Today's annual meeting at North Bancshares in Chicago should be more exciting than the typical gathering of small-thrift shareholders.

The president of a bank suitor that the $114 million-asset thrift recently spurned is eager to state his case. The suburb-based bank has since bought stock in North Bancshares and the president has written to the thrift's shareholders, questioning the performance of its management.

Saul D. Binder, president of $251 million-asset Success National Bank, Lincolnwood, Ill., maintains that North Bancshares' management has not adequately deployed excess capital accrued in the thrift's 1993 conversion from mutual to stock ownership and is obligated to discuss merger opportunities.

But Joseph A. Graber, president and chief operating officer of North Federal Savings Bank, plans to reiterate the company's position not to sell.

"They're obligated to do what's best for their shareholders," said Daniel E. Cardenas, a Howe Barnes Investments analyst who follows the company. However, he added, the company shouldn't do a deal that doesn't make sense for it.

The controversy began in February, when Success' attorney approached North Bancshares' chairman, Mary Ann Hass, about discussing a merger of equals.

"We politely said no," said Mr. Graber, whose 110-year-old institution converted to a stock company in December 1993. "We think we can improve long-term shareholder value by expanding our franchise and growing internally rather than merging right now."

The thrift's business plan includes growing interest-earning assets about 6% annually, evaluating additional stock repurchase programs, improving loans-to-assets and increasing fee income at least 10% annually, he said.

Already, loans have doubled in the past two years, he said. Moreover, the company's stock price has increased 29% since January, he said. However, first-quarter return on equity was 3.64%.

After North Bancshares declined to discuss a merger, Mr. Binder began acquiring its stock. He now owns just under 10,000 of the nearly 1.2 million shares outstanding.

Early this month, he wrote to shareholders, questioning the company's strategies and disparaging the fact its net income was just $696,000 last year although it had $21 million in capital.

Mr. Binder concedes that Success needs the capital a merger with North would provide. "We're growing faster than we're accumulating capital," he said.

Further, the thrift's attractive North Side market is about a mile from Success' only city location. Moreover, two of the nearest rival branches - those of Old Kent Financial Corp. and First Chicago NBD - are closing soon.

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