WAUKEGAN, Ill., April 18, 2018 (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 2018 net income after tax of $866,000, an increase of $496,000, or 134.0%, compared to the first quarter 2017 net income after tax of $370,000. The Company’s per share book value at March 31, 2018 was $0.58.

Some highlights of continued financial improvement during the first quarter of 2018 included the following:   

  • Average loans increased by $19.7 million for the first quarter of 2018 compared with the first quarter of 2017.  Loan interest income increased $325 thousand for the first quarter of 2018 compared to the first quarter of 2017.  The increased loan interest income contributed to a net interest margin for the first quarter of 2018 of 3.45% compared to 3.21% for the first quarter of 2017.
     
  • 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 (“OREO”), decreased by $2.2 million from December 31, 2017 to March 31, 2018.  At March 31, 2018, the allowance for loan and lease losses to total loans and leases ratio was 2.17%.
     
  • First quarter 2018 noninterest income remained relatively stable, increasing $28 thousand compared to the first quarter of 2017.
     
  • First quarter 2018 noninterest expense decreased $264 thousand compared to the first quarter of 2017.  This decrease was primarily due from reductions to OREO expense of $275 thousand when comparing the first quarter of 2018 to the first quarter of 2017 as OREO balances were $1.9 million at March 31, 2018 compared to $10.2 million at March 31, 2017, a reduction of $8.3 million or 81.3%.
     
  • The Company focused on growing core deposits consisting of personal and business non-time deposits.  For the first quarter of 2018, average core deposits increased $10.1 million, or 3.7%, as compared with the first quarter of 2017.  Core deposits assist the Company in maintaining a low cost of funds during the first quarter of 2018 at 21 basis points, with the Bank’s cost of funds at 12 basis points.

“We are encouraged by our solid loan and core deposit growth and increases to earnings.  This will remain a focus along with our continued efforts to reduce 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.

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

          
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 2018   2017   2017   2017   2017 
          
Net income (loss) available to common stockholders$  866  $  (6,266) $  963  $  (1,448) $  370 
Basic income (loss) per average outstanding share 0.01   (0.07)  0.01   (0.02)  0.00 
Diluted income (loss) per average outstanding share 0.01   (0.07)  0.01   (0.02)  0.00 
Return on average assets 0.71%    (4.92)%  0.78%    (1.19)%  0.30%
Return on average equity 6.57%    (42.46)%  6.62%    (9.77)%  2.52%
Yield on interest-earning assets 3.64%  3.55%  3.71%  3.44%  3.36%
Cost of interest-bearing liabilities 0.29%  0.26%  0.24%  0.21%  0.20%
Net interest spread 3.35%  3.29%  3.47%  3.23%  3.16%
Net interest margin 3.45%  3.37%  3.54%  3.29%  3.21%
Net charged-off (recovered) loans$  (76) $  (1) $  (1,172) $  (1) $  56 
Net charged-off loans to average loans (annualized)   (0.10)%  0.00%    (1.55)%  0.00%  0.08%
          
          
 March 31, December 31, September 30, June 30, March 31,
  2018   2017   2017   2017   2017 
          
Total stockholders' equity$  53,138  $  52,474  $  58,859  $  57,795  $  59,047 
Book value per common share$  0.58  $  0.57  $  0.65  $  0.64  $  0.65 
Common shares outstanding 92,252,244   92,252,244   90,345,174   90,345,174   90,345,174 
          
          
 March 31, December 31, September 30, June 30, March 31,
  2018   2017     2017     2017     2017 
Nonperforming assets         
Loans on nonaccrual status$  11,410  $  12,545  $  3,444  $  3,407  $  2,878 
Loans 90 days or more past due, still accruing 137   434   561   537   140 
Loan troubled debt restructurings 4,177   4,783   4,845   4,969   5,309 
  Total nonperforming loans 15,724   17,762   8,850   8,913   8,327 
Other real estate owned 1,898   2,039   2,217   6,935   10,174 
  Total nonperforming assets$  17,622  $  19,801  $  11,067  $  15,848  $  18,501 
          
Nonperforming assets excluding trouble debt         
  restructurings$  13,445  $  15,018  $  6,222  $  10,879  $  13,192 
Nonperforming loans to total assets 3.23%  3.58%  1.74%  1.86%  1.68%
Nonperforming assets to total assets. 3.62%  3.99%  2.18%  3.30%  3.74%
Nonperforming assets excluding trouble debt         
  restructurings to total assets 2.76%  3.03%  1.22%  2.27%  2.67%
Allowance for loan and lease losses to total loans 2.17%  2.22%  2.20%  1.92%  1.94%
                    


           
NORTHERN STATES FINANCIAL CORPORATION         
($000s, except per share data) (Unaudited)          
Condensed Consolidated Balance Sheet March 31, December 31, September 30, June 30, March 31,
   2018   2017   2017   2017   2017 
  Assets          
Cash and due from banks.$  3,595  $  4,323  $  4,557  $  4,431  $  4,853 
Interest bearing deposits in financial institutions -          
    maturities less than 90 days 45,850   59,062   61,682   37,956   47,132 
  Total cash and cash equivalents 49,445   63,385   66,239   42,387   51,985 
Interest bearing deposits in financial institutions -          
    maturities of 90 days or greater 26,678   28,492   24,592   26,774   30,510 
Securities available for sale 47,999   50,570   53,190   56,272   59,640 
Securities held to maturity 12,643   12,714   12,786   12,856   12,926 
Loans and leases, net of deferred fees 317,376   307,448   310,209   294,901   290,801 
Less: Allowance for loan and lease losses (6,897)  (6,821)  (6,820)  (5,648)  (5,647)
  Loans and leases, net 310,479   300,627   303,389   289,253   285,154 
Federal Home Loan Bank stock 492   492   492   492   335 
Office buildings and equipment, net 8,417   8,443   8,419   8,630   8,674 
Other real estate owned 1,898   2,039   2,217   6,935   10,174 
Accrued interest receivable 1,358   1,224   1,358   1,165   1,255 
Bank owned life insurance 10,955   10,886   10,816   10,743   10,675 
Deferred tax asset, net 15,423   15,693   23,041   23,159   22,202 
Other assets 1,304   1,360   1,426   1,242   1,055 
  Total assets$  487,091  $  495,925  $  507,965  $  479,908  $  494,585 
    Liabilities and Stockholders' Equity          
Liabilities          
Deposits          
  Noninterest-bearing deposits$  120,113  $  115,619  $  112,821  $  107,470  $  106,096 
  Interest-bearing  deposits 272,182   283,027   296,462   277,249   290,899 
    Total deposits 392,295   398,646   409,283   384,719   396,995 
Securities sold under repurchase agreements 25,268   29,012   26,062   22,331   22,820 
Subordinated debentures 10,310   10,310   10,310   10,310   10,310 
Advances from borrowers for taxes and insurance 3,481   2,897   957   2,137   2,820 
Accrued interest payable and other liabilities 2,599   2,586   2,494   2,616   2,593 
    Total liabilities 433,953   443,451   449,106   422,113   435,538 
Stockholders' Equity          
Common stock 927   927   906   906   906 
Deferred compensation (2,542)  (2,542)  (945)  (1,050)  (1,155)
Additional paid-in capital 35,700   35,700   34,019   34,019   34,019 
Retained earnings 19,793   18,927   25,193   24,230   25,678 
Treasury stock, at cost. (297)  (297)  (182)  (182)  (182)
Accumulated other comprehensive income (loss), net (443)  (241)  (132)  (128)  (219)
  Total stockholders' equity 53,138   52,474   58,859   57,795   59,047 
    Total liabilities and stockholders' equity$  487,091  $  495,925  $  507,965  $  479,908  $  494,585 
           
Common shares outstanding 92,252,244   92,252,244   90,345,174   90,345,174   90,345,174 
Book value per common share$  0.58  $  0.57  $  0.65  $  0.64  $  0.65 
           


           
NORTHERN STATES FINANCIAL CORPORATION         
($000s, except per share data) (Unaudited)          
           
Condensed Consolidated Statement of Income March 31, December 31, September 30, June 30, March 31,
  For the quarter ended 2018  2017     2017     2017     2017 
Interest income          
  Loans (including fee income)$  3,473 $  3,496  $  3,566  $  3,195  $  3,148 
  Securities          
  Taxable 339  312   333   334   357 
  Federal funds sold and other 273  314   223   177   160 
  Total interest income 4,085  4,122   4,122   3,706   3,665 
Interest expense          
  Time deposits 98  99   74   54   61 
  Other deposits 26  27   26   26   25 
  Repurchase agreements and federal funds purchased 1  1   1   0   1 
  Subordinated debentures 98  90   87   82   76 
  Total interest expense 223  217   188   162   163 
Net interest income 3,862  3,905   3,934   3,544   3,502 
Provision for loan and lease losses 0  0   0   0   0 
Net interest income after provision for          
  loan and lease losses. 3,862  3,905   3,934   3,544   3,502 
Noninterest income          
  Service fees on deposits 378  387   373   384   380 
  Net gain on sale of other assets 0  0   68   0   0 
  Net gain (loss) on sale of other real estate owned 41  3   (51)  (12)  (4)
  Bank owned life insurance income 69  70   72   69   78 
  Other operating income 389  397   352   436   395 
  Total noninterest income 877  857   814   877   849 
Noninterest expense          
  Salaries and employee benefits 1,876  1,993   1,953   1,910   1,945 
  Occupancy and equipment, net 482  450   475   515   486 
  Data processing 416  427   488   466   456 
  Legal 76  29   54   62   23 
  FDIC insurance 70  30   60   60   30 
  Audit and other professional 244  236   150   231   181 
  Printing and supplies expense 40  54   32   38   51 
  Write-down of other real estate owned 0  194   0   3,109   0 
  Other real estate owned expense 55  (58)  103   164   330 
  Other operating expenses 296  271   344   314   317 
  Total noninterest expense 3,555  3,626   3,659   6,869   3,819 
Net income before income taxes 1,184  1,136   1,089   (2,448)  532 
Income tax expense 318  7,402   126   (1,000)  162 
Net income$  866 $  (6,266) $  963  $  (1,448) $  370 
           
Average common shares outstanding   92,252,244    91,886,314     90,345,174     90,345,174     90,345,174 
Basic income (loss) per average outstanding share$  0.01 $  (0.07) $  0.01  $  (0.02) $  0.00 
Diluted income (loss) per average outstanding share$  0.01 $  (0.07) $  0.01  $  (0.02) $  0.00 
           
           


           
NORTHERN STATES FINANCIAL CORPORATION         
($000s, except per share data) (Unaudited)          
           
  March 31, December 31, September 30, June 30, March 31,
   2018   2017   2017   2017   2017 
Loans          
  Commercial$  26,152  $  26,493  $  26,530  $  26,355  $  27,462 
  Real estate-construction 38,163   38,661   37,843   30,866   26,534 
  Real estate-mortgage 1-4 family 47,716   49,717   47,760   48,658   50,533 
  Real estate-mortgage 5+ family 81,553   77,200   75,605   61,714   59,331 
  Real estate-mortgage commercial 113,485   105,488   112,803   118,271   118,917 
  Home equity 8,556   8,518   8,468   8,526   7,428 
  Installment 2,145   1,691   1,572   899   892 
  Deferred loan fees (394)  (320)  (372)  (388)  (296)
  Total loans$  317,376  $  307,448  $  310,209  $  294,901  $  290,801 
           
           
  March 31, December 31, September 30, June 30, March 31,
   2018   2017   2017   2017   2017 
Deposits          
  Demand - noninterest bearing$  120,113  $  115,619  $  112,821  $  107,470  $  106,096 
  Demand - interest bearing 58,018   61,288   73,491   69,326   64,951 
  Money market accounts 49,486   53,347   54,060   49,709   50,161 
  Savings 91,704   89,876   92,363   92,735   91,861 
  Time, over $250,000 21,064   26,892   24,270   12,355   30,651 
  Time, $250,000 and under 51,910   51,624   52,278   53,124   53,275 
  Total deposits$  392,295  $  398,646  $  409,283  $  384,719  $  396,995 
           
           


                
NORTHERN STATES FINANCIAL CORPORATION             
($000s, except per share data) (Unaudited)              
                
 1Q 2018 4Q 2017 3Q 2017 2Q 2017 1Q 2017 
 AverageYield/ AverageYield/ AverageYield/ AverageYield/ AverageYield/ 
 balanceRate balanceRate balanceRate balanceRate balanceRate 
Earning assets               
  Loans$  308,7364.51%$  310,4264.52%$  302,2664.73%$  290,3074.42%$  289,0854.37%
  Securities taxable 62,7572.14  65,0821.91  68,2861.95  71,5431.86  75,3611.88 
  Interest-bearing deposits 77,3261.41  89,3461.41  74,8881.19  70,2991.01  73,0510.88 
  Total earning assets 448,8193.64% 464,8543.55% 445,4403.71% 432,1493.44% 437,4973.36%
Non interest earning assets 36,812   44,855   48,475   53,124   53,678  
Total assets$  485,631  $  509,709  $  493,915  $  485,273  $  491,175  
                
Interest-bearing liabilities               
  Interest-bearing demand deposits$  57,9510.12%$  70,0970.10%$  69,3730.10%$  67,1120.10%$  63,8700.11%
  Money market deposits 51,4150.05  53,7860.05  52,5260.05  50,6820.05  48,3220.05 
  Savings deposits  90,7470.01  91,3820.01  92,3960.01  92,3600.01  90,6260.01 
  Time deposits 74,1330.53  77,1710.51  73,1530.40  70,8980.30  85,0140.29 
  Other borrowings 37,5121.06  38,2520.95  32,4381.09  31,7411.03  37,7370.82 
  Total interest-bearing liabilities 311,7580.29% 330,6880.26% 319,8860.24% 312,7930.21% 325,5690.20%
Demand deposits 115,520   115,391   111,545   107,571   101,689  
Other liabilities 5,648   4,607   4,295   5,621   5,201  
Stockholders' equity 52,705   59,023   58,189   59,288   58,716  
Total liabilities and stockholders' equity$  485,631  $  509,709  $  493,915  $  485,273  $  491,175  
                
Cost of funds (including demand deposits)0.21% 0.17% 0.17% 0.15% 0.15%
                
Net interest spread3.35% 3.29% 3.47% 3.23% 3.16%
Net interest margin3.45% 3.37% 3.54% 3.29% 3.21%
                

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