Declining non-interest expenses and increasing non-interest income pushed up earnings and helped offset declining mortgage banking activity at SBT Bancorp in the fourth quarter last year.
Net income in the fourth quarter totaled $354,000 at the holding company for The Simsbury Bank and Trust Co., compared with $258,000 in the linked quarter and $132,000 in the same period in 2013. For the full year, net income totaled $805,000, compared with $1.1 million in 2013.
Net interest and dividend income for 2014 increased $244,000, or 2.2 percent, over the previous year. Total loans outstanding, including those held-for-sale, increased $9 million, or 3.2 percent, to $291 million. Total assets declined slightly to $409 million, compared with $422 million in 2013.
In a statement announcing the company’s earnings, President and CEO Martin J. Geitz noted a $5.4 million, or 6.6 percent, increase in commercial loan balances since year-end 2013, though he also noted some challenges in the bank’s residential lending unit.
“We experienced a significant increase in applications and closed purchased mortgages during the second half of the year; however, the levels were still below 2013’s levels. The launch of the wholesale mortgage origination channel has contributed incremental loan volume to our retail origination platform, and we expect measured improvement in the mortgage business contribution to earnings,” Geitz said in a statement.
Residential mortgage loans, including loans held for sale, declined $1.4 million, or 1 percent. Consumer loans increased $5 million or 8.6 percent, mainly due to an increase in purchased auto loans.
The company’s allowance for loan losses at year-end 2014 was 0.97 percent of total loans. Non-accrual loans totaled $2 million, or 0.72 percent of total loans, at Dec. 31, 2014, compared with $2.8 million, or 1.02 percent of total loans, in 2013. Total non-accrual and delinquent loans at the year’s end stood at 1.08 percent of loans outstanding, compared with 1.34 percent in the year-ago period.
In the fourth quarter of 2014, total revenues were $3.5 million compared with $3.6 million a year ago, a decrease of $45,000 or 1.3 percent. Non-interest income increased by $47,000 or 7.4 percent, primarily due to an increase in gain on sales of securities available-for-sale of $36,000. For the year-end 2014, total revenues were $13.8 million compared with $14.2 million for the year ended 2013, a decrease of $412,000. Over that time frame, net interest and dividend income increased by $244,000 while noninterest income decreased by $656,000, primarily due to a decrease in mortgage banking activities in the amount of $809,000, offset slightly by an increase in other service charges and fees of $45,000, and other income of $87,000.
