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PRINCETON — Citizens First National Bank must raise capital or merge with another financial institution. According to a recent 8-K filing released by the bank’s holding company, Princeton National Bancorp, the Office of the Comptroller of the Currency has notified the bank that it became “critically undercapitalized” as of Aug. 20. On that date, the bank had reported that its tangible equity to total assets ratio at the end of the quarter ending June 30 was 1.92 percent, below the level required by the prompt corrective action provisions of the Federal Deposit Insurance Act and the regulations of the OCC. In keeping with the prompt corrective action framework, critically undercapitalized institutions are generally required to be placed into conservatorship or receivership within 90 days unless the institution can raise sufficient capital or merge with another financial institution, according to the bank’s 8-K filing. According to the 8-K filing, PNBC and Citizens First National Bank are “diligently working to evaluate and pursue strategic alternatives. There can be no assurance that the Company or the Bank will be successful in obtaining outside additional capital or merging with or being acquired by another company within any regulatory imposed time frame.” The bank remains obligated to submit a capital restoration plan acceptable to the OCC and guaranteed by PNBC, according to the 8-K filing. Among other restrictions, the bank also is prohibited from entering into any material transaction other than in the usual course of business, extending any credit for any highly leveraged transactions, amending the bank’s charter or bylaws, making any material change in accounting methods and paying excessive compensation or bonuses without prior approval from the FDIC, according to the 8-K filing. Deposits at the bank continue to be insured by the FDIC up to the legal maximum insurance limit of $250,000, according to the 8-K filing. The bank’s staff can help depositors with any questions. PNBC president and CEO Thomas Ogaard was unavailable for comment by deadline this morning.