WAUKEGAN, Ill., Oct. 31, 2016 (GLOBE NEWSWIRE) -- Northern States Financial Corporation (OTC PINK:NSFC) (the “Company”), the holding company of NorStates Bank (the “Bank”), an FDIC insured financial institution, today reported third quarter 2016 net income of $483,000 as compared with $354,000 for the second quarter 2016 and $514,000 for the third quarter of 2015. Per share book value at September 30, 2016 was $0.65.
Pretax income for the third quarter of 2016 was $612,000 as compared with pretax income of $564,000 for the same quarter of 2015, an increase of 8.5%. Income tax expense for the third quarter of 2016 was $129,000 as compared with $50,000 for the same quarter of 2015 due to the effect of the Company’s application of deferred tax assets in the third quarter of 2015. For the nine months ended September 30, 2016, pretax income was $1,700,000 as compared with pretax income of $1,151,000 for the first nine months of 2015, an increase of 47.7%.
Total assets of the Company were $508 million at September 30, 2016, an increase of $23 million, or 4.8%, from December 31, 2015. Loans increased $37 million, or 15.6%, between December 31, 2015 and September 30, 2016 while deposits increased $19 million, or 4.7%, between those dates.
The Bank’s third quarter 2016 net interest margin was 3.09%, compared with 3.03% during the third quarter of 2015. The Bank’s cost of interest-bearing liabilities was 0.11% in the third quarter of 2016, compared with 0.13% in the third quarter of 2015. The Bank’s leverage capital ratio at September 30, 2016 was 10.61%.
With regard to asset quality, the Company’s non-performing assets (“NPAs”) at September 30, 2016 decreased $5.6 million, or 22.08%, from December 31, 2015, due primarily to a reduction in loans on nonaccrual status and other real estate owned. At September 30, 2016, the ratio of nonperforming loans to total assets was 1.70% and the allowance for loan and lease losses to total loans was 2.10%.
“We continue to make progress regarding profitability and credit quality,” stated Scott Yelvington, President and Chief Executive Officer of the Company and Bank. “Our focus will remain on the reduction of NPAs, cost reduction and the profitable deployment of 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 | |||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||
| For the quarter ended | 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
| Net income available to common stockholders | $ | 483 | $ | 354 | $ | 321 | $ | 22,043 | $ | 514 | |||||||||||
| Basic income per average outstanding share | 0.01 | 0.00 | 0.00 | 0.25 | 0.01 | ||||||||||||||||
| Diluted income per average outstanding share | 0.01 | 0.00 | 0.00 | 0.25 | 0.01 | ||||||||||||||||
| Return on average assets | 0.38 | % | 0.29 | % | 0.26 | % | 18.89 | % | 0.45 | % | |||||||||||
| Return on average equity | 3.38 | % | 2.50 | % | 2.28 | % | 253.24 | % | 6.13 | % | |||||||||||
| Yield on interest earning assets | 3.17 | % | 3.20 | % | 3.11 | % | 3.30 | % | 3.13 | % | |||||||||||
| Cost of interest-bearing liabilities | 0.18 | % | 0.19 | % | 0.19 | % | 0.19 | % | 0.20 | % | |||||||||||
| Net interest spread | 2.99 | % | 3.01 | % | 2.92 | % | 3.11 | % | 2.93 | % | |||||||||||
| Net interest margin | 3.03 | % | 3.06 | % | 2.96 | % | 3.15 | % | 2.97 | % | |||||||||||
| Net charged-off (recovered) loans | $ | (407 | ) | $ | 168 | $ | 418 | $ | 231 | $ | 803 | ||||||||||
| Net charged-off loans to average loans (annualized) | (0.60 | )% | 0.26 | % | 0.70 | % | 0.40 | % | 1.38 | % | |||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||||
| Total stockholders' equity | $ | 57,258 | $ | 56,868 | $ | 56,431 | $ | 55,673 | $ | 34,135 | |||||||||||
| Book value per common share | $ | 0.65 | $ | 0.65 | $ | 0.64 | $ | 0.64 | $ | 0.39 | |||||||||||
| Common shares outstanding | 87,604,088 | 87,604,088 | 87,604,088 | 87,604,088 | 87,604,088 | ||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||||
| Nonperforming assets | |||||||||||||||||||||
| Loans on nonaccrual status | $ | 3,054 | $ | 3,465 | $ | 4,504 | $ | 5,469 | $ | 8,986 | |||||||||||
| Loans 90 days or more past due, still accruing | 0 | 0 | 700 | 787 | 266 | ||||||||||||||||
| Loan troubled debt restructurings | 5,584 | 5,415 | 5,477 | 6,312 | 2,380 | ||||||||||||||||
| Total nonperforming loans | 8,638 | 8,880 | 10,681 | 12,568 | 11,632 | ||||||||||||||||
| Other real estate owned | 10,958 | 11,418 | 13,100 | 12,579 | 17,173 | ||||||||||||||||
| Total nonperforming assets | $ | 19,596 | $ | 20,298 | $ | 23,781 | $ | 25,147 | $ | 28,805 | |||||||||||
| Nonperforming assets excluding trouble debt | |||||||||||||||||||||
| restructurings | $ | 14,012 | $ | 14,883 | $ | 18,304 | $ | 18,835 | $ | 26,425 | |||||||||||
| Nonperforming loans to total assets | 1.70 | % | 1.78 | % | 2.19 | % | 2.59 | % | 2.52 | % | |||||||||||
| Nonperforming assets to total assets | 3.85 | % | 4.06 | % | 4.88 | % | 5.18 | % | 6.23 | % | |||||||||||
| Nonperforming assets excluding trouble debt | |||||||||||||||||||||
| restructurings to total assets | 2.76 | % | 2.98 | % | 3.75 | % | 3.88 | % | 5.72 | % | |||||||||||
| Allowance for loan and lease losses to total loans | 2.10 | % | 2.05 | % | 2.20 | % | 2.53 | % | 3.02 | % | |||||||||||
| NORTHERN STATES FINANCIAL CORPORATION | ||||||||||||||||||||
| ($000s, except per share data) (Unaudited) | ||||||||||||||||||||
| Condensed Consolidated Balance Sheet | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | $ | 5,491 | $ | 4,965 | $ | 5,539 | $ | 5,834 | $ | 8,092 | ||||||||||
| Interest bearing deposits in financial institutions - | ||||||||||||||||||||
| maturities less than 90 days | 61,013 | 66,743 | 53,004 | 55,380 | 63,044 | |||||||||||||||
| Total cash and cash equivalents | 66,504 | 71,708 | 58,543 | 61,214 | 71,136 | |||||||||||||||
| Interest bearing deposits in financial institutions - | ||||||||||||||||||||
| maturities of 90 days or greater | 33,880 | 31,049 | 31,377 | 33,786 | 16,057 | |||||||||||||||
| Securities available for sale | 71,341 | 69,689 | 78,416 | 97,788 | 106,593 | |||||||||||||||
| Securities held to maturity | 13,360 | 13,428 | 13,496 | 10,564 | 10,771 | |||||||||||||||
| Loans and leases, net of deferred fees | 274,281 | 264,244 | 254,545 | 237,327 | 232,847 | |||||||||||||||
| Less: Allowance for loan and lease losses | (5,757 | ) | (5,425 | ) | (5,593 | ) | (6,011 | ) | (7,032 | ) | ||||||||||
| Loans and leases, net | 268,524 | 258,819 | 248,952 | 231,316 | 225,815 | |||||||||||||||
| Federal Home Loan Bank stock | 931 | 931 | 931 | 931 | 931 | |||||||||||||||
| Office buildings and equipment, net | 8,425 | 8,519 | 8,415 | 7,776 | 6,373 | |||||||||||||||
| Other real estate owned | 10,958 | 11,418 | 13,100 | 12,579 | 17,173 | |||||||||||||||
| Accrued interest receivable | 1,297 | 1,173 | 1,243 | 1,275 | 1,211 | |||||||||||||||
| Bank owned life insurance | 10,520 | 10,439 | 10,358 | 5,054 | 5,014 | |||||||||||||||
| Deferred tax asset, net | 21,461 | 21,479 | 22,112 | 21,869 | (80 | ) | ||||||||||||||
| Other assets | 1,252 | 1,112 | 746 | 1,195 | 1,022 | |||||||||||||||
| Total assets | $ | 508,453 | $ | 499,764 | $ | 487,689 | $ | 485,347 | $ | 462,016 | ||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Noninterest-bearing deposits | $ | 99,245 | $ | 102,097 | $ | 96,829 | $ | 93,913 | $ | 84,823 | ||||||||||
| Interest-bearing deposits | 314,834 | 307,334 | 301,926 | 301,509 | 309,432 | |||||||||||||||
| Total deposits | 414,079 | 409,431 | 398,755 | 395,422 | 394,255 | |||||||||||||||
| Securities sold under repurchase agreements | 23,686 | 18,015 | 16,052 | 18,994 | 19,618 | |||||||||||||||
| Subordinated debentures | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 | |||||||||||||||
| Advances from borrowers for taxes and insurance | 510 | 2,195 | 3,089 | 2,195 | 776 | |||||||||||||||
| Accrued interest payable and other liabilities | 2,610 | 2,945 | 3,052 | 2,753 | 2,922 | |||||||||||||||
| Total liabilities | 451,195 | 442,896 | 431,258 | 429,674 | 427,881 | |||||||||||||||
| 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 | 28,858 | 28,375 | 28,021 | 27,700 | 5,657 | |||||||||||||||
| Treasury stock, at cost | (4,674 | ) | (4,674 | ) | (4,674 | ) | (4,674 | ) | (4,674 | ) | ||||||||||
| Accumulated other comprehensive income (loss), net | 108 | 201 | 118 | (319 | ) | 186 | ||||||||||||||
| Total stockholders' equity | 57,258 | 56,868 | 56,431 | 55,673 | 34,135 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 508,453 | $ | 499,764 | $ | 487,689 | $ | 485,347 | $ | 462,016 | ||||||||||
| Common shares outstanding | 87,604,088 | 87,604,088 | 87,604,088 | 87,604,088 | 87,604,088 | |||||||||||||||
| Book value per common share | $ | 0.65 | $ | 0.65 | $ | 0.64 | $ | 0.64 | $ | 0.39 | ||||||||||
| NORTHERN STATES FINANCIAL CORPORATION | ||||||||||||||||||||
| ($000s, except per share data) (Unaudited) | ||||||||||||||||||||
| Condensed Consolidated Statement of Income | ||||||||||||||||||||
| For the quarter ended | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
| Interest income | ||||||||||||||||||||
| Loans (including fee income) | $ | 3,010 | $ | 2,963 | $ | 2,788 | $ | 3,005 | $ | 2,747 | ||||||||||
| Securities | ||||||||||||||||||||
| Taxable | 378 | 377 | 420 | 491 | 544 | |||||||||||||||
| Exempt from federal income tax | 3 | 3 | 3 | 4 | 4 | |||||||||||||||
| Federal funds sold and other | 163 | 130 | 144 | 97 | 52 | |||||||||||||||
| Total interest income | 3,554 | 3,473 | 3,355 | 3,597 | 3,347 | |||||||||||||||
| Interest expense | ||||||||||||||||||||
| Time deposits | 67 | 68 | 74 | 79 | 82 | |||||||||||||||
| Other deposits | 21 | 24 | 23 | 24 | 24 | |||||||||||||||
| Repurchase agreements and federal funds purchased | 0 | 0 | 1 | 1 | 0 | |||||||||||||||
| Subordinated debentures | 68 | 66 | 63 | 58 | 57 | |||||||||||||||
| Total interest expense | 156 | 158 | 161 | 162 | 163 | |||||||||||||||
| Net interest income | 3,398 | 3,315 | 3,194 | 3,435 | 3,184 | |||||||||||||||
| Provision for loan and lease losses | (75 | ) | 0 | 0 | (789 | ) | 0 | |||||||||||||
| Net interest income after provision for | ||||||||||||||||||||
| loan and lease losses | 3,473 | 3,315 | 3,194 | 4,224 | 3,184 | |||||||||||||||
| Noninterest income | ||||||||||||||||||||
| Service fees on deposits | 398 | 320 | 320 | 319 | 316 | |||||||||||||||
| Gain on sale of securities | 0 | 104 | 117 | 0 | 0 | |||||||||||||||
| Net gain on sale of other assets | 0 | 0 | 0 | 18 | 1,423 | |||||||||||||||
| Net gain (loss) on sale of other real estate owned | (7 | ) | 126 | 13 | 22 | 0 | ||||||||||||||
| Bank owned life insurance income | 80 | 82 | 53 | 40 | 14 | |||||||||||||||
| Other operating income | 419 | 416 | 381 | 419 | 428 | |||||||||||||||
| Total noninterest income | 890 | 1,048 | 884 | 818 | 2,181 | |||||||||||||||
| Noninterest expense | ||||||||||||||||||||
| Salaries and employee benefits | 1,787 | 1,861 | 1,822 | 1,940 | 1,712 | |||||||||||||||
| Occupancy and equipment, net | 490 | 520 | 502 | 526 | 527 | |||||||||||||||
| Data processing | 325 | 427 | 459 | 234 | 501 | |||||||||||||||
| Legal | 28 | 81 | 19 | 52 | 51 | |||||||||||||||
| FDIC insurance | 76 | 118 | 101 | 98 | 96 | |||||||||||||||
| Audit and other professional | 125 | 151 | 168 | 151 | 143 | |||||||||||||||
| Printing and supplies expense | 44 | 45 | 37 | 36 | 42 | |||||||||||||||
| Write-down of other real estate owned | 487 | 126 | 0 | 1,282 | 1,264 | |||||||||||||||
| Other real estate owned expense | 92 | 171 | 131 | 97 | 136 | |||||||||||||||
| Other operating expenses | 297 | 309 | 305 | 303 | 329 | |||||||||||||||
| Total noninterest expense | 3,751 | 3,809 | 3,544 | 4,719 | 4,801 | |||||||||||||||
| Net income before income taxes | 612 | 554 | 534 | 323 | 564 | |||||||||||||||
| Income tax expense | 129 | 200 | 213 | (21,720 | ) | 50 | ||||||||||||||
| Net income | 483 | 354 | 321 | 22,043 | 514 | |||||||||||||||
| Average common shares outstanding | 87,604,088 | 87,604,088 | 87,604,088 | 87,604,088 | 87,604,088 | |||||||||||||||
| Basic income per average outstanding share | $ | 0.01 | $ | 0.00 | $ | 0.00 | $ | 0.25 | $ | 0.01 | ||||||||||
| Diluted income per average outstanding share | $ | 0.01 | $ | 0.00 | $ | 0.00 | $ | 0.25 | $ | 0.01 | ||||||||||
| NORTHERN STATES FINANCIAL CORPORATION | ||||||||||||||||||||
| ($000s, except per share data) (Unaudited) | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
| Loans | ||||||||||||||||||||
| Commercial | $ | 14,977 | $ | 12,556 | $ | 11,883 | $ | 12,144 | $ | 14,019 | ||||||||||
| Real estate-construction | 22,255 | 17,531 | 15,369 | 21,609 | 15,127 | |||||||||||||||
| Real estate-mortgage 1-4 family | 47,826 | 49,530 | 41,499 | 28,449 | 27,977 | |||||||||||||||
| Real estate-mortgage 5+ family | 56,179 | 49,321 | 46,458 | 39,417 | 38,971 | |||||||||||||||
| Real estate-mortgage commercial | 121,491 | 123,717 | 129,042 | 125,978 | 126,375 | |||||||||||||||
| Home equity | 10,955 | 10,965 | 9,671 | 8,953 | 9,526 | |||||||||||||||
| Installment | 873 | 893 | 904 | 1,047 | 1,041 | |||||||||||||||
| Deferred loan fees | (275 | ) | (269 | ) | (281 | ) | (270 | ) | (189 | ) | ||||||||||
| Total loans | $ | 274,281 | $ | 264,244 | $ | 254,545 | $ | 237,327 | $ | 232,847 | ||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
| Deposits | ||||||||||||||||||||
| Demand - noninterest bearing | $ | 99,245 | $ | 102,097 | $ | 96,829 | $ | 93,913 | $ | 84,823 | ||||||||||
| Demand - interest bearing | 78,310 | 75,389 | 67,678 | 67,571 | 72,612 | |||||||||||||||
| Money market accounts | 56,921 | 54,297 | 52,032 | 51,797 | 54,077 | |||||||||||||||
| Savings | 88,578 | 88,813 | 88,826 | 84,515 | 83,153 | |||||||||||||||
| Time, $100,000 and over | 50,716 | 46,989 | 50,442 | 53,093 | 52,744 | |||||||||||||||
| Time, under $100,000 | 40,309 | 41,846 | 42,948 | 44,283 | 45,846 | |||||||||||||||
| Time, brokered | 0 | 0 | 0 | 250 | 1,000 | |||||||||||||||
| Total deposits | $ | 414,079 | $ | 409,431 | $ | 398,755 | $ | 395,422 | $ | 394,255 | ||||||||||
| NORTHERN STATES FINANCIAL CORPORATION | |||||||||||||||||||||||||
| ($000s, except per share data) (Unaudited) | |||||||||||||||||||||||||
| 3Q 2016 | 2Q 2016 | 1Q 2016 | 4Q 2015 | 3Q 2015 | |||||||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||||
| balance | Rate | balance | Rate | balance | Rate | balance | Rate | balance | Rate | ||||||||||||||||
| Earning assets | |||||||||||||||||||||||||
| Loans | $ | 269,395 | 4.49 | % | $ | 254,545 | 4.67 | % | $ | 238,327 | 4.69 | % | $ | 232,821 | 5.18 | % | $ | 232,003 | 4.76 | % | |||||
| Securities taxable | 84,128 | 1.81 | 88,592 | 1.70 | 98,630 | 1.70 | 112,635 | 1.74 | 124,301 | 1.75 | |||||||||||||||
| Securities tax-exempt | 295 | 6.78 | 295 | 5.42 | 295 | 6.78 | 428 | 5.61 | 436 | 6.42 | |||||||||||||||
| Interest-bearing deposits | 96,358 | 0.68 | 92,069 | 0.56 | 95,565 | 0.60 | 91,402 | 0.42 | 73,330 | 0.28 | |||||||||||||||
| Total earning assets | 450,176 | 3.17 | % | 435,501 | 3.20 | % | 432,817 | 3.11 | % | 437,286 | 3.30 | % | 430,070 | 3.13 | % | ||||||||||
| Non interest earning assets | 53,823 | 55,761 | 51,891 | 29,467 | 26,427 | ||||||||||||||||||||
| Total assets | $ | 503,999 | $ | 491,262 | $ | 484,708 | $ | 466,753 | $ | 456,497 | |||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 75,295 | 0.06 | % | $ | 72,646 | 0.09 | % | $ | 67,804 | 0.08 | % | $ | 71,437 | 0.08 | % | $ | 68,681 | 0.09 | % | |||||
| Money market deposits | 56,168 | 0.05 | 52,475 | 0.05 | 52,205 | 0.05 | 53,107 | 0.05 | 52,291 | 0.05 | |||||||||||||||
| Savings deposits | 89,082 | 0.01 | 89,415 | 0.01 | 86,031 | 0.01 | 83,536 | 0.01 | 82,482 | 0.01 | |||||||||||||||
| Time deposits | 91,003 | 0.29 | 89,727 | 0.30 | 96,323 | 0.31 | 98,661 | 0.32 | 101,783 | 0.32 | |||||||||||||||
| Other borrowings | 30,669 | 0.89 | 26,040 | 1.01 | 28,338 | 0.90 | 30,559 | 0.77 | 28,085 | 0.81 | |||||||||||||||
| Total interest-bearing liabilities | 342,217 | 0.18 | % | 330,303 | 0.19 | % | 330,701 | 0.19 | % | 337,300 | 0.19 | % | 333,322 | 0.20 | % | ||||||||||
| Demand deposits | 100,066 | 98,491 | 92,377 | 90,408 | 85,324 | ||||||||||||||||||||
| Other liabilities | 4,547 | 5,932 | 5,406 | 4,228 | 4,308 | ||||||||||||||||||||
| Stockholders' equity | 57,169 | 56,536 | 56,224 | 34,817 | 33,543 | ||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 503,999 | $ | 491,262 | $ | 484,708 | $ | 466,753 | $ | 456,497 | |||||||||||||||
| Net interest spread | 2.99 | % | 3.01 | % | 2.92 | % | 3.11 | % | 2.93 | % | |||||||||||||||
| Net interest margin | 3.03 | % | 3.06 | % | 2.96 | % | 3.15 | % | 2.97 | % | |||||||||||||||