SBT Bancorp (SBTB) 8-K SBT Bancorp, Inc. Reports First Quarter 2008 Results

Exhibit 99.1

SBT Bancorp, Inc. Reports First Quarter 2008 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--SBT Bancorp, Inc., (OTCBB: SBTB), holding company for The Simsbury Bank & Trust Company, today announced net income of $127,000 or $0.15 per diluted share for the first quarter of 2008, compared to $182,000 or $0.21 per diluted share for the first quarter of 2007. Total assets were $220 million on March 31, 2008 compared to $214 million on March 31, 2007.

Following five consecutive quarters of increased earnings, the Company’s first quarter 2008 earnings were lower compared to the first quarter of 2007. The decrease in earnings was primarily due to an increase in the provision for loan losses, in recognition of the slowing economy’s potential impact on the Company’s loan portfolio, and a decline in net interest and dividend income brought about by a rapid decrease in interest rates by the Federal Reserve Board.

On March 31, 2008, loans outstanding were $167 million, an increase of $11 million, or 7%, over a year ago. With a loan loss provision of $100,000 during the quarter, the Company’s allowance for loan losses at March 31, 2008 was 1.21% of total loans.

Core deposits (Demand, Savings, and NOW accounts) grew by $7 million or 5% over the past twelve months. Total deposits ended the quarter at $200 million, an increase of $5 million, or 3%, over a year ago.

Total revenues, consisting of net interest and dividend income plus non-interest income, were $2,187,000 in the first quarter compared to $2,259,000 a year ago, a decrease of 3%. Net interest and dividend income decreased by $54 thousand, or 3%. Income from fees, services and other sources (non-interest income) decreased by $18 thousand, or 6%.

The Company’s taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) decreased by 21 basis points from 4.14% in the fourth quarter of 2007 to 3.93% in the first quarter of 2008. The margin remained flat in relation to the first quarter of 2007 margin of 3.94%.

Total non-interest expenses for the first quarter decreased by $114 thousand, or 6%, compared to a year earlier, primarily due to a decrease in salaries and benefits and professional fees.

“We are very pleased with the steady growth in both loans and core deposits during the first quarter. Many seeking residential mortgages are finding Simsbury Bank to be a convenient and competitive source of financing. Our commercial loan business also continues to grow, though some of our customers are feeling the effects of the slower residential development market,” said Martin J. Geitz, The Simsbury Bank & Trust Company President & CEO. “While we have no exposure to sub-prime loans in our loan portfolio, we did add $100,000 to our loan loss reserves, as a prudent measure in a slowing economic environment. Our overall asset quality and our loan loss reserve of 1.21% of loans compares very well to our peer banks. The recent decline by more than 3.00% in short-term interest rates, including bank prime lending rates, has influenced earnings at all financial institutions. In this difficult environment, we will continue to focus on building profitable banking relationships, diversifying our sources of revenue, and serving our customers’ full range of financial services needs.”

The Simsbury Bank & Trust Company is an independent, locally-controlled, customer-friendly commercial bank for businesses and consumers; the Bank has approximately $220 million in assets. The Bank serves customers through full-service offices in Avon, Bloomfield, Canton, Granby and Simsbury, Connecticut, SBT Online Internet banking at simsburybank.com, free ATM transactions at 2,800 machines throughout the northeastern U.S. via the SUM program in addition to thousands of ATM locations world-wide, and 24 hour telephone banking. The Bank offers investment services through its wholly-owned subsidiary, SBT Investment Services, Inc. The stock of the Bank’s parent company, SBT Bancorp, Inc., is traded over-the-counter under the ticker symbol of OTCBB: SBTB. Visit the Bank’s website at www.simsburybank.com.

SBT BANCORP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
	3/31/2008			12/31/2007			3/31/2007
	(Unaudited)						(Unaudited)
ASSETS
Cash and due from banks	$	11,600		$	13,424		$	9,546
Interest-bearing deposits with Federal Home Loan Bank		3,462			26			7
Federal funds sold		11,938			2,300			8,600
Money market mutual funds		87			4			31
Cash and cash equivalents		27,087			15,754			18,184
Interest-bearing time deposits with other bank		-			-			110
Investments in available for sale securities (at fair value)		22,376			24,871			34,863
Federal Home Loan Bank Stock, at cost		631			631			599
Loans held-for-sale		-			-			-
Loans outstanding		166,672			165,690			155,449
Less allowance for loan losses		2,009			1,925			1,690
Loans, net		164,663			163,765			153,759
Premises and equipment		1,154			1,223			1,467
Accrued interest receivable		741			808			829
Bank owned life insurance		1,842			1,818			2,865
Other assets		1,552			1,520			1,506
Total other assets		5,289			5,369			6,667
TOTAL ASSETS	$	220,046		$	210,390		$	214,182
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand deposits	$	39,611		$	40,196		$	36,907
Savings and NOW deposits		94,768			83,444			90,593
Time deposits		65,144			63,166			67,508
Total deposits		199,523			186,806			195,008
Federal Home Loan Bank advance		-			2,000			-
Securities sold under agreements to repurchase		2,104			1,363			1,548
Due to Broker		-			1,433			-
Other liabilities		1,078			1,470			1,095
Total liabilities		202,705			193,072			197,651
Stockholder's equity:
Common stock, no par value; authorized 2,000,000 shares; issued and outstanding 851,896 shares on 3/31/08; 850,896 shares on 12/31/07; 848,459 shares on 03/31/07.		9,018			8,975			8,756
Retained earnings		8,730			8,603			8,019
Accumulated other comprehensive loss		(407	)		(260	)		(244	)
Total shareholders' equity		17,341			17,318			16,531
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	220,046		$	210,390		$	214,182

SBT BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except for per share amounts)
	For the quarter ended
		3/31/2008		12/31/2007			3/31/2007
Interest and dividend income
Interest and fees on loans	$	2,394	$	2,453		$	2,387
Investment securities		316		338			419
Federal funds sold and overnight deposits		41		28			72
Total interest and dividend income		2,751		2,819			2,878
Interest expense
Deposits		848		837			897
Repurchase agreements		11		11			7
Federal Home Loan Bank advances		2		14			30
Total interest expense		861		862			934
Net interest and dividend income		1,890		1,957			1,944
Provision for loan losses		100		250			-
Net interest and dividend income
after provision for loan losses		1,790		1,707			1,944
Noninterest income
Service charges on deposit accounts		113		116			98
Loss on sale of available for sale securities		-		(314	)		-
Other service charges and fees		130		132			118
Increase in cash surrender value of life insurance policies		24		2			37
BOLI death benefit income		-		613			-
Loss on loans sold		-		(1	)		-
Investment services fees and commissions		16		45			56
Other income		14		10			6
Total noninterest income		297		603			315
Noninterest expense
Salaries and employee benefits		1,031		1,045			1,059
Premises and equipment		409		378			372
Advertising and promotions		64		77			76
Forms and supplies		38		26			46
Professional fees		28		74			109
Directors fees		33		36			37
Correspondent charges		53		48			42
Postage		28		25			24
Other expenses		206		224			239
Total noninterest expense		1,890		1,933			2,004
Income before taxes		197		377			255
Income tax provision		70		(108	)		73
Net income	$	127	$	485		$	182
Average shares outstanding, basic		851,028		850,896			847,413
Net income per share, basic	$	0.15	$	0.57		$	0.21
Average shares outstanding, assuming dilution		859,006		859,128			858,195
Net income per share, assuming dilution	$	0.15	$	0.56		$	0.21

CONTACT:
The Simsbury Bank & Trust Company
Anthony F. Bisceglio, 860-408-5493
EVP & CFO
Fax: 860-408-4679
abisceglio@simsburybank.com