Centrue Financial Corporation Announces Third Quarter Results

Centrue Financial Corporation Announces Third Quarter Results
Board of Directors Announces Share Repurchase Program 


KANKAKEE, Ill., Oct. 21  /PRNewswire-FirstCall/ -- Centrue Financial
Corporation (AMEX:CFF), today announced net income of $1.2 million ($0.50 per
diluted share) for the third quarter of 2004 compared to $823,000 ($0.44 per
diluted share) for the comparable 2003 period.  Net income for the third
quarter of 2004 expressed as an annualized rate of return on average assets and
average common stockholders' equity was 0.81% and 11.86%, compared to 0.64% and
10.54%, for the comparable 2003 period.

The Company also announced a share repurchase program of up to 20%, or
approximately 500,000 shares of its outstanding stock.  The program was
approved through December 31, 2005 by the Company's Board of Directors after
the expiration of the Company's previous share repurchase program.  Under the
previous plan, the Company repurchased 189,500 shares of stock.

For the nine months ended September 30, 2004, the Company reported net income
of $3.3 million ($1.29 per diluted share) compared to $691,000 ($0.35 per
diluted share) in 2003.  Net income for the first nine months of 2004 expressed
as an annualized rate of return on average assets and average common
stockholders' equity was 0.71% and 9.87% compared to 0.18% and 2.72% for the
comparable 2003 period.

"During the past year, we have concentrated our efforts on improving our
profitability profile," commented Thomas A. Daiber, Chief Executive Officer. He
continued, "Several experienced commercial bankers have joined the Centrue team
because of our regional banking philosophy and forward momentum.  We also
reduced headcount, redeployed capital into higher earning assets and introduced
products to improve our fee income, such as the Bounce protection program.  Our
interest rate philosophy on deposits also evolved to better reflect our
profitability goals and lower our cost of funds.  As a result of these
initiatives and several others, we increased net income by 50% over the past
twelve months and improved our net interest margin from 3.08% in the third
quarter of 2003 to 3.47% in the third quarter of 2004.  Our return on equity
for the quarter hit 11.86%, slightly under our year end goal of 12%. Asset
quality has also improved, as evidenced by an 11% decrease in non- performing
assets from the second quarter of 2004.  Our focus for the remainder of 2004
will be to improve our primary profitability and asset quality measures, and
leverage our capital through share repurchases."

Third Quarter Results

For the third quarter of 2004, the Company reported net income of $1.2 million
($0.50 per diluted share) compared to $823,000 ($0.44 per diluted share) in
2003, an increase of $410,000 (49.8%).  The increase was primarily due to a
$1.1 million (30.6%) increase in net interest income and a decrease in income
tax expense of $72,000 (12.5%), partially offset by an increase in noninterest
expense of $802,000 (22.9%)

Primarily as a result of an increase in average interest earning assets, net
interest income increased to $4.8 million or $1.1 million (30.6%) more than in
2003.  The increase was also due to an increase in net interest margin to 3.47%
in 2004's third quarter from 3.08% in the third quarter of 2003.  The increase
in the net interest margin was primarily a result of the Company's sensitivity
to increased interest rates and initiatives that were implemented throughout
the first and second quarters of 2004 and have continued through the third
quarter of 2004.  Lower earning assets, such as federal funds sold, were
replaced with higher yielding tax-advantaged investments and commercial loans. 
In addition, the Company's cost of funds decreased due to an increase in
non-interest bearing demand deposit accounts as a percentage of total deposits
and a reduction in the percentage of certificates of deposit to total deposits
from 55.5% at December 31, 2003 to 51.5% at September 30, 2004.

Noninterest income of $1.6 million increased by $55,000 (3.6%) from the
comparable 2003 period.  Noninterest income for 2003 included fee income of
$373,000 related to the revaluation of mortgage servicing rights.  The increase
in noninterest income was partially due to the implementation of a new
overdraft protection program that began in June of 2004.  As a result, fee
income in the quarter increased $177,000 (16.6%) from the same period in 2003.
Excluding the revaluation of mortgage servicing rights in 2003, the Company's
fee income increased $550,000 in the third quarter of 2004 compared to the 2003
period.  This increase was offset by a decrease in other noninterest income of
$88,000 (44.2%).  The decrease in other noninterest income was primarily due to
income generated from the Company's appraisal business which was sold in the
fourth quarter of 2003.

Noninterest expense was $4.3 million, or $802,000 (22.9%) higher than in 2003. 
In 2004, compensation and benefits increased $433,000 (24.1%), furniture and
equipment increased $95,000 (40.4%) and other expenses increased $283,000
(28.9%).  These expenses increased primarily due to the addition of personnel
and branches that resulted from the merger with Aviston in the fourth quarter
of 2003, the Parish Bank acquisition in March 2004 and the opening of two new
branches in 2004.

Income tax expense was $502,000 or $72,000 lower than in 2003.  The effective
income tax rate for 2004 was 28.9% compared to 41.1% for 2003.  The decrease in
the effective rate was due to several initiatives implemented during 2004 to
minimize the Company's income tax expenses, including the purchase of tax
exempt investment securities.

Financial Condition at September 30, 2004

The Company's total assets at September 30, 2004 were $603.9 million, a
decrease of $5.3 million (0.9%) from $609.2 million at December 31, 2003.  Net
loans increased $2.2 million (0.5%) and investment securities increased $20.2
million (22.8%).  The increase in net loans was partially offset by the sale of
$15.6 million of long-term fixed rate mortgage loans that had previously been
held in the Company's loan portfolio.  Management decided to improve its
interest rate risk position through the reduction of 25-30 year fixed rate
mortgages held in the Company's portfolio.  The Company has retained servicing
on all of the loans sold and recognized a minimal gain on the transactions. 
These increases were partially offset by a decrease in cash and cash
equivalents of $30.4 million.  Trust preferred securities increased $10.0
million to $20.0 million in 2004.  The increase was due to a trust preferred
offering completed by the Company in April 2004.  A portion of the proceeds
from the issuance of these securities have been used for stock repurchases. 
The remaining proceeds have been placed in investment securities until
additional shares are repurchased or cash is required for a merger or
acquisition.

Stockholders' equity totaled $43.0 million, reflecting a decrease of $2.6
million (5.8%) compared to December 31, 2003.  The decrease was due mainly to
common stock repurchases, dividend payments and a decrease in unrealized gains
on available-for-sale securities.  There were 2,423,316 shares of common stock
outstanding at September 30, 2004, compared to 2,606,022 shares at December 31,
2003.  Equity per share of common stock increased by $0.22 to $17.73 at
September 30, 2004 from $17.51 at December 31, 2003.  The capital ratios of the
Company, as well as of Centrue Bank, the Company's wholly-owned subsidiary,
continued to be in excess of regulatory requirements.

Nonperforming loans increased $4.4 million from the end of 2003 to $9.9 million
at September 30, 2004.  The increase in nonperforming loans was mainly
attributable to two large commercial borrowers.  One of these borrowers had
loans totaling $2.9 million which matured at year end 2003. The borrower is
cooperating with the Company to achieve a sale of the real estate collateral
and the Company does not anticipate a material loss.  The second borrower,
which has a $2.0 million commercial loan, filed bankruptcy and ceased making
loan payments during the second quarter of 2004.  The Company has specifically
allocated loan loss reserves which management believes is sufficient to cover
anticipated loss exposure on this loan.  Primarily as a result of these two
loans, many of the Company's credit quality ratios declined compared to
December 2003.  Also during the third quarter, the Company charged off $1.2
million relating to a loan to one commercial borrower.  The loan had been
previously classified and reserved preceding the charge-off recorded in the
third quarter of 2004.  As a result of the charge- off the allowance for loan
losses to total loans decreased to 1.54% at September 30, 2004, from 1.72% at
December 31, 2003.

Centrue Financial Corporation and Centrue Bank are headquartered in Kankakee,
Illinois, which is 60 miles south of downtown Chicago.  The Bank operates
eighteen branches in eight counties ranging from northeast Illinois to the
metropolitan St. Louis area.  Centrue Bank has total assets of more than $603
million and 171 employees on a full time equivalent basis.

                           Financial Highlights
               Condensed Consolidated Statements of Income
                                 Attached

  SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS



This document (including information incorporated by reference) contains, and
future oral and written statements of the Company and its management may
contain, forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 with respect to the financial
condition, results of operations, plans, objectives, future performance and
business of the company.  Forward-looking statements, which may be based upon
beliefs, expectations and assumptions of the Company's management and on
information currently available to management, are generally identifiable by
the use of words such as "believe," "expect," "anticipate," "plan," "intend,"
"estimate," "may," "will," "would," "could," "should" or other similar
expressions.  Additionally, all statements in this document, including
forward-looking statements, speak only as of the date they are made, and the
Company undertakes no obligation to update any statement in light of new
information or future events.

A number of factors, many of which are beyond the ability of the Company to
control or predict, could cause actual results to differ materially from those
in its forward-looking statements.  These factors include, among others, the
following: (I) the strength of the local and national economy; (ii) the
economic impact of any future terrorist threats and attacks, and the response
of the United States to any such threats and attacks; (iii) changes in state
and federal laws, regulations and governmental policies concerning the
Company's general business; (iv) changes in interest rates and prepayment rates
of the Company's assets: (v) increased competition in the financial services
sector and the inability to attract new customers; (vi) changes in technology
and the ability to develop and maintain secure and reliable electronic systems;
(vii) the loss of key executives or employees; (viii) changes in consumer
spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of
existing or new litigation involving the Company; and (xi) changes in
accounting policies and practices.  These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements.  Additional information concerning the
Company and its business, including additional factors that could materially
affect the Company's financial results, is included in the Company's filings
with the Securities and Exchange Commission.

               CENTRUE FINANCIAL CORPORATION AND SUBSIDIARY
               CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              (Dollars in Thousands, Except Per Share Data)
                               (Unaudited)

                           Three Months Ended        Nine Months Ended
                              September 30              September 30
                           2004         2003         2004         2003
    Total interest
     income               $7,358       $6,339      $21,997      $20,313
    Total interest
     expense               2,602        2,696        7,998        9,017
      Net interest
       income              4,756        3,643       13,999       11,296
    Provision for loan
     losses                  300          272          900        4,022
      Net interest income
       after provision for
       loan losses         4,456        3,371       13,099        7,274
  Noninterest income:
    Fee income             1,245        1,068        3,126        2,092
    Net gain (loss) on
     sale of securities       (5)           8           85            8
    Net gain on sale of
     branch                  ---          ---          ---          478
    Net gain on sale of
     real estate held for
     sale                    ---            5           39           37
    Net gain on sale of
     loans                   238          254          661        1,117
    Other                    111          199          431          660
      Total noninterest
       income              1,589        1,534        4,342        4,392
  Noninterest expense:
    Compensation and
     benefits              2,227        1,794        6,624        5,597
    Occupancy, net           367          372        1,087        1,023
    Furniture and
     equipment               330          235        1,019          619
    Legal and professional
     fees                    124          128          526          548
    Other                  1,262          979        3,510        2,992
      Total noninterest
       expense             4,310        3,508       12,766       10,779
  Income before income
   taxes                   1,735        1,397        4,675          887
    Income tax expense       502          574        1,414          196
  Net income              $1,233         $823       $3,261         $691

  Other comprehensive
   income (loss):
    Change in unrealized
     gains on available
     for sale securities,
     net of related income
     taxes                   849         (358)        (706)        (623)
    Less: reclassification
     adjustment for gains
     included in net income
     net of related income
     taxes                    (2)          (3)          32           (3)
    Other comprehensive
     income (loss)           851         (355)        (738)        (620)
  Comprehensive income    $2,084         $468       $2,523          $71

  Basic earnings per
   share                   $0.50        $0.44        $1.29        $0.35
  Diluted earnings per
   share                   $0.50        $0.44        $1.29        $0.35
  Dividends per share       $---        $.075        $.075       $0.225

  Selected operating ratios
   (annualized):

    Net interest margin
     (ratio of net
     interest income to
     average interest-
     earning assets)        3.47%        3.08%        3.40%        3.14%
    Return on assets
     (ratio of net
     income to average
     total assets)          0.81%        0.64%        0.71%        0.18%
    Return on equity
     (ratio of net income
     to average equity)    11.86%       10.54%        9.87%        2.72%


               CENTRUE FINANCIAL CORPORATION AND SUBSIDIARY
                           FINANCIAL HIGHLIGHTS
              (Dollars in Thousands, Except Per Share Data)
                               (Unaudited)

                                                 September 30   December 31
                                                      2004          2003
                                                     (dollars in thousands)
  Selected Financial Condition Data:
    Total assets                                    $603,892       $609,208
    Net loans, including loans held for sale         428,084        425,840
    Allowance for loan losses                          6,687          7,471
    Investment securities - available-for-sale       108,798         87,712
    Investment securities - held to maturity             ---            892
    Deposits                                         496,022        496,054
    Borrowings                                        41,551         54,396
    Trust preferred securities                        20,000         10,000
    Accumulated other comprehensive income (loss)        350          1,088
    Stockholders' equity                              42,969         45,643

    Shares outstanding                             2,423,316      2,606,022

    Stockholders' equity per share                    $17.73         $17.51

    Selected asset quality ratios:
    Allowance for loan losses to total loans           1.54%          1.72%
    Non-performing assets to total assets              1.74%          1.00%
    Allowance for loan losses to non-performing
     loans                                            67.96%        136.34%
    Classified assets to total assets                  3.34%          4.12%
    Allowance for loan losses to classified assets    33.13%         29.76%

  Non-performing asset analysis:
    Non-accrual loans                                 $9,529         $3,248
    Loans past due 90 days and accruing                  328          2,232
    Real estate owned and repossessed assets             596            319
    Troubled debt restructurings                          44            281
    Total                                            $10,497         $6,080

    Net (recoveries) charge-offs for quarter          $1,238          $(528)


DATASOURCE: Centrue Financial Corporation



CONTACT:  James M. Lindstrom, Chief Financial Officer of Centrue

Financial Corporation, [phone]



Web site:  http://www.kfs-bank.com/ 

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