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

Exhibit 99.1

Porter Bancorp, Inc. Announces Fourth Quarter and 2012 Results

LOUISVILLE, Ky.--(BUSINESS WIRE)--January 30, 2013--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with 18 full-service banking offices in Kentucky, today reported unaudited results for the fourth quarter and year ended December 31, 2012.

The Company reported net loss to common shareholders of $7.0 million, or ($0.59) per diluted share, for the fourth quarter of 2012 compared with net loss to common shareholders of $54.5 million, or ($4.64) per diluted share, for the fourth quarter of 2011. Net loss to common shareholders for the year ended December 31, 2012, was $33.4 million, or ($2.85) per diluted common share, compared with net loss to common shareholders of $105.2 million, or ($8.98) per diluted share, for the year ended December 31, 2011. The loss for the year ended December 31, 2011, includes a non-recurring 100% goodwill impairment charge of $23.8 million recorded in the second quarter of 2011, and the establishment of a 100% deferred tax valuation allowance of $31.7 million in the fourth quarter of 2011.

Financial performance continues to be negatively impacted by the Bank’s high level of nonperforming loans and other real estate owned. Non-performing loans increased to $94.6 million, or 10.52% of total loans, at December 31, 2012, compared with $90.1 million, or 9.47% of total loans, at September 30, 2012. Non-performing assets decreased on a dollar basis and increased on a percentage basis to $138.3 million, or 11.9% of total assets, compared with $139.0 million, or 10.8% of total assets, at September 30, 2012.

Foreclosed properties at December 31, 2012, decreased to $43.7 million compared with $48.8 million at September 30, 2012, and increased compared with $41.4 million at December 31, 2011. During the fourth quarter of 2012, the Company acquired $2.0 million of OREO, sold $5.1 million of OREO, and recorded OREO fair value write-downs totaling $2.1 million to reflect new appraisals or marketing prices during the fourth quarter of 2012.

Provision for loan losses totaled $7.0 million for the fourth quarter of 2012 and declined from $25.5 million in the third quarter of 2012, and $35.8 million in the fourth quarter of 2011. Provision for loan losses totaled $40.3 million for the year ended December 31, 2012, compared to $62.6 million for the year ended December 31, 2011.

Net loan charge-offs totaled $4.3 million for the fourth quarter of 2012 and was down from $23.1 million in the third quarter of 2012, and $22.7 million in the fourth quarter of 2011. Net loan charge-offs totaled $36.1 million for the year ended December 31, 2012, compared with $44.3 million for the year ended December 31, 2011.

Net interest income was lower in the three and twelve months ended December 31, 2012, compared with the same periods in 2011, as average earning assets, primarily loans, declined $253.1 million and net interest margin declined 9 basis points between the twelve months ended December 31, 2012, and the twelve months ended December 31, 2011.

At December 31, 2012, PBI Bank’s Tier 1 leverage ratio was 5.37% and its Total risk-based capital ratio was 9.82%, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order with its primary regulators. At December 31, 2012, Porter Bancorp’s Tier 1 leverage ratio was 4.50%, compared with 5.00% at September 30, 2012, and 6.53% at December 31, 2011, and its Total risk-based capital ratio was 9.81% compared with 10.01% at September 30, 2012, and 11.22% at December 31, 2011.

Management and the Board of Directors are evaluating appropriate strategies for increasing the Company’s capital in order to meet the capital requirements of our Consent Order. These include, among other things, a possible public offering or private placement of common stock to new and existing shareholders. We have engaged Sandler O’Neill & Partners, LP to act as our financial advisor and to assist our Board in this evaluation.

Asset quality remediation, capital restoration, and lowering the risk profile of the Company will be major objectives during 2013. Under the direction of John T. Taylor, President and CEO of PBI Bank, our leadership team remains focused on serving the bank’s customers and communities throughout Central Kentucky.

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 fourth quarter and year ending December 31, 2012 follows.

PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data)
	Three			Three			Three			Twelve				Twelve
	Months			Months			Months			Months				Months
	Ended			Ended			Ended			Ended				Ended
	12/31/12			9/30/12			12/31/11			12/31/12				12/31/11
Income Statement Data
Interest income	$	13,175		$	13,987		$	16,637		$		57,729		$	73,554
Interest expense		3,601			3,855			4,986				15,774			22,039
Net interest income		9,574			10,132			11,651				41,955			51,515
Provision for loan losses		7,000			25,500			35,800				40,250			62,600
Net interest income after provision		2,574			(15,368	)		(24,149	)			1,705			(11,085	)
Service charges on deposit accounts		566			563			630				2,239			2,609
Income from fiduciary activities		374			261			255				1,177			993
Bank card interchange fees		174			180			168				727			668
Other real estate owned rental income		178			180			53				420			200
Gains on sales of loans originated for sale		78			138			49				338			713
Gains on sales of securities, net		(294	)		—			—				3,236			1,108
Other than temporary impairment on securities		—			—			(41	)			—			(41	)
Other		330			399			367				1,453			1,583
Non-interest income		1,406			1,721			1,481				9,590			7,833
Salaries & employee benefits		4,090			4,264			3,134				16,648			15,218
Occupancy and equipment		816			971			819				3,642			3,729
Goodwill impairment		—			—			—				—			23,794
Other real estate owned expense		2,883			5,204			7,020				10,549			47,525
FDIC insurance		571			559			830				2,835			3,470
Loan collection expense		704			792			520				2,442			2,509
Franchise tax		494			496			482				2,174			2,228
Professional fees		286			776			429				1,985			1,392
Communications expense		187			175			169				710			678
Borrowing prepayment fees		—			—			486				—			486
Postage and delivery		115			108			117				454			485
Advertising		49			44			32				154			314
Other		638			761			658				2,699			2,445
Non-interest expense		10,833			14,150			14,696				44,292			104,273
(Loss) before income taxes		(6,853	)		(27,797	)		(37,364	)			(32,997	)		(107,525	)
Income tax expense (benefit)		—			(65	)		18,591				(65	)		(218	)
Net (loss)		(6,853	)		(27,732	)		(55,955	)			(32,932	)		(107,307	)
Less:
Dividends on preferred stock		(438	)		(437	)		(438	)			(1,750	)		(1,750	)
Accretion on preferred stock		(45	)		(44	)		(44	)			(179	)		(177	)
Loss allocated to participating securities		343			1,264			1,980				1,429			4,080
Net (loss) to common shareholders	$	(6,993	)	$	(26,949	)	$	(54,457	)	$		(33,432	)	$	(105,154	)
Weighted average shares – Basic		11,762,330			11,751,818			11,724,456			11,746,719				11,715,461
Weighted average shares – Diluted		11,762,330			11,751,818			11,724,456			11,746,719				11,715,461
Basic (loss) per common share	$	(0.59	)	$	(2.29	)	$	(4.64	)	$	(2.85		)	$	(8.98	)
Diluted (loss) per common share	$	(0.59	)	$	(2.29	)	$	(4.64	)	$	(2.85		)	$	(8.98	)
Cash dividends declared per common share	$	0.00		$	0.00		$	0.00		$	0.00			$	0.02

PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data)
	Three			Three			Three			Twelve			Twelve
	Months			Months			Months			Months			Months
	Ended			Ended			Ended			Ended			Ended
	12/31/12			9/30/12			12/31/11			12/31/12			12/31/11
Average Balance Sheet Data
Assets	$	1,264,867		$	1,326,457		$	1,569,669		$	1,341,565		$	1,659,959
Loans		928,974			1,008,053			1,189,123			1,033,320			1,243,474
Earning assets		1,207,711			1,261,864			1,463,093			1,281,735			1,534,875
Deposits		1,162,015			1,196,580			1,379,093			1,217,083			1,434,462
Long-term debt and advances		37,710			38,328			44,040			38,634			48,523
Interest bearing liabilities		1,085,424			1,126,045			1,320,481			1,144,480			1,386,740
Stockholders’ equity		53,229			81,029			130,250			75,679			159,434
Performance Ratios
Return on average assets		(2.16)	%		(8.32)	%		(14.14)	%		(2.45)	%		(6.46)	%
Return on average equity		(51.22)			(136.16)			(170.44)			(43.52)			(67.30)
Yield on average earning assets (tax equivalent)		4.38			4.45			4.55			4.54			4.83
Cost of interest bearing liabilities		1.32			1.36			1.50			1.38			1.59
Net interest margin (tax equivalent)		3.19			3.23			3.20			3.31			3.40
Efficiency ratio		96.09			119.38			111.56			91.68			138.09
Loan Charge-off Data
Loans charged-off	$	(5,008	)	$	(23,487	)	$	(22,816	)	$	(37,515	)	$	(44,646	)
Recoveries		669			412			103			1,366			340
Net charge-offs	$	(4,339	)	$	(23,075	)	$	(22,713	)	$	(36,149	)	$	(44,306	)
Non-Accrual Loan Activity
Non-accrual loans at beginning of period	$	88,632		$	81,653		$	59,132		$	92,020		$	59,799
Loans returned to accrual status		—			—			(123	)		—			(7,792	)
Net principal pay-downs		(3,576	)		(5,768	)		(5,918	)		(18,668	)		(15,838	)
Charge-offs		(3,856	)		(13,442	)		(14,820	)		(24,512	)		(30,358	)
Loans foreclosed and transferred to OREO		(1,998	)		(3,339	)		(7,516	)		(24,409	)		(24,549	)
Loan collateral repossessed		—			—			—			—			(10	)
Loans placed on non-accrual during the period		15,315			29,528			61,265			70,086			110,768
Non-accrual loans at end of period	$	94,517		$	88,632		$	92,020		$	94,517		$	92,020
Other Real Estate Owned (OREO) Activity (Net of Allowance)
OREO at beginning of period	$	48,837		$	54,365		$	44,933		$	41,449		$	67,635
Real estate acquired		1,997			3,405			10,685			33,528			41,917
Valuation adjustment write-downs		(2,064	)		(4,260	)		(4,172	)		(7,154	)		(34,874	)
Proceeds from sales of properties		(4,908	)		(4,140	)		(8,657	)		(22,481	)		(25,990	)
Loss on sales, net		(191	)		(533	)		(1,340	)		(1,672	)		(8,889	)
Capital improvements		—			—			—			1			1,650
OREO at end of period	$	43,671		$	48,837		$	41,449		$	43,671		$	41,449

PORTER BANCORP, INC.
Unaudited Financial Information
(in thousands, except share and per share data)
		As of		As of			As of
		12/31/12		9/30/12			12/31/11
Assets
Loans	$	899,599		$	952,021		$	1,136,717
Loan loss reserve		(56,680	)		(54,019	)		(52,579	)
Net loans		842,919			898,002			1,084,138
Securities available for sale		178,476			198,148			158,833
Federal funds sold & interest bearing deposits		41,161			69,928			92,034
Cash and due from financial institutions		8,411			11,854			13,928
Premises and equipment		20,805			20,955			21,541
Other real estate owned		43,671			48,837			41,449
Deferred tax assets		—			—			—
Accrued interest receivable and other assets		27,188			38,317			43,501
Total Assets	$	1,162,631		$	1,286,041		$	1,455,424
Liabilities and Equity
Certificates of deposit	$	760,573		$	882,303		$	1,024,333
Interest checking		87,234			80,524			87,653
Money market		63,715			63,594			64,302
Savings		39,227			39,703			36,357
Total interest bearing deposits		950,749			1,066,124			1,212,645
Demand deposits		114,310			111,403			111,118
Total deposits		1,065,059			1,177,527			1,323,763
Federal funds purchased & repurchase agreements		2,634			2,403			1,738
FHLB advances		5,604			5,960			7,116
Junior subordinated debentures		31,975			32,200			32,650
Accrued interest payable and other liabilities		10,169			12,967			7,628
Total liabilities		1,115,441			1,231,057			1,372,895
Stockholders’ equity		47,190			54,984			82,529
Total Liabilities and Stockholders’ Equity	$	1,162,631		$	1,286,041		$	1,455,424
Ending shares outstanding		12,002,421			12,007,127			11,824,472
Book value per common share	$	0.74		$	1.39		$	3.74
Tangible book value per common share		0.58			1.22			3.54
Asset Quality Data
Loan 90 days or more past due still on accrual	$	86		$	1,486		$	1,350
Non-accrual loans		94,517			88,632			92,020
Total non-performing loans		94,603			90,118			93,370
Real estate acquired through foreclosures		43,671			48,837			41,449
Other repossessed assets		—			5			5
Total non-performing assets	$	138,274		$	138,960		$	134,824
Non-performing loans to total loans		10.52	%		9.47	%		8.22	%
Non-performing assets to total assets		11.89			10.81			9.26
Allowance for loan losses to non-performing loans		59.91			59.94			56.31
Allowance for loan losses to total loans		6.30			5.68			4.63
Risk-based Capital Ratios
Tier 1 leverage ratio		4.50	%		5.00	%		6.53	%
Tier 1 risk-based capital ratio		6.46			7.03			9.23
Total risk-based capital ratio		9.81			10.01			11.22
FTE employees		278			291			291

CONTACT:
Porter Bancorp, Inc.
John T. Taylor, 502-499-4800
President