LIMESTONE BANCORP, INC. - FORM 8-K - EX-99 - EXHIBIT 99.1 - October 28, 2011

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8-K - PORTER BANCORP, INC. 8-K - LIMESTONE BANCORP, INC.a50048801.htm

Exhibit 99.1

Porter Bancorp, Inc. Announces Third Quarter 2011 Results

LOUISVILLE, Ky.--(BUSINESS WIRE)--October 28, 2011--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with 18 full-service banking offices in Kentucky, today reported results for the third quarter of 2011.

The Company reported a net loss to common shareholders of $12.2 million, or $(1.04) per diluted share, for the third quarter of 2011. Net loss to common shareholders for the nine months ended September 30, 2011, was $50.8 million, or $(4.34) per fully diluted common share.

“Porter Bancorp’s third quarter loss was due primarily to a $15.3 million write-down of other real estate owned and an $8.0 million provision for loan losses,” stated Maria L. Bouvette, President and Chief Executive Officer. “We remain focused on aggressively reducing our problem assets in light of the sluggish economic recovery, continued weakness in local real estate activity and declining values of real estate in certain market sectors. We believe this strategic focus will be a key part in improving our long-term profitability.

“The fundamentals of our business continue to produce positive financial results; however, higher costs related to asset quality issues have been the principal driver of our losses this year. During the third quarter we continued to explore opportunities to bulk sell a package of OREO and loans. While the ultimate outcome of a transaction is uncertain, we determined that we would be willing to sell these properties at an amount below their individual appraised values. Accordingly, we have adjusted the carrying value of these assets to reflect a more aggressive disposition policy,” continued Bouvette.

Porter Bancorp’s strategy to reduce problem assets has resulted in two consecutive quarterly reductions in non-performing loans and non-performing assets and the fourth quarterly decrease in other real estate owned. Non-performing loans decreased to $59.8 million, or 4.96% of total loans, at September 30, 2011, compared with $61.5 million, or 4.92% of total loans, at June 30, 2011. Non-performing assets decreased to $104.7 million, or 6.6% of total assets, compared with $111.4 million, or 6.7% of total assets, at June 30, 2011.

Foreclosed properties at September 30, 2011 declined to $44.9 million compared with $67.6 million at December 31, 2010, and $73.6 million at September 30, 2010. Our ratio of non-performing assets to total assets decreased to 6.6% at September 30, 2011, compared with 7.4% at December 31, 2010, due to loans working their way through the collections, foreclosure and disposition process, and sales and write-downs on other real estate owned.

Our loan loss reserve as a percentage of total loans was increased to 3.27% at September 30, 2011, compared with 2.21% at September 30, 2010. Net loan charge-offs for the third quarter of 2011 were $7.2 million, or 0.59% of average loans for the quarter.

Our provision for loan losses was $8.0 million in the third quarter of 2011, a decrease from $13.7 million in the second quarter of 2011, and an increase from $5.0 million in the prior year third quarter.

 
Non-Accrual Loan Activity
 
    (in thousands)
Non-accrual loans at June 30, 2011 $ 60,331
Loans returned to accrual status (929 )
Net principal pay-downs (3,059 )
Charge-offs (4,804 )
Loans foreclosed and transferred to OREO (3,613 )
Loans collateral repossessed (10 )
Loans placed on non-accrual during the period 11,216  
Non-accrual loans at September 30, 2011 $ 59,132  
 
Other Real Estate Owned (OREO) Activity (Net of Allowance)
 
(in thousands)
OREO at June 30, 2011 $ 49,913
Real estate acquired 15,971
Valuation adjustment write downs (15,265 )
Proceeds from sales of properties (5,189 )
Gain (loss) on sales, net (673 )
Capital improvements 176  
OREO at September 30, 2011 $ 44,933  

PBIB-G PBIB-F

Forward-Looking Statements

Statements in this press release relating to Porter 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,” “seek,” “plan,” “strive” or similar words, or negatives of these words, identify forward-looking statements. These forward-looking statements are based on management’s current expectations. Porter Bancorp’s actual results in future periods may differ materially from those currently expected due to various risks and uncertainties, including those discussed under “Risk Factors” in the Company’s Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of the release and Porter Bancorp does not assume any responsibility to update these statements.

Additional Information

Unaudited supplemental financial information for the third quarter ending September 30, 2011 follows.

             

PORTER BANCORP, INC. AND SUBSIDIARY

Unaudited Financial Information

(in thousands, except share and per share data)

 
Three Three Three Nine Nine
Months Months Months Months Months
Ended Ended Ended Ended Ended
9/30/11 6/30/11 9/30/10 9/30/11 9/30/10

 

 

 

Income Statement Data
Interest income $ 18,103 $ 19,198 $ 21,340 $ 56,917 $ 66,092
Interest expense 5,448 5,757 6,764 17,053 22,612

 

 

 

Net interest income 12,655 13,441 14,576 39,864 43,480
Provision for loan losses 8,000 13,700 5,000 26,800   14,600

 

 

 

 

Net interest income after provision 4,655 (259 ) 9,576 13,064 28,880
 
Service charges on deposit accounts 690 659 757 1,979 2,270
Income from fiduciary activities 237 246 226 738 751
Gains on sales of loans originated for sale 123 320 135 664 410
Gains on sales of securities, net — 1,025 2,175 1,108 2,256
Other than temporary impairment on securities — — — — (465 )
Other 650 615 638 1,863 1,898

 

 

 

Non-interest income 1,700 2,865 3,931 6,352 7,120
 
Salaries & employee benefits 3,780 4,180 3,849 12,084 11,727
Occupancy and equipment 957 981 1,070 2,910 3,107
Goodwill impairment — 23,794 — 23,794 —
Other real estate owned expense 17,029 22,109 2,163 40,505 6,395
FDIC insurance 930 855 855 2,640 2,266
Loan collection expense 802 925 191 1,989 548
Franchise tax 582 582 543 1,746 1,629
Professional fees 329 354 239 963 797
Communications expense 176 165 179 509 538
Postage and delivery 117 128 183 368 569
Advertising 93 87 104 282 277
Other 628 599 573 1,787 1,658

 

 

 

Non-interest expense 25,423 54,759 9,949 89,577 29,511
 
Income (loss) before income taxes (19,068 ) (52,153 ) 3,558 (70,161 ) 6,489
Income tax expense (benefit) (6,906 ) (12,164 ) 1,137 (18,809 ) 1,943

 

 

 

Net income (loss) (12,162 ) (39,989 ) 2,421 (51,352 ) 4,546
Less:
Dividends on preferred stock 437 437 498 1,312 1,373
Accretion on preferred stock 45 44 44 133 132
Earnings (loss) allocated to participating shares (463 ) (1,510 ) 88   (1,995 )   81
 
Net income (loss) to common shareholders $ (12,181 ) $ (38,960 ) $ 1,791 $ (50,802 ) $ 2,960

 

 

 

 
Weighted average shares – Basic 11,721,591 11,718,656 11,021,658 11,713,040 9,762,221
Weighted average shares – Diluted 11,721,591 11,718,656 11,580,371 11,713,040 9,981,600
 
Basic earnings (loss) per common share $ (1.04 ) $ (3.33 ) $ 0.16 $ (4.34 ) $ 0.30
Diluted earnings (loss) per common share $ (1.04 ) $ (3.33 ) $ 0.15 $ (4.34 ) $ 0.30
Cash dividends declared per common share $ 0.00 $ 0.01 $ 0.10 $ 0.02 $ 0.48
           

PORTER BANCORP, INC. AND SUBSIDIARY

Unaudited Financial Information

(in thousands, except share and per share data)

 
Three Three Three Nine Nine
Months Months Months Months Months
Ended Ended Ended Ended Ended
9/30/11 6/30/11 9/30/10 9/30/11 9/30/10

 

 

 

Average Balance Sheet Data
Assets $ 1,625,590 $ 1,708,552 $ 1,704,043 $ 1,690,386 $ 1,758,168
Loans 1,227,024 1,268,196 1,335,357 1,261,790 1,365,322
Earning assets 1,506,384 1,580,185 1,563,599 1,559,065 1,636,839
Deposits 1,405,543 1,473,459 1,402,842 1,453,121 1,467,506
Long-term debt and advances 50,463 51,340 81,441 50,034 88,783
Interest bearing liabilities 1,361,537 1,431,757 1,393,425 1,409,069 1,466,336
Stockholders’ equity 151,055 166,602 201,126 169,269 183,478
 
 
Performance Ratios
Return on average assets (2.97) % (9.39) % 0.56 % (4.06) % 0.35 %
Return on average equity (31.94) (96.27) 4.78 (40.56) 3.31
Yield on average earning assets (tax equivalent) 4.81 4.91 5.44 4.92 5.43
Cost of interest bearing liabilities 1.59 1.61 1.93 1.62 2.06
Net interest margin (tax equivalent) 3.38 3.45 3.73 3.46 3.58
Efficiency ratio 177.10 202.64 60.92 145.83 60.46
 
Loan Charge-off Data
Loans charged-off $ (7,367 ) $ (8,596 ) $ (2,514 ) $ (21,830 ) $ (11,823 )
Recoveries 142 14 70 237 223

 

 

 

Net charge-offs $ (7,225 ) $ (8,582 ) $ (2,444 ) $ (21,593 ) $ (11,600 )
         

PORTER BANCORP, INC. AND SUBSIDIARY

Unaudited Financial Information

(in thousands, except share and per share data)

 
As of As of As of As of
9/30/11 6/30/11 12/31/10 9/30/10

 

 

 

Assets
Loans $ 1,206,341 $ 1,250,023 $ 1,303,013 $ 1,328,695
Loan loss reserve   (39,492 ) (38,717 ) (34,285 ) (29,392 )

 

 

 

 

 

 

Net loans 1,166,849 1,211,306 1,268,728 1,299,303
Securities available for sale 158,813 157,524 106,309 150,569
Federal funds sold & interest bearing deposits 93,062 151,362 137,429 120,591
Cash and due from financial institutions 27,319 23,731 48,006 46,279
Premises and equipment 21,791 21,888 22,468 22,708
Other real estate owned 44,933 49,913 67,635 73,645
Goodwill — — 23,794 23,794
Deferred tax assets 24,005 20,873 12,958 6,025
Accrued interest receivable and other assets   41,251 39,864 36,625 37,265

 

 

 

 

 

 

Total Assets $ 1,578,023 $ 1,676,461 $ 1,723,952 $ 1,780,179

 

 

 

 

 

 

 
Liabilities and Equity
Certificates of deposit $ 1,075,226 $ 1,131,342 $ 1,166,820 $ 1,093,032
Interest checking 77,229 81,776 87,690 80,153
Money market 79,790 83,083 80,082 78,232
Savings   36,508 36,519 34,678 35,222

 

 

 

 

 

 

Total interest bearing deposits 1,268,753 1,332,720 1,369,270 1,286,639
Demand deposits   104,694 102,777 98,398 103,424

 

 

 

 

 

 

Total deposits 1,373,447 1,435,497 1,467,668 1,390,063
Federal funds purchased & repurchase agreements 11,328 11,000 11,616 34,083
FHLB advances 13,155 38,937 15,022 110,763
Junior subordinated debentures 32,875 33,325 33,550 33,775
Accrued interest payable and other liabilities   8,000 7,250 6,681 8,922

 

 

 

 

 

 

Total liabilities 1,438,805 1,526,009 1,534,537 1,577,606
Stockholders’ equity   139,218 150,452 189,415 202,573

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity $ 1,578,023 $ 1,676,461 $ 1,723,952 $ 1,780,179

 

 

 

 

 

 

 
Ending shares outstanding 11,830,581 11,840,670 11,846,107 11,845,776
Book value per common share $ 8.53 $ 9.47 $ 12.76 $ 13.87
Tangible book value per common share 8.32 9.25 10.33 11.11
 
Asset Quality Data
Loan 90 days or more past due still on accrual $ 655 $ 1,146 $ 594 $ 7,048
Non-accrual loans   59,132 60,331 59,799 38,784

 

 

 

 

 

 

Total non-performing loans 59,787 61,477 60,393 45,832
Real estate acquired through foreclosures 44,933 49,913 67,635 73,645
Other repossessed assets   19 54 52 53

 

 

 

 

 

 

Total non-performing assets $ 104,739 $ 111,444 $ 128,080 $ 119,530

 

 

 

 

 

 

Non-performing loans to total loans 4.96 % 4.92 % 4.63 % 3.45 %
Non-performing assets to total assets 6.64 6.65 7.43 6.71
Allowance for loan losses to non-performing loans 66.05 62.98 56.77 64.13
Allowance for loan losses to total loans 3.27 3.10 2.63 2.21
 
Risk-based Capital Ratios
Tier I leverage ratio 9.72 % 9.97 % 11.08 % 11.71 %
Tier I risk-based capital ratio 13.13 13.64 14.39 14.44
Total risk-based capital ratio 15.07 15.58 16.32 16.35
 
FTE employees 298 301 286 288

CONTACT:
Porter Bancorp, Inc.
Maria L. Bouvette, President and CEO, 502-499-4800

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