Limestone Bancorp (LMST) 8-K Porter Bancorp, Inc. Announces Second Quarter 2012 Results

Exhibit 99.1

Porter Bancorp, Inc. Announces Second Quarter 2012 Results

LOUISVILLE, Ky.--(BUSINESS WIRE)--July 26, 2012--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with 18 full-service banking offices in Kentucky, today reported unaudited results for the second quarter of 2012.

The Company reported net loss to common shareholders of $319,000, or ($0.03) per diluted share, for the second quarter of 2012 compared with net loss to common shareholders of $39.0 million, or ($3.33) per diluted share, for the second quarter of 2011. Net income available to common shareholders for the six months ended June 30, 2012, was $661,000, or $0.06 per diluted common share, compared with net loss to common shareholders of $38.6 million, or ($3.30) per diluted share, for the six months ended June 30, 2011.

The improvement for the second quarter and first six months of 2012 compared with the same periods of 2011 was primarily attributable to lower provision for loan losses expense, lower OREO expense, and an increase in gain on sale of investment securities. Additionally, 2011 results were negatively impacted by a non-recurring 100% goodwill impairment charge of $23.8 million. These improvements were partially offset by lower net interest income in the second quarter and first six months of 2012, compared with 2011, as average earning assets declined $256.6 million and net interest margin declined 10 basis points between the six months ended June 30, 2012, and the six months ended June 30, 2011.

Non-performing loans decreased to $81.7 million, or 7.85% of total loans, at June 30, 2012, compared with $98.0 million, or 8.92% of total loans, at March 31, 2012. Non-performing assets increased to $136.1 million, or 10.2% of total assets, compared with $133.5 million, or 9.61% of total assets, at March 31, 2012.

Foreclosed properties at June 30, 2012 increased to $54.4 million compared with $35.6 million at March 31, 2012, and $49.9 million at June 30, 2011. The Company acquired $23.9 million of OREO and sold $4.8 million of OREO during the second quarter of 2012. Our ratio of non-performing assets to total assets increased to 10.2% at June 30, 2012, compared with 6.65% at June 30, 2011.

At June 30, 2012, PBI Bank’s Tier 1 leverage ratio was 7.38% and its Total risk-based capital ratio was 11.71%, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order. At June 30, 2012, Porter Bancorp’s leverage ratio was 7.56%, compared with 7.30% at March 31, 2012, and 6.53% at December 31, 2011, and its Total risk-based capital ratio was 11.94% compared with 11.68% at March 31, 2012, and 11.22% at December 31, 2011. We are continuing our efforts to strengthen our capital levels and comply with the Consent Order.

Non-Accrual Loan Activity
	(in thousands)
Non-accrual loans at March 31, 2012	$	97,230
Net principal pay-downs		(4,084)
Charge-offs		(4,902)
Loans foreclosed and transferred to OREO		(15,243)
Loans placed on non-accrual during the period		8,652
Non-accrual loans at June 30, 2012	$	81,653
Other Real Estate Owned (OREO) Activity (Net of Allowance)
	(in thousands)
OREO at March 31, 2012	$	35,574
Real estate acquired		23,910
Valuation adjustment write downs		(350)
Proceeds from sales of properties		(4,223)
Gain (loss) on sales, net		(546)
OREO at June 30, 2012	$	54,365

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 second quarter ending June 30, 2012 follows.

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	Three			Three		Three			Six		Six
	Months			Months		Months			Months		Months
	Ended			Ended		Ended			Ended		Ended
	6/30/12			3/31/12		6/30/11			6/30/12		6/30/11
Income Statement Data
Interest income	$	14,812		$	15,755	$	19,198		$	30,567	$	38,814
Interest expense		4,017			4,301		5,757			8,318		11,605
Net interest income		10,795			11,454		13,441			22,249		27,209
Provision for loan losses		4,000			3,750		13,700			7,750		18,800
Net interest income after provision		6,795			7,704		(259	)		14,499		8,409
Service charges on deposit accounts		556			554		659			1,110		1,289
Income from fiduciary activities		291			251		246			542		501
Gains on sales of loans originated for sale		77			45		320			122		541
Gains on sales of securities, net		1,511			2,019		1,025			3,530		1,108
Other		583			576		615			1,159		1,213
Non-interest income		3,018			3,445		2,865			6,463		4,652
Salaries & employee benefits		3,982			4,312		4,180			8,294		8,304
Occupancy and equipment		969			886		981			1,855		1,953
Goodwill impairment		—			—		23,794			—		23,794
Other real estate owned expense		1,205			1,257		22,109			2,462		23,476
FDIC insurance		832			873		855			1,705		1,710
Franchise tax		592			592		582			1,184		1,164
Loan collection expense		586			360		925			946		1,187
Professional fees		567			356		354			923		634
Communications expense		168			180		165			348		333
Postage and delivery		109			122		128			231		251
Advertising		28			33		87			61		189
Other		624			676		599			1,300		1,159
Non-interest expense		9,662			9,647		54,759			19,309		64,154
Income (loss) before income taxes		151			1,502		(52,153	)		1,653		(51,093	)
Income tax expense (benefit)		—			—		(12,164	)		—		(11,903	)
Net income (loss)		151			1,502		(39,989	)		1,653		(39,190	)
Less:
Dividends on preferred stock		438			437		437			875		875
Accretion on preferred stock		45			45		44			90		88
Earnings (loss) allocated to participating securities		(13	)		35		(1,510	)		27		(1,552	)
Net income (loss) available to common	$	(319	)	$	985	$	(38,960	)	$	661	$	(38,601	)
Weighted average shares – Basic		11,733,156			11,735,451		11,718,656			11,701,655		11,705,247
Weighted average shares – Diluted		11,733,156			11,735,451		11,718,656			11,701,655		11,705,247
Basic earnings (loss) per common share	$	(0.03	)	$	0.08	$	(3.33	)	$	0.06	$	(3.30	)
Diluted earnings (loss) per common share	$	(0.03	)	$	0.08	$	(3.33	)	$	0.06	$	(3.30	)
Cash dividends declared per common share	$	0.00		$	0.00	$	0.01		$	0.00	$	0.02

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	Three			Three			Three			Six			Six
	Months			Months			Months			Months			Months
	Ended			Ended			Ended			Ended			Ended
	6/30/12			3/31/12			6/30/11			6/30/12			6/30/11
Average Balance Sheet Data
Assets	$	1,363,340		$	1,412,606		$	1,708,552		$	1,387,973		$	1,723,321
Loans		1,078,497			1,119,181			1,268,196			1,098,839			1,279,461
Earning assets		1,307,520			1,350,878			1,580,185			1,329,199			1,585,842
Deposits		1,231,281			1,279,287			1,473,459			1,255,284			1,477,304
Long-term debt and advances		38,959			39,551			51,340			39,255			49,816
Interest bearing liabilities		1,159,447			1,207,855			1,431,757			1,183,651			1,433,229
Stockholders’ equity		83,987			84,659			166,602			84,323			178,527
Performance Ratios
Return on average assets		0.04	%		0.43	%		(9.39	)%		0.24	%		(4.59	)%
Return on average equity		0.72			7.14			(96.27	)		3.94			(44.27	)
Yield on average earning assets (tax equivalent)		4.59			4.73			4.91			4.66			4.97
Cost of interest bearing liabilities		1.39			1.43			1.61			1.41			1.63
Net interest margin (tax equivalent)		3.35			3.45			3.45			3.40			3.50
Efficiency ratio		78.54			74.90			202.64			76.68			131.24
Loan Charge-off Data
Loans charged-off	$	(6,438	)	$	(2,582	)	$	(8,596	)	$	(9,020	)	$	(14,463	)
Recoveries		79			206			14			285			95
Net charge-offs	$	(6,359	)	$	(2,376	)	$	(8,582	)	$	(8,735	)	$	(14,368	)

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	As of			As of			As of			As of
	6/30/12			3/31/12			12/31/11			6/30/11
Assets
Loans	$	1,041,292		$	1,098,962		$	1,136,717		$	1,250,023
Loan loss reserve		(51,594	)		(53,953	)		(52,579	)		(38,717	)
Net loans		989,698			1,045,009			1,084,138			1,211,306
Securities available for sale		194,091			174,918			158,833			157,524
Federal funds sold & interest bearing deposits		30,762			62,560			92,034			151,362
Cash and due from financial institutions		5,599			10,047			13,928			23,731
Premises and equipment		21,223			21,296			21,541			21,888
Other real estate owned		54,365			35,574			41,449			49,913
Deferred tax assets		—			—			—			20,873
Accrued interest receivable and other assets		39,114			40,219			43,501			39,864
Total Assets	$	1,334,852		$	1,389,623		$	1,455,424		$	1,676,461
Liabilities and Equity
Certificates of deposit	$	909,504		$	951,503		$	1,024,333		$	1,131,342
Interest checking		82,208			85,608			87,653			81,776
Money market		60,704			63,701			64,302			83,083
Savings		39,509			38,631			36,357			36,519
Total interest bearing deposits		1,091,925			1,139,443			1,212,645			1,332,720
Demand deposits		112,797			114,304			111,118			102,777
Total deposits		1,204,722			1,253,747			1,323,763			1,435,497
Federal funds purchased & repurchase agreements		2,501			1,926			1,738			11,000
FHLB advances		6,398			6,789			7,116			38,937
Junior subordinated debentures		32,200			32,425			32,650			33,325
Accrued interest payable and other liabilities		7,526			11,945			7,628			7,250
Total liabilities		1,253,347			1,306,832			1,372,895			1,526,009
Stockholders’ equity		81,505			82,791			82,529			150,452
Total Liabilities and Stockholders’ Equity	$	1,334,852		$	1,389,623		$	1,455,424		$	1,676,461
Ending shares outstanding		11,934,872			11,822,102			11,824,472			11,840,670
Book value per common share	$	3.62		$	3.76		$	3.74		$	9.47
Tangible book value per common share		3.44			3.57			3.54			9.25
Asset Quality Data
Loan 90 days or more past due still on accrual	$	88		$	733		$	1,350		$	1,146
Non-accrual loans		81,653			97,230			92,020			60,331
Total non-performing loans		81,741			97,963			93,370			61,477
Real estate acquired through foreclosures		54,365			35,574			41,449			49,913
Other repossessed assets		5			11			5			54
Total non-performing assets	$	136,111		$	133,548		$	134,824		$	111,444
Non-performing loans to total loans		7.85	%		8.92	%		8.22	%		4.92	%
Non-performing assets to total assets		10.20			9.61			9.26			6.65
Allowance for loan losses to non-performing loans		63.12			55.07			56.31			62.98
Allowance for loan losses to total loans		4.96			4.91			4.63			3.10
Risk-based Capital Ratios
Tier 1 leverage ratio		7.56	%		7.30	%		6.53	%		9.97	%
Tier 1 risk-based capital ratio		9.95			9.68			9.23			13.64
Total risk-based capital ratio		11.94			11.68			11.22			15.58
FTE employees		300			298			291			301

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