EX-99.1 2 k33588exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(PRINCETON LOGO)
Princeton National Bancorp, Inc. Generates Record Core Earnings During
The First Six Months of 2008
PRINCETON, ILLINOIS — July 28, 2008 — Princeton National Bancorp, Inc. (NASDAQ: PNBC)
President Tony J. Sorcic stated, “Princeton National Bancorp, Inc. is excited to announce record earnings for the first six months of 2008. Net income of $4,111,000 represents a 37.9% increase over the 2007 net income of $2,982,000. Fully diluted earnings per share for the same period of $1.24 represent a 39.3% increase over the 2007 fully diluted earnings per share of $.89. Additionally, the return on average equity increased 30.5% to 11.98% from 9.18%.”
Mr. Sorcic continued, “The positive trend in net interest income continued throughout the first six months of 2008. Princeton National Bancorp, Inc.’s net interest margin (tax equivalent) grew to 3.44% from 3.13% for the same six-month period in 2007. Based on the current level of assets, this equates to an increase in net (annualized pre-tax) interest income of $2,400,000. The net interest income for the six months ending June 30, 2008 was $15,271,000, compared to $12,978,000 for the first six months of 2007. Management believes the net interest margin will continue to increase throughout the remainder of 2008.”
Mr. Sorcic concluded, “Citizens First National Bank, the subsidiary bank, has been serving customers since 1865 in good times and challenging times. Princeton National Bancorp, Inc. and Citizens First National Bank are very strong organizations with long and successful track records.”
It is with great regret the Company announces the retirement of Thomas M. Longman effective July 28, 2008 due to his relocation outside of the Company’s market area. Mr. Longman has been a long-time Director and great asset to the Company. His support, input and dedication will truly be missed. We wish him well in his retirement.
Non-interest income generated during the six-month period of 2008 totaled $5,904,000, a $537,000 (10.0%) improvement over 2007. The Company remains focused on increasing non-interest income by expanding products and services that are attractive to the customer. The Company’s non-interest income has equaled or exceeded 1% of average assets for 32 consecutive quarters.
As a percentage of average assets, non-interest expense for the six months ended June 30, 2008 was 2.80%, compared to 2.88% for the six months ended June 30, 2007. Operating expenses are well-controlled and emphasis will continue to be placed on improving efficiencies.
In comparing the second quarter of 2008 to the same period in 2007, net income of $2.020 million increased 30.1% from $1.553 million, fully diluted earnings per share increased 32.6%, net interest income increased 18.67%, and the return on average equity increased 22.5%.
Assets at June 30, 2008 reached a record high of $1.105 billion. During the first six months of 2008, total loans have increased $23.6 million, ending the period at $746,234,000. The loan-to-asset ratio increased to 67.5% as of June 30, 2008 from 66.9% at December 31, 2007. The Subsidiary Bank has no sub-prime loans in its loan portfolio. The non-performing loans represent 1.95% of the total loan portfolio at June 30, 2008. The Subsidiary Bank currently has $62.1 million in its commercial banking pipeline, which, if funded, should help continue the improvement in the net interest margin. The Company had total deposits and repurchase agreements of $939.3 million, a $13.7 million increase from $925.6 million at December 31, 2007.

 


 

Princeton National Bancorp, Inc.’s strategies to grow the Company, improve the net interest margin, control expenses and provide a consistent return to shareholders is evidenced by the increases in fully diluted earnings per share, net income, net interest margin, loans and the loan-to-asset ratio and the decrease in non-interest expense as a percent of average assets. Additional financial information is available at www.pnbc-inc.com.
In April 2008, the Board of Directors of Princeton National Bancorp, Inc. announced a 6-month extension of the 50,000 share stock repurchase plan declared in April 2007. During the second quarter 10,000 shares were purchased under the Plan at an average price of $28.38. There are currently 20,000 shares remaining under this plan. The Company currently has 3,295,184 outstanding shares of common stock. Since 1997, the Company has repurchased a total of 1,364,271 shares through stock repurchase programs.
The stock price closed at $27.24 on June 30, 2008, compared to $24.25 on December 31, 2007 and $27.60 on June 30, 2007. Financial stocks continue to be negatively impacted by the poor earnings reports of many institutions, due to compressed net interest margins, loan charge-offs and sub-prime loan issues. As stated in previous communications, the Company has no sub-prime loans in its loan portfolio or as underlying collateral in its investment portfolio.
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 $1.105 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.
Inquiries should be directed to:   Lou Ann Birkey, Vice President — Investor Relations,
Princeton National Bancorp, Inc. (815) 875—4444,
E-Mail address: pnbc@citizens1st.com

 


 

(PRINCETON LOGO)
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)
                 
    June 30,        
    2008     December 31,  
    (unaudited)     2007  
ASSETS
               
 
               
Cash and due from banks
  $ 26,297     $ 25,801  
 
           
Interest-bearing deposits with financial institutions
    102       1,803  
Federal funds sold
    0       0  
 
           
Total cash and cash equivalents
    26,399       27,604  
 
               
Loans held for sale, at lower of cost or market
    3,324       928  
 
               
Investment securities available-for-sale, at fair value
    220,617       218,095  
Investment securities held-to-maturity, at amortized cost
    15,608       14,578  
 
           
Total investment securities
    236,225       232,673  
 
               
Loans, net of unearned interest
    746,234       722,647  
Allowance for loan losses
    (3,396 )     (3,248 )
 
           
Net loans
    742,838       719,399  
 
               
Premises and equipment, net
    30,374       30,801  
Land held for sale, at lower of cost or market
    1,344       1,344  
Bank-owned life insurance
    21,256       22,461  
Interest receivable
    8,764       10,876  
Goodwill, net of accumulated amortization
    24,521       24,521  
Intangible assets, net of accumulated amortization
    4,648       5,090  
Other real estate owned
    851       833  
Other assets
    4,642       4,172  
 
           
 
               
TOTAL ASSETS
  $ 1,105,186     $ 1,080,702  
 
           
 
               
LIABILITIES
               
 
               
Demand deposits
  $ 103,597     $ 102,452  
Interest-bearing demand deposits
    252,954       241,749  
Savings deposits
    63,524       58,401  
Time deposits
    484,198       488,805  
 
           
Total deposits
    904,273       891,407  
 
               
Customer repurchase agreements
    35,079       34,217  
Advances from the Federal Home Loan Bank
    23,488       6,984  
Interest-bearing demand notes issued to the U.S. Treasury
    2,215       1,838  
Federal funds purchased
    21,300       26,500  
Trust Preferred securities
    25,000       25,000  
Note payable
    14,550       14,550  
 
           
Total borrowings
    121,632       109,089  
 
               
Other liabilities
    10,245       11,599  
 
           
Total liabilities
    1,036,150       1,012,095  
 
           
 
               
STOCKHOLDERS’ EQUITY
               
 
               
Common stock
    22,391       22,391  
Surplus
    18,358       18,275  
Retained earnings
    52,960       51,279  
Accumulated other comprehensive income (loss), net of tax
    (553 )     344  
Less: Treasury stock
    (24,120 )     (23,682 )
 
           
Total stockholders’ equity
    69,036       68,607  
 
           
 
               
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY
  $ 1,105,186     $ 1,080,702  
 
           
 
               
CAPITAL STATISTICS (UNAUDITED)
               
 
               
YTD average equity to average assets
    6.39 %     6.33 %
Tier 1 leverage capital ratio
    6.19 %     6.16 %
Tier 1 risk-based capital ratio
    7.93 %     8.00 %
Total risk-based capital ratio
    8.35 %     8.41 %
Book value per share
  $ 20.95     $ 20.66  
Closing market price per share
  $ 27.24     $ 24.25  
End of period shares outstanding
    3,295,184       3,308,447  
End of period treasury shares outstanding
    1,183,111       1,169,848  

 


 

(PRINCETON LOGO)
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)
                                 
    THREE MONTHS     THREE MONTHS     SIX MONTHS     SIX MONTHS  
    ENDED     ENDED     ENDED     ENDED  
    June 30, 2008     June 30, 2007     June 30, 2008     June 30, 2007  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
INTEREST INCOME
                               
 
                               
Interest and fees on loans
  $ 11,801     $ 12,293     $ 24,152     $ 23,900  
Interest and dividends on investment securities
    2,659       2,840       5,338       5,853  
Interest on federal funds sold
    4       75       29       221  
Interest on interest-bearing time deposits in other banks
    9       26       20       76  
 
                       
Total Interest Income
    14,473       15,234       29,539       30,050  
 
                       
 
                               
INTEREST EXPENSE
                               
 
                               
Interest on deposits
    5,805       7,622       12,479       15,101  
Interest on borrowings
    851       1,025       1,789       1,971  
 
                       
Total Interest Expense
    6,656       8,647       14,268       17,072  
 
                       
 
                               
Net interest income
    7,817       6,587       15,271       12,978  
Provision for loan losses
    450       115       818       300  
 
                       
 
                               
Net interest income after provision
    7,367       6,472       14,453       12,678  
 
                       
 
                               
NON-INTEREST INCOME
                               
Trust & farm management fees
    336       357       812       771  
Service charges on deposit accounts
    1,110       1,095       2,202       2,085  
Other service charges
    567       497       1,024       958  
Gain on sales of securities available-for-sale
    0       162       276       209  
Brokerage fee income
    208       214       427       417  
Mortgage banking income
    288       137       636       409  
Bank-owned life insurance
    206       209       421       405  
Other operating income
    36       51       106       113  
 
                       
Total Non-Interest Income
    2,751       2,722       5,904       5,367  
 
                       
 
                               
NON-INTEREST EXPENSE
                               
Salaries and employee benefits
    4,226       4,137       8,623       8,317  
Occupancy
    611       598       1,290       1,201  
Equipment expense
    751       837       1,470       1,615  
Federal insurance assessments
    84       86       168       170  
Intangible assets amortization
    178       164       357       351  
Data processing
    302       257       579       530  
Advertising
    162       178       330       351  
Other operating expense
    1,195       1,137       2,252       2,131  
 
                       
Total Non-Interest Expense
    7,509       7,393       15,069       14,666  
 
                       
 
                               
Income before income taxes
    2,609       1,800       5,288       3,379  
Income tax expense
    589       247       1,177       397  
 
                       
 
                               
Net income
  $ 2,020     $ 1,553     $ 4,111     $ 2,982  
 
                       
 
                               
Net income per share:
                               
BASIC
  $ 0.61     $ 0.47     $ 1.25     $ 0.89  
DILUTED
  $ 0.61     $ 0.46     $ 1.24     $ 0.89  
 
                               
Basic weighted average shares outstanding
    3,295,998       3,333,897       3,300,030       3,340,462  
Diluted weighted average shares outstanding
    3,309,084       3,344,557       3,311,735       3,354,268  
 
                               
PERFORMANCE RATIOS (annualized)
                               
 
                               
Return on average assets
    0.75 %     0.60 %     0.76 %     0.58 %
Return on average equity
    11.71 %     9.56 %     11.98 %     9.18 %
Net interest margin (tax-equivalent)
    3.49 %     3.15 %     3.44 %     3.13 %
Efficiency ratio (tax-equivalent)
    67.71 %     74.67 %     67.68 %     75.04 %
 
                               
ASSET QUALITY
                               
 
                               
Net loan charge-offs
  $ 189     $ 142     $ 670     $ 243  
Total non-performing loans
  $ 14,567     $ 4,809     $ 14,567     $ 4,809  
Non-performing loans as a % of total loans
    1.95 %     0.72 %     1.95 %     0.72 %