Third Quarter 2013 Net Loss Available to Common
Shareholders of $168,000
Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of
PBI Bank, with 18 full-service banking offices in
Kentucky, today reported unaudited results for the third quarter of
2013.
The Company reported that the net loss attributable to common
shareholders declined substantially to $168,000, or ($0.01) per
diluted share, for the third quarter of 2013 compared with a net
loss of $26.9 million, or ($2.29) per diluted share, for the third
quarter of 2012. Net loss attributable to common shareholders for
the nine months ended September 30, 2013 was $2.4 million, or
($0.20) per diluted common share, compared with net loss
attributable to common shareholders of $26.4 million, or ($2.25)
per diluted share, for the nine months ended September 30, 2012.
The significant reduction in net loss since last year reflected our
focus on asset quality remediation, regulatory capital restoration,
and lowering the risk profile of the Company.
Third Quarter 2013 Financial Performance Highlights
- Balance Sheet Reduction - We
have successfully reduced the size of our balance sheet in
accordance with our capital plan. Average assets were $1.056
billion in the third quarter of 2013 compared with
$1.105 billion in the second quarter of 2013 and $1.326
billion in the third quarter of 2012. This reduction was
accomplished primarily by reducing our commercial real estate and
construction and development loans within our loan portfolio and
through the redemption of higher cost certificates of deposit
accounts.
- Net Interest Income – Net
interest income declined to $7.8 million for the third quarter of
2013 compared with $8.4 million in the second quarter of 2013 and
$10.1 million in the third quarter of 2012 as our average loans
declined to $756.1 million for the third quarter of 2013 compared
with $806.9 million in the second quarter of 2013 and $1.008
billion in the third quarter of 2012. Our net interest margin
declined to 3.14% in the third quarter of 2013 compared with 3.24%
in the second quarter of 2013 and 3.23% in the third quarter of
2012.
- Non-interest Income –
Non-interest income decreased $981,000 to $1.2 million in the third
quarter of 2013 compared with $2.1 million in the second quarter of
2013 and decreased $554,000 compared with $1.7 million in the
third quarter of 2012. The quarter over quarter decline from June
2013 to September 2013 is attributable primarily to a $679,000
reduction in the gain on sales of securities, a $230,000 reduction
in income from bank owned life insurance and a $176,000 decline in
other real estate owned income.
- Provision for Loan Losses -
Provision for loan losses expense declined to $250,000 for the
third quarter of 2013 and $700,000 for the first nine months of
2013 compared with $25.5 million for the third quarter of 2012 and
$33.3 million for the first nine months of 2012. The significant
reduction in provision for loan losses is being driven by the
substantial shrinkage of the loan portfolio, declining historical
loss rates, and a reduction in loans migrating downward in risk
grade classification. Our reserve for loans evaluated collectively
for impairment was 4.66% at September 30, 2013, compared with 4.56%
at June 30, 2013 and 5.06% at September 30, 2012.
- Non-performing Assets -
Non-performing assets, which include loans past due 90 days and
still accruing, loans on nonaccrual, and other real estate owned,
decreased on a dollar level basis to $148.8 million, or 14.33% of
total assets at September 30, 2013, compared with
$159.3 million, or 14.86% of total assets, at June 30, 2013.
Non-performing loans and other real estate owned still remain at
higher than normal levels and continue to impact negatively the
Bank’s earnings performance.
Non-performing loans decreased to $106.9
million, or 14.56% of total loans, at September 30, 2013, compared
with $112.3 million, or 14.49% of total loans, at June 30,
2013. However, net charge-offs increased from $2.3 million in the
second quarter of 2013 to $6.1 million in the third quarter of
2013. Net charge-offs for the nine months ended September 30, 2013
decreased to $25.6 million from $31.8 million for the same period
in 2012.
Total past due and nonaccrual loans increased
approximately $687,000 to $124.5 million at
September 30, 2013 from $123.8 million at June 30,
2013.
September 30,
2013
June 30,
2013
March 31,
2013
December 31,
2012
(in thousands) Past Due Loans: 30 – 59 Days $ 10,018 $ 8,600 $
8,052 $ 38,219 60 – 89 Days 7,582 2,979 2,960 20,303 90 Days and
Over — 71 — 86 Nonaccrual Loans 106,922
112,185 120,943 94,517 Total Past Due and Nonaccrual
Loans $ 124,522 $ 123,835 $ 131,955 $ 153,125
Foreclosed properties at September 30, 2013
decreased to $41.9 million compared with $47.0 million at June 30,
2013, and $48.8 million at September 30, 2012. The Company acquired
$3.0 million in other real estate owned and sold $8.0 million in
other real estate owned during the third quarter of 2013. Fair
value write-downs arising from new appraisals or lower marketing
prices totaled $300,000 in the third quarter of 2013 compared with
$4.3 million in the third quarter of 2012 and $977,000 in the
second quarter of 2013.
- Non-interest Expense –
Non-interest expense decreased $3.3 million to $8.5 million for the
third quarter of 2013 compared with $11.8 million for the second
quarter of 2013 and decreased $5.7 million compared with $14.2
million for the third quarter of 2012. The significant reduction in
non-interest expense was attributable primarily to lower loan
collection expenses and lower other real estate owned
expenses.
- Capital – Our net loss available
to common shareholders of $168,000 for the third quarter of 2013
was much improved compared to our net loss available to common
shareholders of $1.7 million in the second quarter of 2013. In
connection with the recent rise in long-term interest rates, our
stockholders’ equity was negatively impacted from June 30, 2013 to
September 30, 2013 by an increase in the net unrealized loss in our
available for sale securities portfolio from $1.1 million at June
30, 2013, to $2.8 million at September 30, 2013.
At September 30, 2013, PBI Bank’s Tier 1
leverage ratio was 6.40% compared with 6.08% at June 30, 2013, and
its Total risk-based capital ratio was 11.04% at September 30, 2013
compared with 10.60% at June 30, 2013, which are below
the minimums of 9.0% and 12.0% required by the Bank’s Consent
Order. At September 30, 2013, Porter Bancorp’s leverage ratio was
5.15% compared with 4.91% at June 30, 2013, and its Total
risk-based capital ratio was 10.78% compared with 10.46% at June
30, 2013.
We are continuing our efforts to strengthen
our capital levels and comply with the Consent Order. Management
and the Board of Directors are evaluating appropriate strategies
for increasing the Company’s capital in order to meet the capital
requirements of our Consent Order. These include, among other
things, a possible public offering or private placement of common
stock to new and existing shareholders. As previously announced, we
have engaged a financial advisor to assist our Board in this
evaluation.
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,” “possible,” “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 indicated by forward-looking
statements due to various risks and uncertainties, including our
ability to reduce our level of higher risk loans such as commercial
real estate and real estate development loans, reduce our level of
non-performing loans and other real estate owned, and increase net
interest income in a low interest rate environment, as well as our
need to increase capital. These and other risks and uncertainties
are described in greater detail 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 third
quarter ending September 30, 2013 follows.
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share
data)
Three Three Three Nine Nine Months Months Months Months
Months Ended Ended Ended Ended Ended 9/30/13 6/30/13 9/30/12
9/30/13 9/30/12
Income Statement Data Interest income $ 10,543 $ 11,168 $
13,987 $ 32,969 $ 44,554 Interest expense 2,694 2,816
3,855 8,470 12,173
Net interest income 7,849 8,352 10,132 24,499 32,381 Provision for
loan losses 250 — 25,500 700
33,250
Net interest income after provision 7,599 8,352 (15,368 ) 23,799
(869 ) Service charges on deposit accounts 536 506 563 1,535
1,673 Income from fiduciary activities — — 261 517 803 Bank card
interchange fees 174 196 180 542 553 Other real estate owned income
54 230 180 396 242 Gains on sales of securities, net 24 703 — 727
3,530 Income from bank owned life insurance 75 305 79 459 238 Other
304 208 458 786 1,145
Non-interest income 1,167 2,148 1,721 4,962 8,184 Salaries
& employee benefits 3,837 3,999 4,264 11,975 12,558 Occupancy
and equipment 884 913 971 2,728 2,826 Other real estate owned
expense 669 1,657 5,204 3,117 7,666 FDIC insurance 578 650 559
1,867 2,264 Franchise tax 537 537 496 1,611 1,680 Loan collection
expense 531 2,407 792 3,973 1,738 Professional fees 503 499 776
1,408 1,699 Communications expense 177 179 175 531 523 Postage and
delivery 99 102 108 314 339 Insurance expense 171 160 96 482 296
Other 482 706 709 1,835 1,870
Non-interest expense 8,468 11,809 14,150 29,841 33,459
Income (loss) before income taxes 298 (1,309 ) (27,797 ) (1,080 )
(26,144 ) Income tax expense (benefit) — — (65
) — (65 )
Net income (loss) 298 (1,309 ) (27,732 ) (1,080 ) (26,079 ) Less:
Dividends on preferred stock 437 437 437 1,311 1,312 Accretion on
preferred stock 45 45 44 135 134 Earnings (loss) allocated to
participating securities (16 ) (110 ) (1,264 )
(174 ) (1,095 ) Net income (loss) available to
common $ (168 ) $ (1,681 ) $ (26,949 ) $ (2,352 ) $ (26,430 )
Weighted average shares – Basic 11,592,959 11,761,788
11,751,818 11,701,396 11,732,835 Weighted average shares – Diluted
11,592,959 11,761,788 11,751,818 11,701,396 11,732,835 Basic
earnings (loss) per common share $ (0.01 ) $ (0.14 ) $ (2.29 ) $
(0.20 ) $ (2.25 ) Diluted earnings (loss) per common share $ (0.01
) $ (0.14 ) $ (2.29 ) $ (0.20 ) $ (2.25 ) Cash dividends declared
per common share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share
data)
Three Three Three Nine Nine Months Months Months Months
Months Ended Ended Ended Ended Ended 9/30/13 6/30/13 9/30/12
9/30/13 9/30/12
Average Balance Sheet Data Assets $ 1,056,300 $ 1,104,807 $
1,326,457 $ 1,103,958 $ 1,367,318 Loans 756,132 806,941 1,008,053
811,433 1,068,356 Earning assets 1,006,838 1,050,515 1,261,864
1,055,891 1,306,590 Deposits 965,501 1,008,102 1,196,580 1,008,839
1,235,573 Long-term debt and advances 36,123 36,652 38,328 36,644
38,944 Interest bearing liabilities 903,607 941,059 1,126,045
942,423 1,164,309 Stockholders’ equity 37,995 46,904 81,029 44,180
83,217
Performance Ratios Return on average
assets 0.11 % (0.48) % (8.32) % (0.13) % (2.55) % Return on average
equity 3.11 (11.19) (136.16) (3.27) (41.86) Yield on average
earning assets (tax equivalent) 4.21 4.31 4.45 4.22 4.59 Cost of
interest bearing liabilities 1.18 1.20 1.36 1.20 1.40 Net interest
margin (tax equivalent) 3.14 3.24 3.23 3.15 3.35 Efficiency ratio
94.17 120.54 119.38 103.85 90.34
Loan Charge-off
Data Loans charged-off $ (7,071 ) $ (3,404 ) $ (23,487 ) $
(28,437 ) $ (32,507 ) Recoveries 1,016 1,124
412 2,811 697
Net charge-offs $ (6,055 ) $ (2,280 ) $ (23,075 ) $ (25,626 ) $
(31,810 )
Nonaccrual Loan Activity Nonaccrual
loans at beginning of period $ 112,185 $ 120,943 $ 81,653 $ 94,517
$ 92,020 Net principal pay-downs (7,408 ) (8,118 ) (5,768 ) (19,599
) (15,092 ) Charge-offs (5,388 ) (3,256 ) (13,442 ) (26,116 )
(20,656 ) Loans foreclosed and transferred to OREO (2,987 ) (11,875
) (3,339 ) (18,542 ) (22,411 ) Loans returned to accrual status
(678 ) (421 ) — (1,099 ) — Loans placed on nonaccrual during the
period 11,198 14,912 29,528 77,761
54,771 Nonaccrual loans at end of period $ 106,922 $
112,185 $ 88,632 $ 106,922 $ 88,632
Troubled Debt
Restructurings (TDRs) Accruing $ 43,968 $ 54,927 $ 81,930 $
43,968 $ 81,930 Nonaccrual 49,255 46,510
35,552 49,255 35,552 Total $ 93,223 $ 101,437 $
117,482 $ 93,223 $ 117,482
Other Real Estate Owned (OREO)
Activity (Net of Allowance) OREO at beginning of period $
47,030 $ 44,192 $ 54,365 $ 43,671 $ 41,449 Real estate acquired
2,987 11,875 3,405 18,542 31,531 Valuation adjustment write-downs
(300 ) (977 ) (4,260 ) (1,584 ) (5,090 ) Proceeds from sales of
properties (8,029 ) (7,898 ) (4,140 ) (18,582 ) (17,573 ) Gain
(loss) on sales, net 169 (162 ) (533 ) (190 ) (1,481 ) Capital
improvements — — — — 1
OREO at end of period $ 41,857 $ 47,030 $ 48,837 $ 41,857 $ 48,837
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share
data)
As of As of As of As of 9/30/13 6/30/13 12/31/12 9/30/12
Assets Loans $ 734,240 $ 774,785 $ 899,092 $ 951,811 Loan
loss reserve (31,754 ) (37,559 ) (56,680 )
(54,019 )
Net loans 702,486 737,226 842,412 897,792 Mortgage loans held for
sale 123 133 507 210 Securities available for sale 193,981 176,942
178,476 198,148 Federal funds sold & interest bearing deposits
42,071 56,512 41,161 69,928 Cash and due from financial
institutions 11,362 7,754 8,411 11,854 Premises and equipment
20,167 20,368 20,805 20,955 Other real estate owned 41,857 47,030
43,671 48,837 Accrued interest receivable and other assets
26,080 26,166 27,188 38,317
Total Assets $ 1,038,127 $ 1,072,131 $ 1,162,631 $ 1,286,041
Liabilities and Equity Certificates of deposit $
658,940 $ 690,557 $ 760,573 $ 882,303 Interest checking 71,851
78,218 87,234 80,524 Money market 77,292 65,620 63,715 63,594
Savings 37,622 40,121 39,227 39,703
Total interest bearing deposits 845,705 874,516 950,749 1,066,124
Demand deposits 101,191 106,320 114,310
111,403
Total deposits 946,896 980,836 1,065,059 1,177,527 Federal funds
purchased & repurchase agreements 3,722 3,292 2,634 2,403 FHLB
advances 4,741 5,016 5,604 5,960 Junior subordinated debentures
31,075 31,525 31,975 32,200 Accrued interest payable and other
liabilities 14,578
12,710 10,169 12,967
Total liabilities 1,001,012 1,033,379 1,115,441 1,231,057
Stockholders’ equity 37,115 38,752 47,190
54,984
Total Liabilities and Stockholders’ Equity $ 1,038,127 $
1,072,131 $ 1,162,631 $ 1,286,041
Ending shares outstanding 12,846,668 12,322,207
12,002,421 12,007,127
Book value per common share $ (0.09 )
$ 0.04 $ 0.74 $ 1.39
Tangible book value per common share
(0.21 ) (0.10 ) 0.58 1.22
Asset Quality Data Loan 90
days or more past due still on accrual $ — $ 71 $ 86 $ 1,486
Nonaccrual loans 106,922 112,185 94,517
88,632
Total non-performing loans 106,922 112,256 94,603 90,118 Real
estate acquired through foreclosures 41,857 47,030 43,671 48,837
Other repossessed assets 11 — — 5
Total non-performing assets $ 148,790 $ 159,286 $ 138,274 $ 138,960
Non-performing loans to total loans 14.56 % 14.49 % 10.52 % 9.47 %
Non-performing assets to total assets 14.33 14.86 11.89 10.81
Allowance for loan losses to non-performing loans 29.70 33.46 59.91
59.94 Allowance as % of loans evaluated individually 3.06 5.82
11.14 8.48 Allowance as % of loans evaluated collectively 4.66 4.56
5.02 5.06 Allowance for loan losses to total loans 4.32 4.85 6.30
5.68
Risk-based Capital Ratios Tier I leverage ratio
5.15 % 4.91 % 4.50 % 5.00 % Tier I risk-based capital ratio 7.19
6.88 6.46 7.03 Total risk-based capital ratio 10.78 10.46 9.81
10.01
FTE employees 260 264 278 291
Porter Bancorp, Inc.John T. Taylor, 502-499-4800President
Porter Bancorp, Inc. (delisted) (NASDAQ:PBIB)
Historical Stock Chart
From Jul 2024 to Aug 2024
Porter Bancorp, Inc. (delisted) (NASDAQ:PBIB)
Historical Stock Chart
From Aug 2023 to Aug 2024
