Market Overview

SBT Bancorp, Inc. Reports Fourth Quarter 2015 Results

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

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.

 
Capital Ratios

December 31, 2015

     

Simsbury Bank &
Trust Company

     

Regulatory Standard For
Well-Capitalized

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)
 
12/31/2015 12/31/2014
(unaudited)

ASSETS

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
 
Loans held-for-sale 2,167 5,374
 
Loans outstanding 326,723 286,142
Less allowance for loan losses   3,028     2,761  
Loans, net   323,695     283,381  
 
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
Other assets   5,262     4,815  
Total other assets   15,214     14,659  
 
 
TOTAL ASSETS $ 444,780   $ 408,840  
 

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
Demand deposits $ 135,580 $ 117,261
Savings and NOW deposits 179,775 177,158
Time deposits   57,287     61,646  
Total deposits 372,642 356,065
 
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 -
Other liabilities   1,751     1,882  
Total liabilities   415,038     379,368  
 

Stockholders' equity:

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
Retained earnings 11,288 10,549
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

(Unaudited)
 
(Dollars in thousands, except for share and per share amounts)
 
For the three months ended For the twelve months ended
12/31/2015 12/31/2014 12/31/2015 12/31/2014
 
Interest and dividend income:
Interest and fees on loans $ 2,762 $ 2,577 $ 10,819 $ 10,387
Investment securities 391 452 1,627 1,825
Other interest   13   7   38   45  
Total interest and dividend income   3,166   3,036   12,484   12,257  
 
Interest expense:
Deposits 49 201 615 849
Repurchase agreements 1 1 4 4
Long-term debt 61 - 61 -
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  
 
Noninterest income:
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
Other income   57   12   198   100  
Total noninterest income   845   686   3,122   2,470  
 
Noninterest expense:
Salaries and employee benefits 1,811 1,595 6,872 6,736
Occupancy expense 348 328 1,394 1,358
Equipment expense 93 103 399 443
Advertising and promotions 77 132 442 594
Forms and supplies 37 33 162 172
Professional fees 123 161 571 538
Directors' fees 68 59 248 254
Correspondent charges 67 33 255 205
FDIC assessment 78 90 312 374
Data processing fees 243 186 773 676
Internet banking costs 51 45 208 215
Other expenses   338   330   1,314   1,435  
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 )
 
Net income $ 364 $ 354 $ 1,409 $ 805  
 
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  
 

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

View Comments and Join the Discussion!