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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, 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)
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Item 5. Other Events
On October 15, 1998, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, Dated October 15, 1998, regarding third quarter
1998 earnings and a regular quarterly 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, 1998 /S/ Joseph A. Graber
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Joseph A. Graber
President and
Chief Executive Officer
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EXHIBIT
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NORTH BANCSHARES, INC NEWS RELEASE
RELEASE: IMMEDIATELY
CONTACT: Joseph A. Graber or Victor E. Caputo
(312) 664-4320
NORTH BANCSHARES ANNOUNCES
THIRD QUARTER EARNINGS
QUARTERLY DIVIDEND
CHICAGO, IL, October 15, 1998, - North Bancshares, Inc., the holding
company of North Federal Savings Bank today announced net income for the
quarter ended September 30, 1998 of $113,000, an increase of $1,000 from
$112,000 for the quarter ended September 30, 1997. Diluted earnings per share
for the quarter ended September 30, 1998 amounted to $.09, an improvement
from $.08 per share for the quarter ended September 30, 1997.
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 16, 1998 to stockholders of record as of November 2, 1998.
Net interest income was $875,000 for the quarter ended September 30,
1998 compared with $909,000 for the quarter ended September 30, 1997. The
decrease was primarily due to a $22,000 decrease in total interest income for
the period. The net interest margin was 2.91% for the quarter ended September
30, 1998 compared with 3.07% for the quarter ended September 30, 1997. The
decline in net interest margin was due primarily to proceeds from mortgage
loan prepayments and higher yielding investment securities called prior to
their maturity dates which were temporarily reinvested in shorter term lower
yielding investments. The interest rate spread at the end of the period
improved to 2.45% at September 30, 1998 from 2.29% at September 30, 1997.
Non-interest income amounted to $99,000 for the quarter ended September
30, 1998 compared with $56,000 for the quarter ended September 30, 1997. The
improvement was primarily due to a $25,000 increase in gain on the sale of
investment securities and loans, available for sale and a $16,000 increase
in fees and service charges.
Non-interest expense remained stable at $797,000 for the quarter ended
September 30, 1998 compared with $798,000 for the quarter ended September 30,
1997.
Net loans receivable totaled $78.5 million at September 30, 1998 compared
with $79.0 million at December 31, 1997. The decrease was due to the high
colume of prepayments that has resulted from the steady decline in interest
rates that began in the last quarter of 1997. Total loans receivable
increased $2.9 million from $75.6 million June 30, 1998. At September 30,
1998, the Bank had $6.7 million in loan applications pending approval or
closing.
Total deposits amounted to $73.3 million at September 30, 1998 compared
with $75.0 million at December 31, 1997. The $1.7 million decrease was
primarily due attributable to a $4.4 million decrease in certificates of
deposit and passbook accounts, partially offset by a $2.8 million increase in
checking and money market accounts. Total deposits increased $500,000 from
$72.8 million at June 30, 1998.
Stockholders' equity was $13.3 million at September 30, 1998 compared
with $16.4 million at December 31, 1997. The decrease was primarily
attributable to a $2.9 million increase in treasury stock related to $3.5
million in stock repurchases, offset by $921,000 in stock options exercised.
Joseph A. Graber, President and Chief Executive Officer, commented:
"We continued the redeployment and diversification of our assets into
higher yielding investor property loans as our conventional loan portfolio
continues to experience high levels of prepayments. We introduced an equity
line of credit product for investors during the quarter and began cross
selling this service in order to improve our ratio of services to this group
of customers." He added, "Our enhanced money market deposit account has
attracted $2.4 million, a majority of which has been new money and we
continue to increase our base of non-interest bearing checking accounts while
reducing our dependence on higher cost certificates of deposit."
"Although is is hard to find a bright side to a major correction in the
stock marketss, at the current price level of the Company stock, we anticipate
1999 ESOP expense to decrease by approximately $75,000, compared with total
estimated 1998 ESOP expense. We have also implemented a number of cost saving
measures this year and are planning more in 1999. We anticipate total
non-interest expense savings for 1999 to be approximately 8% to 10% of total
1998 non-interst expense."
"On October 1st, Frank J. Donati, president of Donati Financial Services
, Inc. joined the board of directors of the Company and the Bank. As an
outsider to the Company who has a wealth of experience as an executive officer
and a consultant for both small and large financial institutions, Frank will
provide us with valuable input as we chart our future course of action."
All 1997 share and per share information has been adjusted to reflect a
three-for-two stock split effected in the form of a 50% stock dividend paid
on December 29, 1997 to stockholders of record on December 8, 1997.
North Bancshares, Inc. is the holding company for North Federal Savings
Bank. Its common stock is traded on the Nasdaq Stock Market under the symbol
"NBSI." It also operates a branch office in Wilmette IL. For 40 consecutive
quarters, the bank has received a five-star superior rating for safety from
Bauer Financial Reports, Inc., and is rated as one of the best in the nation
by Sheshunoff Information Services, Inc. North Federal is proud to support
local srvice and non-profit organizations. Its executives serve on the
boards of the Lincoln Park Chamber of Commerce, Old Town Chamber of Commerce,
Friends of the Near North Library and the Human Capital Council. Further
information is available on its website at www.northfederal.com including
prior press releases, SEC filings, company history, and current products,
services and interest rates.
(FINANCIAL STATEMENTS ATTACHED)
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NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS SEPT 30, 1998 DEC 31, 1997
(UNAUDITED)
<S> <C> <C>
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Cash and due from banks $ 691 $ 727
Interest-bearing deposits 2,227 2,937
Federal funds sold 4,997 5,976
Investment in dollar denominated mutual funds 358 1,477
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TOTAL CASH AND CASH EQUIVALENTS 8,273 11,117
Investment securities available for sale 24,621 23,250
Mortgage-backed securities held to maturity 4,767 5,841
Mortgage-backed securities available for sale 5,100 -
Stock in Federal Home Loan Bank of Chicago 1,705 1,705
Loans receivable, net of allowance for loan
losses of $208 at September 30, 1998 and
December 31, 1997 78,488 79,031
Accrued interest receivable 879 1,060
Premises and equipment, net 1,013 1,043
Other assets 94 31
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TOTAL ASSETS $124,940 $123,078
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposit accounts $ 73,342 $75,041
Borrowed funds 34,100 29,100
Advance payments by borrowers for
taxes and insurance 572 1,239
Accrued interest payable and other liabilities 3,673 1,250
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TOTAL LIABILITIES 111,687 106,630
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Preferred stock, $.01 par value. Authorized
500,000 shares; none outstanding - -
Common stock, $.01 Par value. Authorized
3,500,000 shares; issued 1,914,075 shares 19 19
Additional paid-in capital 13,502 13,767
Retained earnings, substantially restricted 11,077 11,139
Treasury stock at cost (643,382 shares at
September 30, 1998 and 484,293 shares at
December 31, 1997) (10,617) (7,706)
Accumulated other comprehensive income (256) (216)
Common stock acquired by Employee Stock
Ownership Plan (472) (555)
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TOTAL STOCKHOLDERS' EQUITY 13,253 16,448
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $124,940 $123,078
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</TABLE>
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NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
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INTEREST INCOME:
Loans receivable $1,452 $1,497 $4,409 $4,433
Interest-bearing deposits and federal funds sold 113 82 364 164
Investment securities available for sale 480 443 1,262 1,420
Mortgage-backed securities held to maturity 88 119 264 365
Mortgage-backed securities available for sale 1 - 1 -
Investment in mutual funds 7 29 47 81
Dividends on FHLB stock 32 25 94 70
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TOTAL INTEREST INCOME 2,173 2,195 6,441 6,533
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INTEREST EXPENSE:
Deposit accounts 823 818 2,440 2,370
Borrowed funds 475 468 1,354 1,315
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TOTAL INTEREST EXPENSE 1,298 1,286 3,794 3,685
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 875 909 2,647 2,848
PROVISION FOR LOAN LOSSES - - - -
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 875 909 2,647 2,848
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NON-INTEREST INCOME:
Gain on sale of investment securities and loans
available for sale, net 24 (1) 84 53
Fees and service charges 69 53 194 156
Other 6 4 15 13
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TOTAL NON-INTEREST INCOME 99 56 293 222
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NON-INTEREST EXPENSE:
Compensation and benefits 428 409 1,312 1,221
Occupancy expense 122 131 374 361
Professional fees 52 32 205 118
Data processing 48 41 144 126
Advertising and promotion 50 49 113 112
Federal deposit insurance premium 12 13 35 36
Recognition and retention plan - 17 - 59
Other 85 106 236 307
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TOTAL NON-INTEREST EXPENSE 797 798 2,419 2,340
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INCOME BEFORE INCOME TAXES 177 167 521 730
INCOME TAX EXPENSE 64 55 186 214
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NET INCOME 113 112 335 516
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EARNINGS PER SHARE:
Basic .09 .08 .27 .36
Diluted .09 .08 .26 .34
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AVERAGE SHARES OUTSTANDING:
Basic 1,207,344 1,394,033 1,232,833 1,441,865
Diluted 1,267,476 1,478,939 1,301,197 1,518,435
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</TABLE>
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
PERFORMANCE RATIOS:
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Return on assets (ratio of net income
to average total assets) (1) 0.36% 0.37% 0.36% 0.57%
Interest Rate Spread Information:
Average during period (1) 2.30 2.27 2.33 2.43
End of period (1) 2.45 2.29 2.45 2.29
Net interest margin (1) 2.91 3.07 2.96 3.23
Ratio of operating expenses to average assets (1) 2.57 2.63 2.62 2.60
Ratio of average interest-earning assets
to average interest-bearing liabilities 113.94 118.59 114.63 119.12
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SEPTEMBER 30, 1998 DECEMBER 31, 1997
<S> <C> <C>
ASSET QUALITY RATIOS:
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Non-performing assets to total assets 0.00 0.00
Allowance for loan losses to non-performing loans N/A N/A
Allowance for loan losses to loans receivable 0.27 0.26
CAPITAL RATIOS:
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Stockholders' equity to total assets 10.61 13.36
Average Stockholders' equity to average assets 11.42 14.03
Return on Stockholders' equity (ratio of net
income to average equity) (1) 3.18 3.75
Shares outstanding-actual 1,270,693 1,429,782
Book value per share $10.43 $11.50
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Number of full service offices 2 2
</TABLE>
(1) Annualized for the three and nine month periods presented.
