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