<PAGE> 1
=================================================================
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) January 21, 1997
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)
=================================================================
<PAGE> 2
Item 5. Other Events
On January 21, 1997, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, Dated January 21, 1997, regarding
fourth quarter 1996 earnings, increase in quarterly dividend, and
stock repurchase program.
<PAGE> 3
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: Janaury 21, 1997 /S/ Joseph A. Graber
----------------------
Joseph A. Graber
President
<PAGE> 4
EXHIBIT
<PAGE> 5
NORTH BANCSHARES, INC NEWS RELEASE
RELEASE: IMMEDIATE DATE: January 21, 1997
CONTACT: Joseph A. Graber, President
Victor E. Caputo, Executive Vice-President
(312) 664-4320
NORTH BANCSHARES, INC.
ANNOUNCES
FOURTH QUARTER EARNINGS INCREASES 73.9%
20% INCREASE IN QUARTERLY DIVIDEND
STOCK REPURCHASE PROGRAM
Chicago, Illinois, January 21, 1997, - North Bancshares, Inc., (NASDAQ-NBSI),
the holding company for North Federal Savings Bank, announced net income
increased 73.9% from $138,000 or $.11 per primary share for the quarter ended
December 31, 1995 to $240,000 or $.23 per primary share for the quarter ended
December 31, 1996. Net income for the year decreased by $204,000 or 29.2%
from $696,000 for the year ended December 31, 1995 to $492,000 for the year
ended December 31, 1996. Without the FDIC BIF-SAIF Special Assessment net
income increased by $81,000 or 11.6% from $696,000 for the year ended
December 31, 1995 to $777,000 or $.70 per primary share for the year ended
December 31, 1996.
Concurrent with this earnings release the Board of Directors of the Company
has declared a regular quarterly cash dividend of $.12 per share to be paid
on February 15, 1997 to stockholders of record on February 1, 1997. This
represents a 20% increase over the last regular quarterly dividend paid
during 1996.
In addition, the Company announces its intention to repurchase 100,000 shares
of its common stock in open market transactions or in privately negotiated
transactions over a period of one year. This will be the seventh stock
repurchase program initiated by the Company and amounts to approximately 9.5%
of the outstanding shares.
Net interest income for the quarter ended December 31, 1996, before provision
for loan losses, increased by $101,000 or 11.2% from $899,000 for the quarter
ended December 31, 1995 to $1.0 million for the quarter ended December 31,
1996. The increase was attributable to a $402,000 increase in interest on
loans receivable, investment securities and other interest earning assets,
offset by a $182,000 decrease in interest on mortgage-backed securities and
mutual funds and a $119,000 increase in total interest expense.
Non-interest income increased by $95,000 or 250.0% from $38,000 for the
quarter ended December 31, 1995 to $133,000 for the quarter ended December
31, 1996. The increase was attributable to a $74,000 increase in gains on
the sales of investment securities and a $21,000 increase in fees and
services 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 $107,000 from $718,000 for the quarter ended
December 31, 1995 to $825,000 for the quarter ended December 31, 1996. The
increase was primarily attributable to $77,000 in specific reserves allocated
for the Arlington Heights credit enhancement based on a proposal by the owners
who are negotiating financining, to purchase the underlying bonds at an
anticipated discount.
<PAGE 6>
Total assets increased by $5.8 million or 5.2% from $111.7 million at December
31, 1995 to $117.5 million at December 31, 1996. The increase was primarily
attributable to a $17.2 million increase in net loans receivable and
partially offset by a $8.9 million decrease in mortgage-backed securities and
a $3.8 million decrease in investment securities.
Net loans receivable increased $17.2 million or 30.8% from $56.2 million at
December 31, 1995 to $73.4 million at December 31, 1996. The increase was
attributable to expanded mortgage broker activity, two apartment building
loan participations and continued marketing of a mini-jumbo loan product in
the Bank's CRA assessment areas. Approximately 57% of the loans originated
during the year were located within the Bank's assessment area.
Deposit accounts decreased by $1.7 million or 2.3% from $75.2 million at
December 31, 1995 to $73.5 million at December 31, 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 37% since the beginning of the year with checking account
balances increasing $2.5 million or 34%. 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 43.5% of total deposits as of December 31,
1996, compared with 40.2% at December 31, 1995.
Borrowed funds increased by $12.3 million or 104.2% from $11.8 million at
December 31, 1995 to $24.1 million at December 31, 1996. The increase was
used to fund new loan originations and leveraged securities transactions.
Mary Ann Hass, Chairman and Chief Executive Officer, commented:
"The FDIC BIF-SAIF Special Assessment is finally behind us. Although it
meant a pre-tax charge of $485,000 to 1996 earnings, it will mean
approximately $140,000 in additional pre-tax earnings during 1997. The
industry has worked hard to resolve the long running disparity in Bank
Insurance Fund and Savings Association Insurance fund premiums. The
resolution of the BIF-SAIF issue removes an enormous cloud of uncertainty
from our deposit insurance system and our banking institutions."
"During the fourth quarter we introduced our conversant voice response
banking system, "EASY RETRIEVE" and implemented a new "Branch Management
System," that is providing efficiencies in all departments. We have increased
our regular quarterly dividned for 1997 by 20% to $.12 per share. The first
quarterly payment will be made on February 15th to shareholders of record on
February 1, 1997. We have also announced our seventh stock repurchase program
that will begin immediately and amounts to 100,000 shares or approximately
9.5% of the outstanding shares. 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 competetive force in our marketplace.
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 33 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)
<PAGE> 7
<TABLE>
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(IN THOUSANDS)
<CAPTION>
ASSETS DEC 31, 1996 DEC 31, 1995
(UNAUDITED)
<S> <C> <C>
Cash and due from banks $ 618 $ 607
Interest-bearing deposits 2,644 2,634
Federal funds sold 4,800 1,127
Investment in dollar denominated mutual funds 547 3,925
------ ------
TOTAL CASH AND CASH EQUIVALENTS 8,609 8,293
Investment securities available for sale 24,607 27,882
Investment securities held-to-maturity - 498
Mortgage-backed securities available for sale - 6,927
Mortgage-backed securities held-to-maturity 7,465 9,419
Loans receivable, net of allowance for loan
losses of $208 at December 31, 1996 and
$200 at December 31, 1995 73,378 56,161
Accrued interest receivable 1,037 959
Premises and equipment, net 1,061 834
Stock in Federal Home Loan Bank of Chicago 1,025 624
Amounts due from brokers for investments sold 249 -
Other assets 42 71
------ ------
TOTAL ASSETS $117,473 $111,668
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts $ 73,472 $75,169
Borrowed funds 24,100 11,750
Advance payments by borrowers for
taxes and insurance 1,203 1,079
Amounts due to broker for investments
purchased - 1,000
Other liabilities 928 1,642
------- -------
TOTAL LIABILITIES 99,735 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,
1,057,950 outstanding at December 31, 1996 and
1,232,478 outstanding at December 31, 1995 14 14
Additional paid-in capital 13,625 13,629
Retained earnings, substantially restricted 10,986 10,949
Treasury stock at cost (379,551 shares at
December 31, 1996 and 205,023 shares at
December 31, 1995) (5,340) (2,599)
Unrealized gain (loss) on securities
available for sale, net of tax effect (678) 90
SFAS No. 87 adjustment, net of tax (96) (128)
Common stock acquired by Employee Stock
Ownership Plan (667) (778)
Deferred compensation (74) (149)
------ ------
TOTAL STOCKHOLDERS' EQUITY 17,770 21,028
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $117,473 $111,668
======= =======
</TABLE>
<PAGE> 8
<TABLE>
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
(IN THOUSANDS)
<CAPTION>
THREE MONTHS ENDED DEC 31, YEAR ENDED DEC 31,
<C> <C> <C> <C>
INTEREST INCOME 1996 1995 1996 1995
Loans receivable $1,439 $1,118 $5,168 $4,184
Interest-bearing deposits and federal funds sold 56 82 302 328
Investment securities available for sale 522 423 2,270 1,630
Investment securities held-to-maturity - 6 2 64
Mortgage-backed securities available for sale - 121 90 479
Mortgage-backed securities held-to-maturity 129 169 569 678
Investment in mutual funds - 21 - 123
Dividends on FHLB of Chicago stock 20 6 67 39
----- ----- ----- -----
TOTAL INTEREST INCOME 2,166 1,946 8,468 7,525
INTEREST EXPENSE
Deposit accounts 782 846 3,285 3,315
Borrowed funds 384 201 1,356 829
----- ----- ----- -----
TOTAL INTEREST EXPENSE 1,166 1,047 4,641 4,144
----- ----- ----- -----
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 1,000 899 3,827 3,381
PROVISION FOR LOAN LOSSES - 7 8 40
----- ----- ----- -----
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,000 892 3,819 3,341
----- ----- ----- -----
NON-INTEREST INCOME
Gain on sale of investment securities
and mutual funds available for sale 81 7 88 245
Fees and service charges 52 31 185 120
Other - - 30 19
----- ----- ----- -----
TOTAL NON-INTEREST INCOME 133 38 303 384
----- ----- ----- -----
NON-INTEREST EXPENSE
Compensation and benefits 400 381 1,439 1,418
Occupancy expense 104 113 411 429
Professional fees 41 36 166 158
Data processing 37 23 127 94
Advertising and promotion 33 26 156 102
Federal deposit insurance premium 44 52 686 199
Recognition and retention plan 18 19 74 116
Other 148 68 406 260
----- ----- ----- -----
TOTAL NON-INTEREST EXPENSE 825 718 3,465 2,776
----- ----- ----- -----
INCOME BEFORE TAXES 308 212 657 949
INCOME TAX EXPENSE 68 74 165 253
----- ----- ----- -----
NET INCOME $ 240 $ 138 $ 492 $ 696
===== ===== ===== =====
EARNINGS PER SHARE PRIMARY $.23 $.11 $.44 $.56
EARNINGS PER SHARE FULLY DILUTED $.23 $.11 $.44 $.56
WEIGHTED AVERAGE SHARES OUTSTANDING 1,043,768 1,201,718 1,109,833 1,231,167
</TABLE>
<PAGE> 9
SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Performance Ratios:
Return on assets (ratio of net income
to average total assets) (1) .81% .50% .42% .64%
Return on assets without FDIC BIF-SAIF
special Assessment (1) .81% .50% .67% .64%
Interest Rate Spread Information:
Average during period (1) 2.70 2.33 2.60 2.15
End of period (1) 2.64 2.24 2.64 2.24
Net interest margin (1) 3.45 3.36 3.36 3.19
Operating expenses to average assets 2.80 2.61 2.98 2.57
Operating expenses to average assets without
FDIC BIF-SAIF Special Assessment 2.80 2.61 2.56 2.57
Ratio of average interest-earning assets to
average interest-bearing liabilities 118.81 126.36 118.97 126.61
</TABLE>
DEC 31, 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) 0.28 0.36
Capital ratios:
Stockholders' equity to total assets 15.13 18.83
Average Stockholders' equity to average assets 16.32 19.71
Return on Stockholders' equity (ratio of net
income to average equity) 2.59 3.27
Return on Stockholders' equity without FDIC
BIF-SAIF Special Assessment 4.09 3.27
Shares outstanding-actual number 1,057,950 1,232,478
Book value per share $16.80 $17.06
Number of full service offices 2 2
(1) Annualized for the three month periods presented.
</TABLE>
