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| 8-K - PORTER BANCORP, INC. 8-K - LIMESTONE BANCORP, INC. | a50548035.htm |
Exhibit 99.1
Porter Bancorp, Inc. Announces Fourth Quarter and 2012 Results
LOUISVILLE, Ky.--(BUSINESS WIRE)--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 income | $ | 13,175 | $ | 13,987 | $ | 16,637 | $ | 57,729 | $ | 73,554 | |||||||||||
| Interest expense | 3,601 | 3,855 | 4,986 | 15,774 | 22,039 | ||||||||||||||||
| Net interest income | 9,574 | 10,132 | 11,651 | 41,955 | 51,515 | ||||||||||||||||
| Provision for loan losses | 7,000 | 25,500 | 35,800 | 40,250 | 62,600 | ||||||||||||||||
| Net interest income after provision | 2,574 | (15,368 | ) | (24,149 | ) | 1,705 | (11,085 | ) | |||||||||||||
| Service charges on deposit accounts | 566 | 563 | 630 | 2,239 | 2,609 | ||||||||||||||||
| Income from fiduciary activities | 374 | 261 | 255 | 1,177 | 993 | ||||||||||||||||
| Bank card interchange fees | 174 | 180 | 168 | 727 | 668 | ||||||||||||||||
| Other real estate owned rental income | 178 | 180 | 53 | 420 | 200 | ||||||||||||||||
| Gains on sales of loans originated for sale | 78 | 138 | 49 | 338 | 713 | ||||||||||||||||
| Gains on sales of securities, net | (294 | ) | — | — | 3,236 | 1,108 | |||||||||||||||
| Other than temporary impairment on securities | — | — | (41 | ) | — | (41 | ) | ||||||||||||||
| Other | 330 | 399 | 367 | 1,453 | 1,583 | ||||||||||||||||
| Non-interest income | 1,406 | 1,721 | 1,481 | 9,590 | 7,833 | ||||||||||||||||
| Salaries & employee benefits | 4,090 | 4,264 | 3,134 | 16,648 | 15,218 | ||||||||||||||||
| Occupancy and equipment | 816 | 971 | 819 | 3,642 | 3,729 | ||||||||||||||||
| Goodwill impairment | — | — | — | — | 23,794 | ||||||||||||||||
| Other real estate owned expense | 2,883 | 5,204 | 7,020 | 10,549 | 47,525 | ||||||||||||||||
| FDIC insurance | 571 | 559 | 830 | 2,835 | 3,470 | ||||||||||||||||
| Loan collection expense | 704 | 792 | 520 | 2,442 | 2,509 | ||||||||||||||||
| Franchise tax | 494 | 496 | 482 | 2,174 | 2,228 | ||||||||||||||||
| Professional fees | 286 | 776 | 429 | 1,985 | 1,392 | ||||||||||||||||
| Communications expense | 187 | 175 | 169 | 710 | 678 | ||||||||||||||||
| Borrowing prepayment fees | — | — | 486 | — | 486 | ||||||||||||||||
| Postage and delivery | 115 | 108 | 117 | 454 | 485 | ||||||||||||||||
| Advertising | 49 | 44 | 32 | 154 | 314 | ||||||||||||||||
| Other | 638 | 761 | 658 | 2,699 | 2,445 | ||||||||||||||||
| Non-interest expense | 10,833 | 14,150 | 14,696 | 44,292 | 104,273 | ||||||||||||||||
| (Loss) before income taxes | (6,853 | ) | (27,797 | ) | (37,364 | ) | (32,997 | ) | (107,525 | ) | |||||||||||
| Income tax expense (benefit) | — | (65 | ) | 18,591 | (65 | ) | (218 | ) | |||||||||||||
| Net (loss) | (6,853 | ) | (27,732 | ) | (55,955 | ) | (32,932 | ) | (107,307 | ) | |||||||||||
| Less: | |||||||||||||||||||||
| Dividends on preferred stock | (438 | ) | (437 | ) | (438 | ) | (1,750 | ) | (1,750 | ) | |||||||||||
| Accretion on preferred stock | (45 | ) | (44 | ) | (44 | ) | (179 | ) | (177 | ) | |||||||||||
| Loss allocated to participating securities | 343 | 1,264 | 1,980 | 1,429 | 4,080 | ||||||||||||||||
| Net (loss) to common shareholders | $ | (6,993 | ) | $ | (26,949 | ) | $ | (54,457 | ) | $ | (33,432 | ) | $ | (105,154 | ) | ||||||
| Weighted average shares – Basic | 11,762,330 | 11,751,818 | 11,724,456 | 11,746,719 | 11,715,461 | ||||||||||||||||
| Weighted average shares – Diluted | 11,762,330 | 11,751,818 | 11,724,456 | 11,746,719 | 11,715,461 | ||||||||||||||||
| Basic (loss) per common share | $ | (0.59 | ) | $ | (2.29 | ) | $ | (4.64 | ) | $ | (2.85 | ) | $ | (8.98 | ) | ||||||
| Diluted (loss) per common share | $ | (0.59 | ) | $ | (2.29 | ) | $ | (4.64 | ) | $ | (2.85 | ) | $ | (8.98 | ) | ||||||
| Cash dividends declared per common share | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.02 | |||||||||||
| 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 assets | 1,207,711 | 1,261,864 | 1,463,093 | 1,281,735 | 1,534,875 | |||||||||||||||
| Deposits | 1,162,015 | 1,196,580 | 1,379,093 | 1,217,083 | 1,434,462 | |||||||||||||||
| Long-term debt and advances | 37,710 | 38,328 | 44,040 | 38,634 | 48,523 | |||||||||||||||
| Interest bearing liabilities | 1,085,424 | 1,126,045 | 1,320,481 | 1,144,480 | 1,386,740 | |||||||||||||||
| Stockholders’ equity | 53,229 | 81,029 | 130,250 | 75,679 | 159,434 | |||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Return on average assets | (2.16) | % | (8.32) | % | (14.14) | % | (2.45) | % | (6.46) | % | ||||||||||
| Return on average equity | (51.22) | (136.16) | (170.44) | (43.52) | (67.30) | |||||||||||||||
| Yield on average earning assets (tax equivalent) | 4.38 | 4.45 | 4.55 | 4.54 | 4.83 | |||||||||||||||
| Cost of interest bearing liabilities | 1.32 | 1.36 | 1.50 | 1.38 | 1.59 | |||||||||||||||
| Net interest margin (tax equivalent) | 3.19 | 3.23 | 3.20 | 3.31 | 3.40 | |||||||||||||||
| Efficiency ratio | 96.09 | 119.38 | 111.56 | 91.68 | 138.09 | |||||||||||||||
| Loan Charge-off Data | ||||||||||||||||||||
| Loans charged-off | $ | (5,008 | ) | $ | (23,487 | ) | $ | (22,816 | ) | $ | (37,515 | ) | $ | (44,646 | ) | |||||
| Recoveries | 669 | 412 | 103 | 1,366 | 340 | |||||||||||||||
| Net charge-offs | $ | (4,339 | ) | $ | (23,075 | ) | $ | (22,713 | ) | $ | (36,149 | ) | $ | (44,306 | ) | |||||
| Non-Accrual Loan Activity | ||||||||||||||||||||
| Non-accrual loans at beginning of period | $ | 88,632 | $ | 81,653 | $ | 59,132 | $ | 92,020 | $ | 59,799 | ||||||||||
| Loans returned to accrual status | — | — | (123 | ) | — | (7,792 | ) | |||||||||||||
| Net principal pay-downs | (3,576 | ) | (5,768 | ) | (5,918 | ) | (18,668 | ) | (15,838 | ) | ||||||||||
| Charge-offs | (3,856 | ) | (13,442 | ) | (14,820 | ) | (24,512 | ) | (30,358 | ) | ||||||||||
| Loans foreclosed and transferred to OREO | (1,998 | ) | (3,339 | ) | (7,516 | ) | (24,409 | ) | (24,549 | ) | ||||||||||
| Loan collateral repossessed | — | — | — | — | (10 | ) | ||||||||||||||
| Loans placed on non-accrual during the period | 15,315 | 29,528 | 61,265 | 70,086 | 110,768 | |||||||||||||||
| Non-accrual loans at end of period | $ | 94,517 | $ | 88,632 | $ | 92,020 | $ | 94,517 | $ | 92,020 | ||||||||||
| Other Real Estate Owned (OREO) Activity (Net of Allowance) | ||||||||||||||||||||
| OREO at beginning of period | $ | 48,837 | $ | 54,365 | $ | 44,933 | $ | 41,449 | $ | 67,635 | ||||||||||
| Real estate acquired | 1,997 | 3,405 | 10,685 | 33,528 | 41,917 | |||||||||||||||
| Valuation adjustment write-downs | (2,064 | ) | (4,260 | ) | (4,172 | ) | (7,154 | ) | (34,874 | ) | ||||||||||
| Proceeds from sales of properties | (4,908 | ) | (4,140 | ) | (8,657 | ) | (22,481 | ) | (25,990 | ) | ||||||||||
| Loss on sales, net | (191 | ) | (533 | ) | (1,340 | ) | (1,672 | ) | (8,889 | ) | ||||||||||
| Capital improvements | — | — | — | 1 | 1,650 | |||||||||||||||
| OREO at end of period | $ | 43,671 | $ | 48,837 | $ | 41,449 | $ | 43,671 | $ | 41,449 | ||||||||||
| 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 sale | 178,476 | 198,148 | 158,833 | |||||||||
| Federal funds sold & interest bearing deposits | 41,161 | 69,928 | 92,034 | |||||||||
| Cash and due from financial institutions | 8,411 | 11,854 | 13,928 | |||||||||
| 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 and other assets | 27,188 | 38,317 | 43,501 | |||||||||
| 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 deposits | 950,749 | 1,066,124 | 1,212,645 | |||||||||
| Demand deposits | 114,310 | 111,403 | 111,118 | |||||||||
| Total deposits | 1,065,059 | 1,177,527 | 1,323,763 | |||||||||
| Federal funds purchased & repurchase agreements | 2,634 | 2,403 | 1,738 | |||||||||
| FHLB advances | 5,604 | 5,960 | 7,116 | |||||||||
| Junior subordinated debentures | 31,975 | 32,200 | 32,650 | |||||||||
| Accrued interest payable and other liabilities | 10,169 | 12,967 | 7,628 | |||||||||
| Total liabilities | 1,115,441 | 1,231,057 | 1,372,895 | |||||||||
| Stockholders’ equity | 47,190 | 54,984 | 82,529 | |||||||||
| Total Liabilities and Stockholders’ Equity | $ | 1,162,631 | $ | 1,286,041 | $ | 1,455,424 | ||||||
| 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 common share | 0.58 | 1.22 | 3.54 | |||||||||
| Asset Quality Data | ||||||||||||
| Loan 90 days or more past due still on accrual | $ | 86 | $ | 1,486 | $ | 1,350 | ||||||
| Non-accrual loans | 94,517 | 88,632 | 92,020 | |||||||||
| Total non-performing loans | 94,603 | 90,118 | 93,370 | |||||||||
| Real estate acquired through foreclosures | 43,671 | 48,837 | 41,449 | |||||||||
| Other repossessed assets | — | 5 | 5 | |||||||||
| Total non-performing assets | $ | 138,274 | $ | 138,960 | $ | 134,824 | ||||||
| Non-performing loans to total loans | 10.52 | % | 9.47 | % | 8.22 | % | ||||||
| Non-performing assets to total assets | 11.89 | 10.81 | 9.26 | |||||||||
| Allowance for loan losses to non-performing loans | 59.91 | 59.94 | 56.31 | |||||||||
| Allowance for loan losses to total loans | 6.30 | 5.68 | 4.63 | |||||||||
| Risk-based Capital Ratios | ||||||||||||
| Tier 1 leverage ratio | 4.50 | % | 5.00 | % | 6.53 | % | ||||||
| Tier 1 risk-based capital ratio | 6.46 | 7.03 | 9.23 | |||||||||
| Total risk-based capital ratio | 9.81 | 10.01 | 11.22 | |||||||||
| FTE employees | 278 | 291 | 291 | |||||||||
CONTACT:
Porter Bancorp, Inc.
John T. Taylor, 502-499-4800
President