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SBT Bancorp, Inc. Reports Third Quarter 2013 Results

SBT Bancorp, Inc., (OTCBB: SBTB), holding company for Simsbury Bank & Trust Company, today announced net income of $85,000 or $0.06 per diluted share for the third quarter of 2013, compared to $506,000 or $0.55 per diluted share for the third quarter of 2012.

For the nine months ended September 30, 2013, net income amounted to $1,003,000, or $1.05 per diluted share. This compares to net income of $1,440,000 or $1.51 per diluted share for the nine months ended September 30, 2012. Total assets on September 30, 2013 were $407 million compared to $369 million on September 30, 2012.

“The third quarter featured double digit growth in our deposits and continued strong loan growth. Our earnings performance, however, was disappointing as the sudden and dramatic rise in market interest rates adversely impacted our mortgage gain-on-sale revenue trend and slowed demand for mortgage refinancings. Nevertheless, we are very pleased with progress in our commercial lending operations, with commercial loan balances increasing by $18 million or 31% since year end 2012,” stated SBT Bancorp President and CEO, Martin J. Geitz. “Our progress also includes the fulfillment of two key senior management positions that will further strengthen our leadership team. Richard J. Sudol joined the Bank as Senior Vice President and Chief Financial Officer and David H. MacKenzie joined as Senior Vice President and Chief Mortgage and Consumer Lending Officer. Rich and Dave bring the extensive knowledge and experience required to lead our growth into new markets throughout southern New England.

Key highlights for the third quarter or at September 30 include:
  • Overall loan growth of $23 million or 9% during the third quarter reflects strong growth in both commercial loans and residential mortgages
  • During the third quarter total assets grew $25 million or 6.4%
  • Total deposits increased $39 million or 12% during the third quarter
  • Third quarter 2013 net income was $421 thousand lower compared to third quarter 2012 and $316 thousand lower than linked quarter 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
  • Net interest and dividend income increased $270 thousand or 10% compared to the third quarter of 2012 and increased $179 thousand or 7% compared to linked quarter
  • Third quarter net interest margin of 3.15% was up by 12 basis points compared to the third quarter of 2012 and was up by 5 basis points compared to linked quarter
  • Continued asset quality improvement is evidenced by a total loan delinquency decrease to 1.24% of total loans compared to the previous quarter’s 1.38%
  • The allowance for loan losses at September 30, 2013 was 1.00% of total loans.
  • The Bank’s Total Risk Based Capital ratio remains strong ending the third quarter of 2013 at 13.24%
  • During the third quarter, the Bank completed its move of the administrative offices to a larger facility to accommodate growth

On September 30, 2013, loans outstanding were $278 million, an increase of $51 million, or 22%, over a year ago. Commercial loans grew by $22 million or 40%, Residential mortgage loans grew by $26 million or 22%, and Consumer loans grew by $2 million or 4%. Combined mortgage and consumer loan closings decreased by 4% during the third quarter 2013 as compared to the third quarter 2012 due to a 10% decrease in mortgage closings offset by a 25% increase in consumer closings. Combined mortgage and consumer loan closings for the first nine months of 2013 increased by 11% as compared to the first nine months of 2012 due to a 7% increase in mortgage closings and a 32% increase in consumer closings. The Bank was first in mortgage loan volume market share, according to the Warren Group, in its four town branch market as well as its nine town CRA market area. The profile of the Company’s loan portfolio remains relatively strong. The Company’s allowance for loan losses at September 30, 2013 was 1.00% of total loans. The Company had non-accrual loans totaling $2.9 million equal to 1.05% of total loans on September 30, 2013 compared to non-accrual loans totaling $809 thousand or 0.36% of total loans a year ago. Total non-accrual and delinquent loans on September 30, 2013 were 1.24% of loans outstanding compared to 0.69% on September 30, 2012. The increase in non-accrual and delinquent loans was primarily due to two loans to related businesses that discontinued operations in June, totaling $1.1 million. Both loans are fully collateralized with no loss expected.

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