8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 30, 2009 (April 28, 2009)

Princeton National Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

0-20050	36-3210283
(Commission File Number)	(IRS Employer Identification No.)
606 South Main Street Princeton, Illinois	61356
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (815) 875-4444

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02	Results of Operations and Financial Condition.
	The following information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.
	On April 28, 2009, Princeton National Bancorp, Inc. issued a news release to report its financial results for the quarter ended March 31, 2009. The release is furnished as Exhibit 99.1 hereto.
Item 9.01	Financial Statements and Exhibits

(d) Exhibits:

Exhibit 99.1 April 28, 2009 Press Release

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PRINCETON NATIONAL BANCORP, INC. (Registrant)
By:	/s/ Tony J. Sorcic
	Tony J. Sorcic, President and
	Chief Executive Officer

Dated: April 30, 2009

EXHIBIT INDEX

Number	Description
99.1	April 28, 2009 Press Release

EX-99.1

Exhibit 99.1

Princeton National Bancorp, Inc. Announces
First Quarter 2009 Results

Princeton National Bancorp, Inc. (the “Company” or “PNBC”) (NASDAQ: PNBC), the holding company of Citizens First National Bank (the “Subsidiary Bank”), today reported results of operations and financial condition for the first quarter of 2009. Net income was $1,156,000 for the first quarter of 2009, or $0.28 per share, compared to $1,028,000 or $0.31 in the fourth quarter of 2008 and $2,090,000 or $0.63 in the first quarter of 2008. Return on average equity was 5.14% for the first quarter 2009, compared to 5.90% and 12.22% for the fourth quarter and first quarter of 2008, respectively.

President Tony J. Sorcic stated, “Our first quarter operating results reflect both the impact of current economic conditions on our credit costs as well as accruing for one-fourth of the FDIC special assessment, which will be assessed on all banks.”

“At the April Board of Directors’ meeting, the Board made the difficult decision to reduce the dividend from $.28 per share to $.14 per share. The dividend is payable May 26, 2009, to those shareholders of record as of May 11, 2009. The Company has always focused on generating a strong, consistent return for shareholders, but these extraordinary times require extraordinary measures. The reduction in dividend is being done as a precautionary measure to ensure we remain in a strong capital position to take advantage of opportunities in the future. The reduction is also in anticipation of the additional $1.2 million which will be accrued for the FDIC special assessment. Our highest obligation to our shareholders is to keep the Company strong and in a position to grow when economic times improve.”

“The Subsidiary Bank retains servicing of residential mortgages sold into the secondary market for which fees are earned. Accounting standards require the servicing value of these fees to be capitalized into the asset category, mortgage servicing rights. The Subsidiary Bank has been utilizing an accepted multiple for determining this asset value. Given the high level of refinancing due to the historic decrease in mortgage interest rates, the value of existing servicing rights has decreased. This resulted in a pre-tax charge of $556,419 to earnings in the first quarter of 2009.”

“On February 27, 2009, the FDIC announced it had adopted an interim rule to impose an emergency special assessment on June 30, 2009 which will be collected on September 30, 2009. It is anticipated the impact of the emergency special assessment on the Subsidiary Bank will be approximately 16 basis points or $1.6 million. During the first quarter, $416,000 was accrued toward this assessment and the remaining $1.2 million will be accrued for during the second quarter of 2009.

Mr. Sorcic concluded, “The Company’s solid capital base and ability to generate core earnings will be an advantage as we continue to work through the current credit cycle. This advantage enables Citizens First National Bank to meet the financial needs of customers and the communities it serves and positions Princeton National Bancorp, Inc. to benefit as conditions improve.”

Total assets ended the quarter at $1.215 billion, up 4.5% from $1.163 billion at December 31, 2008. Princeton National Bancorp, Inc. experienced a $16.0 million decrease in total loans as of March 31, 2009 in comparison to December 31, 2008 (primarily due to a decrease in the residential real estate category as variable rate loans were refinanced into fixed rate loans and sold in the secondary market, along with seasonal agricultural paydowns).

The non-performing loans of $33.3 million represent 4.30% of the total loan portfolio as of March 31, 2009, up slightly from 4.18% at December 31, 2008 due to the difficult economic environment. Most of the non-performing loans remain secured by the value of collateral pledged. At the end of the first quarter, specific loss provisions for individual credits totaled $1.3 million. The Subsidiary Bank staff will continue to work with borrowers to resolve problem loan situations and to work through the challenging remediation cycle for real estate and construction-related credits. Recognizing this, and

reflective of current conditions, we have increased our level of loan loss provisioning, bringing our level of reserves to .76% of total loans, an increase from .43% one year ago. The loan loss provision taken in the first quarter totaled $1,170,000 versus $1,600,000 in the fourth quarter of 2008 and $368,000 in the first quarter of 2008.

The Company ended the first quarter of 2009 with total core deposits and repurchase agreements of $1.050 million, a $52.1 million increase from December 31, 2008 and $96.1 million increase from March 31, 2008.

In review of the March 31, 2009 consolidated statements of income, net-interest income (before provision) was $8.079 million, non-interest income was $2.795 million and the net interest margin was 3.40%, compared to $8.078 million, $2.837 million and 3.38%, respectively, for the fourth quarter of 2008.

As reported previously, on January 23^rd, the Company received a $25.1 million investment from the U.S. Treasury Department Capital Purchase Program and Emergency Economic Stabilization Act of 2008 (“EESA”). On February 17, 2009 the American Recovery and Reinvestment Act (“ARRA”) of 2009 was enacted. The ARRA contains numerous provisions which modify the EESA and which require additional rule making by various regulatory bodies. The precise impact of ARRA and the rules promulgated under it continue to be announced.

The price of PNBC stock closed at $14.00 on March 31, 2009, compared to $22.14 on December 31, 2008. The decrease in stock price from year-end 2008 is reflective of the banking industry as a whole. Financial stocks continue to be impacted by poor earnings reports by many institutions, due to the current credit cycle.

For detailed financial information, please refer to the attached March 31, 2009 financial statements for Princeton National Bancorp, Inc. You may also visit our website at www.pnbc-inc.com to obtain financial information, as well as press releases, stock prices and information on the Company.

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 $1.215 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

CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share data)

	March 31,
	2009			December 31,
	(unaudited)			2008
ASSETS
Cash and due from banks	$	67,755		$	20,163
Interest-bearing deposits with financial institutions		113			98
Federal funds sold		0			0
Total cash and cash equivalents		67,868			20,261
Loans held for sale, at lower of cost or market		1,084			2,155
Investment securities available-for-sale, at fair value		259,397			236,883
Investment securities held-to-maturity, at amortized cost		15,137			14,232
Total investment securities		274,534			251,115
Loans, net of unearned interest		774,802			790,837
Allowance for loan losses		(5,864	)		(5,064	)
Net loans		768,938			785,773
Premises and equipment, net		29,243			29,297
Land held for sale, at lower of cost or market		2,354			2,354
Federal Reserve and Federal Home Loan Bank stock		4,211			4,211
Bank-owned life insurance		21,842			21,588
Interest receivable		8,301			9,693
Goodwill, net of accumulated amortization		24,521			24,521
Intangible assets, net of accumulated amortization		3,991			4,207
Other real estate owned		3,170			2,487
Other assets		5,427			5,468
TOTAL ASSETS	$	1,215,484		$	1,163,130
LIABILITIES
Demand deposits	$	105,477		$	110,559
Interest-bearing demand deposits		256,113			246,714
Savings deposits		66,234			61,089
Time deposits		583,140			543,770
Total deposits		1,010,964			962,132
Customer repurchase agreements		38,799			35,532
Advances from the Federal Home Loan Bank		32,494			32,493
Interest-bearing demand notes issued to the U.S. Treasury		773			2,441
Federal funds purchased		0			6,500
Trust Preferred securities		25,000			25,000
Note payable		0			16,050
Total borrowings		97,066			118,016
Other liabilities		9,499			10,511
Total liabilities		1,117,529			1,090,659
STOCKHOLDERS’ EQUITY
Preferred stock		24,938			22,391
Common stock		22,391			0
Common stock warrants		150			0
Additional paid-in capital		18,377			18,420
Retained earnings		54,479			54,329
Accumulated other comprehensive income, net of tax		1,655			1,402
Less: Treasury stock		(24,035	)		(24,071	)
Total stockholders’ equity		97,955			72,471
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	1,215,484		$	1,163,130
CAPITAL STATISTICS (UNAUDITED)
YTD average equity to average assets		7.68	%		6.25	%
Tier 1 leverage capital ratio		7.99	%		6.22	%
Tier 1 risk-based capital ratio		10.84	%		7.72	%
Total risk-based capital ratio		11.53	%		8.30	%
Common book value per share	$	22.13		$	21.97
Closing market price per share	$	14.00		$	22.14
End of period shares outstanding		3,300,139			3,298,041
End of period treasury shares outstanding		1,178,156			1,180,254

CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)

	THREE MONTHS			THREE MONTHS
	ENDED			ENDED
	March 31, 2009			March 31, 2008
	(unaudited)			(unaudited)
INTEREST INCOME
Interest and fees on loans	$	11,059		$	12,350
Interest and dividends on investment securities		2,931			2,679
Interest on federal funds sold		0			25
Interest on interest-bearing time deposits in other banks		16			12
Total Interest Income		14,006			15,066
INTEREST EXPENSE
Interest on deposits		5,147			6,674
Interest on borrowings		780			938
Total Interest Expense		5,927			7,612
Net interest income		8,079			7,454
Provision for loan losses		1,170			368
Net interest income after provision		6,909			7,086
NON-INTEREST INCOME
Trust & farm management fees		314			476
Service charges on deposit accounts		976			1,092
Other service charges		446			457
Gain on sales of securities available-for-sale		187			276
Brokerage fee income		198			219
Mortgage banking income		1			348
Bank-owned life insurance		243			215
Other operating income		430			70
Total Non-Interest Income		2,795			3,153
NON-INTEREST EXPENSE
Salaries and employee benefits		4,471			4,398
Occupancy		709			679
Equipment expense		773			718
Federal insurance assessments		697			84
Intangible assets amortization		208			179
Data processing		316			277
Advertising		197			168
Other operating expense		1,281			1,057
Total Non-Interest Expense		8,652			7,560
Income before income taxes		1,052			2,679
Income tax expense (benefit)		(104	)		589
Net income	$	1,156		$	2,090
Preferred stock dividends		237			0
Accretion on preferred stock discount		5			0
Net income available to common stockholders		914			2,090
Per share information:
BASIC net income per common share available to common stockholders	$	0.28		$	0.63
DILUTED net income per common share available to common stockholders	$	0.28		$	0.63
Basic weighted average shares outstanding		3,298,064			3,304,063
Diluted weighted average shares outstanding		3,298,725			3,309,907
PERFORMANCE RATIOS (annualized)
Return on average assets		0.40	%		0.78	%
Return on average equity		5.14	%		12.22	%
Net interest margin (tax-equivalent)		3.40	%		3.39	%
Efficiency ratio (tax-equivalent)		75.30	%		67.66	%
ASSET QUALITY
Net loan charge-offs	$	371		$	481
Total non-performing loans	$	33,278		$	14,110
Non-performing loans as a % of total loans		4.30	%		1.93	%