Northern States Financial Corporation is a bank holding company that operates Bank of Waukegan (the Bank). The principal business of the Company, operating through the Bank, consists of attracting deposits and securities sold under repurchase agreements from the general public, making commercial loans, loans secured by residential and commercial real estate and consumer loans and operating mortgage banking and trust businesses. The Bank provides services to individuals, businesses and local governmental units in northeastern Illinois and southeastern Wisconsin. As of December 31, 2002, the Bank had total assets of approximately $635.5 million, deposits of approximately $450.0 million and stockholder's equity of approximately $76.2 million. The Bank has three banking offices located in Waukegan, Illinois, one office located in Antioch, Illinois, one office located in Gurnee, Illinois and one office located in Winthrop Harbor, Illinois.