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.
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.
CONTACT: David A. Lentini 860-748-4250 email@example.com