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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):
January 22, 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
The Nasdaq Capital Market

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 January 22, 2020, Limestone Bancorp, Inc. issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2019.  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
 

2

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:  January 22, 2020
By
/s/ Phillip W. Barnhouse
   
     Phillip W. Barnhouse
   
     Chief Financial Officer


3
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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1


Limestone Bancorp Reports Net Income of $1.8 million, or $0.24 per Diluted Share, for the 4th Quarter of 2019 and $10.5 million, or $1.41 per Diluted Share, for the Twelve Months Ended December 31, 2019

Non-recurring Acquisition Related Expenses totaled $775,000, or $0.08 per Diluted Share

LOUISVILLE, Ky.--(BUSINESS WIRE)--January 22, 2020--Limestone Bancorp, Inc. (NASDAQ: LMST) (“the Company”), parent company of Limestone Bank (“the Bank”), today reported unaudited results for the fourth quarter and full year 2019. Net income available to common shareholders for the fourth quarter of 2019 was $1.8 million, or $0.24 per basic and diluted common share, compared with $2.4 million, or $0.33 per basic and diluted share, for the fourth quarter of 2018. Net income for the year ended December 31, 2019, was $10.5 million, or $1.41 per diluted common share, compared with $8.8 million, or $1.23 per diluted share, for the year ended December 31, 2018.

Net income before taxes was $11.0 million for the year ended December 31, 2019, compared with $10.8 million for the year ended December 31, 2018. Income tax expense was $480,000 for 2019 compared to $2.0 million for 2018.

Branch Acquisition – On November 15, 2019, the Bank completed the acquisition of four branch banking centers located in the Kentucky cities of Elizabethtown, Frankfort, and Owensboro. The purchase included approximately $126.8 million in performing loans and $1.5 million in premises and equipment, as well as approximately $131.8 million in customer deposits. This acquisition allows the Bank to further optimize its branch footprint regionally and solidifies its presence and ability to serve customers in Daviess, Hardin, and Franklin counties. Fourth quarter results were impacted by non-recurring acquisition related expenses of approximately $775,000, or $0.08 per common share after taxes.

Income Taxes – During the first and second quarters of 2019, the Company benefitted from the enactment of state tax legislation eliminating the Kentucky bank franchise tax which is assessed at a rate of 1.1% of average capital. The legislation implements a state income tax for the Bank at a statutory rate of 5%. The new Kentucky income tax will go into effect on January 1, 2021, and the Company will begin filing a Kentucky combined filing in 2021. The enactment resulted in a tax benefit of $341,000, or $0.05 per basic and diluted share, in the first quarter of 2019 and $1.2 million, or approximately $0.16 per basic and diluted share, in the second quarter of 2019.

Net Interest Income – On a sequential quarter basis, net interest margin was under pressure as the Federal Reserve lowered its federal funds target rate by 25 basis points on July 31, 2019, September 18, 2019, and October 30, 2019. The Company’s interest rate risk profile is marginally asset sensitive as its assets generally reprice more quickly than its liabilities over a twelve-month horizon. In particular, the Fed’s actions served to lower rates on the short end of the yield curve impacting yields on fed funds, certain floating rate investment securities, and loans with variable rate pricing features. As of December 31, 2019, time deposits comprise $476.5 million of the Company’s liabilities with $389.3 million, or 82%, set to reprice or mature within one year of which, $179.4 million with a current average rate of 2.19% reprice or mature in the first quarter of 2020.

Net interest income was $8.9 million for the fourth quarter of 2019, compared to $8.7 million in the third quarter of 2019, and $8.7 million in the fourth quarter of 2018. Average loans increased to $846.2 million for the fourth quarter of 2019, compared to $800.2 million for the third quarter of 2019 and $765.5 million for the fourth quarter of 2018, and was positively impacted by the loans acquired in the branch purchase transaction. Net interest margin decreased to 3.23% in the fourth quarter of 2019, compared with 3.35% for the third quarter of 2019 and 3.46% for the fourth quarter of 2018.


The yield on earning assets decreased to 4.57% for the fourth quarter of 2019, compared to 4.79% for the third quarter of 2019 and 4.66% in the fourth quarter of 2018. 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 $218,000, $247,000, and $167,000 for the quarters ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively. This represents eight basis points, nine basis points, and seven basis points of yield on earning assets and net interest margin for the quarters ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively.

The cost of interest-bearing liabilities was 1.65% for the fourth quarter of 2019, compared to 1.75% for the third quarter of 2019 and 1.46% for the fourth quarter of 2018. Net interest income and the cost of interest-bearing liabilities for the fourth quarter of 2019 were also impacted by the subordinated debt issuance of $17.0 million at a fixed rate of 5.75% on July 23, 2019. This capital was deployed in the branch acquisition transaction.

Net interest income increased to $35.4 million for the year ended December 31, 2019, compared with $33.7 million for 2018. Average loans increased to $801.8 million for 2019, compared with $743.4 million for 2018. Net interest margin decreased to 3.40% for 2019, compared with 3.53% for 2018. The yield on earning assets increased to 4.76% for the year ended December 31, 2019, compared to 4.55% for 2018 and cost of interest-bearing liabilities was 1.66% for 2019, compared to 1.23% for 2018.

Provision and Allowance for Loan Losses – The allowance for loan losses to total loans was 0.90% at December 31, 2019, compared to 1.11% at September 30, 2019, and 1.16% at December 31, 2018. Excluding acquired loans, the allowance for loan losses to total loans was 1.04% at December 31, 2019. Loans acquired in the branch purchase transaction totaled approximately $124.7 million at December 31, 2019, and were recorded at fair value as determined by an independent third party which includes adjustments for yield and credit risk. Net loan charge-offs were $504,000 for 2019, compared to net loan recoveries of $1.2 million for 2018. Based upon historically strong trends in asset quality and management’s assessment of risk in the loan portfolio, no provision for loan losses was recorded for the year ended December 31, 2019, compared to a negative provision for loan losses of $500,000 for 2018. No provision was recorded in the fourth quarter of 2019 or 2018, respectively.

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”), decreased to $5.2 million, or 0.42% of total assets, at December 31, 2019, compared with $5.8 million, or 0.51% of total assets, at September 30, 2019, and decreased compared to $6.4 million, or 0.60% of total assets, at December 31, 2018. Non-performing loans decreased to $2.0 million, or 0.22% of total loans, at December 31, 2019, compared with $2.6 million, or 0.32% of total loans, at September 30, 2019, and decreased from $2.9 million, or 0.38% of total loans, at December 31, 2018.

OREO remained unchanged at $3.2 million at December 31, 2019, compared to September 30, 2019, and decreased compared to $3.5 million at December 31, 2018. Fair value write-downs arising from changing marketing strategies and new appraisals totaled $260,000 for 2019, compared to $850,000 for 2018.

Non-interest Income and Expense – Non-interest income increased $139,000 to $5.9 million for the year ended December 31, 2019, compared with $5.8 million for the year ended December 31, 2018. The increase was primarily due to an increase in bank card interchange fees of $607,000 partially offset by a decrease in other non-interest income of $468,000 related to the $150,000 one-time gain on the sale of the secondary market residential servicing rights portfolio in the third quarter of 2018 and a $632,000 gain on the sale of a subdivided lot at the Company’s headquarters offset by a $392,000 impairment charge associated with the transfer of the Bank’s former data processing center to Premises Held for Sale in the fourth quarter of 2018.

Non-interest expense increased $1.1 million, or 3.9% to $30.3 million, for the year ended December 31, 2019, compared with $29.1 million for the year ended December 31, 2018, primarily due to approximately $775,000 of expenses attributable to the branch acquisition. There was also an increase of $744,000 in salary and employee benefits, as the Bank added sales talent and customer facing associates during 2019, and branch staff added in connection with the branch purchase transaction. Deposit account related expense increased $401,000, which was offset by decreases in OREO expenses of $500,000, and FDIC insurance expense of $346,000.


Non-interest income for the fourth quarter of 2019 decreased $18,000 to $1.7 million, compared with $1.7 million for the fourth quarter of 2018. The decrease from the fourth quarter of 2018 was primarily due to an increase in bank card interchange fees of $138,000 offset by a decrease in other non-interest income related to gains on sales as described in the paragraph above.

Non-interest expense increased $992,000 to $8.3 million for the fourth quarter of 2019, compared with $7.3 million for the fourth quarter of 2018. The increase from the fourth quarter of 2018 was primarily due to $775,000 of expenses attributable to the branch transaction as well as an increase of $278,000 in salary and employee benefits, as the Bank added sales talent and customer facing associates during 2019 and branch staff added in connection with the branch purchase transaction. This increase was partially offset by a decrease in OREO expenses of $243,000 and FDIC insurance expense of $118,000.

Capital – At December 31, 2019, the Bank’s Tier 1 leverage ratio was 9.99%, compared with 9.60% at December 31, 2018, and its Total risk-based capital ratio was 12.08% at December 31, 2019, compared with 12.88% at December 31, 2018. At December 31, 2019, the Bank’s Common equity Tier 1 risk-based capital ratio was 11.25%, compared with 11.83% at December 31, 2018. At December 31, 2019, the Company’s Tier 1 leverage ratio was 8.30%, compared with 9.00% at December 31, 2018, and its Total risk-based capital ratio was 11.85%, compared with 12.23% at December 31, 2018. At December 31, 2019, the Company’s Common equity Tier 1 risk-based capital ratio was 8.32%, compared with 9.44% at December 31, 2018. The decrease in the ratios resulted primarily from the core deposit intangible and goodwill arising from the branch acquisitions, which closed on November 15, 2019.

The Company’s capital ratios were positively impacted by the $17.0 million of subordinated notes issued during the third quarter, as the subordinated notes meet the requirements to qualify as Tier 2 capital. The Bank’s capital ratios also benefitted as the Company contributed $10.0 million of the proceeds to the Bank as Common Equity Tier 1 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. These forward-looking statements include statements related to the expected benefits of the branch acquisition. 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: 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 and regulation, 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, 2018.

Additional Information

Unaudited supplemental financial information for the fourth quarter ending December 31, 2019, follows.


LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

Three

 

Three

 

Twelve

 

Twelve

 

 

Months

 

Months

 

Months

 

Months

 

 

Ended

 

Ended

 

Ended

 

Ended

 

 

12/31/19

 

12/31/18

 

12/31/19

 

12/31/18

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

12,537

 

$

11,741

 

$

49,584

 

$

43,461

 

Interest expense

 

3,676

 

 

3,037

 

 

14,234

 

 

9,790

 

Net interest income

 

8,861

 

 

8,704

 

 

35,350

 

 

33,671

 

Provision (negative provision) for loan losses

 

 

 

 

 

 

 

(500

)

Net interest income after provision

 

8,861

 

 

8,704

 

 

35,350

 

 

34,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

681

 

 

588

 

 

2,381

 

 

2,355

 

Bank card interchange fees

 

711

 

 

573

 

 

2,438

 

 

1,831

 

Bank owned life insurance income

 

96

 

 

100

 

 

410

 

 

437

 

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

 

 

 

 

 

(5

)

 

(6

)

Other

 

166

 

 

411

 

 

694

 

 

1,162

 

Non-interest income

 

1,654

 

 

1,672

 

 

5,918

 

 

5,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & employee benefits

 

4,201

 

 

3,923

 

 

16,233

 

 

15,489

 

Occupancy and equipment

 

890

 

 

915

 

 

3,522

 

 

3,586

 

Professional fees

 

171

 

 

201

 

 

769

 

 

814

 

Marketing expense

 

218

 

 

247

 

 

908

 

 

1,114

 

FDIC insurance

 

 

 

118

 

 

211

 

 

557

 

Data processing expense

 

316

 

 

280

 

 

1,259

 

 

1,192

 

State franchise and deposit tax

 

265

 

 

272

 

 

1,210

 

 

1,118

 

Deposit account related expense

 

333

 

 

170

 

 

1,224

 

 

823

 

Other real estate owned expense

 

35

 

 

278

 

 

368

 

 

868

 

Litigation and loan collection expense

 

77

 

 

83

 

 

189

 

 

245

 

Communications expense

 

200

 

 

174

 

 

772

 

 

701

 

Insurance expense

 

109

 

 

107

 

 

444

 

 

478

 

Postage and delivery

 

140

 

 

66

 

 

544

 

 

364

 

Acquisition costs

 

775

 

 

 

 

775

 

 

 

Other

 

584

 

 

488

 

 

1,842

 

 

1,777

 

Non-interest expense

 

8,314

 

 

7,322

 

 

30,270

 

 

29,126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

2,201

 

 

3,054

 

 

10,998

 

 

10,824

 

Income tax expense

 

437

 

 

614

 

 

480

 

 

2,030

 

Net income

$

1,764

 

$

2,440

 

$

10,518

 

$

8,794

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

7,471,680

 

 

7,457,206

 

 

7,468,215

 

 

7,159,723

 

Weighted average shares – Diluted

 

7,471,680

 

 

7,457,206

 

 

7,468,215

 

 

7,159,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.24

 

$

0.33

 

$

1.41

 

$

1.23

 

Diluted earnings per common share

$

0.24

 

$

0.33

 

$

1.41

 

$

1.23

 

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

 

 

12/31/19

 

9/30/19

 

6/30/19

 

3/31/19

 

12/31/18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

12,537

 

$

12,485

 

$

12,376

 

$

12,186

 

$

11,741

 

Interest expense

 

3,676

 

 

3,755

 

 

3,576

 

 

3,227

 

 

3,037

 

Net interest income

 

8,861

 

 

8,730

 

 

8,800

 

 

8,959

 

 

8,704

 

Provision (negative provision) for loan losses

 

 

 

 

 

 

 

 

 

 

Net interest income after provision

 

8,861

 

 

8,730

 

 

8,800

 

 

8,959

 

 

8,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

681

 

 

633

 

 

571

 

 

496

 

 

588

 

Bank card interchange fees

 

711

 

 

623

 

 

596

 

 

508

 

 

573

 

Bank owned life insurance income

 

96

 

 

97

 

 

118

 

 

99

 

 

100

 

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

 

 

 

 

 

(5

)

 

 

 

 

Other

 

166

 

 

181

 

 

166

 

 

181

 

 

411

 

Non-interest income

 

1,654

 

 

1,534

 

 

1,446

 

 

1,284

 

 

1,672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & employee benefits

 

4,201

 

 

4,202

 

 

3,915

 

 

3,915

 

 

3,923

 

Occupancy and equipment

 

890

 

 

880

 

 

854

 

 

898

 

 

915

 

Professional fees

 

171

 

 

254

 

 

179

 

 

165

 

 

201

 

Marketing expense

 

218

 

 

251

 

 

212

 

 

227

 

 

247

 

FDIC insurance

 

 

 

 

 

103

 

 

108

 

 

118

 

Data processing expense

 

316

 

 

315

 

 

315

 

 

313

 

 

280

 

State franchise and deposit tax

 

265

 

 

315

 

 

315

 

 

315

 

 

272

 

Deposit account related expense

 

333

 

 

300

 

 

310

 

 

281

 

 

170

 

Other real estate owned expense

 

35

 

 

25

 

 

142

 

 

166

 

 

278

 

Litigation and loan collection expense

 

77

 

 

32

 

 

34

 

 

46

 

 

83

 

Communications expense

 

200

 

 

193

 

 

189

 

 

190

 

 

174

 

Insurance expense

 

109

 

 

109

 

 

112

 

 

114

 

 

107

 

Postage and delivery

 

140

 

 

129

 

 

134

 

 

141

 

 

66

 

Acquisition costs

 

775

 

 

 

 

 

 

 

 

 

Other

 

584

 

 

446

 

 

410

 

 

402

 

 

488

 

Non-interest expense

 

8,314

 

 

7,451

 

 

7,224

 

 

7,281

 

 

7,322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

2,201

 

 

2,813

 

 

3,022

 

 

2,962

 

 

3,054

 

Income tax expense (benefit)

 

437

 

 

531

 

 

(611

)

 

123

 

 

614

 

Net income

$

1,764

 

$

2,282

 

$

3,633

 

$

2,839

 

$

2,440

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

7,471,680

 

 

7,471,582

 

 

7,459,631

 

 

7,469,912

 

 

7,457,206

 

Weighted average shares – Diluted

 

7,471,680

 

 

7,471,582

 

 

7,459,631

 

 

7,469,912

 

 

7,457,206

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.24

 

$

0.31

 

$

0.49

 

$

0.38

 

$

0.33

 

Diluted earnings per common share

$

0.24

 

$

0.31

 

$

0.49

 

$

0.38

 

$

0.33

 

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

 

 

 

12/31/19

 

9/30/19

 

6/30/19

 

 

3/31/19

 

 

12/31/18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

926,271

 

$

803,569

 

$

803,114

 

$

786,585

 

$

765,244

 

Allowance for loan losses

 

(8,376

)

 

(8,904

)

 

(8,832

)

 

(8,686

)

 

(8,880

)

Net loans

 

917,895

 

 

794,665

 

 

794,282

 

 

777,899

 

 

756,364

 

Securities available for sale

 

209,000

 

 

203,381

 

 

208,614

 

 

206,411

 

 

201,192

 

Federal funds sold & interest-bearing deposits

 

21,962

 

 

50,327

 

 

40,755

 

 

24,029

 

 

28,398

 

Cash and due from financial institutions

 

8,241

 

 

7,680

 

 

6,860

 

 

6,461

 

 

6,963

 

Premises and equipment

 

19,658

 

 

15,098

 

 

14,827

 

 

14,926

 

 

14,655

 

Premises held for sale

 

900

 

 

935

 

 

995

 

 

1,050

 

 

1,050

 

Bank owned life insurance

 

16,037

 

 

15,946

 

 

15,853

 

 

15,739

 

 

15,646

 

FHLB Stock

 

6,237

 

 

6,467

 

 

6,693

 

 

6,813

 

 

7,233

 

Other real estate owned

 

3,225

 

 

3,225

 

 

3,225

 

 

3,335

 

 

3,485

 

Deferred taxes, net

 

27,765

 

 

28,029

 

 

28,708

 

 

28,568

 

 

29,282

 

Goodwill

 

6,252

 

 

 

 

 

 

 

 

 

Intangible assets

 

2,500

 

 

 

 

 

 

 

 

 

Accrued interest receivable and other assets

 

6,107

 

 

6,411

 

 

5,976

 

 

6,092

 

 

5,424

 

Total Assets

$

1,245,779

 

$

1,132,164

 

$

1,126,788

 

$

1,091,323

 

$

1,069,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

$

476,534

 

$

488,121

 

$

505,263

 

$

465,369

 

$

450,886

 

Interest checking

 

146,038

 

 

95,508

 

 

95,296

 

 

96,537

 

 

94,269

 

Money market

 

160,837

 

 

153,663

 

 

162,917

 

 

166,430

 

 

171,924

 

Savings

 

56,015

 

 

34,618

 

 

33,553

 

 

34,066

 

 

34,534

 

Total interest-bearing deposits

 

839,424

 

 

771,910

 

 

797,029

 

 

762,402

 

 

751,613

 

Demand deposits

 

187,551

 

 

151,524

 

 

141,448

 

 

146,440

 

 

142,618

 

Total deposits

 

1,026,975

 

 

923,434

 

 

938,477

 

 

908,842

 

 

894,231

 

FHLB advances

 

61,389

 

 

56,430

 

 

51,470

 

 

51,511

 

 

46,549

 

Junior subordinated debentures

 

21,000

 

 

21,000

 

 

21,000

 

 

21,000

 

 

21,000

 

Subordinated capital note

 

17,000

 

 

17,000

 

 

 

 

 

 

 

Senior debt

 

5,000

 

 

5,000

 

 

10,000

 

 

10,000

 

 

10,000

 

Accrued interest payable and other liabilities

 

8,665

 

 

4,973

 

 

4,419

 

 

3,651

 

 

5,815

 

Total liabilities

 

1,140,029

 

 

1,027,837

 

 

1,025,366

 

 

995,004

 

 

977,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total common stockholders’ equity

 

105,750

 

 

104,327

 

 

101,422

 

 

96,319

 

 

92,097

 

Total Liabilities and Stockholders’ Equity

$

1,245,779

 

$

1,132,164

 

$

1,126,788

 

$

1,091,323

 

$

1,069,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending shares outstanding

 

7,471,975

 

 

7,471,582

 

 

7,457,832

 

 

7,460,614

 

 

7,462,720

 

Book value per common share

$

14.15

 

$

13.96

 

$

13.60

 

$

12.91

 

$

12.34

 

Tangible book value per common share


12.98

 

 

13.96



13.60



12.91



12.34



LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

As of

 

 

12/31/19

 

 

9/30/19

 

 

6/30/19

 

 

3/31/19

 

 

12/31/18

 

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

$

1,167,179

 

$

1,105,432

 

$

1,100,459

 

$

1,075,553

 

$

1,066,216

 

Loans

 

846,235

 

 

800,194

 

 

793,460

 

 

766,505

 

 

765,542

 

Earning assets

 

1,090,752

 

 

1,035,522

 

 

1,033,581

 

 

1,009,948

 

 

1,001,093

 

Deposits

 

982,991

 

 

933,548

 

 

926,730

 

 

900,829

 

 

895,377

 

Long-term debt and advances

 

73,695

 

 

63,369

 

 

71,989

 

 

76,524

 

 

75,339

 

Interest bearing liabilities

 

882,473

 

 

852,539

 

 

855,100

 

 

834,637

 

 

824,300

 

Stockholders’ equity

 

105,295

 

 

103,818

 

 

97,730

 

 

93,491

 

 

89,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.60

%

 

0.82

%

 

1.32

%

 

1.07

%

 

0.91

%

Return on average equity

 

6.65

 

 

8.72

 

 

14.91

 

 

12.32

 

 

10.78

 

Yield on average earning assets (tax equivalent)

 

4.57

 

 

4.79

 

 

4.81

 

 

4.90

 

 

4.66

 

Cost of interest-bearing liabilities

 

1.65

 

 

1.75

 

 

1.68

 

 

1.57

 

 

1.46

 

Net interest margin (tax equivalent)

 

3.23

 

 

3.35

 

 

3.42

 

 

3.61

 

 

3.46

 

Efficiency ratio

 

71.70

 

 

72.59

 

 

70.47

 

 

71.08

 

 

70.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

$

1,528

 

$

2,389

 

$

2,028

 

$

1,921

 

$

1,991

 

Troubled debt restructurings on accrual

 

475

 

 

188

 

 

905

 

 

910

 

 

910

 

Loan 90 days or more past due still on accrual

 

 

 

 

 

 

 

 

 

 

Total non-performing loans

 

2,003

 

 

2,577

 

 

2,933

 

 

2,831

 

 

2,901

 

Real estate acquired through foreclosures

 

3,225

 

 

3,225

 

 

3,225

 

 

3,335

 

 

3,485

 

Other repossessed assets

 

 

 

 

 

 

 

 

 

 

Total non-performing assets

$

5,228

 

$

5,802

 

$

6,158

 

$

6,166

 

$

6,386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans to total loans

 

0.22

%

 

0.32

%

 

0.37

%

 

0.36

%

 

0.38

%

Non-performing assets to total assets

 

0.42

 

 

0.51

 

 

0.55

 

 

0.57

 

 

0.60

 

Allowance for loan losses to non-performing loans

 

418.17

 

 

345.52

 

 

301.13

 

 

306.82

 

 

306.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

0.90

%

 

1.11

%

 

1.10

%

 

1.10

%

 

1.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Charge-off Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans charged off

$

(639

)

$

(299

)

$

(72

)

$

(278

)

$

(133

)

Recoveries

 

111

 

 

371

 

 

218

 

 

84

 

 

379

 

Net recoveries (charge-offs)

$

(528

)

$

72

 

$

146

 

$

(194

)

$

246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Risk Category

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

$

888,707

 

$

754,050

 

$

767,662

 

$

756,493

 

$

745,604

 

Watch

 

27,522

 

 

37,537

 

 

22,929

 

 

17,412

 

 

13,164

 

Special Mention

 

 

 

 

 

 

 

 

 

113

 

Substandard

 

10,042

 

 

11,982

 

 

12,523

 

 

12,680

 

 

6,363

 

Doubtful

 

 

 

 

 

 

 

 

 

 

Total

$

926,271

 

$

803,569

 

$

803,114

 

$

786,585

 

$

765,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Past Due Status

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 – 59 days

$

1,747

 

$

979

 

$

858

 

$

2,001

 

$

1,593

 

60 – 89 days

 

670

 

 

557

 

 

1,015

 

 

240

 

 

331

 

90 days or more

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

1,528

 

 

2,389

 

 

2,028

 

 

1,921

 

 

1,991

 

Total past due and nonaccrual loans

$

3,945

 

$

3,925

 

$

3,901

 

$

4,162

 

$

3,915

 


LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

As of

 

 

12/31/19

 

 

9/30/19

 

 

6/30/19

 

 

3/31/19

 

 

12/31/18

 

Risk-based Capital Ratios - Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

 

8.30

%

 

9.66

%

 

9.46

%

 

9.30

%

 

9.00

%

Common equity Tier I risk-based capital ratio

 

8.32

 

 

10.19

 

 

9.82

 

 

9.57

 

 

9.44

 

Tier I risk-based capital ratio

 

9.32

 

 

11.88

 

 

11.56

 

 

11.29

 

 

11.08

 

Total risk-based capital ratio

 

11.85

 

 

14.84

 

 

12.56

 

 

12.32

 

 

12.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based Capital Ratios – Limestone Bank

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

 

9.99

%

 

11.25

%

 

10.01

%

 

9.88

%

 

9.60

%

Common equity Tier I risk-based capital ratio

 

11.25

 

 

13.87

 

 

12.26

 

 

12.01

 

 

11.83

 

Tier I risk-based capital ratio

 

11.25

 

 

13.87

 

 

12.26

 

 

12.01

 

 

11.83

 

Total risk-based capital ratio

 

12.08

 

 

14.89

 

 

13.26

 

 

13.01

 

 

12.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FTE employees

 

244

 

 

226

 

 

219

 

 

207

 

 

214

 

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

 

 

12/31/19

 

 

9/30/19

 

 

6/30/19

 

 

3/31/19

 

 

12/31/18

Tangible Book Value Per Share

(in thousands, except share and per share data)

 

 

Common stockholder’s equity

$

105,750

 

$

104,327

 

$

101,422

 

$

96,319

 

$

92,097

Less: Goodwill

 

6,252

 

 

 

 

 

 

 

 

Less: Intangible assets

 

2,500

 

 

 

 

 

 

 

 

Tangible common equity

 

96,998

 

 

104,327

 

 

101,422

 

 

96,319

 

 

92,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

7,471,975

 

 

7,471,582

 

 

7,457,832

 

 

7,460,614

 

 

7,462,720

Tangible book value per common share

$

12.98

 

$

13.96

 

$

13.60

 

$

12.91

 

$

12.34

Book value per common share

 

14.15

 

 

13.96

 

 

13.60

 

 

12.91

 

 

12.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

12/31/19

 

 

9/30/19

 

 

6/30/19

 

 

3/31/19

 

 

12/31/18

 

Efficiency Ratio

(in thousands)

 

 

 

 

Net interest income

$

8,861

 

$

8,730

 

$

8,800

 

$

8,959

 

$

8,704

 

Non-interest income

 

1,654

 

 

1,534

 

 

1,446

 

 

1,284

 

 

1,672

 

Less: Net gain (loss) on securities

 

 

 

 

 

(5)

 

 

 

 

 

Revenue used for efficiency ratio

 

10,515

 

 

10,264

 

 

10,251

 

 

10,243

 

 

10,376

 

Non-interest expense

 

8,314

 

 

7,451

 

 

7,224

 

 

7,281

 

 

7,322

 

Less: Acquisition costs

 

775

 

 

 

 

 

 

 

 

 

Expenses used for efficiency ratio

 

7,539

 

 

7,451

 

 

7,224

 

 

7,281

 

 

7,322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

71.70

%

 

72.59

%

 

70.47

%

 

71.08

%

 

70.57

%

 

Contacts

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

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