8-K 1 pr3rd03.txt PRESS RELEASE 3RD QUARTER 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) October 20, 2003 ------------------------------- 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 October 20, 2003. Item 9. Regulation FD Disclosure (Information furnished in this Item 9 is furnished pursuant to Item 12) On October 20, 2003, the Registrant issued the attached press release regarding third quarter 2003 earnings. 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: October 20, 2003 /S/ Joseph A. Graber ----------------- ------------------------------- Joseph A. Graber President and Chief Executive Officer 3 EXHIBIT 4 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 THIRD QUARTER EARNINGS CHICAGO, IL, OCTOBER 20, 2003, - North Bancshares, Inc., (NASDAQ-NBSI), the holding company of North Federal Savings Bank today announced both basic and diluted earnings per share decreased to $.08 for the quarter ended September 30, 2003 compared with $.21 per share for the quarter ended September 30, 2002. Net income for the quarter ended September 30, 2003 decreased by $149,000 and amounted to $93,000 compared with $242,000 for the quarter ended September 30, 2002. The decrease was primarily attributable to a $253,000 decrease in net interest income. These items were partially offset by a $105,000 decrease in total non-interest expense. Net interest income, before provision for loan losses, decreased by $253,000 to $798,000 for the quarter ended September 30, 2003, compared with $1.1 million for the quarter ended September 30, 2002. The decrease was attributable to a $493,000 reduction in total interest income offset by a $240,000 decrease in total interest expense. The decrease 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 decreased by $106,000 to $96,000 for the quarter ended September 30, 2003 compared with $202,000 for the quarter ended September 30, 2002. The decrease was primarily attributable to a $101,000 decrease in gain on sale of securities available for sale. Non-interest expense decreased by $105,000 to $741,000 for the quarter ended September 30, 2003 compared with $846,000 for the quarter ended September 30, 2002. The decrease was primarily attributable to decreases in compensation and benefits expense, professional fees and other non-interest 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 $9.3 million to $9.0 million at September 30, 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 $3.1 million and amounted to $89.6 million at September 30, 2003 compared with $86.5 million at December 31, 2002. The $3.1 million increase was due primarily to a $6.3 increase in outstanding equity lines of credit partially offset by a $2.2 million decrease in one to four family loans and a $1.0 million decrease in multi-family loans. Equity line of credit loans, that adjust to the prime rate or prime rate plus a margin increased to $18.6 million at September 30, 2003 from $12.3 million at December 31, 2002. The Bank originated $47.0 million in loans during the nine month period ended September 30, 2003 and recorded $42.1 million in repayments and $1.5 million in loan sales compared with $32.4 million in originations, $31.1 million in repayments and $2.1 million in loan sales during the nine month period ended September 30, 2002. At September 30, 2003, the Bank had $9.2 million in loan applications pending approval or closing and $14.0 million in unused lines of credit. The Company did not add to the allowance for loan losses during the quarter ended September 30, 2003 or September 30, 2002, due primarily to a decrease in total loans receivable. The total allowance for loan losses amounted to $326,000 or 0.36% of loans receivable at September 30, 2003 compared with $326,000 and 0.35% of loans receivable at September 30, 2002. Total deposits decreased by $3.9 million and amounted to $86.3 million at September 30, 2003 compared with 1 $90.2 million at December 31, 2002. The decrease was due primarily to a $4.5 million decrease in certificates of deposit primarily attributable to the repayment of a higher cost $2.5 million brokered certificate of Deposit. This decrease was partially offset by a $500,000 increase in checking and money market accounts. The weighted average cost of deposits decreased to 2.30% at September 30, 2003 from 3.06% at September 30, 2002. Borrowed funds decreased by $3.5 million and amounted to $27.5 million at September 30, 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 nine month period. Stockholders' equity was $13.6 million at September 30, 2003 compared with $13.9 million at December 31, 2002. The slight decrease was primarily attributable to a $299,000 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 $222,000 primarily due to the exercise of stock options. In addition, there was a $114,000 decrease in retained earnings due to net income of $229,000 that was offset by $343,000 in dividend payments. Book value per share decreased to $11.81 at September 30, 2003 compared with $12.22 at December 31, 2002. Joseph A. Graber, President and Chief Executive Officer, commented: "We have seen a slowdown in the number of loans being refinanced during the last few months due primarily to the increase in interest rates and as a result we have been able to reduce our liquidity and increase our loans receivable. Our lending has been focused on products that have shorter terms and that adjust to the prime rate." He added, "We still remain cautious about investing long term at such low rates and therefore have maintained excess liquidity which has had a negative impact on our spreads, although our interest rate spread at the end of September has increased to 2.25% from 1.93% at the end of June." 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 60 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-- 2

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(1) Annualized for the three and nine month periods presented. (2) Includes gains on sales. (3) Includes other comprehensive income 5

NORTH BANCSHARES INC 8-K