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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 third quarter of 2011.
The Company reported a net loss to common shareholders of $12.2 million, or $(1.04) per diluted share, for the third quarter of 2011. Net loss to common shareholders for the nine months ended September 30, 2011, was $50.8 million, or $(4.34) per fully diluted common share.
“Porter Bancorp’s third quarter loss was due primarily to a $15.3 million write-down of other real estate owned and an $8.0 million provision for loan losses,” stated Maria L. Bouvette, President and Chief Executive Officer. “We remain focused on aggressively reducing our problem assets in light of the sluggish economic recovery, continued weakness in local real estate activity and declining values of real estate in certain market sectors. We believe this strategic focus will be a key part in improving our long-term profitability.
“The fundamentals of our business continue to produce positive financial results; however, higher costs related to asset quality issues have been the principal driver of our losses this year. During the third quarter we continued to explore opportunities to bulk sell a package of OREO and loans. While the ultimate outcome of a transaction is uncertain, we determined that we would be willing to sell these properties at an amount below their individual appraised values. Accordingly, we have adjusted the carrying value of these assets to reflect a more aggressive disposition policy,” continued Bouvette.
Porter Bancorp’s strategy to reduce problem assets has resulted in two consecutive quarterly reductions in non-performing loans and non-performing assets and the fourth quarterly decrease in other real estate owned. Non-performing loans decreased to $59.8 million, or 4.96% of total loans, at September 30, 2011, compared with $61.5 million, or 4.92% of total loans, at June 30, 2011. Non-performing assets decreased to $104.7 million, or 6.6% of total assets, compared with $111.4 million, or 6.7% of total assets, at June 30, 2011.