EXHIBIT 13


TABLE OF CONTENTS
--------------------------------------------------------------------------------

Message from the Chairman and the President...............................     1

Selected Consolidated Financial Information...............................     2

Management's Discussion and Analysis of Financial
  Condition and Results of Operations.....................................     4

Report of Independent Auditors............................................    14

Consolidated Statements of Financial Condition............................    15

Consolidated Statements of Operations.....................................    16

Consolidated Statements of Changes in
  Stockholders' Equity....................................................    17

Consolidated Statements of Cash Flows.....................................    18

Notes to Consolidated Financial Statements................................    20

Stockholder and Corporate Information.....................................    41


<PAGE>


                                                                  March 22, 2004


To Our Shareholders:

         Our Company ended fiscal year 2003 in much better shape than it began.
During the year 2002 and at the beginning of 2003 we experienced a decline in
our interest rate spread resulting from the extraordinary refinancing activity
that took place as a result of the lowest levels of interest rates in 45 years.
Despite these historically low rates, an employee embezzlement that was
discovered in the first quarter of 2003 and an economy that has just begun to
recover, we ended the year with a record number of loans, which included an $8.2
million increase in equity lines of credit. In January 2004, we fully recovered
the embezzled funds and we have made progress on improving our interest rate
spread. In addition, the credit quality of our portfolio has remained excellent.

         During 2003, we continued the diversification of our loan portfolio
into commercial real estate and consumer loans, while selling long term fixed
rate loans. These higher-yielding consumer and commercial real estate loans
carry shorter terms to maturity and reprice faster than residential mortgages,
which will result in future earnings being less susceptible to movements in
interest rates.

         We also continued to grow our core deposit products with our passbook,
checking and money market deposit accounts growing by 3.3% over year end 2002
and, within that category, non-interest checking accounts growing 9.5%. Many of
our customers are now using our internet banking product and bill payment
service that we introduced in 2003.

         While the economy continues to struggle with recovery and it appears
that interest rates will remain low for an extended period of time, your Board
is committed to improving shareholder value and continues to expand and enhance
our balance sheet with the products and services that our customers demand and
deserve.

                                           Sincerely,



                                           Mary Ann Hass
                                           Chairman of the Board



                                           Joseph A. Graber
                                           President and Chief Executive Officer





                                       1
<PAGE>


Set forth below is selected financial data of the Company. This financial data
is derived in part from, and should be read in conjunction with, the
Consolidated Financial Statements of the Company and the Notes thereto contained
in this annual report.


                   SELECTED CONSOLIDATED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                              --------------------------------------------------------------
                                                 2003         2002         2001         2000          1999
                                              --------------------------------------------------------------
                                                           (IN THOUSANDS-EXCEPT PER SHARE DATA)
============================================================================================================

SELECTED FINANCIAL CONDITION DATA:
----------------------------------
<S>                                           <C>          <C>          <C>          <C>           <C>
Total assets                                  $ 133,746    $ 137,793    $ 136,761    $ 134,581     $ 130,689
Loans receivable, net                            95,471       86,464       93,425       90,765        88,989
Securities available for sale                    18,612       26,875       18,753       30,541        31,578
Deposit accounts                                 90,952       90,150       87,448       81,317        76,506
Borrowed funds                                   27,500       31,000       31,750       38,200        41,100
Stockholders' equity                             13,494       13,905       13,493       12,783        11,253

<CAPTION>

                                                                   YEAR ENDED DECEMBER 31,
                                              --------------------------------------------------------------
SELECTED OPERATING DATA:                         2003          2002         2001         2000         1999
------------------------                      --------------------------------------------------------------
<S>                                           <C>          <C>          <C>          <C>           <C>
Total interest income                         $   6,892    $   8,390    $   9,219    $   9,250     $   8,837
Total interest expense                            3,601        4,420        5,626        5,787         5,276
                                              --------------------------------------------------------------
Net interest income before provision
  for loan losses                                 3,291        3,970        3,593        3,463         3,561
Provision for loan losses                            21           28           36           31            17
                                              --------------------------------------------------------------
Net interest income after provision
  for loan losses                                 3,270        3,942        3,557        3,432         3,544
                                              --------------------------------------------------------------
Non-interest income (loss):

  Gain (loss) on sale of securities
    available for sale                              100          181           11         (138)           75
  Gain (loss) on sale of loans held
    for sale                                         65           75           64          (12)           --
  Gain on sale of real estate                        --           --           --        1,322            --
  Other than temporary decline in
    value of securities available for sale           --           --           --          (24)          (66)
  Service fees and other non-interest
    income                                          429          326          323          308           299
                                              --------------------------------------------------------------
Total non-interest income                           594          582          398        1,456           308
Non-interest expense                              3,283        3,344        3,157        3,065         2,954
                                              --------------------------------------------------------------

Income before tax expense                           581        1,180          798        1,823           898
Income tax expense                                  211          460          313          453           362
                                              --------------------------------------------------------------
NET INCOME                                    $     370    $     720    $     485    $   1,370     $     536
                                              ==============================================================

Basic earnings per share                      $     .32    $     .62    $     .42    $    1.17     $     .45
Diluted earnings per share                          .32          .62          .42         1.16           .44
                                              --------------------------------------------------------------
Dividends paid per share                            .38          .44          .44          .44           .44
                                              --------------------------------------------------------------
</TABLE>

                                        2
<PAGE>


                    SELECTED FINANCIAL RATIOS AND OTHER DATA

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                 --------------------------------------------------------------------------------
                                                     2003             2002             2001             2000             1999
                                                 --------------------------------------------------------------------------------
PERFORMANCE RATIOS:
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>              <C>              <C>              <C>              <C>
 Return on assets (ratio of net income to
   average assets)                                    0.28%            0.52%            0.35%            1.04%            0.42%
 Return on stockholders' equity (ratio of
   net income to average equity)                      2.71             5.28             3.72            11.68             4.36
 Interest rate spread information:
   Average during year                                2.09             2.45             2.09             2.09             2.30
   End of year                                        2.18             2.21             2.15             2.13             2.35
 Net interest margin                                  2.54             2.95             2.67             2.68             2.83
 Ratio of operating expenses to average
   assets                                             2.45             2.41             2.30             2.33             2.30
 Efficiency ratio(1)                                   .85              .74              .79              .62              .76
 Ratio of average interest-earning assets
   to average interest-bearing liabilities          115.86           115.05           114.03           113.31           112.76

ASSET QUALITY RATIOS:
---------------------------------------------------------------------------------------------------------------------------------
 Non-performing assets to total assets at
   end of year                                        0.00             0.00             0.00             0.00             0.00
 Allowance for loan losses to non-
   performing loans                                    N/A(2)           N/A(2)           N/A(2)           N/A(2)           N/A(2)
 Allowance for loan losses to loans
   receivable                                         0.36             0.38             0.32             0.29             0.26

CAPITAL RATIOS:
---------------------------------------------------------------------------------------------------------------------------------
  Stockholders' equity to total assets               10.09            10.09             9.87             9.50             8.61
  Average stockholders' equity to average
   assets                                            10.16             9.82             9.49             8.93             9.56
  Shares outstanding-actual                      1,144,695        1,138,029        1,156,774        1,181,253        1,231,207
  Book value per share                               11.79            12.22            11.66            10.82             9.14
  Dividend payout ratio                               1.19              .71             1.04              .38             1.00

NUMBER OF FULL SERVICE                                   2                2                2                2                2
OFFICES:
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes gains on sales.
(2) Not applicable because the Company had no non-performing loans.


                                        3
<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

GENERAL

         North Bancshares, Inc. (the "Company") was organized on September 23,
1993 under Delaware law as the holding company for North Federal Savings Bank
(the "Bank"). In connection with the Bank's conversion from a federally
chartered mutual savings bank to a stock savings bank, the Bank issued all of
its common stock to the Company for approximately 50% of the net proceeds of the
conversion. At December 31, 2003, there were 1,144,695 outstanding shares of
common stock. The Company's common stock trades on The Nasdaq Stock Market under
the symbol "NBSI."

         The primary business of the Company is that of an independent,
community-oriented financial institution offering a variety of financial
services to meet the needs of the communities it serves. The Company attracts
deposits from the general public, obtains brokered deposits or borrows funds and
uses such funds to originate or acquire one- to four-family residential
mortgages, loans secured by multi-family apartment buildings, commercial real
estate loans and equity loans and lines of credit secured by real estate. The
Company also purchases participating interests in commercial real estate loans
and maintains a commercial line of credit with a manufactured housing developer.
The Company's shorter term investments are primarily federal agency securities,
investment grade securities, mortgage-backed securities and federal funds.

         The Company's consolidated results of operations are primarily
dependent on net interest income, which is the difference between the interest
earned on interest-earning assets and the interest paid on deposits and
borrowings and, to a lesser degree on non-interest income and non-interest
expense. The Company's operating expenses consist principally of employee
compensation, occupancy expenses and other general and administrative expenses.
The Company's results of operations are also significantly affected by general
economic and competitive conditions, particularly changes in market interest
rates, government policies and actions of regulatory authorities.

FORWARD-LOOKING STATEMENTS

         When used in this Annual Report and in other filings with the
Securities and Exchange Commission, in press releases or other public or
shareholder communications, or in oral statements made with the approval of an
authorized executive officer, the words or phrases "believe," "Will likely
result," "are expected to," "will continue", "is anticipated", "estimate",
"project", "plans," or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. You are cautioned not to place undue reliance on
any forward- looking statements, which speak only as of the date made. By their
nature, these statements are subject to numerous uncertainties that could cause
actual results to differ materially from those anticipated in the statements.

         Important factors that could cause actual results to differ materially
from the results anticipated or projected include, but are not limited to, the
following: (1) the credit risks of lending activities, including changes in the
level and direction of loan delinquencies and write-offs; (2) changes in
management's estimate of the adequacy of the allowance for loan losses; (3)
competitive pressures among depository institutions; (4) interest rate movements
and their impact on customer behavior and the Company's net interest margin; (5)
the impact of repricing and competitor's pricing initiatives on loan and deposit
products; (6) the Company's ability to adapt successfully to technological
changes to meet customers' needs and developments in the market place; (7) the
Company's ability to access cost-effective funding; (8) changes in financial
markets and general economic conditions; (9) new legislation or regulatory
changes; (10) changes in accounting principles, policies or guidelines.

         The Company does not undertake any obligation to update any
forward-looking statement to reflect circumstances or events that occur after
the date on which the forward-looking statement is made.


                                        4
<PAGE>


         The Board of Directors and the Management of the Company and the Bank
are continuing to focus on building the franchise value of the Company in order
to improve and produce long term value to our shareholders and to serve the
needs of our communities, customers, and employees.

         In order to accomplish this mission we set forth the following goals
and targets.


         1. To achieve a 7.5% TO 8.0% return on equity (ROE) by the end of
         fiscal year 2006.

         2. To achieve a .65% TO .70% return on assets (ROA) by the end of
         fiscal year 2006.

         3. To increase deposit accounts by 10% per year, with an emphasis on
         lower cost accounts such as non-interest bearing checking accounts.

         4. To achieve a loan to assets ratio of between 75% to 80% by the end
         of fiscal year 2006.

         5. To continue to focus lending on products that carry adjustable rates
         and have shorter terms to maturity than long term fixed rate mortgages.

         6. To increase non-interest income by 10% to 15% per year.

         7. To provide shareholders a regular quarterly dividend.

         8. To continue efforts at controlling costs in order to improve overall
         efficiency.

         9. To consider stock repurchase programs when improvement in both
         earnings per share and book value can be enhanced.


IN ORDER TO ACHIEVE THESE GOALS THE COMPANY:

         1. Will continue to promote its deposit products in the local
         communities and review alternative sources of low cost deposit
         products.

         2. Will continue to promote loan products that are adjustable rate and
         contain shorter terms to maturity such as equity lines of credit and
         commercial real estate loans.

         3. Will continue to focus on cost containment and investigate and
         implement new technologies that provide more effective and efficient
         means to provide financial services to our communities in order to
         improve efficiency.

         4. Will continue to develop relationships with local community groups,
         real estate companies and developers to seek out new business
         opportunities.

         5. Seek out opportunities and locations that compliment the current
         philosophy of the Company in order to expand operations into adjacent
         or new communities.

         6. Continue our commitment to community reinvestment.

         7. Will consider other strategic alternatives in order to improve
         shareholder value.

ASSET/LIABILITY MANAGEMENT

         A key component of successful asset/liability management is the
monitoring and management of interest rate risk sensitivity, which includes the
repricing and maturity of interest-earning assets and interest-bearing
liabilities. The Bank has an Asset-Liability Risk Management Committee and an
Interest Rate Committee that meet on a regular basis to review the business plan
and assess the Bank's investment portfolio and deposit pricing, and meet
quarterly to assess economic conditions and to consider methods of managing the
Bank's asset and liability mix and overall sensitivity to interest rates.


                                        5
<PAGE>


ANALYSIS OF NET INTEREST INCOME

         Net interest income represents the difference between income on
interest-earning assets and expense on interest-bearing liabilities. Net
interest income depends upon the volume of interest- earning assets and
interest-bearing liabilities and the interest rate earned or paid on them.

         The following table presents for the periods indicated the total dollar
amount of interest income from average interest-earning assets and the resultant
yields, as well as the interest expense on average interest-bearing liabilities,
expressed both in dollars and rates. No tax equivalent adjustments were made.
All average balances are monthly average balances.

<TABLE>
<CAPTION>
                                                        -------------------------------------------------------------------------
                                                                        2003                                    2002
                                                        -------------------------------------------------------------------------
                                                         Average      Interest                   Average      Interest
                                                       outstanding     Earned\      Yield\     outstanding     Earned\      Yield\
                                                         balance        Paid         Rate        balance        Paid         Rate
                                                        -------------------------------------------------------------------------
                                                                                   (Dollars in thousands)
<S>                                                     <C>           <C>            <C>        <C>           <C>            <C>
INTEREST-EARNING ASSETS:
  Loans receivable(1)                                   $ 86,416      $  5,531       6.40%      $ 92,441      $  6,641       7.18%
  Securities available for sale                           28,083         1,193       4.25         29,388         1,554       5.29
  Federal funds sold and interest-earning deposits        15,259           168       1.10         12,792           195       1.49
                                                        -------------------------------------------------------------------------
Total interest-earning assets                            129,758         6,892       5.31        134,621         8,390       6.23
Non-interest-earning assets                                4,423                                   4,233
                                                        -------------------------------------------------------------------------
Total assets                                             134,181                                 138,854
                                                        =========================================================================

INTEREST-BEARING LIABILITIES:
  MMDA & NOW accounts                                     27,054           257       0.95         27,363           512       1.87
  Passbook accounts                                       12,702            87       0.68         12,266           204       1.66
  Certificate accounts                                    43,621         1,712       3.92         44,963         1,971       4.38
  Borrowed funds                                          28,615         1,545       5.40         32,423         1,733       5.34
                                                        -------------------------------------------------------------------------
Total interest-bearing liabilities                       111,992         3,601       3.22        117,015         4,420       3.78
                                                        -------------------------------------------------------------------------
Non interest-bearing deposits                              5,466                                   4,643
Other liabilities                                          3,092                                   3,546
                                                        -------------------------------------------------------------------------
Total liabilities                                        120,550                                 125,204
Stockholders' equity                                      13,631                                  13,650
                                                        -------------------------------------------------------------------------
Total liabilities and stockholders' equity               134,181                                 138,854
                                                        =========================================================================
Net interest income/interest rate
 spread(2)                                                            $  3,291       2.09%                    $  3,970       2.45%
                                                        =========================================================================
Net earning assets/net interest margin(3)               $ 17,766                     2.54%      $ 17,606                     2.95%
                                                        =========================================================================
Percentage of interest-earning assets to
interest-bearing liabilities                                            115.86%                                 115.05%
                                                        =========================================================================
</TABLE>

--------------------------------------------------------------------------------
1. Calculated net of deferred loan fees, loan discounts, loans in process and
   allowance for loan losses.
2. Interest rate spread represents the difference between the average rate on
   interest-earning assets and the average cost of interest-bearing liabilities.
3. Net interest margin represents net interest income divided by average
   interest-earning assets.


                                        6
<PAGE>


WEIGHTED AVERAGE YIELD ANALYSIS

         The following table presents the yields received on loans, securities
available for sale, federal funds and other interest-earning assets and the
rates paid on deposits and borrowed funds and the resultant interest rate
spreads at the dates indicated.

                                               At December 31,
                                               ---------------
                                               2003       2002
                                               ---------------

WEIGHTED AVERAGE YIELD ON:
  Loans receivable                             5.83%      6.76%
  Securities available for sale(1)             4.80       5.77
  Federal funds sold and interest-earning
    deposits                                   1.33       2.19
                                               ---------------
  Combined weighted average yield on
     interest-earning assets                   5.21       5.69
                                               ---------------

WEIGHTED AVERAGE RATE PAID ON:
  Passbook accounts                            0.50       1.25
  MMDA & NOW accounts                          0.77       1.25
  Certificate accounts                         3.66       4.25
  Borrowed funds                               5.41       5.19
                                               ---------------
  Combined weighted average rate paid on
    interest-bearing liabilities               3.03       3.48
                                               ---------------
SPREAD                                         2.18%      2.21%
                                               ===============

----------------------------------------------------------------
(1) Mortgage-backed securities are net of premiums and discounts

RATE AND VOLUME ANALYSIS

         The following schedule presents the dollar amount of changes in
interest income and interest expense for major components of interest-earning
assets and interest-bearing liabilities. It distinguishes between the increase
related to changes in outstanding balances (volume) and that due to changes in
interest rates (rates). For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable to
(I) changes in volume (i.e., changes in volume multiplied by current rate) and
(ii) changes in rate (i.e., changes in rate multiplied by old volume). Changes
attributable to both rate and volume which cannot be segregated have been
allocated proportionately to the change due to volume and the change due to
rate.

<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                                       -----------------------------------
                                                                   2003 vs 2002
                                                       -----------------------------------
                                                        Increase (Decrease)
                                                               Due to              Total
                                                       -----------------------------------
                                                                                  Increase
                                                        Volume        Rate       (Decrease)
                                                       -----------------------------------
                                                                  (In Thousands)
<S>                                                    <C>           <C>           <C>
INTEREST-EARNING ASSETS:
 Loans receivable(1)                                   $  (386)      $  (724)      $(1,110)
 Securities available for sale                             (55)         (306)         (361)
 Federal funds sold and interest-earning deposits           27           (54)          (27)
                                                       -----------------------------------
  TOTAL INTEREST-EARNING ASSETS                           (414)       (1,084)       (1,498)
                                                       -----------------------------------

INTEREST-BEARING LIABILITIES:
 MMDA & NOW accounts                                        (3)         (252)         (255)
 Passbook accounts                                           3          (120)         (117)
 Certificate accounts                                      (53)         (206)         (259)
 Borrowed funds                                           (206)           18          (188)
                                                       -----------------------------------
  TOTAL INTEREST-BEARING LIABILITIES                      (259)         (560)         (819)
                                                       -----------------------------------
CHANGE IN NET INTEREST INCOME                                                        $(679)
                                                                                     =====
</TABLE>

------------------------------------------------------------------------------
(1) Calculated net of deferred loan fees, loan discounts, loans in process and
    allowance for loan losses.


                                        7
<PAGE>


CHANGES IN FINANCIAL CONDITION

         Total assets decreased by $4.1 million and amounted to $133.7 million
at December 31, 2003 from $137.8 million at December 31, 2002. The decrease was
primarily attributable to a $5.3 million decrease in cash and cash equivalents
and a $8.3 million decrease in securities available for sale. These decreases
were partially offset by a $9.0 million increase in net loans receivable.

         Net loans receivable increased by $9.0 million and amounted to $95.5
million at December 31, 2003 from $86.5 million at December 31, 2002. The
increase was primarily attributable to a $8.2 million increase in equity lines
of credit that adjust to the prime rate or the prime rate plus a margin. In
addition, there was a $5.4 million increase in commercial real estate loans
which was offset by a $4.0 million decrease in one- to four-family loans. The
decrease in one- to four-family loans was primarily due to a focus on
diversifying the loan portfolio with more consumer and commercial real estate
loans. The Company originated $64.8 million in loans during the year ended
December 31, 2003 compared with $46.0 million during the year ended December 31,
2002. Repayments totaled $54.1 million and loan sales totaled $1.9 million
during the year ended December 31, 2003, compared with $49.0 million in
repayments and $3.9 million in loan sales during the year ended December 31,
2002. At December 31, 2003, the Bank had $6.4 million in loan applications
pending approval, closing or funding and $14.5 million in unused equity lines of
credit compared with $1.2 million in loan applications and $9.7 million in
unused equity lines of credit outstanding at December 31, 2002.

         Cash and cash equivalents decreased $5.3 million and amounted to $13.0
million at December 31, 2003 compared with $18.3 million at December 31, 2002.
The decrease was primarily due to the deployment of federal funds into loans.

         Total deposits increased by $800,000 and amounted to $91.0 million at
December 31, 2003 compared with $90.2 million at December 31, 2002. The increase
was due primarily to a $1.5 million increase in checking, money market deposit
and passbook accounts partially offset by a $600,000 decrease in certificates of
deposit. Non-interest bearing checking accounts increased 9.5% to $5.6 million
at December 31, 2003 compared with $5.1 million at December 31, 2002. Management
believes that the increase in deposits was due in part to customers seeking
safety and convenience as a result of the decline in the stock market, the
negative press the mutual fund industry is receiving and concerns about the
economic recovery. The weighted average cost of interest-bearing deposits
decreased to 2.47% at December 31, 2003 from 3.18% at December 31, 2002.

         Borrowed funds decreased by $3.5 million and amounted to $27.5 million
at December 31, 2002 from $31.0 million at December 31, 2002. The decrease was
attributable to the repayment of FHLB advances that matured during the year.

         Stockholders' equity was $13.5 million at December 31, 2003 compared
with $13.9 million at December 31, 2002. The decrease was primarily attributable
to a $374,000 decrease in accumulated other comprehensive income due primarily
to the increase in interest rates that occurred during the third quarter and the
resulting negative effect on the fair value of the available for sale securities
portfolio. Treasury stock decreased by $120,000 primarily due to the exercise of
stock options. Retained earnings increased by net income of $370,000 which was
offset by $435,000 in dividend payments. Book value per share decreased to
$11.79 at December 31, 2003 compared with $12.22 at December 31, 2002.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2003 AND
DECEMBER 31, 2002

         GENERAL. Net income decreased by $350,000 and amounted to $370,000 for
the year ended December 31, 2003 as compared to $720,000 for the year ended
December 31, 2002. Basic and diluted earnings per share amounted to $.32 for the
year ended December 31, 2003, a decrease of $.30 per share from $.62 per basic
share and diluted share for the year ended December 31, 2002. The decrease was
primarily attributable to a $679,000 decrease in net-interest income before
provision for loan losses partially offset by a $249,000 decrease in income tax
expense and a $61,000 decrease in non-interest expense.


                                        8
<PAGE>


         INTEREST INCOME. Interest income decreased by $1.5 million and amounted
to $6.9 million for the year ended December 31, 2003 compared with $8.4 million
for the year ended December 31, 2002. The decrease was primarily attributable to
a decrease in the average yield on interest-earning assets to 5.31% for the year
ended December 31, 2003 from 6.23% for the year ended December 31, 2002. The
decrease in the average yield during the year was due primarily to the decline
in market rates of interest that occurred during the years 2002 and 2003. This
was compounded by a decrease in higher yielding loans receivable due to
prepayments. These prepayments were temporarily reinvested into lower yielding
securities available for sale and federal funds.

         INTEREST EXPENSE. Interest expense decreased by $819,000 and amounted
to $3.6 million at December 31, 2003 compared with $4.4 million for the year
ended December 31, 2002. The decrease was attributable to a $631,000 decrease in
interest on deposit accounts and a $188,000 decrease in interest on borrowed
funds. The average cost of borrowed funds increased to 5.40% for the year ended
December 31, 2003 from 5.34% for the year ended December 31, 2002. In addition,
there was a decrease in the average cost of all interest bearing deposit
accounts to 2.47% for the year ended December 31, 2003 from 3.18% for the year
ended December 31, 2002 due to the continued decline in both short and long term
interest rates during the years 2002 and 2003. The average balance of
interest-bearing liabilities decreased to $112.0 million for the year ended
December 31, 2003 from $117.0 million for the year ended December 31, 2002.

         PROVISION FOR LOAN LOSSES. The Company added $21,000 to its allowance
for loan losses for the year ended December 31, 2003 compared with $28,000 for
the year ended December 31, 2002. The decrease is primarily attributable to
overall excellent credit quality of the portfolio even though total loans
receivable increased. The allowance for loan losses was $347,000 at December 31,
2003 and amounted to .36% of loans receivable compared with $326,000 at December
31, 2002 and .38% of loans receivable. Future additions to the Company's
allowance for loan losses and any change in the related ratio of the allowance
for loan losses to non-performing loans are dependent upon various factors such
as the performance and composition of the Company's loan portfolio, the economy,
changes in real estate values, interest rates and the view of the regulatory
authorities toward allowance levels and inflation.

         On a quarterly basis, management of the Bank meets to review the
adequacy of the allowance for loan losses. Management classifies loans in
compliance with regulatory classifications. Classified loans are individually
reviewed to arrive at specific reserves for those loans. Once the specific
portion of the allowance is calculated, management calculates a historical
portion for each loan category based on loan loss history, peer data, current
economic conditions and trends in the portfolio, including delinquencies and
impairments, as well as changes in the composition of the loan portfolio.
Although management believes the allowance for loan losses was at a level
adequate to absorb probable incurred losses on existing loans at December 31,
2003, there can be no assurance that such losses will not exceed estimated
amounts.

         NON-INTEREST INCOME. Non-interest income increased by $12,000 and
amounted to $594,000 for the year ended December 31, 2003 compared with $582,000
for the year ended December 31, 2002. The increase was primarily attributable to
a $103,000 increase in service charges and other non-interest income which was
partially offset by an $81,000 decrease in gains on sales of securities
available for sale.

         NON-INTEREST EXPENSE. Non-interest expense decreased by $61,000 and
amounted to $3.3 million for the years ended December 31, 2003 and December 31,
2002. The decrease was primarily attributable to a $189,000 decrease in
compensation and benefits expense and professional fees. The decrease in
compensation and benefits expense was due primarily to the elimination of
expense associated with the ESOP after all shares were fully allocated in 2002.
These decreases were partially offset by an $86,000 increase in other
non-interest expense primarily related to a $67,000 charge for an employee
embezzlement. The embezzlement was fully recovered in the first quarter of 2004.

INCOME TAX EXPENSE.

         The allocation for income taxes decreased by $249,000 and amounted to
$211,000 for the year ended December 31, 2003 from $460,000 for the year ended
December 31, 2002. The decrease was primarily related to a decrease in net
income before taxes. The effective tax rate was 36.3% for the year ended
December 31, 2003 compared with 39.0% for the year ended December 31, 2002.


                                       10
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

         The Bank's primary source of funds are deposits, which include both
retail and brokered, borrowings from the FHLB of Chicago, amortization and
prepayment of loans and mortgage-backed securities and sales and maturities of
other investment securities. The Bank can also borrow from its correspondent
banks. The Bank uses its liquid resources to fund loan commitments, to meet
operating expenses, to invest and to fund deposit withdrawals. Management
believes that loan repayments and the other sources of funds will be adequate to
meet the liquidity needs of the Bank.

         The OTS requires the Bank to maintain sufficient liquidity to ensure
its safe and sound operation. At December 31, 2003, the Bank's liquidity ratio
was 16.4% compared with 22.2% at December 31, 2002. The decrease was primarily
attributable to reinvestment of short-term liquid assets and securities
available for sale into loans.

         The Company's most liquid assets are cash and cash equivalents, which
include federal funds and interest-bearing deposits. The level of these assets
are dependent upon the Company's operating, financing and lending, and investing
activities during any given period. At December 31, 2003, cash and cash
equivalents totaled $13.0 million compared with $18.3 million at December 31,
2002. These activities are summarized in the Consolidated Statements of Cash
Flows for the years ended December 31, 2003 and 2002.

         Certificates of deposit scheduled to mature in one year or less at
December 31, 2003, totaled approximately $19.2 million. Management believes,
based on its ability to adjust rates on those accounts to market levels, that a
significant portion of such deposits will remain with the Company. The Company
will continue to focus on shifting its liability mix from higher cost
certificates of deposit to lower cost transaction accounts that do not earn
interest and produce fee income. The Company will continue to use retail and
brokered certificates of deposit as alternate funding sources.

CRITICAL ACCOUNTING POLICIES:

         Allowance for loan losses: The allowance for loan losses is a valuation
allowance for probable incurred credit losses. Loan losses are charged against
the allowance when management believes the uncollectibility of a loan balance is
confirmed. Subsequent recoveries, if any, are credited to the allowance.
Management estimates the allowance balance required using past loan loss
experience, the nature and volume of the portfolio, information about specific
borrower situations and estimated collateral values, economic conditions, and
other factors. Allocations of the allowance may be made for specific loans, but
the entire allowance is available for any loan that, in management's judgment
should be charged off.

         A loan is impaired when full payment under the loan terms is not
expected. Commercial and commercial real estate loans are individually evaluated
for impairment. If a loan is impaired, a portion of the allowance is allocated
so that the loan is reported, net, at the present value of estimated future cash
flows using the loan's existing rate or at the fair value of collateral if
repayment is expected solely from the collateral. Large groups of smaller
balance homogeneous loans, such as consumer and residential real estate loans,
are collectively evaluated for impairment, and accordingly, they are not
separately identified for impairment disclosures.

         Management recognizes a certain level of imprecision exists in the
manner in which the allowance for loan losses is calculated, owing to the
intangible factors which cannot be quantified for inclusion in a formula.

         Finally, management regularly monitors the performance of the loan
portfolio with regards to levels of criticized and classified loans, as well as
assessing regional economic factors which may impact the loan portfolio. This
enables us to regularly evaluate the adequacy of the allowance.

         Temporary Decline in Fair Value of Debt Securities: The fair value of
certain debt securities was less than amortized cost. Management believes the
decline in market value below cost does not represent an other-than-temporary
impairment, and thus no loss was recognized on the income statement.


                                       10
<PAGE>


COMMITMENTS, CONTINGENCIES AND OTHER CONTRACTUAL OBLIGATIONS

         The Corporation's off-balance sheet arrangements and contractual
obligations at December 31, 2003 are summarized in the table that follows. The
amounts shown for commitments to extend credit are contingent obligations, some
of which expire without being drawn upon. As a result, the amounts shown for
these items do not necessarily represent future cash requirements. The
Corporation believes that its current sources of liquidity are more than
sufficient to fulfill the obligations it has as of December 31, 2003 pursuant to
off-balance sheet arrangements and contractual obligations.

         The Bank is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of its
customers. These instruments include commitments to extend credit. These
instruments involve, to varying degrees, elements of credit risk in excess of
the amount recognized in the consolidated balance sheets.

         Commitments to extend credit are legally binding agreements to lend to
a customer as long as there is no violation of any condition established in the
contract. Unused home equity lines, which comprise a substantial portion of
these commitments, generally expire five years from their date of origination.
Other loan commitments generally expire in 60 days. The amount of collateral
obtained by the bank upon extension of credit is based on management's credit
evaluation of the borrower. Collateral held generally includes mortgages on
commercial and residential real estate and deposit accounts with the bank.

<TABLE>
<CAPTION>
Borrowings:                                Total      Less Than    1-3 Years    4-5 Years     Over 5
                                                       1 Year                                  Years
                                          -----------------------------------------------------------
<S>                                       <C>            <C>          <C>          <C>         <C>
FHLB advances                             $27,500        2,500        9,000        3,000       13,000
-----------------------------------------------------------------------------------------------------
Total contractual cash obligations        $27,500      $ 2,500      $ 9,000      $ 3,000      $13,000
-----------------------------------------------------------------------------------------------------


Other contractual obligations:
     Non-cancelable operating leases           35           35           --           --           --
-----------------------------------------------------------------------------------------------------
 Total other contractual obligations      $    35      $    35      $    --      $    --      $     -
-----------------------------------------------------------------------------------------------------


Loan Commitments:
Unused lines of credit                    $14,526          214          893       13,419           --
Commitments to make loans (at market
   rates)                                   4,937           --          194        2,984        1,759
Construction loans in process               1,431        1,431           --           --           --
-----------------------------------------------------------------------------------------------------
Total commitments                         $20,894      $ 1,645      $ 1,087      $16,403      $ 1,759
=====================================================================================================
</TABLE>

CAPITAL REQUIREMENTS

         Current regulatory standards impose the following capital requirements
on the Bank and other thrifts: a risk-based capital standard expressed as a
percentage of risk-adjusted assets, a leverage ratio of Tier 1 capital to total
adjusted assets, and a core capital ratio expressed as a percentage of total
adjusted assets. As of December 31, 2003, the Bank exceeded its regulatory
capital standards. At such date, the Bank's core capital, Tier 1 capital and
risk-based capital of $13.1 million, $13.1 million and $13.4 million,
respectively, exceeded the applicable minimum requirements by $7.7 million, $7.7
million, and $6.5 million respectively.


                                       11
<PAGE>


RECENT ACCOUNTING DEVELOPMENTS

         Adoption of New Accounting Standards: During 2003, the Company adopted
FASB Statement 149, Amendment of Statement 133 on Derivative Instruments and
Hedging Activities, FASB Statement 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equities, FASB
Statement 132 (revised 2003), Employer's Disclosures about Pensions and Other
Post retirement Benefits, FASB Interpretation 45, Guarantor's Accounting and
Disclosure Requirements for Guarantees, and FASB Interpretation 46,
Consolidation of Variable Interest Entities. Adoption of the new standards did
not materially affect the Company's operating results or financial condition

IMPACT OF INFLATION AND CHANGING PRICES

         The Consolidated Financial Statements and Notes thereto have been
prepared in accordance with accounting principles generally accepted in the
United States of America, which generally requires the measurement of financial
position and operating results without considering the change in the relative
purchasing power of money over time due to inflation. Unlike most industrial
companies, nearly all of the assets and liabilities of the Company are monetary.
As a result, interest rates have a greater impact on the Company's performance
than do the effects of general levels of inflation.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         The OTS requires all regulated thrift institutions to calculate the
estimated change in the Bank's net portfolio value (NPV) assuming instantaneous,
parallel shifts in the Treasury yield curve of 100 to 300 basis points either up
or down in 100 basis point increments. The NPV is defined as the present value
of expected cash flows from existing assets less the present value of expected
cash flows from existing liabilities plus the present value of net expected cash
inflows from existing off-balance sheet contracts.

         The OTS provides all institutions that file a Consolidated
Maturity/Rate schedule (CMR) as a part of their quarterly Thrift Financial
Report with an interest rate sensitivity report of NPV. The OTS simulation model
uses a discounted cash flow analysis and an option-based pricing approach to
measuring the interest rate sensitivity of NPV. The OTS model estimates the
economics value of each type of asset, liability, and off-balance sheet contract
under the assumption that the Treasury yield curve shifts instantaneously and
parallel up and down 100 to 300 basis points in 100 basis point increments. The
OTS provides thrifts the results of their interest rate sensitivity model, which
is based on information provided by the Bank, to estimate the sensitivity of
NPV. Due to the low interest rate environment the negative 200 and 300 basis
point categories are currently not applicable.

         The OTS model utilizes an option-based pricing approach to estimate the
sensitivity of mortgage loans. The most significant embedded option in these
types of assets is the prepayment option of the borrowers. The OTS model uses
various price indications and prepayment assumptions to estimate sensitivity of
mortgage loans.

         In the OTS model, the value of deposit accounts appears on the asset
and liability side of the NPV analysis. In estimating the value of certificate
of deposit accounts, the liability portion of the CD is represented by the
implied value when comparing the difference between the CD face rate and
available wholesale CD rates. On the asset side of the NPV calculation, the
value of the "customer relationship" due to the rollover of retail CD deposits
represents an intangible asset in the NPV calculation.

         Other deposit accounts such as transaction accounts, money market
deposit accounts, passbook accounts, and non-interest bearing accounts also are
included on the asset and liability side of the NPV calculation in the OTS
model. The accounts are valued at 100% of the respective account balances on the
liability side. On the assets side of the analysis, the value of the "customer
relationship" of the various types of deposit accounts is reflected as a deposit
intangible.

         The NPV sensitivity of borrowed funds is estimated by the OTS model
based on a discounted cash flow approach. The cash flows are assumed to consist
of monthly interest payments with principal paid at maturity.


                                       12
<PAGE>


         The OTS model is based only on the Bank's balance sheet. The assets and
liabilities at the parent company level are short-term in nature, primarily cash
and equivalents, and were not considered in the analysis because they would not
have a material effect on the analysis of NPV sensitivity. The following table
sets forth the Company's most recent interest rate sensitivity of NPV, as of
December 31, 2003. The changes reflected in the table are within the limits
established by the board of directors.

                                                              Net Portfolio
                         Net Portfolio Value                 Value as a % of
                                                         Present Value of Assets
                ----------------------------------------------------------------
Changes in      $ Amount      $ Change       % Change     NPV Change      Change
Rates
--------------------------------------------------------------------------------
+300 bp          10,112        -3,757          -27%          7.69%       -230 bp
+200 bp          11,472        -2,397          -17%          8.57%       -142 bp
+100 bp          12,846        -1,023           -7%          9.42%        -58 bp
   0 bp          13,869             0            0%         10.00%          0 bp
-100 bp          13,431          -438           -3%          9.60%        -39 bp
--------------------------------------------------------------------------------













                                       13
<PAGE>





                         REPORT OF INDEPENDENT AUDITORS



Board of Directors
North Bancshares, Inc.
Chicago, Illinois


We have audited the accompanying consolidated statements of financial condition
of North Bancshares, Inc. and Subsidiary (the Company) as of December 31, 2003
and 2002, and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of North Bancshares, Inc. and
Subsidiary as of December 31, 2003 and 2002, and the results of their operations
and their cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.





                                    Crowe Chizek and Company LLC

Oak Brook, Illinois
February 13, 2004





                                       14
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2003 and 2002
                        (In thousands, except share data)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      2003          2002
                                                                   ---------     ---------
<S>                                                                <C>           <C>
ASSETS
Cash and due from banks                                            $   2,003     $   1,629
Interest-bearing deposits                                              2,767         4,338
Federal funds sold                                                     8,166        12,253
Investment in dollar denominated mutual funds                             95            83
                                                                   ---------     ---------
        Cash and cash equivalents                                     13,031        18,303
Securities available for sale                                         18,612        26,875
Stock in Federal Home Loan Bank of Chicago, at cost                    4,252         3,999
Loans receivable, net                                                 95,471        86,464
Accrued interest receivable                                              558           503
Premises and equipment, net                                              849           850
Other assets                                                             973           799
                                                                   ---------     ---------
   Total assets                                                    $ 133,746     $ 137,793
                                                                   =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
     Interest-bearing                                              $  85,392     $  85,074
     Non-interest-bearing                                              5,560         5,076
Borrowed funds                                                        27,500        31,000
Advance payments by borrowers for taxes and insurance                    657           871
Accrued interest payable and other liabilities                         1,143         1,867
                                                                   ---------     ---------
    Total liabilities                                                120,252       123,888

Stockholders' equity
    Preferred stock, $.01 par value. Authorized 500,000 shares;
     none outstanding                                                     --            --
    Common stock, $.01 par value. Authorized 3,500,000
     shares; issued 1,914,075                                             19            19
    Additional paid in capital                                        13,179        13,284
    Retained earnings, substantially restricted                       12,075        12,140
    Treasury stock, at cost (769,380 and 776,046 shares in
      2003 and 2002 respectively)                                    (11,625)      (11,745)
    Accumulated other comprehensive income (loss)                       (115)          259
    Unearned stock awards                                                (39)          (52)
                                                                   ---------     ---------
         Total stockholders' equity                                   13,494        13,905
                                                                   ---------     ---------
              Total liabilities and stockholders' equity           $ 133,746     $ 137,793
                                                                   =========     =========
</TABLE>


See accompanying notes to consolidated financial statements.


                                       15
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     Years ended December 31, 2003 and 2002
                        (In thousands, except share data)
--------------------------------------------------------------------------------

                                                          2003      2002
                                                         ------    ------

Interest income:
     Loans receivable                                    $5,531    $6,641
     Interest-bearing deposits and federal funds sold       168       195
     Securities available for sale                          939     1,363
     Dividends on FHLB stock and other                      254       191
                                                         ------    ------
          Total interest income                           6,892     8,390
Interest expense
     Deposit accounts                                     2,056     2,687
     Borrowed funds                                       1,545     1,733
                                                         ------    ------
          Total interest expense                          3,601     4,420
Net interest income before provision for loan losses      3,291     3,970
Provision for loan losses                                    21        28
                                                         ------    ------
Net interest income after provision for loan losses       3,270     3,942
Noninterest income:
Gain on sale of mortgage loans held-for-sale                 65        75
Gain on sale of securities available-for-sale               100       181
Fees and service charges                                    370       311
Other                                                        59        15
                                                         ------    ------
     Total noninterest income                               594       582
Noninterest expense:
     Compensation and benefits                            1,711     1,848
     Occupancy expense                                      463       442
     Professional fees                                      164       216
     Data processing                                        284       268
     Advertising and promotion                              103        98
     Other                                                  558       472
                                                         ------    ------
          Total noninterest expense                       3,283     3,344
Income before income tax expense                            581     1,180
Income tax expense                                          211       460
                                                         ------    ------
Net income                                               $  370    $  720
                                                         ======    ======
Earnings per share:
     Basic                                               $  .32    $  .62
     Diluted                                                .32       .62


See accompanying notes to consolidated financial statements.


                                       16
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     Years ended December 31, 2003 and 2002
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                                                              Accumulated
                                                                                                                 Other
                                                                                                                Compre-
                                                              Additional                                        hensive
                                                Common         Paid-in         Retained        Treasury         Income
                                                 Stock         Capital         Earnings         Stock           (Loss)
                                               --------        --------        --------        --------        --------
<S>                                            <C>             <C>             <C>             <C>             <C>
Balance at January 1, 2002                     $     19        $ 13,251        $ 11,928        $(11,552)       $    (42)
Net income                                           --              --             720              --              --
Other comprehensive income, net of tax:
    Change in unrealized gain (loss) on
       securities available-for-sale                 --              --              --              --             301

        Comprehensive income                      1,021
ESOP shares released                                 --              76              --              --              --
Stock awards earned                                  --              --              --              --              --
Issuance of stock awards 5,000 shares                --             (11)             --              76              --
Purchase of treasury stock,
   28,745 shares                                     --              --              --            (345)             --
Cash dividend ($.44 per share)                       --              --            (508)             --              --
Reissuance of treasury stock upon
  exercise of 5,000 shares                           --             (32)             --              76              --
                                               --------------------------------------------------------------------------------
Balance at December 31, 2002                         19          13,284          12,140         (11,745)            259
Net income                                           --              --             370              --              --
Other comprehensive income, net of tax:
    Change in unrealized gain (loss) on
        securities available-for-sale                --              --              --              --            (374)

        Comprehensive (loss)                         --              --              --              --              --
Stock awards earned                                  --              --              --              --              --
Purchase of treasury stock,
  11,454 shares                                      --              --              --            (154)             --
Cash dividend ($.38 per share)                       --              --            (435)             --              --
Reissuance of treasury stock upon
  exercise of 18,120 shares                          --            (105)             --             274              --
                                               --------------------------------------------------------------------------------
Balance at December 31, 2003                   $     19        $ 13,179        $ 12,075        $(11,625)       $   (115)
                                               ================================================================================
</TABLE>


[WIDE TABLE CONTINUED FROM ABOVE]

<TABLE>
<CAPTION>
                                                               Common
                                               Unearned         Stock
                                                Stock        Acquired by
                                                Award            ESOP            Total
                                               --------        --------        --------
<S>                                            <C>             <C>             <C>
Balance at January 1, 2002                     $     --        $   (111)       $ 13,493
Net income                                           --              --             720
Other comprehensive income, net of tax:
    Change in unrealized gain (loss) on
       securities available-for-sale                 --              --             301
                                                                               --------
        Comprehensive income
ESOP shares released                                 --             111             187
Stock awards earned                                  13              --              13
Issuance of stock awards 5,000 shares               (65)             --              --
Purchase of treasury stock,
   28,745 shares                                     --              --            (345)
Cash dividend ($.44 per share)                       --              --            (508)
Reissuance of treasury stock upon
  exercise of 5,000 shares                           --              --              44
                                               ----------------------------------------
Balance at December 31, 2002                        (52)             --          13,905
Net income                                           --              --             370
Other comprehensive income, net of tax:
    Change in unrealized gain (loss) on
        securities available-for-sale                --              --            (374)
                                                                               --------
        Comprehensive (loss)                         --              --              (4)
Stock awards earned                                  13              --              13
Purchase of treasury stock,
  11,454 shares                                      --              --            (154)
Cash dividend ($.38 per share)                       --              --            (435)
Reissuance of treasury stock upon
  exercise of 18,120 shares                          --              --             169
                                               ----------------------------------------
Balance at December 31, 2003                   $    (39)       $     --        $ 13,494
                                               ========================================
</TABLE>

--------------------------------------------------------------------------------

          See accompanying notes to consolidated financial statements.


                                       17
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2003 and 2002
                                 (In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                    2003          2002
                                                                  --------     --------
<S>                                                               <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net Income                                                  $    370     $    720
      Adjustments to reconcile net income to net cash provided
       by operating activities:
          Depreciation and amortization                                125           95
          Deferred income tax expense                                  201           32
          Provision for loan losses                                     21           28
          Deferred loan fees, net of amortization                     (211)         (18)
          Amortization of premiums and discounts, net                   21         (269)
          ESOP and stock awards expense                                 13          200
          Federal Home Loan Bank stock dividend                       (253)        (229)
          Gain on sale of mortgage loans held-for-sale                 (65)         (75)
          Gain on sale of securities available-for-sale               (100)        (181)
          Net changes in loans held for sale                            65           75
          Net change in:
                Accrued interest receivable                            (55)         222
                Other assets                                          (174)        (192)
                Other liabilities, net                                (684)        (620)
                                                                  --------     --------
                   Net cash used in by operating activities           (726)        (212)
CASH FLOWS FROM INVESTING ACTIVITIES:
      Maturities, prepayments and calls of securities
        available for sale                                          11,996        7,798
      Purchase of securities available for sale                    (15,422)     (24,537)
      Proceeds from sales of securities available for sale          11,201        8,523
      Loan originations and repayments, net                         (8,817)       6,951
      Purchase of Federal Home Loan Bank stock                          --       (1,000)
      Purchase of premises and equipment                              (124)        (202)
                                                                  --------     --------
                  Net cash used in investing activities             (1,166)      (2,467)
</TABLE>


--------------------------------------------------------------------------------

                                  (Continued)


                                       18
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2003 and 2002
                                 (In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 2003         2002
                                                               --------     --------
<S>                                                            <C>          <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
      Net change in deposit accounts                           $    802     $  2,702
      Proceeds from borrowed funds                                   --        2,500
      Repayments of borrowed funds                               (3,500)      (3,250)
      Net change in advance payments by borrowers for taxes
      and insurance                                                (214)         101
      Payment of cash dividends                                    (435)        (508)
      Proceeds from stock options exercised                         121           44
      Purchase of treasury stock                                   (154)        (345)
                                                               --------     --------
       Net cash provided by (used in)  financing activities      (3,380)       1,244
                                                               --------     --------
Net change in cash and cash equivalents                          (5,272)      (1,435)
Cash and cash equivalents at beginning of year                   18,303       19,738
                                                               --------     --------
Cash and cash equivalents at end of year                       $ 13,031     $ 18,303
                                                               ========     ========
Supplemental disclosures of cash flow information:
 Cash payments during the period for:
       Interest                                                $  3,626     $  4,462
       Taxes                                                        140          356
</TABLE>




--------------------------------------------------------------------------------

          See accompanying notes to consolidated financial statements.


                                       19
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

North Bancshares, Inc. (the Company) was incorporated in August 1993 as a
holding company to purchase 100% of the common stock of North Federal Savings
Bank (Savings Bank) and subsidiary. The Savings Bank converted from the mutual
form to a stock form institution and the Company completed its initial public
offering on December 21, 1993 at which time it purchased all of the outstanding
shares of the Savings Bank. The accounting and reporting policies of the Company
conform to accounting principles generally accepted in the United States of
America and to general practice within the thrift industry.

The company provides financial services through its offices in Cook County,
Illinois. Its primary deposit products are checking, savings and term
certificate accounts, and its primary lending products are residential mortgage,
commercial, and installment loans. Substantially all loans are secured by
specific items of collateral including business assets, consumer assets, and
commercial and residential real estate. Commercial loans are expected to be
repaid from cash flow from operations of businesses. Other financial
instruments, which potentially represent concentrations of credit risk, include
deposit accounts in other financial institutions and federal funds sold.
Included in cash and cash equivalents at December 31, 2003, was $6,662 with the
Company's main correspondent bank.

The following is a description of the more significant of those policies which
the Company follows in preparing and presenting its consolidated financial
statements.

Principles of Consolidation: The consolidated financial statements include the
accounts of the Company, the Savings Bank, and its wholly owned subsidiary,
North Financial Corporation. All significant inter-company balances and
transactions have been eliminated in consolidation.

Use of Estimates: To prepare financial statements in conformity with accounting
principles generally accepted in the United States of America, management makes
estimates and assumptions based on available information. These estimates and
assumptions affect the amounts reported in the financial statements and the
disclosures provided, and future results could differ. The allowance for loan
losses, fair values of financial instruments, and status of contingencies, are
particularly subject to change.

Securities: Securities are classified as available-for-sale when they might be
sold before maturity. Securities available-for-sale are carried at fair value,
with unrealized holding gains and losses reported in other comprehensive income.
Other securities such as Federal Home Loan Bank stock are carried at cost.

Interest income includes amortization of purchase premium or discount. Gains and
losses on sales are based on the amortized cost of the security sold. Securities
are written down to fair value when a decline in fair value is not temporary.

Investment in Mutual Funds: The investment in mutual funds is carried at
estimated fair value. Fair value is based on the month-end net asset value as
provided by the funds. Declines in the fair value deemed to be other than
temporary are charged to operations. The cost of securities sold is determined
on the basis of average cost.

--------------------------------------------------------------------------------

                                   (Continued)


                                       20
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (CONTINUED)

Loans: Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or payoff are reported at the principal
balance outstanding, net of unearned interest, deferred loan fees and costs, and
an allowance for loan losses. Loans held for sale are reported at the lower of
cost or market, on an aggregate basis.

Interest income is reported on the interest method and includes amortization of
net deferred loan fees and costs over the life of the loan term. Interest income
on mortgage and commercial loans is discontinued at the time the loan is 90 days
delinquent (180 days for residential mortgages) unless the credit is
well-secured and in process of collection. Consumer loans are typically charged
off no later than 90 days past due. In all cases, loans are placed on
non-accrual or charged off at an earlier date if collection of principal or
interest is considered doubtful.

All interest accrued but not received for loans placed on non-accrual is
reversed against interest income. Interest received on such loans is accounted
for on the cash-basis or cost-recovery method, until qualifying for return to
accrual. Loans are returned to accrual status when all the principal and
interest amounts contractually due are bought current and future payments are
reasonably assured.

Allowance for Loan Losses: The allowance for loan losses is a valuation
allowance for probable incurred credit losses, increased by the provision for
loan losses and decreased by charge-offs less recoveries. Management estimates
the allowance balance required using past loan loss experience, the nature and
volume of the portfolio, information about specific borrower situations and
estimated collateral values, economic conditions, and other factors. Allocations
of the allowance may be made for specific loans, but the entire allowance is
available for any loan that, in management's judgment, should be charged off.
Loan losses are charged against the allowance when management believes the
uncollectibility of a loan balance is confirmed.

A loan is impaired when full payment under the loan terms is not expected.
Impairment is evaluated in total for smaller-balance loans of similar nature
such as residential mortgage, consumer, and credit card loans, and on an
individual loan basis for other loans. If a loan is impaired, a portion of the
allowance is allocated so that the loan is reported, net, at the present value
of estimated future cash flows using the loan's existing rate or at the fair
value of collateral if repayment is expected solely from the collateral.

Servicing Assets: Servicing assets represent the allocated value of retained
servicing rights on loans sold. Servicing assets are expensed in proportion to,
and over the period of, estimated net servicing revenues. Impairment is
evaluated based on the fair value of the assets, using groupings of the
underlying loans as to the interest rates and then, secondarily, as to
prepayment characteristics. Fair value is determined using prices for similar
assets with similar characteristics, when available, or based upon discounted
cash flows using market-based assumptions. Any impairment of a grouping is
reported as a valuation allowance.

--------------------------------------------------------------------------------

                                   (Continued)


                                       21
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (CONTINUED)

Premises and Equipment: Land is carried at cost. Depreciation of office property
and equipment is accumulated primarily on the straight-line method over the
estimated useful lives ranging from 3 years to 50 years of the related assets.
Leasehold improvements are amortized over the lesser of the estimated useful
life of the asset or the remaining term of the lease. At December 31, 2003 and
2002 leasehold improvements were fully depreciated.

Long term Assets: Premises and equipment and other long term assets are reviewed
for impairment when events indicate their carrying amount may not be recoverable
from future undiscounted cash flows. If impaired, the assets are recorded at
fair value.

Income Taxes: Income tax expense is the total of the current year income tax due
or refundable and the change in deferred tax assets and liabilities. Deferred
tax assets and liabilities are the expected future tax amounts for the temporary
differences between carrying amounts and tax bases of assets and liabilities,
computed using enacted tax rates. A valuation allowance, if needed, reduces
deferred tax assets to the amount expected to be realized.

Earnings Per Share: Basic earnings per share is net income divided by the
weighted average number of common shares outstanding during the period. ESOP
shares are considered outstanding for this calculation unless unearned. Only
options where the exercise price is below the current market price are included
in calculating diluted earnings per share. Stock awards were not considered in
the computation of diluted earnings per share because the effects of the assumed
exercise would have been anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per
share for the years ended December 31.

                                                        2003          2002
                                                     ----------     ---------
Numerator - net income                               $      370    $      720
Denominator:
     Basic earnings per share-weighted average
       shares outstanding                             1,141,798     1,154,492
     Effect of dilutive stock options outstanding         5,930         9,980
                                                     ----------    ----------
     Diluted earnings per share-adjusted weighted
      average shares outstanding                      1,147,728     1,164,472
Basic earnings per share                             $      .32    $      .62
Diluted earnings per share                           $      .32    $      .62

Stock Compensation: Employee compensation expense under stock options is
reported using the intrinsic value method. No stock-based compensation cost is
reflected in net income, as all options granted had an exercise price equal to
or greater than the market price of the underlying common stock at the date of
grant. The following table illustrates the effect on net income and earnings per
share if expense was measured using the fair value recognition provisions of
FASB statement No. 123, Accounting for Stock-Based Compensation

--------------------------------------------------------------------------------

                                   (Continued)


                                       22
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND
  ORGANIZATION (CONTINUED)

                                                         2003       2002
                                                       -------    -------
Net income as reported                                 $   370    $   720

Deduct: Stock-based compensation expense determined
under fair value based method                                4         --
                                                       -------    -------
Pro forma net income                                       366        720

Basic earnings per share as reported                       .32        .62

Pro forma basic earnings per shares                        .32        .62

Diluted earnings per share as reported                     .32        .62

Pro forma diluted earnings per share                       .32        .62

         The pro forma effects are computed using option pricing models, using
the following weighted-average assumptions as of grant date.

                                                         2003       2002
                                                      --------    -------
Risk-free interest rate                                   3.91%        --%
Expected option life                                         8         --
Expected stock price volatility                           7.15%        --%
Dividend yield                                            3.01%        --%
Fair value of option                                  $   1.42   $     --

--------------------------------------------------------------------------------

                                   (Continued)


                                       23
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

Cash Flows: Cash and cash equivalents includes cash and due from banks,
interest-bearing deposits, dollar denominated mutual funds, and federal funds
sold. Net cash flows are reported for loan and deposit transactions.

Employee Stock Ownership Plan: The cost of shares issued to the ESOP, but not
yet allocated to participants, is shown as a reduction of shareholders' equity.
Compensation expense is based on the market price of shares as they are
committed to be released to participant accounts. Dividends on allocated ESOP
shares reduce retained earnings; dividends on unearned ESOP shares reduce debt
and accrued interest.

Financial Reporting of Segments: Operating segments are components of an
enterprise for which separate financial information is available and is
evaluated regularly by management in deciding how to allocate resources and in
assessing performance. The Company operates as a single segment.

Off Balance Sheet Financial Instruments: Financial instruments include
off-balance sheet credit instruments, such as commitments to make loans and
lines of credit, issued to meet customer financing needs. The face amount for
these items represents the exposure to loss, before considering customer
collateral or ability to repay. Such financial instruments are recorded when
they are funded.

Fair Value of Financial Instruments: Fair values of financial instruments are
estimated using relevant market information and other assumptions, as more fully
disclosed in a separate note. Fair value estimates involve uncertainties and
matters of significant judgment regarding interest rates, credit risk,
prepayments, and other factors, especially in the absence of broad markets for
particular items. Changes in assumptions or in market conditions could
significantly affect the estimates.

Comprehensive Income: Comprehensive income consists of net income and other
comprehensive income. Other comprehensive income includes unrealized gains and
losses on securities available for sale and changes in minimum pension liability
which are also recognized as separate components of equity.

Adoption of New Accounting Standards: During 2003, the Company adopted FASB
Statement 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities, FASB Statement 150, Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equities, FASB Statement 132
(revised 2003), Employer's Disclosures about Pensions and Other Post retirement
Benefits, FASB Interpretation 45, Guarantor's Accounting and Disclosure
Requirements for Guarantees, and FASB Interpretation 46, Consolidation of
Variable Interest Entities. Adoption of the new standards did not materially
affect the Company's operating results or financial condition.

--------------------------------------------------------------------------------

                                   (Continued)


                                       24
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 2 - SECURITIES AVAILABLE-FOR-SALE

Year-end securities available-for-sale are as follows:

                                                       Gross         Gross
                                          Fair       Unrealized    Unrealized
                                         Value         Gains         Losses
2003
----
   U.S. Government agency securities    $ 4,922       $    19       $   (97)
   Mortgage-backed securities             9,574            42           (95)
   Mutual funds                           4,053            --           (44)
   Other                                     63            --            --
                                        -------       -------       -------
                                        $18,612       $    61       $  (236)
                                        =======       =======       =======
2002
----
   U.S. Government agency securities    $ 4,068       $    73       $    --
   Mortgage-backed securities            14,503           285           (32)
   Mutual funds                           8,252            77            --
   Other                                     52            --           (11)
                                        -------       -------       -------
                                        $26,875       $   435       $   (43)
                                        =======       =======       =======

The fair value of securities available-for-sale by contractual maturity at year
end 2003 are shown below. Securities not due at a single maturity date,
primarily mortgage-backed securities and mutual funds, are shown separately.

                                                                  Fair Value
        Due in one through five years                               $ 1,000
        Due in five thru ten years                                      975
        Due after ten years                                           2,947
        Mortgage-backed                                               9,574
        Mutual funds                                                  4,053
        Other                                                            63
                                                                    -------
                                                                    $18,612
                                                                    =======

Sale of securities available-for-sale were as follows:

                                                        2003          2002
                                                      -------       -------
        Proceeds                                      $11,201       $ 8,523
        Gross gains                                       103           181
        Gross losses                                        3            --

--------------------------------------------------------------------------------

                                   (Continued)


                                       25
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 2 - SECURITIES AVAILABLE-FOR-SALE (CONTINUED)

Securities with unrealized losses at year end 2003 are presented below by length
of time the securities have been in an unrealized position:

<TABLE>
<CAPTION>
                               Less than 12 Months             12 Months or More                  Total
                             ----------------------         ----------------------         ----------------------
                               Fair        Unrealized         Fair        Unrealized         Fair        Unrealized
Description of Securities     Value           Loss           Value           Loss           Value           Loss
-------------------------    -------        -------         -------        -------         -------        -------
<S>                          <C>            <C>             <C>            <C>             <C>            <C>
US Treasury                  $ 4,922        $   (97)             --             --         $ 4,922        $   (97)
Mortgage-backed                7,017            (63)          1,221            (32)          8,238            (95)
Mutual Funds                   4,053            (44)             --             --           4,053            (44)
Other                             --             --              --             --              --             --
                             ------------------------------------------------------------------------------------
Total                        $15,992        $  (204)        $ 1,221        $   (32)        $17,213        $  (236)
                             ====================================================================================
</TABLE>

Unrealized losses have not been recognized into income as management believes
that the losses are primarily due to increases in market rates and management
has the intent and ability to hold the securities for the foreseeable future.
The fair value is expected to recover as the securities approach their maturity
date and/or market rates decline.

NOTE 3 - LOANS RECEIVABLE

Loans at year-end were as follows:

                                         2003         2002
                                       --------     --------
Mortgage loans:
     One-to four-family                $ 42,951     $ 46,912
     Multifamily                          1,891        2,761
     Commercial real estate              28,708       23,317
                                       --------     --------
           Total mortgage loans          73,550       72,990
Commercial loans                          1,509        1,562
Consumer loans                           20,713       12,474
                                       --------     --------
           Total loans receivable        95,772       87,026
Less:
    Deferred loan fees (costs), net         (46)         236
    Allowance for loan losses               347          326
                                       --------     --------
Total                                  $ 95,471     $ 86,464
                                       ========     ========

--------------------------------------------------------------------------------

                                   (Continued)


                                       26
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

Activity in the allowance for loan losses is summarized as follows:

                                              2003        2002
                                              ----        ----
              Balance at beginning of year    $326        $298
              Provision for loan losses         21          28
                                              ----        ----
              Balance at end of year          $347        $326
                                              ====        ====

The Company did not have any loans considered to be impaired during 2003 or
2002.

Mortgage loans serviced for others amounted to approximately $3,815 and $5,930
as of year- end 2003 and 2002, respectively.

            Servicing Rights                  2003        2002
                                              ----        ----
              Beginning of year               $ 57        $ 32
              Additions                         19          40
              Amortized to expense             (49)        (15)
                                              ----        ----
              End of year                     $ 27        $ 57
                                              ====        ====

NOTE 4 - PREMISES AND EQUIPMENT

Year-end premises and equipment were as follows:

                                             2003        2002
                                           -------     -------
Land                                       $   100     $   100
Office building                              1,101       1,101
Furniture, fixtures and equipment            1,406       1,282
Leasehold improvement                           87          87
                                           -------     -------
                                             2,694       2,570
Accumulated depreciation                    (1,845)     (1,720)
                                           -------     -------
                                           $   849     $   850
                                           =======     =======

The Company currently leases space for its Wilmette branch. The lease expires
September 30, 2004. Minimum future lease payments during 2004 will be $35.

--------------------------------------------------------------------------------

                                   (Continued)


                                       27
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)

NOTE 5 - DEPOSIT ACCOUNTS

Scheduled maturities of time deposits for the next five years and thereafter
were as follows:


                            2004                       $19,221
                            2005                        13,680
                            2006                         4,349
                            2007                         6,287
                            2008                         1,798
                      Thereafter                            55
                                                       -------
                                                       $45,390
                                                       -------

Certificates of deposit of $100 or more totaled $15,737 and $16,682 at year-end
2003 and 2002, respectively.

NOTE 6 - BORROWED FUNDS

Borrowed funds are summarized as follows at year-end 2003 and 2002:

FHLB Advances

                                             2003        2002
                                           -------     -------
Fixed terms, matures March 2003
  through January 2011; range of
  rates 2.90% to 6.65%; averaging
  5.36%                                    $    --     $31,000
Fixed terms, matures March 2004,
  through January, 2011; range of
  rates 4.30% to 6.65%; averaging
  5.41%                                     27,500          --
                                           -------     -------
                                           $27,500     $31,000
                                           =======     =======

Scheduled repayments and maturities of the borrowings at year-end 2003 are as
follows:

                            2004                       $ 2,500
                            2005                         7,000
                            2006                         2,000
                            2008                         3,000
                      Thereafter                        13,000
                                                       -------
                                                       $27,500
                                                       =======

The Savings Bank maintains a collateral pledge agreement covering advances
whereby the Savings Bank has agreed to at all times keep on hand, free of all
other pledges, liens, and encumbrances, first mortgage loans on improved
residential property not more than 90 days delinquent, aggregating no less than
167% of the outstanding advances from the Federal Home Loan Bank of Chicago. At
December 31, 2003 the Company's collateral pledged to the FHLB was sufficient to
collateralize the outstanding advances. At December 31, 2003, $21,000 of

--------------------------------------------------------------------------------

                                   (Continued)


                                       28
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 6 - BORROWED FUNDS (CONTINUED)

Federal Home Loan Bank advances had various call provisions. All stock in the
FHLB of Chicago is pledged as additional collateral for these advances.

The Company has a $500 unsecured line of credit from an unrelated financial
institution. The line provides for an interest rate at the prime rate or 225
basis points over the three-month LIBOR. The line requires quarterly payments of
accrued interest and one payment of all outstanding principal plus accrued
interest at maturity.

NOTE 7 - INCOME TAXES

Income tax expense is comprised as follows for the years ended 2003 and 2002:

                                          2003           2002
                                         ------         ------
               Federal:
                     Current             $   10         $  428
                     Deferred               186             28
                                         ------         ------
                                            196            456
              State:
                    Current                  --              -
                    Deferred                 15              4
                                         ------         ------
                                             15              4
                                         $  211         $  460
                                         ======         ======

Income tax expense resulted in an effective tax rate of 36.3% and 39.0% for the
years ended 2003 and 2002, respectively. The reasons for the difference between
the effective tax rate and the statutory Federal income tax rate are shown
below:

                                                     Years Ended December 31,
                                                         2003     2002
                                                         ----     ----
                                                  (Percentage of earnings before
                                                          income taxes)
Federal income tax rate                                  34.0%    34.0%
Items affecting federal income tax rate:
     State income tax, net of federal benefit             1.8       .3
     Non-deductible compensation expense                   --      2.2
     Other, net                                            .5      2.5
                                                         ----     ----
           Effective income tax rate                     36.3%    39.0%
                                                         ====     ====

--------------------------------------------------------------------------------

                                   (Continued)


                                       29
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 7 - INCOME TAXES (CONTINUED)

The tax effects of existing temporary differences that give rise to significant
portions of the deferred tax liabilities and deferred tax assets at year-end
are:

                                                          2003    2002
                                                          ----    ----
Deferred tax assets:
   State net operating loss carryforwards                 $ 51    $ 35
   Unrealized loss on securities available-for-sale         59      --
   Allowance for loan losses                               135     126
   Other                                                    --      36
                                                          ----    ----
          Gross deferred tax assets                        245     197

Deferred tax liabilities:
      Dividends received in stock, not recognized for
         tax purposes                                     $319    $236
     Unrealized gains on securities available-for-sale      --     133
     Tax depreciation in excess of book depreciation       231     195
     Excess of tax bad debt reserved over base year         --      21
     Deferred loan fees                                     21       3
     Pension expense                                       225     160
     Other                                                  10       1
                                                          ----    ----
         Gross deferred tax liabilities                    806     749
                                                          ----    ----
            Net deferred tax liability                    $561    $552
                                                          ====    ====

Retained earnings as of year-end 2003 included $3,137 for which no provision for
federal income tax had been made. This amount represents allocations of income
to bad debt deductions for tax purposes only. Reduction of amounts so allocated
for purposes other than tax bad debt losses will create income for tax purposes
only, which will be subject to the then current corporate income tax rate.

--------------------------------------------------------------------------------

                                   (Continued)


                                       30

<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 8 - PENSION PLAN

The Company has a qualified non-contributory pension plan covering substantially
all full-time employees employed more than six months and over 20-1/2 years of
age, including part-time employees working over 1,000 hours per year. The
Savings Bank's funding policy provides that payments to the plan shall be
consistent with the Employee Retirement Income Security Act of 1974 using the
frozen entry age actuarial cost method.

The Company's pension plan data for the years ended 2003 and 2002 is shown
below:
                                                          2003       2002
                                                        -------     -------
Change in benefit obligation:
      Benefit obligation at beginning of year           $ 4,173     $ 3,729
      Service cost                                          102          94
      Interest cost                                         252         234
      Actuarial (gain) loss                                 319         357
      Benefits paid                                        (248)       (241)
                                                        -------     -------
           Benefit obligation at end of year            $ 4,598     $ 4,173
                                                        =======     =======
Change in plan assets:
      Fair value of plan assets at beginning of year    $ 4,393     $ 3,941
      Actual return on plan assets                          220         541
      Company contributions                                 155         152
      Benefits paid                                        (248)       (241)
                                                        -------     -------
            Fair value of plan assets at end of year    $ 4,520     $ 4,393
                                                        =======     =======
Reconciliation of funded status:
      Funded status                                     $   (79)    $   220
      Unrecognized net actuarial loss                       872         405
      Unrecognized transition asset                          --          --
      Unrecognized prior service cost                        (4)         (6)
                                                        -------     -------
            Prepaid benefit cost                        $   789     $   619
                                                        =======     =======

Net pension cost for the years ended 2003 and 2002 includes the following
components:

                                                          2003        2002
                                                        -------     -------
Service cost benefits earned during the year            $   102     $    94
Interest cost on projected benefit obligation               252         234
Expected return on plan assets                             (368)       (341)
Net amortization and deferral                                (1)         (3)
                                                        -------     -------
                                                        $   (14)    $   (16)
                                                        =======     =======

--------------------------------------------------------------------------------

                                   (Continued)


                                       31

<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 8 - PENSION PLAN (CONTINUED)

                                                      2003     2002
                                                      ----     ----
Assumptions:
Weighted-average assumptions used to determine
benefit obligation at

    Discount rate                                     6.00%    6.25%

    Rate of compensation increase                     5.00%    4.00%
Weighted-average assumptions used to determine net
periodic benefit cost for years ending

    Discount rate                                     6.00%    6.50%

    Expected long-term return on plan assets          8.50%    8.75%

    Rate of compensation increase                     5.00%    4.00%

The expected long-term rate of return on plan assets was arrived at based on the
types of investments in the plan and the historical rate of return the plan has
provided.

The accumulated benefit obligation was $3,870 and $3,614 at year-end 2003 and
2002, respectively.

PLAN ASSETS

The Company's pension plan asset allocation and statistics are described below.
The General Investment Fund consists primarily of intermediate-term,
fixed-income investments such as public and private corporate bonds, commercial
and residential mortgages, asset-backed securities, and U.S. government and
agency-backed securities. The Separate Account consists of common stock of the
Principal Financial Group, Inc. The Company expects to contribute $125 to its
pension plan in 2004.

For the fiscal Year Ending                           2003     2002
                                                    ------   ------
Principal Life Insurance Company Accounts:
   General Investment Account                       $3,751   $3,702
Principal Separate Accounts:
   Principal Financial Group, Inc.                     769      691
                                                    ------   ------
Total Assets:                                       $4,520    4,393
                                                    ======   ======

--------------------------------------------------------------------------------

                                   (Continued)


                                       32
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

PLAN ASSETS (CONTINUED)

STATISTICS

  Average Effective Duration            5.3 Years
  Average Effective Maturity            8.3 years
  Average Credit Quality                A
  Average Weighted Coupon               7%
  Average Weighted Price                109% of Par

NOTE 9 - STOCK OPTION PLAN

In 1993, the Company adopted a stock option plan (the plan) pursuant to which
the Company's Board of Directors may grant stock options to directors, officers,
and employees of the Company and the Savings Bank. The number of common shares
that were authorized under the plan was 208,294, equal to 10% of the total
number of shares issued in the initial stock offering. The exercise price is
equal to the fair value of the common stock at the date of grant. The option
term cannot exceed ten years from the grant date. At December 31, 2003, there
were no additional shares available for grant under the plan due to the
expiration of the plan.

A summary of the status of the stock option plan for the years ended 2003 and
2002 is presented below:

<TABLE>
<CAPTION>
                                                2003                    2002
                                        ----------------------   ---------------------
                                                      Weighted                Weighted
                                                      Average                 Average
                                                      Exercise                Exercise
                                         Shares        Price     Shares        Price
                                         ------       -------    ------       -------
<S>                                      <C>          <C>        <C>          <C>
Outstanding at beginning of year         50,622       $ 10.17    55,622       $  9.87
Granted                                   2,500         14.58        --            --
Exercised                               (18,120)      $  6.67    (5,000)         6.67
                                        -------       -------    ------       -------
Outstanding and exercisable at end
  of year                                35,002       $ 12.32    50,622       $10.17
                                        =======       =======   =======       ======
</TABLE>

--------------------------------------------------------------------------------

                                   (Continued)


                                       33
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------


Options outstanding and exercisable at year-end 2003 were as follows:

                                                  Weighted
                                                   Average       Weighted
                                                  Remaining      Average
                                                 Contractual     Exercise
Range of exercise price              Number      Life (years)     Price
-----------------------              ------      ------------    ------
   $ 7.75                            10,004           1.1        $ 7.75
   $11.50-$11.69                      4,247           4.9         11.58
   $14.56-$14.83                     20,751           4.8         14.67
                                     ------        ------        ------
    Outstanding at year end          35,002           3.7        $12.32
                                     ======

NOTE 10 - EMPLOYEE STOCK OWNERSHIP PLAN

The Employee Stock Ownership Plan (ESOP) covers substantially all employees with
more than six months of employment who have attained the age of 20-1/2. The plan
was funded by a loan in the amount of $1,111 from the Company to the ESOP Trust
at a rate of 8% with principal and interest payments due quarterly and which
matured on December 31, 2002. The loan was secured by the shares of the Company
purchased with the loan proceeds. The Savings Bank committed to make
contributions to the ESOP sufficient to allow the ESOP to fund its debt service
requirements on the loan. The ESOP purchased 166,635 common shares of the
Company in the conversion with the loan proceeds. The balance of the ESOP loan
was reported as a reduction in stockholders' equity. There were no contributions
made to the ESOP in 2003 due to repayment of the loan. In 2002, contributions to
the ESOP of $187 were used to fund principal and interest payments on the ESOP
debt. The 2002 contribution resulted in the release of 13,102 shares in 2002.
Dividends on allocated ESOP shares are reinvested in Company stock held by the
ESOP.

The ESOP held 122,016 and 124,259 shares as of December 31, 2003 and 2002
respectively.

Distributions of ESOP shares were 5,169 shares and 3,819 shares in 2003 and
2002, respectively. Dividends were used to purchase 2,926 shares and 3,761
shares in 2003 and 2002.

NOTE 11 - 401-K PLAN

On January 1, 2003, the Bank initiated a 401-K plan for all employees who have
completed 12 months of continuous employment and who have attained age 21. The
plan allows participating employees to defer a certain percentage of their
salary at each pay period with the Bank providing a safe harbor matching
contribution of up to 100% of the first 3% of salary plus 50% of the next 2% of
salary. The total employer matching contribution for the year 2003 amounted to
$37.

--------------------------------------------------------------------------------

                                   (Continued)


                                       34
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------


NOTE 12 - COMPREHENSIVE INCOME

Other comprehensive income components and related taxes were as follows:

                                                2003      2002
                                               -----     -----
Unrealized holding gains and losses on
  available-for-sale securities                $(467)    $ 637
Less reclassification adjustments for gains
  recognized in income                          (100)     (181)
                                               -----     -----
    Net unrealized gains and losses             (567)      456
Tax effect                                       193      (155)
                                               -----     -----
Other comprehensive (loss) income              $(374)    $ 301
                                               =====     =====

NOTE 13 - REGULATION AND SUPERVISION

The Savings Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Savings Bank's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Savings Bank must meet specific capital guidelines that involve quantitative
measures of the Savings Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices. The
Savings Bank's capital amounts and classifications are also subject to
qualitative judgments by the regulators about components, risk weightings, and
other factors.

As of year-end 2003, the most recent notification from the Office of Thrift
Supervision categorized the Savings Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Savings Bank must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage ratios as set forth in the following table.
There are no conditions or events since that notification that management
believes have changed the Savings Bank's category.

--------------------------------------------------------------------------------

                                   (Continued)


                                       33
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------


NOTE 13 - REGULATION AND SUPERVISION (CONTINUED)

The Bank's actual capital amounts and ratios are also presented in the table.

<TABLE>
<CAPTION>
                                                                                                To be well capitalized
                                                                            For capital         Under prompt corrective
                                                                                                         Action
                                                      Actual             Adequacy Purposes             Provisions
                                              --------------------      --------------------      -------------------
                                               Amount       Ratio        Amount       Ratio        Amount       Ratio
                                              -------      -------      -------      -------      -------      -------
<S>                                           <C>            <C>       <C>              <C>      <C>             <C>
2003
------
     Total capital (to risk-weighted
       assets)                                $13,449        15.7%     $ 6,853          8.0%     $ 8,567         10.0%
     Tier 1 capital (to risk weighted
       assets)                                 13,102        15.3        3,427          4.0        5,140          6.0
     Tier 1 (core) capital (to adjusted
       total assets)                           13,102         9.8        5,363          4.0        6,703          5.0

2002
------
     Total capital (to risk-weighted
      assets)                                 $13,556        18.5%     $ 5,875          8.0%     $ 7,344         10.0%
     Tier 1 capital (to risk- weighted
      assets)                                  13,230        18.0        2,938          4.0        4,406          6.0
     Tier 1 (core) capital (to adjusted
      total assets)                            13,230         9.6        5,491          4.0        6,864          5.0
</TABLE>

The Company may not declare or pay cash dividends on or repurchase any of its
shares of capital stock if the effect thereof would cause its net worth to be
reduced below applicable regulatory requirements or the amount of the
liquidation account if such a declaration and payment would otherwise violate
regulatory requirements.

NOTE 14 - OFF-BALANCE-SHEET ACTIVITIES

Some financial instruments, such as loan commitments, credit lines, and
overdraft protection, are issued to meet customer financing needs. These are
agreements to provide credit or to support the credit of others, as long as
conditions established in the contract are met, and usually have expiration
dates. Commitments may expire without being used. Off-balance-sheet risk to
credit loss exists up to the face amount of these instruments, although material
losses are not anticipated. The same credit policies are used to make such
commitments as are used for loans, including obtaining collateral at exercise of
the commitment.

--------------------------------------------------------------------------------

                                   (Continued)


                                       36
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 14 - OFF-BALANCE-SHEET ACTIVITIES (CONTINUED)

The contractual amount of financial instruments with off-balance-sheet risk was
as follows at year-end.

                                                 2003       2002
                                               -------    -------
Unused lines of credit                         $14,526    $ 9,660
Commitments to make loans (at market rates)      4,937      1,201
Construction loans in process                    1,431      1,019

Commitments to make loans are generally made for periods of 90 days or less.
Fixed rate loan commitments at year-end 2003 totaled $4,737 and have interest
rates ranging from 5.25% to 6.50% and maturities ranging from 3 years to 30
years. Commitments do not necessarily reflect the cash requirements of the
Company due to the fact that the commitments may expire without being funded.

NOTE 15 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments" (SFAS No. 107), requires the disclosure of
estimated fair values of all asset, liability, and off-balance-sheet financial
instruments. The estimated fair value amounts under SFAS No. 107 have been
determined as of a specific point in time utilizing various available market
information, assumptions, and appropriate valuation methodologies. Accordingly,
the estimated fair values presented herein are not necessarily representative of
the underlying value of the Company. Rather, the disclosures are limited to
reasonable estimates of the fair value of only the Company's financial
instruments. The use of assumptions and various valuation techniques, as well as
the absence of secondary market assets for certain financial instruments, will
likely reduce the comparability of fair value disclosure between financial
institutions. The Company does not plan to sell most of its assets or settle
most of its liabilities at these fair values. The estimated fair values of the
Company's financial instruments as of December 31 are set forth in the following
table:

<TABLE>
<CAPTION>
                                                               2003                      2002
                                                               ----                      ----
                                                      Carrying      Fair        Carrying      Fair
                                                       Amount       Value        Amount       Value
                                                      -------      -------      -------      -------
<S>                                                   <C>          <C>          <C>          <C>
Financial assets:
      Cash and cash equivalents                       $13,031      $13,031      $18,303      $18,303
      Securities available-for-sale                    18,612       18,612       26,875       26,875
      Stock in Federal Home Loan Bank of Chicago        4,252        4,252        3,999        3,999
      Loans receivable, net                            95,471       95,916       86,464       87,477
      Accrued interest receivable                         558          558          503          503

Financial liabilities:
      Deposit accounts                                $90,952      $92,613      $90,150      $91,985
      Borrowed funds                                   27,500       29,938       31,000       34,391
      Accrued interest payable                            143          143          168          168
</TABLE>

--------------------------------------------------------------------------------

                                   (Continued)


                                       37
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)


NOTE 15 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The methods and assumptions used to estimate fair value are described as
follows:

Carrying amount is the estimated fair value for cash and cash equivalents,
short-term borrowings, Federal Home Loan Bank stock, accrued interest receivable
and payable, demand deposits, and variable rate loans or deposits that reprice
frequently and fully. Security and investments in dollar denominated mutual
funds fair values are based on dealer quotes and, if no such information is
available, on the rate and term of the security and information about the
issuer. For fixed rate loans or deposits and for variable rate loans or deposits
with infrequent repricing or repricing limits, fair value is based on discounted
cash flows using current market rates applied to the estimated life and credit
risk. Fair values for impaired loans are estimated using discounted cash flow
analysis or underlying collateral values. The fair value of debt is based on
current rates for similar financing.

Other assets and liabilities of the Company not defined as financial
instruments, such as property and equipment, are not included in the above
disclosures. Also not included are nonfinancial instruments typically not
recognized in the financial statements such as the value of core deposits,
customer goodwill, and similar items.

While the above estimates are based on judgments of the most appropriate
factors, there is no assurance that if the Company disposed of these items, the
fair value would have been achieved, because the market value may differ
depending on the circumstances. The fair values at year end should not
necessarily be considered to apply at subsequent dates.


--------------------------------------------------------------------------------

                                   (Continued)


                                       38

<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 16 - PARENT COMPANY ONLY CONDENSED FINANCIAL STATEMENTS

Presented below are the condensed balance sheets, statements of operations, and
statements of cash flows for North Bancshares, Inc.

                   CONDENSED STATEMENTS OF FINANCIAL CONDITION

                                                     2003       2002
                                                   -------    -------
ASSETS
Cash and cash equivalents                          $   188    $   136
Securities available-for-sale                           63         52
Accrued interest receivable and other assets           262        232
Investment in savings bank                          12,987     13,496
                                                   -------    -------
     Total assets                                  $13,500    $13,916
                                                   =======    =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued expenses and other liabilities                   6         11
Stockholders' equity                                13,494     13,905
                                                   -------    -------
     Total liabilities and stockholders' equity    $13,500    $13,916
                                                   =======    =======


                       CONDENSED STATEMENTS OF OPERATIONS

                                                     2003       2002
                                                   -------    -------
Dividends from subsidiary                          $   528    $   500
Interest income                                          5         14
Other non-interest income                               46         --
Noninterest expense                                    (99)       (97)
                                                   -------    -------
Income before income taxes and equity in
  undistributed earnings of bank subsidiary            480        417
Income tax benefit                                      18         29
Equity in undistributed (over distributed)
 earnings of savings bank                             (128)       274
                                                   -------    -------
Net income                                         $   370    $   720
                                                   =======    =======

--------------------------------------------------------------------------------

                                   (Continued)


                                       39
<PAGE>


                      NORTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002
                    (Dollars in thousands, except share data)
--------------------------------------------------------------------------------

NOTE 16 - PARENT COMPANY ONLY CONDENSED FINANCIAL STATEMENTS  (CONTINUED)

                       CONDENSED STATEMENTS OF CASH FLOWS

                                                         2003      2002
                                                        -----     -----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                              $ 370     $ 720
Adjustments to reconcile net income to net cash
   provided by operating activities
     ESOP and stock awards expense                         13       200
     Net change in accrued interest and other assets       14       (37)
     Net change in other liabilities                       (5)        5
     Equity in (undistributed) over-distributed
       earnings of the Savings Bank                       128      (274)
                                                        -----     -----
     Net cash provided by operating activities            520       614
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital contribution to Savings Bank                     --       (76)
                                                        -----     -----
     Net cash used in investing activities                 --       (76)
CASH FLOWS FROM FINANCING ACTIVITIES:
     Payment of cash dividend                            (435)     (508)
     Proceeds from stock options exercised                121        44
     Purchase of treasury stock                          (154)     (345)
                                                        -----     -----
          Net cash used in financing activities          (468)     (809)
Net change in cash and cash equivalents                    52      (271)
Cash and cash equivalents at beginning of year            136       407
                                                        -----     -----
Cash and cash equivalents at end of year                $ 188     $ 136
                                                        =====     =====

--------------------------------------------------------------------------------

                                   (Continued)


                                       40
<PAGE>


                               BOARD OF DIRECTORS

MARY ANN HASS              ELMER L. HASS                GREGORY W. ROSE
Chairman of the Board      Retired-Cragin Metals        Managing Partner
                             Products, Inc.             Monarch Tool & Die Co.

FRANK J. DONATI, CPA       JOSEPH A. GRABER             ROBERT H. RUSHER
President                  President and                Retired-President and
Donati Financial           Chief Executive Officer      Chief Operating Officer
  Services, Inc.

MARK W. FERSTEL
Director of Leasing
Logicalis, Inc.


                                CURRENT OFFICERS

JOSEPH A. GRABER           VICTOR E. CAPUTO             MARTIN W. TROFIMUK
President and              Executive Vice President     Vice President and
Chief Executive              and Secretary and Chief      Treasurer
  Officer                    Operating Officer

CATHERINE J. HARPER        EMILIE V. REITER             WARREN RIFE
Vice President             Assistant Secretary          Assistant Vice President
North Federal Savings                                   North Federal
  Bank                                                    Savings Bank

SUSAN L. RODRIGUEZ         D. ROBERT HARLESS            EIZABETH M. SIMON
Assistant Secretary        Assistant Vice President     Assistant Vice President
North Federal Savings      North Federal Savings        North Federal
Bank                         Bank                         Savings Bank


CORPORATE INFORMATION

STOCK PRICE INFORMATION
North Bancshares, Inc. common stock trades on The Nasdaq Stock Market(R) under
the symbol "NBSI." The table below shows the high and low closing sales prices
of the common stock during the periods indicated in fiscal 2003 and 2002. On
March 1, 2004, North Bancshares, Inc. had approximately 325 shareholders of
record and 250 beneficial shareholders. As of that date, there were 1,144,695
shares of common stock issued and outstanding.

--------------------------------------------------------------------------------
                                  2003                         2002
                          ------------------------------------------------------
                           High           Low          High           Low
--------------------------------------------------------------------------------
    First quarter         $15.11        $13.54        $13.00        $11.80
--------------------------------------------------------------------------------
    Second quarter         17.07         14.30         13.00         12.25
--------------------------------------------------------------------------------
    Third quarter          17.20         14.75         13.65         11.52
--------------------------------------------------------------------------------
    Fourth quarter         15.00         12.80         14.84         11.26
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------

                                   (Continued)


                                       41
<PAGE>


INVESTOR INFORMATION

A copy of North Bancshares, Inc.'s annual report on Form 10-KSB, to be filed
with the Securities and Exchange Commission, is available without charge by
writing our Corporate Office or can be viewed on line by accessing the SEC's
Edgar reporting system or by accessing Nasdaq.com on the Bank's web site and
reviewing the current Edgar filings for NBSI.

VICTOR E. CAPUTO, SECRETARY
North Bancshares, Inc.
100 West North Avenue
Chicago, Illinois 60610-1399
(312) 664-4320 E-Mail: vecaputo@northfederal.com www.northfederal.com

Shareholders, investors and analysts interested in additional information may
contact the above.

ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of the Shareholders of North Bancshares, Inc. will be held at
3:00 P.M., April 23, 2004, at the main office of the Company at 100 West North
Avenue, Chicago, Illinois.

STOCK TRANSFER AGENT AND REGISTRAR
Inquiries regarding stock transfer, registration, lost certificate, lost
dividend checks or changes in name and address should be directed to the stock
transfer agent and registrar, LaSalle Bank, N. A., by calling 312-904-2584 or by
writing:


LASALLE BANK, N.A.                              MARKET MAKERS
Trust and Asset Management                      Boston Stock Exchange
135 South LaSalle Street                        The Brut ECN, LLC
Chicago, IL 60603                               Friedman, Billings, Ramsey, Inc.
                                                Hill, Thompson, Magid and Co.
CORPORATE COUNSEL/WASHINGTON, D.C.              Keefe, Bruyette & Woods, Inc.
Silver, Freedman & Taff, L.L.P.                 Knight Equity Markets, L. P.
1700 Wisconsin Avenue, N.W.                     National Stock Exchange
Washington, D.C.  20007                         Sandler O'Neill and Partners
                                                Schwab Capital Markets
CORPORATE COUNSEL/CHICAGO, IL                   Trident Securities, Inc.
John P. Koch                                    RBC Dain Rauscher, Inc.
100 West North Avenue
Chicago, IL 60610-1399

INDEPENDENT AUDITORS
Crowe Chizek and Company  LLC
One Mid America Plaza
P.O. Box 3697 Oak Brook, IL 60522






                                       42