The Bank of Waukegan, the wholly owned subsidiary of Northern States Financial Corporation, is the combination of the Bank of Waukegan, founded in 1962, and First Federal Bank, a thrift chartered in 1919 and merged with the Bank of Waukegan in 1998. Its assets of $477 million rank it in the top quartile of the

Lake County is expected to have the third highest growth rate in the region over the next two decades, according to the Northeastern Illinois Planning Commission. The Commission forecasts a population increase to 811,000 by 2020, up from 572,000 in 1995. The combination of rapid population growth, robust home

Chicago area’s 248 banks. The Bank holds a similar ranking for control of expenses.

Growth has been a hallmark of Northern States Financial. In the past five years, net income has risen 12% compounded annually to a record for 1999. In that same period, assets have increased to $477 million from $411 million. Shareholders have been rewarded with consecutive dividend increases in each of the past 17 years.

Serving Illinois’ Wealthiest County

Much of the Company’s success can be attributed to its location. Waukegan, 37 miles north of Chicago, is the tenth largest city in Illinois and the largest community as well as the county seat for Lake County, the state’s wealthiest county. Lake County also is the third largest of Illinois’ 102 counties, fifth in population growth, and third for employment growth, according to Woods & Poole Economics, a Washington, DC research firm.

construction activity, and new business locations support the Commission’s projections.

Northern States Financial has six branches throughout the county and the largest depositor base in Waukegan. Three offices are in Waukegan, one downtown, another on the growing west side and the third at the Company’s headquarters on the affluent north side. The city of 77,000 has seen the value of residential building permits in the 1990s outstrip the total value for the 1980s and 1970s combined. A fourth branch is in Gurnee, Waukegan’s neighbor to the west, where the population has grown four-fold since 1980 and median home values exceed $200,000. Winthrop Harbor, population 7,000, is the Bank’s newest branch, established in 1998. Home values there have risen steadily since the opening of North Point Marina, the Great Lakes’ largest