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 September 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 October 29, 2021, there were 43,349,877 shares outstanding of the Registrant’s Common Stock, $0.01 par value per share.


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

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION

Item 1
Financial Statements
 
 
 
 
 
1
 
 
 
 
2
 
 
 
 
3
 
 
 
 
4
 
 
 
 
5
 
 
 
 
7
 
 
 
Item 2
28
 
 
 
Item 3
44
 
 
 
Item 4
44
 
 
 
PART II
OTHER INFORMATION
 
 
 
 
Item 1
45
Item 1A
45
Item 2
46
Item 3
46
Item 4
46
Item 5
46
Item 6
47
 
 
 
 
48

Item 1 – FINANCIAL STATEMENTS

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

 
September 30,
   
December 31,
 
   
2021
   
2020
 
(In thousands, except share and per share data)
           
Assets
           
Cash and due from banks
 
$
215,032
   
$
159,995
 
Short-term interest-bearing accounts
   
1,131,074
     
512,686
 
Equity securities, at fair value
   
33,013
     
30,737
 
Securities available for sale, at fair value
   
1,576,030
     
1,348,698
 
Securities held to maturity (fair value $689,129 and $636,827, respectively)
   
683,103
     
616,560
 
Federal Reserve and Federal Home Loan Bank stock
   
25,161
     
27,353
 
Loans held for sale
   
1,024
     
1,119
 
Loans
   
7,566,442
     
7,498,885
 
Less allowance for loan losses
   
93,000
     
110,000
 
Net loans
 
$
7,473,442
   
$
7,388,885
 
Premises and equipment, net
   
71,928
     
74,206
 
Goodwill
   
280,541
     
280,541
 
Intangible assets, net
   
9,578
     
11,735
 
Bank owned life insurance
   
227,451
     
186,434
 
Other assets
   
267,034
     
293,957
 
Total assets
 
$
11,994,411
   
$
10,932,906
 
Liabilities
               
Demand (noninterest bearing)
 
$
3,748,162
   
$
3,241,123
 
Savings, NOW and money market
   
5,894,743
     
5,207,090
 
Time
   
552,273
     
633,479
 
Total deposits
 
$
10,195,178
   
$
9,081,692
 
Short-term borrowings
   
99,715
     
168,386
 
Long-term debt
   
14,020
     
39,097
 
Subordinated debt, net
   
98,380
     
98,052
 
Junior subordinated debt
   
101,196
     
101,196
 
Other liabilities
   
244,465
     
256,865
 
Total liabilities
 
$
10,752,954
   
$
9,745,288
 
Stockholders’ equity
               
Preferred stock, $0.01 par value. Authorized 2,500,000 shares at September 30, 2021 and December 31, 2020
 
$
-
   
$
-
 
Common stock, $0.01 par value. Authorized 100,000,000 shares at September 30, 2021 and December 31, 2020; issued 49,651,493 at September 30, 2021 and December 31, 2020
   
497
     
497
 
Additional paid-in-capital
   
577,222
     
578,082
 
Retained earnings
   
831,017
     
749,056
 
Accumulated other comprehensive (loss) income
   
(14,492
)
   
417
 
Common stock in treasury, at cost, 6,313,800 and 6,022,399 shares at September 30, 2021 and December 31, 2020, respectively
   
(152,787
)
   
(140,434
)
Total stockholders’ equity
 
$
1,241,457
   
$
1,187,618
 
Total liabilities and stockholders’ equity
 
$
11,994,411
   
$
10,932,906
 

See accompanying notes to unaudited interim consolidated financial statements.


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

 
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2021
   
2020
   
2021
   
2020
 
(In thousands, except per share data)
                       
Interest, fee and dividend income
                       
Interest and fees on loans
 
$
72,817
   
$
74,998
   
$
222,705
   
$
230,996
 
Securities available for sale
   
5,898
     
5,603
     
17,204
     
16,956
 
Securities held to maturity
   
2,976
     
3,734
     
9,454
     
11,751
 
Other
   
524
     
659
     
1,206
     
2,138
 
Total interest, fee and dividend income
 
$
82,215
   
$
84,994
   
$
250,569
   
$
261,841
 
Interest expense
                               
Deposits
 
$
2,548
   
$
4,267
   
$
8,582
   
$
18,183
 
Short-term borrowings
   
28
     
446
     
130
     
3,215
 
Long-term debt
   
89
     
398
     
301
     
1,184
 
Subordinated debt
   
1,359
     
1,375
     
4,077
     
1,503
 
Junior subordinated debt
   
517
     
565
     
1,572
     
2,186
 
Total interest expense
 
$
4,541
   
$
7,051
   
$
14,662
   
$
26,271
 
Net interest income
 
$
77,674
   
$
77,943
   
$
235,907
   
$
235,570
 
Provision for loan losses
   
(3,342
)
   
3,261
     
(11,354
)
   
51,741
 
Net interest income after provision for loan losses
 
$
81,016
   
$
74,682
   
$
247,261
   
$
183,829
 
Noninterest income
                               
Service charges on deposit accounts
 
$
3,489
   
$
3,087
   
$
9,544
   
$
9,613
 
ATM and debit card fees
   
8,172
     
7,194
     
23,343
     
19,184
 
Retirement plan administration fees
   
10,495
     
9,685
     
30,372
     
26,840
 
Wealth management fees
   
8,783
     
7,695
     
25,099
     
21,791
 
Insurance services
   
3,720
     
3,742
     
10,689
     
11,303
 
Bank owned life insurance income
   
1,548
     
1,255
     
4,588
     
4,010
 
Net securities (losses) gains
   
(100
)
   
84
     
568
     
(548
)
Other
   
4,222
     
4,985
     
12,480
     
15,968
 
Total noninterest income
 
$
40,329
   
$
37,727
   
$
116,683
   
$
108,161
 
Noninterest expense
                               
Salaries and employee benefits
 
$
44,190
   
$
40,451
   
$
128,462
   
$
120,918
 
Occupancy
   
5,117
     
5,294
     
16,281
     
16,354
 
Data processing and communications
   
3,881
     
4,058
     
13,039
     
12,370
 
Professional fees and outside services
   
3,784
     
3,394
     
11,403
     
10,694
 
Equipment
   
5,577
     
5,073
     
16,247
     
14,494
 
Office supplies and postage
   
1,364
     
1,530
     
4,478
     
4,621
 
FDIC expense
   
772
     
645
     
2,243
     
1,949
 
Advertising
   
583
     
530
     
1,502
     
1,461
 
Amortization of intangible assets
   
663
     
856
     
2,157
     
2,573
 
Loan collection and other real estate owned, net
   
706
     
620
     
1,959
     
2,365
 
Other
   
6,232
     
3,857
     
14,405
     
14,730
 
Total noninterest expense
 
$
72,869
   
$
66,308
   
$
212,176
   
$
202,529
 
Income before income tax expense
 
$
48,476
   
$
46,101
   
$
151,768
   
$
89,461
 
Income tax expense
   
11,043
     
10,988
     
34,193
     
19,267
 
Net income
 
$
37,433
   
$
35,113
   
$
117,575
   
$
70,194
 
Earnings per share
                               
Basic
 
$
0.86
   
$
0.80
   
$
2.71
   
$
1.61
 
Diluted
 
$
0.86
   
$
0.80
   
$
2.69
   
$
1.60
 

See accompanying notes to unaudited interim consolidated financial statements.


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

 
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2021
   
2020
   
2021
   
2020
 
(In thousands)
                       
Net income
 
$
37,433
   
$
35,113
   
$
117,575
   
$
70,194
 
Other comprehensive income (loss), net of tax:
                               
                                 
Securities available for sale:
                               
Unrealized net holding (losses) gains arising during the period, gross
 
$
(7,426
)
 
$
(1,263
)
 
$
(21,329
)
 
$
26,509
 
Tax effect
   
1,857
     
316
     
5,332
     
(6,627
)
Unrealized net holding (losses) gains arising during the period, net
 
$
(5,569
)
 
$
(947
)
 
$
(15,997
)
 
$
19,882
 
                                 
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
 
$
149
   
$
157
   
$
434
   
$
495
 
Tax effect
   
(38
)
   
(39
)
   
(109
)
   
(124
)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net
 
$
111
   
$
118
   
$
325
   
$
371
 
                                 
Total securities available for sale, net
 
$
(5,458
)
 
$
(829
)
 
$
(15,672
)
 
$
20,251
 
                                 
Cash flow hedges:
                               
Unrealized losses on derivatives (cash flow hedges), gross
 
$
-
   
$
-
   
$
-
   
$
(274
)
Tax effect
   
-
     
-
     
-
     
69
 
Unrealized losses on derivatives (cash flow hedges), net
 
$
-
   
$
-
   
$
-
   
$
(205
)
                                 
Reclassification of net unrealized losses on cash flow hedges to interest (income), gross
 
$
-
   
$
101
   
$
21
   
$
192
 
Tax effect
   
-
     
(25
)
   
(5
)
   
(48
)
Reclassification of net unrealized losses on cash flow hedges to interest (income), net
 
$
-
   
$
76
   
$
16
   
$
144
 
                                 
Total cash flow hedges, net
 
$
-
   
$
76
   
$
16
   
$
(61
)
                                 
Pension and other benefits:
                               
Amortization of prior service cost and actuarial losses, gross
 
$
344
   
$
381
   
$
996
   
$
1,143
 
Tax effect
   
(86
)
   
(95
)
   
(249
)
   
(286
)
Amortization of prior service cost and actuarial losses, net
 
$
258
   
$
286
   
$
747
   
$
857
 
                                 
Total pension and other benefits, net
 
$
258
   
$
286
   
$
747
   
$
857
 
                                 
Total other comprehensive (loss) income
 
$
(5,200
)
 
$
(467
)
 
$
(14,909
)
 
$
21,047
 
Comprehensive income
 
$
32,233
   
$
34,646
   
$
102,666
   
$
91,241
 

See accompanying notes to unaudited interim consolidated financial statements.


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 June 30, 2021
 
$
497
   
$
576,732
   
$
805,722
   
$
(9,292
)
 
$
(148,603
)
 
$
1,225,056
 
Net income
   
-
     
-
     
37,433
     
-
     
-
     
37,433
 
Cash dividends - $0.28 per share
   
-
     
-
     
(12,138
)
   
-
     
-
     
(12,138
)
Purchase of 119,342 treasury shares
   
-
     
-
     
-
     
-
     
(4,212
)
   
(4,212
)
Net issuance of 1,672 shares to employee and other stock plans
   
-
     
(73
)
   
-
     
-
     
28
     
(45
)
Stock-based compensation
   
-
     
563
     
-
     
-
     
-
     
563
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(5,200
)
   
-
     
(5,200
)
Balance at September 30, 2021
 
$
497
   
$
577,222
   
$
831,017
   
$
(14,492
)
 
$
(152,787
)
 
$
1,241,457
 
                                                 
Balance at June 30, 2020
 
$
497
   
$
577,197
   
$
703,322
   
$
2,488
   
$
(140,852
)
 
$
1,142,652
 
Net income
   
-
     
-
     
35,113
     
-
     
-
     
35,113
 
Cash dividends - $0.27 per share
   
-
     
-
     
(11,785
)
   
-
     
-
     
(11,785
)
Net issuance of 3,030 shares to employee and other stock plans
   
-
     
(108
)
   
-
     
-
     
58
     
(50
)
Stock-based compensation
   
-
     
648
     
-
     
-
     
-
     
648
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(467
)
   
-
     
(467
)
Balance at September 30, 2020
 
$
497
   
$
577,737
   
$
726,650
   
$
2,021
   
$
(140,794
)
 
$
1,166,111
 

 
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
   
-
     
-
     
117,575
     
-
     
-
     
117,575
 
Cash dividends - $0.82 per share
   
-
     
-
     
(35,614
)
   
-
     
-
     
(35,614
)
Purchase of 400,000 treasury shares
   
-
     
-
     
-
     
-
     
(14,083
)
   
(14,083
)
Net issuance of 108,599 shares to employee and other stock plans
   
-
     
(4,679
)
   
-
     
-
     
1,730
     
(2,949
)
Stock-based compensation
   
-
     
3,819
     
-
     
-
     
-
     
3,819
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(14,909
)
   
-
     
(14,909
)
Balance at September 30, 2021
 
$
497
   
$
577,222
   
$
831,017
   
$
(14,492
)
 
$
(152,787
)
 
$
1,241,457
 
                                                 
Balance at December 31, 2019
 
$
497
   
$
576,708
   
$
696,214
   
$
(19,026
)
 
$
(133,996
)
 
$
1,120,397
 
Net income
   
-
     
-
     
70,194
     
-
     
-
     
70,194
 
Cumulative effect adjustment for ASU 2016-13 implementation
   
-
     
-
     
(4,339
)
   
-
     
-
     
(4,339
)
Cash dividends - $0.81 per share
   
-
     
-
     
(35,419
)
   
-
     
-
     
(35,419
)
Purchase of 263,507 treasury shares
   
-
     
-
     
-
     
-
     
(7,980
)
   
(7,980
)
Net issuance of 78,276 shares to employee and other stock plans
   
-
     
(2,928
)
   
-
     
-
     
1,182
     
(1,746
)
Stock-based compensation
   
-
     
3,957
     
-
     
-
     
-
     
3,957
 
Other comprehensive income
   
-
     
-
     
-
     
21,047
     
-
     
21,047
 
Balance at September 30, 2020
 
$
497
   
$
577,737
   
$
726,650
   
$
2,021
   
$
(140,794
)
 
$
1,166,111
 

See accompanying notes to unaudited interim consolidated financial statements.


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

 
Nine Months Ended
September 30,
 
   
2021
   
2020
 
(In thousands)
           
Operating activities
           
Net income
 
$
117,575
   
$
70,194
 
Adjustments to reconcile net income to net cash provided by operating activities
               
Provision for loan losses
   
(11,354
)
   
51,741
 
Depreciation and amortization of premises and equipment
   
7,339
     
7,378
 
Net amortization on securities
   
4,460
     
2,812
 
Amortization of intangible assets
   
2,157
     
2,573
 
Amortization of operating lease right-of-use assets
   
5,401
     
5,549
 
Excess tax benefit on stock-based compensation
   
(321
)
   
(188
)
Stock-based compensation expense
   
3,819
     
3,957
 
Bank owned life insurance income
   
(4,588
)
   
(4,010
)
Amortization of subordinated debt issuance costs
   
328
     
121
 
Proceeds from sale of loans held for sale
   
48,371
     
153,732
 
Originations of loans held for sale
   
(47,996
)
   
(144,105
)
Net gains on sale of loans held for sale
   
(280
)
   
(1,892
)
Net security (gains) losses
   
(568
)
   
548
 
Net gains on sale of other real estate owned
   
(44
)
   
(243
)
Net change in other assets and other liabilities
   
10,951
     
(40,760
)
Net cash provided by operating activities
 
$
135,250
   
$
107,407
 
Investing activities
               
Net cash used in acquisitions
 
$
-
   
$
(3,899
)
Securities available for sale:
               
Proceeds from maturities, calls and principal paydowns
   
308,688
     
239,622
 
Purchases
   
(560,884
)
   
(437,827
)
Securities held to maturity:
               
Proceeds from maturities, calls and principal paydowns
   
149,200
     
181,143
 
Proceeds from sales
   
-
     
996
 
Purchases
   
(216,205
)
   
(215,327
)
Equity securities:
               
Proceeds from calls
   
1,000
     
-
 
Other:
               
Net increase in loans
   
(73,344
)
   
(436,630
)
Proceeds from Federal Home Loan Bank stock redemption
   
2,355
     
58,799
 
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock
   
(163
)
   
(42,663
)
Proceeds from settlement of bank owned life insurance
   
3,571
     
531
 
Purchases of bank owned life insurance
   
(40,000
)
   
-
 
Purchases of premises and equipment, net
   
(5,007
)
   
(4,512
)
Proceeds from sales of other real estate owned
   
784
     
1,113
 
Net cash used in investing activities
 
$
(430,005
)
 
$
(658,654
)
Financing activities
               
Net increase in deposits
 
$
1,113,486
   
$
1,370,363
 
Net decrease in short-term borrowings
   
(68,671
)
   
(471,803
)
Proceeds from issuance of subordinated debt
   
-
     
100,000
 
Payment of subordinated debt issuance costs
   
-
     
(2,178
)
Repayments of long-term debt
   
(25,077
)
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