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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 16, 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)
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Item 5. Other Events
On October 16, 1997, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, dated October 16, 1997, regarding
third quarter 1997 earnings, declaration of dividend, director
elected, and Nasdaq listing requirements.
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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 16, 1997 /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: October 16, 1997
CONTACT: Joseph A. Graber, President
Victor E. Caputo, Executive Vice-President
(312) 664-4320
NORTH BANCSHARES, INC.
ANNOUNCES
THIRD QUARTER EARNINGS
QUARTERLY DIVIDEND DECLARED
ROSE ELECTED DIRECTOR
NASDAQ LISTING REQUIREMENTS
Chicago, Illinois, October 16, 1997, - North Bancshares, Inc., (NASDAQ-NBSI),
the holding company for North Federal Savings Bank, announced net income
increased by $180,000 from a loss of $68,000 for the quarter ended September
30, 1996 to $112,000 for the quarter ended September 30, 1997. Earnings per
share increased by $.18 from a loss of $.06 per primary share for the quarter
ended September 30, 1996 to $.12 per primary share for the quarter ended
September 30, 1997. The increases in net income and earnings per share are
attributed to the absence of the SAIF special assessment which was recorded
during the third quarter of 1996. See discussion of non-interest expense
included below.
Concurrent with this earnings release the Board of Directors of the Company
has declared a quarterly dividend of $.12 per share to be paid on November
14, 1997 to stockholders of record on October 31, 1997.
The Board of Directors announces the election of Gregory W. Rose to the Board
to replace Michael J. Perri, who died on April 27th. Mr. Rose is the managing
partner and a director of Monarch Tool and Die Company.
On August 22, 1997, The Nasdaq Stock Market received approval from the
Securities and Exchange Commission to change its listing requirements.
Effective February 23, 1998, the Nasdaq Stock Market will require a minimum
public float of 750,000 shares to maintain a listing on the National Market
System. The Company would currently not meet this requirement because public
float does not include shares owned by insiders and unallocated ESOP shares.
The Company currently meets all the Nasdaq Small Cap requirements. This means
that the company would move to the Nasdaq Small Cap market system on or
before that date, subject to meeting all of the Nasdaq Small Cap requirements
at that time. Stockholders who maintain margin loan accounts with brokerage
firms may be affected by this listing change. The Company believes there
will be no material effect on the operations of the Company as a result of
this change.
Net interest income for the quarter ended September 30, 1997, before
provision for loan losses, decreased by $98,000 or 9.7% from $1.0 million
for the quarter ended September 30, 1996 to $909,000 for the quarter ended
September 30, 1997. The decrease was attributable to a $91,000 increase in
interest on borrowed funds related to an increase in total outstanding FHLB
advances. Total interest income was affected during the quarter due to a
decline in market rates of interest coupled with sales and calls of investment
securities which bore higher rates of interest. The proceeds of the sales
and calls were invested in lower yielding federal funds in anticipation of
funding approximately $5.0 million in loan commitments and broker
registrations made during the third quarter which will not close until the
fourth quarter.
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Non-interest expense decreased by $408,000 from $1.2 million for the quarter
ended September 30, 1996 to $798,000 for the quarter ended September 30, 1997.
The decrease was primarily attributable to a $525,000 decrease in federal
deposit insurance premiums related to a $486,000 SAIF special assessment
recorded during the third quarter of 1996, and a reduction in FDIC insurance
premiums. These savings were partially offset by a $47,000 increase in
compensation and benefits expense, a $25,000 increase in occupancy expense
related to the expansion of the Bank's hours of operation, and a $23,000
increase in advertising expense related to a certificate of deposit promotion
and teh ongoing promotion of free checking accounts. The increase in
compensation expense is related to an increase in the value of shares being
allocated under the ESOP. Although the Company is required to record
compensation expense for the increase in the value of the ESOP, an offsetting
entry to additional paid in capital is recorded on the consolidated
statements of financial condition and therefore stockholders' equity is
unaffected. For the first nine months of 1997, the Company has recorded
$115,000 in additional compensation expense compared wsith $40,000 for the
first nine months of 1996, and recorded an offsetting entry to additional
paid in capital, related to the increase in the value of the shares being
allocated under the ESOP.
Total assets increased by $4.6 million or 3.9% from $117.5 million at December
31, 1996 to $122.1 million at September 30, 1997. The increase was primarily
attributable to a $4.5 million increase in net loans receivable and cash and
cash equivalents.
Net loans receivable increased $3.0 million or 4.1% from $73.4 million at
December 31, 1996 to $76.4 million at September 30, 1997. The increase was
attributable to the marketing of one- to four-family investor property loans
through the Bank's mortgage broker network. The Bank received a $725,000
payment on a participation loan which was refinanced on September 29, 1997.
On October 2, 1997, the Bank funded a $1.0 million participation on the same
property with the same financial institution.
Deposit accounts increased by $1.5 million during the quarter due to a
certificate of deposit promotion. Total deposit accounts decreased by
$496,000 from $73.6 million at December 31, 1996 to $73.1 million at
September 30, 1997.
Mary Ann Hass, Chairman and Chief Executive Officer, commented:
"We completed our seventh stock repurchase program during this past quarter
and began the eighth program. We have declared a regular quarterly dividend
of $.12 per share to be paid November 14th, and we introduced a Home Equity
Line of Credit program. Our business customers and our regular customers
have indicated the appreciate our new hours of operation and customer traffic
is picking up on Wednesdays. Our Wilmette branch customers are also
responding well to the new hours. 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."
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 36 consecutive quarters from Bauer Financial
Reports, Inc., and is rated one of the best in the nation by Sheshunoff
Information Services, Inc. Visit our Web site at http://www.northfederal.com
to read previous press releases, examine filings withe the SEC, read about
our history, and check our our products, services, and interest rates.
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, 1997 DEC 31, 1996
(UNAUDITED)
<S> <C> <C>
Cash and due from banks $ 669 $ 618
Interest-bearing deposits 2,664 2,644
Federal funds sold 5,100 4,800
Investment in dollar denominated mutual funds 1,635 547
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TOTAL CASH AND CASH EQUIVALENTS 10,068 8,609
Investment securities available for sale 25,329 24,426
Mortgage-backed securities held-to-maturity 6,445 7,465
Loans receivable, net of allowance for loan
losses of $208 at September 30, 1997 and
at December 31, 1996 76,379 73,378
Accrued interest receivable 953 1,025
Premises and equipment, net 1,064 1,061
Stock in Federal Home Loan Bank of Chicago 1,640 1,205
Other assets 203 304
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TOTAL ASSETS $122,081 $117,473
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts $ 73,125 $73,611
Borrowed funds 29,100 24,100
Advance payments by borrowers for
taxes and insurance 625 1,203
Other liabilities 2,839 736
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TOTAL LIABILITIES 105,689 99,650
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,
961,870 outstanding at September 30, 1997 and
1,057,950 outstanding at December 31, 1996 14 14
Additional paid-in capital 13,534 13,688
Retained earnings, substantially restricted 11,133 10,988
Treasury stock at cost (475,631 shares at
September 30, 1997 and 379,551 shares at
December 31, 1996) (7,436) (5,340)
Unrealized loss on securities
available for sale, net of tax effect (146) (678)
SFAS No. 87 adjustment, net of tax (108) (108)
Common stock acquired by Employee Stock
Ownership Plan (583) (667)
Deferred compensation (16) (74)
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TOTAL STOCKHOLDERS' EQUITY 16,392 17,823
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $122,081 $117,473
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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,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable $1,487 $1,348 $4,433 $3,729
Interest-bearing deposits and federal funds sold 82 94 164 246
Investment securities available for sale 443 581 1,420 1,704
Investment securities held-to-maturity - - - 2
Mortgage-backed securities available for sale - - - 90
Mortgage-backed securities held-to-maturity 119 148 365 440
Dollar denominated mutual funds 29 12 81 44
Dividends on FHLB of Chicago stock 25 18 70 47
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TOTAL INTEREST INCOME 2,195 2,201 6,533 6,302
INTEREST EXPENSE
Deposit accounts 818 817 2,370 2,503
Borrowed funds 468 377 1,315 972
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TOTAL INTEREST EXPENSE 1,286 1,194 3,685 3,475
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 909 1,007 2,848 2,827
PROVISION FOR LOAN LOSSES - - - 8
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 909 1,007 2,848 2,819
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NON-INTEREST INCOME
Gain on sale of investment securities available for sale (1) (1) 53 7
Fees and service charges 53 46 156 133
Other 4 18 13 30
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TOTAL NON-INTEREST INCOME 56 63 222 170
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NON-INTEREST EXPENSE
Compensation and benefits 409 362 1,221 1,039
Occupancy expense 131 106 361 307
Professional fees 32 22 118 125
Data processing 41 31 126 90
Advertising and promotion 49 26 112 123
Federal deposit insurance premium 13 538 36 642
Recognition and retention plan 17 19 59 56
Other 106 102 307 258
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TOTAL NON-INTEREST EXPENSE 798 1,206 2,340 2,640
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INCOME BEFORE TAXES 167 (136) 730 349
INCOME TAX EXPENSE 55 (68) 214 97
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NET INCOME $ 112 $ (68) $ 516 $ 252
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EARNINGS PER SHARE PRIMARY $.12 $(.06) $.52 $.22
EARNINGS PER SHARE FULLY DILUTED $.12 $(.06) $.52 $.22
WEIGHTED AVERAGE SHARES OUTSTANDING 970,169 1,065,277 997,050 1,119,323
</TABLE>
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT 30, SPET 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Performance Ratios:
Return on assets (ratio of net income
to average total assets) (1) .37% (.23)% .57% .29%
Interest Rate Spread Information:
Average during period (1) 2.27 2.68 2.43 2.56
End of period (1) 2.29 2.75 2.29 2.75
Net interest margin (1) 3.07 3.48 3.23 3.35
Operating expenses to average assets(1) 2.63 4.07 2.60 3.04
Ratio of average interest-earning assets
to average interest-bearing
liabilities 118.59 119.60 119.12 119.05
</TABLE>
SPET 30, 1997 DEC. 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Asset Quality Ratios:
Non-performing assets to total assets
at end of period N/A N/A
Allowance for loan losses to non-performing loans N/A N/A
Allowance for loan losses to loans receivable (net) 0.27 0.28
Capital ratios:
Stockholders' equity to total assets 13.43 15.12
Average Stockholders' equity to average assets 14.31 16.32
Return on Stockholders' equity (ratio of net
income to average equity) (1) 4.01 2.59
Shares outstanding-actual number 961,870 1,057,950
Book value per share $17.04 $16.85
Number of full service offices 2 2
(1) Annualized for the three month and six month periods presented.
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