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Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with 18 full-service banking offices in Kentucky, today reported results for the fourth quarter and year ended December 31, 2010.
The Company reported a net loss available to common shareholders of $9.0 million, or $(0.77) per diluted share, for the fourth quarter of 2010 compared with a net loss of $256,000, or $(0.03) per diluted share, for the fourth quarter of 2009. Net loss available to common shareholders for 2010 was $6.2 million, or $(0.60) per fully diluted common share, compared with net income of $9.1 million, or $1.00 per fully diluted common share, for 2009.
“Porter Bancorp’s loss for the fourth quarter and 2010 was due to the continued weakness in the real estate market and its effects on values of collateral securing our loans and other real estate owned, as well as some customers’ ability to repay their loans,” stated Maria L. Bouvette, President and CEO of Porter Bancorp. “As a result of these trends, we charged off a high level of construction and land development loans at year-end and wrote-down other real estate owned (OREO) to reflect lower appraisal values.
“Our primary focus is to improve Porter Bancorp’s profitability, preserve our strong capital base and reduce the credit risks in our loan portfolio. Our core business remains solid with continued growth in our net interest margin and non-interest income since the fourth quarter of last year. Our capital ratios were strengthened during 2010 with capital raises of almost $32 million. At the end of 2010, our total risk-based capital ratio rose to 16.32% from 13.83% at year-end 2009, well above the 10.0% requirement for a well-capitalized institution.
“Our non-performing assets have increased from $119.5 million at September 30, 2010, to $128 million at December 31, 2010. The bulk of the non-performing assets are the result of weakness in our construction and land development portfolio. We have made solid progress in reducing our exposure to higher risk construction and land development loans. Since year-end 2008, our construction and land development loans are down 46.3% and represented only 15.3% of our loan portfolio at year-end 2010. We also continue to be diligent in moving non-performing loans through the system of collection or foreclosure to minimize our potential losses. We are diligently working to reduce our non-performing assets. We believe these measures will improve our future profitability when the economy strengthens in our markets,” continued Ms. Bouvette.