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Section 1: 8-K (LIMESTONE BANCORP, INC. 8-K)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
October 21, 2020

LIMESTONE BANCORP, INC.
(Exact Name of Registrant as specified in Charter)


Kentucky
001-33033
61-1142247
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

2500 Eastpoint Parkway, Louisville, Kentucky
40223
(Address of principal executive offices)
(Zip code)

(502) 499-4800
(Registrant's telephone number, including area code)

N/A
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, no par value
LMST
NASDAQ



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS

On October 21, 2020, Limestone Bancorp, Inc. issued a press release announcing its financial results for the third quarter ended September 30, 2020.  A copy of the press release is attached hereto as Exhibit 99.1.

The information in this Form 8-K and in Exhibit 99.1 attached hereto is being furnished to the Securities and Exchange Commission pursuant to Item 2.02 – Results of Operations and Financial Condition and shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
 
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
 
 
(d)
Exhibits
 
Exhibit No.
 
Description of Exhibit
 
104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

   
LIMESTONE BANCORP, INC.
       
Date:  October 21, 2020
 
By
/s/ Phillip W. Barnhouse
     
Phillip W. Barnhouse

   
Chief Financial Officer

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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

Limestone Bancorp Reports Net Income of $2.1 million, or $0.28 per Share, for the 3rd Quarter of 2020 and $5.9 million, or $0.79 per Diluted Share, for the Nine Months Ended September 30, 2020

LOUISVILLE, Ky.--(BUSINESS WIRE)--October 21, 2020--Limestone Bancorp, Inc. (NASDAQ: LMST) (“the Company”), parent company of Limestone Bank (“the Bank”), today reported unaudited results for the third quarter of 2020. Net income available to common shareholders for the third quarter of 2020 was $2.1 million, or $0.28 per basic and diluted common share, compared with $2.3 million, or $0.31 per basic and diluted share, for the third quarter of 2019. Net income for the nine months ended September 30, 2020, was $5.9 million, or $0.79 per diluted common share, compared with net income of $8.8 million, or $1.17 per diluted share, for the nine months ended September 30, 2019.

Net income before taxes was $2.3 million and $6.8 million for the third quarter of 2020 and for the first nine months of 2020, respectively, compared to $2.8 million and $8.8 million for the third quarter and first nine months of 2019, respectively. Income tax expense was $190,000 and $944,000 for the third quarter of 2020 and for the first nine months of 2020, respectively, compared to income tax expense of $531,000 and $43,000 for the third quarter of 2019 and for the first nine months of 2019, respectively.

For 2019 and 2020, income tax expense benefitted from the establishment of a net deferred tax asset related to a change in Kentucky tax law enacted during 2019. Income tax expense benefitted $244,000 and $33,000 for the third quarter of 2020 and 2019, respectively, or $0.03 per basic and diluted common share, and less than $0.01 per basic and diluted common share, respectively. Income tax expense benefitted $395,000 and $1.6 million for the first nine months of 2020 and 2019, respectively, or $0.05 per basic and diluted common share, and $0.21 per basic and diluted common share, respectively. The new Kentucky income tax will go into effect on January 1, 2021.

Net Interest Income – The interest rate environment has been challenging during the first nine months of 2020 as the Federal Reserve, after lowering rates 75 basis points in the latter half of 2019, lowered the federal funds target rate by 50 basis points on March 6, 2020, and 100 basis points on March 15, 2020.

Net interest income decreased to $9.9 million for the third quarter of 2020, compared to $10.1 million for the second quarter of 2020, and increased compared to $8.7 million for the third quarter of 2019. Average loans decreased to $963.5 million for the third quarter of 2020, compared to $978.3 million for the second quarter of 2020, and increased compared to $800.2 million for the third quarter of 2019. Average loans for the second and third quarters of 2020 were positively impacted by the branch purchase transaction on November 15, 2019, which included $126.8 million in loans at the time of purchase, as well as $42.3 million loan originations under the SBA Paycheck Protection Program. Net interest margin decreased to 3.27% for the third quarter of 2020, compared with 3.33% for the second quarter of 2020, and 3.35% for the third quarter of 2019.

The yield on earning assets decreased to 3.98% in the third quarter of 2020, compared to 4.21% in the second quarter of 2020, and 4.79% in the third quarter of 2019. The yield on earning assets for the second and third quarters of 2020 were negatively impacted by falling interest rates on the Bank’s fed funds, certain floating rate investment securities, and loans with variable rate repricing features. Loan fee income can meaningfully impact net interest income, loan yields, and net interest margin. The amount of loan fee income included in total interest income was $387,000, $535,000, and $247,000 for the quarters ended September 30, 2020, June 30, 2020, and September 30, 2019, respectively. This represents 13 basis points, 17 basis points, and nine basis points of yield on earning assets and net interest margin for the quarters ended September 30, 2020, June 30, 2020, and September 30, 2019, respectively. Loan fee income for the third quarter of 2020 included $195,000 in fees earned on SBA PPP loans, as compared to $179,000 in the second quarter of 2020.


The cost of interest-bearing liabilities was 0.90% for the third quarter of 2020, compared to 1.11% in the second quarter of 2020, and 1.75% in the third quarter of 2019. The cost of interest-bearing liabilities continued to decline based on the downward repricing of time deposits. Time deposits declined $47.9 million during the third quarter of 2020 as approximately $127.3 million of time deposits with an average rate of 1.41% matured or repriced at lower interest rates. During the third quarter of 2020, newly originated or renewed time deposits had an average rate of 0.39% and an average term of approximately 23 months.

Net interest income increased to $29.8 million for the first nine months of 2020, compared with $26.5 million in the first nine months of 2019. Average loans increased to $963.7 million for the first nine months of 2020, compared to $786.8 million for the first nine months of 2019. Average loans were positively impacted by the branch purchase transaction on November 15, 2019, along with loan growth during 2019 and 2020, as well as loan originations under the SBA Paycheck Protection Program. Net interest margin decreased to 3.30% in the first nine months of 2020, compared with 3.46% for the first nine months of 2019.

The yield on earning assets decreased to 4.23% for the first nine months of 2020, compared to 4.83% for the first nine months of 2019. The amount of loan fee income included in total interest income was $1.1 million and $960,000 for the nine months ended September 30, 2020 and September 30, 2019, respectively. This represents 13 basis points of yield on earning assets and net interest margin for the nine months ended September 30, 2020 and 2019. The cost of interest-bearing liabilities was 1.15% for the first nine months of 2020, compared to 1.67% in the first nine months of 2019.

As of September 30, 2020, time deposits comprise $398.4 million of the Company’s liabilities including $84.7 million with a current average rate of 1.01% which reprice or mature in the fourth quarter of 2020. The following table denotes contractual time deposit maturities and average rates as of September 30, 2020:

Maturity
Quarter

 

As of
September 30,
2020
(in thousands)

 

Weighted
Average
Rate

 

 

 

 

 

 

 

Q4-2020

 

 

84,715

 

1.01

 

Q1-2021

 

 

100,682

 

1.03

 

Q2-2021

 

 

90,146

 

0.61

 

Q3-2021

 

 

28,443

 

0.77

 

Q4-2021

 

 

9,837

 

0.75

 

Thereafter

 

 

84,606

 

1.23

 

Total time deposits

 

$

398,429

 

0.95

%






 


Investment Securities – The securities portfolio serves as a source of liquidity and earnings and contributes to the management of interest rate risk. Investments are made in various types of liquid assets, including U.S. Treasury obligations and securities of various federal agencies, obligations of states and political subdivisions, corporate bonds, and collateralized loan obligations. The investment portfolio increased by $948,000, or 0.5%, to $203.5 million at September 30, 2020, compared with $202.6 million at June 30, 2020, and $203.4 million at September 30, 2019.

The following table sets forth the carrying value of our securities portfolio at the dates indicated.

 

 

 

September 30, 2020

 

June 30, 2020

 

 

Amortized
Cost

 

Gross
Unrealized
Gains

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

Amortized
Cost

 

Gross
Unrealized
Gains

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

(dollars in thousands)

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government and

federal agencies

 

$

19,158

 

$

931

 

$

 

 

$

20,089

 

$

20,302

 

$

772

 

$

 

 

$

21,074

Agency mortgage-backed residential

 

 

76,388

 

 

2,974

 

 

(13

)

 

 

79,349

 

 

85,048

 

 

3,152

 

 

(21

)

 

 

88,179

Collateralized loan obligations

 

 

44,730

 

 

 

 

(1,905

)

 

 

42,825

 

 

44,730

 

 

 

 

(3,042

)

 

 

41,688

State and municipal

 

 

34,391

 

 

1,076

 

 

(32

)

 

 

35,435

 

 

28,708

 

 

917

 

 

(57

)

 

 

29,568

Corporate bonds

 

 

27,116

 

 

373

 

 

(1,643

)

 

 

25,846

 

 

23,347

 

 

313

 

 

(1,573

)

 

 

22,087

Total available for sale

 

$

201,783

 

$

5,354

 

$

(3,593

)

 

$

203,544

 

$

202,135

 

$

5,154

 

$

(4,693

)

 

$

202,596


 

 

 


 

 

 

 


 

The Bank owns Collateralized Loan Obligations (CLOs), which are debt securities secured by professionally managed portfolios of senior-secured loans to corporations. CLO managers are typically large non-bank financial institutions or banks and are typically $300 million to $1 billion in size, contain one hundred or more loans and have five to six credit tranches ranging from AAA, AA, A, BBB, BB, B and equity tranche. Interest and principal are paid first to the AAA tranche then to the next lower rated tranche. Losses are borne first by the equity tranche then by the subsequently higher rated tranche. CLOs may be less liquid than government securities from time to time and volatility in the CLO market may cause the value of these investments to decline.

The market value of CLOs may be affected by, among other things, changes in composition of the underlying loans, changes in the cash flows from the underlying loans, defaults and recoveries on the underlying loans, capital gains and losses on the underlying loans, prepayments on the underlying loans, and other conditions or economic factors. During the first quarter of 2020, the fair value of the Bank’s CLO portfolio declined as the market was disrupted by COVID-19. At March 31, 2020, the CLO portfolio had an unrealized loss of $4.0 million, or 9% of amortized cost. During the second and third quarters of 2020, the fair value improved as the market stabilized. At September 30, 2020, the portfolio had an unrealized loss of $1.9 million, or 4% of amortized cost.

Although the Bank attempts to mitigate the credit and liquidity risks associated with CLOs by purchasing CLOs with credit ratings of A or higher, completing pre-purchase due diligence, and through ongoing monitoring, no assurance can be given that these risk mitigation efforts will be successful. At September 30, 2020, $27.0 million, $13.5 million, and $2.4 million of our CLOs were AA, A, and BBB rated, respectively. There was one CLO rated below A at BBB, which was downgraded during the third quarter of 2020. Stress testing was completed on each security in the CLO portfolio as of quarter-end. Each security in the portfolio passed, without dollar loss, a stress scenario characterized as severe, which assumed a ten percent per annum constant prepayment rate, a twelve percent per annum constant default rate for four years followed by a four percent rate thereafter, and a forty-five percent recovery rate on a one-year lag. The Bank’s CLOs are all floating rate with rates set on a quarterly basis at three-month LIBOR plus a spread.

The fair value of the Bank’s corporate bond portfolio has also been impacted by market disruption and declining rates. At March 31, 2020, the corporate bond portfolio had a net unrealized loss of $1.3 million, or 6% of amortized cost. At September 30, 2020, the portfolio had a net unrealized loss of $1.3 million, or 5% of amortized cost. The corporate bond portfolio consists of 12 subordinated debt securities of U.S. banks and bank holding companies with maturities ranging from 2024 to 2037. The securities are either initially fixed for five years converting to floating at an index over LIBOR or floating at an index over LIBOR from inception. Management regularly monitors the financial condition of these corporate issuers by reviewing their regulatory and public filings.

The Bank has the intent and ability to hold its CLO and corporate debt securities to maturity and, at this juncture, has determined the value declines are temporary in nature.


Provision and Allowance for Loan Losses – The Bank maintains an allowance for loan losses believed to be sufficient to absorb probable incurred losses existing in the loan portfolio. Management evaluates the adequacy of the allowance using, among other things, historical loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of the underlying collateral and current economic conditions and trends. The allowance may be allocated for specific loans or loan categories, but the entire allowance is available for any loan. The allowance consists of specific and general components. The specific component relates to loans that are individually evaluated and measured for impairment. The general component is based on historical loss experience adjusted for qualitative environmental factors. Management develops allowance estimates based on actual loss experience adjusted for current economic conditions and trends. Allowance estimates are a prudent measurement of the risk in the loan portfolio applied to individual loans based on loan type. If the mix and amount of future charge-off percentages differ significantly from the assumptions used by management in making its determination, management may be required to materially increase its allowance for loan losses and provision for loan losses, which could adversely affect results.

The allowance for loan losses to total loans was 1.18% at September 30, 2020, compared to 1.05% at June 30, 2020, and 1.11% at September 30, 2019. Loans acquired in the November 2019 branch transaction totaled $100.3 million at September 30, 2020, and $109.8 million at June 30, 2020. These loans were recorded at fair value as determined by an independent third party. The remaining discount associated with the fair value purchase accounting adjustments on the acquired loans was $301,000 at September 30, 2020, compared to $347,000 at June 30, 2020. Any subsequent deterioration of these acquired loans may require an adjustment through the allowance for loan loss. Net loan charge-offs were $97,000 and $395,000, respectively, for the three and nine months ended September 30, 2020, compared to net loan recoveries of $72,000 and $24,000, respectively, for the three and nine months ended September 30, 2019.

A provision of $1.4 million and $3.5 million, or $0.14 and $0.37, per common shares after taxes, was recorded in the third quarter and the first nine months of 2020, respectively, compared to no provision for loan losses in the third quarter and first nine months of 2019. The 2020 loan loss provisions were attributable to the net loan charge-offs during the period, trends within the portfolio over the period, and primarily to changes in the economic and business environment attributable to COVID-19, the state and national emergencies that have been declared and the resultant risk the pandemic poses for business disruptions for the Bank’s borrowers which may lead to credit quality deterioration. Substandard loans increased $15.4 million during the third quarter of 2020. The increase in substandard loans was primarily attributable to $12.3 million in commercial and industrial loans migrating from watch to substandard during the quarter.

While the Company expects the U.S. Government’s economic response to the COVID-19 pandemic through monetary policy and fiscal stimulus have provided meaningful support to the economy, management deemed it prudent to increase the allowance for loan losses through its qualitative environmental factors to account for the pandemic risk.

COVID-19 Short-term Loan Concessions – The Bank has elected to account for eligible loan modifications under Section 4013 of the CARES Act. To be an eligible loan under Section 4013 of the CARES Act, a loan modification must be (1) related to the coronavirus pandemic (“COVID-19”); (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the national emergency declared by the President on March 13, 2020, concerning the COVID-19 outbreak (the “national emergency”) or (B) December 31, 2020. Eligible loan modifications are not required to be classified as TDRs and will not be reported as past due provided they are performing in accordance with the modified terms. Interest income will continue to be recognized in accordance with GAAP unless the loan is placed on nonaccrual status.


Short term loan modifications totaled $64.9 million as of September 30, 2020, compared to $161.5 million at June 30, 2020. The following table details the status of the Bank’s short-term loan modifications by loan category or type as of September 30, 2020:

 

 

First
Modification
Active

 

Subsequent
Modification
Active

 

Modification
Ended

 

Total
Modified
Loans

 

Total
Loan
Portfolio

 

% Modified
to Total
Portfolio

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel, Motel, & Lodging

 

$

 

$

8,112

 

$

22,818

 

$

30,930

 

$

51,435

 

60.1

%

Retail Facility

 

 

3,087

 

 

6,764

 

 

 

 

9,851

 

 

62,707

 

15.7

 

Commercial Real Estate

 

 

5,228

 

 

76

 

 

107

 

 

5,411

 

 

161,524

 

3.3

 

1-4 Family Residential

 

 

2,306

 

 

450

 

 

225

 

 

2,981

 

 

194,829

 

1.5

 

Restaurant Full Service

 

 

2,184

 

 

6,307

 

 

2,872

 

 

11,363

 

 

19,966

 

56.9

 

Restaurant Limited Service

 

 

2,303

 

 

 

 

 

 

2,303

 

 

14,842

 

15.5

 

Multi-family

 

 

 

 

 

 

 

 

 

 

63,757

 

 

Construction and Development

 

 

 

 

 

 

 

 

 

 

39,980

 

 

Commercial & Industrial

 

 

345

 

 

 

 

1,239

 

 

1,584

 

 

218,762

 

0.7

 

Farmland

 

 

 

 

 

 

 

 

 

 

69,017

 

 

Consumer, Agriculture & Other

 

 

486

 

 

 

 

 

 

486

 

 

77,649

 

0.6

 

Total

 

$

15,939

 

$

21,709

 

$

27,261

 

$

64,909

 

$

974,468

 

6.7

%


 

 

 

 

 

 
 

First Modification Active includes loans within the terms of the original modification agreement. Subsequent Modification Active includes loans with a matured original modification that have been further modified within the short-term parameters. Modification Ended includes loans that have reached final deferred payment and have yet to make a payment in accordance with the loan’s original terms or have yet to request a subsequent modification. Loans that returned to original contracted terms with a verified payment are considered cured and are no longer included as modified loans in the table above.

Subsequent to September 30, 2020, $27.1 million of the loans categorized as Modification Ended in the table above have received a verified payment and are now considered cured.

Non-performing Assets Non-performing assets, which include loans on nonaccrual, accruing troubled debt restructurings, loans past due 90 days and still accruing, and other real estate owned (“OREO”), increased to $4.2 million, or 0.32%, of total assets at September 30, 2020, compared with $3.5 million, or 0.27%, of total assets at June 30, 2020, and $5.8 million, or 0.51%, of total assets at September 30, 2019. Non-performing loans increased to $2.5 million, or 0.26%, of total loans at September 30, 2020, compared with $1.9 million, or 0.19%, of total loans at June 30, 2020, and $2.6 million, or 0.32%, of total loans at September 30, 2019.

OREO remained unchanged at $1.6 million as of September 30, 2020, compared to June 30, 2020, and decreased compared to $3.2 million at September 30, 2019. There were no fair value write-downs arising from changing marketing strategies for the three or nine months ended September 30, 2020, compared to no fair value write-downs and $260,000 for the three and nine months ended September 30, 2019, respectively.

Non-interest Income and Expense – Non-interest income for the third quarter of 2020 increased $208,000 to $1.7 million, compared with $1.5 million for the third quarter of 2019. The increase was primarily related to bank card interchange fees primarily as a result of the deposit accounts acquired in the branch acquisition transaction on November 15, 2019. Non-interest expense increased $628,000, or 8.4%, to $8.1 million for the third quarter of 2020, compared with $7.5 million for the third quarter of 2019. The increase in the third quarter of 2020 was primarily due to an increase in salaries and employee benefits of $211,000 and $187,000 in deposit account related expense. The Bank added sales talent and customer facing associates during the latter half of 2019 and branch staff in connection with the branch purchase transaction. The increase in deposit account related expense is the result of the deposit accounts acquired in the branch acquisition transaction.


Non-interest income for the first nine months of 2020 increased $803,000 to $5.1 million, compared with $4.3 million for the first nine months of 2019. The increase was primarily due to an increase in bank card interchange fees of $767,000. Non-interest expense increased $2.6 million, or 11.8%, to $24.6 million for the first nine months of 2020, compared with $22.0 million for the first nine months of 2019. The increase was primarily due to increases of $1.6 million in salaries and employee benefits and $507,000 in deposit account related expense. The Bank added sales talent and customer facing associates during the latter half of 2019 and branch staff in connection with the branch purchase transaction. As a result, average FTEs for 2020 were elevated as compared to 2019. In response to COVID-19 and the change in customer branch usage patterns, the Bank realized a reduction in FTEs during the second quarter of 2020 through attrition and workforce reduction. The increase in deposit account related expense is the result of the deposit accounts acquired in the branch acquisition transaction.

Capital – The Company’s capital ratios were positively impacted by the additional $8.0 million of subordinated notes issued on July 21, 2020, as the subordinated notes meet the requirements to qualify as Tier 2 capital.

About Limestone Bancorp, Inc.

Limestone Bancorp, Inc. (NASDAQ: LMST) is a Louisville, Kentucky-based bank holding company which operates banking centers in 14 counties through its wholly-owned subsidiary Limestone Bank. The Bank’s markets include metropolitan Louisville in Jefferson County and the surrounding counties of Bullitt and Henry and extend south along the Interstate 65 corridor. The Bank serves south central, southern, and western Kentucky from banking centers in Barren, Butler, Daviess, Edmonson, Green, Hardin, Hart, Ohio, and Warren counties. The Bank also has banking centers in Lexington, Kentucky, the second largest city in the state, and Frankfort, Kentucky, the state capital. Limestone Bank is a traditional community bank with a wide range of personal and business banking products and services.

Forward-Looking Statements

Statements in this press release relating to Limestone 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 that involve risks and uncertainties. Although the Company's management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: the impact and duration of the COVID-19 pandemic and national, state and local emergency conditions the pandemic has produced; economic conditions both generally and more specifically in the markets in which the Company and its subsidiaries operate; competition for the Company's customers from other providers of financial services; government legislation, regulation, fiscal, and monetary policies, which change from time to time and over which the Company has no control; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Company's customers; and other risks detailed in the Company's filings with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond the control of the Company. See Risk Factors outlined in the Company's Form 10-K for the year ended December 31, 2019, and Form 10-Q for the six months ended June 30, 2020.

Additional Information

Unaudited supplemental financial information for the third quarter ending September 30, 2020, follows.



 





 
 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)


 





 
 

 

 

Three

 

Three

 

Nine

 

 

Nine

 

 

 

Months

 

Months

 

Months

 

 

Months

 

 

 

Ended

 

Ended

 

Ended

 

 

Ended

 

 

 

9/30/20

 

9/30/19

 

9/30/20

 

 

9/30/19

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

12,094

 

$

12,485

 

$

38,147

 

 

$

37,047

 

Interest expense

 

 

2,151

 

 

3,755

 

 

8,332

 

 

 

10,558

 

Net interest income

 

 

9,943

 

 

8,730

 

 

29,815

 

 

 

26,489

 

Provision for loan losses

 

 

1,350

 

 

 

 

3,500

 

 

 

 

Net interest income after provision

 

 

8,593

 

 

8,730

 

 

26,315

 

 

 

26,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

565

 

 

633

 

 

1,674

 

 

 

1,700

 

Bank card interchange fees

 

 

881

 

 

623

 

 

2,494

 

 

 

1,727

 

Bank owned life insurance income

 

 

113

 

 

97

 

 

325

 

 

 

314

 

Gain (loss) on sales and calls of securities, net

 

 

 

 

 

 

(5

)

 

 

(5

)

Other

 

 

183

 

 

181

 

 

579

 

 

 

528

 

Non-interest income

 

 

1,742

 

 

1,534

 

 

5,067

 

 

 

4,264

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & employee benefits

 

 

4,413

 

 

4,202

 

 

13,584

 

 

 

12,032

 

Occupancy and equipment

 

 

1,008

 

 

880

 

 

2,990

 

 

 

2,632

 

Professional fees

 

 

261

 

 

254

 

 

704

 

 

 

598

 

Marketing expense

 

 

134

 

 

251

 

 

452

 

 

 

690

 

FDIC insurance

 

 

81

 

 

 

 

148

 

 

 

211

 

Data processing expense

 

 

382

 

 

315

 

 

1,121

 

 

 

943

 

State franchise and deposit tax

 

 

360

 

 

315

 

 

1,080

 

 

 

945

 

Deposit account related expense

 

 

487

 

 

300

 

 

1,398

 

 

 

891

 

Other real estate owned expense

 

 

20

 

 

25

 

 

58

 

 

 

333

 

Litigation and loan collection expense

 

 

54

 

 

32

 

 

178

 

 

 

112

 

Communications expense

 

 

201

 

 

193

 

 

666

 

 

 

572

 

Insurance expense

 

 

102

 

 

109

 

 

316

 

 

 

335

 

Postage and delivery

 

 

156

 

 

129

 

 

476

 

 

 

404

 

Other

 

 

420

 

 

446

 

 

1,379

 

 

 

1,258

 

Non-interest expense

 

 

8,079

 

 

7,451

 

 

24,550

 

 

 

21,956

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

2,256

 

 

2,813

 

 

6,832

 

 

 

8,797

 

Income tax expense

 

 

190

 

 

531

 

 

944

 

 

 

43

 

Net income

 

$

2,066

 

$

2,282

 

$

5,888

 

 

$

8,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

 

7,499,223

 

 

7,471,582

 

 

7,489,795

 

 

 

7,467,048

 

Weighted average shares – Diluted

 

 

7,499,223

 

 

7,471,582

 

 

7,489,795

 

 

 

7,467,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.28

 

$

0.31

 

$

0.79

 

 

$

1.17

 

Diluted earnings per common share

 

$

0.28

 

$

0.31

 

$

0.79

 

 

$

1.17

 

Cash dividends declared per common share

 

$

0.00

 

$

0.00

 

$

0.00

 

 

$

0.00

 

 



 

 

 
 

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)


 

 

 
 

 

 

 

 

Three

 

Three

 

 

Three

 

 

Three

 

 

Three

 

 

 

Months

 

Months

 

 

Months

 

 

Months

 

 

Months

 

 

 

Ended

 

Ended

 

 

Ended

 

 

Ended

 

 

Ended

 

 

 

9/30/20

 

6/30/20

 

 

3/31/20

 

 

12/31/19

 

 

9/30/19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

12,094

 

$

12,786

 

 

$

13,267

 

$

12,537

 

$

12,485

Interest expense

 

 

2,151

 

 

2,676

 

 

 

3,505

 

 

3,676

 

 

3,755

Net interest income

 

 

9,943

 

 

10,110

 

 

 

9,762

 

 

8,861

 

 

8,730

Provision for loan losses

 

 

1,350

 

 

1,100

 

 

 

1,050

 

 

 

 

Net interest income after provision

 

 

8,593

 

 

9,010

 

 

 

8,712

 

 

8,861

 

 

8,730

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

565

 

 

441

 

 

 

668

 

 

681

 

 

633

Bank card interchange fees

 

 

881

 

 

863

 

 

 

750

 

 

711

 

 

623

Bank owned life insurance income

 

 

113

 

 

116

 

 

 

96

 

 

96

 

 

97

Gain (loss) on sales and calls of securities, net

 

 

 

 

(5

)

 

 

 

 

 

 

Other

 

 

183

 

 

186

 

 

 

210

 

 

166

 

 

181

Non-interest income

 

 

1,742

 

 

1,601

 

 

 

1,724

 

 

1,654

 

 

1,534

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & employee benefits

 

 

4,413

 

 

4,633

 

 

 

4,538

 

 

4,201

 

 

4,202

Occupancy and equipment

 

 

1,008

 

 

983

 

 

 

999

 

 

890

 

 

880

Professional fees

 

 

261

 

 

235

 

 

 

208

 

 

171

 

 

254

Marketing expense

 

 

134

 

 

104

 

 

 

214

 

 

218

 

 

251

FDIC insurance

 

 

81

 

 

67

 

 

 

 

 

 

 

Data processing expense

 

 

382

 

 

380

 

 

 

359

 

 

316

 

 

315

State franchise and deposit tax

 

 

360

 

 

360

 

 

 

360

 

 

265

 

 

315

Deposit account related expense

 

 

487

 

 

460

 

 

 

451

 

 

333

 

 

300

Other real estate owned expense

 

 

20

 

 

22

 

 

 

16

 

 

35

 

 

25

Litigation and loan collection expense

 

 

54

 

 

59

 

 

 

65

 

 

77

 

 

32

Communications expense

 

 

201

 

 

247

 

 

 

218

 

 

200

 

 

193

Insurance expense

 

 

102

 

 

111

 

 

 

103

 

 

109

 

 

109

Postage and delivery

 

 

156

 

 

152

 

 

 

168

 

 

140

 

 

129

Acquisition costs

 

 

 

 

 

 

 

 

 

775

 

 

Other

 

 

420

 

 

423

 

 

 

536

 

 

584

 

 

446

Non-interest expense

 

 

8,079

 

 

8,236

 

 

 

8,235

 

 

8,314

 

 

7,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

2,256

 

 

2,375

 

 

 

2,201

 

 

2,201

 

 

2,813

Income tax expense

 

 

190

 

 

393

 

 

 

361

 

 

437

 

 

531

Net income

 

$

2,066

 

$

1,982

 

 

$

1,840

 

$

1,764

 

$

2,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

 

7,499,223

 

 

7,488,173

 

 

 

7,481,884

 

 

7,471,680

 

 

7,471,582

Weighted average shares – Diluted

 

 

7,499,223

 

 

7,488,173

 

 

 

7,481,884

 

 

7,471,680

 

 

7,471,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.28

 

$

0.26

 

 

$

0.25

 

$

0.24

 

$

0.31

Diluted earnings per common share

 

$

0.28

 

$

0.26

 

 

$

0.25

 

$

0.24

 

$

0.31

Cash dividends declared per common share

 

$

0.00

 

$

0.00

 

 

$

0.00

 

$

0.00

 

$

0.00



 

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)


 

 

 

 

 

As of

 

 

 

 

9/30/20

 

 

6/30/20

 

 

3/31/20

 

 

 

12/31/19

 

 

 

9/30/19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

974,468

 

 

$

975,759

 

 

$

961,561

 

 

$

926,271

 

 

$

803,569

 

Allowance for loan losses

 

 

(11,481

)

 

 

(10,228

)

 

 

(9,150

)

 

 

(8,376

)

 

 

(8,904

)

Net loans

 

 

962,987

 

 

 

965,531

 

 

 

952,411

 

 

 

917,895

 

 

 

794,665

 

Securities available for sale

 

 

203,544

 

 

 

202,596

 

 

 

198,657

 

 

 

209,000

 

 

 

203,381

 

Federal funds sold & interest-bearing deposits

 

 

24,358

 

 

 

39,027

 

 

 

23,639

 

 

 

21,962

 

 

 

50,327

 

Cash and due from financial institutions

 

 

7,593

 

 

 

9,990

 

 

 

9,509

 

 

 

8,241

 

 

 

7,680

 

Premises and equipment

 

 

18,572

 

 

 

19,000

 

 

 

19,282

 

 

 

19,658

 

 

 

15,098

 

Premises held for sale

 

 

1,110

 

 

 

1,149

 

 

 

1,185

 

 

 

900

 

 

 

935

 

Bank owned life insurance

 

 

23,347

 

 

 

16,238

 

 

 

16,128

 

 

 

16,037

 

 

 

15,946

 

FHLB Stock

 

 

5,962

 

 

 

6,142

 

 

 

6,837

 

 

 

6,237

 

 

 

6,467

 

Other real estate owned

 

 

1,625

 

 

 

1,625

 

 

 

3,225

 

 

 

3,225

 

 

 

3,225

 

Deferred taxes, net

 

 

26,540

 

 

 

27,054

 

 

 

28,208

 

 

 

27,765

 

 

 

28,029

 

Goodwill

 

 

6,252

 

 

 

6,252

 

 

 

6,252

 

 

 

6,252

 

 

 

 

Intangible assets

 

 

2,308

 

 

 

2,372

 

 

 

2,436

 

 

 

2,500

 

 

 

 

Accrued interest receivable and other assets

 

 

7,426

 

 

 

7,532

 

 

 

6,441

 

 

 

6,107

 

 

 

6,411

 

Total Assets

 

$

1,291,624

 

 

$

1,304,508

 

 

$

1,274,210

 

 

$

1,245,779

 

 

$

1,132,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

 

$

398,429

 

 

$

446,370

 

 

$

467,535

 

 

$

476,534

 

 

$

488,121

 

Interest checking

 

 

168,735

 

 

 

167,814

 

 

 

157,621

 

 

 

146,038

 

 

 

95,508

 

Money market

 

 

174,588

 

 

 

166,376

 

 

 

154,851

 

 

 

160,837

 

 

 

153,663

 

Savings

 

 

134,962

 

 

 

119,327

 

 

 

92,235

 

 

 

56,015

 

 

 

34,618

 

Total interest-bearing deposits

 

 

876,714

 

 

 

899,887

 

 

 

872,242

 

 

 

839,424

 

 

 

771,910

 

Demand deposits

 

 

217,675

 

 

 

224,901

 

 

 

185,658

 

 

 

187,551

 

 

 

151,524

 

Total deposits

 

 

1,094,389

 

 

 

1,124,788

 

 

 

1,057,900

 

 

 

1,026,975

 

 

 

923,434

 

FHLB advances

 

 

30,634

 

 

 

20,644

 

 

 

61,349

 

 

 

61,389

 

 

 

56,430

 

Junior subordinated debentures

 

 

21,000

 

 

 

21,000

 

 

 

21,000

 

 

 

21,000

 

 

 

21,000

 

Subordinated capital note

 

 

25,000

 

 

 

17,000

 

 

 

17,000

 

 

 

17,000

 

 

 

17,000

 

Senior debt

 

 

 

 

 

5,000

 

 

 

5,000

 

 

 

5,000

 

 

 

5,000

 

Accrued interest payable and other liabilities

 

 

8,315

 

 

 

7,020

 

 

 

7,450

 

 

 

8,665

 

 

 

4,973

 

Total liabilities

 

 

1,179,338

 

 

 

1,195,452

 

 

 

1,169,699

 

 

 

1,140,029

 

 

 

1,027,837

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

112,286

 

 

 

109,056

 

 

 

104,511

 

 

 

105,750

 

 

 

104,327

 

Total Liabilities and Stockholders’ Equity

 

$

1,291,624

 

 

$

1,304,508

 

 

$

1,274,210

 

 

$

1,245,779

 

 

$

1,132,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending shares outstanding

 

 

7,499,183

 

 

 

7,485,872

 

 

 

7,489,305

 

 

 

7,471,975

 

 

 

7,471,582

 

Book value per common share

 

$

14.97

 

 

$

14.57

 

 

$

13.95

 

 

$

14.15

 

 

$

13.96

 

Tangible book value per common share

 

 

13.83

 

 

 

13.42

 

 

 

12.79

 

 

 

12.98

 

 

 

13.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)


 

 

 

 

 

As of

 

 

 

 

9/30/20

 

 

 

6/30/20

 

 

 

3/31/20

 

 

 

12/31/19

 

 

 

9/30/19

 

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

$

1,295,814

 

 

$

1,305,923

 

 

$

1,273,167

 

 

$

1,167,179

 

 

$

1,105,432

 

Loans

 

 

963,486

 

 

 

978,316

 

 

 

949,204

 

 

 

846,235

 

 

 

800,194

 

Earning assets

 

 

1,213,039

 

 

 

1,222,760

 

 

 

1,188,314

 

 

 

1,090,752

 

 

 

1,035,522

 

Deposits

 

 

1,111,865

 

 

 

1,116,420

 

 

 

1,052,944

 

 

 

982,991

 

 

 

933,548

 

Long-term debt and advances

 

 

65,769

 

 

 

75,259

 

 

 

105,407

 

 

 

73,695

 

 

 

63,369

 

Interest bearing liabilities

 

 

955,661

 

 

 

971,770

 

 

 

971,554

 

 

 

882,473

 

 

 

852,539

 

Stockholders’ equity

 

 

110,930

 

 

 

107,348

 

 

 

107,632

 

 

 

105,295

 

 

 

103,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.63

%

 

 

0.61

%

 

 

0.58

%

 

 

0.60

%

 

 

0.82

%

Return on average equity

 

 

7.41

 

 

 

7.43

 

 

 

6.88

 

 

 

6.65

 

 

 

8.72

 

Yield on average earning assets (tax equivalent)

 

 

3.98

 

 

 

4.21

 

 

 

4.50

 

 

 

4.57

 

 

 

4.79

 

Cost of interest-bearing liabilities

 

 

0.90

 

 

 

1.11

 

 

 

1.45

 

 

 

1.65

 

 

 

1.75

 

Net interest margin (tax equivalent)

 

 

3.27

 

 

 

3.33

 

 

 

3.31

 

 

 

3.23

 

 

 

3.35

 

Efficiency ratio

 

 

69.14

 

 

 

70.30

 

 

 

71.70

 

 

 

71.70

 

 

 

72.59

 

Non-interest expense to average assets

 

 

2.48

 

 

 

2.54

 

 

 

2.60

 

 

 

2.83

 

 

 

2.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

2,038

 

 

$

1,410

 

 

$

1,500

 

 

$

1,528

 

 

$

2,389

 

Troubled debt restructurings on accrual

 

 

489

 

 

 

462

 

 

 

466

 

 

 

475

 

 

 

188

 

Loan 90 days or more past due still on accrual

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-performing loans

 

 

2,527

 

 

 

1,872

 

 

 

1,966

 

 

 

2,003

 

 

 

2,577

 

Real estate acquired through foreclosures

 

 

1,625

 

 

 

1,625

 

 

 

3,225

 

 

 

3,225

 

 

 

3,225

 

Other repossessed assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-performing assets

 

$

4,152

 

 

$

3,497

 

 

$

5,191

 

 

$

5,228

 

 

$

5,802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans to total loans

 

 

0.26

%

 

 

0.19

%

 

 

0.20

%

 

 

0.22

%

 

 

0.32

%

Non-performing assets to total assets

 

 

0.32

 

 

 

0.27

 

 

 

0.41

 

 

 

0.42

 

 

 

0.51

 

Allowance for loan losses to non-performing loans

 

 

454.33

 

 

 

546.37

 

 

 

465.41

 

 

 

418.17

 

 

 

345.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

 

1.18

%

 

 

1.05

%

 

 

0.95

%

 

 

0.90

%

 

 

1.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Charge-off Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans charged off

 

$

(150

)

 

$

(193

)

 

$

(335

)

 

$

(639

)

 

$

(299

)

Recoveries

 

 

53

 

 

 

171

 

 

 

59

 

 

 

111

 

 

 

371

 

Net recoveries (charge-offs)

 

$

(97

)

 

$

(22

)

 

$

(276

)

 

$

(528

)

 

$

72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Risk Category

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

923,895

 

 

$

925,558

 

 

$

915,985

 

 

$

888,707

 

 

$

754,050

 

Watch

 

 

27,782

 

 

 

43,014

 

 

 

38,464

 

 

 

27,522

 

 

 

37,537

 

Special Mention

 

 

364

 

 

 

 

 

 

 

 

 

 

 

 

 

Substandard

 

 

22,427

 

 

 

7,187

 

 

 

7,112

 

 

 

10,042

 

 

 

11,982

 

Doubtful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

974,468

 

 

$

975,759

 

 

$

961,561

 

 

$

926,271

 

 

$

803,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Past Due Status

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 – 59 days

 

$

482

 

 

$

458

 

 

$

1,158

 

 

$

1,747

 

 

$

979

 

60 – 89 days

 

 

265

 

 

 

197

 

 

 

248

 

 

 

670

 

 

 

557

 

90 days or more

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

 

2,038

 

 

 

1,410

 

 

 

1,500

 

 

 

1,528

 

 

 

2,389

 

Total past due and nonaccrual loans

 

$

2,785

 

 

$

2,065

 

 

$

2,906

 

 

$

3,945

 

 

$

3,925

 



 
   

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)


 
   

 

 

As of

 

 

9/30/20

 

 

6/30/20

 

 

3/31/20

 

 

12/31/19

 

 

9/30/19

 

Risk-based Capital Ratios - Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

 

8.17

%

 

8.05

%

 

8.29

%

 

8.30

%

 

9.66

%

Common equity Tier I risk-based capital ratio

 

8.54

 

 

8.45

 

 

8.26

 

 

8.32

 

 

10.19

 

Tier I risk-based capital ratio

 

9.77

 

 

9.93

 

 

9.86

 

 

9.32

 

 

11.88

 

Total risk-based capital ratio

 

13.22

 

 

12.57

 

 

12.37

 

 

11.85

 

 

14.84

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based Capital Ratios – Limestone Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

 

9.90

%

 

9.54

%

 

9.67

%

 

9.99

%

 

11.25

%

Common equity Tier I risk-based capital ratio

 

11.88

 

 

11.79

 

 

11.50

 

 

11.25

 

 

13.87

 

Tier I risk-based capital ratio

 

11.88

 

 

11.79

 

 

11.50

 

 

11.25

 

 

13.87

 

Total risk-based capital ratio

 

12.97

 

 

12.78

 

 

12.38

 

 

12.08

 

 

14.89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FTE employees, end of period

 

224

 

 

228

 

 

248

 

 

244

 

 

226

 


 

 

 

 

 

Non-GAAP Financial Measures Reconciliation

Tangible book value per common share is a non-GAAP financial measure derived from GAAP based amounts. Tangible book value is calculated by excluding the balance of intangible assets from common stockholders’ equity. Tangible book value per common share is calculated by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which is calculated by dividing common stockholders’ equity by common shares outstanding. Management believes this is consistent with bank regulatory agency treatment, which excludes tangible assets from the calculation of risk-based capital.

The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. The efficiency ratio is calculated by dividing total non-interest expenses as determined under GAAP by net interest income and total non-interest income, but excluding from the calculation net gains on the sale of securities and expenses disclosed from time to time as non-recurring in nature. Management believes this provides a reasonable measure of primary banking expenses relative to primary banking revenue.

 

 

 

As of

 

 

 

 

9/30/20

 

 

6/30/20

 

 

 

3/31/20

 

 

12/31/19

 

 

9/30/19

 

Tangible Book Value Per Share

 

(in thousands, except share and per share data)

 

 

 

 

 

Common stockholders’ equity

 

$

112,286

 

$

109,056

 

 

$

104,511

 

$

105,750

 

$

104,327

 

Less: Goodwill

 

 

6,252

 

 

6,252

 

 

 

6,252

 

 

6,252

 

 

 

Less: Intangible assets

 

 

2,308

 

 

2,372

 

 

 

2,436

 

 

2,500

 

 

 

Tangible common equity

 

 

103,726

 

 

100,432

 

 

 

95,823

 

 

96,998

 

 

104,327

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

 

7,499,183

 

 

7,485,872

 

 

 

7,489,305

 

 

7,471,975

 

 

7,471,582

 

Tangible book value per common share

 

$

13.83

 

$

13.42

 

 

$

12.79

 

$

12.98

 

$

13.96

 

Book value per common share

 

 

14.97

 

 

14.57

 

 

 

13.95

 

 

14.15

 

 

13.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

9/30/20

 

 

6/30/20

 

 

 

3/31/20

 

 

12/31/19

 

 

9/30/19

 

Efficiency Ratio

 

(in thousands)

 

 

 

 

 

Net interest income

 

$

9,943

 

$

10,110

 

 

$

9,762

 

$

8,861

 

$

8,730

 

Non-interest income

 

 

1,742

 

 

1,601

 

 

 

1,724

 

 

1,654

 

 

1,534

 

Less: Net gain (loss) on securities

 

 

 

 

(5

)

 

 

 

 

 

 

 

Revenue used for efficiency ratio

 

 

11,685

 

 

11,716

 

 

 

11,486

 

 

10,515

 

 

10,264

 

Non-interest expense

 

 

8,079

 

 

8,236

 

 

 

8,235

 

 

8,314

 

 

7,451

 

Less: Acquisition costs

 

 

 

 

 

 

 

 

 

775

 

 

 

Expenses used for efficiency ratio

 

 

8,079

 

 

8,236

 

 

 

8,235

 

 

7,539

 

 

7,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

69.14

%

 

70.30

%

 

 

71.70

%

 

71.70

%

 

72.59

%

 

Contacts

John T. Taylor
Chief Executive Officer
(502) 499-4800

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