SBT Bancorp (SBTB) 8-K SBT Bancorp, Inc. Reports Third Quarter 2015 Results

Exhibit 99.1

SBT Bancorp, Inc. Reports Third Quarter 2015 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--October 16, 2015--SBT Bancorp, Inc., (OTCQX: SBTB), holding company for The Simsbury Bank & Trust Company, Inc., today announced net income of $353,000 or $0.37 basic and diluted earnings per share for the quarter ended September 30, 2015, compared to a net income of $258,000 or $0.26 basic and diluted earnings per share, an increase of $0.11 diluted earnings per share compared to the prior year quarter. The increase in net income is mainly due to a $168,000 increase in mortgage banking activities, and a $121,000 increase in net interest and dividend income.

“The Bank showed strong growth as compared to September 30, 2014,” said Martin J. Geitz, President and Chief Executive Officer. “Commercial loan balances increased by $18.0 million or 21.3% since September 30, 2014. Performance of our mortgage unit continued to show improvement during the 2015 year.”

On October 15, 2015, SBT Bancorp, Inc. closed on the issuance of an unsecured subordinated term note in the aggregate principal amount of $7.5 million due October 1, 2025. The Company intends to use the net proceeds from the issuance to redeem a portion of the 9,000 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series C, that the Company issued to the United States Department of the Treasury as part of the Company’s participation in the Small Business Lending Fund program and to support the growth of the Company, including the Bank's expansion into the West Hartford, Connecticut market through the opening of a new branch office and the growth of the Bank’s loan portfolio, and for other general corporate purposes.

Key highlights for September 30, 2015 compared to September 30, 2014 included:

• Net loans grew $24.6 million or 8.8%.
• Commercial loan balances increased 21.3%.
• Total revenues for the quarter increased 10.4%.
• Residential mortgage banking activities income for the quarter increased 66%.
• Net interest margin of 2.97% for the quarter was 9 basis points higher compared to the prior year’s quarter.
• Total deposits decreased $1.3 million or 0.35%, driven by reductions in CDs ($5.1mm) and Money Market Accounts ($14.9mm), partially offset by increases in Checking Accounts ($15.4mm) and Savings Accounts ($3.3mm).
• Tangible book value per common share was $23.58 at September 30, 2015 compared to $21.98 per common share at September 30, 2014.
• The allowance for loan losses at September 30, 2015 was 0.94% of total loans.
• Return on average assets for the nine months ended September 30, 2015 was 0.34% compared to 0.15% for the nine months ended September 30, 2014.
• Return on equity for the nine months ended September 30, 2015 was 4.72% compared to 1.59% for the nine months ended September 30, 2014.

On September 30, 2015, loans outstanding were $307 million, an increase of $24.7 million, or 8.8% over a year ago. Commercial loans grew by $18.0 million or 21.3% and consumer loans grew by $1.5 million or 2.5%. Residential mortgage loans, including loans held for sale, increased by $4.6 million or 3.3% driven by an increase in jumbo mortgages which are being held in the portfolio.

The Company’s loan portfolio remains strong. The Company’s allowance for loan losses at September 30, 2015 was 0.94% of total loans. The Company had non-accrual loans totaling $4.0 million or 1.31% of total loans on September 30, 2015, compared to non-accrual loans totaling $1.9 million or 0.69% of total loans a year ago. The increase in non-accruals relates to placing a $1.1 million secured commercial borrowing in non-accrual status during the quarter. Total non-accrual and delinquent loans on September 30, 2015 was 1.50% of loans outstanding compared to 0.91% on September 30, 2014.

Total deposits on September 30, 2015 were $375 million, a decrease of $1.3 million or 0.35% over a year ago primarily due to a decrease in time deposits of $5.1 million and a $10.7 million decrease in savings and NOW deposits. These decreases were partially offset by an increase in demand deposits of $14.4 million. At quarter-end, 31% of total deposits were in non-interest bearing demand accounts, 53% were in low-cost savings, money market and NOW accounts and 16% were in time deposits.

For the third quarter 2015, total revenues, consisting of net interest and dividend income plus noninterest income, were $3.9 million compared to $3.5 million a year ago, an increase of $366,000 or 10.4%. Noninterest income increased by $245,000 or 36.2%, primarily due to an increase in mortgage banking activities of $168,000, partially offset by a reduction of deposit fee revenue of $21,000. For the nine months ended September 30, 2015, total revenues were $11.0 million compared to $10.3 million for the nine months ended September 30, 2014, an increase of $702,000 or 6.8%. Noninterest income increased by $473,000 or 26.2%, primarily due to an increase in mortgage banking activities of $458,000.

The Company’s year-to-date 2015 taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 3.01% compared to 2.97% for the 2014 year-to-date period. The Company’s yield on earning assets increased 2 basis points to 3.22%, while the cost of funds decreased 4 basis points to 0.29% for the nine months ended September 30, 2015 compared to the same period of 2014. The Company’s taxable-equivalent net interest margin for the three months ended September 30, 2015 was 2.97% compared to 2.88% for the three months ended September 30, 2014.

Total noninterest expense for the third quarter 2015 was $3.4 million, an increase of $209,000 or 6.6% above the third quarter of 2014. The increase was primarily driven by an increase in salary and benefits expense of $215,000, partially offset by decreases in occupancy expenses of $23,000 and a decrease in advertising and promotions expenses of $68,000. For the nine months ended September 30, 2015, total noninterest expense was $9.6 million, a decrease of $233,000 or 2.4% compared to the nine months ended September 30, 2014. The decrease was primarily driven by a reduction in salary and benefits expense of $78,000, a reduction of advertising and promotion of $96,000 and a reduction in FDIC assessment of $51,000. These reductions were partially offset by an increase in professional fees of $71,000.

Capital levels for The Simsbury Bank & Trust Company on September 30, 2015 were above those required to meet the regulatory “well-capitalized” designation. Capital ratios are calculated under Basel III rules, which became effective January 1, 2015.

Capital Ratios (estimated)
September 30, 2015
	Simsbury Bank & Trust Company	Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio	7.31%	5.00%
Tier 1 Risk-Based Capital Ratio	11.11%	8.00%
Total Risk-Based Capital Ratio	12.19%	10.00%
Common Equity Tier 1 Risk-Based Capital Ratio	11.11%	6.50%

Simsbury Bank is an independent, community bank for consumers and businesses based in Connecticut. Simsbury Bank Home Loans is a division of Simsbury Bank serving the home financing needs of consumers throughout Southern New England. Simsbury Bank is wholly-owned by publicly traded SBT Bancorp, Inc. Its stock is traded on the OTCQX marketplace under the ticker symbol of 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. and Subsidiary
Condensed Consolidated Balance Sheets
September 30, 2015, December 31, 2014 and September 30, 2014
(Dollars in thousands, except for share and per share amounts)
			9/30/2015			12/31/2014			9/30/2014
		(unaudited)						(unaudited)
ASSETS
	Cash and due from banks	$	7,313		$	10,118		$	8,535
	Interest-bearing deposits with Federal Reserve Bank of Boston
	and Federal Home Loan Bank		5,919			9,696			13,599
	Money market mutual funds		580			1			486
	Federal funds sold		346			5			53
	Cash and cash equivalents		14,158			19,820			22,673
	Investments in available-for-sale securities (at fair value)		71,816			83,805			85,051
	Federal Home Loan Bank stock, at cost		3,074			1,801			1,260
	Loans held-for-sale		6,892			5,374			7,140
	Loans outstanding		307,323			286,142			282,593
	Less allowance for loan losses		2,897			2,761			2,761
	Loans, net		304,426			283,381			279,832
	Premises and equipment		1,390			1,460			1,517
	Accrued interest receivable		1,045			1,095			1,020
	Other real estate owned		-			105			130
	Bank owned life insurance		7,338			7,184			7,130
	Other assets		5,021			4,815			4,613
	Total other assets		14,794			14,659			14,410
	TOTAL ASSETS	$	415,160		$	408,840		$	410,366
LIABILITIES AND STOCKHOLDERS' EQUITY
	Deposits:
	Demand deposits	$	115,105		$	117,261		$	100,685
	Savings and NOW deposits		201,170			177,158			211,843
	Time deposits		58,531			61,646			63,612
	Total deposits		374,806			356,065			376,140
	Securities sold under agreements to repurchase		2,722			3,921			3,845
	Federal Home Loan Bank advances		5,500			17,500			-
	Other liabilities		1,717			1,882			1,591
	Total liabilities		384,745			379,368			381,576
	Stockholders' equity:
	Preferred stock, senior non-cumulative perpetual, Series C, no par; 9,000
	shares issued and outstanding at September 30, 2015 and 2014
	and December 31, 2014; liquidation value of $1,000 per share		8,997			8,988			8,985
	Common stock, no par value; authorized 2,000,000 shares;
	issued and outstanding 908,660 shares and 908,246 shares, respectively,
	at 09/30/15 and 898,105 shares and 897,691 shares, respectively, at 12/31/14
	and 901,625 shares and 901,211 shares, respectively, at 09/30/14		10,333			10,127			10,116
	Retained earnings		11,135			10,549			10,345
	Treasury stock, 414 shares		(7	)		(7	)		(7	)
	Unearned compensation- restricted stock awards		(254	)		(207	)		(235	)
	Accumulated other comprehensive income (loss)		211			22			(414	)
	Total stockholders' equity		30,415			29,472			28,790
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	415,160		$	408,840		$	410,366

SBT Bancorp, Inc. and Subsidiary
Condensed Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except for share and per share amounts)
		For the quarter ended					For the nine months ended
			9/30/2015		9/30/2014			9/30/2015		9/30/2014
Interest and dividend income:
	Interest and fees on loans	$	2,748	$	2,590		$	8,057	$	7,733
	Investment securities		393		438			1,235		1,373
	Federal funds sold and overnight deposits		14		21			26		38
	Total interest and dividend income		3,155		3,049			9,318		9,144
Interest expense:
	Deposits		192		213			566		647
	Repurchase agreements		1		1			3		3
	Federal Home Loan Bank advances		8		2			35		9
	Total interest expense		201		216			604		659
	Net interest and dividend income		2,954		2,833			8,714		8,485
Provision for loan losses			65		25			145		55
	Net interest and dividend income after
	provision for loan losses		2,889		2,808			8,569		8,430
Noninterest income:
	Service charges on deposit accounts		98		119			303		353
	Gain (loss) on available-for-sale securities, net of writedowns		26		(1	)		93		96
	Other service charges and fees		208		173			561		560
	Increase in cash surrender value
	of life insurance policies		51		55			154		151
	Mortgage banking activities		422		254			866		408
	Investment services fees and commissions		48		43			159		172
	Other income		68		33			141		64
	Total noninterest income		921		676			2,277		1,804
Noninterest expense:
	Salaries and employee benefits		1,779		1,564			5,062		5,140
	Occupancy expense		340		363			1,046		1,030
	Equipment expense		104		112			306		340
	Advertising and promotions		109		177			365		461
	Forms and supplies		48		45			125		139
	Professional fees		196		167			448		377
	Directors' fees		66		65			180		196
	Correspondent charges		67		42			187		173
	FDIC assessment		78		80			234		285
	Data processing fees		198		170			531		490
	Other expenses		397		388			1,132		1,218
	Total noninterest expense		3,382		3,173			9,616		9,849
Income before income taxes			428		311			1,230		385
Income tax expense (benefit)			75		53			185		(66	)
Net income		$	353	$	258		$	1,045	$	451
Less: Preferred stock dividend and accretion		$	26	$	25		$	86	$	76
Net income available to common stockholders		$	327	$	233		$	959	$	375
Average shares outstanding, basic			890,190		883,998			889,473		882,158
Earnings per common share, basic		$	0.37	$	0.26		$	1.08	$	0.42
Average shares outstanding, assuming dilution			894,380		888,335			892,004		886,694
Earnings per common share, assuming dilution		$	0.37	$	0.26		$	1.08	$	0.42

CONTACT:
Simsbury Bank
Richard J. Sudol, 860-651-2057
860-408-4679 (fax)
SVP & CFO
rsudol@simsburybank.com