Princeton National Bancorp, Inc. (the "Corporation") (NASDAQ:
PNBC), parent corporation of Citizens First National Bank
("Subsidiary Bank"), announced a net loss available to common
stockholders for the second quarter of 2011 of $2,932,000 million
or $(0.88) per basic and diluted common share ("EPS"), compared to
net income of $99,000 or $0.03 EPS in the second quarter of 2010.
The net loss is primarily attributable to a higher loan loss
provision required due to continued real estate collateral
devaluation and increasing costs to carry other real estate owned
properties, partially offset by gains on sales of
available-for-sale securities.
Princeton National Bancorp, Inc.'s net interest margin rose to
4.12% in the second quarter of 2011 compared to 3.96% in the second
quarter of 2010. The increase in the net interest margin continues
to be driven by a reduction in the cost of funds, which decreased
by 46 basis points quarter over quarter (a reduction of $1.4
million in interest expense). Net interest income before the
provision for loan losses was $8,756,000 for the second quarter of
2011, compared to $9,185,000 for the second quarter of 2010.
"We continue to work through the migration process of
underperforming loans and the still eroding property values of our
collateral, primarily in our eastern markets," noted Thomas Ogaard,
President & CEO. "Our focus on resolving credit issues remains
our top priority as evidenced by the results of the quarter," added
Ogaard.
Non-performing loans amounted to 14.74% of total loans at June
30, 2011 compared to 15.16% at March 31, 2011 and 13.83% at
December 31, 2010. Net charge-offs increased during the second
quarter of 2011 to $18.8 million, compared to net charge-offs of
$1.4 million for the second quarter of 2010. The Corporation
recorded a loan loss provision of $8.1 million in the second
quarter of 2011 which reflects management's focus on problem credit
resolution, despite ongoing high levels of stress in the commercial
real estate industry. Given the current state of the economy,
management has assessed the impact of the recession on each
category of loans and adjusted historical loss factors for more
recent economic trends. Also, several economic uncertainties were
taken into consideration in developing the appropriate level of
reserve.
Non-interest income for the second quarter of 2011 was $4.0
million compared to $2.0 million in the second quarter of 2010.
This increase was primarily due to the realization of gains on
sales of available-for-sale securities of $1,598,000 in the second
quarter of 2011, compared to $80,000 in the second quarter of 2010.
Also negatively impacting results in the second quarter of 2010 was
the recognition of a $589,000 impairment charge on mortgage
servicing rights. Service charges on deposits experienced an
increase of $44,000 or 4.6% due to an increase in overdraft fee
income. Annualized non-interest income as a percentage of total
average assets increased to 1.49% for the second quarter of 2011,
from 0.70% for the same period in 2010.
Non-interest expense for the second quarter of 2011 totaled
$10.2 million, up from $8.8 million during the same quarter in
2010. The primary difference between the two quarters was an
increase in expenses related to other real estate owned of
$1,046,000 and an increase in loan collection expenses of $187,000.
Annualized non-interest expense as a percentage of total average
assets increased to 3.78% for the second quarter of 2011, compared
to 3.04% for the same period in 2010.
Stockholders' equity as of June 30, 2011 decreased slightly to
$55.0 million from $56.9 million at December 31, 2010.
The price of PNBC stock closed at $5.00 on June 30, 2011,
compared to $3.64 on December 31, 2010.
Princeton National Bancorp, Inc., through its wholly owned
subsidiary Citizens First National Bank, operates community banking
offices with strategic locations in 8 counties in northern
Illinois. Total assets at June 30, 2011 decreased to $1.070 billion
from $1.096 billion at December 31, 2010. Total loan balances
decreased by $46.4 million during the six month period to $657.7
million due to seasonal pay downs in the agricultural portfolio and
general decline in the overall demand for new low-risk credit. The
decrease in assets reflects the Corporation's 2011 capital
management objectives.
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)
June 30, December 31,
2011 2010
(unaudited)
-------------- --------------
ASSETS
Cash and due from banks $ 18,349 $ 12,992
Interest-bearing deposits with financial
institutions 55,634 30,888
-------------- --------------
Total cash and cash equivalents 73,983 43,880
Loans held for sale, at lower of cost or
market 2,615 5,515
Investment securities available-for-sale, at
fair value 233,883 248,752
Investment securities held-to-maturity, at
amortized cost 11,350 12,187
-------------- --------------
Total investment securities 245,233 260,939
Loans, net of unearned interest 657,687 704,074
Allowance for loan losses (19,129) (29,726)
-------------- --------------
Net loans 638,558 674,348
Premises and equipment, net 26,212 26,901
Land held for sale, at lower of cost or
market 2,244 2,244
Federal Reserve and Federal Home Loan Bank
stock 4,500 4,498
Bank-owned life insurance 23,871 23,416
Interest receivable 6,116 7,482
Deferred income taxes 13,457 10,512
Intangible assets, net of accumulated
amortization 2,163 2,531
Other real estate owned 18,308 20,652
Other assets 12,501 13,553
-------------- --------------
TOTAL ASSETS $ 1,069,761 $ 1,096,471
============== ==============
-------------------------------------------- -------------- --------------
LIABILITIES
Demand deposits $ 142,579 $ 138,683
Interest-bearing demand deposits 373,086 383,126
Savings deposits 82,127 74,817
Time deposits 341,623 366,335
-------------- --------------
Total deposits 939,415 962,961
Customer repurchase agreements 38,309 35,806
Advances from the Federal Home Loan Bank 5,000 9,000
Interest-bearing demand notes issued to the
U.S. Treasury 978 1,753
Trust Preferred securities 25,000 25,000
-------------- --------------
Total borrowings 69,287 71,559
Other liabilities 6,033 5,090
-------------- --------------
Total liabilities 1,014,735 1,039,610
-------------- --------------
STOCKHOLDERS' EQUITY
Preferred stock 25,001 24,986
Common stock 22,391 22,391
Common stock warrants 150 150
Additional paid-in capital 18,259 18,275
Retained earnings 10,384 11,589
Accumulated other comprehensive income
(loss), net of tax 2,365 3,064
Less: Treasury stock (23,524) (23,594)
-------------- --------------
Total stockholders' equity 55,026 56,861
-------------- --------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,069,761 $ 1,096,471
============== ==============
CAPITAL STATISTICS (UNAUDITED)
YTD average equity to average assets 5.30% 6.62%
Tier 1 leverage capital ratio 5.71% 5.93%
Tier 1 risk-based capital ratio 8.27% 8.40%
Total risk-based capital ratio 9.54% 9.68%
Common book value per share $ 9.02 $ 9.58
Closing market price per share $ 5.00 $ 3.64
End of period shares outstanding 3,330,038 3,325,941
End of period treasury shares outstanding 1,148,257 1,152,354
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)
THREE THREE
MONTHS MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
June 30, June 30, June 30, June 30,
2011 2010 2011 2010
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
INTEREST INCOME
Interest and fees on
loans $ 8,186 $ 9,841 $ 17,045 $ 20,427
Interest and dividends
on investment
securities 2,354 2,492 4,768 5,335
Interest on interest-
bearing time deposits
in other banks 34 40 56 72
----------- ----------- ----------- -----------
Total Interest
Income 10,574 12,373 21,869 25,834
----------- ----------- ----------- -----------
INTEREST EXPENSE
Interest on deposits 1,634 2,657 3,372 6,030
Interest on borrowings 184 531 384 1,136
----------- ----------- ----------- -----------
Total Interest
Expense 1,818 3,188 3,756 7,166
----------- ----------- ----------- -----------
Net interest income 8,756 9,185 18,113 18,668
Provision for loan
losses 8,050 2,650 9,925 6,575
----------- ----------- ----------- -----------
Net interest income
after provision 706 6,535 8,188 12,093
----------- ----------- ----------- -----------
NON-INTEREST INCOME
Trust & farm management
fees 269 317 559 581
Service charges on
deposit accounts 1,002 958 1,945 1,849
Other service charges 421 507 826 967
Gain on sales of
securities available-
for-sale 1,598 80 2,682 722
Brokerage fee income 207 224 346 413
Mortgage servicing
rights recovery
(impairment) 0 (589) 0 (589)
Mortgage banking income 288 268 740 763
Bank-owned life
insurance income 225 228 446 457
Other operating income 17 36 83 58
----------- ----------- ----------- -----------
Total Non-Interest
Income 4,027 2,029 7,627 5,221
----------- ----------- ----------- -----------
NON-INTEREST EXPENSE
Salaries and employee
benefits 4,529 4,452 9,145 8,864
Occupancy 623 633 1,312 1,333
Equipment expense 781 747 1,562 1,514
Federal insurance
assessments 447 534 1,087 1,232
Intangible assets
amortization 175 201 369 402
Data processing 349 320 715 632
Marketing 139 206 294 382
ORE Expenses, net 1,433 387 2,015 1,122
Loan collection expenses 371 184 534 388
Other operating expense 1,386 1,152 2,635 2,233
----------- ----------- ----------- -----------
Total Non-Interest
Expense 10,233 8,816 19,668 18,102
----------- ----------- ----------- -----------
Income before income
taxes (5,500) (252) (3,853) (788)
Income tax expense (2,575) (672) (2,663) (1,467)
----------- ----------- ----------- -----------
Net income (2,925) 420 (1,190) 679
Preferred stock
dividends 0 314 0 627
Accretion of preferred
stock discount 7 7 15 14
----------- ----------- ----------- -----------
Net income available to
common stockholders ($2,932) $ 99 ($1,205) $ 38
=========== =========== =========== ===========
Net income (loss) per
share available to
common stockholders:
BASIC ($0.88) $ 0.03 ($0.36) $ 0.01
DILUTED ($0.88) $ 0.03 ($0.36) $ 0.01
Basic weighted average
shares outstanding 3,328,035 3,309,746 3,327,005 3,308,262
Diluted weighted average
shares outstanding 3,328,035 3,309,746 3,327,005 3,308,262
PERFORMANCE RATIOS
(annualized)
Net Income (Loss)
Available to Common
Stockholders to Average
Assets -1.08% 0.03% -0.22% 0.01%
Net Income (Loss)
Available to Common
Stockholders to Average
Equity -20.32% 0.52% -4.21% 0.10%
Net interest margin
(tax-equivalent) 4.12% 3.96% 4.27% 3.93%
Efficiency ratio (tax-
equivalent) 77.45% 73.85% 73.75% 71.42%
ASSET QUALITY
Net loan charge-offs $ 18,828 $ 1,356 $ 20,522 $ 2,723
Total non-performing
loans (non-accrual,
past due over 90 days,
troubled
debt restructuring) $96,970 $66,115 $96,970 $66,115
Non-performing loans as
a % of total loans 14.74% 8.91% 14.74% 8.91%
Inquiries should be directed to: Lou Ann Birkey Vice President -
Investor Relations, Princeton National Bancorp, Inc. (815) 872-6131
E-Mail address: Email Contact
Princeton National Bancorp (CE) (USOTC:PNBC)
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