SBT Bancorp, Inc. Reports Second Quarter 2010 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--SBT Bancorp, Inc., (OTCBB: SBTB), holding company for Simsbury Bank & Trust Company, today announced net income of $273,000 for the second quarter of 2010, compared to $221,000 for the second quarter of 2009, an increase of 24%. Net income available to common shareholders after preferred dividends was $209,000, or $0.24 per diluted share, for the second quarter of 2010, compared to $157,000, or $0.18 per diluted share, for the second quarter of 2009, an increase of 33%.

“Our customer focus remains the foundation of our success as it enables us to build shareholder value with an attractive, low-cost, relationship based deposit mix; a relatively low-risk mortgage, consumer and commercial loan portfolio; and a strong capital position.”

Key items for the quarter include:

• Diluted earnings per share increased by 33%.
• Total revenues increased by 16%.
• Total loans outstanding increased by 15%.
• Core deposits increased by 17%.

• Taxable equivalent net interest margin increased by 47 basis points, from 3.54% to 4.01%.
• Loan loss reserves were maintained at 1.13% of total loans outstanding.
• Capital ratios remained well above regulatory standards for a “well capitalized” bank.

“SBT Bancorp experienced another good quarter of growth in loans, deposits, revenues and earnings,” said SBT Bancorp President and CEO, Martin J. Geitz. “Our customer focus remains the foundation of our success as it enables us to build shareholder value with an attractive, low-cost, relationship based deposit mix; a relatively low-risk mortgage, consumer and commercial loan portfolio; and a strong capital position.”

For the six months ended June 30, 2010, net income amounted to $516,000, or $0.45 per diluted share. This compares to net income of $367,000, or $0.35 per diluted share, for the six months ended June 30, 2009. Total assets were $275 million on June 30, 2010 compared to $266 million on June 30, 2009, an increase of $9 million or 3%.

Total revenues, consisting of net interest and dividend income plus noninterest income, were $2,981,000 in the second quarter compared to $2,559,000 a year ago, an increase of 16%. Net interest and dividend income increased by $445,000, or 21%. This increase was driven by a 3% growth in the balance sheet and a 47 basis point increase in the Company’s taxable equivalent net interest margin. For the six months ended June 30, 2010 total revenues were $5,836,000 compared to $4,856,000 for the six months ended June 30, 2009, an increase of 20%.

The Company’s taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 4.01% for the second quarter of 2010, compared to 3.54% for the second quarter of 2009. The primary cause of this increase was a much lower cost of funds. Core deposits grew rapidly during this period, replacing higher-cost time deposits.

Total non-interest expenses for the second quarter were $2,431,000, an increase of $256,000 or 12% over the second quarter of 2009. Salaries and employee benefit expenses and data processing expenses increased during the second quarter of 2010 compared to the second quarter of 2009. Premises and equipment expenses as well as forms and supplies expenses declined in the second quarter of 2010 compared to the second quarter of 2009. For the six months ended June 30, 2010 total non-interest expenses were $4,751,000 compared to $4,214,000 for the six months ended June 30, 2009, an increase of 13%.

On June 30, 2010, loans outstanding were $205 million, an increase of $26 million, or 15%, over a year ago. With a loan loss provision of $200,000 during the quarter, the Company’s allowance for loan losses at June 30, 2010 was 1.13% of total loans. The profile of the Company’s loan portfolio remains relatively low-risk. The Company had non-accrual loans totaling $2.9 million equal to 1.41% of total loans, on June 30, 2010. Loans 30 days or more delinquent, excluding non-accrual loans, totaled $278,000, or 0.14% of total loans.

Total deposits on June 30, 2010 were $249 million, an increase of $7 million or 3% over a year ago. Core deposits (Demand, Savings and NOW accounts) increased by $26 million or 17% while Time Deposits decreased by $19 million. At quarter-end, 20% of total deposits were in non-interest bearing demand accounts, 50% were in low-cost savings and NOW accounts, and 30% were in time deposits.

Capital levels for the Simsbury Bank & Trust Company remain well in excess of those required to meet the regulatory “well-capitalized” designation.

Capital Ratios 6/30/10
	Simsbury Bank & Trust Company	Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio	7.48%	5.00%
Tier 1 Risk-Based Capital Ratio	12.20%	6.00%
Total Risk-Based Capital Ratio	13.45%	10.00%

SBT Bancorp Inc.’s wholly owned subsidiary, Simsbury Bank & Trust Company, is an independent, locally-controlled, customer-friendly commercial bank for businesses and consumers. The Bank has approximately $275 million in assets. The Bank serves customers through full-service offices in Avon, Bloomfield, Granby and Simsbury, 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 Bank’s wholly-owned subsidiary, SBT Investment Services, Inc., offers securities and insurance products through LPL Financial and its affiliates, Member FINRA/SIPC. SBT Bancorp, Inc. 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., 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
Condensed Consolidated Balance Sheets
(Dollars in thousands, except for per share amounts)
	6/30/2010		12/31/2009		6/30/2009
	(unaudited)				(unaudited)
ASSETS
Cash and due from banks	$	8,357	$	8,212	$	13,011
Interest-bearing deposits with Federal Reserve Bank of Boston		2,448		4,945		-
Interest-bearing deposits with the Federal Home Loan Bank		4		163		55
Federal funds sold		78		2,416		7,870
Money market mutual funds		336		1,353		8,882
Cash and cash equivalents		11,223		17,089		29,818
Interest-bearing time deposits with other bank		5,581		5,488		5,398
Investments in available-for-sale securities (at fair value)		45,739		50,011		45,507
Federal Home Loan Bank stock, at cost		660		631		631
Loans outstanding		205,044		193,515		178,559
Less allowance for loan losses		2,307		2,211		2,132
Loans, net		202,737		191,304		176,427
Premises and equipment		597		684		747
Accrued interest receivable		981		977		921
Bank owned life insurance		3,929		3,846		3,759
Other assets		3,517		3,709		2,639
Total other assets		9,024		9,216		8,066
TOTAL ASSETS	$	274,964	$	273,739	$	265,847
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits	$	48,986	$	43,887	$	40,513
Savings and NOW deposits		125,838		124,482		108,505
Time deposits		74,658		82,077		93,898
Total deposits		249,482		250,446		242,916
Securities sold under agreements to repurchase	$	2,609	$	913	$	757
Other liabilities		964		968		1,096
Total liabilities		253,055		252,327		244,769
Stockholders' equity:
Preferred Stock - Series A		3,828		3,805		3,781
Preferred Stock - Series B		222		225		228
Common Stock, no par value; authorized 2,000,000 shares; issued and outstanding 864,976 shares on 6/30/10, 12/31/09, and 6/30/09		9,381		9,372		9,358
Retained earnings		7,961		7,782		7,766
Accumulated other comprehensive income (loss)		517		228		(55	)
Total stockholders' equity		21,909		21,412		21,078
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	274,964	$	273,739	$	265,847

SBT Bancorp, Inc
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except for per share amounts)
	For the quarter ended				For the six months ended
	6/30/2010		6/30/2009		6/30/2010		6/30/2009
Interest and dividend income:
Interest and fees on loans	$	2,559	$	2,399	$	5,061	$	4,807
Investment securities		470		478		940		900
Federal funds sold and overnight deposits		5		4		9		9
Total interest and dividend income		3,034		2,881		6,010		5,716
Interest expense:
Deposits		427		729		900		1,544
Repurchase agreements		11		1		21		4
Federal Home Loan Bank advances		-		-		-		7
Total interest expense		438		730		921		1,555
Net interest and dividend income		2,596		2,151		5,089		4,161
Provision for loan losses		200		78		425		130
Net interest and dividend income after provision for loan losses		2,396		2,073		4,664		4,031
Noninterest income:
Service charges on deposit accounts		139		134		270		236
Other service charges and fees		164		148		318		268
Increase in cash surrender value of life insurance policies		41		42		83		55
Gain on loans sold		8		40		8		43
Investment services fees and commissions		23		17		46		47
Other income		10		27		22		46
Total noninterest income		385		408		747		695
Noninterest expense:
Salaries and employee benefits		1,189		1,022		2,275		2,069
Premises and equipment		340		363		709		736
Advertising and promotions		97		99		192		179
Forms and supplies		29		48		63		88
Professional fees		161		162		363		270
Directors fees		33		33		81		66
Correspondent charges		73		73		138		139
Postage		21		24		45		49
FDIC assessment		100		100		196		155
Data processing		110		36		227		72
Other expenses		278		215		462		391
Total noninterest expense		2,431		2,175		4,751		4,214
Income before income taxes		350		306		660		512
Income tax provision		77		85		144		145
Net income	$	273	$	221	$	516	$	367
Net income available to common shareholders	$	209	$	157	$	387	$	300
Average shares outstanding, basic		864,976		864,976		864,976		864,976
Earnings per common share, basic	$	0.24	$	0.18	$	0.45	$	0.35
Average shares outstanding, assuming dilution		865,376		864,976		865,283		864,976
Earnings per common share, assuming dilution	$	0.24	$	0.18	$	0.45	$	0.35