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 $49.6 million, or $(14.89) per common share on a
fully diluted basis. The Corporation recorded loan loss provision
of $46.0 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 $4.3 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 high level of
non-accrual loans, a decrease in loans from the lack of sufficient
quality loan demand and the historically low interest rate
environment.
Non-interest income grew to $12.8 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 $817,000.
Net loan charge-offs grew from $22.9 million in 2010 to $46.4
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 $1.020 billion
from $1.096 billion at December 31, 2010. Total net loan balances
decreased by $77.9 million during the twelve month period to $596.5
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 $11.0 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 2.71%, 4.15% and 5.44%, 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,
Revised III 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 625,712 704,074
Allowance for loan losses (29,260) (29,726)
------------- -------------
Net loans 596,452 674,348
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 9,788 13,553
------------- -------------
TOTAL ASSETS $ 1,020,360 $ 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) (36,747) 11,589
Accumulated other comprehensive income (loss),
net of tax 5,378 3,064
Less: Treasury stock (23,335) (23,594)
------------- -------------
Total stockholders' equity 10,979 56,861
------------- -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,020,360 $ 1,096,471
============= =============
CAPITAL STATISTICS (UNAUDITED)
YTD average equity to average assets 4.80% 6.62%
Tier 1 leverage capital ratio 0.44% 5.93%
Tier 1 risk-based capital ratio 0.67% 8.40%
Total risk-based capital ratio 1.33% 9.68%
Common book value per share $ (4.20) $ 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
Revised III 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 28,059 27,250 45,959 40,550
------------ ------------ ------------ ------------
Net interest income
after provision (19,852) (17,835) (11,273) (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) 0 812 (817) (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 3,070 3,798 12,786 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 (28,956) (24,042) (40,419) (28,883)
Income tax expense
(benefit) (665) (8,295) 7,887 (11,904)
------------ ------------ ------------ ------------
Net loss (28,291) (15,747) (48,306) (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 $ (28,612) $ (16,068) $ (49,590) $ (18,262)
============ ============ ============ ============
Net loss per share
available to common
stockholders:
BASIC $ (8.58) $ (4.85) $ (14.89) $ (5.52)
DILUTED $ (8.58) $ (4.85) $ (14.89) $ (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 -10.70% -5.67% -4.59% -1.58%
Net Income (Loss)
Available to Common
Stockholders to
Average Equity -316.45% -84.88% -95.71% -23.82%
Net interest margin
(tax-equivalent) 3.87% 4.16% 4.08% 3.98%
Efficiency ratio
(tax-equivalent) 104.70% 72.85% 85.39% 72.93%
ASSET QUALITY
Net loan charge-offs $ 15,311 $ 16,076 $ 46,425 $ 22,947
Total non-performing
loans (non-accrual,
past due over 90
days, troubled debt
restructuring) $ 105,663 $ 97,351 $ 105,663 $ 97,351
Non-performing loans
as a % of total
loans 16.89% 13.83% 16.89% 13.83%
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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