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SBT Bancorp, Inc. Reports Second Quarter 2015 Results

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SIMSBURY, Conn.--(BUSINESS WIRE)--

SBT Bancorp, Inc., (OTCQX: SBTB), holding company for The Simsbury Bank & Trust Company, Inc., today announced net income of $350,000 or $0.36 basic and diluted earnings per share for the quarter ended June 30, 2015, compared to a net income of $115,000 or $0.10 basic and diluted earnings per share, an increase of $0.26 diluted earnings per share compared to the prior year quarter. The increase in net income is mainly due to a $227,000 increase in mortgage banking activities, an $118,000 increase in net interest and dividend income, and a $50,000 decrease in non-interest expense.

"The Bank showed strong growth as compared to June 30, 2014," said Martin J. Geitz, President and Chief Executive Officer. "Commercial loan balances increased by $16.7 million or 20.5% since June 30, 2014. Performance of our mortgage unit continued to show improvement during the first half of 2015."

Key highlights for June 30, 2015 compared to June 30, 2014 included:

  • Net loans grew $31.8 million or 11.8%.
  • Commercial loan balances increased 20.5%.
  • Total revenues for the quarter increased 9.4%.
  • Residential mortgage banking activities income for the quarter increased 277%.
  • Net interest margin of 3.06% for the quarter was 5 basis point higher compared to the prior year's quarter.
  • Total deposits decreased $11.5 million or 3.3%, driven by reductions in CDs ($6.8mm) and Money Market Accounts ($5.2mm).
  • Total loan delinquency (non-accrual and delinquent loans) decreased to 1.11% of total loans compared to the previous year's 1.28%.
  • The allowance for loan losses at June 30, 2015 was 0.94% of total loans.
  • The Bank's Total Risk-Based Capital ratio remains strong, ending the first quarter of 2015 at 12.16%.

On June 30, 2015, loans outstanding were $303 million, an increase of $31.8 million, or 11.8% over a year ago. Commercial loans grew by $16.7 million or 20.5% and residential mortgage loans increased by $3.6 million or 2.5%. Consumer loans grew by $5.9 million or 10.6%, mainly due to an increase in purchased auto loans.

The Company's loan portfolio remains strong. The Company's allowance for loan losses at June 30, 2015 was 0.94% of total loans. The Company had non-accrual loans totaling $3.0 million or 0.98% of total loans on June 30, 2015, compared to non-accrual loans totaling $2.5 million or 0.92% of total loans a year ago. Total non-accrual and delinquent loans on June 30, 2015 was 1.11% of loans outstanding compared to 1.28% on June 30, 2014.

Total deposits on June 30, 2015 were $334 million, a decrease of $11.5 million or 3.3% over a year ago primarily due to a decrease in time deposits of $6.8 million and a $4.7 million decrease in low cost Demand, Savings and NOW deposits. At quarter-end, 33% of total deposits were in non-interest bearing demand accounts, 49% were in low-cost savings, money market and NOW accounts and 18% were in time deposits.

For the second quarter 2015, total revenues, consisting of net interest and dividend income plus noninterest income, were $3.7 million compared to $3.4 million a year ago, an increase of $319,000 or 9.4%. Non-interest income increased by $201,000 or 33.2%, primarily due to an increase in mortgage banking activities of $227,000, partially offset by a reduction of deposit fee revenue of $15,000. For the six months ended June 30, 2015, total revenues were $7.1 million compared to $6.8 million for the six months ended June 30, 2014, an increase of $337,000 or 5.0%. Noninterest income increased by $219,000 or 19.6%, primarily due to an increase in mortgage banking activities of $290,000.

The Company's year-to-date 2015 taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.05% compared to 3.02% for the comparable 2014 period. The Company's yield on earning assets remained flat at 3.26%, while the cost of funds decreased 4 basis points to 0.30% for the six months ended June 30, 2015 compared to the same period of 2014.

Total noninterest expense for the second quarter 2015 was $3.3 million, a decrease of $50,000 or 1.5% below the second quarter of 2014. The $50,000 decrease was primarily due to a decrease of $129,000 in other expenses, a $29,000 reduction of advertising and promotion expenses, and a $24,000 reduction in FDIC assessment. These decreases were offset by increases in salaries and employee benefits expense of $100,000 and an increase in correspondent bank fees of $41,000. For the six months ended June 30, 2015, total noninterest expense was $6.2 million, a decrease of $442,000 or 6.6% compared to the six months ended June 30, 2014. The decrease was primarily driven by a reduction in salary and benefits expense of $294,000, a reduction of other expenses of $71,000 and a reduction in FDIC assessment of $49,000.

Capital levels for The Simsbury Bank & Trust Company on June 30, 2015 were above those required to meet the regulatory "well-capitalized" designation. Capital ratios are calculated under Basel III rules, which became effective January 1, 2015.

 

Capital Ratios (estimated)
June 30, 2015

   

Simsbury Bank &
Trust Company

 

Regulatory Standard For
Well-Capitalized

Tier 1 Leverage Capital Ratio   7.24%   5.00%
Tier 1 Risk-Based Capital Ratio   11.09%   8.00%
Total Risk-Based Capital Ratio   12.16%   10.00%

Common Equity Tier 1
Risk-Based Capital Ratio

  11.09%   6.50%
   

Simsbury Bank is an independent, publicly-held community bank for consumers and businesses. The Bank serves customers through full-service branches in central Connecticut; mortgage loan advisors and commercial bankers active throughout Southern New England; Simsbury Bank Online internet banking at simsburybank.com; Simsbury Bank Mobile Banking; free ATM transactions at hundreds of machines throughout the northeastern U.S. via the SUM program; and 24 hour telephone banking. The Bank's wholly-owned subsidiary, SBT Investment Services, Inc., offers securities and insurance products through LPL Financial and its affiliates, Member FINRA/SIPC. Simsbury Bank is wholly-owned by publicly traded SBT Bancorp, Inc. Its stock is traded on the OTCQX marketplace under the ticker symbol of SBTB. For more information, visit www.simsburybank.com.

Certain statements in this press release, including statements regarding the intent, belief or current expectations of SBT Bancorp, Inc., The Simsbury Bank & Trust Company, or their directors or officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

 

SBT Bancorp, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
June 30, 2015, December 31, 2014 and June 30, 2014
(Unaudited)
(In Thousands, Except Share Data)

       

6/30/2015

12/31/2014

6/30/2014

 

ASSETS

Cash and due from banks $ 10,606 $ 10,118 $ 10,387
Interest-bearing deposits with Federal Reserve Bank of Boston
and Federal Home Loan Bank
9,622 9,696 12,014
Money market mutual funds 566 1 378
Federal funds sold   50     5     27  
Cash and cash equivalents 20,844 19,820 22,806
 
Investments in available-for-sale securities (at fair value) 75,346 83,805 84,428
Federal Home Loan Bank stock, at cost 3,074 1,801 1,820
 
Loans held-for-sale 5,744 5,374 10,657
 
Loans outstanding 302,796 286,142 270,947
Less allowance for loan losses   2,834     2,761     2,737  
Loans, net   299,962     283,381     268,210  
 
Premises and equipment 1,394 1,460 1,540
Accrued interest receivable 1,088 1,095 1,051
Other real estate owned - 105 695
Bank owned life insurance 7,286 7,184 7,076
Other assets   4,963     4,815     4,365  
Total other assets   14,731     14,659     14,727  
 
 
TOTAL ASSETS $ 419,701   $ 408,840   $ 402,648  
 

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Demand deposits $ 110,534 $ 117,261 $ 111,944
Savings and NOW deposits 164,696 177,158 168,063
Time deposits   58,663     61,646     65,429  
Total deposits 333,893 356,065 345,436
 
Securities sold under agreements to repurchase 2,917 3,921 2,877
Federal Home Loan Bank advances 51,500 17,500 24,000
Other liabilities   1,683     1,882     1,538  
Total liabilities   389,993     379,368     373,851  
 
Stockholders' equity:
Preferred stock, senior non-cumulative perpetual, Series C, no par; 9,000
shares issued and outstanding at June 30, 2015 and December 31, 2014;
liquidation value of $1,000 per share
8,994 8,988 8,982
Common stock, no par value; authorized 2,000,000 shares;
issued and outstanding 907,203 shares and 906,789 shares, respectively,
at 06/30/15 and 898,105 shares and 897,691 shares, respectively, at 12/31/14
and 901,164 shares and 900,750 shares, respectively, at 06/30/14
10,324 10,127 10,155
Retained earnings 10,933 10,549 10,237
Treasury stock, 414 shares (7 ) (7 ) (7 )
Unearned compensation- restricted stock awards (322 ) (207 ) (321 )
Accumulated other comprehensive (loss) income   (214 )   22     (249 )
Total stockholders' equity   29,708     29,472     28,797  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 419,701   $ 408,840   $ 402,648  
 
 

SBT Bancorp, Inc. and Subsidairy
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except for per share amounts)

         
 
For the quarter ended For the six months ended

6/30/2015

6/30/2014

6/30/2015

6/30/2014

 

Interest and dividend income:

Interest and fees on loans $ 2,687 $ 2,543 $ 5,328 $ 5,154
Investment securities 409 440 842 920
Federal funds sold and overnight deposits   5   21     12   32  
Total interest and dividend income   3,101   3,004     6,182   6,106  
 

Interest expense:

Deposits 188 222 373 434
Repurchase agreements 1 5 2 7
Federal Home Loan Bank advances   18   1     26   2  
Total interest expense   207   228     401   443  
 
Net interest and dividend income 2,894 2,776 5,781 5,663
 

Provision for loan losses

  30   -     80   30  
 
Net interest and dividend income after
provision for loan losses   2,864   2,776     5,701   5,633  
 

Noninterest income:

Service charges on deposit accounts 101 116 205 234
Gain on available-for-sale securities 26 103 69 103
Other service charges and fees 200 141 345 350

Increase in cash surrender value
of life insurance policies

51 48 103 96
Mortgage banking activities 309 82 444 154
Investment services fees and commissions 77 68 111 129
Other income   42   47     59   51  
Total noninterest income   806   605     1,336   1,117  
 

Noninterest expense:

Salaries and employee benefits

1,703 1,603 3,282 3,576
Occupancy expense 328 320 706 667
Equipment expense 100 127 202 228
Advertising and promotions 152 181 256 284
Forms and supplies 45 59 77 94
Professional fees 147 133 252 210
Directors' fees 63 64 114 131
Correspondent charges 92 51 121 131
FDIC Assessment 78 102 156 205
Data Processing Fees 189 175 333 320
Other expenses   369   501     735   830  
Total noninterest expense   3,266   3,316     6,234   6,676  
 

Income before income taxes

404 65 803 74

Income tax expense (benefit)

  54   (50 )   110   (119 )
 

Net income

$ 350 $ 115   $ 693 $ 193  
 

Net income available to common stockholders

$ 316 $ 89   $ 633 $ 142  
 

Average shares outstanding, basic

888,587 881,861 888,290 880,973

Earnings per common share, basic

$ 0.36 $ 0.10   $ 0.71 $ 0.16  
 

Average shares outstanding, assuming dilution

889,611 884,675 889,090 885,673

Earnings per common share, assuming dilution

$ 0.36 $ 0.10   $ 0.71 $ 0.16  
 

Simsbury Bank
Richard J. Sudol, 860-651-2057
860-408-4679 (fax)
SVP & CFO
rsudol@simsburybank.com

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