UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 22, 2019



NBT BANCORP INC.
(Exact name of registrant as specified in its charter)

Delaware
000-14703
16-1268674
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)

52 South Broad Street
Norwich, New York 13815
(Address of principal executive offices, zip code)

Registrant’s telephone number, including area code: (607) 337-2265

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of class
Trading Symbol
Name of exchange on which registered
Common Stock, par value $0.01 per share
NBTB
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02
Results of Operations and Financial Condition
 
On July 22, 2019, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended June 30, 2019. That press release is furnished as Exhibit 99.1 hereto.
 
Item 9.01
Financial Statements and Exhibits.
 
(a)
Not applicable.
 
(b)
Not applicable.
 
(c)
Not applicable.
 
(d)
Exhibits.
 
Exhibit No.
 
Description

99.1
Press release of NBT Bancorp Inc. dated July 22, 2019
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
NBT BANCORP INC.
     
Date: July 22, 2019
By:
/s/ Michael J. Chewens
   
Michael J. Chewens
   
Senior Executive Vice President
   
and Chief Financial Officer




Exhibit 99.1

Page 1 of 12

FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS

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

NBT BANCORP INC. ANNOUNCES NET INCOME OF $30.6 MILLION AND DILUTED EARNINGS PER SHARE OF $0.69

NORWICH, NY (July 22, 2019) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the three and six months ended June 30, 2019.

Net income for the three months ended June 30, 2019 was $30.6 million, up 4.9% from $29.1 million for the first quarter of 2019 and up 8.7% from $28.1 million for the second quarter of 2018. Diluted earnings per share for the three months ended June 30, 2019 was $0.69, as compared with $0.66 for the prior quarter, an increase of 4.5%, and $0.64 for the second quarter of 2018, an increase of 7.8%.

Net income for the six months ended June 30, 2019 was $59.7 million, up 10.3% from $54.1 million for the same period last year. Diluted earnings per share for the six months ended June 30, 2019 was $1.35, as compared with $1.23 for the same period in 2018, an increase of 9.8%.

Highlights:

 
Quarterly diluted earnings per share up 4.5% from prior quarter and up 7.8% from prior year
 

Quarter-to-date net income up 4.9% from prior quarter and up 8.7% from prior year
 

FTE net interest margin of 3.63% for the six months ended June 30, 2019, up 6 bps from 2018
 

Full cycle deposit beta of 14.7% through the quarter ending June 30, 20191
 

Tangible equity ratio of 8.41%, up 93 bps from the second quarter of 2018
 
“For the first six months of 2019, we achieved double-digit year-over-year growth with earnings per share and net income up 10% over the same period in 2018,” said NBT President and CEO John H. Watt, Jr. “Positive trends in net interest income and tangible capital growth demonstrate we are effectively managing our business and growing earnings while investing in our long-term strategies. Our team remains focused on building shareholder value by delivering a great customer experience. Relentless focus on process improvement and digitization will permit reinvestment of the productivity gains created into the customer experience.”
 
1 The change in the Company’s quarterly deposit costs from December 31, 2015 to June 30, 2019 of 0.33% divided by the change in Federal Reserve’s target fed funds rate from December 2015 to June 2019 of 2.25%


Page 2 of 12

Net interest income was $78.6 million for the second quarter of 2019, up $0.9 million, or 1.2%, from the previous quarter. The fully taxable equivalent (“FTE”) net interest margin was 3.61% for the three months ended June 30, 2019, down 3 basis points (“bps”) from the previous quarter, as higher funding costs on average interest-bearing liabilities were partially offset by higher average interest-earning assets. Interest income increased $1.9 million, or 2.1%, as the yield on average interest-earning assets of 4.28% was comparable to the prior quarter, while average interest-earning assets of $8.8 billion increased $70 million compared with the prior quarter. Interest expense was up $1.0 million, or 7.0%, as the cost of interest-bearing liabilities increased 4 bps to 0.96% for the quarter ended June 30, 2019, driven by interest-bearing deposit costs increasing 8 bps, partially offset by the 6 bp decrease in short-term borrowings cost.

Net interest income was $78.6 million for the second quarter of 2019, up $2.9 million, or 3.8%, from the second quarter of 2018. The FTE net interest margin of 3.61% was up 4 bps from the second quarter of 2018. Interest income increased $8.5 million, or 10.0%, as the yield on average interest-earning assets increased 29 bps from the same period in 2018, and average interest-earning assets increased $209.7 million, or 2.4%, primarily due to a $207.6 million increase in average loans. Interest expense increased $5.6 million, as the cost of interest-bearing liabilities increased 35 bps, driven by interest-bearing deposit costs increasing 38 bps combined with a 39 bp increase in short-term borrowing costs.

Net interest income for the first six months of 2019 was $156.3 million, up $7.1 million, or 4.8%, from the same period in 2018. FTE net interest margin of 3.63% for the six months ended June 30, 2019, was up from 3.57% for the same period in 2018. Average interest-earning assets were up $261.6 million, or 3.1% for the six months ended June 30, 2019, as compared to the same period in 2018, driven by a $250.7 million increase in loans. Interest income increased $19.1 million, or 11.5%, due to the increase in earning assets combined with a 30 bp improvement in loan yields. Interest expense was up $12.0 million, for the six months ended June 30, 2019 as compared to the same period in 2018 as the cost of interest-bearing liabilities increased 38 bps, driven by interest-bearing deposit costs increasing 38 bps combined with a 55 bp increase in short-term borrowing costs. The Federal Reserve has raised its target fed funds rate nine times from December 2015 through June 2019 for a total increase of 225 bps. During this same cycle of increasing rates, the Company’s average cost of deposits increased by 33 bps, resulting in a full cycle deposit beta of 14.7%.

Noninterest income for the three months ended June 30, 2019 was $34.2 million, up $0.4 million, or 1.2%, from the prior quarter and comparable with the second quarter of 2018. The increase from the prior quarter was primarily driven by higher ATM and debit card fees due to an increase in the number of accounts and usage and other noninterest income due to higher swap fee income that was partially offset by lower seasonal insurance and other financial services revenue.

Noninterest income for the six months ended June 30, 2019 was $68.1 million, up $2.6 million, or 4.0%, 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 that was partially offset by lower trust income and other noninterest income due to lower non-recurring gains recognized in the first six months of 2019.

Noninterest expense for the three months ended June 30, 2019 was $66.2 million, down $2.2 million, or 3.3%, from the prior quarter and up $1.3 million, or 2.1%, from the second quarter of 2018. The decrease from the prior quarter was primarily driven by lower seasonal occupancy expenses and timing of equity-based compensation and other noninterest expense items. The increase from the second quarter of 2018 was driven by increases in salaries and employee benefits expense and equipment expense. Salaries and employee benefits expense increased from the second quarter of 2018 due to wage increases and higher incentive compensation.

Noninterest expense for the six months ended June 30, 2019 was $134.7 million, up $5.5 million, or 4.3%, 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 half of 2019 as compared to the same period of 2018. The increase in salaries and employee benefits was primarily due to the RPS acquisition in the second quarter of 2018 and the timing of incentive compensation and wage increases.


Page 3 of 12

Income tax expense for the three months ended June 30, 2019 was $8.8 million, up $0.7 million from the prior quarter and up $0.7 million from the second quarter of 2018. The effective tax rate of 22.4% for the second quarter of 2019 was up from 21.8% for the first quarter of 2019 and comparable to the second quarter of 2018. The increase in income tax expense from the prior quarter and from the second quarter of 2018 was primarily due to a higher level of taxable income.

Income tax expense for the six months ended June 30, 2019 was $16.9 million, up $1.8 million, or 11.9%, from the same period of 2018. The effective tax rate of 22.1% for the first six months of 2019 was up from 21.8% 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 $6.5 million for the three months ended June 30, 2019 were down as compared to $6.9 million for the prior quarter and comparable to the second quarter of 2018. Provision expense was higher at $7.3 million for the three months ended June 30, 2019, as compared with $5.8 million for the prior quarter and down from $8.8 million for the second quarter of 2018. Annualized net charge-offs to average loans for the second quarter of 2019 was 0.38%, down from 0.41% for the prior quarter and down from 0.39% for the second quarter of 2018.

Net charge-offs of $13.4 million for the six months ended June 30, 2019 compared to $13.3 million for the same period of 2018. Provision expense was $13.1 million for the six months ended June 30, 2019, as compared with $16.3 million for the same period of 2018. Annualized net charge-offs to average loans for the first six months of 2019 was 0.39% as compared with 0.40% for the first six months of 2018.

Nonperforming loans to total loans was 0.39% at June 30, 2019, down 3 bps from 0.42% at March 31, 2019 and up 1 bp from 0.38% at June 30, 2018. Past due loans as a percentage of total loans were 0.52% at June 30, 2019, comparable to March 31, 2019 and up from 0.50% at June 30, 2018.

The allowance for loan losses totaled $72.2 million at June 30, 2019, compared to $71.4 million at March 31, 2019 and $72.5 million at June 30, 2018. The allowance for loan losses as a percentage of loans was 1.04% (1.08% excluding acquired loans) at June 30, 2019, compared to 1.04% (1.09% excluding acquired loans) at March 31, 2019 and 1.06% (1.11% excluding acquired loans) at June 30, 2018.

Balance Sheet

Total assets were $9.6 billion at June 30, 2019, comparable to December 31, 2018. Loans were $7.0 billion at June 30, 2019, up $75.6 million from December 31, 2018. In the first half of 2019, loan growth in commercial and commercial real estate was partially offset by run-off in our consumer portfolios. Total deposits were $7.6 billion at June 30, 2019, up $225.5 million, or 3.1%, from December 31, 2018, reflecting growth in core and municipal deposits. Stockholders’ equity was $1.1 billion, representing a total equity-to-total assets ratio of 11.15% at June 30, 2019, compared with $1.0 billion or a total equity-to-total assets ratio of 10.65% at December 31, 2018.


Page 4 of 12

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.6 billion at June 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 a number of 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.


Page 5 of 12

NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)

   
2019
   
2018
 
Profitability:
 
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Diluted earnings per share
 
$
0.69
   
$
0.66
   
$
0.65
   
$
0.68
   
$
0.64
 
Weighted average diluted common shares outstanding
   
44,120,377
     
44,081,086
     
44,059,796
     
44,050,557
     
44,016,940
 
Return on average assets (1)
   
1.28
%
   
1.24
%
   
1.20
%
   
1.25
%
   
1.21
%
Return on average equity (1)
   
11.63
%
   
11.52
%
   
11.34
%
   
11.96
%
   
11.64
%
Return on average tangible common equity (1)(3)
   
16.38
%
   
16.45
%
   
16.37
%
   
17.42
%
   
17.08
%
Net interest margin (1)(2)
   
3.61
%
   
3.64
%
   
3.61
%
   
3.57
%
   
3.57
%

   
6 Months ended June 30,
                         
Profitability:
   
2019
     
2018
                         
Diluted earnings per share
 
$
1.35
   
$
1.23
                         
Weighted average diluted common shares outstanding
   
44,096,681
     
43,991,731
                         
Return on average assets (1)
   
1.26
%
   
1.18
%
                       
Return on average equity (1)
   
11.57
%
   
11.32
%
                       
Return on average tangible common equity (1)(4)
   
16.41
%
   
16.52
%
                       
Net interest margin (1)(2)
   
3.63
%
   
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
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Net income
 
$
30,555
   
$
29,127
   
$
28,652
   
$
29,807
   
$
28,121
 
Amortization of intangible assets (net of tax)
   
670
     
726
     
734
     
791
     
822
 
Net income, excluding intangibles amortization
 
$
31,225
   
$
29,853
   
$
29,386
   
$
30,598
   
$
28,943
 
                                         
Average stockholders' equity
 
$
1,053,750
   
$
1,025,753
   
$
1,002,822
   
$
988,551
   
$
969,029
 
Less: average goodwill and other intangibles
   
288,930
     
289,913
     
290,854
     
291,814
     
289,250
 
Average tangible common equity
 
$
764,820
   
$
735,840
   
$
711,968
   
$
696,737
   
$
679,779
 

(4) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:

   
6 Months ended June 30,
 
   
2019
   
2018
 
Net income
 
$
59,682
   
$
54,107
 
Amortization of intangible assets (net of tax)
   
1,396
     
1,508
 
Net income, excluding intangibles amortization
 
$
61,078
   
$
55,615
 
                 
Average stockholders' equity
 
$
1,039,829
   
$
964,064
 
Less: average goodwill and other intangibles
   
289,419
     
285,161
 
Average tangible common equity
 
$
750,410
   
$
678,903
 


Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares.


Page 6 of 12

NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)

   
2019
   
2018
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Balance sheet data:
                             
Securities available for sale
 
$
979,696
   
$
951,859
   
$
998,496
   
$
1,101,074
   
$
1,192,939
 
Securities held to maturity
   
744,601
     
780,565
     
783,599
     
659,949
     
544,163
 
Net loans
   
6,891,108
     
6,818,907
     
6,815,204
     
6,814,457
     
6,785,721
 
Total assets
   
9,635,718
     
9,533,510
     
9,556,363
     
9,547,284
     
9,467,138
 
Total deposits
   
7,593,706
     
7,617,659
     
7,368,211
     
7,441,290
     
7,344,449
 
Total borrowings
   
794,829
     
719,775
     
1,046,616
     
986,656
     
1,028,971
 
Total liabilities
   
8,560,895
     
8,499,455
     
8,538,454
     
8,553,129
     
8,488,209
 
Stockholders' equity
   
1,074,823
     
1,034,055
     
1,017,909
     
994,155
     
978,929
 
                                         
Asset quality:
                                       
Nonaccrual loans
 
$
24,669
   
$
25,632
   
$
25,487
   
$
23,301
   
$
24,006
 
90 days past due and still accruing
   
2,387
     
3,335
     
5,085
     
4,734
     
2,209
 
Total nonperforming loans
   
27,056
     
28,967
     
30,572
     
28,035
     
26,215
 
Other real estate owned
   
2,203
     
2,222
     
2,441
     
3,271
     
4,349
 
Total nonperforming assets
   
29,259
     
31,189
     
33,013
     
31,306
     
30,564
 
Allowance for loan losses
   
72,165
     
71,405
     
72,505
     
72,805
     
72,450
 
                                         
Asset quality ratios (total):
                                       
Allowance for loan losses to total loans
   
1.04
%
   
1.04
%
   
1.05
%
   
1.06
%
   
1.06
%
Total nonperforming loans to total loans
   
0.39
%
   
0.42
%
   
0.44
%
   
0.41
%
   
0.38
%
Total nonperforming assets to total assets
   
0.30
%
   
0.33
%
   
0.35
%
   
0.33
%
   
0.32
%
Allowance for loan losses to total nonperforming loans
   
266.72
%
   
246.50
%
   
237.16
%
   
259.69
%
   
276.37
%
Past due loans to total loans
   
0.52
%
   
0.52
%
   
0.55
%
   
0.53
%
   
0.50
%
Net charge-offs to average loans (1)
   
0.38
%
   
0.41
%
   
0.39
%
   
0.33
%
   
0.39
%
                                         
Asset quality ratios (originated) (2):
                                       
Allowance for loan losses to loans
   
1.08
%
   
1.09
%
   
1.10
%
   
1.11
%
   
1.11
%
Nonperforming loans to loans
   
0.38
%
   
0.41
%
   
0.43
%
   
0.39
%
   
0.36
%
Allowance for loan losses to nonperforming loans
   
287.67
%
   
265.63
%
   
254.92
%
   
285.86
%
   
306.08
%
Past due loans to loans
   
0.52
%
   
0.52
%
   
0.56
%
   
0.53
%
   
0.50
%
                                         
Capital:
                                       
Equity to assets
   
11.15
%
   
10.85
%
   
10.65
%
   
10.41
%
   
10.34
%
Tangible equity ratio (3)
   
8.41
%
   
8.06
%
   
7.85
%
   
7.59
%
   
7.48
%
Book value per share
 
$
24.56
   
$
23.64
   
$
23.31
   
$
22.77
   
$
22.43
 
Tangible book value per share (4)
 
$
17.97
   
$
17.02
   
$
16.66
   
$
16.10
   
$
15.73
 
Tier 1 leverage ratio
   
9.88
%
   
9.62
%
   
9.52
%
   
9.36
%
   
9.25
%
Common equity tier 1 capital ratio
   
10.95
%
   
10.69
%
   
10.49
%
   
10.28
%
   
10.04
%
Tier 1 capital ratio
   
12.24
%
   
11.99
%
   
11.79
%
   
11.58
%
   
11.35
%
Total risk-based capital ratio
   
13.21
%
   
12.98
%
   
12.78
%
   
12.58
%
   
12.34
%
Common stock price (end of period)
 
$
37.51
   
$
36.01
   
$
34.59
   
$
38.38
   
$
38.15
 

(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.


Page 7 of 12

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)

Assets
 
June 30,
2019
   
December 31,
2018
 
Cash and due from banks
 
$
150,154
   
$
175,550
 
Short-term interest bearing accounts
   
39,278
     
5,405
 
Equity securities, at fair value
   
26,298
     
23,053
 
Securities available for sale, at fair value
   
979,696
     
998,496
 
Securities held to maturity (fair value $754,995 and $778,675, respectively)
   
744,601
     
783,599
 
Federal Reserve and Federal Home Loan Bank stock
   
45,996
     
53,229
 
Loans held for sale
   
15,662
     
6,943
 
Loans
   
6,963,273
     
6,887,709
 
Less allowance for loan losses
   
72,165
     
72,505
 
Net loans
 
$
6,891,108
   
$
6,815,204
 
Premises and equipment, net
   
76,652
     
78,970
 
Goodwill
   
274,769
     
274,769
 
Intangible assets, net
   
13,738
     
15,599
 
Bank owned life insurance
   
180,042
     
177,479
 
Other assets
   
197,724
     
148,067
 
Total assets
 
$
9,635,718
   
$
9,556,363
 
                 
Liabilities and stockholders' equity
               
Demand (noninterest bearing)
 
$
2,336,776
   
$
2,361,099
 
Savings, NOW and money market
   
4,280,363
     
4,076,434
 
Time
   
976,567
     
930,678
 
Total deposits
 
$
7,593,706
   
$
7,368,211
 
Short-term borrowings
   
609,366
     
871,696
 
Long-term debt
   
84,267
     
73,724
 
Junior subordinated debt
   
101,196
     
101,196
 
Other liabilities
   
172,360
     
123,627
 
Total liabilities
 
$
8,560,895
   
$
8,538,454
 
                 
Total stockholders' equity
 
$
1,074,823
   
$
1,017,909
 
                 
Total liabilities and stockholders' equity
 
$
9,635,718
   
$
9,556,363
 


Page 8 of 12

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2019
   
2018
   
2019
   
2018
 
Interest, fee and dividend income
                       
Interest and fees on loans
 
$
81,271
   
$
74,172
   
$
160,592
   
$
144,615
 
Securities available for sale
   
6,031
     
7,003
     
11,953
     
13,929
 
Securities held to maturity
   
5,089
     
2,811
     
10,306
     
5,436
 
Other
   
842
     
781
     
1,726
     
1,547
 
Total interest, fee and dividend income
 
$
93,233
   
$
84,767
   
$
184,577
   
$
165,527
 
Interest expense
                               
Deposits
 
$
10,234
   
$
5,079
   
$
19,060
   
$
9,010
 
Short-term borrowings
   
2,760
     
2,455
     
5,997
     
4,421
 
Long-term debt
   
471
     
452
     
893
     
928
 
Junior subordinated debt
   
1,141
     
1,040
     
2,309
     
1,941
 
Total interest expense
 
$
14,606
   
$
9,026
   
$
28,259
   
$
16,300
 
Net interest income
 
$
78,627
   
$
75,741
   
$
156,318
   
$
149,227
 
Provision for loan losses
   
7,277
     
8,778
     
13,084
     
16,274
 
Net interest income after provision for loan losses
 
$
71,350
   
$
66,963
   
$
143,234
   
$
132,953
 
Noninterest income
                               
Insurance and other financial services revenue
 
$
5,938
   
$
5,826
   
$
12,694
   
$
12,330
 
Service charges on deposit accounts
   
4,224
     
4,246
     
8,460
     
8,218
 
ATM and debit card fees
   
6,156
     
5,816
     
11,681
     
11,089
 
Retirement plan administration fees
   
7,836
     
7,296
     
15,570
     
12,635
 
Trust
   
4,731
     
5,265
     
9,282
     
10,143
 
Bank owned life insurance income
   
1,186
     
1,217
     
2,563
     
2,564
 
Net securities (losses) gains
   
(69
)
   
91
     
(12
)
   
163
 
Other
   
4,239
     
4,401
     
7,824
     
8,293
 
Total noninterest income
 
$
34,241
   
$
34,158
   
$
68,062
   
$
65,435
 
Noninterest expense
                               
Salaries and employee benefits
 
$
38,567
   
$
37,726
   
$
77,923
   
$
74,293
 
Occupancy
   
5,443
     
5,535
     
11,718
     
11,654
 
Data processing and communications
   
4,693
     
4,508
     
9,107
     
8,787
 
Professional fees and outside services
   
3,359
     
3,336
     
7,027
     
6,828
 
Equipment
   
4,518
     
4,151
     
9,275
     
8,189
 
Office supplies and postage
   
1,577
     
1,504
     
3,168
     
3,077
 
FDIC expense
   
949
     
1,092
     
1,966
     
2,293
 
Advertising
   
641
     
700
     
1,144
     
1,037
 
Amortization of intangible assets
   
893
     
1,096
     
1,861
     
2,010
 
Loan collection and other real estate owned, net
   
961
     
908
     
1,746
     
2,245
 
Other
   
4,630
     
4,332
     
9,756
     
8,747
 
Total noninterest expense
 
$
66,231
   
$
64,888
   
$
134,691
   
$
129,160
 
Income before income tax expense
 
$
39,360
   
$
36,233
   
$
76,605
   
$
69,228
 
Income tax expense
   
8,805
     
8,112
     
16,923
     
15,121
 
Net income
 
$
30,555
   
$
28,121
   
$
59,682
   
$
54,107
 
Earnings Per Share
                               
Basic
 
$
0.70
   
$
0.64
   
$
1.36
   
$
1.24
 
Diluted
 
$
0.69
   
$
0.64
   
$
1.35
   
$
1.23
 


Page 9 of 12

NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
2019
   
2018
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Interest, fee and dividend income
                             
Interest and fees on loans
 
$
81,271
   
$
79,321
   
$
78,963
   
$
77,249
   
$
74,172
 
Securities available for sale
   
6,031
     
5,922
     
6,332
     
6,659
     
7,003
 
Securities held to maturity
   
5,089
     
5,217
     
4,344
     
3,462
     
2,811
 
Other
   
842
     
884
     
885
     
834
     
781
 
Total interest, fee and dividend income
 
$
93,233
   
$
91,344
   
$
90,524
   
$
88,204
   
$
84,767
 
Interest expense
                                       
Deposits
 
$
10,234
   
$
8,826
   
$
6,977
   
$
6,157
   
$
5,079
 
Short-term borrowings
   
2,760
     
3,237
     
3,131
     
3,000
     
2,455
 
Long-term debt
   
471
     
422
     
431
     
431
     
452
 
Junior subordinated debt
   
1,141
     
1,168
     
1,110
     
1,089
     
1,040
 
Total interest expense
 
$
14,606
   
$
13,653
   
$
11,649
   
$
10,677
   
$
9,026
 
Net interest income
 
$
78,627
   
$
77,691
   
$
78,875
   
$
77,527
   
$
75,741
 
Provision for loan losses
   
7,277
     
5,807
     
6,528
     
6,026
     
8,778
 
Net interest income after provision for loan losses
 
$
71,350
   
$
71,884
   
$
72,347
   
$
71,501
   
$
66,963
 
Noninterest income
                                       
Insurance and other financial services revenue
 
$
5,938
   
$
6,756
   
$
5,843
   
$
6,172
   
$
5,826
 
Service charges on deposit accounts
   
4,224
     
4,236
     
4,503
     
4,503
     
4,246
 
ATM and debit card fees
   
6,156
     
5,525
     
5,704
     
5,906
     
5,816
 
Retirement plan administration fees
   
7,836
     
7,734
     
7,113
     
7,244
     
7,296
 
Trust
   
4,731
     
4,551
     
4,573
     
4,808
     
5,265
 
Bank owned life insurance income
   
1,186
     
1,377
     
1,239
     
1,288
     
1,217
 
Net securities (losses) gains
   
(69
)
   
57
     
(6,916
)
   
412
     
91
 
Other
   
4,239
     
3,585
     
3,887
     
3,048
     
4,401
 
Total noninterest income
 
$
34,241
   
$
33,821
   
$
25,946
   
$
33,381
   
$
34,158
 
Noninterest expense
                                       
Salaries and employee benefits
 
$
38,567
   
$
39,356
   
$
38,998
   
$
38,394
   
$
37,726
 
Occupancy
   
5,443
     
6,275
     
5,284
     
5,380
     
5,535
 
Data processing and communications
   
4,693
     
4,414
     
4,431
     
4,434
     
4,508
 
Professional fees and outside services
   
3,359
     
3,668
     
3,968
     
3,580
     
3,336
 
Equipment
   
4,518
     
4,757
     
4,529
     
4,319
     
4,151
 
Office supplies and postage
   
1,577
     
1,591
     
1,564
     
1,563
     
1,504
 
FDIC expense
   
949
     
1,017
     
1,135
     
1,223
     
1,092
 
Advertising
   
641
     
503
     
1,006
     
739
     
700
 
Amortization of intangible assets
   
893
     
968
     
978
     
1,054
     
1,096
 
Loan collection and other real estate owned, net
   
961
     
785
     
738
     
1,234
     
908
 
Other
   
4,630
     
5,126
     
6,273
     
4,577
     
4,332
 
Total noninterest expense
 
$
66,231
   
$
68,460
   
$
68,904
   
$
66,497
   
$
64,888
 
Income before income tax expense
 
$
39,360
   
$
37,245
   
$
29,389
   
$
38,385
   
$
36,233
 
Income tax expense
   
8,805
     
8,118
     
737
     
8,578
     
8,112
 
Net income
 
$
30,555
   
$
29,127
   
$
28,652
   
$
29,807
   
$
28,121
 
Earnings Per Share
                                       
Basic
 
$
0.70
   
$
0.67
   
$
0.66
   
$
0.68
   
$
0.64
 
Diluted
 
$
0.69
   
$
0.66
   
$
0.65
   
$
0.68
   
$
0.64
 


Page 10 of 12

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
 

   
Q2 - 2019
     
Q1 - 2019
     
Q4 - 2018
   
Q3 - 2018
   
Q2 - 2018
 
Assets
                                                                     
Short-term interest bearing accounts
 
$
25,783
     
1.28
%
 
$
9,065
     
4.07
%
 
$
3,780
     
5.25
%
 
$
3,328
     
6.08
%
 
$
3,574
     
5.16
%
Securities available for sale (1) (3)
   
981,079
     
2.47
%
   
984,704
     
2.45
%
   
1,104,198
     
2.29
%
   
1,197,910
     
2.22
%
   
1,266,304
     
2.23
%
Securities held to maturity (1) (3)
   
770,651
     
2.83
%
   
782,570
     
2.90
%
   
688,840
     
2.73
%
   
591,220
     
2.58
%
   
503,501
     
2.50
%
Investment in FRB and FHLB Banks
   
46,179
     
6.60
%
   
49,152
     
6.54
%
   
47,689
     
6.95
%
   
50,107
     
6.20
%
   
48,184
     
6.12
%
Loans (2) (3)
   
6,958,299
     
4.69
%
   
6,886,672
     
4.68
%
   
6,876,341
     
4.56
%
   
6,839,565
     
4.49
%
   
6,750,710
     
4.41
%
Total interest earning assets
 
$
8,781,991
     
4.28
%
 
$
8,712,163
     
4.28
%
 
$
8,720,848
     
4.14
%
 
$
8,682,130
     
4.05
%
 
$
8,572,273
     
3.99
%
Other assets
   
816,748
             
795,585
             
769,302
             
776,219
             
766,604
         
Total assets
 
$
9,598,739
           
$
9,507,748
           
$
9,490,150
           
$
9,458,349
           
$
9,338,877
         
                                                                                 
Liabilities and stockholders' equity
                                                                               
Money market deposit accounts
 
$
1,916,045
     
1.16
%
 
$
1,804,053
     
0.99
%
 
$
1,745,980
     
0.65
%
 
$
1,724,853
     
0.58
%
 
$
1,699,956
     
0.43
%
NOW deposit accounts
   
1,127,413
     
0.13
%
   
1,135,213
     
0.16
%
   
1,166,383
     
0.18
%
   
1,164,513
     
0.17
%
   
1,222,889
     
0.16
%
Savings deposits
   
1,282,084
     
0.06
%
   
1,252,042
     
0.06
%
   
1,250,703
     
0.06
%
   
1,279,520
     
0.06
%
   
1,289,062
     
0.06
%
Time deposits
   
953,698
     
1.73
%
   
942,457
     
1.64
%
   
921,252
     
1.47
%
   
881,792
     
1.33
%
   
858,080
     
1.22
%
Total interest bearing deposits
 
$
5,279,240
     
0.78
%
 
$
5,133,765
     
0.70
%
 
$
5,084,318
     
0.54
%
 
$
5,050,678
     
0.48
%
 
$
5,069,987
     
0.40
%
Short-term borrowings
   
620,898
     
1.78
%
   
712,306
     
1.84
%
   
724,693
     
1.71
%
   
766,372
     
1.55
%
   
706,694
     
1.39
%
Long-term debt
   
82,414
     
2.29
%
   
73,707
     
2.32
%
   
73,735
     
2.32
%
   
73,762
     
2.32
%
   
84,676
     
2.14
%
Junior subordinated debt
   
101,196
     
4.52
%
   
101,196
     
4.68
%
   
101,196
     
4.35
%
   
101,196
     
4.27
%
   
101,196
     
4.12
%
Total interest bearing liabilities
 
$
6,083,748
     
0.96
%
 
$
6,020,974
     
0.92
%
 
$
5,983,942
     
0.77
%
 
$
5,992,008
     
0.71
%
 
$
5,962,553
     
0.61
%
Demand deposits
   
2,298,867
             
2,309,531
             
2,373,235
             
2,356,216
             
2,294,023
         
Other liabilities
   
162,374
             
151,490
             
130,151
             
121,574
             
113,272
         
Stockholders' equity
   
1,053,750
             
1,025,753
             
1,002,822
             
988,551
             
969,029
         
Total liabilities and stockholders' equity
 
$
9,598,739
           
$
9,507,748
           
$
9,490,150
           
$
9,458,349
           
$
9,338,877
         
                                                                                 
Interest rate spread
           
3.32
%
           
3.36
%
           
3.37
%
           
3.34
%
           
3.38
%
Net interest margin (FTE) (3)
           
3.61
%
           
3.64
%
           
3.61
%
           
3.57
%
           
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 $445, $500, $535, $529 and $478 for the three months ended June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018 and June 30, 2018, respectively.


Page 11 of 12

NBT Bancorp Inc. and Subsidiaries
Average Year-to-Date Balance Sheets
(unaudited, dollars in thousands)

   
Average
Balance
   
Interest
   
Yield/
Rates
   
Average
Balance
   
Interest
   
Yield/
Rates
 
Six Months ended June 30,
 
2019
   
2018
 
Assets
                                   
Short-term interest bearing accounts
 
$
17,471
   
$
174
     
2.01
%
 
$
3,198
   
$
82
     
5.17
%
Securities available for sale (1) (3)
   
982,881
     
11,984
     
2.46
%
   
1,269,949
     
14,017
     
2.23
%
Securities held to maturity (1) (3)
   
776,577
     
11,043
     
2.87
%
   
492,996
     
6,081
     
2.49
%
Investment in FRB and FHLB Banks
   
47,657
     
1,552
     
6.57
%
   
47,518
     
1,465
     
6.22
%
Loans (2) (3)
   
6,922,684
     
160,768
     
4.68
%
   
6,672,016
     
144,825
     
4.38
%
Total interest earning assets
 
$
8,747,270
   
$
185,521
     
4.28
%
 
$
8,485,677
   
$
166,470
     
3.96
%
Other assets
   
806,225
                     
756,444
                 
Total assets
 
$
9,553,495
                   
$
9,242,121
                 
                                                 
Liabilities and stockholders' equity
                                               
Money market deposit accounts
 
$
1,860,358
   
$
9,974
     
1.08
%
 
$
1,677,755
   
$
2,933
     
0.35
%
NOW deposit accounts
   
1,131,291
     
817
     
0.15
%
   
1,216,992
     
882
     
0.15
%
Savings deposits
   
1,267,146
     
362
     
0.06
%
   
1,268,859
     
354
     
0.06
%
Time deposits
   
948,109
     
7,907
     
1.68
%
   
830,671
     
4,841
     
1.18
%
Total interest bearing deposits
 
$
5,206,904
   
$
19,060
     
0.74
%
 
$
4,994,277
   
$
9,010
     
0.36
%
Short-term borrowings
   
666,349
     
5,997
     
1.81
%
   
709,442
     
4,421
     
1.26
%
Long-term debt
   
78,085
     
893
     
2.31
%
   
86,749
     
928
     
2.16
%
Junior subordinated debt
   
101,196
     
2,309
     
4.60
%
   
101,196
     
1,941
     
3.87
%
Total interest bearing liabilities
 
$
6,052,534
   
$
28,259
     
0.94
%
 
$
5,891,664
   
$
16,300
     
0.56
%
Demand deposits
   
2,304,169
                     
2,277,083
                 
Other liabilities
   
156,963
                     
109,310
                 
Stockholders' equity
   
1,039,829
                     
964,064
                 
Total liabilities and stockholders' equity
 
$
9,553,495
                   
$
9,242,121
                 
Net interest income (FTE)
         
$
157,262
                   
$
150,170
         
Interest rate spread
                   
3.34
%
                   
3.40
%
Net interest margin (FTE) (3)
                   
3.63
%
                   
3.57
%
Taxable equivalent adjustment
         
$
944
                   
$
943
         
Net interest income
         
$
156,318
                   
$
149,227
         

(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%.


Page 12 of 12

NBT Bancorp Inc. and Subsidiaries
Consolidated Loan Balances
(unaudited, dollars in thousands)

   
2019
   
2018
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Commercial
 
$
1,299,784
   
$
1,306,551
   
$
1,291,568
   
$
1,310,262
   
$
1,299,437
 
Commercial real estate
   
2,025,280
     
1,943,931
     
1,930,742
     
1,902,315
     
1,891,119
 
Residential real estate mortgages
   
1,404,079
     
1,390,411
     
1,380,836
     
1,373,487
     
1,350,336
 
Dealer finance
   
1,189,670
     
1,191,111
     
1,216,144
     
1,229,700
     
1,252,843
 
Specialty lending
   
519,974
     
529,144
     
524,928
     
521,396
     
507,151
 
Home equity
   
456,754
     
463,582
     
474,566
     
480,761
     
488,493
 
Other consumer