Bank Watch: PBI Bank Pressured To Reduce CRE Loan Concentrations

PBI Bank in Louisville, KY, expects to enter into a consent order in the near future with the Federal Deposit Insurance Corp. (FDIC) and the Kentucky Department of Financial Institutions. The order establishes benchmarks for the bank to improve its asset quality, reduce its loan concentrations and maintain its capital levels.

"Like many banks across the nation, PBI had a challenging year in the aftermath of the recession that resulted in an increase in non-performing loans, charge-offs and loan loss provision," stated Maria L. Bouvette, president and CEO of Porter Bancorp Inc., parent company of the bank. "While most of these loans were made several years ago when the economy was much stronger, the increase in unemployment rates and depreciating real estate values since that time put more pressure on construction and land development loans where we have experienced a higher than normal loss rate."

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