CORPORATE PROFILE
	Northern States Financial Corporation is a $587 million bank holding company for the Bank of Waukegan, which serves portions of northeastern Illinois and southeastern Wisconsin. As a full service commercial bank, the Bank attracts deposits; makes commercial, real estate and consumer loans; and operates mortgage banking and trust businesses. The Bank is one of the most profitable in its region. For 2001, net income for the Company was $7,759,000 or $1.74 diluted earnings per share. Loan levels and total assets were also the highest ever, contributing to the largest net interest income in the institution’s 39-year history. The graphs on page 5 show an impressive and consistent record of long-term performance. All banking operations are affected by interest rate fluctuations. Despite this, Northern States Financial Corporation has provided its stockholders over the past seven years with growth in book value of 7.4% compounded annually, while dividends per share have increased at a compounded growth rate of more than 19.3% per year. Net income has advanced 8.2% yearly during the same period. Much of the Company’s performance over the years is attributable to its location in Lake County, Illinois. Lake County is the wealthiest county in the state and is among the fastest growing in population, construction, retail activity and corporate headquarter sites for suburban Chicago. Branch expansions and new product introductions also have enriched the professional services that are a hallmark of the Bank. As its market continues to grow and expand, the Company will continue its efforts to provide value to stockholders while maintaining growth and profitability. Northern States will accomplish these goals by providing competitively priced financial services while always stressing that “Our Most Important Customer Is You.”

NSFC ANNUAL 2 REPORT 2001