EX-99.1 2 k89080exv99w1.txt PRESS RELEASE, DATED OCTOBER 25, 2004 EXHIBIT 99.1 [PRINCETON NATIONAL BANCORP, INC. LOGO] PRINCETON NATIONAL BANCORP, INC. IMPROVES YEAR-TO-DATE DILUTED EARNINGS PER SHARE BY 6.5% PRINCETON, Illinois -- October 25, 2004 -- Princeton National Bancorp, Inc. (NASDAQ: PNBC) President Tony J. Sorcic announced today, "Princeton National Bancorp, Inc. reported a 6.5% increase in diluted earnings per share to $1.64 for the first nine months of 2004 as compared to the same period in 2003, a 4.4% increase in net income to $5,183,000, and a 4.4% increase in the return on average equity to 13.63%." President Sorcic continued, "The Company has experienced loan growth of $12.3 million during the first nine months of 2004. This loan growth positively impacted the net interest margin, which increased to 3.95% for the nine-month period. This compares favorably to 3.62% for the same period in 2003. The Company has $18 million in loans in its Commercial Banking pipeline. We believe the growth in the loan portfolio will continue during the fourth quarter of 2004, which will have a positive impact on the net interest margin." President Sorcic continued, "The fee income trend continues to be strong, as evidenced by the increases in trust and farm management fees, service charges on deposits, and brokerage fees. Non-interest income for the nine-month period was $6,409,000, down from $6,998,000 for the same period in 2003, partially due to a $712,000 decrease in mortgage banking income (a result of the mortgage loan re-financing activity in 2003). Also in 2003, there were security gains of $935,000, compared to $182,000 for the same period in 2004. Offsetting the decrease in mortgage banking income and the decrease in security gains was the sale of the $2 million credit card portfolio in the second quarter of 2004, which resulted in an after tax gain of approximately $285,000." Net income for the quarter was $1,633,000, diluted earnings per share totaled $.52, and the return on average equity was 12.76%, compared to $1,709,000, $.53, and 13.50%, respectively, in the third quarter of 2003 and $1,909,000, $.61, and 15.48%, respectively, in the second quarter of 2004. For the seventh consecutive quarter, annualized non-interest income equaled or exceeded 1% of average assets. The loan portfolio continues to experience strong growth. Loans (net of unearned interested) as of September 30, 2004 totaled $396,026,000. The Company has experienced an 82.6% decrease in non-performing loans over the past twelve months; the balance at September 30, 2004 was $493,991 as compared to $2,839,000 at September 30, 2003. The ratio of non-performing loans to total assets as of September 30, 2004 was 0.12%. Total assets at September 30, 2004 have increased 4.5% to $626,191,000 over the past year and total deposits ended the third quarter at $545,980,000, an increase of 4.1% during the same period. The stock price of $29.38 as of September 30, 2004 represents a 14.8% increase from September 30, 2003. The Company has completed 92% of the Stock Repurchase Program announced on January 26, 2004; 92,000 shares have been repurchased at an average price of $28.81. Since 1997, the Company has repurchased a total of 1,126,271 shares through stock repurchase programs. The Company has community-banking locations throughout northern Illinois, five of which are in high growth markets. These communities include: Huntley, Hampshire, Minooka, Sandwich, 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 [PRINCETON NATIONAL BANCORP, INC. LOGO] CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data) September 30, 2004 December 31, (unaudited) 2003 ----------- ----------- ASSETS Cash and due from banks $ 15,032 $ 13,428 Interest-bearing deposits with financial institutions 78 511 Federal funds sold 0 2,475 ----------- ----------- Total cash and cash equivalents 15,110 16,414 Loans held for sale, at lower of cost or market 1,635 2,323 Investment securities available-for-sale, at fair value 157,018 154,065 Investment securities held-to-maturity, at amortized cost 14,613 15,827 ----------- ----------- Total investment securities 171,631 169,892 Loans, net of unearned interest 396,026 383,053 Allowance for loan losses (2,543) (2,250) ----------- ----------- Net loans 393,483 380,803 Premises and equipment, net 17,877 14,664 Bank-owned life insurance 15,735 15,036 Interest receivable 5,165 4,634 Goodwill, net of accumulated amortization 1,355 1,355 Intangible assets, net of accumulated amortization 1,369 1,525 Other real estate owned 545 798 Other assets 2,286 2,293 ----------- ----------- TOTAL ASSETS $ 626,191 $ 609,737 =========== =========== LIABILITIES Demand deposits $ 62,760 $ 65,418 Interest-bearing demand deposits 185,679 179,805 Savings deposits 59,880 57,151 Time deposits 237,661 235,453 ----------- ----------- Total deposits 545,980 537,827 Customer repurchase agreements 12,238 9,664 Advances from the Federal Home Loan Bank 5,000 5,150 Interest-bearing demand notes issued to the U.S. Treasury 1,264 297 Federal funds purchased 4,000 0 Note payable 941 1,050 ----------- ----------- Total borrowings 23,443 16,161 Other liabilities 4,381 4,874 ----------- ----------- Total liabilities 573,804 558,862 ----------- ----------- STOCKHOLDERS' EQUITY Common stock 20,699 20,699 Surplus 7,676 7,020 Retained earnings 41,694 38,726 Accumulated other comprehensive income, net of tax 1,346 1,275 Less: Treasury stock (19,028) (16,845) ----------- ----------- Total stockholders' equity 52,387 50,875 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 626,191 $ 609,737 =========== =========== CAPITAL STATISTICS (UNAUDITED) YTD average equity to average assets 8.29% 8.49% Tier 1 leverage capital ratio 7.82% 7.70% Tier 1 risk-based capital ratio 10.96% 10.72% Total risk-based capital ratio 11.53% 11.22% Book value per share $ 17.09 $ 16.29 Closing market price per share $ 29.38 $ 28.55 End of period shares outstanding 3,064,998 3,124,003 End of period treasury shares outstanding 1,074,843 1,015,838
[PRINCETON NATIONAL BANCORP, INC. LOGO] CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except share data) THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS ENDED ENDED ENDED ENDED Sept. 30, 2004 Sept. 30, 2003 Sept. 30, 2004 Sept. 30, 2003 -------------- -------------- -------------- -------------- INTEREST INCOME Interest and fees on loans $ 5,900 $ 5,916 $ 17,414 $ 17,858 Interest and dividends on investment securities 1,530 1,505 4,549 3,942 Interest on federal funds sold 2 12 8 60 Interest on interest-bearing time deposits in other banks 2 8 6 46 ----------- ----------- ----------- ----------- Total Interest Income 7,434 7,441 21,977 21,906 ----------- ----------- ----------- ----------- INTEREST EXPENSE Interest on deposits 2,114 2,381 6,278 7,822 Interest on borrowings 116 101 321 316 ----------- ----------- ----------- ----------- Total Interest Expense 2,230 2,482 6,599 8,138 ----------- ----------- ----------- ----------- NET INTEREST INCOME 5,204 4,959 15,378 13,768 Provision for loan losses 75 100 375 365 ----------- ----------- ----------- ----------- NET INTEREST INCOME AFTER PROVISION 5,129 4,859 15,003 13,403 ----------- ----------- ----------- ----------- NON-INTEREST INCOME Trust & farm management fees 343 315 1,045 955 Service charges on deposit accounts 845 774 2,377 2,242 Other service charges 278 264 877 802 Gain on sales of securities available-for-sale 0 0 182 935 Gain on sale of loans 0 0 465 0 Brokerage fee income 135 143 513 410 Mortgage banking income 123 425 406 1,118 Bank-owned life insurance 137 139 420 439 Other operating income 39 12 124 97 ----------- ----------- ----------- ----------- Total Non-Interest Income 1,900 2,072 6,409 6,998 ----------- ----------- ----------- ----------- NON-INTEREST EXPENSE Salaries and employee benefits 2,770 2,561 8,228 7,565 Occupancy 354 320 1,018 942 Equipment expense 398 405 1,188 1,198 Federal insurance assessments 55 50 174 159 Intangible assets amortization 52 52 156 156 Data processing 187 171 556 531 Advertising 191 87 523 304 Other operating expense 880 896 2,667 2,637 ----------- ----------- ----------- ----------- Total Non-Interest Expense 4,887 4,542 14,510 13,492 ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 2,142 2,389 6,902 6,909 Income tax expense 509 680 1,719 1,943 ----------- ----------- ----------- ----------- NET INCOME $ 1,633 $ 1,709 $ 5,183 $ 4,966 =========== =========== =========== =========== NET INCOME PER SHARE: BASIC $ 0.53 $ 0.54 $ 1.67 $ 1.55 DILUTED $ 0.52 $ 0.53 $ 1.64 $ 1.54 Basic weighted average shares outstanding 3,074,308 3,171,527 3,098,357 3,194,049 Diluted weighted average shares outstanding 3,127,810 3,213,331 3,167,894 3,229,696 PERFORMANCE RATIOS (ANNUALIZED) Return on average assets 1.05% 1.13% 1.13% 1.12% Return on average equity 12.76% 13.50% 13.63% 13.06% Net interest margin (tax-equivalent) 3.94% 3.84% 3.95% 3.62% Efficiency ratio (tax-equivalent) 65.22% 62.53% 63.32% 62.75% ASSET QUALITY Net loan charge-offs (recoveries) (22) 152 82 647 Total non-performing loans 494 2,839 494 2,839 Non-performing loans as a % of total loans 0.12% 0.75% 0.12% 0.75%