NORTH BANCSHARES INC
8-K, 2001-01-19
SAVINGS INSTITUTION, FEDERALLY CHARTERED
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NORTH BANCSHARES, INC.          NEWS
100 West North Avenue - Chicago, Illinois 60610 - 312-664-4320

RELEASE:     IMMEDIATELY

CONTACT:     Joseph A. Graber or Victor E. Caputo or Martin W. Trofimuk
             (312) 664-4320

                           NORTH BANCSHARES ANNOUNCES
                             FOURTH QUARTER EARNINGS
                           QUARTERLY DIVIDEND DECLARED

         CHICAGO,  IL, JANUARY 19, 2001, - North  Bancshares,  Inc., the holding
company of North Federal Savings Bank today announced diluted earnings per share
of $.08 for the quarter  ended  December 31, 2000, a decrease of $.02 per share,
from $.10 per share for the quarter ended  December 31, 1999. Net income for the
quarter ended December 31, 2000 amounted to $98,000, a decrease of $20,000, from
$118,000  for the quarter  ended  December  31,  1999.  The  decrease in diluted
earnings  per  share and net  income  for the  quarter  was due  primarily  to a
$142,000  increase in interest on deposit  accounts.  Diluted earnings per share
for the fiscal  year ended  December  31, 2000  amounted to $1.16 per share,  an
increase  of $.72 from $.44 per share for the fiscal  year ended  December  31,
1999.  The  improvement in earnings per share and net income for the fiscal year
was  primarily  related to a $1.3  million gain on the sale of real estate.

         Concurrent  with this  earnings  release the Board of  Directors of the
Company  has  declared  a  quarterly  dividend  of $.11 per  share to be paid on
February 15, 2001 to stockholders of record as of February 1, 2001.

         Net interest  income,  before  provision for loan losses,  decreased by
$97,000 to $818,000  for the quarter  ended  December 31,  2000,  compared  with
$915,000  for the quarter  ended  December 31,  1999.  The interest  rate spread
decreased to 2.13% at December 31, 2000 from 2.35% at December 31, 1999. The net
interest margin  decreased to 2.55% for the quarter ended December 31, 2000 from
2.84% for the quarter ended December 31, 1999.

         Non-interest income decreased by $8,000 and amounted to $29,000 for the
quarter  ended  December 31, 2000  compared  with $37,000 for the quarter  ended
December 31, 1999. The decrease was primarily  attributable to a $45,000 loss on
the sale of  investment  securities  available for sale,  partially  offset by a
$3,000 increase in fees and service  charges.  In addition,  there was a $34,000
other than temporary decline in value of securities  available for sale recorded
during  the  quarter  ended  December  31,  1999 with no  corresponding  decline
recorded during the quarter ended December 31, 2000.

         Non-interest  expense  decreased by $13,000 to $726,000 for the quarter
ended  December 31, 2000 compared  with $739,000 for the quarter ended  December
31, 1999.

         Net loans  receivable  totaled  $90.8  million  at  December  31,  2000
compared  with $89.0  million at December 31, 1999.  Originations  totaled $19.0
million  during the fiscal  year ended  December  31, 2000  compared  with $27.6
million during the fiscal year ended December 31, 1999. Repayments totaled $15.1
million  and loan sales  totaled  $2.0  million  during  the  fiscal  year ended
December  31,  2000  compared  with  repayments  of $16.7  million  and sales of
$425,000  during the fiscal year ended  December 31, 1999. At December 31, 2000,
the  Bank had $5.1  million  in loan  applications  and  participations  pending
approval,  closing or funding  at an average  rate of 9.52% and $2.4  million in
unused lines of credit.

                                     -MORE--


<PAGE>



         Total deposits  amounted to $81.3 million at December 31, 2000 compared
with $76.5 million at December 31, 1999. The $4.8 million increase was primarily
attributable  to an  increase  in  certificates  of deposit  that were used as a
funding source for short term  construction and commercial real estate loans and
to repay  borrowed  funds.  Non-interest  bearing  checking  balances  increased
$900,000 to $3.2  million at December 31, 2000 from $2.3 million at December 31,
1999, while passbooks and NOW accounts decreased by a similar amount.

         Borrowed funds  decreased $2.9 million to $38.2 million at December 31,
2000 from $41.1 million at December 31, 1999.  The decrease was primarily due to
repayment of FHLB advances which were called prior to maturity.

         Stockholders'  equity  increased  $1.5  million  and  amounted to $12.8
million at December 31, 2000  compared  with $11.3 million at December 31, 1999.
The increase was primarily  attributable to net income for the fiscal year which
was partially offset by $530,000 in dividend payments. In addition,  there was a
$1.0 million  improvement in accumulated other comprehensive loss due primarily
to a decline in interest rates and the positive effect the decrease had on the
available for sale portfolio.  There was also a $291,000 increase in treasury
stock. Book value increased to $10.82 per share at December 31, 2000 from $9.14
at December 31, 1999.

         Joseph A. Graber, President and Chief Executive Officer, commented:

         "During  the  year we sold  some  lower  yielding  assets  as part of a
restructuring of our balance sheet.  Although we incurred a loss on the sales we
were able to reinvest the proceeds into higher yielding loans which will provide
an improved revenue stream in future  periods." He added,  "Also during the year
we  were  able  to  fully  utilize,  for  income  tax  purposes,   capital  loss
carryforwards  which would have expired on December  31,  2000.  We expanded our
commercial  real estate and  consumer  lending and  increased  our  non-interest
bearing checking account balances.  We also instituted measures to reduce future
non-interest expenses in order to improve our efficiency."

         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."  North Federal has served the north side of Chicago from its home office
in Old Town since 1886.  It also operates a branch office in Wilmette IL. For 49
consecutive  quarters,  the bank has  received a five-star  superior  rating for
safety from Bauer Financial  Reports,  Inc., and is rated one of the best in the
nation for safety and soundness by Sheshunoff  Information Services,  Inc. North
Federal is proud to support  local  service and  non-profit  organizations.  Its
executives  serve on the boards of Lincoln Park  Chamber of  Commerce,  Old Town
Chamber of  Commerce  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.

         When used in this  press  release  the words or  phrases  "will  likely
result," "are  expected  to," "will  continue,"  "is  anticipated,"  "estimate,"
"project"  or similar  expressions  are  intended to  identify  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  The Company  wishes to caution  readers not to place undue reliance on
any such  forward-looking  statements  which speak only as of the date made. The
Company  wishes to advise readers that the factors listed above could affect the
Company's financial performance.

         The  Company  does not  undertake  -- and  specifically  disclaims  any
obligation -- to publicly release the results of any revisions which may be made
to any  forward-looking  statements to reflect events or circumstances after the
date  of  such  statements  or to  reflect  the  occurrence  of  anticipated  or
unanticipated events.

                        (FINANCIAL STATEMENTS ATTACHED)

                                  --MORE--



<PAGE>



                                      NORTH BANCSHARES, INC.
                         CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                               (IN THOUSANDS, EXCEPT SHARE DATA)
                                          (UNAUDITED)
<TABLE>
<CAPTION>

ASSETS                                                                DEC 31, 2000  DEC 31, 1999
<S>                                                                          <C>         <C>
Cash and due from Banks                                                    $ 1,930     $   1,712
Interest-bearing deposits                                                    2,006         1,260
Federal funds sold                                                           4,245         2,439
Investment in dollar denominated mutual funds                                  903           466
------------------------------------------------------------------------------------------------
   TOTAL CASH AND CASH EQUIVALENTS                                           9,084         5,877

Investment securities available for sale                                    16,961        17,050
Mortgage-backed securities available for sale                               13,580        14,528
Stock in Federal Home Loan Bank of Chicago                                   1,905         2,205
Loans receivable, net of allowance for loan losses  of $262 at
  December 31, 2000 and $231 at December 31, 1999                           90,765        88,989
Accrued interest receivable                                                  1,016           965
Premises and equipment, net                                                    803         1,033
Amounts due from brokers                                                       376             -
Other assets                                                                    91            42
------------------------------------------------------------------------------------------------
   TOTAL ASSETS                                                            134,581       130,689
------------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------
Deposit accounts                                                            81,317        76,506
Borrowed Funds                                                              38,200        41,100
Advance payments by borrowers for taxes and insurance                        1,068         1,092
Accrued interest payable and other liabilities                               1,219           738
------------------------------------------------------------------------------------------------
   TOTAL LIABILITIES                                                       121,804       119,436
------------------------------------------------------------------------------------------------

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 outstanding                                                  19            19
Additional paid in capital                                                  13,242        13,393
Retained earnings, substantially restricted                                 11,955        11,115
Treasury stock, at cost (732,822 shares at December 31, 2000 and
 682,868 shares at December 31, 1999)                                      (11,316)      (11,025)
Accumulated other comprehensive loss                                          (895)       (1,916)
Common stock acquired by Employee Stock Ownership Plan                        (222)         (333)
------------------------------------------------------------------------------------------------
   TOTAL STOCKHOLDERS' EQUITY                                               12,783        11,253
------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                $134,581      $130,689
------------------------------------------------------------------------------------------------
</TABLE>


                                           --MORE-



<PAGE>



                                              NORTH BANCSHARES, INC.
                               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                                        (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

                                                                                    THREE MONTHS ENDED         FISCAL YEAR ENDED
                                                                                      DECEMBER 31,                DECEMBER 31,
                                                                                    2000          1999           2000          1999
INTEREST INCOME:
<S>                                                                               <C>           <C>            <C>           <C>
  Loans receivable                                                                $1,706        $1,670         $6,763        $6,365
  Interest-bearing deposits and federal funds sold                                    68            41            215           204
  Investment securities available for sale                                           294           304          1,208         1.164
  Mortgage-backed securities available for sale                                      214           232            890           945
  Investment in mutual funds                                                          11             3             28            25
  Dividends on FHLB stock                                                             37            40            146           134
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME                                                              2,330         2,290          9,250         8,837
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
  Deposit accounts                                                                   952           810          3,540         3,211
  Borrowed funds                                                                     560           565          2,247         2,065
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE                                                             1,512         1,375          5,787         5,276
-----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES                                 818           915          3,463         3,561
PROVISION FOR LOAN LOSSES                                                              -             -             31            17
-----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                                  818           915          3,432         3,544
-----------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST INCOME:
  (Loss) gain on sale of investment securities available for sale                    (45)            -          (135)            75
  Other than temporary decline in value of securities available for sale               -           (34)          (24)           (66)
  Gain on sale of real estate                                                          -             -          1,322             -
  Loss on sale of loans                                                                -             -           (15)             -
  Fees and service charges                                                            70            67            288           282
  Other                                                                                4             4             20            17
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME                                                             29            37          1,456           308
-----------------------------------------------------------------------------------------------------------------------------------
NON-INTEREST EXPENSE:
  Compensation and benefits                                                          417           398          1,690         1,602
  Occupancy expense                                                                   93           122            438           447
  Professional fees                                                                   63            41            222           172
  Data processing                                                                     53            38            209           194
  Advertising and promotion                                                           16            22            141           132
  Federal deposit insurance premium                                                    2            11             12            45
  Other                                                                               82           107            353           362
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE                                                           726           739          3,065         2,954
-----------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES                                                           121           213          1,823           898
INCOME TAX EXPENSE                                                                    23            95            453           362
-----------------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                                         $  98           118          1,370           536
-----------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE:
  Basic                                                                            $ .08           .10           1.17           .45
  Diluted                                                                            .08           .10           1.16           .44
-----------------------------------------------------------------------------------------------------------------------------------
AVERAGE SHARES OUTSTANDING:
  Basic                                                                        1,156,847     1,188,911      1,175,326     1,200,601
  Diluted                                                                      1,164,831     1,233,413      1,183,935     1,226,498
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                              --MORE-

<PAGE>




SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>

                                                                                  THREE MONTHS ENDED         FISCAL YEAR ENDED
                                                                                     DECEMBER  31,               DECEMBER 31,
                                                                                 2000            1999          2000        1999
PERFORMANCE RATIOS:
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>            <C>           <C>         <C>
Return on assets (ratio of net income to average total assets) (1)               0.30%           0.36%         1.04%       0.42%
Interest rate spread information:
 Average during period (1)                                                       1.87            2.33          2.09        2.30
 End of period (1)                                                               2.13            2.35          2.13        2.35
Net interest margin (1)                                                          2.55            2.84          2.68        2.83
Ratio of operating expenses to average assets (1)                                2.22            2.26          2.33        2.30
Efficiency ratio                                                                  .86             .78           .62         .76
Ratio of average interest-earning assets to average interest-bearing
 liabilities                                                                   114.44          111.98        113.31      112.76
--------------------------------------------------------------------------------------------------------------------------------

                                                                              DECEMBER 31, 2000           DECEMBER 31, 1999
ASSET QUALITY RATIOS:
--------------------------------------------------------------------------------------------------------------------------------
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                                       0.29                           0.26
CAPITAL RATIOS:
--------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity to total assets                                                9.50                           8.61
Average Stockholders' equity to average assets                                      8.93                           9.56
Return on Stockholders' equity (ratio of net income to average
 equity) (1)                                                                       11.68                           4.36
Shares outstanding-actual                                                      1,181,253                      1,231,207
Book value per share                                                               10.82                           9.14
Number of full service offices                                                         2                              2
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Annualized for the three month periods presented.


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