PBIB Porter Bancorp, Inc. (delisted)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 2, 2015


PORTER BANCORP, INC.
(Exact name of registrant as specified in its charter)

2500 Eastpoint Parkway, Louisville, Kentucky, 40223
(Address of principal executive offices)


(502) 499-4800
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS

On February 2, 2015, Porter Bancorp, Inc. issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2014. A copy of the press release is attached hereto as Exhibit 99.1.

The information in this Form 8-K and in Exhibit 99.1 attached hereto is being furnished to the Securities and Exchange Commission pursuant to Item 2.02 – Results of Operations and Financial Condition and shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit 99.1

Porter Bancorp, Inc. Reports Fourth Quarter Results

LOUISVILLE, Ky.--(BUSINESS WIRE)--February 2, 2015--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, today reported unaudited results for the fourth quarter of 2014.

The Company reported that net income attributable to common shareholders for the year ended December 31, 2014, was $19.4 million, or $1.59 per diluted common share, compared with a net loss attributable to common shareholders of $3.4 million, or ($0.29) per diluted share, for the year ended December 31, 2013.

In December 2014, the Company completed a non-cash equity exchange transaction with investors. The exchange transaction consisted of the cancellation of all of the Company’s issued and outstanding Series A Preferred Stock, accrued dividends thereon, and Series C Preferred Stock having an aggregate book value of approximately $45.7 million in exchange for newly issued common and preferred securities having a fair value of approximately $9.6 million. The effect of the preferred stock exchange to common shareholders totaled approximately $36.1 million. The transaction is fully described in 8-Ks filed on November 24, 2014 and December 10, 2014 as well as in the definitive proxy statement filed January 30, 2015.

The Company reported a net loss of $3.8 million and $11.2 million for the three months and year ended December 31, 2014, compared with a net loss of $506,000 and $1.6 million for the three months and year ended December 31, 2013. After additions for the effect of the non-cash equity exchange and deductions for dividends on preferred stock and earnings allocated to participating securities, the Company reported net income attributable to common shareholders of $24.3 million and $19.4 million for the three months and year ended December 31, 2014, compared with a net loss attributable to common shareholders of $1.0 million and $3.4 million for the three months and year ended December 31, 2013.

Net Interest Income – Net interest income before provision expense increased to $7.5 million for the fourth quarter of 2014 compared with $7.3 million in the third quarter of 2014, and decreased from $7.6 million in the fourth quarter of 2013. Average loans declined to $634.9 million for the fourth quarter of 2014 compared with $640.0 million in the third quarter of 2014 and $719.2 million in the fourth quarter of 2013. Net interest margin increased to 3.16% in the fourth quarter of 2014, compared with 3.10% in the third quarter of 2014 and 2.96% in the fourth quarter of 2013 primarily driven over the past quarter by improving cost of funds which declined to 0.99% in the fourth quarter of 2014, compared with 1.13% in the third quarter of 2014 and 1.15% in the fourth quarter of 2013.

Allowance for Loan Losses – The allowance for loan losses to total loans was 3.10% at December 31, 2014 compared to 3.79% at September 30, 2014, and 3.96% at December 31, 2013. The declining level of the allowance is primarily driven by declining historical charge-off levels and improving trends in loan category risk ratings. Net loan charge-offs declined to $15.9 million in 2014 from $29.3 million in 2013 and $36.1 million in 2012. The allowance for loan losses for loans evaluated collectively for impairment was 3.37% at December 31, 2014, compared with 4.00% at September 30, 2014, and 4.41% at December 31, 2013. Provision for loan losses expense of $800,000 was recorded for the fourth quarter of 2014, while no provision was recorded for the third quarter of 2014 or the fourth quarter of 2013. Provision expense of $7.1 million was recorded for 2014, compared to $700,000 for the year ended December 31, 2013.

Non-performing Assets – Non-performing assets, which include loans past due 90 days and still accruing, loans on nonaccrual, and other real estate owned (“OREO”), decreased to $94.0 million, or 9.2% of total assets at December 31, 2014, compared with $99.2 million, or 9.6% of total assets at September 30, 2014, and $132.9 million, or 12.4% of total assets at December 31, 2013.

Non-performing loans increased to $47.3 million, or 7.57% of total loans, at December 31, 2014, compared with $44.7 million, or 7.00% of total loans at September 30, 2014 and decreased from $102.0 million, or 14.4% of total loans at December 31, 2013. The increase from the previous quarter was primarily driven by $7.4 million in loans placed on nonaccrual during the period, offset by $675,000 of nonaccrual loans migrating to OREO, $1.8 million in principal payments received on nonaccrual loans, and $2.3 million of charge-offs.

OREO at December 31, 2014 decreased to $46.2 million, compared with $54.5 million at September 30, 2014 and increased from $30.9 million at December 31, 2013. The Company acquired $675,000 in OREO and sold $5.8 million in OREO during the fourth quarter of 2014. Fair value write-downs arising from new appraisals or lower marketing prices totaled $3.0 million in the fourth quarter of 2014, compared with $600,000 in the third quarter of 2014 and $882,000 in the fourth quarter of 2013.

The following table details non-performing assets as of:

In addition to nonaccrual loans and OREO, loans classified as Troubled Debt Restructures (TDRs) and on accrual totaled $22.0 million at December 31, 2014, compared to $28.1 million at September 30, 2014 and $44.3 million at December 31, 2013.

Loans Held for Sale – During the fourth quarter of 2014, we identified and transferred to loans held for sale certain substandard accruing commercial loans. The loans were transferred to held for sale at the lower of cost or fair value. In accordance with generally accepted accounting principles, the credit component of any writedown upon transfer to held for sale is reflected in charge-offs to the allowance for loan losses. Loans held for sale total $8.9 million at December 31, 2014.

Non-interest Expense – Non-interest expense increased $2.6 million to $11.8 million for the fourth quarter of 2014, compared with $9.3 million for the third quarter of 2014, and increased $2.8 million compared with $9.0 million for the fourth quarter of 2013. While loan collection expenses decreased approximately $510,000 in the fourth quarter of 2014 compared to the third quarter of 2014, OREO expenses increased approximately $3.3 million primarily as a result of fair value writedowns resulting from declines in the fair value of the real estate based upon updated appraisals and reduced marketing prices.

Income Tax Benefit – The calculation for the income tax provision or benefit generally does not consider the tax effects of changes in other comprehensive income, or OCI, which is a component of stockholders’ equity on the balance sheet. However, an exception is provided in certain circumstances, such as when there is a full valuation allowance against net deferred tax assets, there is a loss from continuing operations, and there is income in other components of the financial statements. In such a case, pre-tax income from other categories, such as changes in OCI, must be considered in determining a tax benefit to be allocated to the loss from continuing operations. Our December 31, 2014 tax benefit is entirely due to unrealized gains in other comprehensive income that are presented in current operations in accordance with applicable accounting standards.

Capital – At December 31, 2014, PBI Bank’s Tier 1 leverage ratio was 5.78% compared with 6.09% at September 30, 2014, and its Total risk-based capital ratio was 10.57% at December 31, 2014 compared with 11.01% at September 30, 2014, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order. At December 31, 2014, Porter Bancorp’s leverage ratio was 4.51% compared with 4.02% at September 30, 2014, and its Total risk-based capital ratio was 10.61%, compared with 10.05% at September 30, 2014.

Management and the Board of Directors continue to evaluate appropriate strategies for increasing the Company’s capital in order to meet the capital requirements of the 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, the Company has engaged a financial advisor to assist the Board of Directors in this evaluation.

Shares Issued and Outstanding – At December 31, 2014, we had 14,890,514 shares of common stock issued and outstanding. We also had 40,536 shares of Series B preferred stock and 64,580 shares of Series D preferred stock issued and outstanding. The Series B preferred shares will automatically convert to 4,053,600 common shares and the Series D preferred shares will automatically convert to 6,458,000 non-voting common shares on the third business day following shareholder approval. A special meeting of shareholders to vote on this matter is expected to be held on February 25, 2015.

The following table presents our unaudited book value and tangible book value per common and non-voting common share as of December 31, 2014 reflecting the proforma impact of the automatic conversion of Series B and Series D preferred shares into common and non-voting common shares following shareholder approval as fully described in the definitive proxy statement filed January 30, 2015:

PBIB-G

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 fourth quarter ending December 31, 2014 follows.

CONTACT:
Porter Bancorp, Inc.
John T. Taylor, 502-499-4800
Chief Executive Officer