SOURCE: Princeton National Bancorp, Inc.

October 30, 2009 16:43 ET

Princeton National Bancorp, Inc. Releases 3rd Quarter 2009 Results

PRINCETON, IL--(Marketwire - October 30, 2009) - Princeton National Bancorp, Inc., (NASDAQ: PNBC), the holding company of Citizens First National Bank, today reported results of operations and financial condition for the third quarter of 2009.

Net income for the third quarter of 2009 was $760,000 as compared to $1,898,000 in the second quarter of 2009. Net income available to common stockholders was $440,000, or $0.13 per diluted share, for the quarter ended September 30, 2009, compared to net income available to common stockholders of $1,575,000, or $0.48 earnings per diluted common share, recorded in the second quarter of 2009. In comparison to the third quarter of 2008, earnings per diluted common share decreased $0.53 and net income available to common stockholders decreased $1,747,000. The lower net income is attributable to an increase in the loan loss provision and insurance assessments by the FDIC.

President & CEO Tony J. Sorcic stated, "The country continues to be in a severe recession. Credit quality continues to weaken across the nation, resulting in financial institutions building their loan loss provisions. The decline in collateral values continues in the housing market and the national average unemployment rate rose in September 2009 to 9.8%. Unfortunately, in the State of Illinois the unemployment rate is higher than the national average and has risen to 10.5%, significantly higher than the average of 7.2% reported by the State of Illinois at the end of 2008."

Mr. Sorcic concluded, "Unlike many institutions in the banking industry, the Company continues to experience growth in its balance sheet and generate positive earnings. In comparing September 30, 2009 to September 30, 2008, total deposits increased $127.4 million, total loans increased $10.1 million, net interest income increased $2.464 million, and non-interest income increased $337,000. The net interest margin for the first nine months was 3.45%, down 1 basis point from the same period in 2008. Non-interest expense increased $3.781 million; which represents a minimal increase in core operating expenses when you consider federal insurance assessments increased $1.822 million and other real estate expenses increased $670,000."

Net-interest income for the third quarter of 2009 (before provision) was $8.883 million and non-interest income was $2.772 million, compared to $8.629 million and $3.731 million, respectively, for the second quarter of 2009 and $8.172 million and $2.851 million, respectively, for the third quarter of 2008. Return on average equity was 3.02% for the third quarter 2009, compared to 7.77% for the second quarter 2009 and 12.54% for the third quarter of 2008.

Total assets ended the quarter at $1.287 billion, up 2.3%, or 9.2% annualized, from $1.258 billion at June 30, 2009 and 10.7% from $1.163 billion at December 31, 2008. Princeton National Bancorp, Inc. experienced a $6.5 million increase and in total loans as of September 30, 2009 compared to June 30, 2009 and an $18.6 million decrease compared to December 31, 2008, respectively (due to a general slowdown in the economy and the refinancing of adjustable rate real estate loans into fixed rate products which are sold into the secondary market).

Princeton National Bancorp, Inc. recorded a loan loss provision of $2.410 million during the quarter, compared to $1.465 million in the second quarter and $550,000 in the third quarter of 2008. During the first nine months, the Company has recorded a loan loss provision of $5.045 million versus $1.368 million for the same period in 2008, due to the increase in non-performing loans. Although the loan charge-offs during 2009 remain extremely low at $2.350 million, or .40% of total loans, non-performing loans increased $5.5 million to $38.5 million compared to $33.0 million as of December 31, 2008. At the end of the third quarter, specific loss provisions for individual credits totaled $1.359 million, compared to $1.530 million at June 30, 2009 and $818,000 at December 31, 2008. Citizens First National Bank evaluates the risk characteristics of the loan portfolio on a monthly basis and believes the loan loss reserve is adequate to cover estimated losses as of September 30, 2009. The Subsidiary Bank staff will continue to work with borrowers to resolve problem loan situations and to work through this challenging credit cycle. Recognizing this, and reflective of current conditions, the level of loan loss provisioning has increased, bringing the level of reserves to 1.00% of total loans, an increase from .64% at December 31, 2008 and .50% at September 30, 2008.

The Board of Directors declared a $.14 per common share dividend payable December 7, 2009 to those shareholders of record as of November 16, 2009. This represents the Company's 99th consecutive dividend.

On September 29, 2009, the FDIC adopted a Notice of Proposed Rulemaking that would require insured institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009, and all of 2010, 2011, and 2012. The Corporation estimates the amount of the prepaid assessment to be approximately $6 million. The FDIC also announced a uniform 3-basis point increase in the risk-based assessment effective January 1, 2011, which will bring the Company's assessment rate to 20 basis points.

The Company's solid capital base and ability to generate core earnings continue to be an advantage as we work through the current credit cycle. The Subsidiary Bank has been providing financial solutions to meet the financial needs of its customers since 1865. Princeton National Bancorp, Inc. and Citizens First National Bank continue to focus on positioning themselves to benefit as conditions improve.

The price of PNBC stock closed at $15.75 on September 30, 2009, compared to $14.60 on June 30, 2009, $14.00 on March 31, 2009 and $22.14 on December 31, 2008. Financial stocks continue to be impacted by poor earnings reports by many institutions, due to the current credit cycle. Princeton National Bancorp, Inc. has reported positive quarterly earnings for fifty-eight consecutive quarters!

For detailed financial information, please refer to the attached September 30, 2009 financial statements for Princeton National Bancorp, Inc. You may also visit our website at www.pnbc-inc.com to obtain financial information, as well as press releases, stock prices and information on the Company.

The Company offers shareholders the opportunity to participate in the Princeton National Bancorp, Inc. Dividend Reinvestment and Stock Purchase Plan. The Company also offers electronic direct deposit of dividends. To obtain information about the stock purchase plan or electronic direct deposit, please contact us at 815-875-4445, extension 650.

Princeton National Bancorp, Inc. is the parent holding company of Citizens First National Bank, a $1.287 billion community bank with strategic locations in 8 counties in northern Illinois. The Company is well-positioned in the high growth counties of Will, Kendall, Kane, Grundy, DeKalb and LaSalle plus Bureau and Marshall. Communities include: Aurora, DePue, Genoa, Hampshire, Henry, Huntley, Millbrook, Minooka, Newark, Oglesby, Peru, Plainfield, Plano, Princeton, Sandwich, Somonauk and Spring Valley. The Subsidiary Bank, Citizens First National Bank, provides financial services to meet the needs of individuals, businesses and public entities.

This press release contains certain forward-looking statements, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. These forward-looking statements are identified by the use of words such as 1) believes, 2) anticipates, 3) estimates, 4) expects, 5) projects or similar words. Actual results could differ materially from those contained or implied by such statements for a variety of factors including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature, extent, and timing of governmental actions and reforms; and extended disruption of vital infrastructure. The figures included in this press release are unaudited and may vary from the audited results.


CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)

                                                 September 30,
                                                      2009     December 31,
                                                  (unaudited)      2008
                                                  -----------  -----------
ASSETS

Cash and due from banks                           $    15,332  $    20,163
Interest-bearing deposits with financial
 institutions                                          49,690           98
Federal funds sold                                          0            0
                                                  -----------  -----------
     Total cash and cash equivalents                   65,022       20,261

Loans held for sale, at lower of cost or market         5,484        2,155

Investment securities available-for-sale, at fair
 value                                                320,978      236,883
Investment securities held-to-maturity, at
 amortized cost                                        14,984       14,232
                                                  -----------  -----------
     Total investment securities                      335,962      251,115

Loans, net of unearned interest                       772,208      790,837
Allowance for loan losses                              (7,759)      (5,064)
                                                  -----------  -----------
     Net loans                                        764,449      785,773

Premises and equipment, net                            28,563       29,297
Land held for sale, at lower of cost or market          2,354        2,354
Federal Reserve and Federal Home Loan Bank stock        4,230        4,211
Bank-owned life insurance                              22,308       21,588
Interest receivable                                     9,543        9,693
Goodwill, net of accumulated amortization              24,521       24,521
Intangible assets, net of accumulated
 amortization                                           3,560        4,207
Other real estate owned                                16,182        2,487
Other assets                                            4,881        5,468
                                                  -----------  -----------

     TOTAL ASSETS                                 $ 1,287,059  $ 1,163,130
                                                  ===========  ===========


LIABILITIES

Demand deposits                                   $   110,116  $   110,559
Interest-bearing demand deposits                      337,780      246,714
Savings deposits                                       65,424       61,089
Time deposits                                         551,493      543,770
                                                  -----------  -----------
     Total deposits                                 1,064,813      962,132

Customer repurchase agreements                         50,025       35,532
Advances from the Federal Home Loan Bank               32,498       32,493
Interest-bearing demand notes issued to the U.S.
 Treasury                                                 790        2,441
Federal funds purchased                                     0        6,500
Trust Preferred securities                             25,000       25,000
Note payable                                                0       16,050
                                                  -----------  -----------
     Total borrowings                                 108,313      118,016

Other liabilities                                      10,921       10,511
                                                  -----------  -----------
     Total liabilities                              1,184,047    1,090,659
                                                  -----------  -----------

STOCKHOLDERS' EQUITY

Preferred stock                                        24,951            0
Common stock                                           22,391       22,391
Common stock warrants                                     150            0
Additional paid-in capital                             18,417       18,420
Retained earnings                                      55,575       54,329
Accumulated other comprehensive income (loss),
 net of tax                                             5,505        1,402
Less:  Treasury stock                                 (23,977)     (24,071)
                                                  -----------  -----------
     Total stockholders' equity                       103,012       72,471
                                                  -----------  -----------

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY          $ 1,287,059  $ 1,163,130
                                                  ===========  ===========


CAPITAL STATISTICS  (UNAUDITED)

YTD average equity to average assets                     7.79%        6.25%
Tier 1 leverage capital ratio                            7.79%        6.22%
Tier 1 risk-based capital ratio                         10.63%        7.72%
Total risk-based capital ratio                          11.51%        8.30%
Common book value per share                       $     23.63  $     21.97
Closing market price per share                    $     15.75  $     22.14
End of period shares outstanding                    3,303,563    3,298,041
End of period treasury shares outstanding           1,174,732    1,180,254




CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)


                        THREE MONTHS THREE MONTHS NINE MONTHS  NINE MONTHS
                           ENDED        ENDED        ENDED        ENDED
                         September    September    September    September
                             30,         30,           30,        30,
                            2009        2008          2009        2008
                        (unaudited)  (unaudited)  (unaudited)  (unaudited)
                        -----------  -----------  -----------  -----------
INTEREST INCOME

Interest and fees on
 loans                  $    10,951  $    11,977  $    33,494  $    36,129
Interest and dividends
 on investment
 securities                   3,447        2,772        9,595        8,110
Interest on federal
 funds sold                       0           37            0           66
Interest on
 interest-bearing time
 deposits in other
 banks                           25           26           76           46
                        -----------  -----------  -----------  -----------
     Total Interest
      Income                 14,424       14,812       43,164       44,351
                        -----------  -----------  -----------  -----------

INTEREST EXPENSE

Interest on deposits          4,829        5,771       15,079       18,250
Interest on borrowings          712          869        2,178        2,658
                        -----------  -----------  -----------  -----------
     Total Interest
      Expense                 5,540        6,640       17,257       20,908
                        -----------  -----------  -----------  -----------

Net interest income           8,883        8,172       25,907       23,443
Provision for loan
 losses                       2,410          550        5,045        1,368
                        -----------  -----------  -----------  -----------

Net interest income
 after provision              6,473        7,622       20,862       22,075
                        -----------  -----------  -----------  -----------

NON-INTEREST INCOME
Trust & farm management
 fees                           296          309        1,004        1,120
Service charges on
 deposit accounts             1,050        1,174        3,003        3,376
Other service charges           495          563        1,448        1,587
Gain on sales of
 securities
 available-for-sale              38           54          799          331
Brokerage fee income            192          249          639          676
Mortgage banking income         449          243        1,325          879
Bank-owned life
 insurance                      235          227          708          648
Other operating income           17           32          165          138
                        -----------  -----------  -----------  -----------
     Total Non-Interest
      Income                  2,772        2,851        9,092        8,755
                        -----------  -----------  -----------  -----------

NON-INTEREST EXPENSE
Salaries and employee
 benefits                     4,821        4,459       13,514       13,082
Occupancy                       640          619        1,952        1,908
Equipment expense               768          698        2,304        2,168
Federal insurance
 assessments                    566           99        2,089          267
Intangible assets
 amortization                   204          178          620          535
Data processing                 319          272          974          852
Advertising                     170          195          577          524
ORE Expenses, net               312           29          821          151
Other operating expense       1,202        1,079        3,626        3,209
                        -----------  -----------  -----------  -----------
     Total Non-Interest
      Expense                 9,001        7,628       26,477       22,696
                        -----------  -----------  -----------  -----------

Income before income
 taxes                          244        2,845        3,477        8,134
Income tax expense             (516)         658         (338)       1,836
                        -----------  -----------  -----------  -----------

Net income                      760        2,187        3,815        6,298

Preferred stock
 dividends                      313            0          868            0
Accretion of preferred
 stock discount                   7            0           18            0
                        -----------  -----------  -----------  -----------

Net income available to
 common stockholders    $       440  $     2,187  $     2,929  $     6,298
                        ===========  ===========  ===========  ===========

Net income per share:
     BASIC              $      0.13  $      0.66  $      0.89  $      1.91
     DILUTED            $      0.13  $      0.66  $      0.89  $      1.90

Basic weighted average
 shares outstanding       3,302,172    3,295,200    3,300,148    3,298,408
Diluted weighted
 average shares
 outstanding              3,302,812    3,305,195    3,300,688    3,309,560


PERFORMANCE RATIOS (annualized)

Return on average
 assets                        0.24%        0.78%        0.41%        0.77%
Return on average
 equity                        3.02%       12.54%        5.29%       12.17%
Net interest margin
 (tax-equivalent)              3.40%        3.50%        3.45%        3.46%
Efficiency ratio
 (tax-equivalent)             72.41%       66.00%       71.38%       67.11%


ASSET QUALITY

Net loan charge-offs    $       811  $       103  $     2,350  $       774
Total non-performing
 loans                  $    38,513  $    16,383  $    38,513  $    16,383
Non-performing loans as
 a % of total loans            4.99%        2.15%        4.99%        2.15%

Contact Information


  • Inquiries should be directed to:
    Lou Ann Birkey
    Vice President - Investor Relations,
    Princeton National Bancorp, Inc.
    (815) 875-4444
    E-Mail address: Email Contact