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NBT Bancorp Inc. Announces Third Quarter Net Income of $39.0 Million ($0.90 Per Diluted Common Share); Approves Dividend

10/25/22

NORWICH, N.Y., Oct. 25, 2022 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and nine months ended September 30, 2022.

Net income for the three months ended September 30, 2022 was $39.0 million, or $0.90 per diluted common share, compared to $37.4 million, or $0.86 per diluted share, in the third quarter of 2021 and $37.8 million, or $0.88 per diluted share, in the second quarter of 2022. Net interest income recognized in the third quarter of 2022 from the Paycheck Protection Program (“PPP”) was approximately $0.3 million (less than $0.01 per diluted share), compared to $2.9 million ($0.05 per diluted share) in the third quarter of 2021 and $1.3 million ($0.02 per diluted share) in the second quarter of 2022. Net interest income in the third quarter of 2022 improved in comparison to the third quarter of 2021 and the linked second quarter of 2022, primarily due to higher yields on earning assets due to increases in the Federal Reserve’s targeted Federal Funds rate combined with growth in earning assets. The Company recorded a provision for loan losses of $4.5 million ($0.08 per diluted share) in the third quarter of 2022, compared to a net benefit of $3.3 million ($0.06 per diluted share) in the third quarter of 2021 and a provision of $4.4 million ($0.08 per diluted share) in the second quarter of 2022.

CEO Comments

“We are very pleased with our operating results for the third quarter and first nine months of 2022, which reflect strong execution by our team including solid organic loan growth and disciplined cost of funds management. With additional increases in the targeted Fed Funds rate, we continue to experience the benefits of an asset-sensitive balance sheet,” said NBT President and CEO John H. Watt, Jr. “Our asset quality continues to be excellent, with low levels of net charge-offs and nonperforming assets. Our fee-based businesses reported solid results despite the inherent headwinds associated with lower equity market valuations. Our improved net interest income generation overcame the $4 million or, seven cents per share, reduction in debit interchange revenue due to the Company being subject to the Durbin Amendment of the Dodd-Frank Act beginning in the third quarter of 2022.”

Third Quarter Financial Highlights

Net Income
  • Net income of $39.0 million
  • Diluted earnings per share of $0.90
Net Interest Income / NIM
  • Net interest income on a fully taxable equivalent (“FTE”) basis was $94.8 million1
  • Net interest margin (“NIM”) on a FTE basis was 3.51%1, up 30 basis points (“bps”) from the prior quarter, due primarily to higher yields on earning assets
  • Total cost of deposits of 0.09%, up 2 bps from the prior quarter
Noninterest Income
  • Noninterest income was $37.3 million, excluding securities gains (losses) and was 28.3% of total revenue
Pre-Provision Net Revenue (“PPNR”)
  • PPNR1 was $55.7 million compared to $54.2 million in the second quarter of 2022 and $47.4 million in the third quarter of 2021
Loans and Credit Quality
  • Period end total loans were $7.90 billion at September 30, 2022, up 9.1%, annualized, excluding impact of PPP loans
  • Period end loans increased $504.2 million from December 31, 2021, excluding $3.3 million and $101.2 million of PPP loans at September 30, 2022 and December 31, 2021, respectively
  • Net charge-offs to average loans was 0.07%, annualized
  • Nonperforming loans to total loans was 0.28%, down from 0.33% in the prior quarter
  • Allowance for loan losses to total loans of 1.22%, up 2 bps from the second quarter of 2022 due primarily to loan growth
Capital
  • Announced a $0.30 per share dividend for the fourth quarter, which was a $0.02 per share, or 7.1%, increase from the fourth quarter of 2021
  • Stockholders’ equity decreased $93.9 million from December 31, 2021, driven by a $160.9 million decrease in accumulated other comprehensive income (“AOCI”) due to the change in the market value of securities available for sale, dividends declared of $36.9 million and the repurchase of common stock of $14.7 million, partly offset by net income generation of $115.9 million
  • Tangible book value per share2 was $20.25 at September 30, 2022, modestly lower than the third quarter of 2021 and the second quarter of 2022, due primarily to the impact of higher interest rates on available for sale investment securities and the related impact to AOCI
  • Tangible equity to assets of 7.64%1
  • CET1 ratio of 12.17%; Leverage ratio of 10.21%

Loans

  • Period end total loans were $7.90 billion at September 30, 2022 and $7.50 billion at December 31, 2021.
  • Excluding PPP loans, period end loans increased $504.2 million from December 31, 2021. Commercial and industrial loans increased $103.6 million to $1.26 billion; commercial real estate loans increased $69.4 million to $2.72 billion; and total consumer loans increased $331.2 million to $3.92 billion.
  • Total PPP loans as of September 30, 2022 were $3.3 million (net of unamortized fees) with over 99% of the original $836 million forgiven or extinguished through the third quarter of 2022. The following PPP loan activity occurred during the third quarter of 2022:
    • $14.2 million of loans forgiven.
    • $0.3 million of interest and fees recognized into interest income, compared to $1.3 million for the second quarter of 2022 and $2.9 million for the third quarter of 2021.
  • Commercial line of credit utilization rate was 23% at September 30, 2022 and June 30, 2022, compared to 21% at September 30, 2021.

Deposits

  • Total deposits at September 30, 2022 were $9.92 billion, compared to $10.23 billion at December 31, 2021, representing a 3% decline, which included a $100.0 million brokered deposit secured for liquidity uncertainty purposes early in the pandemic that matured in the prior quarter and declines in money markets deposits driven by certain large customers moving approximately $100 million of their deposit balances to an off-balance sheet, Company-designated short-term treasury product.
  • Loan to deposit ratio was 79.7% at September 30, 2022, compared to 73.3% at December 31, 2021.

Net Interest Income and Net Interest Margin

  • Net interest income for the third quarter of 2022 was $94.5 million, which was up $6.9 million, or 7.9%, from the second quarter of 2022 and up $16.8 million, or 21.6%, from the third quarter of 2021 primarily due to higher yields on earning assets. PPP income for the third quarter of 2022 was $0.3 million, which was $1.0 million lower compared to the prior quarter and down $2.5 million compared to the third quarter of 2021.
  • The NIM on a FTE basis for the third quarter of 2022 was 3.51%, up 30 bps from the second quarter of 2022 and up 63 bps from the third quarter of 2021 due to higher earning asset yields partly offset by higher cost of interest-bearing liabilities.
  • Earning asset yields for the three months ended September 30, 2022 were up 33 bps from the prior quarter and up 63 bps from the same quarter in the prior year. Earning assets declined $255.7 million, or 2.3%, from the prior quarter and were comparable to the same quarter in the prior year. The following are highlights comparing the third quarter of 2022 to the prior quarter:

    • Loan yields increased 25 bps to 4.34% for the quarter. Excluding PPP loans, loan yields increased 28 bps from the prior quarter.
    • The average balances of investment securities increased $5.9 million and yields increased 13 bps.
    • The average balances of short-term interest-bearing accounts decreased $362.1 million resulting from the incremental deployment of excess liquidity into loans and investment securities and modestly lower deposit balances.
  • Total cost of deposits was 0.09% for the third quarter of 2022, up 2 bps from the prior quarter and down 1 bp from the same period in the prior year.
  • The cost of total interest-bearing liabilities for the three months ended September 30, 2022 was 0.29%, up 6 bps from the prior quarter and up 2 bps from the third quarter of 2021.

Credit Quality and Allowance for Credit Losses

  • Net charge-offs to total average loans was 7 bps compared to 4 bps in the prior quarter and 11 bps in the third quarter of 2021. Recoveries in the third quarter of 2022 were $3.4 million compared to $3.3 million in the prior quarter and $2.7 million in the third quarter of 2021.
  • Nonperforming assets to total assets was 0.19% compared to 0.22% at June 30, 2022 and 0.33% at September 30, 2021. Past due loans to total loans decreased to 0.30% as of September 30, 2022 from 0.40% in the prior quarter, primarily due to one commercial credit which returned to current status in early July.
  • Provision expense for the three months ended September 30, 2022 was $4.5 million with net charge-offs of $1.3 million. Provision expense was $0.1 million higher than the second quarter of 2022 and $7.8 million higher than the third quarter of 2021. The increase in provision expense from the third quarter of 2021 was driven both by loan growth and an increase in the level of allowance for loan losses resulting from less favorable economic forecasts in the current year relative to improving economic forecasts in the prior year, partly offset by a lower level of net charge-offs.
  • The allowance for loan losses was $96.8 million, or 1.22% (1.23% excluding PPP loans and related allowance) of total loans, at September 30, 2022, compared to 1.20% (1.21% excluding PPP loans and related allowance) of total loans at June 30, 2022 and 1.23% (1.28% excluding PPP loans and related allowance) of total loans at September 30, 2021. The increase in the level of allowance for loan losses from the prior quarter was primarily due to the increase in loan balances and the modest deterioration in the forecast of economic conditions, which had an impact on the level of expected credit losses.
  • The reserve for unfunded loan commitments increased to $5.3 million at September 30, 2022 compared to the prior quarter at $5.1 million and compared to the prior year quarter at $5.3 million.

Noninterest Income

  • Total noninterest income, excluding securities gains (losses), was $37.3 million for the three months ended September 30, 2022, down $4.9 million from the second quarter and down $3.1 million from the prior year’s third quarter.
  • Card services income was lower than the prior quarter and the third quarter of 2021 driven by the $3.8 million ($0.07 per diluted share) impact from the Company being subject to the statutory price cap provisions of the Durbin Amendment to the Dodd-Frank Act.
  • Retirement plan administration fees were lower than the prior quarter driven by market decline and lower activity-based fees and higher than the third quarter of 2021 driven by higher activity-based fees and organic growth.
  • Wealth management fees were higher than the prior quarter due to seasonal tax preparation services and lower than the third quarter of 2021 driven primarily by market performance.
  • Other income decreased from the prior quarter and the third quarter of 2021 driven by lower commercial loan swap fees.

Noninterest Expense

  • Total noninterest expense for the third quarter of 2022 was up 0.8% from the previous quarter and up 5.2% from the third quarter of 2021.
  • Salaries and benefits increased from the prior quarter due to one additional day of payroll in the third quarter and higher levels of incentive compensation accruals. The increase from the third quarter of 2021 was driven by increased salaries and wages, including merit pay increases and higher levels of incentive compensation accruals.
  • Technology and data services increased from the prior quarter and the third quarter of 2021 due to continued investment in digital platform solutions.
  • Other expenses decreased from the linked second quarter of 2022 due to seasonal timing of certain expenditures. The third quarter of 2021 also included $2.3 million of estimated litigation settlement costs.

Income Taxes

  • The effective tax rate was 22.8% for the third quarter of 2022 compared to 22.5% for the second quarter of 2022 and 22.8% for the third quarter of 2021.

Capital

  • Capital ratios remain strong with tangible common equity to tangible assets1 at 7.64%. Tangible book value per share2 was $20.25 at September 30, 2022, $20.99 at June 30, 2022 and $21.95 at September 30, 2021.
  • Stockholders’ equity decreased $93.9 million from December 31, 2021 driven by the $160.9 million decrease in AOCI due to the change in the market value of securities available for sale, dividends declared of $36.9 million and the repurchase of common stock of $14.7 million, partly offset by net income generation of $115.9 million.
  • September 30, 2022, CET1 capital ratio of 12.17%, leverage ratio of 10.21% and total risk-based capital ratio of 15.50%.

Dividend

  • The Board of Directors approved a fourth-quarter cash dividend of $0.30 per share at a meeting held yesterday, an increase of $0.02, or 7.1%, from the amount paid in the fourth quarter of 2021. 2022 is the tenth consecutive year of dividend increases by the Company. The dividend will be paid on December 15, 2022 to stockholders of record as of December 1, 2022.

Other Events

  • On August 1, 2022, NBT’s subsidiary, NBT Insurance Agency, LLC, a full-service insurance agency, completed the acquisition of substantially all of the assets of Harrison A. Rogers Agency, Inc. (“H.A. Rogers”). H.A. Rogers is a New York based small personal and commercial lines property and casualty insurance agency. This is a strategic regional insurance expansion into the northern New York market where NBT Bank has a long-established presence.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. (Eastern) Wednesday, October 26, 2022, to review third quarter 2022 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar 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 $11.64 billion at September 30, 2022. 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 140 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a national benefits administration 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 press 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, including international military conflicts, 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 other legislative and regulatory responses to the coronavirus (“COVID-19”) pandemic; (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 COVID-19 global pandemic; and (21) the Company’s success at managing the risks involved in the foregoing items.

One of the more 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, treatment developments, public adoption rates of COVID-19 vaccines, including booster shots, and their effectiveness against emerging variants of COVID-19, the impact of the COVID-19 pandemic 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.

The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advises readers 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, the comparable GAAP measure, as well as 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 the Company’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 the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.

Contact:   
John H. Watt, Jr., President and CEO
Scott A. Kingsley, 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)        
           
    2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Profitability:          
Diluted earnings per share $ 0.90   $ 0.88   $ 0.90   $ 0.86   $ 0.86  
Weighted average diluted common shares outstanding   43,110,932     43,092,851     43,385,451     43,574,539     43,631,497  
Return on average assets3   1.33%     1.28%     1.32%     1.23%     1.26%  
Return on average equity3   12.87%     12.73%     12.78%     11.89%     12.04%  
Return on average tangible common equity1 3   17.12%     17.00%     16.87%     15.70%     15.97%  
Net interest margin1 3   3.51%     3.21%     2.95%     3.08%     2.88%  
           
  9 Months Ended September 30,
         
    2022     2021        
Profitability:          
Diluted earnings per share $ 2.68   $ 2.69        
Weighted average diluted common shares outstanding   43,194,037     43,768,647        
Return on average assets3   1.31%     1.37%        
Return on average equity3   12.79%     13.00%        
Return on average tangible common equity1 3   17.00%     17.35%        
Net interest margin1 3   3.22%     3.01%        
           
    2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Balance sheet data:          
Short-term interest-bearing accounts $ 97,303   $ 328,593   $ 913,315   $ 1,111,296   $ 1,131,074  
Securities available for sale   1,556,501     1,619,356     1,662,697     1,687,361     1,576,030  
Securities held to maturity   929,541     936,512     895,005     733,210     683,103  
Net loans   7,807,984     7,684,081     7,559,826     7,406,459     7,473,442  
Total assets   11,640,742     11,720,459     12,147,833     12,012,111     11,994,411  
Total deposits   9,918,751     10,028,708     10,461,623     10,234,469     10,195,178  
Total borrowings   277,889     265,796     278,788     311,476     313,311  
Total liabilities   10,484,196     10,531,903     10,945,583     10,761,658     10,752,954  
Stockholders' equity   1,156,546     1,188,556     1,202,250     1,250,453     1,241,457  
           
Capital:          
Equity to assets   9.94%     10.14%     9.90%     10.41%     10.35%  
Tangible equity ratio1   7.64%     7.87%     7.70%     8.20%     8.13%  
Book value per share $ 27.00   $ 27.75   $ 27.96   $ 28.97   $ 28.65  
Tangible book value per share2 $ 20.25   $ 20.99   $ 21.25   $ 22.26   $ 21.95  
Leverage ratio   10.21%     9.77%     9.52%     9.41%     9.47%  
Common equity tier 1 capital ratio   12.17%     12.14%     12.23%     12.25%     12.20%  
Tier 1 capital ratio   13.27%     13.27%     13.39%     13.43%     13.39%  
Total risk-based capital ratio   15.50%     15.50%     15.64%     15.73%     15.74%  
Common stock price (end of period) $ 37.95   $ 37.59   $ 36.13   $ 38.52   $ 36.12  
           
           



NBT Bancorp Inc. and Subsidiaries          
Asset Quality and Consolidated Loan Balances          
(unaudited, dollars in thousands)          
           
    2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Asset quality:          
Nonaccrual loans $ 19,098   $ 23,673   $ 25,812   $ 30,285   $ 35,737  
90 days past due and still accruing   2,732     2,096     1,944     2,458     2,940  
Total nonperforming loans   21,830     25,769     27,756     32,743     38,677  
Other real estate owned   -     -     -     167     859  
Total nonperforming assets   21,830     25,769     27,756     32,910     39,536  
Allowance for loan losses   96,800     93,600     90,000     92,000     93,000  
           
Asset quality ratios (total):          
Allowance for loan losses to total loans   1.22%     1.20%     1.18%     1.23%     1.23%  
Total nonperforming loans to total loans   0.28%     0.33%     0.36%     0.44%     0.51%  
Total nonperforming assets to total assets   0.19%     0.22%     0.23%     0.27%     0.33%  
Allowance for loan losses to total nonperforming loans   443.43%     363.23%     324.25%     280.98%     240.45%  
Past due loans to total loans4   0.30%     0.40%     0.24%     0.29%     0.46%  
Net charge-offs to average loans3   0.07%     0.04%     0.14%     0.22%     0.11%  
           
Asset quality ratios (excluding paycheck protection program):        
Allowance for loan losses to total loans   1.23%     1.21%     1.18%     1.24%     1.28%  
Total nonperforming loans to total loans   0.28%     0.33%     0.37%     0.44%     0.53%  
Total nonperforming assets to total assets   0.19%     0.22%     0.23%     0.28%     0.34%  
Allowance for loan losses to total nonperforming loans   443.43%     363.27%     324.24%     280.96%     240.42%  
Past due loans to total loans4   0.29%     0.40%     0.25%     0.29%     0.48%  
Net charge-offs to average loans3   0.07%     0.04%     0.14%     0.22%     0.12%  
           
    2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Allowance for loan losses as a percentage of loans by segment:        
Commercial & industrial   0.80%     0.75%     0.66%     0.78%     0.83%  
Commercial real estate   0.88%     0.89%     0.79%     0.78%     0.93%  
Paycheck protection program   0.01%     0.01%     0.01%     0.01%     0.01%  
Residential real estate   0.74%     0.79%     0.88%     0.92%     0.93%  
Auto   0.78%     0.79%     0.76%     0.79%     0.78%  
Other consumer   3.95%     3.98%     4.14%     4.49%     4.57%  
Total   1.22%     1.20%     1.18%     1.23%     1.23%  
Total excluding PPP loans   1.23%     1.21%     1.18%     1.24%     1.28%  
           
    2022     2021  
Loans by line of business: 3rd Q 2nd Q 1st Q 4th Q 3rd Q
Commercial & industrial $ 1,258,871   $ 1,298,072   $ 1,214,834   $ 1,155,240   $ 1,148,176  
Commercial real estate   2,724,728     2,670,633     2,709,611     2,655,367     2,638,762  
Paycheck protection program   3,328     17,286     50,977     101,222     276,195  
Residential real estate mortgages   1,626,528     1,606,188     1,584,551     1,571,232     1,549,684  
Indirect auto   952,757     936,516     890,643     859,454     873,860  
Residential solar   728,898     599,565     514,526     440,016     365,299  
Home equity   313,557     313,395     319,180     330,357     339,316  
Other consumer   296,117     336,026     365,504     385,571     375,150  
Total loans $ 7,904,784   $ 7,777,681   $ 7,649,826   $ 7,498,459   $ 7,566,442  
           
PPP income recognized $ 320   $ 1,301   $ 1,976   $ 7,545   $ 2,861  
PPP unamortized fees $ 108   $ 414   $ 1,629   $ 3,420   $ 10,536  
           



NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)
     
  September 30, December 31,
Assets 2022 2021
Cash and due from banks $ 223,755   $ 157,775  
Short-term interest-bearing accounts   97,303     1,111,296  
Equity securities, at fair value   30,428     33,550  
Securities available for sale, at fair value   1,556,501     1,687,361  
Securities held to maturity (fair value $814,100 and $735,260, respectively)   929,541     733,210  
Federal Reserve and Federal Home Loan Bank stock   24,892     25,098  
Loans held for sale   87     830  
Loans   7,904,784     7,498,459  
Less allowance for loan losses   96,800     92,000  
Net loans $ 7,807,984   $ 7,406,459  
Premises and equipment, net   69,338     72,093  
Goodwill   281,204     280,541  
Intangible assets, net   7,879     8,927  
Bank owned life insurance   230,990     228,238  
Other assets   380,840     266,733  
Total assets $ 11,640,742   $ 12,012,111  
     
Liabilities and stockholders' equity    
Demand (noninterest bearing) $ 3,714,342   $ 3,689,556  
Savings, NOW and money market   5,758,736     6,043,441  
Time   445,673     501,472  
Total deposits $ 9,918,751   $ 10,234,469  
Short-term borrowings   74,554     97,795  
Long-term debt   3,322     13,995  
Subordinated debt, net   98,817     98,490  
Junior subordinated debt   101,196     101,196  
Other liabilities   287,556     215,713  
Total liabilities $ 10,484,196   $ 10,761,658  
     
Total stockholders' equity $ 1,156,546   $ 1,250,453  
     
Total liabilities and stockholders' equity $ 11,640,742   $ 12,012,111  
     



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,
    2022     2021     2022     2021  
Interest, fee and dividend income        
Interest and fees on loans $ 85,266   $ 72,817   $ 237,148   $ 222,705  
Securities available for sale   7,665     5,898     21,822     17,204  
Securities held to maturity   4,854     2,976     12,532     9,454  
Other   1,429     524     3,396     1,206  
Total interest, fee and dividend income $ 99,214   $ 82,215   $ 274,898   $ 250,569  
Interest expense        
Deposits $ 2,233   $ 2,548   $ 5,831   $ 8,582  
Short-term borrowings   84     28     113     130  
Long-term debt   20     89     140     301  
Subordinated debt   1,360     1,359     4,078     4,077  
Junior subordinated debt   1,039     517     2,325     1,572  
Total interest expense $ 4,736   $ 4,541   $ 12,487   $ 14,662  
Net interest income $ 94,478   $ 77,674   $ 262,411   $ 235,907  
Provision for loan losses   4,484     (3,342 )   9,470     (11,354 )
Net interest income after provision for loan losses $ 89,994   $ 81,016   $ 252,941   $ 247,261  
Noninterest income        
Service charges on deposit accounts $ 3,581   $ 3,489   $ 11,032   $ 9,544  
Card services income   5,654     9,101     24,100     25,835  
Retirement plan administration fees   11,496     10,495     37,451     30,372  
Wealth management   8,402     8,783     25,294     25,099  
Insurance services   3,892     3,720     11,258     10,689  
Bank owned life insurance income   1,560     1,548     4,625     4,588  
Net securities (losses) gains   (148 )   (100 )   (914 )   568  
Other   2,735     3,293     8,641     9,988  
Total noninterest income $ 37,172   $ 40,329   $ 121,487   $ 116,683  
Noninterest expense        
Salaries and employee benefits $ 48,371   $ 44,190   $ 140,595   $ 128,462  
Technology and data services   9,096     8,421     26,588     26,154  
Occupancy   6,481     6,154     19,761     19,413  
Professional fees and outside services   3,817     3,784     11,999     11,403  
Office supplies and postage   1,469     1,364     4,441     4,478  
FDIC expense   787     772     2,399     2,243  
Advertising   559     583     1,943     1,502  
Amortization of intangible assets   544     663     1,725     2,157  
Loan collection and other real estate owned, net   549     706     1,690     1,959  
Other   5,021     6,232     13,815     14,405  
Total noninterest expense $ 76,694   $ 72,869   $ 224,956   $ 212,176  
Income before income tax expense $ 50,472   $ 48,476   $ 149,472   $ 151,768  
Income tax expense   11,499     11,043     33,598     34,193  
Net income $ 38,973   $ 37,433   $ 115,874   $ 117,575  
Earnings Per Share        
Basic $ 0.91   $ 0.86   $ 2.70   $ 2.71  
Diluted $ 0.90   $ 0.86   $ 2.68   $ 2.69  
         



NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
           
    2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Interest, fee and dividend income          
Interest and fees on loans $ 85,266   $ 78,539   $ 73,343   $ 79,470   $ 72,817  
Securities available for sale   7,665     7,317     6,840     6,101     5,898  
Securities held to maturity   4,854     4,185     3,493     3,097     2,976  
Other   1,429     1,442     525     639     524  
Total interest, fee and dividend income $ 99,214   $ 91,483   $ 84,201   $ 89,307   $ 82,215  
Interest expense          
Deposits $ 2,233   $ 1,756   $ 1,842   $ 2,132   $ 2,548  
Short-term borrowings   84     13     16     28     28  
Long-term debt   20     33     87     88     89  
Subordinated debt   1,360     1,359     1,359     1,360     1,359  
Junior subordinated debt   1,039     737     549     518     517  
Total interest expense $ 4,736   $ 3,898   $ 3,853   $ 4,126   $ 4,541  
Net interest income $ 94,478   $ 87,585   $ 80,348   $ 85,181   $ 77,674  
Provision for loan losses   4,484     4,390     596     3,097     (3,342 )
Net interest income after provision for loan losses $ 89,994   $ 83,195   $ 79,752   $ 82,084   $ 81,016  
Noninterest income          
Service charges on deposit accounts $ 3,581   $ 3,763   $ 3,688   $ 3,804   $ 3,489  
Card services income   5,654     9,751     8,695     8,847     9,101  
Retirement plan administration fees   11,496     12,676     13,279     11,816     10,495  
Wealth management   8,402     8,252     8,640     8,619     8,783  
Insurance services   3,892     3,578     3,788     3,394     3,720  
Bank owned life insurance income   1,560     1,411     1,654     1,629     1,548  
Net securities (losses)   (148 )   (587 )   (179 )   (2 )   (100 )
Other   2,735     2,812     3,094     3,004     3,293  
Total noninterest income $ 37,172   $ 41,656   $ 42,659   $ 41,111   $ 40,329  
Noninterest expense          
Salaries and employee benefits $ 48,371   $ 46,716   $ 45,508   $ 44,118   $ 44,190  
Technology and data services   9,096     8,945     8,547     8,563     8,421  
Occupancy   6,481     6,487     6,793     6,635     6,154  
Professional fees and outside services   3,817     3,906     4,276     4,903     3,784  
Office supplies and postage   1,469     1,548     1,424     1,528     1,364  
FDIC expense   787     810     802     798     772  
Advertising   559     730     654     1,019     583  
Amortization of intangible assets   544     545     636     651     663  
Loan collection and other real estate owned, net   549     757     384     956     706  
Other   5,021     5,675     3,119     5,934     6,232  
Total noninterest expense $ 76,694   $ 76,119   $ 72,143   $ 75,105   $ 72,869  
Income before income tax expense $ 50,472   $ 48,732   $ 50,268   $ 48,090   $ 48,476  
Income tax expense   11,499     10,957     11,142     10,780     11,043  
Net income $ 38,973   $ 37,775   $ 39,126   $ 37,310   $ 37,433  
Earnings Per Share          
Basic $ 0.91   $ 0.88   $ 0.91   $ 0.86   $ 0.86  
Diluted $ 0.90   $ 0.88   $ 0.90   $ 0.86   $ 0.86  
           



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 - 2022 Q2 - 2022 Q1 - 2022 Q4 - 2021 Q3 - 2021
Assets                      
Short-term interest-bearing accounts   $ 191,463 2.51 % $ 553,548 0.82 % $ 990,319 0.17 % $ 1,145,794 0.16 % $ 1,014,120 0.16 %
Securities taxable1     2,491,315 1.83 %   2,439,960 1.74 %   2,284,578 1.67 %   2,081,796 1.57 %   1,923,700 1.63 %
Securities tax-exempt 1 5     211,306 2.47 %   256,799 1.83 %   258,513 1.84 %   257,320 1.85 %   246,685 1.97 %
FRB and FHLB stock     25,182 3.47 %   24,983 5.03 %   25,026 1.98 %   25,149 2.74 %   25,154 1.91 %
Loans1 6     7,808,025 4.34 %   7,707,730 4.09 %   7,530,674 3.95 %   7,507,165 4.20 %   7,517,839 3.84 %
Total interest-earning assets   $ 10,727,291 3.68 % $ 10,983,020 3.35 % $ 11,089,110 3.09 % $ 11,017,224 3.23 % $ 10,727,498 3.05 %
Other assets     887,378     883,498     947,578     982,136     1,019,797  
Total assets   $ 11,614,669   $ 11,866,518     $ 12,036,688     $ 11,999,360     $ 11,747,295    
Liabilities and stockholders' equity                      
Money market deposit accounts   $ 2,332,341 0.15 % $ 2,577,367 0.14 % $ 2,720,338 0.15 % $ 2,678,477 0.16 % $ 2,580,570 0.19 %
NOW deposit accounts     1,548,115 0.21 %   1,580,132 0.07 %   1,583,091 0.05 %   1,551,846 0.05 %   1,442,678 0.05 %
Savings deposits     1,854,122 0.03 %   1,845,128 0.03 %   1,794,549 0.03 %   1,725,004 0.05 %   1,691,539 0.05 %
Time deposits     455,168 0.35 %   478,531 0.37 %   494,632 0.40 %   537,875 0.46 %   565,216 0.62 %
Total interest-bearing deposits   $ 6,189,746 0.14 % $ 6,481,158 0.11 % $ 6,592,610 0.11 % $ 6,493,202 0.13 % $ 6,280,003 0.16 %
Federal funds purchased     1,522 3.39 %   - -     - -     65 -     - -  
Repurchase agreements     69,048 0.10 %   60,061 0.09 %   72,768 0.09 %   97,389 0.11 %   99,703 0.11 %
Short-term borrowings     6,440 3.33 %   - -     - -     1 -     - -  
Long-term debt     3,331 2.38 %   5,336 2.48 %   13,979 2.52 %   14,004 2.49 %   14,029 2.52 %
Subordinated debt, net     98,748 5.46 %   98,642 5.53 %   98,531 5.59 %   98,422 5.48 %   98,311 5.48 %
Junior subordinated debt     101,196 4.07 %   101,196 2.92 %   101,196 2.20 %   101,196 2.03 %   101,196 2.03 %
Total interest-bearing liabilities   $ 6,470,031 0.29 % $ 6,746,393 0.23 % $ 6,879,084 0.23 % $ 6,804,279 0.24 % $ 6,593,242 0.27 %
Demand deposits     3,708,131     3,711,049     3,710,124     3,719,070     3,676,883  
Other liabilities     234,851     218,491     206,292     231,260     244,125  
Stockholders' equity     1,201,656     1,190,585     1,241,188     1,244,751     1,233,045  
Total liabilities and stockholders' equity   $ 11,614,669   $ 11,866,518     $ 12,036,688     $ 11,999,360     $ 11,747,295    
Interest rate spread     3.39 %   3.12 %   2.86 %   2.99 %   2.78 %
Net interest margin (FTE)1     3.51 %   3.21 %   2.95 %   3.08 %   2.88 %
                       



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,     2022     2021  
Assets              
Short-term interest-bearing accounts   $ 575,517 $ 2,742 0.64 % $ 860,067 $ 763 0.12 %
Securities taxable1     2,406,042   31,460 1.75 %   1,852,963   23,711 1.71 %
Securities tax-exempt 1 5     242,033   3,664 2.02 %   208,438   3,730 2.39 %
FRB and FHLB stock     25,064   654 3.49 %   25,290   443 2.34 %
Loans1 6     7,683,159   237,290 4.13 %   7,555,276   222,821 3.94 %
Total interest-earning assets   $ 10,931,815 $ 275,810 3.37 % $ 10,502,034 $ 251,468 3.20 %
Other assets     905,931       984,372    
Total assets   $ 11,837,746     $ 11,486,406    
Liabilities and stockholders' equity              
Money market deposit accounts   $ 2,541,927 $ 2,801 0.15 % $ 2,557,172 $ 4,022 0.21 %
NOW deposit accounts     1,570,318   1,260 0.11 %   1,419,102   531 0.05 %
Savings deposits     1,831,485   442 0.03 %   1,633,941   625 0.05 %
Time deposits     475,966   1,328 0.37 %   590,385   3,404 0.77 %
Total interest-bearing deposits   $ 6,419,696 $ 5,831 0.12 % $ 6,200,600 $ 8,582 0.19 %
Federal funds purchased     513   13 3.39 %   -   - -  
Repurchase agreements     67,279   46 0.09 %   101,574   104 0.14 %
Short-term borrowings     2,170   54 3.33 %   1,740   26 2.00 %
Long-term debt     7,509   140 2.49 %   15,976   301 2.52 %
Subordinated debt, net     98,641   4,078 5.53 %   98,204   4,077 5.55 %
Junior subordinated debt     101,196   2,325 3.07 %   101,196   1,572 2.08 %
Total interest-bearing liabilities   $ 6,697,004 $ 12,487 0.25 % $ 6,519,290 $ 14,662 0.30 %
Demand deposits     3,709,761       3,514,005    
Other liabilities     219,983       243,525    
Stockholders' equity     1,210,998       1,209,586    
Total liabilities and stockholders' equity   $ 11,837,746     $ 11,486,406    
Net interest income (FTE)1     $ 263,323     $ 236,806  
Interest rate spread       3.12 %     2.90 %
Net interest margin (FTE)1       3.22 %     3.01 %
Taxable equivalent adjustment     $ 912     $ 899  
Net interest income     $ 262,411     $ 235,907  
               



           
1The 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")   2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Net income $ 38,973   $ 37,775   $ 39,126   $ 37,310   $ 37,433  
Income tax expense   11,499     10,957     11,142     10,780     11,043  
Provision for loan losses   4,484     4,390     596     3,097     (3,342 )
FTE adjustment   337     290     285     292     298  
Net securities losses   148     587     179     2     100  
Provision for unfunded loan commitments reserve   225     240     (260 )   (250 )   (470 )
Nonrecurring expense   -     -     (172 )   250     2,288  
PPNR $ 55,666   $ 54,239   $ 50,896   $ 51,481   $ 47,350  
           
Average assets $ 11,614,669   $ 11,866,518   $ 12,036,688   $ 11,999,360   $ 11,747,295  
           
Return on average assets3   1.33%     1.28%     1.32%     1.23%     1.26%  
PPNR return on average assets3   1.90%     1.83%     1.71%     1.70%     1.60%  
           
  9 Months Ended September 30,      
    2022     2021        
Net income $ 115,874   $ 117,575        
Income tax expense   33,598     34,193        
Provision for loan losses   9,470     (11,354 )      
FTE adjustment   912     899        
Net securities losses (gains)   914     (568 )      
Provision for unfunded loan commitments reserve   205     (1,050 )      
Nonrecurring expense   (172 )   4,168        
PPNR $ 160,801   $ 143,863        
           
Average Assets $ 11,837,746   $ 11,486,406        
           
Return on average assets3   1.31%     1.37%        
PPNR return on average assets3   1.82%     1.67%        
           
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 the provision for loan losses, net securities gains (losses) and non-recurring income and/or expense.     
           
           
FTE adjustment   2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Net interest income $ 94,478   $ 87,585   $ 80,348   $ 85,181   $ 77,674  
Add: FTE adjustment   337     290     285     292     298  
Net interest income (FTE) $ 94,815   $ 87,875   $ 80,633   $ 85,473   $ 77,972  
Average earning assets $ 10,727,291   $ 10,983,020   $ 11,089,110   $ 11,017,224   $ 10,727,498  
Net interest margin (FTE)3   3.51%     3.21%     2.95%     3.08%     2.88%  
           
  9 Months Ended September 30,      
    2022     2021        
Net interest income $ 262,411   $ 235,907        
Add: FTE adjustment   912     899        
Net interest income (FTE) $ 263,323   $ 236,806        
Average earning assets $ 10,931,815   $ 10,502,034        
Net interest margin (FTE)3   3.22%     3.01%        
           
Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.
           



           
1The 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   2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Total equity $ 1,156,546   $ 1,188,556   $ 1,202,250   $ 1,250,453   $ 1,241,457  
Intangible assets   289,083     289,259     288,832     289,468     290,119  
Total assets $ 11,640,742   $ 11,720,459   $ 12,147,833   $ 12,012,111   $ 11,994,411  
Tangible equity to tangible assets   7.64%     7.87%     7.70%     8.20%     8.13%  
           
Return on average tangible common equity   2022     2021  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Net income $ 38,973   $ 37,775   $ 39,126   $ 37,310   $ 37,433  
Amortization of intangible assets (net of tax)   408     409     477     488     497  
Net income, excluding intangibles amortization $ 39,381   $ 38,184   $ 39,603   $ 37,798   $ 37,930  
           
Average stockholders' equity $ 1,201,656   $ 1,190,585   $ 1,241,188   $ 1,244,751   $ 1,233,045  
Less: average goodwill and other intangibles   289,296     289,584     289,218     289,834     290,492  
Average tangible common equity $ 912,360   $ 901,001   $ 951,970   $ 954,917   $ 942,553  
Return on average tangible common equity3   17.12%     17.00%     16.87%     15.70%     15.97%  
           
  9 Months Ended September 30,      
    2022     2021        
Net income $ 115,874   $ 117,575        
Amortization of intangible assets (net of tax)   1,294     1,618        
Net income, excluding intangibles amortization $ 117,168   $ 119,193        
           
Average stockholders' equity $ 1,210,998   $ 1,209,586        
Less: average goodwill and other intangibles   289,366     291,177        
Average tangible common equity $ 921,632   $ 918,409        
Return on average tangible common equity3   17.00%     17.35%        
           
2Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.  
3Annualized.          
4Total past due loans, defined as loans 30 days or more past due and in an accrual status.    
5Securities are shown at average amortized cost.        
6For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
           

 



 

 


NBT Bancorp Inc.

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