HARTFORD, Conn., Oct. 24, 2008 (GLOBE NEWSWIRE) -- The Connecticut Bank and Trust Company (Nasdaq:CTBC) ("CBT") reported a net loss of $1,487,000, or $0.42 per share, for the third quarter of 2008, compared to a $530,000, or $0.15 per share loss, for the quarter ended September 30, 2007. The results included additions to the allowance for loan losses of $1,316,000 in the quarter compared to $111,000 in the third quarter of 2007. Chairman and CEO David A. Lentini remarked, "Banks in the United States have and will report some of the worst quarterly results in recent memory and many of these losses will come from the write-downs of the value of Fannie Mae and Freddie Mac securities they held for investment purposes. Even though CBT did not hold any of these securities, we were not immune to the recessionary pressures around us. The unusually large provision to the allowance for loan losses in this quarter is in direct response to those pressures and reflects both increases in recognition of a weakening economic outlook and for individual customers experiencing difficulty."
Lentini added, "Going forward we remain well-capitalized and look forward to reaching profitability in the near future. Although it is hard to predict anything in these difficult times, it appears that on an operating level, we will get close to a break-even situation in the fourth quarter. Further Federal Reserve interest rate reductions or more weakening in our local economy, could adversely affect our results."
For the nine-month period ended September 30, 2008, CBT reported a net loss of $2,178,000, or $0.61 per share, compared to a loss of $1,760,000, or $0.50 per share, for the nine-month period ended September 30, 2007.
Quarterly Results of Operations. Net interest income rose $256,000 to $1,734,000 for the three-month period ended September 30, 2008 over the same period in the prior year. In the 12 months ended September 30, 2008, the Federal Open Market Committee acted seven times to lower the Fed Funds Target Rate and the Prime Rate a total of 2.75%. These unprecedented actions taken by the Federal Reserve will take time to work through the local economy. CBT's net interest income grew by increasing interest earning assets and lowering its costs of funding. Average interest earning assets grew $40 million in the quarter ended September 30, 2008 over the same period in 2007. The net interest margin decreased 19 basis points to 3.39%, compared to 3.58% for the quarter ended September 30, 2007.
Noninterest income was $146,000 in the quarter ended September 30, 2008, an increase of 33% compared to the same period a year earlier primarily due to the increase in fee based services.
Noninterest expense increased $45,000 or 2%, to $2,051,000 for the three-month period ending September 30, 2008, compared to the same period in the prior year. The increase is primarily the result of higher occupancy costs, including rent, taxes and utilities. CBT's efficiency ratio, which measures recurring operating expenses as a percentage of net interest income plus noninterest income for the current quarter, improved to 1.09%, compared to 1.26%, in the same period last year.
Balance Sheet Performance. Total assets grew $44.8 million, or 25%, to $223.5 million at September 30, 2008, compared to $178.7 million at December 31, 2007. Total loans outstanding grew $26.8 million to $169.5 million and total investments grew $8.5 million to $28.4 million at September 30, 2008. Cash and cash equivalents increased $7.6 million to $19.1 million to ensure adequate liquidity and provide funding for future growth. Asset growth was funded through a combination of increased deposits and increased borrowings from the Federal Home Loan Bank of Boston. Total deposits were $169.9 million at September 30, 2008, an increase of $32.1 million from December 31, 2007. Borrowings from the Federal Home Loan Bank of Boston totaled $30.5 million, increasing $13.0 million from the $17.5 million at December 31, 2007. The Bank continues to be well-capitalized with stockholders' equity of $18.1 million at September 30, 2008. The ratio of stockholders' equity to total assets was 8.1%.
Asset Quality. Asset quality remains strong at CBT. Total nonaccrual loans were $2.0 million and represented 1.21% of total loans outstanding at September 30, 2008. The allowance for loan losses is $2.6 million at September 30, 2008, or 1.52% of outstanding loans, compared to $1.7 million, or 1.19% of outstanding loans at December 31, 2007. The coverage ratio, which measures the ratio of allowance for loan losses to nonperforming loans, was 126% at September 30, 2008. CBT had no other loans that were past due 90 days or more.
CEO Lentini ended his remarks by saying, "The economic pressures affecting our customers have, in turn, affected CBT as well. The unprecedented actions taken by the Federal Reserve and other federal agencies will take time to work through the local economy. With our strong capital position, our outlook remains positive about our ability to meet the continuing financial needs of our marketplace."
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Selected Performance Data
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Three months ended
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Dollar
values in
thousands
except June 30, Sept 30, Dec 31, Mar 31, June 30, Sept 30,
per share 2007 2007 2007 2008 2008 2008
------------------- -------- -------- -------- -------- --------
Total
assets
(EOP) $169,816 $181,457 $178,739 $204,205 $200,128 $223,465
Net
operating
loss $ (592) $ (530) $ (388) $ (396) $ (295) $ (1,487)
Net
interest
margin 3.46% 3.58% 3.64% 3.37% 3.43% 3.39%
Net
interest
spread 2.49% 2.54% 2.58% 2.45% 2.75% 2.79%
Ratio of
total
stock-
holders'
equity to
total
assets
(EOP) 12.25% 11.35% 11.44% 9.82% 9.65% 8.09%
Weighted
avg shrs
outstanding 3,534 3,534 3,537 3,545 3,550 3,552
Loss per
share $ (0.17) $ (0.15) $ (0.11) $ (0.11) $ (0.08) $ (0.42)
Book value
per share
(EOP) $ 5.83 $ 5.77 $ 5.72 $ 5.62 $ 5.40 $ 5.06
Allowance
for loan
losses to
total
loans (EOP) 1.22% 1.23% 1.19% 1.19% 1.21% 1.52%
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Nine months ended
------------------
Dollar values in thousands Sept 30, Sept 30,
except per share 2007 2008
------------------------------------------------- -------- --------
Total assets (EOP) $181,457 $223,465
Net operating loss $ (1,760) $ (2,178)
Net interest margin 3.57% 3.40%
Net interest spread 2.54% 2.67%
Ratio of total stockholders'
equity to total assets (EOP) 11.35% 8.09%
Weighted avg shrs outstanding 3,534 3,548
Loss per share $ (0.50) $ (0.61)
Book value per share (EOP) $ 5.77 $ 5.06
Allowance for loan losses to total loans (EOP) 1.23% 1.52%
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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
Summarized Statements of Loss
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
(Dollars in thousands,
except share data) 2008 2007 2008 2007
------- ------- ------- -------
Interest and dividend income:
Interest and fees on loans $ 2,651 $ 2,423 $ 7,805 $ 6,708
Debt securities 356 254 938 749
Dividends 10 26 61 71
Federal funds sold/other 37 196 149 340
------- ------- ------- -------
Total interest and dividend
income 3,054 2,899 8,953 7,868
------- ------- ------- -------
Interest expense:
Deposits 1,039 1,236 3,282 3,325
Borrowed funds 281 185 781 528
------- ------- ------- -------
Total interest expense 1,320 1,421 4,063 3,853
------- ------- ------- -------
Net interest income 1,734 1,478 4,890 4,015
Provision for loan losses 1,316 111 1,537 238
------- ------- ------- -------
Net interest income, after
provisions 418 1,367 3,353 3,777
------- ------- ------- -------
Noninterest income:
Service charges and fees 69 44 172 127
Brokerage commissions 77 65 213 189
Gains (losses) from sales of
available-for-sale
securities, net -- -- 65 (42)
------- ------- ------- -------
Total noninterest income 146 109 450 274
------- ------- ------- -------
Noninterest expenses:
Salaries and benefits 1,102 1,104 3,244 3,276
Occupancy and equipment 467 386 1,333 1,067
Data processing 76 58 218 157
Marketing 90 118 230 339
Professional services 115 138 325 359
Other general and
administrative 201 202 631 613
------- ------- ------- -------
Total noninterest expenses 2,051 2,006 5,981 5,811
------- ------- ------- -------
Net loss $(1,487) $ (530) $(2,178) $(1,760)
======= ======= ======= =======
Net loss per share:
Basic $ (0.42) $ (0.15) $ (0.61) $ (0.50)
Diluted $ (0.42) $ (0.15) $ (0.61) $ (0.50)
THE CONNECTICUT BANK AND TRUST COMPANY
BALANCE SHEETS
(Dollars in Thousands)
ASSETS
Sept. 30, Dec. 31, Sept. 30,
2008 2007 2007
(Unaudited) (Unaudited)
---------- ---------- ----------
Cash and due from banks $ 7,564 $ 3,411 $ 6,383
Federal funds sold 11,545 8,080 17,609
---------- ---------- ----------
Cash and cash equivalents 19,109 11,491 23,992
Securities available for sale 28,381 19,894 21,089
Certificates of deposit 491 76 76
Federal Reserve Bank stock, at cost 585 635 635
Federal Home Loan Bank stock, at
cost 1,585 945 914
Loans 169,467 142,686 132,172
Less: allowance for loan losses (2,572) (1,693) (1,622)
---------- ---------- ----------
Loans, net 166,895 140,993 130,550
Premises and equipment, net 2,710 3,053 2,652
Accrued interest receivable 867 830 820
Other assets 2,842 822 729
---------- ---------- ----------
Total Assets $ 223,465 $ 178,739 $ 181,457
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 169,936 $ 137,800 $ 140,607
Short-term borrowings 2,529 2,255 2,028
Long-term debt 30,450 17,450 17,450
Other liabilities 2,480 793 777
---------- ---------- ----------
Total liabilities 205,395 158,298 160,862
---------- ---------- ----------
Stockholders' equity;
Common stock, $1.00 par value;
10,000,000 shares authorized;
3,572,450 shares issued and
outstanding at September 30,
2008, and December 31, 2007 3,572 3,572 3,572
Common stock warrants 853 853 853
Additional paid-in capital 29,759 29,700 29,678
Restricted stock unearned
compensation (172) (279) (318)
Retained deficit (15,320) (13,142) (12,754)
Accumulated other comprehensive
loss (622) (263) (436)
---------- ---------- ----------
Total stockholders' equity 18,070 20,441 20,595
---------- ---------- ----------
Total Liabilities and
Stockholders' Equity $ 223,465 $ 178,739 $ 181,457
========== ========== ==========