WAUKEGAN, Ill., April 19, 2017 (GLOBE NEWSWIRE) -- Northern States Financial Corporation (OTC PINK:NSFC) (the “Company”), holding company for NorStates Bank (the “Bank”), an FDIC insured financial institution, today reported first quarter 2017 net income after tax of $370 thousand, an increase of $49 thousand, or 15.3%, compared with first quarter 2016 net income after tax of $321 thousand. The Company’s per share book value at March 31, 2017 was $0.65.

Some highlights of continued financial improvement during the first quarter of 2017 included the following:

  • Average loans increased by $50.8 million for the first quarter of 2017 compared with the first quarter of 2016.  Loan interest income increased $360 thousand for the first quarter of 2017 compared to the first quarter of 2016.  The increased loan interest income contributed to a net interest margin for the first quarter of 2017 of 3.21%.
     
  • 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 $499 thousand from December 31, 2016 to March 31, 2017.  At March 31, 2017, the allowance for loan and lease losses to total loans and leases ratio was 1.94%.
     
  • Although first quarter 2017 noninterest income decreased $35 thousand compared to the first quarter of 2016, noninterest income during the first quarter of 2016 included a gain of $117 thousand on the sale of investment securities. After discounting this gain, noninterest income would have increased $82 thousand in the first quarter of 2017 compared with the same quarter of 2016.
     
  • The Company focused on growing core deposits consisting of personal and business non-time deposits.  Core deposits increased $9.9 million, or 3.7%, at March 31, 2017 from December 31, 2016.  Core deposits growth assisted the Company in maintaining a low cost of funds during the first quarter of 2017 at 15 basis points with the Bank’s cost of funds at 8 basis points.

“We expect future income to be positively affected by our continued deployment of excess liquidity and focus on the reduction of expenses and NPAs,” stated Scott Yelvington, President and Chief Executive Officer.

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 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   
             
  March 31, December 31, September 30, June 30, March 31,  
For the quarter ended 2017   2016   2016   2016   2016   
             
Net income available to common stockholders$370  $983  $483  $354  $321   
Basic income per average outstanding share 0.00   0.01   0.01   0.00   0.00   
Diluted income per average outstanding share 0.00   0.01   0.01   0.00   0.00   
Return on average assets 0.30%  0.78%  0.38%  0.29%  0.26%  
Return on average equity 2.52%  6.85%  3.38%  2.50%  2.28%  
Yield on interest-earning assets 3.36%  3.21%  3.17%  3.20%  3.11%  
Cost of interest-bearing liabilities 0.20%  0.19%  0.18%  0.19%  0.19%  
Net interest spread 3.16%  3.02%  2.99%  3.01%  2.92%  
Net interest margin 3.21%  3.07%  3.03%  3.06%  2.96%  
Net charged-off (recovered) loans$56  $54  $(407) $168  $418   
Net charged-off loans to average loans (annualized) 0.08%  0.08%  (0.60)%   0.26%  0.70%  
             
             
  March 31, December 31, September 30, June 30, March 31,  
   2017   2016   2016   2016   2016   
             
Total stockholders' equity$59,047  $58,460  $57,258  $56,868  $56,431   
Book value per common share$0.65  $0.65  $0.65  $0.65  $0.64   
Common shares outstanding 90,345,174   90,345,174   87,604,088   87,604,088   87,604,088   
             
             
  March 31, December 31, September 30, June 30, March 31,  
   2017   2016   2016   2016   2016   
Nonperforming assets            
Loans on nonaccrual status$2,878  $2,990  $3,054  $3,465  $4,504   
Loans 90 days or more past due, still accruing 140   309   0   0   700   
Loan troubled debt restructurings 5,309   5,465   5,584   5,415   5,477   
Total nonperforming loans 8,327   8,764   8,638   8,880   10,681   
Other real estate owned 10,174   10,236   10,958   11,418   13,100   
Total nonperforming assets$18,501  $19,000  $19,596  $20,298  $23,781   
             
Nonperforming assets excluding trouble debt restructurings$13,192  $13,535  $14,012  $14,883  $18,304   
Nonperforming loans to total assets 1.68%  1.79%  1.70%  1.78%  2.19%  
Nonperforming assets to total assets 3.74%  3.88%  3.85%  4.06%  4.88%  
Nonperforming assets excluding trouble debt restructurings to total assets   2.67%  2.76%  2.76%  2.98%  3.75%  
Allowance for loan and lease losses to total loans 1.94%  1.97%  2.10%  2.05%  2.20%  
             

 

             
NORTHERN STATES FINANCIAL CORPORATION
  
($000s, except per share data) (Unaudited)            
Condensed Consolidated Balance Sheet March 31, December 31, September 30, June 30, March 31,  
   2017   2016   2016   2016   2016   
Assets            
Cash and due from banks$4,853  $4,552  $5,491  $4,965  $5,539   
Interest bearing deposits in financial institutions - maturities less than 90 days 47,132   41,179   61,013   66,743   53,004   
Total cash and cash equivalents 51,985   45,731   66,504   71,708   58,543   
Interest bearing deposits in financial institutions - maturities of 90 days or greater   30,510   29,233   33,880   31,049   31,377   
Securities available for sale 59,640   63,180   71,341   69,689   78,416   
Securities held to maturity 12,926   12,996   13,360   13,428   13,496   
Loans and leases, net of deferred fees 290,801   289,594   274,281   264,244   254,545   
Less: Allowance for loan and lease losses (5,647)  (5,703)  (5,757)  (5,425)  (5,593)  
Loans and leases, net 285,154   283,891   268,524   258,819   248,952   
Federal Home Loan Bank stock 335   931   931   931   931   
Office buildings and equipment, net 8,674   8,525   8,425   8,519   8,415   
Other real estate owned 10,174   10,236   10,958   11,418   13,100   
Accrued interest receivable 1,255   1,247   1,297   1,173   1,243   
Bank owned life insurance 10,675   10,597   10,520   10,439   10,358   
Deferred tax asset, net 22,202   22,436   21,461   21,479   22,112   
Other assets 1,055   985   1,252   1,112   746   
Total assets$494,585  $489,988  $508,453  $499,764  $487,689   
Liabilities and Stockholders' Equity            
Liabilities            
Deposits            
Noninterest-bearing deposits$106,096  $100,870  $99,245  $102,097  $96,829   
Interest-bearing  deposits 290,899   289,940   314,834   307,334   301,926   
Total deposits 396,995   390,810   414,079   409,431   398,755   
Securities sold under repurchase agreements 22,820   25,901   23,686   18,015   16,052   
Subordinated debentures 10,310   10,310   10,310   10,310   10,310   
Advances from borrowers for taxes and insurance 2,820   1,902   510   2,195   3,089   
Accrued interest payable and other liabilities 2,593   2,605   2,610   2,945   3,052   
Total liabilities 435,538   431,528   451,195   442,896   431,258   
Stockholders' Equity            
Common stock 906   906   878   878   878   
Deferred compensation (1,155)  (1,260)  0   0   0   
Additional paid-in capital 34,019   34,019   32,088   32,088   32,088   
Retained earnings 25,678   25,308   28,858   28,375   28,021   
Treasury stock, at cost (182)  (182)  (4,674)  (4,674)  (4,674)  
Accumulated other comprehensive income (loss), net (219)  (331)  108   201   118   
Total stockholders' equity 59,047   58,460   57,258   56,868   56,431   
Total liabilities and stockholders' equity$494,585  $489,988  $508,453  $499,764  $487,689   
             
Common shares outstanding 90,345,174   90,345,174   87,604,088   87,604,088   87,604,088   
Book value per common share$0.65  $0.65  $0.65  $0.65  $0.64   
             

 

             
NORTHERN STATES FINANCIAL CORPORATION
  
($000s, except per share data) (Unaudited)  
             
Condensed Consolidated Statement of Income            
For the quarter endedMarch 31, December 31, September 30, June 30, March 31,  
   2017   2016   2016   2016   2016   
Interest income            
Loans (including fee income)$3,148  $3,103  $3,010  $2,963  $2,788   
Securities            
Taxable 357   353   378   377   420   
Exempt from federal income tax 0   3   3   3   3   
Federal funds sold and other 160   145   163   130   144   
Total interest income 3,665   3,604   3,554   3,473   3,355   
Interest expense            
Time deposits 61   61   67   68   74   
Other deposits 25   23   21   24   23   
Repurchase agreements and federal funds purchased 1   1   0   0   1   
Subordinated debentures 76   74   68   66   63   
Total interest expense 163   159   156   158   161   
Net interest income 3,502   3,445   3,398   3,315   3,194   
Provision for loan and lease losses 0   0   (75)  0   0   
Net interest income after provision for loan and lease losses   3,502   3,445   3,473   3,315   3,194   
Noninterest income            
Service fees on deposits 380   403   398   320   320   
Gain on sale of securities 0   0   0   104   117   
Net gain (loss) on sale of other real estate owned (4)  68   (7)  126   13   
Bank owned life insurance income 78   78   80   82   53   
Other operating income 395   424   419   416   381   
Total noninterest income 849   973   890   1,048   884   
Noninterest expense            
Salaries and employee benefits 1,945   2,593   1,787   1,861   1,822   
Occupancy and equipment, net 486   557   490   520   502   
Data processing 456   490   325   427   459   
Legal 23   72   28   81   19   
FDIC insurance 30   45   76   118   101   
Audit and other professional 181   169   125   151   168   
Printing and supplies expense 51   42   44   45   37   
Write-down of other real estate owned 0   55   487   126   0   
Other real estate owned expense 330   164   92   171   131   
Other operating expenses 317   326   297   309   305   
Total noninterest expense 3,819   4,513   3,751   3,809   3,544   
Net income before income taxes 532   (95)  612   554   534   
Income tax expense 162   (1,078)  129   200   213   
Net income 370   983   483   354   321   
             
Average common shares outstanding 90,345,174   87,961,621   87,604,088   87,604,088   87,604,088   
Basic income per average outstanding share$0.00  $0.01  $0.01  $0.00  $0.00   
Diluted income per average outstanding share$0.00  $0.01  $0.01  $0.00  $0.00   
             

  

             
NORTHERN STATES FINANCIAL CORPORATION
  
($000s, except per share data) (Unaudited)
  
             
  March 31, December 31, September 30, June 30, March 31,  
   2017   2016   2016   2016   2016   
Loans            
Commercial$27,462  $28,179  $14,977  $12,556  $11,883   
Real estate-construction 26,534   26,975   22,255   17,531   15,369   
Real estate-mortgage 1-4 family 50,533   48,593   47,826   49,530   41,499   
Real estate-mortgage 5+ family 59,331   59,272   56,179   49,321   46,458   
Real estate-mortgage commercial     118,917   115,514   121,491   123,717   129,042   
Home equity 7,428   10,411   10,955   10,965   9,671   
Installment 892   949   873   893   904   
Deferred loan fees (296)  (299)  (275)  (269)  (281)  
Total loans$290,801  $289,594  $274,281  $264,244  $254,545   
             
             
  March 31, December 31, September 30, June 30, March 31,  
   2017   2016   2016   2016   2016   
Deposits            
Demand - noninterest bearing$106,096  $100,870  $99,245  $102,097  $96,829   
Demand - interest bearing 64,951   70,127   78,310   75,389   67,678   
Money market accounts 50,161   48,231   56,921   54,297   52,032   
Savings 91,861   90,095   88,578   88,813   88,826   
Time, over $250,000 30,651   26,510   33,613   29,332   32,459   
Time, $250,000 and under 53,275   54,977   57,412   59,503   60,931   
Total deposits$396,995  $390,810  $414,079  $409,431  $398,755   
             

 

                
NORTHERN STATES FINANCIAL CORPORATION
 
($000s, except per share data) (Unaudited)  
                
 1Q 2017 4Q 2016 3Q 2016 2Q 2016 1Q 2016 
 AverageYield/ AverageYield/ AverageYield/ AverageYield/ AverageYield/ 
 balanceRate balanceRate balanceRate balanceRate balanceRate 
Earning assets               
Loans$289,0854.37% $283,0294.40% $269,3954.49% $254,5454.67% $238,3274.69%
Securities taxable 75,3611.88   81,3821.73   84,1281.81   88,5921.70   98,6301.70 
Securities tax-exempt 00.00   2835.65   2956.78   2955.42   2956.78 
Interest-bearing deposits 73,0510.88   86,0560.67   96,3580.68   92,0690.56   95,5650.60 
Total earning assets 437,497    3.36%  450,750    3.21%  450,176    3.17%  435,501    3.20%  432,817    3.11%
Non interest earning assets 53,678    53,461    53,823    55,761    51,891  
Total assets$491,175   $504,211   $503,999   $491,262   $484,708  
                
Interest-bearing liabilities               
Interest-bearing demand deposits$63,8700.11% $73,4670.08% $75,2950.06% $72,6460.09% $67,8040.08%
Money market deposits 48,3220.05   55,0720.05   56,1680.05   52,4750.05   52,2050.05 
Savings deposits 90,6260.01   89,4000.01   89,0820.01   89,4150.01   86,0310.01 
Time deposits 85,0140.29   86,6550.28   91,0030.29   89,7270.30   96,3230.31 
Other borrowings 37,7370.82   35,6130.84   30,6690.89   26,0401.01   28,3380.90 
Total interest-bearing liabilities 325,5690.20%  340,2070.19%  342,2170.18%  330,3030.19%  330,7010.19%
Demand deposits 101,689    102,406    100,066    98,491    92,377  
Other liabilities 5,201    4,175    4,547    5,932    5,406  
Stockholders' equity 58,716    57,423    57,169    56,536    56,224  
Total liabilities and stockholders' equity  $491,175   $504,211   $503,999   $491,262   $484,708  
                
Net interest spread3.16%   3.02%   2.99%   3.01%   2.92%
Net interest margin3.21%   3.07%   3.03%   3.06%   2.96%
                

 

For Additional Information, Contact:
Scott Yelvington, President and Chief Executive Officer (847) 775-8200 Ext. 1201
Websites: www.nsfc.com    www.nsfc.net

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