SBT Bancorp (SBTB) 8-K SBT Bancorp, Inc. Reports Third Quarter 2014 Results

Exhibit 99.1

SBT Bancorp, Inc. Reports Third Quarter 2014 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--October 30, 2014--SBT Bancorp, Inc., (OTCBB: SBTB), holding company for The Simsbury Bank & Trust Company, today announced net income of $258,000 or $0.26 basic and diluted earnings per share for the quarter ended September 30, 2014 compared to a net income of $115,000 or $0.10 basic and diluted earnings per share in the linked quarter. For the nine months ended September 30, 2014, net income amounted to $451,000 or $0.42 basic and diluted earnings per share. This compares to net income of $1,003,000 or $1.06 basic and $1.05 diluted earnings per share for the nine months ended September 30, 2013.

Net interest and dividend income for the nine months ended September 30, 2014 increased $335 thousand or 4.1% compared to nine months ending September 30, 2013. Total loans outstanding, including loans held-for-sale, amounted to $290 million, an increase of $12 million or 4.3% as compared to $278 million on September 30, 2013. Total assets on September 30, 2014 were $410 million compared to $407 million on September 30, 2013.

“The Bank showed strong loan and deposit growth as compared to September 30, 2013,” said Martin J. Geitz, President and Chief Executive Officer. “Commercial banking continues to grow, with commercial loan balances increasing by $7.1 million or 9.1% since September 30, 2013. Retail banking remains strong as evidenced by our deposit growth. Performance of our mortgage unit has showed some improvement during the third quarter, however, continues to be challenging. We experienced a significant increase in applications and closed purchase mortgages during the third quarter; however, the levels were still well below 2013’s levels. The launch of the wholesale mortgage origination channel has contributed incremental loan volume to our retail origination platform, and we expect measured improvement in the mortgage business contribution to earnings during the balance of the year.”

Key highlights for September 30, 2014 compared to September 30, 2013 included:

• Net loans, including loans held-for-sale, grew $11.9 million or 4.3%.
• Total asset growth of $3.4 million or 0.8%.
• Total deposits increased $12.3 million or 3.4% over the same period.
• Year-to-date net interest and dividend income increased $335 thousand or 4.1% compared to year-to-date September 30, 2013.
• Year-to-date 2014 net interest margin of 2.98% was 11 basis points lower compared to year-to-date September 30, 2013.
• Total loan delinquency (non-accrual and delinquent loans) decreased to 0.91% of total loans compared to the previous year’s 1.24%. Overall loan delinquency remains favorable to peers.
• The allowance for loan losses at September 30, 2014 was 0.98% of total loans.
• The Bank’s Total Risk Based Capital ratio remains strong, ending the third quarter of 2014 at 12.79%.

On September 30, 2014, loans outstanding, including loans held-for-sale, were $290 million, an increase of $11.9 million, or 4.3% over a year ago. Commercial loans grew by $7.1 million or 9.1%, residential mortgage loans, including loans held-for-sale, grew by $1.5 million or 1.1% and consumer loans grew by $3.4 million or 5.7%. Combined mortgage and consumer loan closings decreased by 46.6% during the third quarter 2014 as compared to the third quarter 2013 due to a 47.1% decrease in mortgage closings and a 71.3% decrease in consumer closings.

The Company’s loan portfolio remains strong. The Company’s allowance for loan losses at September 30, 2014 was 0.98 % of total loans. The Company had non-accrual loans totaling $1.9 million equal to 0.69% of total loans on September 30, 2014 compared to non-accrual loans totaling $2.9 million or 1.05% of total loans a year ago. Total non-accrual and delinquent loans on September 30, 2014 were 0.90% of loans outstanding compared to 1.24% on September 30, 2013.

Total deposits on September 30, 2014 were $376 million, an increase of $12.3 million or 3.4% over a year ago. At quarter-end, 27% of total deposits were in non-interest bearing demand accounts, 56% were in low-cost savings and NOW accounts and 17% were in time deposits.

For the third quarter 2014, total revenues, consisting of net interest and dividend income plus noninterest income, were $3,509,000 compared to $3,331,000 a year ago, an increase of $178,000 or 5.3%. Non-interest income increased by $181,000 or 37.2%, primarily due to an increase in gain on loans sold in the amount of $150,000. For the nine months ended September 30, 2014, total revenues were $10,289,000 compared to $10,657,000 for the nine months ended September 30, 2013, a decrease of $368,000. Over this period, net interest and dividend income increased by $335,000 while noninterest income decreased by $703,000 or 28.3%, primarily due to a decrease in the gain on loans sold in the amount of $821,000, offset slightly by an increase in other service charges and fees of $77,000.

The Company’s year-to-date 2014 taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 2.98% compared to 3.09% for year-to-date 2013. The Company’s yield on earning assets decreased 14 basis points to 3.20%, while the cost of funds remained the same at 0.33% for the nine months ended September 30, 2014 compared to the same period of 2013.

Total noninterest expense for the third quarter 2014 was $3,173,000, an increase of $13,000 or 0.4% above the third quarter of 2013. The $13,000 increase was primarily due to a $73,000 increase in the occupancy expenses, $43,000 due to an increase in the equipment expense and $33,000 due to an increase in professional fees. These increases were offset by a decrease in salary and employee benefits in the amount of $67,000 and a decrease in advertising and promotion expense of $58,000. For the nine months ended September 30, 2014, total noninterest expense was $9,849,000 compared to $9,200,000 for the nine months ended September 30, 2013, an increase of $649,000. This increase is mainly due to increases in salary and benefits of $52,000, occupancy and equipment expenses of $333,000, FDIC assessment of $166,000 and other expenses of $248,000. These increases were offset by a decrease in advertising expense of $132,000.

Capital levels for The Simsbury Bank & Trust Company on September 30, 2014 were above those required to meet the regulatory “well-capitalized” designation.

Capital Ratios September 30, 2014
	Simsbury Bank & Trust Company	Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio	6.78%	5.00%
Tier 1 Risk-Based Capital Ratio	11.67%	6.00%
Total Risk-Based Capital Ratio	12.79%	10.00%

Simsbury Bank is an independent, publicly owned community bank for consumers and businesses based in Central Connecticut’s Farmington Valley. Simsbury Bank’s parent company is SBT Bancorp, Inc. whose stock is traded under the ticker symbol OTCBB: SBTB. The Bank serves customers locally through branches in Avon, Bloomfield, Granby and Simsbury and regionally through mortgage and commercial bankers active throughout Southern New England. Simsbury Bank customers enjoy internet banking and mortgage services at, respectively, www.simsburybank.com and www.simsburybank.com/mortgages. Bank customers have free ATM access at thousands of machines across the country through the SUM program. The Bank offers financial planning, investment and insurance products through LPL Financial and its affiliates, member FINRA/SIPC.

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 Subsidairy
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except for per share amounts)
		For the quarter ended					For the nine months ended
			9/30/2014		9/30/2013			9/30/2014		9/30/2013
Interest and dividend income:
	Interest and fees on loans	$	2,599	$	2,541		$	7,753		$	7,195
	Investment securities		431		522			1,351			1,612
	Federal funds sold and overnight deposits		28		8			60			29
	Total interest and dividend income		3,058		3,071			9,164			8,836
Interest expense:
	Deposits		213		219			647			655
	Repurchase agreements		2		7			9			8
	Federal Home Loan Bank advances		1		-			3			3
	Total interest expense		216		226			659			666
	Net interest and dividend income		2,842		2,845			8,505			8,170
Provision for loan losses			25		120			55			230
	Net interest and dividend income after
	provision for loan losses		2,817		2,725			8,450			7,940
Noninterest income:
	Service charges on deposit accounts		119		118			353			368
	Gain on sales of available-for-sale securities		-		(6	)		103			98
	Other service charges and fees		173		116			556			479
	Increase in cash surrender value
	of life insurance policies		55		51			151			159
	Gain on loans sold		261		111			382			1,203
	Investment services fees and commissions		43		87			172			172
	Other income		16		9			67			8
	Total noninterest income		667		486			1,784			2,487
Noninterest expense:
	Salaries and employee benefits		1,564		1,631			5,140			5,088
	Occupancy expense		363		290			1,030			849
	Equipment expense		112		69			340			188
	Advertising and promotions		177		235			461			593
	Forms and supplies		45		42			139			109
	Professional fees		167		134			377			386
	Directors' fees		65		62			196			187
	Correspondent charges		42		77			173			242
	Postage		-		23			31			66
	FDIC Assessment		80		64			285			119
	Data Processing Fees		170		156			490			434
	Other expenses		388		377			1,187			939
	Total noninterest expense		3,173		3,160			9,849			9,200
Income before income taxes			311		51			385			1,227
Income tax provision (benefit)			53		(34	)		(66	)		224
Net income		$	258	$	85		$	451		$	1,003
Net income available to common stockholders		$	233	$	56		$	375		$	923
Average shares outstanding, basic			883,998		871,055			882,158			870,695
Earnings per common share, basic		$	0.26	$	0.06		$	0.42		$	1.06
Average shares outstanding, assuming dilution			888,335		877,916			886,694			876,185
Earnings per common share, assuming dilution		$	0.26	$	0.06		$	0.42		$	1.05

SBT Bancorp, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
September 30, 2014, December 31, 2013 and September 30, 2013
(In Thousands, Except Share Data)
		9/30/2014	12/31/2013	9/30/2013
		(unaudited)		(unaudited)
ASSETS
	Cash and due from banks	$ 8,535	$ 13,355	$ 10,238
	Interest-bearing deposits with Federal Reserve Bank of Boston
	and Federal Home Loan Bank	13,599	24,165	7,247
	Money market mutual funds	486	346	355
	Federal funds sold	53	724	36
	Cash and cash equivalents	22,673	38,590	17,876
	Interest-bearing time deposits with other bank	-	-	2,814
	Investments in available-for-sale securities (at fair value)	85,051	87,449	96,259
	Federal Home Loan Bank stock, at cost	1,260	2,196	1,807
	Loans held-for-sale	7,140	2,861	-
	Loans outstanding	282,593	279,667	277,800
	Less allowance for loan losses	2,761	2,792	2,764
	Loans, net	286,972	279,736	275,036
	Premises and equipment	1,517	1,618	1,590
	Accrued interest receivable	1,020	1,074	1,001
	Other real estate owned	130	-	117
	Bank owned life insurance	7,130	6,729	6,680
	Other assets	4,613	4,456	3,827
	Total other assets	14,410	13,877	13,215
	TOTAL ASSETS	$ 410,366	$ 421,848	$ 407,007
LIABILITIES AND STOCKHOLDERS' EQUITY
	Deposits:
	Demand deposits	$ 100,685	$ 116,015	$ 94,915
	Savings and NOW deposits	211,843	173,500	197,086
	Time deposits	63,612	68,989	71,814
	Total deposits	376,140	358,504	363,815
	Securities sold under agreements to repurchase	3,845	4,390	3,931
	Federal Home Loan Bank Advances	-	30,000	10,000
	Other liabilities	1,591	1,558	1,326
	Total liabilities	381,576	394,452	379,072
	Stockholders' equity:
	Preferred Stock, senior non-cumulative perpetual, Series C, no par; 9,000
	shares issued and outstanding at September 30, 2014 and December 31, 2013;
	liquidation value of $1,000 per share	8,985	8,976	8,973
	Common Stock, no par value; authorized 2,000,000 shares;
	issued and outstanding 901,625 shares and 901,211 shares, respectively,
	at 9/30/14 and 900,264 shares and 899,850 shares, respectively, at 12/31/13	10,116	10,136	9,929
	Retained earnings	10,345	10,347	10,366
	Treasury Stock, 414 shares	(7)	(7)	(7)
	Unearned compensation restricted stock awards	(235)	(401)	(251)
	Accumulated other comprehensive loss	(414)	(1,655)	(1,075)
	Total stockholders' equity	28,790	27,396	27,935
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 410,366	$ 421,848	$ 407,007

CONTACT:
Simsbury Bank
Richard J. Sudol, 860-408-5493
SVP & CFO
860-408-4679 (fax)
rsudol@simsburybank.com