Tony J. Sorcic, President & CEO, announced today, "Princeton National Bancorp, Inc. had a good year in 2006. There was strong growth in loans, deposits and the investment portfolio. Diluted earnings per share in the 4th quarter increased for the second quarter in a row. As reported previously, the Company opened a new office in Aurora, Illinois in May 2006 and on November 1, 2006 announced it had signed a definitive agreement to purchase the Plainfield office of HomeStar Bank, Manteno, Illinois. In August of 2006, the Subsidiary Bank began an expansion project on the Hampshire office. The project includes adding offices, a teller work area, and enlarging the vault and safe deposit area. The basement is also being finished to include a community room which will be available for community meetings. During 2006, the Company increased its market share in all communities served by the Subsidiary Bank. The staff continues to focus on being the 'Bank of Choice.'"

Sorcic continued, "Princeton National Bancorp, Inc. reached record level total assets of $1.032 billion as of December 31, 2006. This represents growth of 9.2% when compared to assets at December 31, 2005 of $945.3 million. Since 1995, total assets have increased by over $600 million! This record level of assets has been attained through growth in existing offices, establishing new offices and acquisitions. In the last ten years, the Company has added offices in Hampshire, Huntley, Plano, Aurora, Somonauk, Newark, Sandwich and Millbrook."

Sorcic concluded, "The Company experienced a $47.7 million increase in total loans over the last twelve months. In the first half of 2006, the Company sold $19.4 million in adjustable rate mortgages and the funds received were used to finance higher-yielding commercial loans. The Subsidiary Bank was able to replace these loans, while growing an additional $47.7 million. The Company's loan portfolio continues to be high-quality and experienced minimal loan charge-offs during the year. The non-performing loans represent .62% of the total loan portfolio at December 31, 2006, compared to .66% at December 31, 2005."

While other mortgage providers experienced a decrease in volume in 2006, the Subsidiary Bank closed $102 million in residential mortgage loans, up from $85 million for the year 2005. The Subsidiary Bank currently services $359.3 million in mortgage loans. During 2006, mortgage banking revenue was $755,000.

The Company ended 2006 with total deposits and repurchase agreements of $913.2 million, an increase of 10.3% from year-end 2005. This increase occurred in checking, time deposit, repurchase agreements and money market accounts.

Although Princeton National Bancorp, Inc.'s income continues to be negatively impacted by the net interest margin, the Company generated consistent results throughout 2006. The first quarter net income totaled $1,650,000, the second quarter totaled $1,581,000, the third quarter totaled $1,607,000 and the fourth quarter totaled $1,650,000, resulting in net income for the year of $6,488,000. This represents a 14.3% decrease from 2005's net income of $7,574,000. Diluted earnings per share for 2006 were $1.91, down 19.4% from the 2005 diluted earnings per share of $2.37. However, an increase in diluted earnings per share over the prior quarter was experienced in the third and four quarters of 2006. Diluted earnings per share totaled $.49 for the first quarter, $.46 in the second quarter, $.47 in the third quarter and $.49 in the fourth quarter. The return on average equity for 2006 was 10.07%, compared to 13.43% in 2005. The Subsidiary Bank continues to meet expectations on non-interest income and non-interest expense. However, the compressed net interest margin, due to the flat yield curve, continues to negatively impact net income.

Non-interest income increased $1,405,000 in 2006 to $10,245,000 compared to $8,840,000 in 2005. Service charges on deposits increased $787,000. Early in 2006, the Subsidiary Bank increased its focus on the sale of Credit Life & Disability Insurance, which resulted in an $86,000 increase in commissions earned. Check card transactions increased during 2006, which generated $131,000 in additional fee income. The sale of Farm Management to Hertz Farm Management generated a gain of $64,000 (after tax). Increases were also experienced in brokerage income, and income from bank-owned life insurance. The Company's non-interest income exceeded 1% of average assets for the year 2006.

In April 2006, the Company announced a 100,000 share stock repurchase program. The Company has purchased 60,000 shares under the plan at an average price of $33.73 per share. Since 1997, the Company has repurchased 1,294,271 shares of common stock through stock repurchase programs.

Net income for the fourth quarter of 2006 totaled $1,650,000, diluted earnings per share totaled $.49, total non-interest income was $2,532,000 and the return on average equity was 9.92%. Diluted earnings per share increased 4.3% from the third quarter of 2006 and 6.5% from the second quarter.

The stock price reached a record high of $35.45 during 2006 and closed the year at $32.55.

For additional financial information, please refer to the attached December 31, 2006 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.

The Company has set its annual meeting date for April 24, 2007 at 10:00 A.M. at The Galleria Convention Center in Princeton, Illinois. The record date for the Annual Meeting will be February 26, 2007.

Princeton National Bancorp, Inc. is the parent holding company of Citizens First National Bank, a $1.032 billion community bank with strategic locations in 7 counties in northern Illinois. The Company is well-positioned in the high growth counties of Kendall, Kane, Grundy, DeKalb and LaSalle plus Bureau and Marshall. Communities include: Aurora, DePue, Genoa, Hampshire, Henry, Huntley, Millbrook, Minooka, Newark, Oglesby, Peru, 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.

CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) December 31, 2006 December 31, (unaudited) 2005 ------------- -------------

ASSETS

Cash and due from banks $ 33,882 $ 23,635 Interest-bearing deposits with financial institutions 103 110 Federal funds sold 5,200 0 ------------- ------------- Total cash and cash equivalents 39,185 23,745

Loans held for sale, at lower of cost or market 4,512 2,587

Investment securities available-for-sale, at fair value 252,467 235,371 Investment securities held-to-maturity, at amortized cost 15,449 16,115 ------------- ------------- Total investment securities 267,916 251,486

Loans, net of unearned interest 629,472 581,724 Allowance for loan losses (3,053) (3,109) ------------- ------------- Net loans 626,419 578,615

Premises and equipment, net 28,670 26,412 Bank-owned life insurance 21,470 20,434 Interest receivable 11,139 8,714 Goodwill, net of accumulated amortization 23,029 22,665 Intangible assets, net of accumulated amortization 5,921 6,843 Other real estate owned 0 468 Other assets 3,698 3,294 ------------- -------------

TOTAL ASSETS $ 1,031,959 $ 945,263

============= =============

LIABILITIES

Demand deposits $ 107,834 $ 103,622 Interest-bearing demand deposits 231,953 222,675 Savings deposits 116,246 109,491 Time deposits 425,866 362,770 ------------- ------------- Total deposits 881,899 798,558

Customer repurchase agreements 31,344 29,375 Advances from the Federal Home Loan Bank 6,970 8,346 Interest-bearing demand notes issued to the U.S. Treasury 2,333 2,154 Federal funds purchased 0 1,000 Trust Preferred securities 25,000 25,000 Note payable 8,500 6,700 ------------- ------------- Total borrowings 74,147 72,575

Other liabilities 9,936 10,986 ------------- ------------- Total liabilities 965,982 882,119 ------------- -------------

STOCKHOLDERS' EQUITY

Common stock 22,391 22,392 Surplus 18,158 16,968 Retained earnings 48,109 45,786 Accumulated other comprehensive loss, net of tax (338) (482) Less: Treasury stock (22,343) (21,520) ------------- ------------- Total stockholders' equity 65,977 63,144 ------------- -------------

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,031,959 $ 945,263 ============= =============

CAPITAL STATISTICS (UNAUDITED)

YTD average equity to average assets 6.70% 7.21% Tier 1 leverage capital ratio 6.33% 6.46% Tier 1 risk-based capital ratio 8.75% 9.26% Total risk-based capital ratio 9.18% 9.76% Book value per share $ 19.69 $ 18.87 Closing market price per share $ 32.55 $ 33.25 End of period shares outstanding 3,351,410 3,346,443 End of period treasury shares outstanding 1,126,885 1,131,853

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

THREE THREE FOR THE FOR THE MONTHS MONTHS YEAR YEAR ENDED ENDED ENDED ENDED Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2006 2005 2006 2005 (unaudited)(unaudited) (unaudited) ---------- ---------- ---------- ----------

INTEREST INCOME

Interest and fees on loans $ 11,365 $ 9,730 $ 41,923 $ 31,339 Interest and dividends on investment securities 3,085 2,607 10,990 8,445 Interest on federal funds sold 142 45 499 120 Interest on interest-bearing time deposits in other banks 37 24 114 67 ---------- ---------- ---------- ---------- Total Interest Income 14,629 12,406 53,526 39,971 ---------- ---------- ---------- ----------

INTEREST EXPENSE

Interest on deposits 7,107 4,689 23,843 13,787 Interest on borrowings 997 867 3,787 1,939 ---------- ---------- ---------- ---------- Total Interest Expense 8,104 5,556 27,630 15,726 ---------- ---------- ---------- ----------

Net interest income 6,525 6,850 25,896 24,245 Provision for loan losses 110 0 285 0 ---------- ---------- ---------- ----------

Net interest income after provision 6,415 6,850 25,611 24,245 ---------- ---------- ---------- ----------

NON-INTEREST INCOME Trust & farm management fees 309 409 1,467 1,601 Service charges on deposit accounts 1,069 1,032 4,235 3,448 Other service charges 445 454 1,782 1,407 Gain on sales of securities available-for-sale 92 39 250 89 Gain on sale of loans 0 63 90 63 Brokerage fee income 174 193 736 697 Mortgage banking income 220 253 755 780 Bank-owned life insurance 188 160 770 604 Other operating income 35 31 160 151 ---------- ---------- ---------- ---------- Total Non-Interest Income 2,532 2,634 10,245 8,840 ---------- ---------- ---------- ----------

NON-INTEREST EXPENSE Salaries and employee benefits 3,940 3,792 15,884 13,400 Occupancy 527 453 1,985 1,558 Equipment expense 795 706 2,933 2,124 Federal insurance assessments 78 65 313 244 Intangible assets amortization 163 139 651 324 Data processing 251 265 1,032 870 Advertising 207 234 841 770 Other operating expense 1,171 1,102 4,696 3,963 ---------- ---------- ---------- ---------- Total Non-Interest Expense 7,132 6,756 28,335 23,253 ---------- ---------- ---------- ----------

Income before income taxes 1,815 2,728 7,521 9,832 Income tax expense 165 593 1,033 2,258 ---------- ---------- ---------- ----------

Net income $ 1,650 $ 2,135 $ 6,488 $ 7,574 ========== ========== ========== ==========

Net income per share: BASIC $ 0.49 $ 0.64 $ 1.93 $ 2.39 DILUTED $ 0.49 $ 0.63 $ 1.91 $ 2.37

Basic weighted average shares outstanding 3,360,033 3,352,420 3,369,567 3,174,321 Diluted weighted average shares outstanding 3,379,394 3,384,678 3,389,765 3,201,154

PERFORMANCE RATIOS (annualized)

Return on average assets 0.65% 0.90% 0.68% 0.97% Return on average equity 9.92% 13.64% 10.07% 13.43% Net interest margin (tax-equivalent) 3.16% 3.54% 3.33% 3.73% Efficiency ratio (tax-equivalent) 73.64% 66.70% 73.36% 66.18%

ASSET QUALITY

Net loan charge-offs $ 221 $ 139 $ 422 $ 167 Total non-performing loans $ 3,926 $ 3,825 $ 3,926 $ 3,825 Non-performing loans as a % of total loans 0.62% 0.66% 0.62% 0.66%

Inquiries should be directed to: Lou Ann Birkey Vice President - Investor Relations Princeton National Bancorp, Inc. (815) 875-4444 E-Mail address: Email Contact

SOURCE: Princeton National Bancorp, Inc.

Source: marketwire