UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021.

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.

COMMISSION FILE NUMBER 0-14703

NBT BANCORP INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware
 
16-1268674
(State of Incorporation)
 
(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

None
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Title of class
 
Trading Symbol(s)
 
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: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer 
Accelerated filer
Non-accelerated filer
Smaller reporting company
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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No

As of July 31, 2021, there were 43,336,021 shares outstanding of the Registrant’s Common Stock, $0.01 par value per share.





NBT BANCORP INC.
FORM 10-Q - Quarter Ended June 30, 2021

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1
 
 
 
 
 
3
 
 
 
 
4
 
 
 
 
5
 
 
 
 
6
 
 
 
 
7
 
 
 
 
9
 
 
 
Item 2
29
 
 
 
Item 3
45
 
 
 
Item 4
45
 
 
 
PART II
OTHER INFORMATION
 
 
 
 
Item 1
46
Item 1A
46
Item 2
47
Item 3
47
Item 4
47
Item 5
47
Item 6
48
 
 
 
 
49

2


Item 1 – FINANCIAL STATEMENTS

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)

 
June 30,
   
December 31,
 
   
2021
   
2020
 
(In thousands, except share and per share data)
           
Assets
           
Cash and due from banks
 
$
183,185
   
$
159,995
 
Short-term interest-bearing accounts
   
883,758
     
512,686
 
Equity securities, at fair value
   
32,806
     
30,737
 
Securities available for sale, at fair value
   
1,534,733
     
1,348,698
 
Securities held to maturity (fair value $632,954 and $636,827, respectively)
   
622,351
     
616,560
 
Federal Reserve and Federal Home Loan Bank stock
   
25,132
     
27,353
 
Loans held for sale
   
1,404
     
1,119
 
Loans
   
7,517,627
     
7,498,885
 
Less allowance for loan losses
   
98,500
     
110,000
 
Net loans
 
$
7,419,127
   
$
7,388,885
 
Premises and equipment, net
   
72,482
     
74,206
 
Goodwill
   
280,541
     
280,541
 
Intangible assets, net
   
10,241
     
11,735
 
Bank owned life insurance
   
226,507
     
186,434
 
Other assets
   
282,680
     
293,957
 
Total assets
 
$
11,574,947
   
$
10,932,906
 
Liabilities
               
Demand (noninterest bearing)
 
$
3,582,705
   
$
3,241,123
 
Savings, NOW and money market
   
5,633,523
     
5,207,090
 
Time
   
569,029
     
633,479
 
Total deposits
 
$
9,785,257
   
$
9,081,692
 
Short-term borrowings
   
90,598
     
168,386
 
Long-term debt
   
14,045
     
39,097
 
Subordinated debt, net
   
98,271
     
98,052
 
Junior subordinated debt
   
101,196
     
101,196
 
Other liabilities
   
260,524
     
256,865
 
Total liabilities
 
$
10,349,891
   
$
9,745,288
 
Stockholders’ equity
               
Preferred stock, $0.01 par value. Authorized 2,500,000 shares at June 30, 2021 and December 31, 2020
 
$
-
   
$
-
 
Common stock, $0.01 par value. Authorized 100,000,000 shares at June 30, 2021 and December 31, 2020; issued 49,651,493 at June 30, 2021 and December 31, 2020
   
497
     
497
 
Additional paid-in-capital
   
576,732
     
578,082
 
Retained earnings
   
805,722
     
749,056
 
Accumulated other comprehensive (loss) income
   
(9,292
)
   
417
 
Common stock in treasury, at cost, 6,196,130 and 6,022,399 shares at June 30, 2021 and December 31, 2020, respectively
   
(148,603
)
   
(140,434
)
Total stockholders’ equity
 
$
1,225,056
   
$
1,187,618
 
Total liabilities and stockholders’ equity
 
$
11,574,947
   
$
10,932,906
 

See accompanying notes to unaudited interim consolidated financial statements.

3


NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income (unaudited)

 
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2021
   
2020
   
2021
   
2020
 
(In thousands, except per share data)
                       
Interest, fee and dividend income
                       
Interest and fees on loans
 
$
74,795
   
$
77,270
   
$
149,888
   
$
155,998
 
Securities available for sale
   
5,762
     
5,600
     
11,306
     
11,353
 
Securities held to maturity
   
3,096
     
3,926
     
6,478
     
8,017
 
Other
   
391
     
650
     
682
     
1,479
 
Total interest, fee and dividend income
 
$
84,044
   
$
87,446
   
$
168,354
   
$
176,847
 
Interest expense
                               
Deposits
 
$
2,862
   
$
4,812
   
$
6,034
   
$
13,916
 
Short-term borrowings
   
32
     
972
     
102
     
2,769
 
Long-term debt
   
88
     
393
     
212
     
786
 
Subordinated debt
   
1,359
     
128
     
2,718
     
128
 
Junior subordinated debt
   
525
     
695
     
1,055
     
1,621
 
Total interest expense
 
$
4,866
   
$
7,000
   
$
10,121
   
$
19,220
 
Net interest income
 
$
79,178
   
$
80,446
   
$
158,233
   
$
157,627
 
Provision for loan losses
   
(5,216
)
   
18,840
     
(8,012
)
   
48,480
 
Net interest income after provision for loan losses
 
$
84,394
   
$
61,606
   
$
166,245
   
$
109,147
 
Noninterest income
                               
Service charges on deposit accounts
 
$
3,028
   
$
2,529
   
$
6,055
   
$
6,526
 
ATM and debit card fees
   
8,309
     
6,136
     
15,171
     
11,990
 
Retirement plan administration fees
   
9,779
     
9,214
     
19,877
     
17,155
 
Wealth management fees
   
8,406
     
6,823
     
16,316
     
14,096
 
Insurance services
   
3,508
     
3,292
     
6,969
     
7,561
 
Bank owned life insurance income
   
1,659
     
1,381
     
3,040
     
2,755
 
Net securities gains (losses)
   
201
     
180
     
668
     
(632
)
Other
   
4,426
     
5,456
     
8,258
     
10,983
 
Total noninterest income
 
$
39,316
   
$
35,011
   
$
76,354
   
$
70,434
 
Noninterest expense
                               
Salaries and employee benefits
 
$
42,671
   
$
39,717
   
$
84,272
   
$
80,467
 
Occupancy
   
5,291
     
5,065
     
11,164
     
11,060
 
Data processing and communications
   
4,427
     
4,079
     
9,158
     
8,312
 
Professional fees and outside services
   
4,030
     
3,403
     
7,619
     
7,300
 
Equipment
   
5,493
     
4,779
     
10,670
     
9,421
 
Office supplies and postage
   
1,615
     
1,455
     
3,114
     
3,091
 
FDIC expense
   
663
     
993
     
1,471
     
1,304
 
Advertising
   
468
     
322
     
919
     
931
 
Amortization of intangible assets
   
682
     
883
     
1,494
     
1,717
 
Loan collection and other real estate owned, net
   
663
     
728
     
1,253
     
1,745
 
Other
   
5,416
     
3,916
     
8,173
     
10,873
 
Total noninterest expense
 
$
71,419
   
$
65,340
   
$
139,307
   
$
136,221
 
Income before income tax expense
 
$
52,291
   
$
31,277
   
$
103,292
   
$
43,360
 
Income tax expense
   
11,995
     
6,564
     
23,150
     
8,279
 
Net income
 
$
40,296
   
$
24,713
   
$
80,142
   
$
35,081
 
Earnings per share
                               
Basic
 
$
0.93
   
$
0.57
   
$
1.84
   
$
0.80
 
Diluted
 
$
0.92
   
$
0.56
   
$
1.83
   
$
0.80
 

See accompanying notes to unaudited interim consolidated financial statements.

4


NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (unaudited)

 
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2021
   
2020
   
2021
   
2020
 
(In thousands)
                       
Net income
 
$
40,296
   
$
24,713
   
$
80,142
   
$
35,081
 
Other comprehensive income (loss), net of tax:
                               
                                 
Securities available for sale:
                               
Unrealized net holding gains (losses) arising during the period, gross
 
$
9,408
   
$
6,433
   
$
(13,903
)
 
$
27,772
 
Tax effect
   
(2,352
)
   
(1,608
)
   
3,475
     
(6,943
)
Unrealized net holding gains (losses) arising during the period, net
 
$
7,056
   
$
4,825
   
$
(10,428
)
 
$
20,829
 
                                 
Reclassification adjustment for net gains in net income, gross
 
$
-
   
$
-
   
$
-
   
$
(3
)
Tax effect
   
-
     
-
     
-
     
1
 
Reclassification adjustment for net gains in net income, net
 
$
-
   
$
-
   
$
-
   
$
(2
)
                                 
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross
 
$
143
   
$
165
   
$
285
   
$
338
 
Tax effect
   
(36
)
   
(42
)
   
(71
)
   
(85
)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net
 
$
107
   
$
123
   
$
214
   
$
253
 
                                 
Total securities available for sale, net
 
$
7,163
   
$
4,948
   
$
(10,214
)
 
$
21,080
 
                                 
Cash flow hedges:
                               
Unrealized losses on derivatives (cash flow hedges), gross
 
$
-
   
$
(19
)
 
$
-
   
$
(274
)
Tax effect
   
-
     
5
     
-
     
69
 
Unrealized losses on derivatives (cash flow hedges), net
 
$
-
   
$
(14
)
 
$
-
   
$
(205
)
                                 
Reclassification of net unrealized losses on cash flow hedges to interest (income), gross
 
$
-
   
$
81
   
$
21
   
$
91
 
Tax effect
   
-
     
(20
)
   
(5
)
   
(23
)
Reclassification of net unrealized losses on cash flow hedges to interest (income), net
 
$
-
   
$
61
   
$
16
   
$
68
 
                                 
Total cash flow hedges, net
 
$
-
   
$
47
   
$
16
   
$
(137
)
                                 
Pension and other benefits:
                               
Amortization of prior service cost and actuarial losses, gross
 
$
326
   
$
381
   
$
652
   
$
762
 
Tax effect
   
(82
)
   
(96
)
   
(163
)
   
(191
)
Amortization of prior service cost and actuarial losses, net
 
$
244
   
$
285
   
$
489
   
$
571
 
                                 
Total pension and other benefits, net
 
$
244
   
$
285
   
$
489
   
$
571
 
                                 
Total other comprehensive income (loss)
 
$
7,407
   
$
5,280
   
$
(9,709
)
 
$
21,514
 
Comprehensive income
 
$
47,703
   
$
29,993
   
$
70,433
   
$
56,595
 

See accompanying notes to unaudited interim consolidated financial statements.


5


NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity (unaudited)

 
Common
Stock
   
Additional
Paid-in-
Capital
   
Retained
Earnings
   
Accumulated
Other
Comprehensive
(Loss) Income
   
Common
Stock in
Treasury
   
Total
 
(In thousands, except share and per share data)
                                   
Balance at March 31, 2021
 
$
497
   
$
578,597
   
$
777,170
   
$
(16,699
)
 
$
(148,584
)
 
$
1,190,981
 
Net income
   
-
     
-
     
40,296
     
-
     
-
     
40,296
 
Cash dividends - $0.27 per share
   
-
     
-
     
(11,744
)
   
-
     
-
     
(11,744
)
Purchase of 23,627 treasury shares
   
-
     
-
     
-
     
-
     
(851
)
   
(851
)
Net issuance of 53,788 shares to employee and other stock plans
   
-
     
(2,453
)
   
-
     
-
     
832
     
(1,621
)
Stock-based compensation
   
-
     
588
     
-
     
-
     
-
     
588
 
Other comprehensive income
   
-
     
-
     
-
     
7,407
     
-
     
7,407
 
Balance at June 30, 2021
 
$
497
   
$
576,732
   
$
805,722
   
$
(9,292
)
 
$
(148,603
)
 
$
1,225,056
 
                                                 
Balance at March 31, 2020
 
$
497
   
$
577,080
   
$
678,611
   
$
(2,792
)
 
$
(141,217
)
 
$
1,112,179
 
Net income
   
-
     
-
     
24,713
     
-
     
-
     
24,713
 
Cash dividends - $0.00 per share
   
-
     
-
     
(2
)
   
-
     
-
     
(2
)
Net issuance of 20,905 shares to employee and other stock plans
   
-
     
(517
)
   
-
     
-
     
365
     
(152
)
Stock-based compensation
   
-
     
634
     
-
     
-
     
-
     
634
 
Other comprehensive income
   
-
     
-
     
-
     
5,280
     
-
     
5,280
 
Balance at June 30, 2020
 
$
497
   
$
577,197
   
$
703,322
   
$
2,488
   
$
(140,852
)
 
$
1,142,652
 

 
Common
Stock
   
Additional
Paid-in-
Capital
   
Retained
Earnings
   
Accumulated
Other
Comprehensive
(Loss) Income
   
Common
Stock in
Treasury
   
Total
 
(In thousands, except share and per share data)
                                   
Balance at December 31, 2020
 
$
497
   
$
578,082
   
$
749,056
   
$
417
   
$
(140,434
)
 
$
1,187,618
 
Net income
   
-
     
-
     
80,142
     
-
     
-
     
80,142
 
Cash dividends - $0.81 per share
   
-
     
-
     
(23,476
)
   
-
     
-
     
(23,476
)
Purchase of 280,658 treasury shares
   
-
     
-
     
-
     
-
     
(9,871
)
   
(9,871
)
Net issuance of 106,927 shares to employee and other stock plans
   
-
     
(4,606
)
   
-
     
-
     
1,702
     
(2,904
)
Stock-based compensation
   
-
     
3,256
     
-
     
-
     
-
     
3,256
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(9,709
)
   
-
     
(9,709
)
Balance at June 30, 2021
 
$
497
   
$
576,732
   
$
805,722
   
$
(9,292
)
 
$
(148,603
)
 
$
1,225,056
 
                                                 
Balance at December 31, 2019
 
$
497
   
$
576,708
   
$
696,214
   
$
(19,026
)
 
$
(133,996
)
 
$
1,120,397
 
Net income
   
-
     
-
     
35,081
     
-
     
-
     
35,081
 
Cumulative effect adjustment for ASU 2016-13 implementation
   
-
     
-
     
(4,339
)
   
-
     
-
     
(4,339
)
Cash dividends - $0.54 per share
   
-
     
-
     
(23,634
)
   
-
     
-
     
(23,634
)
Purchase of 263,507 treasury shares
   
-
     
-
     
-
     
-
     
(7,980
)
   
(7,980
)
Net issuance of 75,246 shares to employee and other stock plans
   
-
     
(2,820
)
   
-
     
-
     
1,124
     
(1,696
)
Stock-based compensation
   
-
     
3,309
     
-
     
-
     
-
     
3,309
 
Other comprehensive income
   
-
     
-
     
-
     
21,514
     
-
     
21,514
 
Balance at June 30, 2020
 
$
497
   
$
577,197
   
$
703,322
   
$
2,488
   
$
(140,852
)
 
$
1,142,652
 

See accompanying notes to unaudited interim consolidated financial statements.

6


NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)

 
Six Months Ended
June 30,
 
   
2021
   
2020
 
(In thousands)
           
Operating activities
           
Net income
 
$
80,142
   
$
35,081
 
Adjustments to reconcile net income to net cash provided by operating activities
               
Provision for loan losses
   
(8,012
)
   
48,480
 
Depreciation and amortization of premises and equipment
   
4,921
     
4,952
 
Net amortization on securities
   
3,049
     
1,596
 
Amortization of intangible assets
   
1,494
     
1,717
 
Amortization of operating lease right-of-use assets
   
3,613
     
3,702
 
Excess tax benefit on stock-based compensation
   
(322
)
   
(178
)
Stock-based compensation expense
   
3,256
     
3,309
 
Bank owned life insurance income
   
(3,040
)
   
(2,755
)
Amortization of subordinated debt issuance costs
   
219
     
17
 
Proceeds from sale of loans held for sale
   
28,667
     
101,286
 
Originations of loans held for sale
   
(28,792
)
   
(106,381
)
Net gains on sale of loans held for sale
   
(160
)
   
(829
)
Net security (gains) losses
   
(668
)
   
632
 
Net gains on sale of other real estate owned
   
(19
)
   
(85
)
Net change in other assets and other liabilities
   
11,339
     
(13,502
)
Net cash provided by operating activities
 
$
95,687
   
$
77,042
 
Investing activities
               
Net cash used in acquisitions
 
$
-
   
$
(3,899
)
Securities available for sale:
               
Proceeds from maturities, calls and principal paydowns
   
216,468
     
148,658
 
Purchases
   
(418,915
)
   
(255,143
)
Securities held to maturity:
               
Proceeds from maturities, calls and principal paydowns
   
110,328
     
116,022
 
Proceeds from sales
   
-
     
996
 
Purchases
   
(116,360
)
   
(86,209
)
Equity securities:
               
Proceeds from calls
   
1,000
     
-
 
Other:
               
Net increase in loans
   
(22,270
)
   
(502,382
)
Proceeds from Federal Home Loan Bank stock redemption
   
2,352
     
48,672
 
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock
   
(131
)
   
(36,588
)
Proceeds from settlement of bank owned life insurance
   
2,967
     
527
 
Purchases of bank owned life insurance
   
(40,000
)
   
-
 
Purchases of premises and equipment, net
   
(3,138
)
   
(3,586
)
Proceeds from sales of other real estate owned
   
719
     
777
 
Net cash used in investing activities
 
$
(266,980
)
 
$
(572,155
)
Financing activities
               
Net increase in deposits
 
$
703,565
   
$
1,228,071
 
Net decrease in short-term borrowings
   
(77,788
)
   
(315,619
)
Proceeds from issuance of subordinated debt
   
-
     
100,000
 
Payment of subordinated debt issuance costs
   
-
     
(2,035
)
Repayments of long-term debt
   
(25,052
)
   
(57
)
Proceeds from the issuance of shares to employee and other stock plans
   
112
     
184
 
Cash paid by employer for tax-withholdings on stock issuance
   
(1,935
)
   
(1,168
)
Purchase of treasury stock
   
(9,871
)
   
(7,980
)
Cash dividends
   
(23,476
)
   
(23,634
)
Net cash provided by financing activities
 
$
565,555
   
$
977,762
 
Net increase in cash and cash equivalents
 
$
394,262
   
$
482,649
 
Cash and cash equivalents at beginning of period
   
672,681
     
216,843
 
Cash and cash equivalents at end of period
 
$
1,066,943
   
$
699,492
 

7

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited) (continued)

 
Six Months Ended
June 30,
 
   
2021
   
2020
 
Supplemental disclosure of cash flow information
           
Cash paid during the period for:
           
Interest expense
 
$
11,350
   
$
19,985
 
Income taxes paid, net of refund
   
28,004
     
4,157
 
Noncash investing activities:
               
Loans transferred to other real estate owned
 
$
40
   
$
1,017
 
Acquisitions:
               
Fair value of assets acquired
 
$
-
   
$