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| CORPORATE
PROFILE |
Northern
States Financial Corporation is a $486 million bank holding company that serves portions
of Lake and McHenry Counties in Illinois and Kenosha and Walworth Counties in Wisconsin.
During 1998, we merged First Federal Bank,
fsb into the Bank of Waukegan. This provides our customers with all commercial and
consumer banking services under the Bank of Waukegan name at more locations. The merger
provides management with increased efficiencies of scale and less duplication of effort
and, as a consequence, improved bottom line performance.
We have the ability to meet the total banking needs of the
markets we serve with prompt professional service.
As shown in the accompanying charts, our
Company has shown consistent performance over the last seven years. Equally important to
our stockholders, book value per share has increased at a compounded growth rate of 8.2%
over the last seven years, while dividends per share have increased at a compounded growth
rate of l7.0% over the same period. Finally, we have maintained this pattern of consistent
growth while maintaining an average capital ratio of over 9% over the past seven years
with average capital for 1998 at 13.2%.
As our market continues to grow and expand
we will continue in our efforts to provide value to our stockholders and maintain our
growth and profitability. |
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| CONTENTS |
| Financial
Highlights.......................................... |
3 |
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| Chairman's
Letter............................................... |
5 |
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| Bank of Waukegan
Review............................. |
9 |
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| Selected
Consolidated Financial Data........... |
10 |
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| Management's
Discussion and Analysis .... |
10 |
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| Independent
Auditors' Report........................ |
31 |
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| Consolidated
Financial Statements................ |
32 |
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| Notes to
Consolidated Financial Statements. |
36 |
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| Stockholder
Information................................... |
50 |
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| Directors and
Officers....................................... |
52 |
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