Porter Bancorp, Inc. Announces Second Quarter 2012 Results

Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with 18 full-service banking offices in Kentucky, today reported unaudited results for the second quarter of 2012.

The Company reported net loss to common shareholders of $319,000, or ($0.03) per diluted share, for the second quarter of 2012 compared with net loss to common shareholders of $39.0 million, or ($3.33) per diluted share, for the second quarter of 2011. Net income available to common shareholders for the six months ended June 30, 2012, was $661,000, or $0.06 per diluted common share, compared with net loss to common shareholders of $38.6 million, or ($3.30) per diluted share, for the six months ended June 30, 2011.

The improvement for the second quarter and first six months of 2012 compared with the same periods of 2011 was primarily attributable to lower provision for loan losses expense, lower OREO expense, and an increase in gain on sale of investment securities. Additionally, 2011 results were negatively impacted by a non-recurring 100% goodwill impairment charge of $23.8 million. These improvements were partially offset by lower net interest income in the second quarter and first six months of 2012, compared with 2011, as average earning assets declined $256.6 million and net interest margin declined 10 basis points between the six months ended June 30, 2012, and the six months ended June 30, 2011.

Non-performing loans decreased to $81.7 million, or 7.85% of total loans, at June 30, 2012, compared with $98.0 million, or 8.92% of total loans, at March 31, 2012. Non-performing assets increased to $136.1 million, or 10.2% of total assets, compared with $133.5 million, or 9.61% of total assets, at March 31, 2012.

Foreclosed properties at June 30, 2012 increased to $54.4 million compared with $35.6 million at March 31, 2012, and $49.9 million at June 30, 2011. The Company acquired $23.9 million of OREO and sold $4.8 million of OREO during the second quarter of 2012. Our ratio of non-performing assets to total assets increased to 10.2% at June 30, 2012, compared with 6.65% at June 30, 2011.

At June 30, 2012, PBI Bank’s Tier 1 leverage ratio was 7.38% and its Total risk-based capital ratio was 11.71%, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order. At June 30, 2012, Porter Bancorp’s leverage ratio was 7.56%, compared with 7.30% at March 31, 2012, and 6.53% at December 31, 2011, and its Total risk-based capital ratio was 11.94% compared with 11.68% at March 31, 2012, and 11.22% at December 31, 2011. We are continuing our efforts to strengthen our capital levels and comply with the Consent Order.

Non-Accrual Loan Activity
 
    (in thousands)
Non-accrual loans at March 31, 2012 $ 97,230
Net principal pay-downs (4,084)
Charge-offs (4,902)
Loans foreclosed and transferred to OREO (15,243)
Loans placed on non-accrual during the period   8,652
 
Non-accrual loans at June 30, 2012 $ 81,653
 
 
Other Real Estate Owned (OREO) Activity (Net of Allowance)
 
(in thousands)
OREO at March 31, 2012 $ 35,574
Real estate acquired 23,910
Valuation adjustment write downs (350)
Proceeds from sales of properties (4,223)
Gain (loss) on sales, net   (546)
 
OREO at June 30, 2012 $ 54,365
 

PBIB-G PBIB-F

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 second quarter ending June 30, 2012 follows.
 

PORTER BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)
 
    Three     Three     Three     Six     Six
Months Months Months Months Months
Ended Ended Ended Ended Ended
6/30/12 3/31/12 6/30/11 6/30/12 6/30/11

 

 

 
Income Statement Data
Interest income $ 14,812 $ 15,755 $ 19,198 $ 30,567 $ 38,814
Interest expense   4,017     4,301   5,757     8,318   11,605  

 

 

 
Net interest income 10,795 11,454 13,441 22,249 27,209
Provision for loan losses   4,000     3,750   13,700     7,750   18,800  

 

 

 

 
Net interest income after provision 6,795 7,704 (259 ) 14,499 8,409
 
Service charges on deposit accounts 556 554 659 1,110 1,289
Income from fiduciary activities 291 251 246 542 501
Gains on sales of loans originated for sale 77 45 320 122 541
Gains on sales of securities, net 1,511 2,019 1,025 3,530 1,108
Other   583     576   615     1,159   1,213  

 

 

 
Non-interest income 3,018 3,445 2,865 6,463 4,652
 
Salaries & employee benefits 3,982 4,312 4,180 8,294 8,304
Occupancy and equipment 969 886 981 1,855 1,953
Goodwill impairment 23,794 23,794
Other real estate owned expense 1,205 1,257 22,109 2,462 23,476
FDIC insurance 832 873 855 1,705 1,710
Franchise tax 592 592 582 1,184 1,164
Loan collection expense 586 360 925 946 1,187
Professional fees 567 356 354 923 634
Communications expense 168 180 165 348 333
Postage and delivery 109 122 128 231 251
Advertising 28 33 87 61 189
Other   624     676   599     1,300   1,159  

 

 

 
Non-interest expense 9,662 9,647 54,759 19,309 64,154
 
Income (loss) before income taxes 151 1,502 (52,153 ) 1,653 (51,093 )
Income tax expense (benefit)         (12,164 )     (11,903 )

 

 

 
Net income (loss) 151 1,502 (39,989 ) 1,653 (39,190 )
Less:
Dividends on preferred stock 438 437 437 875 875
Accretion on preferred stock 45 45 44 90 88
Earnings (loss) allocated to participating securities   (13 )   35   (1,510 )   27   (1,552 )
 
Net income (loss) available to common $ (319 ) $ 985 $ (38,960 ) $ 661 $ (38,601 )

 

 

 
 
Weighted average shares – Basic 11,733,156 11,735,451 11,718,656 11,701,655 11,705,247
Weighted average shares – Diluted 11,733,156 11,735,451 11,718,656 11,701,655 11,705,247
 
Basic earnings (loss) per common share $ (0.03 ) $ 0.08 $ (3.33 ) $ 0.06 $ (3.30 )
Diluted earnings (loss) per common share $ (0.03 ) $ 0.08 $ (3.33 ) $ 0.06 $ (3.30 )
Cash dividends declared per common share $ 0.00 $ 0.00 $ 0.01 $ 0.00 $ 0.02
 

 

PORTER BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)
 
    Three     Three     Three     Six     Six
Months Months Months Months Months
Ended Ended Ended Ended Ended
6/30/12 3/31/12 6/30/11 6/30/12 6/30/11

 

 

 
Average Balance Sheet Data
Assets $ 1,363,340 $ 1,412,606 $ 1,708,552 $ 1,387,973 $ 1,723,321
Loans 1,078,497 1,119,181 1,268,196 1,098,839 1,279,461
Earning assets 1,307,520 1,350,878 1,580,185 1,329,199 1,585,842
Deposits 1,231,281 1,279,287 1,473,459 1,255,284 1,477,304
Long-term debt and advances 38,959 39,551 51,340 39,255 49,816
Interest bearing liabilities 1,159,447 1,207,855 1,431,757 1,183,651 1,433,229
Stockholders’ equity 83,987 84,659 166,602 84,323 178,527
 
 
Performance Ratios
Return on average assets 0.04 % 0.43 % (9.39 )% 0.24 % (4.59 )%
Return on average equity 0.72 7.14 (96.27 ) 3.94 (44.27 )
Yield on average earning assets (tax equivalent) 4.59 4.73 4.91 4.66 4.97
Cost of interest bearing liabilities 1.39 1.43 1.61 1.41 1.63
Net interest margin (tax equivalent) 3.35 3.45 3.45 3.40 3.50
Efficiency ratio 78.54 74.90 202.64 76.68 131.24
 
Loan Charge-off Data
Loans charged-off $ (6,438 ) $ (2,582 ) $ (8,596 ) $ (9,020 ) $ (14,463 )
Recoveries   79     206     14     285     95  

 

 

 

 
Net charge-offs $ (6,359 ) $ (2,376 ) $ (8,582 ) $ (8,735 ) $ (14,368 )
 

 

PORTER BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)
 
    As of     As of     As of     As of
6/30/12 3/31/12 12/31/11 6/30/11

 

 

 
Assets
Loans $ 1,041,292 $ 1,098,962 $ 1,136,717 $ 1,250,023
Loan loss reserve   (51,594 )   (53,953 )   (52,579 )   (38,717 )

 

 

 

 
Net loans 989,698 1,045,009 1,084,138 1,211,306
Securities available for sale 194,091 174,918 158,833 157,524
Federal funds sold & interest bearing deposits 30,762 62,560 92,034 151,362
Cash and due from financial institutions 5,599 10,047 13,928 23,731
Premises and equipment 21,223 21,296 21,541 21,888
Other real estate owned 54,365 35,574 41,449 49,913
Deferred tax assets 20,873
Accrued interest receivable and other assets   39,114     40,219     43,501     39,864  

 

 

 

 
Total Assets $ 1,334,852   $ 1,389,623   $ 1,455,424   $ 1,676,461  

 

 

 

 
 
Liabilities and Equity
Certificates of deposit $ 909,504 $ 951,503 $ 1,024,333 $ 1,131,342
Interest checking 82,208 85,608 87,653 81,776
Money market 60,704 63,701 64,302 83,083
Savings   39,509     38,631     36,357     36,519  

 

 

 

 
Total interest bearing deposits 1,091,925 1,139,443 1,212,645 1,332,720
Demand deposits   112,797     114,304     111,118     102,777  

 

 

 

 
Total deposits 1,204,722 1,253,747 1,323,763 1,435,497
Federal funds purchased & repurchase agreements 2,501 1,926 1,738 11,000
FHLB advances 6,398 6,789 7,116 38,937
Junior subordinated debentures 32,200 32,425 32,650 33,325
Accrued interest payable and other liabilities   7,526     11,945     7,628     7,250  

 

 

 

 
Total liabilities 1,253,347 1,306,832 1,372,895 1,526,009
Stockholders’ equity   81,505     82,791     82,529     150,452  

 

 

 

 
Total Liabilities and Stockholders’ Equity $ 1,334,852   $ 1,389,623   $ 1,455,424   $ 1,676,461  

 

 

 

 
 
Ending shares outstanding 11,934,872 11,822,102 11,824,472 11,840,670
Book value per common share $ 3.62 $ 3.76 $ 3.74 $ 9.47
Tangible book value per common share 3.44 3.57 3.54 9.25
 
Asset Quality Data
Loan 90 days or more past due still on accrual $ 88 $ 733 $ 1,350 $ 1,146
Non-accrual loans   81,653     97,230     92,020     60,331  

 

 

 

 
Total non-performing loans 81,741 97,963 93,370 61,477
Real estate acquired through foreclosures 54,365 35,574 41,449 49,913
Other repossessed assets   5     11     5     54  

 

 

 

 
Total non-performing assets $ 136,111   $ 133,548   $ 134,824   $ 111,444  

 

 

 

 
Non-performing loans to total loans 7.85 % 8.92 % 8.22 % 4.92 %
Non-performing assets to total assets 10.20 9.61 9.26 6.65
Allowance for loan losses to non-performing loans 63.12 55.07 56.31 62.98
Allowance for loan losses to total loans 4.96 4.91 4.63 3.10
 
Risk-based Capital Ratios
Tier 1 leverage ratio 7.56 % 7.30 % 6.53 % 9.97 %
Tier 1 risk-based capital ratio 9.95 9.68 9.23 13.64
Total risk-based capital ratio 11.94 11.68 11.22 15.58
 
FTE employees 300 298 291 301

Copyright Business Wire 2010

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