SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
- OR -
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-17728
Northern Illinois Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
Illinois 36-6137500
State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
486 W. Liberty St., Wauconda, IL 60084-2489
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (847) 487-1818
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days. Yes X
or No
The number of shares of the registrant's Common Stock outstanding on
July 31, 1996 was 2,956,784 shares.
NORTHERN ILLINOIS FINANCIAL CORPORATION
FORM 10-Q - QUARTERLY REPORT
FOR QUARTER ENDED June 30, 1996
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets, June 30, 1996
and December 31, 1995. 1
Consolidated Statements of Income
Six Months Ended June 30, 1996 and 1995 2 - 3
Three Months Ended June 30, 1996 and 1995 4 - 5
Consolidated Statements of Changes in Shareholders'
Equity, Six Months Ended June 30, 1996 and 1995 6
Consolidated Statements of Cash Flow, Six Months
Ended June 30, 1996 and 1995 7 - 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 16
PART II. OTHER INFORMATION 17
Item 6. A. Exhibits
B. Reports on Form 8-K
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(000's omitted except share data)
June 30, December 31,
1996 1995
(Unaudited) (Audited)
Cash and due from banks $ 23,581 $ 27,888
Interest bearing deposits in other banks 674 4,848
Securities Available for sale, at market 289,681 333,244
Federal funds sold 9,200 6,500
Loans, net of unearned income 586,428 548,055
Less allowance for loan losses (5,987) (5,585)
Premises and equipment 22,876 22,778
Accrued interest receivable 6,827 7,183
Other real estate owned 731 1,610
Other assets 9,465 7,933
$943,476 $954,454
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing $117,081 $113,839
Interest bearing 694,886 686,325
Total deposits 811,967 800,164
Short-term borrowings 17,098 36,872
Long-term borrowings 8,567 11,588
Other liabilities 9,819 11,077
Dividends payable 503 857
Total liabilities 847,954 860,558
Shareholders' equity
Common stock, no par value; authorized
10,000,000 shares; issued and outstanding
2,956,784 and 2,956,784 shares 16,697 16,697
Retained earnings 71,788 68,391
Net unrealized securities gains, net of tax 7,037 8,808
Total shareholders' equity 95,522 93,896
$943,476 $954,454
The accompanying notes are an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted except per share data)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
Interest income
Interest and fees on loans $24,579 $21,733
Interest on federal funds sold 146 415
Interest on securities
Taxable 6,287 6,619
Exempt from federal income tax 2,808 2,262
Interest on deposits in other banks 35 9
Total interest income 33,855 31,038
Interest expense
Interest on deposits 15,151 13,276
Interest on short-term borrowings 857 1,251
Interest on long-term debt 282 215
Total interest expense 16,290 14,742
Net interest income 17,565 16,296
Provision for loan losses 670 94
Net interest income after provision
for loan losses 16,895 16,202
Other income
Fees for customer deposit services 1,955 1,665
Other operating income 1,270 1,000
Trust department income 272 215
Securities gains 395 1,224
Total other income 3,892 4,104
Other expenses
Salaries and employee benefits 8,522 7,391
Occupancy and equipment expense 2,181 1,913
Data processing 544 607
Federal Deposit Insurance premiums 5 824
Other 3,937 3,651
Total other expenses 15,189 14,386
The accompanying notes are an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Continued)
(000's omitted except per share data)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
Income before income taxes $ 5,598 $ 5,920
Applicable income taxes 1,196 1,273
Net Income $ 4,402 $ 4,647
Average number of common shares
outstanding 2,957 2,986
Earnings per common share $ 1.49 $ 1.56
The accompanying notes are an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's omitted except per share data)
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
Interest income
Interest and fees on loans $12,453 $11,117
Interest on federal funds sold 62 293
Interest on securities
Taxable 3,016 3,311
Exempt from federal income tax 1,359 1,117
Interest on deposits in other banks 7 2
Total interest income 16,897 15,840
Interest expense
Interest on deposits 7,494 6,981
Interest on short-term borrowings 361 637
Interest on long-term debt 152 136
Total interest expense 8,007 7,754
Net interest income 8,890 8,086
Provision for loan losses 364 30
Net interest income after provision
for loan losses 8,526 8,056
Other income
Fees for customer deposit services 1,026 840
Other operating income 509 492
Trust department fees 147 106
Gains on other real estate owned 327
Securities gains 383 931
Total other income 2,392 2,369
Other expenses
Salaries and employee benefits 4,388 3,658
Occupancy and equipment expense 1,077 891
Data processing 253 304
Federal Deposit Insurance premiums 2 412
Other 2,180 2,042
Total other expenses 7,900 7,307
The accompanying notes are an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Continued)
(000's omitted except per share data)
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
Income before income taxes $ 3,018 $ 3,118
Applicable income taxes 657 639
Net Income $ 2,361 $ 2,479
Average number of common shares
outstanding 2,957 2,971
Earnings per common share $ .80 $ .83
The accompanying notes are an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(000's omitted
except share data)
Net
Unrealized
Gains(Losses)
on Available
Common Stock Retained for Sale
Shares Amount Earnings Securities
Balance January 1, 1995 3,006,477 $16,978 $61,090 $(3,409)
Net Income 4,647
Cash dividends $.34 per share (1,014)
Cost of shares acquired (48,086) (272) (1,057)
Change in unrealized gains
(losses) on available
for sale securities 5,878
Balance, June 30, 1995 2,958,391 $16,706 $63,666 $ 2,469
Balance, January 1, 1996 2,956,784 $16,697 $68,391 $ 8,808
Net income 4,402
Cash dividends $.34 per share (1,005)
Cost of shares acquired
Change in unrealized gains
(losses) on available
for sale securities (1,771)
Balance, June 30, 1996 2,956,784 $16,697 $71,788 $ 7,037
The accompanying notes are an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
1996 1995
Cash flows from operating activities:
Interest and dividends received $34,449 $31,737
Fees and commissions received 3,497 2,880
Interest paid (16,806) (14,343)
Cash paid to suppliers and employees (13,558) (14,750)
Income taxes paid (1,865) (1,761)
Net cash provided by operating activities 5,717 3,763
Cash flows from investing activities:
Net decrease in interest bearing deposits
in other banks 4,174 932
Sales of securities
Available for sale 34,257 17,194
Maturities of securities
Held to maturity 3,011
Available for sale 72,520 50,235
Purchase of investment securities
Available for sale (67,186) (56,586)
Net increase in loans (39,122) (25,216)
Purchase of officer life insurance (164) (174)
Capital expenditures (1,170) (712)
Proceeds from the sale of property and equipment 31 14
Proceeds from sale of other real estate owned 1,687 165
Net cash provided (used) in
investing activities 5,027 (11,137)
Cash flows from financing activities
Net increase in deposits 11,803 18,333
Net increase (decrease) in short-term borrowings (19,774) 1,217
Net increase (decrease) in long-term borrowings (3,021) 938
Dividends paid (1,359) (1,382)
Common stock acquired (1,328)
Net cash provided (used) in
financing activities (12,351) 17,778
Net increase (decrease) in cash and cash equivalents (1,607) 10,404
Cash and cash equivalents at beginning of period 34,388 36,866
Cash and cash equivalents at end of period $32,781 $47,270
The accompanying notes are an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Continued)
(Unaudited)
(in thousands)
1996 1995
Reconciliation of net income to net
cash provided by operating activities:
Net income $4,402 $4,647
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for premium amortization 1,021 1,285
Provision for discount accretion (783) (682)
Provision for depreciation 1,042 983
Provision for loan losses 670 94
Provision for deferred income taxes (377) (1,565)
Gain on sale of securities (395) (1,224)
(Gain) loss on disposition of equipment (1) 17
(Gain) on sale of other real estate owned (327)
Changes in assets and liabilities:
Decrease in other assets 671 144
Increase (decrease) in other liabilities (206) 64
Total adjustments 1,315 (884)
Net cash provided by operating activities $5,717 $3,763
Supplemental schedule of noncash investing
and financing activities:
Net change in unrealized gains on securities
available for sale $(1,771) $ 5,878
Loans transferred to other real estate owned
throughout the year $ 481 $
Contributions and net earnings of
the Execuflex Plan $ 189 $ 219
Securities purchased in June payable in July $ 115 $ 506
Securities purchased settled in subsequent period $(1,353) $ (936)
The accompanying notes are an integral
part of these financial statements.
NORTHERN ILLINOIS FINANCIAL CORPORATION
AND SUBSIDIARIES
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
financial information of Northern Illinois Financial Corporation and its
subsidiaries. All significant intercompany balances and transactions
have been eliminated. In management's opinion, all adjustments
(consisting of normal recurring accruals) necessary for a fair
presentation of the financial position and the results of operations for
the interim periods have been made. For a further description of
significant accounting policies of the Company, see the 1995 Form 10-K.
2. PROPOSED MERGER
On January 22, 1996 Northern Illinois Financial Corporation
("Northern Illinois") signed a definitive agreement to merge its assets
and operations with Premier Financial Services, Inc., ("Premier")
located in Freeport, Illinois and form a new financial services
corporation to be named Grand Premier Financial, Inc. ("Grand Premier").
In the proposed merger, which is subject to shareholder and regulatory
approval, Northern Illinois common shareholders will receive 4.25 shares
of Grand Premier for each share held. Premier common shareholders will
receive 1.116 shares of Grand Premier for each share held. Premier
preferred stockholders will receive shares of preferred stock of Grand
Premier having terms and conditions substantially identical to the terms
and conditions of the shares of Premier preferred stock held by such
holders. Concurrently with the execution of the Merger Agreement,
Northern Illinois and Premier also entered into reciprocal stock option
agreements. Under such stock option agreements, Northern Illinois
granted Premier an option to purchase up to 19.9% of the outstanding
shares of Northern Illinois common stock at an option price of $30.00
per share, and Premier granted Northern Illinois an option to purchase
up to 19.9% of Premier common stock at an option price of $9.00 per
share, in each case upon the occurrence of certain triggering events.
Those events include actions or proposals by a third-party to merge
with, or acquire stock or assets of, Northern Illiois (in the case of
the Northern Illinois stock option agreement) or Premier (in the case of
Premier stock option agreement). Regulatory approval of the proposed
merger has been obtained from the Federal Reserve Board in a letter
dated May 24, 1996 and from the Office of Banks & Real Estate of the
State of Illinois in a letter dated July 16, 1996. Special meetings of
shareholders of Northern Illinois and Premier are scheduled for August
21, 1996 to vote on the proposed merger. At June 30, 1996, Premier had
total assets of approximately $671 million. It is expected that the
merger will be accounted for as a pooling-of-interest and be consummated
in August 1996.
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following is Northern Illinois' management's discussion and analysis
of the financial condition of Northern Illinois and subsidiaries at June 30,
1996 (unaudited) when compared with December 31, 1995 (audited) and the
results of operations for the three and six month periods ended June 30, 1996
and 1995 (unaudited). This discussion and analysis should be read in
conjunction with the Northern Illinois' consolidated financial statements and
notes thereto appearing elsewhere in this quarterly report.
Financial Condition at June 30, 1996 Compared to December 31, 1995
Total assets of Northern Illinois decreased $11 million to $943.5 million
from December 31, 1995 to June 30, 1996.
Total securities declined $43.6 million for the comparative periods.
Excluding the effect of accounting to market for securities available for
sale, the amortized cost of total securities decreased $40.7 million. The
reduction reflects the comparative decrease in funding liabilities and
increase in loan volumes.
Loans net of unearned income increased $38.4 million. Increase in the
commercial loan portfolio and commercial paper were the major contributors to
this growth.
Allowance for loan losses was 1.02% of loans net of unearned income on
both December 31, 1995 and June 30, 1996. Total nonaccrual loans, impaired
loans and loans past due 90 days or more and still accruing were $5.8 million
and $5.6 million as of December 31, 1995 and June 30, 1996, respectively.
Other real estate owned declined from $1.6 million on December 31, 1995
to $.7 million on June 30, 1996 as a result of real estate property sales.
Total deposits increased $11.8 million from $800.2 million on December
31, 1995 to $812.0 million on June 30, 1996. $8.6 million of that increase
was in interest bearing deposits generated from increases in time
certificates of deposit.
Total borrowings decreased $22.8 million of which $19.8 million was
attributed to declines in customer contracts for securities sold with
agreement to repurchase. Management chose to discourage renewal or sale of
these contracts and encourage the purchase of interest bearing time deposits.
In July, 1996 in order to increase long term funding Grand National Bank
borrowed from the Federal Home Loan Bank of Chicago $5.0 million due in July,
2001.
A summary of the comparative financial condition from a liquidity
viewpoint shows that cash and cash equivalents declined $1.6 million from
December 31, 1995 to June 30, 1996. Cash provided by operating and investing
activities amounted to $10.7 million which was offset by $12.3 million of
cash used in financing activities. Cash provided and utilized for the six
month period in 1996 is reflected in the above comparative financial
condition commentary.
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(continued)
Results of Operations for the Six Months Ended June 30, 1996 and 1995
Net income:
Net income decreased from $4,647,000 on June 30, 1995 to $4,402,000 on
June 30, 1996. A reduction in security gains for the comparative periods was
the major contributor to the net income decrease.
Net Interest Income:
For the comparable periods both interest income and interest expense
increased. The $2,817,000 increase in interest income was largely due to
volume increases in loans. The $1,548,000 increase in interest expense was,
primarily, due to rate and volume increases within the time deposit category.
The average earning asset yield increased 17 basis points from 7.59% in 1995
to 7.76% in 1996. Average rates paid on interest bearing liabilities
increased 16 basis points from 4.32% in 1995 to 4.48% in 1996. Net yield on
average earning assets was 3.99% and 4.03% for June 30, 1995 and June 30,
1996, respectively.
Provision for Loan Losses:
Provision for loan losses was $94,000 and $670,000 for the six months
ended 1995 and 1996, respectively. The increase is largely attributed to the
1996 growth in loans net of unearned income and an increase in nonaccrual
loans. The ratio of nonaccrual loans to total loans was .74% and .82% and the
ratio of allowance for loan losses to nonaccrual loans was 156% and 125% for
June 30, 1995 and June 30, 1996, respectively. The subsidiary banks'
analysis of the current and prospective economic condition, overall credit
quality, historic trends and application of accounting for impaired loans
under the Financial Accounting Standards Board statement numbers 114 and 118
determine the amounts transferred to the provision.
Noninterest Income:
Total noninterest income decreased from $4,104,000 on June 30, 1995 to
$3,892,000 on June 30, 1996. The $829,000 comparative decrease in security
gains was the major contributing factor.
Fees for customer deposit services increased $290,000 from $1,665,000 in
1995 to $1,955,000 in 1996. The increase was due, primarily, to a
restructuring and standardization of service charges that resulted from the
February, 1996 merger of the then existing four subsidiary banks into a
single bank charter.
Other fees and operating income increased from $1,000,000 on June 30,
1995 to $1,270,000 on June 30, 1996. A significant portion of this increase
was the result of gains on the sale of other real estate owned and increased
fees associated with secondary market mortgage operations.
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(continued)
Trust department income increased $57,000 between the comparable periods
and reflects Northern Illinois' focus on revenue enhancement for this line of
business.
Security gains declined from $1,224,000 on June 30, 1995 to $395,000 on
June 30, 1996.
Noninterest Expense:
For the six months ended 1995 and 1996, noninterest expense increased
$803,000 from $14,386,000 to $15,189,000.
Salaries and benefits rose $1,131,000 from $7,391,000 on June 30, 1995 to
8,522,000 on June 30, 1996. The salary portion of this category rose
$999,000 or 88% of the increase. This significant increase was a result of
one time salary payments pursuant to a reduction in force policy, a 6%
increase in average full time equivalent employees and compensation increases
for merit and promotion. The benefit component contributed $132,000 of the
$1,131,000 increase and was due to the increase in full time equivalent
employees.
Occupancy and equipment expense increased $268,000 from $1,913,000 in
1995 to $2,181,000 in 1996. The increase is, largely, attributed to the
addition of three bank branchs that commenced operation between September,
1995 and February, 1996.
Data processing decreased $63,000 from $607,000 in 1995 to $544,000 in
1996. The decrease was due to final contractual obligations paid in 1995 to
a third party vendor that had provided item processing services. The item
processing function was fully transferred to the Northern Illinois' central
operations division by the second quarter 1995.
In late 1995, the Federal Deposit Insurance Corporation reduced the
deposit premium rates to reflect that the Bank Insurance Fund had neared
fully funded status. Deposit premiums declined by $819,000 between the
comparative periods.
Other expenses increased from $3,651,000 for six months ended 1995 to
$3,937,000 for same period in 1996. This increase reflects material
increases in printing, postage and legal fees related to the February, 1996
merger of the subsidiary banks as well as professional expenses incurred as
a result of the proposed merger with Premier Financial.
Income Taxes:
Income taxes were $1,273,000 and $1,196,000 representing effective tax
rates of 21.5% and 21.4% for June 30, 1995 and 1996, respectively.
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(continued)
Results of Operations for the Three Months Ended June 30, 1996 and 1995
Net Income:
Net income decreased $118,000 for the three month period ended 1996
compared to 1995. The decline is attributed to a $548,000 decrease in
security gains.
Net Interest Income:
Net interest income before provision for loan losses rose 9.9% from
$8,086,000 to $8,890,000 for the comparative three month periods. Both total
interest income and interest expense showed increases in 1996 when compared
to 1995. The $1,057,000 increase in interest income was, primarily, due to
increases in loan volume. The $253,000 increase in interest expense was,
largely, due to volume increases in time deposits offset by volume decreases
in short term borrowings and rate reduction in NOW and money market deposits.
Net yield on average earning assets was 3.92% and 4.08% for the three months
ended June 30, 1995 and June 30, 1996, respectively.
Provision for Loan Losses:
Provision for loan losses for the three months ended in 1995 was
$30,000 and $364,000 for the comparable period in 1996. For further comment
regarding the provision for loan losses, refer to the discussion of the
results of operations for the six months ended.
Noninterest Income:
Total noninterest income increased $23,000 from $2,369,000 in 1995
to $2,392,000 for comparable period in 1996.
Fees for customer deposit services increased from $840,000 for the
three months ended 1996 to $1,026,000 for same period in 1996. As in the
discussion regarding the results of operations for the six months ended the
increase was due to the restructuring and standardization of service charges
that followed the February, 1996 merger of the four subsidiary banks.
Other fees and other operating income rose slightly from $492,000 to
$509,000 for the comparative periods due to increased fees from secondary
market mortgage operations. Trust department fees increased between the
comparative periods due to reasons described in the results of operations for
the six months ended.
The $327,000 gain on the sale of other real estate owned in the
second quarter of 1996 helped to offset the $548,000 decline in security
gains for the comparative periods.
Noninterest Expense:
Salaries and benefits rose $730,000 in 1996 when compared to 1995.
$651,000 of this increase is attributed to the salary portion of this
category and $79,000 to the benefit category. For further explanation please
refer to the discussion of salary and benefits in the results of operations
for the six months ended.
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(continued)
Occupancy and equipment expense increased in 1996 compared to 1995
due to expansion in the number of branches previously mentioned.
Data processing declined from $304,000 in 1995 to $253,000 in 1996.
For further commentary please refer to the data processing discussion in the
results of operations for the six months ended.
Federal deposit insurance premiums were $412,000 in 1995 and $2,000
in 1996 for reasons described in the discussion for the results of operations
for the six months ended.
Other expenses rose from $2,042,000 in 1995 to $2,180,000 in 1996.
The increase can be attributed to the same factors described in the
commentary of the results of operations for the six months ended.
Income Taxes:
Income taxes were $639,000 in 1995 and $657,000 in 1996,
representing effective tax rates of 20.5% and 21.7% for the respective
periods.
Shareholder Equity:
Total shareholder equity includes net unrealized gains (losses) on
securities available for sale net of tax. Removing the effect of the net
unrealized gains (losses) of securities, net of tax, shareholder equity would
have been $80,372,000 on June 30, 1995 and $88,485,000 on June 30, 1996 or a
10.09% increase. Average shareholder equity to average assets was 8.97% and
10.11% on June 30, 1995 and June 30, 1996, respectively.
Nonaccrual, Past Due and Restructured Loans:
Nonaccrual loans at the dates indicated were as follows, in thousand of
dollars:
June 30, 1996 December 31, 1995
Commercial, financial and
agricultural $1,016 $ 143
Real estate-construction 800
Real estate-mortgage 3,497 2,675
Installment loans to individuals 276 155
$4,789 $3,773
Other impaired loans under Statement of Financial Accounting Standards No.
114 not included in nonaccrual loans above as of December 31, 1995 were as
follows, in thousands of dollars:
Real estate-construction $1,257
Real estate-mortgage 383
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(continued)
Restructured loans at the dates indicated were as follows, in thousand of
dollars:
June 30, 1996 December 31, 1995
Commercial, financial and
agricultural $ $ 22
Installment loans to individuals 8
Real estate-mortgage 422 471
$422 $505
Accruing loans past due 90 days or more as to principal or interest at the
dates indicated were as follows, in thousands of dollars:
June 30, 1996 December 31, 1995
Commercial, financial and
agricultural $143 $ 30
Real estate-mortgage 448 188
Real estate-construction 46
Installment loans to individuals 147 163
$784 $381
Summary of Loan Loss Experience:
An analysis of loan loss experience for each reported period, in thousands of
dollars, is summarized as follows:
June 30, 1996 June 30, 1995
Balance at beginning of period $5,585 $6,050
Charge-offs:
Commercial, financial and
agricultural 112 137
Installment loans to individuals 310 321
422 458
Recoveries:
Commercial, financial and
agricultural 38 29
Installment loans to individuals 116 66
154 95
Net charge-offs 268 363
Additions charged to expense 670 94
Balance at end of period $5,987 $5,781
Ratio of net charge-offs during the
period to average loans 0.05% 0.07%
Ratio of nonaccrual loans to total loans 0.82% 0.74%
Ratio of allowance for loan losses
to nonaccrual loans 125% 156%
NORTHERN ILLINOIS FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(continued)
Allocation of Allowance for Loan Losses, in thousands:
June 30, 1996 December 31, 1995
% of % of
Loans Loans
in each in each
Category Category
to Total to Total
Amount Loans Amount Loans
Commercial, financial
and agricultural $1,107 18.7% $1,032 19.0%
Real estate-construction 475 6.8 445 7.5
Real estate-mortgage 3,927 66.4 3,620 64.4
Installment loans to
individuals 478 8.1 488 9.1
$5,987 100.0% $5,585 100.0%
NORTHERN ILLINOIS FINANCIAL CORPORATION
PART II. OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders
The following was submitted to a vote of security holders during
the quarter ended June 30, 1996, at the Annual Meeting held May
15, 1996.
1. Election of Directors. Shareholders voted to elect eight
nominees to the Board of Directors. The following Directors
were nominated and elected: Jean Barry, Harry Bystricky,
Frank Callero, Alan Emerick, Brenton Emerick, James Esposito,
Robert Hinman and Howard McKee.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits as follows:
27. Financial Data Schedule, six months ended June 30,
1996.
(b) Reports on Form 8-K
No Form 8-K was required to be filed during the
quarter ended June 30, 1996 as there were no
events or transactions to be reported.
NORTHERN ILLINOIS FINANCIAL CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHERN ILLINOIS FINANCIAL CORPORATION
(Registrant)
August 12, 1996 /s/ Robert W. Hinman
Date Robert W. Hinman, President
August 12, 1996 /s/ David Albright
Date David Albright, Chief Financial Officer
NORTHERN ILLINOIS FINANCIAL CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHERN ILLINOIS FINANCIAL CORPORATION
(Registrant)
August 12, 1996
Date Robert W. Hinman, President
August 12, 1996
Date David Albright, Chief Financial Officer
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