CBT Reports Results for First Quarter 2006

HARTFORD, Conn., April 25  /PRNewswire-FirstCall/ -- The Connecticut Bank and Trust Company, (NASDAQ:CTBC), reported a loss for the quarter ended March 31, 2006 of $877,000 or $0.25 per share, compared to a loss of $964,000 or $0.51 per share for the same period in 2005. The per-share results for the first quarter of 2006 reflect the issuance of 1.65 million shares of CBT common stock issued in September 2005.

Chairman and CEO David A. Lentini remarked, "We were very excited to begin the new year with the grand opening of our Vernon Office on January 5th." He added, "This office, located near the junction of Vernon, Manchester and South Windsor, is well situated to serve our customers from these communities. In this challenging interest rate environment, CBT's branch expansion program can provide lower cost funds to support our growth."

Results of Operations. The results for the first quarter of 2006 were impacted by growth in net interest income and to a lesser extent, an increase in non-interest income and a reduction in loan loss provision. Net interest income rose $469,000, or 100%, to $938,000 for the quarter ended March 31, 2006. Growth in loans, combined with an increase in the net interest margin, were the main drivers of this performance. The operating results also reflect an increase of $427,000 in non-interest expenses to $1,751,000 for the three months ended March 31, 2006 compared to $1,324,000 in the first quarter of 2005. This increase includes investing in the costs related to the opening and operation of the new banking center in Vernon and staff additions in Lending, Operations and Administration.

President Lentini said, "These investments will keep CBT on track with its planned branch expansion. In March, we submitted an application to Federal and State regulators for approval to open a banking center in Newington, Connecticut."

Balance Sheet Performance. Loans outstanding increased $13.4 million to $70.6 million at March 31, 2006, reflecting our most successful quarter of loan production to date. Total assets were $99.0 million at the end of the quarter compared to $96.9 million at December 31, 2005. Total deposits were $64.4 million at March 31, 2006, declining $6.3 million or 8.9% from $70.7 million at December 31, 2005. During the quarter, normal seasonal outflows of commercial funds, coupled with the move of a major depositor's operation away from Connecticut, more than offset the early result of our entry into the Vernon Market. Stockholders' equity at March 31, 2006 was $24.0 million compared to $25.0 million at December 31, 2005 primarily reflecting the first 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 March 31, 2006 was $958,000 compared to $876,000 at December 31, 2005 and represented 1.36% and 1.51% of loans outstanding for the respective dates. There were no loans past due 30 days or more at March 31, 2006 and none classified as nonaccrual or nonperforming.

                        Selected Performance Data

                                          At or for the three months ended
  Dollar values in thousands              Dec 31,  Mar 31,  Jun 30,  Sep 30,
   except per share amounts                2004     2005     2005     2005
  Total assets (period end)              $78,288  $77,357  $86,132  $99,589
  Net operating loss                       ($984)   ($964) ($1,121)   ($861)
  Net interest margin                       1.58%    2.62%    2.95%    2.97%
  Ratio of total stockholders' equity to
   total assets (Period end)               18.02%   16.70%   14.12%   25.84%
  Average shares outstanding (in
   thousands)                              1,887    1,889    1,905    1,968
  Loss per share                          ($0.52)  ($0.51)  ($0.59)  ($0.44)
  Book value per share (period end)        $7.47    $6.84    $6.35    $7.21
  Allowance for loan losses/total
   loans (period end)                       1.13%    1.17%    1.33%    1.45%

                       Selected Performance Data

                                          At or for the      At or for the
                                       three months ended     year ended
  Dollar values in thousands              Dec 31,  Mar 31,  Dec 31,  Dec 31,
   except per share amounts                 2005     2006     2004     2005
  Total assets (period end)              $96,875  $99,016  $78,288  $96,875
  Net operating loss                       ($622)   ($877) ($3,431) ($3,568)
  Net interest margin                       3.69%    4.19%    1.94%    3.08%
  Ratio of total stockholders' equity to
   total assets (Period end)               25.85%   24.25%   18.02%   25.85%
  Average shares outstanding (in
   thousands)                              3,567    3,567    1,501    2,336
  Loss per share                          ($0.17)  ($0.25)  ($2.29)  ($1.53)
  Book value per share (period end)        $7.02    $6.73    $7.47    $7.02
  Allowance for loan losses/total
   loans (period end)                       1.53%    1.36%    1.13%    1.53%





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.

                                   ASSETS

                                         Mar 31,     Dec 31,     Mar 31,
                                          2006        2005        2005
                                       (unaudited)             (unaudited)
  Cash and due from banks                $1,760      $1,406      $1,310
  Federal funds sold                        100      11,027       8,306
            Cash and cash equivalents     1,860      12,433       9,616

  Securities available for sale, at
   fair value                            22,888      23,908      34,167
  Federal Reserve Bank stock, at cost       766         766         529
  Federal Home Loan Bank stock, at cost     534         125           -

  Loans                                  70,550      57,140      30,713
  Allowance for loan losses                (958)       (876)       (359)
            Loans, net                   69,592      56,264      30,354

  Premises and equipment, net             2,059       2,079       1,857
  Accrued interest receivable               529         390         422
  Other assets                              788         910         412

  Total assets                          $99,016     $96,875     $77,357

                   LIABILITIES AND STOCKHOLDERS' EQUITY

  Deposits                              $64,371     $70,740     $63,667
  Short term borrowings                   7,758         442         266
  Long term debt                          2,450           -           -
  Other liabilities                         425         648         508
            Total liabilities            75,004      71,830      64,441


  Stockholders' equity;
    Common stock, $1.00 par value;
     10,000,000 shares authorized;
      shares issued and outstanding:
       3,567,450 at March 31, 2006 and
       December 31, 2005; 1,888,550
       as of March 31, 2005               3,567       3,567       1,889
    Common stock warrants                   853         853         853
    Additional  paid-in capital          29,545      29,536      16,178
    Restricted stock unearned
     compensation                          (569)       (618)       (378)
    Retained deficit                     (8,633)     (7,756)     (5,152)
    Accumulated other comprehensive
     loss                                  (751)       (537)       (474)
            Total stockholders' equity   24,012      25,045      12,916

  Total Liabilities and stockholders'
   equity                               $99,016     $96,875     $77,357



                    THE CONNECTICUT BANK AND TRUST COMPANY
                           Statements of Operations

                                     Three Months Ended        Year Ended
                                                   March
                                  Mar 31, Dec 31,   31,        December 31,
                                    2006    2005    2005      2005     2004
  (Dollars in thousands except       (U N A U D I T E D)
   share data)
  Interest and dividend income:
    Interest and fees on loans     $1,147    $896    $389   $2,514     $340
    Debt securities                   261     231     359    1,197      490
    Dividends                          18      10       8       34       25
    Federal funds sold                 15     108      47      322      177
      Total interest and dividend
       income                       1,441   1,245     803    4,067    1,032
  Interest expense:
    Deposits                          418     405     333    1,581      382
    Borrowed funds                     85       3       1        6       10
      Total interest expense          503     408     334    1,587      392
  Net interest income                 938     837     469    2,480      640
    Provision for loan losses          82     159     120      637      239
        Net interest income, after
         provision for loan losses    856     678     349    1,843      401

  Non-interest income (charges):
    Service charges and fees           18      21      11       66       28
    Net gains on sales of loans         -      14       -       16        -
    Net losses from sales of
     available-for-sale securities      -       -       -      (48)      (2)
      Total non-interest income        18      35      11       34       26

  Non-interest expenses:
    Salaries and benefits             906     793     638    2,782    1,667
    Occupancy and equipment           276     251     194      899      663
    Data processing                    42      61      36      183       90
    Marketing                         272     176     220      797      349
    Professional services              53      21     150      395      314
    Other general and
     administrative                   202      33      86      389      775
      Total non-interest expenses   1,751   1,335   1,324    5,445    3,858
  Net loss                          $(877)  $(622)  $(964) $(3,568) $(3,431)

  Net loss per share:
  Basic                            $(0.25) $(0.17) $(0.51)  $(1.53)  $(2.29)
  Diluted                          $(0.25) $(0.17) $(0.51)  $(1.53)  $(2.29)




CBT is a full service commercial bank headquartered in Hartford, CT, with branch offices conveniently located in Glastonbury, Vernon and West Hartford.

  Contact: David A. Lentini
           860-748-4250
           

DATASOURCE: Connecticut Bank and Trust Company



CONTACT: David A. Lentini of Connecticut Bank and Trust Company,

[phone],  

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