SOURCE: Northern Star Financial, Inc.

June 18, 2009 17:51 ET

Northern Star Financial, Inc. Reports Third Quarter Results

MANKATO, MN--(Marketwire - June 18, 2009) - Northern Star Financial, Inc. (OTCBB: NSBK) today announced results for the Company and its wholly owned subsidiary Northern Star Bank for the third quarter of the fiscal year ending June 30, 2009.

Northern Star Financial, Inc., the parent company of Northern Star Bank, reported a net loss of $503,429 in the third quarter ended March 31, 2009 compared with a loss of $101,335 in the third quarter of fiscal year 2008. The basic loss per share of $0.54 for the third quarter of the fiscal year ending June 30, 2009 compared with a basic loss per share of $0.12 during the third quarter of the fiscal year ending June 30, 2008.

The Company's total assets decreased to $50.68 million at the end of the third quarter from $55.35 million for the fiscal year ending June 30, 2009. Total deposits for the third quarter ended March 31, 2009 decreased to $37.72 million, down from $39.59 million for the fiscal year ending June 30, 2008. Loan receivables net of allowance for loan losses decreased by $0.71 million over the prior fiscal year end.

When comparing the Company's third quarter fiscal year 2009 operating results with the results of operations during the same period of the prior fiscal year, President Stienessen attributed the difference in earnings to a $400 thousand non-cash expense incurred by the bank to increase the bank's allowance for loan losses. Stienessen reported that the need for additional reserves was dictated by the bank's regulators and resulted from the regulator's assessment of commercial real estate collateral values. Stienessen indicated that the requirement for additional reserves will result in a need for the Company to raise additional capital in equity markets that are not supportive of bank stocks.

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


                                                  March 31,     June 30,
                                                ------------  ------------
ASSETS                                              2009          2008
                                                ------------  ------------

Cash and due from banks                         $  1,198,042  $  1,037,213
Federal funds sold                                         -             -
                                                ------------  ------------
  Cash and cash equivalents                        1,198,042     1,037,213
Securities available for sale, at fair value       4,270,782     4,804,281
Federal Home Loan Bank stock, at cost                505,600       500,000
Loans held for sale                                5,873,114     9,740,876
Loans receivable, net of allowance for loan
 and lease losses of $715,974 and $319,657        35,806,467    36,523,996
Property and equipment, net of depreciation          235,475       225,238
Other real estate owned                            1,158,764       954,422
Cash surrender value of life insurance             1,183,350     1,151,488
Accrued interest receivable                          281,719       254,316
Other assets                                         170,503       157,644
                                                ------------  ------------
     Total Assets                               $ 50,683,816  $ 55,349,474
                                                ============  ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits                                 $  2,825,226  $  2,173,937
NOW and money market                               7,557,905     8,128,707
Savings                                            4,640,211     3,490,022
Time deposits                                     22,701,541    25,794,456
                                                ------------  ------------
  Total deposits                                  37,724,883    39,587,122
Federal funds purchased                            1,668,428     2,902,194
Notes payable and other borrowings                 8,067,415     8,814,693
Convertible subordinated notes payable             2,355,000     2,155,000
Accrued interest payable                             335,596       565,439
Other liabilities                                     31,790       162,721
                                                ------------  ------------
     Total Liabilities                            50,183,112    54,187,169

Stockholders' Equity
Common stock, $0.01 par value, 15,000,000
 shares authorized; 923,861 and 871,553 shares
 issued outstanding respectively                       9,238         8,715
Undesignated stock, $0.01 par value, 5,000,000
 shares authorized, no shares issued                       -             -
Paid in Capital                                    6,277,408     6,107,930
Accumulated deficit                               (5,691,013)   (4,909,732)
Accumulated comprehensive income (loss)              (94,929)      (44,608)
                                                ------------  ------------
     Total Stockholders' Equity                      500,704     1,162,305
                                                ------------  ------------
     Total Liabilities and Stockholders' Equity   50,683,816    55,349,474
                                                ============  ============




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


                          For the Three Months      For the Nine Months
                            Ended March 31,           Ended March 31,
                        ------------------------  ------------------------
                            2009         2008         2009         2008
                        -----------  -----------  -----------  -----------

Interest Income:
Loans receivable        $   649,484  $   720,877  $ 2,010,825  $ 2,234,756
Securities available
 for sale                    41,812       54,591      155,668      176,387
Due from banks               14,365          114       20,495          114
Federal funds sold              719       50,079       13,201       82,507
                        -----------  -----------  -----------  -----------
    Total interest
     income                 706,380      825,661    2,200,189    2,493,764
                        -----------  -----------  -----------  -----------

Interest Expense:
Deposits                    266,448      403,736      907,883    1,172,991
Borrowed funds              146,962      156,583      457,035      463,740
                        -----------  -----------  -----------  -----------
    Total interest
     expense                413,410      560,319    1,364,918    1,636,731
                        -----------  -----------  -----------  -----------

Net interest income         292,970      265,342      835,271      857,033
Provision for loan and
 lease losses               482,401            -      494,660            -
                        -----------  -----------  -----------  -----------

    Net interest income
     after provision
     for loan and
     lease losses          (189,431)     265,342      340,611      857,033
                        -----------  -----------  -----------  -----------

Non-interest income:
Other fees and service
 charges                    141,177       68,393      279,859      166,359
Sale of investments               -        4,283            -       12,226
Gain on sale of loans        21,690       12,301       94,695       73,360
                        -----------  -----------  -----------  -----------
    Total non-interest
     income                 162,867       84,977      374,554      251,945
                        -----------  -----------  -----------  -----------

Non-interest expense:
Compensation and
 employee benefits          189,980      212,205      641,669      701,127
Board fees                    4,600        4,500       14,550       16,000
Occupancy                    60,384       62,000      191,531      191,718
Printing and Supplies         5,163        5,682       21,349       21,342
Furniture, fixtures &
 equipment depreciation      10,480        9,151       30,000       30,851
Data Processing              57,915       50,616      185,526      159,283
Professional fees            66,551       30,284      147,774       68,876
Other                        81,792       77,216      264,047      252,439
                        -----------  -----------  -----------  -----------
    Total non-interest
     expense                476,865      451,654    1,496,446    1,441,636
                        -----------  -----------  -----------  -----------

Loss before income tax
 benefit                   (503,429)    (101,335)    (781,281)    (332,658)
Income tax benefit                -            -            -            -
                        -----------  -----------  -----------  -----------

Net loss                $  (503,429) $  (101,335) $  (781,281) $  (332,658)
                        ===========  ===========  ===========  ===========

Net (loss) per common
 share
Basic and diluted
 (loss) per share
 of common stock        $     (0.54) $     (0.12) $     (0.85) $     (0.40)
                        ===========  ===========  ===========  ===========

Contact Information

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