HARTFORD, Conn., April 29, 2011 (GLOBE NEWSWIRE) -- The Connecticut Bank and Trust Company ("CBT" or "Bank") (Nasdaq:CTBC) reported net income of $806,000 for the quarter ending March 31, 2011 compared to net income of $246,000 for the comparable period a year earlier. After accounting for $97,000 of preferred dividends, net income available to common shareholders was $709,000 or $0.19 per diluted common share compared to net income of $149,000 or $0.04 per diluted common share, respectively. Included in the Bank's first quarter results is the recognition of $700,000 in income tax benefit related to net operating loss carryforwards by reversing a portion of the deferred tax valuation allowance.
Chairman and CEO David A. Lentini remarked, "The Bank continues to provide much needed commercial lending in our market area with over $8.5 million in new loans granted in the quarter. Despite this volume, loan assets declined in the period as many business owners continue to shrink their balance sheets in this period of economic uncertainty."
Total assets at March 31, 2011 were $273.6 million compared to $274.2 million at the prior year end. Total loans outstanding declined $2.4 million, and securities were called in advance of their maturity date resulting in a net decrease of $3.1 million.
Operating Results for the Quarter Ended March 31, 2011. Net interest income for the quarter ended March 31, 2011 was $2.5 million, which is unchanged from both the same period in the prior year and the immediately preceding quarter. The net interest margin for the quarter was 3.86% compared to 3.97% for the comparable period a year ago and 3.83% on a linked quarter basis. Growth in average earning assets, principally loans, produced volume related changes of $329,000 which was offset by a comparable decline in yield on assets of ($436,000). This was somewhat mitigated by lower rates and volumes on average interest bearing liabilities of $126,000.
Non-interest income amounted to $293,000 in the quarter, compared to $149,000 for the comparable period a year ago. Fees on deposit operations totaled $113,000, up $44,000 or 64%, from the same period in the prior year. Gains on sales of securities added $85,000 of income and proceeds from the origination and sale of mortgage loans added $27,000 to income.
Operating expenses for the quarter totaled $2.5 million, an increase of $304,000, from the same period last year. General and administrative costs rose $142,000 from the comparable period a year prior primarily due to increased costs of goods and services and collection expenses on increased problem assets. Professional services increased $82,000 from the prior year mainly due to servicing fees on the consumer loan portfolio and increased legal and consulting costs. Compensation costs, including staff additions, benefits, and related taxes, rose $58,000, for the three-month period ended March 31, 2011 compared to the similar period in the prior year. FDIC insurance premiums increased $35,000 chiefly related to higher premiums on insured deposits.
Provision for Loan Losses. The provision for loan losses was $154,000 for quarter ending March 31, 2011 compared to $155,000 for the same period in the prior year. The ratio of reserves to total loans was 1.53% at March 31, 2011 compared to 1.51% at December 31, 2010. While the loan portfolio experienced a decline of $2.4 million, provisions were set aside for qualitative factors affecting the loan portfolio. The allowance was $3.4 million at March 31, 2011 and December 31, 2010.
Asset Quality. All loans are subject to internal risk rating, which are independently reviewed on an annual basis. Internal risk ratings are an integral component in the calculation of reserving for loan losses. Total nonaccrual loans were $10.8 million ($2.7 million government guaranteed) and represented 4.9% of total loans outstanding at March 31, 2011, compared to $8.8 million ($2.4 million government guaranteed) and represented 3.9% of total loans at December 31, 2010. Loans past due 90 days or more and still accruing interest totaled $207,000 as of March 31, 2011 compared to $1.2 million as of December 31, 2010. Charged-off loans amounted to $153,000 for the quarter ended March 31, 2011 and $48,000 in the comparable period a year earlier. Management mitigates the risk of loss through sound underwriting principles, strong collateral management, diversification among industries and government guarantees from the USDA and SBA, when available.
Balance Sheet Performance. Total assets at March 31, 2011 were $273.6 million compared to $274.2 million at the prior year end. Outstanding loans experienced a decline of $2.4 million from December 31, 2010 primarily due to repayments and slower demand for new loans. Securities available for sale declined $3.2 million chiefly attributable to principal prepayments and securities called and redeemed at par. The Bank reduced the valuation allowance against the deferred tax asset in the amount of $700,000 based upon available evidence of historical taxable income levels for the past two years and projected taxable income, and concluded it is more likely than not that this portion of the deferred tax asset will be realized. Total deposits declined $1.2 million from December 31, 2010 to end the quarter at $212.6 million principally from maturities of certificates of deposit. Short-term and secured borrowings increased $1.0 million while advances from the Federal Home Loan Bank Boston declined by $1.0 million. The Bank is considered well-capitalized with stockholders' equity of $25.5 million at March 31, 2011.
| Selected Performance Data | |||||
| Quarter Ended | |||||
| Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | |
| In thousands, except per share data | 2011 | 2010 | 2010 | 2010 | 2010 |
| Total assets (EOP) | $ 273,604 | $ 274,231 | $ 272,292 | $ 267,531 | $ 266,661 |
| Net income (loss) | $ 806 | $ 188 | $ (135) | $ 261 | $ 246 |
| Net income (loss) available to common shareholders | $ 709 | $ 91 | $ (232) | $ 164 | $ 149 |
| Net interest margin | 3.86% | 3.64% | 3.89% | 3.74% | 3.97% |
| Net interest spread | 3.56% | 3.33% | 3.57% | 3.44% | 3.62% |
| Ratio of total stockholders' equity to total assets (EOP) | 9.33% | 9.07% | 9.14% | 9.42% | 9.25% |
| Weighted avg shares outstanding | 3,621 | 3,621 | 3,621 | 3,621 | 3,604 |
| Income (loss) per common share (basic) | $ 0.20 | $ 0.03 | $ (0.06) | $ 0.05 | $ 0.04 |
| Income (loss) per common share (diluted) | $ 0.19 | $ 0.02 | $ (0.06) | $ 0.05 | $ 0.04 |
| Book value per common share (EOP) | $ 5.64 | $ 5.47 | $ 5.48 | $ 5.57 | $ 5.43 |
| Allowance for loan losses to total loans (EOP) | 1.53% | 1.51% | 1.48% | 1.40% | 1.37% |
| Nonperforming loans to total loans | 4.97% | 4.44% | 2.03% | 1.70% | 0.87% |
| THE CONNECTICUT BANK AND TRUST COMPANY | |||||
| Five Quarter Statements of Operations (unaudited) | |||||
| Three Months Ended | |||||
| March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |
| (In thousands,except per share data) | 2011 | 2010 | 2010 | 2010 | 2010 |
| Total interest and dividend income | $ 3,228 | $ 3,291 | $ 3,419 | $ 3,313 | $ 3,335 |
| Total interest expense | 734 | 810 | 836 | 851 | 860 |
| Net interest income | 2,494 | 2,481 | 2,583 | 2,462 | 2,475 |
| Provision for loan losses | 154 | 135 | 587 | 154 | 155 |
| Net interest income, after provision for loan losses | 2,340 | 2,346 | 1,996 | 2,308 | 2,320 |
| Total non-interest income | 293 | 206 | 186 | 209 | 149 |
| Total non-interest expenses | 2,527 | 2,364 | 2,317 | 2,256 | 2,223 |
| Net income (loss) before income tax expense | 106 | 188 | (135) | 261 | 246 |
| Income tax benefit | 700 | -- | -- | -- | -- |
| Less: preferred stock dividend and accretion | (97) | (97) | (97) | (97) | (97) |
| Net income (loss) attributable to common shareholders | $ 709 | $ 91 | $ (232) | $ 164 | $ 149 |
| Net income (loss) per share: | |||||
| Basic | $ 0.20 | $ 0.03 | $ (0.06) | $ 0.05 | $ 0.04 |
| Diluted | $ 0.19 | $ 0.03 | $ (0.06) | $ 0.04 | $ 0.04 |
CBT is a full service commercial bank headquartered in Hartford, CT, with branch offices conveniently located in Glastonbury, Newington, Rocky Hill, Vernon, West Hartford, and Windsor.
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 INCOME | ||
| (Unaudited) | ||
| Three Months Ended | ||
| March 31, | ||
| (In thousands, except per share data) | 2011 | 2010 |
| Interest and dividend income: | ||
| Loans, including fees | $ 3,010 | $ 3,048 |
| Debt securities | 201 | 268 |
| Other | 17 | 19 |
| Total interest and dividend income | 3,228 | 3,335 |
| Interest expense: | ||
| Deposits | 474 | 592 |
| Securities sold under agreements to repurchase | 3 | 3 |
| Federal Home Loan Bank advances | 257 | 265 |
| Total interest expense | 734 | 860 |
| Net interest income | 2,494 | 2,475 |
| Provision for loan losses | 154 | 155 |
| Net interest income, after provision for loan losses | 2,340 | 2,320 |
| Non-interest income: | ||
| Customer service fees | 113 | 69 |
| Loan servicing fees | 68 | 71 |
| Net gain on sales of available-for-sale securities | 85 | -- |
| Net gain on sales of loans | 27 | 9 |
| Total non-interest income | 293 | 149 |
| Non-interest expense: | ||
| Salaries and employee benefits | 1,229 | 1,171 |
| Occupancy and equipment | 449 | 435 |
| Data processing | 82 | 78 |
| Marketing | 62 | 93 |
| Professional services | 231 | 149 |
| FDIC insurance | 132 | 97 |
| Other general and administrative | 342 | 200 |
| Total non-interest expense | 2,527 | 2,223 |
| Income before income tax benefit | 106 | 246 |
| Income tax benefit | 700 | -- |
| Net income | 806 | 246 |
| Less preferred stock dividend and accretion | (97) | (97) |
| Net income attributable to common shareholders | $ 709 | $ 149 |
| Net Income per common share: | ||
| Basic | $ 0.20 | $ 0.04 |
| Diluted | $ 0.19 | $ 0.04 |
| Average basic common shares issued and outstanding | 3,621 | 3,604 |
| Average diluted common shares issued and outstanding | 3,669 | 3,604 |
| THE CONNECTICUT BANK AND TRUST COMPANY | |||
| BALANCE SHEETS | |||
| (Unaudited) | |||
| March 31, | December 31, | March 31, | |
| (In thousands, except share data) | 2011 | 2010 | 2010 |
| ASSETS | |||
| Cash and due from banks | $ 14,559 | $ 8,725 | $ 4,314 |
| Federal funds sold | -- | -- | 24,000 |
| Cash and cash equivalents | 14,559 | 8,725 | 28,314 |
| Interest-bearing deposits in bank | 79 | 79 | 78 |
| Securities available for sale | 32,177 | 35,349 | 27,574 |
| Federal Reserve Bank stock, at cost | 751 | 762 | 724 |
| Federal Home Loan Bank stock, at cost | 2,057 | 2,057 | 2,057 |
| Loans held for sale | -- | 386 | -- |
| Loans | 221,334 | 223,723 | 205,228 |
| Allowance for loan losses | (3,383) | (3,381) | (2,809) |
| Loans, net | 217,951 | 220,342 | 202,419 |
| Premises and equipment, net | 1,780 | 1,898 | 2,005 |
| Deferred tax asset | 700 | -- | -- |
| Other assets | 3,550 | 4,633 | 3,490 |
| $ 273,604 | $ 274,231 | $ 266,661 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| Non-interest-bearing deposits | $ 38,119 | $ 35,972 | $ 30,294 |
| Interest-bearing deposits | 174,517 | 177,822 | 177,486 |
| Total deposits | 212,636 | 213,794 | 207,780 |
| Secured borrowings | 777 | 577 | -- |
| Securities sold under agreements to repurchase | 4,240 | 3,392 | 2,893 |
| Federal Home Loan Bank advances | 29,450 | 30,450 | 30,450 |
| Other liabilities | 983 | 1,151 | 874 |
| Total liabilities | 248,086 | 249,364 | 241,997 |
| Stockholders' equity: | |||
| Preferred stock, no par value; 1,000,000 shares authorized; issued and outstanding: 5,448 shares at March 31, 2011 and December 31, 2010; aggregate liquidation preference of $5,448 at March 31, 2011 and December 31, 2010 | 5,448 | 5,448 | 5,448 |
| Discount on preferred stock | (345) | (374) | (460) |
| Common stock, $1.00 par value; 10,000,000 shares authorized; issued and outstanding: 3,620,950 shares at March 31, 2011 and December 31, 2010 | 3,621 | 3,621 | 3,621 |
| Common stock warrants | 1,405 | 1,405 | 1,405 |
| Additional paid-in capital | 30,097 | 30,088 | 30,032 |
| Restricted stock unearned compensation | (148) | (163) | (207) |
| Accumulated deficit | (14,563) | (15,272) | (15,295) |
| Accumulated other comprehensive income | 3 | 114 | 120 |
| Total stockholders' equity | 25,518 | 24,867 | 24,664 |
| $ 273,604 | $ 274,231 | $ 266,661 | |