Press Release

Limestone Bancorp Reports Net Income of $1.8 million, or $0.25 per Share, for the 1st Quarter of 2020

Company Release - 4/16/2020 4:05 PM ET

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Limestone Bancorp, Inc. (NASDAQ: LMST) (“the Company”), parent company of Limestone Bank (“the Bank”), today reported unaudited results for the first quarter of 2020. The coronavirus pandemic (“COVID-19”) currently impacting the nation has caused a setback to the country’s economy. Since early March, the Company and Bank have felt the impact alongside thousands of businesses across the nation. In response to the global pandemic, and the declarations of emergency at the state and national levels the pandemic has triggered, the Bank has implemented several temporary operational changes to serve customers during the COVID-19 health crisis. Lobby services have been amended to appointment only while drive thru, mobile, and online banking have become the Bank’s primary channels of serving customers. Customer facing employees have been divided into two teams working separate ‘ten day on’ and ‘ten day off’ shifts to ensure a healthy workforce remains available to serve customers. Additionally, operational and support staff have been assigned to work from home where circumstances permit.

Net income for the first quarter of 2020 was $1.8 million, or $0.25 per basic and diluted common share, compared to net income of $2.8 million, or $0.38 per basic and diluted share, for the first quarter of 2019. Net income before taxes and income tax expense was $2.2 million and $361,000, respectively, for the first quarter of 2020, compared with $3.0 million and $123,000, respectively for the first quarter of 2019. Income tax expense for the first quarter of 2019 benefitted $341,000, or $0.05 per basic and diluted common share, from the establishment of a net deferred tax asset related to a change in Kentucky tax law enacted during the first quarter of 2019. The new law eliminated the Kentucky bank franchise tax, which is assessed at a rate of 1.1% of average capital, and, implemented 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.

Net Interest Income – The interest rate environment remained challenging in the first quarter 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 was $9.8 million for the first quarter of 2020, compared to $8.9 million for the fourth quarter of 2019, and $9.0 million for the first quarter of 2019. Average loans increased to $949.2 million for the first quarter of 2020, compared to $846.2 million for the fourth quarter of 2019, and $766.5 million for the first quarter of 2019. Average loans were positively impacted from the branch purchase transaction on November 15, 2019, which included approximately $126.8 million of loans at the time of purchase, as well as loan growth during 2019 and the first three months of 2020. Net interest margin was 3.31% for the first quarter of 2020, 3.23% for the fourth quarter of 2019, and 3.61% for the first quarter of 2019.

The yield on earning assets decreased to 4.50% in the first quarter of 2020, compared to 4.57% in the fourth quarter of 2019, and 4.90% in the first quarter of 2019. The seven basis point decline in the yield on earning assets during the first quarter of 2020 was driven by the impact of falling interest rates on the Bank’s fed funds, certain floating rate investment securities, and loans with variable rate pricing 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 $216,000, $218,000, and $546,000 for the quarters ended March 31, 2020, December 31, 2019, and March 31, 2019, respectively. This represents eight basis points, eight basis points, and 22 basis points of yield on earning assets and net interest margin for the quarters ended March 31, 2020, December 31, 2019, and March 31, 2019, respectively. The cost of interest-bearing liabilities was 1.45% for the first quarter of 2020, compared to 1.65% in the fourth quarter of 2019, and 1.57% in the first quarter of 2019.

Time deposits of approximately $179.4 million at an average rate of 2.19% matured or repriced at lower interest rates during the first quarter of 2020. During the first quarter of 2020, time deposits totaling $180.6 million were originated or renewed at an average rate of 1.39% and an average term of approximately 10 months. As of March 31, 2020, time deposits comprise $467.5 million of the Company’s liabilities with $311.6 million, or 67%, set to reprice or mature in 2020 of which, $160.4 million with a current average rate of 1.78% reprice or mature in the second quarter of 2020. The following table denotes contractual time deposit maturities and average rates as of March 31, 2020:

Maturity
Quarter

 

As of
March 31,
2020
(in thousands)

 

Weighted
Average
Rate

 

 

 

 

 

 

Q2-2020

 

$

160,365

1.78

%

Q3-2020

 

 

93,773

1.38

 

Q4-2020

 

 

57,442

1.19

 

Q1-2021

 

 

71,469

1.05

 

Q2-2021

 

 

21,106

1.10

 

Q3-2021

 

 

17,608

1.00

 

Q4-2021

 

 

3,575

1.14

 

Thereafter

 

 

42,197

1.57

 

Total time deposits

 

$

467,535

1.40

%

 

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 decreased by $10.3 million, or 4.9%, to $198.7 million at March 31, 2020, compared with $209.0 million at December 31, 2019.

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

 

 

March 31, 2020

December 31, 2019

 

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

$

20,751

$

353

$

 

$

21,104

$

22,281

$

196

$

(147

)

$

22,330

Agency mortgage-backed residential

 

86,840

 

2,428

 

(167

)

 

89,101

 

91,269

 

1,186

 

(255

)

 

92,200

Collateralized loan obligations

 

44,732

 

(3,978

)

 

40,754

 

49,831

 

(412

)

 

49,419

State and municipal

 

28,301

 

346

 

(493

)

 

28,154

 

27,819

 

550

 

(3

)

 

28,366

Corporate bonds

 

20,831

 

199

 

(1,486

)

 

19,544

 

16,472

 

213

 

 

16,685

Total available for sale

$

201,455

$

3,326

$

(6,124

)

$

198,657

$

207,672

$

2,145

$

(817

)

$

209,000

 

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. The fair value of the Bank’s CLOs declined by approximately $3.6 million, or 8% of amortized cost, during the first quarter of 2020 as market liquidity within the CLO sector was disrupted by COVID-19.

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 March 31, 2020, $25.7 million and $15.0 million of our CLOs were AA and A rated, respectively. There were no CLOs rated below A and none of the CLOs were subject to ratings downgrade in 2019 or in the first 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. During the first quarter, one of the CLOs in the investment portfolio rated AA with a book value of $5.0 million was called and redeemed at par value or $5.0 million by the issuer. 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 was also impacted by market disruption and declining rates, resulting in a fair value decline of approximately $1.5 million, or 7% of amortized cost, during the first quarter. The corporate bond portfolio consists of ten subordinated debt securities of U.S. banks and bank holding companies with maturities ranging from 2024 to 2037. The securities are either 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 decline is 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 0.95% at March 31, 2020, compared to 0.90% at December 31, 2019, and 1.10% at March 31, 2019. Loans acquired in the November 2019 branch transaction totaled $118.0 million at March 31, 2020 and $124.7 million at December 31, 2019. 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 $427,000 at March 31, 2020, compared to $480,000 at December 31, 2019. Any subsequent deterioration of these acquired loans may require an adjustment through the allowance for loan loss. Excluding loans acquired in the November 2019 branch transaction, the allowance for loan losses to total loans was 1.08% and 1.04% at March 31, 2020 and December 31, 2019, respectively. Net loan charge-offs were $276,000 for the first quarter of 2020, compared to $194,000 for the first quarter of 2019.

While the Company has experienced historically strong trends in asset quality over the last several quarters and management’s assessment of risk in the loan portfolio has been low, a provision of $1.05 million, or $0.11 per common shares after taxes, was recorded in the first quarter of 2020 compared to no provision for loan losses in the first quarter of 2019. The first quarter 2020 loan loss provision was attributable to the level of net loan charge-offs for the quarter, the impact of the increase in loan volume within the portfolio over the quarter, and 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.

While the Company expects the U.S. Government’s economic response to the COVID-19 pandemic through monetary policy and fiscal stimulus will provide 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 – In response to requests from borrowers who have been impacted by COVID-19 through business and cash flow interruption, the Bank made short-term loan modifications involving principal deferrals (interest only) and, in other cases, principal and interest deferrals. The following table details those modifications by loan category and type as of March 31, 2020 and April 14, 2020:

 

March 31, 2020

April 14, 2020

 

Amount

Number

Amount

Number

 

(dollars in thousands)

 

 

 

 

 

Commercial:

 

 

 

 

 

 

Interest only

$

103

4

$

392

7

Principal and interest deferral

 

413

6

 

1,234

14

Commercial Real Estate

 

 

 

 

 

 

Construction:

 

 

 

 

 

 

Interest only

 

 

Principal and interest deferral

 

 

5,077

3

Farmland:

 

 

 

 

 

 

Interest only

 

 

9

1

Principal and interest deferral

 

498

4

 

2,245

13

Nonfarm nonresidential:

 

 

 

 

 

 

Interest only

 

4,796

15

 

11,478

25

Principal and interest deferral

 

3,877

7

 

49,107

18

Residential Real Estate

 

 

 

 

 

 

Multi-family:

 

 

 

 

 

 

Interest only

 

 

Principal and interest deferral

 

188

1

 

188

1

1-4 Family:

 

 

 

 

 

 

Interest only

 

143

2

 

4,402

16

Principal and interest deferral

 

2,046

11

 

8,112

48

Consumer:

 

 

 

 

 

 

Interest only

 

50

5

 

74

8

Principal and interest deferral

 

7

2

 

37

4

Agriculture:

 

 

 

 

 

 

Interest only

 

 

Principal and interest deferral

 

 

Other:

 

 

 

 

 

 

Interest only

 

 

Principal and interest deferral

 

 

Total modified loans

$

12,121

57

$

82,355

158

 

Retail purpose commercial real estate operators, as well as hotel and restaurant operators, have been disproportionately impacted by COVID-19. As of March 31, 2020, the Bank had loans totaling $63.9 million secured by retail purpose commercial real estate, $50.4 million secured by hotel and lodging real estate, and $30.9 million secured by limited and full-service restaurant real estate, or 6.6%, 5.2%, and 3.2% of total loans, respectively. As of April 14, 2020, principal and interest deferrals total $10.5 million for retail purpose commercial real estate, $43.0 million for hotel and lodging real estate, and $7.2 million for limited and full-service restaurant real estate.

The Bank is also working with borrowers to secure SBA guaranteed financing for those who qualify through the SBA Paycheck Protection Program, which became available in early April through the CARES Act. As of April 14, 2020, the Bank had secured loan guarantees for 163 borrowers totaling approximately $27.4 million.

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”), remained unchanged at $5.2 million, or 0.41% of total assets at March 31, 2020, compared with $5.2 million, or 0.42% of total assets at December 31, 2019, and decreased from $6.2 million, or 0.57% of total assets at March 31, 2019. Non-performing loans were unchanged at $2.0 million, or 0.20% of total loans at March 31, 2020, compared with $2.0 million, or 0.22% of total loans at December 31, 2019, and decreased from $2.8 million, or 0.36% of total loans at March 31, 2019.

OREO at March 31, 2020, remained unchanged at $3.2 million, compared to December 31, 2019, and decreased from $3.3 million at March 31, 2019. There were no fair value write-downs arising from changing marketing strategies in the first quarter of 2020 compared to $150,000 for the first quarter of 2019.

Non-interest Income and Expense – Non-interest income increased $440,000 to $1.7 million for the first quarter of 2020, compared with $1.3 million for the first quarter of 2019. The increase was primarily related to services charges on deposit accounts and bank card interchange fees. The service charges on deposit accounts and interchange fee volume increases are primarily attributable to the deposit accounts acquired in the branch acquisition transaction on November 15, 2019. Non-interest expense increased $954,000, or 13.1%, to $8.2 million for the first quarter of 2020, compared with $7.3 million for the first quarter of 2019. The increase from the first quarter of 2019 was primarily due to an increase in salaries and employee benefits of $623,000, as the Bank added sales talent and customer facing associates during the latter half of 2019 and branch staff added in connection with the branch purchase transaction.

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 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, 2019.

Additional Information

Unaudited supplemental financial information for the first quarter ending March 31, 2020, follows.

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

Three Months Ended

 

3/31/20

3/31/19

 

 

 

 

 

Income Statement Data

 

 

 

 

Interest income

$

13,267

$

12,186

Interest expense

 

3,505

 

3,227

Net interest income

 

9,762

 

8,959

Provision for loan losses

 

1,050

 

Net interest income after provision

 

8,712

 

8,959

 

 

 

 

 

Service charges on deposit accounts

 

668

 

496

Bank card interchange fees

 

750

 

508

Bank owned life insurance income

 

96

 

99

Other

 

210

 

181

Non-interest income

 

1,724

 

1,284

 

 

 

 

 

Salaries & employee benefits

 

4,538

 

3,915

Occupancy and equipment

 

999

 

898

Professional fees

 

208

 

165

Marketing expense

 

214

 

227

FDIC insurance

 

 

108

Data processing expense

 

359

 

313

State franchise and deposit tax

 

360

 

315

Deposit account related expense

 

451

 

281

Other real estate owned expense

 

16

 

166

Litigation and loan collection expense

 

65

 

46

Communications expense

 

218

 

190

Insurance expense

 

103

 

114

Postage and delivery

 

168

 

141

Other

 

536

 

402

Non-interest expense

 

8,235

 

7,281

 

 

 

 

 

Income before income taxes

 

2,201

 

2,962

Income tax expense

 

361

 

123

Net income

 

1,840

 

2,839

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

7,481,884

 

7,469,912

Weighted average shares – Diluted

 

7,481,884

 

7,469,912

 

 

 

 

 

Basic earnings per common share

$

0.25

$

0.38

Diluted earnings per common share

$

0.25

$

0.38

Cash dividends declared per common share

$

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

 

 

3/31/20

12/31/19

9/30/19

 

6/30/19

 

 

3/31/19

 

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

Interest income

$

13,267

$

12,537

$

12,485

$

12,376

 

$

12,186

Interest expense

 

3,505

 

3,676

 

3,755

 

3,576

 

 

3,227

Net interest income

 

9,762

 

8,861

 

8,730

 

8,800

 

 

8,959

Provision for loan losses

 

1,050

 

 

 

 

 

Net interest income after provision

 

8,712

 

8,861

 

8,730

 

8,800

 

 

8,959

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

668

 

681

 

633

 

571

 

 

496

Bank card interchange fees

 

750

 

711

 

623

 

596

 

 

508

Bank owned life insurance income

 

96

 

96

 

97

 

118

 

 

99

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

 

 

 

 

(5

)

 

Other

 

210

 

166

 

181

 

166

 

 

181

Non-interest income

 

1,724

 

1,654

 

1,534

 

1,446

 

 

1,284

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & employee benefits

 

4,538

 

4,201

 

4,202

 

3,915

 

 

3,915

Occupancy and equipment

 

999

 

890

 

880

 

854

 

 

898

Professional fees

 

208

 

171

 

254

 

179

 

 

165

Marketing expense

 

214

 

218

 

251

 

212

 

 

227

FDIC insurance

 

 

 

 

103

 

 

108

Data processing expense

 

359

 

316

 

315

 

315

 

 

313

State franchise and deposit tax

 

360

 

265

 

315

 

315

 

 

315

Deposit account related expense

 

451

 

333

 

300

 

310

 

 

281

Other real estate owned expense

 

16

 

35

 

25

 

142

 

 

166

Litigation and loan collection expense

 

65

 

77

 

32

 

34

 

 

46

Communications expense

 

218

 

200

 

193

 

189

 

 

190

Insurance expense

 

103

 

109

 

109

 

112

 

 

114

Postage and delivery

 

168

 

140

 

129

 

134

 

 

141

Acquisition costs

 

 

775

 

 

 

 

Other

 

536

 

584

 

446

 

410

 

 

402

Non-interest expense

 

8,235

 

8,314

 

7,451

 

7,224

 

 

7,281

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

2,201

 

2,201

 

2,813

 

3,022

 

 

2,962

Income tax expense

 

361

 

437

 

531

 

(611

)

 

123

Net income

$

1,840

$

1,764

$

2,282

$

3,633

 

$

2,839

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

7,481,884

 

7,471,680

 

7,471,582

 

7,459,631

 

 

7,469,912

Weighted average shares – Diluted

 

7,481,884

 

7,471,680

 

7,471,582

 

7,459,631

 

 

7,469,912

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.25

$

0.24

$

0.31

$

0.49

 

$

0.38

Diluted earnings per common share

$

0.25

$

0.24

$

0.31

$

0.49

 

$

0.38

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

 

 

 

3/31/20

 

12/31/19

 

9/30/19

 

 

6/30/19

 

 

3/31/19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

961,561

 

$

926,271

 

$

803,569

 

$

803,114

 

$

786,585

 

Allowance for loan losses

 

(9,150

)

 

(8,376

)

 

(8,904

)

 

(8,832

)

 

(8,686

)

Net loans

 

952,411

 

 

917,895

 

 

794,665

 

 

794,282

 

 

777,899

 

Securities available for sale

 

198,657

 

 

209,000

 

 

203,381

 

 

208,614

 

 

206,411

 

Federal funds sold & interest-bearing deposits

 

23,639

 

 

21,962

 

 

50,327

 

 

40,755

 

 

24,029

 

Cash and due from financial institutions

 

9,509

 

 

8,241

 

 

7,680

 

 

6,860

 

 

6,461

 

Premises and equipment

 

19,282

 

 

19,658

 

 

15,098

 

 

14,827

 

 

14,926

 

Premises held for sale

 

1,185

 

 

900

 

 

935

 

 

995

 

 

1,050

 

Bank owned life insurance

 

16,128

 

 

16,037

 

 

15,946

 

 

15,853

 

 

15,739

 

FHLB Stock

 

6,837

 

 

6,237

 

 

6,467

 

 

6,693

 

 

6,813

 

Other real estate owned

 

3,225

 

 

3,225

 

 

3,225

 

 

3,225

 

 

3,335

 

Deferred taxes, net

 

28,208

 

 

27,765

 

 

28,029

 

 

28,708

 

 

28,568

 

Goodwill

 

6,252

 

 

6,252

 

 

 

 

 

 

 

Intangible assets

 

2,436

 

 

2,500

 

 

 

 

 

 

 

Accrued interest receivable and other assets

 

6,441

 

 

6,107

 

 

6,411

 

 

5,976

 

 

6,092

 

Total Assets

$

1,274,210

 

$

1,245,779

 

$

1,132,164

 

$

1,126,788

 

$

1,091,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

$

467,535

 

$

476,534

 

$

488,121

 

$

505,263

 

$

465,369

 

Interest checking

 

157,621

 

 

146,038

 

 

95,508

 

 

95,296

 

 

96,537

 

Money market

 

154,851

 

 

160,837

 

 

153,663

 

 

162,917

 

 

166,430

 

Savings

 

92,235

 

 

56,015

 

 

34,618

 

 

33,553

 

 

34,066

 

Total interest-bearing deposits

 

872,242

 

 

839,424

 

 

771,910

 

 

797,029

 

 

762,402

 

Demand deposits

 

185,658

 

 

187,551

 

 

151,524

 

 

141,448

 

 

146,440

 

Total deposits

 

1,057,900

 

 

1,026,975

 

 

923,434

 

 

938,477

 

 

908,842

 

FHLB advances

 

61,349

 

 

61,389

 

 

56,430

 

 

51,470

 

 

51,511

 

Junior subordinated debentures

 

21,000

 

 

21,000

 

 

21,000

 

 

21,000

 

 

21,000

 

Subordinated capital note

 

17,000

 

 

17,000

 

 

17,000

 

 

 

 

 

Senior debt

 

5,000

 

 

5,000

 

 

5,000

 

 

10,000

 

 

10,000

 

Accrued interest payable and other liabilities

 

7,450

 

 

8,665

 

 

4,973

 

 

4,419

 

 

3,651

 

Total liabilities

 

1,169,699

 

 

1,140,029

 

 

1,027,837

 

 

1,025,366

 

 

995,004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

104,511

 

 

105,750

 

 

104,327

 

 

101,422

 

 

96,319

 

Total Liabilities and Stockholders’ Equity

$

1,274,210

 

$

1,245,779

 

$

1,132,164

 

$

1,126,788

 

$

1,091,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending shares outstanding

 

7,489,305

 

 

7,471,975

 

 

7,471,582

 

 

7,457,832

 

 

7,460,614

 

Book value per common share

$

13.95

 

$

14.15

 

$

13.96

 

$

13.60

 

$

12.91

 

Tangible book value per common share

 

12.79

 

 

12.98

 

 

13.96

 

 

13.60

 

 

12.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

 

As of

 

 

 

3/31/20

 

 

12/31/19

 

 

9/30/19

 

 

6/30/19

 

 

3/31/19

 

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

$

1,273,167

 

$

1,167,179

 

$

1,105,432

 

$

1,100,459

 

$

1,075,553

 

Loans

 

949,204

 

 

846,235

 

 

800,194

 

 

793,460

 

 

766,505

 

Earning assets

 

1,188,314

 

 

1,090,752

 

 

1,035,522

 

 

1,033,581

 

 

1,009,948

 

Deposits

 

1,052,944

 

 

982,991

 

 

933,548

 

 

926,730

 

 

900,829

 

Long-term debt and advances

 

105,407

 

 

73,695

 

 

63,369

 

 

71,989

 

 

76,524

 

Interest bearing liabilities

 

971,554

 

 

882,473

 

 

852,539

 

 

855,100

 

 

834,637

 

Stockholders’ equity

 

107,632

 

 

105,295

 

 

103,818

 

 

97,730

 

 

93,491

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.58

%

 

0.60

%

 

0.82

%

 

1.32

%

 

1.07

%

Return on average equity

 

6.88

 

 

6.65

 

 

8.72

 

 

14.91

 

 

12.32

 

Yield on average earning assets (tax equivalent)

 

4.50

 

 

4.57

 

 

4.79

 

 

4.81

 

 

4.90

 

Cost of interest-bearing liabilities

 

1.45

 

 

1.65

 

 

1.75

 

 

1.68

 

 

1.57

 

Net interest margin (tax equivalent)

 

3.31

 

 

3.23

 

 

3.35

 

 

3.42

 

 

3.61

 

Efficiency ratio

 

71.70

 

 

71.70

 

 

72.59

 

 

70.47

 

 

71.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

$

1,500

 

$

1,528

 

$

2,389

 

$

2,028

 

$

1,921

 

Troubled debt restructurings on accrual

 

466

 

 

475

 

 

188

 

 

905

 

 

910

 

Loan 90 days or more past due still on accrual

 

 

 

 

 

 

 

 

 

 

Total non-performing loans

 

1,966

 

 

2,003

 

 

2,577

 

 

2,933

 

 

2,831

 

Real estate acquired through foreclosures

 

3,225

 

 

3,225

 

 

3,225

 

 

3,225

 

 

3,335

 

Other repossessed assets

 

 

 

 

 

 

 

 

 

 

Total non-performing assets

$

5,191

 

$

5,228

 

$

5,802

 

$

6,158

 

$

6,166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans to total loans

 

0.20

%

 

0.22

%

 

0.32

%

 

0.37

%

 

0.36

%

Non-performing assets to total assets

 

0.41

 

 

0.42

 

 

0.51

 

 

0.55

 

 

0.57

 

Allowance for loan losses to non-performing loans

 

465.41

 

 

418.17

 

 

345.52

 

 

301.13

 

 

306.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

0.95

%

 

0.90

%

 

1.11

%

 

1.10

%

 

1.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Charge-off Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans charged off

$

(335

)

$

(639

)

$

(299

)

$

(72

)

$

(278

)

Recoveries

 

59

 

 

111

 

 

371

 

 

218

 

 

84

 

Net recoveries (charge-offs)

$

(276

)

$

(528

)

$

72

 

$

146

 

$

(194

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Risk Category

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

$

915,985

 

$

888,707

 

$

754,050

 

$

767,662

 

$

756,493

 

Watch

 

38,464

 

 

27,522

 

 

37,537

 

 

22,929

 

 

17,412

 

Special Mention

 

 

 

 

 

 

 

 

 

 

Substandard

 

7,112

 

 

10,042

 

 

11,982

 

 

12,523

 

 

12,680

 

Doubtful

 

 

 

 

 

 

 

 

 

 

Total

$

961,561

 

$

926,271

 

$

803,569

 

$

803,114

 

$

786,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Past Due Status

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30 – 59 days

$

1,158

 

$

1,747

 

$

979

 

$

858

 

$

2,001

 

60 – 89 days

 

248

 

 

670

 

 

557

 

 

1,015

 

 

240

 

90 days or more

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

1,500

 

 

1,528

 

 

2,389

 

 

2,028

 

 

1,921

 

Total past due and nonaccrual loans

$

2,906

 

$

3,945

 

$

3,925

 

$

3,901

 

$

4,162

 

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

As of

 

 

3/31/20

 

12/31/19

 

 

9/30/19

 

6/30/19

 

3/31/19

 

Risk-based Capital Ratios - Company

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

8.29

%

8.30

%

9.66

%

9.46

%

9.30

%

Common equity Tier I risk-based capital ratio

8.26

 

8.32

 

10.19

 

9.82

 

9.57

 

Tier I risk-based capital ratio

9.86

 

9.32

 

11.88

 

11.56

 

11.29

 

Total risk-based capital ratio

12.37

 

11.85

 

14.84

 

12.56

 

12.32

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based Capital Ratios – Limestone Bank

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

9.67

%

9.99

%

11.25

%

10.01

%

9.88

%

Common equity Tier I risk-based capital ratio

11.50

 

11.25

 

13.87

 

12.26

 

12.01

 

Tier I risk-based capital ratio

11.50

 

11.25

 

13.87

 

12.26

 

12.01

 

Total risk-based capital ratio

12.38

 

12.08

 

14.89

 

13.26

 

13.01

 

 

 

 

 

 

 

 

 

 

 

 

FTE employees

248

 

244

 

226

 

219

 

207

 

 

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

 

 

 

3/31/20

 

 

12/31/19

 

 

9/30/19

 

 

6/30/19

 

 

3/31/19

 

Tangible Book Value Per Share

(in thousands, except share and per share data)

 

 

 

 

Common stockholder’s equity

$

104,511

 

$

105,750

 

$

104,327

 

$

101,422

 

$

96,319

 

Less: Goodwill

 

6,252

 

 

6,252

 

 

 

 

 

 

 

Less: Intangible assets

 

2,436

 

 

2,500

 

 

 

 

 

 

 

Tangible common equity

 

95,823

 

 

96,998

 

 

104,327

 

 

101,422

 

 

96,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

7,489,305

 

 

7,471,975

 

 

7,471,582

 

 

7,457,832

 

 

7,460,614

 

Tangible book value per common share

$

12.79

 

$

12.98

 

$

13.96

 

$

13.60

 

$

12.91

 

Book value per common share

 

13.95

 

 

14.15

 

 

13.96

 

 

13.60

 

 

12.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

3/31/20

 

 

12/31/19

 

 

9/30/19

 

 

6/30/19

 

 

3/31/19

 

Efficiency Ratio

(in thousands)

 

 

 

 

Net interest income

$

9,762

 

$

8,861

 

$

8,730

 

$

8,800

 

$

8,959

 

Non-interest income

 

1,724

 

 

1,654

 

 

1,534

 

 

1,446

 

 

1,284

 

Less: Net gain (loss) on securities

 

 

 

 

 

 

 

(5)

 

 

 

Revenue used for efficiency ratio

 

11,486

 

 

10,515

 

 

10,264

 

 

10,251

 

 

10,243

 

Non-interest expense

 

8,235

 

 

8,314

 

 

7,451

 

 

7,224

 

 

7,281

 

Less: Acquisition costs

 

 

 

775

 

 

 

 

 

 

 

Expenses used for efficiency ratio

 

8,235

 

 

7,539

 

 

7,451

 

 

7,224

 

 

7,281

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

71.70

%

 

71.70

%

 

72.59

%

 

70.47

%

 

71.08

%

 

 

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

Source: Limestone Bancorp, Inc.