SOURCE: Northern States Financial Corporation

Northern States Financial Corporation

October 21, 2015 12:44 ET

Northern States Financial Corporation Reports Third Quarter 2015 Net Income of $514,000

WAUKEGAN, IL--(Marketwired - Oct 21, 2015) -  Northern States Financial Corporation (OTCQB: NSFC) (the "Company"), holding company for NorStates Bank (the "Bank"), an FDIC insured financial institution, today reported third quarter 2015 net income of $514,000, an increase from $392,000 for the second quarter of 2015 and $180,000 for the first quarter of 2015. The Company's per share book value at September 30, 2015 was $0.39.

The Bank reported earnings of $604,000 for the third quarter of 2015.

Assets of the Company totaled $462.0 million at September 30, 2015, an increase of 9.4% from December 31, 2014. The Company increased its loans and leases, net of deferred fees by $2.9 million and total interest bearing deposits in financial institutions increased by $12.1 million between June 30, 2015 and September 30, 2015, while total investment securities decreased by $5.8 million between the two dates due to bond calls. Total deposits increased from $381.4 million at June 30, 2015 to $394.3 million at September 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 $8.7 million between December 31, 2014 and September 30, 2015.

"We are pleased to report steady solid growth in earnings and continued progress in the reduction of NPAs," stated Scott Yelvington, President and Chief Executive Officer of the Company. "During the third quarter, we sold one of our branch buildings at a gain of $1.4 million which is being replaced by a new smaller, more efficient building that the Bank will lease. The gain was largely offset by write-downs to other real estate owned of $1.3 million as we prepare to sell these properties to further reduce NPAs. 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 September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014     September 30, 2014  
                                 
Net income (loss) available to common stockholders $ 514   $ 392   $ 180   $ (142 )   $ 283  
Basic income (loss) per average outstanding share   0.01     0.00     0.00     (0.00 )     0.00  
Diluted income (loss) per average outstanding share   0.01     0.00     0.00     (0.00 )     0.00  
Return on average assets   0.45 %   0.36 %   0.17 %   -0.13 %     0.27 %
Return on average equity   6.13 %   4.73 %   2.18 %   -1.75 %     3.50 %
Yield on interest earning assets   3.13 %   3.13 %   3.21 %   3.39 %     3.10 %
Cost of interest-bearing liabilities   0.20 %   0.19 %   0.19 %   0.18 %     0.18 %
Net interest spread   2.93 %   2.94 %   3.02 %   3.21 %     2.92 %
Net interest margin   2.97 %   2.98 %   3.07 %   3.24 %     2.96 %
Net charged-off loans $ 803   $ (1,681 ) $ 488   $ 1,866     $ 163  
Net charged-off loans to average loans (annualized)   1.38 %   -2.99 %   0.89 %   3.45 %     0.30 %
                       
                       
  September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014     September 30, 2014  
                                 
Total stockholders' equity $ 34,135   $ 33,214   $ 33,112   $ 32,333     $ 32,060  
Deferred tax asset   25,103     25,339     25,188     25,566       26,709  
Deferred tax asset valuation allowance   (25,183 )   (25,183 )   (25,183 )   (25,183 )     (26,070 )
Book value per common share $ 0.39   $ 0.38   $ 0.38   $ 0.37     $ 0.37  
Common shares outstanding   87,604,088     87,604,088     87,604,088     87,604,088       87,604,088  
                                 
                       
  September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014     September 30, 2014  
Nonperforming assets                                
Loans on nonaccrual status $ 8,986   $ 10,820   $ 9,715   $ 16,551     $ 23,576  
Loans 90 days or more past due, still accruing   266     198     298     1,048       610  
Loan troubled debt restructurings   2,380     2,400     3,742     3,376       5,851  
  Total nonperforming loans   11,632     13,418     13,755     20,975       30,037  
Other real estate owned   17,172     17,416     19,347     16,514       18,933  
  Total nonperforming assets $ 28,804   $ 30,834   $ 33,102   $ 37,489     $ 48,970  
                                 
Nonperforming assets excluding trouble debt                                
restructurings $ 26,424   $ 28,434   $ 29,360   $ 34,113     $ 43,119  
Nonperforming loans to total assets   2.52 %   3.02 %   3.18 %   4.97 %     7.10 %
Nonperforming assets to total assets   6.23 %   6.94 %   7.66 %   8.88 %     11.57 %
                                 
Nonperforming assets excluding trouble debt restructurings to total assets   5.72 %   6.40 %   6.80 %   8.08 %     10.19 %
                                 
                                 
                                 
NORTHERN STATES FINANCIAL CORPORATION  
   
($000s, except per share data) (Unaudited)  
Condensed Consolidated Balance Sheets  
   
  September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014   September 30, 2014  
  Assets                              
Cash and due from banks $ 8,092   $ 4,817   $ 5,258   $ 8,258   $ 4,272  
Interest bearing deposits in financial institutions - maturities less than 90 days   63,044     60,455     63,768     26,727     40,908  
  Total cash and cash equivalents   71,136     65,272     69,026     34,985     45,180  
Interest bearing deposits in financial institutions - maturities of 90 days or greater   16,057     6,499     7,739     8,483     9,971  
Securities available for sale   106,593     112,353     101,659     121,368     117,447  
Securities held to maturity   10,771     10,838     12,069     16,305     14,968  
Loans and leases, net of deferred fees   232,847     229,932     217,270     219,049     213,031  
Less: Allowance for loan and lease losses   (7,032 )   (7,834 )   (6,153 )   (6,541 )   (8,407 )
  Loans and leases, net   225,815     222,098     211,117     212,508     204,624  
Federal Home Loan Bank stock   931     931     931     931     931  
Office buildings and equipment, net   6,373     6,845     7,851     7,957     8,041  
Other real estate owned   17,173     17,416     19,347     16,514     18,933  
Accrued interest receivable   1,211     1,217     1,144     1,158     1,196  
Other assets   5,956     1,035     986     1,814     1,931  
  Total assets $ 462,016   $ 444,504   $ 431,869   $ 422,023   $ 423,222  
    Liabilities and Stockholders' Equity                              
Liabilities                              
Deposits                              
  Noninterest-bearing deposits $ 84,823   $ 81,795   $ 77,213   $ 79,378   $ 71,285  
  Interest-bearing deposits   309,432     299,564     287,406     277,352     286,520  
    Total deposits   394,255     381,359     364,619     356,730     357,805  
Securities sold under repurchase agreements   19,618     14,836     18,231     18,447     20,100  
Subordinated debentures   10,310     10,310     10,310     10,310     10,310  
Advances from borrowers for taxes and insurance   776     1,904     2,639     1,485     445  
Accrued interest payable and other liabilities   2,922     2,881     2,958     2,718     2,502  
    Total liabilities   427,881     411,290     398,757     389,690     391,162  
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   5,657     5,143     4,751     4,571     4,713  
Treasury stock, at cost   (4,674 )   (4,674 )   (4,674 )   (4,674 )   (4,674 )
Accumulated other comprehensive income (loss), net   186     (221 )   69     (530 )   (945 )
  Total stockholders' equity   34,135     33,214     33,112     32,333     32,060  
    Total liabilities and stockholders' equity $ 462,016   $ 444,504   $ 431,869   $ 422,023   $ 423,222  
                               
Common shares outstanding   87,604,088     87,604,088     87,604,088     87,604,088     87,604,088  
Book value per common share $ 0.39   $ 0.38   $ 0.38   $ 0.37   $ 0.37  
                               
                               
                               
NORTHERN STATES FINANCIAL CORPORATION
($000s, except per share data) (Unaudited)
 
Condensed Consolidated Statements of Operations                
For quarter ended September 30, 2015   June 30, 2015     March 31, 2015   December 31, 2014     September 30,2014
Interest income                                
  Loans (including fee income) $ 2,747   $ 2,646     $ 2,484   $ 2,625     $ 2,319
  Securities                                
    Taxable   544     514       678     683       619
    Exempt from federal income tax   4     5       4     6       5
  Federal funds sold and other   52     54       36     40       36
    Total interest income   3,347     3,219       3,202     3,354       2,979
Interest expense                                
  Time deposits   82     79       71     66       63
  Other deposits   24     21       22     24       23
  Repurchase agreements and federal funds purchased   0     0       1     1       0
  Subordinated debentures   57     55       53     54       54
    Total interest expense   163     155       147     145       140
Net interest income   3,184     3,064       3,055     3,209       2,839
Provision for loan and lease losses   0     0       100     0       0
Net interest income after provision for loan and lease losses   3,184     3,064       2,955     3,209       2,839
Noninterest income                                
  Service fees on deposits   316     324       321     377       408
  Gain on sale of securities   0     48       122     16       0
  Net gain (loss) on sale of other assets   1,423     (10 )     0     0       0
  Net gain (loss) on sale of other real estate owned   0     209       0     (440 )     4
  Other operating income   442     413       385     400       438
    Total noninterest income   2,181     984       828     353       850
Noninterest expense                                
  Salaries and employee benefits   1,712     1,724       1,703     1,726       1,566
  Occupancy and equipment, net   527     561       597     492       537
  Data processing   501     376       330     679       528
  Legal   51     117       93     74       49
  FDIC insurance   96     136       141     135       131
  Audit and other professional   143     162       134     94       126
  Printing and supplies expense   42     63       60     49       40
  Write-down of other real estate owned   1,264     0       0     26       82
  Other real estate owned expense   136     88       170     27       117
  Other operating expenses   329     414       375     402       230
    Total noninterest expense   4,801     3,641       3,603     3,704       3,406
Net income (loss) before income taxes   564     407       180     (142 )     283
Income tax expense   50     15       0     0       0
Net income (loss)   514     392       180     (142 )     283
  Discount on redemption of preferred stock   0     0       0     0       0
  Dividends to preferred stockholders   0     0       0     0       0
  Accretion of discount on preferred stock   0     0       0     0       0
Net income (loss) available to common stockholders $ 514   $ 392     $ 180   $ (142 )   $ 283
                                 
Average common shares outstanding   87,604,088     87,604,088       87,604,088     87,604,088       87,604,088
                                 
                                 
                                 
NORTHERN STATES FINANCIAL CORPORATION  
($000s, except per share data) (Unaudited)  
   
                             
  September 30, 2015     June 30, 2015     March 31, 2015     December 31, 2014     September 30, 2014  
Loans                                      
  Commercial $ 14,019     $ 13,687     $ 10,522     $ 14,239     $ 12,355  
  Real estate-construction   15,127       14,300       11,636       11,600       12,300  
  Real estate-mortgage 1-4 family   27,977       29,379       30,285       30,546       30,322  
  Real estate-mortgage 5+ family   38,971       39,577       36,569       32,968       30,592  
  Real estate-mortgage commercial   126,375       123,176       118,589       119,669       116,933  
  Home equity   9,526       9,089       8,859       9,131       9,327  
  Installment   1,041       943       1,021       1,069       1,380  
  Deferred loan fees   (189 )     (219 )     (211 )     (173 )     (178 )
    Total loans $ 232,847     $ 229,932     $ 217,270     $ 219,049     $ 213,031  
                                       
                                       
                             
  September 30, 2015     June 30 2015     March 31 2015     December 31, 2014     September 30, 2014  
Deposits                                      
  Demand - noninterest bearing $ 84,823     $ 81,795     $ 77,213     $ 79,378     $ 71,285  
  Demand - interest bearing   72,612       65,853       57,158       61,313       66,673  
  Money market accounts   54,077       53,131       49,453       51,046       52,935  
  Savings   83,153       80,884       80,654       77,789       77,651  
  Time, $100,000 and over   52,744       49,223       49,655       37,483       38,517  
  Time, under $100,000   45,846       47,223       48,236       49,471       50,494  
  Time, brokered   1,000       3,250       2,250       250       250  
    Total deposits $ 394,255     $ 381,359     $ 364,619     $ 356,730     $ 357,805  
                                       
                                       
                                       
NORTHERN STATES FINANCIAL CORPORATION
($000s, except per share data) (Unaudited)
   
  3Q 2015     2Q 2015     1Q 2015     4Q 2014     3Q 2014  
  Average   Yield/     Average   Yield/     Average   Yield/     Average   Yield/     Average   Yield/  
  balance   Rate     balance   Rate     balance   Rate     balance   Rate     balance   Rate  
Earning assets                                                          
  Loans $ 232,003   4.76 %   $ 224,996   4.73 %   $ 219,900   4.54 %   $ 216,345   4.88 %   $ 214,261   4.36 %
  Securities taxable   124,301   1.75       119,487   1.72       129,337   2.10       138,741   1.96       128,029   1.92  
  Securities tax-exempt   436   6.42       435   5.52       437   6.41       575   6.30       561   5.68  
  Interest-bearing deposits   73,330   0.28       68,449   0.32       50,803   0.28       42,000   0.38       42,558   0.34  
  Total earning assets   430,070   3.13 %     413,367   3.13 %     400,477   3.21 %     397,661   3.39 %     385,409   3.10 %
Non interest earning assets   26,427           26,460           26,670           29,935           27,115      
Total assets $ 456,497         $ 439,827         $ 427,147         $ 427,596         $ 412,524      
                                                           
Interest-bearing liabilities                                                          
  Interest-bearing demand deposits $ 68,681   0.09 %   $ 61,325   0.08 %   $ 58,445   0.10 %   $ 67,480   0.09 %   $ 63,434   0.09 %
  Money market deposits   52,291   0.05       50,062   0.05       50,104   0.05       51,977   0.05       52,223   0.05  
  Savings deposits   82,482   0.01       81,353   0.01       78,445   0.01       77,339   0.10       77,733   0.01  
  Time deposits   101,783   0.32       99,736   0.32       94,548   0.30       87,923   0.30       81,835   0.31  
  Other borrowings   28,085   0.81       25,492   0.86       30,660   0.70       30,328   0.73       27,780   0.78  
  Total interest-bearing liabilities   333,322   0.20 %     317,968   0.19 %     312,202   0.19 %     315,047   0.18 %     303,005   0.18 %
Demand deposits   85,324           83,126           76,962           76,528           73,580      
Other liabilities   4,308           5,610           4,950           3,567           3,619      
Stockholders' equity   33,543           33,123           33,033           32,454           32,320      
Total liabilities and stockholders' equity $ 456,497         $ 439,827         $ 427,147         $ 427,596         $ 412,524      
                                                           
Net interest spread   2.93 %         2.94 %         3.02 %         3.21 %         2.92 %
Net interest margin   2.97 %         2.98 %         3.07 %         3.24 %         2.96 %
                                                       

Contact Information

  • For Additional Information, Contact:
    Scott Yelvington
    President and Chief Executive Officer
    (847) 662-9828

    Websites: www.nsfc.com, www.nsfc.net