Porter Bancorp, Inc. Announces Fourth Quarter and 2012 Results
Porter Bancorp, Inc. Announces Fourth Quarter and 2012 Results
Business Wire
LOUISVILLE, Ky. -- January 30, 2013
Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with
18 full-service banking offices in Kentucky, today reported unaudited results
for the fourth quarter and year ended December 31, 2012.
The Company reported net loss to common shareholders of $7.0 million, or
($0.59) per diluted share, for the fourth quarter of 2012 compared with net
loss to common shareholders of $54.5 million, or ($4.64) per diluted share,
for the fourth quarter of 2011. Net loss to common shareholders for the year
ended December 31, 2012, was $33.4 million, or ($2.85) per diluted common
share, compared with net loss to common shareholders of $105.2 million, or
($8.98) per diluted share, for the year ended December 31, 2011. The loss for
the year ended December 31, 2011, includes a non-recurring 100% goodwill
impairment charge of $23.8 million recorded in the second quarter of 2011, and
the establishment of a 100% deferred tax valuation allowance of $31.7 million
in the fourth quarter of 2011.
Financial performance continues to be negatively impacted by the Bank’s high
level of nonperforming loans and other real estate owned. Non-performing loans
increased to $94.6 million, or 10.52% of total loans, at December 31, 2012,
compared with $90.1 million, or 9.47% of total loans, at September 30, 2012.
Non-performing assets decreased on a dollar basis and increased on a
percentage basis to $138.3 million, or 11.9% of total assets, compared with
$139.0 million, or 10.8% of total assets, at September 30, 2012.
Foreclosed properties at December 31, 2012, decreased to $43.7 million
compared with $48.8 million at September 30, 2012, and increased compared with
$41.4 million at December 31, 2011. During the fourth quarter of 2012, the
Company acquired $2.0 million of OREO, sold $5.1 million of OREO, and recorded
OREO fair value write-downs totaling $2.1 million to reflect new appraisals or
marketing prices during the fourth quarter of 2012.
Provision for loan losses totaled $7.0 million for the fourth quarter of 2012
and declined from $25.5 million in the third quarter of 2012, and $35.8
million in the fourth quarter of 2011. Provision for loan losses totaled $40.3
million for the year ended December 31, 2012, compared to $62.6 million for
the year ended December 31, 2011.
Net loan charge-offs totaled $4.3 million for the fourth quarter of 2012 and
was down from $23.1 million in the third quarter of 2012, and $22.7 million in
the fourth quarter of 2011. Net loan charge-offs totaled $36.1 million for the
year ended December 31, 2012, compared with $44.3 million for the year ended
December 31, 2011.
Net interest income was lower in the three and twelve months ended December
31, 2012, compared with the same periods in 2011, as average earning assets,
primarily loans, declined $253.1 million and net interest margin declined 9
basis points between the twelve months ended December 31, 2012, and the twelve
months ended December 31, 2011.
At December 31, 2012, PBI Bank’s Tier 1 leverage ratio was 5.37% and its Total
risk-based capital ratio was 9.82%, which are below the minimums of 9.0% and
12.0% required by the Bank’s Consent Order with its primary regulators. At
December 31, 2012, Porter Bancorp’s Tier 1 leverage ratio was 4.50%, compared
with 5.00% at September 30, 2012, and 6.53% at December 31, 2011, and its
Total risk-based capital ratio was 9.81% compared with 10.01% at September 30,
2012, and 11.22% at December 31, 2011.
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. We have engaged Sandler O’Neill & Partners, LP to act as our
financial advisor and to assist our Board in this evaluation.
Asset quality remediation, capital restoration, and lowering the risk profile
of the Company will be major objectives during 2013. Under the direction of
John T. Taylor, President and CEO of PBI Bank, our leadership team remains
focused on serving the bank’s customers and communities throughout Central
Kentucky.
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,” “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 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.
Additional Information
Unaudited supplemental financial information for the fourth quarter and year
ending December 31, 2012 follows.
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data)
Three Three Three Twelve Twelve
Months Months Months Months Months
Ended Ended Ended Ended Ended
12/31/12 9/30/12 12/31/11 12/31/12 12/31/11
Income
Statement Data
Interest $ 13,175 $ 13,987 $ 16,637 $ 57,729 $ 73,554
income
Interest 3,601 3,855 4,986 15,774 22,039
expense
Net interest 9,574 10,132 11,651 41,955 51,515
income
Provision for 7,000 25,500 35,800 40,250 62,600
loan losses
Net interest
income after 2,574 (15,368 ) (24,149 ) 1,705 (11,085 )
provision
Service
charges on 566 563 630 2,239 2,609
deposit
accounts
Income from
fiduciary 374 261 255 1,177 993
activities
Bank card
interchange 174 180 168 727 668
fees
Other real
estate owned 178 180 53 420 200
rental income
Gains on sales
of loans 78 138 49 338 713
originated for
sale
Gains on sales
of securities, (294 ) — — 3,236 1,108
net
Other than
temporary — — (41 ) — (41 )
impairment on
securities
Other 330 399 367 1,453 1,583
Non-interest 1,406 1,721 1,481 9,590 7,833
income
Salaries &
employee 4,090 4,264 3,134 16,648 15,218
benefits
Occupancy and 816 971 819 3,642 3,729
equipment
Goodwill — — — — 23,794
impairment
Other real
estate owned 2,883 5,204 7,020 10,549 47,525
expense
FDIC insurance 571 559 830 2,835 3,470
Loan
collection 704 792 520 2,442 2,509
expense
Franchise tax 494 496 482 2,174 2,228
Professional 286 776 429 1,985 1,392
fees
Communications 187 175 169 710 678
expense
Borrowing
prepayment — — 486 — 486
fees
Postage and 115 108 117 454 485
delivery
Advertising 49 44 32 154 314
Other 638 761 658 2,699 2,445
Non-interest 10,833 14,150 14,696 44,292 104,273
expense
(Loss) before (6,853 ) (27,797 ) (37,364 ) (32,997 ) (107,525 )
income taxes
Income tax
expense — (65 ) 18,591 (65 ) (218 )
(benefit)
Net (loss) (6,853 ) (27,732 ) (55,955 ) (32,932 ) (107,307 )
Less:
Dividends on
preferred (438 ) (437 ) (438 ) (1,750 ) (1,750 )
stock
Accretion on
preferred (45 ) (44 ) (44 ) (179 ) (177 )
stock
Loss allocated
to 343 1,264 1,980 1,429 4,080
participating
securities
Net (loss) to
common $ (6,993 ) $ (26,949 ) $ (54,457 ) $ (33,432 ) $ (105,154 )
shareholders
Weighted
average shares 11,762,330 11,751,818 11,724,456 11,746,719 11,715,461
– Basic
Weighted
average shares 11,762,330 11,751,818 11,724,456 11,746,719 11,715,461
– Diluted
Basic (loss)
per common $ (0.59 ) $ (2.29 ) $ (4.64 ) $ (2.85 ) $ (8.98 )
share
Diluted (loss)
per common $ (0.59 ) $ (2.29 ) $ (4.64 ) $ (2.85 ) $ (8.98 )
share
Cash dividends
declared per $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.02
common share
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data)
Three Three Three Twelve Twelve
Months Months Months Months Months
Ended Ended Ended Ended Ended
12/31/12 9/30/12 12/31/11 12/31/12 12/31/11
Average
Balance Sheet
Data
Assets $ 1,264,867 $ 1,326,457 $ 1,569,669 $ 1,341,565 $ 1,659,959
Loans 928,974 1,008,053 1,189,123 1,033,320 1,243,474
Earning 1,207,711 1,261,864 1,463,093 1,281,735 1,534,875
assets
Deposits 1,162,015 1,196,580 1,379,093 1,217,083 1,434,462
Long-term
debt and 37,710 38,328 44,040 38,634 48,523
advances
Interest
bearing 1,085,424 1,126,045 1,320,481 1,144,480 1,386,740
liabilities
Stockholders’ 53,229 81,029 130,250 75,679 159,434
equity
Performance
Ratios
Return on
average (2.16) % (8.32) % (14.14) % (2.45) % (6.46) %
assets
Return on
average (51.22) (136.16) (170.44) (43.52) (67.30)
equity
Yield on
average
earning 4.38 4.45 4.55 4.54 4.83
assets (tax
equivalent)
Cost of
interest 1.32 1.36 1.50 1.38 1.59
bearing
liabilities
Net interest
margin (tax 3.19 3.23 3.20 3.31 3.40
equivalent)
Efficiency 96.09 119.38 111.56 91.68 138.09
ratio
Loan
Charge-off
Data
Loans $ (5,008 ) $ (23,487 ) $ (22,816 ) $ (37,515 ) $ (44,646 )
charged-off
Recoveries 669 412 103 1,366 340
Net $ (4,339 ) $ (23,075 ) $ (22,713 ) $ (36,149 ) $ (44,306 )
charge-offs
Non-Accrual
Loan Activity
Non-accrual
loans at $ 88,632 $ 81,653 $ 59,132 $ 92,020 $ 59,799
beginning of
period
Loans
returned to — — (123 ) — (7,792 )
accrual
status
Net principal (3,576 ) (5,768 ) (5,918 ) (18,668 ) (15,838 )
pay-downs
Charge-offs (3,856 ) (13,442 ) (14,820 ) (24,512 ) (30,358 )
Loans
foreclosed
and (1,998 ) (3,339 ) (7,516 ) (24,409 ) (24,549 )
transferred
to OREO
Loan
collateral — — — — (10 )
repossessed
Loans placed
on
non-accrual 15,315 29,528 61,265 70,086 110,768
during the
period
Non-accrual
loans at end $ 94,517 $ 88,632 $ 92,020 $ 94,517 $ 92,020
of period
Other Real Estate Owned (OREO) Activity
(Net of Allowance)
OREO at
beginning of $ 48,837 $ 54,365 $ 44,933 $ 41,449 $ 67,635
period
Real estate 1,997 3,405 10,685 33,528 41,917
acquired
Valuation
adjustment (2,064 ) (4,260 ) (4,172 ) (7,154 ) (34,874 )
write-downs
Proceeds from
sales of (4,908 ) (4,140 ) (8,657 ) (22,481 ) (25,990 )
properties
Loss on (191 ) (533 ) (1,340 ) (1,672 ) (8,889 )
sales, net
Capital — — — 1 1,650
improvements
OREO at end $ 43,671 $ 48,837 $ 41,449 $ 43,671 $ 41,449
of period
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data)
As of As of As of
12/31/12 9/30/12 12/31/11
Assets
Loans $ 899,599 $ 952,021 $ 1,136,717
Loan loss reserve (56,680 ) (54,019 ) (52,579 )
Net loans 842,919 898,002 1,084,138
Securities available for 178,476 198,148 158,833
sale
Federal funds sold & 41,161 69,928 92,034
interest bearing deposits
Cash and due from financial 8,411 11,854 13,928
institutions
Premises and equipment 20,805 20,955 21,541
Other real estate owned 43,671 48,837 41,449
Deferred tax assets — — —
Accrued interest receivable 27,188 38,317 43,501
and other assets
Total Assets $ 1,162,631 $ 1,286,041 $ 1,455,424
Liabilities and Equity
Certificates of deposit $ 760,573 $ 882,303 $ 1,024,333
Interest checking 87,234 80,524 87,653
Money market 63,715 63,594 64,302
Savings 39,227 39,703 36,357
Total interest bearing 950,749 1,066,124 1,212,645
deposits
Demand deposits 114,310 111,403 111,118
Total deposits 1,065,059 1,177,527 1,323,763
Federal funds purchased & 2,634 2,403 1,738
repurchase agreements
FHLB advances 5,604 5,960 7,116
Junior subordinated 31,975 32,200 32,650
debentures
Accrued interest payable 10,169 12,967 7,628
and other liabilities
Total liabilities 1,115,441 1,231,057 1,372,895
Stockholders’ equity 47,190 54,984 82,529
Total Liabilities and $ 1,162,631 $ 1,286,041 $ 1,455,424
Stockholders’ Equity
Ending shares outstanding 12,002,421 12,007,127 11,824,472
Book value per common share $ 0.74 $ 1.39 $ 3.74
Tangible book value per 0.58 1.22 3.54
common share
Asset Quality Data
Loan 90 days or more past $ 86 $ 1,486 $ 1,350
due still on accrual
Non-accrual loans 94,517 88,632 92,020
Total non-performing loans 94,603 90,118 93,370
Real estate acquired 43,671 48,837 41,449
through foreclosures
Other repossessed assets — 5 5
Total non-performing assets $ 138,274 $ 138,960 $ 134,824
Non-performing loans to 10.52 % 9.47 % 8.22 %
total loans
Non-performing assets to 11.89 10.81 9.26
total assets
Allowance for loan losses 59.91 59.94 56.31
to non-performing loans
Allowance for loan losses 6.30 5.68 4.63
to total loans
Risk-based Capital Ratios
Tier 1 leverage ratio 4.50 % 5.00 % 6.53 %
Tier 1 risk-based capital 6.46 7.03 9.23
ratio
Total risk-based capital 9.81 10.01 11.22
ratio
FTE employees 278 291 291
Contact:
Porter Bancorp, Inc.
John T. Taylor, 502-499-4800
President
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