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

Exhibit 99.1

SBT Bancorp, Inc. Reports Third Quarter 2009 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--November 6, 2009--SBT Bancorp, Inc. (OTCBB: SBTB), holding company for The Simsbury Bank & Trust Company, today announced third quarter 2009 net income of $160,000 and net income available to common shareholders of $95,000 or $0.11 per diluted share. This compares to a net loss of $1,556,000 or $1.80 per diluted share for the third quarter of 2008. For the nine months ended September 30, 2009, net income amounted to $527,000 and net income available to common shareholders equaled $395,000 or $0.46 per diluted share. This compares to a net loss of $931,000 or $1.09 per diluted share for the nine months ended September 30, 2008.

Key items for the quarter include:

• Net income increased substantially compared to the third quarter of 2008 because of non-recurring items discussed below that impacted 2008 earnings.
• Excluding the non-recurring items, net income for the quarter increased by $48,000 or 43% and diluted earnings per share declined by $0.02 compared to 2008 third quarter. Year to date, excluding non-recurring items, net income increased by $118,000 or 29% and diluted earnings per share declined by $0.01.
• Strong growth in both retail and municipal deposits resulted in a 30% increase in total deposits compared to September 30, 2008.
• Loans outstanding grew to $195 million, an increase of $16 million, or 9%, compared to September 30, 2008.
• The loan portfolio experienced an increase in delinquencies during the quarter, but the overall quality of the loan portfolio remains very sound.
• The Company’s capital position remained very strong, with capital ratios well in excess of well-capitalized regulatory standards.

“The very strong deposit growth we have experienced over the past few quarters is a clear indication that Simsbury Bank is a strong and vibrant banking partner during this time of economic uncertainty,” said Martin J. Geitz, SBT Bancorp President & CEO. “Very low short-term interest rates, including bank prime lending rates, coupled with increasing loan delinquencies continue to negatively impact earnings at all financial institutions. Though we have seen an increase in loan delinquencies recently, the overall quality of our loan portfolio remains very sound. As we manage through this difficult economic period, we will 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 Company’s previous year’s net income was impacted by two major items: (1) non-recurring income of $328,000 for Bank Owned Life Insurance death benefits occurring in the quarter ending June 30, 2008 and (2) an other-than-temporary-impairment (“OTTI”) charge on Fannie Mae and Freddie Mac preferred stock of $1,668,000 in the quarter ending September 30, 2008. Excluding these items, third quarter 2008 net income and net income available to common shareholders would have been $112,000 or $0.13 per diluted share, and September 30, 2008 year to date net income and net income available to common shareholders would have been $409,000 or $0.47 per share. The following table compares 2009 to 2008 excluding these non-recurring items:

Excluding 2008 Non-Recurring Items
	For the Quarter Ended		Year to Date
	09/30/09	09/30/08	09/30/09	09/30/08
Net Income (000)	$160	$112	$527	$409
Income Available to Common Shareholders (000)	$95	$112	$395	$409
Diluted Income Per Share	$0.11	$0.13	$0.46	$0.47

On September 30, 2009, loans outstanding were $195 million, an increase of $16 million, over a year ago. Since September 30, 2008, commercial loans increased by 11% and residential mortgages by 12%. Mortgage loan growth does not reflect the $23 million in mortgages originated but sold as part of the Bank’s asset/liability management strategy. Sale of these mortgages resulted in a $17,000 contribution to fee income for the quarter and $60,000 year to date. The Company also purchased a $9.9 million pool of high quality, seasoned, short-term residential mortgage loans during the quarter. At September 30, 2009, loans 30 days or more past due, including non-performing loans, totaled $4.4 million, or 2.28% of total loans compared to $2.6 million, or 1.46% at June 30, 2009. Non-performing loans were $2.5 million, or 1.27% of total loans compared to $1.4 million at June 30, 2009, or 0.78% of loans. With a loan loss provision of $192,000 during the quarter, the Company’s allowance for loan losses at September 30, 2009 was $2.138 million or 1.10% of total loans compared to the June 30, 2009 total of $2.036 million or 1.14% of total loans. The Company has no foreclosed properties or Other Real Estate Owned (OREO) in its portfolio.

Core deposits (Demand, Savings, and NOW accounts) grew by $33 million or 24% over the past twelve months. Total deposits ended the quarter at $264 million, an increase of $61 million, or 30%, over a year ago. The Bank’s deposit mix continued to be favorable with 27% checking (Demand and Now accounts), 37% savings and 36% certificates of deposit contributing to a relatively low cost of funds of 1.19%. A seasonal inflow of municipal tax deposits contributed to the deposit increase.

The Company's taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) decreased by 15 basis points from 3.57% in the second quarter of 2009 to 3.42% in the third quarter of 2009. The margin declined by 70 basis points when compared to the third quarter of 2008.

Total revenues, consisting of net interest and dividend income plus non-interest income, were $2,752,000 in the third quarter of 2009. Revenues for the third quarter of 2008 were impacted by a non-recurring “OTTI” charge on Fannie Mae and Freddie Mac preferred stock of $1,668,000. Excluding this item, third quarter 2008 total revenues were $2,446,000. Compared to 2008, third quarter 2009 total revenues, excluding non-recurring items, increased by $306,000, or 13%. The primary contributor to revenue enhancement over this period was an increase in net interest income resulting from deposit, loan, and investment portfolio growth.

Total non-interest expenses for the third quarter were $2,367,000, an increase of $125,000 or 5% over the third quarter of 2008 primarily due to an increase in FDIC insurance premiums. Salary and benefit expenses decreased by $139,000 or 13% compared to the third quarter of 2008. Premises and equipment expenses declined $143,000 or 28% compared to the third quarter of 2008.

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

Capital Ratios 09/30/09
	The Simsbury Bank & Trust Company	Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio	7.01%	5.00%
Tier 1 Risk-Based Capital Ratio	12.10%	6.00%
Total Risk-Based Capital Ratio	13.35%	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 $287 million in assets. The Bank serves customers through full-service offices in Avon, Bloomfield, 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; 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., 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 per share amounts)
					9/30/2009		12/31/2008			9/30/2008
					(Unaudited)					(Unaudited)
ASSETS
	Cash and due from banks				$	10,272	$	11,392		$	11,319
	Interest-bearing deposits with Federal Home Loan Bank					89		116			2,949
	Federal funds sold					10,213		1,800			8,985
	Money market mutual funds					3,329		3,027			27
		Cash and cash equivalents				23,903		16,335			23,280
	Interest-bearing time deposits with other bank					5,443		7,320			-
	Investments in available-for-sale securities (at fair value)					54,656		32,997			16,829
	Federal Home Loan Bank Stock, at cost					631		631			631
	Loans outstanding					195,349		180,091			179,608
		Less allowance for loan losses				2,138		2,017			1,822
				Loans, net		193,211		178,074			177,786
	Premises and equipment					705		846			910
	Accrued interest receivable					1,032		836			745
	Bank owned life insurance					3,803		1,204			1,192
	Due from broker					1,195		-			-
	Other assets					2,230		2,513			1,760
		Total other assets				8,965		5,399			4,607
				TOTAL ASSETS	$	286,809	$	240,756		$	223,133
LIABILITIES AND STOCKHOLDERS' EQUITY
	Deposits
		Demand deposits			$	40,011	$	38,288		$	37,418
		Savings and NOW deposits				131,049		98,264			100,880
		Time deposits				92,454		84,327			63,696
			Total deposits			263,514		220,879			201,994
	Federal Home Loan Bank advance					-		1,000			3,000
	Securities sold under agreements to repurchase					741		577			900
	Other liabilities					1,025		1,454			1,012
			Total liabilities			265,280		223,910			206,906
Stockholder's equity:
	Preferred Stock - Class A					3,793		-			-
	Preferred Stock - Class B					227		-			-
	Common stock, no par value; authorized 2,000,000 shares; issued and outstanding 864,976 shares on 9/30/09, 12/31/2008 and 9/30/2008					9,365		9,328			9,292
	Retained earnings					7,759		7,543			7,256
	Accumulated other comprehensive loss					385		(25	)		(321	)
			Total shareholders' equity			21,529		16,846			16,227
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	286,809	$	240,756		$	223,133

SBT BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except for per share amounts)
			For the quarter ended					For the nine months ended
			9/30/2009		9/30/2008			9/30/2009		9/30/2008
Interest and dividend income
	Interest and fees on loans		$	2,447	$	2,522		$	7,254	$	7,330
	Investment securities			528		228			1,428		813
	Federal funds sold and overnight deposits			12		41			21		126
		Total interest and dividend income		2,987		2,791			8,703		8,269
Interest expense
	Deposits			680		658			2,224		2,202
	Repurchase agreements			3		11			7		44
	Federal Home Loan Bank advances			-		2			7		4
		Total interest expense		683		671			2,238		2,250
		Net interest and dividend income		2,304		2,120			6,465		6,019
Provision for loan losses				192		50			322		250
	Net interest and dividend income after provision for loan losses			2,112		2,070			6,143		5,769
Noninterest income (charge)
	Service charges on deposit accounts			159		129			395		363
	Gain on sales of available for sale securities			40		-			40		10
	Write-downs of available for sale securities			-		(1,668	)		-		(1,668	)
	Other service charges and fees			145		154			413		436
	Increase in cash surrender value of life insurance policies			45		11			100		49
	BOLI death benefit income			-		-			-		328
	Gain on loans sold			17		-			60		-
	Investment services fees and commissions			27		20			74		66
	Other income			15		12			61		56
		Total noninterest income (charge)		448		(1,342	)		1,143		(360	)
Noninterest expense
	Salaries and employee benefits			964		1,103			3,033		3,144
	Premises and equipment			373		516			1,109		1,293
	Advertising and promotions			128		109			307		279
	Forms and supplies			50		35			138		118
	Professional fees			125		97			395		197
	Directors fees			33		34			99		101
	Correspondent charges			67		61			206		173
	Postage			28		20			77		78
	Other expenses			599		267			1,217		774
		Total noninterest expense		2,367		2,242			6,581		6,157
	Income (loss) before taxes			193		(1,514	)		705		(748	)
Income tax provision				33		42			178		183
Net income (loss)			$	160	$	(1,556	)	$	527	$	(931	)
Less: Preferred stock dividend and accretion			$	65	$	-		$	132	$	-
Net income (loss) available to common shareholders			$	95	$	(1,556	)	$	395	$	(931	)
Average shares outstanding, basic				864,976		864,976			864,976		858,369
Net income (loss) available per common share, basic			$	0.11	$	(1.80	)	$	0.46	$	(1.09	)
Average shares outstanding, assuming dilution				864,976		864,976			864,976		858,369
Net income (loss) available per common share, assuming dilution			$	0.11	$	(1.80	)	$	0.46	$	(1.09	)

CONTACT:
SBT Bancorp, Inc.
The Simsbury Bank & Trust Company
Anthony F. Bisceglio, 860-408-5493
EVP & CFO
860-408-4679 (fax)
abisceglio@simsburybank.com