EX-99.1 3 k82350exv99w1.txt PRESS RELEASE, DATED JANUARY 26, 2004 [PRINCETON NATIONAL BANCORP, INC. LOGO] EXHIBIT 99.1 PRINCETON NATIONAL BANCORP, INC. GENERATES RECORD EARNINGS PER SHARE PRINCETON, Illinois -- January 26, 2004 -- Princeton National Bancorp, Inc. (NASDAQ: PNBC) Tony Sorcic, President & CEO, announced today, "Princeton National Bancorp, Inc. surpassed its 2002 record-breaking earnings by generating diluted earnings per share of $2.05 in 2003, a 10.2% increase from the $1.86 which was produced in 2002. The Company's efforts to increase the level of non-interest revenue sources contributed to these outstanding results. Fees from mortgage loans, commercial loans, deposits, trust, farm management, and security gains contributed to the additional non-interest income." Sorcic continued, "The Company's return on equity increased 5.2% to 13.01% in 2003 from 12.37% in 2002. Contributing to this increase was the repurchase of 141,000 shares of common stock during 2003. The stock was repurchased at an average price of $24.70. Since 1997, the Company has repurchased 1,034,271 shares of common stock through stock repurchase programs." Sorcic concluded, "The Company's improvement in the net interest margin continued in the fourth quarter; the net interest margin increased to 3.90% from 3.84% in the third quarter. However, the net interest margin for the year of 3.69% is 6.6% below the 2002 level of 3.95%. The prepayment activity on mortgage-backed securities in the investment portfolio contributed to the compression of the net interest margin. During the fourth quarter of 2003, the prepayments on mortgage backed securities returned to the levels experienced prior to the mortgage refinancing period. Based on this reduction in prepayments on mortgage-backed securities and the growth in earning assets, we believe further improvement in the net interest margin will be experienced during 2004." The Board of Directors approved an additional 100,000 share, or approximately 3%, stock repurchase program. Under the plan, the Company will repurchase up to 100,000 shares of its outstanding 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 3,124,003 outstanding shares of common stock. Net income for 2003 was $6.603 million, an increase from $6.134 million in 2002. Non-interest income of $9.408 million represents a 24.4% increase from the 2002 level of $7.563 million. The increase in non-interest income was driven primarily by an $857,000 increase in mortgage banking income as well as gains of $1 million on the sales of securities. The improvement in the return on average assets ratio continued in 2003, resulting in a ratio of 1.10% for the year, compared to 1.08% in 2002. 5 The Company ended 2003 with total deposits of $537.8 million. Despite the lower interest rate environment during 2003, the Company attracted new deposits totaling $26.6 million. This increase in deposits occurred primarily in transaction and money market accounts. Total assets of $609.7 million represents an increase of $22.4 million from December 31, 2002. The Company continued to experience strong growth in its loan portfolio in 2003. Total loans increased $21.6 million, reaching a record high of $383.1 million. Loan growth was particularly strong in the areas of commercial and agricultural, which combined totaled $21.1 million. The Company was able to generate this loan growth while maintaining a low level of non-performing loans; the balance of non-performing loans at December 31, 2003 was approximately $969,000 as compared to $3.8 million at December 31, 2002. The ratio of non-performing loans to total loans decreased to .25% at December 31, 2003 from 1.06% at December 31, 2002. Net income for the fourth quarter of 2003 totaled $1.637 million, diluted earnings per share totaled $.51, and the return on average equity was 12.86%. This compares favorably to net income of $1.505 million in the fourth quarter of 2002, diluted earnings per share of $.46, and the return on average equity of 11.89%. Total non-interest income of $1.974 million is down slightly from the fourth quarter of 2002, due to a $166,000 decline in mortgage banking income. Offsetting the decrease in mortgage banking income were increases in deposit fee income, trust fees, and brokerage fees. For the fourteenth consecutive quarter the Company's annualized non-interest income equaled or exceeded 1% of average assets. In the fourth quarter, the Company repurchased 30,000 shares at an average price of $28.52, completing the Stock Repurchase Program announced in May of 2003. This is the Company's seventh repurchase program since 1997. The stock price reached a record high of $29.12 during 2003 and closed the year at $28.55. This represents a 35.0% increase from the 2002 year-end closing price of $21.15. Princeton National Bancorp, Inc. purchased land in Elburn and signed a purchase contract for land in Aurora, Illinois in 2003. The Company will begin construction of the facility in Aurora, Illinois in 2004. Once this facility is completed, construction will begin on the facility in Elburn, Illinois. Princeton National Bancorp, Inc. is very excited about the opportunities which will be presented from these new locations and is anxious to become a member of these high-growth communities. It is with regret the Company announces the death of a long-time, dedicated Director, Don S. Browning. Mr. Browning was appointed to the Board in 1983 and served on both the Company's and the Subsidiary Bank's Board of Directors. His valuable input and friendship will be greatly missed by the Board of Directors, Management and the Company. The Company has community-banking locations throughout northern Illinois, five of which are in high-growth markets and two additional locations (Aurora and Elburn) which will also be built in high growth markets. These communities include: Huntley, Hampshire, Minooka, Sandwich, 6 Genoa, Peru, Princeton, Henry, Oglesby, Spring Valley, and DePue. 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
7 (PRINCETON NATIONAL BANCORP, INC. LOGO) CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in thousands, except share data)
December 31, December 31, 2003 2002 ----------- ----------- ASSETS Cash and due from banks $ 13,428 $ 13,939 Interest-bearing deposits with financial institutions 511 1,706 Federal funds sold 2,475 3,225 ----------- ----------- Total cash and cash equivalents 16,414 18,870 Loans held for sale, at lower of cost or market 2,323 6,761 Investment securities available-for-sale 154,065 157,881 Investment securities held-to-maturity 15,827 11,437 ----------- ----------- Total investment securities 169,892 169,318 Loans, net of unearned interest 383,053 357,359 Allowance for loan losses (2,250) (2,660) ----------- ----------- Net loans 380,803 354,699 Premises and equipment, net 14,664 13,388 Bank-owned life insurance 15,036 13,566 Goodwill, net of accumulated amortization 1,355 1,355 Intangible assets, net of accumulated amortization 1,525 1,732 Interest receivable 4,634 5,180 Other real estate owned 798 75 Other assets 2,293 2,431 ----------- ----------- TOTAL ASSETS $ 609,737 $ 587,375 =========== =========== --------------------------------------------------------------------------------------- LIABILITIES Demand deposits $ 65,418 $ 58,655 Interest-bearing demand deposits 179,805 155,549 Savings deposits 57,151 51,750 Time deposits 235,453 245,313 ----------- ----------- Total deposits 537,827 511,267 Customer repurchase agreements 9,664 10,044 Advances from the Federal Home Loan Bank 5,150 5,750 Interest-bearing demand notes issued to the U.S. Treasury 297 2,397 Note payable 1,050 1,300 ----------- ----------- Total borrowings 16,161 19,491 Other liabilities 4,874 5,543 ----------- ----------- Total liabilities 558,862 536,301 ----------- ----------- STOCKHOLDERS' EQUITY Common stock 20,699 20,699 Surplus 7,020 6,612 Retained earnings 38,726 35,255 Accumulated other comprehensive income, net of tax 1,275 2,218 Less: Treasury stock (16,845) (13,710) ----------- ----------- Total stockholders' equity 50,875 51,074 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 609,737 $ 587,375 =========== =========== CAPITAL STATISTICS YTD average equity to average assets 8.49% 8.75% Tier 1 leverage capital ratio 7.70% 7.80% Tier 1 risk-based capital ratio 10.72% 11.10% Total risk-based capital ratio 11.22% 11.74% Book value per share $ 16.29 $ 15.79 Closing market price per share $ 28.55 $ 21.15 End of period shares outstanding 3,124,003 3,233,686 End of period treasury shares outstanding 1,015,838 906,155
(PRINCETON NATIONAL BANCORP, INC. LOGO) CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands, except share data)
THREE MONTHS THREE MONTHS YEAR YEAR ENDED ENDED ENDED ENDED Dec. 31, 2003 Dec. 31, 2002 Dec. 31, 2003 Dec. 31, 2002 ------------- ------------- ------------- ------------- INTEREST INCOME Interest and fees on loans $ 5,905 $ 6,115 $ 23,763 $ 24,829 Interest and dividends on investment securities 1,563 1,883 5,504 7,620 Interest on federal funds sold 11 25 72 131 Interest on interest-bearing time deposits in other banks 9 16 55 89 ---------- ---------- ---------- ---------- Total Interest Income 7,488 8,039 29,394 32,669 ---------- ---------- ---------- ---------- INTEREST EXPENSE Interest on deposits 2,272 3,053 10,094 13,029 Interest on borrowings 101 127 417 530 ---------- ---------- ---------- ---------- Total Interest Expense 2,373 3,180 10,511 13,559 ---------- ---------- ---------- ---------- NET INTEREST INCOME 5,115 4,859 18,883 19,110 Provision for loan losses 95 218 460 643 ---------- ---------- ---------- ---------- NET INTEREST INCOME AFTER PROVISION 5,020 4,641 18,423 18,467 ---------- ---------- ---------- ---------- NON-INTEREST INCOME Trust & farm management fees 325 297 1,280 1,192 Service charges on deposit accounts 776 723 3,018 2,754 Other service charges 254 253 1,056 1,013 Gain on sales of securities available-for-sale 67 0 1,002 138 Brokerage fee income 140 130 550 631 Mortgage banking income 217 383 1,771 914 Bank-owned life insurance 145 202 584 778 Other operating income 50 18 147 143 ---------- ---------- ---------- ---------- Total Non-Interest Income 1,974 2,006 9,408 7,563 ---------- ---------- ---------- ---------- NON-INTEREST EXPENSE Salaries and employee benefits 2,807 2,689 10,808 10,094 Occupancy 295 303 1,237 1,195 Equipment expense 427 378 1,624 1,498 Federal insurance assessments 52 53 212 212 Intangible assets amortization 52 54 208 210 Data processing 175 172 706 731 Advertising 145 99 449 447 Other operating expense 826 837 3,463 3,305 ---------- ---------- ---------- ---------- Total Non-Interest Expense 4,779 4,585 18,707 17,692 ---------- ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 2,215 2,062 9,124 8,338 Income tax expense 578 557 2,521 2,204 ---------- ---------- ---------- ---------- NET INCOME $ 1,637 $ 1,505 $ 6,603 $ 6,134 ========== ========== ========== ========== NET INCOME PER SHARE: BASIC $ 0.52 $ 0.47 $ 2.08 $ 1.87 DILUTED $ 0.51 $ 0.46 $ 2.05 $ 1.86 Basic weighted average shares outstanding 3,143,961 3,230,678 3,181,424 3,283,016 Diluted weighted average shares outstanding 3,191,466 3,255,126 3,220,227 3,302,986 PERFORMANCE RATIOS (ANNUALIZED) Return on average assets 1.07% 1.01% 1.10% 1.08% Return on average equity 12.86% 11.89% 13.01% 12.37% Net interest margin (tax-equivalent) 3.90% 3.87% 3.69% 3.95% Efficiency ratio (tax-equivalent) 64.22% 63.72% 63.12% 63.25% ASSET QUALITY Net loan charge-offs 223 305 870 283 Total non-performing loans 969 3,820 969 3,820 Non-performing loans as a % of total loans 0.25% 1.05% 0.25% 1.05%