SBT Bancorp, Inc. Reports Fourth Quarter 2015 Results
SBT Bancorp, Inc., (OTCQX: SBTB), holding company for The Simsbury Bank & Trust Company, Inc., today announced net income of $1.4 million or $1.37 basic and $1.36 diluted earnings per share for the year ended December 31, 2015, compared to a net income of $805,000 or $0.80 basic and $0.79 diluted earnings per share, an increase of $0.57 diluted earnings per share compared to the prior year. The increase in net income of $604,000 is mainly due to a $620,000 increase in mortgage banking activities, and a $370,000 increase in net interest and dividend income. These increases were partially offset by increases in the provision for loan losses of $223,000 and salaries and employee benefits of $136,000.
"The Bank's 2015 performance showed strong improvement from 2014," said Martin J. Geitz, President and Chief Executive Officer. "Commercial loan balances increased by $32.3 million or 37.1% since year-end 2014 while mortgage banking activities income more than doubled to $1.2 million from $581,000 in 2014. As we move into 2016, we are excited with the contribution to continued growth that we expect from our new full-service branch office in West Hartford, which is opening in April. Our successful issuance of common stock and long-term subordinated debt have given us the capital needed to continue on our path of improved earnings performance and overall growth."
In October 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. In November 2015, the Company issued 451,473 shares of common stock at $21.00 per share. The Company used the net proceeds from the two transactions to increase its capital base to support future growth and redeem the 9,000 shares of the Company's Senior Non-Cumulative Perpetual Preferred Stock, Series C, which 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.
Key highlights for December 31, 2015 compared to December 31, 2014 included:
- Net loans grew $40.3 million or 14.2%.
- Commercial loan balances increased 37.1%.
- Total revenues for the quarter increased 10.7%.
- Residential mortgage banking activities income for the quarter increased 68.3%.
- Net interest margin of 3.09% for the quarter was 3 basis points higher compared to the prior year's quarter.
- Total deposits increased $16.6 million or 4.7%, driven by increases in demand deposits of $18.3 million and Savings Accounts of $2.7 million. These were partially offset by a decrease in time deposit balances of $4.4 million.
- The allowance for loan losses at December 31, 2015 was 0.93% of total loans.
- Return on average assets for the twelve months ended December 31, 2015 was 0.34% compared to 0.20% for the twelve months ended December 31, 2014.
- Return on average equity for the twelve months ended December 31, 2015 was 4.48% compared to 2.79% for the twelve months ended December 31, 2014.
On December 31, 2015, loans outstanding were $327 million, an increase of $40.6 million, or 14.2% over a year ago. Commercial loans grew by $32.3 million or 37.1% and consumer loans grew by $4.0 million or 6.4% due principally to an increase home equity line of credit borrowings and purchased auto loans. Residential mortgage loans increased by $4.3 million or 3.1% 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 December 31, 2015 was 0.93% of total loans. The Company had non-accrual loans totaling $4.1 million or 1.27% of total loans on December 31, 2015, compared to non-accrual loans totaling $2.0 million or 0.72% of total loans a year ago. Total non-accrual and delinquent loans on December 31, 2015 was 1.44% of loans outstanding compared to 1.08% on December 31, 2014.
The increase in non-accrual loans is due primarily to the addition of a commercial credit to the non-accrual classification in the amount of $1.2 million.
Total deposits on December 31, 2015 were $373 million, an increase of $16.6 million or 4.7% over a year ago primarily due to an increase in demand deposits of $18.3 million and a $2.7 million increase in savings and NOW deposits. These increases were partially offset by a decrease in time deposits of $4.4 million. At quarter-end, 36% of total deposits were in non-interest bearing demand accounts, 48% were in low-cost savings, money market and NOW accounts and 16% were in time deposits.
For the fourth 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 $376,000 or 10.7%. Noninterest income increased by $159,000 or 23.2%, primarily due to an increase in mortgage banking activities of $136,000, partially offset by a reduction of deposit fee revenue of $24,000. For the twelve months ended December 31, 2015, total revenues were $14.9 million compared to $13.9 million for the twelve months ended December 31, 2014, an increase of $1.0 million or 7.4%. Noninterest income increased by $652,000 or 26.4%, primarily due to an increase in mortgage banking activities of $620,000.
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 3.03% compared to 2.99% for the 2014 period. The Company's yield on earning assets remained at 3.21%, while the cost of funds decreased 5 basis points to 0.27% for the twelve months ended December 31, 2015 compared to the same period of 2014. The Company's taxable-equivalent net interest margin for the three months ended December 31, 2015 was 3.09% compared to 3.06% for the three months ended December 31, 2014.
Total noninterest expense for the fourth quarter 2015 was $3.3 million, an increase of $239,000 or 7.7% above the fourth quarter of 2014. The increase was primarily driven by an increase in salary and benefits expense of $216,000 and data processing costs of $57,000. These were partially offset by decreases in professional fees of $38,000 and a decrease in advertising and promotions expenses of $55,000. For the twelve months ended December 31, 2015, total noninterest expense was $13.0 million, a decrease of $50,000 or 0.4% compared to the twelve months ended December 30, 2014. The decrease was primarily driven by a decrease in advertising and promotions of $152,000 and a reduction in FDIC assessment of $62,000. These were partially offset by an increase of salaries and benefits expense of $136,000, and increases in data processing fees of $97,000.
Capital levels for The Simsbury Bank & Trust Company on December 31, 2015 were above those required to meet the regulatory "well-capitalized" designation. Capital ratios are calculated under Basel III rules, which became effective January 1, 2015.
December 31, 2015
Simsbury Bank &
Regulatory Standard For
|Tier 1 Leverage Capital Ratio||8.58%||5.00%|
|Tier 1 Risk-Based Capital Ratio||13.11%||8.00%|
|Total Risk-Based Capital Ratio||14.21%||10.00%|
|Common Equity Tier 1 Risk-Based Capital Ratio||13.11%||6.50%|
Simsbury Bank is an independent, community bank for consumers and businesses based in Connecticut. Simsbury Bank Home Loans is a division of Simsbury Bank serving the home financing needs of consumers throughout Southern New England. Simsbury Bank is wholly-owned by publicly traded SBT Bancorp, Inc. Its stock is traded on the OTCQX marketplace under the ticker symbol of SBTB. For more information, visit www.simsburybank.com.
Certain statements in this press release, including statements regarding the intent, belief or current expectations of SBT Bancorp, Inc., The Simsbury Bank & Trust Company, or their directors or officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.
|SBT Bancorp, Inc. and Subsidiary|
|Condensed Consolidated Balance Sheets|
|December 31, 2015 and December 31, 2014|
|(Dollars in thousands, except for share and per share amounts)|
|Cash and due from banks||$||8,933||$||10,118|
|Interest-bearing deposits with Federal Reserve Bank of Boston|
|and Federal Home Loan Bank||19,795||9,696|
|Interest bearing deposits||1,263||1|
|Federal funds sold||149||5|
|Cash and cash equivalents||30,140||19,820|
|Investments in available-for-sale securities (at fair value)||71,517||83,805|
|Federal Home Loan Bank stock, at cost||2,047||1,801|
|Less allowance for loan losses||3,028||2,761|
|Premises and equipment||1,420||1,460|
|Accrued interest receivable||1,143||1,095|
|Other real estate owned||-||105|
|Bank owned life insurance||7,389||7,184|
|Total other assets||15,214||14,659|
LIABILITIES AND STOCKHOLDERS' EQUITY
|Savings and NOW deposits||179,775||177,158|
|Securities sold under agreements to repurchase||1,915||3,921|
|Federal Home Loan Bank advances||31,500||17,500|
|Long-term subordinated debt||7,230||-|
|Preferred stock, senior non-cumulative perpetual, Series C, no par; 9,000|
|shares issued and outstanding at December 30, 2014;|
|liquidation value of $1,000 per share||-||8,988|
|Common stock, no par value; authorized 2,000,000 shares;|
issued and outstanding 1,360,591 shares and 1,360,177 shares, respectively,
|at 12/31/15 and 898,105 shares and 897,691 shares, respectively, at 12/31/14||18,856||10,127|
|Treasury stock, 414 shares||(7||)||(7||)|
|Unearned compensation- restricted stock awards||(206||)||(207||)|
|Accumulated other comprehensive (loss) income||(189||)||22|
|Total stockholders' equity||29,742||29,472|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||444,780||$||408,840|
|SBT Bancorp, Inc. and Subsidiary|
Condensed Consolidated Statements of Income
|(Dollars in thousands, except for share and per share amounts)|
|For the three months ended||For the twelve months ended|
|Interest and dividend income:|
|Interest and fees on loans||$||2,762||$||2,577||$||10,819||$||10,387|
|Total interest and dividend income||3,166||3,036||12,484||12,257|
|Federal Home Loan Bank advances||13||9||48||18|
|Total interest expense||124||211||728||871|
|Net interest and dividend income||3,042||2,825||11,756||11,386|
|Provision for loan losses||133||-||278||55|
|Net interest and dividend income after|
|provision for loan losses||2,909||2,825||11,478||11,331|
|Service charges on deposit accounts||97||121||400||474|
|Gain on available-for-sale securities, net of writedowns||39||47||132||142|
|Other service charges and fees||208||188||769||731|
|Increase in cash surrender value|
|of life insurance policies||52||54||206||205|
|Mortgage banking activities||335||199||1,201||581|
|Investment services fees and commissions||57||65||216||237|
|Total noninterest income||845||686||3,122||2,470|
|Salaries and employee benefits||1,811||1,595||6,872||6,736|
|Advertising and promotions||77||132||442||594|
|Forms and supplies||37||33||162||172|
|Data processing fees||243||186||773||676|
|Internet banking costs||51||45||208||215|
|Total noninterest expense||3,334||3,095||12,950||13,000|
|Income before income taxes||420||416||1,650||801|
|Income tax expense (benefit)||56||62||241||(4||)|
|Less: Preferred stock dividend and accretion||$||22||$||26||$||107||$||102|
|Net income available to common stockholders||$||342||$||328||$||1,302||$||703|
|Average shares outstanding, basic||1,143,649||883,929||953,539||880,618|
|Earnings per common share, basic||$||0.30||$||0.37||$||1.37||$||0.80|
|Average shares outstanding, assuming dilution||1,148,399||887,411||956,614||885,033|
|Earnings per common share, assuming dilution||$||0.30||$||0.37||$||1.36||$||0.79|
Richard J. Sudol, 860-651-2057
SVP & CFO