HARTFORD, Conn., April 24, 2008 (PRIME NEWSWIRE) -- The Connecticut Bank and Trust Company (Nasdaq:CTBC) reported a net loss of $396,000, or $0.11 per share, for three months ended March 31, 2008, compared to a net loss of $638,000, or $0.18 per share, for the three months ended March 31, 2007. Total assets were $204.2 million at March 31, 2008, an increase of $25.5 million from $178.7 million reported at December 31, 2007.
Chairman and CEO David A. Lentini commented, "Solid asset growth remains a key ingredient for our financial success. During the first quarter of 2008, we grew our balance sheet $25.5 million, with growth in both loans and investments. We restructured our investment portfolio and improved earnings with a positive spread compared to borrowing rates. I believe that these actions and our ability to grow quality loans should lead to much improved results in the quarters ahead."
Results of Operations. The results of operations for the quarter ended March 31, 2008 improved $242,000 to a loss of $396,000, compared to a loss of $638,000 for the quarter ended March 31, 2007. Net interest income improved $285,000, while noninterest expense increased $94,000 and the provisions for loan losses increased $77,000. Service fees and commissions increased $20,000, and the Bank realized a gain of $65,000 from sales of investment securities in the first quarter of 2008, compared to a loss of $43,000 in the first quarter of 2007.
The recent sharp decline in interest rates has fallen unevenly on community banks. Borrowers have been quick to take advantage of the lower rates while the banks were initially reluctant to lower deposit rates, fearing outflows. This has put pressure on net interest margins, and CBT is no exception. Despite this trend, CBT has been able to grow net interest income. Net interest income was $1.5 million for the three months ended March 31, 2008, compared to $1.2 million for the same period a year earlier. The increase is primarily due to growth in earning assets. The net interest margin declined from 3.70% to 3.38% in a period in which the Federal Open Market Committee (FOMC) lowered the Federal funds rate a total of 200 basis points.
Noninterest expenses increased $94,000, or 5%, to $1,936,000 in the quarter ended March 31, 2008, compared to the same period in 2007. The opening of branches in Windsor and Rocky Hill in 2007 completed our planned development of banking centers in the greater Hartford area. The costs related to operation of these new locations added $175,000 of expense in this quarter. All other expenses decreased $81,000. CEO Lentini stated, "By tightening our practices of cost control for purchasing everything from marketing to employee benefits, we were able to achieve meaningful savings without adversely affecting our delivery of services."
Balance Sheet Performance. Total assets were $204.2 million at March 31, 2008, an increase of $25.5 million, or 14%, compared to $178.7 million at December 31, 2007. CBT has maintained its rate of growth due to its strong capital position. The growth in assets was led by an $11.5 million increase in loans, a net increase of $9.4 million in investments, and a $3.8 million increase in cash and cash equivalents. Asset growth was funded through a combination of increased deposits and increased borrowings from the Federal Home Loan Bank of Boston.
Total deposits were $144.9 million at March 31, 2008, an increase of $7.1 million from December 31, 2007. Advances from the Federal Home Loan Bank of Boston totaled $30.5 million, compared to $17.5 million at December 31, 2007. The Bank continues to be well-capitalized, with stockholders' equity of $20.1 million at March 31, 2008.
Asset Quality. The allowance for loan losses at March 31, 2008 was $1.8 million, compared to $1.7 million at December 31, 2007. This represented 1.19% of outstanding loans at each of the respective dates. There were no charge-offs during the quarter.
Total nonaccrual loans were $785,000 and represented 0.51% of total loans outstanding at March 31, 2008, compared to $597,000, or 0.42%, at March 31, 2007. The coverage ratio, which measures the allowance for loan and lease losses to nonperforming loans, was 233% at March 31, 2008. CBT had no other loans that were past due 90 days or more.
Selected Performance Data
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Three months ended
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Dollar values in
thousands except Dec. 31, March 31, June 30, Sept 30,
per share 2006 2007 2007 2007
------------------------------- --------- --------- ---------
Total assets (EOP) $ 136,434 $ 155,554 $ 169,816 $ 181,457
Net operating loss $ (610) $ (638) $ (592) $ (530)
Net interest margin 3.75% 3.70% 3.46% 3.58%
Net interest spread 2.59% 2.57% 2.49% 2.54%
Ratio of total
stockholders' equity
to total assets (EOP) 16.19% 13.92% 12.25% 11.35%
Weighted avg shrs
outstanding 3,531 3,531 3,534 3,537
Loss per share $ (0.17) $ (0.18) $ (0.17) $ (0.15)
Book value per share
(EOP) $ 6.19 $ 6.07 $ 5.83 $ 5.77
Allowance for loan
losses to total loans
(EOP) 1.29% 1.24% 1.22% 1.23%
Selected Performance Data
Three months ended Year ended
--------------------------------------------- ---------------------
Dollar values in Dec. 31, March 31, Dec. 31 Dec. 31,
thousands except 2007 2008 2006 2007
per share
-------------------------------- ---------- ---------- ---------
Total assets (EOP) $ 178,739 $ 204,205 $ 136,434 $ 178,739
Net operating loss $ (388) $ (396) $ (3,238) $ (2,148)
Net interest margin 3.64% 3.38% 3.85% 3.59%
Net interest spread 2.58% 2.46% 2.65% 2.53%
Ratio of total
stockholders' equity
to total assets (EOP) 11.44% 9.82% 16.19% 11.44%
Weighted avg shrs
outstanding 3,544 3,545 3,524 3,542
Loss per share $ (0.11) $ (0.11) $ (0.92) $ (0.61)
Book value per share
(EOP) $ 5.72 $ 5.62 $ 6.19 $ 5.72
Allowance for loan
losses to total loans
(EOP) 1.19% 1.19% 1.29% 1.19%
Caution concerning forward-looking statements:
Statements contained in this release, which are not historical facts, may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated, due to a number of factors, which include without limitation the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, changes in the interest rates, the effects of competition, and other factors that could cause actual results to differ materially from those provided in any such forward-looking statements. CBT does not undertake to update its forward-looking statements.
See financial statements accompanying this release for additional data.
THE CONNECTICUT BANK AND TRUST COMPANY
Statements of Loss
(Unaudited)
Three Months Ended
March 31,
--------------------------------
2008 2007
-------------- --------------
(Dollars in thousands except
share data)
Interest and dividend income:
Interest and fees on loans $ 2,590 $ 2,031
Debt securities 242 250
Dividends 25 20
Federal funds sold 75 7
-------------- --------------
Total interest and dividend
income 2,932 2,308
-------------- --------------
Interest expense:
Deposits 1,213 904
Borrowed funds 221 191
-------------- --------------
Total interest expense 1,434 1,095
-------------- --------------
Net interest income 1,498 1,213
Provision for loan losses 137 60
-------------- --------------
Net interest income, after
provision for loan losses 1,361 1,153
-------------- --------------
Noninterest income:
Service charges and fees 48 40
Brokerage commissions 66 54
-------------- --------------
Total fees and charges 114 94
Gains(losses) from sales of
available-for-sale securities, net 65 (43)
-------------- --------------
Total noninterest income 179 51
-------------- --------------
Noninterest expenses:
Salaries and benefits 1,058 1,060
Occupancy and equipment 434 336
Data processing 68 49
Marketing 65 115
Professional services 99 105
Telecommunications 55 47
Other general and administrative 157 130
-------------- --------------
Total noninterest expenses 1,936 1,842
-------------- --------------
Net loss $ (396) $ (638)
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Net loss per share:
Basic $ (0.11) $ (0.18)
Diluted $ (0.11) $ (0.18)
THE CONNECTICUT BANK AND TRUST COMPANY
Balance Sheets
ASSETS
March 31, December 31,
2008 2007
---------- ----------
(Dollars in thousands) (Unaudited)
Cash and due from banks $ 4,795 $ 3,411
Federal funds sold 10,473 8,080
---------- ----------
Cash and cash equivalents 15,268 11,491
Securities available for sale 29,306 19,894
Certificates of deposit 416 76
Federal Reserve Bank stock, at cost 622 635
Federal Home Loan Bank stock, at cost 1,477 945
Loans 154,287 142,686
Less: allowance for loan losses (1,830) (1,693)
---------- ----------
Loans, net 152,457 140,993
Premises and equipment, net 2,918 3,053
Accrued interest receivable 813 830
Other assets 928 822
---------- ----------
$ 204,205 $ 178,739
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LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 144,938 $ 137,800
Short term borrowings 2,725 2,255
Long term debt 30,450 17,450
Other liabilities 6,041 793
---------- ----------
Total liabilities 184,154 158,298
---------- ----------
Stockholders' equity;
Common stock, $1.00 par value;
10,000,000 shares authorized;
3,572,450 shares issued and
outstanding at March 31, 2008
and December 31, 2007 3,572 3,572
Common stock warrants 853 853
Additional paid-in capital 29,717 29,700
Restricted stock unearned compensation (243) (279)
Retained deficit (13,538) (13,142)
Accumulated other comprehensive loss (310) (263)
---------- ----------
Total stockholders' equity 20,051 20,441
---------- ----------
$ 204,205 $ 178,739
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