News Column

SBT Bancorp, Inc. Reports First Quarter 2014 Results

April 30, 2014

SIMSBURY, Conn.--(BUSINESS WIRE)-- SBT Bancorp, Inc., (OTCBB: SBTB), holding company for Simsbury Bank & Trust Company, today announced net income of $78,000 or $0.06 per diluted share for the quarter ended March 31, 2014. Excluding a one-time adjustment, net income for the quarter ended March 31, 2014 was $245,000, or $0.25 per diluted share. During the quarter, the Company incurred a one-time cost in the amount of $252,000 (pre-tax) related to the retirement of the Bank’s former Chief Financial Officer. Net interest income for the quarter ended March 31, 2014 amounted to $2,887,000, an increase of 8.6% as compared to the quarter ended March 31, 2013. Total gross loans amounted to $278 million, an increase of $38 million or 16% as compared to $240 million on March 31, 2013. Total assets on March 31, 2014 were $405 million compared to $396 million on March 31, 2013.

“The Bank continues to show double digit growth in our loans and strong deposit growth as compared to March 31, 2013,” said Martin J. Geitz, President and CEO of Simsbury Bank. “We are also very pleased with the progress in our commercial banking operations, with commercial loan balances increasing by $12.6 million or 21.2% since March 31, 2013. Our earnings performance for the first quarter, however, was disappointing primarily due to our decision to maintain a strong residential mortgage infrastructure to support our goal of growing that business regionally despite the dramatically lower mortgage demand since the spike in interest rates last year. Nevertheless, we have taken steps to better align our infrastructure capacity with our originations. We have reduced staff bank-wide by twelve employees or 13% of the total staff with an anticipated annualized expense reduction of approximately $750,000. We continue to focus on creating shareholder value and believe that expanding the residential mortgage business offers opportunities for us that complement our full service banking strength in Hartford County.”

Key highlights for March 31, 2014 compared to March 31, 2013 included:

  • Overall loan growth of $38.4 million or 16.0%.
  • Total asset growth of $9.2 million or 2.3%.
  • Total deposits increased $10.3 million or 2.8% over the same period.
  • Ranked number one in market share in our four town branch market for mortgage originations and in Hartford County ranked fourteenth overall and third among Hartford County headquartered banks.
  • Net interest and dividend income increased $228 thousand or 8.6% compared to the first quarter of 2013.
  • Year to date 2014 net interest margin of 3.04% was 1 basis point higher compared to the first quarter of 2013.
  • Net income, after adjusting for the one-time cost of $167,000, after tax, was $272 thousand lower compared to year to date 2013 primarily due to the reduction in mortgage banking gain on loan sales as the increase in longer-term interest rates has negatively impacted residential mortgage refinancing activity.
  • Total loan delinquency increased to 1.33% of total loans compared to the previous year’s 1.09%. Overall loan delinquency remains favorable to peers.
  • The allowance for loan losses at March 31, 2014 was 1.00% of total loans.
  • The Bank’s Total Risk Based Capital ratio remains strong, ending the first quarter of 2014 at 13.20%.

    On March 31, 2014, loans outstanding were $278 million, an increase of $38.4 million, or 16.0%, over a year ago. Commercial loans grew by $12.6 million or 21.2%, residential mortgage loans grew by $24.8 million or 20.9%, and consumer loans grew by $1.0 million or 1.3%. Combined mortgage and consumer loan closings decreased by 64.9% during the first quarter 2014 as compared to the first quarter 2013 due to a 71.9% decrease in mortgage closings and 25.7% decrease in consumer closings.

    The profile of the Company’s loan portfolio remains strong. The Company’s allowance for loan losses at March 31, 2014 was 1.00 % of total loans. The Company had non-accrual loans totaling $2.3 million equal to 0.84% of total loans on March 31, 2014 compared to non-accrual loans totaling $1.2 million or 0.51% of total loans a year ago. Total non-accrual and delinquent loans on March 31, 2014 were 1.33% of loans outstanding compared to 1.09% on March 31, 2013.

    Total deposits on March 31, 2014 were $372 million, an increase of $10.3 million or 2.8% over a year ago. At quarter-end, 29% of total deposits were in non-interest bearing demand accounts, 52% were in low-cost savings and NOW accounts and 19% were in time deposits.

    For the first quarter 2014, total revenues, consisting of net interest and dividend income plus noninterest income, were $3,399,000 compared to $3,696,000 a year ago, a decrease of $297,000 or 8%. Net interest and dividend income increased by $228,000 or 9% primarily due to an increase in yield on earning assets and increases in average outstanding balances. Non-interest income decreased by $525,000 or 51%, primarily due to a decrease in gain on loan sales in the amount of $532,000.

    The Company’s taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.04% for the first quarter of 2014, compared to 3.03% for the first quarter of 2013. The Company’s cost of funds declined 1 basis point to 0.32 % while the yield on interest earning assets decreased 1 basis point to 3.26% during the first quarter of 2014, compared to the first quarter of 2013.

    Total noninterest expenses, excluding the one-time cost in the amount of $252,000 related to the retirement of the Bank’s former Chief Financial Officer, for the first quarter 2014 were $3,108,000, an increase of $118,000 or 4% above the first quarter of 2013. The $118,000 increase is due primarily to increases in occupancy & equipment costs in the amount of $111,000, FDIC assessment in the amount of $58,000 and other expenses in the amount of $47,000, offset by decreases in advertising and promotions expense of $63,000 and professional fees of $52,000. Total noninterest expenses, including the one-time cost in the amount of $252,000 related to the retirement of the Bank’s former Chief Financial Officer for the first quarter of 2014 were $3,360,000, an increase of $370,000 or 12% above the first quarter of 2013.

    Capital levels for the Simsbury Bank & Trust Company on March 31, 2014 were above those required to meet the regulatory “well-capitalized” designation.

    Capital Ratios

    March 31, 2014

            Simsbury Bank & Trust Company       Regulatory Standard For Well-Capitalized
    Tier 1 Leverage Capital Ratio       7.03%       5.00%
    Tier 1 Risk-Based Capital Ratio       12.03%       6.00%
    Total Risk-Based Capital Ratio       13.20%       10.00%

    Simsbury Bank is an independent, local bank for consumers and businesses. The Bank has approximately $405 million in assets. The Bank serves customers through full-service offices in Avon, Bloomfield, Granby and Simsbury, Connecticut; mortgage loan originators active throughout the region and a mortgage production office in Canton, Connecticut; SBT Online internet banking at; 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 over-the-counter under the ticker symbol of OTCBB: SBTB. For more information, visit

    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 Subsidairy
    Condensed Consolidated Statements of Income
    (Dollars in thousands, except for per share amounts)
    For the quarters ended
    Interest and dividend income:
    Interest and fees on loans$2,611$2,334
    Investment securities480534
    Federal funds sold and overnight deposits   11     12  
    Total interest and dividend income   3,102     2,880  
    Interest expense:
    Repurchase agreements21
    Federal Home Loan Bank advances   1     -  
    Total interest expense   215     221  
    Net interest and dividend income2,8872,659
    Provision for loan losses   30     30  
    Net interest and dividend income after
    provision for loan losses   2,857     2,629  
    Noninterest income:
    Service charges on deposit accounts118128
    Gain on sales of available-for-sale securities-77
    Other service charges and fees242159
    Increase in cash surrender value
    of life insurance policies4856
    Gain on loans sold39571
    Investment services fees and commissions6149
    Other income   4     (3)
    Total noninterest income   512     1,037  
    Noninterest expense:
    Salaries and employee benefits1,9731,743
    Occupancy expense347277
    Equipment expense10160
    Advertising and promotions103166
    Forms and supplies3530
    Professional fees77129
    Directors' fees6751
    Correspondent charges8076
    FDIC Assessment10345
    Data Processing Fees145131
    Other expenses   307     260  
    Total noninterest expense   3,360     2,990  
    Income before income taxes9676
    Income tax (benefit) provision   (69)   159  
    Net income$78   $517  
    Net income available to common stockholders$52   $491  
    Average shares outstanding, basic880,075870,332
    Earnings per common share, basic$0.06   $0.56  
    Average shares outstanding, assuming dilution887,004874,508
    Earnings per common share, assuming dilution$0.06   $0.56  
    SBT Bancorp, Inc. and Subsidiary
    Condensed Consolidated Balance Sheets
    March 31, 2014 and December 31, 2013

    (In Thousands, Except Share Data)



    Cash and due from banks$9,284$13,355
    Interest-bearing deposits with Federal Reserve Bank of Boston
    and Federal Home Loan Bank12,67824,165
    Money market mutual funds345346
    Federal funds sold   774     724  
    Cash and cash equivalents23,08138,590
    Investments in available-for-sale securities (at fair value)86,69487,449
    Federal Home Loan Bank stock, at cost2,1962,196
    Loans held-for-sale2,9892,861
    Loans outstanding278,315279,667
    Less allowance for loan losses   2,779     2,792  
    Loans, net   275,536     276,875  
    Premises and equipment1,6101,618
    Accrued interest receivable9891,074
    Other real estate owned155-
    Bank owned life insurance6,7786,729
    Other assets   4,692     4,456  
    Total other assets   14,224     13,877  
    TOTAL ASSETS$404,720   $421,848  


    Demand deposits$108,941$116,015
    Savings and NOW deposits194,136173,500
    Time deposits   68,517     68,989  
    Total deposits371,594358,504
    Securities sold under agreements to repurchase3,3354,390
    Federal Home Loan Bank Advances-30,000
    Other liabilities   1,720     1,558  
    Total liabilities   376,649     394,452  
    Stockholders' equity:
    Preferred Stock, senior non-cumulative perpetual, Series C, no par; 9,000
    shares issued and outstanding at March 31, 2014 and December 31, 2013;
    liquidation value of $1,000 per share8,9798,976
    Common Stock, no par value; authorized 2,000,000 shares;
    issued and outstanding 900,756 shares and 900,342 shares, respectively,
    at 3/31/14 and 900,264 shares and 899,850 shares, respectively, at 12/31/1310,14610,136
    Retained earnings10,27710,347
    Treasury Stock, 414 shares at March 31, 2014 and December 31, 2013(7)(7)
    Unearned compensation restricted stock awards(362)(401)
    Accumulated other comprehensive loss   (962)   (1,655)
    Total stockholders' equity   28,071     27,396  

    Simsbury Bank

    Richard J. Sudol, 860-408-5493

    SVP & CFO

    860-408-4679 (fax)

    Source: SBT Bancorp, Inc.

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    Source: Business Wire

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