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.

Total deposits on September 30, 2013 were $364 million, an increase of $30 million or 9% over a year ago. This growth was mainly in core demand deposits and municipal deposits. At quarter-end, 26% of total deposits were in non-interest bearing demand accounts, 54% were in low-cost savings and NOW accounts, and 20% were in time deposits.

Total revenues, consisting of net interest and dividend income plus noninterest income, were $3,331,000 in the third quarter compared to $3,677,000 a year ago, a decrease of 9%. Net interest and dividend income increased by $270,000 or 10%, primarily due to an increase in yield on earning assets and increases in average outstanding balances. Noninterest income decreased by $616,000 primarily due to a decrease in gain on loan sales in the amount of $498,000. For the nine months ended September 30, 2013, total revenues were $10,657,000 compared to $10,690,000 for the nine months ended September 30, 2012, a decrease of $33,000 or less than 1%. Over this period, core net interest and dividend income increased by $242,000 or 3% while noninterest income decreased by $275,000 primarily due to a decrease in gains on loans sold.

The Company’s taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.15% for the third quarter of 2013 as compared to 3.03% for the third quarter of 2012. The Company’s cost of funds declined 5 basis points while the yield on interest earning assets increased 7 basis points during the third quarter of 2013 as compared to the third quarter of 2012.

Total noninterest expenses for the third quarter of 2013 were $3,160,000, an increase of $196,000 or 6.6% above the third quarter of 2012. The increase was primarily due to increases in marketing related expenses in the amount of $61,000, other operating expenses in the amount of $82,000 and occupancy expenses in the amount of $23,000. Third quarter 2013 occupancy costs included costs related to relocating the Company’s administrative offices to a larger facility. The move was completed during the month of July. For the nine months ended September 30, 2013, total noninterest expenses were $9,200,000 compared to $8,557,000 for the nine months ended September 30, 2012, an increase of $643,000 or 8%. Over this period, the increase in expenses was primarily in salary and employee benefits.

Capital levels for the Simsbury Bank & Trust Company on September 30, 2013 were above those required to meet the regulatory “well-capitalized” designation.

Capital RatiosSeptember 30, 2013
        Simsbury Bank & Trust Company       Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio       7.12%       5.00%
Tier 1 Risk-Based Capital Ratio       12.08%       6.00%
Total Risk-Based Capital Ratio       13.24%       10.00%

Simsbury Bank is an independent, local bank for consumers and businesses. The Bank has approximately $407 million in assets. The Bank serves customers through full-service offices in Avon, Bloomfield, Granby and Simsbury, Connecticut; loan originators active throughout Southern New England and a mortgage production office in Canton, Connecticut; SBT Online internet banking at simsburybank.com; 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 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
September 30, 2013 and 2012
           

( In Thousands, Except Share Data )
 
9/30/2013 12/31/2012 9/30/2012
(unaudited) (unaudited)

ASSETS
Cash and due from banks $ 10,238 $ 12,372 $ 6,807

Interest-bearing deposits with Federal Reserve Bank of Boston and Federal Home Loan Bank
7,247 19,276 32,340
Money market mutual funds 355 358 365
Federal funds sold   36     2,094     2,476  
Cash and cash equivalents 17,876 34,100 41,988
 
Interest-bearing time deposits with other bank 2,814 3,789 3,752
Investments in available-for-sale securities (at fair value) 96,259 91,820 86,274
Federal Home Loan Bank stock, at cost 1,808 589 589
 
Loans outstanding 277,800 235,884 227,224
Less allowance for loan losses   2,764     2,594     2,482  
Loans, net   275,036     233,290     224,742  
 
Premises and equipment 1,590 824 841
Accrued interest receivable 1,001 1,019 323
Other real estate owned 117 213 961
Bank owned life insurance 6,679 6,520 6,325
Other assets   3,827     2,855     2,903  
Total other assets   13,214     11,431     11,353  
 
 
TOTAL ASSETS $ 407,007   $ 375,019   $ 368,698  
 

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits $ 94,915 $ 92,670 $ 70,100
Savings and NOW deposits 197,086 175,268 188,259
Time deposits   71,814     72,471     74,969  
Total deposits 363,815 340,409 333,328
 
Securities sold under agreements to repurchase 3,931 3,569 4,615
Federal Home Loan Bank advances 10,000 - -
Other liabilities   1,326     1,604     1,528  
Total liabilities   379,072     345,582     339,471  
 
Stockholders' equity:

Preferred Stock, senior non-cumulative perpetual, Series C, no par; 9,000 shares issued and outstanding at September 30, 2013 and 2012; liquidation value of $1,000 per share
8,973 8,964 8,961

Common Stock, no par value; authorized 2,000,000 shares; issued and outstanding 889,396 shares and 888,310 shares, respectively, at 9/30/13 and 888,724 shares and 888,310 shares, respectively, at 12/31/12
9,929 9,901 9,639
Retained earnings 10,366 9,819 9,364
Treasury Stock, 414 shares (7 ) (7 ) (7 )
Unearned compensation restricted stock awards (251 ) (368 ) (141 )
Accumulated other comprehensive income   (1,075 )   1,128     1,411  
Total stockholders' equity   27,935     29,437     29,227  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 407,007   $ 375,019   $ 368,698  
 
 

SBT Bancorp, Inc
Condensed Consolidated Statements of Income
(Unaudited)
             
(Dollars in thousands, except for per share amounts)
 
For the quarter ended For the nine months ended
9/30/2013 9/30/2012 9/30/2013 9/30/2012
 
Interest and dividend income:
Interest and fees on loans $ 2,541 $ 2,352 $ 7,195 $ 7,288
Investment securities 522 464 1,612 1,346
Federal funds sold and overnight deposits   8     23   29   81
Total interest and dividend income   3,071     2,839   8,836   8,715
 
Interest expense:
Deposits 219 263 655 784
Interest on FHLB advances 7 - 8 -
Repurchase agreements   -     1   3   3
Total interest expense   226     264   666   787
 
Net interest and dividend income 2,845 2,575 8,170 7,928
 
Provision for loan losses   120     60   230   210
 
Net interest and dividend income after
provision for loan losses   2,725     2,515   7,940   7,718
 
Noninterest income:
Service charges on deposit accounts 118 121 368 361
Gain on sales of available-for-sale securities (6 ) 30 98 78
Other service charges and fees 116 235 479 558

Increase in cash surrender value of life insurance policies
51 57 159 152
Gain on loans sold 111 609 1,203 1,491
Investment services fees and commissions 87 49 172 120
Other income   9     1   8   2
Total noninterest income   486     1,102   2,487   2,762
 
Noninterest expense:
Salaries and employee benefits 1,631 1,658 5,088 4,648
Occupancy expense 290 267 849 802
Equipment expense 69 72 188 200
Advertising and promotions 235 174 593 506
Forms and supplies 42 42 109 138
Professional fees 134 119 386 438
Directors' fees 62 57 187 170
Correspondent charges 77 83 242 267
Postage 23 20 66 68
FDIC Assessment 64 46 119 114
Data Processing Fees 156 131 434 369
Other expenses   377     295   939   837
Total noninterest expense   3,160     2,964   9,200   8,557
 
Income before income taxes 51 653 1,227 1,923
Income tax provision   (34 )   147   224   483
 
Net income $ 85   $ 506 $ 1,003 $ 1,440
 
Less: Preferred stock dividend and accretion $ 29   $ 25 $ 87 $ 120
 
Net income available to common shareholders $ 56   $ 481 $ 916 $ 1,320
 
Average shares outstanding, basic 871,055 867,640 870,695 866,135
Earnings per common share, basic $ 0.06   $ 0.55 $ 1.06 $ 1.52
 
Average shares outstanding, assuming dilution 877,916 877,018 876,185 876,977
Earnings per common share, assuming dilution $ 0.06   $ 0.55 $ 1.05 $ 1.51

Copyright Business Wire 2010

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