News

FIRST MIDWEST BANCORP, INC. TO ACQUIRE NORTHERN STATES FINANCIAL CORPORATION

First Midwest Continues to Expand in Greater Chicagoland

June 7, 2018
For Immediate Release

CHICAGO, IL, June 7, 2018 – First Midwest Bancorp, Inc. (“First Midwest”) (NASDAQ NGS: FMBI), headquartered in Chicago, Illinois and the parent company of First Midwest Bank, today announced that it has entered into a definitive agreement to acquire Northern States Financial Corporation (“Northern States”) (OTCPINK: NSFC), the holding company for NorStates Bank, based in Waukegan, Illinois.

NorStates Bank operates eight offices in Lake County, Illinois and has approximately $500 million in total assets, $400 million in deposits, of which 90% are core deposits, and $320 million in loans.

“We are very excited to welcome NorStates Bank to First Midwest and build on the strong relationships that NorStates has with its customers,” said Michael L. Scudder, Chairman, President and Chief Executive Officer of First Midwest.  “This combination continues our expansion in the greater Chicagoland area and enhances our presence in Lake County where we have long-standing, deep roots.”

“We are extremely pleased to partner with First Midwest,” said Scott M. Yelvington, President and Chief Executive Officer of Northern States.  “Like First Midwest, we have a strong commitment to relationship banking, personalized customer service and involvement in the communities we serve.  We greatly look forward to offering our customers the broader array of financial products and services that First Midwest provides.”

Subject to certain adjustments, the merger agreement provides for a fixed exchange ratio of 0.0369 shares of First Midwest common stock for each share of Northern States common stock.  Based upon the closing price of First Midwest’s common stock on June 5, 2018 on the Nasdaq Stock Market, the overall transaction is valued at approximately $91.0 million.  The acquisition is subject to regulatory approvals, the approval of Northern States’ stockholders and customary closing conditions, and is presently anticipated to close in the fourth quarter of 2018.

About First Midwest

First Midwest is a relationship-focused financial institution and one of the largest independent publicly-traded bank holding companies based on assets headquartered in the Midwest, with over $14 billion in assets and $11 billion in trust assets under management.  First Midwest’s principal subsidiary, First Midwest Bank, and other affiliates provide a full range of commercial, treasury management, equipment leasing, retail, wealth management, trust and private banking products and services through locations in metropolitan Chicago, northwest Indiana, central and western Illinois, and eastern Iowa.  First Midwest’s common stock is traded on the Nasdaq Stock Market under the symbol FMBI, and its website is www.firstmidwest.com.

About NorStates Bank

NorStates Bank is a wholly-owned subsidiary of Northern States and maintains its principal executive offices in Waukegan, Illinois.  NorStates Bank is a client-focused bank committed to providing quality financial services with a personal touch through a complete line of loan, deposit and cash management services.  It provides these financial services through eight banking locations in Lake County, Illinois.  NorStates Bank’s website is www.norstatesbank.com.

Forward-Looking Statements

This press release, as well as any oral statements made by or on behalf of First Midwest in connection with the matters disclosed herein, may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include those relating to First Midwest’s proposed acquisition of Northern States, including the costs and benefits associated therewith and the timing thereof.  In some cases, forward-looking statements can be identified by the use of words such as “may,” “might,” “will,” “would,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “outlook,” “predict,” “project,” “probable,” “potential,” “possible,” “target,” “continue,” “look forward,” or “assume” and words of similar import.  Forward-looking statements are not historical facts or guarantees of future performance or outcomes, but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control.  It is possible that actual results and events may differ, possibly materially, from the anticipated results or events indicated in these forward-looking statements.  First Midwest cautions you not to place undue reliance on these statements.  Forward-looking statements are made only as of the date of this release, and First Midwest undertakes no obligation to update any forward-looking statements to reflect new information or events or conditions after the date hereof.

Forward-looking statements are subject to certain risks, uncertainties and assumptions, including, but not limited to: expected synergies, cost savings and other financial or other benefits of the proposed transaction between First Midwest and Northern States might not be realized within the expected timeframes or might be less than projected, the requisite stockholder and regulatory approvals for the proposed transaction might not be obtained or might not be obtained in a timely manner, credit and interest rate risks associated with First Midwest’s and Northern States’ respective businesses, customer borrowing, repayment, investment and deposit practices, and general economic conditions, either nationally or in the market areas in which First Midwest and Northern States operate or anticipate doing business, may be less favorable than expected, new regulatory or legal requirements or obligations, and other risks, uncertainties and assumptions identified under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in First Midwest’s annual report on Form 10-K for the year ended December 31, 2017, as well as subsequent filings made with the Securities and Exchange Commission (the “SEC”).  However, these risks and uncertainties are not exhaustive.  Other sections of such reports describe additional factors that could adversely impact First Midwest’s business, financial performance and pending or consummated acquisition transactions, including the proposed acquisition of Northern States.

Additional Information

The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval.  In connection with the proposed merger of First Midwest and Northern States, First Midwest will file a registration statement on Form S-4 with the SEC.  The registration statement will include a proxy statement of Northern States, which also will constitute a prospectus of First Midwest, that will be sent to Northern States’ stockholders.  Investors and stockholders are advised to read the registration statement and proxy statement/prospectus when it becomes available because it will contain important information about First Midwest, Northern States and the proposed transaction.  When filed, this document and other documents relating to the transaction filed by First Midwest can be obtained free of charge from the SEC’s website at www.sec.gov.  These documents also can be obtained free of charge by accessing First Midwest’s website at www.firstmidwest.com under the tab “Investor Relations” and then under “SEC Filings.”  Alternatively, these documents can be obtained free of charge from First Midwest upon written request to First Midwest Bancorp, Inc., Attn: Corporate Secretary, 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631 or by calling (708) 831-7483, or from Northern States upon written request to Northern States Financial Corporation, Attn: Scott Yelvington, President and Chief Executive Officer, 1601 North Lewis Avenue, Waukegan, Illinois 60085 or by calling (847) 775-8200.

Participants in this Transaction

First Midwest, Northern States and certain of their respective directors and executive officers may be deemed under the rules of the SEC to be participants in the solicitation of proxies from Northern States’ stockholders in connection with the proposed transaction.  Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available.  Additional information about First Midwest and its directors and certain of its officers may be found in First Midwest’s definitive proxy statement relating to its 2018 Annual Meeting of Stockholders filed with the SEC on April 11, 2018 and First Midwest’s annual report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018.  The definitive proxy statement and annual report can be obtained free of charge from the SEC’s website at www.sec.gov.

CONTACTS:

Patrick S. Barrett
(Investors)
EVP and Chief Financial Officer
Officer
(708) 831-7231

James V. Stadler
(Media)
EVP and Chief Marketing & Communications
(708) 831-7402
jim.stadler@firstmidwest.com

Letter to StockHolders

June 11, 2018

Dear Fellow Stockholder:

I am pleased to inform you about some great news for our company.  A press release was issued last Thursday announcing that we have entered into a definitive agreement to merge Northern States Financial Corporation (“Northern States”) with First Midwest Bancorp, Inc. (“First Midwest”).  In addition, NorStates Bank will merge with First Midwest Bank.  A copy of the press release is attached.

Under the terms of the merger agreement, which was unanimously approved by the boards of directors of each company, the stockholders of Northern States will receive consideration consisting of First Midwest common stock. The number of shares of First Midwest common stock you will receive for each share of your Northern States common stock will be based on a fixed exchange ratio determined by reference to the 20-day volume weighted average stock price of First Midwest on the fifth trading day prior to closing. Based on the 20-day volume weighted average stock price of First Midwest of $26.04 on June 6, 2018, you would receive 0.0369 shares of First Midwest common stock for each share of your Northern States common stock. The exchange ratio is subject to adjustment as set forth in the merger agreement. The final value you receive upon closing of the merger will fluctuate depending on any changes to First Midwest’s stock price.

A complete description of the transaction, including additional details regarding the calculation of the merger consideration, will be provided in proxy materials that will be sent to you in a few months.  A special meeting of Northern States stockholders will be held following the delivery of the proxy materials where we will seek your approval of the transaction.

You should know that First Midwest is a high quality, well-managed and financially sound company.  We share similar philosophies, including an unparalleled commitment to relationship banking, serving as a trusted financial advisor to our customers and helping our communities thrive.  First Midwest has been providing banking services for over 75 years and has long-standing, deep roots not only in Waukegan and Lake County but also in the greater Chicagoland area.

Importantly, for you as a stockholder, you will have the advantage of receiving First Midwest’s stock, which has traded on Nasdaq for 35 years under the symbol FMBI.  As such, it provides you with the liquidity of a publicly traded stock and one that has paid a dividend every quarter since it was founded – First Midwest’s quarterly cash dividend currently stands at $0.11 per share.  This is truly an exciting time for Northern States as we partner with First Midwest.

Please free feel to contact me with any questions you may have regarding this partnership and, as always, thank you for your continued support.

Sincerely,

allan-jacobs-signature

Allan J. Jacobs

Chairman of the Board

Forward-Looking Statements

Certain statements made herein may constitute “forward-looking statements.”  Forward-looking statements are not historical facts or guarantees of future performance or outcomes, but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. Forward-looking statements are subject to certain risks, uncertainties and assumptions, including those identified under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in First Midwest’s annual report on Form 10-K for the year ended December 31, 2017, as well as First Midwest’s subsequent filings made with the Securities and Exchange Commission (the “SEC”).  Forward-looking statements are made only as of the date hereof and First Midwest undertakes no obligation to update any forward-looking statements to reflect new information or events or conditions after the date hereof.

Additional Information

The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval.  In connection with the proposed merger of First Midwest and Northern States, First Midwest will file a registration statement on Form S-4 with the SEC.  The registration statement will include a proxy statement of Northern States, which also will constitute a prospectus of First Midwest, that will be sent to Northern States’ stockholders.  Investors and stockholders are advised to read the registration statement and proxy statement/prospectus when it becomes available because it will contain important information about First Midwest, Northern States and the proposed transaction.  When filed, this document and other documents relating to the transaction filed by First Midwest can be obtained free of charge from the SEC’s website at www.sec.gov.  These documents also can be obtained free of charge by accessing First Midwest’s website at www.firstmidwest.com under the tab “Investor Relations” and then under “SEC Filings.”  Alternatively, these documents can be obtained free of charge from First Midwest upon written request to First Midwest Bancorp, Inc., Attn: Corporate Secretary, 8750 West Bryn Mawr Avenue, Suite 1300, Chicago, Illinois 60631 or by calling (708) 831-7483, or from Northern States upon written request to Northern States Financial Corporation, Attn: Scott Yelvington, President and Chief Executive Officer, 1601 North Lewis Avenue, Waukegan, Illinois 60085 or by calling (847) 775-8200.

Participants in this Transaction

First Midwest, Northern States and certain of their respective directors and executive officers may be deemed under the rules of the SEC to be participants in the solicitation of proxies from Northern States’ stockholders in connection with the proposed transaction.  Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement/prospectus regarding the proposed transaction when it becomes available.  Additional information about First Midwest and its directors and certain of its officers may be found in First Midwest’s definitive proxy statement relating to its 2018 Annual Meeting of Stockholders filed with the SEC on April 11, 2018 and First Midwest’s annual report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 28, 2018.  The definitive proxy statement and annual report can be obtained free of charge from the SEC’s website at www.sec.gov.

Northern States Financial Corporation Reports First Quarter 2018 Earnings

April 18, 2018 
For Immediate Release

Waukegan, Illinois, April 18, 2018 – 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 

Northern States Financial Corporation Reports Fourth Quarter 2017 Earnings

February 21, 2018
For Immediate Release

Waukegan, Illinois, February 21, 2018 – Northern States Financial Corporation (OTC PINK: NSFC) (the “Company”), holding company for NorStates Bank (the “Bank”), an FDIC insured financial institution, today reported a fourth quarter 2017 loss of $6.3 million (a loss of $0.07 per share). The Company had a net loss of $6.4 million for the year 2017 compared to net income of $2.1 million for the year 2016. The loss in the fourth quarter of 2017 reflects the year-end 2017 adjustment to the Company’s Deferred Tax Asset (“DTA”) due to the Tax Cuts and Jobs Act of 2017, which resulted in a reduction in the DTA by $6.9 million. The reduction reflects the estimated amount of DTA that would not be recaptured with the new federal corporate income tax rate being reduced from 34% to 21%. Income tax increased to $7.4 million in the fourth quarter of 2017 primarily as a result of the adjustment to the DTA. Future income taxes are expected to be reduced significantly due to the change in the federal corporate income tax rate.

Aside from the one-time DTA adjustment and its effect on income tax expense in the fourth quarter, the other major impact to 2017 earnings was the $3.1 million expense for the write-down of other real estate owned in the second quarter. While both of these one-time events negatively impacted 2017 earnings, core earnings (income before taxes and single non-recurring expense events) continued to increase each quarter in 2017.

A positive effect to earnings was the increase to total loans by over 6% at year-end 2017 compared to year-end 2016. The Company’s loan to deposit ratio stands at 77% at year-end 2017. Loan yields increased from 4.40% in the fourth quarter of 2016 to 4.52% in the fourth quarter of 2017. Average loan balances increased from $283.0 million in the fourth quarter of 2016 to $310.4 million in the fourth quarter of 2017. Total earning assets yields increased from 3.21% in the fourth quarter of 2016 to 3.55% in the fourth quarter of 2017. Average noninterest-earning assets decreased from $53.5 million in the fourth quarter of 2016 to $44.9 million in the fourth quarter of 2017.
Total deposits increased a modest 2% at year-end 2017 compared to year-end 2016; however non- interest bearing deposits increased 15% between these two dates. Total core deposits (deposits less time and public deposits) increased 6% from year-end 2017 compared to year-end 2016. Cost of funds increased to 0.17% in the fourth quarter of 2017 from 0.14% in the fourth quarter of 2016. At the Bank level, the cost of funds was 0.11% in the fourth quarter of 2017.

Credit quality was negatively affected by the need to classify two substantial legacy credits in the fourth quarter of 2017. The non-performing loans increased approximately $9.0 million to $17.8 million at December 31, 2017 compared to $8.8 million at December 31, 2016. The Company was able to use unallocated reserves from the allowance for loan and lease losses to cover potential loss exposure. Other real estate owned decreased $8.2 million, or 80%, to $2.0 million at December 31, 2017 compared to December 31, 2016.

“While we were disappointed with some legacy credit issues in the fourth quarter, we were encouraged with our continued increase in demand deposits, solid loan growth and core earnings,” stated Scott Yelvington, President and Chief Executive Officer of the Company. “We intend to continue our focus on improving credit and increasing earnings in 2018.”

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, credit risk, inflation, changes in 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 periods 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 Reports Fourth Quarter 2017 Earnings

Northern States Financial Corporation Reports Third Quarter 2017 Earnings

October 13, 2017
For Immediate Release

Waukegan, Illinois, October 13, 2017 – 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

Northern States Financial Corporation Reports Second Quarter 2017 Loss due to Write-downs in Connection with OREO Sales

July 24, 2017

For Immediate Release

Waukegan, Illinois, July 24, 2017 – Northern States Financial Corporation (OTC PINK: NSFC) (the “Company”), the holding company of NorStates Bank (the “Bank”), today reported a second quarter 2017 loss of $1,448,000 as compared with net income of $370,000 for the first quarter 2017. The second quarter 2017 loss was due to the Bank recognizing $3,109,000 in write-downs on properties which have been carried for several quarters as other real estate owned (“OREO”). The effected properties are primarily under agreements to sell and the sales are expected to be completed in the third quarter. Generally Accepted Accounting Principles requires the Company to recognize these write-downs in the second quarter. Per share book value at June 30, 2017 was $0.64, compared to $0.65 at March 31, 2017.

Scott Yelvington, President and Chief Executive Officer stated, “We were able to increase our net interest income and non-interest income, as well as loans, in the second quarter. However, in an effort to substantially reduce non-performing assets (“NPAs”), we decided to enter into contracts on several OREO properties representing almost 75% of the $10 million OREO balance. While the one-time write- downs are painful, we believe that the associated expense reduction and resulting effect on NPAs was appropriate at this time. Unfortunately, by the accounting rules, we need to recognize the write-down loss this quarter. The sales of these properties will reduce the OREO balance by $5.5 million in the third quarter of 2017 with no additional loss incurred.” Yelvington continued, “Regrettably, the OREO loss obfuscated what was a steady increase in loans, core deposits and core earnings.”

Some highlights of continued financial improvement during the second quarter of 2017 included the following:

  • 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 $3.2 million from December 31, 2016 to June 30, 2017. NPAs less trouble debt restructurings to total assets decreased to 2.27% at June 30, 2017 from 2.76% at December 31, 2016. At June 30, 2017, the allowance for loan and lease losses to total loans and leases ratio was 1.92%, down slightly from 1.94% at March 31, 2017.
  • Average loans increased by $35.8 million for the second quarter of 2017 compared with the second quarter of 2016. Loan interest income increased $232 thousand for the second quarter of 2017 compared to the second quarter of 2016. The increased loan interest income contributed to a net interest margin for the second quarter of 2017 of 3.29%.
  • Core deposits consisting of personal and business non-time deposits increased $7.6 million from December 31, 2016. Core deposits growth assisted the Company in maintaining a low cost of funds during the second quarter of 2017 at 15 basis points with the Bank’s cost of funds at 8 basis points.
  • Excluding the OREO write-downs, the Company’s pretax income for the second quarter of 2017 was $661,000 as compared with pretax income of $532,000 for the first quarter of 2017, and the Bank’s pretax income for the second quarter of 2017 was $782,000 as compared with pretax income of $645,000 for the first quarter of 2017.

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 Earnings 6-30-2017

Northern States Financial Corporation Reports First Quarter 2017 Earnings

April 19, 2017

For Immediate Release

Waukegan, Illinois, April 19, 2017 – 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 2017 net income after tax of $370 thousand, an increase of $49 thousand, or 15.3%, compared with first quarter 2016 net income after tax of $321 thousand. The Company’s per share book value at March 31, 2017 was $0.65.

Some highlights of continued financial improvement during the first quarter of 2017 included the following:

  • Average loans increased by $50.8 million for the first quarter of 2017 compared with the first quarter of 2016. Loan interest income increased $360 thousand for the first quarter of 2017 compared to the first quarter of 2016. The increased loan interest income contributed to a net interest margin for the first quarter of 2017 of 3.21%
  • 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 $499 thousand from December 31, 2016 to March 31, 2017. At March 31, 2017, the allowance for loan and lease losses to total loans and leases ratio was 1.94%.
  • Although first quarter 2017 noninterest income decreased $35 thousand compared to the first quarter of 2016, noninterest income during the first quarter of 2016 included a gain of $117 thousand on the sale of investment securities. After discounting this gain, noninterest income would have increased $82 thousand in the first quarter of 2017 compared with the same quarter of 2016.
  • The Company focused on growing core deposits consisting of personal and business non-time deposits. Core deposits increased $9.9 million, or 3.7%, at March 31, 2017 from December 31, 2016. Core deposits growth assisted the Company in maintaining a low cost of funds during the first quarter of 2017 at 15 basis points with the Bank’s cost of funds at 8 basis points.

“We expect future income to be positively affected by our continued deployment of excess liquidity and focus on the reduction of 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 Reports 2016 Net Income of $2.1 million

February 9, 2017

For Immediate Release

Waukegan, Illinois, February 9, 2017 – Northern States Financial Corporation (OTC PINK: NSFC) (the “Company”), holding company for NorStates Bank (the “Bank”), an FDIC insured financial institution, today reported annual net income for 2016 available to stockholders of $2,141,000, or $0.02 per share.

The Company’s net income for 2016 was positively impacted by the reversal of a portion of the Company’s deferred tax allowance which allowed the booking of a $1.0 million tax credit during the fourth quarter of 2016. Partially offsetting this increase in net income was stock compensation expense of $840,000, as stock awards were issued during the fourth quarter of 2016 pursuant to the stockholderapproved 2015 Restricted Stock Plan. In 2015, the Company recognized a $21.7 million tax credit due to the reversal of a significant portion of the Company’s deferred tax allowance and had no stock compensation expense, resulting in net income available to stockholders of $23.1 million or $0.26 per share for 2015. 

Pretax income for 2016 was $1,605,000 as compared with pretax income for 2015 of $1,474,000. Per share book value at December 31, 2016 was $0.65. After excluding the stock compensation expense, pretax income would have been $2,445,000, an increase of 65.9% from 2015.

For the three months ended December 31, 2016, net income was $983,000, which included tax credits from the $1.0 million reversal of the deferred tax allowance and stock compensation expense of $840,000. The Company had a pretax loss of $95,000 for the quarter ended December 31, 2016 as compared with pretax income of $323,000 for the same quarter of 2015. After excluding the stock compensation expense, pretax income would have been $745,000 for the three months ended December 31, 2016.

Assets of the Company increased $4.6 million to $490.0 million at December 31, 2016 from December 31, 2015. The Company increased its loans by 22.0% to $289.6 million at December 31, 2016 from $237.3 million at December 31, 2015. Total deposits decreased 1.2% to $390.8 million at December 31, 2016 compared to $395.4 million at December 31, 2015 as total time deposits decreased 16.5% between the same dates.

In regard to credit quality, total nonperforming loans decreased 30.3% to $8.8 million at December 31, 2016 compared with December 31, 2015. Other real estate owned decreased 18.6%, between the same dates, to $10.2 million at December 31, 2016.

“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 2016 as we were able to reduce NPAs as a percentage of total assets to 3.9% at year-end 2016 from 5.2% at year-end 2015. Solid earnings growth has allowed us to recapture an additional $1.0 million of the deferred tax allowance, enhancing the share value of our Company. We also showed solid increases to loans and growth to our core deposits as we continued 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.

For Additional Information, Contact:

Scott Yelvington, President and Chief Executive Officer (847) 662-9828

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

Northern States Financial Corporation Reports 2016 Net Income

Northern States Financial Corporation Reports Third Quarter 2016 Earnings 

October 31, 2016

Waukegan, Illinois, October 31, 2016 – 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.

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 Reports Second Quarter 2016 Earnings

July 26, 2016

Waukegan, Illinois, July 26, 2016 – Northern States Financial Corporation (OTC PINK: NSFC) (the "Company"), the holding company of NorStates Bank (the "Bank"), an FDIC insured financial institution, today reported second quarter 2016 net income of $354,000 as compared with $321,000 for the first quarter 2016. Per share book value at June 30, 2016 was $0.65.

Pretax income for the second quarter of 2016 was $554,000 as compared with pretax income of $407,000 for the same quarter of 2015, an increase of 36%. Income tax expense for the second quarter of 2016 was $200,000 as compared with $15,000 for the same quarter of 2015 due to the effect of the Company’s application of deferred tax assets in the second quarter of 2015.

Total assets of the Company were $499 million at June 30, 2016, an increase of $14 million from December 31, 2015. Loans increased $27 million, or 11.34% between December 31, 2015 and June 30, 2016 while deposits increased $14 million, or 3.54%, between those dates.

The Bank’s second quarter net interest margin increased to 3.12%, compared with 3.03% during the first quarter of 2016, while the cost of funds remained unchanged at 0.12% between the periods. The Bank’s leverage capital ratio at June 30, 2016 was 10.20%.

With regard to asset quality, the Company’s non-performing assets ("NPAs") at June 30, 2016 decreased $4.8 million, or 19.28%, from December 31, 2015, due primarily to a reduction in loans on nonaccrual status. At June 30, 2016, the ratio of nonperforming loans to total assets was 1.78% and the allowance for loan and lease losses to total loans was 2.05%.

"We are pleased with our 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 and the profitable deployment of liquidity. We are also continuing our efforts to streamline operations to reduce costs."

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 Reports First Quarter Earnings

May 10, 2016

Waukegan, Illinois, May 10, 2016 – Northern States Financial Corporation (OTCQB-NSFC) (the “Company”), holding company for NorStates Bank (the “Bank”), an FDIC insured financial institution, today reported first quarter 2016 pretax income of $534 thousand as compared with pretax income of $180 thousand for the same quarter of 2015. First quarter 2016 net income after tax was $321 thousand while first quarter 2015 net income after tax remained $180 thousand due to the Company’s tax position during that quarter. The Company’s per share book value at March 31, 2016 was $0.64.

Total assets of the Company were $488 million at March 31, 2016, increasing $2 million from year-end 2015. Loan volume increased $17 million, or 7.25%, during the first quarter of 2016 while deposits increased $3 million. The Bank’s first quarter 2016 net interest margin was 3.03% with a cost of funds of 0.12%. The Bank’s leverage capital ratio was 10.98%.  

With regard to asset quality, the Company’s 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”), were reduced by $1.4 million from December 31, 2015 to March 31, 2016. OREO increased slightly during the quarter primarily due to a multifamily property that was foreclosed upon. This property currently has a sales contract that is expected to close during the second quarter of 2016. All other categories of NPAs at March 31, 2016 showed reductions totaling $1.9 million from year-end 2015. At March 31, 2016, the allowance for loan and lease losses to total loans and leases ratio was 2.20%.

“We are pleased with our growth in assets and profitability as loan generation remains strong,” stated Scott Yelvington, President and Chief Executive Officer. “Credit quality remains a focus as we look to continue the reduction in NPA’s in coming quarters.” 

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 Appoints George Bridges and Joel Leonard to Board of Directors

April 5, 2016

Waukegan, Illinois, April 5, 2016 – Northern States Financial Corporation (OTCQB-NSFC) (the “Company”), holding company for NorStates Bank (the “Bank”), an FDIC insured financial institution, today announced that Judge George Bridges and Mr. Joel Leonard have been appointed as directors of the Company to serve until the next annual meeting of stockholders. The addition of Judge Bridges and Mr. Leonard increases the number of directors to ten members.  Judge Bridges and Mr. Leonard will also serve as directors of NorStates Bank.

Judge Bridges received his B.A. degree from National-Louis University with Honors, and his Juris Doctorate degree from IIT/Chicago-Kent College of Law in 1987. Judge Bridges was appointed an Associate Judge in 1995.  In 2012, he was appointed a Circuit Judge by the Illinois Supreme Court and was elected to his position in November 2014.  Judge Bridges spent the majority of his twenty-one years in the judiciary in the Criminal Felony Division.  Prior to his retirement, he served as the Presiding Judge of the Felony Division, the Co-Chair of the Illinois Supreme Court Seminar Series Committee, a member of the Supreme Court Committee on Education and on the Supreme Court’s Juvenile Justice Sub-Committee.  In the years before his appointment, he was employed as a law enforcement officer, where he twice served as the Chief of Police for the City of Waukegan.  He also spent a number of years as a prosecutor with the Lake County State’s Attorney’s Office and a period of time in private practice.

Mr. Leonard received his B.S. degree in Economics from the University of Wisconsin, Madison in 1981. Mr. Leonard spent the majority of his career focused on the management of portfolio positions and risk, as well as trading and hedging review and evaluation.  He served as a Market Maker in Equity Derivatives on the CBOE in Chicago, Illinois, was a managing member of The Advent Fund in Chicago, Illinois, and was a partner with Cornerstone Trading Group in Chicago, Illinois.  Mr. Leonard is currently a partner with Golden Horseshoe Holdings in Kalamazoo, Michigan, serves as an Investment Advisor for Balanced Asset Strategies in Chicago, Illinois, and is a Partner and Portfolio Manager with DCO Capital Management in Chicago, Illinois.  Mr. Leonard also serves as Director for NEMI Northern Energy & Mining, Inc. in Vancouver, British Columbia.

 “I am pleased that we have added Joel Leonard and George Bridges to the Board of Directors,” said Allan Jacobs, Chairman of the Board of Northern States Financial Corporation. “Mr. Leonard brings a wealth of experience with his knowledge of the marketplace and his insight, especially in dealing with investments.  Judge Bridges, having just retired from the bench, will be replacing Charles W. Smith who has been appointed his replacement on the bench.  With his involvement in the community and his legal experience, Judge Bridges will strengthen the leadership of our institution.”

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) 662-9828

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

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

March 8, 2016

Waukegan, Illinois, March 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. 

For Additional Information, Contact:      

Scott Yelvington, President and Chief Executive Officer (847) 662-9828

Northern States Financial Corporation Reports Third Quarter 2015 Net Income of $514,000

September 30, 2015

Waukegan, Illinois, October 21, 2015 – Northern States Financial Corporation (OTCQB-NSFC) (the "Company"), holding company for NorStates Bank (the "Bank"), an FDIC insured financial institution, today reported third quarter 2015 net income of $514,000, an increase from $392,000 for the second quarter of 2015 and $180,000 for the first quarter of 2015. The Company's per share book value at September 30, 2015 was $0.39.

The Bank reported earnings of $604,000 for the third quarter of 2015.

Assets of the Company totaled $462.0 million at September 30, 2015, an increase of 9.4% from December 31, 2014. The Company increased its loans and leases, net of deferred fees by $2.9 million and total interest bearing deposits in financial institutions increased by $12.1 million between June 30, 2015 and September 30, 2015, while total investment securities decreased by $5.8 million between the two dates due to bond calls. Total deposits increased from $381.4 million at June 30, 2015 to $394.3 million at September 30, 2015.

With regard to asset quality, the Company's 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 $8.7 million between December 31, 2014 and September 30, 2015.

"We are pleased to report steady solid growth in earnings and continued progress in the reduction of NPAs," stated Scott Yelvington, President and Chief Executive Officer of the Company. "During the third quarter, we sold one of our branch buildings at a gain of $1.4 million which is being replaced by a new smaller, more efficient building that the Bank will lease. The gain was largely offset by write-downs to other real estate owned of $1.3 million as we prepare to sell these properties to further reduce NPAs. Our focus will remain on the reduction of NPAs and the further increase in profitability through loan generation and short-term investments while reducing expenses."

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 847.662.9828

NorStates Bank Selects the HomeBridge Affinity Mortgage Platform To Provide Depositors With Residential Mortgage Services

Iselin, NJ, July 29, 2015 – HomeBridge Financial Services, Inc. has been chosen by NorStates Bank to provide a complete line of residential mortgage services for its depositors in Illinois and Wisconsin. Through the HomeBridge Affinity Mortgage Platform, NorStates will now offer its depositors a comprehensive line of residential mortgage products typically found at national banks, combined with the personal attention NorStates has provided the communities it has served for nearly 100 years.

HomeBridge's status as a leading mortgage lender makes it a unique and ideal partner for regional banks by giving these institutions a turnkey way to implement a full-scale mortgage operation, while at the same time eliminating the need for in- house origination, processing, compliance and regulatory systems required to support such a division. Led by HomeBridge Vice President Joseph Cilento, the HomeBridge Affinity Mortgage Platform provides regional financial institutions the ability to offer depositors a wide range of tailored and locally supported mortgage services, without fear that borrowers will later defect to other financial institutions after obtaining a mortgage.

"After an independent review of the top mortgage solution providers, NorStates concluded HomeBridge is the best option to provide our depositors with the broadest range of mortgage options supported by the same personal level of service the local community expects from us. The HomeBridge platform includes locally based mortgage loan originators who are well known within our housing community, along with the ability to offer competitive rates and resources you typically only find from the major national banks," stated Matt Tilton, Executive Vice President at NorStates Bank.

The costs associated with maintaining a competitive mortgage operation are often onerous for regional financial institutions. HomeBridge's Affinity Mortgage Platform provides these institutions with a cost-effective way to broaden their product base and increase retention through an improved experience.

"HomeBridge's Affinity Mortgage Platform will provide a complete end-to-end mortgage solution for NorStates' depositors, with the same level of personal attention the bank has become synonymous with for nearly 100 years. Competition in both banking and the mortgage industry is incredibly fierce right now and the HomeBridge Affinity Mortgage Platform allows regional banks the ability to focus on their customers and their core banking services," commented Cilento.

Financial institutions interested in working with HomeBridge's Affinity Mortgage Platform can contact their local HomeBridge branch manager or Cilento directly at jcilento@homebridge.com.

About HomeBridge Financial Services, Inc.:

HomeBridge Financial Services, Inc. is one of the largest privately held, non-bank lenders in the United States. In the last 25 years, HomeBridge has grown to include nearly 1,400 associates in more than 90 retail branches across the country and two separate wholesale operations, HomeBridge Wholesale and REMN Wholesale. HomeBridge holds FNMA, FNMA, FHLMS, FHA and VA approvals and funded $6.4 billion in home loans in 2014. More information on HomeBridge can be found online at www.HomeBridgeInc.com

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.

Northern States Financial Corporation Reports Second Quarter 2015 Earnings

Waukegan, Illinois, July 21, 2015 – Northern States Financial Corporation (OTCQB-NSFC) (the "Company"), holding company for NorStates Bank (the "Bank"), an FDIC insured financial institution, today reported second quarter 2015 net income of $392,000 as compared with first quarter net income of $180,000. Per share book value at June 30, 2015 was $0.38.

The financial results of the Bank showed earnings of $501,000 for the second quarter of 2015. Assets of the Company totaled $444.5 million at June 30, 2015, an increase 5.3% from December 31, 2014. The Company increased its loans and leases, net of deferred fees, and total investment securities by $12.7 million and $9.5 million, respectively, between March 31, 2015 and June 30, 2015. Total deposits also increased from $364.6 million at March 31, 2015 to $381.4 million at June 30, 2015.

With regard to asset quality, the Company's 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 $6.7 million between December 31, 2014 and June 30, 2015.

"We are pleased to report steady progress in the reduction of NPAs and a solid increase in earnings." stated Scott Yelvington, President and Chief Executive Officer of the Company. "In addition to robust credit opportunities, we were also able to post approximately $2.0 million in recoveries on loans, which boosted our reserves. Our focus will remain on the reduction of NPAs and the further increase in profitability through loan generation and short-term investments while reducing expenses."

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 847.244.6000 Ext. 201

Northern States Financial Corporation Reports First Quarter Earnings

Waukegan, Illinois, May 5, 2015 – Northern States Financial Corporation (OTCQB-NSFC) (the "Company"), holding company for NorStates Bank (the "Bank"), an FDIC insured financial institution, today reported first quarter 2015 net income of $180,000 as compares with a loss of $677,000 for the same quarter of 2014. Per share book value at March 31, 2015 was $0.38.

The financial results of the Bank showed first quarter earnings of $269,000. The Bank made a provision of $100,000 to the allowance for loan and lease losses during the first quarter of 2015. Management believed as of March 31, 2015, the allowance for loan and lease losses was adequate at 2.8% of total loans.

Total assets for the Company were $432 million at March 31, 2015, an increase of 2.3% from year-end 2014. Loan volume was steady during the first quarter, despite some welcome payoffs. The Bank's first quarter net interest margin was 3.12% with the cost of funds of 0.12%. The Bank's leverage capital ratio was 9.95%.

With regard to asset quality, the Company's 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, were reduced by $4.4 million from December 31, 2014 to March 31, 2015.

"The Bank continues to make significant progress with the disposition of and upgrades to its NPAs," stated Scott Yelvington, President and Chief Executive Officer. "We are also continuing our efforts to reduce expenses and increase income."

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 847.244.6000 Ext. 201

NorStates Bank Announces Proposed Plan to Redevelop Westside Waukegan Facility

Waukegan, Illinois, January 23, 2015 – NorStates Bank, an FDIC insured financial institution, today announced proposed plans to redevelop its Westside Waukegan location on the corner of Grand Avenue and Green Bay Road.

Plans for the redevelopment of this 5 acre site have been submitted to the City of Waukegan and include several new commercial businesses as well as the construction of a brand new branch building, which will be located at the southern end of the property. This redevelopment will not only generate new revenue for the city, but it will also provide the bank with an opportunity to design a more modern, cost efficient and customer friendly banking facility.

Originally Spaulding Elementary School, the property was acquired by Bank of Waukegan in 1978. The building was remodeled and opened as the first branch of the Bank of Waukegan on June 2, 1980. Bank of Waukegan later formed Northern States Financial Corporation, the holding company for the bank, and later changed the bank's name to NorStates Bank, following the acquisition of First State Bank of Round Lake. The Westside Facility is currently one of eight branches serving northeastern Illinois and southeastern Wisconsin.

"We look forward to a new, modern facility and the increased efficiencies that come with updated equipment and technology," stated Scott Yelvington, President and Chief Executive Officer. "As a local community bank, continuing to provide our customers with competitive products and premier service is a top priority as we make this transition."

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 back to 1919. NorStates Bank serves the populations of northeastern Illinois and southeastern Wisconsin.

For Additional Information, Contact:

Scott Yelvington, President and Chief Executive Officer 847.244.6000 Ext. 201

Northern States Financial Corporation Reports Third Quarter Earnings

Waukegan, Illinois, November 3, 2014 – Northern States Financial Corporation (OTCQB-NSFC), holding company for NorStates Bank, an FDIC insured financial institution, today reported third quarter 2014 net income of $283,000. Per share book value at September 30, 2014 was $0.37.

The financial results at NorStates Bank (the "Bank") showed third quarter earnings of $363,000 and year to date earnings of $603,000. The Bank made no provision to the allowance for loan and lease losses during the third quarter of 2014. Management believed as of September 30, 2014, the allowance for loan and lease losses was adequate at 3.9% of total loans.

Total assets for Northern States Financial Corporation (the "Company") were $423 million at September 30, 2014, an increase of 7.9% from year-end 2013. While current loan volume was steady during the third quarter, overall loans did decline, and the increase in assets was mainly attributable to an increase to securities available for sale. The Bank's third quarter net interest margin was 3.00% with the cost of funds of 0.09%. The leverage capital ratio was 10.27%.

In regards to asset quality, the Company's 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, have shown a reduction of $7.6 million from December 31, 2013 to September 30, 2014. However, during the third quarter of 2014, NPAs increased $7.9 million. This increase during the third quarter was primarily due to downgrading previously identified credits to NPA status, which included placing 2 credits totaling $8.7 million on nonaccrual status and classifying a credit totaling $1.3 million as a troubled debt restructuring. Partially offsetting these downgrades was a $1.4 million credit upgraded to performing from nonaccrual status and the sale of $521,000 of other real estate owned. Management does not consider these third quarter events to be a negative trend in regards to ongoing credit quality. Management anticipates a substantial decrease in NPAs in the fourth quarter of 2014 and the first quarter of 2015 as a result of credit remediation and asset sales.

"Our efforts to reduce expenses and increase income continue to have a positive effect on earnings," stated Scott Yelvington, President and Chief Executive Officer. "However, our primary focus remains on the reduction of non-performing assets which will be essential to achieving our earnings goals."

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 847.244.6000 Ext. 201

NorStates Bank Announces Release From Consent Order

Waukegan, Illinois, August 13, 2014 – Northern States Financial Corporation (OTCQB-NSFC), today announced that its subsidiary, NorStates Bank has been released from its Consent Order with the Federal Deposit Insurance Corporation and the Illinois Department of Financial and Professional Regulation. This termination ends a period of over 4 years in which NorStates Bank was under an Order with its regulators.

In April of this year, Northern States Financial Corporation successfully completed a $25 million recapitalization after NorStates Bank had recovered sufficiently to allow Northern States Financial Corporation to attract additional capital.

"We are pleased that our regulators have acknowledged the remarkable progress we have made" said Scott Yelvington President and Chief Executive Officer. "While we still have some ancillary credit issues to address, we are well capitalized, profitable and ready to fully resume our support for the critical financial needs of the communities we serve in Lake County, Illinois."

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.

Northern States Financial Corporation Reports Income after Recapitalization

Waukegan, Illinois, August 1, 2014 – Northern States Financial Corporation (OTCQB-NSFC), today reported net income of $367,000 for the second quarter of 2014. Highlighting the quarter was a successful $25 million recapitalization of the Company, which was completed on April 30, 2014, through which the Company was able to retire its TARP obligations with the United States Department of the Treasury and to pay the deferred interest relating to its outstanding trust preferred securities. Consolidated income available to common stockholders of the Company for the three months ended June 30, 2014 totaled $16.1 million, or $0.18 per share based on 87,604,088 outstanding shares of the Company as of June 30, 2014. The amount of consolidated income available to common stockholders was due primarily to the Company's accounting for the recapitalization transaction, as well as earnings from the Company's wholly owned banking subsidiary, NorStates Bank. Stockholders' equity at June 30, 2014 was approximately $32 million, or $0.37 per share. The Company also continued to carry approximately $26 million in a valuation allowance on its deferred tax assets.

The results of operations for the quarter ended June 30, 2014 of NorStates Bank were highlighted by net income of $391,000. The Bank's core earnings were approximately $100,000 per month following the recapitalization, an increase accomplished primarily by deploying the increased available liquidity from the recapitalization. A net gain on the sale of bank owned properties also contributed to net income for the second quarter. The Bank's cost of funds was 10 basis points for the second quarter of 2014.

Total assets of NorStates Bank were $408 million at the end of the second quarter. The Bank's leveraged capital ratio as of June 30, 2014 was 10.39%. Asset quality, as represented by the Bank's non-performing asset ratio, improved from 111% as of March 31, 2014 to 81% as of June 30, 2014. The allowance for loan and lease losses as a percent of total loans and leases of NorStates Bank stood at 3.98% as of June 30, 2014, and no provision for loan losses was made in the second quarter of 2014.

"The successful recapitalization effort completed in April has allowed us to deploy excess liquidity into increasing our securities investments and loan generation, which has had an immediate impact on earnings," stated President and Chief Executive Officer, Scott Yelvington. "Further reduction in expenses related to the recapitalization and lower non-performing assets have had an additional positive impact on earnings, and we expect that to continue. This has been a seminal quarter in our Company's history, and we are excited about the future. A healthy, profitable NorStates Bank will help enhance economic growth in the communities we serve."

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.

For Additional Information, Contact:

Scott Yelvington, President and Chief Executive Officer 847.244.6000 Ext. 201

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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 Bank conducts its operations, including the real estate market in Illinois, and other factors beyond the Bank'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 and statement to reflect new information or subsequent events or circumstances.