LMST Limestone Bancorp Inc

Limestone Bancorp, Inc. (NASDAQ: LMST) (the “Company”), parent company of Limestone Bank, Inc. (the “Bank”), today reported unaudited results for the third quarter of 2022. Net income available to common shareholders for the third quarter of 2022 was $5.8 million, or $0.76 per basic and diluted common share, compared with $4.3 million, or $0.57 per basic and diluted common share, for the third quarter of 2021. Net income for the nine months ended September 30, 2022, was $13.4 million, or $1.76 per basic and diluted common share, compared with net income of $11.5 million, or $1.51 per basic and diluted common share, for the nine months ended September 30, 2021.

John T. Taylor, Chief Executive Officer, noted, “The Limestone team delivered strong performance results in the third quarter and for the first nine months of 2022. Deposit gathering efforts remain successful and loan growth was 5.0% in the third quarter and 12.6% for the first nine months of the year. Asset quality remains strong and net interest margin expanded 12 basis points quarter over quarter, which is directionally consistent with the Fed’s tightening actions and our approach to interest rate risk management.”

Total assets were $1.49 billion at September 30, 2022, up $72.6 million from the previous quarter. The loan portfolio increased $54.1 million, or 5.0%, during the quarter to $1.13 billion at September 30, 2022. Total deposits increased $51.0 million to $1.22 billion at September 30, 2022.

Net Interest Income and Average Earning Assets – Net interest income increased to $12.9 million for the third quarter of 2022, compared to $11.7 million for the second quarter of 2022, and $11.6 million for the third quarter of 2021. Net interest margin increased to 3.73% for the third quarter of 2022, compared with 3.51% for the second quarter of 2022, and 3.61% for the third quarter of 2021.

The yield on earning assets increased to 4.37% in the third quarter of 2022, compared to 3.95% in the second quarter of 2022, and 4.03% in the third quarter of 2021. Quarter over quarter, average loans increased $43.4 million to $1.10 billion. Compared to the prior year third quarter, average loans increased $143.9 million, average investment securities increased $7.4 million, and average lower yielding fed funds sold decreased $56.2 million. PPP loans averaged $157,000 for the third quarter of 2022, $172,000 for the second quarter of 2022, and $12.6 million for the third quarter of 2021.

The Federal Reserve increased the fed funds target by 25 basis points on March 16, 2022, 50 basis points on May 4, 2022, 75 basis points on June 15, 2022, 75 basis points on July 26, 2022, and 75 basis points on September 20, 2022. During the second and third quarters of 2022, the Bank’s fed funds sold, floating rate investment securities, loans with variable rate pricing features, and new loan originations benefitted from the upward movement in short-term rates and are expected to continue to benefit as rates continue to rise. The cost of interest-bearing liabilities has also been impacted to a lesser extent but is also expected to continue to increase as short-term interest rates continue to rise.

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 $279,000, $173,000, and $1.5 million for the quarters ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively. This represents eight basis points, six basis points, and 48 basis points of yield on earning assets and net interest margin for the quarters ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively. Loan fee income for the third and second quarters of 2022 did not include any fees earned on PPP loans, compared to $1.4 million in the third quarter of 2021, which represents 43 basis points of earning asset yield and net interest margin for the third quarter of 2021.

The following table reconciles the as reported yield on earning assets to the yield on earning assets excluding PPP fees, a non-GAAP financial measure:

 

Three Months Ended

 

 

9/30/22

 

6/30/22

 

3/31/22

 

12/31/21

 

9/30/21

 

 

(in thousands)

 

 

 

 

Yield on Earning Assets, as reported

 

4.37

%

 

3.95

%

 

3.82

%

 

3.71

%

 

4.03

%

Less Impact of PPP Fees

 

—

 

 

—

 

 

0.02

 

 

0.08

 

 

0.43

 

Yield on Earning Asset excluding PPP Fees

 

4.37

%

 

3.95

%

 

3.80

%

 

3.63

%

 

3.60

%

The cost of interest-bearing liabilities was 0.85% for the third quarter of 2022, compared to 0.58% in the second quarter of 2022, and 0.56% in the third quarter of 2021. While deposit mix has continued to improve as compared to the prior year third quarter, the movement in short-term rates has impacted the cost of interest-bearing liabilities. Future short-term rate increases are expected to further impact the cost of interest-bearing liabilities.

Net interest income increased to $35.7 million for the first nine months of 2022, compared with $33.2 million in the first nine months of 2021. Net interest margin increased to 3.56% in the first nine months of 2022, compared with 3.53% for the first nine months of 2021.

The yield on earning assets increased to 4.05% for the first nine months of 2022, compared to 4.00% for the first nine months of 2021. During the first nine months of 2022 average loans increased $100.0 million to $1.06 billion and average investment securities increased $30.8 million, while average lower yielding fed funds sold decreased $45.4 million compared to the first nine months of 2021. Average PPP loans were $340,000 and $19.4 million for the first nine months of 2022 and 2021, respectively. The amount of loan fee income included in total interest income was $776,000 and $3.3 million for the nine months ended September 30, 2022 and 2021, respectively. This represents eight basis points and 35 basis points of yield on earning assets and net interest margin for the nine months ended September 30, 2022 and 2021, respectively. Loan fee income included PPP fees of $45,000 and $2.5 million for the nine months ended September 30, 2022 and 2021, respectively, which represented approximately one basis point and 27 basis points of earning asset yield and net interest margin for those nine-month periods, respectively.

The cost of interest-bearing liabilities was 0.66% for the first nine months of 2022, compared to 0.62% in the first nine months of 2021. While deposit mix has continued to improve as compared to the prior year, the cost of interest-bearing liabilities was impacted by the recent increases in short-term interest rates and is expected to continue to increase as short-term interest rates continue to rise.

Time deposits increased $17.6 million during the third quarter of 2022. Approximately $47.9 million of time deposits with an average rate of 0.58% matured and were redeemed or repriced during the third quarter of 2022. During the third quarter of 2022, newly originated or renewed time deposits had an average rate of 2.27% and an average term of approximately 13 months. As of September 30, 2022, time deposits comprised $273.8 million of the Company’s liabilities including $57.1 million with a current average rate of 0.79%, which reprice or mature in the fourth quarter of 2022. The following table denotes contractual time deposit maturities and average rates as of September 30, 2022:

 

Maturity

Quarter

 

As of

September 30,

2022

(in thousands)

Weighted Average Rate

   

 

 

 

 

 

 

 

   

Q4-2022

 

 

57,052

 

0.79

 

   

Q1-2023

 

 

66,691

 

0.89

 

   

Q2-2023

 

 

61,390

 

2.12

 

   

Q3-2023

 

 

24,036

 

0.61

 

   

Thereafter

 

 

64,611

 

0.86

 

   

Total time deposits

 

$

273,780

 

1.11

%

 

Provision and Allowance for Loan Losses – The allowance for loan losses to total loans was 1.16% at September 30, 2022, compared to 1.17% at June 30, 2022, and 1.34% at September 30, 2021.

Net loan recoveries were $1.7 million and $1.6 million, for the three and nine months ended September 30, 2022, compared to net loan recoveries of $36,000 and net loan charge-offs of $120,000, for the three and nine months ended September 30, 2021. During the third quarter of 2022, the Bank received a payoff of $2.0 million on a nonaccrual commercial real estate loan resulting in a recovery of $1.5 million. A negative provision for loan losses of $1,250,000 and $50,000, or $(0.12) and $(0.01) per common share after taxes, was recorded in the third quarter and the first nine months of 2022, respectively, compared to a provision for loan losses of $300,000 and $650,000, or $0.03 and $0.06 per common share after taxes, for the three and first nine months of 2021. The 2022 negative loan loss provisions were primarily attributable to the significant recovery recognized during the third quarter and its impact on the historical loss percentages, offset by the additional reserve required by the growth trends within the portfolio during the periods. The 2021 loan loss provisions were attributable to growth trends within the portfolio and net loan charge-offs impacting historical loss percentages during the periods.

Non-interest Income and Expense – Non-interest income for the third quarter of 2022 decreased $208,000 to $2.2 million, compared with $2.4 million for the third quarter of 2021. The third quarter of 2021 included a $465,000 gain on the call of a corporate bond from the Bank’s available for sale securities portfolio. Service charges on deposit accounts increased $165,000 due to an increase in transaction volumes. Non-interest expense increased $647,000, or 8.0%, to $8.7 million for the third quarter of 2022, compared with $8.1 million for the third quarter of 2021. Salaries and benefits expense increased $377,000 from the third quarter of 2021 as a result of the inflationary impact on talent acquisition and the administration of annual salary adjustments, increased health care utilization costs, and a modest increase in performance-based incentive compensation. Other non-interest expense increased $214,000 from the third quarter of 2021 primarily related to an increase in losses associated with demand deposit charge-offs and fraudulent check and debit card activity during the period.

Non-interest income for the first nine months of 2022 increased $267,000 to $6.7 million, compared with $6.5 million for the first nine months of 2021. The increase was primarily due to an increase in services charges on deposit accounts of $421,000 due to an increase in transaction volumes, as well as a $179,000 increase in bank owned life insurance income due to additional policies being purchased in March 2022. Non-interest income for the first nine months of 2022 also included a $163,000 gain on sale of premises held for sale from the first quarter of 2022, while the first nine months of 2021 included a $191,000 gain on sale of OREO from the second quarter of 2021, as well as, a $465,000 gain on the call of a corporate bond from the third quarter of 2021. Non-interest expense increased $907,000, or 3.8%, to $24.9 million for the first nine months of 2022, compared with $24.0 million for the first nine months of 2021. The increase was primarily due to an increase of $643,000 in salaries and benefits as discussed above, and a $328,000 increase in other non-interest expense primarily related to losses associated with demand deposit charge-offs and fraudulent check and debit card activity during the period.

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; 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 inflation and efforts to control it; 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, 2021.

Additional Information Unaudited supplemental financial information for the third quarter ending September 30, 2022, follows.

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

Three

Three

Nine

Nine

 

 

Months

Months

Months

Months

 

 

Ended

Ended

Ended

Ended

 

 

9/30/22

9/30/21

9/30/22

9/30/21

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

Interest income

$

15,121

 

$

12,975

 

$

40,670

 

$

37,601

 

Interest expense

 

2,209

 

 

1,354

 

 

 

4,964

 

 

4,386

 

Net interest income

 

12,912

 

 

11,621

 

 

 

35,706

 

 

33,215

 

Provision (negative provision) for loan losses

 

(1,250

)

 

300

 

 

 

(50

)

 

650

 

Net interest income after provision

 

14,162

 

 

11,321

 

 

 

35,756

 

 

32,565

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

748

 

 

583

 

 

 

2,072

 

 

1,651

 

Bank card interchange fees

 

1,061

 

 

1,044

 

 

 

3,151

 

 

3,077

 

Bank owned life insurance income

 

148

 

 

112

 

 

 

599

 

 

420

 

Gain on sale of OREO

 

—

 

 

—

 

 

 

—

 

 

191

 

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

 

—

 

 

465

 

 

 

(3

)

 

460

 

Gain on sale of premises held for sale

 

—

 

 

—

 

 

 

163

 

 

—

 

Other

 

271

 

 

232

 

 

 

740

 

 

656

 

Non-interest income

 

2,228

 

 

2,436

 

 

 

6,722

 

 

6,455

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & employee benefits

 

4,959

 

 

4,582

 

 

 

14,174

 

 

13,531

 

Occupancy and equipment

 

1,134

 

 

1,024

 

 

 

3,218

 

 

3,063

 

Deposit account related expense

 

571

 

 

545

 

 

 

1,692

 

 

1,592

 

Data processing expense

 

402

 

 

378

 

 

 

1,191

 

 

1,133

 

Professional fees

 

206

 

 

219

 

 

 

663

 

 

701

 

Marketing expense

 

159

 

 

200

 

 

 

464

 

 

561

 

FDIC insurance

 

90

 

 

90

 

 

 

270

 

 

315

 

Deposit tax

 

99

 

 

90

 

 

 

297

 

 

270

 

Communications expense

 

108

 

 

153

 

 

 

293

 

 

520

 

Insurance expense

 

104

 

 

105

 

 

 

318

 

 

324

 

Postage and delivery

 

156

 

 

169

 

 

 

469

 

 

460

 

Other

 

709

 

 

495

 

 

 

1,846

 

 

1,518

 

Non-interest expense

 

8,697

 

 

8,050

 

 

 

24,895

 

 

23,988

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

7,693

 

 

5,707

 

 

 

17,583

 

 

15,032

 

Income tax expense

 

1,880

 

 

1,366

 

 

 

4,155

 

 

3,568

 

Net income

$

5,813

 

$

4,341

 

 

$

13,428

 

$

11,464

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

7,639,492

 

 

7,602,686

 

 

 

7,628,677

 

 

7,591,800

 

Weighted average shares – Diluted

 

7,639,492

 

 

7,602,686

 

 

 

7,628,677

 

 

7,591,800

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.76

 

$

0.57

 

 

$

1.76

 

$

1.51

 

Diluted earnings per common share

$

0.76

 

$

0.57

 

 

$

1.76

 

$

1.51

 

Cash dividends declared per common share

$

0.05

 

$

0.00

 

 

$

0.15

 

$

0.00

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

1.59

%

 

1.26

 %

 

1.26

%

 

1.14

%

Return on average equity

 

17.83

 

 

13.61

 

 

 

13.87

 

 

12.57

 

Yield on average earning assets (tax equivalent)

 

4.37

 

 

4.03

 

 

 

4.05

 

 

4.00

 

Cost of interest-bearing liabilities

 

0.85

 

 

0.56

 

 

 

0.66

 

 

0.62

 

Net interest margin (tax equivalent)

 

3.73

 

 

3.61

 

 

 

3.56

 

 

3.53

 

Efficiency ratio1

 

57.44

 

 

59.23

 

 

 

58.67

 

 

61.18

 

Non-interest expense to average assets

 

2.38

 

 

2.33

 

 

 

2.34

 

 

2.38

 

 

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

 

 

9/30/22

6/30/22

3/31/22

 

12/31/21

 

9/30/21

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

Interest income

$

15,121

 

$

13,122

 

$

12,427

$

12,314

$

12,975

Interest expense

 

2,209

 

 

1,442

 

 

1,313

 

 

1,307

 

 

1,354

 

Net interest income

 

12,912

 

 

11,680

 

 

11,114

 

 

11,007

 

 

11,621

 

Provision (negative provision) for loan losses

 

(1,250

)

 

450

 

 

750

 

 

500

 

 

300

 

Net interest income after provision

 

14,162

 

 

11,230

 

 

10,364

 

 

10,507

 

 

11,321

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

748

 

 

690

 

 

634

 

 

605

 

 

583

 

Bank card interchange fees

 

1,061

 

 

1,087

 

 

1,003

 

 

1,039

 

 

1,044

 

Bank owned life insurance income

 

148

 

 

249

 

 

202

 

 

106

 

 

112

 

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

 

—

 

 

(3

)

 

—

 

 

—

 

 

465

 

Gain on sale of premises held for sale

 

—

 

 

—

 

 

163

 

 

—

 

 

—

 

Other

 

271

 

 

233

 

 

236

 

 

234

 

 

232

 

Non-interest income

 

2,228

 

 

2,256

 

 

2,238

 

 

1,984

 

 

2,436

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & employee benefits

 

4,959

 

 

4,651

 

 

4,564

 

 

4,601

 

 

4,582

 

Occupancy and equipment

 

1,134

 

 

1,055

 

 

1,029

 

 

978

 

 

1,024

 

Deposit account related expense

 

571

 

 

574

 

 

547

 

 

566

 

 

545

 

Data processing expense

 

402

 

 

403

 

 

386

 

 

379

 

 

378

 

Professional fees

 

206

 

 

236

 

 

221

 

 

251

 

 

219

 

Marketing expense

 

159

 

 

172

 

 

133

 

 

166

 

 

200

 

FDIC insurance

 

90

 

 

90

 

 

90

 

 

90

 

 

90

 

Deposit tax

 

99

 

 

99

 

 

99

 

 

105

 

 

90

 

Communications expense

 

108

 

 

121

 

 

64

 

 

161

 

 

153

 

Insurance expense

 

104

 

 

109

 

 

105

 

 

91

 

 

105

 

Postage and delivery

 

156

 

 

150

 

 

163

 

 

145

 

 

169

 

Other

 

709

 

 

567

 

 

570

 

 

450

 

 

495

 

Non-interest expense

 

8,697

 

 

8,227

 

 

7,971

 

 

7,983

 

 

8,050

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

7,693

 

 

5,259

 

 

4,631

 

 

4,508

 

 

5,707

 

Income tax expense

 

1,880

 

 

1,223

 

 

1,052

 

 

1,063

 

 

1,366

 

Net income

$

5,813

 

$

4,036

 

$

3,579

 

$

3,445

 

$

4,341

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

7,639,492

 

 

7,631,883

 

 

7,614,382

 

 

7,597,256

 

 

7,602,686

 

Weighted average shares – Diluted

 

7,639,492

 

 

7,631,883

 

 

7,614,382

 

 

7,597,256

 

 

7,602,686

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.76

 

$

0.53

 

$

0.47

 

$

0.45

 

$

0.57

 

Diluted earnings per common share

$

0.76

 

$

0.53

 

$

0.47

 

$

0.45

 

$

0.57

 

Cash dividends declared per common share

$

0.05

 

$

0.05

 

$

0.05

 

$

0.00

 

$

0.00

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

1.59

%

 

1.14

%

 

1.03

%

 

0.97

%

 

1.26

%

Return on average equity

 

17.83

 

 

12.66

 

 

11.07

 

 

10.51

 

 

13.61

 

Yield on average earning assets (tax equivalent)

 

4.37

 

 

3.95

 

 

3.82

 

 

3.71

 

 

4.03

 

Cost of interest-bearing liabilities

 

0.85

 

 

0.58

 

 

0.53

 

 

0.53

 

 

0.56

 

Net interest margin (tax equivalent)

 

3.73

 

 

3.51

 

 

3.42

 

 

3.32

 

 

3.61

 

Efficiency ratio1

 

57.44

 

 

59.02

 

 

59.70

 

 

61.45

 

 

59.23

 

Non-interest expense to average assets

 

2.38

 

 

2.33

 

 

2.30

 

 

2.25

 

 

2.33

 

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

 

As of

 

9/30/22

6/30/22

3/31/22

12/31/21

9/30/21

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Loans

$

1,127,945

 

$

1,073,815

 

$

1,047,285

 

$

1,001,840

 

$

968,088

 

Allowance for loan losses

 

(13,031

)

 

(12,550

)

 

(12,195

)

 

(11,531

)

 

(12,973

)

Net loans

 

1,114,914

 

 

1,061,265

 

 

1,035,090

 

 

990,309

 

 

955,115

 

Securities held to maturity2

 

43,350

 

 

44,205

 

 

45,639

 

 

46,460

 

 

47,539

 

Securities available for sale2

 

181,292

 

 

193,022

 

 

204,071

 

 

214,213

 

 

203,548

 

Federal funds sold & interest-bearing deposits

 

50,940

 

 

18,244

 

 

22,040

 

 

67,110

 

 

44,909

 

Cash and due from financial institutions

 

6,430

 

 

7,742

 

 

10,009

 

 

10,493

 

 

13,579

 

Premises and equipment

 

22,503

 

 

22,747

 

 

23,043

 

 

21,575

 

 

21,623

 

Premises held for sale

 

—

 

 

—

 

 

—

 

 

310

 

 

980

 

Bank owned life insurance

 

31,032

 

 

30,888

 

 

30,643

 

 

23,946

 

 

23,845

 

FHLB Stock

 

5,176

 

 

5,116

 

 

5,116

 

 

5,116

 

 

5,116

 

Deferred taxes, net

 

23,002

 

 

23,343

 

 

22,648

 

 

21,583

 

 

22,161

 

Goodwill

 

6,252

 

 

6,252

 

 

6,252

 

 

6,252

 

 

6,252

 

Intangible assets

 

1,797

 

 

1,861

 

 

1,925

 

 

1,989

 

 

2,053

 

Accrued interest receivable and other assets

 

7,007

 

 

6,383

 

 

6,230

 

 

6,336

 

 

6,128

 

Total Assets

$

1,493,695

 

$

1,421,068

 

$

1,412,706

 

$

1,415,692

 

$

1,352,848

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

Certificates of deposit

$

273,780

 

$

256,141

 

$

260,064

 

$

266,011

 

$

280,545

 

Interest checking

 

286,867

 

 

269,240

 

 

274,054

 

 

287,208

 

 

239,923

 

Money market

 

215,450

 

 

209,183

 

 

216,845

 

 

217,943

 

 

198,470

 

Savings

 

154,545

 

 

163,573

 

 

166,135

 

 

163,423

 

 

163,018

 

Total interest-bearing deposits

 

930,642

 

 

898,137

 

 

917,098

 

 

934,585

 

 

881,956

 

Demand deposits

 

287,938

 

 

269,425

 

 

281,533

 

 

274,083

 

 

266,035

 

Total deposits

 

1,218,580

 

 

1,167,562

 

 

1,198,631

 

 

1,208,668

 

 

1,147,991

 

FHLB advances

 

90,000

 

 

70,000

 

 

30,000

 

 

20,000

 

 

20,000

 

Junior subordinated debentures

 

21,000

 

 

21,000

 

 

21,000

 

 

21,000

 

 

21,000

 

Subordinated capital note

 

25,000

 

 

25,000

 

 

25,000

 

 

25,000

 

 

25,000

 

Accrued interest payable and other liabilities

 

10,744

 

 

10,888

 

 

9,855

 

 

10,065

 

 

10,193

 

Total liabilities

 

1,365,324

 

 

1,294,450

 

 

1,284,486

 

 

1,284,733

 

 

1,224,184

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

128,371

 

 

126,618

 

 

128,220

 

 

130,959

 

 

128,664

 

Total Liabilities and Stockholders’ Equity

$

1,493,695

 

$

1,421,068

 

$

1,412,706

 

$

1,415,692

 

$

1,352,848

 

 

 

 

 

 

 

 

 

 

 

 

Ending shares outstanding

 

7,639,033

 

 

7,640,680

 

 

7,622,157

 

 

7,594,749

 

 

7,602,686

 

Book value per common share

$

16.80

 

$

16.57

 

$

16.82

 

$

17.24

 

$

16.92

 

Tangible book value per common share3

 

15.75

 

 

15.51

 

 

15.75

 

 

16.16

 

 

15.83

 

 

 

 

 

 

 

 

 

 

 

 

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

   

 

 

As of

 

9/30/22

 

6/30/22

 

3/31/22

 

12/31/21

 

9/30/21

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

Assets

$

1,451,647

 

$

1,417,087

 

$

1,407,030

 

$

1,405,219

 

$

1,369,372

 

Loans

 

1,096,478

 

 

1,053,057

 

 

1,028,546

 

 

955,516

 

 

952,567

 

Earning assets

 

1,378,771

 

 

1,339,555

 

 

1,326,234

 

 

1,322,821

 

 

1,284,188

 

Deposits

 

1,203,098

 

 

1,184,426

 

 

1,199,174

 

 

1,199,334

 

 

1,166,785

 

Long-term debt and advances

 

108,229

 

 

93,968

 

 

67,667

 

 

66,000

 

 

66,000

 

Interest bearing liabilities

 

1,029,131

 

 

1,000,367

 

 

996,710

 

 

982,132

 

 

954,007

 

Stockholders’ equity

 

129,346

 

 

127,827

 

 

131,097

 

 

129,998

 

 

126,556

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

$

1,054

 

$

3,007

 

$

3,447

 

$

3,124

 

$

1,627

 

Troubled debt restructurings on accrual

 

146

 

 

150

 

 

333

 

 

340

 

 

561

 

Loan 90 days or more past due still on accrual

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total non-performing loans

 

1,200

 

 

3,157

 

 

3,780

 

 

3,464

 

 

2,188

 

Real estate acquired through foreclosures

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Other repossessed assets

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total non-performing assets

$

1,200

 

$

3,157

 

$

3,780

 

$

3,464

 

$

2,188

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans to total loans

 

0.11

%

 

0.29

%

 

0.36

%

 

0.35

%

 

0.23

%

Non-performing assets to total assets

 

0.08

 

 

0.22

 

 

0.27

 

 

0.24

 

 

0.16

 

Allowance for loan losses to non-performing loans

 

1,085.92

 

 

397.53

 

 

322.62

 

 

332.88

 

 

592.92

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

1.16

%

 

1.17

%

 

1.16

%

 

1.15

%

 

1.34

%

 

 

 

 

 

 

 

 

 

 

 

Loan Charge-off Data

 

 

 

 

 

 

 

 

 

 

Loans charged off

$

(86

)

$

(367

)

$

(227

)

$

(2,246

)

$

(25

)

Recoveries

 

1,817

 

 

272

 

 

141

 

 

304

 

 

61

 

Net (charge-offs) recoveries

$

1,731

 

$

(95

)

$

(86

)

$

(1,942

)

$

36

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Risk Category4

 

 

 

 

 

 

 

 

 

 

Pass

$

1,116,009

 

$

1,052,624

 

$

1,023,039

 

$

977,962

 

$

945,396

 

Watch

 

3,177

 

 

6,426

 

 

8,567

 

 

7,856

 

 

3,407

 

Special Mention

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Substandard

 

8,759

 

 

14,765

 

 

15,679

 

 

16,022

 

 

19,285

 

Doubtful

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total

$

1,127,945

 

$

1,073,815

 

$

1,047,285

 

$

1,001,840

 

$

968,088

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Past Due Status

 

 

 

 

 

 

 

 

 

 

Past due loans:

 

 

 

 

 

 

 

 

 

 

30 – 59 days

$

300

 

$

600

 

$

1,108

 

$

556

 

$

630

 

60 – 89 days

 

57

 

 

209

 

 

89

 

 

210

 

 

142

 

90 days or more

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Nonaccrual loans

 

1,054

 

 

3,007

 

 

3,447

 

 

3,124

 

 

1,627

 

Total past due and nonaccrual loans

$

1,411

 

$

3,816

 

$

4,644

 

$

3,890

 

$

2,399

 

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

 

As of

 

9/30/22

 

6/30/22

 

3/31/22

 

12/31/21

 

9/30/21

Risk-based Capital Ratios - Company

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

 

10.04

%

 

9.68

%

 

9.38

%

 

9.14

%

 

9.39

%

Common equity Tier I risk-based capital ratio

 

9.46

 

 

9.16

 

 

8.93

 

 

9.00

 

 

9.37

 

Tier I risk-based capital ratio

 

10.89

 

 

10.49

 

 

10.19

 

 

10.38

 

 

10.86

 

Total risk-based capital ratio

 

13.75

 

 

13.39

 

 

13.12

 

 

13.41

 

 

14.13

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based Capital Ratios – Limestone Bank

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

 

11.56

%

 

11.39

%

 

11.20

%

 

10.84

%

 

10.96

%

Common equity Tier I risk-based capital ratio

 

12.55

 

 

12.38

 

 

12.21

 

 

12.35

 

 

12.68

 

Tier I risk-based capital ratio

 

12.55

 

 

12.38

 

 

12.21

 

 

12.35

 

 

12.68

 

Total risk-based capital ratio

 

13.53

 

 

13.35

 

 

13.17

 

 

13.31

 

 

13.80

 

 

 

 

 

 

 

 

 

 

 

 

FTE employees, end of period

 

226

 

 

225

 

 

222

 

 

227

 

 

232

 

Footnotes:

 

(1) 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.

 

 

 

 

 

Three Months Ended

 

9/30/22

 

6/30/22

 

3/31/22

 

12/31/21

 

9/30/21

Efficiency Ratio

(in thousands)

 

 

Net interest income

$

12,912

 

$

11,680

 

$

11,114

 

$

11,007

 

$

11,621

 

Non-interest income

 

2,228

 

 

2,256

 

 

2,238

 

 

1,984

 

 

2,436

 

Less: Net gain (loss) on securities

 

—

 

 

(3

)

 

—

 

 

—

 

 

465

 

Revenue used for efficiency ratio

 

15,140

 

 

13,939

 

 

13,352

 

 

12,991

 

 

13,592

 

Non-interest expense

 

8,697

 

 

8,227

 

 

7,971

 

 

7,983

 

 

8,050

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

57.44

%

 

59.02

%

 

59.70

%

 

61.45

%

 

59.23

%

 

 

Nine Months Ended

 

9/30/22

9/30/21

 

 

(in thousands)

Efficiency Ratio

 

 

 

 

 

Net interest income

$

35,706

 

$

33,215

 

Non-interest income

 

6,722

 

 

6,455

 

Less: Net gain (loss) on securities

 

(3

)

 

460

 

Revenue used for efficiency ratio

 

42,431

 

 

39,210

 

Non-interest expense

 

24,895

 

 

23,988

 

 

 

 

 

 

Efficiency ratio

 

58.67

%

 

61.18

%

(2) Investment Securities – The following table sets forth the amortized cost and fair value of our securities portfolio at the dates indicated.

 

 

September 30, 2022

 

June 30, 2022

 

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

$

24,810

 

$

—

 

$

(2,864

)

 

$

21,946

 

$

26,438

 

$

—

 

$

(2,062

)

 

$

24,376

Agency mortgage-backed residential

 

82,193

 

 

 

16

 

 

(11,777

)

 

 

70,432

 

 

87,182

 

 

42

 

 

(8,864

)

 

 

78,360

Collateralized loan obligations

 

48,209

 

 

 

—

 

 

(2,221

)

 

 

45,988

 

 

48,216

 

 

—

 

 

(2,038

)

 

 

46,178

Corporate bonds

 

45,493

 

 

 

9

 

 

(2,576

)

 

 

42,926

 

 

45,473

 

 

16

 

 

(1,381

)

 

 

44,108

Total available for sale

$

200,705

 

 

$

25

 

$

(19,438

)

 

$

181,292

 

$

207,309

 

$

58

 

$

(14,345

)

 

$

193,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized

Cost

 

Gross

Unrecognized Gains

 

Gross

Unrecognized Losses

 

Fair

Value

 

Amortized

Cost

 

Gross

Unrecognized Gains

 

Gross

Unrecognized Losses

 

Fair

Value

 

(dollars in thousands)

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

$

43,350

 

 

$

—

 

$

(9,582

)

 

$

33,768

 

$

44,205

 

$

3

 

$

(7,985

)

 

$

36,223

Total held to maturity

$

43,350

 

 

$

—

 

$

(9,582

)

 

$

33,768

 

$

44,205

 

$

3

 

$

(7,985

)

 

$

36,223

(3) Tangible book value per common share is a non-GAAP financial measure derived from GAAP based amounts. Tangible book value per common share is calculated by excluding the balance of goodwill and other 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 goodwill and other intangible assets from the calculation of risk-based capital.

 

 

As of

 

9/30/22

 

6/30/22

 

3/31/22

 

12/31/21

 

9/30/21

Tangible Book Value Per Share

(in thousands, except share and per share data)

 

 

Common stockholders’ equity

$

128,371

 

$

126,618

 

$

128,220

 

$

130,959

 

$

128,664

Less: Goodwill

 

6,252

 

 

6,252

 

 

6,252

 

 

6,252

 

 

6,252

Less: Intangible assets

 

1,797

 

 

1,861

 

 

1,925

 

 

1,989

 

 

2,053

Tangible common equity

 

120,322

 

 

118,505

 

 

120,043

 

 

122,718

 

 

120,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

7,639,033

 

 

7,640,680

 

 

7,622,157

 

 

7,594,749

 

 

7,602,686

Tangible book value per common share

$

15.75

 

$

15.51

 

$

15.75

 

$

16.16

 

$

15.83

Book value per common share

 

16.80

 

 

16.57

 

 

16.82

 

 

17.24

 

 

16.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4) Loans by Risk Category reflect management’s risk ratings based on categories aligned with the bank regulatory definitions.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221019005228/en/

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