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SBT Bancorp, Inc. Reports Second Quarter 2017 Results

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SBT Bancorp, Inc. (the "Company"), (OTCQX:SBTB), holding company for
The Simsbury Bank & Trust Company, Inc. (the "Bank"), today announced
net income of $568 thousand or $0.42 basic and $0.42 diluted earnings
per share for the quarter ended June 30, 2017, compared to a net income
of $251 thousand or $0.19 basic and $0.19 diluted earnings per share for
the prior year's second quarter.

Net interest and dividend income increased $325 thousand or 9.8% as
compared to the prior year's second quarter primarily due to growth in
the Bank's commercial portfolio. Noninterest income increased $67
thousand due principally to an increase in mortgage banking activities
income of $39 thousand. Noninterest expenses for the three months ended
June 30, 2017 were $3.6 million, equivalent to the prior year period.

"We are very pleased to report improved earnings for the second quarter
of 2017 resulting principally from commercial loan growth and strong
expense management," said Simsbury Bank President & CEO Martin J. Geitz.
"Our net income for the quarter ended June 30, 2017 increased over 126%
($317 thousand) compared to the prior year period ended June 30, 2016.
Most of our balance sheet growth came from a 22.7% increase in
commercial loans since the end of the prior year second quarter as our
focus on serving the needs of privately owned and family owned
businesses continues to gain momentum."

Key highlights for quarter ended June 30, 2017 compared to quarter ended
June 30, 2016 included:

  • Net income increased $317 thousand or 126.3%.
  • Total revenue, consisting of net interest and dividend income plus
    noninterest income, increased $392 thousand or 9.8%.
  • Net interest and dividend income increased 9.8% to $3.6 million.
  • Provision for loan losses totaled $85 thousand, a decrease of $85
    thousand compared to the quarter ended June 30, 2016. The allowance
    for loan losses at June 30, 2017 was 0.96% of total gross loans.
  • Net loans grew $39.4 million or 10.7%.
  • Commercial loan balances increased $34.8 million or 22.7% to $188.3
    million compared to June 30, 2016.
  • Total deposits increased $40.4 million or 10.7% to $418 million,
    driven by increases in demand deposits of $4.6 million, savings and
    NOW deposits of $30.5 million, and time deposits of $5.3 million.

The Company's allowance for loan losses at June 30, 2017 was 0.96% of
total gross loans. The Company had non-accrual loans totaling $3.3
million or 0.81% of total loans on June 30, 2017, compared to
non-accrual loans totaling $3.7 million or 1.0% of total loans a year
ago. Total non-accrual and delinquent loans on June 30, 2017 was 0.91%
of loans outstanding compared to 1.67% on June 30, 2016.

Total deposits on June 30, 2017 were $418 million, an increase of $40.4
million or 10.7% over a year ago. At quarter end, 32% of total deposits
were in non-interest bearing demand accounts, 52% were in low-cost
savings, money market and NOW accounts and 16% were in time deposits.

For the quarter ended June 30, 2017, total net revenues, consisting of
net interest and dividend income plus noninterest income, were $4.4
million compared to $4.0 million for the same period in 2016, an
increase of $392 thousand or 9.8% above the prior year's second quarter.
Net interest and dividend income increased $325 thousand or 9.8%,
primarily driven by a $509 thousand, or 15%, increase in interest and
fees on loans. The increase was partially offset by decreased interest
income on securities of $40 thousand. Noninterest income increased by
$67 thousand or 9.5%, primarily due to an increase in mortgage banking
activities of $39 thousand and an increase in other service charges and
fees of $24 thousand.

For the year-to-date ended June 30, 2017, total net revenues, consisting
of net interest and dividend income plus noninterest income, were $8.6
million compared to $7.7 million for the same period in 2016, an
increase of $936 thousand or 12.2% above the prior year-to-date period.
Net interest and dividend income increased $693 thousand or 10.7%,
primarily driven by a $1.1 million, or 17%, increase in interest and
fees on loans. The increase was partially offset by decreased interest
income on securities of $91 thousand and increased interest expenses of
$329 thousand. Noninterest income increased by $243 thousand or 20.9%,
primarily due to an increase in mortgage banking activities of $287
thousand, offset by a decrease in gain on sale of available-for-sale
securities, net of writedowns, of $72 thousand.

The Company's year-to-date 2017 taxable-equivalent net interest margin
(taxable-equivalent net interest and dividend income divided by average
earning assets) was 3.03% compared to 3.03% for the comparable 2016
period. The Company's yield on earning assets increased 10 basis points
to 3.45% and the cost of funds increased 14 basis points to 0.59%,
primarily driven by the subordinated debt interest and increased FHLB
borrowings interest.

Total noninterest expense for the second quarter 2017 was $3.6 million,
equivalent to the second quarter of 2016. Total noninterest expense for
the year-to-date ended June 30, 2017 was $6.9 million, equivalent to the
comparable 2016 year-to-date period.

Capital levels for The Simsbury Bank & Trust Company on June 30, 2017
remain above the regulatory "well-capitalized" designation. Capital
ratios are calculated under Basel III rules.

 
Capital Ratios

June 30, 2017

       

Simsbury Bank &
Trust Company

     

Regulatory Standard For
Well-Capitalized

Tier 1 Leverage Capital Ratio       7.49%       5.00%
Tier 1 Risk-Based Capital Ratio       10.66%       8.00%
Total Risk-Based Capital Ratio       11.76%       10.00%
Common Equity Tier 1 Risk-Based Capital Ratio       10.66%       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
Consolidated Balance Sheets
June 30, 2017, December 31, 2016 and June 30, 2016

 

(Dollars in thousands, except for share amounts)
 
6/30/2017 12/31/2016 6/30/2016
(unaudited) (unaudited)

ASSETS

Cash and due from banks 11,404 10,976 10,133
Interest-bearing deposits with Federal Reserve Bank of Boston and
Federal Home Loan Bank
19,782 9,786 9,352
Money Market Mutual Funds 682 95 45
Federal funds sold   103     150     128  
Cash and cash equivalents 31,971 21,007 19,658
 
Certificates of Deposit 1,250 1,250 1,500
 
Investments in available-for-sale securities (at fair value) 58,069 58,728 68,853
Federal Home Loan Bank stock, at cost 3,663 2,896 3,363
 
Loans held-for-sale 6,473 2,801 6,794
 
Loans outstanding 410,268 409,164 370,269
Less allowance for loan losses   3,924     3,753     3,329  
Loans, net   406,344     405,411     366,940  
 
Premises and equipment, net 2,032 1,905 2,070
Accrued interest receivable 1,291 1,301 1,231
Bank owned life insurance 9,250 9,130 9,002
Other assets   5,386     5,570     5,146  
Total other assets   17,959     17,906     17,449  
 
 
TOTAL ASSETS $ 525,729   $ 509,999   $ 484,557  
 

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
Demand deposits $ 133,044 $ 134,341 $ 128,392
Savings and NOW deposits 217,216 212,835 186,743
Time deposits   67,992     66,588     62,693  
Total deposits 418,252 413,764 377,828
 
Securities sold under agreements to repurchase 2,651 2,694 2,848
Federal Home Loan Bank advances 64,318 54,058 64,000
Long-term subordinated debt 7,266 7,252 7,237
Other liabilities   1,869     1,944     1,813  
Total liabilities   494,356     479,712     453,726  
 
Stockholders' equity:

Common stock, no par value; authorized 2,000,000 shares; issued
and outstanding shares and shares, respectively, 1,373,176 and
1,372,762 at
June 31, 2017; 1,372,394 shares and 1,371,980
shares, respectively, at
December 31, 2016, and 1,361,601
shares and 1,361,187 shares, respectively, at June 30, 2016

 
 
19,156 19,133 18,873
Retained earnings 12,708 12,017 11,368
Treasury stock, 414 shares (7 ) (7 ) (7 )
Unearned compensation- restricted stock awards (225 ) (293 ) (127 )
Accumulated other comprehensive (loss) income   (259 )   (563 )   724  
Total stockholders' equity   31,373     30,287     30,831  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 525,729   $ 509,999   $ 484,557  
 

                     
SBT Bancorp, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
 
(Dollars in thousands, except for share and per share amounts)
 
For the three months ended For the six months ended
6/30/2017 6/30/2016 6/30/2017 6/30/2016
 
Interest and dividend income:
Interest and fees on loans $ 3,814 $ 3,305 $ 7,472 $ 6,380
Investment securities 348 388 691 782
Federal funds sold and overnight deposits   24     10     49     28  
Total interest and dividend income   4,186     3,703     8,212     7,190  
 
Interest expense:
Deposits 273 188 539 347
Repurchase agreements 2 2 3 3
Long-term subordinated debt 135 135 269 242
Federal Home Loan Bank advances   139     66     208     98  
Total interest expense   549     391     1,019     690  
 
Net interest and dividend income 3,637 3,312 7,193 6,500
 
Provision for loan losses   85     170     335     301  
 

Net interest and dividend income after provision for
loan losses

 

3,552

    3,142     6,858     6,199  
 
Noninterest income:
Service charges on deposit accounts 91 91 183 181
(Loss) gain on available-for-sale securities, net of writedowns (1 ) 23 (2 ) 70
Other service charges and fees 232 208 421 440
Increase in cash surrender value of life insurance policies
59 62 120 113
Mortgage banking activities 296 257 538 251
Investment services fees and commissions 45 52 74 79
Other income   49     11     72     29  
Total noninterest income   771     704     1,406     1,163  
 
Noninterest expense:
Salaries and employee benefits 1,747 1,921 3,440 3,752
Occupancy expense 362 390 745 760
Equipment expense 121 113 230 206
Advertising and promotions 203 187 305 294
Forms and supplies 30 35 56 74
Professional fees 198 119 398 203
Directors' fees 52 54 111 107
Correspondent charges 82 73 148 146
FDIC Assessment 108 91 218 153
Data Processing Fees 225 197 454 409
Internet banking costs 47 93 91 145
Other expenses   412     323     724     663  
Total noninterest expense   3,587     3,596     6,920     6,912  
 
Income before income taxes 736 250 1,344 450
Income tax provision (benefit)   168     (1 )   274     (7 )
 
Net income $ 568   $ 251   $ 1,070   $ 457  
 
Net income available to common stockholders $ 568   $ 251   $ 1,070   $ 457  
 
Average shares outstanding, basic 1,359,033 1,351,924 1,358,590 1,350,247
Earnings per common share, basic $ 0.42   $ 0.19   $ 0.79   $ 0.34  
 
Average shares outstanding, assuming dilution 1,362,532 1,352,239 1,361,341 1,351,365
Earnings per common share, assuming dilution $ 0.42   $ 0.19   $ 0.79   $ 0.34  
 

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