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NBT Bancorp Inc. Announces Net Income of $32.4 Million and Diluted Earnings per Share of $0.73; Announces Dividend Increase

10/28/19

NORWICH, N.Y., Oct. 28, 2019 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the three and nine months ended September 30, 2019.

Net income for the three months ended September 30, 2019 was $32.4 million, up 6.0% from $30.6 million for the second quarter of 2019 and up 8.6% from $29.8 million for the third quarter of 2018. Diluted earnings per share for the three months ended September 30, 2019 was $0.73, as compared with $0.69 for the prior quarter, an increase of 5.8%, and $0.68 for the third quarter of 2018, an increase of 7.4%.

Net income for the nine months ended September 30, 2019 was $92.1 million, up 9.7% from $83.9 million for the same period last year. Diluted earnings per share for the nine months ended September 30, 2019 was $2.09, as compared with $1.91 for the same period in 2018, an increase of 9.4%.

The third quarter and year-to-date results include a $4.0 million realized gain on the sale of all of NBT’s Visa Class B shares. The realized gain was substantially offset by targeted branch optimization and employee initiatives that resulted in one-time costs in noninterest expense. These initiatives are expected to create future operating efficiencies that will be redeployed in critical technology investments supporting our digital strategy.

Highlights:

  • Announced a 3.8% increase in the quarterly dividend
  • Quarterly diluted earnings per share up 5.8% from the prior quarter and up 7.4% from prior year
  • Quarter-to-date net income up 6.0% from the prior quarter and up 8.6% from prior year
  • FTE net interest margin of 3.61% for the nine months ended September 30, 2019, up 4 bps from 2018
  • Tangible equity ratio of 8.65%, up 106 bps from the third quarter of 2018
  • Board reauthorized a stock repurchase program

“The team at NBT continued to drive earnings growth with year-over-year earnings per share and net income up over 9% despite a challenging interest rate environment,” said NBT President and CEO John H. Watt, Jr. “Our disciplined approach to the allocation of capital remains a priority that will drive ongoing implementation of our strategic growth and digital strategies now and in the years to come. In addition, our capital allocation plans include a 3.8% increase to the quarterly dividend to $0.27 per share.”

Net interest income was $78.1 million for the third quarter of 2019, down $0.6 million, or 0.7%, from the previous quarter. The fully taxable equivalent (“FTE”) net interest margin was 3.57% for the three months ended September 30, 2019, down 4 basis points (“bps”) from the previous quarter and interest income decreased $0.9 million, or 0.9%. The yield on average interest-earning assets decreased 6 bps to 4.22%, and average interest-earning assets decreased $58 million from the prior quarter to $8.7 billion. The lower asset yield primarily reflects the impact of lower short-term rates on floating-rate loans, while contraction in average earning assets was driven by a smaller investment portfolio. Interest expense was down $0.3 million, or 1.9%, due to a $168 million decrease in average interest-bearing liabilities from the prior quarter. The cost of interest-bearing liabilities remained comparable at 0.96% for the quarter ended September 30, 2019, driven by the 17 bp decrease in short-term borrowings cost, offset by the 3 bp increase in interest-bearing deposit costs.

Net interest income was $78.1 million for the third quarter of 2019, up $0.5 million, or 0.7%, from the third quarter of 2018. The FTE net interest margin of 3.57% was comparable to the third quarter of 2018. Interest income increased $4.2 million, or 4.7%, as the yield on average interest-earning assets increased 17 bps from the same period in 2018, and average interest-earning assets increased $42.3 million, or 0.5%, primarily due to a $147.9 million increase in average loans. Interest expense increased $3.7 million, as the cost of interest-bearing liabilities increased 25 bps, driven by interest-bearing deposit costs increasing 33 bps.

Net interest income for the first nine months of 2019 was $234.4 million, up $7.6 million, or 3.4%, from the same period in 2018. FTE net interest margin of 3.61% for the nine months ended September 30, 2019, was up from 3.57% for the same period in 2018. Average interest-earning assets were up $187.7 million, or 2.2%, for the nine months ended September 30, 2019, as compared to the same period in 2018, driven by a $216.0 million increase in loans. Interest income increased $23.2 million, or 9.2%, due to the increase in earning assets combined with a 25 bp improvement in loan yields. Interest expense was up $15.6 million, for the nine months ended September 30, 2019 as compared to the same period in 2018 as the cost of interest-bearing liabilities increased 34 bps, driven by interest-bearing deposit costs increasing 36 bps combined with a 40 bp increase in short-term borrowing costs. The Federal Reserve reduced its target fed funds rate twice in the third quarter of 2019 by a total of 50 bps. Prior to the Federal Reserve’s change in policy, the Company’s full-cycle deposit beta during the period of policy tightening from December 2015 through July 2019 was 15.2%. The Company’s average cost of deposits increased by 34 bps versus the 225 bps increase in the fed funds rate.

Noninterest income for the three months ended September 30, 2019 was $39.7 million, up $5.5 million, or 16.0%, from the prior quarter and up $6.3 million, or 19.0%, from the third quarter of 2018. In the third quarter of 2019, the Company sold Visa Class B common stock for a gain of $4.0 million. Excluding net securities gains (losses), noninterest income for the three months ended September 30, 2019 would have been $35.7 million, up $1.4 million, or 4.0%, from the prior quarter and up $2.7 million, or 8.2%, from the third quarter of 2018. The increase from the prior quarter was primarily driven by higher insurance and other finance services revenue along with higher trust income. The increase from the third quarter of 2018 was primarily due to higher other noninterest income due primarily to higher swap fee income.

Noninterest income for the nine months ended September 30, 2019 was $107.8 million, up $9.0 million, or 9.1%, from the same period in 2018. Excluding net securities gains, noninterest income for the nine months ended September 30, 2019 would have been $103.8 million, up $5.5 million, or 5.6%, from the same period in 2018. The increase from the prior year was driven by higher retirement plan administration fees due to the acquisition of Retirement Plan Services, LLC (“RPS”) 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 expense for the three months ended September 30, 2019 was $69.7 million, up $3.5 million, or 5.3%, from the prior quarter and up $3.3 million, or 4.9%, from the third quarter of 2018. The increase from the prior quarter and the third quarter of 2018 was primarily driven by higher other noninterest expense items and increases in salaries and employee benefits, partially offset by lower FDIC insurance expense. Salaries and employee benefits expense increased from the prior quarter and the third quarter of 2018 due to wage increases and $0.7 million in one-time charges related to efficiency initiatives. FDIC insurance expense decreased from the prior quarter and the third quarter of 2018 due to receipt of the Small Bank Assessment Credit in the third quarter of 2019. Other noninterest expense increased from the prior quarter and the third quarter of 2018 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.

Noninterest expense for the nine months ended September 30, 2019 was $204.4 million, up $8.8 million, or 4.5%, 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 in the first nine months of 2019 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, the previously mentioned $0.7 million in one-time charges and general wage and benefit increases. The $4.8 million increase in other noninterest expenses was due to the $3.1 million in reorganization expenses previously mentioned and an increase in the amortization expense for pension plan actuarial costs.

Income tax expense for the three months ended September 30, 2019 was $9.3 million, up $0.5 million from the prior quarter and up $0.7 million from the third quarter of 2018. The effective tax rate of 22.4% for the third quarter of 2019 was comparable to the second quarter of 2019 and to the third quarter of 2018. The increase in income tax expense from the prior quarter and from the third quarter of 2018 was primarily due to a higher level of taxable income.

Income tax expense for the nine months ended September 30, 2019 was $26.2 million, up $2.5 million, or 10.7%, from the same period of 2018. The effective tax rate of 22.2% for the first nine months of 2019 was up from 22.0% for the same period in the prior year. The increase in income tax expense from the prior year was due to a higher level of taxable income.

Asset Quality

Net charge-offs of $6.1 million for the three months ended September 30, 2019 were down as compared to $6.5 million for the prior quarter and up compared to $5.7 million for the third quarter of 2018. Provision expense was lower at $6.3 million for the three months ended September 30, 2019, as compared with $7.3 million for the prior quarter and up from $6.0 million for the third quarter of 2018. Annualized net charge-offs to average loans for the third quarter of 2019 was 0.35%, down from 0.38% for the prior quarter and up from 0.33% for the third quarter of 2018.

Net charge-offs of $19.5 million for the nine months ended September 30, 2019 were up compared to $19.0 million for the same period of 2018. Provision expense was $19.4 million for the nine months ended September 30, 2019, as compared with $22.3 million for the same period of 2018. Annualized net charge-offs to average loans for the first nine months of 2019 was 0.38%, comparable to the first nine months of 2018.

Nonperforming loans to total loans was 0.47% at September 30, 2019, up 8 bps from 0.39% at June 30, 2019 and up 6 bps from 0.41% at September 30, 2018. Past due loans as a percentage of total loans was 0.57% at September 30, 2019, up from 0.52% at June 30, 2019 and up from 0.53% at September 30, 2018. The increase in nonperforming and past due loans to total loans primarily resulted from a commercial real estate relationship migrating to over ninety days past due during the quarter. The loan is still accruing interest and is well secured by underlying collateral.

The allowance for loan losses totaled $72.4 million at September 30, 2019, compared to $72.2 million at June 30, 2019 and $72.8 million at September 30, 2018. The allowance for loan losses as a percentage of loans was 1.03% (1.08% excluding acquired loans) at September 30, 2019, compared to 1.04% (1.08% excluding acquired loans) at June 30, 2019 and 1.06% (1.11% excluding acquired loans) at September 30, 2018.

Balance Sheet

Total assets were $9.7 billion at September 30, 2019, up $105.0 million from December 31, 2018. Loans were $7.0 billion at September 30, 2019, up $126.1 million from December 31, 2018. In the first nine months of 2019, loan growth in commercial real estate and residential real estate was partially offset by run-off in our consumer portfolios. Total deposits were $7.7 billion at September 30, 2019, up $375.0 million, or 5.1%, 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 11.37% at September 30, 2019, compared with $1.0 billion or a total equity-to-total assets ratio of 10.65% at December 31, 2018.

Stock Repurchase Program

On October 28, 2019, the Board of Directors authorized a repurchase program for NBT to repurchase up to an additional 1,000,000 shares of its outstanding common stock. This plan expires on December 31, 2021.

Dividend

The Board of Directors approved a fourth-quarter 2019 cash dividend of $0.27 per share at a meeting held today. The dividend, which represents a $0.01, or 3.8%, increase, will be paid on December 13, 2019 to shareholders of record as of November 29, 2019.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.7 billion at September 30, 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 149 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.epic1st.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 accounting standards and tax laws, 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: 3rd Q 2nd Q 1st Q 4th Q 3rd Q  
Diluted earnings per share $ 0.73   $ 0.69   $ 0.66   $ 0.65   $ 0.68    
Weighted average diluted common shares outstanding   44,138,495     44,120,377     44,081,086     44,059,796     44,050,557    
Return on average assets (1)   1.34 %   1.28 %   1.24 %   1.20 %   1.25 %  
Return on average equity (1)   11.83 %   11.63 %   11.52 %   11.34 %   11.96 %  
Return on average tangible common equity (1)(3)   16.43 %   16.38 %   16.45 %   16.37 %   17.42 %  
Net interest margin (1)(2)   3.57 %   3.61 %   3.64 %   3.61 %   3.57 %  
                                 
  9 Months ended September 30,        
Profitability:   2019     2018          
Diluted earnings per share $ 2.09   $ 1.91          
Weighted average diluted common shares outstanding   44,108,467     44,009,385          
Return on average assets (1)   1.29 %   1.20 %        
Return on average equity (1)   11.66 %   11.54 %        
Return on average tangible common equity (1)(4)   16.42 %   16.83 %        
Net interest margin (1)(2)   3.61 %   3.57 %        
             
(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    
  3rd Q 2nd Q 1st Q 4th Q 3rd Q  
Net income $ 32,379   $ 30,555   $ 29,127   $ 28,652   $ 29,807    
Amortization of intangible assets (net of tax)   656     670     726     734     791    
Net income, excluding intangibles amortization $ 33,035   $ 31,225   $ 29,853   $ 29,386   $ 30,598    
             
Average stockholders' equity $ 1,085,961   $ 1,053,750   $ 1,025,753   $ 1,002,822   $ 988,551    
Less: average goodwill and other intangibles   288,077     288,930     289,913     290,854     291,814    
Average tangible common equity $ 797,884   $ 764,820   $ 735,840   $ 711,968   $ 696,737    
             
(4) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:  
                                 
             
  9 Months ended September 30,        
    2019     2018          
Net income $ 92,061   $ 83,914          
Amortization of intangible assets (net of tax)   2,051     2,298          
Net income, excluding intangibles amortization $ 94,112   $ 86,212          
             
Average stockholders' equity $ 1,055,375   $ 972,316          
Less: average goodwill and other intangibles   288,967     287,403          
Average tangible common equity $ 766,408   $ 684,913          
             
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    
  3rd Q 2nd Q 1st Q 4th Q 3rd Q  
Balance sheet data:            
Securities available for sale $ 932,173   $ 979,696   $ 951,859   $ 998,496   $ 1,101,074    
Securities held to maturity   678,435     744,601     780,565     783,599     659,949    
Net loans   6,941,444     6,891,108     6,818,907     6,815,204     6,814,457    
Total assets   9,661,386     9,635,718     9,533,510     9,556,363     9,547,284    
Total deposits   7,743,166     7,593,706     7,617,659     7,368,211     7,441,290    
Total borrowings   628,701     794,829     719,775     1,046,616     986,656    
Total liabilities   8,562,785     8,560,895     8,499,455     8,538,454     8,553,129    
Stockholders' equity   1,098,601     1,074,823     1,034,055     1,017,909     994,155    
                                 
Asset quality:                                
Nonaccrual loans $ 24,623   $ 24,669   $ 25,632   $ 25,487   $ 23,301    
90 days past due and still accruing   8,342     2,387     3,335     5,085     4,734    
Total nonperforming loans   32,965     27,056     28,967     30,572     28,035    
Other real estate owned   2,144     2,203     2,222     2,441     3,271    
Total nonperforming assets   35,109     29,259     31,189     33,013     31,306    
Allowance for loan losses   72,365     72,165     71,405     72,505     72,805    
                                 
Asset quality ratios (total):                                
Allowance for loan losses to total loans   1.03 %   1.04 %   1.04 %   1.05 %   1.06 %  
Total nonperforming loans to total loans   0.47 %   0.39 %   0.42 %   0.44 %   0.41 %  
Total nonperforming assets to total assets   0.36 %   0.30 %   0.33 %   0.35 %   0.33 %  
Allowance for loan losses to total nonperforming loans   219.52 %   266.72 %   246.50 %   237.16 %   259.69 %  
Past due loans to total loans   0.57 %   0.52 %   0.52 %   0.55 %   0.53 %  
Net charge-offs to average loans (1)   0.35 %   0.38 %   0.41 %   0.39 %   0.33 %  
                                 
Asset quality ratios (originated) (2):                                
Allowance for loan losses to loans   1.08 %   1.08 %   1.09 %   1.10 %   1.11 %  
Nonperforming loans to loans   0.47 %   0.38 %   0.41 %   0.43 %   0.39 %  
Allowance for loan losses to nonperforming loans   231.21 %   287.67 %   265.63 %   254.92 %   285.86 %  
Past due loans to loans   0.56 %   0.52 %   0.52 %   0.56 %   0.53 %  
                                 
Capital:                                
Equity to assets   11.37 %   11.15 %   10.85 %   10.65 %   10.41 %  
Tangible equity ratio (3)   8.65 %   8.41 %   8.06 %   7.85 %   7.59 %  
Book value per share $ 25.09   $ 24.56   $ 23.64   $ 23.31   $ 22.77    
Tangible book value per share (4) $ 18.52   $ 17.97   $ 17.02   $ 16.66   $ 16.10    
Tier 1 leverage ratio   10.15 %   9.88 %   9.62 %   9.52 %   9.36 %  
Common equity tier 1 capital ratio   11.14 %   10.95 %   10.69 %   10.49 %   10.28 %  
Tier 1 capital ratio   12.42 %   12.24 %   11.99 %   11.79 %   11.58 %  
Total risk-based capital ratio   13.38 %   13.21 %   12.98 %   12.78 %   12.58 %  
Common stock price (end of period) $ 36.59   $ 37.51   $ 36.01   $ 34.59   $ 38.38    
                                 
(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)  
       
  September 30,
December 31,
 
Assets 2019 2018  
Cash and due from banks $ 217,639 $ 175,550  
Short-term interest bearing accounts   56,457   5,405  
Equity securities, at fair value   26,818   23,053  
Securities available for sale, at fair value   932,173   998,496  
Securities held to maturity (fair value $691,189 and $778,675, respectively)   678,435   783,599  
Federal Reserve and Federal Home Loan Bank stock   37,490   53,229  
Loans held for sale   17,986   6,943  
Loans   7,013,809   6,887,709  
Less allowance for loan losses   72,365   72,505  
Net loans $ 6,941,444 $ 6,815,204  
Premises and equipment, net   75,708   78,970  
Goodwill   274,769   274,769  
Intangible assets, net   12,864   15,599  
Bank owned life insurance   180,513   177,479  
Other assets   209,090   148,067  
Total assets $ 9,661,386 $ 9,556,363  
           
Liabilities and stockholders' equity          
Demand (noninterest bearing) $ 2,477,657 $ 2,361,099  
Savings, NOW and money market   4,405,218   4,076,434  
Time   860,291   930,678  
Total deposits $ 7,743,166 $ 7,368,211  
Short-term borrowings   443,266   871,696  
Long-term debt   84,239   73,724  
Junior subordinated debt   101,196   101,196  
Other liabilities   190,918   123,627  
Total liabilities $ 8,562,785 $ 8,538,454  
           
Total stockholders' equity $ 1,098,601 $ 1,017,909  
           
Total liabilities and stockholders' equity $ 9,661,386 $ 9,556,363  
       
       


NBT Bancorp Inc. and Subsidiaries  
Consolidated Statements of Income  
(unaudited, dollars in thousands except per share data)  
           
  Three Months Ended Nine Months Ended  
  September 30, September 30,  
    2019     2018   2019   2018  
Interest, fee and dividend income          
Interest and fees on loans $ 81,082   $ 77,249 $ 241,674 $ 221,864  
Securities available for sale   5,711     6,659   17,664   20,588  
Securities held to maturity   4,586     3,462   14,892   8,898  
Other   1,002     834   2,728   2,381  
Total interest, fee and dividend income $ 92,381   $ 88,204 $ 276,958 $ 253,731  
Interest expense          
Deposits $ 10,745   $ 6,157 $ 29,805 $ 15,167  
Short-term borrowings   1,989     3,000   7,986   7,421  
Long-term debt   498     431   1,391   1,359  
Junior subordinated debt   1,095     1,089   3,404   3,030  
Total interest expense $ 14,327   $ 10,677 $ 42,586 $ 26,977  
Net interest income $ 78,054   $ 77,527 $ 234,372 $ 226,754  
Provision for loan losses   6,324     6,026   19,408   22,300  
Net interest income after provision for loan losses $ 71,730   $ 71,501 $ 214,964 $ 204,454  
Noninterest income          
Insurance and other financial services revenue $ 6,421   $ 6,172 $ 19,115 $ 18,502  
Service charges on deposit accounts   4,330     4,503   12,790   12,721  
ATM and debit card fees   6,277     5,906   17,958   16,995  
Retirement plan administration fees   7,600     7,244   23,170   19,879  
Trust   5,209     4,808   14,491   14,951  
Bank owned life insurance income   1,556     1,288   4,119   3,852  
Net securities gains   4,036     412   4,024   575  
Other   4,291     3,048   12,115   11,341  
Total noninterest income $ 39,720   $ 33,381 $ 107,782 $ 98,816  
Noninterest expense          
Salaries and employee benefits $ 39,352   $ 38,394 $ 117,275 $ 112,687  
Occupancy   5,335     5,380   17,053   17,034  
Data processing and communications   4,492     4,434   13,599   13,221  
Professional fees and outside services   3,535     3,580   10,562   10,408  
Equipment   4,487     4,319   13,762   12,508  
Office supplies and postage   1,667     1,563   4,835   4,640  
FDIC (credit) expense   (20 )   1,223   1,946   3,516  
Advertising   677     739   1,821   1,776  
Amortization of intangible assets   874     1,054   2,735   3,064  
Loan collection and other real estate owned, net   976     1,234   2,722   3,479  
Other   8,374     4,577   18,130   13,324  
Total noninterest expense $ 69,749   $ 66,497 $ 204,440 $ 195,657  
Income before income tax expense $ 41,701   $ 38,385 $ 118,306 $ 107,613  
Income tax expense   9,322     8,578   26,245   23,699  
Net income $ 32,379   $ 29,807 $ 92,061 $ 83,914  
Earnings Per Share          
Basic $ 0.74   $ 0.68 $ 2.10 $ 1.92  
Diluted $ 0.73   $ 0.68 $ 2.09 $ 1.91  
           


NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
           
    2019   2018
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Interest, fee and dividend income          
Interest and fees on loans $ 81,082   $ 81,271   $ 79,321 $ 78,963   $ 77,249
Securities available for sale   5,711     6,031     5,922   6,332     6,659
Securities held to maturity   4,586     5,089     5,217   4,344     3,462
Other   1,002     842     884   885     834
Total interest, fee and dividend income $ 92,381   $ 93,233   $ 91,344 $ 90,524   $ 88,204
Interest expense          
Deposits $ 10,745   $ 10,234   $ 8,826 $ 6,977   $ 6,157
Short-term borrowings   1,989     2,760     3,237   3,131     3,000
Long-term debt   498     471     422   431     431
Junior subordinated debt   1,095     1,141     1,168   1,110     1,089
Total interest expense $ 14,327   $ 14,606   $ 13,653 $ 11,649   $ 10,677
Net interest income $ 78,054   $ 78,627   $ 77,691 $ 78,875   $ 77,527
Provision for loan losses   6,324     7,277     5,807   6,528     6,026
Net interest income after provision for loan losses $ 71,730   $ 71,350   $ 71,884 $ 72,347   $ 71,501
Noninterest income          
Insurance and other financial services revenue $ 6,421   $ 5,938   $ 6,756 $ 5,843   $ 6,172
Service charges on deposit accounts   4,330     4,224     4,236   4,503     4,503
ATM and debit card fees   6,277     6,156     5,525   5,704     5,906
Retirement plan administration fees   7,600     7,836     7,734   7,113     7,244
Trust   5,209     4,731     4,551   4,573     4,808
Bank owned life insurance income   1,556     1,186     1,377   1,239     1,288
Net securities gains (losses)   4,036     (69 )   57   (6,916 )   412
Other   4,291     4,239     3,585   3,887     3,048
Total noninterest income $ 39,720   $ 34,241   $ 33,821 $ 25,946   $ 33,381
Noninterest expense          
Salaries and employee benefits $ 39,352   $ 38,567   $ 39,356 $ 38,998   $ 38,394
Occupancy   5,335     5,443     6,275   5,284     5,380
Data processing and communications   4,492     4,693     4,414   4,431     4,434
Professional fees and outside services   3,535     3,359     3,668   3,968     3,580
Equipment   4,487     4,518     4,757   4,529     4,319
Office supplies and postage   1,667     1,577     1,591   1,564     1,563
FDIC (credit) expense   (20 )   949     1,017   1,135     1,223
Advertising   677     641     503   1,006     739
Amortization of intangible assets   874     893     968   978     1,054
Loan collection and other real estate owned, net   976     961     785   738     1,234
Other   8,374     4,630     5,126   6,273     4,577
Total noninterest expense $ 69,749   $ 66,231   $ 68,460 $ 68,904   $ 66,497
Income before income tax expense $ 41,701   $ 39,360   $ 37,245 $ 29,389   $ 38,385
Income tax expense   9,322     8,805     8,118   737     8,578
Net income $ 32,379   $ 30,555   $ 29,127 $ 28,652   $ 29,807
Earnings Per Share          
Basic $ 0.74   $ 0.70   $ 0.67 $ 0.66   $ 0.68
Diluted $ 0.73   $ 0.69   $ 0.66 $ 0.65   $ 0.68
           



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
    Q3 - 2019 Q2 - 2019 Q1 - 2019 Q4 - 2018 Q3 - 2018
Assets                      
Short-term interest bearing accounts   $ 57,530 1.95 % $ 25,783 1.28 % $ 9,065 4.07 % $ 3,780 5.25 % $ 3,328 6.08 %
Securities available for sale (1) (3)     940,256 2.41 %   981,079 2.47 %   984,704 2.45 %   1,104,198 2.29 %   1,197,910 2.22 %
Securities held to maturity (1) (3)     698,617 2.77 %   770,651 2.83 %   782,570 2.90 %   688,840 2.73 %   591,220 2.58 %
Investment in FRB and FHLB Banks     40,525 7.04 %   46,179 6.60 %   49,152 6.54 %   47,689 6.95 %   50,107 6.20 %
Loans (2) (3)     6,987,476 4.61 %   6,958,299 4.69 %   6,886,672 4.68 %   6,876,341 4.56 %   6,839,565 4.49 %
Total interest earning assets   $ 8,724,404 4.22 % $ 8,781,991 4.28 % $ 8,712,163 4.28 % $ 8,720,848 4.14 % $ 8,682,130 4.05 %
Other assets     852,616     816,748     795,585     769,302     776,219  
Total assets   $ 9,577,020   $ 9,598,739   $ 9,507,748   $ 9,490,150   $ 9,458,349  
                       
Liabilities and stockholders' equity                      
Money market deposit accounts   $ 2,015,297 1.24 % $ 1,916,045 1.16 % $ 1,804,053 0.99 % $ 1,745,980 0.65 % $ 1,724,853 0.58 %
NOW deposit accounts     1,056,001 0.13 %   1,127,413 0.13 %   1,135,213 0.16 %   1,166,383 0.18 %   1,164,513 0.17 %
Savings deposits     1,274,793 0.06 %   1,282,084 0.06 %   1,252,042 0.06 %   1,250,703 0.06 %   1,279,520 0.06 %
Time deposits     893,837 1.75 %   953,698 1.73 %   942,457 1.64 %   921,252 1.47 %   881,792 1.33 %
Total interest bearing deposits   $ 5,239,928 0.81 % $ 5,279,240 0.78 % $ 5,133,765 0.70 % $ 5,084,318 0.54 % $ 5,050,678 0.48 %
Short-term borrowings     490,694 1.61 %   620,898 1.78 %   712,306 1.84 %   724,693 1.71 %   766,372 1.55 %
Long-term debt     84,250 2.35 %   82,414 2.29 %   73,707 2.32 %   73,735 2.32 %   73,762 2.32 %
Junior subordinated debt     101,196 4.29 %   101,196 4.52 %   101,196 4.68 %   101,196 4.35 %   101,196 4.27 %
Total interest bearing liabilities   $ 5,916,068 0.96 % $ 6,083,748 0.96 % $ 6,020,974 0.92 % $ 5,983,942 0.77 % $ 5,992,008 0.71 %
Demand deposits     2,389,617     2,298,867     2,309,531     2,373,235     2,356,216  
Other liabilities     185,374     162,374     151,490     130,151     121,574  
Stockholders' equity     1,085,961     1,053,750     1,025,753     1,002,822     988,551  
Total liabilities and stockholders' equity $ 9,577,020   $ 9,598,739   $ 9,507,748   $ 9,490,150   $ 9,458,349  
                       
Interest rate spread     3.26 %   3.32 %   3.36 %   3.37 %   3.34 %
Net interest margin (FTE) (3)     3.57 %   3.61 %   3.64 %   3.61 %   3.57 %
                       
(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 $374, $445, $500, $535 and $529 for the three months ended September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018 and September 30, 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  
Nine Months ended September 30,     2019     2018    
Assets                
Short-term interest bearing accounts   $ 30,970 $ 457 1.97 % $ 3,242 $ 133 5.48 %  
Securities available for sale (1) (3)     968,517   17,695 2.44 %   1,245,672   20,714 2.22 %  
Securities held to maturity (1) (3)     750,305   15,921 2.84 %   526,097   9,924 2.52 %  
Investment in FRB and FHLB Banks     45,254   2,271 6.71 %   48,391   2,248 6.21 %  
Loans (2) (3)     6,944,518   241,932 4.66 %   6,728,479   222,184 4.41 %  
Total interest earning assets   $ 8,739,564 $ 278,276 4.26 % $ 8,551,881 $ 255,203 3.99 %  
Other assets     821,859       763,108      
Total assets   $ 9,561,423     $ 9,314,989      
                 
Liabilities and stockholders' equity                
Money market deposit accounts   $ 1,912,572 $ 16,255 1.14 % $ 1,693,627 $ 5,459 0.43 %  
NOW deposit accounts     1,105,919   1,157 0.14 %   1,199,306   1,366 0.15 %  
Savings deposits     1,269,723   550 0.06 %   1,272,452   543 0.06 %  
Time deposits     929,819   11,843 1.70 %   847,899   7,799 1.23 %  
Total interest bearing deposits   $ 5,218,033 $ 29,805 0.76 % $ 5,013,284 $ 15,167 0.40 %  
Short-term borrowings     607,155   7,986 1.76 %   728,627   7,421 1.36 %  
Long-term debt     80,162   1,391 2.32 %   82,372   1,359 2.21 %  
Junior subordinated debt     101,196   3,404 4.50 %   101,196   3,030 4.00 %  
Total interest bearing liabilities   $ 6,006,546 $ 42,586 0.95 % $ 5,925,479 $ 26,977 0.61 %  
Demand deposits     2,332,965       2,303,751      
Other liabilities     166,537       113,443      
Stockholders' equity     1,055,375       972,316      
Total liabilities and stockholders' equity   $ 9,561,423     $ 9,314,989      
Net interest income (FTE)     $ 235,690     $ 228,226    
Interest rate spread       3.31 %     3.38 %  
Net interest margin (FTE) (3)       3.61 %     3.57 %  
Taxable equivalent adjustment     $ 1,318     $ 1,472    
Net interest income     $ 234,372     $ 226,754    
                 
(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
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Commercial $ 1,317,649 $ 1,299,784 $ 1,306,551 $ 1,291,568 $ 1,310,262
Commercial real estate   2,033,552   2,025,280   1,943,931   1,930,742   1,902,315
Residential real estate mortgages   1,416,920   1,404,079   1,390,411   1,380,836   1,373,487
Dealer finance   1,195,783   1,189,670   1,191,111   1,216,144   1,229,700
Specialty lending   528,505   519,974   529,144   524,928   521,396
Home equity   452,535   456,754   463,582   474,566   480,761
Other consumer   68,865   67,732   65,582   68,925   69,341
Total loans $ 7,013,809 $ 6,963,273 $ 6,890,312 $ 6,887,709 $ 6,887,262


Contact:  John H. Watt, Jr., President and CEO
  Michael J. Chewens, CFO
  NBT Bancorp Inc.
  52 South Broad Street
  Norwich, NY 13815
  607-337-6589

Source: NBT Bancorp Inc.

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