LMST Limestone Bancorp Inc

Limestone Bancorp, Inc. (NASDAQ: LMST) (the “Company”), parent company of Limestone Bank, Inc. (the “Bank”), today reported unaudited results for the first quarter of 2023. Please see attached financial results and data tables for more information.

About Limestone Bancorp, Inc.

Limestone Bancorp, Inc. (NASDAQ: LMST) is a Louisville, Kentucky-based bank holding company which operates banking centers in 14 counties through its wholly-owned subsidiary Limestone Bank. The Bank’s markets include metropolitan Louisville in Jefferson County and the surrounding counties of Bullitt and Henry and extend south along the Interstate 65 corridor. The Bank serves south central, southern, and western Kentucky from banking centers in Barren, Butler, Daviess, Edmonson, Green, Hardin, Hart, Ohio, and Warren counties. The Bank also has banking centers in Lexington, Kentucky, the second largest city in the state, and Frankfort, Kentucky, the state capital. Limestone 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 Limestone 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 that involve risks and uncertainties. Although the Company's management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: the Company’s pending merger transaction with Peoples Bancorp, Inc., merger-related expenses and requirements during the pendency of the merger transaction and conditions that must be satisfied for the merger transaction to be completed, including the receipt of required regulatory and shareholder approvals (all of which has been obtained); the impact and duration of the COVID-19 pandemic; economic conditions both generally and more specifically in the markets in which the Company and its subsidiaries operate; competition for the Company's customers from other providers of financial services; government legislation and regulation, which change from time to time and over which the Company has no control; changes in inflation and efforts to control it; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Company's customers; and other risks detailed in the Company's filings with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond the control of the Company. See Risk Factors outlined in the Company's Form 10-K for the year ended December 31, 2022.

The Company’s Annual Report on Form 10-K, which also constitutes the 2022 annual report to shareholders, is accessible at no cost on the Company’s website at www.limestonebank.com, under the Investor Relations section. Shareholders of the Company may receive a hard copy free of charge upon request to the Company at 2500 Eastpoint Parkway, Louisville, Kentucky 40223-4156, Attention: Investor Relations; (502) 499-4773.

Additional Information

Unaudited supplemental financial information for the first quarter ending March 31, 2023, follows.

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

 

Three

 

Three

 

Three

 

Three

 

Three

 

 

Months

 

Months

 

Months

 

Months

 

Months

 

 

Ended

 

Ended

 

Ended

 

Ended

 

Ended

 

 

3/31/23

 

12/31/22

 

9/30/22

 

6/30/22

 

3/31/22

 

 

 

 

 

 

 

 

 

 

 

Income Statement Data

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

17,704

 

 

$

17,140

 

 

$

15,121

 

 

$

13,122

 

 

$

12,427

 

Interest expense

 

 

5,365

 

 

 

3,768

 

 

 

2,209

 

 

 

1,442

 

 

 

1,313

 

Net interest income

 

 

12,339

 

 

 

13,372

 

 

 

12,912

 

 

 

11,680

 

 

 

11,114

 

Provision (negative provision) for credit losses

 

 

654

 

 

 

130

 

 

 

(1,250

)

 

 

450

 

 

 

750

 

Net interest income after provision

 

 

11,685

 

 

 

13,242

 

 

 

14,162

 

 

 

11,230

 

 

 

10,364

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

653

 

 

 

703

 

 

 

748

 

 

 

690

 

 

 

634

 

Bank card interchange fees

 

 

1,006

 

 

 

1,127

 

 

 

1,061

 

 

 

1,087

 

 

 

1,003

 

Bank owned life insurance income

 

 

147

 

 

 

107

 

 

 

148

 

 

 

249

 

 

 

202

 

Gain (loss) on sales and calls of securities, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3

)

 

 

—

 

Gain on sale of premises held for sale

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

163

 

Other

 

 

254

 

 

 

218

 

 

 

271

 

 

 

233

 

 

 

236

 

Non-interest income

 

 

2,060

 

 

 

2,155

 

 

 

2,228

 

 

 

2,256

 

 

 

2,238

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & employee benefits

 

 

4,493

 

 

 

4,847

 

 

 

4,959

 

 

 

4,651

 

 

 

4,564

 

Occupancy and equipment

 

 

1,036

 

 

 

983

 

 

 

1,134

 

 

 

1,055

 

 

 

1,029

 

Deposit account related expense

 

 

561

 

 

 

557

 

 

 

571

 

 

 

574

 

 

 

547

 

Data processing expense

 

 

425

 

 

 

400

 

 

 

402

 

 

 

403

 

 

 

386

 

Professional fees

 

 

226

 

 

 

155

 

 

 

206

 

 

 

236

 

 

 

221

 

Marketing expense

 

 

94

 

 

 

141

 

 

 

159

 

 

 

172

 

 

 

133

 

FDIC insurance

 

 

90

 

 

 

90

 

 

 

90

 

 

 

90

 

 

 

90

 

Deposit tax

 

 

105

 

 

 

99

 

 

 

99

 

 

 

99

 

 

 

99

 

Communications expense

 

 

102

 

 

 

126

 

 

 

108

 

 

 

121

 

 

 

64

 

Insurance expense

 

 

112

 

 

 

102

 

 

 

104

 

 

 

109

 

 

 

105

 

Postage and delivery

 

 

152

 

 

 

153

 

 

 

156

 

 

 

150

 

 

 

163

 

Merger expenses

 

 

417

 

 

 

691

 

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

 

490

 

 

 

518

 

 

 

709

 

 

 

567

 

 

 

570

 

Non-interest expense

 

 

8,303

 

 

 

8,862

 

 

 

8,697

 

 

 

8,227

 

 

 

7,971

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes1

 

 

5,442

 

 

 

6,535

 

 

 

7,693

 

 

 

5,259

 

 

 

4,631

 

Income tax expense

 

 

1,259

 

 

 

1,621

 

 

 

1,880

 

 

 

1,223

 

 

 

1,052

 

Net income

 

$

4,183

 

 

$

4,914

 

 

$

5,813

 

 

$

4,036

 

 

$

3,579

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares – Basic

 

 

7,632,028

 

 

 

7,638,855

 

 

 

7,639,492

 

 

 

7,631,883

 

 

 

7,614,382

 

Weighted average shares – Diluted

 

 

7,632,028

 

 

 

7,638,855

 

 

 

7,639,492

 

 

 

7,631,883

 

 

 

7,614,382

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.55

 

 

$

0.64

 

 

$

0.76

 

 

$

0.53

 

 

$

0.47

 

Diluted earnings per common share

 

$

0.55

 

 

$

0.64

 

 

$

0.76

 

 

$

0.53

 

 

$

0.47

 

Cash dividends declared per common share

 

$

0.05

 

 

$

0.05

 

 

$

0.05

 

 

$

0.05

 

 

$

0.05

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.15

%

 

 

1.33

%

 

 

1.59

%

 

 

1.14

%

 

 

1.03

%

Return on average equity

 

 

12.45

 

 

 

15.05

 

 

 

17.83

 

 

 

12.66

 

 

 

11.07

 

Yield on average earning assets (tax equivalent)

 

 

5.13

 

 

 

4.89

 

 

 

4.37

 

 

 

3.95

 

 

 

3.82

 

Cost of interest-bearing liabilities

 

 

2.05

 

 

 

1.44

 

 

 

0.85

 

 

 

0.58

 

 

 

0.53

 

Net interest margin (tax equivalent)

 

 

3.58

 

 

 

3.82

 

 

 

3.73

 

 

 

3.51

 

 

 

3.42

 

Efficiency ratio2

 

 

54.77

 

 

 

52.62

 

 

 

57.44

 

 

 

59.02

 

 

 

59.70

 

Non-interest expense to average assets

 

 

2.29

 

 

 

2.41

 

 

 

2.38

 

 

 

2.33

 

 

 

2.30

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

 

As of

 

 

3/31/23

 

12/31/22

 

9/30/22

 

6/30/22

 

3/31/22

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,139,208

 

 

$

1,111,854

 

 

$

1,127,945

 

 

$

1,073,815

 

 

$

1,047,285

 

Allowance for credit losses3

 

 

(14,391

)

 

 

(13,030

)

 

 

(13,031

)

 

 

(12,550

)

 

 

(12,195

)

Net loans

 

 

1,124,817

 

 

 

1,098,824

 

 

 

1,114,914

 

 

 

1,061,265

 

 

 

1,035,090

 

Securities held to maturity3, 4

 

 

43,185

 

 

 

43,282

 

 

 

43,350

 

 

 

44,205

 

 

 

45,639

 

Securities available for sale4

 

 

186,978

 

 

 

180,173

 

 

 

181,292

 

 

 

193,022

 

 

 

204,071

 

Federal funds sold & interest-bearing deposits

 

 

40,378

 

 

 

37,476

 

 

 

50,940

 

 

 

18,244

 

 

 

22,040

 

Cash and due from financial institutions

 

 

7,121

 

 

 

7,159

 

 

 

6,430

 

 

 

7,742

 

 

 

10,009

 

Premises and equipment

 

 

21,749

 

 

 

22,103

 

 

 

22,503

 

 

 

22,747

 

 

 

23,043

 

Bank owned life insurance

 

 

31,273

 

 

 

31,132

 

 

 

31,032

 

 

 

30,888

 

 

 

30,643

 

FHLB Stock

 

 

5,626

 

 

 

5,176

 

 

 

5,176

 

 

 

5,116

 

 

 

5,116

 

Deferred taxes, net

 

 

19,689

 

 

 

21,283

 

 

 

23,002

 

 

 

23,343

 

 

 

22,648

 

Goodwill

 

 

6,252

 

 

 

6,252

 

 

 

6,252

 

 

 

6,252

 

 

 

6,252

 

Intangible assets

 

 

1,669

 

 

 

1,733

 

 

 

1,797

 

 

 

1,861

 

 

 

1,925

 

Accrued interest receivable and other assets

 

 

7,694

 

 

 

7,862

 

 

 

7,007

 

 

 

6,383

 

 

 

6,230

 

Total Assets

 

$

1,496,431

 

 

$

1,462,455

 

 

$

1,493,695

 

 

$

1,421,068

 

 

$

1,412,706

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

Certificates of deposit5

 

$

344,697

 

 

$

290,161

 

 

$

273,780

 

 

$

256,141

 

 

$

260,064

 

Interest checking

 

 

291,661

 

 

 

314,082

 

 

 

286,867

 

 

 

269,240

 

 

 

274,054

 

Money market

 

 

161,021

 

 

 

179,035

 

 

 

215,450

 

 

 

209,183

 

 

 

216,845

 

Savings

 

 

163,357

 

 

 

148,552

 

 

 

154,545

 

 

 

163,573

 

 

 

166,135

 

Total interest-bearing deposits

 

 

960,736

 

 

 

931,830

 

 

 

930,642

 

 

 

898,137

 

 

 

917,098

 

Demand deposits

 

 

261,582

 

 

 

268,954

 

 

 

287,938

 

 

 

269,425

 

 

 

281,533

 

Total deposits

 

 

1,222,318

 

 

 

1,200,784

 

 

 

1,218,580

 

 

 

1,167,562

 

 

 

1,198,631

 

FHLB advances

 

 

80,000

 

 

 

70,000

 

 

 

90,000

 

 

 

70,000

 

 

 

30,000

 

Junior subordinated debentures

 

 

21,000

 

 

 

21,000

 

 

 

21,000

 

 

 

21,000

 

 

 

21,000

 

Subordinated capital note

 

 

25,000

 

 

 

25,000

 

 

 

25,000

 

 

 

25,000

 

 

 

25,000

 

Accrued interest payable and other liabilities

 

 

9,722

 

 

 

11,813

 

 

 

10,744

 

 

 

10,888

 

 

 

9,855

 

Total liabilities

 

 

1,358,040

 

 

 

1,328,597

 

 

 

1,365,324

 

 

 

1,294,450

 

 

 

1,284,486

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

140,639

 

 

 

140,639

 

 

 

140,639

 

 

 

140,639

 

 

 

140,639

 

Additional paid-in capital

 

 

26,210

 

 

 

26,312

 

 

 

26,101

 

 

 

25,889

 

 

 

25,733

 

Retained deficit

 

 

(11,793

)

 

 

(14,954

)

 

 

(19,486

)

 

 

(24,917

)

 

 

(28,571

)

Accumulated other comprehensive loss

 

 

(16,665

)

 

 

(18,139

)

 

 

(18,883

)

 

 

(14,993

)

 

 

(9,581

)

Total stockholders’ equity

 

 

138,391

 

 

 

133,858

 

 

 

128,371

 

 

 

126,618

 

 

 

128,220

 

Total Liabilities and Stockholders’ Equity

 

$

1,496,431

 

 

$

1,462,455

 

 

$

1,493,695

 

 

$

1,421,068

 

 

$

1,412,706

 

 

 

 

 

 

 

 

 

 

 

 

Ending shares outstanding

 

 

7,629,402

 

 

 

7,638,633

 

 

 

7,639,033

 

 

 

7,640,680

 

 

 

7,622,157

 

Book value per common share

 

$

18.14

 

 

$

17.52

 

 

$

16.80

 

 

$

16.57

 

 

$

16.82

 

Tangible book value per common share6

 

 

17.10

 

 

 

16.48

 

 

 

15.75

 

 

 

15.51

 

 

 

15.75

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

 

As of

 

 

3/31/23

 

12/31/22

 

9/30/22

 

6/30/22

 

3/31/22

Average Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

Assets

 

$

1,470,834

 

 

$

1,461,199

 

 

$

1,451,647

 

 

$

1,417,087

 

 

$

1,407,030

 

Loans

 

 

1,120,482

 

 

 

1,110,078

 

 

 

1,096,478

 

 

 

1,053,057

 

 

 

1,028,546

 

Earning assets

 

 

1,404,469

 

 

 

1,395,860

 

 

 

1,378,771

 

 

 

1,339,555

 

 

 

1,326,234

 

Deposits

 

 

1,186,981

 

 

 

1,204,804

 

 

 

1,203,098

 

 

 

1,184,426

 

 

 

1,199,174

 

Long-term debt and advances

 

 

136,389

 

 

 

114,586

 

 

 

108,229

 

 

 

93,968

 

 

 

67,667

 

Interest bearing liabilities

 

 

1,062,281

 

 

 

1,037,991

 

 

 

1,029,131

 

 

 

1,000,367

 

 

 

996,710

 

Stockholders’ equity

 

 

136,242

 

 

 

129,560

 

 

 

129,346

 

 

 

127,827

 

 

 

131,097

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Data

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

879

 

 

$

856

 

 

$

1,054

 

 

$

3,007

 

 

$

3,447

 

Troubled debt restructurings on accrual

 

 

—

 

 

 

133

 

 

 

146

 

 

 

150

 

 

 

333

 

Loan 90 days or more past due still on accrual

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total non-performing loans

 

 

879

 

 

 

989

 

 

 

1,200

 

 

 

3,157

 

 

 

3,780

 

Real estate acquired through foreclosures

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other repossessed assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total non-performing assets

 

$

879

 

 

$

989

 

 

$

1,200

 

 

$

3,157

 

 

$

3,780

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans to total loans

 

 

0.08

%

 

 

0.09

%

 

 

0.11

%

 

 

0.29

%

 

 

0.36

%

Non-performing assets to total assets

 

 

0.06

 

 

 

0.07

 

 

 

0.08

 

 

 

0.22

 

 

 

0.27

 

Allowance for credit losses to non-performing loans

 

 

1,637.20

 

 

 

1,317.49

 

 

 

1,085.92

 

 

 

397.53

 

 

 

322.62

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses to total loans3

 

 

1.26

%

 

 

1.17

%

 

 

1.16

%

 

 

1.17

%

 

 

1.16

%

 

 

 

 

 

 

 

 

 

 

 

Loan Charge-off Data

 

 

 

 

 

 

 

 

 

 

Loans charged off

 

$

(130

)

 

$

(158

)

 

$

(86

)

 

$

(367

)

 

$

(227

)

Recoveries

 

 

237

 

 

 

27

 

 

 

1,817

 

 

 

272

 

 

 

141

 

Net (charge-offs) recoveries

 

$

107

 

 

$

(131

)

 

$

1,731

 

 

$

(95

)

 

$

(86

)

 

 

 

 

 

 

 

 

 

 

 

Loans by Risk Category7

 

 

 

 

 

 

 

 

 

 

Pass

 

$

1,113,804

 

 

$

1,089,330

 

 

$

1,116,009

 

 

$

1,052,624

 

 

$

1,023,039

 

Watch

 

 

17,450

 

 

 

15,189

 

 

 

3,177

 

 

 

6,426

 

 

 

8,567

 

Special Mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard

 

 

7,954

 

 

 

7,335

 

 

 

8,759

 

 

 

14,765

 

 

 

15,679

 

Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

1,139,208

 

 

$

1,111,854

 

 

$

1,127,945

 

 

$

1,073,815

 

 

$

1,047,285

 

 

 

 

 

 

 

 

 

 

 

 

Loans by Past Due Status

 

 

 

 

 

 

 

 

 

 

Past due loans:

 

 

 

 

 

 

 

 

 

 

30 – 59 days

 

$

2,015

 

 

$

1,919

 

 

$

300

 

 

$

600

 

 

$

1,108

 

60 – 89 days

 

 

207

 

 

 

268

 

 

 

57

 

 

 

209

 

 

 

89

 

90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual loans

 

 

879

 

 

 

856

 

 

 

1,054

 

 

 

3,007

 

 

 

3,447

 

Total past due and nonaccrual loans

 

$

3,101

 

 

$

3,043

 

 

$

1,411

 

 

$

3,816

 

 

$

4,644

 

LIMESTONE BANCORP, INC.

Unaudited Financial Information

(in thousands, except share and per share data)

 

 

 

As of

 

3/31/23

 

12/31/22

 

9/30/22

 

6/30/22

 

3/31/22

Risk-based Capital Ratios - Company

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

 

10.72

%

 

10.44

%

 

10.04

%

 

9.68

%

 

9.38

%

Common equity Tier I risk-based capital ratio

 

10.23

 

 

10.14

 

 

9.46

 

 

9.16

 

 

8.93

 

Tier I risk-based capital ratio

 

11.81

 

 

11.71

 

 

10.89

 

 

10.49

 

 

10.19

 

Total risk-based capital ratio

 

14.76

 

 

14.63

 

 

13.75

 

 

13.39

 

 

13.12

 

 

 

 

 

 

 

 

 

 

 

 

Risk-based Capital Ratios – Limestone Bank

 

 

 

 

 

 

 

 

 

 

Tier I leverage ratio

 

11.80

%

 

11.59

%

 

11.56

%

 

11.39

%

 

11.20

%

Common equity Tier I risk-based capital ratio

 

13.00

 

 

13.01

 

 

12.55

 

 

12.38

 

 

12.21

 

Tier I risk-based capital ratio

 

13.00

 

 

13.01

 

 

12.55

 

 

12.38

 

 

12.21

 

Total risk-based capital ratio

 

14.08

 

 

14.01

 

 

13.53

 

 

13.35

 

 

13.17

 

 

 

 

 

 

 

 

 

 

 

 

FTE employees, end of period

 

208

 

 

222

 

 

226

 

 

225

 

 

222

 

Footnotes:

(1) Pretax, pre-provision income (PTPI) is a non-GAAP financial measure calculated by adjusting pretax income or income before income taxes to add back provision for credit losses. Management believes that PTPI is a useful financial measure as it enables the assessment of the Company’s ability to generate earnings to cover credit losses through a credit cycle and provides an additional basis for comparing results of operations between periods by isolating the impact of provision for credit losses, which can vary significantly between periods.

 

 

 

 

 

Three Months Ended

 

 

3/31/23

 

12/31/22

 

9/30/22

 

6/30/22

 

3/31/22

Pretax, Pre-Provision Income

 

(in thousands)

 

 

 

Income before income taxes

 

$

5,442

 

$

6,535

 

$

7,693

 

 

$

5,259

 

$

4,631

Provision for credit losses

 

 

654

 

 

130

 

 

(1,250

)

 

 

450

 

 

750

Pretax, pre-provision income

 

 

6,096

 

 

6,665

 

 

6,443

 

 

 

5,709

 

 

5,381

(2) The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. The efficiency ratio is calculated by dividing total non-interest expenses as determined under GAAP by net interest income and total non-interest income, but excluding from the calculation net gains on the sale of securities and expenses disclosed from time to time as non-recurring in nature. Management believes this provides a reasonable measure of primary banking expenses relative to primary banking revenue.

 

 

 

 

 

 

Three Months Ended

 

 

3/31/23

 

12/31/22

 

9/30/22

 

6/30/22

 

3/31/22

Efficiency Ratio

 

(in thousands)

 

 

 

Net interest income

 

$

12,339

 

 

$

13,372

 

 

$

12,912

 

 

$

11,680

 

 

$

11,114

 

Non-interest income

 

 

2,060

 

 

 

2,155

 

 

 

2,228

 

 

 

2,256

 

 

 

2,238

 

Less: Net gain (loss) on securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3

)

 

 

—

 

Revenue used for efficiency ratio

 

 

14,399

 

 

 

15,527

 

 

 

15,140

 

 

 

13,939

 

 

 

13,352

 

Non-interest expense

 

 

8,303

 

 

 

8,862

 

 

 

8,697

 

 

 

8,227

 

 

 

7,971

 

Less: Merger expenses

 

 

417

 

 

 

691

 

 

 

—

 

 

 

—

 

 

 

—

 

Expenses used for efficiency ratio

 

 

7,886

 

 

 

8,171

 

 

 

8,697

 

 

 

8,227

 

 

 

7,971

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

 

54.77

%

 

 

52.62

%

 

 

57.44

%

 

 

59.02

%

 

 

59.70

%

(3) Effective January 1, 2023, the Company began accounting for credit losses under ASC 326, Financial Instruments – Credit Losses (CECL). Adoption resulted in the establishment of an allowance for credit losses for held to maturity securities of $30,000, an increase in allowance for credit losses for loans of $586,000, an increase of the allowance for credit losses related to unfunded commitments of $24,000, which is recorded in other liabilities, and a reduction in retained earnings of $480,000, net of tax.

(4) Investment Securities – The following table sets forth the amortized cost and fair value of the securities portfolio at the dates indicated.

 

 

March 31, 2023

 

December 31, 2022

 

 

Amortized Cost

 

Allowance for Credit Losses

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

Amortized Cost

 

Gross Unrealized Gains

 

Gross Unrealized Losses

 

Fair Value

 

 

(dollars in thousands)

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government and federal agencies

 

$

30,987

 

$

—

 

$

—

 

$

(2,324

)

 

$

28,663

 

$

24,541

 

$

—

 

$

(2,784

)

 

$

21,757

Agency mortgage-backed residential

 

 

78,620

 

 

—

 

 

51

 

 

(9,397

)

 

 

69,274

 

 

80,283

 

 

9

 

 

(10,387

)

 

 

69,905

Collateralized loan obligations

 

 

48,192

 

 

—

 

 

—

 

 

(2,094

)

 

 

46,098

 

 

48,202

 

 

—

 

 

(2,161

)

 

 

46,041

Corporate bonds

 

 

45,526

 

 

—

 

 

116

 

 

(2,699

)

 

 

42,943

 

 

45,512

 

 

—

 

 

(3,042

)

 

 

42,470

Total available for sale

 

$

203,325

 

$

—

 

$

167

 

$

(16,514

)

 

$

186,978

 

$

198,538

 

$

9

 

$

(18,374

)

 

$

180,173

 

 

Amortized Cost

 

Allowance for Credit Losses

 

Gross Unrecognized Gains

 

Gross Unrecognized Losses

 

Fair Value

 

Amortized Cost

 

Gross Unrecognized Gains

 

Gross Unrecognized Losses

 

Fair Value

 

 

(dollars in thousands)

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

 

$

43,215

 

$

(30

)

 

$

1

 

$

(7,637

)

 

$

35,549

 

$

43,282

 

$

—

 

$

(8,386

)

 

$

34,896

Total held to maturity

 

$

43,215

 

$

(30

)

 

$

1

 

$

(7,637

)

 

$

35,549

 

$

43,282

 

$

—

 

$

(8,386

)

 

$

34,896

(5) The following table denotes contractual time deposit maturities and average rates as of March 31, 2023:

 

 

Non-Brokered Time Deposits

 

Brokered Time Deposits

Maturity Quarter

 

As of March 31, 2023 (in thousands)

 

Weighted Average Rate

 

As of March 31, 2023 (in thousands)

 

Weighted Average Rate

 

 

 

 

 

 

 

 

 

Q2-2023

 

 

50,586

 

 

1.62

 

%

 

 

95,251

 

4.29

%

Q3-2023

 

 

43,303

 

1.70

 

 

 

45,933

 

5.09

 

Q4-2023

 

 

40,825

 

2.32

 

 

 

—

 

0.00

 

Q1-2024

 

 

21,062

 

0.67

 

 

—

 

0.00

 

Thereafter

 

 

47,737

 

0.72

 

 

 

—

 

0.00

 

Total time deposits

 

$

203,513

 

1.44

%

 

$

141,184

 

4.55

%

(6) Tangible book value per common share is a non-GAAP financial measure derived from GAAP based amounts. Tangible book value per common share is calculated by excluding the balance of goodwill and other intangible assets from common stockholders’ equity. Tangible book value per common share is calculated by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which is calculated by dividing common stockholders’ equity by common shares outstanding. Management believes this is consistent with bank regulatory agency treatment, which excludes goodwill and other intangible assets from the calculation of risk-based capital.

 

 

As of

 

 

3/31/23

 

12/31/22

 

9/30/22

 

6/30/22

 

3/31/22

Tangible Book Value Per Share

 

(in thousands, except share and per share data)

 

 

 

Common stockholders’ equity

 

$

138,391

 

$

133,858

 

$

128,371

 

$

126,618

 

$

128,220

Less: Goodwill

 

 

6,252

 

 

6,252

 

 

6,252

 

 

6,252

 

 

6,252

Less: Intangible assets

 

 

1,669

 

 

1,733

 

 

1,797

 

 

1,861

 

 

1,925

Tangible common equity

 

 

130,470

 

 

125,873

 

 

120,322

 

 

118,505

 

 

120,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding

 

 

7,629,402

 

 

7,638,633

 

 

7,639,033

 

 

7,640,680

 

 

7,622,157

Tangible book value per common share

 

$

17.10

 

$

16.48

 

$

15.75

 

$

15.51

 

$

15.75

Book value per common share

 

 

18.14

 

 

17.52

 

 

16.80

 

 

16.57

 

 

16.82

(7) Loans by Risk Category reflect management’s risk ratings based on categories aligned with the bank regulatory definitions.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230424005748/en/

John T. Taylor Chief Executive Officer (502) 499-4800