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NBT Bancorp Inc. Announces Net Income of $104.4 Million ($2.37 Per Diluted Common Share); Approves Dividend and Increase to Shares Available Under Share Repurchase Program

01/27/21

NORWICH, N.Y., Jan. 27, 2021 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the quarter and year ended December 31, 2020.

Net income for the year ended December 31, 2020 was $104.4 million, down 13.7% from $121.0 million for the prior year due primarily to higher provision for loan losses after the adoption of the Current Expected Credit Losses (“CECL”) accounting methodology and related to the deterioration of economic conditions caused by the COVID-19 pandemic. Diluted earnings per share for the year ended December 31, 2020 was $2.37, as compared with $2.74 for the prior year, a decrease of 13.5%. Excluding full year branch optimization charges of $4.8 million, net income and earnings per diluted share were $108.1 million and $2.46, respectively.

Pre-provision net revenue (“PPNR”)1 for the year ended December 31, 2020 was $193.4 million compared to $182.1 million in the prior year. The 6% increase in PPNR from the prior year reflected higher net interest income, higher noninterest income and lower noninterest expense.

Net income for the three months ended December 31, 2020 was $34.2 million, or $0.78 per diluted common share. Net income was down $0.9 million from the previous quarter primarily due to branch optimization charges for the quarter of $4.1 million and up $5.2 million from the fourth quarter of 2019 due to higher net interest income and lower provision for loan losses, partly offset by the branch optimization charges. Excluding branch optimization charges for the quarter of $4.1 million, net income and earnings per diluted share were $37.4 million and $0.85, respectively.

PPNR1 for the fourth quarter of 2020 was $48.2 million compared to $49.6 million in the previous quarter and $43.3 million in the fourth quarter of 2019. The 3% decline in PPNR from the previous quarter reflected higher operating expenses related to timing of initiatives, partly offset by higher net interest income.

CEO Comments

“NBT ended the year with active pipelines and building momentum. Our strong capital base provides us with the optionality we need to drive our growth in 2021,” said NBT President and CEO John H. Watt, Jr. “The strength of NBT’s pre-provision net revenue and our outsized noninterest income is reflected in our results for the full year and the fourth quarter of 2020. As we continue to navigate these challenging times and look to the future, our team is customer focused and committed to executing the critical strategies that will carry us forward.”

Fourth Quarter Financial Highlights

Net Income
  • Net income of $34.2 million
  • Diluted earnings per share of $0.78
Net Interest Income / NIM
  • Net interest income on a fully taxable equivalent basis was $80.4 million1
  • Net interest margin (“NIM”) on a fully taxable equivalent basis was 3.20%1, up 3 bps from the prior quarter
PPNR
  • PPNR1 was $48.2 million compared to $49.6 million in the third quarter of 2020 and $43.3 million in the fourth quarter of 2019
Loans and Credit Quality
  • Period end loans were $7.5 billion, up 5% from December 31, 2019 and comparable to September 30, 2020
  • Excluding $431 million of Paycheck Protection Program (“PPP”) loans at December 31, 2020, period end loans increased $22 million or 0.3% from September 30, 2020
  • Allowance for loan losses to total loans of 1.47% (1.56% excluding PPP loans and related allowance), down 4 bps from the third quarter (down 6 bps excluding PPP loans and related allowance)
  • Net charge-offs to average loans was 0.21%, annualized (0.22% excluding PPP loans)
  • Nonperforming assets to total assets was 0.45% (0.47% excluding PPP loans)
Capital
  • Tangible book value per share2 grew 2% for the quarter and 8% from prior year to $20.52 at December 31, 2020
  • Tangible equity to assets of 8.41%1
  • CET1 ratio of 11.84%; Leverage ratio of 9.56%

Loans

  • Period end total loans were $7.5 billion at December 31, 2020 and $7.6 billion at September 30, compared to $7.1 billion at December 31, 2019.
  • Total PPP loans as of December 31, 2020 were $431 million (net of unamortized fees), with $548 million originated at an average loan size of $184 thousand and an average annual fee of 3.2%.
  • Excluding PPP loans, period end loans increased $22.0 million from September 30, 2020. Commercial and industrial loans decreased $29.7 million to $1.3 billion; commercial real estate loans increased $98.5 million to $2.4 billion; and total consumer loans decreased $46.8 million to $3.4 billion.
  • Commercial line of credit utilization rate was 22% at December 31, 2020 compared to 25% at September 30, 2020 and 32% at December 31, 2019.

Deposits

  • Average total deposits in the fourth quarter of 2020 were $9.1 billion, compared to $8.8 billion in the third quarter of 2020, primarily due to increases in non-interest bearing demand deposit accounts.
  • Loan to deposit ratio was 82.6% at December 31, 2020, compared to 94.0% at December 31, 2019 and 84.4% at September 30, 2020.

Net Interest Income and Net Interest Margin

  • Net interest income for the fourth quarter of 2020 was $80.1 million, up $2.2 million or 2.8% from the third quarter of 2020 and up $2.9 million or 3.8% from the fourth quarter of 2019.
  • The net interest margin on a fully taxable equivalent (“FTE”) basis for the fourth quarter of 2020 was 3.20%, up 3 basis points (“bps”) from the third quarter of 2020 and down 32 bps from the fourth quarter of 2019. The net impact of PPP loans and excess liquidity negatively impacted the NIM by 8 bps in the fourth quarter versus a negative impact of 10 bps in the third quarter of 2020. Excluding the impact of PPP lending and excess liquidity from each quarter, NIM increased 1 bp from the prior quarter primarily due to a 5 bps decline in the cost of interest bearing liabilities and minimal reduction in asset yields during the quarter.
  • Earning asset yields for the three months ended December 31, 2020 were up 1 bp from the prior quarter and down 67 bps from the same quarter in the prior year. Earning assets grew $159.3 million or 1.6% from the prior quarter and grew $1.2 billion or 14.3% from the same quarter in the prior year.
    • Excess liquidity resulted in a $74.9 million increase in the average balances of short-term interest bearing accounts.
    • The average balance of investment securities increased $111.4 million while yields declined 20 bps.
    • Loan yields increased 11 bps to 4.06% due primarily to the fees recognized due to $73 million in PPP loans forgiven during the quarter (7 bps) combined with a $45 million increase in the average balance of higher yielding consumer loans (9 bps).
  • Total cost of deposits was 0.17% for the fourth quarter of 2020, down 2 bps from the prior quarter and down 36 bps from the same period in the prior year.
  • The cost of interest-bearing liabilities for the three months ended December 31, 2020 was 0.40%, down as compared to the prior quarter of 0.45% and down 50 bps from the fourth quarter of 2019 of 0.90%.
    • Cost of interest-bearing deposits decreased 4 bps from the prior quarter and decreased 51 bps from the same quarter in 2019.

Credit Quality and Allowance for Credit Losses

  • Net charge-offs to average loans were low due to COVID-19 pandemic relief programs for the quarter and 2020. Net charge-offs to total average loans were 23 bps for 2020 compared to 36 bps for 2019.
  • Net charge-offs to total average loans of 21 bps (22 bps excluding PPP loans) compared to 12 bps (13 bps excluding PPP loans) in the prior quarter and 30 bps in the fourth quarter of 2019. The increase in charge-offs during the fourth quarter of 2020 was primarily due to higher charge-offs in commercial, indirect auto and specialty lending, but continue to be at lower levels due to pandemic relief programs.
  • Nonperforming assets to total assets was 0.45% (0.47% excluding PPP loans) compared to 0.37% (0.39% excluding PPP loans) at September 30, 2020 and 0.31% at December 31, 2019. The change in nonperforming assets was primarily related to an increase in nonperforming commercial and residential real estate loans.
  • Provision expense for the three months ended December 31, 2020 was ($0.6) million while net charge-offs of $3.9 million were up compared with the prior quarter. Provision expense decreased $3.9 million from the third quarter of 2020 and decreased $6.6 million from the fourth quarter of 2019. The decrease in provision expense from the prior quarter and fourth quarter of 2019 was primarily due to the $4.5 million reduction in the level of allowance for loan losses resulting from an improved economic forecast.
  • The allowance for loan losses was $110.0 million or 1.47% (1.56% excluding PPP loans and related allowance) of total loans compared to 1.51% (1.62% excluding PPP loans and related allowance) at September 30, 2020 and 1.02% December 31, 2019. The allowance for loans losses was calculated under the CECL accounting method in 2020 and the incurred loss accounting method in 2019.
  • As of January 19, 2021, 1.5% of loans (loans outstanding as of December 31, 2020; excluding PPP balances) are in payment deferral programs which is down from the second quarter 2020 peak of 14.9%.
  • The reserve for unfunded loan commitments increased to $6.4 million at December 31, 2020 compared to the prior quarter at $5.5 million.

Noninterest Income

  • Total noninterest income, excluding securities gains (losses), was $38.0 million for the three months ended December 31, 2020, up $0.3 million from the prior quarter and up $1.9 million from the prior year quarter.
  • Service charges on deposit accounts were higher than the prior quarter but lower than the fourth quarter of 2019. Overdraft charges have been lower during the COVID-19 pandemic, recovering from the third quarter of 2020 but continue to run lower than prior year levels.
  • ATM and debit card fees were lower compared to the prior quarter due to seasonality and higher compared to the fourth quarter of 2019 due to increased volume and higher per transaction rates.
  • Retirement plan administration fees were lower than the prior quarter, as third quarter fees were higher due to seasonal revenues, and higher than the fourth quarter of 2019 due to the April 1, 2020 acquisition of Alliance Benefit Group of Illinois, Inc. (“ABG”) contributing $1.5 million in revenues during the fourth quarter and $1.7 million during the third quarter.
  • The increase in other noninterest income from the prior quarter was driven by higher loan swap fee income partially offset by lower mortgage banking income. The decrease from the fourth quarter of 2019 was driven by lower loan swap fee income and lower mortgage banking income.

Noninterest Expense

  • Total noninterest expense for the fourth quarter of 2020 was up 13.4% from the previous quarter and up 7.0% from the fourth quarter of 2019, primarily due to $4.1 million in branch optimization costs incurred during the fourth quarter of 2020. The branch optimization strategies charged in 2020 are expected to improve future operating expenses by about $2.5 million annually once fully implemented.
  • Salaries and benefits increased from the prior quarter due to the timing of medical expenses and increased from the fourth quarter of 2019 driven by the addition of ABG’s salaries and benefits.
  • Data processing and communication expense were down compared to the fourth quarter of 2019 due to lower transaction volumes as a result of the COVID-19 pandemic.
  • Professional fees and outside services were up $1.0 million compared to the prior quarter primarily due to the timing of expenses.
  • Equipment expense was higher than both the prior quarter and the fourth quarter of 2019 due to higher technology costs associated with several digital upgrades.
  • FDIC expense was higher than the fourth quarter of 2019 due to the benefit of the FDIC insurance assessment small bank credit in the fourth quarter of 2019.
  • Other expenses increased compared to both the prior quarter and the fourth quarter of 2019 due to $4.1 million in branch optimization charges and a $0.9 million increase in the reserve for unfunded commitments.

Income Taxes

  • The effective tax rate was 21.6% for the fourth quarter of 2020 compared to 23.8% for the third quarter of 2020 and 22.0% for the fourth quarter of 2019. The full year effective tax rate for 2020 was 21.6% compared to 22.1% for the full year in 2019.

Capital

  • Capital ratios remain strong with tangible common equity to tangible assets1 at 8.41%. Tangible book value per share2 grew 2% from the prior quarter and 8% from the prior year quarter to $20.52.
  • December 31, 2020 CET1 capital ratio of 11.84%, leverage ratio of 9.56% and total risk-based capital ratio of 15.62%.

Stock Repurchase Program

  • At a meeting held today, the Board of Directors approved an increase to the total number of shares authorized under the current stock repurchase program to 2 million shares from 1 million shares, previously. There have been 263,507 shares repurchased under the plan. The stock repurchase plan expires on December 31, 2021.

Dividend

  • The Board of Directors approved a first-quarter cash dividend of $0.27 per share at a meeting held today. The dividend will be paid on March 15, 2021 to shareholders of record as of March 1, 2021.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. Eastern Time on Thursday, January 28, 2021, to review fourth quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $10.9 billion at December 31, 2020. 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 141 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine, and is currently entering Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. NBT Insurance Agency, LLC, based in Norwich, NY, 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, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war or terrorism; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (9) changes in consumer spending, borrowings and savings habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisitions and integration of acquired businesses; (13) the ability to increase market share and control expenses; (14) changes in the competitive environment among financial holding companies; (15) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, Economic Growth, Regulatory Relief, Consumer Protection Act of 2018, Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and regulatory pronouncements around CARES Act; (16) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; (17) changes in the Company’s organization, compensation and benefit plans; (18) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (19) greater than expected costs or difficulties related to the integration of new products and lines of business; (20) the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 (“COVID-19”), global pandemic; (21) the impact of a slowing U.S. economy and increased unemployment on the performance of our loan portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products; and (22) the Company’s success at managing the risks involved in the foregoing items.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from the Company’s forward-looking statements is the potential adverse effect of the current COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company, its customers and the global economy and financial markets. The extent to which the COVID-19 pandemic impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic and its impact on the Company’s customers and demand for financial services, the actions governments, businesses and individuals take in response to the pandemic, the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies, national and local economic activity, and the pace of recovery when the COVID-19 pandemic subsides, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2019 and in our Form 10-Q for the quarter ended September 30, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. You should not place undue reliance on any forward-looking statements, which speak only as of the date made, and you are advised that various factors including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected. Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

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”). 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 financial 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.

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
   

 

NBT Bancorp Inc. and Subsidiaries  
Selected Financial Data  
(unaudited, dollars in thousands except per share data)  
             
    2020     2019    
  4th Q 3rd Q 2nd Q 1st Q 4th Q  
Profitability:            
Diluted earnings per share $ 0.78   $ 0.80   $ 0.56   $ 0.23   $ 0.66    
Weighted average diluted common shares outstanding   43,973,971     43,941,953     43,928,344     44,130,324     44,174,201    
Return on average assets3   1.24 %   1.29 %   0.94 %   0.43 %   1.20 %  
Return on average equity3   11.59 %   12.09 %   8.76 %   3.69 %   10.36 %  
Return on average tangible common equity1 3   15.71 %   16.51 %   12.14 %   5.24 %   14.28 %  
Net interest margin1 3   3.20 %   3.17 %   3.38 %   3.52 %   3.52 %  
             
  12 Months ended December 31,        
    2020     2019          
Profitability:            
Diluted earnings per share $ 2.37   $ 2.74          
Weighted average diluted common shares outstanding   43,988,623     44,123,698          
Return on average assets   0.99 %   1.26 %        
Return on average equity   9.09 %   11.32 %        
Return on average tangible common equity1   12.48 %   15.85 %        
Net interest margin1   3.31 %   3.58 %        
             
    2020     2019    
  4th Q 3rd Q 2nd Q 1st Q 4th Q  
Balance sheet data:            
Securities available for sale $ 1,348,698   $ 1,197,925   $ 1,108,443   $ 1,000,980   $ 975,340    
Securities held to maturity   616,560     663,088     599,164     621,359     630,074    
Net loans   7,388,885     7,446,143     7,514,491     7,147,383     7,063,133    
Total assets   10,932,906     10,850,212     10,847,184     9,953,543     9,715,925    
Total deposits   9,081,692     8,958,183     8,815,891     7,864,638     7,587,820    
Total borrowings   406,731     446,737     602,988     714,283     820,682    
Total liabilities   9,745,288     9,684,101     9,704,532     8,841,364     8,595,528    
Stockholders' equity   1,187,618     1,166,111     1,142,652     1,112,179     1,120,397    
             
Capital:            
Equity to assets   10.86 %   10.75 %   10.53 %   11.17 %   11.53 %  
Tangible equity ratio1   8.41 %   8.27 %   8.04 %   8.55 %   8.84 %  
Book value per share $ 27.22   $ 26.74   $ 26.20   $ 25.52   $ 25.58    
Tangible book value per share2 $ 20.52   $ 20.02   $ 19.46   $ 18.96   $ 19.03    
Leverage ratio   9.56 %   9.48 %   9.44 %   10.02 %   10.33 %  
Common equity tier 1 capital ratio   11.84 %   11.63 %   11.34 %   10.90 %   11.29 %  
Tier 1 capital ratio   13.09 %   12.88 %   12.60 %   12.14 %   12.56 %  
Total risk-based capital ratio   15.62 %   15.43 %   15.15 %   13.36 %   13.52 %  
Common stock price (end of period) $ 32.10   $ 26.82   $ 30.06   $ 32.39   $ 40.56    
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)  
             
    2020     2019    
  4th Q 3rd Q 2nd Q 1st Q 4th Q  
Asset quality:            
Nonaccrual loans $ 44,647   $ 35,896   $ 25,567   $ 29,972   $ 25,174    
90 days past due and still accruing   3,149     2,579     2,057     2,280     3,717    
Total nonperforming loans   47,796     38,475     27,624     32,252     28,891    
Other real estate owned   1,458     1,605     1,783     2,384     1,458    
Total nonperforming assets   49,254     40,080     29,407     34,636     30,349    
Allowance for loan losses   110,000     114,500     113,500     100,000     72,965    
             
Asset quality ratios (total):            
Allowance for loan losses to total loans   1.47 %   1.51 %   1.49 %   1.38 %   1.02 %  
Total nonperforming loans to total loans   0.64 %   0.51 %   0.36 %   0.45 %   0.40 %  
Total nonperforming assets to total assets   0.45 %   0.37 %   0.27 %   0.35 %   0.31 %  
Allowance for loan losses to total nonperforming loans   230.14 %   297.60 %   410.87 %   310.06 %   252.55 %  
Past due loans to total loans   0.37 %   0.26 %   0.30 %   0.51 %   0.49 %  
Net charge-offs to average loans3   0.21 %   0.12 %   0.28 %   0.32 %   0.30 %  
             
Asset quality ratios (excluding paycheck protection program):        
Allowance for loan losses to total loans   1.56 %   1.62 %   1.59 %   1.38 %   1.02 %  
Total nonperforming loans to total loans   0.68 %   0.55 %   0.39 %   0.45 %   0.40 %  
Total nonperforming assets to total assets   0.47 %   0.39 %   0.28 %   0.35 %   0.31 %  
Allowance for loan losses to total nonperforming loans   230.10 %   297.53 %   410.78 %   310.06 %   252.55 %  
Past due loans to total loans   0.39 %   0.28 %   0.32 %   0.51 %   0.49 %  
Net charge-offs to average loans3   0.22 %   0.13 %   0.30 %   0.32 %   0.30 %  
             


   
NBT Bancorp Inc. and Subsidiaries  
Consolidated Balance Sheets  
(unaudited, dollars in thousands)  
       
  December 31, December 31,
 
Assets   2020   2019  
Cash and due from banks $ 159,995 $ 170,595  
Short-term interest bearing accounts   512,686   46,248  
Equity securities, at fair value   30,737   27,771  
Securities available for sale, at fair value   1,348,698   975,340  
Securities held to maturity (fair value $636,827 and $641,262, respectively)   616,560   630,074  
Federal Reserve and Federal Home Loan Bank stock   27,353   44,620  
Loans held for sale   1,119   11,731  
Loans   7,498,885   7,136,098  
Less allowance for loan losses   110,000   72,965  
Net loans $ 7,388,885 $ 7,063,133  
Premises and equipment, net   74,206   75,631  
Goodwill   280,541   274,769  
Intangible assets, net   11,735   12,020  
Bank owned life insurance   186,434   181,748  
Other assets   293,957   202,245  
Total assets $ 10,932,906 $ 9,715,925  
       
Liabilities and stockholders' equity      
Demand (noninterest bearing) $ 3,241,123 $ 2,414,383  
Savings, NOW and money market   5,207,090   4,312,244  
Time   633,479   861,193  
Total deposits $ 9,081,692 $ 7,587,820  
Short-term borrowings   168,386   655,275  
Long-term debt   39,097   64,211  
Subordinated debt, net   98,052   -  
Junior subordinated debt   101,196   101,196  
Other liabilities   256,865   187,026  
Total liabilities $ 9,745,288 $ 8,595,528  
       
Total stockholders' equity $ 1,187,618 $ 1,120,397  
       
Total liabilities and stockholders' equity $ 10,932,906 $ 9,715,925  
       

 

   
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,  
    2020     2019   2020     2019  
Interest, fee and dividend income          
Interest and fees on loans $ 76,863   $ 79,800 $ 307,859   $ 321,474  
Securities available for sale   5,478     5,639   22,434     23,303  
Securities held to maturity   3,532     4,213   15,283     19,105  
Other   568     924   2,706     3,652  
Total interest, fee and dividend income $ 86,441   $ 90,576 $ 348,282   $ 367,534  
Interest expense          
Deposits $ 3,887   $ 10,181 $ 22,070   $ 39,986  
Short-term borrowings   193     1,707   3,408     9,693  
Long-term debt   369     484   1,553     1,875  
Subordinated debt   1,339     -   2,842     -  
Junior subordinated debt   545     1,021   2,731     4,425  
Total interest expense $ 6,333   $ 13,393 $ 32,604   $ 55,979  
Net interest income $ 80,108   $ 77,183 $ 315,678   $ 311,555  
Provision for loan losses   (607 )   6,004   51,134     25,412  
  Net interest income after provision for loan losses $ 80,715   $ 71,179 $ 264,544   $ 286,143  
Noninterest income          
Service charges on deposit accounts $ 3,588   $ 4,361 $ 13,201   $ 17,151  
ATM and debit card fees   6,776     5,935   25,960     23,893  
Retirement plan administration fees   9,011     7,218   35,851     30,388  
Wealth management4   7,456     7,085   29,247     28,400  
Insurance4   3,454     3,479   14,757     15,770  
Bank owned life insurance income   1,733     1,236   5,743     5,355  
Net securities gains (losses)   160     189   (388 )   4,213  
Other   5,937     6,738   21,905     18,853  
Total noninterest income $ 38,115   $ 36,241 $ 146,276   $ 144,023  
Noninterest expense          
Salaries and employee benefits $ 41,016   $ 39,592 $ 161,934   $ 156,867  
Occupancy   5,280     5,653   21,634     22,706  
Data processing and communications   4,157     4,719   16,527     18,318  
Professional fees and outside services   4,388     4,223   15,082     14,785  
Equipment   5,395     4,821   19,889     18,583  
Office supplies and postage   1,517     1,744   6,138     6,579  
FDIC expense   739     -   2,688     1,946  
Advertising   827     952   2,288     2,773  
Amortization of intangible assets   822     844   3,395     3,579  
Loan collection and other real estate owned, net   930     1,436   3,295     4,158  
Other   10,133     6,310   24,863     24,440  
Total noninterest expense $ 75,204   $ 70,294 $ 277,733   $ 274,734  
Income before income tax expense $ 43,626   $ 37,126 $ 133,087   $ 155,432  
Income tax expense   9,432     8,166   28,699     34,411  
   Net income $ 34,194   $ 28,960 $ 104,388   $ 121,021  
Earnings Per Share          
Basic $ 0.78   $ 0.66 $ 2.39   $ 2.76  
Diluted $ 0.78   $ 0.66 $ 2.37   $ 2.74  
           

 

 
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
           
    2020   2019
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Interest, fee and dividend income          
Interest and fees on loans $ 76,863   $ 74,998 $ 77,270 $ 78,728   $ 79,800
Securities available for sale   5,478     5,603   5,600   5,753     5,639
Securities held to maturity   3,532     3,734   3,926   4,091     4,213
Other   568     659   650   829     924
Total interest, fee and dividend income $ 86,441   $ 84,994 $ 87,446 $ 89,401   $ 90,576
Interest expense          
Deposits $ 3,887   $ 4,267 $ 4,812 $ 9,104   $ 10,181
Short-term borrowings   193     446   972   1,797     1,707
Long-term debt   369     398   393   393     484
Subordinated debt   1,339     1,375   128   -     -
Junior subordinated debt   545     565   695   926     1,021
Total interest expense $ 6,333   $ 7,051 $ 7,000 $ 12,220   $ 13,393
Net interest income $ 80,108   $ 77,943 $ 80,446 $ 77,181   $ 77,183
Provision for loan losses   (607 )   3,261   18,840   29,640     6,004
Net interest income after provision for loan losses $ 80,715   $ 74,682 $ 61,606 $ 47,541   $ 71,179
Noninterest income          
Service charges on deposit accounts $ 3,588   $ 3,087 $ 2,529 $ 3,997   $ 4,361
ATM and debit card fees   6,776     7,194   6,136   5,854     5,935
Retirement plan administration fees   9,011     9,685   9,214   7,941     7,218
Wealth management4   7,456     7,695   6,823   7,273     7,085
Insurance4   3,454     3,742   3,292   4,269     3,479
Bank owned life insurance income   1,733     1,255   1,381   1,374     1,236
Net securities gains (losses)   160     84   180   (812 )   189
Other   5,937     4,985   5,456   5,527     6,738
Total noninterest income $ 38,115   $ 37,727 $ 35,011 $ 35,423   $ 36,241
Noninterest expense          
Salaries and employee benefits $ 41,016   $ 40,451 $ 39,717 $ 40,750   $ 39,592
Occupancy   5,280     5,294   5,065   5,995     5,653
Data processing and communications   4,157     4,058   4,079   4,233     4,719
Professional fees and outside services   4,388     3,394   3,403   3,897     4,223
Equipment   5,395     5,073   4,779   4,642     4,821
Office supplies and postage   1,517     1,530   1,455   1,636     1,744
FDIC expense   739     645   993   311     -
Advertising   827     530   322   609     952
Amortization of intangible assets   822     856   883   834     844
Loan collection and other real estate owned, net   930     620   728   1,017     1,436
Other   10,133     3,857   3,916   6,957     6,310
Total noninterest expense $ 75,204   $ 66,308 $ 65,340 $ 70,881   $ 70,294
Income before income tax expense $ 43,626   $ 46,101 $ 31,277 $ 12,083   $ 37,126
Income tax expense   9,432     10,988   6,564   1,715     8,166
   Net income $ 34,194   $ 35,113 $ 24,713 $ 10,368   $ 28,960
Earnings Per Share          
Basic $ 0.78   $ 0.80 $ 0.57 $ 0.24   $ 0.66
Diluted $ 0.78   $ 0.80 $ 0.56 $ 0.23   $ 0.66
           


   
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 - 2020 Q3 - 2020 Q2 - 2020 Q1 - 2020 Q4 - 2019  
Assets                        
Short-term interest bearing accounts   $ 552,529 0.11 % $ 477,946 0.11 % $ 380,260 0.10 % $ 74,695 1.28 % $ 51,613 2.43 %  
Securities available for sale1 5     1,230,411 1.77 %   1,137,604 1.96 %   985,561 2.29 %   962,527 2.40 %   942,302 2.37 %  
Securities held to maturity1 5     640,422 2.36 %   621,812 2.56 %   613,899 2.75 %   622,398 2.81 %   651,305 2.73 %  
Investment in FRB and FHLB Banks     28,275 5.94 %   29,720 7.08 %   36,604 6.09 %   39,784 5.97 %   37,842 6.37 %  
Loans1 6     7,533,953 4.06 %   7,559,218 3.95 %   7,589,032 4.10 %   7,163,114 4.42 %   7,055,288 4.49 %  
 Total interest earning assets   $ 9,985,590 3.46 % $ 9,826,300 3.45 % $ 9,605,356 3.68 % $ 8,862,518 4.07 % $ 8,738,350 4.13 %  
Other assets     954,123     967,194     961,807     885,570     861,909    
Total assets   $ 10,939,713   $ 10,793,494     $ 10,567,163   $ 9,748,088   $ 9,600,259    
                         
Liabilities and stockholders' equity                    
Money market deposit accounts   $ 2,455,510 0.27 % $ 2,364,606 0.28 % $ 2,360,407 0.29 % $ 2,101,306 1.00 % $ 2,057,678 1.16 %  
NOW deposit accounts     1,315,370 0.05 %   1,207,064 0.05 %   1,167,486 0.04 %   1,086,205 0.10 %   1,064,193 0.13 %  
Savings deposits     1,465,562 0.05 %   1,447,021 0.05 %   1,383,495 0.05 %   1,276,285 0.06 %   1,251,432 0.06 %  
Time deposits     645,288 1.15 %   684,708 1.31 %   760,803 1.48 %   842,989 1.62 %   853,353 1.69 %  
  Total interest bearing deposits   $ 5,881,730 0.26 % $ 5,703,399 0.30 % $ 5,672,191 0.34 % $ 5,306,785 0.69 % $ 5,226,656 0.77 %  
Short-term borrowings     175,597 0.44 %   277,890 0.64 %   427,004 0.92 %   533,516 1.35 %   475,332 1.42 %  
Long-term debt     59,488 2.47 %   64,137 2.47 %   64,165 2.46 %   64,194 2.46 %   81,613 2.35 %  
Subordinated debt, net     97,984 5.44 %   97,934 5.59 %   8,633 5.96   - -     - -    
Junior subordinated debt     101,196 2.14 %   101,196 2.22 %   101,196 2.76 %   101,196 3.68 %   101,196 4.00 %  
  Total interest bearing liabilities   $ 6,315,995 0.40 % $ 6,244,556 0.45 % $ 6,273,189 0.45 % $ 6,005,691 0.82 % $ 5,884,797 0.90 %  
Demand deposits     3,178,410     3,111,617     2,887,545     2,398,307     2,406,563    
Other liabilities     271,206     282,265     271,635     214,495     199,674    
Stockholders' equity     1,174,102     1,155,056     1,134,794     1,129,595     1,109,225    
Total liabilities and stockholders' equity   $ 10,939,713   $ 10,793,494     $ 10,567,163     $ 9,748,088   $ 9,600,259    
                         
Interest rate spread     3.06 %   3.00 %   3.23 %   3.25 %   3.23 %  
Net interest margin (FTE)1     3.20 %   3.17 %   3.38 %   3.52 %   3.52 %  
                         


   
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,     2020     2019    
Assets                
Short-term interest bearing accounts   $ 372,144 $ 610 0.16 % $ 36,174 $ 773 2.14 %  
Securities available for sale1 5     1,079,600   22,434 2.08 %   961,909   23,334 2.43 %  
Securities held to maturity1 5     624,668   16,363 2.62 %   725,352   20,410 2.81 %  
Investment in FRB and FHLB Banks     33,570   2,096 6.24 %   43,385   2,879 6.64 %  
Loans1 6     7,461,795   308,080 4.13 %   6,972,438   321,805 4.62 %  
 Total interest earning assets   $ 9,571,777 $ 349,583 3.65 % $ 8,739,258 $ 369,201 4.22 %  
Other assets     942,274       831,954      
Total assets   $ 10,514,051     $ 9,571,212      
                 
Liabilities and stockholders' equity                
Money market deposit accounts   $ 2,320,947 $ 10,313 0.44 % $ 1,949,147 $ 22,257 1.14 %  
NOW deposit accounts     1,194,398   716 0.06 %   1,095,402   1,518 0.14 %  
Savings deposits     1,393,436   745 0.05 %   1,265,112   733 0.06 %  
Time deposits     733,073   10,296 1.40 %   910,546   15,478 1.70 %  
  Total interest bearing deposits   $ 5,641,854 $ 22,070 0.39 % $ 5,220,207 $ 39,986 0.77 %  
Short-term borrowings     352,809   3,408 0.97 %   573,927   9,693 1.69 %  
Long-term debt     62,990   1,553 2.47 %   80,528   1,875 2.33 %  
Subordinated debt, net     51,394   2,842 5.53 %   -   - -    
Junior subordinated debt     101,196   2,731 2.70 %   101,196   4,425 4.37 %  
  Total interest bearing liabilities   $ 6,210,243 $ 32,604 0.53 % $ 5,975,858 $ 55,979 0.94 %  
Demand deposits     2,895,341       2,351,515      
Other liabilities     259,992       174,891      
Stockholders' equity     1,148,475       1,068,948      
Total liabilities and stockholders' equity   $ 10,514,051     $ 9,571,212      
Net interest income (FTE)1     $ 316,979     $ 313,222    
Interest rate spread       3.12 %     3.28 %  
Net interest margin (FTE)1       3.31 %     3.58 %  
Taxable equivalent adjustment     $ 1,301     $ 1,667    
Net interest income     $ 315,678     $ 311,555    
                 

 

     
NBT Bancorp Inc. and Subsidiaries    
Consolidated Loan Balances  
(unaudited, dollars in thousands)  
          
The following table presents loans by line of business, paycheck protection program loans includes $6.9 million, $11.3 million and $14.6 million in unamortized fees as of December 31, 2020 September 30, 2020 and June 30, 2020 respectively.   
                                   
                                   
               
    2020     2019      
  4th Q 3rd Q 2nd Q 1st Q 4th Q    
Commercial $ 1,267,679   $ 1,297,408   $ 1,318,806   $ 1,338,609   $ 1,302,209      
Commercial real estate   2,380,358     2,281,843     2,256,580     2,242,139     2,142,057      
Paycheck protection program   430,810     514,558     510,097     -     -      
Residential real estate mortgages   1,466,662     1,448,530     1,460,058     1,446,676     1,445,156      
Indirect auto   931,286     989,369     1,091,889     1,184,888     1,193,635      
Specialty lending   579,644     566,973     515,618     539,378     542,063      
Home equity   387,974     404,346     415,528     431,536     444,082      
Other consumer   54,472     57,616     59,415     64,157     66,896      
  Total loans $ 7,498,885   $ 7,560,643   $ 7,627,991   $ 7,247,383   $ 7,136,098      
                   
The following table provide loans as a percentage of total loans in industries vulnerable to the COVID-19 pandemic as of December 31, 2020:    
                                   
               
Industry % of Total
Loans
           
Accommodations 2.5%            
Healthcare services and practices 2.2%            
Restaurants and entertainment 1.8%            
Retailers 1.7%            
Automotive 1.3%            
  Total 9.5%            
               
Allowance for Loan Losses as a Percentage of Loans by Segment7:        
               
  Incurred CECL          
  12/31/2019 1/1/2020 3/31/2020 6/30/2020* 9/30/2020* 12/31/2020*  
Commercial & industrial 0.96% 0.98% 1.43% 1.25% 1.34% 1.47%  
Commercial real estate 1.02% 0.74% 1.10% 1.56% 1.57% 1.43%  
Paycheck protection program 0.00% 0.00% 0.00% 0.01% 0.01% 0.01%  
Residential real estate 0.27% 0.83% 0.99% 1.13% 1.21% 1.07%  
Auto 0.83% 0.78% 1.08% 0.99% 0.92% 0.93%  
Other consumer 3.74% 3.66% 4.00% 5.01% 4.66% 4.55%  
  Total 1.02% 1.07% 1.38% 1.49% 1.51% 1.47%  
               
* Excluding PPP loans and related allowance, total allowance to loans was 1.59%, 1.62% and 1.56% as of June 30, 2020, September 30, 2020 and December 31, 2020 respectively.  
                                     


               
1 The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:  
               
  Non-GAAP measures            
  (unaudited, dollars in thousands)            
               
  Pre-provision net revenue ("PPNR")   2020     2019    
    4th Q 3rd Q 2nd Q 1st Q 4th Q  
  Income before income tax expense $ 43,626   $ 46,101   $ 31,277   $ 12,083   $ 37,126    
  FTE adjustment   318     325     329     329     349    
  Provision for loan losses   (607 )   3,261     18,840     29,640     6,004    
  Net securities (gains) losses   (160 )   (84 )   (180 )   812     (189 )  
  Nonrecurring expense   4,100     -     650     -     -    
  Unfunded loan commitments reserve   900     -     (200 )   2,000     -    
  PPNR $ 48,177   $ 49,603   $ 50,716   $ 44,864   $ 43,290    
               
  Average Assets $ 10,939,713   $ 10,793,494   $ 10,567,163   $ 9,748,088   $ 9,600,259    
               
  Return on Average Assets3   1.24 %   1.29 %   0.94 %   0.43 %   1.20 %  
  PPNR Return on Average Assets3   1.75 %   1.83 %   1.93 %   1.85 %   1.79 %  
               
    12 Months ended December 31,        
      2020     2019          
  Income before income tax expense $ 133,087   $ 155,432          
  FTE adjustment   1,301     1,667          
  Provision for loan losses   51,134     25,412          
  Net securities (gains) losses   388     (4,213 )        
  Nonrecurring expense   4,750     3,800          
  Unfunded loan commitments reserve   2,700     -          
  PPNR $ 193,360   $ 182,098          
               
  Average Assets $ 10,514,051   $ 9,571,212          
               
  Return on Average Assets   0.99 %   1.26 %        
  PPNR Return on Average Assets   1.84 %   1.90 %        
               
  PPNR is a Non-GAAP financial measure that management believes is useful in evaluating the underlying operating results of the Company excluding the volatility in loan loss provision due to CECL adoption and the impact of the COVID-19 pandemic, net securities gains (losses) and non-recurring income and/or expense.  
                                   
                                   
               
  FTE Adjustment   2020     2019    
    4th Q 3rd Q 2nd Q 1st Q 4th Q  
  Net interest income $ 80,108   $ 77,943   $ 80,446   $ 77,181   $ 77,183    
  Add: FTE adjustment   318     325     329     329     349    
  Net interest income (FTE) $ 80,426   $ 78,268   $ 80,775   $ 77,510   $ 77,532    
  Average earning assets $ 9,985,590   $ 9,826,300   $ 9,605,356   $ 8,862,518   $ 8,738,350    
  Net interest margin (FTE)3   3.20 %   3.17 %   3.38 %   3.52 %   3.52 %  
               
    12 Months ended December 31,        
      2020     2019          
  Net interest income $ 315,678   $ 311,555          
  Add: FTE adjustment   1,301     1,667          
  Net interest income (FTE) $ 316,979   $ 313,222          
  Average earning assets $ 9,571,777   $ 8,739,258          
  Net interest margin (FTE)   3.31 %   3.58 %        
               
  Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.  
               


                 
1 The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:    
                 
  Non-GAAP measures              
  (unaudited, dollars in thousands)              
                 
  Tangible equity to tangible assets   2020     2019      
    4th Q 3rd Q 2nd Q 1st Q 4th Q    
  Total equity $ 1,187,618   $ 1,166,111   $ 1,142,652   $ 1,112,179   $ 1,120,397      
  Intangible assets   292,276     293,098     293,954     285,955     286,789      
  Total assets $ 10,932,906   $ 10,850,212   $ 10,847,184   $ 9,953,543   $ 9,715,925      
  Tangible equity to tangible assets   8.41 %   8.27 %   8.04 %   8.55 %   8.84 %    
                 
  Return on average tangible common equity   2020     2019      
    4th Q 3rd Q 2nd Q 1st Q 4th Q    
  Net income $ 34,194   $ 35,113   $ 24,713   $ 10,368   $ 28,960      
  Amortization of intangible assets (net of tax)   617     642     662     626     633      
  Net income, excluding intangibles amortization $ 34,811   $ 35,755   $ 25,375   $ 10,994   $ 29,593      
                 
  Average stockholders' equity $ 1,174,102   $ 1,155,056   $ 1,134,794   $ 1,129,595   $ 1,109,225      
  Less: average goodwill and other intangibles   292,725     293,572     294,423     286,400     287,268      
  Average tangible common equity $ 881,377   $ 861,484   $ 840,371   $ 843,195   $ 821,957      
  Return on average tangible common equity3   15.71 %   16.51 %   12.14 %   5.24 %   14.28 %    
                 
    12 Months ended December 31,          
      2020     2019            
  Net income $ 104,388   $ 121,021            
  Amortization of intangible assets (net of tax)   2,546     2,684            
  Net income, excluding intangibles amortization $ 106,934   $ 123,705            
                 
  Average stockholders' equity $ 1,148,475   $ 1,068,948            
  Less: average goodwill and other intangibles   291,787     288,539            
  Average tangible common equity $ 856,688   $ 780,409            
  Return on average tangible common equity   12.48 %   15.85 %          
                 
2 Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.    
3 Annualized.    
4 Other financial services revenue previously disclosed and included with Insurance income has been reclassified and combined with Trust income and is disclosed as Wealth management income.    
5 Securities are shown at average amortized cost.    
6 For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.  
7 The allowance for loan losses for December 31, 2019 was calculated based on the incurred losses methodology and beginning January 1, 2020, it was based on the CECL methodology. The risk-based pooling of loans (segments) for incurred and CECL are not consistent. For illustrative purposes only, the loans and related incurred allowance at December 31, 2019 were grouped to conform with the CECL methodology.    
                                     

 


NBT Bancorp Inc.

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