Limestone Bancorp, Inc. (NASDAQ: LMST) (“the Company”), parent
company of Limestone Bank (“the Bank”), today reported unaudited
results for the first quarter of 2021. Net income available to
common shareholders for the first quarter of 2021 was $3.2 million,
or $0.43 per basic and diluted common share, compared with $1.8
million, or $0.25 per basic and diluted common share, for the first
quarter of 2020.
John T. Taylor, Chief Executive Officer, stated, “After
navigating a challenging environment throughout 2020, we are
well-pleased with Limestone’s performance in the first quarter of
2021. Our Limestone Bank associates continue to demonstrate their
commitment to delivering high quality banking products and services
to our customers. We reopened many of our lobbies during the first
quarter and also opened a new banking center in our Louisville
metro market, which will enable us to better serve those
customers.”
Total assets grew to $1.36 billion as of March 31, 2021,
compared to $1.31 billion at December 31, 2020. The loan portfolio
increased $16.8 million, or 1.7%, during the quarter. Loans
increased to $978.9 million at March 31, 2021, compared to $962.1
million at December 31, 2020.
Net Interest Income and Average Earning Assets – Net
interest income was $10.7 million for the first quarter of 2021,
compared to $10.8 million for the fourth quarter of 2020, and $9.8
million for the first quarter of 2020. Average loans decreased to
$964.4 million for the first quarter of 2021, compared to $965.3
million for the fourth quarter of 2020, and increased compared to
$949.2 million for the first quarter of 2020. Average loans for the
first quarter of 2021 were positively impacted by $18.6 million of
loan originations under the SBA Paycheck Protection Program (“PPP”)
and $42.4 million during 2020. PPP loan balances totaled $27.9
million at March 31, 2021, compared to $20.3 million at December
31, 2020.
Net interest margin was 3.53% for the first quarter of 2021 and
the fourth quarter of 2020, compared to 3.31% for the first quarter
of 2020. The yield on earning assets decreased to 4.05% in the
first quarter of 2021, compared to 4.12% in the fourth quarter of
2020, and 4.50% in the first quarter of 2020. The yield on earning
assets in the first quarter of 2021 and fourth quarter of 2020 were
negatively impacted by lower interest rates on the Bank’s fed
funds, certain floating rate investment securities, and loans with
variable rate repricing features. Loan fee income can meaningfully
impact net interest income, loan yields, and net interest margin.
The amount of loan fee income included in total interest income was
$844,000, $1.0 million, and $216,000 for the quarters ended March
31, 2021, December 31, 2020, and March 31, 2020, respectively. This
represents 28 basis points, 33 basis points, and eight basis points
of yield on earning assets and net interest margin for the quarters
ended March 31, 2021, December 31, 2020, and March 31, 2020,
respectively. Loan fee income for the first quarter of 2021
included $436,000 in fees earned on SBA PPP loans, as compared to
$767,000 in the fourth quarter of 2020.
The cost of interest-bearing liabilities was 0.68% for the first
quarter of 2021, compared to 0.76% in the fourth quarter of 2020,
and 1.45% in the first quarter of 2020. The cost of
interest-bearing liabilities continued to decline primarily based
on the downward repricing of time deposits. Time deposits declined
$12.2 million during the first quarter of 2021 as approximately
$104.9 million of time deposits with an average rate of 0.99%
matured or repriced at lower interest rates. During the first
quarter of 2021, newly originated or renewed time deposits had an
average rate of 0.23% and a weighted average term of approximately
14 months.
As of March 31, 2021, time deposits comprise $355.3 million of
the Company’s liabilities including $105.6 million with a current
average rate of 0.56%, which reprice or mature in the second
quarter of 2021. The following table denotes contractual time
deposit maturities and average rates as of March 31, 2021:
Maturity
Quarter
As of March 31, 2021 (in
thousands)
Weighted Average Rate
Q2-2021
105,560
0.56
Q3-2021
64,819
0.44
Q4-2021
34,653
0.38
Q1-2022
41,536
0.39
Q2-2022
12,267
0.66
Thereafter
96,474
1.02
Total time deposits
$
355,309
0.63
%
Provision and Allowance for Loan Losses – The allowance
for loan losses to total loans was 1.30% at March 31, 2021,
compared to 1.29% at December 31, 2020, and 0.95% at March 31,
2020. A provision for loan loss of $350,000, or $0.04 per common
share after taxes, was recorded in the first quarter of 2021,
compared to $1.05 million, or $0.11 per common share after taxes,
in the first quarter of 2020. The 2021 loan loss provision was
attributable to the net loan charge-offs and growth within the
portfolio during the quarter, while the provision for 2020 was
largely attributable to the uncertainty surrounding the COVID-19
pandemic related economic and business disruptions. Net loan
charge-offs were $38,000 for the first quarter of 2021, compared to
net loan charge-offs of $276,000 for the first quarter of 2020.
While the U.S. Government’s economic responses to the COVID-19
pandemic through monetary policy and fiscal stimulus have provided
meaningful support to the economy, management deemed it prudent to
continue to maintain its qualitative environmental factor in the
allowance for loan losses to account for the pandemic risk. The
Bank also granted eligible short-term loan modifications under
Section 4013 of the CARES Act. Short-term loan modifications
declined to $4.7 million as of March 31, 2021, compared to $15.3
million at December 31, 2020. Included in the $4.7 million of
short-term modifications, is one commercial real estate loan
secured by a retail facility totaling $4.4 million, which remains
subject to, and is performing in accordance with, an interest only
short-term COVID-19 modification. The loan is graded substandard,
has been evaluated under ASC-310-10, and allocated a specific
reserve of $2.2 million as of March 31, 2021 and December 31,
2020.
Non-interest Income and Expense – Non-interest income for
the first quarter of 2021 increased $160,000 to $1.9 million,
compared with $1.7 million for the first quarter of 2020. The
increase was primarily related to bank card interchange fees of
$210,000, partially offset by a decrease of $120,000 in service
charges on deposit accounts. Non-interest expense decreased
$251,000, or 3.0%, to $8.0 million for the first quarter of 2021,
compared with $8.2 million for the first quarter of 2020. Deposit
and state franchise tax expense decreased $270,000 as a result of
the elimination of the Kentucky bank franchise tax as discussed
below.
Income Taxes – Income tax expense was $1.0 million for
the first quarter of 2021, compared with $361,000 for the first
quarter of 2020. Effective January 1, 2021, the state of Kentucky
eliminated the bank franchise tax, which was previously recorded as
a non-interest expense, and implemented a state income tax at a
statutory rate of 5%. State income tax expense was $214,000 for the
first quarter of 2021, compared to a state income tax benefit of
$72,000 for the first quarter of 2020, which was related to the
establishment of a net deferred tax asset due to the tax law
change.
About Limestone Bancorp, Inc.
Limestone Bancorp, Inc. (NASDAQ: LMST) is a Louisville,
Kentucky-based bank holding company which operates banking centers
in 14 counties through its wholly-owned subsidiary Limestone Bank.
The Bank’s markets include metropolitan Louisville in Jefferson
County and the surrounding counties of Bullitt and Henry and extend
south along the Interstate 65 corridor. The Bank serves south
central, southern, and western Kentucky from banking centers in
Barren, Butler, Daviess, Edmonson, Green, Hardin, Hart, Ohio, and
Warren counties. The Bank also has banking centers in Lexington,
Kentucky, the second largest city in the state, and Frankfort,
Kentucky, the state capital. Limestone Bank is a traditional
community bank with a wide range of personal and business banking
products and services.
Forward-Looking Statements
Statements in this press release relating to Limestone Bancorp’s
plans, objectives, expectations or future performance are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The words “believe,”
“may,” “should,” “anticipate,” “estimate,” “expect,” “intend,”
“objective,” “possible,” “seek,” “plan,” “strive” or similar words,
or negatives of these words, identify forward-looking statements
that involve risks and uncertainties. Although the Company's
management believes the assumptions underlying the forward-looking
statements contained herein are reasonable, any of these
assumptions could be inaccurate. Therefore, there can be no
assurance the forward-looking statements included herein will prove
to be accurate. Factors that could cause actual results to differ
from those discussed in forward-looking statements include, but are
not limited to: the impact and duration of the COVID-19 pandemic
and national, state and local emergency conditions the pandemic has
produced; economic conditions both generally and more specifically
in the markets in which the Company and its subsidiaries operate;
competition for the Company's customers from other providers of
financial services; government legislation, regulation, fiscal, and
monetary policies, which change from time to time and over which
the Company has no control; changes in interest rates; material
unforeseen changes in liquidity, results of operations, or
financial condition of the Company's customers; and other risks
detailed in the Company's filings with the Securities and Exchange
Commission, all of which are difficult to predict and many of which
are beyond the control of the Company. See Risk Factors outlined in
the Company's Form 10-K for the year ended December 31, 2020.
Additional Information
Unaudited supplemental financial information for the first
quarter ending March 31, 2021, follows.
LIMESTONE BANCORP,
INC.
Unaudited Financial
Information
(in thousands, except share and
per share data)
Three Months Ended
3/31/21
3/31/20
Income Statement Data
Interest income
$
12,250
$
13,267
Interest expense
1,570
3,505
Net interest income
10,680
9,762
Provision for loan losses
350
1,050
Net interest income after provision
10,330
8,712
Service charges on deposit accounts
548
668
Bank card interchange fees
960
750
Bank owned life insurance income
165
96
Other
211
210
Non-interest income
1,884
1,724
Salaries & employee benefits
4,482
4,538
Occupancy and equipment
1,060
999
Professional fees
236
208
Marketing expense
182
214
FDIC insurance
135
—
Data processing expense
378
359
Deposit and state franchise tax
90
360
Deposit account related expense
491
451
Communications expense
173
218
Insurance expense
104
103
Postage and delivery
152
168
Other
501
617
Non-interest expense
7,984
8,235
Income before income taxes
4,230
2,201
Income tax expense
1,008
361
Net income
3,222
1,840
Weighted average shares – Basic
7,575,211
7,481,884
Weighted average shares – Diluted
7,575,211
7,481,884
Basic earnings per common share
$
0.43
$
0.25
Diluted earnings per common share
$
0.43
$
0.25
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
3/31/21
12/31/20
9/30/20
6/30/20
3/31/20
Income Statement Data
Interest income
$
12,250
$
12,606
$
12,094
$
12,786
$
13,267
Interest expense
1,570
1,820
2,151
2,676
3,505
Net interest income
10,680
10,786
9,943
10,110
9,762
Provision for loan losses
350
900
1,350
1,100
1,050
Net interest income after provision
10,330
9,886
8,593
9,010
8,712
Service charges on deposit accounts
548
594
565
441
668
Bank card interchange fees
960
882
881
863
750
Bank owned life insurance income
165
99
113
116
96
Gain (loss) on sales and calls of
securities, net
—
—
—
(5
)
—
Other
211
202
183
186
210
Non-interest income
1,884
1,777
1,742
1,601
1,724
Salaries & employee benefits
4,482
4,167
4,413
4,633
4,538
Occupancy and equipment
1,060
1,011
1,008
983
999
Professional fees
236
233
261
235
208
Marketing expense
182
177
134
104
214
FDIC insurance
135
81
81
67
—
Data processing expense
378
381
382
380
359
Deposit and state franchise tax
90
395
360
360
360
Deposit account related expense
491
492
487
460
451
Communications expense
173
190
201
247
218
Insurance expense
104
112
102
111
103
Postage and delivery
152
151
156
152
168
Other
501
476
494
504
617
Non-interest expense
7,984
7,866
8,079
8,236
8,235
Income before income taxes
4,230
3,797
2,256
2,375
2,201
Income tax expense
1,008
680
190
393
361
Net income
$
3,222
$
3,117
$
2,066
$
1,982
$
1,840
Weighted average shares – Basic
7,575,211
7,499,323
7,499,223
7,488,173
7,481,884
Weighted average shares – Diluted
7,575,211
7,499,323
7,499,223
7,488,173
7,481,884
Basic earnings per common share
$
0.43
$
0.42
$
0.28
$
0.26
$
0.25
Diluted earnings per common share
$
0.43
$
0.42
$
0.28
$
0.26
$
0.25
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
3/31/21
12/31/20
9/30/20
6/30/20
3/31/20
Assets
Loans
$
978,865
$
962,081
$
974,468
$
975,759
$
961,561
Allowance for loan losses
(12,755
)
(12,443
)
(11,481
)
(10,228
)
(9,150)
Net loans
966,110
949,638
962,987
965,531
952,411
Securities held to maturity
41,254
—
—
—
—
Securities available for sale
177,690
203,862
203,544
202,596
198,657
Federal funds sold & interest-bearing
deposits
74,047
56,863
24,358
39,027
23,639
Cash and due from financial
institutions
9,800
10,830
7,593
9,990
9,509
Premises and equipment
20,405
18,533
18,572
19,000
19,282
Premises held for sale
1,035
1,060
1,110
1,149
1,185
Bank owned life insurance
23,601
23,441
23,347
16,238
16,128
FHLB Stock
5,810
5,887
5,962
6,142
6,837
Other real estate owned
1,765
1,765
1,625
1,625
3,225
Deferred taxes, net
24,992
25,714
26,540
27,054
28,208
Goodwill
6,252
6,252
6,252
6,252
6,252
Intangible assets
2,181
2,244
2,308
2,372
2,436
Accrued interest receivable and other
assets
6,769
6,213
7,426
7,532
6,441
Total Assets
$
1,361,711
$
1,312,302
$
1,291,624
$
1,304,508
$
1,274,210
Liabilities and Equity
Certificates of deposit
$
355,309
$
367,552
$
398,429
$
446,370
$
467,535
Interest checking
211,322
190,625
168,735
167,814
157,621
Money market
180,137
175,785
174,588
166,376
154,851
Savings
151,340
142,623
134,962
119,327
92,235
Total interest-bearing deposits
898,108
876,585
876,714
899,887
872,242
Demand deposits
268,882
243,022
217,675
224,901
185,658
Total deposits
1,166,990
1,119,607
1,094,389
1,124,788
1,057,900
FHLB advances
20,613
20,623
30,634
20,644
61,349
Junior subordinated debentures
21,000
21,000
21,000
21,000
21,000
Subordinated capital note
25,000
25,000
25,000
17,000
17,000
Senior debt
—
—
—
5,000
5,000
Accrued interest payable and other
liabilities
8,588
10,048
8,315
7,020
7,450
Total liabilities
1,242,191
1,196,278
1,179,338
1,195,452
1,169,699
Total stockholders’ equity
119,520
116,024
112,286
109,056
104,511
Total Liabilities and Stockholders’
Equity
$
1,361,711
$
1,312,302
$
1,291,624
$
1,304,508
$
1,274,210
Ending shares outstanding
7,594,499
7,498,865
7,499,183
7,485,872
7,489,305
Book value per common share
$
15.74
$
15.47
$
14.97
$
14.57
$
13.95
Tangible book value per common
share
14.63
14.34
13.83
13.42
12.79
LIMESTONE BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share
data)
As of
3/31/21
12/31/20
9/30/20
6/30/20
3/31/20
Average Balance Sheet Data
Assets
$
1,316,878
$
1,304,715
$
1,295,814
$
1,305,923
$
1,273,167
Loans
964,353
965,339
963,486
978,316
949,204
Earning assets
1,230,610
1,220,043
1,213,039
1,222,760
1,188,314
Deposits
1,125,943
1,115,985
1,111,865
1,116,420
1,052,944
Long-term debt and advances
66,617
67,280
65,769
75,259
105,407
Interest bearing liabilities
941,342
951,620
955,661
971,770
971,554
Stockholders’ equity
117,663
113,868
110,930
107,348
107,632
Quarterly Performance Ratios
Return on average assets
0.99
%
0.95
%
0.63
%
0.61
%
0.58
%
Return on average equity
11.11
10.89
7.41
7.43
6.88
Yield on average earning assets (tax
equivalent)
4.05
4.12
3.98
4.21
4.50
Cost of interest-bearing liabilities
0.68
0.76
0.90
1.11
1.45
Net interest margin (tax equivalent)
3.53
3.53
3.27
3.33
3.31
Efficiency ratio
63.55
62.61
69.14
70.30
71.70
Non-interest expense to average assets
2.46
2.40
2.48
2.54
2.60
Asset Quality Data
Nonaccrual loans
$
1,996
$
1,676
$
2,038
$
1,410
$
1,500
Troubled debt restructurings on
accrual
399
480
489
462
466
Loan 90 days or more past due still on
accrual
—
—
—
—
—
Total non-performing loans
2,395
2,156
2,527
1,872
1,966
Real estate acquired through
foreclosures
1,765
1,765
1,625
1,625
3,225
Other repossessed assets
—
—
—
—
—
Total non-performing assets
$
4,160
$
3,921
$
4,152
$
3,497
$
5,191
Non-performing loans to total loans
0.24
%
0.22
%
0.26
%
0.19
%
0.20
%
Non-performing assets to total assets
0.31
0.30
0.32
0.27
0.41
Allowance for loan losses to
non-performing loans
532.57
577.13
454.33
546.37
465.41
Allowance for loan losses to total
loans
1.30
%
1.29
%
1.18
%
1.05
%
0.95
%
Loan Charge-off Data
Loans charged off
$
(77
)
$
(124
)
$
(150
)
$
(193
)
$
(335
)
Recoveries
39
186
53
171
59
Net (charge-offs) recoveries
$
(38
)
$
62
$
(97
)
$
(22
)
$
(276
)
Loans by Risk Category
Pass
$
942,492
$
926,025
$
923,895
$
925,558
$
915,985
Watch
17,929
18,879
27,782
43,014
38,464
Special Mention
—
—
364
—
—
Substandard
18,444
17,177
22,427
7,187
7,112
Doubtful
—
—
—
—
—
Total
$
978,865
$
962,081
$
974,468
$
975,759
$
961,561
Loans by Past Due Status
Past due loans:
30 – 59 days
$
677
$
1,537
$
482
$
458
$
1,158
60 – 89 days
254
372
265
197
248
90 days or more
—
—
—
—
—
Nonaccrual loans
1,996
1,676
2,038
1,410
1,500
Total past due and nonaccrual
loans
$
2,927
$
3,585
$
2,785
$
2,065
$
2,906
LIMESTONE BANCORP, INC.
Unaudited Financial
Information
(in thousands, except share and
per share data)
As of
3/31/21
12/31/20
9/30/20
6/30/20
3/31/20
Risk-based Capital Ratios -
Company
Tier I leverage ratio
8.59
%
8.24
%
8.17
%
8.05
%
8.29
%
Common equity Tier I risk-based capital
ratio
8.96
8.72
8.54
8.45
8.26
Tier I risk-based capital ratio
10.00
9.67
9.77
9.93
9.86
Total risk-based capital ratio
13.42
13.14
13.22
12.57
12.37
Risk-based Capital Ratios – Limestone
Bank
Tier I leverage ratio
10.44
%
10.21
%
9.90
%
9.54
%
9.67
%
Common equity Tier I risk-based capital
ratio
12.21
12.05
11.88
11.79
11.50
Tier I risk-based capital ratio
12.21
12.05
11.88
11.79
11.50
Total risk-based capital ratio
13.37
13.20
12.97
12.78
12.38
FTE employees, end of period
225
219
224
228
248
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
3/31/21
12/31/20
9/30/20
6/30/20
3/31/20
Tangible Book Value Per Share
(in thousands, except share and
per share data)
Common stockholders’ equity
$
119,520
$
116,024
$
112,286
$
109,056
$
104,511
Less: Goodwill
6,252
6,252
6,252
6,252
6,252
Less: Intangible assets
2,181
2,244
2,308
2,372
2,436
Tangible common equity
111,087
107,528
103,726
100,432
95,823
Shares outstanding
7,594,499
7,498,865
7,499,183
7,485,872
7,489,305
Tangible book value per common share
$
14.63
$
14.34
$
13.83
$
13.42
$
12.79
Book value per common share
15.74
15.47
14.97
14.57
13.95
Three Months Ended
3/31/21
12/31/20
9/30/20
6/30/20
3/31/20
Efficiency Ratio
(in thousands)
Net interest income
$
10,680
$
10,786
$
9,943
$
10,110
$
9,762
Non-interest income
1,884
1,777
1,742
1,601
1,724
Less: Net gain (loss) on securities
—
—
—
(5
)
—
Revenue used for efficiency ratio
12,564
12,563
11,685
11,716
11,486
Non-interest expense
7,984
7,866
8,079
8,236
8,235
Efficiency ratio
63.55
%
62.61
%
69.14
%
70.30
%
71.70
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210421005117/en/
John T. Taylor Chief Executive Officer (502) 499-4800
Limestone Bancorp (NASDAQ:LMST)
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Limestone Bancorp (NASDAQ:LMST)
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