Porter Bancorp, Inc. Announces Fourth Quarter And 2010 Results
Net interest margin increased 3 basis points to 3.60% in the fourth quarter of 2010 from our margin of 3.57% in the prior year fourth quarter due primarily to lower cost of funds. The yield on earning assets declined 44 basis points from the 2009 fourth quarter while rates paid on interest-bearing liabilities declined 57 basis points. Net interest margin decreased 13 basis points to 3.60% from our margin of 3.73% in the third quarter of 2010 due primarily to a lower yield on average earning assets. The yield on earning assets declined 26 basis points while the cost of interest-bearing liabilities decreased 17 basis points from the third quarter of 2010.
Average earning assets declined 6.2% to $1.56 billion for the three months ended December 31, 2010, compared with $1.67 billion for the three months ended December 31, 2009. The decline in average earning assets was due primarily to lower average loans resulting from a slowdown in new loan originations and loans moved to other real estate owned (OREO).
Average deposits decreased 0.4% to $1.43 billion, down from $1.44 billion for the three months ended December 31, 2009.
Non-Interest IncomeNon-interest income for the fourth quarter of 2010 increased 166.1%, or $2.8 million, to $4.5 million compared with $1.7 million in the fourth quarter of 2009. The increase in non-interest income was due primarily to $2.9 million in net gains on sales of securities in the fourth quarter of 2010 compared with a net loss of $7,000 on sales of securities in the fourth quarter of 2009. Non-Interest Expense Non-interest expense for the fourth quarter of 2010 increased from the prior year’s fourth quarter due primarily to increased OREO expense. OREO expense increased to $9.9 million in the fourth quarter of 2010 compared with $449,000 in the fourth quarter of 2009, due primarily to increased losses on sales of OREO, OREO write-downs and OREO maintenance costs. FDIC insurance expense increased 14.6% to $705,000 in the fourth quarter of 2010 compared with $615,000 in the fourth quarter of 2009. State franchise tax expense increased 20.7% to $543,000 in the fourth quarter of 2010 compared with $450,000 in the fourth quarter of 2009.
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