SOURCE: Princeton National Bancorp, Inc.

January 28, 2008 15:20 ET

Princeton National Bancorp, Inc. 4th Quarter Earnings Improve 17.7%

PRINCETON, IL--(Marketwire - January 28, 2008) - Princeton National Bancorp, Inc. (NASDAQ: PNBC)

Tony J. Sorcic, President & CEO, stated, "The Company is very pleased to announce the outstanding results generated in the fourth quarter of 2007. Net income was $2,048,000, fully diluted earnings per share totaled $.62, and the return on average equity was 12.18%. This is an improvement of 17.7%, 19.2% and 14.4%, respectively, from the third quarter of 2007."

Sorcic continued, "Net income for 2007 was $6,770,000, a 4.4% increase from 2006 net income of $6,488,000. Significant progress was made during 2007, as net income of $1,429,000 in the first quarter increased 8.7% to $1,553,000 in the second quarter, 12.1% to $1,740,000 in the third quarter, and 17.7% to $2,048,000 in the fourth quarter. In comparing the fourth quarter of 2007 to the first quarter, there was a 43.3% increase in net income. The Bank's plan to increase the net interest margin was executed, with the outcome being a steady improvement throughout 2007. Net interest income for 2007 was $27,054,000 compared to $25,896,000 in 2006."

Sorcic continued, "There was also consistent improvement in the diluted earnings per share during the year. Diluted earnings per share for 2007 totaled $2.03, an improvement of 6.3% from $1.91 in 2006. The return on average equity for 2007 increased to 10.32% from 10.07% in 2006."

Princeton National Bancorp, Inc. also reached a record level of total assets at $1.081 billion as of December 31, 2007. This represents growth of 4.7% when compared to total assets at December 31, 2006 of $1.032 billion. The Company's loan portfolio grew $93.2 million over the last twelve months. Growth was experienced in existing offices, as well as from the acquisition of the Plainfield office of HomeStar Bank, Manteno, Illinois which was completed in February 2007. The Company's loan portfolio continues to be high-quality and had minimal loan charge-offs during the year. Non-performing loans represent 1.03% of the total loan portfolio at December 31, 2007. The funding of loans was achieved primarily through maturing securities in the investment portfolio and secondarily through deposit growth. This resulted in the loan to asset ratio improving to 66.9% at December 31, 2007 from 61.0% one year earlier.

Non-interest income increased $1,053,000 in 2007 to $11,298,000 compared to $10,245,000 in 2006. Growth was generated in service charges on deposits ($196,000), brokerage fee income ($184,000), mortgage banking income ($148,000), other service charges (184,000), and income from bank owned life insurance ($46,000). The Company's non-interest income exceeded 1% of average assets for the year 2007. Non-interest expense, although slightly higher than 2006, represents 2.85% of total assets compared to 2.95% in 2006 and was below budgeted expectations.

The Company ended 2007 with total deposits and repurchase agreements of $925.6 million, an increase from $913.2 million at year-end 2006.

During 2007, the Company purchased 50,000 shares under the Stock Repurchase Plans at an average price of $29.19 per share. Since 1997, the Company has repurchased 1,344,271 shares of common stock through stock repurchase programs.

The stock price closed the year at $24.25, a decrease from the December 31, 2006 stock price of $32.55. The decrease in the PNBC stock price is reflective of the banking industry as a whole. The Subsidiary Bank does not have sub-prime loans in its loan portfolio or as underlying collateral within the investment portfolio.

For additional financial information, please refer to the attached December 31, 2007 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 has set its annual meeting date for April 29, 2008 at 10:00 A.M. at The Galleria Convention Center in Princeton, Illinois. The record date for the Annual Meeting will be February 29, 2008.

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 $1.081 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.


Princeton National Bancorp, Inc.

CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
                                                  December 31,
                                                      2007     December 31,
REVISED                                           (unaudited)      2006
                                                  -----------  -----------
ASSETS

Cash and due from banks                           $    25,801  $    33,882
Interest-bearing deposits with financial
 institutions                                           1,803          103
Federal funds sold                                          0        5,200
                                                  -----------  -----------
     Total cash and cash equivalents                   27,604       39,185

Loans held for sale, at lower of cost or market           928        4,512

Investment securities available-for-sale, at fair
 value                                                218,095      252,467
Investment securities held-to-maturity, at
 amortized cost                                        14,578       15,449
                                                  -----------  -----------
     Total investment securities                      232,673      267,916

Loans, net of unearned interest                       722,647      629,472
Allowance for loan losses                              (3,248)      (3,053)
                                                  -----------  -----------
     Net loans                                        719,399      626,419

Premises and equipment, net                            30,801       28,670
Land held for sale, at lower of cost or market          1,344            0
Bank-owned life insurance                              22,461       21,470
Interest receivable                                    10,876       11,139
Goodwill, net of accumulated amortization              24,521       23,029
Intangible assets, net of accumulated
 amortization                                           5,090        5,921
Other real estate owned                                   833            0
Other assets                                            4,172        3,698
                                                  -----------  -----------

     TOTAL ASSETS                                 $ 1,080,702  $ 1,031,959
                                                  ===========  ===========

LIABILITIES

Demand deposits                                   $   102,452  $   107,834
Interest-bearing demand deposits                      241,749      231,953
Savings deposits                                       58,401       66,060
Time deposits                                         488,805      476,052
                                                  -----------  -----------
     Total deposits                                   891,407      881,899

Customer repurchase agreements                         34,217       31,344
Advances from the Federal Home Loan Bank                6,984        6,970
Interest-bearing demand notes issued to the U.S.
 Treasury                                               1,838        2,333
Federal funds purchased                                26,500            0
Trust Preferred securities                             25,000       25,000
Note payable                                           14,550        8,500
                                                  -----------  -----------
     Total borrowings                                 109,089       74,147

Other liabilities                                      11,864       10,558
                                                  -----------  -----------
     Total liabilities                              1,012,360      966,604
                                                  -----------  -----------

STOCKHOLDERS' EQUITY

Common stock                                           22,391       22,391
Surplus                                                18,275       18,158
Retained earnings                                      51,279       48,109
Accumulated other comprehensive income (loss),
 net of tax                                                79         (960)
Less:  Treasury stock                                 (23,682)     (22,343)
                                                  -----------  -----------
     Total stockholders' equity                        68,342       65,355
                                                  -----------  -----------

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY          $ 1,080,702  $ 1,031,959
                                                  ===========  ===========


CAPITAL STATISTICS  (UNAUDITED)

YTD average equity to average assets                     6.33%        6.70%
Tier 1 leverage capital ratio                            6.16%        6.33%
Tier 1 risk-based capital ratio                          8.00%        8.75%
Total risk-based capital ratio                           8.41%        9.18%
Book value per share                              $     20.66  $     19.50
Closing market price per share                    $     24.25  $     32.55
End of period shares outstanding                    3,308,447    3,351,410
End of period treasury shares outstanding           1,169,848    1,126,885



Princeton National Bancorp, Inc.

CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands,
 except share data)
                            THREE        THREE       FOR THE     FOR THE
                            MONTHS       MONTHS       YEAR         YEAR
REVISED                      ENDED        ENDED       ENDED       ENDED
                            December     December   December     December
                            31, 2007     31, 2006   31, 2007     31, 2006
                          (unaudited)  (unaudited) (unaudited)  (unaudited)
                          -----------  -----------  ---------  -----------
INTEREST INCOME

Interest and fees on
 loans                    $    13,102  $    11,365  $  49,982  $    41,923
Interest and dividends on
 investment securities          2,652        3,085     11,124       10,990
Interest on federal funds
 sold                              86          142        332          499
Interest on
 interest-bearing time
 deposits in other banks           37           37        121          114
                          -----------  -----------  ---------  -----------
     Total Interest
      Income                   15,877       14,629     61,559       53,526
                          -----------  -----------  ---------  -----------

INTEREST EXPENSE

Interest on deposits            7,547        7,107     30,324       23,843
Interest on borrowings          1,105          997      4,181        3,787
                          -----------  -----------  ---------  -----------
     Total Interest
      Expense                   8,652        8,104     34,505       27,630
                          -----------  -----------  ---------  -----------

Net interest income             7,225        6,525     27,054       25,896
Provision for loan losses          90          110        640          285
                          -----------  -----------  ---------  -----------

Net interest income after
 provision                      7,135        6,415     26,414       25,611
                          -----------  -----------  ---------  -----------

NON-INTEREST INCOME
Trust & farm management
 fees                             382          309      1,507        1,467
Service charges on
 deposit accounts               1,173        1,069      4,431        4,235
Other service charges             473          445      1,966        1,782
Gain on sales of
 securities
 available-for-sale               183           92        541          250
Gain on sale of loans               0            0          0           90
Brokerage fee income              279          174        920          736
Mortgage banking income           237          220        903          755
Bank-owned life insurance         208          188        816          770
Other operating income             61           35        214          160
                          -----------  -----------  ---------  -----------
     Total Non-Interest
      Income                    2,996        2,532     11,298       10,245
                          -----------  -----------  ---------  -----------

NON-INTEREST EXPENSE
Salaries and employee
 benefits                       4,300        3,940     16,874       15,884
Occupancy                         623          527      2,393        1,985
Equipment expense                 788          795      3,158        2,933
Federal insurance
 assessments                       83           78        338          313
Intangible assets
 amortization                     176          163        704          651
Data processing                   304          251      1,101        1,032
Advertising                       183          207        722          841
Other operating expense         1,055        1,171      4,275        4,696
                          -----------  -----------  ---------  -----------
     Total Non-Interest
      Expense                   7,512        7,132     29,565       28,335
                          -----------  -----------  ---------  -----------

Income before income
 taxes                          2,619        1,815      8,147        7,521
Income tax expense                571          165      1,377        1,033
                          -----------  -----------  ---------  -----------

Net income                $     2,048  $     1,650  $   6,770  $     6,488
                          ===========  ===========  =========  ===========



Net income per share:
  BASIC                   $      0.62  $      0.49  $    2.04  $      1.93
  DILUTED                 $      0.62  $      0.49  $    2.03  $      1.91

Basic weighted average
 shares outstanding         3,310,487    3,360,033  3,326,467    3,369,567
Diluted weighted average
 shares outstanding         3,316,573    3,379,394  3,334,507    3,389,765


PERFORMANCE RATIOS
 (annualized)

Return on average assets         0.77%        0.65%      0.65%        0.68%
Return on average equity        12.18%        9.92%     10.32%       10.07%
Net interest margin
 (tax-equivalent)                3.29%        3.16%      3.20%        3.33%
Efficiency ratio
 (tax-equivalent)               69.69%       73.64%     72.72%       73.36%


ASSET QUALITY

Net loan charge-offs      $        64  $       221  $     445  $       422
Total non-performing
 loans                    $     7,434  $     3,926  $   7,434  $     3,926
Non-performing loans as a
 % of total loans                1.03%        0.62%      1.03%        0.62%


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