Annual Meeting: All stockholders are invited to attend our annual meeting, which will be held at 4:30 P.M., on Thursday, April 27, 2000 in the lobby of the Bank of Waukegan, 1601 N. Lewis Avenue, Waukegan, Illinois 60085.

      We look forward to meeting all stockholders and welcome your questions at the annual meeting. Any stockholders unable to attend this year’s meeting are invited to send questions and comments in writing to Fred Abdula, Chairman of the Board and Chief Executive Officer, at Northern States Financial Corporation.

      Form 10-K: Stockholders who wish to obtain a copy at no charge of Northern States Financial Corporation’s Form 10-K for the fiscal year ended December 31, 1999, as filed with the Securities and Exchange Commission, may do so by writing Thomas M. Nemeth, Vice President & Treasurer, at Northern States Financial Corporation.

     For Further Information: Stockholders and prospective investors are welcome to call or write Northern States Financial Corporation with questions or requests for additional information. Please direct inquiries to:

     Thomas M. Nemeth
     Vice President & Treasurer
     Northern States Financial Corporation
     1601 N. Lewis Avenue
     Waukegan, Illinois 60085
     (847) 244-6000 ext. 269

     Transfer Agent, Registrar & Dividend Disbursements: Stockholders with a change of address or related inquiries should contact:

      Firstar Bank, NA
      Investors Services Unit
      1555 N. Rivercenter Dr., Suite 301
      Milwaukee, Wisconsin 53212
      (800) 637-7549

     Quarterly Calendar: The Company operates on a fiscal year ending December 31. Quarterly results are announced within 45 days after the end of each quarter, and audited results are announced within 90 days after year end.

     Semi-annual Dividend Dates: Dividends are expected to be announced and paid on the following schedule during 2000:

     Stock Market Information: The common stock of Northern States Financial Corporation is traded on the National Association of Securities Dealers Automated Quotation System (NASDAQ Small-Cap Market) under the ticker symbol NSFC. Stock price quotations are published daily in the Chicago Tribune and Chicago Sun-Times newspapers and, when traded, in The Wall Street Journal. The stock is commonly listed as NthnStat.

     As of December 31, 1999 there were 6,500,000 common shares authorized; 4,458,345 common shares were outstand-ing, held by approximately 435 registered stockholders.

     As of February 29, 2000, the following securities firms indi-cated they were maintaining an inventory of Northern States Financial Corporation common stock and are acting as market makers:

     Herzog, Heine, Geduld, Inc.
     Miami, Florida
     (800) 966-7022 or (305) 932-5880

     Howe Barnes Investments, Inc.
     Chicago, Illinois
     (800) 800-4693 or (312) 655-2995

     Spear Leeds & Kellogg Capital Markets
     Jersey City, New Jersey
     (800) 526-3160 or (201) 418-4000

     Price Summary: The following schedule details our stock’s quarter ending bid and ask price:

     Cash Dividends: Northern States Financial Corporation pays semi-annual cash dividends in June and December. Uninterrupted cash dividends have been paid since the Company’s formation in 1984 and have increased each year since then. The table below shows semi-annual cash dividends per share for the past six years.

Independent Auditors:
Crowe, Chizek and Company LLP
Oak Brook, Illinois