PNBC Princeton National Bancorp Inc (CE)

Princeton National Bancorp, Inc. (NASDAQ:PNBC): Tony J. Sorcic, President & CEO, announced today, "The Board of Directors of Princeton National Bancorp, Inc. approved a 100,000 share, or approximately 2.95%, stock repurchase program. Under the plan, the Company will repurchase up to 100,000 shares of its outstanding shares of common stock in the open market or in private transactions over the next twelve months. Purchases will be dependent upon market conditions and the availability of shares. The Company currently has 3,394,794 outstanding shares of common stock. Since 1997, the Company has repurchased a total of 1,234,271 shares through stock repurchase programs." Sorcic continued, "The Board of Directors of Princeton National Bancorp, Inc. voted to increase the dividend 4.2% to $.25 per share payable May 25, 2006 to those shareholders of record as of May 5, 2006. This is the ninth increase in the dividend in the last twelve quarters and the Company's 85th consecutive dividend. The stock price reached a high of $34.48 during the first quarter and closed at $33.10 on March 31, 2006. The March 31, 2006 closing stock price represents a 10.3% increase from the March 31, 2005 closing price of $30.00." Sorcic concluded, "The construction of the Aurora office continued throughout the first quarter of 2006 and the facility is scheduled to open May 1. The staff for the Aurora office was hired during the first quarter in anticipation of the opening of the office. Although the hiring of the Aurora staff created additional compensation expense, the long-term benefits of having a fully-trained staff on board when the facility opens outweigh the short-term negative impact of the additional salary expense." Net income for the first quarter of 2006 was $1,650,000, diluted earnings per share totaled $.49 and the Return on Average Equity was 10.54%. Net income for the first quarter of 2005 was $1,708,000, diluted earnings per share totaled $.55 and the Return on Average Equity was 13.24%. Impacting net income for the first quarter of 2006 was the salary expense incurred for the Aurora staff and continued start-up expenses relating to the Plano office. Although these expenses negatively impacted net income in the first quarter, they have positioned the Company to take advantage of long-term opportunities. Additionally, the net interest margin continues to be negatively impacted by the flat yield curve. The net interest margin for the first quarter was 3.52%, a decrease of 42 basis points from the first quarter of 2005 and 2 basis points from the fourth quarter of 2005. Total non-interest income for the quarter of $2,499,000 rose 33.3% from $1,875,000 in the first quarter of 2005. For the twenty-third consecutive quarter, the Company's annualized non-interest income equaled or exceeded 1% of average assets. Total assets at March 31, 2006 were $928.5 million, a $267 million increase from March 31, 2005 and a $16.8 million decrease from December 31, 2005. Total loans as of March 31, 2006 were $566.9 million, an increase of $143.7 million from March 31, 2005. Net loan growth of $29,751,000 and the addition of the Somonauk loan portfolio of $113,966,000 both contributed to these results. During the first quarter of 2006, the Subsidiary Bank sold $16.5 million in mortgage loans (primarily adjustable-rate) into the secondary market, realizing a gain of $55,000 after tax. The sale of these loans will add liquidity to the Company's balance sheet to fund future commercial loans at higher yields, which should positively impact the net interest margin. The loans sold were added to the Company's mortgage loan servicing portfolio, which now exceeds $338 million, and provides the Corporation with another source of fee income. Total deposits ended the quarter at $815.8 million (including repurchase agreements), a $223.3 million increase from March 31, 2005 and a $12.2 million decrease from December 31, 2005. In comparing total deposits to March 31, 2005, the Company attracted new core deposits totaling $30,501,000 and added $192,792,000 from the acquisition of Somonauk. This increase in deposits occurred in checking, time deposit, money market accounts and repurchase agreements. Princeton National Bancorp, Inc. is a $928.5 million community bank with strategic locations throughout northern Illinois. The Company is well-positioned in the high growth counties of Kendall, Kane, Grundy, DeKalb, LaSalle plus Bureau and Marshall. Communities include: Aurora, DePue, Genoa, Hampshire, Huntley, Millbrook, Minooka, Newark, Oglesby, Peru, 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. -0- *T CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) March 31, 2006 December 31, (unaudited) 2005 ------------ ------------ ASSETS Cash and due from banks $14,449 $23,635 Interest-bearing deposits with financial institutions 153 110 Federal funds sold 7,400 0 ------------ ------------ Total cash and cash equivalents 22,002 23,745 Loans held for sale, at lower of cost or market 3,526 2,587 Investment securities available-for-sale, at fair value 221,262 235,371 Investment securities held-to-maturity, at amortized cost 16,376 16,115 ------------ ------------ Total investment securities 237,638 251,486 Loans, net of unearned interest 566,906 581,724 Allowance for loan losses (3,010) (3,109) ------------ ------------ Net loans 563,896 578,615 Premises and equipment, net 27,385 26,412 Bank-owned life insurance 20,765 20,434 Interest receivable 7,419 8,714 Goodwill, net of accumulated amortization 22,673 22,665 Intangible assets, net of accumulated amortization 6,613 6,843 Other real estate owned 467 468 Other assets 16,081 3,294 ------------ ------------ TOTAL ASSETS $928,465 $945,263 ============ ============ ---------------------------------------------------------------------- LIABILITIES Demand deposits $96,445 $103,622 Interest-bearing demand deposits 200,321 222,675 Savings deposits 116,277 109,491 Time deposits 374,997 362,770 ------------ ------------ Total deposits 788,040 798,558 Customer repurchase agreements 27,738 29,375 Advances from the Federal Home Loan Bank 8,352 8,346 Interest-bearing demand notes issued to the U.S. Treasury 176 2,154 Federal funds purchased 0 1,000 Trust Preferred securities 25,000 25,000 Note payable 6,650 6,700 ------------ ------------ Total borrowings 67,916 72,575 Other liabilities 8,114 10,986 ------------ ------------ Total liabilities 864,070 882,119 ------------ ------------ STOCKHOLDERS' EQUITY Common stock 22,392 22,392 Surplus 17,849 16,968 Retained earnings 46,151 45,786 Accumulated other comprehensive income (loss), net of tax (1,381) (482) Less: Treasury stock (20,616) (21,520) ------------ ------------ Total stockholders' equity 64,395 63,144 ------------ ------------ TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $928,465 $945,263 ============ ============ CAPITAL STATISTICS (UNAUDITED) YTD average equity to average assets 6.82% 7.21% Tier 1 leverage capital ratio 6.80% 6.46% Tier 1 risk-based capital ratio 9.61% 9.26% Total risk-based capital ratio 10.09% 9.76% Book value per share $18.97 $18.87 Closing market price per share $33.10 $33.25 End of period shares outstanding 3,394,794 3,346,443 End of period treasury shares outstanding 1,083,502 1,131,853 CONSOLIDATED STATEMENTS OF INCOME (unaudited) (dollars in thousands, except share data) THREE MONTHS THREE MONTHS THREE MONTHS THREE MONTHS ENDED ENDED ENDED ENDED Mar. 31, 2006 Dec. 31, 2005 Mar. 31, 2005 Dec. 31, 2004 ------------- ------------- ------------- ------------- INTEREST INCOME Interest and fees on loans $9,744 $9,730 $6,291 $6,104 Interest and dividends on investment securities 2,551 2,607 1,705 1,598 Interest on federal funds sold 14 45 1 22 Interest on interest- bearing time deposits in other banks 4 24 1 18 ------------- ------------- ------------- ------------- Total Interest Income 12,313 12,406 7,998 7,742 ------------- ------------- ------------- ------------- INTEREST EXPENSE Interest on deposits 4,854 4,689 2,441 2,318 Interest on borrowings 930 867 182 153 ------------- ------------- ------------- ------------- Total Interest Expense 5,784 5,556 2,623 2,471 ------------- ------------- ------------- ------------- Net interest income 6,529 6,850 5,375 5,271 Provision for loan losses 10 0 0 0 ------------- ------------- ------------- ------------- Net interest income after provision 6,519 6,850 5,375 5,271 ------------- ------------- ------------- ------------- NON-INTEREST INCOME Trust & farm management fees 405 409 397 406 Service charges on deposit accounts 997 1,032 708 772 Other service charges 390 454 262 288 Gain on sales of securities available-for- sale 60 39 20 34 Gain on sale of loans 90 63 0 0 Brokerage fee income 144 193 160 94 Mortgage banking income 186 253 131 155 Bank-owned life insurance 186 160 139 135 Other operating income 41 31 58 22 ------------- ------------- ------------- ------------- Total Non- Interest Income 2,499 2,634 1,875 1,906 ------------- ------------- ------------- ------------- NON-INTEREST EXPENSE Salaries and employee benefits 4,032 3,792 2,954 2,901 Occupancy 471 453 342 350 Equipment expense 705 706 465 465 Federal insurance assessments 79 65 58 55 Intangible assets amortization 163 139 52 52 Data processing 305 265 194 191 Advertising 195 234 156 220 Other operating expense 1,132 1,102 776 759 ------------- ------------- ------------- ------------- Total Non- Interest Expense 7,082 6,756 4,997 4,993 ------------- ------------- ------------- ------------- Income before income taxes 1,936 2,728 2,253 2,184 Income tax expense 286 593 545 495 ------------- ------------- ------------- ------------- Net income $1,650 $2,135 $1,708 $1,689 ============= ============= ============= ============= Net income per share: BASIC $0.49 $0.64 $0.56 $0.55 DILUTED $0.49 $0.63 $0.55 $0.55 Basic weighted average shares outstanding 3,362,332 3,352,420 3,055,021 3,060,661 Diluted weighted average shares outstanding 3,385,248 3,384,678 3,081,018 3,088,172 PERFORMANCE RATIOS (annualized) Return on average assets 0.72% 0.90% 1.06% 1.05% Return on average equity 10.54% 13.64% 13.24% 12.99% Net interest margin (tax- equivalent) 3.52% 3.54% 3.94% 3.86% Efficiency ratio (tax- equivalent) 73.32% 66.70% 65.24% 65.90% ASSET QUALITY Net loan charge-offs $109 $139 $11 $19 Total non- performing loans $4,519 $3,825 $2,005 $328 Non-performing loans as a % of total loans 0.80% 0.66% 0.47% 0.08% *T