Porter Bancorp, Inc. Expects PBI Bank to Enter into Agreement With FDIC and KDFI
June 17 2011 - 4:30PM
Business Wire
Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank,
announced today that PBI Bank expects to enter into a Consent Order
in the near future with the Federal Deposit Insurance Corporation
(FDIC) and the Kentucky Department of Financial Institutions
(KDFI). The Consent Order establishes benchmarks for the bank to
improve its asset quality, reduce its loan concentrations and
maintain its capital levels.
“Like many banks across the nation, PBI had a challenging year
in the aftermath of the recession that resulted in an increase in
non-performing loans, charge-offs and loan loss provision,” stated
Maria L. Bouvette, President and CEO of Porter Bancorp, Inc. “While
most of these loans were made several years ago when the economy
was much stronger, the increase in unemployment rates and
depreciating real estate values since that time put more pressure
on construction and land development loans where we have
experienced a higher than normal loss rate.
“The increased level of problem loans experienced by PBI and
other banks has also led to increased oversight by bank regulators.
As a result, PBI Bank’s board of directors has voluntarily agreed
to take the steps to improve our asset quality, reduce our loan
concentrations and maintain our capital levels as formalized in the
Consent Order with the FDIC and the KDFI. We have already adopted
and implemented many of the actions prescribed in the Consent
Order, and we are confident that our continued progress and
execution of these plans and actions will result in a much stronger
bank.
“The Consent Order has no effect on our deposit customers, and
they will continue to be insured by the FDIC to the maximum
amounts,” noted Ms. Bouvette. “We do not believe the Consent Order
will have any effect on our customers or our ability to support
them going forward. We remain focused on providing our customers
with the same high level of customer service that they expect from
PBI Bank.
“We are fortunate that Porter Bancorp raised over $32 million in
new capital last year. Our capital ratios are much stronger than
many of our peer banks and exceed those specified in the Consent
Order. We believe our capital levels provide PBI Bank with a solid
foundation to build on for our future,” concluded Ms. Bouvette.
Porter Bancorp expects to file a copy of the Consent Order on
Form 8-K with the Securities and Exchange Commission when the
agreement is finalized and signed by PBI Bank’s Board of Directors,
the FDIC and KDFI.
About Porter Bancorp, Inc.
Porter Bancorp, Inc., a bank holding company headquartered in
Louisville, Kentucky, had $1.7 billion in assets as of March
31, 2011. 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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