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SBT Bancorp, Inc. Reports Fourth Quarter 2013 Results

SBT Bancorp, Inc. Reports Fourth Quarter 2013 Results

SIMSBURY, CT. – 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.

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.comand 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. 

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