PBIB Porter Bancorp, Inc. (delisted)

Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI�Bank, with 19 full-service banking offices in 12 counties in Kentucky, today reported results for the first quarter of 2008. The Company reported net income of $3.6 million, or $0.46 per share, for the first quarter of 2008, compared with $3.6 million, or $0.47 per share, for the first quarter of 2007. �Porter reported strong growth in loans, deposits and assets in the first quarter of 2008 and benefited from the continued expansion of existing markets and the contribution from acquisitions completed over the past year,� stated Maria L. Bouvette, President and CEO of Porter Bancorp, Inc. �Asset quality remained solid in the first quarter, highlighting the overall strength of our markets and our increased attention on managing credit risks. Our first quarter provision for loan losses rose only 4% from the prior year�s first quarter while our coverage ratio of allowance for loan losses to non-performing loans increased to 179% from 160% in the first quarter of 2007. Our net income was slightly below first quarter 2007 primarily due to the impact of the recent declines in interest rates on our margin and higher expenses as we expanded our operations. We are well positioned to improve earnings as interest rates stabilize and we streamline our operational efficiency,� continued Ms. Bouvette. Highlights Net interest income increased 16.4% to $11.3 million for the three months ended March 31, 2008, compared with the same quarter of 2007. Loans grew 41.8% to $1.3 billion compared with $927 million at March 31, 2007. Deposits increased 37.8% to $1.2 billion compared with $897 million at March 31, 2007. Core customer non-interest bearing deposit accounts increased 36.0% to $95.2 million from $70 million at March 31, 2007. Total assets increased 39.7% to $1.6 billion since the first quarter of 2007, fueled by strong loan growth and the acquisitions of Kentucky Trust Bank and Paramount Bank. We completed the acquisition of Paramount Bank in Lexington, Kentucky in a $5 million all cash transaction on February 1, 2008. The acquisition added approximately $75 million in assets and $75 million in deposits, of which approximately $15 million are core demand deposits. This acquisition established our physical presence in Lexington, Fayette County, the second largest market in Kentucky. We repurchased 17,371 common shares of our common stock at an aggregate price of $300,518 under our $3�million stock repurchase plan in the first quarter 2008. The Company has approximately $2.5 million remaining under the original $3 million authorized by the Board of Directors to purchase additional shares of common stock. �We are pleased with our solid financial performance in the first quarter,� continued Ms. Bouvette. �We benefited from organic growth in our existing markets and the synergy of the new markets that we entered since last year. Our challenge for 2008 will be to manage our credit risks in light of the soft economy and to improve our margin on earning assets. We continue to believe Porter Bancorp is in a solid position to weather this soft economy and we remain committed to our mission of strategically expanding our franchise throughout our target market area.� Net Interest Income Net interest income increased 16.4% to $11.3 million for the three months ended March 31, 2008, an increase of $1.6�million, compared with $9.7 million for the same period in 2007. This increase was attributable to the growth in our loan portfolio and the Kentucky Trust Bank and Paramount Bank acquisitions. Net interest margin for the first quarter of 2008 declined to 3.21% compared with 3.92% for the first quarter of 2007. Net interest margin decreased 33 basis points from our margin of 3.54% in the fourth quarter of 2007. Our spread and margin were adversely impacted during the quarter as the Federal Reserve decreased rates by 200 basis points on top of the effects of a 50 basis points decline during the fourth quarter of 2007. Our balance sheet is asset-sensitive, so our loan yields have responded more rapidly to the Federal Reserve rate cuts than our cost of funds. If the interest rate environment stabilizes, we believe that our funding costs will decrease in the near term as our deposits reprice to match the decline in loan yields. However, future rate cuts would continue to put pressure on our margin since our loans reprice more quickly than our deposits. Non-Interest Income Non-interest income for the first quarter of 2008 increased 55.4%, or $648,000, over the first quarter of 2007, and 2.9%, or $52,000, over the fourth quarter of 2007. The growth in non-interest income over the first quarter of 2007 was primarily attributable to higher service charges on deposit accounts and income from fiduciary activities. Porter added income from fiduciary activities as a result of the acquisition of the trust operation from Kentucky Trust Bank. Income from fiduciary activities added $253,000 to non-interest income in the first quarter of 2008. Non-Interest Expense Non-interest expense for the first quarter increased 43.8% from prior year first quarter. This was due primarily to costs related to the acquisitions of Kentucky Trust Bank and Paramount Bank, increased salaries and benefits for existing employees, and occupancy and equipment expense to support the six additional offices. Expenses also increased because FDIC insurance premiums rose significantly due to amendments made by the FDIC in 2007 to its risk-based deposit premium assessment system. Our efficiency ratio continues to outperform our peers at 54.5% for 2008 compared with 45.4% in 2007. Balance Sheet Review Total assets increased 39.7%, or $445 million, to $1.6 billion at March 31, 2008, from $1.1 billion at March�31, 2007. The Company�s loan portfolio increased 41.8%, or $387 million, to $1.3 billion from $927�million at March 31, 2007, primarily due to in-house loan origination efforts and the acquisitions of Kentucky Trust Bank and Paramount Bank. Deposits at March 31, 2008 increased 37.8% to $1.2 billion from $897 million at March 31, 2007, primarily due to an increase in both time deposits and transactional accounts from promotional efforts throughout the period, and the Kentucky Trust Bank and Paramount Bank acquisitions. Asset Quality �Our asset quality remains stable in this difficult operating environment,� continued Ms. Bouvette. �Our ratio of non-performing loans to total loans declined to 0.77% at March 31, 2008, compared with 0.89% for the same date in 2007. Additionally, our ratio of non-performing assets to total assets improved during the quarter to 1.10% at March�31, 2008, compared with 1.17% at December 31, 2007. We believe that this improvement is indicative of our continuing ability to manage our risks during this difficult credit cycle.� Nonperforming loans at March 31, 2008, were $10.1 million, or 0.77% of total loans, compared with $12.7 million, or 1.04% of total loans at December 31, 2007, and $8.3 million, or 0.89% of total loans at March 31, 2007. The $2.6�million decrease in nonperforming loans since year-end reflects the normal progression of troubled loans through workout, collateral repossession and ultimate disposition. Foreclosed properties at March 31, 2008, were $7.1 million compared with $2.7 million at March 31, 2007, and $4.3 million at December 31, 2007. Our loan loss reserve as a percentage of total loans at March 31, 2008, increased slightly to 1.37% from 1.34% at December 31, 2007, and decreased from 1.43% at March 31, 2007. Net loan charge-offs for the first quarter of 2008 were $345,000, or 0.02% of average loans for the quarter. We assess the adequacy of our loan loss reserve each quarter and make the appropriate provision for loan losses based on that assessment. 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. 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, 2008 follows. PORTER BANCORP, INC. AND SUBSIDIARY Unaudited Financial Information (in thousands, except share and per share data) � � Three Three Three Months Months Months Ended Ended Ended 3/31/08 12/31/07 3/31/07 � � � Income Statement Data Interest income $ 25,674 $ 25,960 $ 20,054 Interest expense � 14,331 � 14,164 � 10,310 � � � Net interest income 11,343 11,796 9,744 Provision for loan losses � 650 � 1,200 � 625 � � � Net interest income after provision 10,693 10,596 9,119 � Service charges on deposit accounts 829 908 535 Income from fiduciary activities 253 206 - Gains on sales of securities, net 94 3 - Other � 642 � 649 � 635 � � � Non-interest income 1,818 1,766 1,170 � Salaries & employee benefits 3,824 3,419 2,935 Occupancy and equipment 913 890 565 Franchise tax 435 360 325 Professional fees 246 344 152 FDIC insurance 221 170 25 Communications expense 161 144 110 Advertising 161 151 139 Other real estate owned expense 227 506 42 Other � 929 � 894 � 657 � � � Non-interest expense 7,117 6,878 4,950 � Income before income taxes 5,394 5,484 5,339 Income tax expense � 1,797 � 1,844 � 1,738 � � � Net income $ 3,597 $ 3,640 $ 3,601 � � � � Weighted average shares - Basic 7,839,365 7,848,215 7,582,819 Weighted average shares - Diluted 7,839,365 7,848,215 7,582,819 � Basic and diluted earnings per share $ 0.46 $ 0.46 $ 0.47 Cash dividends declared per share $ 0.21 $ 0.21 $ 0.20 PORTER BANCORP, INC. AND SUBSIDIARY Unaudited Financial Information (in thousands, except share and per share data) � � � Three Three Three Months Months Months Ended Ended Ended 3/31/08 12/31/07 3/31/07 � � � Average Balance Sheet Data Assets $ 1,513,245 $ 1,406,800 $ 1,066,894 Loans 1,269,818 1,188,194 891,591 Earning assets 1,434,044 1,331,043 1,016,964 Deposits 1,221,159 1,142,606 875,568 Long-term debt and advances 146,605 110,124 72,853 Interest bearing liabilities 1,288,152 1,188,512 881,771 Stockholders� equity 124,023 122,809 110,235 � � Performance Ratios Return on average assets 0.96 % 1.03 % 1.37 % Return on average equity 11.66 11.76 13.25 Yield on average earning assets (tax equivalent) 7.20 7.77 8.03 Cost of interest bearing liabilities 4.47 4.73 4.74 Net interest margin (tax equivalent) 3.21 3.54 3.92 Efficiency ratio 54.47 50.73 45.35 � Loan Charge-off Data Loans charged-off $ (419 ) $ (1,029 ) $ (314 ) Recoveries � 74 � 46 � 68 � � � Net charge-offs $ (345 ) $ (983 ) $ (246 ) PORTER BANCORP, INC. AND SUBSIDIARY Unaudited Financial Information (in thousands, except share and per share data) � � � As of As of As of � 3/31/08 12/31/07 3/31/07 � � � Assets Loans $ 1,314,075 $ 1,217,698 $ 926,747 Loan loss reserve � (18,067 ) � (16,342 ) � (13,211 ) � � � � Net loans 1,296,008 1,201,356 913,536 Securities available for sale 123,560 128,036 97,463 Federal funds sold & interest bearing deposits 1,285 19,979 6,042 Cash and due from financial institutions 55,376 23,608 44,553 Premises and equipment 22,413 21,279 13,808 Goodwill 23,504 18,174 12,881 Accrued interest receivable and other assets � 42,592 � 43,588 � 31,462 � � � � Total Assets $ 1,564,738 $ 1,456,020 $ 1,119,745 � � � � � Liabilities and Equity Certificates of deposit $ 916,560 $ 846,568 $ 673,017 Interest checking 97,834 95,953 49,600 Money market 91,825 99,839 79,823 Savings � 35,469 � 28,661 � 25,041 � � � � Total interest bearing deposits 1,141,688 1,071,021 827,481 Demand deposits � 95,163 � 95,533 � 69,998 � � � � Total deposits 1,236,851 1,166,554 897,479 Federal funds purchased & repurchase agreements 24,706 11,285 1,473 FHLB advances 146,021 121,767 77,007 Junior subordinated debentures 25,000 25,000 25,000 Accrued interest payable and other liabilities � 7,415 � 9,125 � 8,227 � � � � Total liabilities 1,439,993 1,333,731 1,009,186 Stockholders� equity � 124,745 � 122,289 � 110,559 � � � � Total Liabilities and Stockholders� Equity $ 1,564,738 $ 1,456,020 $ 1,119,745 � � � � � Ending shares outstanding 7,863,745 7,881,206 7,621,647 Book value per share $ 15.86 $ 15.52 $ 14.51 Tangible book value per share 12.26 12.80 12.73 � Asset Quality Data Loan 90 days or more past due still on accrual $ 3,301 $ 2,145 $ 769 Non-accrual loans � 6,808 � 10,524 � 7,493 � � � � Total non-performing loans 10,109 12,669 8,262 Real estate acquired through foreclosures 7,140 4,309 2,702 Other repossessed assets � 32 � 30 � 9 � � � � Total non-performing assets $ 17,281 $ 17,008 $ 10,973 � � � � Non-performing loans to total loans 0.77 % 1.04 % 0.89 % Non-performing assets to total loans 1.32 1.40 1.18 Non-performing assets to total assets 1.10 1.17 0.98 Allowance for loan losses to non-performing loans 178.72 128.99 159.90 Allowance for loan losses to total loans 1.37 1.34 1.43 � Risk-based Capital Ratios Tier I leverage ratio 8.14 % 9.07 % 11.58 % Tier I risk-based capital ratio 9.35 10.39 13.42 Total risk-based capital ratio 10.60 11.64 14.67 � FTE employees 290 273 221