April 23, 2009 at 15:15 PM EDT
CBT Announces First Ever Quarterly Profit

HARTFORD, Conn., April 23, 2009 (GLOBE NEWSWIRE) -- The Connecticut Bank and Trust Company (Nasdaq:CTBC) reported net operating income of $27,000 before preferred dividends for the three months ended March 31, 2009. Total loans, while unchanged at $182 million, included $10 million in new loans closed during the quarter. CBT entered the residential mortgage business with additional staff and a commitment to financing home ownership in our market.

Chairman and CEO David A. Lentini remarked, "The first quarter of 2009 represents the culmination of years of hard work and I am extremely proud of our staff for their commitment and many accomplishments. The positive earnings outcome is the result of our continued efforts to maximize the margin and maintain tight control over expenses."

First Quarter 2009 Results

Interest Income. Net interest income for the quarter ended March 31, 2009 increased $436,000 or 30% over the same period in 2008. This result was helped by a $34 million increase in average-earning assets and a 32 basis point improvement in the Bank's net interest margin.

Noninterest Income. Service fees and commissions increased a modest $11,000. Gains made in fees for banking services were offset by decreases in the volume of retail brokerage transactions. CBT realized a gain of $39,000 from sales of investment securities in the first quarter of 2009.

Noninterest Expenses. The cost of operations for the first quarter of 2009 remained well under control. The expenses for the quarter amounted to $2 million, increasing $48,000 or 2.5%, from the same period in 2008. Most categories of expense shared in this modest increase, largely the result of higher prices. It is noteworthy that staff costs decreased through the elimination of bonuses and the remarketing of CBT's medical benefit plans.

Provisions for Loan Losses. The provisions for loan losses in the first quarter of 2009 amounted to $87,000. With loans remaining flat in the quarter, this increased the reserve ratio to 1.5% of loans outstanding. Mr. Lentini said, "While the outlook for the economy as a whole, and Connecticut in particular, remains unclear, I am confident that CBT is prepared to meet the possible challenges faced by our borrowers."

Balance Sheet Performance. Total assets were $223 million at March 31, 2009, virtually unchanged from December 31, 2008. Loans outstanding at the end of the quarter amounted to $182 million and deposits were $164 million. Borrowings from the Federal Home Loan Bank Boston remained at $31 million. The Bank continues to be well-capitalized with stockholders' equity of $23 million at March 31, 2009.

Asset Quality. CBT lenders work closely with our clients to respond quickly to changing conditions. Our ability to respond quickly in these difficult economic conditions is intended to reduce our risk of loss by providing assistance where appropriate. Total nonaccrual loans were $1.6 million and represented 0.9% of total loans outstanding at March 31, 2009, compared to $2.1 million, or 1.49% of total loans at December 31, 2008. The coverage ratio which measures the allowance for loan losses to nonperforming loans was 174% at March 31, 2009. CBT had no other loans that were past due 90 days or more.

Allowance for Loan Losses. The level of outstanding loans was unchanged from year-end 2008, but the provision for loan losses was $87,000 in the current quarter compared to $137,000 in the comparable period a year ago. At March 31, 2009 the allowance was $2.7 million, compared to $2.6 million at December 31, 2008. This represented 1.50% and 1.47% of outstanding loans at each of the respective dates. Charge-offs amounted to $29,000 during the quarter.



 ---------------------------------------------------------------------
                       Selected Performance Data
 ---------------------------------------------------------------------
                              Three months ended             
 ---------------------------------------------------------------------
 Dollar 
 values in
 thousands
 except    Dec. 31,  March 31, June 30,  Sept 30,  Dec. 31,  March 31,
 per share   2007      2008      2008      2008      2008      2009    
 ------------------- --------- --------- --------- --------- ---------

 Total 
  assets 
  (EOP)    $178,739  $204,205  $200,128  $223,465  $225,078  $223,420 

 Net oper-
  ating 
  income 
  (loss)   $   (388) $   (396) $   (295) $ (1,487) $   (298) $     27 
 Net 
  interest 
  margin      3.64%     3.37%     3.43%     3.39%     3.41%     3.69% 
 Net 
  interest
  spread      2.58%     2.45%     2.75%     2.79%     2.84%     3.15% 
 Ratio of 
  total 
  stock-
  holders'
  equity 
  to total
  assets 
  (EOP)      11.44%     9.82%     9.65%     8.09%    11.44%    10.48% 
 Weighted 
  avg shrs
  outstand-
  ing         3,537     3,545     3,550     3,552     3,556     3,557 
 Loss per 
  share    $  (0.11) $  (0.11) $  (0.08) $  (0.42) $  (0.08) $  (0.00)
 Book 
  value 
  per 
  share 
  (EOP)    $   5.72  $   5.62  $   5.40  $   5.06  $   5.23  $   5.20 
 Allowance
  for loan
  losses 
  to total
  loans 
  (EOP)       1.19%     1.19%     1.21%     1.52%     1.47%     1.51% 


 ---------------------------------------------------------------------




 ---------------------------------------------------------------------
                                                   Year ended
                                          ----------------------------
 Dollar values in thousands                 Dec. 31         Dec. 31,
  except per share                            2007            2008
 ----------------------------------------------------    ------------
                                                          
 Total assets (EOP)                         $178,739       $225,078
                                                          
 Net operating income (loss)                $ (2,148)      $ (2,476)
 Net interest margin                           3.59%          3.41%
 Net interest spread                           2.53%          2.73%
 Ratio of total stockholders'                             
  equity to total assets (EOP)                11.44%         10.46%
 Weighted avg shrs outstanding                 3,537          3,551
 Loss per share                             $  (0.61)      $  (0.70)
 Book value per share (EOP)                 $   5.72       $   5.23
 Allowance for loan losses to                             
  total loans (EOP)                            1.19%          1.47%
                                                          
                                                          
 ---------------------------------------------------------------------

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
                     Statement of Income (Loss)
                            (Unaudited)

                                                 Three Months Ended
                                                      March 31,
                                              ------------------------
                                                 2009          2008
                                              ----------    ----------
 (Dollars in thousands; except share data) 
 Interest and dividend income:
   Loans, including fees                       $  2,702      $  2,590
   Debt securities                                  358           242
   Dividends                                          5            25
   Federal funds sold/other                           1            75
                                              ----------    ----------
     Total interest and dividend income           3,066         2,932
                                              ----------    ----------
 Interest expense:
   Deposits                                         850         1,213
   Borrowed funds                                   282           221
                                              ----------    ----------
     Total interest expense                       1,132         1,434
                                              ----------    ----------
 Net interest income                              1,934         1,498
 Provision for loan losses                           87           137
                                              ----------    ----------
     Net interest income, after provision 
      for loan losses                             1,847         1,361
                                              ----------    ----------

 Noninterest income:
   Service charges and fees                          66            48
   Brokerage commissions                             59            66
                                              ----------    ----------
     Total fees and charges                         125           114
   Gains from sales of available-for-sale 
    securities, net                                  39            65
                                              ----------    ----------
     Total noninterest income                       164           179
                                              ----------    ----------

 Noninterest expenses:
   Salaries and benefits                          1,024         1,058
   Occupancy and equipment                          468           434
   Data processing                                   78            68
   Marketing                                         80            65
   Professional services                            122            99
   Other general and administrative                 212           212
                                              ----------    ----------
     Total noninterest expenses                   1,984         1,936
                                              ----------    ----------
 Net income (loss)                             $     27      $   (396)

 Preferred Stock Dividends, including 
  deemed dividends of $29                            29            --
                                              ----------    ----------
 Net Income Available to common 
  shareholders                                 $     (2)     $   (396)
                                              ==========    ==========

 Per share information:
 Basic                                         $  (0.00)     $  (0.11)
 Diluted                                       $  (0.00)     $  (0.11)
 Average common shares issued and 
  outstanding (in thousands)                      3,557         3,545
 Average diluted common shares issued and 
  outstanding (in thousands)                      3,557         3,545



                 THE CONNECTICUT BANK AND TRUST COMPANY
                            Balance Sheets

                                ASSETS

                                           March 31,     December 31,
                                             2009            2008
                                         -----------    -------------
 (Dollars in thousands)                   unaudited
 Cash and due from banks                  $   8,268       $   6,774
 Federal funds sold                              --              --
                                         -----------    -------------
     Cash and cash equivalents                8,268           6,774

 Certificates of deposit                         78              99
 Securities available for sale, at 
  fair value                                 29,024          32,461
 Federal Reserve Bank stock, at 
  cost                                          710             585
 Federal Home Loan Bank stock, 
  at cost                                     2,057           1,870

 Loans held for sale                            402              --
 Loans                                      181,552         181,772
 Less: allowance for loan losses             (2,739)         (2,681)
                                         -----------    -------------
 Loans, net                                 178,813         179,091

 Premises and equipment, net                  2,433           2,566
 Accrued interest receivable                    944             949
 Other assets                                   691             683
                                         -----------    -------------
                                          $ 223,420       $ 225,078
                                         ===========    =============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

 Deposits                                 $ 164,161       $ 162,934
 Short-term borrowings                        4,667           7,521
 Long-term debt                              30,450          30,450
 Other liabilities                              722             634
                                         -----------    -------------
     Total liabilities                      200,000         201,539
                                         -----------    -------------

 Stockholders' equity;
  Preferred stock, no par value; 
   1,000,000 shares authorized; 
   5,448 shares issued and 
   outstanding at March 31, 2009 
   and December 31, 2008; aggregate
   liquidation preference of 
   $5,448 at March 31, 2009 and 
   December 31, 2008                          5,448           5,448
  Discount preferred stock                     (574)           (604)
  Common stock, $1.00 par value; 
   10,000,000 shares authorized;
   3,572,450 shares issued and 
   outstanding at March 31, 2009
   and December 31, 2008                      3,572           3,572
  Common stock warrants                       1,405           1,405
  Additional paid-in capital                 29,801          29,780
  Restricted stock unearned compensation       (110)           (141)
  Retained deficit                          (15,621)        (15,618)
  Accumulated other comprehensive loss         (501)           (303)
                                         -----------    -------------
     Total stockholders' equity              23,420          23,539
                                         -----------    -------------
                                          $ 223,420       $ 225,078
                                         ===========    =============

CONTACT:  The Connecticut Bank and Trust Company
          David A. Lentini
          860-748-4250
          dlentini@thecbt.com
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