Our provision for loan losses was $13.7 million in the second quarter of 2011, an increase from $5.1 million in the first quarter of 2011, and $6.6 million in the prior year second quarter. The increase was due to an increase in charge-offs, soft real estate market conditions and their effect on underlying property values and borrowers’ ability to repay, internal downgrades to existing credits, and additional reserves for various commercial credits.
“We completed our first bulk asset sale of OREO in the second quarter as part of our revised strategy to reduce the balance of non-performing assets,” continued Ms. Bouvette. “We continue to evaluate other opportunities to reduce the level of non-performing assets. We remain focused on managing credit quality and disposing of other real estate, which are the keys to restoring Porter Bancorp’s earnings power in future quarters.”
Regulation G Disclosure
This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission (the “SEC”). The Company believes these non-GAAP financial measures provide information that is useful to the users of its financial information regarding the Company’s financial condition and results of operations. Additionally, the Company uses these non-GAAP measures to evaluate its past performance and prospects for future performance. The Company believes this non-GAAP financial information is helpful in understanding the results of operations separate and apart from items that may, or could, have a disproportional positive or negative impact in any particular period.While the Company believes these non-GAAP financial measures are useful in evaluating Company performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with U.S. GAAP. Further, these non-GAAP financial measures may differ from similar measures presented by other companies.