Exhibit 99.1
Porter Bancorp Reports 2017 Net Income of $37.5 Million or $6.15 per Share Compared to 2016 Net Loss of $2.7 Million or ($0.46) per Share
Reversal of Deferred Tax Asset Valuation Allowance
LOUISVILLE, Ky.--(BUSINESS WIRE)--January 24, 2018--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, today reported unaudited results for the fourth quarter of 2017. The Company reported net income attributable to common shareholders for the fourth quarter of 2017 of $32.5 million, or $5.31 per basic and diluted common share, compared to a net loss attributable to common shareholders of $6.4 million, or ($1.07) per basic and diluted share, for the fourth quarter of 2016.
Net income attributable to common shareholders for the year ended December 31, 2017, was $37.5 million, or $6.15 per basic and diluted common share, compared to net loss attributable to common shareholders of $2.7 million, or ($0.46) per basic and diluted common share, for the year ended December 31, 2016. Net income before taxes was $6.6 million for the year ended December 31, 2017, compared to a net loss before taxes of $2.7 million for the year ended December 31, 2016.
Net income for 2017 was impacted by the reversal of the Company’s deferred tax asset valuation allowance and the change in federal corporate tax rates in connection with the enactment of the Tax Cuts and Jobs Act of 2017. The net result of these two items was an income tax benefit of $31.9 million for 2017.
Reversal of Deferred Tax Asset Valuation Allowance and Change in Federal Corporate Tax Rate – The Company has had a full valuation allowance against its net deferred tax asset since 2011. The Company’s ability to utilize the net deferred tax asset depends upon generating sufficient future levels of taxable income. The determination to restore a deferred tax asset and eliminate a valuation allowance depends upon the evaluation of both positive and negative evidence regarding the likelihood of achieving sufficient future taxable income levels. During the fourth quarter of 2017, management concluded it was more-likely-than-not the asset would be utilized to reduce future taxes payable related to the future taxable income of the Company, and as such, reversed the valuation allowance. The positive evidence that outweighed the negative evidence evaluated by management in arriving at the conclusion to remove the valuation allowance included, but was not limited to, the following:
- positive cumulative pre-tax earnings over the prior three-year period ended December 31, 2017
- growth in net interest income, stable non-interest income trends, and lower non-interest expense trends
- improvement in asset quality which increases management’s ability to forecast future taxable income and achieve forecasted results
- the Company’s net operating loss (“NOLs”) carryforwards do not begin to expire until 2032, and
- the Bank’s Consent Order was terminated in the fourth quarter of 2017
As a result of the conclusion to reverse the valuation allowance, the Company recorded an income tax benefit of $52.2 million for the year ended December 31, 2017. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law. Among other significant changes to the tax code, the new law lowered the federal corporate tax rate from 35% to 21% beginning in 2018. As a result, the Company revalued its net deferred tax asset at the new 21% rate. Due to this revaluation, the Company recorded a $20.3 million charge to income tax expense for the year ended December 31, 2017. The combination of the reversal of the valuation allowance and the change in federal corporate tax rates resulted in an income tax benefit of $31.9 million for the year ended December 31, 2017.
Net Interest Income – Net interest income before provision for loan losses was $8.0 million for the fourth quarter of 2017, compared to $7.8 million in the third quarter of 2017, and $7.3 million in the fourth quarter of 2016. Average loans increased to $695.6 million for the fourth quarter of 2017, compared with $669.6 million in the third quarter of 2017, and $619.6 million for the fourth quarter of 2016. Net interest margin increased to 3.50% for the fourth quarter of 2017, compared to 3.44% for the third quarter of 2017, and 3.35% for the fourth quarter of 2016.
The yield on earning assets increased to 4.24% for the fourth quarter of 2017, compared to 4.16% for the third quarter of 2017, and 4.01% for the fourth quarter of 2016. The cost of interest bearing liabilities was 0.88% for the fourth quarter of 2017, compared to 0.85% for the third quarter of 2017, and 0.78% for the fourth quarter of 2016.
Negative Provision and Allowance for Loan Losses – Because of continuing improvement in asset quality and management’s assessment of risk in the loan portfolio, a negative provision for loan losses of $800,000 was recorded for 2017, compared to a negative provision for loan losses of $2.5 million for 2016. The negative provision of $800,000 was recorded in the fourth quarter of 2017, compared to a negative provision of $550,000 in the fourth quarter of 2016.
The allowance for loan losses to total loans was 1.15% at December 31, 2017, compared to 1.32% at September 30, 2017, and 1.40% at December 31, 2016. The reduced level of the allowance in 2017, compared to 2016 was primarily driven by declining charge-off levels, growth in the portfolio, improving trends in credit quality, and the negative provision. Net loan recoveries were $35,000 for 2017, compared to net loan charge-offs of $624,000 for 2016. The allowance for loan losses for loans evaluated collectively for impairment was 1.13% at December 31, 2017, compared with 1.27% at September 30, 2017, and 1.37% at December 31, 2016.
Non-performing Assets – Non-performing assets, which include loans past due 90 days and still accruing, loans on nonaccrual, and other real estate owned (“OREO”), decreased to $9.9 million, or 1.02% of total assets at December 31, 2017, compared with $12.1 million, or 1.26% of total assets at September 30, 2017, and $16.0 million, or 1.70% of total assets, at December 31, 2016.
Non-performing loans decreased to $5.5 million, or 0.77% of total loans at December 31, 2017, compared with $5.8 million, or 0.85% of total loans at September 30, 2017, and $9.2 million, or 1.44% of total loans, at December 31, 2016. The decrease from the previous year was primarily driven by $5.0 million in principal payments received on nonaccrual loans, $270,000 of nonaccrual loans migrating to OREO, and $665,000 of charge-offs offset by $2.3 million in loans placed on nonaccrual during 2017. OREO at December 31, 2017, decreased to $4.4 million, compared with $6.3 million at September 30, 2017, and $6.8 million at December 31, 2016. During the year, the Company sold $793,000 in OREO and acquired $270,000 in new OREO properties. Fair value write-downs arising from lower marketing prices or new appraisals totaled $2.0 million for 2017, compared to $1.2 million in 2016.
The following table details past due loans and non-performing assets as of:
| | | | December 31, 2017 | | | September 30, 2017 | | | June 30, 2017 | | | March 31, 2017 | | | December 31, 2016 |
| | | | (in thousands) |
| Past due loans: | | | | | | | | | | | | | | | | |
| 30 – 59 days | | | | $ | 1,478 | | | $ | 872 | | | $ | 1,328 | | | $ | 972 | | | $ | 2,302 |
| 60 – 89 days | | | | | 171 | | | | 612 | | | | 765 | | | | 289 | | | | 315 |
| 90 days or more | | | | | 1 | | | | — | | | | — | | | | — | | | | — |
| Nonaccrual loans | | | | | 5,457 | | | | 5,769 | | | | 6,509 | | | | 8,102 | | | | 9,216 |
Total past due and nonaccrual loans | | | | $ | 7,107 | | | $ | 7,253 | | | $ | 8,602 | | | $ | 9,363 | | | $ | 11,833 |
| | | | | | | | | | | | | | | | |
Loans past due 90 days or more | | | | $ | 1 | | | $ | — | | | $ | — | | | $ | — | | | $ | — |
| Nonaccrual loans | | | | | 5,457 | | | | 5,769 | | | | 6,509 | | | | 8,102 | | | | 9,216 |
| OREO | | | | | 4,409 | | | | 6,330 | | | | 6,318 | | | | 6,571 | | | | 6,821 |
| Other repossessed assets | | | | | — | | | | — | | | | — | | | | — | | | | — |
Total non-performing assets | | | | $ | 9,867 | | | $ | 12,099 | | | $ | 12,827 | | | $ | 14,673 | | | $ | 16,037 |
| |
In addition to nonaccrual loans and OREO, loans classified as Troubled Debt Restructures (TDRs) and on accrual totaled $1.2 million at both December 31, 2017 and September 30, 2017, compared to $5.4 million at December 31, 2016.
Non-interest Income – Non-interest income increased $91,000 to $4.9 million for the year ended December 31, 2017, compared with $4.8 million for the year ended December 31, 2016. The increase between years was primarily attributable to a $295,000 increase in service charges on deposit accounts, a $123,000 increase in bank card interchange fees, and a $72,000 increase in net gain on sales of securities partially offset by no income from OREO in 2017, compared to $456,000 of OREO income in 2016.
Non-interest income increased $382,000 to $1.5 million for the fourth quarter of 2017, compared with $1.1 million for the fourth quarter of 2016. The increase was due primarily to a net gain on sale of securities of $293,000 compared to $29,000 in the fourth quarter of 2016.
Non-interest Expense – Non-interest expense decreased $9.3 million to $30.2 million for the year ended December 31, 2017, compared with $39.6 million for the year ended December 31, 2016. The decrease in non-interest expense was due primarily to lower litigation and loan collection expense, which decreased $8.6 million. Litigation expense was negatively impacted in the fourth quarter of 2016 by a ruling from the Kentucky Court of Appeals against the Bank that approximated $8.0 million. Non-interest expense also benefited from declining professional fees expense, salaries and employee benefits, and FDIC insurance expense.
Non-interest expense decreased $6.7 million to $8.9 million for the fourth quarter of 2017, compared with $15.6 million for the fourth quarter of 2016. The decrease was due primarily to the nonrecurring nature of the 2016 litigation expense of $8.0 partially offset by a $1.8 million increase in OREO expenses primarily resulting from fair value write-downs arising from lower marketing prices or new appraisals.
Capital – At December 31, 2017, PBI Bank’s Tier 1 leverage ratio was 8.70%, compared with 6.24% at December 31, 2016, and its Total risk-based capital ratio was 11.61% at December 31, 2017, compared with 9.88% at December 31, 2016. At December 31, 2017, PBI Bank’s Common equity Tier I risk-based capital ratio was 10.35%, compared with 8.28% at December 31, 2016.
At December 31, 2017, Porter Bancorp’s Tier 1 leverage ratio was 7.11%, compared with 5.27% at December 31, 2016, and its Total risk-based capital ratio was 10.55%, compared with 10.21% at December 31, 2016. Porter Bancorp’s Common equity Tier I risk-based capital ratio was 6.92%, compared with 5.20% at December 31, 2016.
Deferred Tax Assets and Liabilities – The Company has a net deferred tax asset of $31.3 million at December 31, 2017. Deferred tax assets and liabilities are shown below.
| | | | December 31, | | | December 31, |
| | | | 2017 | | | 2016 |
| | | | (in thousands) |
| Deferred tax assets: | | | | | | | |
| Net operating loss carry-forward | | | | $ | 25,645 | | | $ | 42,094 | |
| Allowance for loan losses | | | | | 1,723 | | | | 3,139 | |
| Other real estate owned write-down | | | | | 2,432 | | | | 3,366 | |
| Other | | | | | 2,388 | | | | 7,607 | |
| | | | | 32,188 | | | | 56,206 | |
| | | | | | | |
| Deferred tax liabilities: | | | | | | | |
| FHLB stock dividends | | | | | 557 | | | | 928 | |
| Other | | | | | 318 | | | | 1,229 | |
| | | | | 875 | | | | 2,157 | |
| Net deferred tax assets before valuation allowance | | | | | 31,313 | | | | 54,049 | |
| Valuation allowance | | | | | — | | | | (54,049 | ) |
| Net deferred tax asset | | | | $ | 31,313 | | | $ | — | |
| | | | | | | |
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 quarter and year ending December 31, 2017, follows.
| |
| |
| |
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data) |
| |
| | | | Three Months Ended | | | Years Ended |
| | | | 12/31/17 | | | 9/30/17 | | | 12/31/16 | | | 12/31/17 | | | 12/31/16 |
| | | | | | | | | | | | | | | | |
| Income Statement Data | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | | | $ | 9,717 | | | | $ | 9,446 | | | $ | 8,781 | | | | $ | 37,522 | | | | $ | 35,602 | |
| Interest expense | | | | | 1,716 | | | | | 1,659 | | | | 1,465 | | | | | 6,405 | | | | | 5,981 | |
| Net interest income | | | | | 8,001 | | | | | 7,787 | | | | 7,316 | | | | | 31,117 | | | | | 29,621 | |
| Provision (negative provision) for loan losses | | | | | (800 | ) | | | | — | | | | (550 | ) | | | | (800 | ) | | | | (2,450 | ) |
| Net interest income after provision | | | | | 8,801 | | | | | 7,787 | | | | 7,866 | | | | | 31,917 | | | | | 32,071 | |
| | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | | | 636 | | | | | 568 | | | | 536 | | | | | 2,253 | | | | | 1,958 | |
| Bank card interchange fees | | | | | 259 | | | | | 245 | | | | 212 | | | | | 972 | | | | | 849 | |
| Other real estate owned income | | | | | — | | | | | — | | | | 5 | | | | | — | | | | | 456 | |
| Bank owned life insurance income | | | | | 103 | | | | | 103 | | | | 101 | | | | | 412 | | | | | 417 | |
| Gains (losses) on sales and calls of securities, net | | | | | 293 | | | | | — | | | | 29 | | | | | 288 | | | | | 216 | |
| Other | | | | | 207 | | | | | 266 | | | | 233 | | | | | 930 | | | | | 868 | |
| Non-interest income | | | | | 1,498 | | | | | 1,182 | | | | 1,116 | | | | | 4,855 | | | | | 4,764 | |
| | | | | | | | | | | | | | | | | | | | | |
| Salaries & employee benefits | | | | | 3,657 | | | | | 3,683 | | | | 3,884 | | | | | 15,090 | | | | | 15,508 | |
| Occupancy and equipment | | | | | 919 | | | | | 836 | | | | 1,013 | | | | | 3,420 | | | | | 3,517 | |
| Professional fees | | | | | 202 | | | | | 232 | | | | 317 | | | | | 978 | | | | | 1,568 | |
| Marketing expense | | | | | 218 | | | | | 364 | | | | 267 | | | | | 1,098 | | | | | 973 | |
| FDIC insurance | | | | | 357 | | | | | 356 | | | | 202 | | | | | 1,412 | | | | | 1,660 | |
| Data processing expense | | | | | 325 | | | | | 321 | | | | 298 | | | | | 1,256 | | | | | 1,185 | |
| State franchise and deposit tax | | | | | 281 | | | | | 225 | | | | 200 | | | | | 956 | | | | | 965 | |
| Other real estate owned expense | | | | | 1,881 | | | | | 111 | | | | 257 | | | | | 1,973 | | | | | 1,541 | |
| Litigation and loan collection expense | | | | | 58 | | | | | 78 | | | | 8,230 | | | | | 179 | | | | | 8,805 | |
| Other | | | | | 1,030 | | | | | 969 | | | | 952 | | | | | 3,856 | | | | | 3,845 | |
| Non-interest expense | | | | | 8,928 | | | | | 7,175 | | | | 15,620 | | | | | 30,218 | | | | | 39,567 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income (loss) before income taxes | | | | | 1,371 | | | | | 1,794 | | | | (6,638 | ) | | | | 6,554 | | | | | (2,732 | ) |
| Income tax expense (benefit) | | | | | (31,899 | ) | | | | — | | | | — | | | | | (31,899 | ) | | | | 21 | |
| Net income (loss) | | | | | 33,270 | | | | | 1,794 | | | | (6,638 | ) | | | | 38,453 | | | | | (2,753 | ) |
| Less: | | | | | | | | | | | | | | | | | | | | | |
| Earnings (loss) allocated to participating securities | | | | | 797 | | | | | 45 | | | | (202 | ) | | | | 967 | | | | | (88 | ) |
| Net income (loss) attributable to common | | | | $ | 32,473 | | | | $ | 1,749 | | | $ | (6,436 | ) | | | $ | 37,486 | | | | $ | (2,665 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares – Basic | | | | | 6,109,991 | | | | | 6,102,452 | | | | 6,035,403 | | | | | 6,091,932 | | | | | 5,788,713 | |
| Weighted average shares – Diluted | | | | | 6,109,991 | | | | | 6,102,452 | | | | 6,035,403 | | | | | 6,091,932 | | | | | 5,788,713 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic earnings (loss) per common share | | | | $ | 5.31 | | | | $ | 0.29 | | | $ | (1.07 | ) | | | $ | 6.15 | | | | $ | (0.46 | ) |
| Diluted earnings (loss) per common share | | | | $ | 5.31 | | | | $ | 0.29 | | | $ | (1.07 | ) | | | $ | 6.15 | | | | $ | (0.46 | ) |
| Cash dividends declared per common share | | | | $ | 0.00 | | | | $ | 0.00 | | | $ | 0.00 | | | | $ | 0.00 | | | | $ | 0.00 | |
| |
| |
| |
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data) |
| |
| | | | Three Months Ended | | | Years Ended |
| | | | 12/31/17 | | | 9/30/17 | | | 12/31/16 | | | 12/31/17 | | | 12/31/16 |
| | | | | | | | | | | | | | | | |
| Average Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | |
| Assets | | | | $ | 960,269 | | | | $ | 951,687 | | | | $ | 925,721 | | | | $ | 947,961 | | | | $ | 929,140 | |
| Loans | | | | | 695,646 | | | | | 669,592 | | | | | 619,640 | | | | | 667,474 | | | | | 621,275 | |
| Earning assets | | | | | 916,561 | | | | | 907,723 | | | | | 878,470 | | | | | 904,069 | | | | | 875,262 | |
| Deposits | | | | | 862,625 | | | | | 870,623 | | | | | 847,168 | | | | | 864,278 | | | | | 852,717 | |
| Long-term debt and advances | | | | | 50,335 | | | | | 36,046 | | | | | 27,753 | | | | | 38,057 | | | | | 27,675 | |
| Interest bearing liabilities | | | | | 774,507 | | | | | 777,597 | | | | | 748,159 | | | | | 773,247 | | | | | 760,656 | |
| Stockholders’ equity | | | | | 41,397 | | | | | 39,159 | | | | | 42,696 | | | | | 37,851 | | | | | 39,423 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | | | 13.75 | % | | | | 0.75 | % | | | | (2.85 | )% | | | | 4.06 | % | | | | (0.30 | )% |
| Return on average equity | | | | | 318.85 | | | | | 18.18 | | | | | (61.85 | ) | | | | 101.59 | | | | | (6.98 | ) |
| Yield on average earning assets (tax equivalent) | | | | | 4.24 | | | | | 4.16 | | | | | 4.01 | | | | | 4.18 | | | | | 4.11 | |
| Cost of interest bearing liabilities | | | | | 0.88 | | | | | 0.85 | | | | | 0.78 | | | | | 0.83 | | | | | 0.79 | |
| Net interest margin (tax equivalent) | | | | | 3.50 | | | | | 3.44 | | | | | 3.35 | | | | | 3.48 | | | | | 3.42 | |
| Efficiency ratio | | | | | 96.98 | | | | | 80.00 | | | | | 185.89 | | | | | 84.68 | | | | | 115.80 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Loan Charge-off Data | | | | | | | | | | | | | | | | | | | | | |
| Loans charged-off | | | | $ | (226 | ) | | | $ | (67 | ) | | | $ | (547 | ) | | | $ | (901 | ) | | | $ | (2,629 | ) |
| Recoveries | | | | | 201 | | | | | 159 | | | | | 575 | | | | | 936 | | | | | 2,005 | |
| Net recoveries (charge-offs) | | | | $ | 25 | | | | $ | 92 | | | | $ | 28 | | | | $ | 35 | | | | $ | (624 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual Loan Activity | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans at beginning of period | | | | $ | 5,769 | | | | $ | 6,509 | | | | $ | 10,099 | | | | $ | 9,216 | | | | $ | 14,087 | |
| Net principal pay-downs | | | | | (488 | ) | | | | (1,068 | ) | | | | (1,251 | ) | | | | (4,952 | ) | | | | (5,286 | ) |
| Charge-offs | | | | | (137 | ) | | | | (57 | ) | | | | (434 | ) | | | | (665 | ) | | | | (1,725 | ) |
| Loans foreclosed and transferred to OREO | | | | | — | | | | | (130 | ) | | | | (30 | ) | | | | (270 | ) | | | | (1,273 | ) |
| Loans returned to accrual status | | | | | — | | | | | — | | | | | (283 | ) | | | | (199 | ) | | | | (1,034 | ) |
| Loans placed on nonaccrual during the period | | | | | 313 | | | | | 515 | | | | | 1,115 | | | | | 2,327 | | | | | 4,447 | |
| Nonaccrual loans at end of period | | | | $ | 5,457 | | | | $ | 5,769 | | | | $ | 9,216 | | | | $ | 5,457 | | | | $ | 9,216 | |
Troubled Debt Restructurings (TDRs) | | | | | | | | | | | | | | | | | | | | | |
| Accruing | | | | $ | 1,217 | | | | $ | 1,226 | | | | $ | 5,350 | | | | $ | 1,217 | | | | $ | 5,350 | |
| Nonaccrual | | | | | 1,829 | | | | | 1,932 | | | | | 3,374 | | | | | 1,829 | | | | | 3,374 | |
| Total | | | | $ | 3,046 | | | | $ | 3,158 | | | | $ | 8,724 | | | | $ | 3,046 | | | | $ | 8,724 | |
| | | | | | | | | | | | | | | | | | | | | |
| Other Real Estate Owned (OREO) Activity | | | | | | | | | | | | | | | | |
| OREO at beginning of period | | | | $ | 6,330 | | | | $ | 6,318 | | | | $ | 7,098 | | | | $ | 6,821 | | | | $ | 19,214 | |
| Real estate acquired | | | | | — | | | | | 130 | | | | | 30 | | | | | 270 | | | | | 1,273 | |
| Valuation adjustment write-downs | | | | | (1,865 | ) | | | | (98 | ) | | | | (210 | ) | | | | (1,963 | ) | | | | (1,180 | ) |
| Proceeds from sales of properties | | | | | (55 | ) | | | | (30 | ) | | | | (98 | ) | | | | (793 | ) | | | | (12,708 | ) |
| Gain (loss) on sales, net | | | | | (1 | ) | | | | 10 | | | | | 1 | | | | | 74 | | | | | 222 | |
| OREO at end of period | | | | $ | 4,409 | | | | $ | 6,330 | | | | $ | 6,821 | | | | $ | 4,409 | | | | $ | 6,821 | |
| |
| |
| |
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data) |
| |
| | | | As of |
| | | | 12/31/17 | | | 9/30/17 | | | 6/30/17 | | | 3/31/17 | | | 12/31/16 |
| | | | | | | | | | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | | | | | | | |
| Loans | | | | $ | 712,115 | | | | $ | 682,511 | | | | $ | 654,938 | | | | $ | 664,183 | | | | $ | 639,236 | |
| Allowance for loan losses | | | | | (8,202 | ) | | | | (8,977 | ) | | | | (8,885 | ) | | | | (8,966 | ) | | | | (8,967 | ) |
| Net loans | | | | | 703,913 | | | | | 673,534 | | | | | 646,053 | | | | | 655,217 | | | | | 630,269 | |
| Loans held for sale | | | | | 70 | | | | | — | | | | | — | | | | | — | | | | | — | |
| Securities held to maturity | | | | | — | | | | | 41,424 | | | | | 41,635 | | | | | 41,752 | | | | | 41,818 | |
| Securities available for sale | | | | | 152,720 | | | | | 149,797 | | | | | 154,993 | | | | | 156,001 | | | | | 152,790 | |
| Federal funds sold & interest bearing deposits | | | | | 25,966 | | | | | 37,812 | | | | | 51,413 | | | | | 32,329 | | | | | 56,867 | |
| Cash and due from financial institutions | | | | | 8,137 | | | | | 9,557 | | | | | 9,297 | | | | | 5,456 | | | | | 9,449 | |
| Premises and equipment | | | | | 16,789 | | | | | 16,975 | | | | | 17,164 | | | | | 17,687 | | | | | 17,848 | |
| Bank owned life insurance | | | | | 15,229 | | | | | 15,131 | | | | | 15,033 | | | | | 14,935 | | | | | 14,838 | |
| FHLB Stock | | | | | 7,323 | | | | | 7,323 | | | | | 7,323 | | | | | 7,323 | | | | | 7,323 | |
| Other real estate owned | | | | | 4,409 | | | | | 6,330 | | | | | 6,318 | | | | | 6,571 | | | | | 6,821 | |
| Deferred taxes, net | | | | | 31,313 | | | | | — | | | | | — | | | | | — | | | | | — | |
| Accrued interest receivable and other assets | | | | | 4,932 | | | | | 5,082 | | | | | 5,228 | | | | | 5,083 | | | | | 7,154 | |
| Total Assets | | | | $ | 970,801 | | | | $ | 962,965 | | | | $ | 954,457 | | | | $ | 942,354 | | | | $ | 945,177 | |
| | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Equity | | | | | | | | | | | | | | | | | | | | | |
| Certificates of deposit | | | | $ | 424,235 | | | | $ | 445,577 | | | | $ | 458,068 | | | | $ | 470,029 | | | | $ | 444,639 | |
| Interest checking | | | | | 99,383 | | | | | 94,523 | | | | | 97,169 | | | | | 104,811 | | | | | 103,876 | |
| Money market | | | | | 151,388 | | | | | 156,905 | | | | | 153,700 | | | | | 122,434 | | | | | 142,497 | |
| Savings | | | | | 34,632 | | | | | 35,946 | | | | | 36,363 | | | | | 36,380 | | | | | 34,518 | |
| Total interest bearing deposits | | | | | 709,638 | | | | | 732,951 | | | | | 745,300 | | | | | 733,654 | | | | | 725,530 | |
| Demand deposits | | | | | 137,386 | | | | | 133,896 | | | | | 129,518 | | | | | 127,049 | | | | | 124,395 | |
| Total deposits | | | | | 847,024 | | | | | 866,847 | | | | | 874,818 | | | | | 860,703 | | | | | 849,925 | |
| FHLB advances | | | | | 11,797 | | | | | 16,847 | | | | | 2,158 | | | | | 17,313 | | | | | 22,458 | |
| Junior subordinated debentures | | | | | 23,250 | | | | | 23,475 | | | | | 23,700 | | | | | 23,925 | | | | | 24,150 | |
| Senior debt | | | | | 10,000 | | | | | 10,000 | | | | | 10,000 | | | | | — | | | | | — | |
| Accrued interest payable and other liabilities | | | | | 6,057 | | | | | 5,728 | | | | | 5,388 | | | | | 4,908 | | | | | 15,911 | |
| Total liabilities | | | | | 898,128 | | | | | 922,897 | | | | | 916,064 | | | | | 906,849 | | | | | 912,444 | |
| | | | | | | | | | | | | | | | | | | | | |
| Preferred stockholders’ equity | | | | | 2,771 | | | | | 2,771 | | | | | 2,771 | | | | | 2,771 | | | | | 2,771 | |
| Common stockholders’ equity | | | | | 69,902 | | | | | 37,297 | | | | | 35,622 | | | | | 32,734 | | | | | 29,962 | |
| Total stockholders’ equity | | | | | 72,673 | | | | | 40,068 | | | | | 38,393 | | | | | 35,505 | | | | | 32,733 | |
| Total Liabilities and Stockholders’ Equity | | | | $ | 970,801 | | | | $ | 962,965 | | | | $ | 954,457 | | | | $ | 942,354 | | | | $ | 945,177 | |
| | | | | | | | | | | | | | | | | | | | | |
| Ending shares outstanding | | | | | 6,259,864 | | | | | 6,259,864 | | | | | 6,259,864 | | | | | 6,247,520 | | | | | 6,224,533 | |
| Book value per common share | | | | $ | 11.17 | | | | $ | 5.96 | | | | $ | 5.69 | | | | $ | 5.24 | | | | $ | 4.81 | |
| Tangible book value per common share | | | | | 11.17 | | | | | 5.96 | | | | | 5.69 | | | | | 5.23 | | | | | 4.79 | |
| |
| |
| |
PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data) |
| |
| | | | As of |
| | | | 12/31/17 | | | 9/30/17 | | | 6/30/17 | | | 3/31/17 | | | 12/31/16 |
| Asset Quality Data | | | | | | | | | | | | | | | | | | | | | |
| Loan 90 days or more past due still on accrual | | | | $ | 1 | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | |
| Nonaccrual loans | | | | | 5,457 | | | | | 5,769 | | | | | 6,509 | | | | | 8,102 | | | | | 9,216 | |
| Total non-performing loans | | | | | 5,458 | | | | | 5,769 | | | | | 6,509 | | | | | 8,102 | | | | | 9,216 | |
| Real estate acquired through foreclosures | | | | | 4,409 | | | | | 6,330 | | | | | 6,318 | | | | | 6,571 | | | | | 6,821 | |
| Other repossessed assets | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
| Total non-performing assets | | | | $ | 9,867 | | | | $ | 12,099 | | | | $ | 12,827 | | | | $ | 14,673 | | | | $ | 16,037 | |
| | | | | | | | | | | | | | | | | | | | | |
| Non-performing loans to total loans | | | | | 0.77 | % | | | | 0.85 | % | | | | 0.99 | % | | | | 1.22 | % | | | | 1.44 | % |
| Non-performing assets to total assets | | | | | 1.02 | | | | | 1.26 | | | | | 1.34 | | | | | 1.56 | | | | | 1.70 | |
| Allowance for loan losses to non-performing loans | | | | | 150.27 | | | | | 155.61 | | | | | 136.50 | | | | | 110.66 | | | | | 97.30 | |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loans evaluated individually | | | | $ | 219 | | | | $ | 425 | | | | $ | 254 | | | | $ | 332 | | | | $ | 399 | |
| Loans evaluated individually for impairment | | | | | 7,173 | | | | | 7,509 | | | | | 8,273 | | | | | 9,891 | | | | | 15,131 | |
| Allowance as % of loans evaluated individually | | | | | 3.05 | % | | | | 5.66 | % | | | | 3.07 | % | | | | 3.36 | % | | | | 2.64 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loans evaluated collectively | | | | $ | 7,983 | | | | $ | 8,552 | | | | $ | 8,631 | | | | $ | 8,634 | | | | $ | 8,568 | |
| Loans evaluated collectively for impairment | | | | | 704,942 | | | | | 675,002 | | | | | 646,665 | | | | | 654,292 | | | | | 624,105 | |
| Allowance as % of loans evaluated collectively | | | | | 1.13 | % | | | | 1.27 | % | | | | 1.33 | % | | | | 1.32 | % | | | | 1.37 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses to total loans | | | | | 1.15 | % | | | | 1.32 | % | | | | 1.36 | % | | | | 1.35 | % | | | | 1.40 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Loans by Risk Category | | | | | | | | | | | | | | | | | | | | | |
| Pass | | | | $ | 673,033 | | | | $ | 633,203 | | | | $ | 610,356 | | | | $ | 617,361 | | | | $ | 586,430 | |
| Watch | | | | | 25,715 | | | | | 35,167 | | | | | 29,433 | | | | | 26,442 | | | | | 30,431 | |
| Special Mention | | | | | 164 | | | | | 598 | | | | | 604 | | | | | 492 | | | | | 497 | |
| Substandard | | | | | 13,203 | | | | | 13,543 | | | | | 14,545 | | | | | 19,888 | | | | | 21,878 | |
| Doubtful | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
| Total | | | | $ | 712,115 | | | | $ | 682,511 | | | | $ | 654,938 | | | | $ | 664,183 | | | | $ | 639,236 | |
| | | | | | | | | | | | | | | | | | | | | |
| Risk-based Capital Ratios - Company | | | | | | | | | | | | | | | | | | | | | |
| Tier I leverage ratio | | | | | 7.11 | % | | | | 5.85 | % | | | | 5.65 | % | | | | 5.43 | % | | | | 5.27 | % |
| Common equity Tier I risk-based capital ratio | | | | | 6.92 | | | | | 5.49 | | | | | 5.58 | | | | | 5.29 | | | | | 5.20 | |
| Tier I risk-based capital ratio | | | | | 8.44 | | | | | 7.31 | | | | | 7.46 | | | | | 7.09 | | | | | 6.99 | |
| Total risk-based capital ratio | | | | | 10.55 | | | | | 10.05 | | | | | 10.44 | | | | | 10.15 | | | | | 10.21 | |
| | | | | | | | | | | | | | | | | | | | | |
| Risk-based Capital Ratios – PBI Bank | | | | | | | | | | | | | | | | | | | | | |
| Tier I leverage ratio | | | | | 8.70 | % | | | | 7.73 | % | | | | 7.54 | % | | | | 6.37 | % | | | | 6.24 | % |
| Common equity Tier I risk-based capital ratio | | | | | 10.35 | | | | | 9.66 | | | | | 9.97 | | | | | 8.33 | | | | | 8.28 | |
| Tier I risk-based capital ratio | | | | | 10.35 | | | | | 9.66 | | | | | 9.97 | | | | | 8.33 | | | | | 8.28 | |
| Total risk-based capital ratio | | | | | 11.61 | | | | | 11.10 | | | | | 11.50 | | | | | 9.89 | | | | | 9.88 | |
| | | | | | | | | | | | | | | | | | | | | |
| FTE employees | | | | | 217 | | | | | 217 | | | | | 221 | | | | | 230 | | | | | 238 | |
Non-GAAP Financial Measures Reconciliation
Tangible book value per common share is a non-GAAP financial measure derived from GAAP-based amounts. Tangible book value per common share is calculated by excluding the balance of intangible assets from common stockholders’ equity. Tangible book value per common share is calculated by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which is calculated by dividing common stockholders’ equity by common shares outstanding. Management believes this is consistent with bank regulatory agency treatment, which excludes tangible assets from the calculation of risk-based capital.
The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. The efficiency ratio is calculated by dividing total non-interest expenses as determined under GAAP by net interest income and total non-interest income, but excluding net gains on the sale of securities from the calculation. Management believes this provides a reasonable measure of primary banking expenses relative to primary banking revenue.
| | | | As of |
| | | | 12/31/17 | | | 9/30/17 | | | 6/30/17 | | | 3/31/17 | | | 12/31/16 |
| Tangible Book Value Per Share | | | | (in thousands, except share and per share data) |
| | | | |
| Common stockholder’s equity | | | | $ | 69,902 | | | | $ | 37,297 | | | | $ | 35,622 | | | | $ | 32,734 | | | | $ | 29,962 | |
| Less: Intangible assets | | | | | — | | | | | — | | | | | — | | | | | 42 | | | | | 140 | |
| Tangible common equity | | | | | 69,902 | | | | | 37,297 | | | | | 35,622 | | | | | 32,692 | | | | | 29,822 | |
| | | | | | | | | | | | | | | | | | | | | |
| Shares outstanding | | | | | 6,259,864 | | | | | 6,259,864 | | | | | 6,259,864 | | | | | 6,247,520 | | | | | 6,224,533 | |
| Tangible book value per common share | | | | $ | 11.17 | | | | $ | 5.96 | | | | $ | 5.69 | | | | $ | 5.23 | | | | $ | 4.79 | |
| Book value per common share | | | | | 11.17 | | | | | 5.96 | | | | | 5.69 | | | | | 5.24 | | | | | 4.81 | |
| |
| |
| |
| | | | Three Months Ended | | | Year Ended |
| | | | 12/31/17 | | | 9/30/17 | | | 12/31/16 | | | 12/31/17 | | | 12/31/16 |
| Efficiency Ratio | | | | (in thousands) |
| | | | |
| Net interest income | | | | $ | 8,001 | | | | $ | 7,787 | | | | $ | 7,316 | | | | $ | 31,117 | | | | $ | 29,621 | |
| Non-interest income | | | | | 1,498 | | | | | 1,182 | | | | | 1,116 | | | | | 4,855 | | | | | 4,764 | |
| Less: Net gain (loss) on securities | | | | | 293 | | | | | — | | | | | 29 | | | | | 288 | | | | | 216 | |
| Revenue used for efficiency ratio | | | | | 9,206 | | | | | 8,969 | | | | | 8,403 | | | | | 35,684 | | | | | 34,169 | |
| Non-interest expense | | | | | 8,928 | | | | | 7,175 | | | | | 15,620 | | | | | 30,218 | | | | | 39,567 | |
| | | | | | | | | | | | | | | | | | | | | |
| Efficiency ratio | | | | | 96.98 | % | | | | 80.00 | % | | | | 185.89 | % | | | | 84.68 | % | | | | 115.80 | % |
| |
| |
| |
CONTACT:
Porter Bancorp, Inc.
John T. Taylor, 502-499-4800
Chief Executive Officer
