Exhibit 99.1
Porter Bancorp, Inc. Announces First Quarter 2007 Results
LOUISVILLE, Ky.--(BUSINESS WIRE)--April 26, 2007--Porter Bancorp,
Inc. (NASDAQ: PBIB), parent company of PBI Bank, with offices in
Louisville, Shepherdsville, Glasgow, Bowling Green and throughout
central Kentucky, today reported results for the first quarter ended
March 31, 2007. The Company reported net income for the first quarter
of 2007 of $3.6 million, or $0.47 per share, compared with $3.4
million, or $0.54 per share, for the first quarter of 2006.
Highlights
-- Net income increased 5.8% to $3.6 million for the first
quarter of 2007 compared with $3.4 million for the first
quarter of 2006.
-- Total assets increased 14.1% to $1.12 billion since the first
quarter of 2006.
-- Loans grew 14.7% to $926.7 million compared with the first
quarter of 2006.
-- Deposits grew 10.8% since the first quarter of 2006. The
Bank's core customer non-interest bearing deposit accounts
increased from $59.8 million to $65.5 million, or 9.5%, during
the quarter.
-- The efficiency ratio for the first quarter of 2007 improved to
45.4% from 48.1% in the first quarter of 2006.
-- We expanded our presence to Bowling Green, Kentucky by opening
a loan production office during March 2007 and recruiting an
experienced lending and product team with an established
customer base.
"Loan growth accelerated in the first quarter with an 8.5%
increase in our loan portfolio from year end," stated Maria L.
Bouvette, President and CEO of Porter Bancorp, Inc. "We benefited from
increased demand across our markets and expect our new loan production
office in Bowling Green to contribute to further loan growth in 2007.
During the first quarter, we implemented our deposit growth
initiatives, which we believe contributed to our 9.5% increase in core
customer non-interest bearing deposits during the first quarter. We
believe the new deposit growth initiatives will be an important part
in funding future loan growth and improving margins in the future."
Net Interest Income
Net interest income was $9.7 million for the three months ended
March 31, 2007, an increase of $700,000, or 7.7%, compared with $9.0
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 first quarter of 2007 remained strong
at 3.92% compared with 3.95% for the first quarter of 2006. On a
linked quarter basis, net interest margin increased 2 basis points
over our margin of 3.90% in the fourth quarter of 2006. We believe
that our asset/liability management strategies have us well positioned
in this flattened yield curve environment and should serve us well
should the Federal Reserve raise or lower short-term interest rates.
Non-Interest Income
Non-interest income was $1.2 million in the first quarter of 2007
compared with $1.4 million in the first quarter of 2006. The decrease
in non-interest income was primarily attributable to decreased gains
on the sale of government guaranteed loans. Government guaranteed loan
sales are cyclical in nature and require significant lead times. We
also experienced a decrease in service charges on deposit accounts.
This decrease was a result of changes in product fee structures that
the Company believes will make certain products more competitive,
thereby increasing product sales over time.
Non-Interest Expense
Non-interest expense decreased $54,000, or 1.1%, in the first
quarter of 2007 compared with the first quarter of 2006. The decrease
in non-interest expense was primarily attributable to reduced
occupancy, equipment, and communications expenses, and was partially
offset by slight increases in salaries and employee benefits. Our
diligent focus on expense control resulted in an improved efficiency
ratio of 45.4% for the first quarter of 2007 compared with 48.1% for
the first quarter of 2006. Our efficiency ratio could increase
modestly in future quarters as we make investments to grow into new
markets.
Balance Sheet Review
Total assets increased 6.5% to $1.12 billion at March 31, 2007,
from $1.05 billion at December 31, 2006. The Company's loan portfolio
increased 8.5% to $926.7 million from $854.4 million at December 31,
2006, primarily due to in-house loan origination efforts of our
lending staff. Deposits at March 31, 2007, increased 4.1% to $897.5
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. The core customer
non-interest bearing deposit account growth of $5.7 million during the
quarter is attributable to our new deposit growth focus which includes
new incentives for our employees and product improvements.
Total assets increased $68.7 million during the quarter. Net loans
increased $72.0 million and cash, federal funds sold and interest
bearing deposits decreased $5.7 million. Asset growth was funded by
growth in money market deposit accounts of $18.2 million, certificates
of deposit accounts of $16.3 million, and Federal Home Loan Bank
advances of $29.4 million.
Asset Quality
Nonperforming loans at March 31, 2007, were $8.3 million, or 0.89%
of total loans, compared with $8.6 million, or 1.06% of total loans at
March 31, 2006, and $8.9 million, or 1.05% of total loans at December
31, 2006. The decrease of $678,000 in nonperforming loans from
December 31, 2006 to March 31, 2007, is primarily attributable to our
collection efforts via foreclosure and collateral repossession.
Foreclosed properties at March 31, 2007, were $2.7 million
compared with $1.9 million at March 31, 2006, and $2.4 million at
December 31, 2006. The increase in foreclosed properties reflects the
normal progression of troubled loans through workout, collateral
repossession, and ultimate disposition. We value foreclosed properties
at fair or net recoverable value when acquired and expect to liquidate
these properties to recover our investment in the due course of
business.
Our loan loss reserve as a percentage of total loans at March 31,
2007, decreased to 1.43% from 1.56% at March 31, 2006, and 1.50% at
December 31, 2006. Provision for loan losses increased $249,000 to
$625,000 for the first quarter of 2007 compared with the first quarter
of 2006 and $249,000 compared with the fourth quarter of 2006. The
loan loss provision for the first quarter of 2007 was unusually large
due to the outstanding growth in the loan portfolio requiring a larger
than usual provision to remain consistent with historical experience.
Net loan charge-offs for the first quarter of 2007 were $246,000, or
0.03% of total loans, compared with $6,000, or 0.001% for the first
quarter of 2006, and $199,000, or .02% for the fourth quarter of 2006.
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 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 first quarter
ending March 31, 2007 follows.
PORTER BANCORP, INC. AND SUBSIDIARY
Unaudited Financial Information
(in thousands, except share and per share data)
Three Three Three
Months Months Months
Ended Ended Ended
3/31/07 12/31/06 3/31/06
----------- ----------- -----------
Income Statement Data
Interest income $ 20,054 $ 19,365 $ 16,987
Interest expense 10,310 9,857 7,943
----------- ----------- -----------
Net interest income 9,744 9,508 9,044
Provision for loan losses 625 376 376
Service charges on deposit accounts 535 574 665
Gains on sales of government
guaranteed loans, net - - 99
Gains on sales of loans originated
for sale, net - - 111
Gains on sales of other assets, net 6 (28 ) 18
Other 635 637 473
----------- ----------- -----------
Non-interest income 1,176 1,183 1,366
Salaries & employee benefits 2,935 2,798 2,837
Occupancy and equipment 565 502 688
Franchise tax 325 267 273
Communications expense 110 107 146
Advertising 139 178 129
Write-off of unamortized debt issue
costs - 280 -
Other 882 713 937
----------- ----------- -----------
Non-interest expense 4,956 4,845 5,010
Income before income taxes 5,339 5,470 5,024
Income tax expense 1,738 1,773 1,621
----------- ----------- -----------
Net income $ 3,601 $ 3,697 $ 3,403
=========== =========== ===========
Weighted average shares (basic &
diluted) 7,582,819 7,582,447 6,332,447
Basic and diluted earnings per
share $ 0.47 $ 0.48 $ 0.54
Cash dividends declared per share $ 0.20 $ 0.20 $ 0.20
PORTER BANCORP, INC. AND SUBSIDIARY
Unaudited Financial Information
(in thousands, except share and per share data)
Three Three Three
Months Months Months
Ended Ended Ended
3/31/07 12/31/06 3/31/06
----------- ----------- ----------
Average Balance Sheet Data
Assets $1,066,894 $1,024,526 $ 987,381
Loans 891,591 835,265 797,919
Earning assets 1,016,964 974,539 938,684
Deposits 875,568 830,746 810,056
Long-term debt and advances 72,853 79,514 82,242
Interest bearing liabilities 881,771 847,865 841,488
Stockholders' equity 110,235 105,633 73,541
Performance Ratios
Return on average assets 1.37% 1.43% 1.40%
Return on average equity 13.25 13.89 18.77
Yield on average earning assets (tax
equivalent) 8.03 7.92 7.38
Cost of interest bearing liabilities 4.74 4.61 3.83
Net interest margin (tax equivalent) 3.92 3.90 3.95
Efficiency ratio 45.38 45.32 48.13
Loan Charge-off Data
Loans charged-off $ (314) $ (262) $ (77)
Recoveries 68 63 71
----------- ----------- ----------
Net charge-offs $ (246) $ (199) $ (6)
PORTER BANCORP, INC. AND SUBSIDIARY
Unaudited Financial Information
(in thousands, except share and per share data)
As of As of As of
3/31/07 12/31/06 3/31/06
----------- ----------- -----------
Assets
Loans $ 926,747 $ 854,367 $ 807,736
Loan loss reserve (13,211) (12,832) (12,567)
----------- ----------- -----------
Net loans 913,536 841,535 795,169
Securities available for sale 97,463 95,090 100,419
Federal funds sold & interest
bearing deposits 6,042 40,957 13,084
Cash and due from financial
institutions 44,553 15,306 15,792
Premises and equipment 13,808 13,774 14,254
Goodwill 12,881 12,881 12,881
Accrued interest receivable and
other assets 31,462 31,463 29,632
----------- ----------- -----------
Total Assets $1,119,745 $1,051,006 $ 981,231
=========== =========== ===========
Liabilities and Equity
Certificates of deposit $ 673,017 $ 656,691 $ 637,173
Interest checking 49,600 50,840 52,277
Money market 79,823 61,666 32,722
Savings 25,041 23,479 22,843
----------- ----------- -----------
Total interest bearing deposits 827,481 792,676 745,015
Demand deposits 69,998 69,180 64,949
----------- ----------- -----------
Total deposits 897,479 861,856 809,964
Federal funds purchased &
repurchase agreements 1,473 1,134 1,549
Notes payable - - 9,600
FHLB advances 77,007 47,562 53,569
Junior subordinated debentures 25,000 25,000 25,000
Accrued interest payable and other
liabilities 8,227 7,108 7,581
----------- ----------- -----------
Total liabilities 1,009,186 942,660 907,263
Stockholders' equity 110,559 108,346 73,968
----------- ----------- -----------
Total Liabilities and
Stockholders' Equity $1,119,745 $1,051,006 $ 981,231
=========== =========== ===========
Ending shares outstanding 7,621,647 7,622,447 6,372,047
Book value per share $ 14.51 $ 14.21 $ 11.61
Tangible book value per share 12.73 12.45 9.60
Asset Quality Data
Loan 90 days or more past due
still on accrual $ 769 $ 2,010 $ 2,728
Non-accrual loans 7,493 6,930 5,874
----------- ----------- -----------
Total non-performing loans 8,262 8,940 8,602
Real estate acquired through
foreclosures 2,702 2,415 1,926
Other repossessed assets 9 9 1
----------- ----------- -----------
Total non-performing assets $ 10,973 $ 11,364 $ 10,529
=========== =========== ===========
Non-performing loans to total
loans 0.89% 1.05% 1.06%
Non-performing assets to total
loans 1.18 1.33 1.30
Allowance for loan losses to non-
performing loans 159.90 143.53 146.09
Allowance for loan losses to total
loans 1.43 1.50 1.56
Risk-based Capital Ratios
Tier I leverage ratio 11.58% 11.86% 8.83%
Tier I risk-based capital ratio 13.42 14.32 10.89
Total risk-based capital ratio 14.67 15.57 12.16
FTE employees 221 218 221
PBIB-F
PBIB-G
CONTACT: Porter Bancorp, Inc.
Maria L. Bouvette, President and CEO, 502-499-4800