Porter Bancorp, Inc. announces agreement
Porter Bancorp, Inc., parent company of PBI Bank, announced today that it has entered into a secured loan agreement with First Merchants Bank of Muncie, Indiana, using the proceeds to strengthen the capital position of PBI Bank, the Company’s wholly owned banking subsidiary. Under the terms of the loan agreement, the Company borrowed $10.0 million on June 30, 2017. Interest payments are payable quarterly at the rate of three-month LIBOR plus 250 basis points through June 30, 2020, at which time quarterly principal payments of $250,000 plus interest will commence. The loan is due on June 30, 2022 and is secured by 100% of the issued and outstanding common stock of PBI Bank. The loan agreement also includes covenants relating to cash-on-hand at the Company, maintenance of certain risk-based capital ratios by the Bank and the Company, and non-performing assets. The Company contributed $9.0 million of the borrowing proceeds to the Bank as Common Equity Tier-1 Capital. The remaining $1.0 million in proceeds were retained by the lender in an escrow to service quarterly interest payments.
Leave a Reply
You must be logged in to post a comment.