SBT Bancorp, Inc. Reports Third Quarter 2015 Results
SBT Bancorp, Inc., (OTCQX: SBTB), holding company for The Simsbury Bank & Trust Company, Inc., today announced net income of $353,000 or $0.37 basic and diluted earnings per share for the quarter ended September 30, 2015, compared to a net income of $258,000 or $0.26 basic and diluted earnings per share, an increase of $0.11 diluted earnings per share compared to the prior year quarter. The increase in net income is mainly due to a $168,000 increase in mortgage banking activities, and a $121,000 increase in net interest and dividend income.
"The Bank showed strong growth as compared to September 30, 2014," said Martin J. Geitz, President and Chief Executive Officer. "Commercial loan balances increased by $18.0 million or 21.3% since September 30, 2014. Performance of our mortgage unit continued to show improvement during the 2015 year."
On October 15, 2015, SBT Bancorp, Inc. closed on the issuance of an unsecured subordinated term note in the aggregate principal amount of $7.5 million due October 1, 2025. The Company intends to use the net proceeds from the issuance to redeem a portion of the 9,000 shares of the Company's Senior Non-Cumulative Perpetual Preferred Stock, Series C, that the Company issued to the United States Department of the Treasury as part of the Company's participation in the Small Business Lending Fund program and to support the growth of the Company, including the Bank's expansion into the West Hartford, Connecticut market through the opening of a new branch office and the growth of the Bank's loan portfolio, and for other general corporate purposes.
Key highlights for September 30, 2015 compared to September 30, 2014 included:
- Net loans grew $24.6 million or 8.8%.
- Commercial loan balances increased 21.3%.
- Total revenues for the quarter increased 10.4%.
- Residential mortgage banking activities income for the quarter increased 66%.
- Net interest margin of 2.97% for the quarter was 9 basis points higher compared to the prior year's quarter.
- Total deposits decreased $1.3 million or 0.35%, driven by reductions in CDs ($5.1mm) and Money Market Accounts ($14.9mm), partially offset by increases in Checking Accounts ($15.4mm) and Savings Accounts ($3.3mm).
- Tangible book value per common share was $23.58 at September 30, 2015 compared to $21.98 per common share at September 30, 2014.
- The allowance for loan losses at September 30, 2015 was 0.94% of total loans.
- Return on average assets for the nine months ended September 30, 2015 was 0.34% compared to 0.15% for the nine months ended September 30, 2014.
- Return on equity for the nine months ended September 30, 2015 was 4.72% compared to 1.59% for the nine months ended September 30, 2014.
On September 30, 2015, loans outstanding were $307 million, an increase of $24.7 million, or 8.8% over a year ago. Commercial loans grew by $18.0 million or 21.3% and consumer loans grew by $1.5 million or 2.5%. Residential mortgage loans, including loans held for sale, increased by $4.6 million or 3.3% driven by an increase in jumbo mortgages which are being held in the portfolio.
The Company's loan portfolio remains strong. The Company's allowance for loan losses at September 30, 2015 was 0.94% of total loans. The Company had non-accrual loans totaling $4.0 million or 1.31% of total loans on September 30, 2015, compared to non-accrual loans totaling $1.9 million or 0.69% of total loans a year ago. The increase in non-accruals relates to placing a $1.1 million secured commercial borrowing in non-accrual status during the quarter. Total non-accrual and delinquent loans on September 30, 2015 was 1.50% of loans outstanding compared to 0.91% on September 30, 2014.
Total deposits on September 30, 2015 were $375 million, a decrease of $1.3 million or 0.35% over a year ago primarily due to a decrease in time deposits of $5.1 million and a $10.7 million decrease in savings and NOW deposits. These decreases were partially offset by an increase in demand deposits of $14.4 million. At quarter-end, 31% of total deposits were in non-interest bearing demand accounts, 53% were in low-cost savings, money market and NOW accounts and 16% were in time deposits.
For the third quarter 2015, total revenues, consisting of net interest and dividend income plus noninterest income, were $3.9 million compared to $3.5 million a year ago, an increase of $366,000 or 10.4%. Noninterest income increased by $245,000 or 36.2%, primarily due to an increase in mortgage banking activities of $168,000, partially offset by a reduction of deposit fee revenue of $21,000. For the nine months ended September 30, 2015, total revenues were $11.0 million compared to $10.3 million for the nine months ended September 30, 2014, an increase of $702,000 or 6.8%. Noninterest income increased by $473,000 or 26.2%, primarily due to an increase in mortgage banking activities of $458,000.
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 3.01% compared to 2.97% for the 2014 year-to-date period. The Company's yield on earning assets increased 2 basis points to 3.22%, while the cost of funds decreased 4 basis points to 0.29% for the nine months ended September 30, 2015 compared to the same period of 2014. The Company's taxable-equivalent net interest margin for the three months ended September 30, 2015 was 2.97% compared to 2.88% for the three months ended September 30, 2014.
Total noninterest expense for the third quarter 2015 was $3.4 million, an increase of $209,000 or 6.6% above the third quarter of 2014. The increase was primarily driven by an increase in salary and benefits expense of $215,000, partially offset by decreases in occupancy expenses of $23,000 and a decrease in advertising and promotions expenses of $68,000. For the nine months ended September 30, 2015, total noninterest expense was $9.6 million, a decrease of $233,000 or 2.4% compared to the nine months ended September 30, 2014. The decrease was primarily driven by a reduction in salary and benefits expense of $78,000, a reduction of advertising and promotion of $96,000 and a reduction in FDIC assessment of $51,000. These reductions were partially offset by an increase in professional fees of $71,000.
Capital levels for The Simsbury Bank & Trust Company on September 30, 2015 were above those required to meet the regulatory "well-capitalized" designation. Capital ratios are calculated under Basel III rules, which became effective January 1, 2015.
|Capital Ratios (estimated)|
|September 30, 2015|
Simsbury Bank &
Regulatory Standard For
|Tier 1 Leverage Capital Ratio||7.31%||5.00%|
|Tier 1 Risk-Based Capital Ratio||11.11%||8.00%|
|Total Risk-Based Capital Ratio||12.19%||10.00%|
|Common Equity Tier 1 Risk-Based Capital Ratio||11.11%||6.50%|
Simsbury Bank is an independent, community bank for consumers and businesses based in Connecticut. Simsbury Bank Home Loans is a division of Simsbury Bank serving the home financing needs of consumers throughout Southern New England. Simsbury Bank is wholly-owned by publicly traded SBT Bancorp, Inc. Its stock is traded on the OTCQX marketplace under the ticker symbol of SBTB. For more information, visit www.simsburybank.com.
Certain statements in this press release, including statements regarding the intent, belief or current expectations of SBT Bancorp, Inc., The Simsbury Bank & Trust Company, or their directors or officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.
|SBT Bancorp, Inc. and Subsidiary|
|Condensed Consolidated Balance Sheets|
|September 30, 2015, December 31, 2014 and September 30, 2014|
|(Dollars in thousands, except for share and per share amounts)|
|Cash and due from banks||$||7,313||$||10,118||$||8,535|
|Interest-bearing deposits with Federal Reserve Bank of Boston|
|and Federal Home Loan Bank||5,919||
|Money market mutual funds||580||1||486|
|Federal funds sold||346||5||53|
|Cash and cash equivalents||14,158||19,820||22,673|
|Investments in available-for-sale securities (at fair value)||71,816||83,805||85,051|
|Federal Home Loan Bank stock, at cost||3,074||1,801||1,260|
|Less allowance for loan losses||2,897||2,761||2,761|
|Premises and equipment||1,390||1,460||1,517|
|Accrued interest receivable||1,045||1,095||1,020|
|Other real estate owned||-||105||130|
|Bank owned life insurance||7,338||7,184||7,130|
|Total other assets||14,794||14,659||14,410|
LIABILITIES AND STOCKHOLDERS' EQUITY
|Savings and NOW deposits||201,170||177,158||211,843|
|Securities sold under agreements to repurchase||2,722||3,921||3,845|
|Federal Home Loan Bank advances||5,500||17,500||-|
|Preferred stock, senior non-cumulative perpetual, Series C, no par; 9,000|
|shares issued and outstanding at September 30, 2015 and 2014|
|and December 31, 2014; liquidation value of $1,000 per share||8,997||8,988||8,985|
|Common stock, no par value; authorized 2,000,000 shares;|
|issued and outstanding 908,660 shares and 908,246 shares, respectively,|
|at 09/30/15 and 898,105 shares and 897,691 shares, respectively, at 12/31/14|
|and 901,625 shares and 901,211 shares, respectively, at 09/30/14||10,333||10,127||10,116|
|Treasury stock, 414 shares||(7||)||(7||)||(7||)|
|Unearned compensation- restricted stock awards||(254||)||(207||)||(235||)|
|Accumulated other comprehensive income (loss)||211||22||(414||)|
|Total stockholders' equity||30,415||29,472||28,790|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||415,160||$||408,840||$||410,366|
|SBT Bancorp, Inc. and Subsidiary|
|Condensed Consolidated Statements of Income|
|(Dollars in thousands, except for share and per share amounts)|
|For the quarter ended||For the nine months ended|
|Interest and dividend income:|
|Interest and fees on loans||$||2,748||$||2,590||$||8,057||$||7,733|
|Federal funds sold and overnight deposits||14||21||26||38|
|Total interest and dividend income||3,155||3,049||9,318||9,144|
|Federal Home Loan Bank advances||8||2||35||9|
|Total interest expense||201||216||604||659|
|Net interest and dividend income||2,954||2,833||8,714||8,485|
|Provision for loan losses||65||25||145||55|
|Net interest and dividend income after|
|provision for loan losses||2,889||2,808||8,569||8,430|
|Service charges on deposit accounts||98||119||303||353|
|Gain (loss) on available-for-sale securities, net of writedowns||26||(1||)||93||96|
|Other service charges and fees||208||173||561||560|
|Increase in cash surrender value|
|of life insurance policies||51||55||154||151|
|Mortgage banking activities||422||254||866||408|
|Investment services fees and commissions||48||43||159||172|
|Total noninterest income||921||676||2,277||1,804|
|Salaries and employee benefits||1,779||1,564||5,062||5,140|
|Advertising and promotions||109||177||365||461|
|Forms and supplies||48||45||125||139|
|Data processing fees||198||170||531||490|
|Total noninterest expense||3,382||3,173||9,616||9,849|
|Income before income taxes||428||311||1,230||385|
|Income tax expense (benefit)||75||53||185||(66||)|
|Less: Preferred stock dividend and accretion||$||26||$||25||$||86||$||76|
|Net income available to common stockholders||$||327||$||233||$||959||$||375|
|Average shares outstanding, basic||890,190||883,998||889,473||882,158|
|Earnings per common share, basic||$||0.37||$||0.26||$||1.08||$||0.42|
|Average shares outstanding, assuming dilution||894,380||888,335||892,004||886,694|
|Earnings per common share, assuming dilution||$||0.37||$||0.26||$||1.08||$||0.42|
Richard J. Sudol, 860-651-2057
SVP & CFO