-----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, Ln/cbTVvMG7wsOZuEE7GcEuhu6/wqeuVi7TfSi6IxeaCBNiz4SxxQfslz2gsXurI sv/URs3X3+czrlIXJQY8Eg== 0000927797-03-000137.txt : 20030813 0000927797-03-000137.hdr.sgml : 20030813 20030813131702 ACCESSION NUMBER: 0000927797-03-000137 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030813 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: 03840063 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_06-03.txt FORM 10-Q JUNE 30, 2003 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, 2003 [ ] 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 by check mark whether the Registrant is an accelerated Filer (as defined in Rule 12b-2 of the Exchange Act). Yes No X --- 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 July 25, 2003 ----------------------------------------------------------------------- Common Stock, $.01 par value 1,601,580 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, 2003 and December 31, 2002 1 Consolidated Condensed Statements of Income for the three and six months ended June 30, 2003 and 2002 2 Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2003 and 2002 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 13 Item 4. Controls and Procedures 13 Part II. Other Information Items 1 through 6 14 Signatures 15 Exhibits PART I. FINANCIAL INFORMATION ITEM 1. NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
June 30, December 31, ASSETS 2003 2002 ---- ---- Cash and due from banks: Interest-bearing $ 22,481,460 $ 13,025,657 Noninterest-bearing 1,899,788 2,142,944 Securities available-for-sale 31,506,247 22,833,742 Loans receivable, net 348,727,460 341,146,364 Loans held for sale 3,317,892 2,372,134 Accrued interest receivable 1,880,423 1,928,278 Foreclosed real estate 1,277,071 768,726 Premises and equipment, net 8,922,411 8,195,963 Rental real estate 2,903,064 2,197,382 Title plant 925,256 925,256 Goodwill 4,970,800 4,970,800 Deferred taxes 829,704 608,657 Prepaid expenses and other assets 979,712 2,755,778 ------------- ------------- Total assets $ 430,621,288 $ 403,871,681 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits $ 290,336,491 $ 277,000,082 Borrowed funds 97,453,522 85,026,438 Advances from borrowers for taxes and insurance 1,481,520 1,512,114 Dividends payable 335,072 295,250 Income taxes payable 116,235 63,553 Accrued expenses and other liabilities 1,637,362 1,226,040 ------------- ------------- Total liabilities 391,360,202 365,123,477 ------------- ------------- 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 2003, 1,601,580; 2002, 1,640,280 shares) 16,920 16,403 Additional paid-in capital 18,266,573 17,011,095 Retained earnings, substantially restricted 24,234,159 21,862,248 Accumulated other comprehensive income 54,775 176,555 Less cost of treasury stock, 2003, 90,400 shares; 2002, None (3,069,494) -- Unearned shares, employee stock ownership plan (241,847) (318,097) ------------- ------------- Total stockholders' equity 39,261,086 38,748,204 ------------- ------------- Total liabilities and stockholders' equity $ 430,621,288 $ 403,871,681 ============= =============
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, --------------------------------------------------------- 2003 2002 2003 2002 ------------ ------------ ------------ ------------ Interest income: Loans receivable $ 6,063,880 $ 6,407,193 $ 12,232,542 $ 12,499,824 Securities and cash deposits 377,015 353,389 734,736 791,415 ------------ ------------ ------------ ------------ 6,440,895 6,760,582 12,967,278 13,291,239 ------------ ------------ ------------ ------------ Interest expense: Deposits 2,007,147 2,370,150 4,088,827 4,803,584 Borrowed funds 1,129,521 1,128,634 2,227,529 2,188,263 ------------ ------------ ------------ ------------ 3,136,668 3,498,784 6,316,356 6,991,847 ------------ ------------ ------------ ------------ Net Interest Income 3,304,227 3,261,798 6,650,922 6,299,392 Provision for loan losses 60,000 90,000 120,000 270,000 ------------ ------------ ------------ ------------ Net interest income after provision for loan losses 3,244,227 3,171,798 6,530,922 6,029,392 ------------ ------------ ------------ ------------ Noninterest income: Fees and service charges 626,589 596,273 1,190,181 1,184,854 Abstract fees 495,127 402,221 929,147 798,831 Mortgage banking fees 275,361 107,014 449,729 215,172 Loss on sale of securities available for sale, net -- -- -- (1,365) Other income 301,979 280,322 522,959 502,860 ------------ ------------ ------------ ------------ Total noninterest income 1,699,056 1,385,830 3,092,016 2,700,352 ------------ ------------ ------------ ------------ Noninterest expense: Salaries and employee benefits 1,411,599 1,324,414 2,843,959 2,590,344 Premises and equipment 307,010 301,635 616,182 610,452 Data processing 156,179 132,180 290,498 261,112 SAIF deposit insurance premiums 11,145 11,766 22,792 23,952 Other expenses 768,144 634,979 1,438,396 1,284,570 ------------ ------------ ------------ ------------ Total noninterest expense 2,654,077 2,404,974 5,211,827 4,770,430 ------------ ------------ ------------ ------------ Income before income taxes 2,289,206 2,152,654 4,411,111 3,959,314 Provision for income taxes 761,506 728,806 1,381,026 1,304,730 ------------ ------------ ------------ ------------ Net Income $ 1,527,700 $ 1,423,848 $ 3,030,085 $ 2,654,584 ============ ============ ============ ============ Basic earnings per common share $ 0.97 $ 0.87 $ 1.91 $ 1.62 ============ ============ ============ ============ Earnings per common share- assuming dilution $ 0.92 $ 0.81 $ 1.80 $ 1.52 ============ ============ ============ ============ Dividends declared per common share $ 0.21 $ 0.18 $ 0.42 $ 0.36 ============ ============ ============ ============ Comprehensive income $ 1,379,534 $ 1,483,291 $ 2,908,305 $ 2,662,384 ============ ============ ============ ============
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, 2003 2002 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 3,030,085 $ 2,654,584 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 120,000 270,000 Depreciation 380,866 353,196 Amortization and accretion 309,863 91,813 Deferred taxes (148,617) (103,782) Effect of contribution to employee stock ownership plan 269,386 204,528 (Gain) on sale of foreclosed real estate and loans, net (482,786) (212,789) Loss on sale of securities available for sale -- 1,365 (Gain) loss on disposal of equipment and premises, net 1,253 (889) Proceeds from sales of loans held for sale 28,946,235 16,064,139 Originations of loans held for sale (29,442,264) (15,906,346) Change in assets and liabilities: Accrued interest receivable 47,855 (138,692) Income taxes receivable -- (175,622) Prepaid expenses and other assets 1,776,066 (32,736) Income taxes payable 52,682 (78,711) Accrued expenses and other liabilities 411,322 (202,351) ------------ ------------ Net cash provided by operating activities 5,271,946 2,787,707 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Net decrease in loans 17,592,624 17,865,181 Purchase of loans (26,199,567) (53,214,514) Proceeds from sales of securities available-for-sale -- 13,760 Purchase of securities available-for-sale (10,865,958) (273,363) Proceeds from maturities of securities available-for-sale 1,978,412 5,973,549 Purchase of premises and equipment and rental real estate (1,814,249) (1,026,381) Proceeds from sale of equipment -- 1,015 Other 141,527 6,344 ------------ ------------ Net cash (used in) investing activities (19,167,211) (30,654,409) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 13,336,409 11,922,099 (Decrease) in advances from borrowers for taxes and insurance (30,594) (154,452) Net change in short-term borrowings -- 750,000 Proceeds from other borrowed funds 17,500,000 27,000,000 Payments on other borrowings (5,072,916) (15,569,367) Purchase of treasury stock (3,069,494) (1,514,050) Dividends paid (618,352) (538,882) Issuance of common stock 1,062,859 1,122,866 ------------ ------------ Net cash provided by financing activities 23,107,912 23,018,214 ------------ ------------ Net increase (decrease) in cash 9,212,647 (4,848,488) CASH Beginning 15,168,601 19,908,902 ------------ ------------ Ending $ 24,381,248 $ 15,060,414 ============ ============ SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION Cash payments for: Interest paid to depositors $ 4,124,268 $ 5,017,193 Interest paid on borrowings 2,227,635 2,188,726 Income taxes 1,091,808 1,343,904
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, 2003 and 2002 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 disclosures 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 2002 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, 2003, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,572,148 and 1,666,398, respectively. For the six-month period ended June 30, 2003, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,583,748 and 1,684,531, respectively. 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. 3. DIVIDENDS On May 23, 2003, the Company declared a cash dividend on its common stock, payable on July 7, 2003 to stockholders of record as of June 16, 2003, equal to $0.21 per share. 4. GOODWILL As of January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" that eliminated the amortization and required a goodwill impairment test. The Company completed the goodwill impairment test during the year ended December 31, 2002 and has determined that there has been no impairment of goodwill. As of June 30, 2003 and December 31, 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 three and six months ended June 30, 2003 or June 30, 2002. 5. STOCK OPTION PLAN FASB Statement No. 123, Accounting for Stock-Based Compensation, establishes a fair value based method for financial accounting and reporting for stock-based employee compensation plans and for transactions in which an entity issues its equity instruments to acquire goods and services from nonemployees. However, the standard allows compensation to continue to be measured by using the intrinsic value based method of 4 accounting prescribed by APB No. 25, Accounting for Stock Issued to Employees, but requires expanded disclosures. The Company has elected to apply the intrinsic value based method of accounting for stock options issued to employees. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company's stock at the date of grant over the amount an employee must pay to acquire the stock. Had compensation cost for the Plan been determined based on the grant date fair values of awards (the method described in FASB Statement No. 123), the approximate reported net income and earnings per common share would have been decreased to the pro forma amounts shown below:
Three Months Ended Three Months Ended June 30, 2003 June 30, 2002 ------------- ------------- Net income, as reported $ 1,527,700 $ 1,423,848 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects (13,317) (29,251) ----------- ----------- Pro forma net income $ 1,514,383 $ 1,394,597 =========== =========== Earnings per common share - basic: As reported $ 0.97 $ 0.87 Pro forma 0.96 0.85 Earnings per common share - assuming dilution: As reported $ 0.92 $ 0.81 Pro forma 0.91 0.79
Six Months Ended Six Months Ended June 30, 2003 June 30, 2002 ------------- ------------- Net income, as reported $ 3,030,085 $ 2,654,584 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects (52,994) (55,887) ----------- ----------- Pro forma net income $ 2,977,091 $ 2,598,697 =========== =========== Earnings per common share - basic: As reported $ 1.91 $ 1.62 Pro forma 1.88 1.58 Earnings per common share - assuming dilution: As reported $ 1.80 $ 1.52 Pro forma 1.77 1.49
The fair values of the grants are estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions for grants in 2003 and 2002, respectively: dividend rate of 2.3% and 3.5%, price volatility of 20% and 20%, risk-free interest rate of 3.70% and 4.92%, and expected lives of 8 years for all periods. 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 $26.7 million, or 6.6%, to $430.6 million at June 30, 2003 compared to $403.9 million at December 31, 2002. Interest-bearing cash increased $9.5 million, or 72.6%, to $22.5 million at June 30, 2003 from $13.0 million at December 31, 2002. Securities available for sale increased $8.7 million, or 38.0%, to $31.5 million at June 30, 2003 from $22.8 million at December 31, 2002, primarily invested in mortgage backed securities. Total loans receivable, net, increased by $7.6 million to $348.7 million at June 30, 2003 from $341.1 million at December 31, 2002, due primarily to originations of $32.7 million of first mortgage loans secured primarily by one-to four-family residences, purchases of $26.2 million of first mortgage loans secured primarily by one to four family, multifamily and commercial real estate and originations of $12.6 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 $68.7 million. Foreclosed real estate increased $508,000, or 66.1% to $1.3 million at June 30, 2003 from $769,000 at December 31, 2002. At June 30, 2003, foreclosed real estate consisted of fourteen one-to-four family properties and one commercial real estate property in the state of Washington. Total deposits increased $13.3 million, or 4.8%, to $290.3 million at June 30, 2003 from $277.0 million at December 31, 2002, reflecting increases primarily in checking, savings accounts, money market accounts and public fund certificates of deposits, offset by a decrease in retail certificates of deposit accounts. The increase in the Bank's deposits was due in part to an increase in the deposits at the Bank's Ankeny office, which moved to a permanent location in the first quarter of 2003. Other borrowings, primarily Federal Home Loan Bank ("FHLB") advances, increased by $12.4 million to $97.5 million at June 30, 2003 from $85.0 million at December 31, 2002, as management elected to increase borrowings to fund asset growth. Total stockholders' equity increased $513,000, to $39.3 million at June 30, 2003 from $38.7 million at December 31, 2002. See "Capital." CAPITAL The Company's total stockholders' equity increased by $513,000 to $39.3 million at June 30, 2003 from $38.7 million at December 31, 2002, 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 $242,000 at June 30, 2003 from $318,000 at December 31, 2002. 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, 2003, the Bank exceeded all of its regulatory capital requirements. The Bank's required, actual and excess capital levels as of June 30, 2003 were as follows: Amount Percentage of Assets (dollars in thousands) Tangible capital: Capital level $ 31,595 7.44% Less Requirement 6,372 1.50% --------- ---- Excess $ 25,223 5.94% ========= ==== Core capital: Capital level $ 31,595 7.44% Less Requirement 16,991 4.00% --------- ---- Excess $ 14,604 3.44% ========= ==== Risk-based capital: Capital level $ 34,710 12.34% Less Requirement 22,497 8.00% --------- ---- Excess $ 12,213 4.34% ========= ==== 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, calls and proceeds from the sale of securities). During the first six months of 2003 and 2002, principal payments, repayments and proceeds from sale of loans totaled $98.1 million and $53.0 million, respectively. The net increase in deposits during the first six months of 2003 and 2002 totaled $13.3 million and $11.9 million, respectively. The proceeds from borrowed funds during the six months ended June 30, 2003 and 2002 totaled $17.5 million and $27.0 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 2003 and 2002, the proceeds from the maturities, calls and sales of securities totaled $2.0 million and $6.0 million, respectively. Cash provided from operating activities during the first six months of 2003 and 2002 totaled $5.3 million and $2.8 million, respectively. 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 2003 and 2002, the Company's gross purchases and origination of loans totaled $106.9 million and $101.2 million, respectively. The purchase of securities available for sale for the six months ended June 30, 2003 and 2002 totaled $10.9 million and $273,000, respectively. The repayment of borrowed funds during the first six months of 2003 and 2002 totaled $5.1 million and $15.6 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 has a line of credit agreement in the amount of $3.0 million with an unaffiliated bank. As of June 30, 2003, there were no borrowings outstanding on this line of credit. The Company may use this line of credit to fund stock repurchases in the future and for general corporate purposes. Stockholders' equity totaled $39.3 million at June 30, 2003 compared to $38.7 million at December 31, 2002, 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 90,400 shares of common stock during the six months ended June 30, 2003 at an average price of $33.95. On April 7, 2003, the Company paid a quarterly cash dividend of $0.21 per share on common stock outstanding as of the close of business on March 17, 2003, aggregating $339,000. On May 23, 2003, the Company declared a quarterly cash dividend of $0.21 per share payable on July 7, 2003 to shareholders of record as of the close of business on June 16, 2003, aggregating $335,000. 7 RESULTS OF OPERATIONS Interest Income. Interest income decreased by $320,000 to $6.4 million for the three months ended June 30, 2003 compared to $6.8 million for the three months ended June 30, 2002. 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 interest bearing assets. The yield on interest earning assets decreased to 6.35% for the three months ended June 30, 2003 from 7.14% for the three months ended June 30, 2002. 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 6.87% for the three months ended June 30, 2003 from 7.60% for the three months ended June 30, 2002. The average yield on securities available for sale decreased to 4.19% for the three months ended June 30, 2003 from 4.66% for the three months ended June 30, 2002. The average yield on interest bearing cash decreased to 0.85% for the three months ended June 30, 2003 from 1.40% for the three months ended June 30, 2002. 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 $26.3 million to $405.1 million for the three months ended June 30, 2003 from $378.8 million for the three months ended June 30, 2002. This increase was primarily due to higher levels of loans, securities available for sale and interest bearing cash. 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. The increase in the average balance of securities available for sale generally reflects purchases over the past twelve months, offset in part by proceeds from the maturity of securities available for sale. See "Financial Condition." Interest income decreased by $324,000 to $13.0 million for the six months ended June 30, 2003 compared to $13.3 million for the six months ended June 30, 2002. .. 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 interest bearing assets. The yield on interest earning assets decreased to 6.51% for the six months ended June 30, 2003 from 7.13% for the six months ended June 30, 2002. 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 6.99% for the six months ended June 30, 2003 from 7.66% for the six months ended June 30, 2002. The average yield on securities available for sale decreased to 4.30% for the six months ended June 30, 2003 from 4.87% for the six months ended June 30, 2002. The average yield on interest bearing cash decreased to 0.85% for the six months ended June 30, 2003 from 1.40% for the six months ended June 30, 2002. 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 $26.0 million to $399.2 million for the six months ended June 30, 2003 from $373.2 million for the six months ended June 30, 2002. This increase was primarily due to higher levels of loans and 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. . The increase in the average balance of securities available for sale generally reflects purchases over the past twelve months, offset in part by proceeds from the maturity and sale of securities available for sale. See "Financial Condition." Interest Expense. Interest expense decreased by $362,000 to $3.1 million for the three months ended June 30, 2003 compared to $3.5 million for the three months ended June 30, 2002. 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 3.35% for the three months ended June 30, 2003 from 4.00% for the three months ended June 30, 2002. The decrease in the average cost of interest bearing liabilities was due primarily to decreases in all categories of interest bearing liabilities. The average cost of NOW and money market accounts decreased to 0.64% for the three months ended June 30, 2003 from 0.96% for the three months ended June 30, 2002. The average cost of savings accounts decreased to 0.54% for the three months ended June 30, 2003 from 1.25% for the three months ended June 30, 2002. The average cost of certificates of deposit decreased to 4.08% for the three months ended June 30, 2003 from 4.77% for the three months ended June 30, 2002. The average cost of borrowed funds decreased to 4.62% for the three months ended June 30, 2003 from 5.36% for the three months ended June 30, 2002. 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 $25.1 million to $375.8 million for 8 RESULTS OF OPERATIONS (Continued) the three months ended June 30, 2003 from $350.8 million for the three months ended June 30, 2002. This increase was due primarily to an increase in NOW accounts, money market accounts, savings accounts, certificates of deposit and borrowed funds. Interest expense decreased by $675,000 to $6.3 million for the six months ended June 30, 2003 compared to $7.0 million for the six months ended June 30, 2002. 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 3.45% for the six months ended June 30, 2003 from 4.07% for the six months ended June 30, 2002. The decrease in the average cost of interest bearing liabilities was due primarily to decreases in all categories of interest bearing liabilities. The average cost of NOW and money market accounts decreased to 0.68% for the six months ended June 30, 2003 from 0.99% for the six months ended June 30, 2002. The average cost of savings accounts decreased to 0.66% for the six months ended June 30, 2003 from 1.26% for the six months ended June 30, 2002. The average cost of certificates of deposit decreased to 4.19% for the six months ended June 30, 2003 from 4.89% for the six months ended June 30, 2002. The average cost of borrowed funds decreased to 4.68% for the six months ended June 30, 2003 from 5.49% for the six months ended June 30, 2002. 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 $23.8 million to $369.8 million for the six months ended June 30, 2003 from $346.0 million for the six months ended June 30, 2002. This increase was due primarily to an increase in NOW accounts, money market accounts, savings accounts, certificates of deposit and borrowed funds. Net Interest Income. Net interest income before the provision for loan losses increased by $42,000 to $3.3 million for the three months ended June 30, 2003 from $3.3 million for the three months ended June 30, 2002. The increase is due primarily to an increase in the average balance of interest earning assets, offset in part by a narrowing interest rate spread. The interest rate spread (i.e., the difference in the average yield on assets and average cost of liabilities) decreased to 3.00% for the three months ended June 30, 2003 from 3.14% for the three months ended June 30, 2002. Net interest income before the provision for loan losses increased by $352,000 to $6.7 million for the six months ended June 30, 2003 from $6.3 million for the six months ended June 30, 2002. The increase is due primarily to an increase in the average balance of interest earning assets. The interest rate spread (i.e., the difference in the average yield on assets and average cost of liabilities) was 3.06% for the six months ended June 30, 2003 and 2002. 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, 2003 and 2002, respectively.
For the Three Months Ended June 30, -------------------------------------------------------------------------------- 2003 2002 -------------------------------------------------------------------------------- Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------- -------- ---------- ------- -------- ---------- (Dollars in thousands) Assets: Interest-earning assets: Loans $ 353,505 $ 6,064 6.87% $ 337,506 $ 6,407 7.60% Securities available for sale 32,002 336 4.19 25,621 299 4.66 Interest bearing cash 19,565 41 0.85 15,650 55 1.40 --------- --------- ------ --------- -------- ------ Total interest-earning assets 405,072 6,441 6.35% 378,777 $ 6,761 7.14% --------- ------ -------- ------ Noninterest-earning assets 22,777 19,846 --------- --------- Total assets $ 427,849 $ 398,623 ========= ========= Liabilities and Equity: Interest-bearing liabilities: NOW and money market savings $ 66,888 $ 106 0.64% $ 61,016 $ 146 0.96% Passbook savings 27,642 38 0.54 24,924 78 1.25 Certificates of deposit 183,340 1,863 4.08 180,447 2,146 4.77 Borrowed funds 97,978 1,130 4.62 84,410 1,129 5.36 --------- --------- ------ --------- -------- ------ Total interest-bearing liabilities 375,848 $ 3,137 3.35% 350,797 $ 3,499 4.00% --------- ------ -------- ------ Noninterest-bearing liabilities 12,884 10,858 --------- --------- Total liabilities 388,732 361,655 Equity 39,117 36,968 --------- --------- Total liabilities and equity $ 427,849 $ 398,623 ========= ========= Net interest income $ 3,304 $ 3,262 ======== ======== Net interest rate spread 3.00% 3.14% ====== ====== Net interest margin 3.26% 3.44% ====== ====== Ratio of average interest-earning assets to average interest-bearing liabilities 107.78% 107.98% ====== ======
For the Six Months Ended June 30, -------------------------------------------------------------------------------- 2003 2002 -------------------------------------------------------------------------------- Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost ------- -------- ---------- ------- -------- ---------- (Dollars in thousands) Assets: Interest-earning assets: Loans $ 350,512 $ 12,232 6.99% $ 327,178 $ 12,500 7.66% Securities available for sale 30,597 658 4.30 27,095 660 4.87 Interest bearing cash 18,137 77 0.85 18,950 131 1.40 --------- --------- ------ --------- --------- ------ Total interest-earning assets 399,246 $ 12,967 6.51% 373,223 $ 13,291 7.13% --------- ------ --------- ------ Noninterest-earning assets 21,955 19,488 --------- --------- Total assets $ 421,201 $ 392,711 ========= ========= Liabilities and Equity: Interest-bearing liabilities: NOW and money market savings $ 64,970 $ 220 0.68% $ 62,151 $ 306 0.99% Passbook savings 27,133 89 0.66 24,246 151 1.26 Certificates of deposit 181,772 3,779 4.19 179,172 4,347 4.89 Borrowed funds 95,920 2,228 4.68 80,443 2,188 5.49 --------- --------- ------ --------- ----- ------ Total interest-bearing liabilities 369,795 $ 6,316 3.45% 346,012 $ 6,992 4.07% --------- ------ --------- ------ Noninterest-bearing liabilities 12,385 10,056 --------- --------- Total liabilities 382,180 356,068 Equity 39,021 36,643 --------- --------- Total liabilities and equity $ 421,201 $ 392,711 ========= ========= Net interest income $ 6,651 $ 6,299 ========= ========= Net interest rate spread 3.06% 3.06% ====== ====== Net interest margin 3.33% 3.38% ====== ====== Ratio of average interest-earning assets to average interest-bearing liabilities 107.96% 107.86% ====== ======
10 RESULTS OF OPERATIONS (Continued) Provision for Loan Losses. The Company's provision for loan losses was $60,000 and $90,000 for the three months ended June 30, 2003 and 2002, respectively. The Company's provision for loan losses was $120,000 and $270,000 for the six months ended June 30, 2003 and 2002, 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 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 $74,000 for the six months ended June 30, 2003 as compared to net charge offs of $35,000 for the six months ended June 30, 2002. The resulting allowance for loan losses was $3.2 million, $3.1 million and $3.1 million at June 30, 2003, December 31, 2002 and June 30, 2002, respectively. The allowance for loan losses as a percentage of total loans receivable was 0.90%, 0.90% and 0.90% at June 30, 2003, December 31, 2002 and June 30, 2002, respectively. The level of nonperforming loans was $651,000 at June 30, 2003, $643,000 at December 31, 2002 and $795,000 at June 30, 2002. 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 $313,000 to $1.7 million for the three months ended June 30, 2003 from $1.4 million for the three months ended June 30, 2002. The increase is due to increases in fees and service charges, abstract fees, mortgage banking income and other income. Fees and service charges increased $30,000, primarily due to fees associated with NOW accounts, including overdraft fees. Abstract fees increased $93,000, primarily due to increased sales volume. Sales volume increased in part due to a general increase in real estate activity. Mortgage banking income increased $168,000 due in part to increase in loan originations resulting from lower interest rates. Other income increased $22,000, primarily due to an increase in rent income due to the opening of a second multifamily apartment building in March, 2003. Total noninterest income increased by $392,000 to $3.1 million for the six months ended June 30, 2003 from $2.7 million for the six months ended June 30, 2002. The increase is due to increases in abstract fees and mortgage banking income. Abstract fees increased $130,000, primarily due to increased sales volume. Sales volume increased in part due to a general increase in real estate activity. Mortgage banking income increased $235,000 due in part to increase in loan originations resulting from lower interest rates. Noninterest Expense. Total noninterest expense increased by $249,000 to $2.7 million for the three months ended June 30, 2003 from $2.4 million for the three months ended June 30, 2002. The increase is due primarily to increases in salaries and employee benefits, data processing and other expenses. The increase in salaries and employee benefits was due in part to increases in employee benefit costs, an increase in personnel in the Ankeny, Iowa office and ordinary salary increases. The increase in data processing costs was due in part to increases in internet banking costs, consulting costs and ordinary cost increases. The increase in other expenses were due in part to increases in marketing costs in conjunction with a direct mail checking account promotion, increased costs associated with Northridge Apartments Limited Partnership and the increased costs associated with the opening of a second multifamily apartment building in March, 2003. Other increases in noninterest expense were partially due to the Bank relocating its Ankeny office to a newly constructed 5,000 square foot branch office in February, 2003. The Company's efficiency ratio for the three months ended June 30, 2003 and 2002 was 53.05% and 51.75%, respectively. The Company's ratio of noninterest expense to average assets for the three months ended June 30, 2003 and 2002 was 2.48% and 2.41%, respectively. Total noninterest expense increased by $441,000 to $5.2 million for the six months ended June 30, 2003 from $4.8 million for the six months ended June 30, 2002. The increase is due primarily to increases in salaries and 11 RESULTS OF OPERATIONS (Continued) employee benefits, data processing and other expenses. The increase in salaries and employee benefits was due in part to increases in employee benefits, an increase in personnel in the Ankeny, Iowa office and ordinary salary increases. The increase in data processing was due in part to increases in internet banking costs and ordinary cost increases. The increase in other expenses were due in part to increases in marketing costs in conjunction with a direct mail checking account promotion, increased costs associated with Northridge Apartments Limited Partnership, the increased costs associated with the opening of a second multifamily apartment building in March, 2003 and increased insurance costs, offset in part by lower professional fees. Other increases in noninterest expense were partially due to the Bank relocating its Ankeny office to a newly constructed 5,000 square foot branch office in February, 2003. The Company's efficiency ratio for the six months ended June 30, 2003 and 2002 was 53.49% and 53.01%, respectively. The Company's ratio of noninterest expense to average assets for the six months ended June 30, 2003 and 2002 was 2.47% and 2.43%, respectively. Income Taxes. Income taxes increased by $33,000 to $762,000 for the three months ended June 30, 2003 as compared to $729,000 for the three months ended June 30, 2002, primarily due to an increase in net income before income taxes and a decrease in nontaxable income, partially offset by federal income tax credit from Northridge Apartments Limited Partnership II. Income taxes increased by $76,000 to $1.4 million for the six months ended June 30, 2003 as compared to $1.3 million for the six months ended June 30, 2002, primarily due to an increase in net income before income taxes and a decrease in nontaxable income, partially offset by a one time state tax credit which decreased income tax expense by approximately $100,000 and a federal income tax credit from Northridge Apartments Limited Partnership II. Net Income. Net income increased by $104,000 to $1.5 million for the three months ended June 30, 2003, as compared to $1.4 million for the same period in 2002. Net income increased by $376,000 to $3.0 million for the six months ended June 30, 2003, as compared to $2.7 million for the same period in 2002. 12 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, 2002 as reported in Item 7A of the Annual Report on Form 10-K. ITEM 4. CONTROLS AND PROCEDURES Management, including the Company's Chief Executive Officer and Treasurer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(f) and 15d-15(e)) as of the end of the period covered by this report. Based upon 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 changes in the Company's internal control over financial reporting identified in connection with the evaluation that occurred during the Company's last fiscal quarter that has materially affected, or that is reasonably likely to materially affect, the Company's internal control over financial reporting. 13 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 2003 Annual Meeting of Stockholders on April 25, 2003. 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: David M. Bradley Robert H. Singer, Jr. The results of the election of directors are as follows: Votes ----- In favor Withheld -------- -------- David M. Bradley 1,426,864 22,561 Robert H. Singer, Jr. 1,426,864 22,561 There were no broker non-votes or abstentions on this proposal. The following directors' terms of office continued after the meeting: Mark M. Thompson Melvin R. Schroeder KaRene Egemo Craig R. Barnes 2. The ratification of the engagement of McGladrey & Pullen LLP, as the Company's independent auditors for the 2003 fiscal year, was approved by a vote of 1,440,428 in favor, 3,590 votes against and 5,407 votes abstaining. There were no broker non-votes on this proposal. Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 31.1 Certification pursuant to Section 302 of the Sarbanes Oxley Act of 2002 Exhibit 32.1 Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002 Exhibit 99.1 Press Release, dated April 24, 2003 (regarding 2003 first quarter earnings) Exhibit 99.2 Press Release, dated May 23, 2003 (regarding declaration of dividend) (b) Reports on Form 8-K The Company filed a Form 8-K on April 25, 2003 furnishing to the Commission a press release announcing the Company's earnings for the period ended March 31, 2003. 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 13, 2003 BY: /s/David M. Bradley ----------------------------------------- David M. Bradley, Chairman, President and Chief Executive Officer DATE: August 13, 2003 BY: /s/John L. Pierschbacher --------------------------- John L. Pierschbacher Principal Financial Officer 15 EX-31 4 ncb10qexhibit311_06-03.txt EXHIBIT 31.1 SECTION 302 CERTIFICATIONS Exhibit 31.1 Certification pursuant to Section 302 of the Sarbanes Oxley Act of 2002. SARBANES-OXLEY ACT - SECTION 302 CERTIFICATIONS I, David M. Bradley, certify that: 1. I have reviewed this quarterly report on Form 10-Q of North Central Bancshares, Inc.; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the quarterly report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and 5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting. Date: August 13, 2003 /s/David M. Bradley ------------------- David M. Bradley President and Chief Executive Officer SARBANES-OXLEY ACT - SECTION 302 CERTIFICATIONS I, John L. Pierschbacher, certify that: 1. I have reviewed this quarterly report on Form 10-Q of North Central Bancshares, Inc.; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; 4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the quarterly report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and 5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting. Date: August 13, 2003 /s/John L. Pierschbacher ------------------------ John L. Pierschbacher Treasurer EX-32 5 ncb10qexhibit321_06-03.txt EXHIBIT 32.1 SECTION 906 CERTIFICATIONS Exhibit 32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002. 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 Form 10-Q for the second quarter ended June 30, 2003 (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 13, 2003 /s/David M. Bradley - --------------- ----------------------------------- Date David M. Bradley, President and CEO A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350 The undersigned, John L. Pierschbacher, is 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 Form 10-Q for the second quarter ended June 30, 2003 (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 13, 2003 /s/ John L. Pierschbacher - --------------- -------------------------------- Dated John L. Pierschbacher, Treasurer A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. EX-99 6 ncb10qexhibit991_06-03.txt EXHIBIT 99.1 PRESS RELEASE APRIL 24, 2003 Exhibit 99.1 Press Release PRESS RELEASE April 24, 2003 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 EARNINGS FOR FIRST QUARTER OF 2003 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 $0.88 diluted earnings per share for the quarter ended March 31, 2003, compared to diluted earnings per share of $0.71 for the quarter ended March 31, 2002, an increase in diluted earnings per share of 23.9%. In dollars, the Company's net income was $1.5 million for the quarter ended March 31, 2003, as compared to $1.2 million for the quarter ended March 31, 2002, an increase of 22.1%. Total assets at March 31, 2003 were $425.6 million as compared to $403.9 million at December 31, 2002. The increase in assets resulted primarily from an increase in loans and securities available-for-sale. Loans increased by $7.8 million, or 2.3%, to $348.9 million at March 31, 2003 from $341.1 million at December 31, 2002. At March 31, 2003, net loans consisted of $156.2 million of one-to-four family loans, $72.1 million of multifamily real estate loans, $69.1 million of commercial real estate loans and $51.5 million of consumer loans. The increase in loans was due in part to the purchases of $19.9 million of one- to four-family, multifamily and commercial real estate loans. Securities available-for-sale increased $10.2 million, or 44.5%, to $33.0 million at March 31, 2003 from $22.8 million at December 31, 2002. The increase in securities available-for-sale was primarily due to an increase in our investment in mortgage-backed securities. Deposits increased $3.7 million, or 1.4%, to $280.7 million at March 31, 2003 from $277.0 million at December 31, 2002. Other borrowed funds increased $18.0 million, or 21.1%, to $103.0 million at March 31, 2003 from $85.0 million at December 31, 2002. The increase in the deposits and borrowed funds were used in part to fund asset growth. Nonperforming assets were 0.37% of total assets as of March 31, 2003 compared to 0.35% of total assets as of December 31, 2002. The allowance for loan losses was $3.2 million, or 0.89% of total loans, at March 31, 2003, compared to $3.1 million, or 0.90% of total loans, at December 31, 2002. The net interest spread of 3.11% for the quarter ended March 31, 2003 represented an increase from the net interest spread of 2.98% for the quarter ended March 31, 2002. The net interest margin of 3.40% for the quarter ended March 31, 2003 represented an increase from the net interest margin of 3.31% for the quarter ended March 31, 2002. Net interest income for the quarter ended March 31, 2003 was $3.3 million, compared to net interest income of $3.0 million for the quarter ended March 31, 2002. - MORE- The Company's provision for loan losses was $60,000 and $180,000 for the quarters ended March 31, 2003 and 2002, 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. 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. Stockholders' equity was $38.5 million at March 31, 2003, compared to $38.7 million at December 31, 2002. Stockholders' equity decreased by $280,000 primarily due to stock repurchases and declared dividends, offset in part by earnings and the exercise of stock options. Book value, or stockholders' equity per share, at March 31, 2003 was $23.94 compared to $23.62 at December 31, 2002. The ratio of stockholders' equity to total assets was 9.0% at March 31, 2003, as compared to 9.6% at December 31, 2002. All stockholders of record on March 17, 2003, received a quarterly cash dividend of $0.21 per share on April 7, 2003. In addition, on February 27, 2003, the Company announced a new stock repurchase program for 100,000 shares, to commence after the completion of the Company's current stock repurchase program. The Company has 1,606,580 shares of common stock currently outstanding. During the quarter ended March 31, 2003, the Company repurchased a total of 70,400 shares or approximately 4.3% of its outstanding shares of common stock at prevailing market prices averaging $33.96 per share. Since its formation in 1996, the Company has invested a total of $46.0 million in the repurchase of 2,567,267 shares of its outstanding stock. The Company's noninterest income was $1.4 million and $1.3 million for the quarters ended March 31, 2003 and 2002, respectively. The increase in noninterest income was due in part to increases in checking account fees, abstract fees and mortgage banking income, offset in part by a decrease in loan prepayment fees. The Company's noninterest expense was $2.6 million and $2.4 million for the quarters ended March 31, 2003 and 2002, respectively. The increase in noninterest expense was due primarily to an increase in salaries and employee benefits. The Company's provision for income taxes was $620,000 and $576,000 for the quarters ended March 31, 2003 and 2002, respectively. The increase in the provision for income taxes was due to an increase in the income before income taxes and a decrease in the nontaxable income, offset in part by a one time low-income housing income tax credit with an effect on net income of approximately $100,000. In March 2003, the Bank completed the construction of a 23-unit low-income housing tax credit apartment building for the elderly in Fort Dodge, Iowa. This project will result in an annualized income tax credit of approximately $125,000 per year for a ten year period. The Bank relocated its Ankeny office to a newly constructed 5,000 square foot branch office in February, 2003. In April, 2003, the Bank submitted an application to establish a new branch office in Clive, Iowa. The Bank intends to begin construction of a 5,000 square foot building later this year. The Bank will open a temporary office in the second quarter of 2003 at 2204 Woodlands Parkway, Clive, Iowa. 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. 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) March 31, 2003 December 31, 2002 -------------- ----------------- Assets Cash and cash equivalents $ 17,818 $ 15,169 Securities available for sale 32,999 22,834 Loans (net of allowance of loan loss of $3,155 and $3,118, respectively) 348,932 341,146 Goodwill 4,971 4,971 Other assets 20,901 19,752 ----------- ------------ Total Assets $ 425,621 $ 403,872 =========== ============ Liabilities Deposits $ 280,749 $ 277,000 Other borrowed funds 102,992 85,026 Other liabilities 3,417 3,098 ----------- ------------ Total Liabilities 387,158 365,124 Stockholders' Equity 38,463 38,748 ----------- ------------ Total Liabilities and Stockholders' Equity $ 425,621 $ 403,872 =========== ============ Stockholders' equity to total assets 9.04% 9.61% =========== =========== Book value per share $ 23.94 $ 23.62 =========== =========== Total shares outstanding 1,606,580 1,640,280 =========== ===========
Condensed Consolidated Statements of Income (Unaudited) (Dollars in Thousands, except per share data) For the Three Months Ended March 31, 2003 2002 ---- ---- Interest income $ 6,526 $ 6,531 Interest expense 3,179 3,493 ------- ------- Net interest income 3,347 3,038 Provision for loan loss 60 180 ------- ------- Net interest income after provision for loan loss 3,287 2,858 Noninterest income 1,393 1,315 Noninterest expense 2,558 2,366 ------- ------- Income before income taxes 2,122 1,807 Income taxes 620 576 ------- ------- Net income $ 1,502 $ 1,231 ======= ======= Basic earnings per share $ 0.94 $ 0.75 ======= ======= Diluted earnings per share $ 0.88 $ 0.71 ======= ======= Selected Financial Ratios
For the Three Months For the Year Ended March 31 Ended December 31 2003 2002 2002 ---- ---- ---- Performance Ratios Net interest spread 3.11% 2.98% 3.15% Net interest margin 3.40% 3.31% 3.44% Return on average assets 1.45% 1.27% 1.47% Return on average equity 15.44% 13.56% 15.57% Efficiency ratio (noninterest expense divided by the sum of net interest income before provision for loan losses plus noninterest income) 53.96% 54.35% 51.01%
EX-99 7 ncb10qexhibit992_06-03.txt EXHIBIT 99.2 PRESS RELEASE MAY 23, 2003 Exhibit 99.2 Press Release PRESS RELEASE May 23, 2003 For further information contact: David M. Bradley Chairman, President and 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 $0.21 per share on the Company's common stock for the fiscal quarter ended June 30, 2003. The dividend will be payable to all stockholders of record as of June 16, 2003 and will be paid on July 7, 2003. 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 recently announced plans to open a new branch office in Clive, Iowa this year. 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". -----END PRIVACY-ENHANCED MESSAGE-----