Limestone Bancorp (LMST) 8-K Porter Bancorp, Inc. Reports First Quarter 2014 Results

Exhibit 99.1

Porter Bancorp, Inc. Reports First Quarter 2014 Results

First Quarter 2014 Net Loss Attributable to Common Shareholders of $976,000

LOUISVILLE, Ky.--(BUSINESS WIRE)--April 30, 2014--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, with 18 full-service banking centers in Kentucky, today reported unaudited results for the first quarter of 2014.

The Company reported that the net loss attributable to common shareholders decreased to $976,000, or ($0.08) per diluted share, for the first quarter of 2014 compared to a net loss of $1,028,000, or ($0.09) per diluted share for the fourth quarter of 2013 and increased compared to the net loss of $524,000, or ($0.04) per diluted share, for the first quarter of 2013.

Our primary initiatives for 2014 are to continue reducing non-performing assets, restore capital, and return to sustainable profitability while continuing to serve our customers and developing new quality financial relationships.

First Quarter 2014 Financial Performance Highlights

• Net Interest Income – Net interest income declined to $7.3 million for the first quarter of 2014 compared with $7.6 million in the fourth quarter of 2013 and $8.3 million in the first quarter of 2013 as average loans declined to $698.2 million for the first quarter of 2014 compared with $719.2 million in the fourth quarter of 2013 and $872.5 million in the first quarter of 2013. Net interest margin remained consistent at 2.96% in the first quarter of 2014, compared with 2.96% in the fourth quarter of 2013, and declined from 3.07% in the first quarter of 2013.

• Provision for Loan Losses – No provision for loan losses expense was recorded for the first quarter of 2014 or the fourth quarter of 2013, compared to $450,000 in the first quarter of 2013. The reduction in provision for loan losses benefited from the downsizing of the loan portfolio, declining historical loss rates, and a reduction in loans migrating downward in risk grade classification. The allowance for loan losses for loans evaluated collectively for impairment was 4.10% at March 31, 2014, compared with 4.41% at December 31, 2013, and 4.88% at March 31, 2013.
• Non-performing Assets - Non-performing assets, which include loans past due 90 days and still accruing, loans on nonaccrual, and other real estate owned (OREO), decreased to $123.3 million, or 11.59% of total assets at March 31, 2014, compared with $132.9 million, or 12.35% of total assets, at December 31, 2013.

Non-performing loans decreased to $77.3 million, or 11.33% of total loans, at March 31, 2014, compared with $102.0 million, or 14.38% of total loans, at December 31, 2013. The decline was primarily driven by $16.9 million of nonaccrual loans migrating to OREO, $10.2 million in principal payments received on nonaccrual loans, and $2.7 million of net charge-offs.

Non-performing loans and OREO remain at elevated levels and continue to negatively impact financial performance.

		March 31, 2014		December 31, 2013	September 30, 2013		June 30, 2013		March 31, 2013
		(in thousands)
Past due loans:
30 – 59 days	$	5,667	$	10,696	$	10,018	$	8,600	$	8,052
60 – 89 days		1,232		775		7,582		2,979		2,960
90 days or more		—		232		—		71		—
Nonaccrual loans		77,344		101,767		106,922		112,185		120,943
Total past due and nonaccrual loans	$	84,243	$	113,470	$	124,522	$	123,835	$	131,955
Loans past due 90 days or more	$	—	$	232	$	—	$	71	$	—
Nonaccrual loans		77,344		101,767		106,922		112,185		120,943
OREO		45,918		30,892		41,857		47,030		44,192
Total non-performing assets	$	123,262	$	132,891	$	148,779	$	159,286	$	165,135

In addition to nonaccrual loans and OREO, loans classified as Troubled Debt Restructures (TDRs) and on accrual totaled $41.8 million at March 31, 2014, compared to $44.3 million at December 31, 2013 and $55.2 million at March 31, 2013.

OREO at March 31, 2014 increased to $45.9 million, compared with $30.9 million at December 31, 2013, and $44.2 million at March 31, 2013. The Company acquired $17.4 million in OREO and sold $2.1 million in OREO during the first quarter of 2014. Fair value write-downs arising from new appraisals or lower marketing prices totaled $250,000 in the first quarter of 2014, compared with $882,000 in the fourth quarter of 2013 and $307,000 in the first quarter of 2013.

• Non-interest Expense – Non-interest expense decreased $547,000 to $8.5 million for the first quarter of 2014, compared with $9.0 million for the fourth quarter of 2013, and decreased $1.1 million compared with $9.6 million for the first quarter of 2013. The reduction in non-interest expense was attributable primarily to lower loan collection expenses and lower OREO expenses.
• Capital – At March 31, 2014, PBI Bank’s Tier 1 leverage ratio was 6.36% compared with 6.28% at December 31, 2013, and its Total risk-based capital ratio was 11.50% at March 31, 2014 compared with 11.44% at December 31, 2013, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order. At March 31, 2014, Porter Bancorp’s leverage ratio was 4.87% compared with 4.95% at December 31, 2013, and its Total risk-based capital ratio was 10.93%, compared with 11.03% at December 31, 2013.

Management and the Board of Directors continue to evaluate appropriate strategies for increasing the Company’s capital in order to meet the capital requirements of the Consent Order. These include, among other things, a possible public offering or private placement of common stock to new and existing shareholders. As previously announced, the Company has engaged a financial advisor to assist the Board of Directors in this evaluation.

PBIB-G

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,” “possible,” “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 indicated by forward-looking statements due to various risks and uncertainties, including our ability to reduce our level of higher risk loans such as commercial real estate and real estate development loans, reduce our level of non-performing loans and other real estate owned, increase net interest income in a low interest rate environment, cybersecurity risks that may result in increased costs for us to protect against the risks, as well as liability or reputational damage to the Company in the event of a breach of our security, as well as our need to increase capital. These and other risks and uncertainties are described in greater detail 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 first quarter ending March 31, 2014 follows.

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	Three			Three			Three
	Months			Months			Months
	Ended			Ended			Ended
	3/31/14			12/31/13			3/31/13
Income Statement Data
Interest income	$	9,897		$	10,259		$	11,258
Interest expense		2,597			2,673			2,960
Net interest income		7,300			7,586			8,298
Provision for loan losses		—			—			450
Net interest income after provision		7,300			7,586			7,848
Service charges on deposit accounts		468			523			493
Income from fiduciary activities		—			—			517
Bank card interchange fees		161			176			172
Other real estate owned income		7			3			112
Gain (loss) on sales of securities, net		44			(4	)		—
Income from bank owned life insurance		76			75			79
Other		159			184			274
Non-interest income		915			957			1,647
Salaries & employee benefits		3,741			3,526			4,139
Occupancy and equipment		892			855			931
Other real estate owned expense		662			1,399			791
FDIC insurance		540			511			639
Franchise tax		425			333			537
Loan collection expense		539			734			1,035
Professional fees		558			484			406
Communications expense		235			180			175
Postage and delivery		110			109			113
Insurance expense		149			166			151
Other		651			752			647
Non-interest expense		8,502			9,049			9,564
Income (loss) before income taxes		(287	)		(506	)		(69	)
Income tax expense (benefit)		—			—			—
Net income (loss)		(287	)		(506	)		(69	)
Less:
Dividends on preferred stock		786			607			438
Accretion on preferred stock		—			25			45
Earnings (loss) allocated to participating securities		(97	)		(110	)		(28	)
Net income (loss) available to common	$	(976	)	$	(1,028	)	$	(524	)
Weighted average shares – Basic		12,021,313			11,907,766			11,847,907
Weighted average shares – Diluted		12,021,313			11,907,766			11,847,907
Basic earnings (loss) per common share	$	(0.08	)	$	(0.09	)	$	(0.04	)
Diluted earnings (loss) per common share	$	(0.08	)	$	(0.09	)	$	(0.04	)
Cash dividends declared per common share	$	0.00		$	0.00		$	0.00

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	Three			Three			Three
	Months			Months			Months
	Ended			Ended			Ended
	3/31/14			12/31/13			3/31/13
Average Balance Sheet Data
Assets	$	1,073,586		$	1,081,908		$	1,151,816
Loans		698,184			719,163			872,505
Earning assets		1,019,173			1,033,083			1,111,469
Deposits		984,169			989,847			1,053,884
Long-term debt and advances		35,233			35,652			37,169
Interest bearing liabilities		911,186			922,519			983,481
Stockholders’ equity		36,992			38,035			47,749
Performance Ratios
Return on average assets		(0.11	)%		(0.19	)%		(0.02	)%
Return on average equity		(3.15	)		(5.28	)		(0.59	)
Yield on average earning assets (tax equivalent)		3.99			3.99			4.15
Cost of interest bearing liabilities		1.16			1.15			1.22
Net interest margin (tax equivalent)		2.96			2.96			3.07
Efficiency ratio		104.05			105.87			96.17
Loan Charge-off Data
Loans charged-off	$	(3,082	)	$	(4,171	)	$	(17,962	)
Recoveries		373			541			671
Net charge-offs	$	(2,709	)	$	(3,630	)	$	(17,291	)
Nonaccrual Loan Activity
Nonaccrual loans at beginning of period	$	101,767		$	106,922		$	94,517
Net principal pay-downs		(10,245	)		(5,151	)		(4,105	)
Charge-offs		(2,472	)		(3,232	)		(17,472	)
Loans foreclosed and transferred to OREO		(16,895	)		(2,064	)		(3,648	)
Loans returned to accrual status		(870	)		(2,459	)		—
Loans placed on nonaccrual during the period		6,059			7,751			51,651
Nonaccrual loans at end of period	$	77,344		$	101,767		$	120,943
Troubled Debt Restructurings (TDRs)
Accruing	$	41,813		$	44,346		$	55,171
Nonaccrual		30,640			46,916			52,592
Total	$	72,453		$	91,262		$	107,763
OREO at beginning of period	$	30,892		$	41,857		$	43,671
Real estate acquired		17,351			2,064			3,680
Valuation adjustment write-downs		(250	)		(882	)		(307	)
Proceeds from sales of properties		(2,075	)		(12,205	)		(2,655	)
Gain (loss) on sales, net		—			58			(197	)
OREO at end of period	$	45,918		$	30,892		$	44,192

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	As of			As of			As of
	3/31/14			12/31/13			3/31/13
Assets
Loans	$	682,591		$	709,326		$	827,076
Loan loss reserve		(25,415	)		(28,124	)		(39,839	)
Net loans		657,176			681,202			787,237
Mortgage loans held for sale		—			149			—
Securities held to maturity		43,550			43,612			—
Securities available for sale		166,442			163,344			183,247
Federal funds sold & interest bearing deposits		99,286			103,669			62,505
Cash and due from financial institutions		7,449			7,465			8,683
FHLB stock		7,323			10,072			10,072
Premises and equipment		19,821			19,983			20,667
Other real estate owned		45,918			30,892			44,192
Accrued interest receivable and other assets		16,565			15,733			16,266
Total Assets	$	1,063,530		$	1,076,121		$	1,132,869
Liabilities and Equity
Certificates of deposit	$	656,475		$	679,952		$	739,934
Interest checking		79,689			84,626			83,522
Money market		89,678			79,349			62,111
Savings		38,524			36,292			41,952
Total interest bearing deposits		864,366			880,219			927,519
Demand deposits		110,507			107,486			108,841
Total deposits		974,873			987,705			1,036,360
Federal funds purchased & repurchase agreements		2,240			2,470			2,853
FHLB advances		4,345			4,492			5,324
Junior subordinated debentures		30,625			30,850			31,525
Accrued interest payable and other liabilities		15,110			14,673			10,069
Total liabilities		1,027,193			1,040,190			1,086,131
Stockholders’ equity		36,337			35,931			46,738
Total Liabilities and Stockholders’ Equity	$	1,063,530		$	1,076,121		$	1,132,869
Ending shares outstanding		12,894,741			12,840,999			12,139,975
Book value per common share	$	(0.15	)	$	(0.18	)	$	0.70
Tangible book value per common share		(0.25	)		(0.29	)		0.55
Asset Quality Data
Loan 90 days or more past due still on accrual	$	—		$	232		$	—
Nonaccrual loans		77,344			101,767			120,943
Total non-performing loans		77,344			101,999			120,943
Real estate acquired through foreclosures		45,918			30,892			44,192
Other repossessed assets		—			—			—
Total non-performing assets	$	123,262		$	132,891		$	165,135
Non-performing loans to total loans		11.33	%		14.38	%		14.62	%
Non-performing assets to total assets		11.59			12.35			14.58
Allowance for loan losses to non-performing loans		32.86			27.57			32.94
Allowance as % of loans evaluated individually		2.01			2.32			4.60
Allowance as % of loans evaluated collectively		4.10			4.41			4.88
Allowance for loan losses to total loans		3.72			3.96			4.82
Risk-based Capital Ratios
Tier I leverage ratio		4.87	%		4.95	%		4.91	%
Tier I risk-based capital ratio		7.22			7.34			6.77
Total risk-based capital ratio		10.93			11.03			10.16
FTE employees		263			260			264

CONTACT:
Porter Bancorp, Inc.
John T. Taylor, 502-499-4800
Chief Executive Officer