UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material under ss. 240.14a-12
SBT Bancorp, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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EXPLANATORY NOTE
On February 10, 2009, SBT Bancorp, Inc. (the "Company") made a filing of
additional definitive proxy soliciting materials with the Securities and
Exchange Commission (the "Original Filing") which included a copy of a letter
from the Company's President and Chief Executive Officer. The copy of the letter
submitted with the Original Filing omitted the following statement which was
included in the letter that the Company made available at its headquarters and
banking branches and it sent to certain of its shareholders: "Also, please visit
our website at simsburybank.com to read our February 4, 2009 press release
announcing our plans to participate in the Capital Purchase Program." A
corrected copy of the letter is including with this filing and the corrected
letter is filed hereby to the extent it may be deemed additional soliciting
materials within the meaning of the Securities Exchange Act of 1934, as amended.
The Simsbury Bank
February 10, 2009
Dear Valued Shareholders and Customers of Simsbury Bank:
The worldwide financial market crisis unfolded rapidly last fall and the U.S.
government's response has sometimes been confusing and often controversial. The
financial market crisis has led to a deepening worldwide economic recession. Our
government continues to struggle to develop effective programs to stabilize
financial markets and revitalize the U.S. economy. The complexity of the crisis
has already led the government to implement a variety of stabilization programs
and more are planned. There appears to be no simple path to restoring a healthy
financial system and stimulating the economy.
The primary causes of the financial market crisis were reckless residential
mortgage lending; risky "innovative" mortgage products; the securitization of
these risky mortgages and subsequent worldwide sale; and the unregulated use of
derivative contracts such as "credit default swaps" that resulted in magnifying
the risk. Fortunately, Simsbury Bank did not take part in such risky behavior.
Many of the world's largest commercial and investment banks were responsible for
the activities that led to the financial market crisis. Some have failed, or
been purchased by other banks, or continue to operate with the help of
government support. During the past several months, we have also learned of
risk-taking, business management, and compensation excesses by executives of
many of the same large financial services companies that created the financial
market crisis. These insights into the culture of greed that apparently pervaded
many large financial companies have created incredulity, anger, and outrage
among most Americans.
This understandable reaction has tarnished the perception of some of the
government's efforts to stabilize financial markets. Politicians and the news
media have stoked popular emotions of outrage. There is concern that taxpayer
funds will be used to support continued excesses. There is concern that those
who created this crisis are being bailed out and not being held accountable for
their actions. There is concern about how mortgage and mortgage securities
losses will be shared among borrowers, lenders, investors and taxpayers. All of
these issues combine to form a healthy and sometimes emotional public debate
about the government's financial market stabilization efforts and economic
stimulation proposals.
SBT Bancorp, Inc. and its subsidiary, Simsbury Bank, have chosen to participate
in two U.S. government agency programs created to enhance the capitalization and
liquidity of the U.S. financial system. These programs are the U.S. Treasury
Department's Capital Purchase Program and the FDIC's Temporary Liquidity
Guarantee Program. The Capital Purchase Program has become quite controversial
while the FDIC's program has not. The Capital Purchase Program offers banks the
opportunity to access attractively priced capital to support lending activities
and overall financial strength. However, due in large part to what we have
learned about the culture of greed, many now view the entire Capital Purchase
Program as a "bail out" of undeserving banks that created the current crisis.
Yet, the purpose of the program was and remains to make capital available to
healthy banks of all sizes to promote their ability to lend on a safe and sound
basis.
Our decision to participate in the Capital Purchase Program was guided by a
number of factors.
- - We anticipate that the growth we have experienced during the past year will
continue and the opportunity to access attractively priced capital to
support that growth makes good sense for our customers and shareholders. We
anticipate that many of our regional and national bank competitors will
continue to be distracted by dealing with their problems related to the
financial crisis. This will create an opportunity for us to serve more of
the loan needs of our market.
- - Although our capital ratios qualify us as "well capitalized" from a
regulatory perspective, we believe that we are in a period of such economic
uncertainty that it is prudent to maintain higher capital ratios. Both the
Bush and Obama administrations, as well as most economists, characterize
this financial market and economic crisis as the most severe since the
Great Depression. We agree with this assessment. As such, past experience
is a less reliable predictor of the timing of stabilization and improvement
of the economy. Given this environment, we view the Capital Purchase
Program as an excellent way to ensure that we maintain capital levels
appropriate to the economic conditions.
- - Finally, we believe that one of the most important lessons learned from
this crisis is that the concentration of financial risk and power among
just a handful of investment and commercial banks was a major contributor
to the magnitude of this crisis. Clearly, there are economic forces that
have driven the financial services industry consolidation during the past
30 years including economies of scale and technology. Consolidation,
however, has also been fueled by a series of regulatory actions during the
same time period including the deregulation of deposit rates, the opening
of interstate banking, and the repeal of the Glass-Steagall Act. An
unhealthy result of consolidation is that a relatively small number of
institutions poorly managing enormous levels of risk were able to cause the
systemic failure with which the government is coping. We believe that the
regulatory response to this crisis should include steps to ensure a more
diverse financial services industry in the future and thereby lower the
systemic risk. We view the Capital Purchase Program's availability to
healthy banks of all sizes as an excellent first step to a stronger more
diverse financial system in the U.S.
As a community banking institution, we share the frustration with the ad hoc
manner in which the government has addressed the financial market crisis and the
disgust with the excesses of the Wall Street greed culture. However, we believe
that the Capital Purchase Program is an important and necessary component of a
multifaceted approach to stabilizing the nation's financial system and restoring
the economy to growth.
Community banks like Simsbury Bank that did not participate in the excessive
risk taking of the past several years are poised to take up the slack from
regional and national banks hurt by their aggressive strategies. Simsbury Bank
will use the capital from the Capital Purchase Program to make the kind of
business and consumer loans that it has always made and to continue to provide
safe and competitive deposit services and knowledgeable financial advice and
investment services for retirement savings and other long term needs.
Simsbury Bank remains committed to continuing to serve the interests of our
customers, shareholders, employees and communities and together we will weather
this financial storm.
Should you have any further questions, please don't hesitate to contact me
directly. Also, please visit our website at simsburybank.com to read our
February 4, 2009 press release announcing our plans to participate in the
Capital Purchase Program.
Sincerely,
/s/ Martin J. Geitz
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Martin J. Geitz
President & Chief Executive Officer
860-651-2088
ADDITIONAL INFORMATION
The Company filed a definitive proxy statement with the Securities and Exchange
Commission on January 28, 2009 in connection with the special meeting of the
Company's shareholders to be held on February 27, 2009. The Company's
shareholders are strongly advised to read the definitive proxy statement
carefully before making any voting decision because the definitive proxy
statement contains important information. The Company's definitive proxy
statement can be obtained free of charge at the Company's web site at
http://www.simsburybank.com/aboutus-shareholders.php.