SOURCE: Northern Star Financial, Inc.

October 17, 2008 11:41 ET

Northern Star Financial, Inc. Reports Fourth Quarter Results and Year End Results

MANKATO, MN--(Marketwire - October 17, 2008) - Northern Star Financial, Inc. (OTCBB: NSBK) today announced results for the Company and its wholly owned subsidiary Northern Star Bank (Bank) for the fourth quarter and for the fiscal year ending June 30, 2008.

Northern Star Financial, Inc., the parent company of Northern Star Bank, reported a consolidated net loss of $186,316 in the fourth quarter and $518,974 for the fiscal year ended June 30, 2008 compared with a net loss of $142,896 in the fourth quarter and a net loss of $569,424 during fiscal year 2007. The Company reported a basic loss per share of $(0.61) during the fiscal year ending June 30, 2006 compared with a basic loss of $(0.77) per share during fiscal year ending June 30, 2007. The Company's wholly owned subsidiary, Northern Star Bank, reported operating losses of $3,200 during the fourth quarter and $87,441 for the fiscal year ending June 30, 2008.

Thomas Stienessen, President and Chief Executive Officer, commented that when comparing operations to the prior fiscal year there had been a $50,000 improvement in annual operating results. President Stienessen reiterated his comments of previous earnings releases in that the Company's operating results were overshadowed by the more than $200 thousand annual cost of carrying the Company's debt.

When commenting on the organization's operating performance Stienessen reported that sudden and deep drops in interest rates had resulted in a $300 thousand reduction in net interest income during the prior fiscal year which was exacerbated by $100 thousand increase in professional fees associated with the Company's previously announced plans to acquire Rive City Mortgage and Financial, Inc. of Eagan, Minnesota. Stienessen advised investors that the Company was able to compensate for the loss in net interest income and for the increase in expenses by increasing fee income $110 thousand; reducing compensation and benefits by $90 thousand; and a $110 thousand reduction in provisions for loan losses.

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 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.

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

Statements that Northern Star Financial, Inc. 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 competitive marketplace, changes in the interest rate environment, economic conditions, and outcome of pending litigations, 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 STOCKHOLDERS' EQUITY
                    YEARS ENDED JUNE 30, 2008 AND 2007



                                                    2008          2007
                                                ------------  ------------
                     ASSETS

Cash and due from banks                         $  1,037,213  $  1,270,856
Federal funds sold                                         -     1,447,688
                                                ------------  ------------
       Cash and cash equivalents                   1,037,213     2,718,544
Securities available for sale, at fair value       4,804,281     4,093,750
Restricted stock, at cost                            500,000       420,900
Loans held for sale                                9,740,876             -
Loans receivable, net of allowance for loan
 and lease losses of $319,657 and $319,978        36,523,996    39,883,169
Property and equipment, net of depreciation          225,238       279,089
Other real estate owned                              954,422             -
Cash surrender value of life insurance             1,151,488     1,109,770
Accrued interest receivable                          254,316       281,204
Other assets                                         157,644       152,311
                                                ------------  ------------

        Total Assets                            $ 55,349,474  $ 48,938,737
                                                ============  ============

       LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
Demand deposits                                 $  2,173,937  $  2,558,306
NOW and money market                               8,128,707     8,716,094
Savings                                            3,490,022     3,440,319
Time deposits                                     25,794,456    22,619,026
                                                ------------  ------------
       Total deposits                             39,587,122    37,333,745
Federal funds purchased                            2,902,194             -
Notes payable and other borrowings                 8,814,693     8,066,862
Subordinated notes payable                         2,155,000     1,450,000
Accrued interest payable                             565,439       486,173
Other liabilities                                    162,721        30,370
                                                ------------  ------------
       Total Liabilities                          54,187,169    47,367,150

Stockholders' Equity:
Common stock, $.01 par value, 15,000,000 shares
 authorized; 871,553 and 837,188 shares issued         8,715         8,371
Undesignated stock, par value $.01 per share;
 5,000,000 shares authorized, no shares issued             -             -
Additional paid in capital                         6,107,930     5,987,838
Accumulated deficit                               (4,909,732)   (4,390,764)
Accumulated other comprehensive income (loss)        (44,608)      (33,858)
                                                ------------  ------------
       Total Stockholders' Equity                  1,162,305     1,571,587
                                                ------------  ------------

       Total Liabilities and Stockholders
        Equity                                  $ 55,349,474  $ 48,938,737
                                                ============  ============





               NORTHERN STAR FINANCIAL, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED JUNE 30, 2008 AND 2007



                                                      2008         2007
                                                  -----------  -----------
INTEREST INCOME
Loans receivable                                  $ 2,963,498  $ 3,163,823
Securities available-for-sale                         232,971      182,713
Other                                                  92,429      106,423
                                                  -----------  -----------
       Total interest income                        3,288,898    3,452,959

INTEREST EXPENSE
Deposits                                            1,531,997    1,508,932
Borrowed Funds                                        621,734      534,677
                                                  -----------  -----------
       Total interest expense                       2,153,731    2,043,609
                                                  -----------  -----------

NET INTEREST INCOME                                 1,135,167    1,409,350

PROVISON FOR LOAN LOSSES                                4,500      114,885
                                                  -----------  -----------

NEW INTEREST INCOME AFTER PROVISION
 FOR LOAN LOSSES                                    1,130,667    1,294,465

NON-INTEREST INCOME
Other fees and service charges                        229,330      164,528
Gain on sale of loans held for sale                   157,209      108,166
Gain on sale of investments                            12,225            -
Other income                                                -       12,580
                                                  -----------  -----------
       Total non-interest income                      398,764      285,274

NON-INTEREST EXPENSE
Compensation and employee benefits                    941,917    1,032,499
Board fees                                             23,750       27,100
Occupancy                                             266,137      262,983
Printing and supplies                                  33,560       49,761
Furniture, fixtures and equipment depreciation         39,450       68,458
Data processing                                       209,770      192,200
Professional fees                                     206,148       87,614
Other                                                 327,673      428,548
                                                  -----------  -----------
       Total non-interest expense                   2,048,405    2,149,163
                                                  -----------  -----------

NET LOSS                                          $  (518,974) $  (569,424)
                                                  ===========  ===========

NET LOSS PER COMMON SHARE
Basic and diluted loss per share
 of common stock                                  $     (0.61) $     (0.77)
                                                  ===========  ===========

Contact Information

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