ELYRIA, Ohio, Jan. 13 /PRNewswire-FirstCall/ -- Northern Savings & Loan (BULLETIN BOARD: NLVS) has announced preliminary earnings for the year ended December 31, 2005 of $2,842,661, down from 2004 earnings of $3,074,330. Total assets at December 31, 2005 were $340,806,868, up 6.5% from December 31, 2004.
Net interest income was $10,875,372 in 2005, an increase of 2.7% over 2004. The growth was primarily due to growth in the loan portfolio offset by rising rates on deposits. Net interest margin was 3.11% at December 31, 2005 slightly lower than the 3.20% at December 31, 2004. This compression in margins reflects the flattening yield curve as short-term interest rates have increased in response to the Federal Reserve Bank's tightening monetary policy, while long term rates have remained stable.
Northern Savings realized substantial mortgage lending growth in 2005. Net loans are up by approximately $47 million compared to last year's results. New mortgage loans were $91 million in 2005 representing a positive trend at a time of diminishing industry-wide refinance activity due to the Federal Reserve's action to increase interest rates.
Northern Savings increased the allowance for loan losses to $425,000, 0.15% of total loans at December 31, 2005, as a result of the growth in our loan portfolio. This resulted in a charge to income of $33,811 in 2005.
Noninterest expense increased approximately $635,000 during 2005 as a result of increased professional fees for compliance costs related to the Sarbanes-Oxley Act of 2002 and outsourcing certain audit functions; increased compensation costs incurred in the normal coarse of business, increased occupancy costs primarily focused on the headquarters renovation completed in December 2004, and increased marketing costs.
Northern paid dividends to shareholders of $0.55 per share on December 23, 2005, bringing the total dividends to shareholders to $1.00 per share in 2005, a 75.4% increase over the 2004 dividends paid to shareholders. The dividends included a $0.60 regular dividend per share and a $0.40 special, non-recurring dividend per share.
Northern Savings and Loan is a locally owned and operated financial institution with eight offices in Elyria, North Ridgeville, Grafton, Avon Lake and Amherst.
