Limestone Bancorp Reports Net Income of $3.1 million, or $0.42 per Share, for the 4th Quarter of 2020 and $9.0 million, or $1.20 per Diluted Share, for the Twelve Months Ended December 31, 2020

Rhea-AI Summary

Limestone Bancorp (NASDAQ: LMST) reported a net income of $3.1 million for Q4 2020, up from $1.8 million in Q4 2019. For 2020, total net income reached $9.0 million, a decrease from $10.5 million in 2019. The net interest income rose to $10.8 million in Q4 compared to $9.9 million in Q3 2020, driven by a growth in loans due to SBA PPP participation. However, net interest margin decreased to 3.36% for 2020. The provision for loan losses was $900,000 in Q4, influenced by COVID-19 risks. Capital ratios improved after issuing $8 million in subordinated notes.

Positive

• Net income for Q4 2020 was $3.1 million, a 72% increase YoY.
• Net interest income grew to $10.8 million in Q4 2020, up from $8.9 million in Q4 2019.
• Average loans increased to $965.3 million, reflecting growth from SBA PPP loans.
• Non-interest income rose to $1.8 million for Q4 2020, driven by bank card interchange fees.

Negative

• 2020 net income declined to $9.0 million from $10.5 million in 2019.
• Net interest margin decreased to 3.36% for 2020 from 3.40% in 2019.
• Provision for loan losses was $900,000 in Q4 2020 due to economic uncertainty from COVID-19.

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 of 2020. Net income available to common shareholders for the fourth quarter of 2020 was $3.1 million, or $0.42 per basic and diluted common share, compared with $1.8 million, or $0.24 per basic and diluted share, for the fourth quarter of 2019. Net income for the twelve months ended December 31, 2020, was $9.0 million, or $1.20 per diluted common share, compared with net income of $10.5 million, or $1.41 per diluted share, for the twelve months ended December 31, 2019.

“While 2020 will likely be remembered as a challenging year, I am proud of the work accomplished by the Limestone Bank team," stated John T. Taylor, President and CEO. "Fighting the headwinds of the pandemic, our team adjusted to the COVID environment by providing support to our communities and customers through participation in the SBA Paycheck Protection Program and the relief prescribed in the CARES Act. We did all this while implementing measures to ensure our personnel were safe and healthy to serve our customers. The team at Limestone quickly reacted to the falling interest rate environment, grew earning assets, and continued to successfully grow our franchise value by onboarding high quality core deposit relationships. The long-term impact of the pandemic may not yet be fully known, but we believe we are well-positioned for the future with a scalable community banking platform as well as sound credit metrics and reserves.”

Income Taxes - Net income before taxes was $10.6 million for the year ended December 31, 2020, compared with $11.0 million for the year ended 2019. Income tax expense was $1.6 million for 2020 compared to $480,000 for 2019. For 2020 and 2019, income tax expense benefitted from the establishment of a net deferred tax asset related to a change in Kentucky tax law enacted during 2019. Income tax expense benefitted $478,000 and $1.6 million for the years ended December 31, 2020 and 2019, respectively, or $0.06 per basic and diluted common share, and $0.21 per basic and diluted common share, respectively. The new Kentucky income tax went into effect on January 1, 2021.

Net Interest Income – Net interest income increased to $10.8 million for the fourth quarter of 2020, compared to $9.9 million for the third quarter of 2020, and $8.9 million for the fourth quarter of 2019. Average loans increased to $965.3 million for the fourth quarter of 2020, compared to $963.5 million for the third quarter of 2020, and $846.2 million for the fourth quarter of 2019. Average loans for 2020 were positively impacted by the branch purchase transaction on November 15, 2019, which included $126.8 million in loans at the time of purchase, as well as $42.4 million of 2020 loan originations under the SBA Paycheck Protection Program. After forgiveness and paydowns, PPP loans declined to $20.3 million at December 31, 2020. Net interest margin increased to 3.53% for the fourth quarter of 2020, compared with 3.27% for the third quarter of 2020, and 3.23% for the fourth quarter of 2019.

The yield on earning assets increased to 4.12% in the fourth quarter of 2020, compared to 3.98% in the third quarter of 2020, and decreased compared to 4.57% in the fourth quarter of 2019. The yield on earning assets for the third and fourth quarters 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 $1.0 million, $387,000, and $218,000 for the quarters ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively. This represents 33 basis points, 13 basis points, and eight basis points of yield on earning assets and net interest margin for the quarters ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively. Loan fee income for the fourth quarter of 2020 included $767,000 in fees earned on SBA PPP loans, as compared to $195,000 in the third quarter of 2020.

The cost of interest-bearing liabilities was 0.76% for the fourth quarter of 2020, compared to 0.90% in the third quarter of 2020, and 1.65% in the fourth quarter of 2019. The cost of interest-bearing liabilities continued to decline primarily based on the downward repricing of time deposits. Time deposits declined $30.9 million during the fourth quarter of 2020 as approximately $84.7 million of time deposits with an average rate of 1.01% matured or repriced at lower interest rates. During the fourth quarter of 2020, newly originated or renewed time deposits had an average rate of 0.33% and a weighted average term of approximately 19 months.

Net interest income increased to $40.6 million for the year ended December 31, 2020, compared with $35.4 million for 2019. Average loans increased to $964.1 million for 2020, compared with $801.8 million for 2019. Average loans were positively impacted by the branch purchase transaction on November 15, 2019, along with loan growth during 2019 and 2020, as well as SBA PPP loan originations as discussed above. Net interest margin decreased to 3.36% for 2020, compared with 3.40% for 2019.

The yield on earning assets decreased to 4.20% for year ended December 31, 2020, compared to 4.76% for 2019. The amount of loan fee income included in total interest income was $2.1 million and $1.2 million for the year ended December 31, 2020 and December 31, 2019, respectively. This represents 18 basis points and 11 basis points of yield on earning assets and net interest margin for 2020 and 2019, respectively. Loan fee income for the year ended December 31, 2020, included $1.1 million in fees earned on SBA PPP loans. The cost of interest-bearing liabilities was 1.05% for 2020, compared to 1.66% for 2019.

As of December 31, 2020, time deposits comprise $367.6 million of the Company’s liabilities including $104.9 million with a current average rate of 0.99%, which reprice or mature in the first quarter of 2021. The following table denotes contractual time deposit maturities and average rates as of December 31, 2020:

Maturity Quarter		As of December 31, 2020 (in thousands)			Weighted Average Rate
Q1-2021			104,874		0.99
Q2-2021			102,627		0.57
Q3-2021			42,557		0.59
Q4-2021			21,782		0.50
Q1-2022			11,034		0.80
Thereafter			84,678		1.18
Total time deposits		$	367,552		0.84	%

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

		December 31, 2020																September 30, 2020
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value				Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
		(dollars in thousands)
Securities available for sale
U.S. Government and federal agencies		$	18,811			$	806			$	—			$	19,617			$	19,158			$	931			$	—			$	20,089
Agency mortgage-backed residential			71,582				2,777				(26	)			74,333				76,388				2,974				(13	)			79,349
Collateralized loan obligations			44,730				—				(1,578	)			43,152				44,730				—				(1,905	)			42,825
State and municipal			34,759				1,296				—				36,055				34,391				1,076				(32	)			35,435
Corporate bonds			31,635				472				(1,402	)			30,705				27,116				373				(1,643	)			25,846
Total available for sale		$	201,517			$	5,351			$	(3,006	)		$	203,862			$	201,783			$	5,354			$	(3,593	)		$	203,544

Provision and Allowance for Loan Losses – The allowance for loan losses to total loans was 1.29% at December 31, 2020, compared to 1.18% at September 30, 2020, and 0.90% at December 31, 2019. Loans acquired in the November 2019 branch transaction totaled $85.9 million at December 31, 2020, and $100.3 million at September 30, 2020. These loans were recorded at fair value as determined by an independent third party. The remaining discount associated with the fair value purchase accounting adjustments on the acquired loans was $288,000 at December 31, 2020, compared to $301,000 at September 30, 2020. Subsequent deterioration of these acquired loans, if any, may require an adjustment through the allowance for loan loss.

A provision of $900,000 and $4.4 million, or $0.09 and $0.46, per common share after taxes, was recorded in the fourth quarter and the year ended December 31, 2020, compared to no provision for loan losses in the fourth quarter and the year ended December 31, 2019. The 2020 loan loss provisions were attributable to the net loan charge-offs during the year, trends within the portfolio during the year, and primarily to changes in the economic and business environment attributable to COVID-19, the state and national emergencies that have been declared, and the resultant risk the pandemic poses for business disruptions for the Bank’s borrowers which may lead to credit quality deterioration. Net loan charge-offs were $333,000 for 2020, compared to net loan charge-offs of $504,000 for 2019.

While the Company expects 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 increase the allowance for loan losses through its qualitative environmental factors to account for the pandemic risk.

COVID-19 Short-term Loan Concessions – The Bank has elected to account for eligible loan modifications under Section 4013 of the CARES Act. To be an eligible loan under Section 4013 of the CARES Act, a loan modification must be (1) related to the coronavirus pandemic (“COVID-19”); (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the national emergency declared by the President on March 13, 2020, concerning the COVID-19 outbreak (the “national emergency”) or (B) January 1, 2022. Eligible loan modifications are not required to be classified as TDRs and will not be reported as past due provided they are performing in accordance with the modified terms. Interest income will continue to be recognized in accordance with GAAP unless the loan is placed on nonaccrual status.

Short-term loan modifications totaled $15.3 million as of December 31, 2020, compared to $64.9 million at September 30, 2020. The following table details the status of the Bank’s short-term loan modifications by loan category or type as of December 31, 2020:

		First Modification Active				Subsequent Modification Active				Modification Ended				Total Modified Loans				Total Loan Portfolio							% Modified to Total Portfolio
		(in thousands)
Hotel, Motel, & Lodging		$	—			$	—			$	7,822			$	7,822			$	51,822							15.1				%
Retail Facility			—				4,355				—				4,355				67,785							6.4
Commercial Real Estate			—				346				—				346				160,433							0.2
1-4 Family Residential			—				—				—				—				188,955							—
Restaurant Full Service			—				—				—				—				15,094							—
Restaurant Limited Service			2,303				—				—				2,303				15,780							14.6
Multi-family			—				—				—				—				61,180							—
Construction and Development			—				—				—				—				48,396							—
Commercial & Industrial			—				—				—				—				208,244							—
Farmland			—				—				—				—				70,272							—
Consumer, Agriculture & Other			—				—				486				486				74,120							0.7
Total		$	2,303			$	4,701			$	8,308			$	15,312			$	962,081							1.6				%

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

The table above includes one commercial real estate loan secured by a retail facility totaling $4.4 million that remains subject to and is performing in accordance with an interest only short-term subsequent 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 December 31, 2020.

Subsequent to December 31, 2020, $8.3 million of the loans categorized as “Modification Ended” in the table above have received a verified payment and are now considered cured.

Non-performing Assets – Non-performing assets, which include loans on nonaccrual, accruing troubled debt restructurings, loans past due 90 days and still accruing, and other real estate owned (“OREO”), decreased to $3.9 million, or 0.30%, of total assets at December 31, 2020, compared with $4.2 million, or 0.32%, of total assets at September 30, 2020, and $5.2 million, or 0.42%, of total assets at December 31, 2019.

Non-interest Income and Expense – Non-interest income for the fourth quarter of 2020 increased $123,000 to $1.8 million, compared with $1.7 million for the fourth quarter of 2019. The increase was primarily related to bank card interchange fees of $171,000 as a result of the deposit accounts acquired in the branch transaction on November 15, 2019. Non-interest expense decreased $448,000, or 5.4%, to $7.9 million for the fourth quarter of 2020, compared with $8.3 million for the fourth quarter of 2019. Deposit account related expense increased by $159,000, occupancy expense increased by $121,000, and franchise tax expense increased by $130,000, which were all primarily the result of the branch acquisition. Non-interest expense for 2019 also included $775,000 of acquisition expenses related to the branch purchase transaction.

Non-interest income increased $926,000 to $6.8 million for the year ended December 31, 2020, compared with $5.9 million for year ended December 31, 2019. The increase was primarily related to bank card interchange fees of $938,000 as a result of the deposit accounts acquired in the branch purchase transaction. Non-interest expense increased $2.1 million, or 7.1%, to $32.4 million for year ended December 31, 2020, compared with $30.3 million for the year ended December 31, 2019. The increase was primarily due to an increase in salaries and employee benefits of $1.5 million and $666,000 in deposit account related expense. While the Bank added sales talent and customer facing associates during the latter half of 2019 and branch staff in connection with the branch purchase transaction, the Bank realized a reduction in FTEs from 248 at March 31, 2020, to 219 as of December 31, 2020, through attrition and workforce reduction. The increase in deposit account related expense is the result of the deposit accounts acquired in the branch purchase transaction.

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

About Limestone Bancorp, Inc.

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

Forward-Looking Statements

Statements in this press release relating to Limestone Bancorp’s plans, objectives, expectations or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “possible,” “seek,” “plan,” “strive” or similar words, or negatives of these words, identify forward-looking statements that involve risks and uncertainties. Although the Company's management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: the impact and duration of the COVID-19 pandemic and national, state and local emergency conditions the pandemic has produced; economic conditions both generally and more specifically in the markets in which the Company and its subsidiaries operate; competition for the Company's customers from other providers of financial services; government legislation, regulation, fiscal, and monetary policies, which change from time to time and over which the Company has no control; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Company's customers; and other risks detailed in the Company's filings with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond the control of the Company. See Risk Factors outlined in the Company's Form 10-K for the year ended December 31, 2019, and Form 10-Q for the nine months ended September 30, 2020.

Additional Information

Unaudited supplemental financial information for the fourth quarter ending December 31, 2020, 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
	12/31/20			12/31/19			12/31/20				12/31/19
Income Statement Data
Interest income	$	12,606		$	12,537		$		50,753		$	49,584
Interest expense		1,820			3,676				10,152			14,234
Net interest income		10,786			8,861				40,601			35,350
Provision for loan losses		900			—				4,400			—
Net interest income after provision		9,886			8,861				36,201			35,350
Service charges on deposit accounts		594			681				2,268			2,381
Bank card interchange fees		882			711				3,376			2,438
Bank owned life insurance income		99			96				424			410
Gain (loss) on sales and calls of securities, net		—			—				(5	)		(5	)
Other		202			166				781			694
Non-interest income		1,777			1,654				6,844			5,918
Salaries & employee benefits		4,167			4,201				17,751			16,233
Occupancy and equipment		1,011			890				4,001			3,522
Professional fees		233			171				937			769
Marketing expense		177			218				629			908
FDIC insurance		81			—				229			211
Data processing expense		381			316				1,502			1,259
State franchise and deposit tax		395			265				1,475			1,210
Deposit account related expense		492			333				1,890			1,224
Other real estate owned expense		5			35				63			368
Litigation and loan collection expense		22			77				200			189
Communications expense		190			200				856			772
Insurance expense		112			109				428			444
Postage and delivery		151			140				627			544
Acquisition costs		—			775				—			775
Other		449			584				1,828			1,842
Non-interest expense		7,866			8,314				32,416			30,270
Income before income taxes		3,797			2,201				10,629			10,998
Income tax expense		680			437				1,624			480
Net income	$	3,117		$	1,764		$		9,005		$	10,518
Weighted average shares – Basic		7,499,323			7,471,680			7,492,190				7,468,215
Weighted average shares – Diluted		7,499,323			7,471,680			7,492,190				7,468,215
Basic earnings per common share	$	0.42		$	0.24		$	1.20			$	1.41
Diluted earnings per common share	$	0.42		$	0.24		$	1.20			$	1.41
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
		12/31/20		9/30/20			6/30/20				3/31/20			12/31/19
Income Statement Data
Interest income	$	12,606		$	12,094		$	12,786		$	13,267		$	12,537
Interest expense		1,820			2,151			2,676			3,505			3,676
Net interest income		10,786			9,943			10,110			9,762			8,861
Provision for loan losses		900			1,350			1,100			1,050			—
Net interest income after provision		9,886			8,593			9,010			8,712			8,861
Service charges on deposit accounts		594			565			441			668			681
Bank card interchange fees		882			881			863			750			711
Bank owned life insurance income		99			113			116			96			96
Gain (loss) on sales and calls of securities, net		—			—			(5	)		—			—
Other		202			183			186			210			166
Non-interest income		1,777			1,742			1,601			1,724			1,654
Salaries & employee benefits		4,167			4,413			4,633			4,538			4,201
Occupancy and equipment		1,011			1,008			983			999			890
Professional fees		233			261			235			208			171
Marketing expense		177			134			104			214			218
FDIC insurance		81			81			67			—			—
Data processing expense		381			382			380			359			316
State franchise and deposit tax		395			360			360			360			265
Deposit account related expense		492			487			460			451			333
Other real estate owned expense		5			20			22			16			35
Litigation and loan collection expense		22			54			59			65			77
Communications expense		190			201			247			218			200
Insurance expense		112			102			111			103			109
Postage and delivery		151			156			152			168			140
Acquisition costs		—			—			—			—			775
Other		449			420			423			536			584
Non-interest expense		7,866			8,079			8,236			8,235			8,314
Income before income taxes		3,797			2,256			2,375			2,201			2,201
Income tax expense		680			190			393			361			437
Net income	$	3,117		$	2,066		$	1,982		$	1,840		$	1,764
Weighted average shares – Basic		7,499,323			7,499,223			7,488,173			7,481,884			7,471,680
Weighted average shares – Diluted		7,499,323			7,499,223			7,488,173			7,481,884			7,471,680
Basic earnings per common share	$	0.42		$	0.28		$	0.26		$	0.25		$	0.24
Diluted earnings per common share	$	0.42		$	0.28		$	0.26		$	0.25		$	0.24
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
		12/31/20		9/30/20			6/30/20				3/31/20			12/31/19
Assets
Loans	$	962,081		$	974,468		$	975,759		$	961,561		$	926,271
Allowance for loan losses		(12,443	)		(11,481	)		(10,228	)		(9,150	)		(8,376	)
Net loans		949,638			962,987			965,531			952,411			917,895
Securities available for sale		203,862			203,544			202,596			198,657			209,000
Federal funds sold & interest-bearing deposits		56,863			24,358			39,027			23,639			21,962
Cash and due from financial institutions		10,830			7,593			9,990			9,509			8,241
Premises and equipment		18,533			18,572			19,000			19,282			19,658
Premises held for sale		1,060			1,110			1,149			1,185			900
Bank owned life insurance		23,441			23,347			16,238			16,128			16,037
FHLB Stock		5,887			5,962			6,142			6,837			6,237
Other real estate owned		1,765			1,625			1,625			3,225			3,225
Deferred taxes, net		25,714			26,540			27,054			28,208			27,765
Goodwill		6,252			6,252			6,252			6,252			6,252
Intangible assets		2,244			2,308			2,372			2,436			2,500
Accrued interest receivable and other assets		6,213			7,426			7,532			6,441			6,107
Total Assets	$	1,312,302		$	1,291,624		$	1,304,508		$	1,274,210		$	1,245,779
Liabilities and Equity
Certificates of deposit	$	367,552		$	398,429		$	446,370		$	467,535		$	476,534
Interest checking		190,625			168,735			167,814			157,621			146,038
Money market		175,785			174,588			166,376			154,851			160,837
Savings		142,623			134,962			119,327			92,235			56,015
Total interest-bearing deposits		876,585			876,714			899,887			872,242			839,424
Demand deposits		243,022			217,675			224,901			185,658			187,551
Total deposits		1,119,607			1,094,389			1,124,788			1,057,900			1,026,975
FHLB advances		20,623			30,634			20,644			61,349			61,389
Junior subordinated debentures		21,000			21,000			21,000			21,000			21,000
Subordinated capital note		25,000			25,000			17,000			17,000			17,000
Senior debt		—			—			5,000			5,000			5,000
Accrued interest payable and other liabilities		10,048			8,315			7,020			7,450			8,665
Total liabilities		1,196,278			1,179,338			1,195,452			1,169,699			1,140,029
Total stockholders’ equity		116,024			112,286			109,056			104,511			105,750
Total Liabilities and Stockholders’ Equity	$	1,312,302		$	1,291,624		$	1,304,508		$	1,274,210		$	1,245,779
Ending shares outstanding		7,498,865			7,499,183			7,485,872			7,489,305			7,471,975
Book value per common share	$	15.47		$	14.97		$	14.57		$	13.95		$	14.15
Tangible book value per common share		14.34			13.83			13.42			12.79			12.98

LIMESTONE BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
		As of
		12/31/20			9/30/20			6/30/20			3/31/20			12/31/19
Average Balance Sheet Data
Assets	$	1,304,715		$	1,295,814		$	1,305,923		$	1,273,167		$	1,167,179
Loans		965,339			963,486			978,316			949,204			846,235
Earning assets		1,220,043			1,213,039			1,222,760			1,188,314			1,090,752
Deposits		1,115,985			1,111,865			1,116,420			1,052,944			982,991
Long-term debt and advances		67,280			65,769			75,259			105,407			73,695
Interest bearing liabilities		951,620			955,661			971,770			971,554			882,473
Stockholders’ equity		113,868			110,930			107,348			107,632			105,295
Quarterly Performance Ratios
Return on average assets		0.95	%		0.63	%		0.61	%		0.58	%		0.60	%
Return on average equity		10.89			7.41			7.43			6.88			6.65
Yield on average earning assets (tax equivalent)		4.12			3.98			4.21			4.50			4.57
Cost of interest-bearing liabilities		0.76			0.90			1.11			1.45			1.65
Net interest margin (tax equivalent)		3.53			3.27			3.33			3.31			3.23
Efficiency ratio		62.61			69.14			70.30			71.70			71.70
Non-interest expense to average assets		2.40			2.48			2.54			2.60			2.83
Asset Quality Data
Nonaccrual loans	$	1,676		$	2,038		$	1,410		$	1,500		$	1,528
Troubled debt restructurings on accrual		480			489			462			466			475
Loan 90 days or more past due still on accrual		—			—			—			—			—
Total non-performing loans		2,156			2,527			1,872			1,966			2,003
Real estate acquired through foreclosures		1,765			1,625			1,625			3,225			3,225
Other repossessed assets		—			—			—			—			—
Total non-performing assets	$	3,921		$	4,152		$	3,497		$	5,191		$	5,228
Non-performing loans to total loans		0.22	%		0.26	%		0.19	%		0.20	%		0.22	%
Non-performing assets to total assets		0.30			0.32			0.27			0.41			0.42
Allowance for loan losses to non-performing loans		577.13			454.33			546.37			465.41			418.17
Allowance for loan losses to total loans		1.29	%		1.18	%		1.05	%		0.95	%		0.90	%
Loan Charge-off Data
Loans charged off	$	(124	)	$	(150	)	$	(193	)	$	(335	)	$	(639	)
Recoveries		186			53			171			59			111
Net recoveries (charge-offs)	$	62		$	(97	)	$	(22	)	$	(276	)	$	(528	)
Loans by Risk Category
Pass	$	926,025		$	923,895		$	925,558		$	915,985		$	888,707
Watch		18,879			27,782			43,014			38,464			27,522
Special Mention		—			364			—			—			—
Substandard		17,177			22,427			7,187			7,112			10,042
Doubtful		—			—			—			—			—
Total	$	962,081		$	974,468		$	975,759		$	961,561		$	926,271
Loans by Past Due Status
Past due loans:
30 – 59 days	$	1,537		$	482		$	458		$	1,158		$	1,747
60 – 89 days		372			265			197			248			670
90 days or more		—			—			—			—			—
Nonaccrual loans		1,676			2,038			1,410			1,500			1,528
Total past due and nonaccrual loans	$	3,585		$	2,785		$	2,065		$	2,906		$	3,945

LIMESTONE BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
		As of
		12/31/20			9/30/20			6/30/20			3/31/20			12/31/19
Risk-based Capital Ratios - Company
Tier I leverage ratio		8.24	%		8.17	%		8.05	%		8.29	%		8.30		%
Common equity Tier I risk-based capital ratio		8.72			8.54			8.45			8.26			8.32
Tier I risk-based capital ratio		9.67			9.77			9.93			9.86			9.32
Total risk-based capital ratio		13.14			13.22			12.57			12.37			11.85
Risk-based Capital Ratios – Limestone Bank
Tier I leverage ratio		10.21	%		9.90	%		9.54	%		9.67	%		9.99		%
Common equity Tier I risk-based capital ratio		12.05			11.88			11.79			11.50			11.25
Tier I risk-based capital ratio		12.05			11.88			11.79			11.50			11.25
Total risk-based capital ratio		13.20			12.97			12.78			12.38			12.08
FTE employees, end of period		219			224			228			248			244

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
		12/31/20			9/30/20			6/30/20			3/31/20				12/31/19
Tangible Book Value Per Share	(in thousands, except share and per share data)
Common stockholders’ equity	$	116,024		$	112,286		$	109,056		$	104,511		$		105,750
Less: Goodwill		6,252			6,252			6,252			6,252				6,252
Less: Intangible assets		2,244			2,308			2,372			2,436				2,500
Tangible common equity		107,528			103,726			100,432			95,823				96,998
Shares outstanding		7,498,865			7,499,183			7,485,872			7,489,305				7,471,975
Tangible book value per common share	$	14.34		$	13.83		$	13.42		$	12.79		$		12.98
Book value per common share		15.47			14.97			14.57			13.95				14.15
	Three Months Ended
		12/31/20			9/30/20			6/30/20			3/31/20					12/31/19
Efficiency Ratio	(in thousands)
Net interest income	$	10,786		$	9,943		$	10,110		$	9,762			$		8,861
Non-interest income		1,777			1,742			1,601			1,724					1,654
Less: Net gain (loss) on securities		—			—			(5	)		—					—
Revenue used for efficiency ratio		12,563			11,685			11,716			11,486					10,515
Non-interest expense		7,866			8,079			8,236			8,235					8,314
Less: Acquisition costs		—			—			—			—					775
Expenses used for efficiency ratio		7,866			8,079			8,236			8,235					7,539
Efficiency ratio		62.61	%		69.14	%		70.30	%		71.70	%				71.70	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210120005493/en/

FAQ

What were Limestone Bancorp's earnings for Q4 2020?

Limestone Bancorp reported a net income of $3.1 million for Q4 2020.

How did the pandemic impact Limestone Bancorp's financial performance in 2020?

The pandemic led to a decline in net income to $9.0 million for 2020, down from $10.5 million in 2019.

What was the net interest margin for Limestone Bancorp in 2020?

The net interest margin for Limestone Bancorp decreased to 3.36% in 2020.

How much did Limestone Bancorp provision for loan losses in Q4 2020?

Limestone Bancorp provisioned $900,000 for loan losses in Q4 2020.

What is the significance of the $8 million subordinated notes issued by Limestone Bancorp?

The issuance of $8 million in subordinated notes improved the company's capital ratios.