CST: 06/12/2016 06:07:29   

Northern States Financial Corporation Reports 2015 Net Income of $23.1 million

272 Days ago

WAUKEGAN, IL--(Marketwired - Mar 8, 2016) - Northern States Financial Corporation (OTCQB: NSFC) (the "Company"), holding company for NorStates Bank (the "Bank"), an FDIC insured financial institution, today reported annual net income for 2015 available to stockholders of $23,129,000, or $0.26 per share. A significant portion of the Company's net income for 2015 resulted from the reversal of almost all of the Company's deferred tax allowance which allowed the booking of a $21.7 million tax credit during the fourth quarter of 2015. At year-end 2015, there remains a deferred tax allowance of approximately $3.0 million. In 2014, the Company successfully negotiated a discount of TARP preferred shares in association with the Company's recapitalization which resulted in net income available to stockholders of $15,564,000, or $0.26 per share. Pretax income for 2015 was $1,474,000 as compared with pretax income for 2014 of $210,000. Per share book value at December 31, 2015 was $0.64.

For the three months ended December 31, 2015, the Company showed net income of $22,043,000, mainly due to the reversal of the deferred tax allowance. Pretax income for the quarter was $323,000 as compared with a loss of $142,000 for the same quarter of 2014. 

Assets of the Company increased 15.0% to $485.3 million at December 31, 2015 from year-end 2014. Despite some strategic loan payoffs and reduction of nonperforming loans, the Company increased its loans by 8.3% to $237.3 million at December 31, 2015 compared with December 31, 2014. Total deposits increased 10.9% to $395.4 million as noninterest bearing deposits increased 18.3% and interest bearing deposits increased 8.7% between the same dates.

In regards to credit quality, total nonperforming loans were reduced 60.7% to $8.3 million at December 31, 2015 compared with December 31, 2014. Other real estate owned was reduced 23.8% to $12.6 million between the same dates.

"The Company continues to focus on non-performing asset ("NPA") reduction and earnings," stated Scott Yelvington, President and Chief Executive Officer of the Company. "We are pleased with our progress on both fronts in 2015 as we were able to reduce NPAs as a percentage of total assets to 4.3% at year-end from 8.9% at year-end 2014. Solid earnings growth has allowed us to recapture the vast majority of the deferred tax allowance enhancing share value of our Company. We were also pleased with the net increase in loans and growth to our core deposits as we move to profitably deploy our excess liquidity."

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
                               
    December 31,     September 30,     June 30,     March 31,     December 31,  
For quarter ended   2015     2015     2015     2015     2014  
                                         
Net income (loss) available to common stockholders   $ 22,043     $ 514     $ 392     $ 180     $ (142 )
Basic income (loss) per average outstanding share     0.00       0.01       0.00       0.00       (0.00 )
Diluted income (loss) per average outstanding share     0.25       0.01       0.00       0.00       (0.00 )
Return on average assets     18.89 %     0.45 %     0.36 %     0.17 %     (0.13 %)
Return on average equity     253.24 %     6.13 %     4.73 %     2.18 %     (1.75 %)
Yield on interest earning assets     3.30 %     3.13 %     3.13 %     3.21 %     3.39 %
Cost of interest-bearing liabilities     0.19 %     0.20 %     0.19 %     0.19 %     0.18 %
Net interest spread     3.11 %     2.93 %     2.94 %     3.02 %     3.21 %
Net interest margin     3.15 %     2.97 %     2.98 %     3.07 %     3.24 %
Net charged-off loans   $ 231     $ 803     $ (1,681 )   $ 488     $ 1,866  
Net charged-off loans to average loans (annualized)     0.40 %     1.38 %     (2.99 %)     0.89 %     3.45 %
                                         
                                         
    December 31,     September 30,     June 30,     March 31,     December 31,  
    2015     2015     2015     2015     2014  
                                         
Total stockholders' equity   $ 55,673     $ 34,135     $ 33,214     $ 33,112     $ 32,333  
Deferred tax asset     24,869       25,103       25,339       25,188       25,566  
Deferred tax asset valuation allowance     (3,000 )     (25,183 )     (25,183 )     (25,183 )     (25,183 )
Book value per common share   $ 0.64     $ 0.39     $ 0.38     $ 0.38     $ 0.37  
Common shares outstanding     87,604,088       87,604,088       87,604,088       87,604,088       87,604,088  
                                         
                                         
    December 31,     September 30,     June 30,     March 31,     December 31,  
    2015     2015     2015     2015     2014  
Nonperforming assets                                        
Loans on nonaccrual status   $ 5,469     $ 8,986     $ 10,820     $ 9,715     $ 16,551  
Loans 90 days or more past due, still accruing     787       266       198       298       1,048  
Loan troubled debt restructurings     1,999       2,380       2,400       3,742       3,376  
  Total nonperforming loans     8,255       11,632       13,418       13,755       20,975  
Other real estate owned     12,579       17,173       17,416       19,347       16,514  
  Total nonperforming assets   $ 20,834     $ 28,805     $ 30,834     $ 33,102     $ 37,489  
                                         
Nonperforming assets excluding trouble debt restructurings   $
 18,835
    $
26,425
    $
28,434
    $
29,360
    $
34,113
 
Nonperforming loans to total assets     1.70 %     2.52 %     3.02 %     3.18 %     4.97 %
Nonperforming assets to total assets     4.29 %     6.23 %     6.94 %     7.66 %     8.88 %
Nonperforming assets excluding trouble debt restructurings to total assets    
3.88
%    
5.72
%    
6.40
%    
6.80
%    
8.08
%
                                         
 
NORTHERN STATES FINANCIAL CORPORATION
($000s, except per share data) (Unaudited)
Condensed Consolidated Balance Sheets
    December 31,     September 30,     June 30,     March 31,     December 31,  
    2015     2015     2015     2015     2014  
  Assets                                        
Cash and due from banks   $ 5,834     $ 8,092     $ 4,817     $ 5,258     $ 8,258  
Interest bearing deposits in financial institutions - maturities less than 90 days    
55,380
     
63,044
     
60,455
     
63,768
     
26,727
 
  Total cash and cash equivalents     61,214       71,136       65,272       69,026       34,985  
Interest bearing deposits in financial institutions - maturities of 90 days or greater    
33,786
     
16,057
     
6,499
     
7,739
     
8,483
 
Securities available for sale     97,788       106,593       112,353       101,659       121,368  
Securities held to maturity     10,564       10,771       10,838       12,069       16,305  
Loans and leases, net of deferred fees     237,327       232,847       229,932       217,270       219,049  
Less: Allowance for loan and lease losses     (6,011 )     (7,032 )     (7,834 )     (6,153 )     (6,541 )
  Loans and leases, net     231,316       225,815       222,098       211,117       212,508  
Federal Home Loan Bank stock     931       931       931       931       931  
Office buildings and equipment, net     7,776       6,373       6,845       7,851       7,957  
Other real estate owned     12,579       17,173       17,416       19,347       16,514  
Accrued interest receivable     1,275       1,211       1,217       1,144       1,158  
Other assets     28,118       5,956       1,035       986       1,814  
  Total assets   $ 485,347     $ 462,016     $ 444,504     $ 431,869     $ 422,023  
    Liabilities and Stockholders' Equity                                        
Liabilities                                        
Deposits                                        
  Noninterest-bearing deposits   $ 93,913     $ 84,823     $ 81,795     $ 77,213     $ 79,378  
  Interest-bearing deposits     301,509       309,432       299,564       287,406       277,352  
    Total deposits     395,422       394,255       381,359       364,619       356,730  
Securities sold under repurchase agreements     18,994       19,618       14,836       18,231       18,447  
Subordinated debentures     10,310       10,310       10,310       10,310       10,310  
Advances from borrowers for taxes and insurance     2,195       776       1,904       2,639       1,485  
Accrued interest payable and other liabilities     2,753       2,922       2,881       2,958       2,718  
    Total liabilities     429,674       427,881       411,290       398,757       389,690  
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     27,700       5,657       5,143       4,751       4,571  
Treasury stock, at cost     (4,674 )     (4,674 )     (4,674 )     (4,674 )     (4,674 )
Accumulated other comprehensive income (loss), net     (319 )     186       (221 )     69       (530 )
  Total stockholders' equity     55,673       34,135       33,214       33,112       32,333  
    Total liabilities and stockholders' equity   $ 485,347     $ 462,016     $ 444,504     $ 431,869     $ 422,023  
Common shares outstanding     87,604,088       87,604,088       87,604,088       87,604,088       87,604,088  
Book value per common share   $ 0.64     $ 0.39     $ 0.38     $ 0.38     $ 0.37  
                                         
 
NORTHERN STATES FINANCIAL CORPORATION
($000s, except per share data) (Unaudited)
 
Condensed Consolidated Statements of Income
For quarter ended   December 31,     September 30,   June 30,     March 31,   December 31,  
    2015     2015   2015     2015   2014  
Interest income                                    
  Loans (including fee income)   $ 3,005     $ 2,747   $ 2,646     $ 2,484   $ 2,625  
  Securities                                    
    Taxable     491       544     514       678     683  
    Exempt from federal income tax     4       4     5       4     6  
  Federal funds sold and other     97       52     54       36     40  
      Total interest income     3,597       3,347     3,219       3,202     3,354  
Interest expense                                    
  Time deposits     79       82     79       71     66  
  Other deposits     24       24     21       22     24  
  Repurchase agreements and federal funds purchased     1       0     0       1     1  
  Subordinated debentures     58       57     55       53     54  
      Total interest expense     162       163     155       147     145  
Net interest income     3,435       3,184     3,064       3,055     3,209  
Provision for loan and lease losses     (789 )     0     0       100     0  
Net interest income after provision for loan and lease losses    
4,224
     
3,184
   
3,064
     
2,955
   
3,209
 
Noninterest income                                    
  Service fees on deposits     319       316     324       321     377  
  Gain on sale of securities     0       0     48       122     16  
  Net gain (loss) on sale of other assets     18       1,423     (10 )     0     0  
  Net gain (loss) on sale of other real estate owned     22       0     209       0     (440 )
  Other operating income     459       442     413       385     400  
      Total noninterest income     818       2,181     984       828     353  
Noninterest expense                                    
  Salaries and employee benefits     1,940       1,712     1,724       1,703     1,726  
  Occupancy and equipment, net     526       527     561       597     492  
  Data processing     234       501     376       330     679  
  Legal     52       51     117       93     74  
  FDIC insurance     98       96     136       141     135  
  Audit and other professional     151       143     162       134     94  
  Printing and supplies expense     36       42     63       60     49  
  Write-down of other real estate owned     1,282       1,264     0       0     26  
  Other real estate owned expense     97       136     88       170     27  
  Other operating expenses     303       329     414       375     402  
      Total noninterest expense     4,719       4,801     3,641       3,603     3,704  
Net income (loss) before income taxes     323       564     407       180     (142 )
Income tax expense     (21,720 )     50     15       0     0  
Net income (loss)     22,043       514     392       180     (142 )
                                     
Average common shares outstanding     87,604,088       87,604,088     87,604,088       87,604,088     87,604,088  
Basic income (loss) per average outstanding share   $ 0.25     $ 0.01   $ 0.00     $ 0.00   $ (0.00 )
Diluted income (loss) per average outstanding share   $ 0.25     $ 0.01   $ 0.00     $ 0.00   $ (0.00 )
                                     
 
NORTHERN STATES FINANCIAL CORPORATION
($000s, except per share data) (Unaudited) 
                               
    December 31,     September 30,     June 30,     March 31,     December 31,  
    2015     2015     2015     2015     2014  
Loans                                        
  Commercial   $ 12,144     $ 14,019     $ 13,687     $ 10,522     $ 14,239  
  Real estate-construction     21,609       15,127       14,300       11,636       11,600  
  Real estate-mortgage 1-4 family     28,449       27,977       29,379       30,285       30,546  
  Real estate-mortgage 5+ family     39,417       38,971       39,577       36,569       32,968  
  Real estate-mortgage commercial     125,978       126,375       123,176       118,589       119,669  
  Home equity     8,953       9,526       9,089       8,859       9,131  
  Installment     1,047       1,041       943       1,021       1,069  
  Deferred loan fees     (270 )     (189 )     (219 )     (211 )     (173 )
    Total loans   $ 237,327     $ 232,847     $ 229,932     $ 217,270     $ 219,049  
                                         
                                         
    December 31,     September 30,     June 30     March 31     December 31,  
    2015     2015     2015     2015     2014  
Deposits                                        
  Demand - noninterest bearing   $ 93,913     $ 84,823     $ 81,795     $ 77,213     $ 79,378  
  Demand - interest bearing     67,571       72,612       65,853       57,158       61,313  
  Money market accounts     51,797       54,077       53,131       49,453       51,046  
  Savings     84,515       83,153       80,884       80,654       77,789  
  Time, $100,000 and over     53,093       52,744       49,223       49,655       37,483  
  Time, under $100,000     44,283       45,846       47,223       48,236       49,471  
  Time, brokered     250       1,000       3,250       2,250       250  
    Total deposits   $ 395,422     $ 394,255     $ 381,359     $ 364,619     $ 356,730  
                                         
 
NORTHERN STATES FINANCIAL CORPORATION
($000s, except per share data) (Unaudited)
                                         
    4Q 2015     3Q 2015     2Q 2015     1Q 2015     4Q 2014  
    Average Yield/     Average Yield/     Average Yield/     Average Yield/     Average Yield/  
    balance Rate     balance Rate     balance Rate     balance Rate     balance Rate  
Earning assets                                                  
  Loans   $ 232,821 5.18 %   $ 232,003 4.76 %   $ 224,996 4.73 %   $ 219,900 4.54 %   $ 216,345 4.88 %
  Securities taxable     112,635 1.74       124,301 1.75       119,487 1.72       129,337 2.10       138,741 1.96  
  Securities tax-exempt     428 5.61       436 6.42       435 5.52       437 6.41       575 6.30  
  Interest-bearing deposits     91,402 0.42       73,330 0.28       68,449 0.32       50,803 0.28       42,000 0.38  
  Total earning assets     437,286 3.30 %     430,070 3.13 %     413,367 3.13 %     400,477 3.21 %     397,661 3.39 %
Non interest earning assets     29,467         26,427         26,460         26,670         29,935    
Total assets   $ 466,753       $ 456,497       $ 439,827       $ 427,147       $ 427,596    
                                                   
Interest-bearing liabilities                                                  
  Interest-bearing demand deposits   $ 71,437 0.08 %   $ 68,681 0.09 %   $ 61,325 0.08 %   $ 58,445 0.10 %   $ 67,480 0.09 %
  Money market deposits     53,107 0.05       52,291 0.05       50,062 0.05       50,104 0.05       51,977 0.05  
  Savings deposits     83,536 0.01       82,482 0.01       81,353 0.01       78,445 0.01       77,339 0.10  
  Time deposits     98,661 0.32       101,783 0.32       99,736 0.32       94,548 0.30       87,923 0.30  
  Other borrowings     30,559 0.77       28,085 0.81       25,492 0.86       30,660 0.70       30,328 0.73  
  Total interest-bearing liabilities     337,300 0.19 %     333,322 0.20 %     317,968 0.19 %     312,202 0.19 %     315,047 0.18 %
Demand deposits     90,408         85,324         83,126         76,962         76,528    
Other liabilities     4,228         4,308         5,610         4,950         3,567    
Stockholders' equity     34,817         33,543         33,123         33,033         32,454    
Total liabilities and stockholders' equity   $ 466,753       $ 456,497       $ 439,827       $ 427,147       $ 427,596    
                                                   
Net interest spread       3.11 %       2.93 %       2.94 %       3.02 %       3.21 %
Net interest margin       3.15 %       2.97 %       2.98 %       3.07 %       3.24 %
                                                   

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


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