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CORRECTING and REPLACING SBT Bancorp, Inc. Reports Third Quarter 2011 Results


Published on 2011-11-01 23:22:19 - Market Wire
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SIMSBURY, Conn.--([ BUSINESS WIRE ])--Please replace the release with the following corrected version due to multiple revisions.

"We recently implemented two initiatives to expand the Companyas capital base to support our growth. The Company received $9 million in capital through the United States Treasuryas Small Business Lending Fund (aSBLF"

The corrected release reads:

SBT BANCORP, INC. REPORTS THIRD QUARTER 2011 RESULTS

SBT Bancorp, Inc., (OTCBB: SBTB), holding company for Simsbury Bank & Trust Company, today announced net income of $258,000 or $0.10 per diluted share for the third quarter of 2011. Total assets on September 30, 2011 were $351 million, an increase of $54 million or 18% over September 30, 2010.

Earnings per share for the third quarter of 2011 were impacted by a one-time reduction in net income available to common shareholders related to the repayment of Capital Purchase Program (CPP) funding. Excluding this one-time item, earnings per share would have been $0.22 per diluted share. For the third quarter of 2010, net income was $314,000 or $0.29 per diluted share.

For the nine months ended September 30, 2011, net income amounted to $543,000, or $0.28 per diluted share. Net income and earnings per share for the first quarter of 2011 were impacted by a one-time charge related to the Bankas formation of a Passive Investment Company (PIC). As noted above, earnings per share for the third quarter of 2011 were impacted by a one-time reduction in net income available to common shareholders related to the repayment of Capital Purchase Program funding. Excluding these one-time items net income for the nine months ended September 30, 2011 would have been $715,000 or $0.60 per common diluted share. This compares to net income of $830,000, or $0.74 per diluted share, for the nine months ended September 30, 2010.

The following table demonstrates the impact of these one-time items:

Three Months
Ended 9/30/11

Nine Months
Ended 9/30/11

Net Income EPS Net Income EPS
GAAP Basis $ 258,000 $ 0.10 $ 543,000 $ 0.28
PIC 2011Q1 Net Charges - - $ 172,000 $ 0.20
CPP Refunding EPS Impact - $ 0.12 - $

0.12

Results Excluding One-Time Items $ 258,000 $ 0.22 $ 715,000 $ 0.60

aSBT Bancorp has experienced nearly 20% growth over the past year,a said SBT Bancorp President and CEO, Martin J. Geitz. aWe recently implemented two initiatives to expand the Companyas capital base to support our growth. The Company received $9 million in capital through the United States Treasuryas Small Business Lending Fund (aSBLFa) and the Company introduced a dividend reinvestment plan for its shareholders. These two initiatives will provide the Company with capital to continue to expand its business lending activities and support growth in related deposits and services.a

Total deposits on September 30, 2011 were $319 million, an increase of $49 million or 18% over a year ago. This growth was mainly in Core deposits (Demand, Savings and NOW accounts). The Companyas deposits from municipalities grew by $26 million or 66% over a year ago. At quarter-end, 19% of total deposits were in non-interest bearing demand accounts, 57% were in low-cost savings and NOW accounts and 24% were in time deposits.

On September 30, 2011, loans outstanding were $211 million, an increase of $1.5 million, or 1%, over a year ago. With a loan loss provision of $165,000 during the quarter, the Companyas allowance for loan losses at September 30, 2011 was 1.15% of total loans. The profile of the Companyas loan portfolio remains relatively low-risk. The Company had non-accrual loans totaling $2 million equal to 0.83% of total loans on September 30, 2011 compared to non-accrual loans totaling $2.5 million or 1.07% of total loans a year ago. Total non-accrual loans and loans 30 or more days delinquent increased slightly from 1.28% of loans outstanding on September 30, 2010 to 1.34% of loans outstanding on September 30, 2011.

Total revenues, consisting of net interest and dividend income plus noninterest income, were $3,165,000 in the third quarter compared to $3,116,000 a year ago, an increase of 2.0%. Net interest and dividend income declined by approximately 2%, while noninterest income increased by $105,000 or 21% primarily due to an increase in gain on sales of securities and gain on loans sold.

The Companyas taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.11% for the third quarter of 2011, compared to 3.75% for the third quarter of 2010. The Companyas cost of funds declined during the third quarter of 2011, compared to the third quarter of 2010. However, the Company experienced a greater decline in yield on assets as compared to the decline in cost of funds.

Total noninterest expenses for the third quarter were $2,688,000, an increase of $173,000 or 7% over the third quarter of 2010. Salaries and employee benefit expenses and professional fees accounted for the majority of the increase in expenses. These expenses were primarily associated with strategic initiatives to position the Company for future growth. For the nine months ended September 30, 2011 total noninterest expenses were $8,081,000 compared to $7,268,000 for the nine months ended September 30, 2010, an increase of 11%.

During the quarter, the Company received $9 million in capital through the United States Treasuryas Small Business Lending Fund (aSBLFa). The SBLF was created by the United States Department of the Treasury to encourage banks to increase lending to small businesses by providing additional capital to eligible banks at an adjustable dividend rate based on the volume of qualified lending. More than 900 banks applied for SBLF funds and only 332 were approved by the Treasury. The initial weighted average dividend rate for the Company is 3%. As SBT Bancorpas small business loans increase over the next several quarters, the dividend rate on the entire $9 million is expected to decline to the minimum amount of 1%. The Company used approximately $4.3 million of the proceeds to redeem all of the outstanding shares of preferred stock issued to the Treasury under the TARP Capital Purchase Program. In connection with the redemption of Capital Purchase Program shares, a one-time reduction in net income available to common shareholders was incurred in the quarter ended September 30, 2011 totaling $105,000 or $0.12 per diluted share.

In January of 2011, Simsbury Bank & Trust Company formed a subsidiary Passive Investment Company (PIC). Under State of Connecticut statutes, such a company is not subject to Connecticut corporation business tax. Provided that statutory requirements and certain other conditions are met, the current annual benefit to net income of establishing the PIC should exceed $100,000. This benefit may adjust upward or downward as the Bankas net income changes over time. Net income for the nine months ended September 30, 2011 was negatively impacted by certain non-recurring tax charges incurred in establishing the PIC, net of a favorable federal tax adjustment, resulting in a $172,000 one-time net charge reflected in the Companyas first quarter 2011 income tax provision.

Capital levels for the Simsbury Bank & Trust Company on September 30, 2011 were above those required to meet the regulatory awell-capitalizeda designation.

Simsbury Bank is an independent, local bank for consumers and businesses. The Bank has approximately $351 million in assets. The Bank serves customers through full-service offices in Avon, Bloomfield, Granby and Simsbury, Connecticut; loan originators throughout central Connecticut, a loan production office and ATM 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 Bankas 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 aforward-lookinga 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
Condensed Consolidated Balance Sheets
(Dollars in thousands, except for per share amounts)
9/30/201112/31/20109/30/2010
(Unaudited)(Unaudited)

ASSETS

Cash and due from banks$7,656$7,164$7,276
Interest-bearing deposits with Federal Reserve Bank of Boston64,69912,57414,817
Interest-bearing deposits with the Federal Home Loan Bank237
Federal funds sold2,0362,7871,509
Money market mutual funds 5,346 8,343 8,842
Cash and cash equivalents79,73930,87132,451
Interest-bearing time deposits with other bank4,6845,9635,629
Investments in available-for-sale securities (at fair value)49,44346,28942,896
Federal Home Loan Bank stock, at cost660660660
Loans outstanding210,592205,118209,069
Less allowance for loan losses 2,429 2,326 2,309
Loans, net 208,163 202,792 206,760
Premises and equipment505562580
Accrued interest receivable922905925
Bank owned life insurance4,1334,0133,971
Other real estate owned-350-
Other assets 2,908 3,162 3,157
Total other assets 8,468 8,992 8,633
TOTAL ASSETS$351,157 $295,567$297,029

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Demand deposits$61,269$55,339$49,136
Savings and NOW deposits181,888136,208145,300
Time deposits 75,761 77,732 75,883
Total deposits318,918269,279270,319
Securities sold under agreements to repurchase3,9083,2353,435
Other liabilities 1,078 1,086 930
Total liabilities 323,904 273,600 274,684
Stockholders' equity:
Preferred Stock - Series A-3,8513,839
Preferred Stock - Series B-219221
Preferred Stock - SBLF8,947--

Common Stock, no par value; authorized 2,000,000 shares;
issued and outstanding 876,596 shares on 9/30/11,
864,976 on 12/31/10 and 9/30/2010

9,6169,3819,381
Unearned stock awards(225)--
Retained earnings8,1568,2558,107
Accumulated other comprehensive income 759 261 797
Total stockholders' equity 27,253 21,967 22,345
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$351,157 $295,567$297,029
SBT Bancorp, Inc
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except for per share amounts)
For the quarter endedFor the nine months ended
9/30/20119/30/20109/30/20119/30/2010
Interest and dividend income:
Interest and fees on loans$2,500$2,619$7,436$7,679
Investment securities4164381,2501,379
Federal funds sold and overnight deposits 30 11 69 21
Total interest and dividend income 2,946 3,068 8,755 9,079
Interest expense:
Deposits3834461,1801,346
Repurchase agreements 7 10 21 31
Total interest expense 390 456 1,201 1,377
Net interest and dividend income2,5562,6127,5547,702
Provision for loan losses 165 180 330 605
Net interest and dividend income after
provision for loan losses
2,3912,4327,2247,097
Noninterest income:
Service charges on deposit accounts129116377386
Gain on sales of available-for-sale securities115-384-
Other service charges and fees148166424484
Increase in cash surrender value
of life insurance policies
4142120125
Gain on loans sold11493215101
Investment services fees and commissions363513981
Other income 26 52 49 75
Total noninterest income 609 504 1,708 1,252
Noninterest expense:
Salaries and employee benefits1,3971,2324,2123,507
Premises and equipment3313591,0231,068
Advertising and promotions14097357289
Forms and supplies423613599
Professional fees233178617541
Directors fees5333131114
Correspondent charges7378229216
Postage24266571
FDIC Assessment57100298297
Data Processing Fees107126328353
Other expenses 231 250 686 713
Total noninterest expense 2,688 2,515 8,081 7,268
Income before income taxes3124218511,081
Income tax provision 54 107 308 251
Net income$258$314$543$830
Net income available to common shareholders$83$249$239$636
Average shares outstanding, basic864,976864,976864,976864,976
Earnings per common share, basic$0.10$0.29$0.28$0.74
Average shares outstanding, assuming dilution870,803865,363867,149865,311
Earnings per common share, assuming dilution$0.10$0.29$0.28$0.74

Contributing Sources