Limestone Bancorp (LMST) 8-K Porter Bancorp, Inc. Announces Third Quarter 2011 Results

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