Replies to post #10 on Princeton National Bancorp, I (PNBC)

[Enterprising Investor]

KILL - Princeton National Bancorp, Inc.

Editors and other readers are advised to disregard the news release with the headline, "Princeton National Bancorp, Inc. Releases 2011 Results," issued earlier today by Princeton National Bancorp, Inc. (NASDAQ: PNBC).

Princeton National Bancorp, Inc., parent corporation of Citizens First National Bank, announced today that in light of certain subsequent events related to information received on previously impaired loans that arose after the release of the Company's Press Release on Friday, March 30, 2012 requiring recognition and disclosure in the Company's Annual Report, the Company has determined that it is in its best interest and the best interest of its shareholders to retract the March 30th Press Release, which should not be relied upon, until the Company is able to fully evaluate and address the financial impact of the developments that arose on March 30, 2012. This information was received after the initial press release and before the filing of the Annual Report with the SEC.

[Enterprising Investor]

PNBC Releases 2011 Results (4/12/12)

PRINCETON, IL--(Marketwire - Apr 12, 2012) - 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 $55.6 million, or $(16.71) per common share on a fully diluted basis. The Corporation recorded loan loss provision of $51.8 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 $4.1 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 decrease in loans from the lack of sufficient quality loan demand and the historically low interest rate environment.

Non-interest income grew to $12.6 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 $1,017,000.

Net loan charge-offs grew from $22.9 million in 2010 to $51.1 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 $1.014 billion from $1.096 billion at December 31, 2010. Total net loan balances decreased by $83.7 million during the twelve month period to $590.6 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 $4.9 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 2.14%, 3.31% and 4.60%, 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.

http://www.marketwire.com/press-release/princeton-national-bancorp-inc-releases-2011-results-nasdaq-pnbc-1643454.htm

[Enterprising Investor]

PNBC Releases 1st Quarter 2012 Results (5/11/12)

PRINCETON, IL--(Marketwire - May 11, 2012) - Princeton National Bancorp, Inc. (the "Corporation" or "PNBC") (NASDAQ: PNBC), parent corporation of Citizens First National Bank (the "Bank"), ended the first quarter 2012 with net income available to common stockholders of $686,000, or $.20 per common share on a fully diluted basis, compared to $1.414 million for the first quarter of 2011, or $.42 per common share on a fully diluted basis. This decrease is primarily attributable to a lower level of net interest income and fewer gains recognized on the sale of available for sale investment securities, partially offset by a reduction in the provision for loan losses. The net income available to common stockholders to average equity increased to 45.81%, for the first quarter of 2012, compared with 9.95% for the first quarter of 2011.

Net interest income, before the provision for loan losses, was $7.720 million for the quarter and the net yield on interest-bearing assets (on a fully taxable equivalent basis) was 3.89%. There was a decrease in the net interest margin in comparison to the first quarter of 2011 due to continued yield compression, in both the loan and investment portfolios in this historically low interest rate environment. The yield compression was partially offset by a reduction in the cost of interest-bearing liabilities, primarily time deposits, which decreased to .60% from 0.88% for the first quarter of 2011.

The Corporation's provision for loan loss expense recorded each quarter is determined by management's evaluation of the risk characteristics of the loan portfolio. Net charge-offs decreased during the first quarter of 2012 to $747,000, compared to net charge-offs of $1.694 million for the first quarter of 2011. The Corporation recorded a loan loss provision of $75,000 in the first quarter of 2012 compared to a provision of $1.875 million in the first quarter of 2011.

Non-interest income totaled $3.143 million for the first quarter of 2012, compared to $3.600 million in the first quarter of 2011. This decrease was due to a reduction in the realization of gains on securities sold of $530,000 in the first quarter of 2012 compared to the same period in 2011. Annualized non-interest income as a percentage of total average assets decreased to 1.24% for the first three months of 2012, from 1.33% for the same period in 2011.

Total non-interest expense for the first quarter of 2012 was $9.728 million up from $9.435 million in the first quarter of 2011. The largest differences between the first quarters of 2012 and 2011 were an increase in loan collection costs and deposit insurance assessments of $747,000 and $276,000, respectively, due to increased costs incurred in the aggressive collection of problem loans and higher risk-assessed FDIC insurance premiums. These increases were partially offset by net gains realized on the sale of other real estate owned properties. Annualized non-interest expense as a percentage of total average assets increased to 3.85% for the first three months of 2012, compared to 3.50% for the same period in 2011.

Total assets at March 31, 2012 increased to $1.021 billion from $1.014 billion at December 31, 2011. Total loan balances decreased by $49.7 million during the three month period to $571.3 million due to seasonal pay downs in the agricultural portfolio and continued general decline in the overall demand for new low-risk credit. The continued negative effects of the current economic environment in which business and consumer borrowers have reduced demand and capacity for new indebtedness has impacted growth in our loan portfolio and resulted in a higher percentage of loans being charged off or transferred to other real estate owned. Non-performing loans amounted to 19.8% of total loans at March 31, 2012 compared to 16.26% at December 31, 2011. The increase reflects a continued high level of stress in the commercial real estate industry. Investment balances totaled $292.2 million at March 31, 2012, compared to $261.6 million at December 31, 2011. Total deposits increased to $921.8 million at March 31, 2012 from $917.3 million at December 31, 2011.

The allowance for loan losses of $29.7 million and $30.4 million, respectively, was 5.21% and 4.90% of total loans as of March 31, 2012 and December 31, 2011. The Corporation's net charge-offs as a percentage of average loans was 0.15% and 8.74% for the three months ended March 31, 2012 and year ended December 31, 2011, respectively. The Corporation's net charge-offs and the level of required allowance for loan losses declined in the first three months of 2012 from the high levels experienced in 2010 and 2011 due to the Corporation's aggressive efforts to identify and recognize the impact of the troubled loan portfolio. The allowance for loan losses as a percentage of non-performing loans decreased to 29.5% as of March 31, 2012 from 30.1% as of December 31, 2011. The allowance for loan losses calculation takes into consideration continuing economic declines and resulting increases in non-performing loans in the quantitative and qualitative factors used to adjust the reserve percentages on loans not specifically reserved for in the calculation.

Total stockholders' equity has increased $809,000 to $5.744 million as of March 31, 2012 from $4.935 million at December 31, 2011, due to net income of $686,000 and the change in the unrealized gain on available for sale investment securities.

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. On March 29, 2012, the subsidiary bank's Board of Directors received a Prompt Corrective Action Notice under 12 U.S.C. 1831o and 12 C.F.R. Part 6 due to its amended Call Report filed with the OCC on March 22, 2012 reflecting capital ratios in the Significantly Undercapitalized PCA capital category. This Notice places the Bank under certain restrictions regarding the payment of capital distributions and management fees, as well as restrictions on asset growth, on certain expansion activities and on payment of bonuses and compensation to senior executive officers. These mandatory requirements also include a requirement that the Bank submit an acceptable Capital Restoration Plan ("CRP") to the OCC, addressing the steps the Bank will take to become adequately capitalized, the levels of capital to be attained during each quarter of each year of the CRP, the types and level of activities in which the Bank will engage; and how management will comply with the restrictions against asset growth, and acquisition, branching and new lines of business. The CRP was submitted on May 7, 2012.

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.

On April 18, 2012, the Corporation received written notice from the Listing Qualifications Staff of the NASDAQ stock market that as of December 31, 2011 the Corporation was no longer in compliance with the minimum stockholders' equity requirement for continued listing on the NASDAQ Global Market of $10 million. The Listing Notice does not result in the immediate delisting of the Corporation's common stock from the NASDAQ Global Market. Rather, in accordance with the NASDAQ Listing Rules, the Corporation has 45 calendar days from the date of the Listing Notice to submit to the Staff a plan to regain compliance with this continued listing requirement. The plan has been submitted and if it is accepted by NASDAQ they may grant an extension of up to 180 calendar days from the date of the Listing Notice for the Corporation to provide evidence of compliance.

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.

http://www.marketwire.com/press-release/princeton-national-bancorp-inc-releases-1st-quarter-2012-results-nasdaq-pnbc-1656288.htm