SOURCE: Northern Star Financial, Inc.

February 21, 2008 16:18 ET

Northern Star Financial, Inc. Reports Second Quarter Results

MANKATO, MN--(Marketwire - February 21, 2008) - 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, 2008.

Northern Star Financial, Inc., the parent company of Northern Star Bank, reported a net loss of $101,430 (a basic loss of $0.12 per share) in the second quarter ended December 31, 2007 compared with a net loss of $48,666 (a basic loss of $0.07 per share) during the same period of the prior fiscal year. The Company reported a basic loss per share of $0.28 for the six month period ended December 31, 2007 compared with a basic loss per share of $0.20 during the same six month period of the prior fiscal year.

The Company's total assets increased $4.56 million to $53.50 million at the end of the second quarter from $48.94 million at fiscal year ending June 30, 2007. Total deposits for the second quarter ended December 31, 2007 increased $2.76 million to $40.09 million from $37.33 million at fiscal year ending June 30, 2007. Loan receivables net of an allowance for loan losses decreased by $2.72 million over the prior fiscal year end.

When comparing the Company's operating results for the first six months of fiscal year 2008 with the results of operations during the same period of the prior fiscal year, President Stienessen said, "While non-interest income and operating expenses were materially unchanged from period to period; Northern Star's net interest income declined nearly $100 thousand due to a $2.72 million decline in loan receivables and to our clients' demand for lower yielding fixed rate loans and higher cost time deposits arising out of a two year long flat or inverted yield curve."

The Company operates 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                                              2007          2007
                                                ------------  ------------

Cash and due from banks                         $  1,569,038  $  1,270,856
Federal funds sold                                 2,279,959     1,447,688
                                                ------------  ------------
  Cash and cash equivalents                        3,848,997     2,718,544
Securities available for sale, at fair value       4,265,074     4,093,750
Federal Home Loan Bank stock, at cost                435,500       420,900
Loans held for sale                                6,041,051             -
Loans receivable, net of allowance for loan and
   lease losses of $316,691 and $319,979          37,161,020    39,883,169
Property and equipment, net of depreciation          249,572       279,089
Cash surrender value of life insurance             1,130,725     1,109,770
Accrued interest receivable                          286,223       281,204
Other assets                                          83,639       152,311
                                                ------------  ------------
     Total Assets                               $ 53,501,801  $ 48,938,737
                                                ============  ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits                                 $  2,323,185  $  2,558,306
NOW and money market                               8,541,280     8,716,094
Savings                                            3,637,616     3,440,319
Time deposits                                     25,592,543    22,619,026
                                                ------------  ------------
  Total deposits                                  40,094,624    37,333,745
Federal funds purchased                                    -             -
Notes payable and other borrowings                 9,412,445     8,066,862
Convertible subordinated notes payable             2,030,000     1,450,000
Accrued interest payable                             436,566       486,173
Other libilities                                     154,143        30,370
                                                ------------  ------------
     Total Liabilities                            52,127,778    47,367,150

Stockholders' Equity
Common stock, $0.01 par value, 15,000,000
 shares authorized; 837,188 and 837,188 shares
 issued outstanding respectively                       8,371         8,371
Undesignated stock, par value $0.01 per share
 5,000,000 shares authorized, no shares issued
Paid in Capital                                    5,987,838     5,987,838
Accumulated deficit                               (4,622,087)   (4,390,764)
Accumulated comprehensive income (loss)                  (99)      (33,858)
                                                ------------  ------------
     Total Stockholders' Equity                    1,374,023     1,571,587
                                                ------------  ------------
     Total Liabilities and Stockholders' Equity   53,501,801    48,938,737
                                                ============  ============



               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,
                        ------------------------  ------------------------
                            2007         2006         2007         2006
                        -----------  -----------  -----------  -----------

Interest Income:
Loans receivable        $   782,726  $   816,662  $ 1,513,879  $ 1,541,413
Securities available
 for sale                    62,667       44,927      121,796       86,863
Federal funds sold           10,004       16,615       32,428       30,787
                        -----------  -----------  -----------  -----------
    Total interest
     income                 855,397      878,204    1,668,103    1,659,063
                        -----------  -----------  -----------  -----------

Interest Expense:
Deposits                    383,012      387,518      769,255      730,480
Borrowed funds              150,320      133,075      307,157      237,941
                        -----------  -----------  -----------  -----------
    Total interest
     expense                533,332      520,593    1,076,412      968,421
                        -----------  -----------  -----------  -----------

Net interest income         322,065      357,611      591,691      690,642
Provision for loan and
 lease lossess                    -       15,000            -       15,000
                        -----------  -----------  -----------  -----------

    Net interest income
     after provision
     for loan and lease
     lossess                322,065      342,611      591,691      675,642
                        -----------  -----------  -----------  -----------

Non-interest income:
Other fees and service
 charges                     46,785       77,209       97,966      121,347
Sale of investments           7,943            -        7,943            -
Gain on sale of loans        42,185       23,346       61,059       51,501
                        -----------  -----------  -----------  -----------
    Total non-interest
     income                  96,913      100,555      166,968      172,848
                        -----------  -----------  -----------  -----------

Non-interest expense:
Compensation and
 employee benefits          250,214      240,452      488,922      488,821
Board fees                    5,750       11,750       11,500       16,250
Occupancy                    65,378       63,496      129,718      127,452
Printing and Supplies         8,279       12,314       15,660       21,930
Furniture, fixutres &
 equipment depreciation      10,390       17,101       21,700       38,086
Data Processing              54,847       49,039      108,667       97,171
Professional fees            27,287       21,533       38,592       46,536
Other                        98,263       76,147      175,229      154,083
                        -----------  -----------  -----------  -----------
    Total non-interest
     expense                520,408      491,832      989,988      990,329
                        -----------  -----------  -----------  -----------

Loss before income tax
 benefit                   (101,430)     (48,666)    (231,329)    (141,839)
Income tax benefit                -            -            -            -
                        -----------  -----------  -----------  -----------

Net  loss               $  (101,430) $   (48,666) $  (231,329) $  (141,839)
                        ===========  ===========  ===========  ===========

Net (loss) per common
 share
Basic and diluted
 (loss) per share
 of common stock        $     (0.12) $     (0.07) $     (0.28) $     (0.20)
                        ===========  ===========  ===========  ===========


Contact Information

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