SBT Bancorp (SBTB) 8-K SBT Bancorp, Inc. Reports First Quarter 2017 Results

Exhibit 99.1

SBT Bancorp, Inc. Reports First Quarter 2017 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--April 28, 2017--SBT Bancorp, Inc. (the “Company”), (OTCQX: SBTB), holding company for The Simsbury Bank & Trust Company, Inc. (the “Bank”), today announced net income of $502 thousand or $0.37 basic and $0.37 diluted earnings per share for the quarter ended March 31, 2017, compared to a net income of $206 thousand or $0.15 basic and $0.15 diluted earnings per share for the prior year’s first quarter.

Net interest and dividend income increased $367 thousand or 11.5% as compared to the prior year’s first quarter primarily due to growth in the Bank’s commercial and consumer loan portfolios. Gain on sale of mortgages increased 7.7% to $223 thousand compared to the quarter ended March 31, 2016. Mortgage loan servicing activities income increased $232 thousand due to an increase in the mortgage servicing rights valuation as result of the rise in long-term interest rates and related decrease in implied prepayment rates.

“We are very pleased to report significantly improved earnings for the first quarter of 2017 resulting principally from commercial loan growth, increased noninterest income and very low growth in noninterest expenses,” said Simsbury Bank President & CEO Martin J. Geitz. “Our net income for the quarter ended March 31, 2017 increased $296 thousand (143.7%) over the prior year period ended March 31, 2016. Most of our balance sheet growth came from a 29.7% increase in commercial loans since the end of the prior year first quarter as our focus on serving the needs of privately owned businesses continues to gain momentum.”

Key highlights for quarter ended March 31, 2017 compared to quarter ended March 31, 2016 included:

• Net Income increased 143.7%.
• Total revenue, consisting of net interest and dividend income plus noninterest income, increased $543 thousand or 14.9%.
• Net interest and dividend income increased 11.5% to $3.6 million.
• Provision for loan losses totaled $250 thousand, an increase of $119 thousand compared to the quarter ended March 31, 2016. The allowance for loan losses at March 31, 2017 was 0.95% of total gross loans.
• Net loans grew $59.5 million or 17.3%.
• Commercial loan balances increased $41.0 million or 29.7% to $178.9 million compared to March 31, 2016.
• Consumer loans grew $11.6 million or 17.1% to $79.5 million driven by increases in home equity loans and the purchase of student loans in 2016.
• Total deposits increased $43.8 million or 11.4% to $427 million, driven by increases in demand deposits of $ 7.1 million, savings and NOW deposits of $24.3 million, and time deposits of $12.4 million.

The Company’s allowance for loan losses at March 31, 2017 was 0.95% of total gross loans. The Company had non-accrual loans totaling $3.5 million or 0.87% of total loans on March 31, 2017, compared to non-accrual loans totaling $3.8 million or 1.09% of total loans a year ago. Total non-accrual and delinquent loans on March 31, 2017 was 0.99% of loans outstanding compared to 1.72% on March 31, 2016.

Total deposits on March 31, 2017 were $427 million, an increase of $43.8 million or 11.4% over a year ago. At quarter end, 41% of total deposits were in non-interest bearing demand accounts, 43% were in low-cost savings, money market and NOW accounts and 16% were in time deposits.

For the quarter ended March 31, 2017, total net revenues, consisting of net interest and dividend income plus noninterest income, were $4.2 million compared to $3.6 million for the same period in 2016, an increase of $542 thousand or 14.9% above the prior year’s first quarter. Net interest and dividend income increased $367 thousand or 11.5%, primarily driven by a $583 thousand, or 19%, increase in interest and fees on loans. The increase was partially offset by decreased interest income on securities of $52 thousand. Noninterest income increased by $176 thousand or 38.3%, primarily due to an increase in mortgage servicing activities of $232 thousand.

The Company’s year-to-date 2017 taxable-equivalent net interest margin (taxable-equivalent net interest and dividend income divided by average earning assets) was 2.99% compared to 3.06% for the comparable 2016 period. The Company’s yield on earning assets increased 4 basis points to 3.38% and the cost of funds increased 14 basis points to 0.55%, primarily driven by the subordinated debt interest.

Total noninterest expense for the first quarter 2017 was $3.3 million, equivalent to the first quarter of 2016.

Capital levels for The Simsbury Bank & Trust Company on March 31, 2017 remain above the regulatory “well-capitalized” designation. Capital ratios are calculated under Basel III rules.

Capital Ratios March 31, 2017
	Simsbury Bank & Trust Company	Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio	7.38%	5.00%
Tier 1 Risk-Based Capital Ratio	10.85%	8.00%
Total Risk-Based Capital Ratio	11.96%	10.00%
Common Equity Tier 1 Risk-Based Capital Ratio	10.85%	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
Consolidated Balance Sheets
March 31, 2017, December 31, 2016 and March 31, 2016
(Dollars in thousands, except for share amounts)
		3/31/2017			12/31/2016			3/31/2016
	(unaudited)						(unaudited)
ASSETS
Cash and due from banks		8,251			10,976			6,111
Interest-bearing deposits with Federal Reserve Bank of Boston
and Federal Home Loan Bank		11,586			9,786			5,867
Money Market Mutual Funds		634			95			393
Federal funds sold		157			150			200
Cash and cash equivalents		20,628			21,007			12,571
Certificates of Deposit		1,250			1,250			1,500
Investments in available-for-sale securities (at fair value)		59,665			58,728			72,874
Federal Home Loan Bank stock, at cost		2,187			2,896			2,009
Loans held-for-sale		747			2,801			1,187
Loans outstanding		407,080			409,164			346,863
Less allowance for loan losses		3,869			3,753			3,160
Loans, net		403,211			405,411			343,703
Premises and equipment, net		1,841			1,905			1,688
Accrued interest receivable		1,222			1,301			1,161
Other real estate owned		570			-			-
Bank owned life insurance		9,191			9,130			8,940
Other assets		5,223			5,570			4,831
Total other assets		18,047			17,906			16,620
TOTAL ASSETS	$	505,735		$	509,999		$	450,464
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits	$	130,982		$	134,341		$	123,904
Savings and NOW deposits		228,491			212,835			204,187
Time deposits		67,568			66,588			55,121
Total deposits		427,041			413,764			383,212
Securities sold under agreements to repurchase		2,425			2,694			1,988
Federal Home Loan Bank advances		36,318			54,058			26,000
Long-term subordinated debt		7,259			7,252			7,230
Other liabilities		1,924			1,944			1,621
Total liabilities		474,967			479,712			420,051
Stockholders' equity:
Common stock, no par value; authorized 2,000,000 shares;
issued and outstanding shares and shares, respectively, 1,372,823 and 1,372,409 at
March 31, 2017; 1,372,394 shares and 1,371,980 shares, respectively, at
December 31, 2016, and 1,361,103 shares and 1,360,689 shares, respectively, at March 31, 2016		19,146			19,133			18,871
Retained earnings		12,330			12,017			11,305
Treasury stock, 414 shares		(7	)		(7	)		(7	)
Unearned compensation- restricted stock awards		(258	)		(293	)		(172	)
Accumulated other comprehensive (loss) income		(443	)		(563	)		416
Total stockholders' equity		30,768			30,287			30,413
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	505,735		$	509,999		$	450,464

SBT Bancorp, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except for share and per share amounts)
	For the quarter ended
		3/31/2017			3/31/2016
Interest and dividend income:
Interest and fees on loans	$	3,658		$	3,075
Investment securities		338			390
Federal funds sold and overnight deposits		30			23
Total interest and dividend income		4,026			3,488
Interest expense:
Deposits		265			159
Repurchase agreements		2			1
Long-term subordinated debt		134			107
Federal Home Loan Bank advances		69			32
Total interest expense		470			299
Net interest and dividend income		3,556			3,189
Provision for loan losses		250			131
Net interest and dividend income after
provision for loan losses		3,306			3,058
Noninterest income:
Service charges on deposit accounts		92			90
(Loss) gain on available-for-sale securities		(1	)		47
Other service charges and fees		189			233
Increase in cash surrender value
of life insurance policies		61			51
Mortgage loan servicing activities		19			(213	)
Gain on sale of mortgages		223			207
Investment services fees and commissions		29			27
Other income		23			17
Total noninterest income		635			459
Noninterest expense:
Salaries and employee benefits		1,693			1,830
Occupancy expense		383			370
Equipment expense		109			93
Advertising and promotions		101			107
Forms and supplies		26			39
Professional fees		200			84
Directors' fees		58			53
Correspondent charges		66			72
FDIC Assessment		111			62
Data Processing Fees		229			213
Internet banking costs		44			53
Other expenses		313			342
Total noninterest expense		3,333			3,318
Income before income taxes		608			199
Income tax provision (benefit)		106			(7	)
Net income	$	502		$	206
Net income available to common stockholders	$	502		$	206
Average shares outstanding, basic		1,358,142			1,348,572
Earnings per common share, basic	$	0.37		$	0.15
Average shares outstanding, assuming dilution		1,360,776			1,350,507
Earnings per common share, assuming dilution	$	0.37		$	0.15

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