WAUKEGAN, Ill., Oct. 13, 2017 (GLOBE NEWSWIRE) -- Northern States Financial Corporation (OTC PINK:NSFC) (the “Company”), the holding company of NorStates Bank (the “Bank”), today reported a third quarter 2017 earnings of $963,000 as compared with a loss of $1,448,000 for the second quarter of 2017 and earnings of $483,000 for the third quarter of 2016. Per share book value at September 30, 2017 was $0.65, compared to $0.64 at June 30, 2017.
Some highlights of continued financial improvement during the third quarter of 2017 included the following:
- The Bank’s pretax earnings for the third quarter of 2017 were $1,201,000 as compared with $707,000 for the third quarter of 2016, an increase of 69.9%.
- 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 $4.8 million from June 30, 2017 to September 30, 2017. The decrease to NPAs resulted from sales of other real estate owned (“OREO”). It is expected that the costs for carrying the OREO will be substantially reduced in future quarters. NPAs less troubled debt restructurings to total assets decreased to 1.22% at September 30, 2017 from 2.27% at June 30, 2017.
- At September 30, 2017, the allowance for loan and lease losses to total loans and leases ratio was 2.20%, increasing from 1.92% at June 30, 2017 as the Bank received a $1.2 million recovery during the third quarter of 2017.
- Loans increased by $15.3 million for the third quarter of 2017 compared with the second quarter of 2017. Loan interest income increased $371 thousand for the third quarter of 2017 compared to the second quarter of 2017 which included $50,000 in loan prepayment penalties and additional loan fee income classified as interest resulting from the loan growth. The increased loan interest income contributed to a net interest margin for the third quarter of 2017 of 3.54%.
- Core deposits consisting of personal and business non-time deposits increased $4.8 million from June 30, 2017. Core deposits growth assisted the Company in having a low cost of funds, 17 basis points, during the third quarter of 2017. The Bank’s cost of funds for the third quarter was 10 basis points.
- Third quarter Illinois corporate income tax rates increased from 7.75% to 9.50% which resulted in a $269,000 increase in the deferred tax asset related to our Illinois net operating loss carry forward. This also resulted in a non-cash tax benefit during the third quarter. This rate increase will have an impact on income tax expense in future quarters.
“Q3 was an exceptionally good quarter for our Company,” stated Scott Yelvington, President and Chief Executive Officer of the Company, “as the reduction in NPA’s and the increase in loans had a very favorable impact on earnings. Additionally, we continue to emphasize growth in core deposits, reduction of expenses, and prudent deployment of 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.
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 | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| For the quarter ended | 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||
| Net income available to common stockholders | $ | 963 | $ | (1,448 | ) | $ | 370 | $ | 983 | $ | 483 | ||||||||
| Basic income (loss) per average outstanding share | 0.01 | (0.02 | ) | 0.00 | 0.01 | 0.01 | |||||||||||||
| Diluted income (loss) per average outstanding share | 0.01 | (0.02 | ) | 0.00 | 0.01 | 0.01 | |||||||||||||
| Return on average assets | 0.78 | % | -1.19 | % | 0.30 | % | 0.78 | % | 0.38 | % | |||||||||
| Return on average equity | 6.62 | % | -9.77 | % | 2.52 | % | 6.85 | % | 3.38 | % | |||||||||
| Yield on interest-earning assets | 3.71 | % | 3.44 | % | 3.36 | % | 3.21 | % | 3.17 | % | |||||||||
| Cost of interest-bearing liabilities | 0.24 | % | 0.21 | % | 0.20 | % | 0.19 | % | 0.18 | % | |||||||||
| Net interest spread | 3.47 | % | 3.23 | % | 3.16 | % | 3.02 | % | 2.99 | % | |||||||||
| Net interest margin | 3.54 | % | 3.29 | % | 3.21 | % | 3.07 | % | 3.03 | % | |||||||||
| Net charged-off (recovered) loans | $ | (1,172 | ) | $ | (1 | ) | $ | 56 | $ | 54 | $ | (407 | ) | ||||||
| Net charged-off loans to average loans (annualized) | -1.55 | % | 0.00 | % | 0.08 | % | 0.08 | % | -0.60 | % | |||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Total stockholders' equity | $ | 58,859 | $ | 57,795 | $ | 59,047 | $ | 58,460 | $ | 57,258 | |||||||||
| Book value per common share | $ | 0.65 | $ | 0.64 | $ | 0.65 | $ | 0.65 | $ | 0.65 | |||||||||
| Common shares outstanding | 90,345,174 | 90,345,174 | 90,345,174 | 90,345,174 | 87,604,088 | ||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Nonperforming assets | |||||||||||||||||||
| Loans on nonaccrual status | $ | 3,444 | $ | 3,407 | $ | 2,878 | $ | 2,990 | $ | 3,054 | |||||||||
| Loans 90 days or more past due, still accruing | 561 | 537 | 140 | 309 | 0 | ||||||||||||||
| Loan troubled debt restructurings | 4,845 | 4,969 | 5,309 | 5,465 | 5,584 | ||||||||||||||
| Total nonperforming loans | 8,850 | 8,913 | 8,327 | 8,764 | 8,638 | ||||||||||||||
| Other real estate owned | 2,217 | 6,935 | 10,174 | 10,236 | 10,958 | ||||||||||||||
| Total nonperforming assets | $ | 11,067 | $ | 15,848 | $ | 18,501 | $ | 19,000 | $ | 19,596 | |||||||||
| Nonperforming assets excluding trouble debt | |||||||||||||||||||
| restructurings | $ | 6,222 | $ | 10,879 | $ | 13,192 | $ | 13,535 | $ | 14,012 | |||||||||
| Nonperforming loans to total assets | 1.74 | % | 1.86 | % | 1.68 | % | 1.79 | % | 1.70 | % | |||||||||
| Nonperforming assets to total assets | 2.18 | % | 3.30 | % | 3.74 | % | 3.88 | % | 3.85 | % | |||||||||
| Nonperforming assets excluding trouble debt | |||||||||||||||||||
| restructurings to total assets | 1.22 | % | 2.27 | % | 2.67 | % | 2.76 | % | 2.76 | % | |||||||||
| Allowance for loan and lease losses to total loans | 2.20 | % | 1.92 | % | 1.94 | % | 1.97 | % | 2.10 | % | |||||||||
| NORTHERN STATES FINANCIAL CORPORATION | |||||||||||||||||||
| ($000s, except per share data) (Unaudited) | |||||||||||||||||||
| Condensed Consolidated Balance Sheet | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from banks | $ | 4,557 | $ | 4,431 | $ | 4,853 | $ | 4,552 | $ | 5,491 | |||||||||
| Interest bearing deposits in financial institutions - | |||||||||||||||||||
| maturities less than 90 days | 61,682 | 37,956 | 47,132 | 41,179 | 61,013 | ||||||||||||||
| Total cash and cash equivalents | 66,239 | 42,387 | 51,985 | 45,731 | 66,504 | ||||||||||||||
| Interest bearing deposits in financial institutions - | |||||||||||||||||||
| maturities of 90 days or greater | 24,592 | 26,774 | 30,510 | 29,233 | 33,880 | ||||||||||||||
| Securities available for sale | 53,190 | 56,272 | 59,640 | 63,180 | 71,341 | ||||||||||||||
| Securities held to maturity | 12,786 | 12,856 | 12,926 | 12,996 | 13,360 | ||||||||||||||
| Loans and leases, net of deferred fees | 310,209 | 294,901 | 290,801 | 289,594 | 274,281 | ||||||||||||||
| Less: Allowance for loan and lease losses | (6,820 | ) | (5,648 | ) | (5,647 | ) | (5,703 | ) | (5,757 | ) | |||||||||
| Loans and leases, net | 303,389 | 289,253 | 285,154 | 283,891 | 268,524 | ||||||||||||||
| Federal Home Loan Bank stock | 492 | 492 | 335 | 931 | 931 | ||||||||||||||
| Office buildings and equipment, net | 8,419 | 8,630 | 8,674 | 8,525 | 8,425 | ||||||||||||||
| Other real estate owned | 2,217 | 6,935 | 10,174 | 10,236 | 10,958 | ||||||||||||||
| Accrued interest receivable | 1,358 | 1,165 | 1,255 | 1,247 | 1,297 | ||||||||||||||
| Bank owned life insurance | 10,816 | 10,743 | 10,675 | 10,597 | 10,520 | ||||||||||||||
| Deferred tax asset, net | 23,041 | 23,159 | 22,202 | 22,436 | 21,461 | ||||||||||||||
| Other assets | 1,426 | 1,242 | 1,055 | 985 | 1,252 | ||||||||||||||
| Total assets | $ | 507,965 | $ | 479,908 | $ | 494,585 | $ | 489,988 | $ | 508,453 | |||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Deposits | |||||||||||||||||||
| Noninterest-bearing deposits | $ | 112,821 | $ | 107,470 | $ | 106,096 | $ | 100,870 | $ | 99,245 | |||||||||
| Interest-bearing deposits | 296,462 | 277,249 | 290,899 | 289,940 | 314,834 | ||||||||||||||
| Total deposits | 409,283 | 384,719 | 396,995 | 390,810 | 414,079 | ||||||||||||||
| Securities sold under repurchase agreements | 26,062 | 22,331 | 22,820 | 25,901 | 23,686 | ||||||||||||||
| Subordinated debentures | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 | ||||||||||||||
| Advances from borrowers for taxes and insurance | 957 | 2,137 | 2,820 | 1,902 | 510 | ||||||||||||||
| Accrued interest payable and other liabilities | 2,494 | 2,616 | 2,593 | 2,605 | 2,610 | ||||||||||||||
| Total liabilities | 449,106 | 422,113 | 435,538 | 431,528 | 451,195 | ||||||||||||||
| Stockholders' Equity | |||||||||||||||||||
| Common stock | 906 | 906 | 906 | 906 | 878 | ||||||||||||||
| Deferred compensation | (945 | ) | (1,050 | ) | (1,155 | ) | (1,260 | ) | 0 | ||||||||||
| Additional paid-in capital | 34,019 | 34,019 | 34,019 | 34,019 | 32,088 | ||||||||||||||
| Retained earnings | 25,193 | 24,230 | 25,678 | 25,308 | 28,858 | ||||||||||||||
| Treasury stock, at cost | (182 | ) | (182 | ) | (182 | ) | (182 | ) | (4,674 | ) | |||||||||
| Accumulated other comprehensive income (loss), net | (132 | ) | (128 | ) | (219 | ) | (331 | ) | 108 | ||||||||||
| Total stockholders' equity | 58,859 | 57,795 | 59,047 | 58,460 | 57,258 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 507,965 | $ | 479,908 | $ | 494,585 | $ | 489,988 | $ | 508,453 | |||||||||
| Common shares outstanding | 90,345,174 | 90,345,174 | 90,345,174 | 90,345,174 | 87,604,088 | ||||||||||||||
| Book value per common share | $ | 0.65 | $ | 0.64 | $ | 0.65 | $ | 0.65 | $ | 0.65 | |||||||||
| 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, | ||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Interest income | |||||||||||||||||||
| Loans (including fee income) | $ | 3,566 | $ | 3,195 | $ | 3,148 | $ | 3,103 | $ | 3,010 | |||||||||
| Securities | |||||||||||||||||||
| Taxable | 333 | 334 | 357 | 353 | 378 | ||||||||||||||
| Exempt from federal income tax | 0 | 0 | 0 | 3 | 3 | ||||||||||||||
| Federal funds sold and other | 223 | 177 | 160 | 145 | 163 | ||||||||||||||
| Total interest income | 4,122 | 3,706 | 3,665 | 3,604 | 3,554 | ||||||||||||||
| Interest expense | |||||||||||||||||||
| Time deposits | 74 | 54 | 61 | 61 | 67 | ||||||||||||||
| Other deposits | 26 | 26 | 25 | 23 | 21 | ||||||||||||||
| Repurchase agreements and federal funds purchased | 1 | 0 | 1 | 1 | 0 | ||||||||||||||
| Subordinated debentures | 87 | 82 | 76 | 74 | 68 | ||||||||||||||
| Total interest expense | 188 | 162 | 163 | 159 | 156 | ||||||||||||||
| Net interest income | 3,934 | 3,544 | 3,502 | 3,445 | 3,398 | ||||||||||||||
| Provision for loan and lease losses | 0 | 0 | 0 | 0 | (75 | ) | |||||||||||||
| Net interest income after provision for | |||||||||||||||||||
| loan and lease losses | 3,934 | 3,544 | 3,502 | 3,445 | 3,473 | ||||||||||||||
| Noninterest income | |||||||||||||||||||
| Service fees on deposits | 373 | 384 | 380 | 403 | 398 | ||||||||||||||
| Net gain on sale of other assets | 68 | 0 | 0 | 0 | 0 | ||||||||||||||
| Net gain (loss) on sale of other real estate owned | (51 | ) | (12 | ) | (4 | ) | 68 | (7 | ) | ||||||||||
| Bank owned life insurance income | 72 | 69 | 78 | 78 | 80 | ||||||||||||||
| Other operating income | 352 | 436 | 395 | 424 | 419 | ||||||||||||||
| Total noninterest income | 814 | 877 | 849 | 973 | 890 | ||||||||||||||
| Noninterest expense | |||||||||||||||||||
| Salaries and employee benefits | 1,953 | 1,910 | 1,945 | 2,593 | 1,787 | ||||||||||||||
| Occupancy and equipment, net | 475 | 515 | 486 | 557 | 490 | ||||||||||||||
| Data processing | 488 | 466 | 456 | 490 | 325 | ||||||||||||||
| Legal | 54 | 62 | 23 | 72 | 28 | ||||||||||||||
| FDIC insurance | 60 | 60 | 30 | 45 | 76 | ||||||||||||||
| Audit and other professional | 150 | 231 | 181 | 169 | 125 | ||||||||||||||
| Printing and supplies expense | 32 | 38 | 51 | 42 | 44 | ||||||||||||||
| Write-down of other real estate owned | 0 | 3,109 | 0 | 55 | 487 | ||||||||||||||
| Other real estate owned expense | 103 | 164 | 330 | 164 | 92 | ||||||||||||||
| Other operating expenses | 344 | 314 | 317 | 326 | 297 | ||||||||||||||
| Total noninterest expense | 3,659 | 6,869 | 3,819 | 4,513 | 3,751 | ||||||||||||||
| Net income before income taxes | 1,089 | (2,448 | ) | 532 | (95 | ) | 612 | ||||||||||||
| Income tax expense | 126 | (1,000 | ) | 162 | (1,078 | ) | 129 | ||||||||||||
| Net income | $ | 963 | $ | (1,448 | ) | $ | 370 | $ | 983 | $ | 483 | ||||||||
| Average common shares outstanding | 90,345,174 | 90,345,174 | 90,345,174 | 87,961,621 | 87,604,088 | ||||||||||||||
| Basic income per average outstanding share | $ | 0.01 | $ | (0.02 | ) | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||||||
| Diluted income per average outstanding share | $ | 0.01 | $ | (0.02 | ) | $ | 0.00 | $ | 0.01 | $ | 0.01 | ||||||||
| NORTHERN STATES FINANCIAL CORPORATION | |||||||||||||||||||
| ($000s, except per share data) (Unaudited) | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Loans | |||||||||||||||||||
| Commercial | $ | 26,530 | $ | 26,355 | $ | 27,462 | $ | 28,179 | $ | 14,977 | |||||||||
| Real estate-construction | 37,843 | 30,866 | 26,534 | 26,975 | 22,255 | ||||||||||||||
| Real estate-mortgage 1-4 family | 47,760 | 48,658 | 50,533 | 48,593 | 47,826 | ||||||||||||||
| Real estate-mortgage 5+ family | 75,605 | 61,714 | 59,331 | 59,272 | 56,179 | ||||||||||||||
| Real estate-mortgage commercial | 112,803 | 118,271 | 118,917 | 115,514 | 121,491 | ||||||||||||||
| Home equity | 8,468 | 8,526 | 7,428 | 10,411 | 10,955 | ||||||||||||||
| Installment | 1,572 | 899 | 892 | 949 | 873 | ||||||||||||||
| Deferred loan fees | (372 | ) | (388 | ) | (296 | ) | (299 | ) | (275 | ) | |||||||||
| Total loans | $ | 310,209 | $ | 294,901 | $ | 290,801 | $ | 289,594 | $ | 274,281 | |||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | |||||||||||||||
| Deposits | |||||||||||||||||||
| Demand - noninterest bearing | $ | 112,821 | $ | 107,470 | $ | 106,096 | $ | 100,870 | $ | 99,245 | |||||||||
| Demand - interest bearing | 73,491 | 69,326 | 64,951 | 70,127 | 78,310 | ||||||||||||||
| Money market accounts | 54,060 | 49,709 | 50,161 | 48,231 | 56,921 | ||||||||||||||
| Savings | 92,363 | 92,735 | 91,861 | 90,095 | 88,578 | ||||||||||||||
| Time, over $250,000 | 24,470 | 12,355 | 30,651 | 26,510 | 33,613 | ||||||||||||||
| Time, $250,000 and under | 52,278 | 53,124 | 53,275 | 54,977 | 57,412 | ||||||||||||||
| Total deposits | $ | 409,483 | $ | 384,719 | $ | 396,995 | $ | 390,810 | $ | 414,079 | |||||||||
| NORTHERN STATES FINANCIAL CORPORATION | ||||||||||||||||||||
| ($000s, except per share data) (Unaudited) | ||||||||||||||||||||
| 3Q 2017 | 2Q 2017 | 1Q 2017 | 4Q 2016 | 3Q 2016 | ||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||
| balance | Rate | balance | Rate | balance | Rate | balance | Rate | balance | Rate | |||||||||||
| Earning assets | ||||||||||||||||||||
| Loans | $ | 302,266 | 4.73 | % | $ | 290,307 | 4.42 | % | $ | 289,085 | 4.37 | % | $ | 283,029 | 4.40 | % | $ | 269,395 | 4.49 | % |
| Securities taxable | 68,286 | 1.95 | 71,543 | 1.86 | 75,361 | 1.88 | 81,382 | 1.73 | 84,128 | 1.81 | ||||||||||
| Securities tax-exempt | 0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 283 | 5.65 | 295 | 6.78 | ||||||||||
| Interest-bearing deposits | 74,888 | 1.19 | 70,299 | 1.01 | 73,051 | 0.88 | 86,056 | 0.67 | 96,358 | 0.68 | ||||||||||
| Total earning assets | 445,440 | 3.71 | % | 432,149 | 3.44 | % | 437,497 | 3.36 | % | 450,750 | 3.21 | % | 450,176 | 3.17 | % | |||||
| Non interest earning assets | 48,475 | 53,124 | 53,678 | 53,461 | 53,823 | |||||||||||||||
| Total assets | $ | 493,915 | $ | 485,273 | $ | 491,175 | $ | 504,211 | $ | 503,999 | ||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||
| Interest-bearing demand deposits | $ | 69,373 | 0.10 | % | $ | 67,112 | 0.10 | % | $ | 63,870 | 0.11 | % | $ | 73,467 | 0.08 | % | $ | 75,295 | 0.06 | % |
| Money market deposits | 52,526 | 0.05 | 50,682 | 0.05 | 48,322 | 0.05 | 55,072 | 0.05 | 56,168 | 0.05 | ||||||||||
| Savings deposits | 92,396 | 0.01 | 92,360 | 0.01 | 90,626 | 0.01 | 89,400 | 0.01 | 89,082 | 0.01 | ||||||||||
| Time deposits | 73,153 | 0.40 | 70,898 | 0.30 | 85,014 | 0.29 | 86,655 | 0.28 | 91,003 | 0.29 | ||||||||||
| Other borrowings | 32,438 | 1.09 | 31,741 | 1.03 | 37,737 | 0.82 | 35,613 | 0.84 | 30,669 | 0.89 | ||||||||||
| Total interest-bearing liabilities | 319,886 | 0.24 | % | 312,793 | 0.21 | % | 325,569 | 0.20 | % | 340,207 | 0.19 | % | 342,217 | 0.18 | % | |||||
| Demand deposits | 111,545 | 107,571 | 101,689 | 102,406 | 100,066 | |||||||||||||||
| Other liabilities | 4,295 | 5,621 | 5,201 | 4,175 | 4,547 | |||||||||||||||
| Stockholders' equity | 58,189 | 59,288 | 58,716 | 57,423 | 57,169 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 493,915 | $ | 485,273 | $ | 491,175 | $ | 504,211 | $ | 503,999 | ||||||||||
| Cost of funds (including demand deposits) | 0.17 | % | 0.15 | % | 0.15 | % | 0.14 | % | 0.14 | % | ||||||||||
| Net interest spread | 3.47 | % | 3.23 | % | 3.16 | % | 3.02 | % | 2.99 | % | ||||||||||
| Net interest margin | 3.54 | % | 3.29 | % | 3.21 | % | 3.07 | % | 3.03 | % | ||||||||||