Princeton National Bancorp, Inc. Releases 2011 Results

Thu Apr 12, 2012 5:00pm EDT

* Reuters is not responsible for the content in this press release.

  PRINCETON, IL, Apr 12 (Marketwire) -- 
Princeton National Bancorp, Inc. (the "Corporation" or "PNBC") (NASDAQ:
PNBC), parent corporation of Citizens First National Bank (the "Bank"),
ended the year with a net loss available to common stockholders of $55.6
million, or $(16.71) per common share on a fully diluted basis. The
Corporation recorded loan loss provision of $51.8 million in 2011 to
resolve problem loan assets that are materially impacting the
Corporation's wholly-owned subsidiary, Citizens First National Bank. At
the end of 2010 and throughout 2011, a credit administration division was
created at the Bank to help proactively identify and address the Bank's
loan portfolio challenges, and help pave the way for a return to a more
normal loan loss provision level.

    Net income available to common stockholders, on a pre-tax, pre-provision
basis, was $4.1 million at year-end 2011 compared to $10.4 million at
year-end 2010. This decline is due to an increase in loan collection
expenses and continuing write-downs of assets placed in other real estate
owned.

    The net interest margin for 2011 was a strong 4.08%, as compared to 3.98%
for 2010. The Bank was able to increase the net interest margin during
2011 despite the impact of a decrease in loans from the lack of
sufficient quality loan demand and the historically low interest rate
environment. 

    Non-interest income grew to $12.6 million in 2011, from $11.5 million in
2010. In 2011, non-interest income was positively impacted by increased
gains from the sales of securities, an increase in service charges on
deposits, and negatively impacted by a mortgage impairment write-down of
$1,017,000. 

    Net loan charge-offs grew from $22.9 million in 2010 to $51.1 million in
2011 due to a proactive charge-off stance, which was the result of the
Bank's focus on problem loan identification and resolution. We anticipate
that these aggressive tactics will assist in stabilizing the Bank's
charge-offs with the goal to have them decline significantly. 

    Total assets at December 31, 2011 decreased to $1.014 billion from $1.096
billion at December 31, 2010. Total net loan balances decreased by $83.7
million during the twelve month period to $590.6 million due to seasonal
pay downs in the agricultural portfolio, non-performing loans being
transferred into OREO, and a general decline in the overall demand for
new low-risk credit. Deposits totaled $917.3 million, down from $963.0
million in 2010, reflecting managed efforts to reduce deposit levels to
positively impact capital ratios. The Bank benefitted from a very low
cost of funds in 2011, while maintaining consistent funding levels and
increased levels of liquidity. The balance sheet reduction strategy did
not impact the Bank's core customer base and was managed via slightly
lower CD rates and high-yield money market rates, while seizing
appropriate opportunities to lower higher cost public and non-public
deposits.

    Stockholders' equity was $4.9 million at year-end 2011, compared to $56.9
million in 2010. At December 31, 2011, the Bank's tier-one leverage, tier
one and total risk-based capital ratios were 2.14%, 3.31% and 4.60%,
respectively. 

    The Bank continues to operate under a Consent Order entered into on
September 20, 2011 with the Office of the Comptroller of the Currency,
its principal regulator. Actions have been implemented to ensure that an
adequate loan loss allowance and workout plan for substandard loans is
maintained and to improve the loan risk rating system. 

    The Corporation entered into a Written Agreement with the Federal Reserve
Bank, which included similar items as the OCC Consent Order, on October
27, 2011 and is taking steps to fully comply with the requirements in
that agreement. 

    The Corporation offers stockholders the opportunity to participate in the
Princeton National Bancorp, Inc. Dividend Reinvestment and Stock Purchase
Plan, which allows for optional cash contributions to purchase stock. To
obtain information about the stock purchase plan, please contact us at
815-872-6131.

    Princeton National Bancorp, Inc.'s Web Address: www.pnbc-inc.com.

    FORWARD-LOOKING INFORMATION:

    This press release may contain certain forward-looking statements,
including certain plans, revenues, earnings, 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 "believe," "anticipate," "estimate," "expect," "intend,"
"plan," "project" or words of similar meaning, or future or conditional
verbs such as "will," "would," "should," "could," or "may." 

    Forward-looking statements by their very nature are subject to risks and
uncertainties. A number of factors, many of which are beyond the
Corporation's control, could cause actual conditions, events or results
to differ significantly from those described in the forward-looking
statements. The Corporation's most recent reports filed with the
Securities and Exchange Commission describe some of these factors,
including certain credit, market, operational, liquidity and interest
rate risks associated with the Corporation's business and operations.
Other factors described in these reports include changes in business and
economic conditions, competition, fiscal and monetary policies,
disintermediation, legislation including the Sarbanes-Oxley Act of 2002
and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

    Forward-looking statements speak only as of the date they are made. The
Corporation does not undertake to update forward-looking statements to
reflect circumstances or events that occur after the date forward-looking
statements are made.



CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)        December 31,  December 31, 
                                                     2011          2010
                                                  (unaudited)
                                                 ------------  ------------ 

ASSETS

Cash and due from banks                          $     16,307  $     12,992 
Interest-bearing deposits with financial
 institutions                                          46,988        30,888 
                                                 ------------  ------------ 
  Total cash and cash equivalents                      63,295        43,880 

Loans held for sale, at lower of cost or market         2,220         5,515 

Investment securities available-for-sale, at
 fair value                                           251,747       248,752 
Investment securities held-to-maturity, at
 amortized cost                                         9,836        12,187 
                                                 ------------  ------------ 
  Total investment securities                         261,583       260,939 

Loans, net of unearned interest                       621,021       704,074 
Allowance for loan losses                             (30,413)      (29,726)
                                                 ------------  ------------ 
  Net loans                                           590,608       674,348 

Premises and equipment, net                            25,850        26,901 
Land held for sale, at lower of cost or market          2,164         2,244 
Federal Reserve and Federal Home Loan Bank stock        4,500         4,498 
Bank-owned life insurance                              24,330        23,416 
Interest receivable                                     6,453         7,482 
Deferred income taxes                                       0        10,512 
Intangible assets, net of accumulated
 amortization                                           1,877         2,531 
Other real estate owned                                21,848        20,652 
Other assets                                            9,588        13,553 
                                                 ------------  ------------ 

  TOTAL ASSETS                                   $  1,014,316  $  1,096,471 
                                                 ============  ============ 

LIABILITIES

Demand deposits                                  $    171,939  $    138,683 
Interest-bearing demand deposits                      353,462       383,126 
Savings deposits                                       84,599        74,817 
Time deposits                                         307,295       366,335 
                                                 ------------  ------------ 
  Total deposits                                      917,295       962,961 

Customer repurchase agreements                         54,835        35,806 
Advances from the Federal Home Loan Bank                5,000         9,000 
Interest-bearing demand notes issued to the U.S.
 Treasury                                                   0         1,753 
Trust Preferred securities                             25,000        25,000 
                                                 ------------  ------------ 
  Total borrowings                                     84,835        71,559 

Other liabilities                                       7,251         5,090 
                                                 ------------  ------------ 
  Total liabilities                                 1,009,381     1,039,610 
                                                 ------------  ------------ 

STOCKHOLDERS' EQUITY

Preferred stock                                        25,016        24,986 
Common stock                                           22,391        22,391 
Common stock warrants                                     150           150 
Additional paid-in capital                             18,126        18,275 
Retained earnings (deficit)                           (42,791)       11,589 
Accumulated other comprehensive income (loss),
 net of tax                                             5,378         3,064 
Less: Treasury stock                                  (23,335)      (23,594)
                                                 ------------  ------------ 
  Total stockholders' equity                            4,935        56,861 
                                                 ------------  ------------ 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY         $  1,014,316  $  1,096,471 
                                                 ============  ============ 

CAPITAL STATISTICS (UNAUDITED)

YTD average equity to average assets                     4.80%         6.62%
Tier 1 leverage capital ratio                           -0.32%         5.93%
Tier 1 risk-based capital ratio                         -0.50%         8.40%
Total risk-based capital ratio                          -0.50%         9.68%
Common book value per share                      $      (6.01) $       9.58 
Closing market price per share                   $       1.51  $       3.64 
End of period shares outstanding                    3,341,029     3,325,941 
End of period treasury shares outstanding           1,137,266     1,152,354 

CONSOLIDATED STATEMENTS OF INCOME
(dollars in
 thousands, except
 share data)
                                                    TWELVE        TWELVE
                     THREE MONTHS  THREE MONTHS     MONTHS        MONTHS
                         ENDED         ENDED         ENDED         ENDED
                     December 31,  December 31,  December 31,  December 31, 
                         2011          2010          2011          2010
                      (unaudited)   (unaudited)   (unaudited)   (unaudited) 
                     ------------  ------------  ------------  ------------ 

INTEREST INCOME

Interest and fees on
 loans               $      7,478  $      9,251  $     32,397  $     39,310 
Interest and
 dividends on
 investment
 securities                 2,101         2,403         9,042        10,117 
Interest on
 interest-bearing
 time deposits in
 other banks                   42            36           136           139 
                     ------------  ------------  ------------  ------------ 
  Total Interest
   Income                   9,621        11,690        41,575        49,566 
                     ------------  ------------  ------------  ------------ 

INTEREST EXPENSE

Interest on deposits        1,190         2,038         6,085        10,385 
Interest on
 borrowings                   224           237           804         1,853 
                     ------------  ------------  ------------  ------------ 
  Total Interest
   Expense                  1,414         2,275         6,889        12,238 
                     ------------  ------------  ------------  ------------ 

Net interest income         8,207         9,415        34,686        37,328 
Provision for loan
 losses                    33,903        27,250        51,803        40,550 
                     ------------  ------------  ------------  ------------ 

Net interest income
 after provision          (25,696)      (17,835)      (17,117)       (3,222)
                     ------------  ------------  ------------  ------------ 

NON-INTEREST INCOME
Trust & farm
 management fees              259           298         1,073         1,148 
Service charges on
 deposit accounts           1,005           914         4,033         3,969 
Other service
 charges                      402           392         1,674         1,593 
Gain on sales of
 securities
 available-for-sale             0             0         2,693           722 
Brokerage fee income          190           207           684           754 
Mortgage servicing
 rights recovery
 (impairment)                (200)          812        (1,017)         (110)
Mortgage banking
 income                       792           926         2,104         2,383 
Bank-owned life
 insurance income             227           227           904           910 
Other operating
 income                       195            22           438           123 
                     ------------  ------------  ------------  ------------ 
  Total Non-Interest
   Income                   2,870         3,798        12,586        11,492 
                     ------------  ------------  ------------  ------------ 

NON-INTEREST EXPENSE
Salaries and
 employee benefits          4,583         4,717        18,388        18,211 
Occupancy                     672           657         2,661         2,635 
Equipment expense             749           821         3,065         3,117 
Federal insurance
 assessments                  945           683         2,714         2,519 
Intangible assets
 amortization                 144           203           657           808 
Data processing               313           340         1,330         1,327 
Marketing                     161           160           605           696 
ORE Expenses, net           1,131         1,018         3,998         2,586 
Loan collection
 expenses                   2,030           199         3,127           691 
Write-down of land
 held-for-sale                 80             0            80           110 
Other operating
 expense                    1,366         1,207         5,307         4,453 
                     ------------  ------------  ------------  ------------ 
  Total Non-Interest
   Expense                 12,174        10,005        41,932        37,153 
                     ------------  ------------  ------------  ------------ 

Loss before income
 taxes                    (35,000)      (24,042)      (46,463)      (28,883)
Income tax expense
 (benefit)                   (665)       (8,295)        7,887       (11,904)
                     ------------  ------------  ------------  ------------ 

Net loss                  (34,335)      (15,747)      (54,350)      (16,979)

Preferred stock
 dividends                      0           314             0         1,255 
Dividends in arrears
 on preferred stock           314             0         1,254             0 
Accretion of
 preferred stock
 discount                       7             7            30            28 
                     ------------  ------------  ------------  ------------ 

Net loss available
 to common
 stockholders        $    (34,656) $    (16,068) $    (55,634) $    (18,262)
                     ============  ============  ============  ============ 

Net loss per share
 available to common
 stockholders:
  BASIC              $     (10.39) $      (4.85) $     (16.71) $      (5.52)
  DILUTED            $     (10.39) $      (4.85) $     (16.71) $      (5.52)

Basic weighted
 average shares
 outstanding            3,333,968     3,315,512     3,329,523     3,311,291 
Diluted weighted
 average shares
 outstanding            3,333,968     3,315,512     3,329,523     3,311,291 

PERFORMANCE RATIOS
 (annualized)

Net Income (Loss)
 Available to Common
 Stockholders to
 Average Assets            -12.96%        -5.67%        -5.15%        -1.58%
Net Income (Loss)
 Available to Common
 Stockholders to
 Average Equity           -384.69%       -84.88%      -107.44%       -23.82%
Net interest margin
 (tax-equivalent)            3.87%         4.16%         4.08%         3.98%
Efficiency ratio
 (tax-equivalent)          106.53%        72.85%        85.74%        72.93%

ASSET QUALITY

Net loan charge-offs $     20,001  $     16,076  $     51,115  $     22,947 
Total non-performing
 loans (non-accrual,
 past due over 90
 days, troubled debt
 restructuring)      $    100,979  $     97,351  $    100,979  $     97,351 
Non-performing loans
 as a % of total
 loans                      16.26%        13.83%        16.26%        13.83%


    


Inquiries should be directed to: 
Lou Ann Birkey
Vice President - Investor Relations
Princeton National Bancorp, Inc. 
(815) 872-6131 
E-Mail address: pnbc@citizens1st.com 

Copyright 2012, Marketwire, All rights reserved.

-0-