Limestone Bancorp (LMST) 8-K Porter Bancorp Reports 1st Quarter 2016 Net Income of $1.4 Million or $0.05 Per Diluted Share

Exhibit 99.1

Porter Bancorp Reports 1st Quarter 2016 Net Income of $1.4 Million or $0.05 Per Diluted Share

Reports 13% NPA Reduction in 1st Quarter

LOUISVILLE, Ky.--(BUSINESS WIRE)--April 27, 2016--Porter Bancorp, Inc. (NASDAQ: PBIB), parent company of PBI Bank, today reported unaudited results for the first quarter of 2016.

The Company reported that net income attributable to common shareholders for the first quarter of 2016 was $1.4 million, or $0.05 per basic and diluted common share, compared with $409,000, or $0.02 per basic and diluted share, for the first quarter of 2015.

John T. Taylor, President and CEO of the Company noted, “PBI Bank has continued to make significant progress in reducing its non-performing assets. In the first quarter of 2016, non-performing assets were reduced by $4.3 million after achieving reductions of $12.9 million in the fourth quarter of 2015. In addition to lowering the risk profile of the Company, we are pleased to see a return to profitability, as the cost to remediate non-performing assets continues to decline, and we continued the all-important work to attract new customers and provide high quality service to our existing customer base.”

Net Interest Income – Net interest income before provision expense increased to $7.7 million for the first quarter of 2016 compared with $7.4 million in the fourth quarter of 2015, and $7.3 million in the first quarter of 2015. Average loans remained consistent at $620.1 million for the first quarter of 2016 compared with $619.5 million in the fourth quarter of 2015 and declined compared to $643.0 million in the first quarter of 2015. Net interest margin increased to 3.53% in the first quarter of 2016, compared with 3.32% in the fourth quarter of 2015 and 3.21% in the first quarter of 2015.

Our yield on earning assets improved to 4.23% in the first quarter of 2016 compared to 4.02% in the fourth quarter of 2015 and 4.03% in the first quarter of 2015. The yield on earning assets was positively impacted in the first quarter of 2016 by the collection of previously charged-off accrued uncollected interest of approximately $285,000 along with the full unpaid balance on three nonaccrual loans. Our cost of funds was 0.79% in the first quarter of 2016 and the fourth quarter of 2015 and improved from 0.91% in the first quarter of 2015.

Allowance for Loan Losses – The allowance for loan losses to total loans was 1.83% at March 31, 2016 compared to 1.95% at December 31, 2015, and 2.94% at March 31, 2015. 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 were $151,000 for the first quarter of 2016, compared to net recoveries of $143,000 for the fourth quarter of 2015 and net charge-offs of $767,000 for the first quarter of 2015. The allowance for loan losses for loans evaluated collectively for impairment was 1.83% at March 31, 2016, compared with 1.98% at December 31, 2015, and 3.18% at March 31, 2015. Because of ongoing improvements in asset quality and management’s assessment of risk in the loan portfolio, a negative provision of $550,000 was recorded for the first quarter of 2016, compared to a negative provision of $2.3 million for the fourth quarter of 2015 and no provision for loan losses in the first quarter of 2015.

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 $29.0 million, or 3.09% of total assets at March 31, 2016, compared with $33.3 million, or 3.51% of total assets at December 31, 2015, and $80.1 million, or 7.94% of total assets at March 31, 2015.

Non-performing loans decreased to $11.1 million, or 1.79% of total loans at March 31, 2016, compared with $14.1 million, or 2.28% of total loans at December 31, 2015, and decreased from $36.5 million, or 5.77% of total loans at March 31, 2015. The decrease from the previous quarter was primarily driven by $2.7 million in principal payments received on nonaccrual loans, $441,000 of nonaccrual loans migrating to OREO, and $644,000 in charge-offs.

OREO at March 31, 2016, decreased to $17.9 million, compared with $19.2 million at December 31, 2015, and $43.6 million at March 31, 2015. The Company acquired $441,000 in OREO and sold $1.3 million in OREO during the first quarter of 2016. Fair value write-downs arising from lower marketing prices or new appraisals totaled $500,000 in the first quarter of 2016, compared with $2.8 million in the fourth quarter of 2015 and $300,000 in the first quarter of 2015.

The following table details past due loans and non-performing assets as of:
		March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015		March 31, 2015
		(in thousands)
	Past due loans:
	30 – 59 days	$	1,829	$	3,133	$	1,972	$	1,941	$	4,370
	60 – 89 days		62		241		578		650		1,769
	90 days or more		—		—		—		92		18
	Nonaccrual loans		11,119		14,087		16,987		30,215		36,500
	Total past due and nonaccrual loans	$	13,010	$	17,461	$	19,537	$	32,898	$	42,657
	Loans past due 90 days or more	$	—	$	—	$	—	$	92	$	18
	Nonaccrual loans		11,119		14,087		16,987		30,215		36,500
	OREO		17,861		19,214		29,177		39,545		43,618
	Other repossessed assets		—		—		—		—		—
	Total non-performing Assets	$	28,980	$	33,301	$	46,164	$	69,852	$	80,136

In addition to nonaccrual loans and OREO, loans classified as Troubled Debt Restructures (TDRs) and on accrual totaled $14.9 million at March 31, 2016, compared to $17.4 million at December 31, 2015 and $18.8 million at March 31, 2015.

Non-interest Income – Non-interest income increased $167,000 to $1.4 million for the first quarter of 2016, compared with $1.2 million for the fourth quarter of 2015, and decreased $1.3 million compared with $2.7 million for the first quarter of 2015. Gain on sales of securities was $203,000 in the first quarter of 2016, compared to $70,000 in the fourth quarter of 2015 and $1.5 million in the first quarter of 2015.

Non-interest Expense – Non-interest expense decreased $3.5 million to $8.1 million for the first quarter of 2016, compared with $11.6 million for the fourth quarter of 2015, and decreased $1.3 million compared with $9.4 million for the first quarter of 2015. This decrease from the fourth quarter of 2015 was primarily due to a reduction in OREO expenses of approximately $2.8 million as fair value write-downs based upon reductions in listing prices as well as new appraisals declined from $2.8 million in the fourth quarter of 2015 to $500,000 in the first quarter of 2016. We also had reductions in professional fees and loan collection expenses in the first quarter of 2016 compared to the fourth and first quarters of 2015.

Capital – At March 31, 2016, PBI Bank’s Tier 1 leverage ratio was 6.39% compared with 6.08% at December 31, 2015, and its Total risk-based capital ratio was 10.64% at March 31, 2016, compared with 10.58% at December 31, 2015, which are below the minimums of 9.0% and 12.0% required by the Bank’s Consent Order. At March 31, 2016, Porter Bancorp’s leverage ratio was 5.03% compared with 4.74% at December 31, 2015, and its Total risk-based capital ratio was 10.46%, compared with 10.46% at December 31, 2015. At March 31, 2016, PBI Bank’s Common equity Tier I risk-based capital ratio was 8.94%, and Porter Bancorp’s Common equity Tier I risk-based capital ratio was 5.21%.

Subsequent to March 31, 2015, the Company completed a private placement of common stock to accredited investors on April 15, 2016. In the transaction, the Company issued 2.9 million common shares and 1.1 million non-voting common shares at $1.25 each resulting in total proceeds of $5.0 million. Approximately $2.8 million of the proceeds were directed by investors to make interest payments and bring current the Company’s trust preferred securities which had been in deferral since 2011. The balance of the proceeds will be used for general corporate purposes and to support the Company’s wholly-owned subsidiary, PBI Bank.

Among the accredited investors participating in the transaction were John T. Taylor, our CEO, and Directors Bradford T. Ray and James M. Parsons. After the transaction, the Company had issued and outstanding 22,986,177 common shares and 7,958,000 non-voting common shares.

About Porter Bancorp, Inc.
Porter Bancorp, Inc. (NASDAQ: PBIB) is a Louisville, Kentucky-based bank holding company which operates banking centers in 12 counties through its wholly-owned subsidiary PBI Bank. Our markets include metropolitan Louisville in Jefferson County and the surrounding counties of Henry and Bullitt, and extend south along the Interstate 65 corridor. We serve southern and south central Kentucky from banking centers in Butler, Green, Hart, Edmonson, Barren, Warren, Ohio and Daviess counties. We also have a banking center in Lexington, Kentucky, the second largest city in the state. PBI Bank is a traditional community bank with a wide range of personal and business banking products and services.

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, 2016 follows.

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	Three Months Ended
	3/31/16			12/31/15			3/31/15
Income Statement Data
Interest income	$	9,185		$	9,025		$	9,203
Interest expense		1,534			1,585			1,913
Net interest income		7,651			7,440			7,290
Provision (negative provision) for loan losses		(550	)		(2,300	)		—
Net interest income after provision		8,201			9,740			7,290
Service charges on deposits		429			475			409
Bank card interchange fees		202			195			203
Other real estate owned income		256			237			357
Gains (losses) on sales of securities, net		203			70			1,497
Other		301			247			230
Non-interest income		1,391			1,224			2,696
Salaries & employee benefits		3,822			4,062			3,847
Occupancy and equipment		854			936			870
Professional fees		385			572			979
FDIC insurance		523			539			570
Data processing expense		297			268			304
State Franchise and deposit tax		255			265			285
Other real estate owned expense		668			3,506			733
Loan collection expense		82			246			283
Other		1,205			1,171			1,521
Non-interest expense		8,091			11,565			9,392
Income (loss) before income taxes		1,501			(601	)		594
Income tax expense		21			—			—
Net income (loss)		1,480			(601	)		594
Less:
Earnings (losses) allocated to participating securities		51			(22	)		185
Net income (loss) attributable to common	$	1,429		$	(579	)	$	409
Weighted average shares – Basic		26,025,327			25,967,066			17,493,397
Weighted average shares – Diluted		26,025,327			25,967,066			17,493,397
Basic earnings (loss) per common share	$	0.05		$	(0.02	)	$	0.02
Diluted earnings (loss) per common share	$	0.05		$	(0.02	)	$	0.02
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
	3/31/16			12/31/15			3/31/15
Average Balance Sheet Data
Assets	$	937,378		$	954,934		$	1,011,561
Loans		620,077			619,506			642,959
Earning assets		881,635			900,418			936,037
Deposits		865,125			882,046			931,698
Long-term debt and advances		28,033			28,421			33,902
Interest bearing liabilities		779,438			793,182			854,423
Stockholders’ equity		33,546			33,697			33,971
Performance Ratios
Return on average assets		0.64	%		(0.25	)%		0.24	%
Return on average equity		17.74			(7.08	)		7.09
Yield on average earning assets (tax equivalent)		4.23			4.02			4.03
Cost of interest bearing liabilities		0.79			0.79			0.91
Net interest margin (tax equivalent)		3.53			3.32			3.21
Efficiency ratio		91.54			134.57			110.64
Loan Charge-off Data
Loans charged-off	$	(749	)	$	(961	)	$	(1,327	)
Recoveries		598			1,104			560
Net (charge-offs) recoveries	$	(151	)	$	143		$	(767	)
Nonaccrual Loan Activity
Nonaccrual loans at beginning of period	$	14,087		$	16,987		$	47,175
Net principal pay-downs		(2,712	)		(2,472	)		(10,754	)
Charge-offs		(644	)		(756	)		(955	)
Loans foreclosed and transferred to OREO		(441	)		(1,063	)		(337	)
Loans returned to accrual status		(84	)		(29	)		(78	)
Loans placed on nonaccrual during the period		913			1,420			1,449
Nonaccrual loans at end of period	$	11,119		$	14,087		$	36,500
Troubled Debt Restructurings (TDRs)
Accruing	$	14,867		$	17,440		$	18,798
Nonaccrual		3,479			3,544			19,002
Total	$	18,346		$	20,984		$	37,800
Other Real Estate Owned (OREO) Activity
OREO at beginning of period	$	19,214		$	29,177		$	46,197
Real estate acquired		441			1,063			347
Valuation adjustment write-downs		(500	)		(2,775	)		(300	)
Proceeds from sales of properties		(1,349	)		(8,150	)		(2,629	)
Gain (loss) on sales, net		55			(101	)		3
OREO at end of period	$	17,861		$	19,214		$	43,618

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	As of
	3/31/16			12/31/15			9/30/15			6/30/15			3/31/15			12/31/14
Assets
Loans	$	619,827		$	618,666		$	624,414		$	648,321		$	632,428		$	624,999
Allowance for loan losses		(11,340	)		(12,041	)		(14,198	)		(16,809	)		(18,597	)		(19,364	)
Net loans		608,487			606,625			610,216			631,512			613,831			605,635
Loans held for sale		113			186			71			125			—			8,926
Securities held to maturity		42,011			42,075			42,138			42,202			42,263			42,325
Securities available for sale		141,525			144,978			146,837			151,758			157,290			190,791
Federal funds sold & interest bearing deposits		72,209			85,329			73,940			63,987			101,872			66,011
Cash and due from financial institutions		8,097			8,006			6,540			7,403			7,899			14,169
Premises and equipment		18,751			18,812			19,109			19,167			19,323			19,507
Bank owned life insurance		14,531			9,441			9,381			9,320			9,231			9,167
FHLB Stock		7,323			7,323			7,323			7,323			7,323			7,323
Other real estate owned		17,861			19,214			29,177			39,545			43,618			46,197
Accrued interest receivable and other assets		7,251			6,733			6,748			6,998			7,056			7,938
Total Assets	$	938,159		$	948,722		$	951,480		$	979,340		$	1,009,706		$	1,017,989
Liabilities and Equity
Certificates of deposit	$	478,965		$	499,827		$	534,031		$	564,253		$	597,117		$	574,681
Interest checking		96,465			97,515			83,247			84,627			86,614			91,086
Money market		134,684			125,935			119,324			110,529			102,349			109,734
Savings		35,197			34,677			35,131			35,942			36,418			36,430
Total interest bearing deposits		745,311			757,954			771,733			795,351			822,498			811,931
Demand deposits		120,302			120,043			106,160			108,800			108,011			114,910
Total deposits		865,613			877,997			877,893			904,151			930,509			926,841
Federal funds purchased & repurchase agreements		—			—			—			1,265			1,145			1,341
FHLB advances		2,932			3,081			3,255			3,430			3,597			15,752
Junior subordinated debentures		24,825			25,050			25,275			29,500			29,725			29,950
Accrued interest payable and other liabilities		10,181			10,577			11,249			10,949			10,758			10,640
Total liabilities		903,551			916,705			917,672			949,295			975,734			984,524
Preferred stockholders’ equity		2,771			2,771			2,771			2,771			2,771			8,552
Common stockholders’ equity (deficit)		31,837			29,246			31,037			27,274			31,201			24,913
Total stockholders’ equity		34,608			32,017			33,808			30,045			33,972			33,465
Total Liabilities and Stockholders’ Equity	$	938,159		$	948,722		$	951,480		$	979,340		$	1,009,706		$	1,017,989
Ending shares outstanding		26,944,177			26,947,533			26,949,205			25,759,223			25,663,495			14,890,514
Book value per common share	$	1.18		$	1.09		$	1.15		$	1.06		$	1.22		$	1.67
Tangible book value per common share		1.17			1.07			1.13			1.03			1.18			1.61

PORTER BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	As of
	3/31/16			12/31/15			9/30/15			6/30/15			3/31/15			12/31/14
Asset Quality Data
Loan 90 days or more past due still on accrual	$	—		$	—		$	—		$	92		$	18		$	151
Nonaccrual loans		11,119			14,087			16,987			30,215			36,500			47,175
Total non-performing loans		11,119			14,087			16,987			30,307			36,518			47,326
Real estate acquired through foreclosures		17,861			19,214			29,177			39,545			43,618			46,197
Other repossessed assets		—			—			—			—			—			—
Total non-performing assets	$	28,980		$	33,301		$	46,164		$	69,852		$	80,136		$	93,523
Non-performing loans to total loans		1.79	%		2.28	%		2.72	%		4.67	%		5.77	%		7.57	%
Non-performing assets to total assets		3.09			3.51			4.85			7.13			7.94			9.19
Allowance for loan losses to non-performing loans		101.99			85.48			83.58			55.46			50.93			40.92
Allowance for loans evaluated individually	$	464		$	428		$	469		$	842		$	254		$	752
Loans evaluated individually for impairment		26,236			31,776			34,895			49,011			55,299			71,993
Allowance as % of loans evaluated individually		1.77	%		1.35	%		1.34	%		1.72	%		0.46	%		1.04	%
Allowance for loans evaluated collectively	$	10,876		$	11,613		$	13,729		$	15,967		$	18,343		$	18,612
Loans evaluated collectively for impairment		593,591			586,890			589,519			599,310			577,129			553,006
Allowance as % of loans evaluated collectively		1.83	%		1.98	%		2.33	%		2.66	%		3.18	%		3.37	%
Allowance for loan losses to total loans		1.83	%		1.95	%		2.27	%		2.59	%		2.94	%		3.10	%
Loans by Risk Category
Pass	$	534,451		$	517,484		$	508,470		$	509,843		$	480,545		$	461,126
Watch		59,265			63,363			66,726			67,712			76,876			68,200
Special Mention		1,383			1,395			1,700			1,718			1,110			4,189
Substandard		24,728			36,424			47,518			69,048			73,897			91,484
Doubtful		—			—			—			—			—			—
Total	$	619,827		$	618,666		$	624,414		$	648,321		$	632,428		$	624,999
Risk-based Capital Ratios - Company
Tier I leverage ratio		5.03	%		4.74	%		4.73	%		4.25	%		4.13	%		4.51	%
Common equity Tier I risk-based capital ratio		5.21			5.09			5.07			4.42			4.68			N/A
Tier I risk-based capital ratio		7.03			6.89			6.86			6.02			5.85			6.70
Total risk-based capital ratio		10.46			10.46			10.40			10.25			10.00			10.61
Risk-based Capital Ratios – PBI Bank
Tier I leverage ratio		6.39	%		6.08	%		6.01	%		5.95	%		5.84	%		5.78	%
Common equity Tier I risk-based capital ratio		8.94			8.84			8.73			8.43			8.32			N/A
Tier I risk-based capital ratio		8.94			8.84			8.73			8.43			8.32			8.59
Total risk-based capital ratio		10.64			10.58			10.50			10.34			10.26			10.57
FTE employees		246			244			246			253			258			264

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