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 26, 2020



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 26, 2020, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended September 30, 2020. That press release is furnished as Exhibit 99.1 hereto. A conference call will be held at 8:30 a.m. Eastern Time on Tuesday, October 27, 2020, to review third quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events.
 
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 26, 2020



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 26, 2020
By:
/s/ John V. Moran


John V. Moran


Executive Vice President


and Chief Financial Officer




Exhibit 99.1

1

FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS

Contact:
John H. Watt, Jr., President and CEO

John V. Moran, Executive Vice President and CFO

NBT Bancorp Inc.

52 South Broad Street

Norwich, NY 13815

607-337-6589

NBT BANCORP INC. ANNOUNCES THIRD QUARTER NET INCOME OF $35.1 MILLION, OR $0.80 PER DILUTED COMMON SHARE; ANNOUNCES DIVIDEND

NORWICH, NY (October 26, 2020) – 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, 2020.
 
Net income for the three months ended September 30, 2020 was $35.1 million, or $0.80 per diluted common share. Net income was up $10.4 million from the previous quarter primarily due to lower loan loss provision and up $2.7 million from the third quarter of 2019.
 
Pre-provision net revenue (“PPNR”)1 for the third quarter of 2020 was $49.6 million compared to $50.7 million in the previous quarter and $48.2 million in the third quarter of 2019. The 2% decline in PPNR from the previous quarter reflected lower net interest income and slightly higher operating expenses, partly offset by higher noninterest income.
 
CEO Comments

“The continued strength of NBT’s pre-provision net revenue is reflected in our third quarter 2020 results,” said NBT President and CEO John H. Watt, Jr. “Strong fee-based income, including higher income from our retirement plan administration businesses driven by an acquisition completed in April, and focused expense management were key contributors. As we continue to work closely with our customers through the impacts of the pandemic, we are encouraged that total loan deferrals dropped to 2% in October from a peak of approximately 15% in May. Adoption of digital banking services and functionality by our customers continued to accelerate in the third quarter and, with our well-established technology roadmap, we are positioned to scale up.”


2
Third Quarter Financial Highlights

Net Income

    Net income of $35.1 million
    Diluted earnings per share of $0.80
Net Interest
Income / NIM

    Net interest income on a fully taxable equivalent basis was $78.3 million1
    Net interest margin (“NIM”) on a fully taxable equivalent basis was 3.17%1
PPNR

    PPNR1 was $49.6 million compared to $50.7 million in the second quarter of 2020 and $48.2 million in the third quarter of 2019
Loans and Credit
Quality

    Period end loans were $7.6 billion, up 8%, annualized, from December 31, 2019 and consistent with June 30, 2020
    Excluding Paycheck Protection Program (“PPP”) loans of $515 million at September 30, 2020, period end loans contracted $72 million or 1% from June 30, 2020
    Allowance for loan losses to total loans of 1.51% (1.62% excluding PPP loans and related allowance)
    Net charge-offs to average loans was 0.12%, annualized (0.13% excluding PPP loans)
    Nonperforming assets to total assets was 0.37% (0.39% excluding PPP loans)
Capital

    Tangible book value per share2 grew 3% for the quarter and 8% from prior year to $20.02 at September 30, 2020
    Tangible equity to assets of 8.27%1
    CET1 ratio of 11.63%; Total leverage ratio of 9.48%

Loans


Period end total loans were $7.6 billion at September 30 and June 30, 2020, compared to $7.1 billion at December 31, 2019.

Total PPP loans as of September 30, 2020 were $515 million (net of unamortized fees), with $548 million originated at an average loan size of $184 thousand and an average annual fee of 3.2%.

Excluding PPP loans, period end loans decreased $71.8 million from June 30, 2020. Commercial and industrial loans decreased $21.4 million to $1.3 billion; commercial real estate loans increased $25.3 million to $2.3 billion; and total consumer loans decreased $75.7 million to $3.5 billion, driven by run-off of indirect auto loans.

Commercial line of credit utilization rate was 25% at September 30, 2020 compared to 26% at June 30, 2020 and 33% at September 30, 2019.

Deposits


Average total deposits in the third quarter of 2020 were $8.8 billion, compared to $8.6 billion in the second quarter of 2020, primarily due to increases in non-interest bearing demand deposit accounts.

Loan to deposit ratio was 84.4% at September 30, 2020, compared to 94.0% at December 31, 2019 and 86.5% at June 30, 2020.


3
Net Interest Income and Net Interest Margin


Net interest income for the third quarter of 2020 was $77.9 million, down $2.5 million or 3.1% from the second quarter of 2020 and consistent with the third quarter of 2019.

The net interest margin on a fully taxable equivalent (“FTE”) basis for the third quarter of 2020 was 3.17%, down 21 basis points (“bps”) from the second quarter of 2020 and down 40 bps from the third quarter of 2019. The net impact of PPP loans and excess liquidity, both of which the Company expects to be transitory, negatively impacted the NIM by 10 bps in the third quarter versus a negative 7 bps in the second quarter of 2020. Excluding the impact of PPP lending and excess liquidity from each quarter, NIM declined 18 bps from the prior quarter primarily due to the impact of asset repricing while funding costs remained stable during the quarter.

Earning asset yields for the three months ended September 30, 2020 were down 23 bps from the prior quarter and down 77 bps from the same quarter in the prior year. Earning assets grew $220.9 million or 2.3% from the prior quarter and grew $1.1 billion or 12.6% from the same quarter in the prior year.

o
Excess liquidity resulted in a $97.7 million increase in the average balances of short-term interest bearing accounts.

o
The average balance of investment securities increased $160.0 million while yields declined 29 bps.

o
Loan yields decreased 15 bps to 3.95%.

Total cost of deposits was 0.19% for the third quarter of 2020, down 4 bps from the prior quarter and down 37 bps from the same period in the prior year.

The cost of interest-bearing liabilities for the three months ended September 30, 2020 was 0.45%, flat as compared to the prior quarter of 0.45% and down 51 bps from the third quarter of 2019 of 0.96%.

o
Cost of interest-bearing deposits decreased 4 bps from the prior quarter and decreased 51 bps from the same quarter in 2019.

Credit Quality and CECL


Net charge-offs to average loans were very low due to COVID-19 pandemic relief programs.

Net charge-offs to total average loans of 12 bps (13 bps excluding PPP loans) compared to 28 bps (30 bps excluding PPP loans) in the prior quarter and 35 bps in the third quarter of 2019.

Nonperforming assets to total assets was 0.37% (0.39% excluding PPP loans) compared to 0.27% (0.28% excluding PPP loans) at June 30, 2020 and 0.36% at September 30, 2019. The increase in nonperforming assets was primarily due to two COVID-19 impacted commercial relationships totaling $10.9 million moving to non-accrual for the quarter.

Provision expense for the three months ended September 30, 2020 was $3.3 million with an increase in allowance coverage levels due to specific reserves for the two nonperforming commercial relationships and a change in loan mix while net charge-offs of $2.3 million were down compared with the prior quarter. Provision expense decreased $15.6 million from the second quarter of 2020 and decreased $3.1 million from the third quarter of 2019.

The allowance for loan losses was $114.5 million or 1.51% (1.62% excluding PPP loans and related allowance) of total loans compared to 1.49% (1.59% excluding PPP loans and related allowance) at June 30, 2020 and 1.03% September 30, 2019.


4

As of October 19, 2020, 2.0% of loans (loans outstanding as of 9/30/2020; excluding PPP balances) are in payment deferral programs which is down from the second quarter 2020 peak of 14.9%.

The reserve for unfunded loan commitments remained consistent with the prior quarter at $5.5 million at September 30, 2020.

Noninterest Income
 

Total noninterest income, excluding securities gains (losses), was $37.6 million for the three months ended September 30, 2020, up $2.8 million from the prior quarter and up $2.0 million from the prior year quarter.

Service charges on deposit accounts were higher than the prior quarter but lower than the third quarter of 2019 due to lower overdraft charges during the COVID-19 pandemic that recovered but continue to run lower than prior year levels.

ATM and debit card fees were higher than both prior quarter and the third quarter of 2019 due to increased volume and higher per transaction rates.

Retirement plan administration fees were higher than both prior quarter and the third quarter of 2019 due to the April 1, 2020 acquisition of Alliance Benefit Group of Illinois, Inc. (“ABG”) contributing $1.7 million in revenues during the quarter.

Wealth management fees were higher than the prior quarter due to seasonality of tax revenue and market conditions.

The increase in other noninterest income from the prior year third quarter was driven by higher mortgage banking income, while the decrease from the second quarter of 2020 was driven by lower loan swap fee income.

Noninterest Expense


Total noninterest expense for the third quarter of 2020 was up 1.5% from the previous quarter and down 4.9% from the third quarter of 2019.

Salaries and benefits increased from the prior quarter due to timing of medical expenses during the COVID-19 pandemic ($0.6 million) and increased from the third quarter of 2019 driven by the addition of ABG’s salaries and benefits.

Equipment expense was higher than both the prior quarter and the third quarter of 2019 due to higher technology costs associated with several digital upgrades.

FDIC expense was higher than the third quarter of 2019 due to the benefit of the FDIC insurance assessment small bank credit in the third quarter of 2019.

Other expenses decreased $4.5 million from the third quarter of 2019 due to lower travel and training expenses during the pandemic, lower pension costs and $3.1 million in reorganization expenses incurred during the third quarter of 2019 primarily related to branch optimization strategies to improve future operating efficiencies.

Income Taxes


Effective tax rate was 23.8% for the third quarter of 2020 compared to 21.0% in the second quarter of 2020 and 22.4% in the third quarter of 2019. The higher effective tax rate compared to the second quarter of 2020 was due to a higher level of taxable income relative to total income and included a true-up of tax expense to bring the full year estimated effective tax rate to 21.75%. The higher effective tax rate compared to the third quarter of 2019 was due to a higher level of taxable income relative to total income.


5
Capital


Capital ratios remain strong with tangible common equity to tangible assets1 at 8.27%. Tangible book value per share2 grew 3% from the prior quarter and 8% from the prior year quarter to $20.02.

September 30, 2020 CET1 capital ratio of 11.63%, total leverage ratio of 9.48% and total risk-based capital ratio of 15.43%.

Dividend


The Board of Directors approved a fourth-quarter cash dividend of $0.27 per share at their meeting held today. The dividend will be paid on December 15, 2020 to shareholders of record as of December 1, 2020.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. Eastern Time on Tuesday, October 27, 2020, to review third quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $10.8 billion at September 30, 2020. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has over 140 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine, and is currently entering Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtinsurance.com.


6
Forward-Looking Statements

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

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


7
Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the financial results of NBT’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider NBT’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of NBT.


8
NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)

   
2020
   
2019
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Profitability:
                             
Diluted earnings per share
 
$
0.80
   
$
0.56
   
$
0.23
   
$
0.66
   
$
0.73
 
Weighted average diluted common shares outstanding
   
43,941,953
     
43,928,344
     
44,130,324
     
44,174,201
     
44,138,495
 
Return on average assets3
   
1.29
%
   
0.94
%
   
0.43
%
   
1.20
%
   
1.34
%
Return on average equity3
   
12.09
%
   
8.76
%
   
3.69
%
   
10.36
%
   
11.83
%
Return on average tangible common equity1 3
   
16.51
%
   
12.14
%
   
5.24
%
   
14.28
%
   
16.43
%
Net interest margin1 3
   
3.17
%
   
3.38
%
   
3.52
%
   
3.52
%
   
3.57
%
                                         
   
9 Months ended September 30,
                         
   
2020
   
2019
                         
Profitability:
                                       
Diluted earnings per share
 
$
1.60
   
$
2.09
                         
Weighted average diluted common shares outstanding
   
43,996,637
     
44,108,467
                         
Return on average assets3
   
0.90
%
   
1.29
%
                       
Return on average equity3
   
8.23
%
   
11.66
%
                       
Return on average tangible common equity1 3
   
11.36
%
   
16.42
%
                       
Net interest margin1 3
   
3.35
%
   
3.61
%
                       

   
2020
   
2019
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Balance sheet data:
                             
Securities available for sale
 
$
1,197,925
   
$
1,108,443
   
$
1,000,980
   
$
975,340
   
$
932,173
 
Securities held to maturity
   
663,088
     
599,164
     
621,359
     
630,074
     
678,435
 
Net loans
   
7,446,143
     
7,514,491
     
7,147,383
     
7,063,133
     
6,941,444
 
Total assets
   
10,850,212
     
10,847,184
     
9,953,543
     
9,715,925
     
9,661,386
 
Total deposits
   
8,958,183
     
8,815,891
     
7,864,638
     
7,587,820
     
7,743,166
 
Total borrowings
   
446,737
     
602,988
     
714,283
     
820,682
     
628,701
 
Total liabilities
   
9,684,101
     
9,704,532
     
8,841,364
     
8,595,528
     
8,562,785
 
Stockholders' equity
   
1,166,111
     
1,142,652
     
1,112,179
     
1,120,397
     
1,098,601
 
                                         
Capital:
                                       
Equity to assets
   
10.75
%
   
10.53
%
   
11.17
%
   
11.53
%
   
11.37
%
Tangible equity ratio1
   
8.27
%
   
8.04
%
   
8.55
%
   
8.84
%
   
8.65
%
Book value per share
 
$
26.74
   
$
26.20
   
$
25.52
   
$
25.58
   
$
25.09
 
Tangible book value per share2
 
$
20.02
   
$
19.46
   
$
18.96
   
$
19.03
   
$
18.52
 
Tier 1 leverage ratio
   
9.48
%
   
9.44
%
   
10.02
%
   
10.33
%
   
10.15
%
Common equity tier 1 capital ratio
   
11.63
%
   
11.34
%
   
10.90
%
   
11.29
%
   
11.14
%
Tier 1 capital ratio
   
12.88
%
   
12.60
%
   
12.14
%
   
12.56
%
   
12.42
%
Total risk-based capital ratio
   
15.43
%
   
15.15
%
   
13.36
%
   
13.52
%
   
13.38
%
Common stock price (end of period)
 
$
26.82
   
$
30.06
   
$
32.39
   
$
40.56
   
$
36.59
 
Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares.
 


9
NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)

   
2020
   
2019
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Asset quality:
                             
Nonaccrual loans
 
$
35,896
   
$
25,567
   
$
29,972
   
$
25,174
   
$
24,623
 
90 days past due and still accruing
   
2,579
     
2,057
     
2,280
     
3,717
     
8,342
 
Total nonperforming loans
   
38,475
     
27,624
     
32,252
     
28,891
     
32,965
 
Other real estate owned
   
1,605
     
1,783
     
2,384
     
1,458
     
2,144
 
Total nonperforming assets
   
40,080
     
29,407
     
34,636
     
30,349
     
35,109
 
Allowance for loan losses
   
114,500
     
113,500
     
100,000
     
72,965
     
72,365
 
                                         
Asset quality ratios (total):
                                       
Allowance for loan losses to total loans
   
1.51
%
   
1.49
%
   
1.38
%
   
1.02
%
   
1.03
%
Total nonperforming loans to total loans
   
0.51
%
   
0.36
%
   
0.45
%
   
0.40
%
   
0.47
%
Total nonperforming assets to total assets
   
0.37
%
   
0.27
%
   
0.35
%
   
0.31
%
   
0.36
%
Allowance for loan losses to total nonperforming loans
   
297.60
%
   
410.87
%
   
310.06
%
   
252.55
%
   
219.52
%
Past due loans to total loans
   
0.26
%
   
0.30
%
   
0.51
%
   
0.49
%
   
0.57
%
Net charge-offs to average loans3
   
0.12
%
   
0.28
%
   
0.32
%
   
0.30
%
   
0.35
%
                                         
Asset quality ratios (excluding paycheck protection program):
                                 
Allowance for loan losses to total loans
   
1.62
%
   
1.59
%
   
1.38
%
   
1.02
%
   
1.03
%
Total nonperforming loans to total loans
   
0.55
%
   
0.39
%
   
0.45
%
   
0.40
%
   
0.47
%
Total nonperforming assets to total assets
   
0.39
%
   
0.28
%
   
0.35
%
   
0.31
%
   
0.36
%
Allowance for loan losses to total nonperforming loans
   
297.53
%
   
410.78
%
   
310.06
%
   
252.55
%
   
219.52
%
Past due loans to total loans
   
0.28
%
   
0.32
%
   
0.51
%
   
0.49
%
   
0.57
%
Net charge-offs to average loans3
   
0.13
%
   
0.30
%
   
0.32
%
   
0.30
%
   
0.35
%


10
NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)

Assets
  
September 30,
2020
     
December 31,
2019
  
Cash and due from banks
 
$
167,169
   
$
170,595
 
Short-term interest bearing accounts
   
450,291
     
46,248
 
Equity securities, at fair value
   
30,758
     
27,771
 
Securities available for sale, at fair value
   
1,197,925
     
975,340
 
Securities held to maturity (fair value $684,862 and $641,262, respectively)
   
663,088
     
630,074
 
Federal Reserve and Federal Home Loan Bank stock
   
28,484
     
44,620
 
Loans held for sale
   
1,823
     
11,731
 
Loans
   
7,560,643
     
7,136,098
 
Less allowance for loan losses
   
114,500
     
72,965
 
Net loans
 
$
7,446,143
   
$
7,063,133
 
Premises and equipment, net
   
73,055
     
75,631
 
Goodwill
   
280,541
     
274,769
 
Intangible assets, net
   
12,557
     
12,020
 
Bank owned life insurance
   
185,227
     
181,748
 
Other assets
   
313,151
     
202,245
 
Total assets
 
$
10,850,212
   
$
9,715,925
 
                 
Liabilities and stockholders' equity
               
Demand (noninterest bearing)
 
$
3,163,717
   
$
2,414,383
 
Savings, NOW and money market
   
5,134,495
     
4,312,244
 
Time
   
659,971
     
861,193
 
Total deposits
 
$
8,958,183
   
$
7,587,820
 
Short-term borrowings
   
183,472
     
655,275
 
Long-term debt
   
64,126
     
64,211
 
Subordinated debt, net
   
97,943
     
-
 
Junior subordinated debt
   
101,196
     
101,196
 
Other liabilities
   
279,181
     
187,026
 
Total liabilities
 
$
9,684,101
   
$
8,595,528
 
                 
Total stockholders' equity
 
$
1,166,111
   
$
1,120,397
 
                 
Total liabilities and stockholders' equity
 
$
10,850,212
   
$
9,715,925
 


11
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,
  
   
2020
   
2019
   
2020
   
2019
 
Interest, fee and dividend income
                       
Interest and fees on loans
 
$
74,998
   
$
81,082
   
$
230,996
   
$
241,674
 
Securities available for sale
   
5,603
     
5,711
     
16,956
     
17,664
 
Securities held to maturity
   
3,734
     
4,586
     
11,751
     
14,892
 
Other
   
659
     
1,002
     
2,138
     
2,728
 
Total interest, fee and dividend income
 
$
84,994
   
$
92,381
   
$
261,841
   
$
276,958
 
Interest expense
                               
Deposits
 
$
4,267
   
$
10,745
   
$
18,183
   
$
29,805
 
Short-term borrowings
   
446
     
1,989
     
3,215
     
7,986
 
Long-term debt
   
398
     
498
     
1,184
     
1,391
 
Subordinated debt
   
1,375
     
-
     
1,503
     
-
 
Junior subordinated debt
   
565
     
1,095
     
2,186
     
3,404
 
Total interest expense
 
$
7,051
   
$
14,327
   
$
26,271
   
$
42,586
 
Net interest income
 
$
77,943
   
$
78,054
   
$
235,570
   
$
234,372
 
Provision for loan losses
   
3,261
     
6,324
     
51,741
     
19,408
 
Net interest income after provision for loan losses
 
$
74,682
   
$
71,730
   
$
183,829
   
$
214,964
 
Noninterest income
                               
Service charges on deposit accounts
 
$
3,087
   
$
4,330
   
$
9,613
   
$
12,790
 
ATM and debit card fees
   
7,194
     
6,277
     
19,184
     
17,958
 
Retirement plan administration fees
   
9,685
     
7,600
     
26,840
     
23,170
 
Wealth management4
   
7,695
     
7,630
     
21,791
     
21,315
 
Insurance4
   
3,742
     
4,000
     
11,303
     
12,291
 
Bank owned life insurance income
   
1,255
     
1,556
     
4,010
     
4,119
 
Net securities gains (losses)
   
84
     
4,036
     
(548
)
   
4,024
 
Other
   
4,985
     
4,291
     
15,968
     
12,115
 
Total noninterest income
 
$
37,727
   
$
39,720
   
$
108,161
   
$
107,782
 
Noninterest expense
                               
Salaries and employee benefits
 
$
40,451
   
$
39,352
   
$
120,918
   
$
117,275
 
Occupancy
   
5,294
     
5,335
     
16,354
     
17,053
 
Data processing and communications
   
4,058
     
4,492
     
12,370
     
13,599
 
Professional fees and outside services
   
3,394
     
3,535
     
10,694
     
10,562
 
Equipment
   
5,073
     
4,487
     
14,494
     
13,762
 
Office supplies and postage
   
1,530
     
1,667
     
4,621
     
4,835
 
FDIC expense (credit)
   
645
     
(20
)
   
1,949
     
1,946
 
Advertising
   
530
     
677
     
1,461
     
1,821
 
Amortization of intangible assets
   
856
     
874
     
2,573
     
2,735
 
Loan collection and other real estate owned, net
   
620
     
976
     
2,365
     
2,722
 
Other
   
3,857
     
8,374
     
14,730
     
18,130
 
Total noninterest expense
 
$
66,308
   
$
69,749
   
$
202,529
   
$
204,440
 
Income before income tax expense
 
$
46,101
   
$
41,701
   
$
89,461
   
$
118,306
 
Income tax expense
   
10,988
     
9,322
     
19,267
     
26,245
 
Net income
 
$
35,113
   
$
32,379
   
$
70,194
   
$
92,061
 
Earnings Per Share
                               
Basic
 
$
0.80
   
$
0.74
   
$
1.61
   
$
2.10
 
Diluted
 
$
0.80
   
$
0.73
   
$
1.60
   
$
2.09
 


12
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
2020
   
2019
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Interest, fee and dividend income
                             
Interest and fees on loans
 
$
74,998
   
$
77,270
   
$
78,728
   
$
79,800
   
$
81,082
 
Securities available for sale
   
5,603
     
5,600
     
5,753
     
5,639
     
5,711
 
Securities held to maturity
   
3,734
     
3,926
     
4,091
     
4,213
     
4,586
 
Other
   
659
     
650
     
829
     
924
     
1,002
 
Total interest, fee and dividend income
 
$
84,994
   
$
87,446
   
$
89,401
   
$
90,576
   
$
92,381
 
Interest expense
                                       
Deposits
 
$
4,267
   
$
4,812
   
$
9,104
   
$
10,181
   
$
10,745
 
Short-term borrowings
   
446
     
972
     
1,797
     
1,707
     
1,989
 
Long-term debt
   
398
     
393
     
393
     
484
     
498
 
Subordinated debt
   
1,375
     
128
     
-
     
-
     
-
 
Junior subordinated debt
   
565
     
695
     
926
     
1,021
     
1,095
 
Total interest expense
 
$
7,051
   
$
7,000
   
$
12,220
   
$
13,393
   
$
14,327
 
Net interest income
 
$
77,943
   
$
80,446
   
$
77,181
   
$
77,183
   
$
78,054
 
Provision for loan losses
   
3,261
     
18,840
     
29,640
     
6,004
     
6,324
 
Net interest income after provision for loan losses
 
$
74,682
   
$
61,606
   
$
47,541
   
$
71,179
   
$
71,730
 
Noninterest income
                                       
Service charges on deposit accounts
 
$
3,087
   
$
2,529
   
$
3,997
   
$
4,361
   
$
4,330
 
ATM and debit card fees
   
7,194
     
6,136
     
5,854
     
5,935
     
6,277
 
Retirement plan administration fees
   
9,685
     
9,214
     
7,941
     
7,218
     
7,600
 
Wealth management4
   
7,695
     
6,823
     
7,273
     
7,085
     
7,630
 
Insurance4
   
3,742
     
3,292
     
4,269
     
3,479
     
4,000
 
Bank owned life insurance income
   
1,255
     
1,381
     
1,374
     
1,236
     
1,556
 
Net securities gains (losses)
   
84
     
180
     
(812
)
   
189
     
4,036
 
Other
   
4,985
     
5,456
     
5,527
     
6,738
     
4,291
 
Total noninterest income
 
$
37,727
   
$
35,011
   
$
35,423
   
$
36,241
   
$
39,720
 
Noninterest expense
                                       
Salaries and employee benefits
 
$
40,451
   
$
39,717
   
$
40,750
   
$
39,592
   
$
39,352
 
Occupancy
   
5,294
     
5,065
     
5,995
     
5,653
     
5,335
 
Data processing and communications
   
4,058
     
4,079
     
4,233
     
4,719
     
4,492
 
Professional fees and outside services
   
3,394
     
3,403
     
3,897
     
4,223
     
3,535
 
Equipment
   
5,073
     
4,779
     
4,642
     
4,821
     
4,487
 
Office supplies and postage
   
1,530
     
1,455
     
1,636
     
1,744
     
1,667
 
FDIC expense (credit)
   
645
     
993
     
311
     
-
     
(20
)
Advertising
   
530
     
322
     
609
     
952
     
677
 
Amortization of intangible assets
   
856
     
883
     
834
     
844
     
874
 
Loan collection and other real estate owned, net
   
620
     
728
     
1,017
     
1,436
     
976
 
Other
   
3,857
     
3,916
     
6,957
     
6,310
     
8,374
 
Total noninterest expense
 
$
66,308
   
$
65,340
   
$
70,881
   
$
70,294
   
$
69,749
 
Income before income tax expense
 
$
46,101
   
$
31,277
   
$
12,083
   
$
37,126
   
$
41,701
 
Income tax expense
   
10,988
     
6,564
     
1,715
     
8,166
     
9,322
 
Net income
 
$
35,113
   
$
24,713
   
$
10,368
   
$
28,960
   
$
32,379
 
Earnings Per Share
                                       
Basic
 
$
0.80
   
$
0.57
   
$
0.24
   
$
0.66
   
$
0.74
 
Diluted
 
$
0.80
   
$
0.56
   
$
0.23
   
$
0.66
   
$
0.73
 


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 - 2020
     
Q2 - 2020
     
Q1 - 2020
     
Q4 - 2019
     
Q3 - 2019
 
Assets
                                                 
         
         
Short-term interest bearing accounts
 
$
477,946
     
0.11
%
 
$
380,260
     
0.10
%
 
$
74,695
     
1.28
%
 
$
51,613
     
2.43
%
 
$
57,530
     
1.95
%
Securities available for sale1 5
   
1,137,604
     
1.96
%
   
985,561
     
2.29
%
   
962,527
     
2.40
%
   
942,302
     
2.37
%
   
940,256
     
2.41
%
Securities held to maturity1 5
   
621,812
     
2.56
%
   
613,899
     
2.75
%
   
622,398
     
2.81
%
   
651,305
     
2.73
%
   
698,617
     
2.77
%
Investment in FRB and FHLB Banks
   
29,720
     
7.08
%
   
36,604
     
6.09
%
   
39,784
     
5.97
%
   
37,842
     
6.37
%
   
40,525
     
7.04
%
Loans1 6
   
7,559,218
     
3.95
%
   
7,589,032
     
4.10
%
   
7,163,114
     
4.42
%
   
7,055,288
     
4.49
%
   
6,987,476
     
4.61
%
Total interest earning assets
 
$
9,826,300
     
3.45
%
 
$
9,605,356
     
3.68
%
 
$
8,862,518
     
4.07
%
 
$
8,738,350
     
4.13
%
 
$
8,724,404
     
4.22
%
Other assets
   
967,194
             
961,807
             
885,570
             
861,909
             
852,616
         
Total assets
 
$
10,793,494
           
$
10,567,163
           
$
9,748,088
           
$
9,600,259
           
$
9,577,020
         
                                                                                 
Liabilities and stockholders' equity
                                                                               
Money market deposit accounts
 
$
2,364,606
     
0.28
%
 
$
2,360,407
     
0.29
%
 
$
2,101,306
     
1.00
%
 
$
2,057,678
     
1.16
%
 
$
2,015,297
     
1.24
%
NOW deposit accounts
   
1,207,064
     
0.05
%
   
1,167,486
     
0.04
%
   
1,086,205
     
0.10
%
   
1,064,193
     
0.13
%
   
1,056,001
     
0.13
%
Savings deposits
   
1,447,021
     
0.05
%
   
1,383,495
     
0.05
%
   
1,276,285
     
0.06
%
   
1,251,432
     
0.06
%
   
1,274,793
     
0.06
%
Time deposits
   
684,708
     
1.31
%
   
760,803
     
1.48
%
   
842,989
     
1.62
%
   
853,353
     
1.69
%
   
893,837
     
1.75
%
Total interest bearing deposits
 
$
5,703,399
     
0.30
%
 
$
5,672,191
     
0.34
%
 
$
5,306,785
     
0.69
%
 
$
5,226,656
     
0.77
%
 
$
5,239,928
     
0.81
%
Short-term borrowings
   
277,890
     
0.64
%
   
427,004
     
0.92
%
   
533,516
     
1.35
%
   
475,332
     
1.42
%
   
490,694
     
1.61
%
Long-term debt
   
64,137
     
2.47
%
   
64,165
     
2.46
%
   
64,194
     
2.46
%
   
81,613
     
2.35
%
   
84,250
     
2.35
%
Subordinated debt, net
   
97,934
     
5.59
%
   
8,633
     
5.96
%
   
-
     
-
     
-
     
-
     
-
     
-
 
Junior subordinated debt
   
101,196
     
2.22
%
   
101,196
     
2.76
%
   
101,196
     
3.68
%
   
101,196
     
4.00
%
   
101,196
     
4.29
%
Total interest bearing liabilities
 
$
6,244,556
     
0.45
%
 
$
6,273,189
     
0.45
%
 
$
6,005,691
     
0.82
%
 
$
5,884,797
     
0.90
%
 
$
5,916,068
     
0.96
%
Demand deposits
   
3,111,617
             
2,887,545
             
2,398,307
             
2,406,563
             
2,389,617
         
Other liabilities
   
282,265
             
271,635
             
214,495
             
199,674
             
185,374
         
Stockholders' equity
   
1,155,056
             
1,134,794
             
1,129,595
             
1,109,225
             
1,085,961
         
Total liabilities and stockholders' equity
 
$
10,793,494
           
$
10,567,163
           
$
9,748,088
           
$
9,600,259
           
$
9,577,020
         
                                                                                 
Interest rate spread
           
3.00
%
           
3.23
%
           
3.25
%
           
3.23
%
           
3.26
%
Net interest margin (FTE)1
           
3.17
%
           
3.38
%
           
3.52
%
           
3.52
%
           
3.57
%


14
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
 
Nine Months Ended September 30,
 
2020
   
2019
 
Assets
                                   
Short-term interest bearing accounts
 
$
311,577
   
$
464
     
0.20
%
 
$
30,970
   
$
457
     
1.97
%
Securities available for sale1 5
   
1,028,962
     
16,956
     
2.20
%
   
968,517
     
17,695
     
2.44
%
Securities held to maturity1 5
   
619,379
     
12,562
     
2.71
%
   
750,305
     
15,921
     
2.84
%
Investment in FRB and FHLB Banks
   
35,349
     
1,674
     
6.33
%
   
45,254
     
2,271
     
6.71
%
Loans1 6
   
7,437,566
     
231,168
     
4.15
%
   
6,944,518
     
241,932
     
4.66
%
Total interest earning assets
 
$
9,432,833
   
$
262,824
     
3.72
%
 
$
8,739,564
   
$
278,276
     
4.26
%
Other assets
   
938,296
                     
821,859
                 
Total assets
 
$
10,371,129
                   
$
9,561,423
                 
                                                 
Liabilities and stockholders' equity
                                               
Money market deposit accounts
 
$
2,275,765
   
$
8,646
     
0.51
%
 
$
1,912,572
   
$
16,255
     
1.14
%
NOW deposit accounts
   
1,153,780
     
548
     
0.06
%
   
1,105,919
     
1,157
     
0.14
%
Savings deposits
   
1,369,219
     
553
     
0.05
%