SOURCE: Northern Star Bank

February 21, 2007 11:07 ET

Northern Star Financial, Inc. Reports Second Quarter Results

MANKATO, MN -- (MARKET WIRE) -- February 21, 2007 -- Northern Star Financial, Inc. (OTCBB: NSBK) today announced results for the Company and its wholly owned subsidiary Northern Star Bank for the second 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 $48,666 (a basic loss of $0.07 per share) in the second quarter ended December 31, 2006 compared with a net loss of $15,881 (a basic loss of $0.03 per share) during the same period of the prior fiscal year. The Company reported a basic loss per share of $0.20 for the six month period ended December 31, 2006 compared with a basic loss per share of $0.17 during the same six month period of the prior fiscal year.

The Company's total assets increased $4.29 million to $51.63 million at the end of the second quarter from $47.34 million at fiscal year ending June 30, 2006. Total deposits for the second quarter ended December 31, 2006 increased $1.35 million to $39.52 million from $38.17 million at fiscal year ending June 30, 2006. Loan receivables net of an allowance for loan losses increased by $4.47 million over the prior fiscal year end.

When comparing the Company's operating results for the first six months of fiscal year 2007 with the results of operations during the same period of the prior fiscal year, President Stienessen said, "More than $117 thousand of the nearly $142 thousand loss is attributable to expenses incurred at the bank holding company level." When asked about the Company's previously announced capital raising initiatives, Stienessen confirmed that the Company was continuing its efforts to increase it capital through a sale of its St. Cloud office and through a private placement of its common stock.

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


                                                December 31,    June 30,
                                                ------------  ------------
ASSETS                                              2006          2006
                                                ------------  ------------

Cash and due from banks                         $  1,473,222  $  1,306,523
Federal funds sold                                         -       156,309
                                                ------------  ------------
  Cash and cash equivalents                        1,473,222     1,462,832
Securities available for sale, at fair value       4,198,817     4,029,341
Federal Home Loan Bank stock, at cost                419,300       304,200
Loans held for sale                                  108,000       369,072
Loans receivable, net of allowance for loan and
 lease losses of $448,218 and $479,920            43,532,631    39,062,547
Property and equipment, net of depreciation          317,280       359,164
Accrued interest receivable                          336,847       238,273
Other assets                                       1,240,160     1,510,743
                                                ------------  ------------
   Total Assets                                 $ 51,626,257    47,336,172
                                                ============  ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits                                 $  2,733,378  $  4,321,709
NOW and money market                               9,536,478     8,664,412
Savings                                            3,488,952     3,812,025
Time deposits                                     23,761,362    21,374,628
                                                ------------  ------------
  Total deposits                                  39,520,170    38,172,774
Federal funds purchased                              251,783             -
Notes payable and other borrowings                 8,075,771     5,504,728
Convertible subordinated notes payable             1,880,000     1,800,000
Accrued interest payable                             391,545       348,966
Other libilities                                     157,082        64,323
                                                ------------  ------------
   Total Liabilities                              50,276,351    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                               (3,963,179)   (3,821,340)
Accumulated comprehensive income (loss)              (33,124)      (79,488)
                                                ------------  ------------
   Total Stockholders' Equity                      1,349,906     1,445,381
                                                ------------  ------------
   Total Liabilities and Stockholders' Equity     51,626,257    47,336,172
                                                ============  ============



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


                          For the Three Months       For the Six Months
                           Ended December 31,        Ended December 31,
                        ------------------------  ------------------------
                            2006         2005         2006         2005
                        -----------  -----------  -----------  -----------

Interest Income:
Loans receivable        $   816,662  $   690,419  $ 1,541,413  $ 1,334,867
Securities available
 for sale                    44,927       41,311       86,863       82,930
Federal funds sold           16,615        1,693       30,787        3,249
                        -----------  -----------  -----------  -----------
   Total interest
    income                  878,204      733,423    1,659,063    1,421,046
                        -----------  -----------  -----------  -----------

Interest Expense:
Deposits                    387,518      282,565      730,480      545,655
Borrowed funds              133,075       86,128      237,941      167,569
                        -----------  -----------  -----------  -----------
   Total interest
    expense                 520,593      368,693      968,421      713,224
                        -----------  -----------  -----------  -----------

Net interest income         357,611      364,730      690,642      707,822
Provision for loan and
 lease lossess               15,000       24,335       15,000       32,823
                        -----------  -----------  -----------  -----------

    Net interest income
     after provision
     for loan and lease
     lossess                342,611      340,395      675,642      674,999
                        -----------  -----------  -----------  -----------

Non-interest income:
Other fees and service
 charges                     77,209       54,344      121,347      119,442
Gain on sale of loans        23,346       43,202       51,501       72,874
                        -----------  -----------  -----------  -----------
   Total non-interest
    income                  100,555       97,546      172,848      192,316
                        -----------  -----------  -----------  -----------

Non-interest expense:
Compensation and
 employee benefits          240,452      168,122      488,821      423,750
Board fees                   11,750        6,000       16,250       14,450
Occupancy                    63,496       58,251      127,452      122,304
Printing and Supplies        12,314        9,729       21,930       21,560
Furniture, fixtures &
 equipment depreciation      17,101       22,476       38,086       45,616
Data Processing              49,039       48,333       97,171       97,207
Professional fees            21,533       66,578       46,536       94,778
Other                        76,147       74,333      154,083      155,758
                        -----------  -----------  -----------  -----------
   Total non-interest
    expense                 491,832      453,822      990,329      975,423
                        -----------  -----------  -----------  -----------
Loss before income tax
 benefit                    (48,666)     (15,881)    (141,839)    (108,108)
Income tax benefit                -            -            -            -
                        -----------  -----------  -----------  -----------

Net  loss               $   (48,666) $   (15,881) $  (141,839) $  (108,108)
                        ===========  ===========  ===========  ===========

Net (loss) per common
 share
Basic and diluted
 (loss) per share of
 common stock           $     (0.07) $     (0.03) $     (0.20) $     (0.17)
                        ===========  ===========  ===========  ===========

Contact Information

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