Market Overview

NBT Bancorp Inc. Announces Record Net Income of $121.0 Million and Diluted Earnings Per Share of $2.74; Declares Cash Dividend

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NORWICH, N.Y., Jan. 27, 2020 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. ("NBT" or the "Company") (NASDAQ:NBTB) reported record net income and diluted earnings per share for the year ended December 31, 2019.

Net income for the year ended December 31, 2019 was $121.0 million, up 7.5% from $112.6 million for the prior year. Diluted earnings per share for the year ended December 31, 2019 was $2.74, as compared with $2.56 for the prior year, an increase of 7.0%.

Net income for the three months ended December 31, 2019 was $29.0 million, down 10.6% from $32.4 million for the third quarter of 2019 and up 1.1% from $28.7 million for the fourth quarter of 2018. Diluted earnings per share for the three months ended December 31, 2019 was $0.66, down 9.5% as compared with $0.73 for the prior quarter and up 1.5% from $0.65 for the fourth quarter of 2018.

Highlights:

  • Diluted earnings per share up 7.0% from prior year
  • Full year 2019 net income up 7.5% from 2018
  • Loan growth for the year ended December 31, 2019 of 3.6% and 6.9% for the fourth quarter, annualized, driven by commercial and residential real estate
  • Strong asset quality continued with nonperforming loans to total loans of 0.40% down 7 basis points from prior quarter
  • Tangible equity ratio of 8.84%, up 99 bps from prior year, and tangible book value per share of $19.03, up 14.2% from 2018

"We are pleased to report that NBT achieved a seventh straight year of record net income in 2019 along with a new annual EPS record," said NBT President and CEO John H. Watt, Jr. "The best team in community banking maintained focus on the fundamentals of our core banking business, including low-cost deposit gathering and prudent loan growth, while advancing our strategic priorities and executing on technology and digital initiatives. Our strong balance sheet, disciplined approach to credit and risk management, and diversified fee businesses provide NBT with optionality as we continue to grow our company, both organically and by acquisition. In the second quarter of 2020, we intend to accelerate the growth of our well-established EPIC Retirement Plan Services business with the acquisition of Alliance Benefit Group of Illinois, Inc. of Peoria, bringing the number of plan participants we support nationwide to 250,000."

Net interest income for the year ended 2019 was $311.6 million, up $5.9 million, or 1.9%, from 2018. The fully taxable equivalent ("FTE") net interest margin of 3.58% for the year ended December 31, 2019, was comparable to 2018. Average interest-earning assets were up $144.8 million, or 1.7%, for the year ended December 31, 2019, as compared to the same period in 2018, driven by a $206.7 million increase in loans that was partially offset by an $89.9 million decrease in securities. Interest income increased $23.3 million, or 6.8%, due to the increase in earning assets combined with a 17 basis point ("bp") improvement in loan yields. Interest expense was up $17.4 million, or 44.9% for the year ended December 31, 2019 as compared to the same period in 2018 as the cost of interest-bearing liabilities increased 29 bps, driven by interest-bearing deposit costs increasing 33 bps.

Net interest income was $77.2 million for the fourth quarter of 2019, down $0.9 million, or 1.1%, from the previous quarter. FTE net interest margin was 3.52% for the three months ended December 31, 2019, down 5 bps from the previous quarter, and interest income decreased $1.8 million, or 2.0%. The yield on average interest-earning assets decreased 9 bps to 4.13%, and average interest-earning assets were steady at $8.7 billion. The lower asset yield primarily reflects the impact of lower short-term rates on floating-rate loans, while average earning assets remained consistent driven by a smaller investment portfolio partially offset by an increase in loans. Interest expense was down $0.9 million, or 6.5%, due to a $31.3 million decrease in average interest-bearing liabilities from the prior quarter. The cost of interest-bearing liabilities decreased 6 bps to 0.90% for the quarter ended December 31, 2019, driven by a 19 bp decrease in short-term borrowings cost and a 4 bp decrease in interest-bearing deposit costs.

Noninterest income for the year ended December 31, 2019 was $144.0 million, up $19.3 million, or 15.4%, from the same period in 2018. Excluding net securities gains (losses), noninterest income for the year ended December 31, 2019 was $139.8 million, up $8.7 million or 6.6%, from the same period in 2018. The increase from the prior year was driven by higher other noninterest income primarily due to higher swap fee income, higher retirement plan administration fees due to a full year's contribution from Retirement Plan Services, LLC ("RPS"), which was acquired in the second quarter of 2018, and higher ATM and debit card fees due to an increase in the number of accounts and usage.

Noninterest income for the three months ended December 31, 2019 was $36.2 million, down $3.5 million or 8.8%, from the prior quarter and up $10.3 million or 39.7%, from the fourth quarter of 2018. In the third quarter of 2019, the Company sold Visa Class B common stock for a gain of $4.0 million and in the fourth quarter of 2018, the Company restructured the investment portfolio by selling $109 million lower yielding bonds and reinvesting the proceeds in higher yielding bonds, which resulted in a $6.6 million loss on securities sold. Excluding net securities gains (losses), noninterest income for the three months ended December 31, 2019 was $36.1 million, up $0.4 million or 1.0%, from the prior quarter and up $3.2 million or 9.7%, from the fourth quarter of 2018. The increase from the prior quarter and from the fourth quarter of 2018 was primarily due to higher other noninterest income due primarily to higher swap fee income.

Noninterest expense for the year ended December 31, 2019 was $274.7 million, up $10.2 million or 3.8%, from the same period in 2018. The increase from the prior year was driven by higher salaries and employee benefits, equipment expense and other noninterest expenses as compared to the same period of 2018, partially offset by lower FDIC insurance expense. The increase in salaries and employee benefits was primarily due to the RPS acquisition in the second quarter of 2018 and $0.7 million in one-time charges related to efficiency initiatives and general wage and benefit increases. The $4.8 million increase in other noninterest expenses was due to $3.1 million in reorganization expenses incurred during the third quarter of 2019, primarily related to branch optimization strategies to improve future operating efficiencies and an increase in the amortization expense for pension plan actuarial costs. FDIC insurance expense decreased from 2018 due to receipt of the Small Bank Assessment Credit in 2019.

Noninterest expense for the three months ended December 31, 2019 was $70.3 million, up $0.5 million or 0.8%, from the prior quarter and up $1.4 million or 2.0%, from the fourth quarter of 2018. The increase from the prior quarter was primarily driven by an increase in professional fees and loan collection expenses, which were partially offset by lower other noninterest expenses due to the previously mentioned branch optimization that occurred during the third quarter of 2019. The increase from the fourth quarter of 2018 was primarily due to increases in salaries and employee benefits and loan collection, partially offset by lower FDIC insurance expense due to the previously mentioned receipt of the Small Bank Assessment Credit in 2019.

Income tax expense for the year ended December 31, 2019 was $34.4 million, up $10.0 million, or 40.8%, from the same period of 2018. The effective tax rate of 22.1% in 2019 was up from 17.8% for the same period in the prior year. The increase in income tax expense from the prior year was due to a $5.5 million tax benefit recorded in the fourth quarter of 2018 primarily related to one-time income tax return accounting method changes, combined with a higher level of taxable income.

Income tax expense for the three months ended December 31, 2019 was $8.2 million, down $1.2 million from the prior quarter and up $7.4 million from the fourth quarter of 2018. The effective tax rate of 22.0% for the fourth quarter of 2019 was down from 22.4% from the third quarter of 2019 and up from 2.5% from the fourth quarter of 2018. The decrease in income tax expense from the prior quarter was due to lower taxable income and the increase from the fourth quarter of 2018 primarily due to one-time income tax return accounting method changes during the fourth quarter of 2018.

Asset Quality

Net charge-offs of $25.0 million for the year ended December 31, 2019 were down compared to $25.8 million for the same period of 2018. Provision expense was $25.4 million for the year ended December 31, 2019, as compared with $28.8 million for the same period of 2018. Annualized net charge-offs to average loans for the year ended December 31, 2019 was 0.36%, as compared with 0.38% for the same period of 2018.

Net charge-offs of $5.4 million for the three months ended December 31, 2019 were down as compared to $6.1 million for the prior quarter and down compared to $6.8 million for the fourth quarter of 2018. Provision expense was lower at $6.0 million for the three months ended December 31, 2019, as compared with $6.3 million for the prior quarter and $6.5 million for the fourth quarter of 2018. Annualized net charge-offs to average loans for the fourth quarter of 2019 was 0.30%, down from 0.35% for the prior quarter and down from 0.39% for the fourth quarter of 2018.

Nonperforming loans to total loans was 0.40% at December 31, 2019, down 7 bps from 0.47% at September 30, 2019 and down 4 bps from 0.44% at December 31, 2018. Past due loans as a percentage of total loans was 0.49% at December 31, 2019, down from 0.57% at September 30, 2019 and down from 0.55% at December 31, 2018.

The allowance for loan losses totaled $73.0 million at December 31, 2019, compared to $72.4 million at September 30, 2019 and $72.5 million at December 31, 2018. The allowance for loan losses as a percentage of loans was 1.02% (1.06% excluding acquired loans) at December 31, 2019, compared to 1.03% (1.08% excluding acquired loans) at September 30, 2019 and 1.05% (1.10% excluding acquired loans) at December 31, 2018.

Balance Sheet

Total assets were $9.7 billion at December 31, 2019, up $159.6 million from December 31, 2018. Loans were $7.1 billion at December 31, 2019, up $248.4 million from December 31, 2018. In 2019, loan growth in commercial real estate and residential real estate was partially offset by run-off in consumer portfolios. Total deposits were $7.6 billion at December 31, 2019, up $219.6 million, or 3.0%, from December 31, 2018, reflecting growth in money market deposit accounts and non-interest-bearing demand accounts. Stockholders' equity was $1.1 billion, representing a total equity-to-total assets ratio of 11.53% at December 31, 2019, compared with $1.0 billion or a total equity-to-total assets ratio of 10.65% at December 31, 2018. Tangible book value per share was $19.03 at December 31, 2019, an increase of 14.2% from December 31, 2018.

On January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL"). While certain key assumptions to be used in NBT's CECL model and methodologies are being finalized, as well as certain review controls, the day-one impact of adopting CECL is not expected to be material to the Company's total capital.

Dividend

The Board of Directors approved a first-quarter 2020 cash dividend of $0.27 per share at a meeting held today. The dividend will be paid on March 13, 2020 to shareholders of record as of February 28, 2020.

Other Events

On January 24, 2020, NBT subsidiary EPIC Retirement Plan Services, a full-service 401(k) recordkeeping firm, signed a definitive agreement to purchase the assets of Alliance Benefit Group of Illinois, Inc. ("ABGIL"). ABGIL is a retirement plan services company located in Peoria, Illinois that provides full-service recordkeeping, administration, fiduciary investment advice and plan design solutions to employers nationwide. This is NBT's fifth retirement plan services acquisition since 2015. The addition of ABGIL will strengthen NBT's presence in retirement services and bring the number of plan participants supported by NBT to 250,000 in all 50 states. The Company expects to complete the acquisition of ABGIL in the second quarter of 2020.

2020 Annual Meeting

NBT will be moving to a virtual shareholder meeting format, and the 2020 Annual Meeting of Shareholders will be hosted online on May 19, 2020. As technology enables new types of engagement, this virtual format will allow NBT to reach more shareholders, who will have the same opportunities to participate as in past in-person meetings. Details will be provided to shareholders with proxy materials in April 2020.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.7 billion at December 31, 2019. The Company primarily operates through NBT Bank, N.A., a full-service community bank and through two financial services companies. NBT Bank, N.A. has 146 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine. EPIC Retirement Plan Services, based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. NBT Insurance Agency, LLC, based in Norwich, N.Y., is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtinsurance.com.

Forward-Looking Statements

This news release contains forward-looking statements. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of NBT and its subsidiaries and on the information available to management at the time that these statements were made. There are several factors, many of which are beyond NBT's control, which could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others: (1) competitive pressures among depository and other financial institutions may increase significantly, including as a result of competitors having greater financial resources than NBT; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in tax laws and accounting standards, including the estimated effects from the adoption of the CECL model on January 1, 2020, may adversely affect business and results; (6) NBT's ability to successfully integrate acquired businesses and employees; and (7) adverse changes may occur in the securities markets or with respect to inflation. Forward-looking statements speak only as of the date they are made. Except as required by law, NBT does not update forward-looking statements to reflect subsequent circumstances or events.

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These measures adjust GAAP measures to exclude the effects of acquisition related intangible amortization expense on earnings, equity and assets as well as providing a FTE yield on securities and loans. Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of NBT's core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider NBT's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of NBT.

 
NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)
           
  2019
2018
Profitability: 4th Q 3rd Q 2nd Q 1st Q 4th Q
Diluted earnings per share $ 0.66   $ 0.73   $ 0.69   $ 0.66   $ 0.65  
Weighted average diluted common shares outstanding   44,174,201     44,138,495     44,120,377     44,081,086     44,059,796  
Return on average assets (1)   1.20 %   1.34 %   1.28 %   1.24 %   1.20 %
Return on average equity (1)   10.36 %   11.83 %   11.63 %   11.52 %   11.34 %
Return on average tangible common equity (1)(3)   14.28 %   16.43 %   16.38 %   16.45 %   16.37 %
Net interest margin (1)(2)   3.52 %   3.57 %   3.61 %   3.64 %   3.61 %
           
  12 Months ended December 31,      
Profitability: 2019 2018      
Diluted earnings per share $ 2.74   $ 2.56        
Weighted average diluted common shares outstanding   44,123,698     44,019,698        
Return on average assets   1.26 %   1.20 %      
Return on average equity   11.32 %   11.49 %      
Return on average tangible common equity (4)   15.85 %   16.71 %      
Net interest margin (2)   3.58 %   3.58 %      
           
(1) Annualized.
(2) Calculated on a FTE basis.
(3) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
                               
           
  2019
2018
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Net income $ 28,960   $ 32,379   $ 30,555   $ 29,127   $ 28,652  
Amortization of intangible assets (net of tax)   633     656     670     726     734  
Net income, excluding intangibles amortization $ 29,593   $ 33,035   $ 31,225   $ 29,853   $ 29,386  
           
Average stockholders' equity $ 1,109,225   $ 1,085,961   $ 1,053,750   $ 1,025,753   $ 1,002,822  
Less: average goodwill and other intangibles   287,268     288,077     288,930     289,913     290,854  
Average tangible common equity $ 821,957   $ 797,884   $ 764,820   $ 735,840   $ 711,968  
           
(4) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
           
  12 Months ended December 31,      
  2019 2018      
Net income $ 121,021   $ 112,566        
Amortization of intangible assets (net of tax)   2,684     3,032        
Net income, excluding intangibles amortization $ 123,705   $ 115,598        
           
Average stockholders' equity $ 1,068,948   $ 980,005        
Less: average goodwill and other intangibles   288,539     288,273        
Average tangible common equity $ 780,409   $ 691,732        
           
Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares.
           


 
NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)
           
  2019
2018
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Balance sheet data:          
Securities available for sale $ 975,340   $ 932,173   $ 979,696   $ 951,859   $ 998,496  
Securities held to maturity   630,074     678,435     744,601     780,565     783,599  
Net loans   7,063,133     6,941,444     6,891,108     6,818,907     6,815,204  
Total assets   9,715,925     9,661,386     9,635,718     9,533,510     9,556,363  
Total deposits   7,587,820     7,743,166     7,593,706     7,617,659     7,368,211  
Total borrowings   820,682     628,701     794,829     719,775     1,046,616  
Total liabilities   8,595,528     8,562,785     8,560,895     8,499,455     8,538,454  
Stockholders' equity   1,120,397     1,098,601     1,074,823     1,034,055     1,017,909  
           
Asset quality:          
Nonaccrual loans $ 25,174   $ 24,623   $ 24,669   $ 25,632   $ 25,487  
90 days past due and still accruing   3,717     8,342     2,387     3,335     5,085  
Total nonperforming loans   28,891     32,965     27,056     28,967     30,572  
Other real estate owned   1,458     2,144     2,203     2,222     2,441  
Total nonperforming assets   30,349     35,109     29,259     31,189     33,013  
Allowance for loan losses   72,965     72,365     72,165     71,405     72,505  
           
Asset quality ratios (total):          
Allowance for loan losses to total loans   1.02 %   1.03 %   1.04 %   1.04 %   1.05 %
Total nonperforming loans to total loans   0.40 %   0.47 %   0.39 %   0.42 %   0.44 %
Total nonperforming assets to total assets   0.31 %   0.36 %   0.30 %   0.33 %   0.35 %
Allowance for loan losses to total nonperforming loans   252.55 %   219.52 %   266.72 %   246.50 %   237.16 %
Past due loans to total loans   0.49 %   0.57 %   0.52 %   0.52 %   0.55 %
Net charge-offs to average loans (1)   0.30 %   0.35 %   0.38 %   0.41 %   0.39 %
           
Asset quality ratios (originated) (2):          
Allowance for loan losses to loans   1.06 %   1.08 %   1.08 %   1.09 %   1.10 %
Nonperforming loans to loans   0.39 %   0.47 %   0.38 %   0.41 %   0.43 %
Allowance for loan losses to nonperforming loans   269.90 %   231.21 %   287.67 %   265.63 %   254.92 %
Past due loans to loans   0.48 %   0.56 %   0.52 %   0.52 %   0.56 %
           
Capital:          
Equity to assets   11.53 %   11.37 %   11.15 %   10.85 %   10.65 %
Tangible equity ratio (3)   8.84 %   8.65 %   8.41 %   8.06 %   7.85 %
Book value per share $ 25.58   $ 25.09   $ 24.56   $ 23.64   $ 23.31  
Tangible book value per share (4) $ 19.03   $ 18.52   $ 17.97   $ 17.02   $ 16.66  
Tier 1 leverage ratio   10.33 %   10.15 %   9.88 %   9.62 %   9.52 %
Common equity tier 1 capital ratio   11.29 %   11.14 %   10.95 %   10.69 %   10.49 %
Tier 1 capital ratio   12.56 %   12.42 %   12.24 %   11.99 %   11.79 %
Total risk-based capital ratio   13.52 %   13.38 %   13.21 %   12.98 %   12.78 %
Common stock price (end of period) $ 40.56   $ 36.59   $ 37.51   $ 36.01   $ 34.59  
           
(1) Annualized.
(2) Non-GAAP measure - Excludes acquired loans.
(3) Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets.
(4) Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.
           


 
NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)
     
  December 31, December 31,
Assets 2019 2018
Cash and due from banks $ 170,595   $ 175,550  
Short-term interest bearing accounts   46,248     5,405  
Equity securities, at fair value   27,771     23,053  
Securities available for sale, at fair value   975,340     998,496  
Securities held to maturity (fair value $641,262 and $778,675, respectively)   630,074     783,599  
Federal Reserve and Federal Home Loan Bank stock   44,620     53,229  
Loans held for sale   11,731     6,943  
Loans   7,136,098     6,887,709  
Less allowance for loan losses   72,965     72,505  
Net loans $ 7,063,133   $ 6,815,204  
Premises and equipment, net   75,631     78,970  
Goodwill   274,769     274,769  
Intangible assets, net   12,020     15,599  
Bank owned life insurance   181,748     177,479  
Other assets   202,245     148,067  
Total assets $ 9,715,925   $ 9,556,363  
     
Liabilities and stockholders' equity    
Demand (noninterest bearing) $ 2,414,383   $ 2,361,099  
Savings, NOW and money market   4,312,244     4,076,434  
Time   861,193     930,678  
Total deposits $ 7,587,820   $ 7,368,211  
Short-term borrowings   655,275     871,696  
Long-term debt   64,211     73,724  
Junior subordinated debt   101,196     101,196  
Other liabilities   187,026     123,627  
Total liabilities $ 8,595,528   $ 8,538,454  
     
Total stockholders' equity $ 1,120,397   $ 1,017,909  
     
Total liabilities and stockholders' equity $ 9,715,925   $ 9,556,363  
     


 
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2019
2018 2019
2018
Interest, fee and dividend income        
Interest and fees on loans $ 79,800   $ 78,963   $ 321,474   $ 300,827  
Securities available for sale   5,639     6,332     23,303     26,920  
Securities held to maturity   4,213     4,344     19,105     13,242  
Other   924     885     3,652     3,266  
Total interest, fee and dividend income $ 90,576   $ 90,524   $ 367,534   $ 344,255  
Interest expense        
Deposits $ 10,181   $ 6,977   $ 39,986   $ 22,144  
Short-term borrowings   1,707     3,131     9,693     10,552  
Long-term debt   484     431     1,875     1,790  
Junior subordinated debt   1,021     1,110     4,425     4,140  
Total interest expense $ 13,393   $ 11,649   $ 55,979   $ 38,626  
Net interest income $ 77,183   $ 78,875   $ 311,555   $ 305,629  
Provision for loan losses   6,004     6,528     25,412     28,828  
Net interest income after provision for loan losses $ 71,179   $ 72,347   $ 286,143   $ 276,801  
Noninterest income        
Insurance and other financial services revenue $ 5,891   $ 5,843   $ 25,006   $ 24,345  
Service charges on deposit accounts   4,361     4,503     17,151     17,224  
ATM and debit card fees   5,935     5,704     23,893     22,699  
Retirement plan administration fees   7,218     7,113     30,388     26,992  
Trust   4,673     4,573     19,164     19,524  
Bank owned life insurance income   1,236     1,239     5,355     5,091  
Net securities gains (losses)   189     (6,916 )   4,213     (6,341 )
Other   6,738     3,887     18,853     15,228  
Total noninterest income $ 36,241   $ 25,946   $ 144,023   $ 124,762  
Noninterest expense        
Salaries and employee benefits $ 39,592   $ 38,998   $ 156,867   $ 151,685  
Occupancy   5,653     5,284     22,706     22,318  
Data processing and communications   4,719     4,431     18,318     17,652  
Professional fees and outside services   4,223     3,968     14,785     14,376  
Equipment   4,821     4,529     18,583     17,037  
Office supplies and postage   1,744     1,564     6,579     6,204  
FDIC expense   -     1,135     1,946     4,651  
Advertising   952     1,006     2,773     2,782  
Amortization of intangible assets   844     978     3,579     4,042  
Loan collection and other real estate owned, net   1,436     738     4,158     4,217  
Other   6,310     6,273     24,440     19,597  
Total noninterest expense $ 70,294   $ 68,904   $ 274,734   $ 264,561  
Income before income tax expense $ 37,126   $ 29,389   $ 155,432   $ 137,002  
Income tax expense   8,166     737     34,411     24,436  
Net income $ 28,960   $ 28,652   $ 121,021   $ 112,566  
Earnings Per Share        
Basic $ 0.66   $ 0.66   $ 2.76   $ 2.58  
Diluted $ 0.66   $ 0.65   $ 2.74   $ 2.56  
         


 
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
           
  2019
2018
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Interest, fee and dividend income          
Interest and fees on loans $ 79,800   $ 81,082   $ 81,271   $ 79,321   $ 78,963  
Securities available for sale   5,639     5,711     6,031     5,922     6,332  
Securities held to maturity   4,213     4,586     5,089     5,217     4,344  
Other   924     1,002     842     884     885  
Total interest, fee and dividend income $ 90,576   $ 92,381   $ 93,233   $ 91,344   $ 90,524  
Interest expense          
Deposits $ 10,181   $ 10,745   $ 10,234   $ 8,826   $ 6,977  
Short-term borrowings   1,707     1,989     2,760     3,237     3,131  
Long-term debt   484     498     471     422     431  
Junior subordinated debt   1,021     1,095     1,141     1,168     1,110  
Total interest expense $ 13,393   $ 14,327   $ 14,606   $ 13,653   $ 11,649  
Net interest income $ 77,183   $ 78,054   $ 78,627   $ 77,691   $ 78,875  
Provision for loan losses   6,004     6,324     7,277     5,807     6,528  
Net interest income after provision for loan losses $ 71,179   $ 71,730   $ 71,350   $ 71,884   $ 72,347  
Noninterest income          
Insurance and other financial services revenue $ 5,891   $ 6,421   $ 5,938   $ 6,756   $ 5,843  
Service charges on deposit accounts   4,361     4,330     4,224     4,236     4,503  
ATM and debit card fees   5,935     6,277     6,156     5,525     5,704  
Retirement plan administration fees   7,218     7,600     7,836     7,734     7,113  
Trust   4,673     5,209     4,731     4,551     4,573  
Bank owned life insurance income   1,236     1,556     1,186     1,377     1,239  
Net securities gains (losses)   189     4,036     (69 )   57     (6,916 )
Other   6,738     4,291     4,239     3,585     3,887  
Total noninterest income $ 36,241   $ 39,720   $ 34,241   $ 33,821   $ 25,946  
Noninterest expense          
Salaries and employee benefits $ 39,592   $ 39,352   $ 38,567   $ 39,356   $ 38,998  
Occupancy   5,653     5,335     5,443     6,275     5,284  
Data processing and communications   4,719     4,492     4,693     4,414     4,431  
Professional fees and outside services   4,223     3,535     3,359     3,668     3,968  
Equipment   4,821     4,487     4,518     4,757     4,529  
Office supplies and postage   1,744     1,667     1,577     1,591     1,564  
FDIC expense (credit)   -     (20 )   949     1,017     1,135  
Advertising   952     677     641     503     1,006  
Amortization of intangible assets   844     874     893     968     978  
Loan collection and other real estate owned, net   1,436     976     961     785     738  
Other   6,310     8,374     4,630     5,126     6,273  
Total noninterest expense $ 70,294   $ 69,749   $ 66,231   $ 68,460   $ 68,904  
Income before income tax expense $ 37,126   $ 41,701   $ 39,360   $ 37,245   $ 29,389  
Income tax expense   8,166     9,322     8,805     8,118     737  
Net income $ 28,960   $ 32,379   $ 30,555   $ 29,127   $ 28,652  
Earnings Per Share          
Basic $ 0.66   $ 0.74   $ 0.70   $ 0.67   $ 0.66  
Diluted $ 0.66   $ 0.73   $ 0.69   $ 0.66   $ 0.65  
           


 
NBT Bancorp Inc. and Subsidiaries
Average Quarterly Balance Sheets
(unaudited, dollars in thousands)
                       
    Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
    Q4 - 2019 Q3 - 2019 Q2 - 2019 Q1 - 2019 Q4 - 2018
Assets                      
Short-term interest bearing accounts   $ 51,613 2.43 % $ 57,530 1.95 % $ 25,783 1.28 % $ 9,065 4.07 % $ 3,780 5.25 %
Securities available for sale (1) (3)     942,302 2.37 %   940,256 2.41 %   981,079 2.47 %   984,704 2.45 %   1,104,198 2.29 %
Securities held to maturity (1) (3)     651,305 2.73 %   698,617 2.77 %   770,651 2.83 %   782,570 2.90 %   688,840 2.73 %
Investment in FRB and FHLB Banks     37,842 6.37 %   40,525 7.04 %   46,179 6.60 %   49,152 6.54 %   47,689 6.95 %
Loans (2) (3)     7,055,288 4.49 %   6,987,476 4.61 %   6,958,299 4.69 %   6,886,672 4.68 %   6,876,341 4.56 %
Total interest earning assets   $ 8,738,350 4.13 % $ 8,724,404 4.22 % $ 8,781,991 4.28 % $ 8,712,163 4.28 % $ 8,720,848 4.14 %
Other assets     861,909     852,616     816,748     795,585     769,302  
Total assets   $ 9,600,259   $ 9,577,020   $ 9,598,739   $ 9,507,748   $ 9,490,150  
                       
Liabilities and stockholders' equity                      
Money market deposit accounts   $ 2,057,678 1.16 % $ 2,015,297 1.24 % $ 1,916,045 1.16 % $ 1,804,053 0.99 % $ 1,745,980 0.65 %
NOW deposit accounts     1,064,193 0.13 %   1,056,001 0.13 %   1,127,413 0.13 %   1,135,213 0.16 %   1,166,383 0.18 %
Savings deposits     1,251,432 0.06 %   1,274,793 0.06 %   1,282,084 0.06 %   1,252,042 0.06 %   1,250,703 0.06 %
Time deposits     853,353 1.69 %   893,837 1.75 %   953,698 1.73 %   942,457 1.64 %   921,252 1.47 %
Total interest bearing deposits   $ 5,226,656 0.77 % $ 5,239,928 0.81 % $ 5,279,240 0.78 % $ 5,133,765 0.70 % $ 5,084,318 0.54 %
Short-term borrowings     475,332 1.42 %   490,694 1.61 %   620,898 1.78 %   712,306 1.84 %   724,693 1.71 %
Long-term debt     81,613 2.35 %   84,250 2.35 %   82,414 2.29 %   73,707 2.32 %   73,735 2.32 %
Junior subordinated debt     101,196 4.00 %   101,196 4.29 %   101,196 4.52 %   101,196 4.68 %   101,196 4.35 %
Total interest bearing liabilities   $ 5,884,797 0.90 % $ 5,916,068 0.96 % $ 6,083,748 0.96 % $ 6,020,974 0.92 % $ 5,983,942 0.77 %
Demand deposits     2,406,563     2,389,617     2,298,867     2,309,531     2,373,235  
Other liabilities     199,674     185,374     162,374     151,490     130,151  
Stockholders' equity     1,109,225     1,085,961     1,053,750     1,025,753     1,002,822  
Total liabilities and stockholders' equity   $ 9,600,259   $ 9,577,020   $ 9,598,739   $ 9,507,748   $ 9,490,150  
                       
Interest rate spread     3.23 %   3.26 %   3.32 %   3.36 %   3.37 %
Net interest margin (FTE) (3)     3.52 %   3.57 %   3.61 %   3.64 %   3.61 %
                       
(1) Securities are shown at average amortized cost.
(2) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
(3) Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%. The total amount of adjustment to present yields on a FTE basis is $349, $374, $445, $500 and $535 for the three months ended December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019 and December 31, 2018, respectively.
 


 
NBT Bancorp Inc. and Subsidiaries
Average Year-to-Date Balance Sheets
(unaudited, dollars in thousands)
               
    Average   Yield/ Average   Yield/
    Balance Interest Rates Balance Interest Rates
Twelve Months ended December 31,   2019
2018
Assets              
Short-term interest bearing accounts   $ 36,174 $ 773 2.14 % $ 3,377 $ 183 5.42 %
Securities available for sale (1) (3)     961,909   23,334 2.43 %   1,210,013   27,081 2.24 %
Securities held to maturity (1) (3)     725,352   20,410 2.81 %   567,117   14,657 2.58 %
Investment in FRB and FHLB Banks     43,385   2,879 6.64 %   48,214   3,083 6.39 %
Loans (2) (3)     6,972,438   321,805 4.62 %   6,765,748   301,258 4.45 %
Total interest earning assets   $ 8,739,258 $ 369,201 4.22 % $ 8,594,469 $ 346,262 4.03 %
Other assets     831,954       764,670    
Total assets   $ 9,571,212     $ 9,359,139    
               
Liabilities and stockholders' equity              
Money market deposit accounts   $ 1,949,147 $ 22,257 1.14 % $ 1,706,823 $ 8,314 0.49 %
NOW deposit accounts     1,095,402   1,518 0.14 %   1,191,008   1,894 0.16 %
Savings deposits     1,265,112   733 0.06 %   1,266,970   725 0.06 %
Time deposits     910,546   15,478 1.70 %   866,388   11,211 1.29 %
Total interest bearing deposits   $ 5,220,207 $ 39,986 0.77 % $ 5,031,189 $ 22,144 0.44 %
Short-term borrowings     573,927   9,693 1.69 %   727,635   10,552 1.45 %
Long-term debt     80,528   1,875 2.33 %   80,195   1,790 2.23 %
Junior subordinated debt     101,196   4,425 4.37 %   101,196   4,140 4.09 %
Total interest bearing liabilities   $ 5,975,858 $ 55,979 0.94 % $ 5,940,215 $ 38,626 0.65 %
Demand deposits     2,351,515       2,321,264    
Other liabilities     174,891       117,655    
Stockholders' equity     1,068,948       980,005    
Total liabilities and stockholders' equity   $ 9,571,212     $ 9,359,139    
Net interest income (FTE)     $ 313,222     $ 307,636  
Interest rate spread       3.28 %     3.38 %
Net interest margin (FTE) (3)       3.58 %     3.58 %
Taxable equivalent adjustment     $ 1,667     $ 2,007  
Net interest income     $ 311,555     $ 305,629  
               
(1) Securities are shown at average amortized cost.
(2) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
(3) Interest income for tax-exempt securities and loans has been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.
 


 
NBT Bancorp Inc. and Subsidiaries
Consolidated Loan Balances
(unaudited, dollars in thousands)
           
  2019
2018
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Commercial $ 1,302,209   $ 1,317,649   $ 1,299,784   $ 1,306,551   $ 1,291,568  
Commercial real estate   2,142,057     2,033,552     2,025,280     1,943,931     1,930,742  
Residential real estate mortgages   1,445,156     1,416,920     1,404,079     1,390,411     1,380,836  
Dealer finance   1,193,635     1,195,783     1,189,670     1,191,111     1,216,144  
Specialty lending   542,063     528,505     519,974     529,144     524,928  
Home equity   444,082     452,535     456,754     463,582     474,566  
Other consumer   66,896     68,865     67,732     65,582     68,925  
Total loans $ 7,136,098   $ 7,013,809   $ 6,963,273   $ 6,890,312   $ 6,887,709  
           

Contact:

John H. Watt, Jr., President and CEO
John V. Moran, Executive Vice President and CFO
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
607-337-6589

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