CTBC The Connecticut Bank And Trust Company (MM)

The Connecticut Bank and Trust Company, (Nasdaq: CTBC), reported total assets reached $112 million at June 30, 2006, an increase of $26 million or 30% compared to $86 million a year ago. Loans outstanding increased $45.2 million or 119% to $83 million at June 30, 2006 compared to $38 million one year ago. President and CEO David A. Lentini stated "To pass the $100 million mark in assets in just nine quarters of operation is very gratifying and indicates our acceptance into the marketplace. Loan growth remains strong with more and more commercial firms choosing CBT as their financial services partner." The results for the quarter ended June 30, 2006 improved $213,000 or 19% to a loss of $908,000 or $0.25 per share, compared to a loss of $1,121,000 or $0.59 per share for the same period in 2005. For the six months ended June 30, 2006, the net loss was $1,784,000 or $.50 per share compared to a loss of $2,085,000 or $1.10 per share for same period in 2005. The per-share results for the second quarter of 2006 reflect the issuance of 1.65 million shares of CBT common stock issued in September 2005. Results of Operations. The results for the second quarter of 2006 were impacted by significant growth in net interest income. Net interest income rose $416,000, or 76%, to $965,000 for the quarter ended June 30, 2006 compared to $549,000 for the quarter ended June 30, 2005. For the six months ended June 30, 2006, net interest income amounted to $1,903,000, an increase of $885,000 or 87% compared to $1,018,000 in the first half of 2005. The growth in loans and an increase in the net interest margin to 3.86% in this quarter from 2.95% in the same period last year, were the main drivers of this performance. The operating results also reflect an increase of $181,000 in noninterest expenses to $1,720,000 for the quarter ended June 30, 2006 compared to $1,539,000 in the second quarter of 2005. For the first half of 2006, noninterest expenses were $3,470,000 compared to $2,863,000 in the first half of 2005. This increase includes costs related to the opening and operation of the new banking centers in Vernon and Newington and staff additions in Lending, Operations and Administration. Balance Sheet Performance. Loans outstanding increased $26.0 million to $83.0 million at June 30, 2006 in connection with our most successful quarter of loan production to date. Total assets were $112.0 million at the end of the quarter compared to $96.9 million at December 31, 2005. Total deposits were $75.8 million at June 30, 2006, increasing $5.1 million or 7.3% from $70.7 million at December 31, 2005. Stockholders' equity at June 30, 2006 was $23.0 million compared to $25.0 million at December 31, 2005 primarily reflecting the second quarter 2006 operating loss and a decrease in the estimated market value of the Bank's available for sale securities portfolio. Asset Quality. The allowance for loan losses at June 30, 2006 was $1,136,000 compared to $876,000 at December 31, 2005 and represented 1.37% and 1.53% of loans outstanding for the respective dates. The loans classified as nonaccrual amounted to $9,000 and there were no loans past due 30 days or more at June 30, 2006. Recent News. Following our successful opening in Vernon at the start of this year, in June work was completed on renovations for CBT's fifth Banking Center. It is located at 66 Cedar Street, in Newington, CT, and opened July 10th. During the quarter, Management began finalizing plans to renovate the space formally occupied by Arthur's Drug in Windsor, CT. This office is expected to open in January 2007. Also during the quarter, CBT established an office of Raymond James Financial Services, Inc, ("RJFS") in the Glastonbury Banking Center. Through this facility CBT customers have easy access to a full range of non-deposit investments such as bonds, stocks and annuities. CEO Lentini noted, "At CBT we know the importance of providing choices to both our business and personal customers in reaching their financial objectives. Additional RJFS locations are planned in the year ahead." -0- *T Selected Performance Data ---------------------------------------------------------------------- Three months ended ---------------------------------------------------------------------- Dollar values in March June Sept. Dec. March June thousands 31, 30, 30, 31, 31, 30, except per share 2005 2005 2005 2005 2006 2006 ---------------------------------------------------------------------- Total assets (EOP) $77,357 $86,132 $99,589 $96,875 $99,016 $112,462 Net operating loss $(964)$(1,121) $(861) $(622) $(877) $(908) Net interest margin 2.62% 2.95% 2.97% 3.69% 4.19% 3.86% Ratio of total stockholders' equity to total assets (EOP) 16.70% 14.12% 25.84% 25.85% 24.25% 20.47% Average shares outstanding 1,889 1,905 1,968 3,567 3,567 3,567 Loss per share (1) $(0.51) $(0.59) $(0.44) $(0.17) $(0.25) $(0.25) Book value per share (EOP) $6.84 $6.35 $7.21 $7.02 $6.73 $6.45 Allowance for loan losses to total loans (EOP) 1.17% 1.33% 1.45% 1.53% 1.36% 1.37% (1) Issuance of Shares in Sept. 2005. ---------------------------------------------------------------------- Selected Performance Data ---------------------------------------------------------------------- Year ended ---------------------------------------------------------------------- Dollar values in thousands June 30, June 30, except per share 2005 2006 ---------------------------------------------------------------------- Total assets (EOP) $86,132 $112,462 Net operating loss $(2,085) $(1,784) Net interest margin 2.77% 4.02% Ratio of total stockholders' equity to total assets (EOP) 14.12% 20.47% Average shares outstanding 1,897 3,567 Loss per share (1) $(1.10) $(0.50) Book value per share (EOP) $6.35 $6.45 Allowance for loan losses to total loans (EOP) 1.33% 1.37% (1) Issuance of Shares in Sept. 2005. ---------------------------------------------------------------------- *T 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. See financial statements accompanying this release for additional data. -0- *T THE CONNECTICUT BANK AND TRUST COMPANY BALANCE SHEETS June 30, 2006 (Dollars in Thousands) ASSETS June December June 30, 31, 30, 2006 2005 2005 (Unaudited) (Unaudited) ----------- -------- ----------- Cash and due from banks $4,596 $1,406 $2,296 Interest bearing asset 25 - - Federal funds sold 50 11,027 13,939 ----------- -------- ----------- Cash and cash equivalents 4,671 12,433 16,235 Securities available for sale 21,083 23,908 29,502 Federal Reserve Bank stock, at cost 770 766 529 Federal Home Loan Bank stock, at cost 533 125 - Loans 83,069 57,140 37,919 Less: allowance for loan losses (1,136) (876) (506) ----------- -------- ----------- Loans, net 81,933 56,264 37,413 Premises and equipment, net 2,036 2,079 1,796 Accrued interest receivable 497 390 322 Other assets 939 910 335 ----------- -------- ----------- Total Assets $112,462 $96,875 $86,132 =========== ======== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $75,877 $70,740 $73,113 Short term borrowings 10,591 442 286 Long term debt 2,450 - - Other liabilities 525 648 573 ----------- -------- ----------- Total liabilities 89,443 71,830 73,972 ----------- -------- ----------- Stockholders' equity; Common stock, $1.00 par value; 10,000,000 shares authorized; 3,567,450 shares issued and outstanding at June 30, 2006 and December 31, 2005, 1,913,250 as of June 30, 2005 3,567 3,567 1,914 Common stock warrants 853 853 853 Additional paid-in capital 29,553 29,536 16,478 Restricted stock unearned compensation (523) (618) (666) Retained deficit (9,540) (7,756) (6,273) Accumulated other comprehensive loss (891) (537) (146) ----------- -------- ----------- Total stockholders' equity 23,019 25,045 12,160 ----------- -------- ----------- Total Liabilities and Stockholders' Equity $112,462 $96,875 $86,132 =========== ======== =========== THE CONNECTICUT BANK AND TRUST COMPANY Consolidated Statements of Operations Three Months Ended Six Months Ended June 30, June 30, ------------------ ----------------- 2006 2005 2006 2005 --------- -------- -------- -------- (Dollars in thousands except (Unaudited) (Unaudited) share data) Interest and dividend income: Interest and fees on loans $1,386 $539 $2,534 $928 Debt securities 239 317 499 676 Dividends 11 8 29 16 Federal funds sold 1 63 16 110 --------- -------- -------- -------- Total interest and dividend income 1,637 927 3,078 1,730 --------- -------- -------- -------- Interest expense: Deposits 530 377 948 710 Borrowed funds 142 1 227 2 --------- -------- -------- -------- Total interest expense 672 378 1,175 712 --------- -------- -------- -------- Net interest income 965 549 1,903 1,018 Provision for loan losses 178 147 260 267 --------- -------- -------- -------- Net interest income, after provision for loan losses 787 402 1,643 751 --------- -------- -------- -------- Non-interest income: Service charges and fees 25 19 43 30 Net losses from sales of available-for-sale securities - (3) - (3) --------- -------- -------- -------- Total non-interest income 25 16 43 27 --------- -------- -------- -------- Non-interest expenses: Salaries and benefits 928 657 1,834 1,295 Occupancy and equipment 287 216 563 410 Data processing 40 37 82 73 Marketing 158 283 430 503 Professional services 146 191 253 305 Other general and administrative 161 155 308 277 --------- -------- -------- -------- Total non-interest expenses 1,720 1,539 3,470 2,863 --------- -------- -------- -------- Net loss $(908) $(1,121) $(1,784) $(2,085) ========= ======== ======== ======== Net loss per share: Basic $(0.25) $(0.59) $(0.50) $(1.10) Diluted $(0.25) $(0.59) $(0.50) $(1.10) *T