Exhibit 10.1



 Exhibit 10.1 

UNITED STATES OF AMERICA 
 BEFORE THE 
 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM 

WASHINGTON, D.C. 
  

			
	Written Agreement by and between	  	 
		  	Docket No. 11-114-WA /RB-HC
	 PRINCETON NATIONAL BANCORP, INC.
	  	
	 Princeton, Illinois
	  	
	 and
	  	
	 FEDERAL RESERVE BANK OF
	  	
	 CHICAGO
	  	
	 Chicago, Illinois
	  	

 WHEREAS, Princeton National Bancorp, Inc., Princeton. Illinois (“Princeton”), a registered bank
holding company, owns and controls Citizens First National Bank, Princeton, Illinois (the “Bank”), and a nonbank subsidiary; 
 WHEREAS, it is the common goal of Princeton and the Federal Reserve Bank of Chicago (the “Reserve Bank”) to maintain the financial soundness of Princeton so that Princeton may serve as a source
of strength to the Bank; 
 WHEREAS, Princeton and the Reserve Bank have mutually agreed to enter into this Written Agreement
(the “Agreement”); and 
 WHEREAS, on October 24 , 2011, the board of directors of Princeton, at a duly
constituted meeting, adopted a resolution authorizing and directing Thomas D. Ogaard to enter into this Agreement on behalf of Princeton, and consenting to compliance with each and every provision of this Agreement by Princeton and its
institution-affiliated parties, as defined in 







 sections 3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as amended (the “FDI Act”)
(12U.S.C. §§ 1813(u) and 1818(b)(3)). 
 NOW, THEREFORE, Princeton and the Reserve Bank agree as follows: 

 Source of Strength 
 1. The board of directors of Princeton shall take appropriate steps to fully utilize Princeton’s financial and managerial resources, pursuant to section 38A of the FDI Act (12 U.S.C. § 1830 o-l)
and section 225.4 (a) of Regulation Y of the Board of Governors of the Federal Reserve System (the “Board of Governors”) (12 C.F.R. § 225.4(a)), to serve as a source of strength to the Bank, including, but not limited to, taking
steps to ensure that the Bank complies with the Consent Order entered into with the Office of the Comptroller of the Currency dated September 20, 2011, and any other supervisory action taken by the Bank’s federal regulator. 

Dividends and Distributions 
 2. (a) Princeton shall not declare or pay any dividends without the prior written approval of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation (the
“Director”) of the Board of Governors. 
 (b) Princeton shall not directly or indirectly take dividends or any other
form of payment representing a reduction in capital from the Bank without the prior written approval of the Reserve Bank. 
 (c)
Princeton and its nonbank subsidiary shall not make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without the prior written approval of the Reserve Bank and the Director. 


  
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 (d) All requests for prior approval shall be received by the Reserve Bank at least 30 days
prior to the proposed dividend declaration date, proposed distribution on subordinated debentures, and required notice of deferral on trust preferred securities. All requests shall contain, at a minimum, current and projected information on
Princeton’s capital, earnings, and cash flow; the Bank’s capital, asset quality, earnings, and allowance for loan and lease losses; and identification of the sources of funds for the proposed payment or distribution. For requests to
declare or pay dividends, Princeton must also demonstrate that the requested declaration or payment of dividends is consistent with the Board of Governors’ Policy Statement on the Payment of Cash Dividends by State Member Banks and Bank Holding
Companies, dated November 14,1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323). 
 Debt and Stock Redemption

 3. (a) Princeton and any nonbank subsidiary shall not, directly or indirectly, incur, increase, or guarantee any debt
without the prior written approval of the Reserve Bank. All requests for prior written approval shall contain, but not be limited to, a statement regarding the purpose of the debt, the terms of the debt, and the planned source(s) for debt repayment,
and an analysis of the cash flow resources available to meet such debt repayment. 
 (b) Princeton shall not, directly or
indirectly, purchase or redeem any shares of its stock without the prior written approval of the Reserve Bank.  
 Capital Plan

 4. Within 60 days of this Agreement, Princeton shall submit to the Reserve Bank an acceptable written plan to maintain
sufficient capital at Princeton on a consolidated basis. The plan shall, at a minimum, address, consider, and include: 

  
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 (a) The consolidated organization’s and the Bank’s current and future capital
requirements, including compliance with the Capital Adequacy Guidelines for Bank Holding Companies: Risk-Based Measure and Tier 1 Leverage Measure, Appendices A and D of Regulation Y of the Board of Governors (12 C.F.R. Part 225, App. A and D) and
the applicable capital adequacy guidelines for the Bank issued by the Bank’s federal regulator; 
 (b) the adequacy of the
Bank’s capital, taking into account the volume of classified credits, concentrations of credit, allowance for loan and lease losses, current, and projected asset growth, and projected retained earnings; 

(c) the source and timing of additional funds necessary to fulfill the consolidated organization’s and the Bank’s future
capital requirements; 
 (d) supervisory requests for additional capital at the Bank or the requirements of any supervisory
action imposed on the Bank by its federal regulator; and 
 (e) the requirements of section 38A of the FDI Act and section
225,4(a) of Regulation Y of the Board of Governors that Princeton serve as a source of strength to the Bank. 
 5. Princeton
shall notify the Reserve Bank, in writing, no more than 45 days after the end of any quarter in which any of Princeton’s capital ratios fall below the approved plan’s minimum ratios. Together with the notification, Princeton shall submit
an acceptable written plan that details the steps that Princeton will take to increase Princeton’s capital ratios to or above the approved plan’s minimums. 
 Cash Flow Projections 
 6. Within 60 days of this Agreement, Princeton shall
submit to the Reserve Bank a written statement of its planned sources and uses of cash for debt service, operating expenses, and other purposes (“Cash Flow Projection”) for 2012. Princeton shall submit to the Reserve 

  
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 Bank a Cash Flow Projection for each calendar year subsequent to 2012 at least one month prior to the
beginning of that calendar year. 
 Compliance with Laws and Regulations 

7. (a) In appointing any new director or senior executive officer, or changing the responsibilities of any senior executive officer so
that the officer would assume a different senior executive officer position, Princeton shall comply with the notice provisions of section 32 of the FDJ Act (12 U.S.C. §18311) and Subpart H of Regulation Y of the Board of Governors (12 C.F.R.
§§225.71 etseg.’). 
 (b) Princeton shall comply with the restrictions on indemnification and severance
payments of section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal Deposit Insurance Corporation’s regulations (12 C.F.R. Part 359). 
 Progress Reports 
 8. Within 45 days after the end of each calendar quarter
following the date of this Agreement, the board of directors shall submit to the Reserve Bank written progress reports detailing the form and manner of all actions taken to secure compliance with the provisions of this Agreement and the results
thereof, and a parent company only balance sheet, income statement, and, as applicable, report of changes in stockholders’ equity. 

Approval and Implementation of Flan 
 9. (a) Princeton shall submit a written capital plan that is acceptable to the Reserve Bank within the applicable time period set forth in paragraph 4 of this Agreement. 

(b) Within 10 days of approval by the Reserve Bank, Princeton shall adopt the approved capital plan. Upon adoption, Princeton shall
promptly implement the approved plan, and thereafter fully comply with it. 

  
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 (c) During the term of this Agreement, the approved capital plan shall not be amended or
rescinded without the prior written approval of the Reserve Bank. 
 Communications 

10. All communications regarding this Agreement shall be sent to: 

(a) Mr. David A. Ward 
 Assistant Vice President 
 Federal Reserve Bank of Chicago 

230 South LaSalle Street 
 Chicago, Illinois 60604-1413 
 (b) Mr. Thomas D. Ogaard

 President and Chief Executive Officer 
 Princeton National Bancorp, Inc. 
 606 South Main Street 

Princeton, Illinois 61356 

Miscellaneous 
 11.
Notwithstanding any provision of this Agreement, the Reserve Bank may, in its sole discretion, grant written extensions of time to Princeton to comply with any provision of this Agreement. 

12. The provisions of this Agreement shall be binding upon Princeton and its institution-affiliated parties, in their capacities as such,
and their successors and assigns. 
 13. Each provision of this Agreement shall remain effective and enforceable until stayed,
modified, terminated, or suspended in writing by the Reserve Bank. 
 14. The provisions of this Agreement shall not bar, estop,
or otherwise prevent the Board of Governors, the Reserve Bank, or any other federal or state agency from taking any other action affecting Princeton, the Bank, any nonbank subsidiary of Princeton, or any of their current or former
institution-affiliated parties and their successors and assigns. 

  
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 15. Pursuant to section 50 of the FDI Act(12U.S.C. § 183laa), this Agreement is
enforceable by the Board of Governors under section 8 of the FD1 Act (12 U.S.C. § 1818). 
 IN WITNESS WHEREOF, the parties
have caused this Agreement to be executed as of the 27th day of October, 2011. 
  

									
	 PRINCETON NATIONAL

BANCORP, INC.
	 		 	 FEDERAL RESERVE BANK

OF CHICAGO

					
	By:	 	Thomas D. Ogaard	 		 	By:	 	/s/ Mark H. Kawa
		 	President & CEO	 		 		 	  Mark H. Kawa
		 		 		 		 	  Vice President


  
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