Porter Bancorp, Inc. Reports Growth In First Quarter Net Income

Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with 18 full-service banking offices in Kentucky, today reported unaudited results for the first quarter of 2012. The Company also announced that it filed its first quarter 10-Q with the Securities and Exchange Commission.

The Company reported growth in net income available to common shareholders of $985,000, or $0.08 per diluted share, for the first quarter of 2012 compared with $305,000, or $0.03 per diluted share, for the first quarter of 2011.

The increase in net income was primarily attributable to the gain on sale of investment securities in the first quarter of 2012 which totaled $2.0 million compared with $83,000 in the first quarter of 2011 and a decrease in our provision for loan losses in the first quarter of 2012 which totaled $3.8 million compared to $5.1 million in the first quarter of 2011. Those improvements were partially offset by lower net interest income in the first quarter of 2012 compared with the first quarter of 2011.

Non-performing loans increased to $98.0 million, or 8.92% of total loans, at March 31, 2012, compared with $93.4 million, or 8.22% of total loans, at December 31, 2011. Non-performing assets decreased on a dollar basis to $133.5 million, or 9.61% of total assets, compared with $134.8 million, or 9.26% of total assets, at December 31, 2011.

Foreclosed properties at March 31, 2012 declined to $35.6 million compared with $41.4 million at December 31, 2011, and $73.9 million at March 31, 2011. The Company sold $9.6 million in other real estate owned during the first quarter of 2012. Our ratio of non-performing assets to total assets increased to 9.61% at March 31, 2012, compared with 8.28% at March 31, 2011.

At March 31, 2012, PBI Bank’s Tier 1 leverage ratio was 7.07% and its Total risk-based capital ratio was 11.38%, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order. At March 31, 2012, Porter Bancorp’s leverage ratio was 7.30%, compared with 6.53% at December 31, 2011, and its Total risk based capital ratio was 11.68% compared with 11.22% at December 31, 2011. We are continuing our efforts to strengthen our capital levels and comply with the Consent Order.

More detailed information regarding the Company’s result of operations are included in Porter Bancorp’s 10-Q filed with the Securities and Exchange Commission for the quarter ended March 31, 2012.

Non-Accrual Loan Activity
 
(in thousands)
Non-accrual loans at December 31, 2011 $ 92,020
Net principal pay-downs (5,240 )
Charge-offs (2,312 )
Loans foreclosed and transferred to OREO (3,829 )
Loans placed on non-accrual during the period   16,591  
 
Non-accrual loans at March 31, 2012 $ 97,230  
 
 
Other Real Estate Owned (OREO) Activity (Net of Allowance)
 
(in thousands)
OREO at December 31, 2011 $ 41,449
Real estate acquired 4,216
Valuation adjustment write downs (480 )
Improvements 1
Proceeds from sales of properties (9,210 )
Gain (loss) on sales, net   (402 )
 
OREO at March 31, 2012 $ 35,574  
 
 

Forward-Looking Statements

Statements in this press release relating to Porter Bancorp’s plans, objectives, expectations or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “plan,” “strive” or similar words, or negatives of these words, identify forward-looking statements. These forward-looking statements are based on management’s current expectations. Porter Bancorp’s actual results in future periods may differ materially from those currently expected due to various risks and uncertainties, including those discussed under “Risk Factors” in the Company’s Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of the release and Porter Bancorp does not assume any responsibility to update these statements.

Additional Information

Unaudited supplemental financial information for the first quarter ending March 31, 2012 follows.

 
 
 

PORTER BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)
 
  Three   Three   Three
Months Months Months
Ended Ended Ended

3/31/12

12/31/11

3/31/11

 

 

 
Income Statement Data
Interest income $ 15,755 $ 16,637 $ 19,616
Interest expense   4,301   4,986     5,848

 

 

 
Net interest income 11,454 11,651 13,768
Provision for loan losses   3,750   35,800     5,100

 

 

 
Net interest income after provision 7,704 (24,149 ) 8,668
 
Service charges on deposit accounts 554 630 630
Income from fiduciary activities 251 255 255
Gains on sales of loans originated for sale 45 49 221
Gains (losses) on sales of securities, net 2,019 83
Other than temporary impairment on securities (41 )
Other   576   588     598

 

 

 
Non-interest income 3,445 1,481 1,787
 
Salaries & employee benefits 4,312 3,134 4,124
Occupancy and equipment 886 819 972
Other real estate owned expense 1,257 7,020 1,367
FDIC insurance 873 830 855
Franchise tax 592 482 582
Loan collection expense 360 520 262
Professional fees 356 429 280
Communications expense 180 169 168
Borrowing prepayment fees 486
Postage and delivery 122 117 123
Advertising 33 32 102
Other   676   658     560

 

 

 
Non-interest expense 9,647 14,696 9,395
 
Income (loss) before income taxes 1,502 (37,364 ) 1,060
Income tax expense     18,591     261

 

 

 
Net income (loss) 1,502 (55,955 ) 799
Less:
Dividends on preferred stock 437 438 438
Accretion on preferred stock 45 44 44
Earnings (loss) allocated to participating securities   35   (1,980 )   12
 
Net income (loss) available to common $ 985 $ (54,457 ) $ 305

 

 

 
 
Weighted average shares – Basic 11,735,451 11,724,456 11,704,651
Weighted average shares – Diluted 11,735,451 11,724,456 11,704,651
 
Basic earnings (loss) per common share $ 0.08 $ (4.64 ) $ 0.03
Diluted earnings (loss) per common share $ 0.08 $ (4.64 ) $ 0.03
Cash dividends declared per common share $ 0.00 $ 0.00 $ 0.01

 
 
 

PORTER BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)
 
  Three   Three   Three
Months Months Months
Ended Ended Ended
3/31/12 12/31/11 3/31/11

 

 

 
Average Balance Sheet Data
Assets $ 1,412,606 $ 1,569,669 $ 1,738,253
Loans 1,119,181 1,189,123 1,290,851
Earning assets 1,350,878 1,463,093 1,591,561
Deposits 1,279,287 1,379,093 1,481,192
Long-term debt and advances 39,551 44,040 48,275
Interest bearing liabilities 1,207,855 1,320,481 1,434,718
Stockholders’ equity 84,659 130,250 190,585
 
 
Performance Ratios
Return on average assets 0.43 % (14.14 )% 0.19 %
Return on average equity 7.14 (170.44 ) 1.70
Yield on average earning assets (tax equivalent) 4.73 4.55 5.03
Cost of interest bearing liabilities 1.43 1.50 1.65
Net interest margin (tax equivalent) 3.45 3.20 3.54
Efficiency ratio 74.90 111.56 60.72
 
Loan Charge-off Data
Loans charged-off $ (2,582 ) $ (22,816 ) $ (5,867 )
Recoveries   206     103     81  

 

 

 
Net charge-offs $ (2,376 ) $ (22,713 ) $ (5,786 )

 
 
 

PORTER BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)
 
  As of   As of   As of
3/31/12 12/31/11 3/31/11

 

 

 
Assets
Loans $ 1,098,962 $ 1,136,717 $ 1,277,497
Loan loss reserve   (53,953 )   (52,579 )   (33,599 )

 

 

 
Net loans 1,045,009 1,084,138 1,243,898
Securities available for sale 174,918 158,833 163,032
Federal funds sold & interest bearing deposits 62,560 92,034 146,477
Cash and due from financial institutions 10,047 13,928 15,626
Premises and equipment 21,296 21,541 22,175
Other real estate owned 35,574 41,449 73,942
Goodwill 23,794
Deferred tax assets 12,720
Accrued interest receivable and other assets   40,219     43,501     35,443  

 

 

 
Total Assets $ 1,389,623   $ 1,455,424   $ 1,737,107  

 

 

 
 
Liabilities and Equity
Certificates of deposit $ 951,503 $ 1,024,333 $ 1,168,841
Interest checking 85,608 87,653 85,343
Money market 63,701 64,302 83,133
Savings   38,631     36,357     38,234  

 

 

 
Total interest bearing deposits 1,139,443 1,212,645 1,375,551
Demand deposits   114,304     111,118     106,772  

 

 

 
Total deposits 1,253,747 1,323,763 1,482,323
Federal funds purchased & repurchase agreements 1,926 1,738 11,429
FHLB advances 6,789 7,116 14,564
Junior subordinated debentures 32,425 32,650 33,550
Accrued interest payable and other liabilities   11,945     7,628     5,507  

 

 

 
Total liabilities 1,306,832 1,372,895 1,547,373
Stockholders’ equity   82,791     82,529     189,734  

 

 

 
Total Liabilities and Stockholders’ Equity $ 1,389,623   $ 1,455,424   $ 1,737,107  

 

 

 
 
Ending shares outstanding 11,822,102 11,824,472 11,840,176
Book value per common share $ 3.76 $ 3.74 $ 12.79
Tangible book value per common share 3.57 3.54 10.37
 
Asset Quality Data
Loan 90 days or more past due still on accrual $ 733 $ 1,350 $ 3,907
Non-accrual loans   97,230     92,020     65,964  

 

 

 
Total non-performing loans 97,963 93,370 69,871
Real estate acquired through foreclosures 35,574 41,449 73,942
Other repossessed assets   11     5     41  

 

 

 
Total non-performing assets $ 133,548   $ 134,824   $ 143,854  

 

 

 
Non-performing loans to total loans 8.92 % 8.22 % 5.47 %
Non-performing assets to total assets 9.61 9.26 8.28
Allowance for loan losses to non-performing loans 55.07 56.31 48.09
Allowance for loan losses to total loans 4.91 4.63 2.63
 
Risk-based Capital Ratios
Tier I leverage ratio 7.30 % 6.53 % 10.93 %
Tier I risk-based capital ratio 9.68 9.23 14.59
Total risk-based capital ratio 11.68 11.22 16.52
 
FTE employees 298 291 300
 
 

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