SIMSBURY, Conn.--(BUSINESS WIRE)--SBT Bancorp, Inc. (the “Company”), (OTC Pink: SBTB), holding company for The Simsbury Bank & Trust Company, Inc. (the “Bank”), today announced net income of $934 thousand or $0.69 basic and $0.68 diluted earnings per share for the quarter ended March 31, 2018, compared to net income of $502 thousand or $0.37 basic and diluted earnings per share for the prior year’s first quarter.
“Last year, Simsbury Bank identified and began the implementation of a range of initiatives to increase revenues and manage expenses,” said Simsbury Bank President & CEO Martin J. Geitz. “We are very pleased that these initiatives have led to a second consecutive quarter of significantly improved earnings. Our strategic focus on increasing the Bank’s commercial banking activities, with particular focus on family owned businesses, continues to progress.”
Total revenue increased $284 thousand, or 6.8%, in the three months ended March 31, 2018 as compared to the three months ended March 31, 2017, primarily due to higher rates in the Bank’s loan portfolio. Year over year, noninterest expenses decreased $24 thousand due principally to a decrease in data processing fees of $37 thousand, occupancy expenses of $33 thousand and other noninterest expenses of $50 thousand. These were offset by an increase in advertising and promotions of $86 thousand and equipment expenses of $27 thousand. Deposit balances for the period ended March 31, 2018 increased 9.3% ($40 million) from the prior year end of March 31, 2017.
Key highlights for quarter ended March 31, 2018 compared to quarter ended March 31, 2017 included:
- Net income increased $432 thousand, or 86.1%.
- Total revenue, consisting of net interest and dividend income plus noninterest income, increased $284 thousand, or 6.8%.
- Net interest and dividend income increased 6.8% to $3.8 million.
- Provision for loan losses totaled $25 thousand, a decrease of $200 thousand compared to the quarter ended March 31, 2017. The allowance for loan losses at March 31, 2018 was 1.04% of total gross loans compared to 0.95% at March 31, 2017.
- Service charges on deposit accounts for the three months ended March 31, 2018 increased $45 thousand, or 48.9%, compared to the three months ended March 31, 2017, primarily driven by increases in overdraft fees related to the implementation of an overdraft privilege program in the fourth quarter of 2017.
- Commercial loan balances increased $1.3 million, or 0.7%, to $189.1 million compared to March 31, 2017.
- Total deposits increased $39.6 million, or 9.3%, to $467 million, driven by increases in savings and NOW deposits of $40.0 million, and demand deposits of $6.0 million, partially offset by a decrease in time deposits of $6.4 million.
- Income tax expenses increased $101 thousand related to higher pre-tax earnings.
The Company’s allowance for loan losses at March 31, 2018 was 1.04% of total gross loans compared to 0.95% at March 31, 2017. The Company had non-accrual loans totaling $1.4 million, or 0.35%, of total loans on March 31, 2018, compared to non-accrual loans totaling $3.5 million, or 0.87%, of total loans a year ago. Total non-accrual and delinquent loans on March 31, 2018 was 1.17% of loans outstanding compared to 0.99% on March 31, 2017.
Total deposits on March 31, 2018 were $467 million, an increase of $39.6 million, or 9.3%, over a year ago. At the period end, 29% of total deposits were in non-interest bearing demand accounts, 58% were in low-cost savings, money market and NOW accounts and 13% were in time deposits.
For the three months ended March 31, 2018, total net revenues, consisting of net interest and dividend income plus noninterest income, were $4.8 million compared to $4.2 million for the same period in 2017, an increase of $284 thousand, or 6.8%, above the prior year’s first quarter. Net interest and dividend income increased $110 thousand, or 4.1%, primarily driven by a $214 thousand, or 5.9%, increase in interest and fees on loans and a $130 thousand increase in interest on federal funds sold and overnight deposits. The increase was partially offset by increased interest expense on deposits of $119 thousand. Noninterest income increased by $44 thousand, or 6.9%, primarily due to an increase in service charges on deposit accounts of $45 thousand and an increase in other income of $20 thousand.
The Company’s year-to-date 2018 taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.14% compared to 2.99% for the comparable 2017 period. The Company’s yield on earning assets increased 18 basis points to 3.56% and the cost of funds increased 5 basis points to 0.60%, primarily driven by a 10 basis point increase in deposit interest expense.
Total noninterest expense for the first quarter 2018 was $3.3 million, a decrease of $24 thousand compared to the first quarter of 2017 primarily driven by decreases in data processing expenses and occupancy expenses.
Capital levels for The Simsbury Bank & Trust Company on March 31, 2018 remain above the regulatory “well-capitalized” designation. Capital ratios are calculated under Basel III rules.
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Capital Ratios
March 31, 2018 |
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| Simsbury Bank & Trust Company | Regulatory Standard For Well-Capitalized | |||||||
| Tier 1 Leverage Capital Ratio | 7.76% | 5.00% | ||||||
| Tier 1 Risk-Based Capital Ratio | 11.16% | 8.00% | ||||||
| Total Risk-Based Capital Ratio | 12.31% | 10.00% | ||||||
| Common Equity Tier 1 Risk-Based Capital Ratio | 11.16% | 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.
| SBT Bancorp, Inc. and Subsidiary | ||||||||||||||||||
| Consolidated Balance Sheets | ||||||||||||||||||
| March 31, 2018, December 31, 2017 and March 31, 2017 | ||||||||||||||||||
| (Dollars in thousands, except for share amounts) | ||||||||||||||||||
| 3/31/2018 | 12/31/2017 | 3/31/2017 | ||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||
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ASSETS |
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| Cash and due from banks | 12,816 | 13,066 | 8,251 | |||||||||||||||
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Interest-bearing deposits with Federal Reserve Bank of Boston and Federal Home Loan Bank |
42,056 | 23,853 | 11,586 | |||||||||||||||
| Money Market Mutual Funds | 44 | 388 | 634 | |||||||||||||||
| Federal funds sold | 500 | 185 | 157 | |||||||||||||||
| Cash and cash equivalents | 55,416 | 37,492 | 20,628 | |||||||||||||||
| Certificates of Deposit | 1,250 | 1,250 | 1,250 | |||||||||||||||
| Investments in available-for-sale securities (at fair value) | 47,730 | 51,656 | 59,665 | |||||||||||||||
| Federal Home Loan Bank stock, at cost | 903 | 903 | 2,187 | |||||||||||||||
| Loans held-for-sale | 1,211 | 2,259 | 747 | |||||||||||||||
| Loans outstanding | 393,354 | 396,413 | 407,095 | |||||||||||||||
| Less: Allowance for loan losses | 4,099 | 4,088 | 3,869 | |||||||||||||||
| Loans, net | 389,255 | 392,325 | 403,226 | |||||||||||||||
| Premises and equipment, net | 1,782 | 1,863 | 1,841 | |||||||||||||||
| Accrued interest receivable | 1,221 | 1,402 | 1,222 | |||||||||||||||
| Other real estate owned | 192 | 192 | 570 | |||||||||||||||
| Bank owned life insurance | 9,428 | 9,370 | 9,191 | |||||||||||||||
| Other assets | 5,528 | 5,313 | 5,208 | |||||||||||||||
| Total other assets | 18,151 | 18,140 | 18,032 | |||||||||||||||
| TOTAL ASSETS | $ | 513,916 | $ | 504,025 | $ | 505,735 | ||||||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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| Deposits: | ||||||||||||||||||
| Demand deposits | $ | 136,988 | $ | 143,635 | $ | 130,982 | ||||||||||||
| Savings and NOW deposits | 268,493 | 247,251 | 228,491 | |||||||||||||||
| Time deposits | 61,119 | 66,514 | 67,568 | |||||||||||||||
| Total deposits | 466,600 | 457,400 | 427,041 | |||||||||||||||
| Securities sold under agreements to repurchase | 3,120 | 2,449 | 2,425 | |||||||||||||||
| Federal Home Loan Bank advances | 2,318 | 2,318 | 36,318 | |||||||||||||||
| Long-term subordinated debt | 7,288 | 7,281 | 7,259 | |||||||||||||||
| Other liabilities | 2,345 | 2,358 | 1,924 | |||||||||||||||
| Total liabilities | 481,671 | 471,806 | 474,967 | |||||||||||||||
| Stockholders' equity: | ||||||||||||||||||
| Common stock, no par value; authorized 2,000,000 shares; | ||||||||||||||||||
| issued and outstanding, 1,381,840 shares and 1,381,426 shares, respectively, at | ||||||||||||||||||
| March 31, 2018; 1,373,532 shares and 1,373,118 shares, respectively, at | ||||||||||||||||||
| December 31, 2017, and 1,372,823 shares and 1,372,409 shares, respectively, at March 31, 2017 | 19,434 | 19,442 | 19,146 | |||||||||||||||
| Retained earnings | 14,380 | 13,648 | 12,330 | |||||||||||||||
| Treasury stock, 414 shares | (7 | ) | (7 | ) | (7 | ) | ||||||||||||
| Unearned compensation- restricted stock awards | (369 | ) | (420 | ) | (258 | ) | ||||||||||||
| Accumulated other comprehensive loss | (1,193 | ) | (444 | ) | (443 | ) | ||||||||||||
| Total stockholders' equity | 32,245 | 32,219 | 30,768 | |||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 513,916 | $ | 504,025 | $ | 505,735 | ||||||||||||
| SBT Bancorp, Inc. and Subsidiary | |||||||||||||
| Consolidated Statements of Income | |||||||||||||
| (Unaudited) | |||||||||||||
| (Dollars in thousands, except for share and per share amounts) | |||||||||||||
| For the quarter ended | |||||||||||||
| 3/31/2018 | 3/31/2017 | ||||||||||||
| Interest and dividend income: | |||||||||||||
| Interest and fees on loans | $ | 3,872 | $ | 3,658 | |||||||||
| Investment securities | 284 | 338 | |||||||||||
| Federal funds sold and overnight deposits | 160 | 30 | |||||||||||
| Total interest and dividend income | 4,316 | 4,026 | |||||||||||
| Interest expense: | |||||||||||||
| Deposits | 384 | 265 | |||||||||||
| Repurchase agreements | 2 | 2 | |||||||||||
| Long-term subordinated debt | 134 | 134 | |||||||||||
| Federal Home Loan Bank advances | - | 69 | |||||||||||
| Total interest expense | 520 | 470 | |||||||||||
| Net interest and dividend income | 3,796 | 3,556 | |||||||||||
| Provision for loan losses | 25 | 250 | |||||||||||
| Net interest and dividend income after | |||||||||||||
| provision for loan losses | 3,771 | 3,306 | |||||||||||
| Noninterest income: | |||||||||||||
| Service charges on deposit accounts | 137 | 92 | |||||||||||
| (Loss) gain on available-for-sale securities | (1 | ) | (1 | ) | |||||||||
| Other service charges and fees | 183 | 189 | |||||||||||
| Increase in cash surrender value of life insurance policies | |||||||||||||
| 58 | 61 | ||||||||||||
| Mortgage banking activities, net | 230 | 242 | |||||||||||
| Investment services fees and commissions | 29 | 29 | |||||||||||
| Other income | 43 | 23 | |||||||||||
| Total noninterest income | 679 | 635 | |||||||||||
| Noninterest expense: | |||||||||||||
| Salaries and employee benefits | 1,685 | 1,693 | |||||||||||
| Occupancy expense | 350 | 383 | |||||||||||
| Equipment expense | 136 | 109 | |||||||||||
| Advertising and promotions | 187 | 101 | |||||||||||
| Forms and supplies | 30 | 26 | |||||||||||
| Professional fees | 182 | 200 | |||||||||||
| Directors' fees | 70 | 58 | |||||||||||
| Correspondent charges | 74 | 66 | |||||||||||
| FDIC Assessment | 93 | 111 | |||||||||||
| Data Processing Fees | 192 | 229 | |||||||||||
| Internet banking costs | 47 | 44 | |||||||||||
| Other expenses | 263 | 313 | |||||||||||
| Total noninterest expense | 3,309 | 3,333 | |||||||||||
| Income before income taxes | 1,141 | 608 | |||||||||||
| Income tax provision | 207 | 106 | |||||||||||
| Net income | $ | 934 | $ | 502 | |||||||||
| Net income available to common stockholders | $ | 934 | $ | 502 | |||||||||
| Average shares outstanding, basic | 1,363,802 | 1,358,142 | |||||||||||
| Earnings per common share, basic | $ | 0.69 | $ | 0.37 | |||||||||
| Average shares outstanding, assuming dilution | 1,366,589 | 1,360,776 | |||||||||||
| Earnings per common share, assuming dilution | $ | 0.68 | $ | 0.37 | |||||||||
