Weeks after closing on another bank acquisition, Porter Bancorp Inc. of Louisville said Thursday that it has an agreement to acquire Paramount Bank in Lexington, Ky., for about $5 million in cash from Blue River Bancshares Inc. of Shelbyville, Ind.
Paramount has about $75 million of assets. It has operated as a division of a Blue River subsidiary, SCB Bank of Shelbyville, since July. Before that it had operated as a stand-alone federal savings association.
This month Porter, the $1.2 billion-asset parent of PBI Bank, bought the $120 million-asset Ohio County Bancshares of Beaver Dam, Ky., for $12 million. That deal, announced in June, was Porter's first since it raised $27 million in a public offering a year ago.
The deal for Paramount is expected to close in the first quarter.
Kevin Fitzsimmons, an analyst with Sandler O'Neill & Partners LP, wrote in a note issued Thursday that the deal seems "a logical add-on" to Porter's recent entrance into the "attractive" Lexington area, where it opened an office in June.
Paramount has been "suffering from poor credit quality," he wrote; its nonperforming asset rate was 3.49% as of June 30.
However, since the purchase is for assets, as opposed to a traditional acquisition, "we are confident that Porter Bancorp Inc. was able to cherry-pick" the loans it wanted.
