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): October 28, 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 October 28, 2019, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended September 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

Press release of NBT Bancorp Inc. dated October 28, 2019

104
Cover Page Interactive Data File (embedded within the Inline XBRL document)


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: October 28, 2019
By:
/s/ Michael J. Chewens
 
 
Michael J. Chewens
 
 
Senior Executive Vice President
 
 
and Chief Financial Officer
 



Exhibit 99.1

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 $32.4 MILLION AND DILUTED EARNINGS PER SHARE OF $0.73; ANNOUNCES DIVIDEND INCREASE

NORWICH, NY (October 28, 2019) – 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.”


Page 2 of 13
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.


Page 3 of 13
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.


Page 4 of 13
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.


Page 5 of 13
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 6 of 13
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.
                 


Page 7 of 13
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.


Page 8 of 13
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
 


Page 9 of 13
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
Three Months Ended
September 30,
   
Nine Months Ended
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


Page 10 of 13
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


Page 11 of 13
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