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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) April 17, 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 April 17, 1998, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, Dated April 17, 1998, regarding first 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: April 23, 1998 /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: April 17, 1998
Joseph A. Graber, President
Victor E. Caputo, Executive Vice President
(312) 664-4320
NORTH BANCSHARES, INC.
ANNOUNCES
FIRST QUARTER EARNINGS
QUARTERLY DIVIDEND
Chicago, Illinois, April 17, 1998, - North Bancshares, Inc., (NASDAQ-NBSI),
the holding company for North Federal Savings Bank, announced net income for
the quarter ended March 31, 1998 of $155,000, a decrease of $74,000 from
$229,000 for the quarter ended March 31, 1997. Diluted earnings per share
decreased by $.03 from $.15 per share for the quarter ended March 31, 1997 to
$.12 per share for the quarter ended March 31, 1998. The decrease is
primarily related to a $60,000 decrease in net interest income and a $52,000
increase in non-interest expenses primarily related to increases in
compensation and benefits expense and professional fees.
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 May 15,
1998 to stockholders of record on May 1, 1998.
Net interest income for the quarter ended March 31, 1998 decreased by $60,000
or 6.2% from $969,000 for the quarter ended March 31, 1997 to $909,000 for
the quarter ended March 31, 1998. The decrease was attributable to a $66,000
increase in interest on deposit accounts and borrowed funds offset by a
$6,000 increase in total interest income. There was a decrease in the net
interest margin from 3.32% for the quarter ended March 31, 1997 to 3.07$ for
the quarter ended March 31, 1998.
Non-interest expense increased by $52,000 from $746,000 for the quarter ended
March 31, 1997 to $798,000 for the quarter ended March 31, 1998. The
increase was primarily attributable to a $58,000 increase in compensation and
benefits expense, related to the expansion of the Bank's hours of operation
and a $27,000 increase in additional ESOP expense, a component of
compensation and benefits expense. The additional ESOP expense is related to
an increase, during the quarter ended March 31, 1998, in the market price of
the Company's stock committed to be released under the ESOP. For the quarter
ended March 31, 1998, a total of $48,000 in ESOP expense was recorded along
with an offsetting entry to additional paid in capital and therefore,
stockholders' equity was unaffected by the transaction. In addition, there
was a $37,000 increase in professional fees which are directly related to a
review of a rejected unsolicited offer to purchase the Company and
shareholder proposals.
Total assets decreased by $4.6 million or 3.7% from $123.1 million at December
31, 1997 to $118.5 million at March 31, 1998. The decrease was primarily
attributable to a $3.2 million decrease in loans receivable from $79.0
million at December 31, 1997 to $75.8 million at March 31, 1998 and a $2.1
million or 9.1% decrease in investment securities available for sale from
$23.2 million at December 31, 1997 to $21.1 million at March 31, 1998.
Net loans receivable decreased $3.2 million or 4.1% from $79.0 million at
December 31, 1997 to $75.8 million at March 31, 1998. The decrease was
attributable to the high level of refinance activity that began in the last
quarter of 1997 and continued into the first quarter of 1998. At March 31,
1998, the Bank had $4.7 million in loan applications awaiting approval or
closing.
Total deposits decreased by $1.6 million or 2.1% from $75.0 million at
December 31, 1997 to $73.4 million at March 31, 1998. The decrease was
primarily attributable to a $1.9 million decrease in certificates of deposit
partially offset by a $300,000 net increase in checking, money market and
passbook accounts.
Stockholders' equity decreased by $2.8 million or 17.1% from $16.4 million at
December 31, 1997 to $13.6 million at March 31, 1998. The decrease was
primarily attributable to a $2.8 million increase in treasury stock related
to $3.1 million in stock repurchases offset by $369,000 in stock options
exercised.
Mary Ann Hass, Chairman and Chief Executive Officer, commented:
"We have experienced a dramatic increase in the number of mortgage loans
repaid, refinanced or modified during this quarter and at the same time a
number of certificates of deposit have been withdrawn." She added, "As part
of our overall strategy to increase the yield on our loan portfolio we are
expanding our consumer loan products to include manufactured housing loans
and have intensified the marketing efforts for our Home Equity Line of Credit
product. In addition, in order to become less dependent on certificates of
deposit as a funding source we will introduce an enhanced version of our
Money Market Deposit Account that will provide easier access to funds on
deposit and also pay an interest rate that is comparable to money narket
funds."
All per share information has been adjusted to reflect a three-for-two stock
split effected in teh form of a 505 stock dividend paid on December 29, 1997
to stockholders of record on December 8, 1997.
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 39 consecutive quarters from Bauer Financial
Reports, Inc. and is rated one of the best in nation by Sheshunoff Information
Services, Inc. Visit our Web site at www.northfederal.com to read previous
press releases, examine filings with the SEC, read about our history, and
check out 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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NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS MARCH 31, 1998 DEC 31, 1997
(UNAUDITED)
<S> <C> <C>
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Cash and due from banks $ 764 $ 727
Interest-bearing deposits 2,657 2,937
Federal funds sold 7,121 5,976
Investment in dollar denominated mutual funds 1,768 1,477
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TOTAL CASH AND CASH EQUIVALENTS 12,310 11,117
Investment securities available for sale 21,125 23,250
Mortgage-backed securities held to maturity 5,560 5,841
Stock in Federal Home Loan Bank of Chicago 1,705 1,705
Loans receivable, net of allowance for loan
losses of $208 at March 31, 1998 and
December 31, 1997 75,776 79,031
Accrued interest receivable 803 1,060
Premises and equipment, net 1,019 1,043
Other assets 179 31
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TOTAL ASSETS $118,477 $123,078
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposit accounts $ 73,449 $75,041
Borrowed funds 29,100 29,100
Advance payments by borrowers for
taxes and insurance 792 1,239
Accrued interest payable and other liabilities 1,567 1,250
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TOTAL LIABILITIES 104,908 106,630
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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 1,914,105 shares 19 19
Additional paid-in capital 13,626 13,767
Retained earnings, substantially restricted 11,153 11,139
Treasury stock at cost (633,827 shares at
March 31, 1998 and 484,293 shares at
December 31, 1997) (10,481) (7,706)
Unrealized loss on securities available for
sale, net of tax (60) (56)
Additional pension liability, net of tax (160) (160)
Common stock acquired by Employee Stock
Ownership Plan (528) (555)
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TOTAL STOCKHOLDERS' EQUITY 13,569 16,448
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $118,477 $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 MARCH 31,
1998 1997
<S> <C> <C>
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INTEREST INCOME:
Loans receivable $1,494 $1,449
Interest-bearing deposits and federal funds sold 116 48
Investment securities available for sale 383 465
Mortgage-backed securities held to maturity 96 125
Investment in mutual funds 31 34
Dividends on FHLB stock 29 22
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TOTAL INTEREST INCOME 2,149 2,143
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INTEREST EXPENSE:
Deposit accounts 819 773
Borrowed funds 421 401
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TOTAL INTEREST EXPENSE 1,240 1,174
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 909 969
PROVISION FOR LOAN LOSSES - -
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 909 969
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NON-INTEREST INCOME:
Gain on sale of investment securities
available for sale, net 39 48
Fees and service charges 59 46
Other 4 4
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TOTAL NON-INTEREST INCOME 102 98
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NON-INTEREST EXPENSE:
Compensation and benefits 452 394
Occupancy expense 125 113
Professional fees 75 38
Data processing 47 42
Advertising and promotion 24 31
Federal deposit insurance premium 12 12
Recognition and retention plan - 19
Other 63 97
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TOTAL NON-INTEREST EXPENSE 798 746
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INCOME BEFORE INCOME TAXES 213 321
INCOME TAX EXPENSE 58 92
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NET INCOME $ 155 $ 229
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EARNINGS PER SHARE:
Basic $.12 $.16
Diluted $.12 $.15
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AVERAGE SHARES OUTSTANDING:
Basic 1,272,779 1,489,454
Diluted 1,341,510 1,558,490
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</TABLE>
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
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PERFORMANCE RATIOS:
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Return on assets (ratio of net income
to average total assets) (1) .51% .77%
Interest Rate Spread Information:
Average during period (1) 2.41 2.57
End of period (1) 2.55 2.62
Net interest margin (1) 3.07 3.32
Ratio of operating expenses to average assets (1) 2.63 2.52
Ratio of average interest-earning assets
to average interest-bearing liabilities 115.81 118.71
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MARCH 31, 1998 DECEMBER 31, 1997
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<S> <C> <C>
ASSET QUALITY RATIOS:
Non-performing assets to total assets N/A N/A
Allowance for loan losses to non-performing loans N/A N/A
Allowance for loan losses to loans receivable 0.28 0.26
CAPITAL RATIOS:
Stockholders' equity to total assets 11.45 13.36
Average Stockholders' equity to average assets 12.42 14.03
Return on Stockholders' equity (ratio of net
income to average equity) (1) 4.11 3.75
Shares outstanding-actual 1,280,278 1,429,812
Book value per share $10.60 $11.50
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Number of full service offices 2 2
</TABLE>
(1) Annualized for the three month periods presented.
