Porter Bancorp Net Losses Continues in Third Quarter
Porter Bancorp struggled in the third quarter reporting a net loss of $12.2 million.
For the year, the Louisville, Ky.-based bank's shareholders have lost $50.8 million.
Maria Bouvette, president and CEO of Porter Bancorp, said the third-quarter loss occurred because of a $15.3 million writedown of other real estate owned properties and an $8 million provision for loan losses.
“We remain focused on aggressively reducing our problem assets in light of the sluggish economic recovery, continued weakness in local real estate activity and declining values of real estate in certain market sectors,” Bouvette said. “We believe this strategic focus will be a key part in improving our long-term profitability.”
Porter Bancorp's strategy to reduce problem assets has resulted in two consecutive quarterly reductions in nonperforming loans and nonperforming assets and the fourth straight quarterly decrease in OREO.
Nonperforming loans decreased to $59.8 million, approximately 5% of the total loans through the third quarter. At the end of the second quarter, these same loans were valued at $61.5 million, about 4.9% of total loans.
Nonperforming assets fell quarter-over-quarter from $111.4 million to $104.7 million, representing 6.6% of the total assets at the end of the third quarter.
Real estate acquired through forecloses declined to $44.9 million last quarter compared to $73.6 million at the same time period last year.
“Higher costs related to asset quality issues have been the principal drive of our losses this year,” Bouvette said. “During the third quarter we continued to explore opportunities to bulk sell a package of OREO and loans. While the ultimate outcome of a transaction is uncertain, we determined that we would be willing to sell these properties at an amount below their individual appraised values. Accordingly, we have adjusted the carrying value of these assets to reflect a more aggressive disposition policy.”