Northern States Financial Corporation Reports First Quarter 2018 Earnings
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 | ||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||
balance | Rate | balance | Rate | balance | Rate | balance | Rate | balance | Rate | |||||||||||
Earning assets | ||||||||||||||||||||
Loans | $ | 308,736 | 4.51 | % | $ | 310,426 | 4.52 | % | $ | 302,266 | 4.73 | % | $ | 290,307 | 4.42 | % | $ | 289,085 | 4.37 | % |
Securities taxable | 62,757 | 2.14 | 65,082 | 1.91 | 68,286 | 1.95 | 71,543 | 1.86 | 75,361 | 1.88 | ||||||||||
Interest-bearing deposits | 77,326 | 1.41 | 89,346 | 1.41 | 74,888 | 1.19 | 70,299 | 1.01 | 73,051 | 0.88 | ||||||||||
Total earning assets | 448,819 | 3.64 | % | 464,854 | 3.55 | % | 445,440 | 3.71 | % | 432,149 | 3.44 | % | 437,497 | 3.36 | % | |||||
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 | $ | 57,951 | 0.12 | % | $ | 70,097 | 0.10 | % | $ | 69,373 | 0.10 | % | $ | 67,112 | 0.10 | % | $ | 63,870 | 0.11 | % |
Money market deposits | 51,415 | 0.05 | 53,786 | 0.05 | 52,526 | 0.05 | 50,682 | 0.05 | 48,322 | 0.05 | ||||||||||
Savings deposits | 90,747 | 0.01 | 91,382 | 0.01 | 92,396 | 0.01 | 92,360 | 0.01 | 90,626 | 0.01 | ||||||||||
Time deposits | 74,133 | 0.53 | 77,171 | 0.51 | 73,153 | 0.40 | 70,898 | 0.30 | 85,014 | 0.29 | ||||||||||
Other borrowings | 37,512 | 1.06 | 38,252 | 0.95 | 32,438 | 1.09 | 31,741 | 1.03 | 37,737 | 0.82 | ||||||||||
Total interest-bearing liabilities | 311,758 | 0.29 | % | 330,688 | 0.26 | % | 319,886 | 0.24 | % | 312,793 | 0.21 | % | 325,569 | 0.20 | % | |||||
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 spread | 3.35 | % | 3.29 | % | 3.47 | % | 3.23 | % | 3.16 | % | ||||||||||
Net interest margin | 3.45 | % | 3.37 | % | 3.54 | % | 3.29 | % | 3.21 | % | ||||||||||