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Form 8-K NBT BANCORP INC For: Jul 25

July 26, 2016 3:58 PM EDT

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 25, 2016
 
NBT BANCORP INC.
(Exact name of registrant as specified in its charter)
 
DELAWARE
0-14703
16-1268674
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

52 SOUTH BROAD STREET, NORWICH, NEW YORK 13815
(Address of principal executive offices)

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

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 communication 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))
 


ITEM 2.02 Results of Operations and Financial Condition

On July 25, 2016, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended June 30, 2016.  That press release is furnished as Exhibit 99.1 hereto.

 ITEM 9.01 Financial Statements and Exhibits

(d)
The following is being furnished herewith:

Exhibit No.
Exhibit Description
   
Press release text of NBT Bancorp Inc. dated July 25, 2016

 SIGNATURES

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.
 
 
(Registrant)
 
     
 
/s/ Michael J. Chewens
 
 
Michael J. Chewens
 
 
Senior Executive Vice President
 
 
and Chief Financial Officer
 

Date: July 26, 2016
 
 


Exhibit 99.1
 
Page 1 of 13
 
FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS

Contact:
Martin A. Dietrich, CEO
 
Michael J. Chewens, CFO
 
NBT Bancorp Inc.
 
52 South Broad Street
 
Norwich, NY 13815
 
607-337-6119

NBT BANCORP INC. ANNOUNCES NET INCOME OF $19.9 MILLION FOR THE SECOND QUARTER OF 2016; ANNOUNCES 4.5% DIVIDEND INCREASE

NORWICH, NY (July 25, 2016) – NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported net income for the three months ended June 30, 2016 was $19.9 million, up from $18.9 million for the first quarter of 2016, and up from $19.3 million for the second quarter of 2015.  Diluted earnings per share for the three months ended June 30, 2016 was $0.46, as compared with $0.43 for the prior quarter, and $0.43 per share for the second quarter of 2015.

Net income for the six months ended June 30, 2016 was $38.8 million, up from $37.4 million for the same period last year.  Reported diluted earnings per share for the six months ended June 30, 2016 was $0.89, as compared with $0.84 for the same period in 2015.

Second Quarter 2016 Highlights:

· Net income for the second quarter of 2016 is up 5.4% compared to the first quarter of 2016 and up 3.3% compared to the second quarter of 2015

· Year to date loan growth was 5.3% (annualized)

· Average demand deposits for the six months ended June 30, 2016 were up 10.5% from the same period in 2015

“We’re pleased to report on our continued strong performance through the second quarter of 2016, particularly in the areas of income generation, loan growth and asset quality,” said NBT Chairman, President and CEO Martin Dietrich. “We remain focused on taking care of our customers, making strategic investments in the future while managing our overall cost structure, and creating opportunities to continue to grow organically across our footprint in markets like New York’s Thruway Corridor and New England. We also continue to find opportunities to engage in relationships with new customers who have been impacted by the disruption caused by mergers and acquisitions among other financial institutions.”

Net interest income was $65.8 million for the second quarter of 2016, up $1.2 million from the previous quarter, and up $3.1 million from the second quarter of 2015.  FTE net interest margin was 3.44% for the three months ended June 30, 2016, down from 3.47% for the previous quarter and down from 3.51% for the second quarter of 2015.  Average interest earning assets were up $203.0 million, or 2.7%, for the second quarter of 2016 as compared to the prior quarter, and up $538.4 million, or 7.4%, from the same period in 2015.  The increase from the first quarter of 2016 was driven primarily by loan production.  Annualized loan growth of 4.8% during the second quarter of 2016 was driven by growth in the commercial loan portfolio.  Yields on earning assets decreased by 2 basis points (“bps”) from 3.75% during the first quarter of 2016 to 3.73% for the second quarter of 2016.  Average interest bearing liabilities increased $209.9 million, or 3.9%, from the first quarter of 2016 to the second quarter of 2016, which was driven by a 2.1% increase in interest bearing deposits for the second quarter of 2016.  The rate paid on interest bearing liabilities of 0.41% during the second quarter of 2016 was unchanged from the first quarter of 2016 but slightly higher than the 0.39% paid during the second quarter of 2015 due primarily to an increase in borrowing costs.
 

Page 2 of 13
Net interest income was $130.4 million for the six months ended June 30, 2016, up $5.5 million from the same period in 2015.  FTE net interest margin was 3.46% for the six months ended June 30, 2016, down from 3.55% for the six months ended June 30, 2015.  Average interest earning assets were up $511.1 million, or 7.1%, for the six months ended June 30, 2016 as compared to the same period in 2015.  This increase from last year was driven primarily by 5.3% annualized loan growth during the first six months of 2016.  Yields on earning assets decreased from 3.84% during the first six months of 2015 to 3.74% for the first six months of 2016, but the decrease was more than offset by growth in earning assets resulting in a 4.4% increase in interest income for the six months ended June 30, 2016 as compared to the same period in 2015.  The yield compression was driven by a 9 bp decrease in loan yields from the first six months of 2015 to the first six months of 2016.  Average interest bearing liabilities increased $325.4 million, or 6.4%, from the six months ended June 30, 2015 to the six months ended June 30, 2016.  Total average deposits increased $374.9 million, or 5.9%, for the six months ended June 30, 2016 as compared to the same period last year driven primarily by growth in non-interest bearing demand deposits of 10.5%, combined with a $185.8 million increase in interest bearing deposits due to growth in money market deposit accounts, NOW accounts and savings accounts.  In addition, average short-term borrowings increased $142.9 million for the six months ended June 30, 2016 as compared to the same period last year.  The rates paid on interest bearing liabilities increased by 1 bp for the six months ended June 30, 2016 to 0.41% as compared to the 0.40% paid in the same period in 2015.  This increase resulted primarily from slightly higher rates paid on short-term borrowings and a change in the mix of interest bearing deposits.

Noninterest income for the three months ended June 30, 2016 was $29.6 million, up $1.2 million, or 4.4% from the prior quarter, and up $1.4 million, or 5.0%, from the second quarter of 2015.  The increase from the prior quarter was driven primarily by increases in other noninterest income, trust income, ATM and debit card fees, retirement plan administration fees, and service charges on deposit accounts.  Other noninterest income was up $1.2 million, or 34.1%, for the second quarter of 2016 as compared to the first quarter of 2016 due primarily to the gain recognized on the sale of equity investments of $0.8 million during the second quarter.  The liquidation of these investments made by the Company in order to comply with provisions contained within the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Trust revenue was up $0.6 million, or 12.8%, for the second quarter of 2016 as compared with the first quarter of 2016 due primarily to seasonality of trust revenue.  ATM and debit card fees were up $0.4 million, or 7.7%, for the second quarter of 2016 as compared to the first quarter of 2016 due primarily to increases in debit card transactions and number of accounts.  Retirement plan administration fees were up $0.3 million, or 8.0%, for the second quarter of 2016 as compared to the first quarter of 2016 due primarily to a downturn in market conditions in the first quarter of 2016 and subsequent recovery in the second quarter.  These increases were partially offset by a $1.3 million, or 19.0%, decrease in insurance revenue in the second quarter of 2016 as compared with the first quarter of 2016 due primarily to seasonality of insurance revenue.
 
Noninterest income for the six months ended June 30, 2016 was $58.0 million, up $3.2 million, or 5.9% from the same period last year.  The increase from the prior year was driven primarily by increases in other noninterest income, retirement plan administration fees, ATM and debit card fees, and insurance revenue.  Other noninterest income was up $1.8 million, or 27.8%, for the first half of 2016 as compared to the first half of 2015 due primarily to the above mentioned gain on the sale of equity investments and fee income from customer interest rate swaps.  Retirement plan administration fees were up $1.0 million, or 15.5%, for the first half of 2016 as compared to the same period in 2015 due primarily to the 2015 fourth quarter acquisition of Third Party Administrators, Inc. (“TPA, Inc.”).  ATM and debit card fees were up $0.6 million, or 6.6%, for the first half of 2016 as compared to the same period last year due primarily to increases in debit card activity and number of accounts.
 

Page 3 of 13
Noninterest expense for the three months ended June 30, 2016 was $60.4 million, up $2.2 million or 3.8% from the prior quarter and up $2.5 million from the second quarter of 2015.  The increase from the prior quarter was due primarily to increases in other operating expenses which increased $1.5 million or 33.4% from the first quarter of 2016 to the second quarter of 2016 due primarily to higher loan initiation fees due to the timing of loan originations and an increase in fraud losses.  In addition, salaries and employee benefits increased $0.5 million, or 1.5%, from the first quarter of 2016 to the second quarter of 2016 as contract terminations costs of $1.2 million were partly offset by $0.5 million in lower medical costs. These increases were partially offset by a decrease in occupancy expenses for the second quarter of 2016 from the first quarter of 2016 due to seasonal expenses.  Income tax expense for the three month period ended June 30, 2016 was $10.3 million, up $0.5 million from both the prior quarter and the second quarter of 2015.  The increase from the prior period was due primarily to a higher level of taxable income for the second quarter of 2016.  The effective tax rate was 34.0% for the first and second quarters of 2016, and 33.6% for the second quarter of 2015.

Noninterest expense for the six months ended June 30, 2016 was $118.7 million, up $3.0 million or 2.6% from the same period in 2015.  The increase is due primarily to an increase in salaries and benefit expense of $4.4 million or 7.1% due to increases in salaries, medical insurance costs, retirement plan costs and contract termination costs accrued in the second quarter of 2016.  Loan collection and other real estate owned expenses increased $0.7 million in the first six months of 2016 as compared to the same period in 2015 due to a higher level of gains on sales of real estate recorded in first half of 2015.  These increases were partially offset by a $0.7 million decrease in occupancy expenses for the first six months of 2016 as compared to the same period in 2015, driven by lower seasonal maintenance and utilities costs due to the mild winter conditions this year.  Income tax expense for the six month period ended June 30, 2016 was $20.0 million, up $1.0 million from the six month period ended June 30, 2015.  The increase from 2015 was due to a higher level of taxable income in 2016 compared to the first half of 2015.  The effective tax rate was 34.0% for the first six months of 2016 as compared to 33.6% for the first six months of 2015.

Asset Quality

Net charge-offs were $4.5 million for the three months ended June 30, 2016, down from $4.8 million for the prior quarter, but up slightly from $4.3 million for the second quarter of 2015.  Provision expense was $4.8 million for the three months ended June 30, 2016, as compared with $6.1 million for the prior quarter, and $3.9 million for the second quarter of 2015.  Annualized net charge-offs to average loans for the second quarter of 2016 was 0.30%, compared with 0.33% for the first quarter of 2016 and 0.30% for the second quarter of 2015.

Nonperforming loans to total loans was 0.65% at June 30, 2016, down 4 bps from the prior quarter, and down 12 bps from June 30, 2015.  Past due loans as a percentage of total loans were 0.60% at June 30, 2016 as compared to 0.61% at June 30, 2015.
 
The allowance for loan losses totaled $64.6 million at June 30, 2016, compared to $64.3 million at March 31, 2016, and $65.0 million at June 30, 2015.  The allowance for loan losses as a percentage of loans was 1.07% (1.16% excluding acquired loans with no related allowance recorded) at June 30, 2016, compared to 1.08% (1.18% excluding acquired loans with no related allowance recorded) at March 31, 2016 and 1.13% (1.24% excluding acquired loans with no related allowance recorded) at June 30, 2015.  The decrease in the allowance for loan losses as a percentage of loans from prior periods was due primarily to continued positive trends in asset quality metrics of the originated loan portfolio.
 

Page 4 of 13
Balance Sheet

Total assets were $8.6 billion at June 30, 2016, up $362.1 million, or 4.4% from December 31, 2015.  Loans were $6.0 billion at June 30, 2016, up $156.3 million, or 2.7%, from December 31, 2015.  Total deposits were $6.7 billion at June 30, 2016, up $135.6 million, or 2.1%, from December 31, 2015.  Stockholders’ equity was $896.4 million, representing a total equity-to-total assets ratio of 10.39% at June 30, 2016, compared with $882.0 million or a total equity-to-total assets ratio of 10.67% at December 31, 2015.

Stock Repurchase Program

The Company purchased 675,535 shares of its common stock during the six months ended June 30, 2016 at an average price of $25.45 per share under a previously announced plan.  As of June 30, 2016, there were 277,313 shares available for repurchase under this plan, which expires on December 31, 2016.  On March 28, 2016, the NBT Board of Directors authorized a new 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, 2017.

Dividend

The NBT Board of Directors approved a 2016 third-quarter cash dividend of $0.23 per share at a meeting held today.  The dividend, which represents a 4.5% increase, will be paid on September 15, 2016 to shareholders of record as of September 1, 2016.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $8.6 billion at June 30, 2016.  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 155 banking locations with offices in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine. EPIC Advisors, Inc., based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. NBT-Mang Insurance Agency, based in Norwich, N.Y., is a full-service insurance agency. More information about NBT and its divisions can be found on the Internet at: www.nbtbancorp.com, www.nbtbank.com, www.epic1st.com and www.nbtmang.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 Bancorp and its subsidiaries and on the information available to management at the time that these statements were made. There are a number of factors, many of which are beyond NBT’s control, that 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, the following possibilities: (1) competitive pressures among depository and other financial institutions may increase significantly; (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 the businesses in which NBT is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than NBT; 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 and equity as well as providing a fully taxable equivalent yield on securities and loans.  Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables.  Management believes that these non-GAAP measures provided 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)
 
   
2016
   
2015
 
Profitability:
 
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Diluted Earnings Per Share
 
$
0.46
   
$
0.43
   
$
0.43
   
$
0.45
   
$
0.43
 
Weighted Average Diluted
                                       
Common Shares Outstanding
   
43,453,674
     
43,707,489
     
44,072,049
     
44,262,426
     
44,530,123
 
Return on Average Assets (1)
   
0.94
%
   
0.92
%
   
0.93
%
   
0.97
%
   
0.97
%
Return on Average Equity (1)
   
9.00
%
   
8.63
%
   
8.58
%
   
8.97
%
   
8.81
%
Return on Average Tangible Common Equity (1)(2)
   
13.54
%
   
13.17
%
   
13.04
%
   
13.66
%
   
13.47
%
Net Interest Margin (1)(3)
   
3.44
%
   
3.47
%
   
3.42
%
   
3.48
%
   
3.51
%
 
   
Six Months ended June 30,
 
Profitability:
 
2016
   
2015
 
Diluted Earnings Per Share
 
$
0.89
   
$
0.84
 
Weighted Average Diluted
               
Common Shares Outstanding
   
43,583,837
     
44,589,358
 
Return on Average Assets (1)
   
0.93
%
   
0.96
%
Return on Average Equity (1)
   
8.81
%
   
8.63
%
Return on Average Tangible Common Equity (1)(4)
   
13.35
%
   
13.28
%
Net Interest Margin (1)(3)
   
3.46
%
   
3.55
%
 
 
(1)
Annualized
(2)
Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
(3)
Calculated on a Fully Tax Equivalent ("FTE") basis

   
2016
   
2015
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Net Income
 
$
19,909
   
$
18,891
   
$
19,127
   
$
19,851
   
$
19,281
 
Amortization of intangible assets (net of tax)
   
567
     
670
     
750
     
712
     
725
 
   
$
20,476
   
$
19,561
   
$
19,877
   
$
20,563
   
$
20,006
 
                                         
Average stockholders' equity
 
$
890,053
   
$
880,311
   
$
884,743
   
$
878,305
   
$
878,164
 
Less: average goodwill and other intangibles
   
281,709
     
282,751
     
279,904
     
281,048
     
282,272
 
Average tangible common equity
 
$
608,344
   
$
597,560
   
$
604,839
   
$
597,257
   
$
595,892
 

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

   
Six Months ended June 30,
 
   
2016
   
2015
 
Net Income
 
$
38,800
   
$
37,447
 
Amortization of intangible assets (net of tax)
   
1,236
     
1,510
 
   
$
40,036
   
$
38,957
 
                 
Average stockholders' equity
 
$
885,182
   
$
874,639
 
Less: average goodwill and other intangibles
   
282,230
     
282,887
 
Average tangible common equity
 
$
602,952
   
$
591,752
 
 
Note: Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.
 

Page 7 of 13
NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, dollars in thousands except per share data)

   
2016
   
2015
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Balance Sheet Data:
                             
Securities Available for Sale
 
$
1,271,596
   
$
1,259,874
   
$
1,174,544
   
$
1,058,397
   
$
1,129,249
 
Securities Held to Maturity
   
500,840
     
466,914
     
471,031
     
470,758
     
454,312
 
Net Loans
   
5,974,825
     
5,903,491
     
5,820,115
     
5,806,129
     
5,705,929
 
Total Assets
   
8,624,780
     
8,472,964
     
8,262,646
     
8,178,976
     
8,081,892
 
Total Deposits
   
6,740,416
     
6,905,042
     
6,604,843
     
6,600,627
     
6,371,479
 
Total Borrowings
   
877,926
     
579,441
     
674,124
     
594,163
     
743,893
 
Total Liabilities
   
7,728,427
     
7,591,237
     
7,380,642
     
7,302,760
     
7,205,921
 
Stockholders' Equity
   
896,353
     
881,727
     
882,004
     
876,216
     
875,971
 
                                         
Asset Quality:
                                       
Nonaccrual Loans
 
$
37,397
   
$
38,944
   
$
33,744
   
$
42,524
   
$
42,286
 
90 Days Past Due and Still Accruing
   
1,613
     
2,185
     
3,662
     
3,790
     
1,994
 
Total Nonperforming Loans
   
39,010
     
41,129
     
37,406
     
46,314
     
44,280
 
Other Real Estate Owned
   
2,211
     
2,716
     
4,666
     
4,855
     
4,649
 
Total Nonperforming Assets
   
41,221
     
43,845
     
42,072
     
51,169
     
48,929
 
Allowance for Loan Losses
   
64,568
     
64,318
     
63,018
     
64,859
     
64,959
 
                                         
Asset Quality Ratios (Total):
                                       
Allowance for Loan Losses to Total Loans
   
1.07
%
   
1.08
%
   
1.07
%
   
1.10
%
   
1.13
%
Total Nonperforming Loans to Total Loans
   
0.65
%
   
0.69
%
   
0.64
%
   
0.79
%
   
0.77
%
Total Nonperforming Assets to Total Assets
   
0.48
%
   
0.52
%
   
0.51
%
   
0.63
%
   
0.61
%
Allowance for Loan Losses to Total Nonperforming Loans
   
165.52
%
   
156.38
%
   
168.47
%
   
140.04
%
   
146.70
%
Past Due Loans to Total Loans
   
0.60
%
   
0.50
%
   
0.62
%
   
0.63
%
   
0.61
%
Net Charge-Offs to Average Loans (1)
   
0.30
%
   
0.33
%
   
0.51
%
   
0.35
%
   
0.30
%
                                         
Asset Quality Ratios (Originated) (2):
                                       
Allowance for Loan Losses to Loans
   
1.16
%
   
1.18
%
   
1.18
%
   
1.21
%
   
1.24
%
Nonperforming Loans to Loans
   
0.62
%
   
0.67
%
   
0.61
%
   
0.63
%
   
0.59
%
Allowance for Loan Losses to Nonperforming Loans
   
186.71
%
   
175.40
%
   
193.00
%
   
192.49
%
   
208.99
%
Past Due Loans to Loans
   
0.61
%
   
0.51
%
   
0.64
%
   
0.67
%
   
0.64
%
                                         
Capital:
                                       
Equity to Assets
   
10.39
%
   
10.41
%
   
10.67
%
   
10.71
%
   
10.84
%
Book Value Per Share
 
$
20.85
   
$
20.57
   
$
20.31
   
$
20.29
   
$
20.05
 
Tangible Book Value Per Share (3)
 
$
14.31
   
$
13.99
   
$
13.79
   
$
13.80
   
$
13.61
 
Tier 1 Leverage Ratio
   
9.03
%
   
9.15
%
   
9.44
%
   
9.34
%
   
9.57
%
Common Equity Tier 1 Capital Ratio
   
9.83
%
   
9.79
%
   
10.20
%
   
10.04
%
   
10.22
%
Tier 1 Capital Ratio
   
11.29
%
   
11.28
%
   
11.73
%
   
11.57
%
   
11.78
%
Total Risk-Based Capital Ratio
   
12.29
%
   
12.29
%
   
12.74
%
   
12.62
%
   
12.84
%
Common Stock Price (End of Period)
 
$
28.63
   
$
26.95
   
$
27.88
   
$
26.94
   
$
26.17
 

(1)
Annualized
(2)
Excludes acquired loans
(3)
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)
 
ASSETS
 
June 30,
2016
   
December 31,
2015
 
Cash and due from banks
 
$
151,775
   
$
130,593
 
Short term interest bearing accounts
   
19,828
     
9,704
 
Securities available for sale, at fair value
   
1,271,596
     
1,174,544
 
Securities held to maturity (fair value of $512,349 and $473,140 at
June 30, 2016 and December 31, 2015, respectively)
   
500,840
     
471,031
 
Trading securities
   
8,591
     
8,377
 
Federal Reserve and Federal Home Loan Bank stock
   
45,260
     
36,673
 
Loans
   
6,039,393
     
5,883,133
 
Less allowance for loan losses
   
64,568
     
63,018
 
Net loans
   
5,974,825
     
5,820,115
 
Premises and equipment, net
   
84,596
     
88,826
 
Goodwill
   
265,957
     
265,957
 
Intangible assets, net
   
15,241
     
17,265
 
Bank owned life insurance
   
163,149
     
117,044
 
Other assets
   
123,122
     
122,517
 
TOTAL ASSETS
 
$
8,624,780
   
$
8,262,646
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Deposits:
               
Demand (noninterest bearing)
 
$
2,031,078
   
$
1,998,165
 
Savings, NOW, and money market
   
3,826,626
     
3,697,851
 
Time
   
882,712
     
908,827
 
Total deposits
   
6,740,416
     
6,604,843
 
Short-term borrowings
   
666,424
     
442,481
 
Long-term debt
   
110,306
     
130,447
 
Junior subordinated debt
   
101,196
     
101,196
 
Other liabilities
   
110,085
     
101,675
 
Total liabilities
   
7,728,427
     
7,380,642
 
                 
Total stockholders' equity
   
896,353
     
882,004
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
8,624,780
   
$
8,262,646
 
 

Page 9 of 13
NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)

 
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2016
   
2015
   
2016
   
2015
 
Interest, fee and dividend income:
                       
Loans
 
$
62,449
   
$
59,873
   
$
123,679
   
$
119,391
 
Securities available for sale
   
5,976
     
5,144
     
11,963
     
10,089
 
Securities held to maturity
   
2,496
     
2,315
     
4,784
     
4,598
 
Other
   
454
     
395
     
903
     
875
 
Total interest, fee and dividend income
   
71,375
     
67,727
     
141,329
     
134,953
 
Interest expense:
                               
Deposits
   
3,605
     
3,517
     
7,202
     
7,090
 
Short-term borrowings
   
579
     
144
     
907
     
265
 
Long-term debt
   
773
     
836
     
1,606
     
1,662
 
Junior subordinated debt
   
641
     
545
     
1,260
     
1,085
 
Total interest expense
   
5,598
     
5,042
     
10,975
     
10,102
 
Net interest income
   
65,777
     
62,685
     
130,354
     
124,851
 
Provision for loan losses
   
4,780
     
3,898
     
10,878
     
7,540
 
Net interest income after provision for loan losses
   
60,997
     
58,787
     
119,476
     
117,311
 
Noninterest income:
                               
Insurance and other financial services revenue
   
5,625
     
5,836
     
12,571
     
12,210
 
Service charges on deposit accounts
   
4,166
     
4,285
     
8,105
     
8,357
 
ATM and debit card fees
   
4,934
     
4,679
     
9,517
     
8,927
 
Retirement plan administration fees
   
4,054
     
3,566
     
7,808
     
6,762
 
Trust
   
4,937
     
5,196
     
9,313
     
9,646
 
Bank owned life insurance income
   
1,271
     
928
     
2,562
     
2,487
 
Net securities gains
   
1
     
26
     
30
     
40
 
Other
   
4,626
     
3,699
     
8,075
     
6,320
 
Total noninterest income
   
29,614
     
28,215
     
57,981
     
54,749
 
Noninterest expense:
                               
Salaries and employee benefits
   
32,931
     
30,831
     
65,372
     
61,013
 
Occupancy
   
5,254
     
5,412
     
10,745
     
11,478
 
Data processing and communications
   
4,121
     
4,288
     
8,171
     
8,391
 
Professional fees and outside services
   
3,331
     
3,395
     
6,562
     
6,892
 
Equipment
   
3,547
     
3,316
     
7,007
     
6,565
 
Office supplies and postage
   
1,676
     
1,627
     
3,223
     
3,246
 
FDIC expenses
   
1,293
     
1,280
     
2,551
     
2,478
 
Advertising
   
595
     
734
     
1,099
     
1,453
 
Amortization of intangible assets
   
928
     
1,187
     
2,024
     
2,471
 
Loan collection and other real estate owned
   
845
     
22
     
1,550
     
894
 
Other operating
   
5,924
     
5,872
     
10,365
     
10,785
 
Total noninterest expense
   
60,445
     
57,964
     
118,669
     
115,666
 
Income before income taxes
   
30,166
     
29,038
     
58,788
     
56,394
 
Income taxes
   
10,257
     
9,757
     
19,988
     
18,947
 
Net income
 
$
19,909
   
$
19,281
   
$
38,800
   
$
37,447
 
Earnings Per Share:
                               
Basic
 
$
0.46
   
$
0.44
   
$
0.90
   
$
0.85
 
Diluted
 
$
0.46
   
$
0.43
   
$
0.89
   
$
0.84
 
 

Page 10 of 13
NBT Bancorp Inc. and Subsidiaries
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
 
   
2016
   
2015
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Interest, fee and dividend income:
                             
Loans
 
$
62,449
   
$
61,230
   
$
60,781
   
$
61,656
   
$
59,873
 
Securities available for sale
   
5,976
     
5,987
     
5,204
     
5,125
     
5,144
 
Securities held to maturity
   
2,496
     
2,288
     
2,317
     
2,318
     
2,315
 
Other
   
454
     
449
     
469
     
401
     
395
 
Total interest, fee and dividend income
   
71,375
     
69,954
     
68,771
     
69,500
     
67,727
 
Interest expense:
                                       
Deposits
   
3,605
     
3,597
     
3,613
     
3,554
     
3,517
 
Short-term borrowings
   
579
     
328
     
222
     
296
     
144
 
Long-term debt
   
773
     
833
     
848
     
845
     
836
 
Junior subordinated debt
   
641
     
619
     
576
     
560
     
545
 
Total interest expense
   
5,598
     
5,377
     
5,259
     
5,255
     
5,042
 
Net interest income
   
65,777
     
64,577
     
63,512
     
64,245
     
62,685
 
Provision for loan losses
   
4,780
     
6,098
     
5,779
     
4,966
     
3,898
 
Net interest income after provision for loan losses
   
60,997
     
58,479
     
57,733
     
59,279
     
58,787
 
Noninterest income:
                                       
Insurance and other financial services revenue
   
5,625
     
6,946
     
6,139
     
5,862
     
5,836
 
Service charges on deposit accounts
   
4,166
     
3,939
     
4,350
     
4,349
     
4,285
 
ATM and debit card fees
   
4,934
     
4,583
     
4,541
     
4,780
     
4,679
 
Retirement plan administration fees
   
4,054
     
3,754
     
4,135
     
3,249
     
3,566
 
Trust
   
4,937
     
4,376
     
4,769
     
4,611
     
5,196
 
Bank owned life insurance income
   
1,271
     
1,291
     
916
     
931
     
928
 
Net securities gains
   
1
     
29
     
3,044
     
3
     
26
 
Gain on the sale of Springstone investment
   
-
     
-
     
-
     
4,179
     
-
 
Other
   
4,626
     
3,449
     
4,577
     
3,297
     
3,699
 
Total noninterest income
   
29,614
     
28,367
     
32,471
     
31,261
     
28,215
 
Noninterest expense:
                                       
Salaries and employee benefits
   
32,931
     
32,441
     
33,078
     
30,227
     
30,831
 
Occupancy
   
5,254
     
5,491
     
5,291
     
5,326
     
5,412
 
Data processing and communications
   
4,121
     
4,050
     
3,990
     
4,207
     
4,288
 
Professional fees and outside services
   
3,331
     
3,231
     
3,378
     
3,137
     
3,395
 
Equipment
   
3,547
     
3,460
     
3,491
     
3,352
     
3,316
 
Office supplies and postage
   
1,676
     
1,547
     
1,545
     
1,576
     
1,627
 
FDIC expenses
   
1,293
     
1,258
     
1,312
     
1,355
     
1,280
 
Advertising
   
595
     
504
     
780
     
421
     
734
 
Amortization of intangible assets
   
928
     
1,096
     
1,228
     
1,165
     
1,187
 
Loan collection and other real estate owned
   
845
     
705
     
1,027
     
699
     
22
 
Other operating
   
5,924
     
4,441
     
5,499
     
8,426
     
5,872
 
Total noninterest expense
   
60,445
     
58,224
     
60,619
     
59,891
     
57,964
 
Income before income taxes
   
30,166
     
28,622
     
29,585
     
30,649
     
29,038
 
Income taxes
   
10,257
     
9,731
     
10,458
     
10,798
     
9,757
 
Net income
 
$
19,909
   
$
18,891
   
$
19,127
   
$
19,851
   
$
19,281
 
Earnings per share:
                                       
Basic
 
$
0.46
   
$
0.44
   
$
0.44
   
$
0.45
   
$
0.44
 
Diluted
 
$
0.46
   
$
0.43
   
$
0.43
   
$
0.45
   
$
0.43
 

Note:  Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.
 

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
 
     
Q2 - 2016 
     
Q1 - 2016
     
Q4 - 2015
   
Q3 - 2015
   
Q2 - 2015
 
ASSETS:
                                                           
Short-term interest bearing accounts
 
$
16,063
   
0.53
%
 
$
13,639
   
0.63
%
 
$
13,494
   
0.34
%
 
$
8,100
   
0.32
%
 
$
9,854
   
0.36
%
Securities available for sale (1)(2)
   
1,227,367
   
1.99
%
   
1,188,437
   
2.06
%
   
1,070,643
   
1.97
%
   
1,079,206
   
1.92
%
   
1,067,619
   
1.98
%
Securities held to maturity (1)
   
498,493
   
2.49
%
   
465,916
   
2.48
%
   
470,027
   
2.43
%
   
460,252
   
2.44
%
   
452,948
   
2.49
%
Investment in FRB and FHLB Banks
   
38,939
   
4.47
%
   
33,470
   
5.14
%
   
32,263
   
5.63
%
   
37,358
   
4.19
%
   
31,564
   
4.90
%
Loans (3)
   
6,007,677
   
4.19
%
   
5,884,073
   
4.20
%
   
5,872,011
   
4.12
%
   
5,824,311
   
4.21
%
   
5,688,159
   
4.24
%
Total interest earning assets
 
$
7,788,539
   
3.73
%
 
$
7,585,535
   
3.75
%
 
$
7,458,438
   
3.70
%
 
$
7,409,227
   
3.77
%
 
$
7,250,144
   
3.79
%
Other assets
   
747,074
           
699,194
           
693,981
           
690,768
           
685,523
       
Total assets
 
$
8,535,613
         
$
8,284,729
         
$
8,152,419
         
$
8,099,995
         
$
7,935,667
       
                                                                       
LIABILITIES AND STOCKHOLDERS' EQUITY:
                                                                     
Money market deposit accounts
 
$
1,709,644
   
0.22
%
 
$
1,653,930
   
0.22
%
 
$
1,626,644
   
0.22
%
 
$
1,557,651
   
0.22
%
 
$
1,598,898
   
0.20
%
NOW deposit accounts
   
1,073,881
   
0.05
%
   
1,051,959
   
0.05
%
   
1,039,563
   
0.05
%
   
963,744
   
0.05
%
   
974,504
   
0.05
%
Savings deposits
   
1,143,654
   
0.06
%
   
1,105,480
   
0.06
%
   
1,079,757
   
0.06
%
   
1,085,680
   
0.06
%
   
1,080,954
   
0.06
%
Time deposits
   
906,250
   
1.06
%
   
921,754
   
1.04
%
   
918,875
   
1.05
%
   
939,542
   
1.01
%
   
968,714
   
1.00
%
Total interest bearing deposits
 
$
4,833,429
   
0.30
%
 
$
4,733,123
   
0.31
%
 
$
4,664,839
   
0.31
%
 
$
4,546,617
   
0.31
%
 
$
4,623,070
   
0.31
%
Short-term borrowings
   
484,590
   
0.48
%
   
369,443
   
0.36
%
   
332,742
   
0.26
%
   
456,663
   
0.26
%
   
302,693
   
0.19
%
Long-term debt
   
124,851
   
2.55
%
   
130,420
   
2.57
%
   
130,522
   
2.58
%
   
130,680
   
2.56
%
   
130,743
   
2.56
%
Junior subordinated debt
   
101,196
   
2.49
%
   
101,196
   
2.46
%
   
101,196
   
2.26
%
   
101,196
   
2.20
%
   
101,196
   
2.16
%
Total interest bearing liabilities
 
$
5,544,066
   
0.41
%
 
$
5,334,182
   
0.41
%
 
$
5,229,299
   
0.40
%
 
$
5,235,156
   
0.40
%
 
$
5,157,702
   
0.39
%
Demand deposits
   
1,994,601
           
1,970,315
           
1,944,820
           
1,894,555
           
1,815,705
       
Other liabilities
   
106,893
           
99,921
           
93,557
           
91,979
           
84,096
       
Stockholders' equity
   
890,053
           
880,311
           
884,743
           
878,305
           
878,164
       
Total liabilities and stockholders' equity
 
$
8,535,613
         
$
8,284,729
         
$
8,152,419
         
$
8,099,995
         
$
7,935,667
       
                                                                       
Interest rate spread
         
3.32
%
         
3.34
%
         
3.30
%
         
3.37
%
         
3.40
%
Net interest margin
         
3.44
%
         
3.47
%
         
3.42
%
         
3.48
%
         
3.51
%

(1)
Securities are shown at average amortized cost
(2)
Excluding unrealized gains or losses
(3)
For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding
Note:  Interest income for tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory Federal income tax rate of 35%
 

Page 12 of 13
NBT Bancorp Inc. and Subsidiaries
AVERAGE YEAR-TO-DATE BALANCE SHEETS
(unaudited, dollars in thousands)
 
   
Average
Balance
   
Interest
   
Yield/
Rates
   
Average
Balance
   
Interest
   
Yield/
Rates
 
Six Months ended June 30,
 
2016
   
2015
 
ASSETS:
                                   
Short-term interest bearing accounts
 
$
14,851
   
$
43
     
0.58
%
 
$
9,507
   
$
16
     
0.33
%
Securities available for sale (1)(2)
   
1,207,902
     
12,174
     
2.03
%
   
1,043,385
     
10,349
     
2.00
%
Securities held to maturity (1)
   
482,204
     
5,953
     
2.48
%
   
453,947
     
5,580
     
2.48
%
Investment in FRB and FHLB Banks
   
36,205
     
860
     
4.78
%
   
31,250
     
859
     
5.54
%
Loans (3)
   
5,945,875
     
124,028
     
4.19
%
   
5,637,829
     
119,770
     
4.28
%
Total interest earning assets
 
$
7,687,037
   
$
143,058
     
3.74
%
   
7,175,918
   
$
136,574
     
3.84
%
Other assets
   
723,134
                     
690,777
                 
Total assets
 
$
8,410,171
                   
$
7,866,695
                 
                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY:
                                               
Money market deposit accounts
 
$
1,681,787
   
$
1,832
     
0.22
%
 
$
1,571,843
   
$
1,603
     
0.21
%
NOW deposit accounts
   
1,062,920
     
266
     
0.05
%
   
973,390
     
249
     
0.05
%
Savings deposits
   
1,124,567
     
322
     
0.06
%
   
1,060,606
     
324
     
0.06
%
Time deposits
   
914,002
     
4,782
     
1.05
%
   
991,681
     
4,914
     
1.00
%
Total interest bearing deposits
 
$
4,783,276
   
$
7,202
     
0.30
%
 
$
4,597,520
   
$
7,090
     
0.31
%
Short-term borrowings
   
427,016
     
907
     
0.43
%
   
284,160
     
265
     
0.19
%
Long-term debt
   
127,636
     
1,606
     
2.53
%
   
130,811
     
1,662
     
2.56
%
Junior subordinated debt
   
101,196
     
1,260
     
2.50
%
   
101,196
     
1,085
     
2.16
%
Total interest bearing liabilities
 
$
5,439,124
   
$
10,975
     
0.41
%
 
$
5,113,687
   
$
10,102
     
0.40
%
Demand deposits
   
1,982,458
                     
1,793,328
                 
Other liabilities
   
103,408
                     
85,041
                 
Stockholders' equity
   
885,181
                     
874,639
                 
Total liabilities and stockholders' equity
 
$
8,410,171
                   
$
7,866,695
                 
Net interest income (FTE)
           
132,083
                     
126,472
         
Interest rate spread
                   
3.33
%
                   
3.44
%
Net interest margin
                   
3.46
%
                   
3.55
%
Taxable equivalent adjustment
           
1,729
                     
1,621
         
Net interest income
         
$
130,354
                   
$
124,851
         

(1)
Securities are shown at average amortized cost
(2)
Excluding unrealized gains or losses
(3)
For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding
Note:  Interest income for tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory Federal income tax rate of 35%
 

Page 13 of 13
NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED LOAN BALANCES
(unaudited, dollars in thousands)

   
2016
   
2015
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Residential real estate mortgages
 
$
1,219,388
   
$
1,211,821
   
$
1,196,780
   
$
1,177,195
   
$
1,154,416
 
Commercial
   
1,176,008
     
1,168,191
     
1,159,089
     
1,167,007
     
1,147,586
 
Commercial real estate
   
1,497,683
     
1,448,920
     
1,430,618
     
1,435,378
     
1,423,489
 
Consumer
   
1,629,836
     
1,620,669
     
1,568,204
     
1,549,844
     
1,495,160
 
Home equity
   
516,478
     
518,208
     
528,442
     
541,564
     
550,237
 
Total loans
 
$
6,039,393
   
$
5,967,809
   
$
5,883,133
   
$
5,870,988
   
$
5,770,888
 
 
 



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