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 30, 2014
PORTER
BANCORP, INC.
(Exact
name of registrant as specified in its charter)
Kentucky |
001-33033 |
61-1142247 |
(State or other jurisdiction of incorporation and organization) |
(Commission File Number) |
(I.R.S. Employer 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 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))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS
On July 30, 2014, Porter Bancorp, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 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
(d) | Exhibits |
Exhibit No. | Description of Exhibit | |
99.1 | Press Release issued by Porter Bancorp, Inc. on July 30, 2014 |
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 30, 2014 |
Porter Bancorp Inc. |
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By: |
/s/ Phillip W. Barnhouse |
Phillip W. Barnhouse |
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Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
Description |
99.1 |
Press Release dated July 30, 2014 |
Exhibit 99.1
Porter Bancorp, Inc. Reports Second Quarter Results
Second Quarter 2014 Net Loss Attributable to Common Shareholders of $672,000
LOUISVILLE, Ky.--(BUSINESS WIRE)--July 30, 2014--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with 18 full-service banking offices in Kentucky, today reported unaudited results for the second quarter of 2014.
The Company reported a net loss attributable to common shareholders of $672,000, or ($0.06) per diluted share, for the second quarter of 2014 compared with a net loss of $1.7 million, or ($0.14) per diluted share, for the second quarter of 2013. Net loss attributable to common shareholders for the six months ended June 30, 2014, was $1.6 million, or ($0.14) per diluted common share, compared with net loss attributable to common shareholders of $2.2 million, or ($0.19) per diluted share, for the six months ended June 30, 2013.
Our primary initiatives for 2014 are to continue reducing non-performing assets, restore capital, and return to sustainable profitability while continuing to serve our customers and develop new quality financial relationships.
Second Quarter 2014 Financial Performance Highlights
Non-performing loans decreased to $44.4 million, or 6.90% of total loans, at June 30, 2014, compared with $77.3 million, or 11.33% of total loans, at March 31, 2014. The decline was primarily driven by $18.5 million of nonaccrual loans migrating to OREO, $12.2 million in principal payments received on nonaccrual loans, and $2.9 million of charge-offs.
Non-performing loans and OREO remain at elevated levels and continue to negatively impact financial performance.
June 30,
2014 |
March 31,
2014 |
December 31,
2013 |
September 30,
2013 |
June 30,
2013 |
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(in thousands) | ||||||||||||||||||
Past due loans: | ||||||||||||||||||
30 – 59 days | $ | 3,057 | $ | 5,667 | $ | 10,696 | $ | 10,018 | $ | 8,600 | ||||||||
60 – 89 days | 991 | 1,232 | 775 | 7,582 | 2,979 | |||||||||||||
90 days or more | — | — | 232 | — | 71 | |||||||||||||
Nonaccrual loans | 44,375 | 77,344 | 101,767 | 106,922 | 112,185 | |||||||||||||
Total past due and nonaccrual loans |
$ |
48,423 |
$ |
84,243 | $ | 113,470 | $ | 124,522 | $ | 123,835 | ||||||||
Loans past due 90 days or more |
$ |
— |
$ |
— | $ | 232 | $ | — | $ | 71 | ||||||||
Nonaccrual loans | 44,375 | 77,344 | 101,767 | 106,922 | 112,185 | |||||||||||||
OREO | 62,935 | 45,918 | 30,892 | 41,857 | 47,030 | |||||||||||||
Total non-performing assets |
$ |
107,310 |
$ |
123,262 | $ | 132,891 | $ | 148,779 | $ | 159,286 | ||||||||
In addition to nonaccrual loans and OREO, loans classified as Troubled Debt Restructures (TDRs) and on accrual totaled $32.4 million at June 30, 2014, compared to $41.8 million at March 31, 2014 and $54.9 million at June 30, 2013.
OREO at June 30, 2014 increased to $62.9 million, compared with $45.9 million at March 31, 2014, and $47.0 million at June 30, 2013. The Company acquired $19.6 million in OREO and sold $2.2 million in OREO during the second quarter of 2014. Fair value write-downs arising from new appraisals or lower marketing prices totaled $400,000 in the second quarter of 2014, compared with $250,000 in the first quarter of 2014 and $977,000 in the second quarter of 2013.
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.
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 second quarter ending June 30, 2014 follows.
PORTER BANCORP, INC. |
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Three | Three | Three | Six | Six | ||||||||||||||||
Months | Months | Months | Months | Months | ||||||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||||||
6/30/14 | 3/31/14 | 6/30/13 | 6/30/14 | 6/30/13 | ||||||||||||||||
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Income Statement Data | ||||||||||||||||||||
Interest income | $ | 10,166 | $ | 9,897 | $ | 11,168 | $ | 20,063 | $ | 22,426 | ||||||||||
Interest expense | 2,552 | 2,597 | 2,816 | 5,149 | 5,776 | |||||||||||||||
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Net interest income | 7,614 | 7,300 | 8,352 | 14,914 | 16,650 | |||||||||||||||
Provision for loan losses | — | — | — | — | 450 | |||||||||||||||
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Net interest income after provision | 7,614 | 7,300 | 8,352 | 14,914 | 16,200 | |||||||||||||||
Service charges on deposit accounts | 487 | 468 | 506 | 955 | 999 | |||||||||||||||
Income from fiduciary activities | — | — | — | — | 517 | |||||||||||||||
Bank card interchange fees | 205 | 161 | 196 | 366 | 368 | |||||||||||||||
Other real estate owned income | 18 | 7 | 230 | 25 | 342 | |||||||||||||||
Gains (losses) on sales of securities, net | 2 | 44 | 703 | 46 | 703 | |||||||||||||||
Income from bank owned life insurance | 62 | 76 | 305 | 138 | 384 | |||||||||||||||
Other | 175 | 159 | 208 | 334 | 482 | |||||||||||||||
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Non-interest income | 949 | 915 | 2,148 | 1,864 | 3,795 | |||||||||||||||
Salaries & employee benefits | 3,949 | 3,741 | 3,999 | 7,690 | 8,138 | |||||||||||||||
Occupancy and equipment | 896 | 892 | 913 | 1,788 | 1,844 | |||||||||||||||
Other real estate owned expense | 774 | 662 | 1,657 | 1,436 | 2,448 | |||||||||||||||
FDIC insurance | 571 | 540 | 650 | 1,111 | 1,289 | |||||||||||||||
Franchise tax | 405 | 425 | 537 | 830 | 1,074 | |||||||||||||||
Loan collection expense | 389 | 539 | 2,407 | 928 | 3,442 | |||||||||||||||
Professional fees | 764 | 558 | 499 | 1,322 | 905 | |||||||||||||||
Communications expense | 165 | 235 | 179 | 400 | 354 | |||||||||||||||
Postage and delivery | 94 | 110 | 102 | 204 | 215 | |||||||||||||||
Insurance expense | 153 | 149 | 160 | 302 | 311 | |||||||||||||||
Other | 784 | 651 | 706 | 1,435 | 1,353 | |||||||||||||||
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Non-interest expense | 8,944 | 8,502 | 11,809 | 17,446 | 21,373 | |||||||||||||||
Income (loss) before income taxes | (381 | ) | (287 | ) | (1,309 | ) | (668 | ) | (1,378 | ) | ||||||||||
Income tax expense (benefit) | (424 | ) | — | — | (424 | ) | — | |||||||||||||
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Net income (loss) | 43 | (287 | ) | (1,309 | ) | (244 | ) | (1,378 | ) | |||||||||||
Less: | ||||||||||||||||||||
Dividends on preferred stock | 789 | 786 | 437 | 1,574 | 875 | |||||||||||||||
Accretion on preferred stock | — | — | 45 | — | 90 | |||||||||||||||
Earnings allocated to participating securities | (74 | ) | (97 | ) | (110 | ) | (173 | ) | (131 | ) | ||||||||||
Net income (loss) attributable to common | $ | (672 | ) | $ | (976 | ) | $ | (1,681 | ) | $ | (1,645 | ) | $ | (2,212 | ) | |||||
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Weighted average shares – Basic | 11,981,121 | 12,021,313 | 11,761,788 | 11,992,925 | 11,801,663 | |||||||||||||||
Weighted average shares – Diluted | 11,981,121 | 12,021,313 | 11,761,788 | 11,992,925 | 11,801,663 | |||||||||||||||
Basic earnings (loss) per common share | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.14 | ) | $ | (0.14 | ) | $ | (0.19 | ) | |||||
Diluted earnings (loss) per common share | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.14 | ) | $ | (0.14 | ) | $ | (0.19 | ) | |||||
Cash dividends declared per common share | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 |
PORTER BANCORP, INC. |
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Three | Three | Three | Six | Six | ||||||||||||||||
Months | Months | Months | Months | Months | ||||||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||||||
6/30/14 | 3/31/14 | 6/30/13 | 6/30/14 | 6/30/13 | ||||||||||||||||
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Average Balance Sheet Data | ||||||||||||||||||||
Assets | $ | 1,056,888 | $ | 1,073,586 | $ | 1,104,807 | $ | 1,065,191 | $ | 1,128,182 | ||||||||||
Loans | 677,643 | 698,184 | 806,941 | 687,857 | 839,542 | |||||||||||||||
Earning assets | 991,416 | 1,019,173 | 1,050,515 | 1,005,218 | 1,080,824 | |||||||||||||||
Deposits | 966,164 | 984,169 | 1,008,102 | 975,117 | 1,030,867 | |||||||||||||||
Long-term debt and advances | 35,372 | 35,233 | 36,652 | 35,303 | 36,909 | |||||||||||||||
Interest bearing liabilities | 893,921 | 911,186 | 941,059 | 902,506 | 962,153 | |||||||||||||||
Stockholders’ equity | 37,690 | 36,992 | 46,904 | 37,343 | 47,324 | |||||||||||||||
Performance Ratios | ||||||||||||||||||||
Return on average assets | 0.02 | % | (0.11 | )% | (0.48 | )% | (0.05 | )% | (0.25 | )% | ||||||||||
Return on average equity | 0.46 | (3.15 | ) | (11.19 | ) | (1.32 | ) | (5.87 | ) | |||||||||||
Yield on average earning assets (tax equivalent) | 4.16 | 3.99 | 4.31 | 4.08 | 4.23 | |||||||||||||||
Cost of interest bearing liabilities | 1.15 | 1.16 | 1.20 | 1.15 | 1.21 | |||||||||||||||
Net interest margin (tax equivalent) | 3.13 | 2.96 | 3.24 | 3.04 | 3.15 | |||||||||||||||
Efficiency ratio | 104.47 | 104.05 | 120.54 | 104.27 | 108.26 | |||||||||||||||
Loan Charge-off Data | ||||||||||||||||||||
Loans charged-off | $ | (3,130 | ) | $ | (3,082 | ) | $ | (3,404 | ) | $ | (6,212 | ) | $ | (21,366 | ) | |||||
Recoveries | 1,741 | 373 | 1,124 | 2,114 | 1,795 | |||||||||||||||
Net charge-offs | $ | (1,389 | ) | $ | (2,709 | ) | $ | (2,280 | ) | $ | (4,098 | ) | $ | (19,571 | ) | |||||
Nonaccrual Loan Activity | ||||||||||||||||||||
Nonaccrual loans at beginning of period | $ | 77,344 | $ | 101,767 | $ | 120,943 | $ | 101,767 | $ | 94,517 | ||||||||||
Net principal pay-downs | (12,195 | ) | (10,245 | ) | (8,118 | ) | (22,440 | ) | (12,223 | ) | ||||||||||
Charge-offs | (2,932 | ) | (2,472 | ) | (3,256 | ) | (5,404 | ) | (20,728 | ) | ||||||||||
Loans foreclosed and transferred to OREO | (18,524 | ) | (16,895 | ) | (11,875 | ) | (35,419 | ) | (15,523 | ) | ||||||||||
Loans returned to accrual status | (2,362 | ) | (870 | ) | (421 | ) | (3,232 | ) | (421 | ) | ||||||||||
Loans placed on nonaccrual during the period | 3,044 | 6,059 | 14,912 | 9,103 | 66,563 | |||||||||||||||
Nonaccrual loans at end of period | $ | 44,375 | $ | 77,344 | $ | 112,185 | $ | 44,375 | $ | 112,185 | ||||||||||
Troubled Debt Restructurings (TDRs) | ||||||||||||||||||||
Accruing | $ | 32,389 | $ | 41,813 | $ | 54,927 | $ | 32,389 | $ | 54,927 | ||||||||||
Nonaccrual | 18,500 | 30,640 | 46,510 | 18,500 | 46,510 | |||||||||||||||
Total | $ | 50,889 | $ | 72,453 | $ | 101,437 | $ | 50,889 | $ | 101,437 | ||||||||||
Other Real Estate Owned (OREO) Activity (Net of Allowance) | ||||||||||||||||||||
OREO at beginning of period | $ | 45,918 | $ | 30,892 | $ | 44,192 | $ | 30,892 | $ | 43,671 | ||||||||||
Real estate acquired | 19,569 | 17,351 | 11,875 | 36,920 | 15,555 | |||||||||||||||
Valuation adjustment write-downs | (400 | ) | (250 | ) | (977 | ) | (650 | ) | (1,284 | ) | ||||||||||
Proceeds from sales of properties | (2,206 | ) | (2,075 | ) | (7,898 | ) | (4,281 | ) | (10,553 | ) | ||||||||||
Gain (loss) on sales, net | 54 | — | (162 | ) | 54 | (359 | ) | |||||||||||||
OREO at end of period | $ | 62,935 | $ | 45,918 | $ | 47,030 | $ | 62,935 | $ | 47,030 |
PORTER BANCORP, INC. |
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As of | As of | As of | As of | |||||||||||||
6/30/14 | 3/31/14 | 12/31/13 | 6/30/13 | |||||||||||||
Assets | ||||||||||||||||
Loans | $ | 643,030 | $ | 682,591 | $ | 709,326 | $ | 774,785 | ||||||||
Loan loss reserve | (24,026 | ) | (25,415 | ) | (28,124 | ) | (37,559 | ) | ||||||||
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Net loans | 619,004 | 657,176 | 681,202 | 737,226 | ||||||||||||
Mortgage loans held for sale | 280 | — | 149 | 133 | ||||||||||||
Securities held to maturity | 43,488 | 43,550 | 43,612 | — | ||||||||||||
Securities available for sale | 180,723 | 166,442 | 163,344 | 176,942 | ||||||||||||
Federal funds sold & interest bearing deposits | 95,353 | 99,286 | 103,669 | 56,512 | ||||||||||||
Cash and due from financial institutions | 6,913 | 7,449 | 7,465 | 7,754 | ||||||||||||
Premises and equipment | 19,788 | 19,821 | 19,983 | 20,368 | ||||||||||||
FHLB Stock | 7,323 | 7,323 | 10,072 | 10,072 | ||||||||||||
Other real estate owned | 62,935 | 45,918 | 30,892 | 47,030 | ||||||||||||
Accrued interest receivable and other assets | 16,220 | 16,565 | 15,733 | 16,094 | ||||||||||||
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Total Assets | $ | 1,052,027 | $ | 1,063,530 | $ | 1,076,121 | $ | 1,072,131 | ||||||||
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Liabilities and Equity | ||||||||||||||||
Certificates of deposit | $ | 631,110 | $ | 656,475 | $ | 679,952 | $ | 690,557 | ||||||||
Interest checking | 76,625 | 79,689 | 84,626 | 78,218 | ||||||||||||
Money market | 95,946 | 89,678 | 79,349 | 65,620 | ||||||||||||
Savings | 37,178 | 38,524 | 36,292 | 40,121 | ||||||||||||
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Total interest bearing deposits | 840,859 | 864,366 | 880,219 | 874,516 | ||||||||||||
Demand deposits | 109,956 | 110,507 | 107,486 | 106,320 | ||||||||||||
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Total deposits | 950,815 | 974,873 | 987,705 | 980,836 | ||||||||||||
Federal funds purchased & repurchase agreements | 2,451 | 2,240 | 2,470 | 3,292 | ||||||||||||
FHLB advances | 14,134 | 4,345 | 4,492 | 5,016 | ||||||||||||
Junior subordinated debentures | 30,400 | 30,625 | 30,850 | 31,525 | ||||||||||||
Accrued interest payable and other liabilities | 16,453 | 15,110 | 14,673 | 12,710 | ||||||||||||
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Total liabilities | 1,014,253 | 1,027,193 | 1,040,190 | 1,033,379 | ||||||||||||
Stockholders’ equity | 37,774 | 36,337 | 35,931 | 38,752 | ||||||||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,052,027 | $ | 1,063,530 | $ | 1,076,121 | $ | 1,072,131 | ||||||||
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Ending shares outstanding | 13,104,853 | 12,894,741 | 12,840,999 | 12,322,207 | ||||||||||||
Book value per common share | $ | (0.04 | ) | $ | (0.15 | ) | $ | (0.18 | ) | $ | 0.04 | |||||
Tangible book value per common share | (0.13 | ) | (0.25 | ) | (0.29 | ) | (0.10 | ) | ||||||||
Asset Quality Data | ||||||||||||||||
Loan 90 days or more past due still on accrual | $ | — | $ | — | $ | 232 | $ | 71 | ||||||||
Nonaccrual loans | 44,375 | 77,344 | 101,767 | 112,185 | ||||||||||||
Total non-performing loans | 44,375 | 77,344 | 101,999 | 112,256 | ||||||||||||
Real estate acquired through foreclosures | 62,935 | 45,918 | 30,892 | 47,030 | ||||||||||||
Other repossessed assets | — | — | — | — | ||||||||||||
Total non-performing assets | $ | 107,310 | $ | 123,262 | $ | 132,891 | $ | 159,286 | ||||||||
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Non-performing loans to total loans | 6.90 | % | 11.33 | % | 14.38 | % | 14.49 | % | ||||||||
Non-performing assets to total assets | 10.20 | 11.59 | 12.35 | 14.86 | ||||||||||||
Allowance for loan losses to non-performing loans | 54.14 | 32.86 | 27.57 | 33.46 | ||||||||||||
Allowance as % of loans evaluated individually | 2.20 | 2.01 | 2.32 | 5.82 | ||||||||||||
Allowance as % of loans evaluated collectively | 3.95 | 4.10 | 4.41 | 4.56 | ||||||||||||
Allowance for loan losses to total loans | 3.74 | 3.72 | 3.96 | 4.85 | ||||||||||||
Risk-based Capital Ratios | ||||||||||||||||
Tier I leverage ratio | 4.89 | % | 4.87 | % | 4.95 | % | 4.91 | % | ||||||||
Tier I risk-based capital ratio | 7.31 | 7.22 | 7.34 | 6.88 | ||||||||||||
Total risk-based capital ratio | 11.07 | 10.93 | 11.03 | 10.46 | ||||||||||||
FTE employees | 275 | 263 | 260 | 264 | ||||||||||||
CONTACT:
Porter Bancorp, Inc.
John T. Taylor, President,
502-499-4800