Princeton National Bancorp, Inc. ("Princeton" or "the Company")
(NASDAQ: PNBC)
Tony J. Sorcic, President & CEO, stated, "Princeton National
Bancorp, Inc. continues to perform well in light of the
unprecedented turmoil in the financial markets and the continued
deterioration of the housing market. During 2008, fully diluted
earnings per share of $2.22 were generated compared to $2.03 in
2007. Net income for the year was $7.326 million, up 8.2% from
$6.770 million in 2007. The return on average equity also increased
to 10.59% from 10.32%. Net income for Citizens First National Bank,
the subsidiary bank, reached a record level of $8.746 million."
Sorcic continued, "The Board of Directors has declared a
dividend of $.28 per share, payable February 25, 2009, to those
shareholders of record as of February 6, 2009. This is the
Company's 96th consecutive dividend. The 2008 total dividend of
$1.12 represents an increase of 220% over the last ten years."
Sorcic concluded, "In these uncertain economic times, Management
believes it is prudent to position the Company with extra capital,
which will also allow us to take advantage of future opportunities.
With the changes in the financial industry, the well-capitalized
banking organizations in attractive markets will be the survivors
when the turmoil settles. On January 23rd, the Company received a
$25.1 million investment from the U.S. Treasury Department TARP
Capital Purchase Program. This Program is designed to provide
additional capital to healthy, well-managed financial institutions.
We are confident the funds received from the Treasury can be
leveraged to increase revenue, fund loan growth and make
acquisitions."
The investment by the U.S. Treasury Department is comprised of
$25.1 million in senior preferred shares, with warrants to purchase
155,025 shares of Princeton common stock at a price of $24.27, and
at a term of 10 years. The senior preferred stock will pay a
cumulative dividend at a coupon rate of 5% for the first five years
and 9% thereafter. This investment can be redeemed after three
years at par value plus unpaid dividends. As of December 31, 2008,
the Tier 1 Capital Ratio for Princeton was 5.98% at December 31,
2008. If the TARP funds were included, this ratio increases to
8.22%. Likewise, the Risk Based Capital Ratio would increase from
8.30% to 11.19%. As of December 31, 2008, Princeton National
Bancorp, Inc. had 3,298,041 shares of common stock outstanding.
The Board of Directors is pleased to announce Gretta E. Bieber
has been appointed to the Princeton National Bancorp, Inc. Board of
Directors. Bieber served on the Somonauk FSB Bancorp, Inc. Board of
Directors from 2001 to 2005 and then joined the Citizens First
National Bank Board of Directors' after the acquisition of Somonauk
FSB Bancorp, Inc. Bieber will fill the vacancy created upon Thomas
Longman's retirement. Bieber is an attorney for Alschuler, Simantz
& Hem, LLC in Aurora. The Company is pleased to have someone of
Bieber's quality join the Board of Directors.
Sharon Covert, who has served on the Princeton National Bancorp,
Inc. Board of Directors since 2001, was appointed to serve on the
Citizens First National Bank Board of Directors. Covert will fill
the vacancy created by Thomas Longman's retirement. Covert is a
successful businesswoman, has been actively involved in the
promotion of agriculture at the local, state, and national level,
and is currently on the Board of Directors of the United Soybean
Board. The subsidiary bank is pleased to have her expertise on the
Board of Directors.
Total interest income decreased 4.4% during 2008; however, total
interest expense decreased 20.9%. The Company focused on reducing
interest expense and improving net interest income. The end result,
a 16.5% increase in net interest income to $31.521 million,
compared to $27.054 million in 2007. The net interest margin
experienced steady improvement throughout the year resulting in a
7.5% increase to 3.44%, up from 3.20% in 2007.
Non-interest income was $11.593 million compared to $11.298
million in 2007. The Company's non-interest income was 1.05% of
average assets for the year 2008. Non-interest expense remains well
controlled and represents 2.81% of total assets compared to 2.85%
in 2007.
Princeton National Bancorp, Inc. also reached a record level of
total assets at $1.163 billion as of December 31, 2008. This
represents growth of 7.6% when compared to total assets at December
31, 2007 of $1.081 billion. The Company's loan portfolio grew $68.2
million over the last twelve months. During 2008, the Company
generated $113.6 million in mortgage loans compared to $97.3
million in 2007. The subsidiary bank underwrites all fixed
mortgages to secondary market standards and sells them. With the
reduction in mortgage interest rates, mortgage loan volume has
increased and the Company currently has $30 million in its
pipeline. The Company's loan charge-offs during the year totaled
.16% of total average loans, higher than historic levels but well
below Princeton's peers. Non-performing loans were 4.18% of the
total loan portfolio at December 31, 2008. The majority of the
non-performing loans (55%) are concentrated in three credits, and
current appraisals indicate all three credits are adequately
secured. The Company's charge-offs have historically been lower
than its peers, so the loan loss reserve was also lower. Due to the
strong loan growth in 2008 and given the uncertain global and
national economic conditions, Management decided to infuse a large
provision into the allowance for possible loan and lease losses.
Therefore, the provision expense for 2008 was methodically
increased to $2.968 million, compared to $640,000 in 2007. The
allowance for loan losses now represents .64% of total loans at
December 31, 2008, compared to .45% at December 31, 2007. Even with
the record provision, during 2008 the subsidiary bank generated the
highest earnings in its 144-year history.
The Company ended 2008 with total deposits and repurchase
agreements of $997.7 million, an increase of 7.8% from $925.6
million at year-end 2007.
During 2008, the Company purchased 20,000 shares under the Stock
Repurchase Plans at an average price of $27.69 per share. Since
1997, the Company has repurchased 1,364,271 shares of common stock
through stock repurchase programs.
The stock price closed the year at $22.14, a decrease from the
December 31, 2007 stock price of $24.25. The decrease in
Princeton's stock price is reflective of the banking industry as a
whole.
The Company has set its annual meeting date for April 28, 2009
at 10:00 A.M. at The Galleria Convention Center in Princeton,
Illinois. The record date for the Annual Meeting will be February
27, 2009.
Princeton National Bancorp, Inc. has no sub-prime loans in its
loan portfolio or as underlying collateral in the investment
portfolio and does not own Fannie Mae or Freddie Mac preferred
stock. For additional financial information, please refer to the
attached December 31, 2008 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 $1.163 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, December 31,
2008 2007
(unaudited)
----------- -----------
ASSETS
Cash and due from banks $ 17,487 $ 25,801
Interest-bearing deposits with financial
institutions 2,774 1,803
Federal funds sold 0 0
----------- -----------
Total cash and cash equivalents 20,261 27,604
Loans held for sale, at lower of cost or market 2,155 928
Investment securities available-for-sale, at fair
value 236,883 218,095
Investment securities held-to-maturity, at
amortized cost 18,443 14,578
----------- -----------
Total investment securities 255,326 232,673
Loans, net of unearned interest 790,837 722,647
Allowance for loan losses (5,064) (3,248)
----------- -----------
Net loans 785,773 719,399
Premises and equipment, net 30,307 30,801
Land held for sale, at lower of cost or market 1,344 1,344
Bank-owned life insurance 21,588 22,461
Interest receivable 9,693 10,876
Goodwill, net of accumulated amortization 24,521 24,521
Intangible assets, net of accumulated
amortization 4,207 5,090
Other real estate owned 2,487 833
Other assets 5,468 4,172
----------- -----------
TOTAL ASSETS $ 1,163,130 $ 1,080,702
=========== ===========
LIABILITIES
Demand deposits $ 110,559 $ 102,452
Interest-bearing demand deposits 246,714 241,749
Savings deposits 61,089 58,401
Time deposits 543,770 488,805
----------- -----------
Total deposits 962,132 891,407
Customer repurchase agreements 35,532 34,217
Advances from the Federal Home Loan Bank 32,493 6,984
Interest-bearing demand notes issued to the U.S.
Treasury 2,441 1,838
Federal funds purchased 6,500 26,500
Trust Preferred securities 25,000 25,000
Note payable 16,050 14,550
----------- -----------
Total borrowings 118,016 109,089
Other liabilities 10,511 11,599
----------- -----------
Total liabilities 1,090,659 1,012,095
----------- -----------
STOCKHOLDERS' EQUITY
Common stock 22,391 22,391
Surplus 18,420 18,275
Retained earnings 54,329 51,279
Accumulated other comprehensive income (loss),
net of tax 1,402 344
Less: Treasury stock (24,071) (23,682)
----------- -----------
Total stockholders' equity 72,471 68,607
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,163,130 $ 1,080,702
=========== ===========
CAPITAL STATISTICS (UNAUDITED)
YTD average equity to average assets 6.25% 6.33%
Tier 1 leverage capital ratio 5.98% 6.16%
Tier 1 risk-based capital ratio 7.71% 8.00%
Total risk-based capital ratio 8.30% 8.41%
Book value per share $ 21.97 $ 20.74
Closing market price per share $ 22.14 $ 24.25
End of period shares outstanding 3,298,041 3,308,447
End of period treasury shares outstanding 1,180,254 1,169,848
Princeton National Bancorp, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)
THREE THREE TWELVE TWELVE
MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED
December December December December
31, 2008 31, 2007 31, 2008 31, 2007
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
INTEREST INCOME
Interest and fees on loans $ 11,586 $ 13,101 $ 47,715 $ 49,982
Interest and dividends on
investment securities 2,872 2,652 10,982 11,124
Interest on federal funds
sold 5 86 71 332
Interest on
interest-bearing time
deposits in other banks 8 37 54 121
---------- ---------- ---------- ----------
Total Interest Income 14,471 15,876 58,822 61,559
---------- ---------- ---------- ----------
INTEREST EXPENSE
Interest on deposits 5,532 7,546 23,782 30,324
Interest on borrowings 861 1,105 3,519 4,181
---------- ---------- ---------- ----------
Total Interest Expense 6,393 8,651 27,301 34,505
---------- ---------- ---------- ----------
Net interest income 8,078 7,225 31,521 27,054
Provision for loan losses 1,600 90 2,968 640
---------- ---------- ---------- ----------
Net interest income after
provision 6,478 7,135 28,553 26,414
---------- ---------- ---------- ----------
NON-INTEREST INCOME
Trust & farm management
fees 410 382 1,530 1,507
Service charges on deposit
accounts 1,032 1,173 4,408 4,431
Other service charges 550 473 2,137 1,966
Gain on sales of securities
available-for-sale 74 183 405 541
Brokerage fee income 237 279 913 920
Mortgage banking income 190 237 1,069 903
Bank-owned life insurance 226 208 874 816
Other operating income 118 61 257 214
---------- ---------- ---------- ----------
Total Non-Interest
Income 2,837 2,996 11,593 11,298
---------- ---------- ---------- ----------
NON-INTEREST EXPENSE
Salaries and employee
benefits 4,611 4,300 17,692 16,874
Occupancy 651 623 2,559 2,393
Equipment expense 828 788 2,996 3,158
Federal insurance
assessments 578 83 845 338
Intangible assets
amortization 178 176 714 704
Data processing 300 304 1,151 1,101
Advertising 218 183 742 722
Other operating expense 1,063 1,055 4,424 4,275
---------- ---------- ---------- ----------
Total Non-Interest
Expense 8,427 7,512 31,123 29,565
---------- ---------- ---------- ----------
Income before income taxes 888 2,619 9,023 8,147
Income tax expense (139) 571 1,697 1,377
---------- ---------- ---------- ----------
Net income $ 1,027 $ 2,048 $ 7,326 $ 6,770
========== ========== ========== ==========
Net income per share:
BASIC $ 0.31 $ 0.62 $ 2.22 $ 2.04
DILUTED $ 0.31 $ 0.62 $ 2.22 $ 2.03
Basic weighted average
shares outstanding 3,296,743 3,310,487 3,297,990 3,326,467
Diluted weighted average
shares outstanding 3,301,233 3,316,573 3,306,195 3,334,507
PERFORMANCE RATIOS (annualized)
Return on average assets 0.36% 0.77% 0.66% 0.65%
Return on average equity 5.90% 12.18% 10.59% 10.32%
Net interest margin
(tax-equivalent) 3.38% 3.29% 3.44% 3.20%
Efficiency ratio
(tax-equivalent) 73.21% 69.69% 68.66% 72.72%
ASSET QUALITY
Net loan charge-offs $ 378 $ 64 $ 1,151 $ 445
Total non-performing loans $ 33,038 $ 7,434 $ 33,038 $ 7,434
Non-performing loans as a %
of total loans 4.18% 1.03% 4.18% 1.03%
Inquiries should be directed to: Lou Ann Birkey Vice President
Investor Relations, Princeton National Bancorp, Inc. (815) 875-4444
E-Mail address: Email Contact
Princeton National Bancorp (CE) (USOTC:PNBC)
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