SIMSBURY, CT. – July 30, 2019 – SBT Bancorp, Inc. (the “Company”), (OTC Pink: SBTB), holding company for The Simsbury Bank & Trust Company, Inc. (the “Bank”), today announced net income of $618 thousand or $0.45 basic and $0.45 diluted earnings per share for the quarter ended June 30, 2019, compared to net income of $1.01 million or $0.73 basic and $0.73 diluted earnings per share for the prior year’s second quarter. Net income for the three months was impacted by one-time merger related expenses and a write-down on an asset held for sale. Excluding one-time merger related expenses and the write-down, net income would have been $1.08 million or $0.78 basic and $0.78 diluted earnings per share for the quarter ended June 30, 2019. There was minimal change in total revenue in the three months ended June 30, 2019 as compared to the three months ended June 30, 2018, with increases in mortgage banking activities of $31 thousand and gain on sale of investments of $89 thousand offset by a decrease in net interest income of $141 thousand.

On March 21, 2019, Liberty Bank, headquartered in Middletown, CT and the Company jointly announced that they had entered into a definitive agreement for the merger of the Company and the Bank, with and into Liberty Bank. The transaction was approved by the shareholders of the Company and received customary regulatory approvals, including approvals from the State of Connecticut Department of Banking and the Federal Deposit Insurance Corporation. The transaction is expected to be consummated in October of 2019.

“We are pleased with our earnings before one-time expenses for the quarter as we and our Liberty Bank colleagues are working closely to ensure a seamless merger integration for our many customers early in the fourth quarter of 2019” said Simsbury Bank President and CEO Martin J. Geitz.

Year over year, noninterest expenses increased $540 thousand due primarily to a write-down of an asset of $298 thousand as well as merger related professional services of $200 thousand, and other merger related expenses of $23 thousand. These items were partially offset by a decrease in salaries and benefits of $27 thousand and equipment expenses of $33 thousand.

Key highlights for quarter ended June 30, 2019 compared to quarter ended June 30, 2018 included:

  • Book value increased $2.98 or 12.5% as compared to June 30, 2018.
  • Net interest margin increased to 3.41% due to increased yields on loans and fed funds, slightly offset by an increase in the cost of deposits.
  • Total revenue, consisting of net interest and dividend income plus noninterest income, increased by $27 thousand, or 0.6%.
  • Gain on Sale of Investments increased by $89 thousand.
  • Provision for loan losses totaled $25 thousand, a decrease of $5 thousand compared to the quarter ended June 30, 2018.
  • Total deposits decreased $14.3 million, or 3.3%, to $425 million, due primarily to a decrease in Savings and NOW deposits of $11.1 million.
  • As of June 30, 2019, 44% of total deposits were in non-interest bearing demand accounts, 43% were in low-cost savings, money market and NOW accounts and 14% were in time deposits.
  • The allowance for loan losses at June 30, 2019 was 1.00% of total gross loans compared to 1.13% at June 30, 2018.

The Company’s allowance for loan losses at June 30, 2019 was 1.00% of total gross loans compared to 1.13% at June 30, 2018. The Company had non-accrual loans totaling $4.2 million, or 1.11%, of total loans on June 30, 2019, compared to non-accrual loans totaling $0.9 million, or 0.24%, of total loans a year ago. Total non-accrual and delinquent loans on June 30, 2019 was 1.19% of loans outstanding compared to 0.92% on June 30, 2018.

Total deposits on June 30, 2019 were $425 million, a decrease of $14.3 million, or 3.3%, below a year ago due primarily to a decrease in savings and NOW deposits. At the period end, 44% of total deposits were in non-interest bearing demand accounts, 43% were in low-cost savings, money market and NOW accounts and 14% were in time deposits.

For the three months ended June 30, 2019, total net revenues, consisting of net interest and dividend income plus noninterest income, were $4.7 million compared to $4.7 million for the same period in 2018. Net interest and dividend income decreased $141 thousand, primarily driven by a $65 thousand decrease in interest income on investments offset by a $24 thousand increase in interest and fees on loans and a $22 thousand increase on funds sold and overnight deposits. The decrease was also impacted by increased interest expense on deposits of $123 thousand. Noninterest income increased by $114 thousand, primarily due to a gain on sale of securities of $88 thousand, mortgage banking activities of $31 thousand and other service charges and fees of $21 thousand.

The Company’s year-to-date 2019 taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.41% compared to 3.38% for the comparable 2018 period. The Company’s yield on earning assets increased 15 basis points to 3.93% and the cost of funds increased 21 basis points to 0.79%, primarily driven by a 20 basis point increase in deposit interest expense.

Capital levels for The Simsbury Bank & Trust Company on June 30, 2019 remain above the regulatory “well-capitalized” designation. Capital ratios are calculated under Basel III rules.

Capital Ratios

June 30, 2019

Simsbury Bank & Trust Company Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio  9.14% 5.00%
Tier 1 Risk-Based Capital Ratio 12.36% 8.00%
Total Risk-Based Capital Ratio 13.43% 10.00%
Common Equity Tier 1 Risk-Based Capital Ratio 12.36% 6.50%

 

Simsbury Bank is a Central Connecticut based independent, community bank for businesses and consumers. Simsbury Bank Home Loans is a division of Simsbury Bank serving the home financing needs of consumers. 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., whose stock is traded on the OTC Pink marketplace under the ticker symbol of 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.

Q2 2019 Balance Sheet

Q2 2019 Income Statement

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