-----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, FqFYX30hYpVWE1lAlYQLvhJtgEaO3IFJmJ39Lep41IoL7/VGhmNe/MXh+1wy3U+5 sGojkuad7NxjP5jQSXud5w== /in/edgar/work/0000950131-00-006364/0000950131-00-006364.txt : 20001115 0000950131-00-006364.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950131-00-006364 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH CENTRAL BANCSHARES INC CENTRAL INDEX KEY: 0001005188 STANDARD INDUSTRIAL CLASSIFICATION: [6035 ] IRS NUMBER: 421449849 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-27672 FILM NUMBER: 762529 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 0001.txt 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, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 193 4 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 November 7, 2000 - -------------------------------------------------------------------------------- Common Stock, $.01 par value 1,965,242 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, 2000 (Unaudited) and December 31, 1999 1 Consolidated Condensed Statements of Income for the three and nine months ended September 30, 2000 and 1999 (Unaudited) 2 Consolidated Condensed Statements of Cash Flows for the nine months ended September 30, 2000 and 1999 (Unaudited) 3 Notes to Consolidated Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 to 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk 11 Part II. Other Information 12 to 13 Items 1 through 6 12 Signatures 13 Exhibits
PART I. FINANCIAL INFORMATION ITEM 1. NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
September 30, December 31, ASSETS 2000 1999 ------------- ------------ (Unaudited) Cash and due from banks: Interest-bearing $ 6,026,164 $ 4,127,153 Noninterest-bearing 2,160,901 8,541,525 Securities available-for-sale 43,430,723 49,692,857 Loans receivable, net 312,749,995 286,759,101 Loans held for sale 1,701,453 335,564 Accrued interest receivable 2,234,683 2,082,598 Foreclosed real estate 163,661 503,150 Premises and equipment, net 6,336,080 5,356,097 Rental real estate 1,779,295 1,846,134 Title plant 925,256 925,256 Goodwill 5,561,163 5,915,381 Deferred taxes 840,668 921,057 Prepaid expenses and other assets 466,859 426,772 ------------ ------------ Total assets $384,376,901 $367,432,645 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits $261,685,769 $271,030,791 Borrowed funds 84,622,554 55,715,289 Advances from borrowers for taxes and insurance 496,317 1,204,025 Dividends payable 246,905 226,174 Income taxes payable 10,120 74,214 Accrued expenses and other liabilities 1,311,870 1,055,228 ------------ ------------ Total liabilities 348,373,535 329,305,721 ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock ($.01 par value, authorized 3,000,000 shares, issued and outstanding none) - - - - Common stock ($.01 par value, authorized 15,500,000 shares; issued and outstanding 4,011,057) 40,111 40,111 Additional paid-in capital 38,347,335 38,278,872 Retained earnings, substantially restricted 32,547,618 30,290,488 Accumulated other comprehensive (loss) (781,630) (921,138) Less cost of treasury stock, 2000 2,040,815 shares; 1999 1,749,315 shares (33,459,332) (28,735,925) Unearned shares, employee stock ownership plan (690,736) (825,484) ------------ ------------ Total stockholders' equity 36,003,366 38,126,924 ------------ ------------ Total liabilities and stockholders' equity $384,376,901 $367,432,645 ============ ============
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 2000 1999 2000 1999 ---------- ---------- ----------- ----------- Interest income: Loans receivable $6,210,911 $5,307,629 $17,919,983 $15,574,150 Securities and cash deposits 739,999 821,758 2,292,378 2,526,727 ---------- ---------- ----------- ----------- 6,950,910 6,129,387 20,212,361 18,100,877 ---------- ---------- ----------- ----------- Interest expense: Deposits 3,127,879 2,814,579 9,077,768 8,165,869 Borrowed funds 1,228,044 576,085 3,094,573 1,659,539 ---------- ---------- ----------- ----------- 4,355,923 3,390,664 12,172,341 9,825,408 ---------- ---------- ----------- ----------- Net Interest Income 2,594,987 2,738,723 8,040,020 8,275,469 Provision for loan losses 30,000 30,000 90,000 90,000 ---------- ---------- ----------- ----------- Net interest income after provision for loan losses 2,564,987 2,708,723 7,950,020 8,185,469 ---------- ---------- ----------- ----------- Noninterest income: Fees and service charges 423,629 378,799 1,157,816 1,074,152 Abstract fees 304,583 371,844 962,333 1,098,000 Mortgage banking fees 54,264 128,585 126,854 324,175 Gain on sale of securities available for sale, net 42 29,575 42 61,564 Other income 206,093 219,882 648,625 545,924 ---------- ---------- ----------- ----------- Total noninterest income 988,611 1,128,685 2,895,670 3,103,815 ---------- ---------- ----------- ----------- Noninterest expense: Salaries and employee benefits 1,004,519 1,033,039 3,039,533 3,013,023 Premises and equipment 282,842 235,859 764,297 658,823 Data processing 112,252 111,122 341,788 408,237 SAIF deposit insurance premiums 13,920 35,621 41,854 109,269 Goodwill amortization 118,072 118,072 354,217 354,217 Other expenses 546,257 593,997 1,758,801 1,795,753 ---------- ---------- ----------- ----------- Total noninterest expense 2,077,862 2,127,710 6,300,490 6,339,322 ---------- ---------- ----------- ----------- Income before income taxes 1,475,736 1,709,698 4,545,200 4,949,962 Provision for income taxes 504,266 622,193 1,561,863 1,730,820 ---------- ---------- ----------- ----------- Net Income $ 971,470 $1,087,505 $ 2,983,337 $ 3,219,142 ========== ========== =========== =========== Basic earnings per common share $0.50 $0.44 $1.50 $1.20 ========== ========== =========== =========== Earnings per common share- assuming dilution $0.49 $0.43 $1.47 $1.18 ========== ========== =========== =========== Dividends declared per common share $0.125 $0.10 $0.375 $0.30 ========== ========== =========== =========== Comprehensive income $1,237,783 $ 890,815 $ 3,122,845 $ 2,280,943 ========== ========== =========== ===========
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, 2000 1999 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,983,337 $ 3,219,142 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 90,000 90,000 Depreciation 453,094 410,285 Amortization and accretion 418,541 431,790 Deferred taxes (3,062) (126,152) Effect of contribution to employee stock ownership plan 208,617 252,907 (Gain) on sale of foreclosed real estate and loans, net (33,796) (28,742) (Gain) on sale of securities available for sale (42) (61,564) Loss on impairment and disposal of equipment and premises, net 28,294 13,653 Proceeds from sales of loans held for sale 7,469,293 17,534,085 Originations of loans held for sale (8,835,182) (16,401,099) Change in assets and liabilities: Accrued interest receivable (152,085) (83,286) Prepaid expenses and other assets (40,087) (258,614) Income taxes payable (64,094) (19,401) Accrued expenses and other liabilities 256,642 (636,692) ------------ ------------ Net cash provided by operating activities 2,779,470 4,336,312 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Net (increase) decrease in loans (11,253,726) 8,465,153 Purchase of loans (14,540,353) (36,004,744) Proceeds from sales of securities available-for-sale 224,792 438,915 Purchase of securities available-for-sale (1,395,100) (17,088,919) Proceeds from maturities of securities available-for-sale 7,592,261 14,538,863 Purchase of premises and equipment and rental real estate (1,651,671) (1,869,396) Proceeds from sale of equipment 257,139 3,743 Other 85,329 (787) ------------ ------------ Net cash (used in) investing activities (20,681,329) (31,517,172) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in deposits (9,345,022) 13,961,263 (Decrease) in advances from borrowers for taxes and insurance (707,708) (569,170) Net change in short-term borrowings 4,000,000 14,500,000 Proceeds from other borrowed funds 34,000,000 6,000,000 Payments of other borrowings (9,092,735) (3,088,170) Purchase of treasury stock (4,723,405) (10,739,710) Issuance of treasury stock (5,409) -- Dividends paid (705,475) (776,110) ------------ ------------ Net cash provided by financing activities 13,420,246 19,288,103 ------------ ------------ Net (decrease) in cash (4,481,613) (7,892,757) CASH Beginning 12,668,678 15,636,876 ------------ ------------ Ending $ 8,187,065 $ 7,744,119 ============ ============ SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION Cash payments for: Interest paid to depositors $ 8,884,213 $ 8,229,094 Interest paid on borrowings 3,039,400 1,656,694 Income taxes 1,628,903 1,876,373
-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, 2000 and 1999 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 1999 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, 2000, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,924,950 and 1,968,305, respectively. For the nine month period ended September 30, 2000, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 1,993,493 and 2,029,734, respectively. For the three month period ended September 30, 1999, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 2,463,982 and 2,524,721, respectively. For the nine month period ended September 30, 1999, the weighted average number of shares outstanding for basic and diluted earnings per share computation were 2,679,297 and 2,739,582, respectively. 3. DIVIDENDS On August 28, 2000, the Company declared a cash dividend on its common stock, payable on October 6, 2000 to stockholders of record as of September 15, 2000, equal to $0.125 per share. -4- 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. FINANCIAL CONDITION Total assets increased $16.9 million, or 4.6%, to $384.4 million at September 30, 2000 compared to $367.4 million at December 31, 1999. Noninterest bearing cash decreased $6.4 million, or 74.7%, due to customer focused preparations for the Year 2000 which resulted in increases in cash as of December 31, 1999. Interest bearing cash increased $1.9 million, or 46.0%, primarily due to seasonal fluctuations. Securities available for sale decreased $6.3 million, or 12.6%, primarily due to $7.8 million of maturities, calls and sales and increases in fair market value of $223,000, offset in part by purchases of $1.4 million of such securities. Total loans receivable, net, increased by $26.0 million to $312.7 million from December 31, 1999, due primarily to originations of $30.1 million of first mortgage loans secured primarily by one-to four-family residences, purchases of $14.6 million of first mortgage loans secured primarily by one-to four-family, multi-family residences and commercial real estate and originations of $16.9 million of second mortgage loans. These originations and purchases were offset in part by payments and prepayments of loans of approximately $42.6 million. Total deposits decreased $9.3 million, or 3.4%, from $271.0 million at December 31, 1999 to $261.7 million at September 30, 2000, reflecting decreases primarily in certificates of deposit accounts. Other borrowings, primarily Federal Home Loan Bank ("FHLB") advances, increased by $28.9 million to $84.6 million at September 30, 2000 from $55.7 million at December 31, 1999. Total stockholders' equity decreased $2.1 million, to $36.0 million at September 30, 2000 from $38.1 million at December 31, 1999. See "Capital." CAPITAL The Company's total stockholders' equity decreased by $2.1 million to $36.0 million at September 30, 2000 from $38.1 million at December 31, 1999, primarily due to stock repurchases and dividends declared, which were offset in part by earnings. The changes in stockholders' equity were also due to a decrease in the accumulated other comprehensive losses and a decrease in the unearned shares from First Federal Savings Bank of Iowa's Employee Stock Ownership Plan (the "ESOP") to $691,000 at September 30, 2000 from $825,000 at December 31, 1999. The decrease in unearned shares resulted from the release of shares by the ESOP to employees of First Federal Savings Bank of Iowa (the "Bank"). -5- 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, 2000, the Bank exceeded all of its regulatory capital requirements. The Bank's required, actual and excess capital levels as of September 30, 2000 were as follows:
Amount Percentage of Assets -------- --------------------- (dollars in thousands) Tangible capital: Capital level $28,166 7.45% Less Requirement 5,669 1.50% ------- ----- Excess $22,497 5.95% ======= ===== Core capital: Capital level $28,166 7.45% Less Requirement 15,117 4.00% ------- ----- Excess $13,049 3.45% ======= ===== Risk-based capital: Capital level $30,893 14.16% Less Requirement 17,457 8.00% ------- ----- Excess $13,436 6.16% ======= =====
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 2000 and 1999, principal payments and repayments on loans totalled $42.6 million and $58.4 million, respectively. The net increase in deposits during the first nine months of 1999 totalled $14.0 million. The proceeds from borrowed funds during the nine months ended September 30, 2000 and 1999 totalled $34.0 million and $6.0 million, respectively. The net change in short-term borrowings during the nine months ended September 30, 2000 and 1999 totalled $4.0 million and $14.5 million, respectively. During the first nine months of 2000 and 1999, the proceeds from the maturities, calls and sales of securities totalled $7.6 million and $14.5 million, respectively. Cash provided from operating activities during the first nine months of 2000 and 1999 totalled $2.8 million and $4.3 million, respectively, of which $3.0 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 (including decreases in deposits). During the first nine months of 2000 and 1999, the Company's gross purchases and origination of loans totalled $68.7 million and $87.3 million, respectively. The purchase of securities available for sale for the nine months ended September 30, 2000 and 1999 totalled $1.4 million and $17.1 million, respectively. The net decrease in deposits during the first nine months of 2000 totalled $9.3 million. The repayment of borrowed funds during the first nine months of 2000 and 1999 totalled $9.1 million and $3.1 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 Bank is required to maintain an average daily balance of liquid assets (cash, certain time deposits, bankers' acceptances, specified United States Government, state or federal agency obligations, shares of certain mutual funds and certain corporate debt securities and commercial paper) in each calendar quarter of not less than 4.0% of either (1) the liquidity base at the end of the preceding calendar quarter, or (2) the average daily balance of the liquidity base during the preceding quarter equal to a specified percentage of its net withdrawable deposit accounts plus short-term borrowings. This liquidity requirement may be changed from time to time by the OTS to any amount within the range of 4.0% to 10.0%, depending upon economic conditions and the savings flows of member institutions. The liquidity requirement is currently 4.0%. Monetary penalties may be imposed for failure to meet these liquidity requirements. At September 30, 2000, the Bank's liquidity position was $27.0 million, or 8.7%, of liquid assets, compared to $31.7 million, or 10.8%, at December 31, 1999. The Company has entered into a $2.0 million line of credit agreement on September 21, 2000 with another bank. The Company may use this line of credit to fund stock repurchases in the future. As of September 30, 2000, there were no borrowings outstanding on this line of credit. -6- Stockholders' equity totaled $36.0 million at September 30, 2000 compared to $38.1 million at December 31, 1999, reflecting the Company's earnings, 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 loss. The Company repurchased 47,000 shares of common stock during the three months ended September 30, 2000 at an average price of $16.23. On July 6, 2000, the Company paid a quarterly cash dividend of $0.125 per share on common stock outstanding as of the close of business on June 16, 2000, aggregating $254,000. On August 28, 2000, the Company declared a quarterly cash dividend of $0.125 per share payable on October 6, 2000 to shareholders of record as of the close of business on September 15, 2000, aggregating $247,000. Interest Income. Interest income increased by $822,000 to $7.0 million for the three months ended September 30, 2000 compared to $6.1 million for the three months ended September 30, 1999. The increase in interest income was primarily due to an increase in the average balance of interest earning assets and the average yield on average assets. The average balance of interest earning assets increased $35.1 million to $362.0 million for the three months ended September 30, 2000 from $326.9 million for the three months ended September 30, 1999. This increase was primarily due to first mortgage and consumer loans, offset by a decrease in securities available for sale. The increase in the average balance of loans generally reflects an increase over the past twelve months in originations of first mortgage loans, second mortgage loans and purchases of first mortgage loans secured primarily by multi-family, one-to four-family residential and commercial real estate loans, which were offset in part by payments, sales and prepayments of loans. See "Financial Condition." The decrease in securities available for sale reflect funds used for asset growth. The yield on interest earning assets increased to 7.67% for the three months ended September 30, 2000 from 7.49% for the three months ended September 30, 1999. The increase in average yields was due primarily to an increase in the average balance of loans as compared to the average balance of interest bearing assets, an increase in the average yield on interest bearing cash, and an increase in the average yield on loans. The average yield on loans increased to 7.94% for the three months ended September 30, 2000 from 7.85% for the three months ended September 30, 1999. The average yield on interest earning cash increased to 6.21% for the three months ended September 30, 2000 from 4.95% for the three months ended September 30, 1999. The average yield on interest earning cash reflects an increase in short term interest rates as of September 30, 2000 as compared to September 30, 1999. Interest income increased by $2.1 million to $20.2 million for the nine months ended September 30, 2000 compared to $18.1 million for the nine months ended September 30, 1999. The increase in interest income was primarily due to an increase in the average balance of interest earning assets and the average yield on average assets. The average balance of interest earning assets increased $34.3 million to $355.5 million for the nine months ended September 30, 2000 from $321.3 million for the nine months ended September 30, 1999. This increase was primarily due to an increase in first mortgage and consumer loans, offset by a decrease in securities available for sale and interest earning cash. The increase in the average balance of loans generally reflects an increase over the past twelve months in originations of first and second mortgage loans and purchases of first mortgage loans secured primarily by multi-family, one-to four-family residential and commercial real estate loans, which were offset in part by payments, sales and prepayments of loans. See "Financial Condition." The decrease in securities available for sale and interest bearing cash reflects funds used for asset growth. The average yield on interest earning assets increased to 7.58% for the nine months ended September 30, 2000 from 7.52% for the nine months ended September 30, 1999. The increase in average yield was due primarily to an increase in the average balance of loans, as compared to the average balance of interest bearing assets, and an increase in the average yield on interest bearing cash, offset in part by a decrease in the average yield on loans. The average yield on loans decreased from 7.94% for the nine months ended September 30, 1999 to 7.87% for the nine months ended September 30, 2000. The average yield on interest earning cash increased to 5.85% for the nine months ended September 30, 2000 from 4.62% for the nine months ended September 30, 1999. The average yield on interest earning cash reflects an increase in short term interest rates as of September 30, 2000 as compared to September 30, 1999. Interest Expense. Interest expense increased by $965,000 to $4.4 million for the three months ended September 30, 2000 compared to $3.4 million for the three months ended September 30, 1999. The increase in interest expense was primarily due to an increase in the average balance and average cost of interest bearing liabilities. The average balance of interest bearing liabilities increased $38.0 million to $334.7 million for the three months ended September 30, 2000 from $296.7 million for the three months ended September 30, 1999. This increase -7- RESULTS OF OPERATIONS (Continued) was due primarily to certificates of deposit and borrowed funds, offset by a decrease in NOW, money market and savings accounts. The increase in certificates of deposit was primarily due to an increase in the deposits of public funds, while the increase in borrowed funds was due to the borrowing of funds in part to fund the corresponding asset growth and stock repurchases. The average cost of interest bearing liabilities increased to 5.14% for the three months ended September 30, 2000 from 4.52% for the three months ended September 30, 1999. The increase in the average cost of interest bearing liabilities was due primarily to an increase in the average cost of money market savings accounts, certificates of deposit and borrowed funds resulting from the increase in market interest rates and the offering of a premium money market product. Interest expense increased by $2.3 million to $12.2 million for the nine months ended September 30, 2000 compared to $9.8 million for the nine months ended September 30, 1999. The increase in interest expense was primarily due to an increase in the average balance and average cost of interest bearing liabilities. The average balance of interest bearing liabilities increased $40.6 million to $327.7 million for the nine months ended September 30, 2000 from $287.1 million for the nine months ended September 30, 1999. This increase was due primarily to increases in certificates of deposit and borrowed funds, offset in part by decreases in NOW, money market and savings accounts. The increase in certificates of deposit was due primarily to an increase in the deposits of public funds. The increase in borrowed funds reflected, in part, additional borrowings to fund the corresponding asset growth and stock repurchases. The average cost of interest bearing liabilities increased to 4.93% for the nine months ended September 30, 2000 from 4.56% for the nine months ended September 30, 1999. The increase in the average cost of interest bearing liabilities was due primarily to the increase in market interest rates which raised the average cost of certificates of deposit and borrowed funds. Net Interest Income. Net interest income before the provision for loan losses decreased by $144,000 to $2,595,000 for the three months ended September 30, 2000 from $2,739,000 for the three months ended September 30, 1999. The decrease is due primarily to decreases in the interest rate spread and the ratio of average interest earning assets to average interest bearing liabilities. The interest rate spread (i.e., the difference in the average yield on assets and average cost of liabilities) decreased to 2.53% for the three months ended September 30, 2000 from 2.97% for the three months ended September 30, 1999. The ratio of average interest earning assets to average interest bearing liabilities for decreased to 108.15% for the three months ended September 30, 2000 from 110.19% for the three months ended September 30, 1999. Net interest income before the provision for loan losses decreased by $235,000 to $8,040,000 for the nine months ended September 30, 2000 from $8,275,000 for the nine months ended September 30, 1999. The decrease is due primarily to decreases in the interest rate spread and the ratio of average interest earning assets to average interest bearing liabilities. The interest rate spread decreased to 2.65% for the nine months ended September 30, 2000 from 2.96% for the nine months ended September 30, 1999. The ratio of average interest earning assets to average interest bearing liabilities for decreased to 108.49% for the three months ended September 30, 2000 from 111.88% for the three months ended September 30, 1999. 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, 2000 and 1999, respectively. -8- RESULTS OF OPERATIONS (Continued)
For the Three Months Ended September 30, ------------------------------------------------------------------ 2000 1999 ------------------------------------------------------------------ Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost --------- -------- ---------- --------- -------- ---------- (Dollars in thousands) Assets: Interest-earning assets: Loans $312,327 $6,211 7.94% $269,956 $5,307 7.85% Securities available for sale 45,286 671 5.93 51,847 758 5.85 Interest bearing cash 4,402 69 6.21 5,130 64 4.95 -------- ------ ------ -------- ------ ------ Total interest-earning assets 362,015 $6,951 7.67% 326,933 $6,129 7.49% ------ ------ ------ ------ Noninterest-earning assets 18,528 18,676 -------- -------- Total assets $380,543 $345,609 ======== ======== Liabilities and Equity: Interest-bearing liabilities: NOW and money market savings $ 48,140 $ 315 2.60% $ 51,875 $ 274 2.10% Passbook savings 24,032 122 2.01 28,048 142 2.01 Certificates of deposit 185,276 2,691 5.76 176,479 2,398 5.39 Borrowed funds 77,274 1,228 6.22 40,309 576 5.59 -------- ------ ------ -------- ------ ------ Total interest-bearing liabilities 334,722 $4,356 5.14% 296,711 $3,390 4.52% ------ ------ ------ ------ Noninterest-bearing liabilities 9,835 6,597 -------- -------- Total liabilities 344,557 303,308 Equity 35,986 42,301 -------- -------- Total liabilities and equity $380,543 $345,609 ======== ======== Net interest income $2,595 $2,739 ====== ====== Net interest rate spread 2.53% 2.97% ====== ====== Net interest margin 2.87% 3.35% ====== ====== Ratio of average interest-earning assets to average interest-bearing liabilities 108.15% 110.19% ====== ======
For the Nine Months Ended September 30, ----------------------------------------------------------------- 2000 1999 ---------------------------------------------------------------- Average Average Average Average Balance Interest Yield/Cost Balance Interest Yield/Cost --------- -------- ---------- --------- -------- ---------- (Dollars in thousands) Assets: Interest-earning assets: Loans $303,586 $17,920 7.87% $261,747 $15,574 7.94% Securities available for sale 47,669 2,104 5.89 51,333 2,243 5.83 Interest bearing cash 4,293 188 5.85 8,182 283 4.62 -------- ------- ------ -------- ------- ------ Total interest-earning assets 355,548 $20,212 7.58% 321,262 $18,100 7.52% ------- ------ ------- ------ Noninterest-earning assets 18,391 17,661 -------- -------- Total assets $373,939 $338,923 ======== ======== Liabilities and Equity: Interest-bearing liabilities: NOW and money market savings $ 47,071 822 2.33% $ 51,674 $ 827 2.14% Passbook savings 25,256 380 2.01 27,313 427 2.09 Certificates of deposit 188,008 7,875 5.58 169,176 6,911 5.46 Borrowed funds 67,377 3,095 6.03 38,981 1,660 5.61 -------- ------- ------ -------- ------- ------ Total interest-bearing liabilities 327,712 $12,172 4.93% 287,144 $ 9,825 4.56% ------- ------ ------- ------ Noninterest-bearing liabilities 10,070 5,907 -------- -------- Total liabilities 337,782 293,051 Equity 36,157 45,872 -------- -------- Total liabilities and equity $373,939 $338,923 ======== ======== Net interest income $ 8,040 $ 8,275 ======= ======= Net interest rate spread 2.65% 2.96% ====== ====== Net interest margin 3.02% 3.43% ====== ====== Ratio of average interest-earning assets to average interest-bearing liabilities 108.49% 111.88% ====== ======
-9- RESULTS OF OPERATIONS (Continued) Provision for Loan Losses. The Company's provision for loan losses was $30,000 and $90,000 for each of the three and nine months ended September 30, 2000 and 1999, 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 $47,000 for the nine months ended September 30, 2000 as compared to net charge offs of $13,000 for the nine months ended September 30, 1999. The resulting allowance for loan losses was $2.8 million at September 30, 2000, December 31, 1999 and September 30, 1999. The level of nonperforming loans increased to $1.1 million at September 30, 2000 from $213,000 at December 31, 1999 and from $503,000 at September 30, 1999. The increase in the nonperforming loans is due primarily to one commercial real estate mortgage loan in the amount of $489,000. Management believes that the allowance for loan losses is adequate. 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 decreased by $140,000 to $989,000 for the three months ended September 30, 2000 from $1,129,000 for the three months ended September 30, 1999. The decrease is due to decreases in abstract fees, mortgage banking income and other income, offset in part by increases in fees and service charges. Abstract fees decreased $67,000 due to decreased sales volume, which resulted in part from a general decline in real estate activity. Mortgage banking income decreased by $74,000 due to a decrease in loan originations. Other income decreased $14,000, primarily due to decreases in revenues from the sale of annuities, offset in part by an increase in revenues from the sale of insurance and mutual funds. Fees and service charges increased $45,000, primarily due to increases in overdraft fees, loan prepayment fees and monthly services charges on checking accounts. Noninterest income for the three months ended September 30, 1999 reflects gains on the sales of securities available for sale of $30,000, while the three months ended June 30, 2000 does not include any significant gains on the sale of securities available for sale. Total noninterest income decreased by $208,000 to $2,896,000 for the nine months ended September 30, 2000 from $3,104,000 for the nine months ended September 30, 1999. The decrease is due to decreases in abstract fees and mortgage banking income, offset in part by increases in fees and service charges and other income. Abstract fees decreased $136,000 due to decreased sales volume, which resulted in part from a general decline in real estate activity. Mortgage banking income decreased by $197,000 due to a decrease in loan originations. Fees and service charges increased $84,000, primarily due to increases in overdraft fees and monthly services charges on checking accounts, offset in part by decreases in loan prepayment fees. Other income increased by $103,000, primarily due to increases in revenues from the sales of annuity, mutual funds and insurance products. Noninterest income for the nine months ended September 30, 1999 reflects gains on the sales of securities available for sale of $62,000, while the nine months ended September 30, 2000 does not include any significant gains on the sale of securities available for sale. Noninterest Expense. Total noninterest expense decreased by $50,000 to $2,078,000 for the three months ended September 30, 2000 from $2,128,000 for the three months ended September 30, 1999. The decrease is due primarily to decreases in Savings Association Insurance Fund ("SAIF") deposit insurance premiums and other expenses, offset in part by increases in premises and equipment. The decrease in the SAIF deposit insurance premium was primarily due to lower SAIF deposit premium rates. The decrease in other expenses were primarily due to decreases in the purchases of office supplies and professional expenses, offset in part by increases in marketing expenses. The increases in premises and equipment were primarily due to an increase in depreciation expense relating primarily to the opening of a branch office in Ames, Iowa and updating of computer equipment and normal cost increases. The Company's efficiency ratio for the three months ended September 30, 2000 and 1999 were 57.98% and 55.02%, respectively. The Company's ratio of noninterest expense to average assets for the three months ended September 30, 2000 and 1999 were 2.18% and 2.46%, respectively. Total noninterest expense decreased by $39,000 to $6,300,000 for the nine months ended September 30, 2000 from $6,339,000 for the nine months ended September 30, 1999. The decrease is due primarily to decreases in data processing and SAIF deposit insurance, offset in part by an increase in premises and equipment. The decreases in data processing -10- RESULTS OF OPERATIONS (Continued) expense were due primarily to the Bank signing a new multi-year data processing contract in 1999 and costs associated with the Year 2000 issues incurred in 1999. The decrease in the SAIF deposit insurance premium was primarily due to lower SAIF deposit premium rates. The increases in premises and equipment were primarily due to an increase in depreciation expense relating primarily to the opening of a branch office in Perry, Iowa and Ames, Iowa, updating computer equipment and normal cost increases. The Company's efficiency ratio for the nine months ended September 30, 2000 and 1999 were 57.61% and 55.71%, respectively. The Company's ratio of noninterest expense to average assets for the nine months ended September 30, 2000 and 1999 were 2.25% and 2.49%, respectively. Income Taxes. Income taxes decreased by $118,000 to $504,000 for the three months ended September 30, 2000 as compared to $622,000 for the three months ended September 30, 1999, primarily due to a decrease in net income before income taxes. Income taxes decreased by $169,000 to $1,562,000 for the nine months ended September 30, 20000 as compared to $1,731,000 for the nine months ended June 30, 1999, primarily due to a decrease in net income before income taxes. Net Income. Net income decreased by $116,000 to $971,000 for the three months ended September 30, 2000, as compared to $1,088,000 for the same period in 1999. Net income decreased by $236,000 to $2,983,000 for the nine months ended September 30, 2000, as compared to $3,219,000 for the same period in 1999. 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, 1999 as reported in Item 7A of the Annual Report on Form 10-K. -11- 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 None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27. Financial data schedule. (Only submitted with filing in electronic format.) Exhibit 99.1 Press Release, dated August 28, 2000 (regarding the declaration of a dividend). Exhibit 99.2 Press Release, dated October 20, 2000 (regarding the issuance of limited financial information for the three months ended September 30, 2000). (b) Reports on Form 8-K None -12- 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, 2000 BY: /s/ David M. Bradley David M. Bradley, Chairman, President and Chief Executive Officer DATE: November 14, 2000 /s/ John L. Pierschbacher John L. Pierschbacher, CPA Principal Financial Officer -13- EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
9 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 2,160,901 6,026,164 0 0 43,430,723 0 0 312,749,995 2,819,741 384,376,901 261,685,769 53,000,000 2,065,212 31,622,554 0 0 40,111 35,963,255 384,376,901 17,919,983 2,292,378 0 20,212,361 9,077,768 12,172,341 8,040,020 90,000 0 6,300,490 4,545,200 4,545,200 0 0 2,983,337 1.50 1.47 7.58 1,060,953 0 0 0 2,776,539 49,042 2,244 2,819,741 2,819,741 0 0
EX-99.1 3 0003.txt PRESS RELEASE, DATED 08/28/2000 Exhibit 99.1 Press Release PRESS RELEASE August 28, 2000 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. ANNOUNCES 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 $0.125 per share on the Company's common stock for the fiscal quarter ended September 30, 2000. The dividend will be payable to all stockholders of record as of September 15, 2000 and will be paid on October 6, 2000. North Central Bancshares, Inc. serves north central and southeastern Iowa at 8 full service locations in Fort Dodge, Nevada, Ames, Burlington, Mount Pleasant and Perry, 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-99.2 4 0004.txt PRESS RELEASE, DATED 10/20/2000 Exhibit 99.2 Press Release PRESS RELEASE October 20, 2000 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 PER SHARE FOR THIRD QUARTER 2000 (Nasdaq: FFFD) Fort Dodge, Iowa -- North Central Bancshares, Inc. (the "Company"), the holding company for First Federal Savings Bank of Iowa (the "Bank"), announced today that the Company earned $0.49 diluted earnings per share for the third quarter of 2000, compared to diluted earnings per share of $0.43 for the third quarter of 1999, an increase of 14.0%. In dollars, the Company's net income was $971,000 for the third quarter of 2000, compared to $1.1 million for the third quarter of 1999. The Company's net income was $3.0 million, or diluted earnings per share of $1.47, for the nine months ended September 30, 2000, compared to $3.2 million, or diluted earnings per share of $1.18, for the nine months ended September 30, 1999. Total assets at September 30, 2000 were $384.4 million as compared to $367.4 million at December 31, 1999. The increase in assets resulted primarily from increases in loans, offset by a decrease in cash and securities available-for- sale. Cash decreased by $4.5 million, or 35.4%, from $12.7 million at December 31, 1999 to $8.2 million at September 30, 2000. Securities available-for-sale decreased $6.3 million, or 12.6%, from $49.7 million at December 31, 1999 to $43.4 million at September 30, 2000. The decrease in securities available for sale was primarily due to calls and maturities in excess of purchases. Loans increased by $26.0 million, or 9.1 %, to $312.7 million at September 30, 2000 from $286.8 million at December 31, 1999. Deposits decreased $9.3 million, or 3.4%, to $261.7 million at September 30, 2000 from $271.0 million at December 31, 1999. Other borrowed funds increased $28.9 million, or 51.9%, to $84.6 million at September 30, 2000 from $55.7 million at December 31, 1999. The increase in other borrowings was primarily due to the funding of asset growth and stock repurchases. Nonperforming assets were 0.32% of total assets as of September 30, 2000 compared to 0.20% of total assets as of December 31, 1999. The allowance for loan losses was $2.8 million, or 0.89% of total loans, at September 30, 2000, compared to $2.8 million, or 0.95% of total loans, at December 31, 1999. The net interest spread of 2.53% for the three months ended September 30, 2000 represented a decrease from the net interest spread of 2.97% for the three months ended September 30, 1999. The net interest margin of 2.87% for the - MORE- three months ended September 30, 2000 represented a decrease from the net interest margin of 3.35% for the three months ended September 30, 1999. Net interest income for the three months ended September 30, 2000 was $2.6 million, compared to net interest income of $2.7 million for the corresponding period a year ago. The Bank's provision for loan losses was $30,000 for the three months ended September 30, 2000 and 1999. The Company establishes provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level which is deemed to be appropriate based upon an assessment of prior conditions, the volume and type of loans in the Bank's portfolio, and other factors related to the collectibility of the Bank's loan portfolio. Stockholders' equity was $36.0 million at September 30, 2000, compared to $38.1 million at December 31, 1999. Stockholders' equity decreased by $2.1 million primarily due to stock repurchases and declared dividends, which were offset in part by earnings. Book value, or stockholders' equity per share, at September 30, 2000 was $18.27 compared to $16.86 at December 31, 1999. The ratio of stockholders' equity to total assets was 9.4% at September 30, 2000, as compared to 10.4% at December 31, 1999. Stockholders of record on September 15, 2000, received a quarterly cash dividend of $0.125 per share on October 6, 2000. The Company commenced a stock repurchase program on April 27, 2000. The program authorizes the Company to repurchase up to 5.0%, or 102,862 shares, of its 2,057,242 outstanding shares of common stock during the next twelve months. The Company has repurchased 92,000 shares through October 3, 2000. The remaining repurchases will be made from time to time in open market transactions at the discretion of management. The Company announced a dividend reinvestment and stock purchase plan on September 22, 2000. Shareholders owning 100 or more shares registered in their name are eligible to enroll in this plan. North Central Bancshares, Inc. serves north central and southeastern Iowa at 8 full service locations in Fort Dodge, Nevada, Ames, Perry, 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. The Company's stock is traded on The Nasdaq National Market under the symbol "FFFD". For more information contact: David M. Bradley, President, 515-576-7531 FINANCIAL HIGHLIGHTS OF NORTH CENTRAL BANCSHARES, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Financial Condition
(Dollars in Thousands, except per share and share data) September 30, 2000 December 31, 1999 ------------------- ------------------ Assets Cash and cash equivalents $ 8,187 $ 12,669 Securities available for sale 43,431 49,693 Loans (net of allowance of loan loss of $2.8 million and $2.8 million, respectively) 312,750 286,838 Goodwill 5,561 5,915 Other assets 14,448 12,318 ---------- ---------- Total Assets $ 384,377 $ 367,433 ========== ========== Liabilities Deposits $ 261,686 $ 271,031 Other borrowed funds 84,623 55,715 Other liabilities 2,065 2,560 ---------- ---------- Total Liabilities 348,374 329,306 Stockholders' Equity 36,003 38,127 ---------- ---------- Total Liabilities and Stockholders' Equity $ 384,377 $ 367,433 ========== ========== Stockholders' equity to total assets 9.37% 10.38% ========== ========== Book value per share $18.27 $16.86 ========== ========== Total shares outstanding 1,970,242 2,261,742 ========== ==========
Condensed Consolidated Statements of Income (Dollars in Thousands, except per share data)
For the Three Months For the Nine Months Ended September 30, Ended September 30, 2000 1999 2000 1999 ------ ------ ------- ------- Interest income $6,951 $6,130 $20,212 $18,100 Interest expense 4,356 3,391 12,172 9,825 ------ ------ ------- ------- Net interest income 2,595 2,739 8,040 8,275 Provision for loan loss 30 30 90 90 ------ ------ ------- ------- Net interest income after provision for loan loss 2,565 2,709 7,950 8,185 Noninterest income 988 1,129 2,896 3,104 Noninterest expense 2,078 2,128 6,301 6,339 ------ ------ ------- ------- Income before income taxes 1,475 1,710 4,545 4,950 Income taxes 504 622 1,562 1,731 ------ ------ ------- ------- Net income $ 971 $1,088 $ 2,983 $ 3,219 ====== ====== ======= ======= Basic earnings per share $ 0.50 $ 0.44 $ 1.50 $ 1.20 ====== ====== ======= ======= Diluted earnings per share $ 0.49 $ 0.43 $ 1.47 $ 1.18 ====== ====== ======= =======
Selected Financial Ratios
For the Three Months For the Nine Months Ended September 30, Ended September 30, 2000 1999 2000 1999 ----- ----- ----- ----- Performance ratios Net interest spread 2.53% 2.97% 2.65% 2.95% Net interest margin 2.87% 3.35% 3.02% 3.43% Return on average assets 1.02% 1.25% 1.06% 1.27% Return on average equity 10.80% 10.28% 11.00% 9.36% Efficiency ratio (noninterest expense divided by the sum of net interest income before provision for loan losses plus noninterest income) 57.98% 55.01% 57.61% 55.70%
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