SBT Bancorp, Inc. Reports Third Quarter 2013 Results

  SBT Bancorp, Inc. Reports Third Quarter 2013 Results

Business Wire

SIMSBURY, Conn. -- October 25, 2013

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

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           7,247         19,276        32,340
and Federal Home Loan Bank
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           2,814         3,789         3,752
with other bank
Investments in
available-for-sale securities            96,259        91,820        86,274
(at fair value)
Federal Home Loan Bank stock,            1,808         589           589
at cost
                                                                   
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                    3,931         3,569         4,615
agreements to repurchase
Federal Home Loan Bank                   10,000        -             -
advances
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                8,973         8,964         8,961
September 30, 2013 and 2012;
liquidation value of $1,000
per share
Common Stock, no par value;
authorized 2,000,000 shares;
issued and outstanding 889,396
shares and 888,310 shares,               9,929         9,901         9,639
respectively, at 9/30/13 and
888,724 shares and 888,310
shares, respectively, at
12/31/12
Retained earnings                        10,366        9,819         9,364
Treasury Stock, 414 shares               (7      )     (7      )     (7      )
Unearned compensation                    (251    )     (368    )     (141    )
restricted stock awards
Accumulated other                       (1,075  )    1,128       1,411   
comprehensive income
Total stockholders' equity              27,935      29,437      29,227  
TOTAL LIABILITIES AND                  $ 407,007    $ 375,019    $ 368,698 
STOCKHOLDERS' EQUITY
                                                                             
                                                                             

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           $ 2,541       $ 2,352     $  7,195       $ 7,288
on loans
Investment                    522           464          1,612         1,346
securities
Federal funds sold
and overnight                8           23          29           81
deposits
Total interest and           3,071       2,839       8,836        8,715
dividend income
                                                                     
Interest expense:
Deposits                      219           263          655           784
Interest on FHLB              7             -            8             -
advances
Repurchase                   -           1           3            3
agreements
Total interest               226         264         666          787
expense
                                                                     
Net interest and              2,845         2,575        8,170         7,928
dividend income
                                                                     
Provision for loan           120         60          230          210
losses
                                                                     
Net interest and
dividend income
after
provision for loan           2,725       2,515       7,940        7,718
losses
                                                                     
Noninterest income:
Service charges on            118           121          368           361
deposit accounts
Gain on sales of
available-for-sale            (6      )     30           98            78
securities
Other service                 116           235          479           558
charges and fees
Increase in cash
surrender value of            51            57           159           152
life insurance
policies
Gain on loans sold            111           609          1,203         1,491
Investment services
fees and                      87            49           172           120
commissions
Other income                 9           1           8            2
Total noninterest            486         1,102       2,487        2,762
income
                                                                     
Noninterest
expense:
Salaries and                  1,631         1,658        5,088         4,648
employee benefits
Occupancy expense             290           267          849           802
Equipment expense             69            72           188           200
Advertising and               235           174          593           506
promotions
Forms and supplies            42            42           109           138
Professional fees             134           119          386           438
Directors' fees               62            57           187           170
Correspondent                 77            83           242           267
charges
Postage                       23            20           66            68
FDIC Assessment               64            46           119           114
Data Processing               156           131          434           369
Fees
Other expenses               377         295         939          837
Total noninterest            3,160       2,964       9,200        8,557
expense
                                                                     
Income before                 51            653          1,227         1,923
income taxes
Income tax                   (34     )    147         224          483
provision
                                                                     
Net income                  $ 85         $ 506       $  1,003       $ 1,440
                                                                     
Less: Preferred
stock dividend and          $ 29         $ 25        $  87          $ 120
accretion
                                                                     
Net income
available to common         $ 56         $ 481       $  916         $ 1,320
shareholders
                                                                     
Average shares                871,055       867,640      870,695       866,135
outstanding, basic
Earnings per common         $ 0.06       $ 0.55      $  1.06        $ 1.52
share, basic
                                                                     
Average shares
outstanding,                  877,916       877,018      876,185       876,977
assuming dilution
Earnings per common
share, assuming             $ 0.06       $ 0.55      $  1.05        $ 1.51
dilution

Contact:

The Simsbury Bank & Trust Company
Richard Sudol, SVP & CFO, 860-408-5493
860-408-4679 (fax)
rsudol@simsburybank.com
 
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