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

Exhibit 99.1

SBT Bancorp, Inc. Reports Third Quarter 2017 Results

SIMSBURY, Conn.--(BUSINESS WIRE)--October 26, 2017--SBT Bancorp, Inc. (the “Company”), (OTCQX: SBTB), holding company for The Simsbury Bank & Trust Company, Inc. (the “Bank”), today announced net income of $602 thousand or $0.44 basic and $0.44 diluted earnings per share for the quarter ended September 30, 2017, compared to net income of $431 thousand or $0.32 basic and $0.32 diluted earnings per share for the prior year’s third quarter.

Net interest and dividend income increased $438 thousand, or 13.0%, as compared to the prior year’s third quarter primarily due to growth in the Bank’s commercial loan portfolio. Noninterest income decreased $296 thousand due principally to a decrease in mortgage banking activities income of $204 thousand. Noninterest expenses for the three months ended September 30, 2017 were $3.6 million, a decrease of 2.8% from the prior year’s third quarter.

“We are very pleased to report improved earnings for the third quarter of 2017 resulting principally from increased commercial loan interest and strong expense management,” said Simsbury Bank President & CEO Martin J. Geitz. “Our net income for the quarter ended September 30, 2017 increased over 39% ($171 thousand) compared to the prior year period ended September 30, 2016. Deposit balances for period ended September 30, 2017 increased 8.1% ($35 million) compared to the period ended September 30, 2016. Most of this growth can be attributed to the success of our new West Hartford branch opened in the second quarter of 2016.”

Key highlights for quarter ended September 30, 2017 compared to quarter ended September 30, 2016 included:

• Net income increased $171 thousand, or 39.7%.
• Total revenue, consisting of net interest and dividend income plus noninterest income, increased $142 thousand, or 3.1%.
• Net interest and dividend income increased 13.0% to $3.8 million.
• Provision for loan losses totaled $235 thousand, a decrease of $70 thousand compared to the quarter ended September 30, 2016. The allowance for loan losses at September 30, 2017 was 1.01% of total gross loans.
• Net loans grew $6.2 million, or 1.6%.
• Commercial loan balances increased $31.8 million, or 20.4%, to $187.4 million compared to September 30, 2016.
• Total deposits increased $35.0 million, or 8.1%, to $468 million, driven by increases in savings and NOW deposits of $31.8 million, and time deposits of $4.0 million.

The Company’s allowance for loan losses at September 30, 2017 was 1.01% of total gross loans. The Company had non-accrual loans totaling $1.6 million, or 0.40%, of total loans on September 30, 2017, compared to non-accrual loans totaling $3.1 million, or 0.77%, of total loans a year ago. Total non-accrual and delinquent loans on September 30, 2017 was 0.48% of loans outstanding compared to 0.90% on September 30, 2016.

Total deposits on September 30, 2017 were $468 million, an increase of $35.0 million, or 8.1%, over a year ago. At quarter end, 27% of total deposits were in non-interest bearing demand accounts, 58% were in low-cost savings, money market and NOW accounts and 15% were in time deposits.

For the quarter ended September 30, 2017, total net revenues, consisting of net interest and dividend income plus noninterest income, were $4.7 million compared to $4.6 million for the same period in 2016, an increase of $142 thousand, or 3.1%, above the prior year’s third quarter. Net interest and dividend income increased $438 thousand, or 13.0%, primarily driven by a $516 thousand, or 15%, increase in interest and fees on loans. The increase was partially offset by decreased interest income on securities of $29 thousand. Noninterest income decreased by $296 thousand, or 24.9%, primarily due to a decrease in income from mortgage banking activities of $204 thousand and a decrease in other service charges and fees of $78 thousand.

For the year-to-date ended September 30, 2017, total net revenues, consisting of net interest and dividend income plus noninterest income, were $13.3 million compared to $12.2 million for the same period in 2016, an increase of $1.1 million, or 8.8%, above the prior year-to-date period. Net interest and dividend income increased $1.1 million, or 11.5%, primarily driven by a $1.6 million, or 16.4%, increase in interest and fees on loans. The increase was partially offset by decreased interest income on securities of $119 thousand and increased interest expense of $488 thousand. Noninterest income decreased by $52 thousand, or 2.2%, primarily due to a decrease in other service charges and fees of $97 thousand, and a decrease in gain on sale of available-for-sale securities, net of writedowns, of $95 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 3.03% compared to 2.98% for the comparable 2016 period. The Company’s yield on earning assets increased 15 basis points to 3.47% and the cost of funds increased 13 basis points to 0.61%, primarily driven by the subordinated debt interest and increased FHLB borrowings interest.

Total noninterest expense for the third quarter 2017 was $3.6 million, a decrease of $104 thousand compared to the third quarter of 2016. Total noninterest expense for the year-to-date ended September 30, 2017 was $10.5 million, a decrease of $95 thousand compared to the 2016 year-to-date period.

Capital levels for The Simsbury Bank & Trust Company on September 30, 2017 remain above the regulatory “well-capitalized” designation. Capital ratios are calculated under Basel III rules.

Capital Ratios September 30, 2017 (estimated)
	Simsbury Bank & Trust Company	Regulatory Standard For Well-Capitalized
Tier 1 Leverage Capital Ratio	7.18%	5.00%
Tier 1 Risk-Based Capital Ratio	10.61%	8.00%
Total Risk-Based Capital Ratio	11.74%	10.00%
Common Equity Tier 1 Risk-Based Capital Ratio	10.61%	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
September 30, 2017, December 31, 2016 and September 30, 2016
(Dollars in thousands, except for share amounts)
		9/30/2017			12/31/2016			9/30/2016
	(unaudited)						(unaudited)
ASSETS
Cash and due from banks	$	8,209		$	10,976		$	12,994
Interest-bearing deposits with Federal Reserve Bank
and Federal Home Loan Bank		27,119			9,786			6,418
Money market mutual funds		24			95			45
Federal funds sold		150			150			100
Cash and cash equivalents		35,502			21,007			19,557
Certificates of deposit		1,250			1,250			1,500
Investments in available-for-sale securities at fair value		54,647			58,728			63,611
Federal Home Loan Bank stock, at cost		861			2,896			1,977
Loans held-for-sale		4,289			2,801			8,238
Loans outstanding		402,893			409,164			396,280
Less allowance for loan losses		4,077			3,753			3,631
Loans, net		398,816			405,411			392,649
Premises and equipment, net		1,948			1,905			1,988
Accrued interest receivable		1,272			1,301			1,232
Bank owned life insurance		9,310			9,130			9,066
Other assets		6,355			5,570			5,120
Total other assets		18,885			17,906			17,406
TOTAL ASSETS	$	514,250		$	509,999		$	504,938
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits	$	127,156		$	134,341		$	128,000
Savings and NOW deposits		271,384			212,835			239,557
Time deposits		69,088			66,588			65,108
Total deposits		467,628			413,764			432,665
Securities sold under agreements to repurchase		2,862			2,694			3,193
Federal Home Loan Bank advances		2,318			54,058			29,000
Long-term subordinated debt		7,274			7,252			7,245
Other liabilities		2,292			1,944			1,854
Total liabilities		482,374			479,712			473,957
Stockholders' equity:
Common stock, no par value; authorized 2,000,000 shares;
issued and outstanding 1,373,532 shares and 1,373,118 shares, respectively, at
September 30, 2017; 1,372,394 shares and 1,371,980 shares, respectively, at
December 31, 2016, and 1,361,135 shares and 1,360,721 shares, respectively, at September 30, 2016		19,168			19,133			18,887
Retained earnings		13,106			12,017			11,609
Treasury stock, 414 shares		(7	)		(7	)		(7	)
Unearned compensation- restricted stock awards		(192	)		(293	)		(95	)
Accumulated other comprehensive (loss) income		(199	)		(563	)		587
Total stockholders' equity		31,876			30,287			30,981
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	514,250		$	509,999		$	504,938

SBT Bancorp, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except for share and per share amounts)
	For the three months ended					For the nine months ended
		9/30/2017			9/30/2016		9/30/2017			9/30/2016
Interest and dividend income:
Interest and fees on loans	$	3,949		$	3,433	$	11,421		$	9,814
Investment securities		330			359		1,011			1,130
Federal funds sold and overnight deposits		137			26		196			65
Total interest and dividend income		4,416			3,818		12,628			11,009
Interest expense:
Deposits		415			271		954			619
Repurchase agreements		2			2		5			5
Long-term subordinated debt		137			137		406			379
Federal Home Loan Bank advances		52			36		260			134
Total interest expense		606			446		1,625			1,137
Net interest and dividend income		3,810			3,372		11,003			9,872
Provision for loan losses		235			305		570			606
Net interest and dividend income after
provision for loan losses		3,575			3,067		10,433			9,266
Noninterest income:
Service charges on deposit accounts		86			98		269			278
(Loss) gain on available-for-sale securities, net of writedowns		(1	)		23		(2	)		93
Other service charges and fees		215			293		636			733
Increase in cash surrender value
of life insurance policies		60			64		180			177
Mortgage banking activities		444			648		982			898
Investment services fees and commissions		69			53		143			133
Other income		21			11		93			41
Total noninterest income		894			1,190		2,301			2,353
Noninterest expense:
Salaries and employee benefits		1,823			1,949		5,263			5,700
Occupancy expense		322			387		1,067			1,147
Equipment expense		145			111		375			317
Advertising and promotions		148			213		453			508
Forms and supplies		27			86		84			160
Professional fees		166			142		564			345
Directors' fees		57			53		168			160
Correspondent charges		74			83		223			228
FDIC assessment		107			70		325			223
Data processing fees		244			219		698			628
Internet banking costs		71			75		161			221
Other expenses		438			338		1,162			1,001
Total noninterest expense		3,622			3,726		10,543			10,638
Income before income taxes		847			531		2,191			981
Income tax provision		245			100		519			93
Net income	$	602		$	431	$	1,672		$	888
Net income available to common stockholders	$	602		$	431	$	1,672		$	888
Weighted average shares outstanding, basic		1,359,549			1,352,263		1,358,913			1,350,725
Earnings per common share, basic	$	0.44		$	0.32	$	1.23		$	0.66
Weighted average shares outstanding, assuming dilution		1,364,293			1,354,362		1,362,349			1,352,887
Earnings per common share, assuming dilution	$	0.44		$	0.32	$	1.23		$	0.66

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