CTBC The Connecticut Bank And Trust Company (MM)

The Connecticut Bank and Trust Company, (Nasdaq: CTBC), reported a net loss for the quarter ended December 31, 2006 of $610,000 or $0.17 per share compared to a net loss of $844,000 or $0.24 per share in the immediately preceding quarter. The results also reflected modest improvement compared to $622,000 or $0.17 per share reported for the quarter ended December 31, 2005. During the quarter, CBT passed the $100 million mark in loans outstanding. CBT has attained this threshold faster than that of any de novo institution in the history of the State of Connecticut. For the year ended December 31, 2006, the net loss was $3,238,000 or $0.91 per share compared to a net loss of $3,568,000 or $1.53 per share for the year ended December 31, 2005. The per-share results reflect the issuance of 1.65 million shares of CBT common stock issued in September 2005. During 2006, total assets increased $39.5 million to end the year at $136.4 million. The results for both the quarter and all of 2006 reflect growth in total assets and the increased costs of operations. During 2006, the Bank continued to invest in its expanding network of banking centers, opening facilities in Vernon and Newington and developing the home-office team to support them. Chairman and CEO David A. Lentini noted, �In 2007, we intend to complete this phase of our development with offices in Windsor and Rocky Hill, subject to all necessary approvals. With the start-up costs of our seven banking centers behind us, we will then be positioned to optimize marketing dollars, technology and the best team of bankers in greater Hartford to attain profitability.� Results of Operations. The results for the fourth quarter of 2006 improved $12,000 compared to the fourth quarter of 2005. Interest income improved $920,000 for the quarter ending December 31, 2006 to $2,165,000 compared to $1,245,000 for the same period in 2005. Interest expense paid on deposits and borrowed funds increased to $1,007,000 for the period ending December 31, 2006 from $408,000 for the comparable period in 2005. Net interest income rose $321,000, or 38%, to $1,158,000 for the three month period ending December 31, 2006 compared to $837,000 for the period ending December 31, 2005. For the quarter ending December 31, 2006 the net interest margin was 3.74%, a modest improvement from 3.69% for the quarter ending December 31, 2005 Chairman Lentini remarked, �As our financial statements illustrate, we have been emphasizing loan growth, and in particular our loan yields. Interest income continues to rise in relation to loans outstanding; however, developing our core deposit base by attracting business customers will alleviate the effects of this narrow interest rate environment.� Non-interest expenses totaled $1,762,000 for the quarter ended December 31, 2006 compared to $1,335,000 for the quarter ending December 31, 2005. The increase in non-interest expenses is largely attributable to the opening of the two new branches in 2006. Balance Sheet Performance. Total assets were $136.4 million as of December 31, 2006 compared to $96.9 million as of December 31, 2005. Total loans outstanding grew $49.8 million, or 87%, to $106.9 million at year end December 31, 2006 compared to $57.1 million for the year ended December 31, 2005. Total deposits of $99.7 million at December 31, 2006 represented a $29.0 million increase from the prior year end of $70.7 million. Stockholders� equity at December 31, 2006 was $22.1 million compared to $25.0 million at December 31, 2005 primarily reflecting the operating losses for the year ended December 31, 2006. Asset Quality. The allowance for loan losses at December 31, 2006 was $1,384,000 compared to $876,000 at December 31, 2005 and represented 1.29% and 1.53% of total loans outstanding for the respective dates. There are two loans past due 30 days or more totaling $151,000 and two loans are classified as nonaccrual totaling $597,000. At the prior year end, there were no loans past due more than 30 days or more other than one consumer loan on nonaccrual for $25,000. Selected Performance Data � Three months ended Year ended Dollar values in thousands except per share Sept. 30, Dec. 31, March 31, June 30, Sept 30, Dec. 31, Dec. 31, Dec. 31, 2005� 2005� 2006� 2006� 2006� 2006� 2005� � 2006� � Total assets (EOP) $ 99,589� $ 96,875� $ 99,016� $ 112,462� $ 123,325� $ 136,434� $ 96,875� $ 136,434� � Net operating loss $ (861) $ (622) $ (877) $ (908) $ (844) $ (610) $ (3,568) $ (3,238) Net interest margin 2.97% 3.69% 4.19% 3.86% 3.69% 3.74% 3.08% 3.85% Ratio of total stock-holders' equity to total assets (EOP) 25.84% 25.85% 24.25% 20.47% 18.35% 16.19% 25.85% 16.19% Average shares outstanding 1,968� 3,567� 3,567� 3,567� 3,567� 3,547� 2,336� 3,541� Loss per share (1) $ (0.44) $ (0.17) $ (0.25) $ (0.25) $ (0.24) $ (0.17) $ (1.53) $ (0.91) Book value per share (EOP) $ 7.21� $ 7.02� $ 6.73� $ 6.45� $ 6.34� $ 6.19� $ 7.02� $ 6.19� Allowance for loan losses to total loans (EOP) 1.45% 1.53% 1.36% 1.37% 1.34% 1.29% 1.53% 1.29% � (1) Issuance of Shares in Sept. 2005. 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. THE CONNECTICUT BANK AND TRUST COMPANY Consolidated Statements of Operations � Three Months Ended Year Ended December 31, December 31, 2006� 2005� 2006� 2005� (Dollars in thousands,except share data) � (Unaudited) � (Unaudited) Interest and dividends: Loans, including fees $ 1,859� $ 896� $ 6,054� $ 2,514� Debt securities 231� 231� 963� 1,197� Dividends 40� 10� 82� 34� Federal funds sold 35� 108� 51� 322� Total interest and dividend income 2,165� 1,245� 7,150� 4,067� Interest expense: Deposits 866� 405� 2,469� 1,581� Borrowed funds 141� 3� 584� 6� Total interest expense 1,007� 408� 3,053� 1,587� Net interest income 1,158� 837� 4,097� 2,480� Provision for loan losses 106� 159� 516� 637� Net interest income, after provision for loan losses 1,052� 678� 3,581� 1,843� � Non-interest income: Service charges and fees 30� 21� 98� 66� Brokerage fee income 87� -� 95� -� Net gains on sales of loans -� 14� -� 16� Net losses from sales of available-for-sale securities (17) -� (17) (48) Total non-interest income 100� 35� 176� 34� � Non-interest expenses: Salaries and benefits 1,043� 793� 3,890� 2,782� Occupancy and equipment 326� 251� 1,202� 899� Data processing 53� 61� 174� 183� Marketing 81� 176� 649� 797� Professional services 99� 21� 444� 395� Other general and administrative 160� 33� 636� 389� Total non-interest expenses 1,762� 1,335� 6,995� 5,445� Net loss $ (610) $ (622) $ (3,238) $ (3,568) � Net loss per share: Basic $ (0.17) $ (0.17) $ (0.91) $ (1.53) Diluted $ (0.17) $ (0.17) $ (0.91) $ (1.53) THE CONNECTICUT BANK AND TRUST COMPANY Balance Sheets December 31, 2006 and 2005 (Dollars in Thousands) � ASSETS 2006� 2005� � Cash and due from banks $ 4,589� $ 1,406� Federal funds sold 475� 11,027� Cash and cash equivalents 5,064� 12,433� � Securities available for sale, at fair value 20,738� 23,908� Certificates of deposit 76� -� Federal Reserve Bank stock, at cost 693� 766� Federal Home Loan Bank stock, at cost 728� 125� � Loans 106,910� 57,140� Allowance for loan losses (1,384) (876) Loans, net 105,526� 56,264� � Premises and equipment, net 2,217� 2,079� Accrued interest receivable 613� 390� Other assets 779� 910� � $136,434� $ 96,875� � LIABILITIES AND STOCKHOLDERS' EQUITY � Deposits $ 99,745� $ 70,740� Short-term borrowings 1,453� 442� Long-term debt 12,450� -� Other liabilities 701� 648� Total liabilities 114,349� 71,830� � � � Stockholders' equity; Common stock, $1.00 par value; 10,000,000 shares authorized;shares issued and outstanding: 3,567,450 at December 31, 2006and December 31, 2005 � 3,567� 3,567� Common stock warrants 853� 853� Additional paid-in capital 29,582� 29,536� Restricted stock unearned compensation (426) (618) Retained deficit (10,994) (7,756) Accumulated other comprehensive loss (497) (537) Total stockholders' equity 22,085� 25,045� � $136,434� $ 96,875�