HARTFORD, Conn., July 23, 2007 (PRIME NEWSWIRE) -- The Connecticut Bank and Trust Company (Nasdaq:CTBC) today announced its financial results for the second quarter of 2007. CBT reported that total assets rose $33.3 million from December 31, 2006 to $169.8 million on June 30, 2007. CBT also reported a reduction of $316,000, or 35%, in the net loss for the second quarter. The net loss for the quarter ending June 30, 2007 was $592,000 or $0.17 per share compared to a net loss of $908,000 or $0.26 per share for comparable period a year earlier.
The results of operation for the six months ended June 30, 2007 also reflected improvement with a reduction in the loss of $554,000, or 31%, to a loss of $1,230,000 or $0.35 per share compared to a loss of $1,784,000 or $0.51 per share for the six months ended June 30, 2006.
Chairman and CEO David A. Lentini commented, "I am pleased that the results continue to show improvement while we expand our geographic reach. We marked the opening of our newest banking center in Windsor, CT with an open house and reception held on May 8. Our entrance into that community has been well received. The Business Development Officers have been increasing the number of customer relationships in that area and our new facility provides a service base to build upon." Lentini went on to add, "We received regulatory approval to open our 7th banking center in Rocky Hill later this year. This will complete the current expansion phase to support our footprint as the fastest growing bank in CT."
Results of Operations. For the quarter ended June 30, 2007, net interest income totaled $1,324,000 compared to $965,000 for the quarter ended June 30, 2006. Net interest increased $359,000 and noninterest income grew $89,000. Noninterest expense increased $243,000 while the provision for loan losses decreased $111,000.
The increase in net interest is due to growth in interest earning assets which contributed $356,000 to net interest income, with the remaining $3,000 comprised of rate changes. The net interest margin (NIM) was 3.46% for the quarter ending June 30, 2007 compared to 3.86% for the comparable period a year earlier. The NIM has been negatively impacted by the rapid growth in average earning assets expanding at a quicker rate than net interest income.
CEO Lentini remarked, "The yield curve and the competitive market continue to put pressure on net interest income, and ultimately the net interest margin. We raised funds through a CD promotion, which coincided with our opening of the Windsor banking center. These funds provide liquidity and will continue to support loan growth, but are temporarily held in short term investments."
The net interest spread declined 23 basis points from 2.72% at June 30, 2006 to 2.49% at June 30, 2007. The net interest spread measures the difference between the average rate earned on earning assets and the average rate paid for interest bearing liabilities. The funds raised through the CD promotion are invested in Federal funds, and the yield is comparable to the cost on the certificates of deposit, which lowers the overall net interest spread.
Noninterest income increased $89,000, or 356%, from $25,000 for the quarter ended June 30, 2006 to $114,000 for the quarter ended June 30, 2007. Service charges and fees on deposit accounts increased $18,000 to $43,000 for the quarter ended June 30, 2007. Brokerage commission revenue contributed $70,000 for the quarter ended June 30, 2007. CBT commenced offering retail brokerage services to its customers in the third quarter of 2006.
Noninterest expenses increased $243,000 to $1,963,000 in the quarter ended June 30, 2007 compared to $1,720,000 for the quarter ended June 30, 2006. Compensation costs rose due to staff additions and occupancy costs rose as a result of branch expansion and the related costs of goods and services. Expenses for marketing, professional services and other management discretionary expenses were flat from the same period a year earlier.
Balance Sheet Performance. Total assets at June 30, 2007 were $169.8 million, an increase of $33.3 million from the $136.4 million reported at December 31, 2006. The loan portfolio totaled $123.7 million at June 30, 2007 with a $16.7 million increase in loans from year end. Additionally, there was a $16.6 million increase in cash and cash equivalents which will be used for funding future loan growth and our daily operating needs. The increase in assets was completely funded through deposits raised in the market. Total deposits increased $33.3 million to $133 million at June 30, 2007. Stockholders' equity at June 30, 2007 was $20.8 million compared to $22.1 million at December 31, 2006 primarily reflective of the operating losses for the period ending June 30, 2007.
Asset Quality. The allowance for loan losses at June 30, 2007 was $1,511,000 compared to $1,384,000 at December 31, 2006. This represented 1.22% and 1.29% of outstanding loans at the respective dates and reflects the risk in the portfolio. There were no charge-offs during the quarter.
At June 30, 2007, three loans totaling $621,000 were classified as nonperforming loans compared to two loans totaling $597,000 at December 31, 2006. The coverage ratio which measures the allowance for loan and lease losses to total nonperforming loans was 243% at June 30, 2007 compared to 242% at March 31, 2007.
THE CONNECTICUT BANK AND TRUST COMPANY
Selected Performance Data
Dollar values in thousands except per share
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Three months ended
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Mar 31, June 30, Sept 30, Dec 31, Mar 31, June 30,
2006 2006 2006 2006 2007 2007
---------- ------- -------- -------- -------- -------- --------
Total assets
(EOP) $99,016 $112,462 $123,325 $136,434 $155,554 $169,816
Net
operating
loss $ (876) $ (908) $ (844) $ (610) $ (638) $ (592)
Net interest
margin 4.19% 3.86% 3.69% 3.74% 3.70% 3.46%
Net interest
spread 2.90% 2.72% 2.57% 2.59% 2.57% 2.49%
Ratio of total
stockholders'
equity to
total assets
(EOP) 24.25% 20.47% 18.35% 16.19% 13.92% 12.25%
Weighted avg
shrs out-
standing 3,517 3,521 3,524 3,531 3,531 3,534
Loss per
share $ (0.25) $ (0.26) $ (0.24) $ (0.17) $ (0.18) $ (0.17)
Book value
per share
(EOP) $ 6.73 $ 6.45 $ 6.34 $ 6.19 $ 6.07 $ 5.83
Allowance
for loan
losses to
total
loans
(EOP) 1.36% 1.37% 1.34% 1.29% 1.24% 1.22%
Year ended
---------------------------------------------------------------
June 30, June 30,
2006 2007
----------------------------------- --------------------------
Total assets (EOP) $112,462 $169,816
Net operating loss $ (1,784) $ (1,230)
Net interest margin 4.02% 3.57%
Net interest spread 2.82% 2.54%
Ratio of total stockholders' equity
to total assets (EOP) 20.47% 12.25%
Weighted avg shrs outstanding 3,518 3,532
Loss per share $ (0.51) $ (0.35)
Book value per share (EOP) $ 6.45 $ 5.83
Allowance for loan losses
to total loans (EOP) 1.37% 1.22%
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
Consolidated Statements of Operations
(Dollars in thousands except share data)
Three Months Ended Six Months Ended
June 30, June 30,
--------------- -----------------
2007 2006 2007 2006
------ ------ ------- -------
(Unaudited) (Unaudited)
Interest and dividend income:
Interest and fees on loans $2,254 $1,386 $ 4,285 $ 2,534
Debt securities 245 239 495 499
Dividends 25 11 45 29
Federal funds sold 137 1 144 16
------ ------ ------- -------
Total interest and
dividend income 2,661 1,637 4,969 3,078
------ ------ ------- -------
Interest expense:
Deposits 1,185 530 2,089 948
Borrowed funds 152 142 343 227
------ ------ ------- -------
Total interest expense 1,337 672 2,432 1,175
------ ------ ------- -------
Net interest income 1,324 965 2,537 1,903
Provision for loan losses 67 178 127 260
------ ------ ------- -------
Net interest income, after
provision for loan losses 1,257 787 2,410 1,643
------ ------ ------- -------
Non-interest income:
Service charges and fees 43 25 83 43
Brokerage commissions 70 -- 124 --
Net gain/(loss) from sales
of available-for-sale
securities 1 -- (42) --
------ ------ ------- -------
Total non-interest income 114 25 165 43
------ ------ ------- -------
Non-interest expenses:
Salaries and benefits 1,112 928 2,172 1,834
Occupancy and equipment 345 287 681 563
Data processing 50 40 99 82
Marketing 106 158 221 430
Professional services 116 200 221 253
Telecommunications 44 54 91 98
Other general and administrative 190 53 320 210
------ ------ ------- -------
Total non-interest expenses 1,963 1,720 3,805 3,470
------ ------ ------- -------
Net loss $ (592) $ (908) $(1,230) $(1,784)
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Net loss per share:
Basic $(0.17) $(0.26) $ (0.35) $ (0.51)
Diluted $(0.17) $(0.26) $ (0.35) $ (0.51)
THE CONNECTICUT BANK AND TRUST COMPANY
BALANCE SHEETS
(Dollars in Thousands)
June 30, December 31, June 30,
2007 2006 2006
(Unaudited) (Unaudited)
--------- --------- ---------
ASSETS
Cash and due from banks $ 5,407 $ 4,589 $ 4,596
Interest bearing asset 76 76 25
Federal funds sold 16,274 475 50
--------- --------- ---------
Cash and cash equivalents 21,757 5,140 4,671
Securities available for sale 20,125 20,738 21,083
Federal Reserve Bank stock,
at cost 675 693 770
Federal Home Loan Bank stock,
at cost 914 728 533
Loans 123,665 106,910 83,069
Less: allowance for loan losses (1,511) (1,384) (1,136)
--------- --------- ---------
Loans, net 122,154 105,526 81,933
Premises and equipment, net 2,689 2,217 2,036
Accrued interest receivable 765 613 497
Other assets 737 779 939
--------- --------- ---------
Total Assets $ 169,816 $ 136,434 $ 112,462
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LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $ 133,091 $ 99,745 $ 75,877
Short term borrowings 1,839 1,453 10,591
Long term debt 12,450 12,450 2,450
Other liabilities 1,628 701 525
--------- --------- ---------
Total liabilities 149,008 114,349 89,443
--------- --------- ---------
Stockholders' equity;
Common stock, $1.00 par value;
10,000,000 shares authorized;
3,572,450 shares issued and
outstanding at June 30, 2007
and 3,567,450 issued and
outstanding at December 31, 2006 3,572 3,567 3,567
Common stock warrants 853 853 853
Additional paid-in capital 29,657 29,582 29,553
Restricted stock unearned
compensation (367) (426) (523)
Retained deficit (12,224) (10,994) (9,540)
Accumulated other
comprehensive loss (683) (497) (891)
--------- --------- ---------
Total stockholders' equity 20,808 22,085 23,019
--------- --------- ---------
Total Liabilities and
Stockholders' Equity $ 169,816 $ 136,434 $ 112,462
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