UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2008
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ________ to _______
Commission file Number: 000-51832
SBT BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Connecticut 20-4346972
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(State or Other Jurisdiction of (IRS Employer Identification
Incorporation or Organization) Number)
760 Hopmeadow Street, P.O. Box 248, Simsbury, CT 06070
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(Address of Principal Executive Offices, including Zip Code)
(860) 408-5493
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
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(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
1
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
The aggregate market value of the registrant's common stock held by
non-affiliates of the registrant, computed by reference to the price at which
the common stock was last sold, or the average bid and asked price of such
common stock, as of the last business day of the registrant's most recently
completed second quarter, is $18,287,021.
As of March 27, 2009, 864,976 shares of the registrant's common stock were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of SBT Bancorp, Inc.'s definitive Proxy Statement for its 2009
Annual Meeting of Shareholders to be held May 12, 2009 (the "Proxy Statement")
are incorporated by reference into Part III of this Form 10-K, and portions of
SBT Bancorp, Inc.'s Annual Report to Shareholders for the fiscal year ended
December 31, 2008 (the "Annual Report") are incorporated by reference into Part
II of this Form 10-K.
2
INDEX
SBT BANCORP, INC.
Page No.
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PART I
Item 1. Business 4
Item 1A. Risk Factors 13
Item 1B. Unresolved Staff Comments 13
Item 2. Properties 13
Item 3. Legal Proceedings 14
Item 4. Submission of Matters to a Vote of Security Holders 14
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities 14
Item 6. Selected Financial Data 14
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation 14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 14
Item 8. Financial Statements and Supplementary Data 14
Item 9. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure 15
Item 9A. Controls and Procedures 15
Item 9B. Other Information 15
PART III
Item 10. Directors, Executive Officers and Corporate Governance 16
Item 11. Executive Compensation 17
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters 17
Item 13. Certain Relationships and Related Transactions, and Director Independence 17
Item 14. Principal Accounting Fees and Services 17
PART IV
Item 15. Exhibits and Financial Statement Schedules 18
SIGNATURES 21
3
ITEM 1. BUSINESS
General
SBT Bancorp, Inc. (the "Company") is the holding company for The
Simsbury Bank & Trust Company, Inc. (the "Bank"). The Company was incorporated
in the State of Connecticut on February 17, 2006. The Company became the Bank's
sole shareholder pursuant to a reorganization that occurred on March 7, 2006.
The Company's only business is its investment in the Bank, which is a community
oriented financial institution providing a variety of banking and investment
services.
The Simsbury Bank & Trust Company, Inc. was incorporated on April 28,
1992 and commenced operations as a Connecticut chartered bank on March 31, 1995.
The Bank's deposit accounts are insured under the Federal Deposit Insurance Act,
up to the maximum applicable limits thereof. The Bank is not a member of the
Federal Reserve System. The Bank's main office and corporate offices are located
in the town of Simsbury, Connecticut. The Bank also maintains branch offices in
Avon, Bloomfield, and Granby, Connecticut and a business office in Canton,
Connecticut. Services to the Bank's customers are also provided through SBT
Online Internet banking. The aggregate population for the Bank's market area is
98,000 people, comprised of approximately 37,000 households. The Bank's customer
base consists primarily of individual consumers and small businesses in north
central Connecticut. The Bank has over 22,200 deposit accounts.
The Bank also has seven ATMs; two are located at each of its main office
and its Bloomfield office, and one at each of the other branch/business offices.
The ATMs generate activity fees based upon utilization by other banks'
customers.
The Bank offers a full range of commercial banking services to residents
and business in its primary and secondary markets through a wide variety of
mortgage programs as well as home equity lines and loans, FDIC insured checking,
savings, and IRA accounts, 401K rollover accounts, as well as safe deposit and
other customary non-deposit banking services. The Bank offers investment
products to customers through SBT Investment Services, Inc., a wholly-owned
subsidiary of the Bank, and through its affiliation with the securities
broker/dealer LPL Financial Corporation.
As of December 31, 2008, approximately 70% of the Bank's loans were
secured by residential property located in Connecticut.
The Bank's deposits increased by $34.1 million or 18.2% in 2008,
compared to an $11.6 million decrease in 2007. The Bank's total assets at
year-end 2008 were $241 million, an increase of $31 million or 14.4% from the
$210 million at year-end 2007. The Bank's loan portfolio increased by $14.4
million or 8.7% in 2008 and ended the year at $180.1 million. The Bank's
loan-to-deposit ratio, an important determinant of net interest income,
decreased to 82% at year-end 2008, compared to 89% at year-end 2007.
The Bank had a net loss of $644,824 (($0.75) per common share) for the
year ending December 31, 2008, a decrease of $1.78 million from the net income
of $1,139,711 ($1.34 per common share) reported for the year ended December 31,
2007.
Banking is a business that depends on rate differentials. In general,
the difference between the interest rate paid by the Bank on its deposits and
its other borrowings and the interest rate received by the Bank on loans
extended to its customers and securities held in the Bank's portfolio comprise
the major portion of the Bank's earnings. These rates are highly sensitive to
many factors that are beyond the control of the Bank. Accordingly, the earnings
and growth of the Bank are subject to the influence of domestic and foreign
economic conditions, including inflation, recession and unemployment.
Commercial banking is affected not only by general economic conditions
but also by monetary and fiscal policies of the federal government and policies
of regulatory agencies, particularly the Federal Reserve Board. The Federal
Reserve Board implements national monetary policies (with objectives such as
curbing inflation and combating recession) by its open-market operations in
United States government securities, by adjusting the required level of reserves
for financial institutions subject to its reserve requirements, and by varying
the discount rates applicable to borrowings by depository institutions. The
actions of the Federal Reserve Board in these areas influence the growth of bank
loans, investments and deposits and also affect interest rates charged on loans
and paid on deposits. The nature and impact of future changes in monetary
policies cannot be predicted.
4
The Bank's Investment Policy permits the Bank to invest in
mortgage-backed securities. It is the policy of the Bank to invest in
mortgage-backed securities that have no more risk than the underlying mortgages.
The Investment Policy also permits the Bank to invest in preferred stock issued
by Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage
Corporation (FHLMC).
Market Area
The towns of Avon, Bloomfield, Canton, Granby and Simsbury, which
comprise the Bank's primary market, are located in north central Connecticut,
west of the Connecticut River near the northern corner of Hartford. All five
towns are situated near Interstate Routes 91 and 84. Bradley International
Airport is nearby and provides a convenient alternative to road and rail systems
for passengers and cargo.
The road network from each of the towns included in the Bank's
secondary market of Barkhamsted, East Granby and New Hartford leads through its
primary market towns. Residents of these communities, therefore, may travel near
the Bank's offices and find it convenient to bank there.
Based on the most current information available, the Bank's primary and
secondary markets have a median household income of $89,138. This level places
the overall market approximately 35% above the median income of all
Connecticut's households. Compared to the nation as a whole, the median income
in the Bank's primary and secondary markets is approximately 77% greater than
the median income for all U.S. households. By themselves, the towns of Simsbury
and Avon had median household incomes of over $107,110, placing them 113% over
the median income for the U.S. and almost 62% over the median income of all
households in Connecticut.
Educational attainment in the Bank's primary and secondary markets is
similarly high. Forty-six percent of the residents aged twenty-five and over in
the eight towns are college graduates. In Avon, Bloomfield, Canton, Granby and
Simsbury, this figure averages 47%.
Employees
At December 31, 2008, the Company employed 2 people, both of whom were
full-time employees, and the Bank employed a total of 61 people, 55 full-time
employees and 6 part-time employees. Neither the Company's employees nor the
Bank's employees are represented by any union or other collective bargaining
agreement, and the Company and the Bank believe their employee relations are
satisfactory.
Competition
The banking and financial services business in Connecticut generally,
and in the Bank's market areas specifically, is highly competitive. The
increasingly competitive environment is a result primarily of changes in
regulation, changes in technology and product delivery systems, and the
accelerating pace of consolidation among financial services providers. The Bank
competes for loans and deposits and customers for financial services with other
commercial banks, savings and loan associations, securities and brokerage
companies, mortgage companies, insurance companies, finance companies, money
market funds, credit unions and other nonbank financial service providers. Many
of these competitors are much larger in total assets and capitalization, have
greater access to capital markets, and offer a broader array of financial
services than the Bank. In order to compete with these other financial services
providers, the Bank principally relies upon its strong reputation for service
excellence, personal relationships established by officers, directors and
employees with its customers, and advertising and public relations.
5
The Bank's primary and secondary markets have a number of banking
institutions which offer a variety of financial products. The types of
institutions range from large nationwide banks to various institutions of
smaller size. Simsbury is served by seven depository institutions with a total
of seven offices. Of these institutions, there are three commercial banks, two
savings banks and two credit unions. Avon is served by eleven depository
institutions with fourteen offices. Of these institutions, there are four
commercial banks, five savings banks and two credit unions. Granby is served by
five depository institutions with the same number of offices. Two of these
institutions are commercial banks and three are savings banks. Bloomfield is
served by six depository institutions, including four commercial banks and two
savings banks. Canton is served by five depository institutions with six
offices. The total eight-town area of the Bank's primary and secondary markets
is served by fourteen institutions.
As of June 30, 2008, by deposit account market share, the top three
banks in Simsbury are Simsbury Bank & Trust Company (28%), Bank of America
(28%), and Webster Bank (21%). The top three banks in Avon are People's Bank
(21%), Bank of America (18%), and Farmington Savings Bank (15%). In Granby, the
top three banks are Windsor Federal Savings And Loan Association (28%), Bank of
America (27%) and Simsbury Bank & Trust Company (22%). In Canton, the top three
banks are Collinsville Savings Society (41%), Webster Bank (24%) and Bank of
America (24%). In Bloomfield, the top three banks are Wachovia Bank (36%),
Webster Bank (23%) and Bank of America (20%). In the Bank's primary market
(Simsbury, Granby, Avon, Bloomfield and Canton, as of June, 2008), the top 3
banks are Bank of America with 22% of the market, Webster Bank with 17% and The
Simsbury Bank and Trust Company with 12%. In the total eight-town area of the
Bank's primary and secondary markets, the top three banks are Bank of America
with 23% of the market, Webster Bank with 17% and The Simsbury Bank & Trust
Company with 11%.
The present bank regulatory scheme is undergoing significant change,
both as it affects the banking industry itself and as it affects competition
between banks and non-banking financial institutions. There has been a
significant regulatory change in the bank merger and acquisition area, in the
products and services banks can offer, and in the non-banking activities in
which bank holding companies may engage. Under the Gramm-Leach-Bliley Act
enacted by Congress on November 12, 1999, banks and bank holding companies may
now affiliate with insurance and securities companies. In part as a result of
these changes, banks are now actively competing with other types of
non-depository institutions, such as money market funds, brokerage firms,
insurance companies and other financial service enterprises.
Moreover, certain legislation and regulatory proposals that could
affect the Bank and the banking industry in general are pending or may be
introduced before the United States Congress, the Connecticut General Assembly
and various governmental agencies. These proposals include measures that may
further alter the structure, regulation and competitive relationship of
financial institutions and that may subject the Bank to increased regulation,
disclosure and reporting requirements. In addition, the various banking
regulatory agencies frequently propose rules and regulations to implement and
enforce already existing regulation.
Since September 2008, the United States Congress, United States
Department of the Treasury, Federal Deposit Insurance Corporation, and Federal
Reserve Board have, within their respective authorities, enacted legislation
subsequently signed by the President of the United States, promulgated
regulations, created special programs, and taken other actions to address the
current financial market crisis and continuing economic recession. Members of
Congress, the President, the Treasury Secretary and Chairman of the Federal
Reserve Board have indicated that significant changes must be made to the
nation's financial market regulatory system in order to address the causes of
the current financial market crisis. Simsbury Bank & Trust Company anticipates
that these changes may affect the Bank's competitive position relative to other
banks and financial services companies. However, it is uncertain at this time
when the changes impacting the Bank's competitive position will be enacted and
how they may change our competitive position.
Supervision and Regulation
Banks and bank holding companies are extensively regulated under both
federal and state law. Set forth below are brief summaries of various aspects of
the supervision and regulation of the Company and the Bank. These summaries do
not purport to be complete and are qualified in their entirety by reference to
applicable laws, rules and regulations.
6
As a bank holding company, the Company is regulated by and subject to
the supervision of the Board of Governors of the Federal Reserve System (the
"FRB") and is required to file with the FRB an annual report and such other
information as may be required. The FRB has the authority to conduct
examinations of the Company as well.
The Bank Holding Company Act of 1956 (the "BHC Act") limits the types
of companies which the Company may acquire or organize and the activities in
which they may engage. In general, a bank holding company and its subsidiaries
are prohibited from engaging in or acquiring control of any company engaged in
non-banking activities unless such activities are so closely related to banking
or managing and controlling banks as to be a proper incident thereto. Activities
determined by the FRB to be so closely related to banking within the meaning of
the BHC Act include operating a mortgage company, finance company, credit card
company, factoring company, trust company or savings association; performing
certain data processing operations; providing limited securities brokerage
services; acting as an investment or financial advisor; acting as an insurance
agent for certain types of credit-related insurance; leasing personal property
on a full-payout, non-operating basis; providing tax planning and preparation
service; operating a collection agency; and providing certain courier services.
The FRB also has determined that certain other activities, including real estate
brokerage and syndication, land development, property management and
underwriting of life insurance unrelated to credit transactions, are not closely
related to banking and therefore are not proper activities for a bank holding
company.
The BHC Act requires every bank holding company to obtain the prior
approval of the FRB before acquiring substantially all the assets of, or direct
or indirect ownership or control of more than five percent of the voting shares
of, any bank. Subject to certain limitations and restrictions, a bank holding
company, with the prior approval of the FRB, may acquire an out-of-state bank.
In November 1999, Congress amended certain provisions of the BHC Act
through passage of the Gramm-Leach-Bliley Act. Under this legislation, a bank
holding company may elect to become a "financial holding company" and thereby
engage in a broader range of activities than would be permissible for
traditional bank holding companies. In order to qualify for the election, all of
the depository institution subsidiaries of the bank holding company must be well
capitalized and well managed, as defined under FRB regulations, and all such
subsidiaries must have achieved a rating of "satisfactory" or better with
respect to meeting community credit needs. Pursuant to the Gramm-Leach-Bliley
Act, financial holding companies are permitted to engage in activities that are
"financial in nature" or incidental or complementary thereto, as determined by
the FRB. The Gramm-Leach-Bliley Act identifies several activities as "financial
in nature", including, among others, insurance underwriting and agency
activities, investment advisory services, merchant banking and underwriting, and
dealing in or making a market in securities. The Company currently owns a
financial subsidiary, SBT Investment Services, Inc.
The Company believes that it meets the regulatory criteria that would
enable it to elect to become a financial holding company. At this time, the
Company has determined not to make such an election, although it may do so in
the future.
The Gramm-Leach-Bliley Act also makes it possible for entities engaged
in providing various other financial services to form financial holding
companies and form or acquire banks. Accordingly, the Gramm-Leach-Bliley Act
makes it possible for a variety of financial services firms to offer products
and services comparable to the products and services offered through the
Company's subsidiaries.
There are various statutory and regulatory limitations regarding the
extent to which present and future banking subsidiaries of the Company can
finance or otherwise transfer funds to the Company or its non-banking
subsidiaries, whether in the form of loans, extensions of credit, investments or
asset purchases, including regulatory limitation on the payment of dividends
directly or indirectly to the Company from the Bank. Federal bank regulatory
agencies also have the authority to limit further the Bank's payment of
dividends based on such factors as the maintenance of adequate capital for such
subsidiary bank, which could reduce the amount of dividends otherwise payable.
7
Under the policy of the FRB, the Company is expected to act as a source
of financial strength to its banking subsidiaries and to commit resources to
support its banking subsidiaries in circumstances where the Company might not do
so absent such policy. In addition, any subordinated loans by the Company to its
banking subsidiaries would also be subordinate in right of payment to depositors
and obligations to general creditors of such subsidiary banks.
The FRB has established capital adequacy guidelines for bank holding
companies that are similar to the FDIC capital requirements for banks described
below under the heading "Capital Standards." The Company exceeded all current
regulatory capital requirements to be considered in the "well capitalized" at
December 31, 2008
The Bank, as a Connecticut state-chartered bank, is subject to
supervision, periodic examination and regulation by the Connecticut Commissioner
of Banking (the "Commissioner") and the Federal Deposit Insurance Corporation
(the "FDIC"). If, as a result of an examination of a bank, the FDIC should
determine that the financial condition, capital resources, asset quality,
earnings prospects, management, liquidity or other aspects of the bank's
operations are unsatisfactory or that the bank or its management is violating or
has violated any law or regulation, various remedies are available to the FDIC.
Such remedies include the power to enjoin "unsafe or unsound" practices, to
require affirmative action to correct any conditions resulting from any
violation or practice, to issue an administrative order that can be judicially
enforced, to direct an increase in capital, to restrict the growth of the bank,
to assess civil monetary penalties, to remove officers and directors, and
ultimately, to terminate a bank's deposit insurance, which for a Connecticut
state-chartered bank would result in a revocation of the bank's charter. The
Commissioner has many of the same remedial powers.
The deposits of the Bank are insured by the FDIC in the manner and to
the extent provided by law. For this protection, the Bank is subject to a
semiannual statutory assessment. (See "Premiums for Deposit Insurance").
Although the Bank is not a member of the Federal Reserve System, it is
nevertheless subject to certain regulations of the Board of Governors of the
Federal Reserve System.
Various requirements and restrictions under the laws of the State of
Connecticut and the United States affect the operations of the Bank. State and
federal statutes and regulations relate to many aspects of the Bank's
operations, including reserves against deposits, interest rates payable on
deposits, loans, investments, mergers and acquisitions, borrowings, dividends,
locations of branch offices and capital requirements. Further, the Bank is
required to maintain certain levels of capital.
The Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") implements a broad
range of corporate governance and accounting measures for public companies
(including publicly-held bank holding companies such as the Company) designed to
promote honesty and transparency in corporate America. Sarbanes-Oxley's
principal provisions, many of which have been interpreted through regulations of
the Securities and Exchange Commission, provide for and include, among other
things: (i) the creation of an independent accounting oversight board; (ii)
auditor independence provisions that restrict non-audit services that
accountants may provide to their audit clients; (iii) additional corporate
governance and responsibility measures, including the requirement that the chief
executive officer and chief financial officer of a public company certify
financial statements; (iv) the forfeiture of bonuses or other incentive-based
compensation and profits from the sale of an issuer's securities by directors
and senior officers in the twelve month period following initial publication of
any financial statements that later require restatement; (v) an increase in the
oversight of, and enhancement of certain requirements relating to, audit
committees of public companies and how they interact with the company's
independent auditors; (vi) requirements that audit committee members must be
independent and are barred from accepting consulting, advisory or other
compensatory fees from the issuer; (vii) requirements that companies disclose
whether at least one member of the audit committee is a "financial expert" (as
such term is defined by the SEC); (viii) expanded disclosure requirements for
corporate insiders, including accelerated reporting of stock transactions by
insiders and a prohibition on insider trading during pension blackout periods;
(ix) a prohibition on personal loans to directors and officers, except certain
loans made by insured financial institutions on non-preferential terms and in
compliance with other bank regulatory requirements; (x) disclosure of a code of
ethics and filing a Form 8-K for a change or waiver of such code; and (xi) a
range of enhanced penalties for fraud and other violations. On December 15,
2006, the Securities and Exchange Commission delayed the internal control
reporting requirements under Section 404 of the Sarbanes-Oxley Act for
non-accelerated filers to periods ending after December 15, 2007. In accordance
with the requirements of Section 404(a), Management's report on internal
controls is included herein at Item 9A(T). On January 31, 2008, the SEC proposed
and on June 20, 2008 approved a further one-year delay from fiscal years ending
after December 15, 2008 to fiscal years ending after December 15, 2009 for the
auditors attestation report on internal controls over financial reporting. On
June 20, 2008 the SEC also announced that it received Office of Management and
Budget (OMB) approval to proceed with data collection for a study of the costs
and benefits of Section 404 implementation, focusing on the consequences for
smaller companies and the effects of the Section 404 auditor attestation
requirements. The results of the study are expected to become available during
the extension period.
8
USA Patriot Act
The Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (the "Patriot Act"),
designed to deny terrorists and others the ability to obtain access to the
United States financial system, has significant implications for depository
institutions, broker-dealers and other businesses involved in the transfer of
money. The Patriot Act, as implemented by various federal regulatory agencies,
requires financial institutions, including the Company and the Bank, to
implement new policies and procedures or amend existing policies and procedures
with respect to, among other matters, anti-money laundering, compliance,
suspicious activity and currency transaction reporting, and due diligence on
customers. The Patriot Act and its underlying regulations also permit
information sharing for counter-terrorist purposes between federal law
enforcement agencies and financial institutions, as well as among financial
institutions, subject to certain conditions, and require the Federal Reserve
Board (and other federal banking agencies) to evaluate the effectiveness of an
applicant in combating money laundering activities when considering applications
filed under the BHC Act or the Bank Merger Act.
Regulations Related to Troubled Asset Relief Program
On March 27, 2009, pursuant to the Troubled Asset Relief Program
("TARP") Capital Purchase Program (the "CPP") under the Emergency Economic
Stabilization Act of 2008 (the "EESA"), the Company entered into a Letter
Agreement, including the Securities Purchase Agreement - Standard Terms, with
the United States Department of the Treasury (the "Treasury") pursuant to which
the Company issued and sold, and the Treasury purchased (i) 4,000 shares of the
Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A ("Series A
Preferred Stock") and (ii) a ten-year warrant to purchase up to 200.002 shares
of the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series B
("Series B Preferred Stock") at an exercise price of $0.01 per share, for
aggregate cash consideration of $4,000,000. The Treasury immediately exercised
the warrant on a net basis following the closing of the transaction on March 27,
2009, resulting in the issuance of 200 shares of the Series B Preferred Stock.
The Series A Preferred Stock pays quarterly cumulative dividends at a
rate of 5% per year for the first five years and thereafter at a rate of 9% per
year and has a liquidation preference of $1,000 per share, while the Series B
Preferred Stock pays quarterly cumulative dividends at a rate of 9% per year and
has a liquidation preference of $1,000 per share.
As a result of its participation in the TARP CPP under EESA through the
sale by the Company of Series A Preferred Stock to the Treasury, the Company is
subject to restrictions contained in the agreement between the Treasury and the
Company related to the sale of the Series A Preferred Stock which among other
things restricts the payment of cash dividends or making other distributions by
the Company on its common stock or the repurchase of its shares of common stock
or other capital stock or other equity securities of any kind of the Company or
any of its or its affiliates' trust preferred securities until the tenth
anniversary of the Treasury's purchase of the Series A Preferred Stock.
Furthermore, the Company is prohibited by the terms of the Series A Preferred
Stock from paying dividends on the common stock of the Company or redeeming or
otherwise acquiring its common stock or certain other of its equity securities
unless all accrued and unpaid dividends on the Series A Preferred Stock have
been fully paid.
9
In addition, the EESA and guidance issued by the Treasury limit
executive compensation and require the reporting of information to the Treasury
and others and limit the deductibility for Federal income tax purposes of
compensation paid to certain executives in excess of $500,000 per year and the
payment of certain severance and change in control payments to certain
executives. The American Recovery and Reinvestment Act of 2009 (the "Stimulus
Package Act") contains further limitations on the payment of compensation to
certain executives of the Company or the Bank, the claw-back of certain
compensation paid to certain executives of the Company or the Bank and imposes
new corporate governance requirements on the Company, including the inclusion of
a non-binding "say on pay" proposal in the Company's annual proxy statement.
The Board of Governors of the Federal Reserve System has issued a
supervisory letter to bank holding companies that contains guidance on when the
board of directors of a bank holding company should eliminate or defer or
severely limit dividends including, for example, when net income available for
shareholders for the past four quarters net of previously paid dividends paid
during that period is not sufficient to fully fund the dividends. The letter
also contains guidance on the redemption of stock by bank holding companies
which urges bank holding companies to advise the Federal Reserve of any such
redemption or repurchase of common stock for cash or other value which results
in the net reduction of a bank holding company's capital at the beginning of the
quarter below the capital outstanding at the end of the quarter.
Dividend Restrictions
The primary source of cash to pay dividends, if any, to the Company's
shareholders and to meet the Company's obligations is dividends paid to the
Company by the Bank. Dividend payments by the Bank to the Company are subject to
Connecticut banking laws and the Federal Deposit Insurance Act ("FDIA"). Under
Connecticut banking laws and the FDIA, a bank may not pay any dividends if,
after paying such dividends, it would be undercapitalized under applicable
capital requirements. In addition to these explicit limitations, the federal
regulatory agencies are authorized to prohibit a banking subsidiary or bank
holding company from engaging in unsafe or unsound banking practices. Depending
upon the circumstances, the agencies could take the position that paying a
dividend would constitute an unsafe or unsound banking practice.
It is the policy of the Federal Reserve Board that bank holding
companies should pay cash dividends on common stock only out of income available
from the immediately preceding year and only if prospective earnings retention
is consistent with the organization's expected future needs and financial
condition. The policy provides that bank holding companies should not maintain a
level of cash dividend that undermines the bank holding company's ability to
serve as a source of strength to its banking subsidiary. A bank holding company
may not pay dividends when it is insolvent.
Please also refer to the discussion above of the Series A Preferred
Stock under the heading "Regulations Related to Troubled Asset Relief Program"
for additional restrictions on cash dividends.
Capital Standards
The FDIC has adopted risk-based capital guidelines to which
FDIC-insured, state-chartered banks that are not members of the Federal Reserve
System, such as the Bank, are subject. The guidelines establish a systematic
analytical framework that makes regulatory capital requirements more sensitive
to the differences in risk profiles among banking organizations. Banks are
required to maintain minimum levels of capital based upon their total assets and
total "risk-weighted assets." For purposes of these requirements, capital is
comprised of both Tier 1 and Tier 2 capital. Tier 1 capital consists primarily
of common stock and retained earnings. Tier 2 capital consists primarily of loan
loss reserves, subordinated debt, and convertible securities. In determining
total capital, the amount of Tier 2 capital may not exceed the amount of Tier 1
capital. A bank's total "risk-based assets" are determined by assigning the
bank's assets and off-balance sheet items (e.g., letters of credit) to one of
four risk categories based upon their relative credit risks. The greater the
risk associated with an asset, the greater the amount of such asset that will be
subject to capital requirements. Banks must satisfy the following three minimum
capital standards: (1) Tier 1 capital in an amount equal to between 4% and 5% of
total assets (the "leverage ratio"); (2) Tier 1 capital in an amount equal to 4%
of risk-weighted assets; and (3) total Tier 1 and Tier 2 capital in an amount
equal to 8% of risk-weighted assets.
10
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") defines specific capital categories based upon an institution's
capital ratios. The capital categories, in declining order, are: (i) well
capitalized; (ii) adequately capitalized; (iii) undercapitalized; (iv)
significantly undercapitalized; and (v) critically undercapitalized. Under
FDICIA and the FDIC's prompt corrective action rules, the FDIC may take any one
or more of the following actions against an undercapitalized bank: restrict
dividends and management fees, restrict asset growth and prohibit new
acquisitions, new branches or new lines of business without prior FDIC approval.
If a bank is significantly undercapitalized, the FDIC may also require the bank
to raise capital, restrict interest rates a bank may pay on deposits, require a
reduction in assets, restrict any activities that might cause risk to the bank,
require improved management, prohibit the acceptance of deposits from
correspondent banks and restrict compensation to any senior executive officer.
When a bank becomes critically undercapitalized (i.e., the ratio of tangible
equity to total assets is equal to or less than 2%), the FDIC must, within 90
days thereafter, appoint a receiver for the bank or take such action as the FDIC
determines would better achieve the purposes of the law. Even where such other
action is taken, the FDIC generally must appoint a receiver for a bank if the
bank remains critically undercapitalized during the calendar quarter beginning
270 days after the date on which the bank became critically undercapitalized.
To be considered "adequately capitalized," an institution must
generally have a leverage ratio of at least 4%, a Tier 1 capital to
risk-weighted assets ratio of at least 4% and total Tier 1 and Tier 2 capital to
risk-weighted assets ratio of at least 8%. As of December 31, 2008, the most
recent notification from the FDIC categorized the Bank as well capitalized under
the regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based
and Tier 1 leverage ratios as set forth in the table below. There are no
conditions that Management believes have changed the Bank's category.
The following table presents the amounts of regulatory capital and the
capital ratios for the Bank compared to its minimum regulatory capital
requirements as of December 31, 2008 and 2007.
December 31, 2008 December 31, 2007
----------------------------------------- -------------------------------------
Capital Minimum Capital Minimum
Ratio Requirement Ratio Requirement
----- ----------- ----- -----------
Leverage ratio ............. 7.00% 4.00% 8.21% 4.00%
Tier 1 risk-based ratio....... 10.88% 4.00% 12.23% 4.00%
Total risk-based ratio........ 12.13% 8.00% 13.48% 8.00%
Safety and Soundness Standards
Federal law requires each federal banking agency to prescribe for
depository institutions under its jurisdiction standards relating to, among
other things: internal controls; information systems and audit systems; loan
documentation; credit underwriting; interest rate risk exposure; asset growth;
compensation; fees and benefits; and such other operational and managerial
standards as the agency deems appropriate. The federal banking agencies adopted
final regulations and Interagency Guidelines Establishing Standards for Safety
and Soundness (the "Guidelines") to implement these safety and soundness
standards. The Guidelines set forth the safety and soundness standards that the
federal banking agencies use to identify and address problems at insured
depository institutions before capital becomes impaired. The Guidelines address
internal controls and information systems; internal audit system; credit
underwriting; loan documentation; interest rate risk exposure; asset quality;
earnings and compensation; fees and benefits. If the appropriate federal banking
agency determines that an institution fails to meet any standard prescribed by
the Guidelines, the agency may require the institution to submit to the agency
an acceptable plan to achieve compliance with the standard set by the Federal
Deposit Insurance Act, as amended. The final regulations establish deadlines for
submission and review of such safety and soundness compliance plans.
11
The federal banking agencies also have adopted final regulations for
real estate lending prescribing uniform guidelines for real estate lending. The
regulations require insured depository institutions to adopt written policies
establishing standards, consistent with such guidelines, for extensions of
credit secured by real estate. The policies must address loan portfolio
management, underwriting standards and loan to value limits that do not exceed
the supervisory limits prescribed by the regulations.
Appraisals for "real estate-related financial transactions," generally
transactions with a value of $250,000 or more, must be conducted, depending on
the value of the transaction by either state certified or state licensed
appraisers. State certified appraisers are required for: all transactions with a
transaction value of $1,000,000 or more; nonresidential transactions valued at
$250,000 or more; and transactions of $250,000 or more involving "complex" 1-4
family residential properties. An appraisal or real estate "evaluation" executed
by a state licensed appraiser is required for all other federally related
transactions. Federally related transactions include the sale, lease, purchase,
investment in, or exchange of, real property or interests in real property, the
financing or refinancing of real property, and the use of real property or
interests in real property as security for a loan or investment, including
mortgage-backed securities.
Premiums for Deposit Insurance
The FDIC has implemented a risk-based assessment system under which an
institution's deposit insurance premium assessment is based on the probability
that the deposit insurance fund will incur a loss with respect to the
institution, the likely amount of any such loss, and the revenue needs of the
deposit insurance fund.
Under this risk-based assessment system, banks are categorized into one
of three capital categories (well capitalized, adequately capitalized, and
undercapitalized) and one of three categories based on supervisory evaluations
by its primary federal regulator (in the Bank's case, the FDIC). The three
supervisory categories are: financially sound with only a few minor weaknesses
(Group A), demonstrates weaknesses that could result in significant
deterioration (Group B), and poses a substantial probability of loss (Group C).
The capital ratios used by the FDIC to define well-capitalized, adequately
capitalized and undercapitalized are the same in the FDIC's prompt corrective
action regulations. The Bank is currently considered a "Well Capitalized Group
A" institution and, therefore, is not subject to any quarterly FDIC Bank
Insurance Fund ("BIF") or Savings Association Insurance Fund ("SAIF")
assessments. This could change in the future based on the capitalization of the
BIF and SAIF. The Bank is, however, subject to quarterly assessments by The
Financing Corporation ("FICO") to service the interest on its bond obligations.
The rate for this assessment is determined quarterly and is paid based on the
Bank's average deposits for a given quarter. The Bank paid $128,643 in FICO
assessments during 2008.
Interstate Banking and Branching
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
("Riegle-Neal") was enacted to ease restrictions on interstate banking.
Effective September 25, 1995, Riegle-Neal allows the Federal Reserve Board to
approve an application of an adequately capitalized and adequately managed bank
holding company to acquire control of, or acquire all or substantially all of
the assets of, a bank located in a state other that such holding company's home
state, without regard to whether the transaction is prohibited by the laws of
any state. The Federal Reserve Board may not approve the acquisition of a bank
that has not been in existence for a minimum time period (not exceeding five
years) specified by the statutory law of the host state. Riegle-Neal also
prohibits the Federal Reserve Board from approving an application if the
applicant (and its depository institution affiliates) controls or would control
more than 10% of the insured deposits in the United States or 30% or more of the
deposits in the target bank's home state or in any state in which the target
bank maintains a branch. Riegle-Neal does not affect the authority of states to
limit the percentage of total insured deposits in the state which may be held or
controlled by a bank or bank holding company to the extent such limitation does
not discriminate against out-of-state banks or bank holding companies.
Individual states may also waive the 30% state-wide concentration limit
contained in Riegle-Neal.
12
Community Reinvestment Act
Under the Community Reinvestment Act, as amended, ("CRA"), as
implemented by FDIC regulations, the Bank has a continuing and affirmative
obligation consistent with its safe and sound operation to help meet the credit
needs of its entire community, including low and moderate-income neighborhoods.
The CRA does not prescribe specific lending requirements or programs for
financial institutions nor does it limit an institution's discretion to develop
the types of products and services that it believes are best suited to its
particular community, consistent with the CRA. The CRA requires the FDIC, in
connection with its examination of a savings institution, to assess the
institution's record of meeting the credit needs of its community and to take
such record into account in its evaluation of certain applications by such
institution. The Financial Institutions Reform, Recovery and Enforcement Act
(FIRREA) amended the CRA to require public disclosure of an institution's CRA
rating and require the FDIC to provide a written evaluation of an institution's
CRA performance utilizing a four-tiered descriptive rating system. The Bank's
latest CRA rating, received from the FDIC, was "satisfactory."
ITEM 1A. RISK FACTORS
Not required.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The Company does not own any properties.
The Bank's main office is located at 981 Hopmeadow Street, Simsbury,
Connecticut. The Bank leases its main office pursuant to a lease with an initial
term of ten years, expiring 2011, and which contains renewal options for a total
of an additional ten years. The Bank also has the option to purchase the office
during the tenth year of the lease. This lease also covers the lot at 989
Hopmeadow Street and the building at 987 Hopmeadow Street that are being used as
additional administrative offices and are partially subleased to small local
businesses.
The Bank's Granby branch office is located at 11 Hartford Avenue,
Granby, Connecticut. The Bank leases this office pursuant to a lease with an
initial term of fifteen years, expiring in 2013, and which contains renewal
options for a total of an additional ten years.
The Bank's Avon branch office is located at 27 Dale Road, Avon,
Connecticut. The Bank leases this office pursuant to a lease with an initial
term of fifteen years, expiring in 2014, and which contains renewal options for
a total of an additional ten years.
The Bank's Canton business office is located at 250 Albany Turnpike,
Canton, Connecticut. The Bank leases this office pursuant to a lease with an
initial term of ten years, expiring in 2015, and which contains renewal options
for a total of an additional fifteen years.
The Bank's Bloomfield office is located at 864 Cottage Grove Road,
Bloomfield, Connecticut. The Bank leases this office pursuant to a lease with an
initial term of ten years, expiring in 2016, and which contains renewal options
for a total of an additional ten years.
13
The Bank's administrative offices are located at 760 Hopmeadow Street,
Simsbury, Connecticut. The Bank leases this building pursuant to a lease with a
term that expires in 2011. The Bank has an option to renew the lease for an
additional term of five years.
The Bank made $619,429 in total lease payments during 2008.
14
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding, nor is its
property the subject of any pending legal proceeding, other than routine
litigation that is incidental to its business. The Company is not aware of any
pending or threatened litigation that could have a material adverse effect upon
its business, operating results, or financial condition. Moreover, the Company
is not a party to any administrative or judicial proceeding, including but not
limited to proceedings arising under Section 8 of the Federal Deposit Insurance
Act.
To the best of our knowledge, no director, officer, affiliate or
holder, of record or beneficially, of 5% or more of our securities is a party
adverse to the Company or has a material interest adverse to the Company in any
proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 2008.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The information required by this Item 5 is incorporated into this Form
10-K by reference to the Company's Annual Report under the caption "SHAREHOLDER
DATA."
ITEM 6. SELECTED FINANCIAL DATA
Not required.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
The information required by this Item 7 is incorporated into this Form
10-K by reference to the Company's Annual Report under the caption "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is incorporated into this Form
10-K by reference to the Company's Annual Report under the captions "SELECTED
FINANCIAL AND OTHER DATA" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
15
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
The Company has initiatives in place to ensure compliance with the
Sarbanes-Oxley Act of 2002 (the "Act"). The Company has an Internal Compliance
Committee that is responsible for the monitoring of and compliance with all
federal regulations. This committee reports to the Audit and Compliance
Committee of the Board of Directors.
The Company's Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of the Company's disclosure controls and procedures
as of December 31, 2008 and have concluded that, as of that date, the Company's
disclosure controls and procedures were effective at ensuring that required
information will be disclosed on a timely basis. This conclusion is based on the
above-referenced officers' evaluation of such controls and procedures.
(b) Management's Annual Report on Internal Control Over Financial Reporting
The Company's management is responsible for establishing and
maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The
Company's internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.
Any system of internal control, no matter how well designed, has
inherent limitations, including the possibility that a control can be
circumvented or overridden and misstatements due to error or fraud may occur and
not be detected. Also, because of changes in conditions, internal control
effectiveness may vary over time. Accordingly, even an effective system of
internal control will provide only reasonable assurance with respect to
financial statement preparation.
Management assessed the effectiveness of the Company's internal control
over financial reporting as of December 31, 2008. This assessment was based on
criteria for effective internal control over financial reporting described in
"Internal Control - Integrated Framework", issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on this assessment,
management believes that the Company maintained effective internal control over
financial reporting as of December 31, 2008.
This annual report does not include an attestation report of the
Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management's report in this annual report.
(c) Changes in Internal Control Over Financial Reporting
There were no changes in the Company's internal control over financial
reporting that occurred during the quarter ended December 31, 2008 that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
16
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Executive Officers
The following table shows the name, age, positions held with the
Company and principal occupations during the past five years of the Company's
executive officers.
NAME AGE POSITIONS HELD / PRINCIPAL OCCUPATIONS YEAR OF HIRE
Martin J. Geitz 52 President and Chief Executive Officer of the 2004
President and Chief Company since March 2006; President and Chief
Executive Officer Executive Officer of the Bank since October
2004; Vice President of Massachusetts Mutual
Life Insurance Company, 2003 to 2004; Chief
Executive Officer and Chief Financial Officer
of Cigna Bank & Trust Company, 2000 to 2003.
Anthony F. Bisceglio, Ph.D. 61 Treasurer and Chief Financial Officer of the 1995
Executive Vice President and Company since March 2006; Executive Vice
Chief Financial Officer President and CFO of the Bank since January
2005; Senior Vice President and Chief
Financial Officer of the Bank from 1995
through January 2005.
Howard R. Zern 62 Senior Vice President and Chief Retail 2008
Senior Vice President and Banking, Operations & Technology Officer of
Chief Retail Banking, the Bank since June 2008; Executive Vice
Operations & Technology President of Bank of America, from which he
Officer retired in 2005; Director of Stony Brook
University Alumni Association.
Paul R. Little 49 Senior Vice President and Chief Lending 2006
Senior Vice President and Officer of the Bank since May 2006; Vice
Chief Lending Officer President, Commercial Real Estate Lending,
Liberty Bank, 2004 through May 2006; Vice
President, Commercial Real Estate Loans,
Savings Bank of Manchester/New Alliance Bank,
1990 through 2004
Code of Ethics
The Company has adopted a Code of Ethics and Conflicts of Interest Policy
applicable to directors, officers and employees. The Company will provide to any
person, without charge, upon written request, a copy of our Code of Ethics and
Conflicts of Interest Policy. All such requests should be directed to SBT
Bancorp, Inc., 760 Hopmeadow Street, P.O. Box 248, Simsbury, Connecticut, 06070,
Attention: Secretary.
Directors; Compliance with Section 16(a) of the Exchange Act; Corporate
Governance
Additional information required by this Item 10 is incorporated into this
Form 10-K by reference to the Proxy Statement of the Company (the "Proxy
Statement") for the annual meeting of shareholders to be held on May 12, 2009
under the captions "ELECTION OF DIRECTORS," "INFORMATION ABOUT OUR DIRECTORS,"
and "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE."
17
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated into this Form 10-K
by reference to the Company's Proxy Statement under the captions "EXECUTIVE
COMPENSATION" and "EMPLOYMENT AGREEMENTS."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth the securities authorized for issuance under
equity compensation plans.
Number of securities
remaining available for
Number of securities Weighted-average future issuance under
to be issued upon exercise price equity compensation plans
exercise of of outstanding (excluding securities
outstanding options options reflected in column (a))
(a) (b) (c)
------------------------------------------------------------------
Equity compensation plans
approved by security
holders 51,189 $30.33 10,870
Equity compensation plans not
approved by security
holders 0 0 0
------------------------------------------------------------------
Total 51,189 $30.33 10,870
==================================================================
Additional information required by this Item 12 is contained in the
Company's Proxy Statement under the caption "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" and is hereby incorporated by reference
herein.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by Item 13 is incorporated into this form 10-K by
reference to the Company's Proxy Statement under the captions "CERTAIN
TRANSACTIONS" and "INDEPENDENCE OF DIRECTORS AND NOMINEES."
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Item 14 appears in the Company's Proxy
Statement under the caption "RATIFICATION OF APPOINTMENT OF INDEPENDENT
AUDITORS" and is incorporated by reference herein.
18
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Financial Statements and Schedules.
Those portions of the Annual Report attached hereto as Exhibit 13 contain
the financial statements incorporated herein by reference.
Exhibits.
The following exhibits required by Item 601 are filed herewith or are
incorporated by reference to the filings previously made by the Bank and the
Company as noted below (the reference in parentheses at the end of an Exhibit
indicates the number of the Exhibit as it was filed in the document referenced
below):
Exhibit No. Description
- ----------- -----------
3(i)* Conformed Copy of the Certificate of Incorporation of SBT
Bancorp, Inc.
3(ii) Certificate of Amendment of Certificate of Incorporation of
SBT Bancorp, Inc., authorizing preferred stock (incorporated
by reference to Exhibit 3.1 of the Company's Form 8-K filed
on March 30, 2009)
3(iii) Certificate of Amendment of Certificate of Incorporation of
SBT Bancorp, Inc., establishing the terms of the Preferred
Stock and the Warrant Preferred Stock (incorporated by
reference to Exhibit 3.2 of the Company's Form 8-K filed on
March 30, 2009)
3(iv) Bylaws (incorporated by reference to Exhibit 3.2 of the
Company's Form 8K12G3 filed on March 7, 2006)
4.1 Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4 of the Company's Form 10-QSB filed on May 15,
2006)
4.2 Warrant, dated March 27, 2009, to purchase up to 200.002
shares of Warrant Preferred Stock of the Company
(incorporated by reference to Exhibit 4.1 of the Company's
Form 8-K filed on March 30, 2009)
10.1# Employment Agreement, dated as of September 1, 2004, by and
between the Bank and Martin J. Geitz (incorporated by
reference to Exhibit 10.13 of the Company's Form 10-QSB dated
November 12, 2004)
10.2*# Amendment to Employment Agreement, dated as of December 31,
2008, between the Bank and Martin J. Geitz
10.3# Supplemental Executive Retirement Plan Agreement, dated as of
April 23, 2001, by and between the Bank and Charles D. Forgie
(incorporated by reference to Exhibit 10.5 of the Company's
Form 10-KSB dated March 17, 2004)
19
10.4# Supplemental Executive Retirement Plan Agreement, dated as of
April 23, 2001, by and between the Bank and Anthony F.
Bisceglio (incorporated by reference to Exhibit 10.6 of the
Company's Form 10-KSB dated March 17, 2004)
10.5# Change in Control Agreement, dated as of July 30, 1999, by
and between the Bank and Anthony F. Bisceglio (incorporated
by reference to Exhibit 10.8 of the Company's Form
10-KSB dated March 17, 2004)
10.6*# Amendment to Change in Control Agreement, dated as of
December 31, 2008, by and between the Bank and Anthony F.
Bisceglio
10.7*# Change in Control Severance Agreement dated as of December
30, 2008 by and between the Bank and Terry L. Boulton
10.8*# Change in Control Agreement, dated as of December 30, 2008,
by and between the Bank and Paul R. Little
10.9*# Change in Control Agreement, dated as of December 30, 2008,
by and between the Bank and Howard R. Zern
10.10 Letter Agreement dated as of April 25, 2006 by and between
the Company and Paul R. Little (incorporated by reference to
Exhibit 10.1 of the Company's Form 8-K filed on May 22, 2006)
10.11 Letter Agreement, dated March 27, 2009, between the Company
and the United States Department of the Treasury, with
respect to the issuance and sale of the Preferred Stock and
the Warrant (incorporated by reference to Exhibit 10.1 of the
Company's Form 8-K filed on March 30, 2009)
10.12 Side Letter, dated March 27, 2009, between the Company and
the United States Department of the Treasury (incorporated by
reference to Exhibit 10.2 of the Company's Form 8-K filed on
March 30, 2009)
10.13# Form of Waiver, executed by each of Messrs. Martin J. Geitz,
Anthony F. Bisceglio and Paul R. Little (incorporated by
reference to Exhibit 10.3 of the Company's Form 8-K filed on
March 30, 2009)
10.14# Form of Senior Executive Officer Agreement, executed by each
of Messrs. Martin J. Geitz, Anthony F. Bisceglio and Paul R.
Little (incorporated by reference to Exhibit 10.4 of the
Company's Form 8-K filed on March 30, 2009)
13* 2008 Annual Report (except for those portions expressly
incorporated by reference, the 2008 Annual Report is
furnished for informational purposes and is not to be deemed
filed as part of this Form 10-K)
21* Subsidiaries
23* Consent of Shatswell, MacLeod & Company, P.C.
31.1* Section Rule 13(a)-14(a)/15(d)-14(a) Certification by Chief
Executive Officer
20
31.2* Section Rule 13(a)-14(a)/15(d)-14(a) Certification by Chief
Financial Officer
32.1* Section 1350 Certification by Chief Executive Officer
32.2* Section 1350 Certification by Chief Financial Officer
* Filed herewith
# Management contract or compensatory plan or arrangement
21
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized, on March 30, 2009.
SBT BANCORP, INC.
By: /s/ Martin J. Geitz
------------------------------------------
Martin J. Geitz
President and Chief Executive Officer
In accordance with the Exchange Act, this Report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.
Name Capacity Date
/s/ Martin J. Geitz President and March 30, 2009
- ---------------------------------------- Chief Executive Officer
Martin J. Geitz
/s/ Anthony F. Bisceglio Executive Vice President, March 30, 2009
- ---------------------------------------- Chief Financial Officer and
Anthony F. Bisceglio Chief Accounting Officer
/s/ Robert J. Bogino Director March 30, 2009
- ----------------------------------------
Robert J. Bogino
/s/ James T. Fleming Director March 30, 2009
- ----------------------------------------
James T. Fleming
/s/ Edward J. Guarco Director March 30, 2009
- ----------------------------------------
Edward J. Guarco
/s/ Gary R. Kevorkian Director March 30, 2009
- ----------------------------------------
Gary R. Kevorkian
/s/ George B. Odlum, Jr., DMD Director March 30, 2009
- ----------------------------------------
George B. Odlum, Jr., DMD
/s/ David W. Sessions Director March 30, 2009
- ----------------------------------------
David W. Sessions
/s/ Rodney R. Reynolds Director March 30, 2009
- ----------------------------------------
Rodney R. Reynolds
/s/ Penny R. Woodford Director March 30, 2009
- ----------------------------------------
Penny R. Woodford
/s/ Lincoln S. Young Director March 30, 2009
- ----------------------------------------
Lincoln S. Young
22