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PNBC reports net loss in 2011

PRINCETON — Princeton National Bancorp Inc. (PNBC), parent corporation of Citizens First National 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.

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. The net interest margin for 2011 was 4.08 percent, as compared to 3.98 percent for 2010.

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.

Total assets at Dec. 31, 2011, decreased to $1.014 billion from $1.096 billion at Dec.31, 2010. Deposits totaled $917.3 million, down from $963 million in 2010, reflecting managed efforts to reduce deposit levels to positively impact capital ratios.

Stockholders’ equity was $4.9 million at year-end 2011, compared to $56.9 million in 2010.

The bank continues to operate under a consent order entered into on Sept. 20, 2011, with the Office of the Comptroller of the Currency, its principal regulator.

Actions have been implemented to ensure 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 Oct. 27, 2011, and is taking steps to fully comply with the requirements in that agreement.

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