NSTS Bancorp, Waukegan, IL (NSTS)

An Illinois Case of Self-Serving Bank Conversion

In my opinion, Illinois’ NSTS Bancorp is one of the Top 3 worst recent bank conversions along with 1895 Bancorp of Wisconsin (BCOW) and Ponce Financial Group of New York (PBLB).

Is there an NSTS shareholder who meets SEC Rule §240.14a-8 criteria for Who Can Submit a Shareholder Proposal willing to deliver the kick in the pants North Shore Trust and Savings apparently needs to do the right thing and sell the bank? 

North Shore can't legally sell before the three anniversary of their conversion comes up in January 2025, but its upcoming May 2024 annual meeting would be the perfect time to put your proposal up for a shareholder vote as needed to get Management in line sooner vs later. 

Per North Shore's latest Proxy, the deadline to submit a proposal is December 16, 2023.

Disclosure: As of this posting, I own shares of NSTS and may subsequently either dispose of them or purchase more.

Prospective Buyers

I suspect any or all of these Illinois banks would be interested in submitting a bid to buy North Shore Trust and Savings when its three-year moratorium on a sale expires in 2025:

First Mid Bancshares, Matoon, IL (FMBH)
HBT Financial, Bloomington, IL (HBT)
Tri-County Financial, Mendota, IL (TYFG)

Financial Snapshot
as of 06/30/2023

Total assets:
Tangible book value per share:   
NPAs to assets:
Price to book:
Market cap:
Dividend yield:
Trailing 12-month ROA:
Trailing 12-month ROE:


Stephen G. Lear, Chairman, President, and CEO
Nathan E. Walker, CEO North Shore Trust
Thomas Ivantic, Director (longest serving)

Red Flags

North Shore Trust and Savings is run by weak operators with a flawed operating model delivering a negative return on equity.

Two years after taking NSTS public, Management has failed to successfully deploy the money they raised. They're buying back stock, but not anywhere near as aggressively as they should.

Instead of cutting costs, NSTS hired a team of seven mortgage lenders, raised Management salaries by 14%, and paid CEO Stephen Lear average compensation of $340K per year.

In contrast, the annual salary for the average bank CEO in the US is $184K,* and the average bank has been earning a 12.9% ROE.**



  1. The challenge with NSTS is that 91% of its loans are residential mortgages and have fair value marks of $11.7 million or about $2.10/sh.

  2. Thank you for reading and commenting. Clearly the lower-yielding mortgages are another challenge with North Shore Trust.