Princeton National Bancorp, Inc. (NASDAQ: PNBC), parent company of
Citizens First National Bank ("Subsidiary Bank"), announced a net
loss available to common stockholders of $2.232 million or $(0.67)
per diluted common share ("EPS"), compared to net income to
available common stockholders of $440,000 or $0.13 EPS in the third
quarter of 2009.
"Results for the third quarter reflect the more aggressive
approach the Subsidiary Bank is taking with regard to credits that
have deteriorated," stated President & CEO Thomas D. Ogaard.
"This approach resulted in a $6.7 million loan loss provision and
net charge-offs of $4.1 million. Year-to-date, we have taken a
provision expense of $13.3 million and incurred charge-offs of $6.9
million, compared to $5.0 million and $2.4 million respectively for
the same period in 2009. Because the economic and business climate
in any given industry or market and its impact on any given
borrower can change rapidly, the risk profile of the loan portfolio
is continually assessed and adjusted when appropriate. We will
continue to move forward with this aggressive approach in the
fourth quarter of 2010 and first quarter of 2011; where after, we
anticipate a more moderate need for loan loss provisions."
At the forefront of the Company's ability to generate core
earnings is the continued improvement in the net interest margin,
resulting in an increase of 74 basis points to 4.14% in the third
quarter of 2010 from 3.40% in the third quarter of 2009. Driving
the increase in the net interest margin continues to be the
reduction in the cost of funds, 88 basis points year over year (a
reduction of $7.3 million in interest expense). "The disciplines we
have put into place to maintain asset yields and control funding
costs will continue to be beneficial," noted Ogaard.
The staff of the Subsidiary Bank continues their focus on
addressing problem loan situations. The net loan losses for the
nine months ending September 30, 2010 totaled 1.21% (as a percent
of loans, annualized). The level of reserve now represents 2.55% of
total loans, an increase from 1.00% one year ago. Stockholders'
equity was $76.5 million at September 30, 2010, down from $103.0
million at September 30, 2009 (primarily from the write-down of
goodwill at year-end 2009), resulting in a tier one capital ratio
of 8.01% and risk based regulatory capital ratio of 12.31%, both of
which exceed the "well-capitalized" regulatory requirements.
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. At September 30, 2010, the Company's total assets and
total loans outstanding were $1.11 billion and $727.8 million,
respectively. The Company made a decision to restructure its
balance sheet in the fourth quarter of 2009 to lower total assets,
and that restructuring continued in the third quarter of 2010.
Non-performing loans at September 30, 2010 totaled $82.7
million, compared to $58.6 million at December 31, 2009. Our
classified substandard & doubtful loans continue to move within
the various categories, which is part of the natural progression
and a result of our remediation efforts.
Non-interest income for the third quarter of 2010 was $2.5
million and non-interest expense was $9.0 million; non-interest
income is down slightly from $2.8 million in the third quarter of
2009 (due to further impairment of the mortgage servicing rights
portfolio in this recent low-rate environment) and non-interest
expense is unchanged.
The price of PNBC stock closed at $4.75 on September 30, 2010,
compared to $10.81 on December 31, 2009.
The Company 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. 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
815-872-6131.
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 Company's control, could cause actual conditions, events
or results to differ significantly from those described in the
forward-looking statements. The Company'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 Company'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 Company 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) September 30, December 31,
2010 2009
Revised (unaudited)
----------- -----------
ASSETS
Cash and due from banks $ 18,485 $ 15,546
Interest-bearing deposits with financial
institutions 42,789 55,527
----------- -----------
Total cash and cash equivalents 61,274 71,073
Loans held for sale, at lower of cost or market 1,088 3,296
Investment securities available-for-sale, at fair
value 229,336 288,474
Investment securities held-to-maturity, at
amortized cost 15,075 12,793
----------- -----------
Total investment securities 244,411 301,267
Loans, net of unearned interest 727,774 798,074
Allowance for loan losses (18,553) (12,075)
----------- -----------
Net loans 709,221 785,999
Premises and equipment, net 27,109 28,269
Land held for sale, at lower of cost or market 2,244 2,354
Federal Reserve and Federal Home Loan Bank stock 4,498 4,230
Bank-owned life insurance 23,189 22,540
Interest receivable 7,952 9,267
Intangible assets, net of accumulated
amortization 2,734 3,347
Other real estate owned 18,372 17,658
Other assets 9,135 11,430
----------- -----------
TOTAL ASSETS $ 1,111,227 $ 1,260,730
=========== ===========
LIABILITIES
Demand deposits $ 133,023 $ 136,026
Interest-bearing demand deposits 368,294 374,624
Savings deposits 72,184 68,292
Time deposits 386,045 496,597
----------- -----------
Total deposits 959,546 1,075,539
Customer repurchase agreements 31,299 47,327
Advances from the Federal Home Loan Bank 16,000 31,500
Interest-bearing demand notes issued to the U.S.
Treasury 778 1,021
Trust Preferred securities 25,000 25,000
----------- -----------
Total borrowings 73,077 104,848
Other liabilities 2,118 5,683
----------- -----------
Total liabilities 1,034,741 1,186,070
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock 24,979 24,958
Common stock 22,391 22,391
Common stock warrants 150 150
Additional paid-in capital 18,397 18,423
Retained earnings 27,657 29,851
Accumulated other comprehensive income (loss),
net of tax 6,686 2,816
Less: Treasury stock (23,774) (23,929)
----------- -----------
Total stockholders' equity 76,486 74,660
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,111,227 $ 1,260,730
=========== ===========
CAPITAL STATISTICS (UNAUDITED)
YTD average equity to average assets 6.61% 7.84%
Tier 1 leverage capital ratio 8.01% 7.48%
Tier 1 risk-based capital ratio 11.05% 10.25%
Total risk-based capital ratio 12.31% 11.50%
Common book value per share $ 15.54 $ 15.03
Closing market price per share $ 4.75 $ 10.81
End of period shares outstanding 3,315,397 3,306,369
End of period treasury shares outstanding 1,162,898 1,171,926
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)
THREE THREE
MONTHS MONTHS NINE MONTHS NINE MONTHS
Revised ENDED ENDED ENDED ENDED
September September September September
30, 2010 30, 2009 30, 2010 30, 2009
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ----------- ---------- -----------
INTEREST INCOME
Interest and fees on
loans $ 9,632 $ 10,951 $ 30,059 $ 33,494
Interest and dividends on
investment securities 2,378 3,448 7,713 9,594
Interest on
interest-bearing time
deposits in other banks 32 25 104 76
---------- ----------- ---------- -----------
Total Interest
Income 12,042 14,424 37,876 43,164
---------- ----------- ---------- -----------
INTEREST EXPENSE
Interest on deposits 2,318 4,829 8,348 15,079
Interest on borrowings 479 712 1,615 2,178
---------- ----------- ---------- -----------
Total Interest
Expense 2,797 5,541 9,963 17,257
---------- ----------- ---------- -----------
Net interest income 9,245 8,883 27,913 25,907
Provision for loan losses 6,725 2,410 13,300 5,045
---------- ----------- ---------- -----------
Net interest income after
provision 2,520 6,473 14,613 20,862
---------- ----------- ---------- -----------
NON-INTEREST INCOME
Trust & farm management
fees 269 296 850 1,004
Service charges on
deposit accounts 1,004 1,050 2,853 3,004
Other service charges 469 446 1,436 1,346
Gain on sales of
securities
available-for-sale 0 38 722 799
Brokerage fee income 134 192 547 638
Mortgage servicing rights
impairment (333) 0 (922) (556)
Mortgage banking income 694 498 1,457 1,984
Bank-owned life insurance 227 235 684 708
Other operating income 10 17 68 165
---------- ----------- ---------- -----------
Total Non-Interest
Income 2,474 2,772 7,695 9,092
---------- ----------- ---------- -----------
NON-INTEREST EXPENSE
Salaries and employee
benefits 4,628 4,821 13,494 13,514
Occupancy 645 640 1,978 1,952
Equipment expense 782 768 2,296 2,304
Federal insurance
assessments 603 566 1,835 2,089
Intangible assets
amortization 204 204 606 620
Data processing 355 319 987 974
Advertising 154 169 536 577
ORE Expenses, net 446 312 1,567 821
Loan collection expenses 104 123 492 325
Write-down of land
held-for-sale 110 0 110 0
Other operating expense 1,016 1,079 3,248 3,301
---------- ----------- ---------- -----------
Total Non-Interest
Expense 9,047 9,001 27,149 26,477
---------- ----------- ---------- -----------
Income before income
taxes (4,053) 244 (4,841) 3,477
Income tax expense (2,142) (516) (3,609) (338)
---------- ----------- ---------- -----------
Net income (1,911) 760 (1,232) 3,815
Preferred stock dividends 314 313 941 868
Accretion of preferred
stock discount 7 7 21 18
---------- ----------- ---------- -----------
Net income available to
common stockholders $ (2,232) $ 440 $ (2,194) $ 2,929
========== =========== ========== ===========
Net income (loss) per
share available to
common stockholders:
BASIC $ (0.67) $ 0.13 $ (0.66) $ 0.89
DILUTED $ (0.67) $ 0.13 $ (0.66) $ 0.89
Basic weighted average
shares outstanding 3,313,029 3,302,172 3,309,869 3,300,148
Diluted weighted average
shares outstanding 3,313,029 3,302,812 3,309,869 3,300,688
PERFORMANCE RATIOS
(annualized)
Net Income (Loss)
Available to Common
Stockholders to Average
Assets -0.79% 0.14% -0.25% 0.32%
Net Income (Loss)
Available to Common
Stockholders to Average
Equity -11.28% 1.75% -3.80% 4.07%
Net interest margin
(tax-equivalent) 4.14% 3.40% 4.00% 3.45%
Efficiency ratio
(tax-equivalent) 72.69% 72.41% 71.84% 71.38%
ASSET QUALITY
Net loan charge-offs $ 4,148 $ 811 $ 6,871 $ 2,350
Total non-performing loans
(non-accrual, past due
over 90 days, troubled
debt restructuring) $ 82,655 $ 38,513 $ 82,655 $ 38,513
Non-performing loans as a
% of total loans 11.36% 4.99% 11.36% 4.99%
Inquiries should be directed to: Lou Ann Birkey Vice President -
Investor Relations, Princeton National Bancorp, Inc. (815) 872-6131
Email Contact
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