SOURCE: Northern Star Bank

December 28, 2006 16:56 ET

Northern Star Financial, Inc. Reports First Quarter Results

MANKATO, MN -- (MARKET WIRE) -- December 28, 2006 --Northern Star Financial, Inc. (OTCBB: NSBK) today announced results for the Company and its wholly owned subsidiary, Northern Star Bank, for the first quarter of the fiscal year ending June 30, 2007.

Northern Star Financial, Inc., the parent company of Northern Star Bank, reported a net loss of $93,173 in the first quarter ended September 30, 2006 compared with a net loss of $92,198 in the first quarter of fiscal year 2006. The basic loss per share of $0.15 for the first quarter of the fiscal year ending June 30, 2007 compared with a basic loss per share of $0.15 during the first quarter of the fiscal year ending June 30, 2006.

The Company's total assets increased to $48.79 million at the end of the first quarter up from $47.34 million for the fiscal year ending June 30, 2006. Total deposits for the first quarter ended September 30, 2006 increased to $39.69 million up from $38.17 million for the fiscal year ending June 30, 2006. Loan receivables net of allowance for loan losses decreased by $576 thousand over the prior fiscal year end.

When comparing the Company's first quarter fiscal year 2007 operating results with the results of operations during the same period of the prior fiscal year, President Stienessen said, "Bottom line operating performance was unchanged from the prior quarter despite an increase in interest income of nearly $100 thousand and a $37 thousand decrease in non interest expenses." Stienessen reported that the improvement in interest income and the reduction in operating expenses had been offset by a nearly like amount of increase in interest expense and a decrease in non-interest income. Stienessen confirmed that the Company was continuing its previously announced efforts to increase its capital while trimming expenses. Stienessen also announced that the shareholders had re-elected Gerald W. Eick and himself to the board of directors at their annual meeting held on November 15, 2006.

The Company commenced operations on January 25, 1999 as a bank holding company whose subsidiary provides financial services. Northern Star Bank's business is that of a financial intermediary and consists primarily of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to make secured and unsecured loans to business and professional concerns and mortgage loans secured by residential real estate and other consumer loans. The Bank operates two full-service offices that are located in Mankato and St. Cloud, Minnesota.

THIS PRESS RELEASE CONTAINS FORWARD-LOOKING INFORMATION AND ACTUAL RESULTS MAY DIFFER.

Statements that Northern Star Financial may publish, including those in this announcement that are not strictly historical, are "forward-looking" statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are inherently unreliable and actual results may vary. Factors which could cause actual results to differ from these forward-looking statements include changes in the competitive marketplace, changes in the interest rate environment, economic conditions, outcome of pending litigation, risks associated with credit quality and other factors discussed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

               Northern Star Financial, Inc. and Subsidiary
              Consolidated Statements of Financial Condition
                               Unaudited
                                                September 30,   June 30,
                                                ------------  ------------
ASSETS                                               2006          2006
                                                ------------  ------------

Cash and due from banks                         $  1,703,131  $  1,306,523
Federal funds sold                                 2,392,256       156,309
                                                ------------  ------------
  Cash and cash equivalents                        4,095,387     1,462,832
Securities available for sale, at fair value       3,860,455     4,029,341
Federal Home Loan Bank stock, at cost                304,200       304,200
Loans held for sale                                  214,000       369,072
Loans receivable, net of allowance for loan and
 lease losses of $456,580 and $479,920            38,486,991    39,062,547
Property and equipment, net of depreciation          336,132       359,164
Accrued interest receivable                          307,113       238,273
Other assets                                       1,189,353     1,510,743
                                                ------------  ------------
     Total Assets                               $ 48,793,631  $ 47,336,172
                                                ============  ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits                                 $  3,691,901  $  4,321,709
NOW and money market                               9,446,832     8,664,412
Savings                                            3,798,568     3,812,025
Time deposits                                     22,753,910    21,374,628
                                                ------------  ------------
  Total deposits                                  39,691,211    38,172,774
Federal funds sold                                         -             -
Notes payable and other borrowings                 5,399,380     5,504,728
Convertible subordinated notes payable             1,800,000     1,800,000
Accrued interest payable                             476,814       348,966
Other libilities                                      36,920        64,323
                                                ------------  ------------
     Total Liabilities                          $ 47,404,325  $ 45,890,791

Stockholders' Equity
Common stock, $0.01 par value, 15,000,000
 shares authorized; 707,188 and 707,188 shares
 issued outstanding respectively                       7,071         7,071
Undesignated stock, par value $0.01 per share
 5,000,000 shares authorized, no shares issued
Paid in Capital                                    5,339,138     5,339,138
Accumulated deficit                               (3,914,510)   (3,821,340)
Unearned stock compensation                                -             -
Accumulated comprehensive income (loss)              (42,393)      (79,488)
                                                ------------  ------------
     Total Stockholders' Equity                 $  1,389,306  $  1,445,381
                                                ------------  ------------
     Total Liabilities and Stockholders' Equity $ 48,793,631  $ 47,336,172
                                                ============  ============


               Northern Star Financial, Inc. and Subsidiary
              Unaudited Consolidated Statements of Operation


                                                      For the Three Months
                                                       Ended September 30
                                                      --------------------
                                                         2006       2005
                                                      ---------  ---------
Interest Income:
Loans receivable                                      $ 724,751  $ 644,448
Securities available for sale                            41,938     41,619
Federal funds sold                                       14,170      1,556
                                                      ---------  ---------
    Total interest income                               780,859    687,623
                                                      ---------  ---------

Interest Expense:
Deposits                                                342,963    263,090
Borrowed funds                                          104,865     81,441
                                                      ---------  ---------
    Total interest expense                              447,828    344,531
                                                      ---------  ---------

Net interest income                                     333,031    343,092
Provision for loan and lease lossess                          -      8,488
                                                      ---------  ---------

    Net interst income after provision
      for loan and lease lossess                        333,031    334,604
                                                      ---------  ---------

Non-interest income:
Other fees and service charges                           44,138     65,098
Gain on sale of securities                                    -          -
Gain on sale of loans                                    28,155     29,672
                                                      ---------  ---------
    Total non-interest income                            72,293     94,770
                                                      ---------  ---------

Non-interest expense:
Compensation and employee benefits                      250,869    255,599
Board fees                                                4,500      8,450
Occupancy                                                63,958     64,053
Printing and Supplies                                     9,616     11,831
Furniture, fixtures & equipment depreciation             20,980     23,140
Data Processing                                          40,244     48,874
Professional fees                                        15,712     28,200
Other                                                    77,936     81,425
                                                      ---------  ---------
                                                        483,815    521,572
                                                      ---------  ---------

Income (loss) before income tax benefit                 (93,173)   (92,198)
income tax benefit                                            -          -
                                                      ---------  ---------

Net income (loss)                                     $ (93,173) $ (92,198)
                                                      =========  =========

Net income (loss) per common share
Basic and diluted income (loss) per share
  of common stock                                     $   (0.13) $   (0.15)
                                                      =========  =========

Contact Information

  • Contact:
    Thomas Stienessen
    Chief Executive Officer
    (507) 387-2265