SOURCE: Northern States Financial Corporation

Northern States Financial Corporation

July 21, 2015 18:22 ET

Northern States Financial Corporation Reports Second Quarter 2015 Earnings

WAUKEGAN, IL--(Marketwired - Jul 21, 2015) - Northern States Financial Corporation (OTCQB: NSFC) (the "Company"), holding company for NorStates Bank (the "Bank"), an FDIC insured financial institution, today reported second quarter 2015 net income of $392,000 as compared with first quarter net income of $180,000. Per share book value at June 30, 2015 was $0.38.

The financial results of the Bank showed earnings of $501,000 for the second quarter of 2015. Assets of the Company totaled $444.5 million at June 30, 2015, an increase 5.3% from December 31, 2014. The Company increased its loans and leases, net of deferred fees, and total investment securities by $12.7 million and $9.5 million, respectively, between March 31, 2015 and June 30, 2015. Total deposits also increased from $364.6 million at March 31, 2015 to $381.4 million at June 30, 2015.

With regard to asset quality, the Company's non-performing assets ("NPAs"), consisting of nonaccrual loans, ninety days or more past due loans still accruing, loans considered troubled debt restructurings and other real estate owned, decreased by $6.7 million between December 31, 2014 and June 30, 2015.

"We are pleased to report steady progress in the reduction of NPAs and a solid increase in earnings," stated Scott Yelvington, President and Chief Executive Officer of the Company. "In addition to robust credit opportunities, we were also able to post approximately $2.0 million in recoveries on loans, which boosted our reserves. Our focus will remain on the reduction of NPAs and the further increase in profitability through loan generation and short-term investments while reducing expenses."

About Northern States Financial Corporation

Northern States Financial Corporation is the holding company for NorStates Bank, a full-service commercial bank with eight branches in Lake County, Illinois. NorStates Bank is the successor to financial institutions dating to 1919. NorStates Bank serves the populations of northeastern Illinois and southeastern Wisconsin.

Forward-Looking Information

This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include, but are not necessarily limited to, fluctuations in interest rates, inflation, government regulations, general economic conditions, competition within the business areas in which the Company conducts its operations including the real estate market in Illinois, and other factors beyond the Company's control. Such risks and uncertainties could cause actual results for subsequent interim periods or for the entire year to differ materially from those expressed or implied by any forward-looking statement. Readers should not place undue reliance on the forward-looking statements, which reflect management's beliefs, expectations and assumptions only as of the date hereof. The Company undertakes no obligation to update statements to reflect new information or subsequent events or circumstances.

                           
NORTHERN STATES FINANCIAL CORPORATION  
($000s, except per share data) (Unaudited)  
Key Performance Data  
                           

For quarter ended
  June 30,
2015
    March 31,
2015
  December 31,
2014
    September 30,
2014
  June 30,
2014
 
                                     
Net income (loss) available to common stockholders   $ 392     $ 180   $ (142 )   $ 283   $ 16,100  
Basic income (loss) per average outstanding share     0.00       0.00     (0.00 )     0.00     0.26  
Diluted income (loss) per average outstanding share     0.00       0.00     (0.00 )     0.00     0.26  
Return on average assets     0.36 %     0.17 %   -0.13 %     0.27 %   15.99 %
Return on average equity     4.73 %     2.18 %   -1.75 %     3.50 %   237.95 %
Yield on interest earning assets     3.13 %     3.21 %   3.39 %     3.10 %   3.13 %
Cost of interest-bearing liabilities     0.19 %     0.19 %   0.18 %     0.18 %   0.20 %
Net interest spread     2.94 %     3.02 %   3.21 %     2.92 %   2.93 %
Net interest margin     2.98 %     3.07 %   3.24 %     2.96 %   2.97 %
Net charged-off loans   $ (1,681 )   $ 488   $ 1,866     $ 163   $ 641  
Net charged-off loans to average loans (annualized)     -2.99 %     0.89 %   3.45 %     0.30 %   1.17 %
                                     
                                     
    June 30,
2015
    March 31,
2015
  December 31,
2014
    September 30,
2014
  June 30,
2014
 
                                     
Total stockholders' equity   $ 33,214     $ 33,112   $ 32,333     $ 32,060   $ 32,016  
Deferred tax asset     25,339       25,188     25,566       26,709     26,539  
Deferred tax asset valuation allowance     (25,183 )     (25,183 )   (25,183 )     (26,070 )   (26,053 )
Book value per common share   $ 0.38     $ 0.38   $ 0.37     $ 0.37   $ 0.17  
Common shares outstanding     87,604,088       87,604,088     87,604,088       87,604,088     87,604,088  
                                     
                                     
    June 30,
2015
    March 31,
2015
  December 31,
2014
    September 30,
2014
  June 30,
2014
 
Nonperforming assets                                    
Loans on nonaccrual status   $ 10,820     $ 9,715   $ 16,551     $ 23,576   $ 15,242  
Loans 90 days or more past due, still accruing     198       298     1,048       610     283  
Loan troubled debt restructurings     2,400       3,742     3,376       5,851     6,531  
  Total nonperforming loans     13,418       13,755     20,975       30,037     22,056  
Other real estate owned     17,416       19,347     16,514       18,933     19,012  
  Total nonperforming assets   $ 30,834     $ 33,102   $ 37,489     $ 48,970   $ 41,068  
                                     
Nonperforming assets excluding trouble debt restructurings    
$ 28,434
     
$ 29,360
   
$ 34,113
     
$ 43,119
   
$ 34,537
 
Nonperforming loans to total assets excluding trouble debt     3.02 %     3.18 %   4.97 %     7.10 %   5.41 %
Nonperforming assets to total assets excluding trouble debt     6.94 %     7.66 %   8.88 %     11.57 %   10.07 %
Nonperforming assets excluding trouble debt restructurings to total assets    
6.40
%    
6.80
%  
8.08
%    
10.19
%  
8.47
%
                                     
                       
NORTHERN STATES FINANCIAL CORPORATION  
                       
($000s, except per share data) (Unaudited)                      
Condensed Consolidated Balance Sheets
 
 
 
June 30,
2015
 
 
March 31,
2015
 
 
December 31,
2014
 
 
September 30,
2014
 
 
June 30,
2014
 
 
  Assets                                
Cash and due from banks   $ 4,817   $ 5,258   $ 8,258   $ 4,272   $ 5,627  
Interest bearing deposits in financial institutions - maturities less than 90 days    
60,455
   
63,768
   
26,727
   
40,908
   
33,162
 
  Total cash and cash equivalents     65,272     69,026     34,985     45,180     38,789  
Interest bearing deposits in financial institutions - maturities of 90 days or greater    
6,499
   
7,739
   
8,483
   
9,971
   
8,483
 
Securities available for sale     112,353     101,659     121,368     117,447     116,363  
Securities held to maturity     10,838     12,069     16,305     14,968     7,001  
Loans and leases, net of deferred fees     229,932     217,270     219,049     213,031     215,307  
Less: Allowance for loan and lease losses     (7,834 )   (6,153 )   (6,541 )   (8,407 )   (8,570 )
  Loans and leases, net     222,098     211,117     212,508     204,624     206,737  
Federal Home Loan Bank stock     931     931     931     931     931  
Office buildings and equipment, net     6,845     7,851     7,957     8,041     8,021  
Other real estate owned     17,416     19,347     16,514     18,933     19,012  
Accrued interest receivable     1,217     1,144     1,158     1,196     1,147  
Other assets     1,035     986     1,814     1,931     1,435  
  Total assets   $ 444,504   $ 431,869   $ 422,023   $ 423,222   $ 407,919  
    Liabilities and Stockholders' Equity                                
Liabilities                                
Deposits                                
  Noninterest-bearing deposits   $ 81,795   $ 77,213   $ 79,378   $ 71,285   $ 71,318  
  Interest- bearing deposits     299,564     287,406     277,352     286,520     273,608  
    Total deposits     381,359     364,619     356,730     357,805     344,926  
Securities sold under repurchase agreements     14,836     18,231     18,447     20,100     16,601  
Subordinated debentures     10,310     10,310     10,310     10,310     10,310  
Advances from borrowers for taxes and insurance     1,904     2,639     1,485     445     1,328  
Accrued interest payable and other liabilities     2,881     2,958     2,718     2,502     2,738  
  Total liabilities     411,290     398,757     389,690     391,162     375,903  
Stockholders' Equity                                
Common stock     878     878     878     878     878  
Additional paid-in capital     32,088     32,088     32,088     32,088     32,088  
Retained earnings     5,143     4,751     4,571     4,713     4,430  
Treasury stock, at cost     (4,674 )   (4,674 )   (4,674 )   (4,674 )   (4,674 )
Accumulated other comprehensive income (loss), net     (221 )   69     (530 )   (945 )   (706 )
  Total stockholders' equity     33,214     33,112     32,333     32,060     32,016  
    Total liabilities and stockholders' equity   $ 444,504   $ 431,869   $ 422,023   $ 423,222   $ 407,919  
                                 
Common shares outstanding     87,604,088     87,604,088     87,604,088     87,604,088     87,604,088  
Book value per common share   $ 0.38   $ 0.38   $ 0.37   $ 0.37   $ 0.17  
                                 
                         
NORTHERN STATES FINANCIAL CORPORATION  
($000s, except per share data) (Unaudited)  
                         
Condensed Consolidated Statements of Operations                        
For quarter ended   June 30,
2015
  March 31,
2015
  December 31,
2014
    September 30,
2014
  June 30,
2014
 
Interest income                                  
  Loans (including fee income)   $ 2,646   $ 2,484   $ 2,625     $ 2,319   $ 2,427  
  Securities                                  
    Taxable     514     678     683       619     488  
    Exempt from federal income tax     5     4     6       5     6  
  Federal funds sold and other     54     36     40       36     44  
      Total interest income     3,219     3,202     3,354       2,979     2,965  
Interest expense                                  
  Time deposits     79     71     66       63     66  
  Other deposits     21     22     24       23     21  
  Repurchase agreements and federal funds purchased     0     1     1       0     1  
  Subordinated debentures     55     53     54       54     58  
    Total interest expense     155     147     145       140     146  
Net interest income     3,064     3,055     3,209       2,839     2,819  
Provision for loan and lease losses     0     100     0       0     0  
Net interest income after provision for loan and lease losses    
3,064
   
2,955
   
3,209
     
2,839
   
2,819
 
Noninterest income                                  
  Service fees on deposits     324     321     377       408     403  
  Gain on sale of securities     48     122     16       0     0  
  Net gain (loss) on sale of other real estate owned     209     0     (440 )     4     373  
  Other operating income     403     385     400       438     434  
    Total noninterest income     984     828     353       850     1,210  
Noninterest expense                                  
  Salaries and employee benefits     1,724     1,703     1,726       1,566     1,495  
  Occupancy and equipment, net     561     597     492       537     477  
  Data processing     376     330     679       528     451  
  Legal     117     93     74       49     42  
  FDIC insurance     136     141     135       131     205  
  Audit and other professional     162     134     94       126     97  
  Printing and supplies expense     63     60     49       40     43  
  Write-down of other real estate owned     0     0     26       82     158  
  Other real estate owned expense     88     170     27       117     181  
  Other operating expenses     414     375     402       230     513  
    Total noninterest expense     3,641     3,603     3,704       3,406     3,662  
Net income (loss) before income taxes     407     180     (142 )     283     367  
Income tax expense     15     0     0       0     0  
Net income (loss)     392     180     (142 )     283     367  
  Discount on redemption of preferred stock     0     0     0       0     (15,883 )
  Dividends to preferred stockholders     0     0     0       0     150  
  Accretion of discount on preferred stock     0     0     0       0     0  
Net income (loss) available to common stockholders   $ 392   $ 180   $ (142 )   $ 283   $ 16,100  
                                   
Average common shares outstanding    87,604,088    87,604,088    87,604,088      87,604,088    61,047,312  
                                   
Basic income (loss) per average outstanding share   $ 0.00   $ 0.00   $ (0.00 )   $ 0.00   $ 0.26  
Diluted income (loss) per average outstanding share   $ 0.00   $ 0.00   $ (0.00 )   $ 0.00   $ 0.26  
                                   
                     
NORTHERN STATES FINANCIAL CORPORATION  
($000s, except per share data) (Unaudited)  
                     
  June 30,
2015
  March 31,
2015
  December 31,
2014
  September 30,
2014
  June 30,
2014
 
Loans                              
  Commercial $ 13,687   $ 10,522   $ 14,239   $ 12,355   $ 13,127  
  Real estate-construction   14,300     11,636     11,600     12,300     12,333  
  Real estate-mortgage 1-4 family   29,379     30,285     30,546     30,322     30,381  
  Real estate-mortgage 5+ family   39,577     36,569     32,968     30,592     30,769  
  Real estate-mortgage commercial   123,176     118,589     119,669     116,933     117,621  
  Home equity   9,089     8,859     9,131     9,327     10,031  
  Installment   943     1,021     1,069     1,380     1,230  
  Deferred loan fees   (219 )   (211 )   (173 )   (178 )   (185 )
    Total loans $ 229,932   $ 217,270   $ 219,049   $ 213,031   $ 215,307  
                               
                               
  June 30
2015
  March 31
2015
  December 31,
2014
  September 30,
2014
  June 30,
2014
 
Deposits                              
  Demand - noninterest bearing $ 81,795   $ 77,213   $ 79,378   $ 71,285   $ 71,318  
  Demand - interest bearing   65,853     57,158     61,313     66,673     62,287  
  Money market accounts   53,131     49,453     51,046     52,935     51,220  
  Savings   80,884     80,654     77,789     77,651     77,092  
  Time, $100,000 and over   49,223     49,655     37,483     38,517     31,202  
  Time, under $100,000   47,223     48,236     49,471     50,494     51,807  
  Time, brokered   3,250     2,250     250     250     0  
    Total deposits $ 381,359   $ 364,619   $ 356,730   $ 357,805   $ 344,926  
                               
 
NORTHERN STATES FINANCIAL CORPORATION
($000s, except per share data) (Unaudited)
 
                                                   
    2Q 2015     1Q 2015     4Q 2014     31Q 2014     2Q 2014  
    Average   Yield/     Average   Yield/     Average   Yield/     Average   Yield/     Average   Yield/  
    balance   Rate     balance   Rate     balance   Rate     balance   Rate     balance   Rate  
Earning assets                                                            
  Loans   $ 224,996   4.73 %   $ 219,900   4.54 %   $ 216,345   4.88 %   $ 214,261   4.36 %   $ 218,419   4.47 %
  Securities taxable     119,487   1.72       129,337   2.10       138,741   1.96       128,029   1.92       108,473   1.77  
  Securities tax-exempt     435   5.52       437   6.41       575   6.30       561   5.68       560   6.36  
  Interest-bearing deposits     68,449   0.32       50,803   0.28       42,000   0.38       42,558   0.34       52,801   0.33  
  Total earning assets     413,367   3.13 %     400,477   3.21 %     397,661   3.39 %     385,409   3.10 %     380,253   3.13 %
Non interest earning assets     26,460           26,670           29,935           27,115           22,543      
Total assets   $ 439,827         $ 427,147         $ 427,596         $ 412,524         $ 402,796      
                                                             
Interest-bearing liabilities                                                            
  Interest-bearing demand deposits   $ 61,325   0.08 %   $ 58,445   0.10 %   $ 67,480   0.09 %   $ 63,434   0.09 %   $ 62,418   0.08 %
  Money market deposits     50,062   0.05       50,104   0.05       51,977   0.05       52,223   0.05       49,747   0.05  
  Savings deposits     81,353   0.01       78,445   0.01       77,339   0.10       77,733   0.01       77,795   0.01  
  Time deposits     99,736   0.32       94,548   0.30       87,923   0.30       81,835   0.31       84,621   0.31  
  Other borrowings     25,492   0.86       30,660   0.70       30,328   0.73       27,780   0.78       24,865   0.95  
  Total interest-bearing liabilities     317,968   0.19 %     312,202   0.19 %     315,047   0.18 %     303,005   0.18 %     299,446   0.20 %
Demand deposits     83,126           76,962           76,528           73,580           70,776      
Other liabilities     5,610           4,950           3,567           3,619           5,509      
Stockholders' equity     33,123           33,033           32,454           32,320           27,065      
Total liabilities and stockholders' equity   $ 439,827         $ 427,147         $ 427,596         $ 412,524         $ 402,796      
                                                             
Net interest spread         2.94 %         3.02 %         3.21 %         2.92 %         2.93 %
Net interest margin         2.98 %         3.07 %         3.24 %         2.96 %         2.97 %
                                                             

Contact Information

  • For Additional Information, Contact:
    Scott Yelvington
    President and Chief Executive Officer
    (847) 244-6000 Ext. 201
    Websites: www.nsfc.com | www.nsfc.net