Porter Bancorp, Inc. Expects PBI Bank To Enter Into Agreement With FDIC And KDFI
Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, announced today that PBI Bank expects to enter into a Consent Order in the near future with the Federal Deposit Insurance Corporation (FDIC) and the Kentucky Department of Financial Institutions (KDFI). The Consent Order establishes benchmarks for the bank to improve its asset quality, reduce its loan concentrations and maintain its capital levels.
“Like many banks across the nation, PBI had a challenging year in the aftermath of the recession that resulted in an increase in non-performing loans, charge-offs and loan loss provision,” stated Maria L. Bouvette, President and CEO of Porter Bancorp, Inc. “While most of these loans were made several years ago when the economy was much stronger, the increase in unemployment rates and depreciating real estate values since that time put more pressure on construction and land development loans where we have experienced a higher than normal loss rate.
“The increased level of problem loans experienced by PBI and other banks has also led to increased oversight by bank regulators. As a result, PBI Bank’s board of directors has voluntarily agreed to take the steps to improve our asset quality, reduce our loan concentrations and maintain our capital levels as formalized in the Consent Order with the FDIC and the KDFI. We have already adopted and implemented many of the actions prescribed in the Consent Order, and we are confident that our continued progress and execution of these plans and actions will result in a much stronger bank.
“The Consent Order has no effect on our deposit customers, and they will continue to be insured by the FDIC to the maximum amounts,” noted Ms. Bouvette. “We do not believe the Consent Order will have any effect on our customers or our ability to support them going forward. We remain focused on providing our customers with the same high level of customer service that they expect from PBI Bank.
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