Porter Bancorp, Inc. Adopts Tax Benefits Preservation Plan to Preserve Use of Net Operating Losses
June 26 2015 - 9:00AM
Business Wire
Porter Bancorp, Inc. (NASDAQ: PBIB) (the “Company”) today
announced that its board of directors adopted a tax benefits
preservation plan designed to preserve the value of certain of the
Company's deferred tax assets primarily associated with net
operating loss carryforwards (NOLs) under Section 382 of the
Internal Revenue Code.
NOLs can generally be used to offset future taxable income and
therefore reduce federal income tax obligations. However, the
Company's ability to use its NOLs would be limited if there was an
“ownership change” under Section 382. This would occur if
shareholders owning (or deemed to own under the tax rules) 5% or
more of the Company's stock increase their aggregate ownership of
outstanding shares of the Company's common stock by more than 50
percentage points over a defined period of time. The plan is
intended to reduce the likelihood of an “ownership change”
occurring as a result of the buying and selling of the Company's
common stock.
“The primary purpose of the tax preservation plan is to protect
the value of our NOLs for our shareholders,” stated John Taylor,
President and CEO of Porter Bancorp. “While our deferred tax asset
is subject to a full valuation allowance, it remains very important
to the Company.”
In connection with the plan, the Company has declared a dividend
of one preferred stock purchase right for each share of common
stock outstanding as of the close of business on July 10, 2015.
Effective today, any shareholder or group that acquires beneficial
ownership of 5 percent or more of the Company's outstanding stock
(an “acquiring person”) could be subject to significant dilution in
its holdings if the Company's board of directors does not approve
such acquisition. Existing shareholders holding 5 percent or more
of the Company's common stock will not be considered acquiring
persons unless they acquire additional shares, subject to certain
exceptions described in the plan. In addition, in its discretion,
the board of directors may exempt certain transactions and certain
persons whose acquisition of securities is determined by the board
not to jeopardize the Company's deferred tax assets.
The rights will expire upon the earlier of (i) June 29, 2018,
(ii) the beginning of a taxable year with respect to which the
board of directors determines that no tax benefits may be carried
forward, (iii) the repeal or amendment of Section 382 or any
successor statute, if the board of directors determines that the
plan is no longer needed to preserve the tax benefits, (iv) the
effective date of an amendment to the Company's articles of
incorporation to preserve the Company's tax benefits that has been
approved by the Company's shareholders entitled to vote on such
amendment, and (v) certain other events as described in the
plan.
Additional information regarding the plan will be provided in a
Current Report on Form 8-K and in a Registration Statement on Form
8-A, which the Company intends to file with the Securities and
Exchange Commission. In addition, the Company's shareholders of
record as of July 10, 2015 will be mailed a detailed summary of the
plan.
About Porter Bancorp, Inc.
Porter Bancorp, Inc. (NASDAQ: PBIB) is a Louisville,
Kentucky-based bank holding company which operates banking centers
in 12 counties through its wholly-owned subsidiary PBI Bank. Our
markets include metropolitan Louisville in Jefferson County and the
surrounding counties of Henry and Bullitt, and extend south along
the Interstate 65 corridor. We serve southern and south central
Kentucky from banking centers in Butler, Green, Hart, Edmonson,
Barren, Warren, Ohio and Daviess counties. We also have a banking
center in Lexington, Kentucky, the second largest city in the
state. PBI Bank is a traditional community bank with a wide range
of personal and business banking products and services.
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.
PBIB-G
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Porter Bancorp, Inc.John T. Taylor, 502-499-4800Chief Executive
Officer
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