Porter Bancorp, Inc. Raises Additional $4.25 Million in Stock Offering
July 23 2010 - 4:55PM
Business Wire
Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank,
announced today that it raised an additional $4,255,000 in a
private placement to an accredited institutional investor. The
private placement included the sale of 370,000 shares of
convertible preferred stock at a price of $11.50 per share. The
proceeds of the offering will be used for working capital, general
corporate purposes and for augmenting the balance sheet.
“We are pleased to complete the follow-on investment of stock by
a new institutional investor in addition to the $27.0 million
raised in a similar offering completed on June 30, 2010,” stated
Maria L. Bouvette, President and CEO of Porter Bancorp, Inc. “The
additional proceeds further strengthens our capital base and will
provide a solid base to support our continued growth.”
Private Placement Terms
The private placement totaled $4,255,000 and included the sale
of 370,000 shares of Series B Mandatory Convertible Preferred Stock
at $11.50 per share. The Preferred Stock is convertible into Common
Stock on a share-for-share basis. The Company also issued a warrant
that is convertible into 185,000 shares of Non-Voting Common Stock
at an exercise price of $11.50 per share.
The Series B Preferred Stock issued to the new investor has the
same terms as the Series B Preferred Stock issued in the June 30
private placement. The preferred shares will convert into common
stock only when approved by Porter shareholders, in accordance with
NASDAQ Rule 5635, which requires shareholder approval when the
total number of common shares sold in a private placement would
exceed 20% of the Company’s outstanding common shares. J. Chester
Porter, Chairman of the Board of Porter Bancorp, and Maria
Bouvette, President and CEO of Porter Bancorp, the Company’s
principal shareholders, have agreed to vote in favor of the
conversion. The Company expects to submit the proposal for
shareholder approval during the third quarter of 2010.
In addition, the Company granted the new purchaser an option to
purchase an additional 64,784 shares of common stock and a warrant
for 32,392 shares of its non-voting common stock, which will enable
the new investor to make a total investment of $5 million. The
option will not be exercisable until the Company obtains
shareholder approval and will have a term of five business
days.
More detailed information regarding the private placement will
be included in the Company’s 8-K filing with the Securities and
Exchange Commission.
The Company and its directors and officers may be deemed to be
participants in the solicitation of proxies from Company
shareholders in connection with (1) the proposal to issue common
stock upon the conversion of Series B Preferred Stock, Series C
Preferred Stock, and Non-Voting Common Stock in accordance with
NASDAQ Rule 5635; and (2) the proposal to authorize the new class
of Non-Voting Common Stock issuable upon the exercise of the
Warrants. Information about the Company’s directors and executive
officers and their ownership of Company stock is set forth in the
proxy statement for the Company’s 2010 Annual Meeting of
Shareholders.
Shareholders can obtain more information when the proxy
statement relating to shareholder approval of the foregoing
proposals becomes available. This proxy statement, and any other
documents filed by the Company with the SEC, may be obtained free
of charge at the SEC website at www.sec.gov. Shareholders should
read the proxy statement carefully, when it becomes available,
before making any voting decision because it will contain important
information.
About Porter Bancorp, Inc.
Porter Bancorp, Inc., a bank holding company headquartered in
Louisville, Kentucky, had $1.8 billion in assets as of June
30, 2010. Through Porter’s subsidiary PBI Bank, it operates 18 full
service banking offices in Kentucky. Porter Bancorp’s common stock
is traded on the Nasdaq Global Market under the symbol “PBIB.”
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.
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