WAUKEGAN, IL--(Marketwired - Aug 1, 2014) - Northern States Financial Corporation (
The results of operations for the quarter ended June 30, 2014 of NorStates Bank were highlighted by net income of $391,000. The Bank's core earnings were approximately $100,000 per month following the recapitalization, an increase accomplished primarily by deploying the increased available liquidity from the recapitalization. A net gain on the sale of bank owned properties also contributed to net income for the second quarter. The Bank's cost of funds was 10 basis points for the second quarter of 2014.
Total assets of NorStates Bank were $408 million at the end of the second quarter. The Bank's leveraged capital ratio as of June 30, 2014 was 10.39%. Asset quality, as represented by the Bank's non-performing asset ratio, improved from 111% as of March 31, 2014 to 81% as of June 30, 2014. The allowance for loan and lease losses as a percent of total loans and leases of NorStates Bank stood at 3.98% as of June 30, 2014, and no provision for loan losses was made in the second quarter of 2014.
"The successful recapitalization effort completed in April has allowed us to deploy excess liquidity into increasing our securities investments and loan generation, which has had an immediate impact on earnings," stated President and Chief Executive Officer, Scott Yelvington. "Further reduction in expenses related to the recapitalization and lower non-performing assets have had an additional positive impact on earnings, and we expect that to continue. This has been a seminal quarter in our Company's history, and we are excited about the future. A healthy, profitable NorStates Bank will help enhance economic growth in the communities we serve."
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.
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 Bank conducts its operations, including the real estate market in Illinois, and other factors beyond the Bank'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 and statement to reflect new information or subsequent events or circumstances.
| NORTHERN STATES FINANCIAL CORPORATION | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| June 30, 2014 and December 31, 2013 | ||||||||||
| (In thousands of dollars) (Unaudited) | ||||||||||
| June 30, | December 31, | |||||||||
| 2014 | 2013 | |||||||||
| Assets | ||||||||||
| Cash and due from banks | $ | 5,627 | $ | 5,235 | ||||||
| Interest bearing deposits in financial institutions - maturities less than 90 days | 33,162 | 42,350 | ||||||||
| Total cash and cash equivalents | 38,789 | 47,585 | ||||||||
| Interest bearing deposits in financial institutions - maturities of 90 days or greater | 8,483 | 9,227 | ||||||||
| Securities available for sale | 116,363 | 92,407 | ||||||||
| Securities held to maturity (fair value $7,017 at June 30, 2014) | 7,001 | 0 | ||||||||
| Loans and leases, net of deferred fees | 215,307 | 225,295 | ||||||||
| Less: Allowance for loan and lease losses | (8,570 | ) | (9,130 | ) | ||||||
| Loans and leases, net | 206,737 | 216,165 | ||||||||
| Federal Home Loan Bank stock | 931 | 931 | ||||||||
| Office buildings and equipment, net | 8,021 | 8,262 | ||||||||
| Other real estate owned | 19,012 | 14,357 | ||||||||
| Accrued interest receivable | 1,147 | 1,101 | ||||||||
| Other assets | 1,435 | 2,377 | ||||||||
| Total assets | $ | 407,919 | $ | 392,412 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||
| Liabilities | ||||||||||
| Deposits | ||||||||||
| Demand - noninterest bearing | $ | 71,318 | $ | 71,970 | ||||||
| Interest bearing | 273,608 | 275,159 | ||||||||
| Total deposits | 344,926 | 347,129 | ||||||||
| Securities sold under repurchase agreements | 16,601 | 16,213 | ||||||||
| Subordinated debentures | 10,310 | 10,310 | ||||||||
| Advances from borrowers for taxes and insurance | 1,328 | 1,119 | ||||||||
| Accrued interest payable and other liabilities | 2,738 | 7,987 | ||||||||
| Total liabilities | 375,903 | 382,758 | ||||||||
| Stockholders' Equity | ||||||||||
| Common stock | 878 | 1,789 | ||||||||
| Preferred stock | 0 | 17,198 | ||||||||
| Warrants (584,084 issued and outstanding at December 31, 2013) | 0 | 681 | ||||||||
| Additional paid-in capital | 32,088 | 7,326 | ||||||||
| (Accumulated deficit) retained earnings | 4,430 | (10,993 | ) | |||||||
| Treasury stock, at cost | (4,674 | ) | (4,674 | ) | ||||||
| Accumulated other comprehensive income, net | (706 | ) | (1,673 | ) | ||||||
| Total stockholders' equity | 32,016 | 9,654 | ||||||||
| Total liabilities and stockholders' equity | $ | 407,919 | $ | 392,412 | ||||||
| NORTHERN STATES FINANCIAL CORPORATION | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| Three and six months ended June 30, 2014 and 2013 | ||||||||||||||||||
| (In thousands of dollars, except per share data) (Unaudited) | ||||||||||||||||||
| Three months ended | Six months ended | |||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| Interest income | ||||||||||||||||||
| Loans (including fee income) | $ | 2,427 | $ | 3,132 | $ | 4,911 | $ | 6,313 | ||||||||||
| Securities | ||||||||||||||||||
| Taxable | 488 | 287 | 748 | 720 | ||||||||||||||
| Exempt from federal income tax | 6 | 23 | 17 | 48 | ||||||||||||||
| Federal funds sold and other | 44 | 44 | 82 | 79 | ||||||||||||||
| Total interest income | 2,965 | 3,486 | 5,758 | 7,160 | ||||||||||||||
| Interest expense | ||||||||||||||||||
| Time deposits | 66 | 85 | 133 | 182 | ||||||||||||||
| Other deposits | 21 | 23 | 44 | 44 | ||||||||||||||
| Repurchase agreements and federal funds purchased | 1 | 0 | 1 | 1 | ||||||||||||||
| Subordinated debentures | 58 | 60 | 117 | 119 | ||||||||||||||
| Total interest expense | 146 | 168 | 295 | 346 | ||||||||||||||
| Net interest income | 2,819 | 3,318 | 5,463 | 6,814 | ||||||||||||||
| Provision for loan and lease losses | 0 | 1,600 | 0 | 2,000 | ||||||||||||||
| Net interest income after provision for loan and lease losses | 2,819 | 1,718 | 5,463 | 4,814 | ||||||||||||||
| Noninterest income | ||||||||||||||||||
| Service fees on deposits | 403 | 404 | 790 | 781 | ||||||||||||||
| Gain on sale of securities | 0 | 411 | 78 | 1,749 | ||||||||||||||
| Net gain on sale of other real estate owned | 373 | 83 | 385 | 93 | ||||||||||||||
| Other operating income | 434 | 415 | 819 | 787 | ||||||||||||||
| Total noninterest income | 1,210 | 1,313 | 2,072 | 3,410 | ||||||||||||||
| Noninterest expense | ||||||||||||||||||
| Salaries and employee benefits | 1,495 | 1,374 | 2,934 | 2,794 | ||||||||||||||
| Occupancy and equipment, net | 477 | 628 | 1,116 | 1,215 | ||||||||||||||
| Data processing | 451 | 476 | 929 | 936 | ||||||||||||||
| Legal | 42 | 168 | 180 | 303 | ||||||||||||||
| FDIC insurance | 205 | 214 | 427 | 439 | ||||||||||||||
| Audit and other professional | 97 | 138 | 226 | 358 | ||||||||||||||
| Prinitng and supplies expense | 43 | 46 | 76 | 103 | ||||||||||||||
| Write-down of other real estate owned | 158 | 0 | 151 | 1,425 | ||||||||||||||
| Other real estate owned expense | 181 | 183 | 488 | 222 | ||||||||||||||
| Loan and collection | 113 | (75 | ) | 116 | (6 | ) | ||||||||||||
| Other operating expenses | 400 | 423 | 823 | 859 | ||||||||||||||
| Total noninterest expense | 3,662 | 3,575 | 7,466 | 8,648 | ||||||||||||||
| Net income (loss) before income taxes | 367 | (544 | ) | 69 | (424 | ) | ||||||||||||
| Income tax expense | 0 | 0 | 0 | 0 | ||||||||||||||
| Net income (loss) | 367 | (544 | ) | 69 | (424 | ) | ||||||||||||
| Discount on redemption of preferred stock | (15,733 | ) | 0 | (15,733 | ) | 0 | ||||||||||||
| Dividends to preferred stockholders | 0 | 258 | 366 | 512 | ||||||||||||||
| Accretion of discount on preferred stock | 0 | 38 | 13 | 75 | ||||||||||||||
| Net income (loss) available to common stockholders | $ | 16,100 | $ | (840 | ) | $ | 15,423 | $ | (1,011 | ) | ||||||||
| Basic income (loss) per average outstanding share | $ | 0.26 | $ | (0.20 | ) | $ | 0.47 | $ | (0.24 | ) | ||||||||
| Diluted income (loss) per average outstanding share | $ | 0.26 | $ | (0.20 | ) | $ | 0.47 | $ | (0.24 | ) | ||||||||
| Basic income (loss) per end of period share | $ | 0.18 | $ | (0.20 | ) | $ | 0.18 | $ | (0.24 | ) | ||||||||
For Additional Information, Contact: Scott Yelvington President and Chief Executive Officer (847) 244-6000 Ext. 201 Websites: www.nsfc.com www.nsfc.net
