SBT Bancorp (SBTB) 8-K SBT Bancorp, Inc. Reports Second Quarter 2012 Results

Exhibit 99.1

SBT Bancorp, Inc. Reports Second Quarter 2012 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--July 24, 2012--SBT Bancorp, Inc., (OTCBB: SBTB), holding company for Simsbury Bank & Trust Company, today announced net income of $453,000 or $0.49 per diluted share for the second quarter of 2012, compared to $198,000 or $0.15 per diluted share for the second quarter of 2011.

For the six months ended June 30, 2012, net income amounted to $934,000, or $0.96 per diluted share. This compares to net income of $285,000 or $0.18 per diluted share for six months ended June 30, 2011. Total assets on June 30, 2012 were $340 million.

Key financial highlights for the second quarter of 2012 compared to the second quarter of 2011 include earnings growth, favorable asset quality trends, and a well capitalized regulatory capital position:

• Quarterly net income increased by $255 thousand or 129%
• Second quarter earnings per share increased by $0.34, from $0.15 to $0.49 per diluted common share
• Non-interest income increased by $373 thousand or 65%
• Net interest and dividend income increased by $114 thousand or 5%
• Asset quality remained very favorable with total non-accrual loans and loans 30 or more days past due decreasing to 0.44% of loans outstanding on June 30, 2012 from 1.17% of loans outstanding on June 30, 2011
• The Bank’s Total Risk Based Capital ratio ended the second quarter of 2012 at 14.99%

“Strong revenue growth produced solid second quarter earnings for SBT Bancorp,” stated SBT Bancorp President and CEO, Martin J. Geitz. “Our asset quality continues to be excellent, with total loan delinquency remaining well below 1.00% of total loans at quarter end. We remain focused on growing the company’s revenue and building value for our shareholders.”

Total loans outstanding on June 30, 2012 were $223 million, an increase of $13 million or 6% over a year ago. Average loan balances for the quarter ending June 30, 2012 increased by $14 million or 7% compared to average loan balances for the quarter ending June 30, 2011. Residential mortgage loan average balances increased $6.4 million or 7% over last year’s second quarter. Commercial loan average balances increased $5.2 million or 10%. Consumer loan average balances increased $2.5 million or 4%. The profile of the Company’s loan portfolio remains relatively low-risk. Allowance for loan losses at June 30, 2012 was 1.10% of total loans. The Company had non-accrual loans of $0.8 million equal to 0.38% of total loans on June 30, 2012 compared to non-accrual loans of $2.1 million or 1.00% of total loans a year ago. Total delinquent loans decreased from 1.17% of loans outstanding on June 30, 2011 to 0.44% of loans outstanding on June 30, 2012.

Total deposits on June 30, 2012 were $308 million, a decrease of $1.6 million compared to total deposits a year ago. Prior year quarter-end, June 30, 2011, total deposits included a business checking account short-term deposit of $22 million that was deposited in late June 2011 and was withdrawn in early July 2011. Excluding this prior year quarter-end anomaly, total deposits for the quarter ending June 30, 2012 increased by $20 million or 7%. This growth was all in Core deposits (Demand, Savings and NOW accounts). Compared to June 30, 2011, demand deposits, excluding the prior year quarter-end anomaly, increased $8 million or 12%, savings and NOW deposits increased $14 million or 10%, and time deposits decreased by $1.5 million or 2%. At quarter end, 24% of total deposits were in non-interest bearing demand accounts, 52% were in low-cost savings and NOW accounts, and 24% were in time deposits.

Total revenues, consisting of net interest and dividend income plus noninterest income, were $3,616,000 in the second quarter compared to $3,129,000 a year ago, an increase of $487,000 or 16%. Net interest and dividend income increased by $114,000 or 5%, while noninterest income increased by $373,000 or 65% primarily due to an increase in the gain on loans sold.

The Company’s taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.34% for the second quarter of 2012, compared to 3.45% for the second quarter of 2011. The Company’s cost of funds declined 23 basis points while the yield on interest earning assets decreased 31 basis points during the second quarter of 2012, compared to the second quarter of 2011.

Total noninterest expenses increased by $205,000 or 7% to $2,946,000 for the second quarter 2012 compared to $2,741,000 in the second quarter 2011. This increase was mainly due to expenses related to growing the Bank’s revenues. Salaries and employee benefit expenses increased by $201,000. Advertising and promotion expenses increased by $66,000. Offsetting a portion of these expense increases were decreases in expenses for professional fees and FDIC assessment fees totaling $118,000.

Capital levels for the Simsbury Bank & Trust Company on June 30, 2012 were above those required to meet the regulatory “well-capitalized” designation.

Simsbury Bank is an independent, local bank for consumers and businesses. The Bank has approximately $340 million in assets. The Bank serves customers through full-service offices in Avon, Bloomfield, Granby and Simsbury, Connecticut; mortgage loan originators throughout Connecticut and a mortgage loan production office in Canton, Connecticut; Simsbury Bank Online internet banking at simsburybank.com; free ATM transactions at hundreds of 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. Simsbury Bank is wholly-owned by publicly traded SBT Bancorp, Inc. Its stock 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 for per share amounts)
		6/30/2012			12/31/2011			6/30/2011
	(unaudited)						(unaudited)
ASSETS
Cash and due from banks	$	8,101		$	19,217		$	7,381
Interest-bearing deposits with Federal Reserve Bank of Boston		17,737			65,291			38,939
Interest-bearing deposits with the Federal Home Loan Bank		2			1			2
Federal funds sold		2,314			2,024			4,138
Money market mutual funds		348			5,346			9,344
Cash and cash equivalents		28,502			91,879			59,804
Interest-bearing time deposits with other bank		3,715			4,728			4,641
Investments in available-for-sale securities (at fair value)		75,709			56,859			53,857
Federal Home Loan Bank stock, at cost		589			660			660
Loans outstanding		222,632			216,553			209,607
Less allowance for loan losses		2,439			2,469			2,314
Loans, net		220,193			214,084			207,293
Premises and equipment		840			679			520
Other real estate owned		372			-			-
Accrued interest receivable		977			964			967
Bank owned life insurance		6,268			4,173			4,093
Other assets		2,652			3,013			3,141
Total other assets		11,109			8,829			8,721
TOTAL ASSETS	$	339,817		$	377,039		$	334,976
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits	$	72,906		$	103,778		$	87,266
Savings and NOW deposits		159,887			164,318			145,627
Time deposits		74,757			76,681			76,256
Total deposits		307,550			344,777			309,149
Securities sold under agreements to repurchase		2,673			3,548			2,581
Due to broker		-			-			-
Other liabilities		1,186			1,271			897
Total liabilities		311,409			349,596			312,627
Stockholders' equity:
Preferred Stock - Series A		-			-			3,874
Preferred Stock - Series B		-			-			216
Preferred Stock - Series C		8,958			8,952			-
Common Stock, no par value; authorized 2,000,000 shares;  issued and outstanding 876,926 shares on 6/30/12, 876,394  shares on 12/31/11, and 864,976 shares on 6/30/11, respectively		9,631			9,620			9,381
Treasury Stock, 414 shares		(7	)		(7	)		-
Unearned compensation restricted stock awards		(163	)		(199	)		-
Retained earnings		8,991			8,360			8,203
Accumulated other comprehensive income		998			717			675
Total stockholders' equity		28,408			27,443			22,349
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	339,817		$	377,039		$	334,976

SBT Bancorp, Inc
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except for per share amounts)
	For the quarter ended				For the six months ended
		6/30/2012		6/30/2011		6/30/2012		6/30/2011
Interest and dividend income:
Interest and fees on loans	$	2,433	$	2,480	$	4,935	$	4,955
Investment securities		469		437		883		835
Federal funds sold and overnight deposits		20		22		58		39
Total interest and dividend income		2,922		2,939		5,876		5,829
Interest expense:
Deposits		253		379		521		797
Repurchase agreements		1		6		2		14
Total interest expense		254		385		523		811
Net interest and dividend income		2,668		2,554		5,353		5,018
Provision for loan losses		60		165		150		165
Net interest and dividend income after
provision for loan losses		2,608		2,389		5,203		4,853
Noninterest income:
Service charges on deposit accounts		118		134		240		247
Gain on sales of available-for-sale securities		24		162		47		269
Other service charges and fees		169		145		323		276
Increase in cash surrender value of life insurance policies		55		39		95		79
Gain on loans sold		533		54		882		101
Investment services fees and commissions		48		37		71		103
Other income		1		4		1		4
Total noninterest income		948		575		1,659		1,079
Noninterest expense:
Salaries and employee benefits		1,603		1,402		2,990		2,815
Premises and equipment		324		330		663		692
Advertising and promotions		183		117		332		217
Forms and supplies		53		41		96		93
Professional fees		174		226		319		384
Directors' fees		56		39		113		78
Correspondent charges		85		80		184		156
Postage		20		20		47		41
FDIC Assessment		46		112		69		241
Data Processing Fees		124		112		238		221
Other expenses		278		262		541		455
Total noninterest expense		2,946		2,741		5,592		5,393
Income before income taxes		610		223		1,270		539
Income tax provision		157		25		336		254
Net income	$	453	$	198	$	934	$	285
Net income available to common shareholders	$	423	$	133	$	839	$	156
Average shares outstanding, basic		854,078		864,976		859,657		864,976
Earnings per common share, basic	$	0.49	$	0.15	$	0.98	$	0.18
Average shares outstanding, assuming dilution		865,284		865,264		871,113		865,282
Earnings per common share, assuming dilution	$	0.49	$	0.15	$	0.96	$	0.18

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