8-K 1 pr4th03.txt PRESS RELEASE 4TH QTR 2003 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 20, 2004 ------------------------------ 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) 1 Item 7. Financial Statements and Exhibits (c) Exhibits 99.1. Press release, dated January 20, 2004. Item 9. Regulation FD Disclosure (Information furnished in this Item 9 is furnished pursuant to Item 12 ------------------------------------------------------------------------------ On January 20, 2004, the Registrant issued the attached press release regarding fourth quarter 2003 earnings, the declaration of a quarterly dividend and the date of the annual meeting of stockholders. The press release is attached as Exhibit 99.1 to this current report on Form 8-K and is being furnished pursuant to Item 12 of Form 8-K. 2 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 20, 2004 /S/ Joseph A. Graber ---------------- -------------------- Joseph A. Graber President and Chief Executive Officer 3 EXHIBIT 4 NORTH BANCSHARES, INC. NEWS 100 West North Avenue at Clark - 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 ANNUAL MEETING DATE CHICAGO, IL, JANUARY 20, 2004, - North Bancshares, Inc., (NASDAQ-NBSI), the holding company of North Federal Savings Bank today announced both basic and diluted earnings per share decreased to $.12 for the quarter ended December 31, 2003 compared with $.17 per share for the quarter ended December 31, 2002. Net income for the quarter ended December 31, 2003 decreased by $47,000 and amounted to $141,000 compared with $188,000 for the quarter ended December 31, 2002. The decrease was primarily attributable to a $92,000 decrease in net interest income before provision for loan losses, partially offset by a $16,000 decrease in non-interest expense. Concurrent with this earnings release the Board of Directors of the Company has declared a quarterly dividend of $.08 per share to be paid on February 16, 2004 to stockholders of record as of February 2, 2004 and set Friday, April 23, 2004 at 3:00 PM at the main office of the Bank as the date, time and place of the Company's annual meeting of stockholders. Net interest income, before provision for loan losses, decreased by $92,000 to $856,000 for the quarter ended December 31, 2003, compared with $948,000 for the quarter ended December 31, 2002. The decrease was attributable to a $295,000 reduction in total interest income offset by a $203,000 decrease in total interest expense. The decrease in interest income was primarily attributable to the low interest rate environment and the large number of loans that have been prepaid, refinanced or have had their loan terms modified to reflect lower interest rates. Non-interest income increased by $6,000 to $188,000 for the quarter ended December 31, 2003 compared with $182,000 for the quarter ended December 31, 2002. The increase was primarily attributable to the receipt of a $46,000 settlement resulting from a class action lawsuit related to common stock the Company owned in Reliance Acceptance Corporation and sold at a loss in a prior period, partially offset by a $28,000 decrease in the gain on sale of mortgage loans held for sale. Non-interest expense decreased by $16,000 to $801,000 for the quarter ended December 31, 2003 compared with $817,000 for the quarter ended December 31, 2002. The decrease was primarily attributable to decreases in compensation and benefits expense resulting from the absence of the Company's ESOP plan, a reduction in staff and expense control measures implemented during the first and second quarters of the year. Cash and cash equivalents decreased by $5.3 million to $13.0 million at December 31, 2003 compared with $18.3 million at December 31, 2002. The decrease was primarily due to a decrease in federal funds sold. The funds were reinvested into higher yielding loans and in part to repay FHLB advances and a brokered certificate of deposit. Net loans receivable increased by $9.0 million and amounted to $95.5 million at December 31, 2003 compared with $86.5 million at December 31, 2002. Equity line of credit loans, that adjust to the prime rate or prime rate plus a margin increased to $20.5 million at December 31, 2003 from $12.3 million at December 31, 2002. The Bank originated $64.8 million in loans during the fiscal year ended December 31, 2003 and recorded $54.1 million in repayments and $1.9 million in loan sales compared with $46.0 million in originations, $49.0 million in repayments and $3.9 million in loan sales during the fiscal year ended December 31, 2002. At December 31, 2003, the Bank had $6.4 million in loan applications pending approval or closing and $14.5 million in unused lines of credit. The Company added $21,400 to 5 the allowance for loan losses during the quarter ended December 31, 2003, due primarily to growth in the loan portfolio during the quarter. The total allowance for loan losses amounted to $347,400 or 0.36% of loans receivable at December 31, 2003 compared with $326,000 and 0.38% of loans receivable at December 31, 2002. Total deposits increased by $800,000 and amounted to $91.0 million at December 31, 2003 compared with $90.2 million at December 31, 2002. The increase was due primarily to a $1.5 million increase in checking, money market accounts and passbook accounts partially offset by a $600,000 decrease in certificates of deposit. The weighted average cost of deposits decreased to 2.47% at December 31, 2003 from 3.18% at December 31, 2002. Borrowed funds decreased by $3.5 million and amounted to $27.5 million at December 31, 2003 compared with $31.0 million at December 31, 2002. The decrease is attributable to repayment of higher cost FHLB advances that matured during the fiscal year. Stockholders' equity was $13.5 million at December 31, 2003 compared with $13.9 million at December 31, 2002. The decrease was primarily attributable to a $374,000 decrease in accumulated other comprehensive income due primarily to the increase in interest rates that occurred during the third quarter and the resulting negative effect on the available for sale securities portfolio. Treasury stock decreased by $120,000 primarily due to the exercise of stock options. Book value per share decreased to $11.77 at December 31, 2003 compared with $12.22 at December 31, 2002. Joseph A. Graber, President and Chief Executive Officer, commented: "We put a lot of effort into moving funds out of cash and into loans during the third and fourth quarters as loan interest rates have increased. As a result we have made some progress on improving our margins and efficiency." He added, "Our lending continues to be focused on products that have shorter terms and that adjust to the prime rate which will help to improve performance in the future as the economy improves and likely interest rate increases follow." 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 61 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 or have served on the boards of a variety of local community organizations. 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-- 6

NORTH BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED) ASSETS ~~SEPTEMBER~~DECEMBER 3031, 2003 DECEMBER 31, 2002 Cash and due from banks $2,~~986~~003 $ 1,629 Interest-bearing deposits 2,~~516~~767 4,338 Federal funds sold 38,~~410~~166 12,253 Investment in dollar denominated mutual funds 95 83 --------------------------------------------------------------------------------------------- TOTAL CASH AND CASH EQUIVALENTS 913,~~007~~031 18,303 Securities available for sale 2418,~~888~~612 26,875 Stock in Federal Home Loan Bank (FHLB) of Chicago 4,~~179~~252 3,999 Loans receivable, net of allowance for loan losses of $~~326~~347 at ~~September~~December 3031, 2003 and $326 at December 31, 2002 8995,~~623~~471 86,464 Accrued interest receivable ~~452~~558 503 Premises and equipment, net ~~877~~849 850 Other assets ~~955~~973 799 --------------------------------------------------------------------------------------------- TOTAL ASSETS ~~129~~133,~~981~~746 137,793 --------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY --------------------------------------------------------------------------------------------- Deposits Interest-bearing 8085,~~772~~392 85,074 Non-interest-bearing 5,~~515~~560 5,076 Borrowed funds 27,500 31,000 Advance payments by borrowers for taxes and insurance ~~305~~657 871 Accrued interest payable and other liabilities 21,~~286~~159 1,867 --------------------------------------------------------------------------------------------- TOTAL LIABILITIES ~~116~~120,~~378~~268 123,888 --------------------------------------------------------------------------------------------- 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; outstanding 1,~~151~~144,~~995~~695 at ~~September~~December 3031, 2003 and 1,138,029 at December 31, 2002 19 19 Additional paid in capital 13,163 13,284 Retained earnings, substantially restricted 12,~~026~~075 12,140 Treasury stock, at cost (~~762~~769,~~080~~380 shares at ~~September~~December 3031, 2003 and 776,046 shares at December 31, 2002) (11,~~523~~625) (11,745) Accumulated other comprehensive (loss)income (40115) 259 Unearned stock awards (4239) (52) --------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 13,~~603~~478 13,905 --------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $~~129~~133,~~981~~746 $137,793 ---------------------------------------------------------------------------------------------

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NORTH BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED) THREE MONTHS ENDED ~~NINE~~FISCAL ~~MONTHS~~YEAR ENDED ~~SEPT~~DECEMBER 3031, ~~SEPT~~DECEMBER 3031, 2003 2002 2003 2002 INTEREST INCOME: Loans receivable $1,~~309~~485 $1,~~688~~544 45,~~046~~531 56,~~097~~641 Interest-bearing deposits and federal funds sold 3516 4259 ~~152~~168 ~~136~~195 Securities available for sale ~~245~~125 ~~369~~332 ~~814~~939 1,~~031~~363 Dividend on FHLB stock and other interest income 6773 5059 ~~181~~254 ~~132~~191 -------------------------------------------------------------------------------------------------------------- TOTAL INTEREST INCOME 1,~~656~~699 21,~~149~~994 56,~~193~~892 68,~~396~~390 -------------------------------------------------------------------------------------------------------------- INTEREST EXPENSE: Deposit accounts ~~478~~463 ~~655~~624 12,~~593~~056 2,~~063~~687 Borrowed funds 380 ~~443~~422 1,~~165~~545 1,~~311~~733 -------------------------------------------------------------------------------------------------------------- TOTAL INTEREST EXPENSE ~~858~~843 1,~~098~~046 23,~~758~~601 34,~~374~~420 -------------------------------------------------------------------------------------------------------------- NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES ~~798~~856 ~~1,051~~948 23,~~435~~291 3,~~022~~970 PROVISION FOR LOAN LOSSES -21 - -21 28 -------------------------------------------------------------------------------------------------------------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ~~798~~835 ~~1,051~~948 23,~~435~~270 23,~~994~~942 -------------------------------------------------------------------------------------------------------------- NON-INTEREST INCOME: Gain (loss) on sale of securities available for sale ~~(3)~~39 9864 61100 ~~118~~181 Gain on sale of mortgage loans held for sale -6 1634 5965 4175 Other non-interest income 99143 8884 ~~286~~429 ~~241~~326 -------------------------------------------------------------------------------------------------------------- TOTAL NON-INTEREST INCOME 96188 ~~202~~182 ~~406~~594 ~~400~~582 -------------------------------------------------------------------------------------------------------------- NON-INTEREST EXPENSE: Compensation and benefits ~~404~~425 476 1,~~286~~711 1,~~372~~848 Occupancy expense ~~101~~120 ~~110~~106 ~~343~~463 ~~336~~442 Professional fees 3840 5640 ~~124~~164 ~~176~~216 Data processing 6771 6678 ~~213~~284 ~~190~~268 Advertising and promotion 20 1825 83103 7398 Other non-interest expense ~~111~~125 ~~120~~92 ~~433~~558 ~~380~~472 -------------------------------------------------------------------------------------------------------------- TOTAL NON-INTEREST EXPENSE ~~741~~801 ~~846~~817 23,~~482~~283 23,~~527~~344 -------------------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES ~~153~~222 ~~407~~313 ~~359~~581 ~~867~~1,180 INCOME TAX EXPENSE 6081 ~~165~~125 ~~130~~211 ~~335~~460 -------------------------------------------------------------------------------------------------------------- NET INCOME $93141 ~~$242~~188 ~~229~~370 ~~532~~720 -------------------------------------------------------------------------------------------------------------- EARNINGS PER SHARE: Basic $.0812 $.2117 .2032 .4662 Diluted $.0812 $.2117 .2032 .4662 -------------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 1,~~143~~144,~~123~~437 1,~~150~~134,~~321~~029 1,~~140~~141,~~908~~798 1,~~152~~154,~~765~~492 Diluted 1,~~144~~149,~~048~~377 1,~~170~~144,~~468~~355 1,147,~~646~~728 1,~~168~~164,~~263~~472 -------------------------------------------------------------------------------------------------------------- COMPREHENSIVE (LOSS) INCOME $~~(18)~~66 ~~$409~~188 (704) ~~833~~1,021 --------------------------------------------------------------------------------------------------------------

--MORE-- 8 SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):

~~SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):~~ THREE MONTHS ENDED ~~NINE~~FISCAL ~~MONTHS~~YEAR ENDED ~~SEPT~~DECEMBER 3031, ~~SEPT~~DECEMBER 3031, 2003 2002 2003 2002 PERFORMANCE RATIOS: ------------------------------------------------------------------------------------------------------------------ Return on assets (ratio of net income to average total assets) (1) 0.2843% 0.6954% 0.2328% 0.5152% Return on Stockholders' equity (ratio of net income to average equity) (1) 24.7419 75.0345 2.2371 5.8728 Interest rate spread information: Average during period (1) 2.0628 2.5733 2.0409 2.4945 End of period (1) 2.2520 2.6021 2.2520 2.6021 Net interest margin (1) 2.5170 32.0682 2.4954 2.9995 Ratio of operating expenses to average assets (1) 2.2545 2.3935 2.45 2.4341 Efficiency ratio (2) .8377 .6872 .8785 .74 Ratio of average interest-earning assets to average interest-bearing liabilities ~~116~~115.6264 115.3868 115.8086 ~~114~~115.8805 ----------------------------------------------------------------------------------------------------------------- ~~SEPTEMBER~~DECEMBER 3031, 2003 DECEMBER 31, 2002 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 0.36 0.38 CAPITAL RATIOS: ----------------------------------------------------------------------------------------------------------------- Stockholders' equity to total assets 10.4708 10.09 Average Stockholders' equity to average assets 10.1417 9.83 Shares outstanding-actual 1,~~151~~144,~~995~~695 1,138,029 Book value per share (3) 11.8177 12.22 Number of full service offices 2 2 ----------------------------------------------------------------------------------------------------------------- (1) Annualized for the three month periods presented. (2) Includes gains on sales. (3) Includes other comprehensive income.

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