SBT Bancorp, Inc. (SBTB: OTCQX U.S. Premier) | SBT Bancorp, Inc. Reports Fourth Quarter and Year End 2016 Results

OTC

SBT Bancorp, Inc. Reports Fourth Quarter and Year End 2016 Results

Jan 26, 2017

OTC Disclosure News Service

SBT Bancorp, Inc. (the “Company”), (OTCQX: SBTB), holding company for
The Simsbury Bank Trust Company, Inc. (the “Bank”), today announced
net income of $604 thousand or $0.45 basic and $0.45 diluted earnings
per share for the quarter ended December 31, 2016, compared to a net
income of $364 thousand or $0.30 basic and $0.30 diluted earnings per
share for the quarter ended December 31, 2015. Net income for the year
ended December 31, 2016 was $1.5 million or $1.10 basic and diluted
earnings per share compared to a net income of $1.4 million or $1.37
basic and $1.36 diluted earnings per share for the year-to-date period
ended December 31, 2015.

Net interest and dividend income for the fourth quarter increased $636
thousand or 20.9% as compared to the fourth quarter of 2015 due
principally to growth in the Bank’s commercial and consumer loan
portfolios. Gain on sale of mortgages increased 26.3% to $452 thousand
compared to the quarter ended December 31, 2015. Noninterest income
decreased $2 thousand compared to the quarter ended December 31, 2015,
and noninterest expense increased $94 thousand as the Bank continues to
invest in its three primary business lines of Commercial, Retail and
Mortgage Banking.

“We are very pleased to report significantly improved earnings for the
fourth quarter of 2016 resulting principally from commercial loan growth
and increase in gain on sale of mortgages,” said Simsbury Bank President
CEO Martin J. Geitz. “Our net income for the year ended December 31,
2016 increased $83 thousand (5.9%) over the prior year ended December
31, 2015. We were able to achieve this significant growth in income even
as we incurred increased costs related to the opening of our new branch
in West Hartford, interest on the subordinated debt issuance as part of
our capital raise in late 2015, the reorganization of our mortgage
business, and the replacement of all customer cards with EMV chip
enabled cards. Most of our balance sheet growth came from a 49.4%
increase in commercial loans since the end of the prior year as our
focus on serving the needs of privately owned businesses continues to
gain momentum.”

Key highlights for quarter ended December 31, 2016 compared to quarter
ended December 31, 2015 included:

  • Net Income increased 65.9%.
  • Total revenue, consisting of net interest and dividend income plus
    noninterest income, increased $634 thousand or 16.3%.
  • Net interest and dividend income increased 20.9% to $3.7 million.
  • Provision for loan losses totaled $305 thousand due primarily to loan
    growth. The allowance for loan losses at December 31, 2016 was 0.92%
    of total gross loans.
  • Gain on sale of mortgages increased $94 thousand, or 26.3%.
  • Net loans grew $81.8 million or 25.3%.
  • Commercial loan balances increased $58.8 million or 49.5% to $177.8
    million compared to December 31, 2015.
  • Consumer loans grew $16.8 million or 25.0% to $83.8 million driven
    primarily by the purchase of $18.8 million of refinanced student loans
    during the year.
  • Total deposits increased $41.1 million or 11.0% to $413.8 million,
    driven by increases in savings and NOW deposits of $33.1 million, and
    time deposits of $9.3 million, partially offset by a decrease in
    demand deposits of $1.2 million.

Key highlights for year ended December 31, 2016 compared to year ended
December 31, 2015 included:

  • Net Income increased 5.9%.
  • Total revenue, consisting of net interest and dividend income plus
    noninterest income, increased $1.9 million or 12.6% to $16.7 million.
  • Net interest and dividend income increased 15.2% to $13.6 million.
  • Provision for loan losses totaled $911 thousand due primarily to loan
    growth. The allowance for loan losses at December 31, 2016 was 0.92%
    of total gross loans.
  • Gain on sale of mortgages increased $337 thousand, or 25.4%.

The Company’s allowance for loan losses at December 31, 2016 was 0.92%
of total gross loans. The Company had non-accrual loans totaling $4.1
million or 0.99% of total loans on December 31, 2016, compared to
non-accrual loans totaling $4.1 million or 1.27% of total loans a year
ago. Total non-accrual and delinquent loans on December 31, 2016 was
1.26% of loans outstanding compared to 1.44% on December 31, 2015.

Total deposits on December 31, 2016 were $414 million, an increase of
$41.1 million or 11.0% over a year ago primarily due to an increase in
savings and NOW deposits of $33.1 million and a $9.3 million increase in
time deposit accounts. At year end, 33% of total deposits were in
non-interest bearing demand accounts, 51% were in low-cost savings,
money market and NOW accounts and 16% were in time deposits.

For the quarter ended December 31, 2016, total net revenues, consisting
of net interest and dividend income plus noninterest income, were $4.5
million compared to $3.9 million for the same period in 2015, an
increase of $634 thousand or 16.3% above the prior year’s fourth
quarter. Net interest and dividend income increased $636 thousand or
20.9% primarily driven by a $1.0 million, or 36.8%, increase in interest
and fees on loans. The increase was partially offset by increased
interest expense on deposits of $212 thousand primarily due to increases
in interest-bearing deposit balances. Noninterest income decreased by $2
thousand or 0.24%, primarily due to a decrease in mortgage servicing
activities of $83 thousand, and a decrease in gain on available-for-sale
securities of $40 thousand. These were partially offset by an increase
in gain on sale of mortgages of $94 thousand.

For the year ended December 31, 2016, total net revenues, consisting of
net interest and dividend income plus noninterest income, were $16.7
million compared to $14.9 million for the year ended December 31, 2015,
an increase of $1.9 million or 12.6% above the year ended December 31,
2015. Net interest and dividend income increased $1.8 million or 15.3%
primarily driven by a $2.8 million, or 25.6%, increase in interest and
fees on loans. The increase was partially offset by an increase in
interest expense on subordinated debt of $454 thousand and increased
interest expense on deposits of $266 thousand. Noninterest income
increased by $74 thousand or 2.4%, primarily due to an increase in gain
on sale of mortgage loans of $337 thousand and an increase in other
service charges and fees of $176 thousand. These were partially offset
by a decrease in income from mortgage loan servicing activities of $391
thousand. Mortgage loan servicing activities decreased $391 thousand
in-part due to a writedown related to the decline in the value of
mortgage servicing rights. Gain on sale of loans sold for the year ended
December 31, 2016 was $1.7 million compared to $1.3 million for the year
ended December 31, 2015.

The Company’s year-to-date 2016 taxable-equivalent net interest margin
(taxable-equivalent net interest and dividend income divided by average
earning assets) was 3.03% compared to 3.03% for the 2015 period. The
Company’s yield on earning assets increased 16 basis points to 3.37% and
the cost of funds increased 23 basis points to 0.50% The Company’s
taxable-equivalent margin for the three months ended December 31, 2016
was 3.14% compared to 3.09% for the three months ended December 31, 2015.

Total noninterest expense for the fourth quarter of 2016 was $3.4
million, an increase of $94 thousand or 2.8% above the fourth quarter of
2015. The increase was primarily driven by an increase in FDIC expense
of $48 thousand, occupancy costs of $36 thousand, and advertising and
promotions of $20 thousand. FDIC expenses increased due to the larger
asset and deposit base of the institution when compared to the fourth
quarter of 2015. These were partially offset by a decrease in data
processing fees of $35 thousand.

Total noninterest expense for the year ended December 31, 2016 was $14.1
million, an increase of $1.1 million or 8.7% above the comparable 2015
period. The increase was primarily driven by increases in salary and
benefits expense of $627 thousand, advertising and promotion costs of
$163 thousand, occupancy costs of $136 thousand, and data processing
fees of $63 thousand. These were partially offset by decreases in
professional fees of $92 thousand.

Capital levels for The Simsbury Bank Trust Company on December 31,
2016 remain above the regulatory “well-capitalized” designation. Capital
ratios are calculated under Basel III rules, which became effective
January 1, 2015.

 

Capital Ratios
December 31, 2016

 

 

 

 

 

Simsbury Bank
Trust Company

 

 

 

 

Regulatory Standard For
Well-Capitalized

Tier 1 Leverage Capital Ratio

 

 

 

 

7.46%

 

 

 

 

5.00%

Tier 1 Risk-Based Capital Ratio

 

 

 

 

10.65%

 

 

 

 

8.00%

Total Risk-Based Capital Ratio

 

 

 

 

11.72%

 

 

 

 

10.00%

Common Equity Tier 1 Risk-Based Capital Ratio

 

 

 

 

10.65%

 

 

 

 

6.50%

 

 

 

 

 

 

 

 

Simsbury Bank is an independent, community bank for consumers and
businesses based in Connecticut. Simsbury Bank Home Loans is a division
of Simsbury Bank serving the home financing needs of consumers
throughout Southern New England. Simsbury Bank is wholly-owned by
publicly traded SBT Bancorp, Inc. Its stock is traded on the OTCQX
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

Condensed Consolidated Balance Sheets

December 31, 2016 and December 31, 2015

 

(Dollars in thousands, except share data)

 

 

 

 

 

12/31/2016

12/31/2015

(unaudited)

ASSETS

Cash and due from banks

$

10,976

$

8,933

Interest-bearing deposits with Federal Reserve Bank of Boston

and Federal Home Loan Bank

9,786

19,795

Money market mutual funds

95

13

Federal funds sold

 

150

 

 

149

 

Cash and cash equivalents

21,007

28,890

 

Certificates of deposit

1,250

1,250

 

Investments in available-for-sale securities (at fair value)

58,728

71,517

Federal Home Loan Bank stock, at cost

2,896

2,047

 

Loans held-for-sale

2,801

2,167

 

Loans outstanding

409,152

326,723

Less allowance for loan losses

 

3,753

 

 

3,028

 

Loans, net

 

405,399

 

 

323,695

 

 

Premises and equipment, net

1,905

1,420

Accrued interest receivable

1,301

1,143

Bank owned life insurance

9,130

7,389

Other assets

 

5,582

 

 

5,262

 

Total other assets

 

17,918

 

 

15,214

 

 

 

TOTAL ASSETS

$

509,999

 

$

444,780

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits:

Demand deposits

$

134,341

$

135,580

Savings and NOW deposits

212,835

179,775

Time deposits

 

66,588

 

 

57,287

 

Total deposits

413,764

372,642

 

Securities sold under agreements to repurchase

2,694

1,915

Federal Home Loan Bank advances

54,058

31,500

Long-term subordinated debt

7,252

7,230

Other liabilities

 

1,944

 

 

1,751

 

Total liabilities

 

479,712

 

 

415,038

 

 

Stockholders’ equity:

Common stock, no par value; authorized 2,000,000 shares;

issued and outstanding 1,372,394 shares and 1,371,980 shares,
respectively, at

December 31, 2016; 1,360,591 shares and 1,360,177 shares,
respectively, at December 31, 2015

19,133

18,856

Retained earnings

12,017

11,288

Treasury stock, 414 shares

(7

)

(7

)

Unearned compensation- restricted stock awards

(293

)

(206

)

Accumulated other comprehensive loss

 

(563

)

 

(189

)

Total stockholders’ equity

 

30,287

 

 

29,742

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

509,999

 

$

444,780

 

 

 

SBT Bancorp, Inc. and Subsidiary

Condensed Consolidated Statements of Income

 

 

(Dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

For the quarter ended

For the twelve months ended

12/31/2016

12/31/2015

12/31/2016

12/31/2015

(unaudited)

(unaudited)

Interest and dividend income:

Interest and fees on loans

$

3,777

$

2,762

$

13,591

$

10,819

Investment securities

344

391

1,473

1,627

Federal funds sold and overnight deposits

 

15

 

 

13

 

81

 

 

38

Total interest and dividend income

 

4,136

 

 

3,166

 

15,145

 

 

12,484

 

Interest expense:

Deposits

261

49

881

615

Repurchase agreements

2

1

6

4

Interest on long-term subordinated debt

137

61

515

61

Federal Home Loan Bank advances

 

58

 

 

13

 

192

 

 

48

Total interest expense

 

458

 

 

124

 

1,594

 

 

728

 

Net interest and dividend income

3,678

3,042

13,551

11,756

 

Provision for loan losses

 

305

 

 

133

 

911

 

 

278

 

Net interest and dividend income after

provision for loan losses

 

3,373

 

 

2,909

 

12,640

 

 

11,478

 

Noninterest income:

Service charges on deposit accounts

101

97

379

400

Gain (loss) on available-for-sale securities, net of writedowns

(1

)

39

91

132

Other service charges and fees

211

208

945

769

Increase in cash surrender value

of life insurance policies

64

52

241

206

Mortgage loan servicing activities

(62

)

21

(378

)

13

Gain on sale of mortgages

452

358

1,666

1,329

Investment services fees and commissions

62

57

194

216

Other income

 

16

 

 

13

 

58

 

 

57

Total noninterest income

 

843

 

 

845

 

3,196

 

 

3,122

 

Noninterest expense:

Salaries and employee benefits

1,799

1,811

7,499

6,872

Occupancy expense

384

348

1,530

1,394

Equipment expense

102

93

420

399

Advertising and promotions

97

77

605

442

Forms and supplies

41

37

202

162

Professional fees

134

123

479

571

Directors’ fees

56

68

216

248

Correspondent charges

86

67

314

255

FDIC Assessment

126

78

349

312

Data Processing Fees

208

243

836

773

Internet banking costs

61

51

282

208

Other expenses

 

334

 

 

338

 

1,335

 

 

1,314

Total noninterest expense

 

3,428

 

 

3,334

 

14,067

 

 

12,950

 

Income before income taxes

788

420

1,769

1,650

Income tax provision

 

184

 

 

56

 

277

 

 

241

 

Net income

$

604

 

$

364

$

1,492

 

$

1,409

 

Less: Preferred stock dividend and accretion

$

 

$

22

$

 

$

108

 

Net income available to common stockholders

$

604

 

$

342

$

1,492

 

$

1,301

 

Average shares outstanding, basic

1,347,872

1,143,649

1,350,725

953,539

Earnings per common share, basic

$

0.45

 

$

0.30

$

1.10

 

$

1.37

 

Average shares outstanding, assuming dilution

1,357,070

1,148,399

1,359,265

956,614

Earnings per common share, assuming dilution

$

0.45

 

$

0.30

$

1.10

 

$

1.36

 

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