merging of the BIF and SAIF insurance funds has still not
been passed by both houses of Congress. We continue to lobby hard for this
legislation even though it will mean a charge to 1996 earnings of
approximately $610,000 to the Bank, if implemented as proposed. 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 4 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 31 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 JUNE 30, 1996 DEC 31, 1995
(UNAUDITED)
<S> <C> <C>
Cash and due from banks $ 701 $ 607
Interest-bearing deposits 2,938 2,634
Investment in dollar denominated mutual funds 594 1,127
Federal funds sold 2,150 3,925
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TOTAL CASH AND CASH EQUIVALENTS 6,383 8,293
Investment securities available for sale 34,165 27,882
Investment securities held-to-maturity - 498
Mortgage-backed securities available for sale - 6,927
Mortgage-backed securities held-to-maturity 8,284 9,419
Loans receivable, net of allowance for loan
losses of $208 at June 30, 1996 and
$200 at December 31, 1995 66,285 56,161
Accrued interest receivable 1,161 959
Premises and equipment, net 942 834
Stock in Federal Home Loan Bank of Chicago 1,087 624
Amounts due from brokers for investments sold 1,000 -
Other assets 129 71
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TOTAL ASSETS $119,436 $111,668
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts $ 75,547 $75,169
Borrowed funds 21,750 11,750
Advance payments by borrowers for
taxes and insurance 1,254 1,079
Amounts due to broker for investments
purchased - 1,000
Other liabilities 2,371 1,642
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TOTAL LIABILITIES 100,922 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,
1,113,631 outstanding at June 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 11,031 10,949
Treasury stock at cost (323,870 shares at
June 30, 1996 and 205,023 shares at
December 31, 1995) (4,445) (2,599)
Unrealized gain (loss) on securities
available for sale, net of tax effect (749) 90
SFAS No. 87 adjustment, net of tax (128) (128)
Common stock acquired by Employee Stock
Ownership Plan (722) (778)
Deferred compensation (112) (149)
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TOTAL STOCKHOLDERS' EQUITY 18,514 21,028
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $119,436 $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 JUNE 30, SIX MONTHS ENDED JUNE 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable $1,248 $1,021 $2,381 $1,998
Interest-bearing deposits and federal funds sold 66 95 152 157
Investment securities available for sale 647 341 1,155 680
Investment securities held-to-maturity - 74 2 125
Mortgage-backed securities available for sale - - 90 -
Mortgage-backed securities held-to-maturity 133 306 292 555
Investment in mutual funds - 23 - 137
Dividends on FHLB of Chicago stock 16 10 29 18
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TOTAL INTEREST INCOME 2,110 1,870 4,101 3,670
INTEREST EXPENSE
Deposit accounts 855 873 1,686 1,623
Borrowed funds 335 203 595 435
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TOTAL INTEREST EXPENSE 1,190 1,076 2,281 2,058
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 920 794 1,820 1,612
PROVISION FOR LOAN LOSSES - 10 8 24
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 920 784 1,812 1,588
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NON-INTEREST INCOME
Gain on sale of investment securities
and mutual funds available for sale 9 - 8 167
Fees and service charges 42 28 87 57
Other 6 4 12 9
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TOTAL NON-INTEREST INCOME 57 32 107 233
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NON-INTEREST EXPENSE
Compensation and benefits 342 355 677 708
Occupancy expense 103 91 201 196
Professional fees 62 45 103 88
Data processing 32 22 59 48
Advertising and promotion 66 27 97 50
Federal deposit insurance premium 52 49 104 97
Recognition and retention plan 18 28 37 79
Other 93 85 156 145
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TOTAL NON-INTEREST EXPENSE 768 702 1,434 1,411
----- ----- ----- -----
INCOME BEFORE TAXES 209 114 485 410
INCOME TAX EXPENSE 76 8 165 46
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NET INCOME $ 133 $ 106 $ 320 $ 364
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EARNINGS PER SHARE PRIMARY $.12 $.09 $.28 $.30
EARNINGS PER SHARE FULLY DILUTED $.12 $.09 $.28 $.30
WEIGHTED AVERAGE SHARES OUTSTANDING 1,109,206 1,231,891 1,146,736 1,236,007
</TABLE>
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Performance Ratios:
Return on assets (ratio of net income
to average total assets) (1) .45% .39% .56% .68%
Interest Rate Spread Information:
Average during period (1) 2.36 1.98 2.37 2.04
End of period (1) 2.31 2.01 2.31 2.01
Net interest margin (1) 3.23 3.02 3.26 3.06
Operating expenses to average assets(1) 2.63 2.29 2.50 2.37
Ratio of average interest-earning assets
to average interest-bearing
liabilities 120.70 125.30 121.88 126.17
</TABLE>
JUNE 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) 0.31 0.36
Capital ratios:
Stockholders' equity to total assets 15.50 18.83
Average Stockholders' equity to average assets 17.33 19.71
Return on Stockholders' equity (ratio of net
income to average equity) (1) 3.21 3.27
Shares outstanding-actual number 1,113,631 1,232,478
Book value per share $16.62 $17.06
Number of full service offices 2 2
(1) Annualized for the three month and six month periods presented.
</TABLE>
