Balance Sheet Review
Total assets rose 3.0%, or $51.4 million, to $1.78 billion at September 30, 2010, from $1.73 billion at September 30, 2009. The Company’s loan portfolio decreased 4.2%, or $58.7 million, to $1.33 billion from $1.39 billion at September 30, 2009, due primarily to efforts to move troubled loans through the collection, foreclosure, and disposition process. Deposits at September 30, 2010 increased 0.8% to $1.39 billion from $1.38 billion at September 30, 2009, due primarily to growth in interest checking and demand deposits.
Non-performing loans decreased to $45.8 million, or 3.45% of total loans, at September 30, 2010, compared with $48.7 million, or 3.64% of total loans, at June 30, 2010. Non-performing loans were up $19.6 million from $26.3 million, or 1.89% of total loans, at September 30, 2009, due primarily to troubled loans working their way through the collection, foreclosure and disposition process. As a result, foreclosed properties at September 30, 2010, rose to $73.6 million compared with $68.5 million at June 30, 2010, and $12.9 million at September 30, 2009. Our ratio of non-performing assets to total assets increased slightly during the quarter to 6.71% at September 30, 2010, compared with 6.66% at June 30, 2010.Our loan loss reserve as a percentage of total loans increased to 2.21% at September 30, 2010, compared with 1.58% at September 30, 2009. Net loan charge-offs for the third quarter of 2010 were $2.4 million, or 0.18% of average loans for the quarter. Our provision for loan losses was $5.0 million in the third quarter of 2010, compared with $6.6 million in the second quarter of 2010, and $2.0 million in the prior year third quarter. “We believe Porter Bancorp is positioned well to grow our earnings as the economy improves,” continued Ms. Bouvette. “We have strengthened our capital position, improved our margins and been proactive in aligning our loan portfolio values with the current economic conditions in our markets. We have also increased our reserve for loan losses to the highest level in years and believe these steps will be an important part in restoring our earnings momentum in the future.”