SBT Bancorp (SBTB) 8-K SBT Bancorp, Inc. Reports First Quarter 2009 Results

Exhibit 99.1

SBT Bancorp, Inc. Reports First Quarter 2009 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--May 4, 2009--SBT Bancorp, Inc., (OTCBB: SBTB), holding company for The Simsbury Bank & Trust Company, today announced net income of $146,000 or $0.17 per diluted share for the first quarter of 2009, compared to $127,000 or $0.15 per diluted share for the first quarter of 2008. Total assets were $260 million on March 31, 2009 compared to $220 million on March 31, 2008, an increase of $40 million or 18%.

On March 31, 2009, loans outstanding were $181 million, an increase of $14 million, or 8%, over a year ago. With a loan loss provision of $52,000 during the quarter, the Company’s allowance for loan losses at March 31, 2009 was 1.14% of total loans. The profile of the Company’s loan portfolio remains relatively low-risk. On March 31, 2009, 71% of total loans were conventionally underwritten residential mortgages and consumer home equity lines and loans. The Company had non-accrual loans totaling $911,000, equal to 0.50% of total loans, on March 31, 2009. Loans 30 days or more delinquent totaled $2.0 million, or 1.12% of total loans. The Company’s exposure to commercial real estate loans is relatively conservative. Total exposure to builder and land development loans and non-owner occupied commercial real estate was $13.8 million on March 31, 2009, equal to 8% of total loans and 66% of total capital.

Total deposits on March 31, 2009 were $237 million, an increase of $38 million or 19% over a year ago. Core deposits (Demand, Savings and NOW accounts) increased by $13 million or 10% and Time Deposits increased by $25 million or 38%. At quarter-end, 15% of total deposits were in non-interest bearing demand accounts, 47% were in low-cost savings and NOW accounts, and 38% were in time deposits.

Total revenues, consisting of net interest and dividend income plus noninterest income, were $2,297,000 in the first quarter compared to $2,187,000 a year ago, an increase of 5%. Net interest and dividend income increased by $120,000, or 6%. This increase was driven by the 18% growth in the balance sheet. Income from fees, services, and other sources (noninterest income) decreased by $10,000, or 3%. A $14,000 increase in investment services income was offset by a decline in service charge income.

The Company’s taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.49% for the first quarter of 2009, compared to 3.93% for the first quarter of 2008. The primary cause of this decline was the much lower level of interest rates in the first quarter of 2009 compared to the first quarter of 2008. Over this past year, the Prime Rate has dropped from 6.50% in January of 2008 to its current level of 3.25%.

Total non-interest expense for the first quarter increased by $149,000, or 8%, compared to a year earlier. The majority of this increase was in professional fees and other expenses, which together increased by a total of $141,000. Legal fees and FDIC insurance premiums were the individual categories that experienced the largest increases. Premises and equipment expense in the first quarter of 2009 declined in comparison to the first quarter of 2008 due to the Company’s market delivery network restructuring completed in 2008.

On March 27, 2009 the Company raised $4 million in Tier 1 capital through a preferred stock issuance to the U.S. Treasury through its Capital Purchase Program. Capital levels for the Simsbury Bank & Trust Company remain well in excess of those required to meet the regulatory “well-capitalized” designation.

Capital Ratios 3/31/09
	The Simsbury Bank & Trust Company	Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio	8.26%	5.00%
Tier 1 Risk-Based Capital Ratio	12.60%	6.00%
Total Risk-Based Capital Ratio	13.85%	10.00%

“Despite a continuation through the first quarter of the economic slowdown that began over a year ago, deposit and loan growth at the Simsbury Bank has been strong,” said Martin J. Geitz, The Simsbury Bank & Trust Company President & CEO. “In the past three months alone, deposits have grown by $16 million, or 7%, a clear indication that Simsbury Bank’s market area views it as a strong, vibrant, well-capitalized banking partner during this time of great economic uncertainty. The very low level of short-term interest rates, including bank prime lending rates, continues to influence earnings at all financial institutions. Though we have seen an increase in loan delinquencies over the past several months, the overall quality of our loan portfolio remains excellent. Through this difficult economic period, our mission remains the same. We continue to focus on increasing shareholder value by 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 $260 million in assets. The Bank serves customers through full-service offices in Avon, Bloomfield, Granby and Simsbury Connecticut; a Business Office in Canton, 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’s wholly-owned subsidiary, SBT Investment Services, Inc., offers securities and insurance products through LPL Financial and its affiliates, Member FINRA/SIPC. 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.

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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except for per share amounts)
						3/31/2009			12/31/2008			3/31/2008
					(Unaudited)						(Unaudited)
ASSETS
	Cash and due from banks				$	11,490		$	11,392		$	11,600
	Interest-bearing deposits with Federal Home Loan Bank					271			116			3,462
	Federal funds sold					10,107			1,800			11,938
	Money market mutual funds					9,537			3,027			87
		Cash and cash equivalents				31,405			16,335			27,087
	Interest-bearing time deposits with other banks					5,355			7,320			-
	Investments in available-for-sale securities (at fair value)					35,363			32,997			22,376
	Federal Home Loan Bank Stock, at cost					631			631			631
	Loans outstanding					181,259			180,091			166,672
		Less allowance for loan losses				2,061			2,017			2,009
				Loans, net		179,198			178,074			164,663
	Premises and equipment					796			846			1,154
	Accrued interest receivable					889			836			741
	Bank owned life insurance					3,717			1,204			1,842
	Other assets					2,579			2,513			1,552
		Total other assets				7,981			5,399			5,289
				TOTAL ASSETS	$	259,933		$	240,756		$	220,046
LIABILITIES AND STOCKHOLDERS' EQUITY
	Deposits
		Demand deposits			$	36,814		$	38,288		$	39,611
		Savings and NOW deposits				110,399			98,264			94,768
		Time deposits				90,014			84,327			65,144
			Total deposits			237,227			220,879			199,523
	Federal Home Loan Bank advance					-			1,000			-
	Securities sold under agreements to repurchase					723			577			2,104
	Other liabilities					1,074			1,454			1,078
			Total liabilities			239,024			223,910			202,705
Stockholder's equity:
	Preferred Stock					3,770			-			-
	Warrant Preferred Stock					230			-			-
	Common stock, no par value; authorized 2,000,000 shares;
		issued and outstanding 864,976 shares on 3/31/09 and 12/31/08;
		851,896 on 3/31/08				9,343			9,328			9,018
	Retained earnings					7,688			7,543			8,730
	Accumulated other comprehensive loss					(122	)		(25	)		(407	)
			Total stockholders' equity			20,909			16,846			17,341
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	259,933		$	240,756		$	220,046

SBT BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except for per share amounts)
			For the Quarter Ended
				3/31/2009		12/31/2008			3/31/2008
Interest and dividend income
	Interest and fees on loans		$	2,408	$	2,484		$	2,394
	Investment securities			422		292			316
	Federal funds sold and overnight deposits			5		19			41
		Total interest and dividend income		2,835		2,795			2,751
Interest expense
	Deposits			815		774			848
	Repurchase agreements			3		4			11
	Federal Home Loan Bank advances			7		14			2
		Total interest expense		825		792			861
		Net interest and dividend income		2,010		2,003			1,890
Provision for loan losses				52		200			100
	Net interest and dividend income
	after provision for loan losses			1,958		1,803			1,790
Noninterest income
	Service charges on deposit accounts			102		116			113
	Write-down of available-for-sale securities			-		(87	)		-
	Other service charges and fees			120		140			130
	Increase in cash surrender value
		of life insurance policies		13		12			24
	Gain on loans sold			3		-			-
	Investment services fees and commissions			30		16			16
	Other income			19		9			14
		Total noninterest income		287		206			297
Noninterest expense
	Salaries and employee benefits			1,047		1,141			1,031
	Premises and equipment			373		406			409
	Impairment of operating lease			-		299			-
	Advertising and promotions			80		105			64
	Forms and supplies			40		34			38
	Professional fees			108		211			28
	Directors fees			33		45			33
	Correspondent charges			66		68			53
	Postage			25		28			28
	Other expenses			267		337			206
		Total noninterest expense		2,039		2,674			1,890
	Income (loss) before income taxes			206		(665	)		197
Income tax provision (benefit)				60		(951	)		70
Net income			$	146	$	286		$	127
Average shares outstanding, basic				864,976		864,976			851,028
Net income per share, basic			$	0.17	$	0.33		$	0.15
Average shares outstanding, assuming dilution				864,976		865,276			859,006
Net income per share, assuming dilution			$	0.17	$	0.33		$	0.15

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