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
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200416005549/en/
John T. Taylor Chief Executive Officer (502) 499-4800
Limestone Bancorp (NASDAQ:LMST)
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