<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 22, 1998
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 22, 1998, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, dated January 22, 1998, regarding Year 1997
earnings, and an increase in the quarterly dividend.
<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: January 22, 1998 /S/ Joseph A. Graber
----------------------
Joseph A. Graber
President
<PAGE> 4
EXHIBIT
<PAGE> 5
NORTH BANCSHARES, INC NEWS RELEASE
RELEASE: IMMEDIATE DATE: January 22, 1998
CONTACT: Joseph A. Graber, President
Victor E. Caputo, Executive Vice-President
(312) 664-4320
NORTH BANCSHARES, INC.
ANNOUNCES
1997 YEAR END EARNINGS
INCREASE IN QUARTERLY DIVIDEND
Chicago, Illinois, January 22, 1998, - North Bancshares, Inc., (NASDAQ-NBSI),
the holding company for North Federal Savings Bank, announced net income for
the year 1997 increased by $144,000 from $492,000 for the year ended December
31, 1996 to $636,000 for the year ended December 31, 1997. Basic earnings
per share, after adjusting for the three-for-two stock split in the fourth
quarter of 1997, increased by $.13 from $.31 per share for the year ended
December 31, 1996 to $.44 per share for the year ended December 31, 1997.
For the quarter ended December 31, 1997, net income decreased by $120,000
from $240,000 for the quarter ended December 31, 1996 to $120,000 for the
quarter ended December 31, 1997. Basic earnings per share, after adjusting
for the three-for-two stock split, decreased by $.07 from $.15 per share for
the quarter ended December 31, 1996 to $.08 per share for the quarter ended
December 31, 1997. The quarterly decrease is primarily attributable to an
$82,000 increase in income tax expense, a $74,000 decrease in gains on the
sale of investment securities, available-for-sale, and a $69,000 decrease in
net interest income before provision for loan losses partially offset by a
$69,000 decrease in other expense and a $18,000 decrease in compensation
and benefits expense.
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 February 17
1998 to stockholders of record on February 2, 1998. After adjusting for the
recent three-for-two stock split this represents a 25% increase over the last
regular quarterly dividend paid during 1997.
Net interest income for the quarter ended December 31, 1997, before
provision for loan losses, decreased by $69,000 or 6.9% from $1.0 million
for the quarter ended December 31, 1996 to $931,000 for the quarter ended
December 31, 1997. The decrease was attributable to a $122,000 increase in
interest on deposit accounts and borrowed funds offset by a $53,000 increase
in total interest income. The increase in interest on deposit accounts is
attributable to bonus interest paid on certificates of deposit opened during
the second and third quarter. In addition, there was an additional $5.0
million in obrrowings outstanding during the fourth quarter of 1997.
Non-interest expense decreased by $94,000 or 11.4% from $825,000 for the
quarter ended December 31, 1996 to $731,000 for the quarter ended December
31, 1997. The decrease is primarily attributable to a $69,000 decrease in
other non-interest expense related to a specific reserve allocation recorded
during the fourth quarter of 1996 and a $18,000 decrease in compensation and
benefits expense related to an adjustment for additional ESOP expense
recorded during the fourth quarter of 1997. For the year ended December 31,
1997, non-interest expense decreased by $393,000 or 11.4% from $3.5 million
<PAGE 6>
for the year ended December 31, 1996 to $3.1 million for the year ended
December 31, 1997. The decrease was primarily attributable to the absence of
the $486,000 SAIF special assessment recorded during 1996 partially offset by
a $165,000 increase in compensation expense which is primarily related to an
increase in the market price of the Company's stock that was allocated under
the ESOP, and to increases in staff as a result of the Bank's expanded hours
of operation. For 1997, the Company recorded $159,000 in additional ESOP
expense compared with $62,000 for 1996. An offsetting entry to additional
paid in capital is recorded on the consolidated statements of financial
condition and therefore stocklholders' equity is unaffected.
Total assets increased by $5.5 million or 4.7% from $117.5 million at
December 31, 1996 to $123.0 million at December 31, 1997. The increase was
primarily attributable to a $5.6 million or 7.6% increase in net loans
receivable $73.4 million at December 31, 1996 to $79.0 million at December 31
, 1997 attributable to the marketing of one- to four-family investor property
loans through the Bank's mortgage broker network.
Deposit accounts increased by $1.5 million or 2.0% from $73.6 million at
December 31, 1996 to $75.1 million at December 31, 1997.
Mary Ann Hass, Chairman and Chief Executive Officer, commented:
"We announced a three-for-two stock split which was distributed on December
29, 1997 and we have now declared a regular quarterly dividend of $.10 per
share, which amounts to a 25% increase after adjusting for the stock split,
to be paid February 17th. During the past year we expanded our hours of
operation to be open six days a week at our Chicago Office, we began offering
a new home equity lien of credit product, we installed an additional ATM at
the Gold Coast Multi-Plez health center, we instituted a direct marketing
program for "Free Checking" account product in cooperation with a local
magazine and the Old Town Chamber of Commerce, and we have improved and
expanded our "Easy Retrieve" telephone banking system and our data processing
systems. We will continue to focus on all the elements of our business plan
in order to continue 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 37 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)
<PAGE> 7
<TABLE>
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(IN THOUSANDS)
<CAPTION>
ASSETS DEC 31, 1997 DEC 31, 1996
(UNAUDITED)
<S> <C> <C>
Cash and due from banks $ 627 $ 618
Interest-bearing deposits 2,937 2,644
Federal funds sold 5,976 4,800
Investment in dollar denominated mutual funds 1,477 547
------ ------
TOTAL CASH AND CASH EQUIVALENTS 11,017 8,609
Investment securities available-for-sale 23,250 24,426
Mortgage-backed securities held-to-maturity 5,841 7,465
Loans receivable, net of allowance for loan
losses of $208 at December 31, 1997 and
at December 31, 1996 79,031 73,378
Accrued interest receivable 1,074 1,025
Premises and equipment, net 1,043 1,061
Stock in Federal Home Loan Bank of Chicago 1,705 1,205
Other assets 17 304
------ ------
TOTAL ASSETS $122,978 $117,473
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts $ 75,053 $73,611
Borrowed funds 29,100 24,100
Advance payments by borrowers for
taxes and insurance 1,239 1,203
Other liabilities 994 736
------- -------
TOTAL LIABILITIES 106,386 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; 1,914,105 shares issued 19 14
Additional paid-in capital 13,730 13,688
Retained earnings, substantially restricted 11,166 10,988
Treasury stock at cost (484,293 shares at
December 31, 1997 and 379,551 shares at
December 31, 1996) (7,552) (5,340)
Unrealized loss on securities
available for sale, net of tax effect (56) (678)
SFAS No. 87 adjustment, net of tax (160) (108)
Common stock acquired by Employee Stock
Ownership Plan (555) (667)
Deferred compensation - (74)
------ ------
TOTAL STOCKHOLDERS' EQUITY 16,592 17,823
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $122,978 $117,473
======= =======
</TABLE>
<PAGE> 8
<TABLE>
NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
(IN THOUSANDS)
<CAPTION>
THREE MONTHS ENDED DEC 31, YEAR ENDED DEC 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans receivable $1,535 $1,439 $5,968 $5,168
Interest-bearing deposits and federal funds sold 116 56 280 246
Investment securities available-for-sale 412 516 1,832 2,301
Mortgage-backed securities available-for-sale - - - 77
Mortgage-backed securities held-to-maturity 105 129 470 582
Dollar denominated mutual funds 21 6 102 23
Dividends on FHLB of Chicago stock 30 20 100 71
----- ----- ----- -----
TOTAL INTEREST INCOME 2,219 2,166 8,752 8,468
INTEREST EXPENSE
Deposit accounts 831 782 3,201 3,285
Borrowed funds 457 384 1,772 1,355
----- ----- ----- -----
TOTAL INTEREST EXPENSE 1,288 1,166 4,973 4,640
----- ----- ----- -----
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 931 1,000 3,779 3,828
PROVISION FOR LOAN LOSSES - - - 8
----- ----- ----- -----
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 931 1,000 3,779 3,820
----- ----- ----- -----
NON-INTEREST INCOME
Gain on sale of investment securities available for sale 7 81 60 88
Fees and service charges 56 52 212 190
Other 7 - 20 23
----- ----- ----- -----
TOTAL NON-INTEREST INCOME 70 133 292 301
----- ----- ----- -----
NON-INTEREST EXPENSE
Compensation and benefits 382 400 1,603 1,438
Occupancy expense 113 104 474 424
Professional fees 31 41 149 166
Data processing 43 37 169 127
Advertising and promotion 21 33 133 156
Federal deposit insurance premium 47 44 83 686
Recognition and retention plan 15 18 74 75
Other 79 148 386 392
----- ----- ----- -----
TOTAL NON-INTEREST EXPENSE 731 825 3,071 3,464
----- ----- ----- -----
INCOME BEFORE TAXES 270 308 1,000 657
INCOME TAX EXPENSE 150 68 364 165
----- ----- ----- -----
NET INCOME $ 120 $ 240 $ 636 $ 492
===== ===== ===== =====
EARNINGS PER SHARE-BASIC* $.08 $.15 $.44 $.31
EARNINGS PER SHARE-DILUTED $.08 $.15 $.42 $.30
TOTAL OUTSTANDING SHARES 1,429,812 1,586,925 1,429,812 1,586,925
WEIGHTED AVERAGE SHARES OUTSTANDING 1,441,549 1,567,053 1,501,567 1,665,762
*All per share financial information has been adjusted
to reflect the 3 for 2 stock split effected in the form of
a stock dividend distributed to shareholders on
December 29, 1997.
</TABLE>
<PAGE> 9
SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DEC 31, DEC 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Performance Ratios:
Return on assets (ratio of net income
to average total assets) (1) .39% .81% .41% .42%
Interest Rate Spread Information:
Average during period (1) 2.35 2.70 2.41 2.53
End of period (1) 2.48 2.57 2.48 2.57
Net interest margin (1) 3.09 3.45 3.19 3.36
Operating expenses to average assets(1) 2.68 2.80 2.62 2.98
Ratio of average interest-earning assets
to average interest-bearing
liabilities 117.27 119.60 118.60 126.61
</TABLE>
DEC 31, 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) 0.26 0.28
Capital ratios:
Stockholders' equity to total assets 13.48 15.17
Average Stockholders' equity to average assets 14.06 16.32
Return on Stockholders' equity (ratio of net
income to average equity) (1) 3.73 2.59
Shares outstanding-actual number 1,429,812 1,586,925 (2)
Book value per share $11.59 $11.23 (2)
Number of full service offices 2 2
(1) Annualized for the three month periods presented.
(2) Adjusted for three-for-two stock split distributed December 29, 1997.
</TABLE>
