-----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, WLtCfGFF6hHdDWssnxV/6d1tIrt8OEumifCBHrxjMgW1O+Fw+WPFgpNL71q7BtGs +WCZK55ww4iG4/65bzFKxQ== 0000927797-02-000238.txt : 20021114 0000927797-02-000238.hdr.sgml : 20021114 20021114110227 ACCESSION NUMBER: 0000927797-02-000238 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021114 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: 02822559 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_09-02.txt 2002 THIRD QUARTER 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 September 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 October 24, 2002 - -------------------------------------------------------------------------------- Common Stock, $.01 par value 1,659,880 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 September 30, 2002 (Unaudited) and December 31, 2001 1 Consolidated Condensed Statements of Income for the three and nine months ended September 30, 2002 and 2001 (Unaudited) 2 Consolidated Condensed Statements of Cash Flows for the nine months ended September 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 Item 4. Controls and Procedures 12 Part II. Other Information Items 1 through 6 13 Signatures 14 Section 302 Certifications 15 & 16 Exhibits PART I. FINANCIAL INFORMATION ITEM 1. NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
ASSETS September 30, December 31, 2002 2001 ------------- ------------ (Unaudited) Cash and due from banks: Interest-bearing $ 19,254,017 $ 17,650,064 Noninterest-bearing 2,282,699 2,258,838 Securities available-for-sale 23,828,816 31,365,731 Loans receivable, net 336,889,080 307,981,424 Loans held for sale 3,155,962 1,605,710 Accrued interest receivable 1,991,996 1,913,557 Foreclosed real estate 987,800 1,073,873 Premises and equipment, net 7,788,631 6,797,505 Rental real estate 1,812,959 1,681,337 Title plant 925,256 925,256 Goodwill 4,970,800 4,970,800 Deferred taxes 518,372 484,904 Prepaid expenses and other assets 721,860 666,228 ------------- ------------- Total assets $ 405,128,248 $ 379,375,227 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits $ 279,819,304 $ 268,813,731 Borrowed funds 84,560,115 71,412,723 Advances from borrowers for taxes and insurance 775,577 1,589,314 Dividends payable 300,992 256,587 Income taxes payable 280,296 78,711 Accrued expenses and other liabilities 1,190,667 1,311,412 ------------- ------------- Total liabilities 366,926,951 343,462,478 ------------- ------------- 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, 1,770,580; 2001, 1,700,280 shares) 17,706 17,003 Additional paid-in capital 18,209,455 16,780,875 Retained earnings, substantially restricted 22,884,383 19,402,706 Accumulated other comprehensive income 349,005 189,991 Less cost of treasury stock, 2002, 110,700 shares; 2001, none (2,902,048) -- Unearned shares, employee stock ownership plan (357,204) (477,826) ------------- ------------- Total stockholders' equity 38,201,297 35,912,749 ------------- ------------- Total liabilities and stockholders' equity $ 405,128,248 $ 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 Nine Months Ended September 30, September 30, ---------------------------------------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Interest income: Loans receivable $ 6,619,709 $ 6,389,131 $ 19,119,533 $ 19,106,625 Securities and cash deposits 317,198 505,180 1,108,613 1,750,661 ------------ ------------ ------------ ------------ 6,936,907 6,894,311 20,228,146 20,857,286 ------------ ------------ ------------ ------------ Interest expense: Deposits 2,394,364 2,983,834 7,197,948 9,202,908 Borrowed funds 1,138,206 1,121,880 3,326,469 3,539,202 ------------ ------------ ------------ ------------ 3,532,570 4,105,714 10,524,417 12,742,110 ------------ ------------ ------------ ------------ Net Interest Income 3,404,337 2,788,597 9,703,729 8,115,176 Provision for loan losses 56,000 60,000 326,000 150,000 ------------ ------------ ------------ ------------ Net interest income after provision for loan losses 3,348,337 2,728,597 9,377,729 7,965,176 ------------ ------------ ------------ ------------ Noninterest income: Fees and service charges 661,825 502,758 1,846,679 1,383,034 Abstract fees 435,998 387,851 1,234,829 1,068,425 Mortgage banking fees 167,323 191,051 382,495 500,887 Gain (loss) on sale of securities available for sale, net 842 -- (523) (933) Other income 242,932 186,303 745,792 590,316 ------------ ------------ ------------ ------------ Total noninterest income 1,508,920 1,267,963 4,209,272 3,541,729 ------------ ------------ ------------ ------------ Noninterest expense: Salaries and employee benefits 1,260,754 1,126,739 3,851,098 3,274,592 Premises and equipment 261,179 290,065 871,631 876,569 Data processing 130,896 116,581 392,008 339,380 SAIF deposit insurance premiums 11,623 12,577 35,575 37,864 Goodwill amortization -- 118,072 -- 354,217 Other expenses 616,851 570,522 1,901,421 1,710,383 ------------ ------------ ------------ ------------ Total noninterest expense 2,281,303 2,234,556 7,051,733 6,593,005 ------------ ------------ ------------ ------------ Income before income taxes 2,575,954 1,762,004 6,535,268 4,913,900 Provision for income taxes 867,956 608,134 2,172,686 1,668,588 ------------ ------------ ------------ ------------ Net Income $ 1,707,998 $ 1,153,870 $ 4,362,582 $ 3,245,312 ============ ============ ============ ============ Basic earnings per common share $ 1.04 $ 0.66 $ 2.65 $ 1.81 ============ ============ ============ ============ Earnings per common share- assuming dilution $ 0.98 $ 0.62 $ 2.50 $ 1.72 ============ ============ ============ ============ Dividends declared per common share $ 0.18 $ 0.15 $ 0.54 $ 0.45 ============ ============ ============ ============ Comprehensive income $ 1,859,212 $ 1,289,667 $ 4,521,596 $ 3,763,418 ============ ============ ============ ============
See Notes to Consolidated Condensed Financial Statements. 2 NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, -------------------------------- 2002 2001 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 4,362,582 $ 3,245,312 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 326,000 150,000 Depreciation 531,622 523,324 Amortization and accretion 169,452 498,706 Deferred taxes (127,021) (157,470) Effect of contribution to employee stock ownership plan 318,224 276,676 (Gain) on sale of foreclosed real estate and loans, net (379,688) (498,464) Loss on sale of securities available for sale 523 933 Loss on disposal of equipment and premises, net 5,923 5,121 Proceeds from sales of loans held for sale 29,647,050 32,545,314 Originations of loans held for sale (30,814,807) (32,656,943) Change in assets and liabilities: Accrued interest receivable (78,439) 92,155 Income taxes receivable -- 206,024 Prepaid expenses and other assets (89,232) (120,770) Income taxes payable 201,585 -- Accrued expenses and other liabilities (120,745) (79,145) ------------ ------------ Net cash provided by operating activities 3,953,029 4,030,773 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Net decrease in loans 34,306,299 18,757,858 Purchase of loans (63,607,175) (18,591,648) Proceeds from sales of securities available-for-sale 750,227 220,125 Purchase of securities available-for-sale (322,763) (7,293,386) Proceeds from maturities of securities available-for-sale 7,341,398 17,273,623 Purchase of premises and equipment and rental real estate (1,627,708) (635,966) Proceeds from sale of equipment 1,015 18,376 Other 1,131 (216,668) ------------ ------------ Net cash provided by (used in) investing activities (23,157,576) 9,532,314 ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 11,005,573 9,020,310 (Decrease) in advances from borrowers for taxes and insurance (813,737) (513,457) Net change in short-term borrowings (250,000) (3,000,000) Proceeds from other borrowed funds 34,000,000 3,000,000 Payments on other borrowings (20,602,608) (17,097,543) Purchase of treasury stock (2,902,048) (3,635,540) Dividends paid (836,500) (765,136) Issuance of common stock 1,231,681 475,484 Other -- (9,704) ------------ ------------ Net cash provided by (used in) financing activities 20,832,361 (12,525,586) ------------ ------------ Net increase in cash 1,627,814 1,037,501 CASH Beginning 19,908,902 8,849,726 ------------ ------------ Ending $ 21,536,716 $ 9,887,227 ============ ============ SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION Cash payments for: Interest paid to depositors $ 7,462,117 $ 9,289,479 Interest paid on borrowings 3,326,937 3,590,140 Income taxes 1,744,053 1,527,753
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 nine-month periods ended September 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 September 30, 2002, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,648,583 and 1,747,428, respectively. For the nine-month period ended September 30, 2002, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,644,583 and 1,745,906, respectively. For the three-month period ended September 30, 2001, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,755,147 and 1,857,930, respectively. For the nine-month period ended September 30, 2001, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,788,812 and 1,882,818, respectively. 3. DIVIDENDS On August 23, 2002, the Company declared a cash dividend on its common stock, payable on October 7, 2002 to stockholders of record as of September 16, 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 September 30, 2001 ------------------------------------------------ Net Basic earnings Diluted earnings Income Per Share Per Share ----------- -------------- ---------------- Net Income: As reported $ 1,153,870 $ 0.66 $ 0.62 Add: Goodwill amortization 118,072 0.06 0.06 ----------- -------- -------- Pro forma net income $ 1,271,942 $ 0.72 $ 0.68 =========== ======== ======== Nine months ended September 30, 2001 ------------------------------------------------- Net Basic earnings Diluted earnings Income Per Share Per Share ----------- -------------- ---------------- Net Income: As reported $ 3,245,312 $ 1.81 $ 1.72 Add: Goodwill amortization 354,217 0.20 0.19 ----------- -------- -------- Pro forma net income $ 3,599,529 $ 2.01 $ 1.91 =========== ======== ======= As of December 31, 2001 and September 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 nine months ended September 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 $25.8 million, or 6.8%, to $405.1 million at September 30, 2002 compared to $379.4 million at December 31, 2001. Interest-bearing cash increased $1.6 million, or 9.1%, to $19.3 million at September 30, 2002 from $17.7 million as of December 31, 2001. Securities available for sale decreased $7.5 million, or 24.0% from $31.4 million at December 31, 2001 to $23.8 million at September 30, 2002, primarily due to $8.1 million of maturities, calls and sales, offset in part due to $323,000 in purchases. Total loans receivable, net, increased by $28.9 million to $336.9 million at September 30, 2002 from $308.0 million at December 31, 2001, due primarily to originations of $49.9 million of first mortgage loans secured primarily by one-to four-family residences, purchases of $63.6 million of first mortgage loans secured primarily by multifamily and commercial real estate and originations of $22.2 million of second mortgage loans secured primarily by one-to-four-family residences. These originations and purchases were offset in part by payments, prepayments and sales proceeds of loans of approximately $116.3 million. Total deposits increased $11.0 million, or 4.1%, to $279.8 million at September 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 $13.1 million to $84.6 million at September 30, 2002 from $71.4 million at December 31, 2001, as management elected to increase borrowings to fund loan originations. Total stockholders' equity increased $2.3 million, to $38.2 million at September 30, 2002 from $35.9 million at December 31, 2001. See "Capital." CAPITAL The Company's total stockholders' equity increased by $2.3 million to $38.2 million at September 30, 2002 from $35.9 million at December 31, 2001, primarily due to earnings and stock issued in connection with stock options exercised, 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 $357,000 at September 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 September 30, 2002, the Bank exceeded all of its regulatory capital requirements. The Bank's required, actual and excess capital levels as of September 30, 2002 were as follows: Amount Percentage of Assets --------- -------------------- (dollars in thousands) Tangible capital: Capital level $ 30,548 7.66% Less Requirement 5,979 1.50% --------- ---- Excess $ 24,569 6.16% ========= ==== Core capital: Capital level $ 30,548 7.66% Less Requirement 15,944 4.00% --------- ---- Excess $ 14,604 3.66% ========= ==== Risk-based capital: Capital level $ 33,614 13.08% Less Requirement 20,556 8.00% --------- ---- Excess $ 13,058 5.08% ========= ==== 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 nine months of 2002 and 2001, principal payments, repayments and proceeds from sale of loans totaled $116.3 million and $104.6 million, respectively. The net increase in deposits during the first nine months of 2002 and 2001 totaled $11.0 million and $9.0 million, respectively. The proceeds from borrowed funds during the nine months ended September 30, 2002 and 2001 totaled $34.0 million and $3.0 million, respectively. During the first nine months of 2002 and 2001, the proceeds from the maturities, calls and sales of securities totaled $8.1 million and $17.5 million, respectively. Cash provided from operating activities during the first nine months of 2002 and 2001 totaled $4.0 million and $4.0 million, respectively, of which $4.4 million and $3.2 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 nine months of 2002 and 2001, the Company's gross purchases and origination of loans totaled $145.7 million and $104.6 million, respectively. The purchase of securities available for sale for the nine months ended September 30, 2002 and 2001 totaled $323,000 and $7.3 million, respectively. The repayment of borrowed funds during the first nine months of 2002 and 2001 totaled $20.6 million and $17.1 million, respectively. The net change in short-term borrowings during the nine months ended September 30, 2002 and 2001 totaled $250,000 and $3.0 million, respectively. 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 an unaffiliated bank for a one year term. The Company may use this line of credit to fund stock repurchases in the future and for general corporate purposes. As of September 30, 2002, there were no borrowings outstanding on this line of credit. On October 1, 2002, the Company renewed its line of credit agreement in the amount of $3.0 million with the same unaffiliated bank. Stockholders' equity totaled $38.2 million at September 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 110,700 shares of common stock during the nine months ended September 30, 2002 at an average price of $26.22. On July 5, 2002, the Company paid a quarterly cash dividend of $0.18 per share on common stock outstanding as of the close of business on June 17, 2002, aggregating $306,000. On August 23, 2002, the Company declared a quarterly cash dividend of $0.18 per share payable on October 7, 2002 to shareholders of record as of the close of business on September 16, 2002, aggregating $301,000. 7 RESULTS OF OPERATIONS Interest Income. Interest income increased by $43,000 to $6.9 million for the three months ended September 30, 2002 compared to $6.9 million for the three months ended September 30, 2001. The increase in interest income was primarily due to an increase in the average balance of interest earning assets, offset in part by a decrease in the average yield on interest earning assets. The average balance of interest earning assets increased $25.9 million to $387.6 million for the three months ended September 30, 2002 from $361.8 million for the three months ended September 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. The yield on interest earning assets decreased to 7.14% for the three months ended September 30, 2002 from 7.61% for the three months ended September 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 7.56% for the three months ended September 30, 2002 from 7.90% for the three months ended September 30, 2001. The average yield on securities available for sale decreased to 4.51% for the three months ended September 30, 2002 from 5.66% for the three months ended September 30, 2001. The average yield on interest bearing cash decreased to 1.32% for the three months ended September 30, 2002 from 3.18% for the three months ended September 30, 2001. The decrease in the average yields on assets was primarily due to decreases in market interest rates. Interest income decreased by $629,000 to $20.2 million for the nine months ended September 30, 2002 compared to $20.9 million for the nine months ended September 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 nine months ended September 30, 2002 from 7.65% for the nine months ended September 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 7.62% for the nine months ended September 30, 2002 from 7.96% for the nine months ended September 30, 2001. The average yield on securities available for sale decreased to 4.76% for the nine months ended September 30, 2002 from 5.64% for the nine months ended September 30, 2001. The average yield on interest bearing cash decreased to 1.37% for the nine months ended September 30, 2002 from 4.31% for the nine months ended September 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 $14.4 million to $378.0 million for the nine months ended September 30, 2002 from $363.7 million for the nine months ended September 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 $573,000 to $3.5 million for the three months ended September 30, 2002 compared to $4.1 million for the three months ended September 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 3.90% for the three months ended September 30, 2002 from 4.87% for the three months ended September 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 0.87% for the three months ended September 30, 2002 from 1.91% for the three months ended September 30, 2001. The average cost of savings accounts decreased to 1.08% for the three months ended September 30, 2002 from 1.72% for the three months ended September 30, 2001. The average cost of certificates of deposit decreased to 4.65% for the three months ended September 30, 2002 from 5.67% for the three months ended September 30, 2001. The average cost of borrowed funds decreased to 5.26% for the three months ended September 30, 2002 from 6.00% for the three months ended September 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 $21.1 million to $359.2 million for the three months ended September 30, 2002 from $338.2 million for the three months ended September 30, 2001. This increase was due primarily to an increase in savings accounts, certificates of deposit and borrowed funds. The increase in the average balance of the certificates of deposit was offset in part by a decrease in the average balance of the public funds certificates of deposit. Interest expense decreased by $2.2 million to $10.5 million for the nine months ended September 30, 2002 compared to $12.7 million for the nine months ended September 30, 2001. The decrease in interest expense was primarily due to a decrease in the 8 RESULTS OF OPERATIONS (Continued) 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 4.02% for the nine months ended September 30, 2002 from 5.02% for the nine months ended September 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 0.95% for the nine months ended September 30, 2002 from 2.32% for the nine months ended September 30, 2001. The average cost of savings accounts decreased to 1.20% for the nine months ended September 30, 2002 from 1.76% for the nine months ended September 30, 2001. The average cost of certificates of deposit decreased to 4.81% for the nine months ended September 30, 2002 from 5.84% for the nine months ended September 30, 2001. The average cost of borrowed funds decreased to 5.41% for the nine months ended September 30, 2002 from 6.05% for the nine months ended September 30, 2001. The decrease in the average cost of funds was primarily due to decreases in market interest rates. The average balance of interest bearing liabilities increased $11.3 million to $350.4 million for the nine months ended September 30, 2002 from $339.1 million for the nine months ended September 30, 2001. This increase was due primarily to an increase in NOW and money market savings accounts, savings accounts and borrowed funds. Net Interest Income. Net interest income before the provision for loan losses increased by $616,000 to $3.4 million for the three months ended September 30, 2002 from $2.8 million for the three months ended September 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 3.24% for the three months ended September 30, 2002 from 2.74% for the three months ended September 30, 2001. Net interest income before the provision for loan losses increased by $1.6 million to $9.7 million for the nine months ended September 30, 2002 from $8.1 million for the nine months ended September 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 3.12% for the nine months ended September 30, 2002 from 2.63% for the nine months ended September 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 nine-month periods ended September 30, 2002 and 2001, respectively.
For the Three Months Ended September 30, ------------------------------------------------------------------------------ 2002 2001 ------------------------------------------------------------------------------ Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------- -------- ---------- ------- -------- ---------- (Dollars in thousands) Assets: Interest-earning assets: Loans $ 349,615 $ 6,620 7.56% $ 322,790 $ 6,389 7.90% Securities available for sale 23,973 270 4.51 31,493 445 5.66 Interest bearing cash 14,055 47 1.32 7,471 60 3.18 --------- --------- ------ ---------- --------- ----- Total interest-earning assets 387,643 $ 6,937 7.14% 361,754 $ 6,894 7.61% --------- ------ --------- ----- Noninterest-earning assets 20,531 22,760 --------- ---------- Total assets $ 408,174 $ 384,514 ========= ========== Liabilities & Equity: Interest-bearing liabilities: NOW and money market savings $ 61,375 $ 135 0.87% $ 60,290 $ 290 1.91% Passbook savings 25,286 69 1.08 21,995 95 1.72 Certificates of deposit 186,772 2,191 4.65 181,713 2,599 5.67 Borrowed funds 85,783 1,138 5.26 74,168 1,122 6.00 --------- --------- ------ ---------- --------- ----- Total interest-bearing liabilities 359,216 $ 3,533 3.90% 338,166 $ 4,106 4.87% --------- ------ --------- ----- Noninterest-bearing liabilities 10,473 9,440 --------- ---------- Total liabilities 369,689 347,606 Equity 38,485 36,908 --------- ---------- Total liabilities and equity $ 408,174 $ 384,514 ========= ========== Net interest income $ 3,404 $ 2,788 ========= ========= Net interest rate spread 3.24% 2.74% ====== ===== Net interest margin 3.51% 3.08% ====== ===== Ratio of average interest-earning assets to average interest-bearing liabilities 107.91% 106.98% ====== ======
For the Nine Months Ended September 30, ------------------------------------------------------------------------------ 2002 2001 ------------------------------------------------------------------------------ Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------- -------- ---------- ------- -------- ---------- (Dollars in thousands) Assets: Interest-earning assets: Loans $ 334,658 $ 19,119 7.62% $ 320,109 $ 19,107 7.96% Securities available for sale 26,054 931 4.76 34,453 1,457 5.64 Interest bearing cash 17,318 178 1.37 9,110 293 4.31 --------- --------- ------ ---------- --------- ----- Total interest-earning assets 378,030 $ 20,228 7.14% 363,672 $ 20,857 7.65% --------- ------ ---------- ----- Noninterest-earning assets 19,836 21,343 --------- ---------- Total assets $ 397,866 $ 385,015 ========= ========== Liabilities and Equity: Interest-bearing liabilities: NOW and money market savings $ 61,892 $ 441 0.95% $ 58,197 $ 1,008 2.32% Passbook savings 24,593 220 1.20 21,750 286 1.76 Certificates of deposit 181,705 6,537 4.81 180,952 7,909 5.84 Borrowed funds 82,223 3,326 5.41 78,200 3,539 6.05 --------- --------- ------ ---------- ---------- ----- Total interest-bearing liabilities 350,413 $ 10,524 4.02% 339,099 $ 12,742 5.02% --------- ------ --------- ----- Noninterest-bearing liabilities 10,196 9,106 --------- ---------- Total liabilities 360,609 348,205 Equity 37,257 36,810 --------- ---------- Total liabilities and equity $ 397,866 $ 385,015 ========= ========== Net interest income $ 9,704 $ 8,115 ========= ========== Net interest rate spread 3.12% 2.63% ==== ==== Net interest margin 3.42% 2.98% ==== ==== Ratio of average interest-earning assets to average interest-bearing liabilities 107.88% 107.25% ====== ======
10 RESULTS OF OPERATIONS (Continued) Provision for Loan Losses. The Company's provision for loan losses was $56,000 and $60,000 for the three months ended September 30, 2002 and 2001, respectively. The Company's provision for loan losses was $326,000 and $150,000 for the nine months ended September 30, 2002 and 2001, respectively. The increase in the provision for loan loss for the nine months 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 $89,000 for the nine months ended September 30, 2002 as compared to net charge offs of $100,000 for the nine months ended September 30, 2001. The resulting allowance for loan losses was $3.1 million, $2.9 million and $2.9 million at September 30, 2002, December 31, 2001 and September 30, 2001, respectively. The allowance for loan losses as a percentage of total loans receivable was 0.91%, 0.92% and 0.90% at September 30, 2002, December 31, 2001 and September 30, 2001, respectively. The level of nonperforming loans was $599,000 at September 30, 2002, $277,000 at December 31, 2001 and $614,000 at September 30, 2001. The level of nonperforming assets was $1.6 million, $1.4 million and $1.6 million at September 30, 2002, December 31, 2001 and September 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 $241,000 to $1.5 million for the three months ended September 30, 2002 from $1.3 million for the three months ended September 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 $159,000, primarily due to increases in loan prepayment fees and overdraft fees. Abstract fees increased $48,000, primarily due to increased sales volume. Sales volume increased in part due to a general increase in real estate activity. Other income increased $57,000, primarily due to increases in revenues from the sale of annuities, mutual funds and insurance. Mortgage banking income decreased $24,000 due to competitive pricing pressures. Total noninterest income increased by $668,000 to $4.2 million for the nine months ended September 30, 2002 from $3.5 million for the nine months ended September 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 $464,000, primarily due to increases in loan prepayment fees and overdraft fees. Abstract fees increased $166,000, primarily due to increased sales volume. Sales volume increased in part due to a general increase in real estate activity. Other income increased $155,000, primarily due to increases in revenues from the sale of annuities and mutual funds. Mortgage banking income decreased $118,000 due to a decrease in loans held for sale originations and competitive pricing pressures. Noninterest Expense. Total noninterest expense increased by $47,000 to $2.3 million for the three months ended September 30, 2002 from $2.2 million for the three months ended September 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 a new office in Ankeny, Iowa, normal salary increases, increase in salaries related to the sale of annuities and mutual funds, increases in health insurance costs and other employee benefit costs. 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 donations, the opening of a new office in Ankeny, Iowa, loan costs, insurance costs and costs associated with the abstract companies, offset in part by a decrease in costs associated with debit and ATM cards. The decrease in goodwill expense was due to no amortization of goodwill expense for the three months ended September 30, 2002, due to the Company's adoption of SFAS No. 142 goodwill and Other Intangible Assets. As a result, the Company expects to experience a $118,000 decrease in goodwill amortization each quarter for the foreseeable future. The Company's efficiency ratio for the three months ended September 30, 2002 and 2002 was 46.43% and 55.08%, respectively. The Company's ratio of noninterest expense to average assets for the three months ended September 30, 2002 and 2001 was 2.24% and 2.32%, respectively. 11 RESULTS OF OPERATIONS (Continued) Total noninterest expense increased by $459,000 to $7.1 million for the nine months ended September 30, 2002 from $6.6 million for the nine months ended September 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 the opening of the Ankeny office, increases in salaries related to the sale of annuities and mutual funds, normal salary increases and increases in health insurance costs and other employee benefit costs. 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 the opening of a new office in Ankeny, Iowa, marketing expenses, office supplies, insurance and costs associated with the abstract companies, offset in part by a decrease in costs associated with debit and ATM cards. The decrease in goodwill expense was due to no amortization of goodwill expense for the nine months ended September 30, 2002 due to the Company's adoption of SFAS No. 142, Goodwill and Other Intangible Assets. As a result, the Company expects to experience a $354,000 decrease in goodwill amortization for each comparable period for the foreseeable future. The Company's efficiency ratio for the nine months ended September 30, 2002 and 2001 was 50.68% and 56.56%, respectively. The Company's ratio of noninterest expense to average assets for the nine months ended September 30, 2002 and 2001 was 2.36% and 2.28%, respectively. Income Taxes. Income taxes increased by $260,000 to $868,000 for the three months ended September 30, 2002 as compared to $608,000 for the three months ended September 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, a reduction in nontaxable interest income and an increase in taxable deductions due to changes in the Company's retirement plan. Income taxes increased by $504,000 to $2.2 million for the nine months ended September 30, 2002 as compared to $1.7 million for the nine months ended September 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, a reduction in nontaxable interest income and an increase in taxable deductions due to changes in the Company's retirement plan. Net Income. Net income increased by $554,000 to $1.7 million for the three months ended September 30, 2002, as compared to $1.2 million for the same period in 2001. Net income increased by $1.1 million to $4.4 million for the nine months ended September 30, 2002, as compared to $3.2 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. ITEM 4. CONTROLS AND PROCEDURES During the 90-day period prior to the filing date of this report, management, including the Company's Chief Executive Officer and Treasurer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon, and as of the date of that evaluation, the Chief Executive Officer and Treasurer concluded that the disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required. There have been no significant changes in the Company's internal controls or in other factors which could significantly affect internal controls subsequent to the date the Company carried out its evaluation. There were no significant deficiencies or material weaknesses identified in the evaluation and therefore, no corrective actions were taken. 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 None 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 September 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 99.4. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 99.1 Press Release, dated August 23, 2002 (regarding the declaration of a dividend). Exhibit 99.2 Press Release, dated September 27, 2002 (regarding stock repurchase program). Exhibit 99.3 Press Release, dated October 24, 2002 (regarding 2002 3rd Quarter earnings) Exhibit 99.4 Certification of Chief Executive Officer and Treasurer. (Pursuant to Section 906 of the Sarbanes-Oxley Act) (b) Reports on Form 8-K None 13 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: November 14, 2002 BY: /s/ David M. Bradley ----------------------------------------- David M. Bradley, Chairman, President and Chief Executive Officer DATE: November 14, 2002 BY: /s/ John L. Pierschbacher ----------------------------------------- John L. Pierschbacher Principal Financial Officer 14 Certification of Chief Executive Officer and Treasurer SARBANES-OXLEY ACT - SECTION 302 CERTIFICATIONS I, David M. Bradley, certify that: 1. I have reviewed this annual report on Form 10-Q of North Central Bancshares, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 14, 2002 /s/ David M. Bradley -------------------- David M. Bradley President and Chief Executive Officer 15 SARBANES-OXLEY ACT - SECTION 302 CERTIFICATIONS I, John L. Pierschbacher, certify that: 1. I have reviewed this annual report on Form 10-Q of North Central Bancshares, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 14, 2002 /s/ John L. Pierschbacher ------------------------- John L. Pierschbacher Treasurer 16 EX-99 4 northcentral10qex991_09-02.txt EXHIBIT 99.1 PRESS RELEASE AUGUST 23, 2002 Exhibit 99.1 Press Release PRESS RELEASE August 23, 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 September 30, 2002. The dividend will be payable to all stockholders of record as of September 16, 2002 and will be paid on October 7, 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_09-02.txt EXHIBIT 99.2 PRESS RELEASE SEPTEMBER 27, 2002 Exhibit 99.2 Press Release PRESS RELEASE September 27, 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 STOCK REPURCHASE PROGRAM Fort Dodge, Iowa, September 27, 2002 - North Central Bancshares, Inc. (Nasdaq: "FFFD") (the "Company"), the holding company for First Federal Savings Bank of Iowa, announced that it will commence a new stock repurchase program beginning three days after the Company's press release announcing earnings for the third quarter ending September 30, 2002. The program authorizes the Company to repurchase up to 6.02 % or 100,000 shares of its 1,659,880 outstanding shares of common stock during the next twelve months. The repurchases will be made from time to time, in open market transactions, at the discretion of management. North Central Bancshares also announced that it has completed its most recent stock repurchase program. The Company said it repurchased 100,000 shares of its outstanding common stock, par value $.01 per share, at the aggregate cost of $2.7 million in open market transactions. This repurchase program began on February 21, 2002. North Central Bancshares, Inc., with over $404 million in assets, as of June 30, 2002, is the holding company for First Federal Savings Bank of Iowa, a federally chartered stock savings bank. First Federal is a community-oriented institution serving Iowa through 9 full service locations in Fort Dodge, Nevada, Ames, Perry, Ankeny, Burlington and Mt. Pleasant, Iowa. First Federal's deposits are insured by the Federal Deposit Insurance Corporation. EX-99 6 northcentral10qex993_09-02.txt EXHIBIT 99.3 PRESS RELEASE OCTOBER 24, 2002 Exhibit 99.3 Press Release PRESS RELEASE October 24, 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 THIRD 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 $0.98 diluted earnings per share for the quarter ended September 30, 2002, compared to diluted earnings per share of $0.62 for the quarter ended September 30, 2001, an increase in diluted earnings per share of 58.1%. In dollars, the Company's net income was a record $1.7 million for the quarter ended September 30, 2002, as compared to $1.2 million for the quarter ended September 30, 2001, an increase of 48.0%. The Company's net income was $4.4 million, or diluted earnings per share of $2.50, for the nine months ended September 30, 2002, compared to $3.2 million, or diluted earnings per share of $1.72, for the nine months ended September 30, 2001. Total assets at September 30, 2002 were $405.1 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. Loans increased by $28.9 million, or 9.4%, to $336.9 million at September 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. At September 30, 2002, net loans consisted of $147.0 million of one-to-four family loans, $76.6 million of multifamily real estate loans, $59.8 million of commercial real estate loans and $53.5 million of consumer loans. The increase in loans was primarily due to the purchases of $63.4 million of multifamily and commercial real estate loans. Securities available-for-sale decreased $7.5 million, or 24.02%, from $31.4 million at December 31, 2001 to $23.8 million at September 30, 2002. The decrease in securities available-for-sale was primarily due to calls and maturities. Deposits increased $11.0 million, or 4.1%, to $279.8 million at September 30, 2002 from $268.8 million at December 31, 2001. Other borrowed funds increased $13.1 million, or 18.4%, to $84.6 million at September 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 0.39% of total assets as of September 30, 2002 compared to 0.36% of total assets as of December 31, 2001. The allowance for loan losses was $3.1 million, or 0.91% of total loans, at September 30, 2002, compared to $2.9 million, or 0.92% of total loans, at December 31, 2001. - MORE- The net interest spread of 3.24% for the quarter ended September 30, 2002 represented an increase from the net interest spread of 2.74% for the quarter ended September 30, 2001. The net interest margin of 3.51% for the quarter ended September 30, 2002 represented an increase from the net interest margin of 3.08% for the quarter ended September 30, 2001. Net interest income for the quarter ended September 30, 2002 was $3.4 million, compared to net interest income of $2.8 million for the quarter ended September 30, 2001. The Company's provision for loan losses was $56,000 and $60,000 for the quarters ended September 30, 2002 and 2001, respectively. The Company's provision for loan losses was $326,000 and $150,000 for the nine months ended September 30, 2002. The increase in the provision for loan losses for the nine months was due primarily to increases in the loan portfolio from December 31, 2002 and 2001, respectively. 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. The Company's noninterest income was $1.5 million and $1.3 million for the quarters ended September 30, 2002 and 2001, respectively. The Company's noninterest income was $4.2 million and $3.5 million for the nine months ended September 30, 2002 and 2001, respectively. These increases in noninterest income were due in part to increases in loan prepayment fees, abstract fees, overdraft fees and sales of annuity and mutual funds, offset in part by a decrease in mortgage banking income. Stockholders' equity was $38.2 million at September 30, 2002, compared to $35.9 million at December 31, 2001. Stockholders' equity increased by $2.3 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 September 30, 2002 was $23.01 compared to $21.12 at December 31, 2001. The ratio of stockholders' equity to total assets was 9.4% at September 30, 2002, as compared to 9.5% at December 31, 2001. All stockholders of record on September 16, 2002, received a quarterly cash dividend of $0.18 per share on October 7, 2002. On September 27, 2002, the Company commenced a new stock repurchase program for 100,000 shares, of which 100,000 shares remain to be repurchased. The Company has 1,659,880 shares of common stock currently outstanding. During the nine months ended September 30, 2002, the Company repurchased a total of 110,700 shares or approximately 6.5% of its outstanding shares of common stock as of December 31, 2001 at prevailing market prices averaging $26.22 per share. Since its formation in 1996, the Company has invested a total of $42.9 million in the repurchase of 2,474,467 shares of its outstanding stock. 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". - MORE - 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) September 30, 2002 December 31, 2001 --------------------------------------- Assets Cash and cash equivalents $ 21,537 $ 19,909 Securities available for sale 23,829 31,366 Loans (net of allowance of loan loss of $3,120 and $2,883, respectively) 336,889 307,981 Goodwill 4,971 4,971 Other assets 17,902 15,148 ---------- ---------- Total Assets $ 405,128 $ 379,375 ========== ========== Liabilities Deposits $ 279,819 $ 268,814 Other borrowed funds 84,560 71,413 Other liabilities 2,548 3,235 ---------- ---------- Total Liabilities 366,927 343,462 Stockholders' Equity 38,201 35,913 ---------- ---------- Total Liabilities and Stockholders' Equity $ 405,128 $ 379,375 ========== ========== Stockholders' equity to total assets 9.43% 9.47% ========== ========== Book value per share $ 23.01 $ 21.12 ========== ========== Total shares outstanding 1,659,880 1,700,280 ========== ==========
Condensed Consolidated Statements of Income (Unaudited) (Dollars in Thousands, except per share data)
For the Three Months For the Nine Months Ended September 30, Ended September 30, 2002 2001 2002 2001 ---------------------------------------------------- Interest income $ 6,937 $ 6,895 $20,228 $20,857 Interest expense 3,533 4,106 10,524 12,742 ------- ------- ------- ------- Net interest income 3,404 2,789 9,704 8,115 Provision for loan loss 56 60 326 150 ------- ------- ------- ------- Net interest income after provision for loan loss 3,348 2,729 9,378 7,965 Noninterest income 1,509 1,268 4,209 3,542 Noninterest expense 2,281 2,235 7,052 6,593 ------- ------- ------- ------- Income before income taxes 2,576 1,762 6,535 4,914 Income taxes 868 608 2,172 1,669 ------- ------- ------- ------- Net income $ 1,708 $ 1,154 $ 4,363 $ 3,245 ======= ======= ======= ======= Basic earnings per share $ 1.04 $ 0.66 $ 2.65 $ 1.81 ======= ======= ======= ======= Diluted earnings per share $ 0.98 $ 0.62 $ 2.50 $ 1.72 ======= ======= ======= =======
Selected Financial Ratios
For the Three Months For the Nine Months Ended September 30, Ended September 30, 2002 2001 2002 2001 ------------------------------------------------------------------- Performance ratios Net interest spread 3.24% 2.74% 3.12% 2.63% Net interest margin 3.51% 3.08% 3.42% 2.98% Return on average assets 1.67% 1.20% 1.46% 1.12% Return on average equity 17.75% 12.51% 15.61% 11.76% Efficiency ratio (noninterest expense divided by the sum of net interest income before provision for loan losses plus noninterest income) 46.43% 55.08% 50.68% 56.56%
EX-99 7 northcentral10qex994_09-02.txt EXHIBIT 99.4 CERTIFICATION OF CEO AND TREASURER Exhibit 99.4 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 September 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. November 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 September 30, 2002 (the "Report"). By execution of this statement, I certify that: C) 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 D) 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. November 14, 2002 /s/ John L. Pierschbacher - ----------------- ------------------------- Dated John L. Pierschbacher -----END PRIVACY-ENHANCED MESSAGE-----