SBT Bancorp, Inc. Reports Fourth Quarter 2013 Results

  SBT Bancorp, Inc. Reports Fourth Quarter 2013 Results

Business Wire

SIMSBURY, Conn. -- January 28, 2014

SBT Bancorp, Inc., (OTCBB: SBTB), holding company for Simsbury Bank & Trust
Company, today announced net income of $132,000 or $0.12 per diluted share for
the fourth quarter of 2013, compared to $604,000 or $0.66 per diluted share
for the fourth quarter of 2012.

For the twelve months ended December 31, 2013, net income amounted to
$1,135,000 or $1.17 per diluted share. This compares to net income of
$2,044,000 or $2.18 per diluted share for the twelve months ended December 31,
2012. Total assets on December 31, 2013 were $422 million compared to $375
million on December 31, 2012.

“2013 featured double digit growth in our loans and continued strong deposit
growth. We continue to enjoy leading market share in mortgage originations and
the leading Connecticut based bank for deposits in our markets. We are also
very pleased with the progress in our commercial banking operations, with
commercial loan balances increasing by $22 million or 36% since yearend 2012.
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 due to lower demand for mortgage re-financings.”
stated SBT Bancorp President and CEO, Martin J. Geitz.

Key highlights for year-to-date 2013 included:

  *Overall loan growth of $46.6 million or 19.8% during 2013.
  *Total asset growth of $46.8 million or 12.5%.
  *Total deposits increased $18.1 million or 5.3% during 2013.
  *Ranked number one in market share in our nine town core market for
    mortgage originations and in Hartford County ranked thirteenth overall and
    third among Hartford County headquartered banks.
  *In four towns in which we have branch locations, ranked second overall and
    first among Connecticut headquartered banks in deposit market share.
  *Net interest and dividend income increased $561 thousand or 5.3% compared
    to year to date 2012 and increased $319 thousand or 12.3% compared to
    fourth quarter of 2012.
  *Year to date 2013 net interest margin of 3.13% was 4 basis points lower
    compared to year to date 2012 but was 11 basis points higher compared to
    the fourth quarter of 2012.
  *Year to date 2013 net income was $909 thousand lower compared to year to
    date 2012 primarily due to the reduction in mortgage banking gains on loan
    sales as the increase in longer-term interest rates has negatively
    impacted residential mortgage refinancing activity.
  *Total loan delinquency increased to 1.34% of total loans compared to the
    previous year’s 0.76% primarily due to one relationship totaling $0.9
    million that was placed on non-accrual status during the second quarter,
    with no loss expected. Overall loan delinquency remains favorable to
    peers.
  *The allowance for loan losses at December 31, 2013 was 0.99% of total
    loans.
  *The Bank’s Total Risk Based Capital ratio remains strong ending the fourth
    quarter of 2013 at 13.08%

On December 31, 2013, loans outstanding were $283 million, an increase of
$46.6 million, or 20%, over a year ago. Commercial loans grew by $22 million
or 36%, residential mortgage loans grew by $23 million or 19%, and consumer
loans grew by $1.6 million or 3%. Combined mortgage and consumer loan closings
decreased by 34.6% during the fourth quarter 2013 as compared to the fourth
quarter 2012 due to a 42.9% decrease in mortgage closings offset by a 3.6%
increase in consumer closings. Combined mortgage and consumer closings for
full year 2013 increased by 0.4% as compared to full year 2012 due to a 4.7%
decrease in mortgage closings offset by 26.4% 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 December 31, 2013 was 0.99% of total
loans. The Company had non-accrual loans totaling $2.8 million equal to 0.98%
of total loans on December 31, 2013 compared to non-accrual loans totaling
$1.2 million or 0.53% of total loans a year ago. Total non-accrual and
delinquent loans on December 31, 2013 were 1.32% of loans outstanding compared
to 0.76% on December 31, 2012. The increase in non-accrual and delinquent
loans was primarily due to one relationship totaling $0.9 million which is
fully collateralized with no loss expected.

Total deposits on December 31, 2013 were $358 million, an increase of $18.1
million or 5.3% over a year ago. At quarter-end, 32% of total deposits were in
non-interest bearing demand accounts, 49% were in low-cost savings and NOW
accounts and 19% were in time deposits.

For the fourth quarter, total revenues, consisting of net interest and
dividend income plus noninterest income, were $3,556,000 compared to
$3,889,000 a year ago, a decrease of $333,000 or 9%. Net interest and dividend
income increased by $319,000 or 12% primarily due to an increase in yield on
earning assets and increases in average outstanding balances. Non-interest
income decreased by $652,000 or 51%, primarily due to a decrease in gain on
loan sales in the amount of $588,000. For the twelve months ended December 31,
2013, total revenues were $14,213,000 compared to $14,579,000 for the twelve
months ended December 31, 2012, a decrease of $366,000 or 3%. Over this
period, net interest and dividend income increased by $561,000 or 5%, while
noninterest income decreased by $927,000 or 23% primarily due to a decrease in
gains on loans sold in the amount of $876,000.

The Company’s taxable-equivalent net interest margin (taxable-equivalent net
interest and dividend income divided by average earning assets) was 3.26% for
the fourth quarter of 2013, compared to 3.15% for the fourth quarter of 2012.
The Company’s cost of funds declined 3 basis points while the yield on
interest earning assets increased 8 basis points during the fourth quarter of
2013, compared to the fourth quarter of 2012.

Total noninterest expenses for the fourth quarter of 2013 were $3,399,000, an
increase of $448,000 or 15% above the fourth quarter of 2012. Fourth quarter
2013 expense increases included salaries and employee benefits in the amount
of 169,000 or 10%, occupancy costs related to lease expense related to the
company’s new administration offices in the amount of $79,000 or 31%. Data
processing fees increased by $52,000 or 39% and other expenses increased by
$63,000 or 23%. For the twelve months ended December 31, 2013, total
noninterest expenses were $12,599,000 compared to $11,508,000 for the twelve
months ended December 31, 2012, an increase of $1,091,000 or 9.5%. Over this
period, the increase in expenses was primarily in salary and employee benefits
and occupancy expenses.

Capital levels for the Simsbury Bank & Trust Company on December 31, 2013 were
above those required to meet the regulatory “well-capitalized” designation.


Capital Ratios

December 31, 2013
                  Simsbury Bank &     Regulatory Standard For
                    Trust Company           Well-Capitalized
Tier 1 Leverage    7.09%               5.00%
Capital Ratio
Tier 1 Risk-Based  11.92%              6.00%
Capital Ratio
Total Risk-Based   13.08%              10.00%
Capital Ratio
                                      

Simsbury Bank is an independent, publicly owned community bank for consumers
and businesses based in Central Connecticut’s Farmington Valley. The Bank has
approximately $422 million in assets. Simsbury Bank’s parent company is SBT
Bancorp, Inc. whose stock is traded under the ticker symbol OTCBB: SBTB. The
Bank serves customers locally through branches in Avon, Bloomfield, Granby and
Simsbury and regionally through mortgage and commercial bankers active
throughout Southern New England. Simsbury Bank customers enjoy internet
banking and mortgage services at, respectively, www.simsburybank.com and
www.simsburybank.com/mortgages. Bank customers have free ATM access at
thousands of machines across the country through the SUM program. The Bank
offers financial planning, investment and insurance products through LPL
Financial and its affiliates, member FINRA/SIPC.

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
 December 31, 2013 and 2012
                                                            
(In Thousands, Except Share Data)
                                                                
                                             12/31/2013        12/31/2012 
                                            (unaudited)
ASSETS
  Cash and due from banks                   $ 13,355            $ 12,372
  Interest-bearing deposits with Federal Reserve Bank of
  Boston
  and Federal Home Loan Bank                  24,165              19,276
  Money market mutual funds                   346                 358
  Federal funds sold                         724               2,094      
  Cash and cash equivalents                   38,590              34,100
                                                                
  Interest-bearing time deposits with         -                   3,789
  other bank
  Investments in available-for-sale           87,449              91,820
  securities (at fair value)
  Federal Home Loan Bank stock, at            2,196               589
  cost
                                                                
  Loans outstanding                           282,528             235,884
  Less allowance for loan losses             2,792             2,594      
  Loans, net                                 279,736           233,290    
                                                                
  Premises and equipment                      1,618               824
  Accrued interest receivable                 1,074               1,019
  Other real estate owned                     -                   213
  Bank owned life insurance                   6,729               6,520
  Other assets                               4,456             2,855      
  Total other assets                         13,877            11,431     
                                                                
                                                                
  TOTAL ASSETS                              $ 421,848          $ 375,019    
                                                                
LIABILITIES AND STOCKHOLDERS' EQUITY
  Deposits:
  Demand deposits                           $ 116,015           $ 92,670
  Savings and NOW deposits                    173,500             175,268
  Time deposits                              68,989            72,471     
  Total deposits                              358,504             340,409
                                                                
  Securities sold under agreements to         4,390               3,569
  repurchase
  FHLBB Advances                              30,000              0
  Other liabilities                          1,558             1,604      
  Total liabilities                          394,452           345,582    
                                                                
  Stockholders' equity:
  Preferred Stock, senior non-cumulative perpetual, Series C, no par; 9,000
  shares issued and outstanding at June 30, 2013 and 2012;
  liquidation value of $1,000 per             8,976               8,964
  share
  Common Stock, no par value; authorized 2,000,000 shares;
  issued and outstanding 900,264 shares and 899,850 shares, respectively,
  at 12/31/13 and 888,724 shares and          10,136              9,901
  870,268 shares, respectively, at 12/31/12
  Retained earnings                           10,347              9,819
  Treasury Stock, 414 shares                  (7         )        (7         )
  Unearned compensation restricted            (401       )        (368       )
  stock awards
  Accumulated other comprehensive            (1,655     )       1,128      
  (loss) income
  Total stockholders' equity                 27,396            29,437     
  TOTAL LIABILITIES AND STOCKHOLDERS'       $ 421,848          $ 375,019    
  EQUITY
                                                                             
                                                                             



SBT Bancorp, Inc
Condensed Consolidated Statements of Income
(Unaudited)
                                                                
(Dollars in thousands, except for per share amounts)
                                                                              
                     For the quarter ended                 For the twelve months ended
                     12/31/2013         12/31/2012         12/31/2013         12/31/2012
                                                                              
Interest and
dividend income:
  Interest and       $ 2,658            $ 2,368            $ 9,853            $ 9,656
  fees on loans
  Investment         504                316                2,116              1,662
  securities
  Federal funds sold
  and overnight      6                  168                35                 249
  deposits
  Total interest and 3,168              2,852              12,004             11,567
  dividend income
                                                                              
Interest expense:
  Deposits           239                253                894                1,037
  Repurchase         1                  1                  4                  4
  agreements
  Federal Home
  Loan Bank          11                 -                  19                 -
  advances
  Total interest     251                254                917                1,041
  expense
                                                                              
  Net interest and   2,917              2,598              11,087             10,526
  dividend income
                                                                              
Provision for loan   115                110                345                320
losses
                                                                              
  Net interest and
  dividend income
  after
  provision for      2,802              2,488              10,742             10,206
  loan losses
                                                                              
Noninterest
income:
  Service charges
  on deposit         120                134                488                495
  accounts
  Gain on sales of
  available-for-sale 11                 35                 109                113
  securities
  Other service      207                240                686                798
  charges and fees
  Increase in cash
  surrender value
  of life
  insurance          50                 56                 209                208
  policies
  Gain on loans      187                775                1,390              2,266
  sold
  Investment
  services fees and  59                 51                 231                171
  commissions
  Other income       5                  -                  13                 2
  Total
  noninterest        639                1,291              3,126              4,053
  income
                                                                              
Noninterest
expense:
  Salaries and
  employee           1,792              1,623              6,880              6,271
  benefits
  Occupancy          336                257                1,185              1,059
  expense
  Equipment          102                75                 290                275
  expense
  Loss on sale of
  other real estate  45                 38                 45                 38
  owned
  Advertising and    163                149                756                655
  promotions
  Forms and          35                 35                 144                173
  supplies
  Professional       157                139                543                577
  fees
  Directors' fees    77                 59                 264                229
  Correspondent      76                 77                 318                344
  charges
  Postage            20                 25                 86                 93
  FDIC Assessment    69                 62                 188                176
  Data Processing    185                133                619                502
  Fees
  Other expenses     342                279                1,281              1,116
  Total
  noninterest        3,399              2,951              12,599             11,508
  expense
                                                                              
Income before        42                 828                1,269              2,751
income taxes
Income tax
provision            (90)               224                134                707
(benefit)
                                                                              
Net income           $ 132              $ 604              $ 1,135            $ 2,044
                                                                              
Net income available
to common            $ 107              $ 579              $ 1,029            $ 1,898
shareholders
                                                                              
Average shares       875,833            869,931            872,411            867,087
outstanding, basic
Earnings per
common share,        $ 0.12             $ 0.67             $ 1.18             $ 2.19
basic
                                                                              
Average shares
outstanding,         879,186            876,000            876,987            872,206
assuming dilution
Earnings per common
share, assuming      $ 0.12             $ 0.66             $ 1.17             $ 2.18
dilution
                                                                              
                                                                              

Contact:

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