Princeton National Bancorp, Inc. (the "Company" or "PNBC") (NASDAQ:
PNBC), the holding company of Citizens First National Bank (the
"Subsidiary Bank"), today reported results of operations and
financial condition for the first quarter of 2009. Net income was
$1,156,000 for the first quarter of 2009, or $0.28 per share,
compared to $1,028,000 or $0.31 in the fourth quarter of 2008 and
$2,090,000 or $0.63 in the first quarter of 2008. Return on average
equity was 5.14% for the first quarter 2009, compared to 5.90% and
12.22% for the fourth quarter and first quarter of 2008,
respectively.
President Tony J. Sorcic stated, "Our first quarter operating
results reflect both the impact of current economic conditions on
our credit costs as well as accruing for one-fourth of the FDIC
special assessment, which will be assessed on all banks."
"At the April Board of Directors' meeting, the Board made the
difficult decision to reduce the dividend from $0.28 per share to
$0.14 per share. The dividend is payable May 26, 2009, to those
shareholders of record as of May 11, 2009. The Company has always
focused on generating a strong, consistent return for shareholders,
but these extraordinary times require extraordinary measures. The
reduction in dividend is being done as a precautionary measure to
ensure we remain in a strong capital position to take advantage of
opportunities in the future. The reduction is also in anticipation
of the additional $1.2 million which will be accrued for the FDIC
special assessment. Our highest obligation to our shareholders is
to keep the Company strong and in a position to grow when economic
times improve."
"The Subsidiary Bank retains servicing of residential mortgages
sold into the secondary market for which fees are earned.
Accounting standards require the servicing value of these fees to
be capitalized into the asset category, mortgage servicing rights.
The Subsidiary Bank has been utilizing an accepted multiple for
determining this asset value. Given the high level of refinancing
due to the historic decrease in mortgage interest rates, the value
of existing servicing rights has decreased. This resulted in a
pre-tax charge of $556,419 to earnings in the first quarter of
2009."
"On February 27, 2009, the FDIC announced it had adopted an
interim rule to impose an emergency special assessment on June 30,
2009 which will be collected on September 30, 2009. It is
anticipated the impact of the emergency special assessment on the
Subsidiary Bank will be approximately 16 basis points or $1.6
million. During the first quarter, $416,000 was accrued toward this
assessment and the remaining $1.2 million will be accrued for
during the second quarter of 2009."
Mr. Sorcic concluded, "The Company's solid capital base and
ability to generate core earnings will be an advantage as we
continue to work through the current credit cycle. This advantage
enables Citizens First National Bank to meet the financial needs of
customers and the communities it serves and positions Princeton
National Bancorp, Inc. to benefit as conditions improve."
Total assets ended the quarter at $1.215 billion, up 4.5% from
$1.163 billion at December 31, 2008. Princeton National Bancorp,
Inc. experienced a $16.0 million decrease in total loans as of
March 31, 2009 in comparison to December 31, 2008 (primarily due to
a decrease in the residential real estate category as variable rate
loans were refinanced into fixed rate loans and sold in the
secondary market, along with seasonal agricultural paydowns).
The non-performing loans of $33.3 million represent 4.30% of the
total loan portfolio as of March 31, 2009, up slightly from 4.18%
at December 31, 2008 due to the difficult economic environment.
Most of the non-performing loans remain secured by the value of
collateral pledged. At the end of the first quarter, specific loss
provisions for individual credits totaled $1.3 million. The
Subsidiary Bank staff will continue to work with borrowers to
resolve problem loan situations and to work through the challenging
remediation cycle for real estate and construction-related credits.
Recognizing this, and reflective of current conditions, we have
increased our level of loan loss provisioning, bringing our level
of reserves to .76% of total loans, an increase from .43% one year
ago. The loan loss provision taken in the first quarter totaled
$1,170,000 versus $1,600,000 in the fourth quarter of 2008 and
$368,000 in the first quarter of 2008.
The Company ended the first quarter of 2009 with total core
deposits and repurchase agreements of $1.050 million, a $52.1
million increase from December 31, 2008 and $96.1 million increase
from March 31, 2008.
In review of the March 31, 2009 consolidated statements of
income, net-interest income (before provision) was $8.079 million,
non-interest income was $2.795 million and the net interest margin
was 3.40%, compared to $8.078 million, $2.837 million and 3.38%,
respectively, for the fourth quarter of 2008.
As reported previously, on January 23rd, the Company received a
$25.1 million investment from the U.S. Treasury Department Capital
Purchase Program and Emergency Economic Stabilization Act of 2008
("EESA"). On February 17, 2009 the American Recovery and
Reinvestment Act ("ARRA") of 2009 was enacted. The ARRA contains
numerous provisions which modify the EESA and which require
additional rule making by various regulatory bodies. The precise
impact of ARRA and the rules promulgated under it continue to be
announced.
The price of PNBC stock closed at $14.00 on March 31, 2009,
compared to $22.14 on December 31, 2008. The decrease in stock
price from year-end 2008 is reflective of the banking industry as a
whole. Financial stocks continue to be impacted by poor earnings
reports by many institutions, due to the current credit cycle.
For detailed financial information, please refer to the attached
March 31, 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 $1.215 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)
March 31,
2009 December 31,
(unaudited) 2008
----------- -----------
ASSETS
Cash and due from banks $ 67,755 $ 20,163
Interest-bearing deposits with financial
institutions 113 98
Federal funds sold 0 0
----------- -----------
Total cash and cash equivalents 67,868 20,261
Loans held for sale, at lower of cost or market 1,084 2,155
Investment securities available-for-sale, at fair
value 259,397 236,883
Investment securities held-to-maturity, at
amortized cost 15,137 14,232
----------- -----------
Total investment securities 274,534 251,115
Loans, net of unearned interest 774,802 790,837
Allowance for loan losses (5,864) (5,064)
----------- -----------
Net loans 768,938 785,773
Premises and equipment, net 29,243 29,297
Land held for sale, at lower of cost or market 2,354 2,354
Federal Reserve and Federal Home Loan Bank stock 4,211 4,211
Bank-owned life insurance 21,842 21,588
Interest receivable 8,301 9,693
Goodwill, net of accumulated amortization 24,521 24,521
Intangible assets, net of accumulated amortization 3,991 4,207
Other real estate owned 3,170 2,487
Other assets 5,427 5,468
----------- -----------
TOTAL ASSETS $ 1,215,484 $ 1,163,130
=========== ===========
LIABILITIES
Demand deposits $ 105,477 $ 110,559
Interest-bearing demand deposits 256,113 246,714
Savings deposits 66,234 61,089
Time deposits 583,140 543,770
----------- -----------
Total deposits 1,010,964 962,132
Customer repurchase agreements 38,799 35,532
Advances from the Federal Home Loan Bank 32,494 32,493
Interest-bearing demand notes issued to the U.S.
Treasury 773 2,441
Federal funds purchased 0 6,500
Trust Preferred securities 25,000 25,000
Note payable 0 16,050
----------- -----------
Total borrowings 97,066 118,016
Other liabilities 9,499 10,511
----------- -----------
Total liabilities 1,117,529 1,090,659
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock 24,938 22,391
Common stock 22,391 0
Common stock warrants 150 0
Additional paid-in capital 18,377 18,420
Retained earnings 54,479 54,329
Accumulated other comprehensive income, net of
tax 1,655 1,402
Less: Treasury stock (24,035) (24,071)
----------- -----------
Total stockholders' equity 97,955 72,471
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,215,484 $ 1,163,130
=========== ===========
CAPITAL STATISTICS (UNAUDITED)
YTD average equity to average assets 7.68% 6.25%
Tier 1 leverage capital ratio 7.99% 6.22%
Tier 1 risk-based capital ratio 10.84% 7.72%
Total risk-based capital ratio 11.53% 8.30%
Common book value per share $ 22.13 $ 21.97
Closing market price per share $ 14.00 $ 22.14
End of period shares outstanding 3,300,139 3,298,041
End of period treasury shares outstanding 1,178,156 1,180,254
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)
THREE MONTHS THREE MONTHS
ENDED ENDED
March 31, March 31,
2009 2008
(unaudited) (unaudited)
------------ ------------
INTEREST INCOME
Interest and fees on loans $ 11,059 $ 12,350
Interest and dividends on investment securities 2,931 2,679
Interest on federal funds sold 0 25
Interest on interest-bearing time deposits in
other banks 16 12
------------ ------------
Total Interest Income 14,006 15,066
------------ ------------
INTEREST EXPENSE
Interest on deposits 5,147 6,674
Interest on borrowings 780 938
------------ ------------
Total Interest Expense 5,927 7,612
------------ ------------
Net interest income 8,079 7,454
Provision for loan losses 1,170 368
------------ ------------
Net interest income after provision 6,909 7,086
------------ ------------
NON-INTEREST INCOME
Trust & farm management fees 314 476
Service charges on deposit accounts 976 1,092
Other service charges 446 457
Gain on sales of securities available-for-sale 187 276
Brokerage fee income 198 219
Mortgage banking income 1 348
Bank-owned life insurance 243 215
Other operating income 430 70
------------ ------------
Total Non-Interest Income 2,795 3,153
------------ ------------
NON-INTEREST EXPENSE
Salaries and employee benefits 4,471 4,398
Occupancy 709 679
Equipment expense 773 718
Federal insurance assessments 697 84
Intangible assets amortization 208 179
Data processing 316 277
Advertising 197 168
Other operating expense 1,281 1,057
------------ ------------
Total Non-Interest Expense 8,652 7,560
------------ ------------
Income before income taxes 1,052 2,679
Income tax expense (benefit) (104) 589
------------ ------------
Net income $ 1,156 $ 2,090
Preferred stock dividends 237 0
Accretion on preferred stock discount 5 0
------------ ------------
Net income available to common stockholders 914 2,090
============ ============
Per share information:
BASIC net income per common share available
to common stockholders $ 0.28 $ 0.63
DILUTED net income per common share
available to common stockholders $ 0.28 $ 0.63
Basic weighted average shares outstanding 3,298,064 3,304,063
Diluted weighted average shares outstanding 3,298,725 3,309,907
PERFORMANCE RATIOS (annualized)
Return on average assets 0.40% 0.78%
Return on average equity 5.14% 12.22%
Net interest margin (tax-equivalent) 3.40% 3.39%
Efficiency ratio (tax-equivalent) 75.30% 67.66%
ASSET QUALITY
Net loan charge-offs $ 371 $ 481
Total non-performing loans $ 33,278 $ 14,110
Non-performing loans as a % of total loans 4.30% 1.93%
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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