-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JQmsoENO6uwbCsv+nSda2ImCY9BdJdqlnjU6lQ6WZ2Zh/A0DTUzSAoAARIqAHzA3 1fF5Vbj+YbaH2c9NbS3DTA== 0001157523-07-007173.txt : 20070725 0001157523-07-007173.hdr.sgml : 20070725 20070725080017 ACCESSION NUMBER: 0001157523-07-007173 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070725 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070725 DATE AS OF CHANGE: 20070725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Porter Bancorp, Inc. CENTRAL INDEX KEY: 0001358356 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 611142247 STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33033 FILM NUMBER: 07997875 BUSINESS ADDRESS: STREET 1: 2500 EASTPOINT PARKWAY CITY: LOUISVILLE STATE: KY ZIP: 40223 BUSINESS PHONE: 502-499-4800 MAIL ADDRESS: STREET 1: 2500 EASTPOINT PARKWAY CITY: LOUISVILLE STATE: KY ZIP: 40223 8-K 1 a5455207.txt PORTER BANCORP, INC. 8-K ================================================================================ 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): July 25, 2007 PORTER BANCORP, INC. (Exact name of registrant as specified in its charter) Kentucky 001-33033 61-1142247 -------- --------- ---------- (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 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 communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14-2(b)) [_] Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS On July 25, 2007, Porter Bancorp, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2007. 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 (d) Exhibits Exhibit No. Description of Exhibit - ----------- --------------------------------------------------------------- 99.1 Press Release issued by Porter Bancorp, Inc. on July 25, 2007 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. Date: July 25, 2007 Porter Bancorp Inc. By: /s/ Maria L. Bouvette --------------------- Maria L. Bouvette, President and Chief Executive Officer EXHIBIT INDEX ------------- Exhibit Description - ------- ----------- 99.1 Press Release dated July 25, 2007 EX-99.1 2 a5455207ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Porter Bancorp, Inc. Announces Second Quarter 2007 Results LOUISVILLE, Ky.--(BUSINESS WIRE)--July 25, 2007--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with offices in Louisville, Lexington, Shepherdsville, Glasgow, Bowling Green and other central Kentucky communities, today reported results for the second quarter and six months ended June 30, 2007. The Company reported net income for the second quarter of 2007 of $3.7 million, or $0.49 per share, compared with $3.4 million, or $0.54 per share, for the second quarter of 2006. Earnings for the six months ended June 30, 2007, were $7.3 million, or $0.96 per share, compared with $6.8 million, or $1.08 per share, for the same period of 2006. The reduction in earnings per share between periods is primarily attributable to the issuance of 1,250,000 shares of common stock in our initial public offering in September 2006. Second Quarter Highlights -- Net income increased 7.6% to $3.7 million for the three months ended June 30, 2007, compared with the prior year's quarter. -- Total assets increased 18.2% to $1.2 billion since the second quarter of 2006, fueled by strong growth in loans. -- Loans grew 20.7% to $983.3 million compared with the second quarter of 2006. -- Deposits grew 20.3% to $977 million since the second quarter of 2006. The Bank's core customer non-interest bearing deposit accounts increased from $59.8 million to $65 million, or 8.7%, during the first half of 2007. -- The efficiency ratio for the second quarter of 2007 improved to 45.0% from 49.3% for the same period in 2006. -- We expanded our geographical footprint to Lexington, Kentucky with a new loan production office during June 2007. We recruited an experienced lending and product team with an established customer base. We plan to open a full service branch in that market in August. -- On June 18, 2007, we entered into a definitive agreement to acquire Ohio County Bancshares, Inc., the holding company for Kentucky Trust Bank, which operates six retail banking offices in three Kentucky counties, including the Bowling Green and Owensboro markets. Headquartered in Beaver Dam, Kentucky, Kentucky Trust Bank has assets of approximately $120 million. The acquisition is valued at approximately $12 million and will be paid in a combination of cash and stock, of which between 50% and 60% will be payable in Porter Bancorp shares. The proposed acquisition is expected to close in the early fourth quarter. "We are very excited about our new market opportunities in Lexington, Bowling Green, Beaver Dam, and Owensboro. These are excellent growth markets and we believe loan opportunities in these markets are substantial," stated Maria L. Bouvette, President and CEO of Porter Bancorp, Inc. "Our loan growth of $129 million for the first six months of 2007 is more than double our loan growth for all of 2006. Our loan growth accelerated in 2007 and benefited from increased demand across our markets and the contribution of new offices opened since last year." "New deposit programs launched in the first quarter of 2007 contributed to the 20.3% increase in deposits to $977 million," continued Ms. Bouvette. "The deposit program is an important part of our strategy to fund the growth in our loan portfolio. Total deposits are up $115.1 million in the first six months of 2007, or more than double the growth of $55.3 million for all of 2006." Net Interest Income Net interest income was $10.1 million for the three months ended June 30, 2007, an increase of $710,000, or 7.5%, compared with $9.4 million for the same period in 2006. Net interest income was $19.9 million for the six months ended June 30, 2007, an increase of $1.4 million, or 7.6%, compared with $18.5 million for the same period in 2006. This increase was attributable to the growth in our loan portfolio, partially offset by the reduction in net interest margin reflecting the effect of a flat yield curve. Net interest margin for the second quarter of 2007 declined to 3.69% compared with 4.10% for the second quarter of 2006. Our yield on earning assets increased to 7.96% for the second quarter of 2007 compared to 7.78% for the second quarter of 2006 while our cost of funds increased to 4.86% for the second quarter of 2007 compared to 4.12% for the second quarter of 2006. Net interest margin decreased 23 basis points from our margin of 3.92% in the first quarter of 2007. Our yield on earning assets declined 7 basis points from 8.03% during the first quarter of 2007 while our cost of funds increased 12 basis points from 4.74%. This was due in part to our use of promotional pricing in our marketing efforts to attract premium customers in our new markets. Non-Interest Income Non-interest income was $1.3 million in both the second quarter of 2007 and the second quarter of 2006. Non-interest income was $2.5 million in the first six months of 2007 compared with $2.7 million for the same period of 2006. This decrease is primarily attributable to a decrease in service charges on deposit accounts. Product fee changes implemented during the first quarter of 2007 have resulted in increased fees during the second quarter. Future expectations are that this will continue during the remainder of the year. Non-Interest Expense Non-interest expense for the second quarter decreased 3.1% from prior year second quarter. Non-interest expense for the six months ended June 30, 2007, decreased 2.1% from the six months ended June 30, 2006. Our diligent focus on overhead management and expense control resulted in an improved efficiency ratio of 45.0% for the second quarter of 2007 compared with 49.3% for the second quarter of 2006. Our efficiency ratio continues to outperform our peers at 45.2% for the first six months of 2007 compared with 48.7% for the first six months of 2006. Balance Sheet Review Total assets increased 14.0%, or $147.2 million, to $1.2 billion at June 30, 2007, from $1.05 billion at December 31, 2006. The Company's loan portfolio increased 15.1%, or $129 million, to $983.3 million from $854.4 million at December 31, 2006, primarily due to in-house loan origination efforts of our lending staff. Deposits at June 30, 2007, increased 13.4% to $977 million from $861.9 million at December 31, 2006, primarily due to an increase in both time deposits and transactional accounts from promotional efforts throughout the period. Asset Quality "Asset quality remains strong as evidenced by the reduction in non-performing assets since last year," continued Ms. Bouvette. "Our non-performing loans as a percentage of total loans have declined each quarter since last year. In addition, our coverage ratio of allowance for loan losses to non-performing loans increased to 187% in the latest quarter from 124% in the second quarter of last year. We have no subprime exposure and remain diligent about maintaining our excellent loan quality to support future earnings growth." Nonperforming loans at June 30, 2007, were $7.2 million, or 0.73% of total loans, compared with $8.3 million, or 0.89% of total loans at March 31, 2007, and $8.9 million, or 1.05% of total loans at December 31, 2006. The decrease of $1.7 million in nonperforming loans from December 31, 2006 to June 30, 2007, is primarily attributable to our collection efforts via foreclosure and collateral repossession. Foreclosed properties at June 30, 2007, were $4.1 million compared with $2.4 million at June 30, 2006, and $2.7 million at March 31, 2007. The increase in foreclosed properties reflects the normal progression of troubled loans through workout, collateral repossession, and ultimate disposition. Our loan loss reserve as a percentage of total loans at June 30, 2007, decreased to 1.37% from 1.55% at June 30, 2006, and 1.43% at March 31, 2007. Provision for loan losses increased $323,000 to $700,000 for the three months ended June 30, 2007, and increased $572,000 to $1.3 million for the first six months of 2007, compared to the same periods ended June 30, 2006. The increase in the loan loss provision for the first six months of 2007 reflected the strong growth in the loan portfolio requiring a larger provision to remain consistent with historical experience. Net loan charge-offs for the second quarter of 2007 were $432,000, or .18% of average loans annualized, and .15% annualized for the first half of 2007. We assess the adequacy of our loan loss reserve each quarter and make the appropriate provision for loan losses based on that assessment. 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. 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 The foregoing may be deemed to be offering materials of Porter Bancorp in connection with Porter Bancorp's proposed acquisition of Ohio County Bancshares, on the terms and subject to the conditions in the Agreement and Plan of Merger, dated June 16, 2007, between Porter Bancorp and Ohio County Bancshares. Porter Bancorp and Ohio County Bancshares shareholders and other investors are urged to read the joint proxy statement/prospectus that will be included in the registration statement on Form S-4, which Porter Bancorp will file with the SEC in connection with the proposed merger, because it will contain important information about Porter Bancorp, Ohio County Bancshares, the merger, the persons soliciting proxies in the proposed merger and their interests in the proposed merger and related matters. The respective directors and executive officers of Porter Bancorp and Ohio County Bancshares and other persons may be deemed to be participants in the solicitation of proxies from Ohio County Bancshares shareholders with respect to the proposed transaction. Information regarding Porter Bancorp's directors and executive officers is available in its proxy statement filed with the SEC on April 18, 2007. Information regarding Ohio County Bancshares's directors and executive officers and other information regarding the participants in the solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. This news release is not an offer to sell, or a solicitation of an offer to buy, shares of Porter Bancorp common stock, or the solicitation of any proxies from Ohio County Bancshares shareholders. After it is filed with the SEC, the proxy statement/prospectus will be available for free, both on the SEC Web site (www.sec.gov) and from Porter Bancorp by contacting C. Bradford Harris, Executive Vice President and Corporate General Counsel, Porter Bancorp, Inc., 2500 Eastpoint Parkway, Louisville, Kentucky 40223. Telephone: (502) 499-4800. In addition to the proposed registration statement and proxy statement/prospectus, Porter Bancorp files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information filed by Porter Bancorp at the SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the SEC's other public reference rooms in New York and Chicago. Please call the SEC at 1 800 SEC 0330 for more information on the public reference rooms. Porter Bancorp SEC filings also are available to the public from commercial document retrieval services and at www.sec.gov. Unaudited supplemental financial information for the second quarter and six months ending June 30, 2007 follows. PORTER BANCORP, INC. AND SUBSIDIARY Unaudited Financial Information (in thousands, except share and per share data) Three Three Three Six Six Months Months Months Months Months Ended Ended Ended Ended Ended 6/30/07 3/31/07 6/30/06 6/30/07 6/30/06 ---------- ---------- ---------- ---------- ---------- Income Statement Data Interest income $ 21,935 $ 20,054 $ 17,947 $ 41,989 $ 34,934 Interest expense 11,815 10,310 8,537 22,125 16,480 ---------- ---------- ---------- ---------- ---------- Net interest income 10,120 9,744 9,410 19,864 18,454 Provision for loan losses 700 625 377 1,325 753 Service charges on deposit accounts 648 535 683 1,183 1,348 Gains on sales of government guaranteed loans, net 15 - - 15 99 Gains on sales of loans originated for sale, net - - 129 - 240 Gains on sales of securities, net 62 - 27 62 27 Gains on sales of other assets, net 1 6 - 7 18 Other 582 635 491 1,217 964 ---------- ---------- ---------- ---------- ---------- Non-interest income 1,308 1,176 1,330 2,484 2,696 Salaries & employee benefits 3,001 2,935 3,048 5,936 5,885 Occupancy and equipment 599 565 672 1,164 1,360 Franchise tax 325 325 267 650 540 Communications expense 99 110 137 209 283 Advertising 114 139 190 253 319 Other 973 882 963 1,855 1,900 ---------- ---------- ---------- ---------- ---------- Non-interest expense 5,111 4,956 5,277 10,067 10,287 Income before income taxes 5,617 5,339 5,086 10,956 10,110 Income tax expense 1,928 1,738 1,656 3,666 3,277 ---------- ---------- ---------- ---------- ---------- Net income $ 3,689 $ 3,601 $ 3,430 $ 7,290 $ 6,833 ========== ========== ========== ========== ========== Weighted average shares (basic & diluted) 7,586,167 7,582,819 6,332,447 7,584,502 6,332,447 Basic and diluted earnings per share $ 0.49 $ 0.47 $ 0.54 $ 0.96 $ 1.08 Cash dividends declared per share $ 0.20 $ 0.20 $ 0.20 $ 0.40 $ 0.40 PORTER BANCORP, INC. AND SUBSIDIARY Unaudited Financial Information (in thousands, except share and per share data) Three Three Three Six Six Months Months Months Months Months Ended Ended Ended Ended Ended 6/30/07 3/31/07 6/30/06 6/30/07 6/30/06 ----------- ----------- --------- ----------- --------- Average Balance Sheet Data Assets $1,161,738 $1,066,894 $979,566 $1,114,578 $983,452 Loans 955,896 891,591 811,403 923,921 804,698 Earning assets 1,110,384 1,016,964 930,924 1,063,932 934,783 Deposits 939,634 875,568 802,878 907,778 806,447 Long-term debt and advances 101,648 72,853 87,882 87,330 89,851 Interest bearing liabilities 974,738 881,771 831,754 928,511 836,594 Stockholders' equity 112,672 110,235 75,830 111,460 74,692 Performance Ratios Return on average assets 1.27% 1.37% 1.40% 1.32% 1.39% Return on average equity 13.13 13.25 18.14 13.19 18.45 Yield on average earning assets (tax equivalent) 7.96 8.03 7.78 7.99 7.58 Cost of interest bearing liabilities 4.86 4.74 4.12 4.81 3.97 Net interest margin (tax equivalent) 3.69 3.92 4.10 3.80 4.02 Efficiency ratio 44.97 45.38 49.26 45.17 48.70 Loan Charge- off Data Loans charged- off $ (512) $ (314) $ (416) $ (826) $ (493) Recoveries 80 68 83 148 154 ----------- ----------- --------- ----------- --------- Net charge- offs $ (432) $ (246) $ (333) $ (678) $ (339) PORTER BANCORP, INC. AND SUBSIDIARY Unaudited Financial Information (in thousands, except share and per share data) As of As of As of As of 6/30/07 3/31/07 12/31/06 6/30/06 --------- ---------- ---------- ----------- Assets Loans $ 983,343 $ 926,747 $ 854,367 $ 814,489 Loan loss reserve (13,479) (13,211) (12,832) (12,611) ---------- --------- --------- --------- Net loans 969,864 913,536 841,535 801,878 Securities available for sale 101,733 97,463 95,090 97,976 Federal funds sold & interest bearing deposits 49,293 6,042 40,957 13,950 Cash and due from financial institutions 15,821 44,553 15,306 41,721 Premises and equipment 14,414 13,808 13,774 13,943 Goodwill 12,881 12,881 12,881 12,881 Accrued interest receivable and other assets 34,176 31,462 31,463 31,023 ---------- --------- --------- --------- Total Assets $1,198,182 $1,119,745 $1,051,006 $1,013,372 ========== ========= ========= ========= Liabilities and Equity Certificates of deposit $ 727,053 $ 673,017 $ 656,691 $ 647,955 Interest checking 44,573 49,600 50,840 47,989 Money market 106,691 79,823 61,666 26,307 Savings 25,379 25,041 23,479 23,875 ---------- --------- --------- --------- Total interest bearing deposits 903,696 827,481 792,676 746,126 Demand deposits 73,265 69,998 69,180 66,064 ---------- --------- --------- --------- Total deposits 976,961 897,479 861,856 812,190 Federal funds purchased & repurchase agreements 1,491 1,473 1,134 6,537 Notes payable - - - 9,500 FHLB advances 76,479 77,007 47,562 77,680 Junior subordinated debentures 25,000 25,000 25,000 25,000 Accrued interest payable and other liabilities 6,397 8,227 7,108 6,928 ---------- --------- --------- --------- Total liabilities 1,086,328 1,009,186 942,660 937,835 Stockholders' equity 111,854 110,559 108,346 75,537 ---------- --------- --------- --------- Total Liabilities and Stockholders' Equity $1,198,182 $1,119,745 $1,051,006 $1,013,372 ========== ========= ========= ========= Ending shares outstanding 7,629,102 7,621,647 7,622,447 6,371,697 Book value per share $ 14.66 $ 14.51 $ 14.21 $ 11.86 Tangible book value per share 13.01 12.73 12.45 9.95 Asset Quality Data Loan 90 days or more past due still on accrual $ 1,485 $ 769 $ 2,010 $ 4,536 Non-accrual loans 5,704 7,493 6,930 5,643 ---------- --------- --------- --------- Total non-performing loans 7,189 8,262 8,940 10,179 Real estate acquired through foreclosures 4,118 2,702 2,415 2,402 Other repossessed assets 9 9 9 15 ---------- --------- --------- --------- Total non-performing assets $ 11,316 $ 10,973 $ 11,364 $ 12,596 ========== ========= ========= ========= Non-performing loans to total loans 0.73% 0.89% 1.05% 1.25% Non-performing assets to total loans 1.15 1.18 1.33 1.55 Allowance for loan losses to non-performing loans 187.49 159.90 143.53 123.89 Allowance for loan losses to total loans 1.37 1.43 1.50 1.55 Risk-based Capital Ratios Tier I leverage ratio 10.82% 11.58% 11.86% 9.15% Tier I risk-based capital ratio 12.64 13.42 14.32 11.02 Total risk-based capital ratio 13.89 14.67 15.57 12.27 FTE employees 233 221 218 223 PBIB-G PBIB-F CONTACT: Porter Bancorp, Inc. Maria L. Bouvette, 502-499-4800 President and CEO -----END PRIVACY-ENHANCED MESSAGE-----