-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M4Na38vBLKPWVMErq6pyhuViM9T/dSq9RcyBAxDB1CnX7dhRaqdT6WCpnx5zJP0C HuB7k1Vu8eByCvczqAadww== 0000927797-02-000184.txt : 20020814 0000927797-02-000184.hdr.sgml : 20020814 20020814100629 ACCESSION NUMBER: 0000927797-02-000184 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH CENTRAL BANCSHARES INC CENTRAL INDEX KEY: 0001005188 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 421449849 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27672 FILM NUMBER: 02732021 BUSINESS ADDRESS: STREET 1: 825 CENTRAL AVE STREET 2: C/O FIRST FED SAVINGS BANK OF FT DODGE CITY: FORT DODGE STATE: I0 ZIP: 50501 BUSINESS PHONE: 5155767531 MAIL ADDRESS: STREET 1: 825 CENTRAL AVENUE CITY: FORT DODGE STATE: IA ZIP: 50501 10-Q 1 northcentral10q_06-02.txt JUNE 30, 2002 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [Mark One] [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- ---------------- Commission File Number 0-27672 NORTH CENTRAL BANCSHARES, INC. (Exact Name of Registrant as Specified in Its Charter) Iowa 42-1449849 - -------------------------------------------------------------------------------- (State or Other Jurisdiction of (I. R. S. Employer Incorporation or Organization) Identification Number) 825 Central Avenue Fort Dodge, Iowa 50501 ----------------------------------------- (Address of Principal Executive Offices) Registrant's Telephone Number, Including Area Code:(515) 576-7531 None ---- Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 1, 2002 - -------------------------------------------------------------------------------- Common Stock, $.01 par value 1,702,680 NORTH CENTRAL BANCSHARES, INC. INDEX Page Part I. Financial Information Item 1. Consolidated Condensed Financial Statements (Unaudited) 1 to 3 Consolidated Condensed Statements of Financial Condition at June 30, 2002 (Unaudited) and December 31, 2001 1 Consolidated Condensed Statements of Income for the three and six months ended June 30, 2002 and 2001 (Unaudited) 2 Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2002 and 2001 (Unaudited) 3 Notes to Consolidated Condensed Financial Statements 4 & 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 to 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk 12 Part II. Other Information Items 1 through 6 13 & 14 Signatures 15 Exhibits PART I. FINANCIAL INFORMATION ITEM 1. NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
June 30, December 31, ASSETS 2002 2001 ------------- ------------- (Unaudited) Cash and due from banks: Interest-bearing $ 12,797,874 $ 17,650,064 Noninterest-bearing 2,262,540 2,258,838 Securities available-for-sale 25,651,999 31,365,731 Loans receivable, net 343,179,243 307,981,424 Loans held for sale 1,663,089 1,605,710 Accrued interest receivable 2,052,249 1,913,557 Foreclosed real estate 865,418 1,073,873 Premises and equipment, net 7,511,599 6,797,505 Rental real estate 1,640,302 1,681,337 Title plant 925,256 925,256 Goodwill 4,970,800 4,970,800 Deferred taxes 584,336 484,904 Income taxes receivable 175,622 -- Prepaid expenses and other assets 698,964 666,228 ------------- ------------- Total assets $ 404,979,291 $ 379,375,227 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits $ 280,735,830 $ 268,813,731 Borrowed funds 83,593,356 71,412,723 Advances from borrowers for taxes and insurance 1,434,862 1,589,314 Dividends payable 306,482 256,587 Income taxes payable -- 78,711 Accrued expenses and other liabilities 1,109,061 1,311,412 ------------- ------------- Total liabilities 367,179,591 343,462,478 ------------- ------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock ($.01 par value, authorized 3,000,000 shares; issued and outstanding none) -- -- Common stock ($.01 par value, authorized 15,500,000 shares; issued 2002, 1,764,680; 2001, 1,700,280 shares) 17,647 17,003 Additional paid-in capital 18,026,700 16,780,875 Retained earnings, substantially restricted 21,468,513 19,402,706 Accumulated other comprehensive income 197,791 189,991 Less cost of treasury stock, 2002, 62,000 shares; 2001, none (1,514,050) -- Unearned shares, employee stock ownership plan (396,901) (477,826) ------------- ------------- Total stockholders' equity 37,799,700 35,912,749 ------------- ------------- Total liabilities and stockholders' equity $ 404,979,291 $ 379,375,227 ============= =============
See Notes to Consolidated Condensed Financial Statements. -1- NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ----------------------------------------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Interest income: Loans receivable $ 6,407,193 $ 6,344,461 $ 12,499,824 $ 12,717,494 Securities and cash deposits 353,389 577,961 791,415 1,245,481 ------------ ------------ ------------ ------------ 6,760,582 6,922,422 13,291,239 13,962,975 ------------ ------------ ------------ ------------ Interest expense: Deposits 2,370,150 3,086,479 4,803,584 6,219,074 Borrowed funds 1,128,634 1,168,504 2,188,263 2,417,322 ------------ ------------ ------------ ------------ 3,498,784 4,254,983 6,991,847 8,636,396 ------------ ------------ ------------ ------------ Net Interest Income 3,261,798 2,667,439 6,299,392 5,326,579 Provision for loan losses 90,000 60,000 270,000 90,000 ------------ ------------ ------------ ------------ Net interest income after provision for loan losses 3,171,798 2,607,439 6,029,392 5,236,579 ------------ ------------ ------------ ------------ Noninterest income: Fees and service charges 596,273 471,470 1,184,854 880,276 Abstract fees 402,221 378,302 798,831 680,574 Mortgage banking fees 107,014 201,073 215,172 309,836 Loss on sale of securities available for sale, net -- (1,733) (1,365) (933) Other income 280,322 186,078 502,860 404,013 ------------ ------------ ------------ ------------ Total noninterest income 1,385,830 1,235,190 2,700,352 2,273,766 ------------ ------------ ------------ ------------ Noninterest expense: Salaries and employee benefits 1,324,414 1,048,007 2,590,344 2,147,853 Premises and equipment 301,635 289,359 610,452 586,504 Data processing 132,180 117,219 261,112 222,799 SAIF deposit insurance premiums 11,766 12,451 23,952 25,287 Goodwill amortization -- 118,072 -- 236,145 Other expenses 634,979 599,482 1,284,570 1,139,861 ------------ ------------ ------------ ------------ Total noninterest expense 2,404,974 2,184,590 4,770,430 4,358,449 ------------ ------------ ------------ ------------ Income before income taxes 2,152,654 1,658,039 3,959,314 3,151,896 Provision for income taxes 728,806 547,735 1,304,730 1,060,454 ------------ ------------ ------------ ------------ Net Income $ 1,423,848 $ 1,110,304 $ 2,654,584 $ 2,091,442 ============ ============ ============ ============ Basic earnings per common share $ 0.87 $ 0.62 $ 1.62 $ 1.16 ============ ============ ============ ============ Earnings per common share- assuming dilution $ 0.81 $ 0.59 $ 1.52 $ 1.10 ============ ============ ============ ============ Dividends declared per common share $ 0.18 $ 0.15 $ 0.36 $ 0.30 ============ ============ ============ ============ Comprehensive income $ 1,483,291 $ 1,109,404 $ 2,662,384 $ 2,473,751 ============ ============ ============ ============
See Notes to Consolidated Condensed Financial Statements. -2- NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30 ---------------------------- 2002 2001 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,654,584 $ 2,091,442 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 270,000 90,000 Depreciation 353,196 345,437 Amortization and accretion 91,813 309,002 Deferred taxes (103,782) (131,415) Effect of contribution to employee stock ownership plan 204,528 178,947 (Gain) on sale of foreclosed real estate and loans, net (212,789) (295,211) Loss on sale of securities available for sale 1,365 933 (Gain) loss on impairment and disposal of equipment and premises, (889) 5,121 net Proceeds from sales of loans held for sale 16,064,139 21,345,410 Originations of loans held for sale (15,906,346) (22,303,539) Change in assets and liabilities: Accrued interest receivable (138,692) 128,848 Income taxes receivable (175,622) 209,995 Prepaid expenses and other assets (32,736) (120,781) Income taxes payable (78,711) 47,432 Accrued expenses and other liabilities (202,351) (74,848) ------------ ------------ Net cash provided by operating activities 2,787,707 1,826,773 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Net decrease in loans 17,865,181 11,103,149 Purchase of loans (53,214,514) (14,408,497) Proceeds from sales of securities available-for-sale 13,760 220,125 Purchase of securities available-for-sale (273,363) (6,736,938) Proceeds from maturities of securities available-for-sale 5,973,549 16,726,643 Purchase of premises and equipment and rental real estate (1,026,381) (466,809) Proceeds from sale of equipment 1,015 18,376 Other 6,344 -- ------------ ------------ Net cash provided by (used in) investing activities (30,654,409) 6,456,049 ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 11,922,099 10,737,345 Increase (decrease) in advances from borrowers for taxes and (154,452) 130,350 insurance Net change in short-term borrowings 750,000 (5,000,000) Proceeds from other borrowed funds 27,000,000 3,000,000 Payments of other borrowings (15,569,367) (9,566,000) Purchase of treasury stock (1,514,050) (2,131,985) Dividends paid (538,882) (504,121) Issuance of common stock 1,122,866 170,965 Other -- (9,704) ------------ ------------ Net cash provided by (used in) financing activities 23,018,214 (3,173,150) ------------ ------------ Net increase (decrease) in cash (4,848,488) 5,109,672 CASH Beginning 19,908,902 8,849,726 ------------ ------------ Ending $ 15,060,414 $ 13,959,398 ============ ============ SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION Cash payments for: Interest paid to depositors $ 5,017,193 $ 6,294,220 Interest paid on borrowings 2,188,726 2,468,872 Income taxes 1,343,904 934,442
-3- NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES The consolidated condensed financial statements for the three and six-month periods ended June 30, 2002 and 2001 are unaudited. In the opinion of the management of North Central Bancshares, Inc. (the "Company" or the "Registrant") these financial statements reflect all adjustments, consisting only of normal recurring accruals, necessary to present fairly these consolidated financial statements. The results of operations for the interim periods are not necessarily indicative of results, which may be expected for an entire year. Certain information and footnote disclosure normally included in complete financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with the requirements for interim financial statements. The financial statements and notes thereto should be read in conjunction with the Company's 2001 Annual Report on Form 10-K. The consolidated condensed financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 2. EARNINGS PER SHARE The earnings per share amounts were computed using the weighted average number of shares outstanding during the periods presented. In accordance with Statement of Position No. 93-6, Employers' Accounting for Employee Stock Ownership Plans, issued by the American Institute of Certified Public Accountants, shares owned by First Federal Savings Bank of Iowa's Employee Stock Ownership Plan that have not been committed to be released are not considered to be outstanding for the purpose of computing earnings per share. For the three-month period ended June 30, 2002, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,645,954 and 1,755,609, respectively. For the six-month period ended June 30, 2002, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,642,584 and 1,745,147, respectively. For the three-month period ended June 30, 2001, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,777,141 and 1,870,053, respectively. For the six-month period ended June 30, 2001, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,805,929 and 1,895,546, respectively. 3. DIVIDENDS On May 24, 2002, the Company declared a cash dividend on its common stock, payable on July 5, 2002 to stockholders of record as of June 17, 2002, equal to $0.18 per share. 4. GOODWILL On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 141, "Business Combinations, " and No. 142, "Goodwill and Other Intangible Assets" (SFAS 141 and 142). SFAS 141 addresses financial accounting and reporting for business combinations and replaces APB Opinion No. 16, "Business Combinations" (APB 16). SFAS 141 no longer allows the pooling of interests method of accounting for acquisitions, provides new recognition criteria for intangible assets and carries forward without reconsideration the guidance in APB 16 related to the application of the purchase method of accounting. SFAS 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets and replaces APB Opinion No. 17, "Intangible Assets." SFAS 142 addresses how intangible assets should be accounted for upon their acquisition and after they have been initially recognized in the financial statements. The new standards provide specific guidance on measuring goodwill for impairment annually using a two-step process. The first step identifies potential impairment and the second step measures the amount of goodwill impairment loss to be recognized. As of January 1, 2002, the Company has undertaken to identify those intangible assets that remain separable under the provisions of the new standard and those that are to be included in goodwill and concluded that all amounts should be included in goodwill. In the year of adoption, SFAS 142 requires the first step of the goodwill impairment test to be completed within the first six months and the final step to be completed within the twelve months of adoption. The Company has completed the first step of the goodwill impairment test and has determined that there is no impairment of goodwill. -4- Had the provisions of SFAS 141 and 142 been applied in fiscal year 2001, the Company's net income and net income per share would have been as follows:
Three months ended June 30, 2001 -------------------------------------------------------- Net Basic earnings Diluted earnings Income Per Share Per Share ----------- -------------- ---------------- Net Income: As reported $ 1,110,304 $ 0.62 $ 0.59 Add: Goodwill amortization 118,072 0.07 0.07 ----------- ------- ------- Pro forma net income $ 1,228,376 $ 0.69 $ 0.66 =========== ======= ======= Six months ended June 30, 2001 -------------------------------------------------------- Net Basic earnings Diluted earnings Income Per Share Per Share ----------- -------------- ---------------- Net Income: As reported $ 2,091,442 $ 1.16 $ 1.10 Add: Goodwill amortization 236,145 0.13 0.13 ----------- ------- ------- Pro forma net income $ 2,327,587 $ 1.29 $ 1.23 =========== ======= =======
As of December 31, 2001 and June 30, 2002, the Company had intangible assets of $4,970,800, all of which has been determined to be goodwill. There was no goodwill impairment loss or amortization related to goodwill during the six months ended June 30, 2002. -5- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS EXPLANATORY NOTE This Quarterly Report on Form 10-Q contains forward-looking statements consisting of estimates with respect to the financial condition, results of operations and business of the Company that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include changes in general, economic, market, legislative and regulatory conditions, and the development of an interest rate environment that adversely affects the interest rate spread or other income anticipated from the Company's operations and investments. The Company's actual results may differ from the results discussed in the forward-looking statements. The Company disclaims any obligation to publicly announce future events or developments that may affect the forward-looking financial statements contained here within. FINANCIAL CONDITION Total assets increased $25.6 million, or 6.7%, to $405.0 million at June 30, 2002 compared to $379.4 million at December 31, 2001. Interest-bearing cash decreased $4.9 million, or 27.5% from $17.7 million at December 31, 2001 to $12.8 million as of June 30, 2002. Securities available for sale decreased $5.7 million, or 18.2% from $31.4 million at December 31, 2001 to $25.7 million at June 30, 2002, primarily due to $6.0 million of maturities, calls and sales, offset in part due to $273,000 in purchases. Total loans receivable, net, increased by $35.2 million to $343.2 million at June 30, 2002 from $308.0 million at December 31, 2001, due primarily to originations of $27.7 million of first mortgage loans secured primarily by one-to four-family residences, purchases of $53.2 million of first mortgage loans secured primarily by multifamily and commercial real estate and originations of $13.3 million of second mortgage loans secured primarily by one-to-four-family residences. These originations and purchases were offset in part by payments and prepayments of loans of approximately $53.0 million. Total deposits increased $11.9 million, or 4.4%, to $280.7 million at June 30, 2002 from $268.8 million at December 31, 2001, reflecting increases primarily in checking, savings and retail certificates of deposit accounts, offset in part by a decrease in the money market account and public funds certificates of deposit. Other borrowings, primarily Federal Home Loan Bank ("FHLB") advances, increased by $12.2 million to $83.6 million at June 30, 2002 from $71.4 million at December 31, 2001. Total stockholders' equity increased $1.9 million, to $37.8 million at June 30, 2002 from $35.9 million at December 31, 2001. See "Capital." CAPITAL The Company's total stockholders' equity increased by $1.9 million to $37.8 million at June 30, 2002 from $35.9 million at December 31, 2001, primarily due to earnings and stock issued, which were offset in part by stock repurchases and dividends declared. The changes in stockholders' equity were also due to a decrease in the unearned shares from First Federal Savings Bank of Iowa's Employee Stock Ownership Plan (the "ESOP") to $397,000 at June 30, 2002 from $478,000 at December 31, 2001. The decrease in unearned shares resulted from the release of shares within the ESOP to employees of First Federal Savings Bank of Iowa (the "Bank"). -6- The Office of Thrift Supervision (the "OTS") requires that the Bank meet minimum tangible, leverage (core) and risk-based capital requirements. As of June 30, 2002, the Bank exceeded all of its regulatory capital requirements. The Bank's required, actual and excess capital levels as of June 30, 2002 were as follows: Amount Percentage of Assets ------ -------------------- (dollars in thousands) Tangible capital: Capital level $ 29,863 7.50% Less Requirement 5,972 1.50% --------- ------ Excess $ 23,891 6.00% ========= ====== Core capital: Capital level $ 29,863 7.50% Less Requirement 15,925 4.00% --------- ------ Excess $ 13,938 3.50% ========= ====== Risk-based capital: Capital level $ 32,921 12.78% Less Requirement 20,602 8.00% --------- ------ Excess $ 12,319 4.78% ========= ====== LIQUIDITY The Company's primary sources of funds are cash provided by operating activities (including net income), certain financing activities (including increases in deposits and proceeds from borrowings) and certain investing activities (including principal payments on loans and maturities and calls of securities). During the first six months of 2002 and 2001, principal payments and repayments on loans totaled $53.0 million and $43.6 million, respectively. The net increase in deposits during the first six months of 2002 and 2001 totaled $11.9 million and $10.7 million, respectively. The proceeds from borrowed funds during the six months ended June 30, 2002 and 2001 totaled $27.0 million and $3.0 million, respectively. The net change in short-term borrowings during the six months ended June 30, 2002 totaled $750,000. During the first six months of 2002 and 2001, the proceeds from the maturities, calls and sales of securities totaled $6.0 million and $16.9 million, respectively. Cash provided from operating activities during the first six months of 2002 and 2001 totaled $2.8 million and $1.8 million, respectively, of which $2.7 million and $2.1 million, respectively, represented net income of the Company. The Company's primary use of funds is cash used to originate and purchase loans, purchase of securities available for sale, repayment of borrowed funds and other financing activities. During the first six months of 2002 and 2001, the Company's gross purchases and origination of loans totaled $101.2 million and $69.9 million, respectively. The purchase of securities available for sale for the six months ended June 30, 2002 and 2001 totaled $273,000 and $6.7 million, respectively. The repayment of borrowed funds during the first six months of 2002 and 2001 totaled $15.6 million and $9.6 million, respectively. The net change in short-term borrowings during the six months ended June 30, 2001 totaled $5.0 million. For additional information about cash flows from the Company's operating, financing and investing activities, see "Statements of Cash Flows in the Condensed Consolidated Financial Statements." The OTS regulations require the Company to maintain sufficient liquidity to ensure its safe and sound operation. The Company entered into a $2.0 million line of credit agreement on October 1, 2001 with another unaffiliated bank. The Company may use this line of credit to fund stock repurchases in the future and general corporate purposes. As of June 30, 2002, there were no borrowings outstanding on this line of credit. Stockholders' equity totaled $37.8 million at June 30, 2002 compared to $35.9 million at December 31, 2001, reflecting the Company's earnings, stock issued, stock repurchases, the amortization of the unallocated portion of shares held by the ESOP, dividends declared on common stock and the change in the accumulated other comprehensive income. The Company repurchased 62,000 shares of common stock during the six months ended June 30, 2002 at an average price of $24.42. On April 8, 2002, the Company paid a quarterly cash dividend of $0.18 per share on common stock outstanding as of the close of business on March 15, 2002, aggregating $301,000. On May 24, 2002, the Company declared a quarterly cash dividend of $0.18 per share payable on July 5, 2002 to shareholders of record as of the close of business on June 17, 2002, aggregating $306,000. -7- RESULTS OF OPERATIONS (Continued) Interest Income. Interest income decreased by $162,000 to $6.8 million for the three months ended June 30, 2002 compared to $6.9 million for the three months ended June 30, 2001. The decrease in interest income was primarily due to a decrease in the average yield on interest earning assets, offset in part by an increase in the average balance of interest earning assets. The yield on interest earning assets decreased to 7.14% for the three months ended June 30, 2002 from 7.66% for the three months ended June 30, 2001. The decrease in average yields was due primarily to a decrease in the average yield on loans, securities available for sale and interest-bearing cash. The average yield on loans decreased to 7.60% for the three months ended June 30, 2002 from 7.96% for the three months ended June 30, 2001. The average yield on securities available for sale decreased to 4.66% for the three months ended June 30, 2002 from 5.83% for the three months ended June 30, 2001. The average yield on interest bearing cash decreased to 1.40% for the three months ended June 30, 2002 from 4.19% for the three months ended June 30, 2001. The decrease in the average yields on assets was primarily due to decreases in market interest rates. The average balance of interest earning assets increased $17.3 million to $378.8 million for the three months ended June 30, 2002 from $361.5 million for the three months ended June 30, 2001. This increase was primarily due to higher levels of loans and interest bearing cash, offset in part by a decrease in securities available for sale. The increase in the average balance of loans generally reflects originations over the past twelve months of first mortgage loans, second mortgage loans and purchases of first mortgage loans secured primarily by one-to four-family residential, multifamily and commercial real estate loans, offset in part by payments, sales and prepayments of loans. See "Financial Condition." The decrease in securities available for sale reflects maturities, calls and sales, offset in part by purchases. Interest income decreased by $672,000 to $13.3 million for the six months ended June 30, 2002 compared to $14.0 million for the six months ended June 30, 2001. The decrease in interest income was primarily due to a decrease in the average yield on interest earning assets, offset in part by an increase in the average balance of interest earning assets. The yield on interest earning assets decreased to 7.13% for the six months ended June 30, 2002 from 7.67% for the six months ended June 30, 2001. The decrease in average yields was due primarily to a decrease in the average yield on loans, securities available for sale and interest-bearing cash. The average yield on loans decreased to 7.66% for the six months ended June 30, 2002 from 7.99% for the six months ended June 30, 2001. The average yield on securities available for sale decreased to 4.87% for the six months ended June 30, 2002 from 5.63% for the six months ended June 30, 2001. The average yield on interest bearing cash decreased to 1.40% for the six months ended June 30, 2002 from 4.74% for the six months ended June 30, 2001. The decrease in the average yields on assets was primarily due to decreases in market interest rates. The average balance of interest earning assets increased $8.6 million to $373.2 million for the six months ended June 30, 2002 from $364.6 million for the six months ended June 30, 2001. This increase was primarily due to higher levels of loans and interest bearing cash, offset in part by a decrease in securities available for sale. The increase in the average balance of loans generally reflects originations over the past twelve months of first mortgage loans, second mortgage loans and purchases of first mortgage loans secured primarily by one-to four-family residential, multifamily and commercial real estate loans, offset in part by payments, sales and prepayments of loans. See "Financial Condition." The decrease in securities available for sale reflects maturities, calls and sales, offset in part by purchases. Interest Expense. Interest expense decreased by $756,000 to $3.5 million for the three months ended June 30, 2002 compared to $4.3 million for the three months ended June 30, 2001. The decrease in interest expense was primarily due to a decrease in the average cost of interest bearing liabilities, offset in part by an increase in the average balances of interest bearing liabilities. The average cost of interest bearing liabilities decreased to 4.00% for the three months ended June 30, 2002 from 5.04% for the three months ended June 30, 2001. The decrease in the average cost of interest bearing liabilities was due primarily to decreases in all categories of interest bearing liabilities. The average NOW and money market accounts decreased to 0.96% for the three months ended June 30, 2002 from 2.29% for the three months ended June 30, 2001. The average cost of savings accounts decreased to 1.25% for the three months ended June 30, 2002 from 1.72% for the three months ended June 30, 2001. The average cost of certificates of deposit decreased to 4.77% for the three months ended June 30, 2002 from 5.89% for the three months ended June 30, 2001. The average cost of borrowed funds decrease to 5.36% for the three months ended June 30, 2002 from 6.07% for the three months ended June 30, 2001. The decreased in the average cost of funds was primarily due to decreases in market interest rates. The average balance of interest bearing liabilities increased $12.4 million to $350.8 million for the three months ended June 30, 2002 from $338.4 million for the three months ended June 30, 2001. This increase was due primarily to an increase in NOW and money market savings accounts, savings accounts and borrowed funds, offset in part by a decrease in certificates of deposits. -8- RESULTS OF OPERATIONS (Continued) The decrease in the certificates of deposit was due in part to a decrease in the average balances of public funds certificates of deposits, offset in part by an increase in the average balance of retail certificates of deposit. Interest expense decreased by $1.6 million to $7.0 million for the six months ended June 30, 2002 compared to $8.6 million for the six months ended June 30, 2001. The decrease in interest expense was primarily due to a decrease in the average cost of interest bearing liabilities, offset in part by an increase in the average balances of interest bearing liabilities. The average cost of interest bearing liabilities decreased to 4.07% for the six months ended June 30, 2002 from 5.13% for the six months ended June 30, 2001. The decrease in the average cost of interest bearing liabilities was due primarily to decreases in all categories of interest bearing liabilities. The average NOW and money market accounts decreased to 0.99% for the six months ended June 30, 2002 from 2.53% for the six months ended June 30, 2001. The average cost of savings accounts decreased to 1.26% for the six months ended June 30, 2002 from 1.78% for the six months ended June 30, 2001. The average cost of certificates of deposit decreased to 4.89% for the six months ended June 30, 2002 from 5.93% for the six months ended June 30, 2001. The average cost of borrowed funds decreased to 5.49% for the six months ended June 30, 2002 from 6.08% for the six months ended June 30, 2001. The decreased in the average cost of funds was primarily due to decreases in market interest rates. The average balance of interest bearing liabilities increased $6.4 million to $346.0 million for the six months ended June 30, 2002 from $339.6 million for the six months ended June 30, 2001. This increase was due primarily to an increase in NOW and money market savings accounts and savings accounts, offset in part by a decrease in certificates of deposits. The decrease in the certificates of deposit was due in part to a decrease in the average balances of public funds certificates of deposits, offset in part by an increase in the average balance of retail certificates of deposit. Net Interest Income. Net interest income before the provision for loan losses increased by $594,000 to $3.3 million for the three months ended June 30, 2002 from $2.7 million for the three months ended June 30, 2001. The increase is due primarily to an increase in the interest rate spread. The interest rate spread (i.e., the difference in the average yield on assets and average cost of liabilities) increased to 3.14% for the three months ended June 30, 2002 from 2.62% for the three months ended June 30, 2001. Net interest income before the provision for loan losses increased by $973,000 to $6.3 million for the six months ended June 30, 2002 from $5.3 million for the six months ended June 30, 2001. The increase is due primarily to an increase in the interest rate spread. The interest rate spread (i.e., the difference in the average yield on assets and average cost of liabilities) increased to 3.06% for the six months ended June 30, 2002 from 2.54% for the six months ended June 30, 2001. -9- RESULTS OF OPERATIONS (Continued) The following table sets forth certain information relating to the Company's average balance sheets and reflects the average yield on assets and average cost of liabilities for the three and six-month periods ended June 30, 2002 and 2001, respectively
For the Three Months Ended June 30, ---------------------------------------------------------------------------------- 2002 2001 ---------------------------------------------------------------------------------- Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------- -------- ---------- ------- -------- ---------- (Dollars in thousands) Assets: Interest-earning assets: Loans $ 337,506 $ 6,407 7.60% $ 318,889 $ 6,344 7.96% Securities available for sale 25,621 299 4.66 32,132 469 5.83 Interest bearing cash 15,650 55 1.40 10,462 109 4.19 ---------- -------- -------- ---------- -------- ------- Total interest-earning assets 378,777 $ 6,761 7.14% 361,483 $ 6,922 7.66% -------- -------- -------- ------- Noninterest-earning assets 19,846 22,318 ---------- ---------- Total assets $ 398,623 $ 383,801 ========== ========== Liabilities and Equity: Interest-bearing liabilities: NOW and money market savings $ 61,016 $ 146 0.96% $ 58,040 $ 331 2.29% Passbook savings 24,924 78 1.25 21,807 94 1.72 Certificates of deposit 180,447 2,146 4.77 181,343 2,662 5.89 Borrowed funds 84,410 1,129 5.36 77,172 1,168 6.07 ---------- -------- -------- ---------- -------- ------- Total interest-bearing liabilities 350,797 $ 3,499 4.00% 338,362 $ 4,255 5.04% -------- -------- -------- ------- Noninterest-bearing liabilities 10,858 8,759 ---------- ---------- Total liabilities 361,355 347,121 Equity 36,968 36,680 ---------- ---------- Total liabilities and equity $ 398,623 $ 383,801 ========== ========== Net interest income $ 3,262 $ 2,667 ======== ======== Net interest rate spread 3.14% 2.62% ======== ======= Net interest margin 3.44% 2.95% ======== ======= Ratio of average interest-earning assets to average interest-bearing liabilities 107.98% 106.83% ======== =======
For the Six Months Ended June 30, ---------------------------------------------------------------------------------- 2002 2001 ---------------------------------------------------------------------------------- Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------- -------- ---------- -------- -------- ---------- (Dollars in thousands) AssetsAssets: Interest-earning assets: Loans $ 327,178 $ 12,500 7.66% $ 318,768 $ 12,718 7.99% Securities available for sale 27,095 660 4.87 35,932 1,012 5.63 Interest bearing cash 18,950 131 1.40 9,930 233 4.74 ---------- --------- -------- ---------- --------- -------- Total interest-earning assets 373,223 $ 13,291 7.13% 364,630 $ 13,963 7.67% --------- -------- --------- -------- Noninterest-earning assets 19,488 20,635 ---------- ---------- Total assets $ 392,711 $ 385,265 ========== ========== Liabilities and Equity Interest-bearing liabilities: NOW and money market savings $ 62,151 $ 306 0.99% $ 57,151 $ 718 2.53% Passbook savings 24,246 151 1.26 21,628 191 1.78 Certificates of deposit 179,172 4,347 4.89 180,571 5,310 5.93 Borrowed funds 80,443 2,188 5.49 80,216 2,417 6.08 ---------- --------- -------- ---------- --------- -------- Total interest-bearing liabilities 346,012 $ 6,992 4.07% 339,566 $ 8,636 5.13% --------- --------- --------- -------- Noninterest-bearing liabilities 10,056 8,938 ---------- ---------- Total liabilities 356,068 348,504 Equity 36,643 36,761 ---------- ---------- Total liabilities and equity $ 392,711 $ 385,265 ========== ========== Net interest income $ 6,299 $ 5,327 ========= ========= Net interest rate spread 3.06% 2.54% ======== ======== Net interest margin 3.38% 2.92% ======== ======== Ratio of average interest-earning assets to average interest-bearing liabilities 107.86% 107.38% ======== ========
-10- RESULTS OF OPERATIONS (Continued) Provision for Loan Losses. The Company's provision for loan losses was $90,000 and $60,000 for the three months ended June 30, 2002 and 2001, respectively. The Company's provision for loan losses was $270,000 and $90,000 for the six months ended June 30, 2002 and 2001, respectively. The increase in the provision for loan loss is primarily due to the increase in the loan portfolio, specifically the commercial real estate loan portfolio, nonperforming loans and general economic conditions. The Company establishes provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level, which is deemed to be appropriate, based upon an assessment of a number of factors. These factors include prior loss experience, industry standards, past due loans, economic conditions, the volume and type of loans in the Bank's portfolio, which includes a significant amount of multi-family and commercial real estate loans, substantially all of which are purchased and are collateralized by properties located outside of the Bank's market area, and other factors related to the collectibility of the Bank's loan portfolio. The net charge offs were $35,000 for the six months ended June 30, 2002 as compared to net charge offs of $33,000 for the six months ended June 30, 2001. The resulting allowance for loan losses was $3.1 million, $2.9 million and $2.9 million at June 30, 2002, December 31, 2001 and June 30, 2001, respectively. The allowance for loan losses as a percentage of total loans receivable was 0.90%, 0.92% and 0.89% at June 30, 2002, December 31, 2001 and June 30, 2001, respectively. The level of nonperforming loans was $795,000 at June 30, 2002, $277,000 at December 31, 2001 and $1.5 million at June 30, 2001. The level of nonperforming assets was $1.7 million, $1.4 million and $1.7 million at June 30, 2002, December 31, 2001 and June 30, 2001, respectively. The allowance for loan losses is management's best estimates of probable losses inherent in the loan portfolio as of the balance sheet date. While management estimates loan losses using the best available information, such as independent appraisals for significant collateral properties, no assurance can be made that future adjustments to the allowance will not be necessary based on changes in economic and real estate market conditions, further information obtained regarding known problem loans, identification of additional problem loans, and other factors, both within and outside of management's control. Noninterest Income. Total noninterest income increased by $151,000 to $1.4 million for the three months ended June 30, 2002 from $1.2 million for the three months ended June 30, 2001. The increase is due to increases in fees and services charges, abstract fees and other income, offset in part by a decrease in mortgage banking income. Fees and services charges increased $125,000, primarily due to increases in loan prepayment fees and overdraft fees. Abstract fees increased $24,000, primarily due to increased sales volume. Sales volume increased in part due to a general increase in real estate activity. Other income increased $94,000, primarily due to increases in revenues from the sale of annuities and mutual funds. Mortgage banking income decreased $94,000 due to a decrease in loan originations. Noninterest income for the three months ended June 30, 2001 reflects losses on the sales of securities available for sale of $1,700, while the three months ended June 30, 2002 does not include any gains or losses on the sale of securities available for sale. Total noninterest income increased by $427,000 to $2.7 million for the six months ended June 30, 2002 from $2.3 million for the six months ended June 30, 2001. The increase is due to increases in fees and services charges, abstract fees and other income, offset in part by a decrease in mortgage banking income. Fees and services charges increased $305,000, primarily due to increases in loan prepayment fees and overdraft fees. Abstract fees increased $118,000, primarily due to increased sales volume. Sales volume increased in part due to a general increase in real estate activity. Other income increased $99,000, primarily due to increases in revenues from the sale of annuities and mutual funds, offset in part by decreases in revenues from the sale of insurance. Mortgage banking income decreased $95,000 due to a decrease in loan originations. Noninterest income for the six months ended June 30, 2002 reflects losses on the sales of securities available for sale of $1,400, while the six months ended June 30, 2001 reflects losses on the sale of securities available for sale of $900. Noninterest Expense. Total noninterest expense increased by $220,000 to $2.4 million for the three months ended June 30, 2002 from $2.2 million for the three months ended June 30, 2001. The increase is due primarily to increases in salaries and employee benefits, data processing and other expenses, offset in part by a decrease in goodwill amortization. The increase in salaries and employee benefits was due in part to normal salary increases, increases in health insurance costs and other employee benefit costs, increases in salaries related to the sale of annuities and mutual funds and the opening of a new office in Ankeny, Iowa. The increase in data processing was primarily due to normal data processing costs increases and an increase in consulting costs. The increase in other expenses was primarily due to an increase in marketing expenses, professional expenses and the opening of a new office in Ankeny, Iowa. The decrease in goodwill expense was due to no amortization of goodwill expense for the three months ended June 30, 2002, -11- RESULTS OF OPERATIONS (Continued) due to the Company's adoption of SFAS No. 142, Goodwill and Other Intangible Assets. The Company expects that this trend in the decrease of $118,000 to goodwill expense will continue. The Company's efficiency ratio for the three months ended June 30, 2002 and 2002 were 51.75% and 55.98%, respectively. The Company's ratio of noninterest expense to average assets for the three months ended June 30, 2002 and 2001 were 2.41% and 2.28%, respectively. Total noninterest expense increased by $412,000 to $4.8 million for the six months ended June 30, 2002 from $4.4 million for the six months ended June 30, 2001. The increase is due primarily to increases in salaries and employee benefits, data processing and other expenses, offset in part by a decrease in goodwill amortization. The increase in salaries and employee benefits was due in part to normal salary increases, increases in health insurance costs and other employee benefit costs, increases in salaries related to the sale of annuities and mutual funds and the opening of a new office in Ankeny, Iowa. The increase in data processing was primarily due to normal data processing costs increases and an increase in consulting costs. The increase in other expenses was primarily due to an increase in marketing expenses and the opening of a new office in Ankeny, Iowa. The decrease in goodwill expense was due to no amortization of goodwill expense for the three months ended June 30, 2002 due to the Company's adoption of SFAS No. 142, Goodwill and Other Intangible Assets. The Company expects that this trend in the decrease of $236,000 to goodwill expense will continue. The Company's efficiency ratio for the six months ended June 30, 2002 and 2001 were 53.01% and 57.35%, respectively. The Company's ratio of noninterest expense to average assets for the six months ended June 30, 2002 and 2001 were 2.43% and 2.26%, respectively. Income Taxes. Income taxes increased by $181,000 to $729,000 for the three months ended June 30, 2002 as compared to $548,000 for the three months ended June 30, 2001, primarily due to an increase in net income before income taxes, partially offset by a decrease in nondeductible amortization as a result of the Company's adoption of SFAS 142 and a reduction in nontaxable interest income. Income taxes increased by $244,000 to $1.3 million for the six months ended June 30, 2002 as compared to $1.1 million for the six months ended June 30, 2001, primarily due to an increase in net income before income taxes, partially offset by a decrease in nondeductible amortization as a result of the Company's adoption of SFAS 142 and a reduction in nontaxable interest income. Net Income. Net income increased by $314,000 to $1.4 million for the three months ended June 30, 2002, as compared to $1.1 million for the same period in 2001. Net income increased by $563,000 to $2.7 million for the six months ended June 30, 2002, as compared to $2.1 million for the same period in 2001. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In management's opinion, there has not been a material change in market risk from December 31, 2001 as reported in Item 7A of the Annual Report on Form 10-K. -12- PART II. OTHER INFORMATION Item 1. Legal Proceedings Not applicable Item 2. Changes in Securities and Use of Proceeds Not applicable Item 3. Defaults Upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Security Holders The Company held its 2002 Annual Meeting of Stockholders on April 25, 2002. All proposals submitted to stockholders at the meeting were approved. At the meeting, the stockholders of the Company considered and voted upon the following matters: 1. The election of the following individuals as directors for a three-year term: KaRene Egemo Mark M. Thompson The results of the election of directors are as follows: Votes ----- In favor Withheld -------- -------- KaRene Egemo 1,598,179 13,340 Mark M. Thompson 1,598,891 12,628 There were no broker non-votes or abstentions on this proposal. The following directors' terms of office continued after the meeting: David M. Bradley Melvin R. Schroeder Robert H. Singer, Jr. Craig R. Barnes 2. The ratification of the engagement of McGladrey & Pullen LLP, as the Company's independent auditors for the 2002 fiscal year, was approved by a vote of 1,596,488 in favor, 7,163 votes against and 7,868 votes abstaining. There were no broker non-votes on this proposal. Item 5. Other Information The Company's Chief Executive Officer and Treasurer have furnished statements relating to its Form 10-Q for the quarter ended June 30, 2002 pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002. The statements are attached hereto as Exhibit 99.3. -13- Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 99.1 Press Release, dated May 24, 2002 (regarding the declaration of a dividend). Exhibit 99.2 Press Release, dated July 24, 2002 (regarding 2002 2nd Quarter earnings) Exhibit 99.3 Certification of Chief Executive Officer and Treasurer. (b) Reports on Form 8-K None -14- 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 thereunto duly authorized. NORTH CENTRAL BANCSHARES, INC. DATE: August 14, 2002 BY: /s/ David M. Bradley ---------------------------------- David M. Bradley, Chairman, President and Chief Executive Officer DATE: August 14, 2002 BY: /s/ John L. Pierschbacher ---------------------------------- John L. Pierschbacher Principal Financial Officer -15- EX-99 4 northcentral10qex991_06-02.txt EXHIBIT 99.1 PRESS RELEASE MAY 24, 2002 Exhibit 99.1 Press Release PRESS RELEASE May 24, 2002 For further information contact: David M. Bradley Chairman, President & Chief Executive Officer North Central Bancshares, Inc. 825 Central Avenue Fort Dodge, Iowa 50501 515-576-7531 NORTH CENTRAL BANCSHARES, INC. DECLARES DIVIDEND David M. Bradley, Chairman, President and Chief Executive Officer of North Central Bancshares, Inc. (the "Company") announced today that the Company declared a regular quarterly cash dividend of $0.18 per share on the Company's common stock for the fiscal quarter ended June 30, 2002. The dividend will be payable to all stockholders of record as of June 17, 2002 and will be paid on July 5, 2002. North Central Bancshares, Inc. serves north central and southeastern Iowa at 9 full service locations in Fort Dodge, Nevada, Ames, Burlington, Mount Pleasant, Perry and Ankeny, Iowa through its wholly-owned subsidiary, First Federal Savings Bank of Iowa, headquartered in Fort Dodge, Iowa. The Bank's deposits are insured by the Federal Deposit Insurance Corporation. The Company's stock is traded on The Nasdaq National Market under the symbol "FFFD". EX-99 5 northcentral10qex992_06-02.txt EXHIBIT 99.2 PRESS RELEASE JULY 25, 2002 Exhibit 99.2 Press Release PRESS RELEASE July 25, 2002 For further information contact: David M. Bradley Chairman, President and Chief Executive Officer North Central Bancshares, Inc. 825 Central Avenue PO Box 1237 Fort Dodge, Iowa 50501 515-576-7531 NORTH CENTRAL BANCSHARES, INC. ANNOUNCES RECORD EARNINGS FOR SECOND QUARTER OF 2002 Fort Dodge, Iowa -- North Central Bancshares, Inc. (the "Company") (Nasdaq: FFFD), the holding company for First Federal Savings Bank of Iowa (the "Bank"), announced today that the Company earned a record $0.81 diluted earnings per share for the quarter ended June 30, 2002, compared to diluted earnings per share of $0.59 for the quarter ended June 30, 2001, an increase in diluted earnings per share of 37.3%. In dollars, the Company's net income was a record $1.4 million for the quarter ended June 30, 2002, as compared to $1.1 million for the quarter ended June 30, 2001, an increase of 28.2%. The Company's net income was $2.7 million, or diluted earnings per share of $1.52, for the six months ended June 30, 2002, compared to $2.1 million, or diluted earnings per share of $1.10, for the six months ended June 30, 2001. Total assets at June 30, 2002 were $405.0 million as compared to $379.4 million at December 31, 2001. The increase in assets resulted primarily from an increase in loans, offset by a decrease in securities available-for-sale and interest-bearing cash. Loans increased by $35.2 million, or 11.4%, to $343.2 million at June 30, 2002 from $308.0 million at December 31, 2001. The increase in loans was funded in part by increases in deposits and borrowings and decreases in securities available-for-sale and interest-bearing cash. At June 30, 2002, net loans consisted of $153.5 million of one-to-four family loans, $78.6 million of multifamily real estate loans, $58.7 million of commercial real estate loans and $52.4 million of consumer loans. The increase in loans was primarily due to the purchases of $53.5 million of multifamily and commercial real estate loans. Securities available-for-sale decreased $5.7 million, or 18.2%, from $31.4 million at December 31, 2001 to $25.7 million at June 30, 2002. The decrease in securities available-for-sale was primarily due to calls and maturities. Interest-bearing cash decreased $4.9 million, or 27.5%, from $17.7 million at December 31, 2001 to $12.8 million at June 30, 2002. Deposits increased $11.9 million, or 4.4%, to $280.7 million at June 30, 2002 from $268.8 million at December 31, 2001. Other borrowed funds increased $12.2 million, or 17.1%, to $83.6 million at June 30, 2002 from $71.4 million at December 31, 2001. The increase in the deposits and borrowed funds were used in part to fund asset growth. Nonperforming assets were 0.41% of total assets as of June 30, 2002 compared to 0.36% of total assets as of December 31, 2001. The allowance for loan losses was $3.1 million, or 0.90% of total loans, at June 30, 2002, compared to $2.9 million, or 0.92% of total loans, at December 31, 2001. The net interest spread of 3.14% for the quarter ended June 30, 2002 represented an increase from the net interest spread of 2.62% for the quarter ended June 30, 2001. The net interest margin of 3.44% for the quarter ended June 30, 2002 represented an increase from the net interest margin of 2.95% for the quarter ended June 30, 2001. Net interest income for the quarter ended June 30, 2002 was $3.3 million, compared to net interest income of $2.7 million for the quarter ended June 30, 2001. -MORE- The Company's provision for loan losses was $90,000 and $60,000 for the quarters ended June 30, 2002 and 2001, respectively. The increase in the provision for loan losses was due primarily to increases in the loan portfolio and nonperforming assets. The Company establishes provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level which is deemed to be appropriate based upon an assessment of prior conditions, the volume and type of loans in the Bank's portfolio, and other factors related to the collectibility of the Bank's loan portfolio. Stockholders' equity was $37.8 million at June 30, 2002, compared to $35.9 million at December 31, 2001. Stockholders' equity increased by $1.9 million primarily due to earnings and the exercise of stock options, offset in part by stock repurchases and declared dividends. Book value, or stockholders' equity per share, at June 30, 2002 was $22.20 compared to $21.12 at December 31, 2001. The ratio of stockholders' equity to total assets was 9.3% at June 30, 2002, as compared to 9.5% at December 31, 2001. All stockholders of record on June 17, 2002, received a quarterly cash dividend of $0.18 per share on July 5, 2002. On February 21, 2002, the Company commenced a new stock repurchase program for 100,000 shares, of which 48,700 shares remain to be repurchased. The Company has 1,702,680 shares of common stock currently outstanding. During the six months ended June 30, 2002, the Company repurchased a total of 62,000 shares or approximately 3.6% of its outstanding shares of common stock at prevailing market prices averaging $24.42 per share. Since its formation in 1996, the Company has invested a total of $41.5 million in the repurchase of 2,425,767 shares of its outstanding stock. The Bank received approval in April, 2002 from the Iowa Finance Authority to construct a 23-unit low-income housing tax credit apartment building for the elderly in Fort Dodge, Iowa. Construction on this project has begun and we anticipate that the project will be completed in the first quarter of 2003. Total cost of the project is expected to be $1.6 million. North Central Bancshares, Inc. serves north central and southeastern Iowa at nine full service locations in Fort Dodge, Nevada, Ames, Perry, Ankeny, Burlington and Mount Pleasant, Iowa through its wholly owned subsidiary, First Federal Savings Bank of Iowa, headquartered in Fort Dodge, Iowa. Construction has begun on a new 5,000 square foot facility in Ankeny, Iowa. The Bank's Ankeny office will relocate to this new office when completed, sometime during the first quarter of 2003. The Bank's deposits are insured by the Federal Deposit Insurance Corporation under the full extent permitted by law. The Company's stock is traded on The Nasdaq National Market under the symbol "FFFD". Statements contained in this news release, which are not historical facts, contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risk and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time. The Company or the Bank does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company or the Bank. For more information contact: David M. Bradley, President and Chief Executive Officer, 515-576-7531 FINANCIAL HIGHLIGHTS OF NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Financial Condition
(Unaudited) (Dollars in Thousands, except per share and share data) June 30, 2002 December 31, 2001 --------------------------------------- Assets Cash and cash equivalents $ 15,060 $ 19,909 Securities available for sale 25,652 31,366 Loans (net of allowance of loan loss of $3,118 and $2,883, respectively) 343,179 307,981 Goodwill 4,971 4,971 Other assets 16,117 15,148 ---------- ---------- Total Assets $ 404,979 $ 379,375 ========== ========== Liabilities Deposits $ 280,736 $ 268,814 Other borrowed funds 83,593 71,413 Other liabilities 2,850 3,235 ---------- ---------- Total Liabilities 367,179 343,462 Stockholders' Equity 37,800 35,913 ---------- ---------- Total Liabilities and Stockholders' Equity $ 404,979 $ 379,375 ========== ========== Stockholders' equity to total assets 9.33% 9.47% ========== ========== Book value per share $ 22.20 $ 21.12 ========== ========== Total shares outstanding 1,702,680 1,700,280 ========== ========== Condensed Consolidated Statements of Income (Unaudited) (Dollars in Thousands, except per share data)
For the Three Months For the Six Months Ended June 30, Ended June 30, 2002 2001 2002 2001 ---------------------------------------------------------------------- Interest income $ 6,760 $ 6,922 $ 13,291 $ 13,963 Interest expense 3,498 4,255 6,992 8,636 --------- -------- --------- --------- Net interest income 3,262 2,667 6,299 5,327 Provision for loan loss 90 60 270 90 --------- -------- --------- --------- Net interest income after provision for loan loss 3,172 2,607 6,029 5,237 Noninterest income 1,386 1,235 2,701 2,274 Noninterest expense 2,405 2,184 4,770 4,359 --------- -------- --------- --------- Income before income taxes 2,153 1,658 3,960 3,152 Income taxes 729 548 1,305 1,061 --------- -------- --------- --------- Net income $ 1,424 $ 1,110 $ 2,655 $ 2,091 ========= ======== ========= ========= Basic earnings per share $ 0.87 $ 0.62 $ 1.62 $ 1.16 ======== ========= ========= ========= Diluted earnings per share $ 0.81 $ 0.59 $ 1.52 $ 1.10 ======== ========= ========= =========
Selected Financial Ratios
For the Three Months For the Six Months Ended June 30, Ended June 30, 2002 2001 2002 2001 ------------------------------------------------------------------ Performance ratios Net interest spread 3.14% 2.62% 3.06% 2.55% Net interest margin 3.44% 2.95% 3.38% 2.92% Return on average assets 1.42% 1.16% 1.35% 1.09% Return on average equity 15.41% 12.11% 14.49% 11.38% Efficiency ratio (noninterest expense divided by the sum of net interest income before provision for loan losses plus noninterest income) 51.75% 55.98% 53.01% 57.35%
EX-99 6 northcentral10qex993_06-02.txt EXHIBIT 99.3 CERTIFICATION OF CEO AND CFO Exhibit 99.3 Certification of Chief Executive Officer and Treasurer STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350 The undersigned, David M. Bradley, is the President and Chief Executive Officer of North Central Bancshares, Inc. (the "Company"). This statement is being furnished in connection with the filing by the Company of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (the "Report"). By execution of this statement, I certify that: A) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and B) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report. This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended. August 14, 2002 /s/ David M. Bradley - --------------- -------------------- Dated David M. Bradley STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350 The undersigned, John L. Pierschbacher, the Treasurer of North Central Bancshares, Inc. (the "Company"). This statement is being furnished in connection with the filing by the Company of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (the "Report"). By execution of this statement, I certify that: A) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and B) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report. This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended. August 14, 2002 /s/ John L. Pierschbacher - --------------- ------------------------- Dated John L. Pierschbacher -----END PRIVACY-ENHANCED MESSAGE-----