SOURCE: Northern Star Bank

May 11, 2007 17:13 ET

Northern Star Financial, Inc. Reports Third Quarter Results

MANKATO, MN -- (MARKET WIRE) -- May 11, 2007 -- 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, 2007.

Northern Star Financial, Inc., the parent company of Northern Star Bank, reported a net loss of $284,693 in the third quarter ended March 31, 2007 compared with a loss of $51,558 in the third quarter of fiscal year 2006. The basic loss per share of $0.38 for the third quarter of the fiscal year ending June 30, 2007 compared with a basic loss per share of $0.08 during the third quarter of the fiscal year ending June 30, 2006.

The Company's total assets increased to $51.80 million at the end of the third quarter, up from $47.34 million for the fiscal year ending June 30, 2006. Total deposits for the third quarter ended March 31, 2007 increased to $39.85 million up from $38.17 million for the fiscal year ending June 30, 2006. Loan receivables net of allowance for loan losses increased by $2.28 million over the prior fiscal year end.

When commenting on the announcement, Thomas Stienessen, Chief Executive Officer of Northern Star financial, Inc., reported that during the third quarter of fiscal year 2007 the Company had incurred a $196 thousand current operating expense by way of a provision to its reserves for loan losses. Stienessen indicated that the Board of Directors remains committed to seeking prudent ways of improving operating results; however, they were constrained in this effort by the cost of carrying the holding company's debt obligations and its limited access to capital necessary to grow the level of earning assets.

The Company reported it had raised $650 thousand during the third quarter of fiscal year 2007 through a private placement of 130 thousand shares of its common stock a price of $5.00 per share and that it did not incur any underwriting or placement expenses in connection with the offering.

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                                              2007          2006
                                                ------------  ------------

Cash and due from banks                         $  1,340,642  $  1,306,523
Federal funds sold                                 2,477,705       156,309
                                                ------------  ------------
  Cash and cash equivalents                        3,818,347     1,462,832
Securities available for sale, at fair value       4,027,658     4,029,341
Federal Home Loan Bank stock, at cost                419,300       304,200
Loans held for sale                                  316,420       369,072
Loans receivable, net of allowance for loan and
 lease losses of $419,043 and $448,218            41,346,208    39,062,547
Property and equipment, net of depreciation          290,895       359,164
Accrued interest receivable                          286,505       238,273
Other assets                                       1,294,165     1,510,743
                                                ------------  ------------
     Total Assets                               $ 51,799,498    47,336,172
                                                ============  ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Demand deposits                                 $  4,023,078     4,321,709
NOW and money market                               9,100,127     8,664,412
Savings                                            3,824,344     3,812,025
Time deposits                                     22,898,681    21,374,628
                                                ------------  ------------
  Total deposits                                  39,846,230    38,172,774
Federal funds purchased                                    -             -
Notes payable and other borrowings                 8,365,448     5,504,728
Convertible subordinated notes payable             1,480,000     1,800,000
Accrued interest payable                             509,825       348,966
Other libilities                                      25,095        64,323
                                                ------------  ------------
     Total Liabilities                            50,226,598    45,890,791

Stockholders' Equity
Common stock, $0.01 par value, 15,000,000
 shares authorized; 807,188 and 707,188 shares
 issued outstanding respectively                       8,072         7,071
Undesignated stock, par value $0.01 per share
 5,000,000 shares authorized, no shares issued
Paid in Capital                                    5,838,138     5,339,138
Accumulated deficit                               (4,247,868)   (3,821,340)
Accumulated comprehensive income (loss)              (25,442)      (79,488)
                                                ------------  ------------
     Total Stockholders' Equity                    1,572,900     1,445,381
                                                ------------  ------------
     Total Liabilities and Stockholders' Equity   51,799,498    47,336,172
                                                ============  ============




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

Interest Income:
Loans receivable          $   825,690  $ 686,311  $ 2,367,103  $ 2,021,178
Securities available for
 sale                          43,690     43,225      130,553      126,155
Federal funds sold             15,063      2,786       45,850        6,035
                          -----------  ---------  -----------  -----------
    Total interest income     884,443    732,322    2,543,506    2,153,368
                          -----------  ---------  -----------  -----------

Interest Expense:
Deposits                      390,060    278,687    1,120,540      824,342
Borrowed funds                152,138     84,161      390,079      251,730
                          -----------  ---------  -----------  -----------
    Total interest
     expense                  542,198    362,848    1,510,619    1,076,072
                          -----------  ---------  -----------  -----------

Net interest income           342,245    369,474    1,032,887    1,077,296
Provision for loan and
 lease lossess                196,417        709      211,417       33,532
                          -----------  ---------  -----------  -----------

    Net interst income
     after provision
     for loan and lease
     lossess                  145,828    368,765      821,470    1,043,764
                          -----------  ---------  -----------  -----------

Non-interest income:
Other fees and service
 charges                       77,269     44,050      198,616      163,492
Gain on sale of
 securities                         -     17,400            -       17,400
Gain on sale of loans          29,119     35,439       80,620      108,313
                          -----------  ---------  -----------  -----------
    Total non-interest
     income                   106,388     96,889      279,236      289,205
                          -----------  ---------  -----------  -----------

Non-interest expense:
Compensation and employee
 benefits                     272,524    232,113      761,345      655,834
Board fees                      5,100      5,400       21,350       19,850
Occupancy                      69,533     65,721      196,985      188,025
Printing and Supplies          15,191     17,111       37,121       38,671
Furniture, fixtures &
 equipment depreciation        22,476     22,397       60,562       68,013
Data Processing                49,343     50,435      146,514      147,642
Professional fees              16,957     36,369       63,493      131,147
Other                          85,785     87,666      239,864      243,424
                          -----------  ---------  -----------  -----------
    Total non-interest
     expense                  536,909    517,212    1,527,234    1,492,606
                          -----------  ---------  -----------  -----------

Loss before income tax
 benefit                     (284,693)   (51,558)    (426,528)    (159,637)
income tax benefit                  -          -            -            -
                          -----------  ---------  -----------  -----------

Net  loss                 $  (284,693) $ (51,558) $  (426,528) $  (159,637)
                          ===========  =========  ===========  ===========

Net (loss) per common
 share
Basic and diluted (loss)
 per share of
 common stock             $     (0.38) $   (0.08) $     (0.59) $     (0.25)
                          ===========  =========  ===========  ===========


Contact Information

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