Limestone Bancorp (LMST) 8-K Porter Bancorp, Inc. Reports $409,000 First Quarter 2015 Net Income

Exhibit 99.1

Porter Bancorp, Inc. Reports $409,000 First Quarter 2015 Net Income

Continued Improvement in Asset Quality

LOUISVILLE, Ky.--(BUSINESS WIRE)--April 30, 2015--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, today reported unaudited results for the first quarter of 2015.

The Company reported that net income attributable to common shareholders for the first quarter of 2015 was $409,000, or $0.02 per basic and diluted common share, compared with a net loss attributable to common shareholders of $976,000, or $(0.08) per basic and diluted share, for the first quarter of 2014.

Net Interest Income – Net interest income before provision expense decreased to $7.3 million for the first quarter of 2015 compared with $7.5 million in the fourth quarter of 2014, and remained consistent compared to $7.3 million in the first quarter of 2014. Average loans increased to $643.0 million for the first quarter of 2015 compared with $634.9 million in the fourth quarter of 2014 and declined compared to $698.2 million in the first quarter of 2014. Net interest margin increased to 3.21% in the first quarter of 2015, compared with 3.16% in the fourth quarter of 2014 and 2.96% in the first quarter of 2014 primarily driven by improving cost of funds which declined to 0.91% in the first quarter of 2015, compared with 0.99% in the fourth quarter of 2014 and 1.16% in the first quarter of 2014.

Allowance for Loan Losses – The allowance for loan losses to total loans was 2.94% at March 31, 2015 compared to 3.10% at December 31, 2014, and 3.72% at March 31, 2014. The declining level of the allowance is primarily driven by declining historical charge-off levels and improving trends in loan category risk ratings. Net loan charge-offs declined to $767,000 for the first quarter of 2015, compared to $5.6 million for the fourth quarter of 2014 and $2.7 million for the first quarter of 2014. The allowance for loan losses for loans evaluated collectively for impairment was 3.18% at March 31, 2015, compared with 3.37% at December 31, 2014, and 4.10% at March 31, 2014. Because of ongoing improvements in asset quality and management’s assessment of risk in the loan portfolio, no provision expense was recorded for the first quarter of 2015, compared to $800,000 for the fourth quarter of 2014.

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 $80.1 million, or 7.94% of total assets at March 31, 2014, compared with $93.5 million, or 9.19% of total assets at December 31, 2014, and $123.3 million, or 11.59% of total assets at March 31, 2014.

Non-performing loans decreased to $36.5 million, or 5.77% of total loans, at March 31, 2015, compared with $47.3 million, or 7.57% of total loans at December 31, 2014 and decreased from $77.3 million, or 11.33% of total loans at March 31, 2014. The decrease from the previous quarter was primarily driven by $10.8 million in principal payments received on nonaccrual loans, $337,000 of nonaccrual loans migrating to OREO, and $955,000 of net charge-offs.

OREO at March 31, 2015 decreased to $43.6 million, compared with $46.2 million at December 31, 2014 and $45.9 million at March 31, 2014. The Company acquired $347,000 in OREO and sold $2.6 million in OREO during the first quarter of 2015. Fair value write-downs arising from new appraisals or lower marketing prices totaled $300,000 in the first quarter of 2015, compared with $3.0 million in the fourth quarter of 2014 and $250,000 in the first quarter of 2014.

The following table details past due loans and non-performing assets as of:

		March 31, 2015		December 31, 2014	September 30, 2014		June 30, 2014		March 31, 2014
		(in thousands)
Past due loans:
30 – 59 days	$	4,370	$	3,960	$	3,507	$	3,057	$	5,667
60 – 89 days		1,769		980		3,333		991		1,232
90 days or more		18		151		—		—		—
Nonaccrual loans		36,500		47,175		44,670		44,375		77,344
Total past due and nonaccrual loans	$	42,657	$	52,266	$	51,510	$	48,423	$	84,243
Loans past due 90 days or more	$	18	$	151	$	—	$	—	$	—
Nonaccrual loans		36,500		47,175		44,670		44,375		77,344
OREO		43,618		46,197		54,507		56,882		45,918
Other repossessed assets		—		—		—		—		—
Total non-performing assets	$	80,136	$	93,523	$	99,177	$	101,257	$	123,262

In addition to nonaccrual loans and OREO, loans classified as Troubled Debt Restructures (TDRs) and on accrual totaled $18.8 million at March 31, 2015, compared to $22.0 million at December 31, 2014 and $41.8 million at March 31, 2014.

Non-interest Income – Non-interest income increased $1.5 million to $2.7 million for the first quarter of 2015, compared with $1.2 million for the fourth quarter of 2014, and increased $1.8 million compared with $915,000 for the first quarter of 2014 driven primarily by gains on the sales of securities totaling $1.5 million in the first quarter of 2015. There were no securities sales gains in the fourth quarter of 2014, and gains of $44,000 in the first quarter of 2014.

Non-interest Expense – Non-interest expense decreased $2.5 million to $9.4 million for the first quarter of 2015, compared with $11.8 million for the fourth quarter of 2014, and increased $890,000 compared with $8.5 million for the first quarter of 2014. This decrease from the fourth quarter of 2014 was primarily due to a reduction in OREO expenses of approximately $3.1 million, partially offset by an increase in professional fees of $448,000 driven primarily by legal fees and litigation expenses. OREO expenses decreased primarily due to a reduction in fair value write-downs from $3.0 million in the fourth quarter of 2014 to $300,000 in the first quarter of 2015. These write-downs result from declines in the fair value of the real estate based upon updated appraisals as well as reductions in listing prices.

Capital – At March 31, 2015, PBI Bank’s Tier 1 leverage ratio was 5.84% compared with 5.78% at December 31, 2014, and its Total risk-based capital ratio was 10.25% at March 31, 2015 compared with 10.57% at December 31, 2014, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order. At March 31, 2015, Porter Bancorp’s leverage ratio was 4.13% compared with 4.51% at December 31, 2014, and its Total risk-based capital ratio was 10.05%, compared with 10.61% at December 31, 2014. At March 31, 2015, PBI Bank’s Common equity Tier I risk-based capital ratio was 8.32%, and Porter Bancorp’s Common equity Tier I risk-based capital ratio was 4.71%.

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 including, among other things, a possible private placement of common stock to new and existing shareholders.

Shares Issued and Outstanding – On February 25, 2015, shareholders approved the conversion of all mandatorily convertible Series B Preferred Shares into 4,053,600 common shares and the conversion of all mandatorily convertible Series D Preferred Shares into 6,458,000 non-voting common shares. The conversion reduced preferred stockholders’ equity by $5.8 million and increased common stockholders’ equity by the same amount. Total issued and outstanding common shares and non-voting common shares were 25,663,495 at March 31, 2015.

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, and increase net interest income in a low interest rate environment, 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, 2015 follows.

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	Three Months Ended
	3/31/15		12/31/14			3/31/14
Income Statement Data
Interest income	$	9,203	$	9,636		$	9,897
Interest expense		1,913		2,169			2,597
Net interest income		7,290		7,467			7,300
Provision for loan losses		—		800			—
Net interest income after provision		7,290		6,667			7,300
Service charges on deposits		409		498			468
Bank card interchange fees		203		190			161
Other real estate owned income		357		226			7
Gains (losses) on sales of securities, net		1,497		—			44
Other		230		244			235
Non-interest income		2,696		1,158			915
Salaries & employee benefits		3,847		3,927			3,741
Occupancy and equipment		870		852			892
Professional fees		979		531			289
FDIC insurance		570		590			540
Data processing expense		304		288			269
State Franchise and deposit tax		285		210			425
Other real estate owned expense		733		3,843			662
Loan collection expense		283		348			539
Other		1,521		1,259			1,145
Non-interest expense		9,392		11,848			8,502
Income (loss) before income taxes		594		(4,023	)		(287	)
Income tax expense (benefit)		—		(238	)		—
Net income (loss)		594		(3,785	)		(287	)
Less:
Dividends and accretion on preferred stock		—		—			786
Effect of exchange of preferred stock to common stock		—		(36,104	)		—
Earnings allocated to participating securities		185		7,977			(97	)
Net income (loss) attributable to common	$	409	$	24,342		$	(976	)
Weighted average shares – Basic		17,493,397		12,767,430			12,021,313
Weighted average shares – Diluted		17,493,397		12,767,430			12,021,313
Basic earnings (loss) per common share	$	0.02	$	1.91		$	(0.08	)
Diluted earnings (loss) per common share	$	0.02	$	1.91		$	(0.08	)
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 Months Ended
	3/31/15			12/31/14			3/31/14
Average Balance Sheet Data
Assets	$	1,011,561		$	1,033,327		$	1,073,586
Loans		642,959			634,872			698,184
Earning assets		936,037			952,946			1,019,173
Deposits		931,698			948,899			984,169
Long-term debt and advances		33,902			34,127			35,233
Interest bearing liabilities		854,423			865,042			911,186
Stockholders’ equity		33,971			29,928			36,992
Performance Ratios
Return on average assets		0.24	%		(1.45)	%		(0.11)	%
Return on average equity		7.09			(50.18)			(3.15)
Yield on average earning assets (tax equivalent)		4.03			4.06			3.99
Cost of interest bearing liabilities		0.91			0.99			1.16
Net interest margin (tax equivalent)		3.21			3.16			2.96
Efficiency ratio		110.64			137.37			104.05
Loan Charge-off Data
Loans charged-off	$	(1,327	)	$	(6,197	)	$	(3,082	)
Recoveries		560			563			373
Net charge-offs	$	(767	)	$	(5,634	)	$	(2,709	)
Nonaccrual Loan Activity
Nonaccrual loans at beginning of period	$	47,175		$	44,670		$	101,767
Net principal pay-downs		(10,754	)		(1,825	)		(10,245	)
Charge-offs		(955	)		(2,291	)		(2,472	)
Loans foreclosed and transferred to OREO		(337	)		(675	)		(16,895	)
Loans returned to accrual status		(78	)		(116	)		(870	)
Loans placed on nonaccrual during the period		1,449			7,412			6,059
Nonaccrual loans at end of period	$	36,500		$	47,175		$	77,344
Troubled Debt Restructurings (TDRs)
Accruing	$	18,798		$	21,985		$	41,813
Nonaccrual		19,002			20,507			30,640
Total	$	37,800		$	42,492		$	72,453
Other Real Estate Owned (OREO) Activity
OREO at beginning of period	$	46,197		$	54,507		$	30,892
Real estate acquired		347			675			17,351
Valuation adjustment write-downs		(300	)		(3,005	)		(250	)
Proceeds from sales of properties		(2,629	)		(5,831	)		(2,075	)
Gain (loss) on sales, net		3			(149	)		—
OREO at end of period	$	43,618		$	46,197		$	45,918

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	As of
	3/31/15			12/31/14			9/30/14			6/30/14			3/31/14				12/31/13
Assets
Loans	$	632,428		$	624,999		$	638,360		$	643,030		$	682,591		$	709,326
Allowance for loan losses		(18,597	)		(19,364	)		(24,198	)		(25,133	)		(25,415	)		(28,124	)
Net loans		613,831			605,635			614,162			617,897			657,176			681,202
Loans held for sale		—			8,926			—			280			—			149
Securities held to maturity		42,263			42,325			42,386			43,488			43,550			43,612
Securities available for sale		157,290			190,791			192,146			180,723			166,442			163,344
Federal funds sold & interest bearing deposits		101,872			66,011			73,494			95,353			99,286			103,669
Cash and due from financial institutions		7,899			14,169			11,336			6,913			7,449			7,465
Premises and equipment		19,323			19,507			19,649			19,788			19,821			19,983
Bank owned life insurance		9,231			9,167			9,103			9,039			8,981			8,911
FHLB Stock		7,323			7,323			7,323			7,323			7,323			10,072
Other real estate owned		43,618			46,197			54,507			56,882			45,918			30,892
Accrued interest receivable and other assets		7,056			7,938			6,608			7,181			7,584			6,822
Total Assets	$	1,009,706		$	1,017,989		$	1,030,714		$	1,044,867		$	1,063,530		$	1,076,121
Liabilities and Equity
Certificates of deposit	$	597,117		$	574,681		$	609,682		$	631,110		$	656,475		$	679,952
Interest checking		86,614			91,086			76,431			76,625			79,689			84,626
Money market		102,349			109,734			100,890			95,946			89,678			79,349
Savings		36,418			36,430			36,364			37,178			38,524			36,292
Total interest bearing deposits		822,498			811,931			823,367			840,859			864,366			880,219
Demand deposits		108,011			114,910			110,165			109,956			110,507			107,486
Total deposits		930,509			926,841			933,532			950,815			974,873			987,705
Federal funds purchased & repurchase agreements		1,145			1,341			1,817			2,451			2,240			2,470
FHLB advances		3,597			15,752			16,940			14,134			4,345			4,492
Junior subordinated debentures		29,725			29,950			30,175			30,400			30,625			30,850
Accrued interest payable and other liabilities		10,758			10,640			18,922			16,453			15,110			14,673
Total liabilities		975,734			984,524			1,001,386			1,014,253			1,027,193			1,040,190
Preferred stockholders’ equity		2,771			8,552			38,283			38,283			38,283			38,283
Common stockholders’ equity (deficit)		31,201			24,913			(8,955	)		(7,669	)		(1,946	)		(2,352	)
Total stockholders’ equity		33,972			33,465			29,328			30,614			36,337			35,931
Total Liabilities and Stockholders’ Equity	$	1,009,706		$	1,017,989		$	1,030,714		$	1,044,867		$	1,063,530		$	1,076,121
Ending shares outstanding		25,663,495			14,890,514			13,099,400			13,104,853			12,894,741			12,840,999
Book value per common share	$	1.22		$	1.67		$	(0.68	)	$	(0.59	)	$	(0.15	)	$	(0.18	)
Tangible book value per common share		1.18			1.61			(0.76	)		(0.67	)		(0.25	)		(0.29	)

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	As of
	3/31/15			12/31/14			9/30/14			6/30/14			3/31/14			12/31/13
Asset Quality Data
Loan 90 days or more past due still on accrual	$	18		$	151		$	—		$	—		$	—		$	232
Nonaccrual loans		36,500			47,175			44,670			44,375			77,344			101,767
Total non-performing loans		36,518			47,326			44,670			44,375			77,344			101,999
Real estate acquired through foreclosures		43,618			46,197			54,507			56,882			45,918			30,892
Other repossessed assets		—			—			—			—			—			—
Total non-performing assets	$	80,136		$	93,523		$	99,177		$	101,257		$	123,262		$	132,891
Non-performing loans to total loans		5.77	%		7.57	%		7.00	%		6.90	%		11.33	%		14.38	%
Non-performing assets to total assets		7.94			9.19			9.62			9.69			11.59			12.35
Allowance for loan losses to non-performing loans		50.93			40.92			54.17			56.64			32.86			27.57
Allowance for loans evaluated individually	$	254		$	752		$	1,788		$	1,753		$	2,453		$	3,471
Loans evaluated individually for impairment		55,299			71,993			78,695			79,742			122,158			149,883
Allowance as % of loans evaluated individually		0.46	%		1.04	%		2.27	%		2.20	%		2.01	%		2.32	%
Allowance for loans evaluated collectively	$	18,343		$	18,612		$	22,410		$	23,380		$	22,962		$	24,653
Loans evaluated collectively for impairment		577,129			553,006			559,665			563,288			560,433			559,443
Allowance as % of loans evaluated collectively		3.18	%		3.37	%		4.00	%		4.15	%		4.10	%		4.41	%
Allowance for loan losses to total loans		2.94	%		3.10	%		3.79	%		3.91	%		3.72	%		3.96	%
Loans by Risk Category
Pass	$	480,545		$	461,126		$	446,166		$	434,853		$	415,144		$	369,529
Watch		76,876			68,200			83,711			91,208			104,171			144,316
Special Mention		1,110			4,189			4,431			3,223			4,069			5,865
Substandard		73,897			91,484			104,052			113,746			159,207			189,616
Doubtful		—			—			—			—			—			—
Total	$	632,428		$	624,999		$	638,360		$	643,030		$	682,591		$	709,326
Risk-based Capital Ratios - Company
Tier I leverage ratio		4.13	%		4.51	%		4.02	%		4.10	%		4.87	%		4.95	%
Common equity Tier I risk-based capital ratio		4.71			N/A			N/A			N/A			N/A			N/A
Tier I risk-based capital ratio		5.88			6.70			5.93			6.19			7.22			7.34
Total risk-based capital ratio		10.05			10.61			10.05			10.27			10.93			11.03
Risk-based Capital Ratios – PBI Bank
Tier I leverage ratio		5.84	%		5.78	%		6.09	%		5.96	%		6.36	%		6.28	%
Common equity Tier I risk-based capital ratio		8.32			N/A			N/A			N/A			N/A			N/A
Tier I risk-based capital ratio		8.32			8.59			8.99			9.00			9.44			9.35
Total risk-based capital ratio		10.25			10.57			11.01			11.06			11.50			11.44
FTE employees		258			264			268			275			263			260

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