Porter Bancorp, Inc. (NASDAQ:PBIB) on the Rise as it Reports 3rd Quarter 2016 Net Income of $1.3 million

Parent company of PBI Bank, Porter Bancorp, Inc. (NASDAQ:PBIB), announces results of unaudited reports for Q3, 2016.

Porter Bancorp, Inc. (PBIB), parent company of PBI Bank, today reported unaudited results for the third quarter of 2016.

The Company reported that net income available to common shareholders for the third quarter of 2016 was $1.3 million, or $0.04 per basic and diluted common share, compared with net loss attributable to common shareholders of $1.0 million, or ($0.04) per basic and diluted share, for the third quarter of 2015. Net income available to common shareholders for the nine months ended September 30, 2016, was $3.8 million, or $0.13 per diluted common share, compared with net loss attributable to common shareholders of $2.3 million, or ($0.10) per diluted share, for the nine months ended September 30, 2015.

John T. Taylor, President and CEO of the Company noted, “More progress was made in the third quarter in reducing the overall levels of non-performing assets. Non-performing assets were reduced by $6.7 million from the previous quarter end and $16.1 million or 48% from the previous year end. We are also pleased to see a third consecutive profitable quarter supported by increasing net interest income versus the previous quarter.”

Net Interest Income – Net interest income increased to $7.5 million for the third quarter of 2016 compared to $7.2 million in the second quarter of 2016 and $7.5 million in the third quarter of 2015. Average loans increased to $626.1 million for the third quarter of 2016 compared with $619.3 million in the second quarter of 2016, and declined compared to $640.0 million in the third quarter of 2015. Net interest margin increased to 3.47% in the third quarter of 2016 compared to 3.34% in the second quarter of 2016 and 3.33% in the third quarter of 2015.

Our yield on earning assets increased to 4.15% in the third quarter of 2016 compared to 4.03% in the second quarter of 2016 and 4.07% in the third quarter of 2015. Our cost of funds was 0.78% in the third quarter of 2016 compared to 0.79% in the second quarter of 2016 and improved from 0.83% in the third quarter of 2015.

Allowance for Loan Losses and Recovery of Provision – The allowance for loan losses to total loans was 1.53% at September 30, 2016, compared to 1.62% at June 30, 2016, and 2.27% at September 30, 2015. The declining level of the allowance is primarily driven by declining charge-off levels and improving trends in credit quality. Net loan recoveries were $135,000 for the third quarter of 2016, compared to net charge-offs of $636,000 for the second quarter of 2016 and net charge-offs of $411,000 for the third quarter of 2015. The allowance for loan losses for loans evaluated collectively for impairment was 1.51% at September 30, 2016, compared with 1.66% at June 30, 2016, and 2.33% at September 30, 2015.

Because of ongoing improvements in asset quality and management’s assessment of risk in the loan portfolio, a negative provision of $750,000 was recorded for the third quarter of 2016, compared to a negative provision of $600,000 for the second quarter of 2016 and negative provision of $2.2 million in the third quarter of 2015.

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 $17.2 million, or 1.88% of total assets at September 30, 2016, compared with $23.9 million, or 2.61% of total assets at June 30, 2016, and $46.2 million, or 4.85% of total assets at September 30, 2015.

Non-performing loans decreased to $10.1 million, or 1.62% of total loans, at September 30, 2016, compared with $11.6 million, or 1.86% of total loans at June 30, 2016, and $17.0 million, or 2.72% of total loans at September 30, 2015. The decrease from the previous quarter was primarily driven by $592,000 in principal payments received on nonaccrual loans, $667,000 of nonaccrual loans migrating to OREO, and $303,000 of charge-offs.

OREO at September 30, 2016, decreased to $7.1 million, compared with $12.3 million at June 30, 2016, and $29.2 million at September 30, 2015. The Company acquired $667,000 in OREO and sold $5.6 million in OREO during the third quarter of 2016. Fair value write-downs arising from lower marketing prices or new appraisals totaled $320,000 in the third quarter of 2016 compared with $150,000 in the second quarter of 2016 and $4.5 million in the third quarter of 2015.

In addition to nonaccrual loans and OREO, loans classified as Troubled Debt Restructures (TDRs) and on accrual totaled $6.1 million at September 30, 2016, compared to $13.9 million at June 30, 2016, and $17.7 million at September 30, 2015.

Non-interest Income – Non-interest income decreased $47,000 to $1.1 million for the third quarter of 2016 compared with $1.2 million for the second quarter of 2016, and decreased $1.1 million compared with $2.2 million for the third quarter of 2015. The decrease in non-interest income from the third quarter of 2015 is due to the gain on extinguishment of junior subordinated debt of $883,000 recognized in 2015. Additionally, OREO income has continued to decline as income producing properties have been sold.

Non-interest Expense – Non-interest expense was unchanged at $7.9 million for the third quarter of 2016 compared to the second quarter of 2016, and decreased $5.0 million compared with $13.0 million for the third quarter of 2015. The decrease from the third quarter of 2015 was due to a decrease in OREO expense as a result of fewer write-downs during the third quarter of 2016.

Capital – On April 15, 2016, we completed a $5.03 million stock offering to accredited investors in a private placement transaction in which we issued 2,300,000 Common Shares and 1,100,000 Non-Voting Common Shares. Approximately $2.8 million of the proceeds were directed by the investors to make interest payments on the outstanding capital securities of the Company’s subsidiary trusts, which brought interest payments current through the second quarter of 2016. Also from the proceeds, the Company made a $500,000 capital contribution to PBI Bank and the balance of the proceeds will be used for general corporate purposes.

At September 30, 2016, PBI Bank’s Tier 1 leverage ratio was 6.97% compared with 6.65% at June 30, 2016, and its Total risk-based capital ratio was 11.18% at September 30, 2016, compared with 10.87% at June 30, 2016, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order. At September 30, 2016, Porter Bancorp’s leverage ratio was 6.21% compared with 5.87% at June 30, 2016, and its Total risk-based capital ratio was 11.57%, compared with 11.31% at June 30, 2016. At September 30, 2016, PBI Bank’s Common Equity Tier I risk-based capital ratio was 9.53% and Porter Bancorp’s Common Equity Tier I risk-based capital ratio was 6.37%.

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.

Original Source

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Porter Bancorp, Inc. (NASDAQ:PBIB) shares are trading +3.66% on the news and in the range of $1.64 – 1.78 during the current trading session.  When taking a look at which direction the stock might be headed, investors often look to brokerage analysts who cover the stock.  Sell-side research firms on Wall Street currently have a consensus one-year price target of $1.50 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.

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Sell-side analysts are projecting earnings per share of $0.00 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-0.30 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading +4.35% away from its 50-day moving average of $1.63.  Based on the most recent available data, the equity is -33.33% off of its 52-week high of $2.55 and +55.96% away from its 52-week low which is $1.09.

In taking a look at the company’s valuation, the firm’s price to earnings ratio stands at 56.67.  Today, the stock opened at $1.64 and the last bid at the time of writing stood at $1.70.  During the session thus far, the equity dipped down to $1.64 and touched $1.78 as the high point.  Porter Bancorp, Inc. (NASDAQ:PBIB) has a market cap of $51.07M and has seen an average daily volume of 22,063 over the past three months.

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