NORWICH, N.Y., Jan. 28, 2019 (GLOBE NEWSWIRE) — NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported record net income and diluted earnings per share for the year ended December 31, 2018.
Net income for the year ended December 31, 2018 was $112.6 million, up 37.0% from $82.2 million for the prior year driven by net interest margin expansion, loan growth, strong asset quality and a reduction in tax expense due to tax reform. Diluted earnings per share for the year ended December 31, 2018 was $2.56, as compared with $1.87 for the prior year, an increase of 37%.
Net income for the three months ended December 31, 2018 was $28.7 million, down 3.9% from $29.8 million for the third quarter of 2018 and up 62.5% from $17.6 million for the fourth quarter of 2017. Diluted earnings per share for the three months ended December 31, 2018 was $0.65, as compared with $0.68 for the prior quarter, a decrease of 4.4%, and $0.40 for the fourth quarter of 2017, an increase of 63%.
Highlights:
- Diluted earnings per share up 37% from prior year
- Earnings in excess of $100 million for the first time in the 163 year history of the Company
- Loan growth for the year ended December 31, 2018 of 4.6%
- Average demand deposits for the year ended December 31, 2018 up 4.7% over 2017
- FTE net interest margin of 3.58% for year ended December 31, 2018 up 11 bps from 2017
- Recognized a one-time $5.5 million tax benefit in the fourth quarter
- Recorded a $6.6 million loss on securities sold in the fourth quarter related to the restructuring of the investment portfolio
- Full cycle deposit beta of 6.9% through the quarter ending December 31, 20181
“As our 2018 results demonstrate, NBT had a strong year. We achieved record net income for the sixth consecutive year and a new annual EPS record,” said NBT President and CEO John H. Watt, Jr. “This strong performance was delivered by a focused and aligned team across all lines of business. They concentrate on the fundamentals of our business, including low-cost deposit gathering, loan growth and strong asset quality, while continuing to grow our fee-based business, including the RPS acquisition in the second quarter. At the same time we continued to invest in enhancing the customer experience and digitizing our offerings. As we continue to grow the Company and build shareholder value, we were pleased to increase the cash dividend paid to shareholders on two occasions in 2018 for a combined increase of 13%.”
Net interest income for the year ended 2018 was $305.6 million, up $22.1 million, or 7.8%, from 2017. The fully taxable equivalent (“FTE”) net interest margin of 3.58% for the year ended December 31, 2018, was up from 3.47% for the year ended December 31, 2017 primarily due to asset yields increasing 24 basis points (“bps”), more than offsetting the 20 bp rise in the cost of interest bearing liabilities. Average interest earning assets were up $320.1 million, or 3.9%, for the year ended December 31, 2018, as compared to the same period in 2017, driven by a $406.3 million increase in loans that was partially offset by a $81.4 million decrease in securities. Interest income increased $34.8 million, or 11.3%, due to the increase in earning assets combined with a 24 bp improvement in loan yields. Interest expense was up $12.7 million, or 49.1%, for the year ended December 31, 2018 as compared to the same period in 2017 resulting primarily from a 20 bp increase in rates on interest bearing liabilities driven by higher borrowing costs and a 14 bp increase in the cost of interest bearing deposits, combined with an increase in average interest bearing liabilities of $173.0 million. The Federal Reserve has raised its target fed funds rate nine times from December 2015 through December 2018 for a total of 225 bps. During this same cycle of increasing rates, the Company’s deposit rates have increased by 15 bps, resulting in a full cycle deposit beta of 6.9%.
Net interest income was $78.9 million for the fourth quarter of 2018, up $1.3 million, or 1.7%, from the previous quarter. The FTE net interest margin was 3.61% for the three months ended December 31, 2018, up 4 bps from the previous quarter, as higher rates on average earning assets were partially offset by higher funding costs. Interest income increased $2.3 million, or 2.6%, as the yield on average earning assets increased 9 bps from the prior quarter to 4.14%, combined with an increase in average interest earning assets of $38.7 million, or 0.4%, driven by the increase in average loans of $36.8 million. Interest expense was up $1.0 million, or 9.1%, as the cost of interest bearing liabilities increased 6 bps to 0.77% for the quarter ended December 31, 2018, driven by interest-bearing deposit costs increasing 6 bps with increased short-term borrowings cost.
Net interest income was $78.9 million for the fourth quarter of 2018, up $5.4 million, or 7.4%, from the fourth quarter of 2017. The FTE net interest margin of 3.61% was up 9 bps from the fourth quarter of 2017. Interest income increased $10.3 million, or 12.8%, as the yield on average earning assets increased 30 bps from the same period in 2017, and average interest earning assets increased $338.2 million, or 4.0%, primarily due to the $347.9 million increase in average loans. Interest expense increased $4.9 million, or 71.8%, as the cost of interest bearing liabilities increased 31 bps, driven by interest-bearing deposit costs increasing 23 bps combined with the increase in short-term borrowing costs.
Noninterest income for the year ended December 31, 2018 was $124.8 million, up $3.5 million, or 2.9%, from the same period in 2017. The increase from the prior year was driven by higher retirement plan administration fees and an increase in other noninterest income that was partially offset by net securities losses in 2018. Retirement plan administration fees increased due to the acquisitions of Retirement Plan Services, LLC (“RPS”) in the second quarter of 2018 and of Downeast Pension Services in the second quarter of 2017. In the fourth quarter of 2018, the Company restructured the investment portfolio by selling $109 million lower yielding bonds and reinvesting the proceeds in higher yielding bonds, which resulted in a $6.6 million loss on securities sold. Other noninterest income in 2018 increased compared to the same period of 2017 due to non-recurring gains recognized in 2018. Excluding net securities (losses) gains, noninterest income for the year ended December 31, 2018 would have been $131.1 million, up $11.7 million, or 9.8%, from the same period in 2017.
Noninterest income for the three months ended December 31, 2018 was $25.9 million, down $7.4 million, or 22.3%, from the prior quarter and down $5.5 million, or 17.6%, from the fourth quarter of 2017. Excluding net securities (losses) gains, noninterest income for the three months ended December 31, 2018 would have been $32.9 million, comparable to the prior quarter and up $3.3 million, or 11.0% from the fourth quarter of 2017. The increase from the fourth quarter of 2017 was primarily due to higher retirement plan administration fees resulting from the acquisition of RPS in the second quarter of 2018 and higher other noninterest income due primarily to swap fees.
Noninterest expense for the year ended December 31, 2018 was $264.6 million, up $18.9 million, or 7.7%, from the same period in 2017. The increase from the prior year was driven by higher salaries and employee benefits due to the retirement plan services acquisitions in 2018 and 2017, higher incentive compensation and wage increases for over 60% of our employees from the Company’s commitment to invest a portion of the tax reform benefit in our employees.
Noninterest expense for the three months ended December 31, 2018 was $68.9 million, up $2.4 million, or 3.6%, from the prior quarter and up $5.5 million, or 8.6%, from the fourth quarter of 2017. The increase from the fourth quarter of 2017 was driven by an increase in salaries and employee benefits expenses primarily due to the RPS acquisition, wage increases related to tax reform initiatives and higher incentive compensation associated with business growth. The increase from the prior quarter was primarily due to increases in salaries and employee benefits due to an increase in medical costs, an increase in professional fees and advertising expense due to timing of initiatives and an increase in other noninterest expense. The increase in other noninterest expense was primarily due to the timing of contributions and $0.5 million in non-recurring items.
Income tax expense for the year ended December 31, 2018 was $24.4 million, down $21.6 million, or 46.9%, from the same period of 2017. The effective tax rate of 17.8% in 2018 was down from 35.9% for the same period in the prior year. The decrease in income tax expense from the prior year was due to the lower effective tax rate resulting from the Tax Cuts and Jobs Act (“TCJA”), a $5.5 million tax benefit recorded in the fourth quarter of 2018 primarily related to one-time income tax return accounting method changes during the fourth quarter of 2018, combined with the $4.4 million estimated non-cash charge related to the enactment of the TCJA in 2017 for the Company’s deferred tax assets due to the tax rate reduction. This was partially offset by a higher level of taxable income and lower tax benefit from equity-based transactions. Excluding the tax benefit from equity-based transactions, the tax benefit in the fourth quarter of 2018 and the TCJA charge in 2017, the effective tax rate was 22.2% and 33.8% for the years ending December 31, 2018 and 2017, respectively.
Income tax expense for the three months ended December 31, 2018 was $0.7 million, down $7.8 million, or 91.4%, from the prior quarter and down $15.0 million, or 95.3%, from the fourth quarter of 2017. The effective tax rate of 2.5% for the fourth quarter of 2018 was down from 22.3% for the third quarter of 2018 and down from 47.1% for the fourth quarter of 2017. The decrease in income tax expense from the prior quarter was primarily due to one-time income tax return accounting method changes during the fourth quarter of 2018. The decrease in income tax expense from the fourth quarter of 2017 was due to the lower effective tax rate resulting from the TCJA, and the income tax return accounting method changes during the fourth quarter of 2018, combined with the $4.4 million estimated non-cash charge related to the enactment of the TCJA in 2017 for the revaluation of the Company’s deferred tax assets due to the tax rate reduction. This was partially offset by a higher level of taxable income.
Asset Quality
Net charge-offs of $25.8 million for the year ended December 31, 2018 were down as compared to $26.7 million for the same period of 2017. Provision expense was $28.8 million for the year ended December 31, 2018, as compared with $31.0 million for the same period of 2017. Annualized net charge-offs to average loans for the year ended December 31, 2018 was 0.38% as compared with 0.42% for the same period of 2017.
Net charge-offs of $6.8 million for the three months ended December 31, 2018 were up as compared to $5.7 million for the prior quarter and comparable to the $7.0 million for the fourth quarter of 2017. Provision expense was higher at $6.5 million for the three months ended December 31, 2018, as compared with $6.0 million for the prior quarter and lower compared with $8.2 million for the fourth quarter of 2017. Annualized net charge-offs to average loans for the fourth quarter of 2018 was 0.39%, up from 0.33% for the prior quarter and down from 0.43% for the fourth quarter of 2017.
Nonperforming loans to total loans was 0.44% at December 31, 2018, up 3 bps from 0.41% for the prior quarter and down 3 bps from 0.47% at December 31, 2017. Past due loans as a percentage of total loans were 0.55% at December 31, 2018, up from 0.53% at September 30, 2018 and down from 0.63% at December 31, 2017.
The allowance for loan losses totaled $72.5 million at December 31, 2018, compared to $72.8 million at September 30, 2018 and $69.5 million at December 31, 2017. The allowance for loan losses as a percentage of loans was 1.05% (1.10% excluding acquired loans) at December 31, 2018, compared to 1.06% (1.11% excluding acquired loans) at September 30, 2018 and 1.06% (1.12% excluding acquired loans) at December 31, 2017.
Balance Sheet
Total assets were $9.6 billion at December 31, 2018, up $419.6 million, or 4.6%, from December 31, 2017. Loans were $6.9 billion at December 31, 2018, up $304.1 million, or 4.6%, from December 31, 2017. Total deposits were $7.4 billion at December 31, 2018, up $197.6 million, or 2.8%, from December 31, 2017, reflecting growth in core and municipal deposits. Stockholders’ equity was $1.0 billion, representing a total equity-to-total assets ratio of 10.65% at December 31, 2018, compared with $958.2 million or a total equity-to-total assets ratio of 10.49% at December 31, 2017.
Dividend
The Board of Directors approved a first-quarter 2019 cash dividend of $0.26 per share at a meeting held today. The dividend will be paid on March 15, 2019 to shareholders of record as of March 1, 2019.
Corporate Overview
NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.6 billion at December 31, 2018. 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 151 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine. EPIC Retirement Plan Services, based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. NBT Insurance Agency, LLC, based in Norwich, N.Y., is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epic1st.com and www.nbtinsurance.com.
Forward-Looking Statements
This news release contains forward-looking statements. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of NBT and its subsidiaries and on the information available to management at the time that these statements were made. There are a number of factors, many of which are beyond NBT’s control, which could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others: (1) competitive pressures among depository and other financial institutions may increase significantly, including as a result of competitors having greater financial resources than NBT; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards and tax laws, may adversely affect business and results; (6) NBT’s ability to successfully integrate acquired businesses and employees; and (7) adverse changes may occur in the securities markets or with respect to inflation. Forward-looking statements speak only as of the date they are made. Except as required by law, NBT does not update forward-looking statements to reflect subsequent circumstances or events.
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 FTE yield on securities and loans. Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of NBT’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider NBT’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of NBT.
1 The change in the Company’s quarterly deposit costs from December 31, 2015 to December 31, 2018 of 0.15% divided by the change in Federal Reserve’s target fed funds rate from December 2015 to December 2018 of 2.25%
Contact:
John H. Watt, Jr., President and CEO
Michael J. Chewens, CFO
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
607-337-6119
| NBT Bancorp Inc. and Subsidiaries | ||||||||||||||||
| Selected Financial Data | ||||||||||||||||
| (unaudited, dollars in thousands except per share data) | ||||||||||||||||
| 2018 | 2017 | |||||||||||||||
| Profitability: | 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Diluted earnings per share | $ | 0.65 | $ | 0.68 | $ | 0.64 | $ | 0.59 | $ | 0.40 | ||||||
| Weighted average diluted common shares outstanding | 44,059,796 | 44,050,557 | 44,016,940 | 43,975,248 | 43,957,571 | |||||||||||
| Return on average assets (1) | 1.20% | 1.25% | 1.21% | 1.15% | 0.77% | |||||||||||
| Return on average equity (1) | 11.34% | 11.96% | 11.64% | 10.99% | 7.27% | |||||||||||
| Return on average tangible common equity (1)(3) | 16.37% | 17.42% | 17.08% | 15.95% | 10.65% | |||||||||||
| Net interest margin (1)(2) | 3.61% | 3.57% | 3.57% | 3.57% | 3.52% | |||||||||||
| 12 Months ended December 31, | ||||||||||||||||
| Profitability: | 2018 | 2017 | ||||||||||||||
| Diluted earnings per share | $ | 2.56 | $ | 1.87 | ||||||||||||
| Weighted average diluted common shares outstanding | 44,019,698 | 43,904,520 | ||||||||||||||
| Return on average assets | 1.20% | 0.91% | ||||||||||||||
| Return on average equity | 11.49% | 8.71% | ||||||||||||||
| Return on average tangible common equity (4) | 16.71% | 12.82% | ||||||||||||||
| Net interest margin (2) | 3.58% | 3.47% | ||||||||||||||
| (1) Annualized. | ||||||||||||||||
| (2) Calculated on a FTE basis. | ||||||||||||||||
| (3) Non-GAAP measure – excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows: | ||||||||||||||||
| 2018 | 2017 | |||||||||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | ||||||||||||
| Net income | $ | 28,652 | $ | 29,807 | $ | 28,121 | $ | 25,986 | $ | 17,637 | ||||||
| Amortization of intangible assets (net of tax) | 734 | 791 | 822 | 686 | 594 | |||||||||||
| Net income, excluding intangibles amortization | $ | 29,386 | $ | 30,598 | $ | 28,943 | $ | 26,672 | $ | 18,231 | ||||||
| Average stockholders’ equity | $ | 1,002,822 | $ | 988,551 | $ | 969,029 | $ | 959,044 | $ | 962,660 | ||||||
| Less: average goodwill and other intangibles | 290,854 | 291,814 | 289,250 | 281,027 | 283,554 | |||||||||||
| Average tangible common equity | $ | 711,968 | $ | 696,737 | $ | 679,779 | $ | 678,017 | $ | 679,106 | ||||||
| (4) Non-GAAP measure – excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows: | ||||||||||||||||
| 12 Months ended December 31, | ||||||||||||||||
| 2018 | 2017 | |||||||||||||||
| Net income | $ | 112,566 | $ | 82,151 | ||||||||||||
| Amortization of intangible assets (net of tax) | 3,032 | 2,446 | ||||||||||||||
| Net income, excluding intangibles amortization | $ | 115,598 | $ | 84,597 | ||||||||||||
| Average stockholders’ equity | $ | 980,005 | $ | 943,676 | ||||||||||||
| Less: average goodwill and other intangibles | 288,273 | 283,573 | ||||||||||||||
| Average tangible common equity | $ | 691,732 | $ | 660,103 | ||||||||||||
| Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares. | ||||||||||||||||
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||||
| Selected Financial Data | |||||||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||||||
| 2018 | 2017 | ||||||||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Balance sheet data: | |||||||||||||||
| Securities available for sale | $ | 998,496 | $ | 1,101,074 | $ | 1,192,939 | $ | 1,265,912 | $ | 1,255,925 | |||||
| Securities held to maturity | 783,599 | 659,949 | 544,163 | 487,126 | 484,073 | ||||||||||
| Net loans | 6,815,204 | 6,814,457 | 6,785,721 | 6,575,522 | 6,514,139 | ||||||||||
| Total assets | 9,556,363 | 9,547,284 | 9,467,138 | 9,230,834 | 9,136,812 | ||||||||||
| Total deposits | 7,368,211 | 7,441,290 | 7,344,449 | 7,393,928 | 7,170,636 | ||||||||||
| Total borrowings | 1,046,616 | 986,656 | 1,028,971 | 776,032 | 909,188 | ||||||||||
| Total liabilities | 8,538,454 | 8,553,129 | 8,488,209 | 8,278,104 | 8,178,635 | ||||||||||
| Stockholders’ equity | 1,017,909 | 994,155 | 978,929 | 952,730 | 958,177 | ||||||||||
| Asset quality: | |||||||||||||||
| Nonaccrual loans | $ | 25,487 | $ | 23,301 | $ | 24,006 | $ | 25,426 | $ | 25,708 | |||||
| 90 days past due and still accruing | 5,085 | 4,734 | 2,209 | 2,934 | 5,410 | ||||||||||
| Total nonperforming loans | 30,572 | 28,035 | 26,215 | 28,360 | 31,118 | ||||||||||
| Other real estate owned | 2,441 | 3,271 | 4,349 | 4,949 | 4,529 | ||||||||||
| Total nonperforming assets | 33,013 | 31,306 | 30,564 | 33,309 | 35,647 | ||||||||||
| Allowance for loan losses | 72,505 | 72,805 | 72,450 | 70,200 | 69,500 | ||||||||||
| Asset quality ratios (total): | |||||||||||||||
| Allowance for loan losses to total loans | 1.05% | 1.06% | 1.06% | 1.06% | 1.06% | ||||||||||
| Total nonperforming loans to total loans | 0.44% | 0.41% | 0.38% | 0.43% | 0.47% | ||||||||||
| Total nonperforming assets to total assets | 0.35% | 0.33% | 0.32% | 0.36% | 0.39% | ||||||||||
| Allowance for loan losses to total nonperforming loans | 237.16% | 259.69% | 276.37% | 247.53% | 223.34% | ||||||||||
| Past due loans to total loans | 0.55% | 0.53% | 0.50% | 0.53% | 0.63% | ||||||||||
| Net charge-offs to average loans (1) | 0.39% | 0.33% | 0.39% | 0.42% | 0.43% | ||||||||||
| Asset quality ratios (originated) (2): | |||||||||||||||
| Allowance for loan losses to loans | 1.10% | 1.11% | 1.11% | 1.12% | 1.12% | ||||||||||
| Nonperforming loans to loans | 0.43% | 0.39% | 0.36% | 0.41% | 0.46% | ||||||||||
| Allowance for loan losses to nonperforming loans | 254.92% | 285.86% | 306.08% | 273.54% | 243.85% | ||||||||||
| Past due loans to loans | 0.56% | 0.53% | 0.50% | 0.53% | 0.65% | ||||||||||
| Capital: | |||||||||||||||
| Equity to assets | 10.65% | 10.41% | 10.34% | 10.32% | 10.49% | ||||||||||
| Book value per share | $ | 23.31 | $ | 22.77 | $ | 22.43 | $ | 21.84 | $ | 22.01 | |||||
| Tangible book value per share (3) | $ | 16.66 | $ | 16.10 | $ | 15.73 | $ | 15.41 | $ | 15.54 | |||||
| Tier 1 leverage ratio | 9.52% | 9.36% | 9.25% | 9.26% | 9.14% | ||||||||||
| Common equity tier 1 capital ratio | 10.49% | 10.28% | 10.04% | 10.12% | 10.06% | ||||||||||
| Tier 1 capital ratio | 11.79% | 11.58% | 11.35% | 11.48% | 11.42% | ||||||||||
| Total risk-based capital ratio | 12.78% | 12.58% | 12.34% | 12.47% | 12.42% | ||||||||||
| Common stock price (end of period) | $ | 34.59 | $ | 38.38 | $ | 38.15 | $ | 35.48 | $ | 36.80 | |||||
| (1) Annualized. | |||||||||||||||
| (2) Non-GAAP measure – Excludes acquired loans. | |||||||||||||||
| (3) Non-GAAP measure – Stockholders’ equity less goodwill and intangible assets divided by common shares outstanding. | |||||||||||||||
| NBT Bancorp Inc. and Subsidiaries | |||||
| Consolidated Balance Sheets | |||||
| (unaudited, dollars in thousands) | |||||
| December 31, | December 31, | ||||
| Assets: | 2018 | 2017 | |||
| Cash and due from banks | $ | 175,550 | $ | 156,852 | |
| Short-term interest bearing accounts | 5,405 | 2,812 | |||
| Equity securities, at fair value (1) | 23,053 | – | |||
| Securities available for sale, at fair value (1) | 998,496 | 1,255,925 | |||
| Securities held to maturity (fair value $778,675 and $481,871) | 783,599 | 484,073 | |||
| Trading securities (1) | – | 11,467 | |||
| Federal Reserve Bank and Federal Home Loan Bank stock | 53,229 | 46,706 | |||
| Loans held for sale | 6,943 | 1,134 | |||
| Loans | 6,887,709 | 6,583,639 | |||
| Less allowance for loan losses | 72,505 | 69,500 | |||
| Net loans | $ | 6,815,204 | $ | 6,514,139 | |
| Premises and equipment, net | 78,970 | 81,305 | |||
| Goodwill | 274,769 | 268,043 | |||
| Intangible assets, net | 15,599 | 13,420 | |||
| Bank owned life insurance | 177,479 | 172,388 | |||
| Other assets | 148,067 | 128,548 | |||
| Total assets | $ | 9,556,363 | $ | 9,136,812 | |
| Liabilities and stockholders’ equity: | |||||
| Demand (noninterest bearing) | $ | 2,361,099 | $ | 2,286,892 | |
| Savings, NOW and money market | 4,076,434 | 4,076,978 | |||
| Time | 930,678 | 806,766 | |||
| Total deposits | $ | 7,368,211 | $ | 7,170,636 | |
| Short-term borrowings | 871,696 | 719,123 | |||
| Long-term debt | 73,724 | 88,869 | |||
| Junior subordinated debt | 101,196 | 101,196 | |||
| Other liabilities | 123,627 | 98,811 | |||
| Total liabilities | $ | 8,538,454 | $ | 8,178,635 | |
| Total stockholders’ equity | $ | 1,017,909 | $ | 958,177 | |
| Total liabilities and stockholders’ equity | $ | 9,556,363 | $ | 9,136,812 | |
| (1) Available for sale and trading equity securities amounts reclassified from securities available for sale and trading securities to equity securities for the current period, related to the adoption of Accounting Standard Update No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, in the first quarter of 2018. | |||||
| NBT Bancorp Inc. and Subsidiaries | |||||||||||
| Consolidated Statements of Income | |||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||
| December 31, | December 31, | ||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||
| Interest, fee and dividend income: | |||||||||||
| Interest and fees on loans | $ | 78,963 | $ | 69,697 | $ | 300,827 | $ | 267,096 | |||
| Securities available for sale (1) | 6,332 | 7,059 | 26,920 | 28,564 | |||||||
| Securities held to maturity | 4,344 | 2,671 | 13,242 | 10,934 | |||||||
| Other | 885 | 803 | 3,266 | 2,813 | |||||||
| Total interest, fee and dividend income | $ | 90,524 | $ | 80,230 | $ | 344,255 | $ | 309,407 | |||
| Interest expense: | |||||||||||
| Deposits | $ | 6,977 | $ | 3,817 | $ | 22,144 | $ | 14,475 | |||
| Short-term borrowings | 3,131 | 1,621 | 10,552 | 5,996 | |||||||
| Long-term debt | 431 | 505 | 1,790 | 2,299 | |||||||
| Junior subordinated debt | 1,110 | 836 | 4,140 | 3,144 | |||||||
| Total interest expense | $ | 11,649 | $ | 6,779 | $ | 38,626 | $ | 25,914 | |||
| Net interest income | $ | 78,875 | $ | 73,451 | $ | 305,629 | $ | 283,493 | |||
| Provision for loan losses | 6,528 | 8,153 | 28,828 | 30,988 | |||||||
| Net interest income after provision for loan losses | $ | 72,347 | $ | 65,298 | $ | 276,801 | $ | 252,505 | |||
| Noninterest income: | |||||||||||
| Insurance and other financial services revenue | $ | 5,843 | $ | 5,605 | $ | 24,345 | $ | 23,532 | |||
| Service charges on deposit accounts | 4,503 | 4,351 | 17,224 | 16,750 | |||||||
| ATM and debit card fees | 5,704 | 5,347 | 22,699 | 21,372 | |||||||
| Retirement plan administration fees | 7,113 | 5,332 | 26,992 | 20,213 | |||||||
| Trust | 4,573 | 4,966 | 19,524 | 19,586 | |||||||
| Bank owned life insurance income | 1,239 | 1,262 | 5,091 | 5,175 | |||||||
| Net securities (losses) gains | (6,916 | ) | 1,869 | (6,341 | ) | 1,867 | |||||
| Other (1) | 3,887 | 2,740 | 15,228 | 12,809 | |||||||
| Total noninterest income | $ | 25,946 | $ | 31,472 | $ | 124,762 | $ | 121,304 | |||
| Noninterest expense: | |||||||||||
| Salaries and employee benefits (2) | $ | 38,998 | $ | 33,812 | $ | 151,685 | $ | 135,222 | |||
| Occupancy | 5,284 | 5,280 | 22,318 | 21,808 | |||||||
| Data processing and communications | 4,431 | 4,242 | 17,652 | 17,068 | |||||||
| Professional fees and outside services | 3,968 | 3,751 | 14,376 | 13,499 | |||||||
| Equipment | 4,529 | 4,001 | 17,037 | 15,225 | |||||||
| Office supplies and postage | 1,564 | 1,604 | 6,204 | 6,284 | |||||||
| FDIC expense | 1,135 | 1,196 | 4,651 | 4,767 | |||||||
| Advertising | 1,006 | 1,033 | 2,782 | 2,744 | |||||||
| Amortization of intangible assets | 978 | 961 | 4,042 | 3,960 | |||||||
| Loan collection and other real estate owned, net | 738 | 1,136 | 4,217 | 4,763 | |||||||
| Other (2) | 6,273 | 6,428 | 19,597 | 20,308 | |||||||
| Total noninterest expense | $ | 68,904 | $ | 63,444 | $ | 264,561 | $ | 245,648 | |||
| Income before income tax expense | $ | 29,389 | $ | 33,326 | $ | 137,002 | $ | 128,161 | |||
| Income tax expense | 737 | 15,689 | 24,436 | 46,010 | |||||||
| Net income | $ | 28,652 | $ | 17,637 | $ | 112,566 | $ | 82,151 | |||
| Earnings Per Share: | |||||||||||
| Basic | $ | 0.66 | $ | 0.40 | $ | 2.58 | $ | 1.89 | |||
| Diluted | $ | 0.65 | $ | 0.40 | $ | 2.56 | $ | 1.87 | |||
| Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares. | |||||||||||
| (1) Income on available for sale and trading equity securities amounts reclassified from interest, fee and dividend income on securities available for sale to other noninterest income for the current periods, related to the adoption of Accounting Standard Update No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, in the first quarter of 2018. | |||||||||||
| (2) Amounts reclassified for the prior periods from salaries and employee benefits to other expenses related to the adoption of Accounting Standard Update No. 2017-07, Compensation – Retirement Benefits (Topic 715), in the first quarter of 2018. | |||||||||||
| NBT Bancorp Inc. and Subsidiaries | ||||||||||||
| Quarterly Consolidated Statements of Income | ||||||||||||
| (unaudited, dollars in thousands except per share data) | ||||||||||||
| 2018 | 2017 | |||||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | ||||||||
| Interest, fee and dividend income: | ||||||||||||
| Interest and fees on loans | $ | 78,963 | $ | 77,249 | $ | 74,172 | $ | 70,443 | $ | 69,697 | ||
| Securities available for sale (1) | 6,332 | 6,659 | 7,003 | 6,926 | 7,059 | |||||||
| Securities held to maturity | 4,344 | 3,462 | 2,811 | 2,625 | 2,671 | |||||||
| Other | 885 | 834 | 781 | 766 | 803 | |||||||
| Total interest, fee and dividend income | $ | 90,524 | $ | 88,204 | $ | 84,767 | $ | 80,760 | $ | 80,230 | ||
| Interest expense: | ||||||||||||
| Deposits | $ | 6,977 | $ | 6,157 | $ | 5,079 | $ | 3,931 | $ | 3,817 | ||
| Short-term borrowings | 3,131 | 3,000 | 2,455 | 1,966 | 1,621 | |||||||
| Long-term debt | 431 | 431 | 452 | 476 | 505 | |||||||
| Junior subordinated debt | 1,110 | 1,089 | 1,040 | 901 | 836 | |||||||
| Total interest expense | $ | 11,649 | $ | 10,677 | $ | 9,026 | $ | 7,274 | $ | 6,779 | ||
| Net interest income | $ | 78,875 | $ | 77,527 | $ | 75,741 | $ | 73,486 | $ | 73,451 | ||
| Provision for loan losses | 6,528 | 6,026 | 8,778 | 7,496 | 8,153 | |||||||
| Net interest income after provision for loan losses | $ | 72,347 | $ | 71,501 | $ | 66,963 | $ | 65,990 | $ | 65,298 | ||
| Noninterest income: | ||||||||||||
| Insurance and other financial services revenue | $ | 5,843 | $ | 6,172 | $ | 5,826 | $ | 6,504 | $ | 5,605 | ||
| Service charges on deposit accounts | 4,503 | 4,503 | 4,246 | 3,972 | 4,351 | |||||||
| ATM and debit card fees | 5,704 | 5,906 | 5,816 | 5,273 | 5,347 | |||||||
| Retirement plan administration fees | 7,113 | 7,244 | 7,296 | 5,339 | 5,332 | |||||||
| Trust | 4,573 | 4,808 | 5,265 | 4,878 | 4,966 | |||||||
| Bank owned life insurance income | 1,239 | 1,288 | 1,217 | 1,347 | 1,262 | |||||||
| Net securities (losses) gains | (6,916 | ) | 412 | 91 | 72 | 1,869 | ||||||
| Other (1) | 3,887 | 3,048 | 4,401 | 3,892 | 2,740 | |||||||
| Total noninterest income | $ | 25,946 | $ | 33,381 | $ | 34,158 | $ | 31,277 | $ | 31,472 | ||
| Noninterest expense: | ||||||||||||
| Salaries and employee benefits (2) | $ | 38,998 | $ | 38,394 | $ | 37,726 | $ | 36,567 | $ | 33,812 | ||
| Occupancy | 5,284 | 5,380 | 5,535 | 6,119 | 5,280 | |||||||
| Data processing and communications | 4,431 | 4,434 | 4,508 | 4,279 | 4,242 | |||||||
| Professional fees and outside services | 3,968 | 3,580 | 3,336 | 3,492 | 3,751 | |||||||
| Equipment | 4,529 | 4,319 | 4,151 | 4,038 | 4,001 | |||||||
| Office supplies and postage | 1,564 | 1,563 | 1,504 | 1,573 | 1,604 | |||||||
| FDIC expense | 1,135 | 1,223 | 1,092 | 1,201 | 1,196 | |||||||
| Advertising | 1,006 | 739 | 700 | 337 | 1,033 | |||||||
| Amortization of intangible assets | 978 | 1,054 | 1,096 | 914 | 961 | |||||||
| Loan collection and other real estate owned, net | 738 | 1,234 | 908 | 1,337 | 1,136 | |||||||
| Other (2) | 6,273 | 4,577 | 4,332 | 4,415 | 6,428 | |||||||
| Total noninterest expense | $ | 68,904 | $ | 66,497 | $ | 64,888 | $ | 64,272 | $ | 63,444 | ||
| Income before income tax expense | $ | 29,389 | $ | 38,385 | $ | 36,233 | $ | 32,995 | $ | 33,326 | ||
| Income tax expense | 737 | 8,578 | 8,112 | 7,009 | 15,689 | |||||||
| Net income | $ | 28,652 | $ | 29,807 | $ | 28,121 | $ | 25,986 | $ | 17,637 | ||
| Earnings Per Share: | ||||||||||||
| Basic | $ | 0.66 | $ | 0.68 | $ | 0.64 | $ | 0.60 | $ | 0.40 | ||
| Diluted | $ | 0.65 | $ | 0.68 | $ | 0.64 | $ | 0.59 | $ | 0.40 | ||
| (1) Income on available for sale and trading equity securities amounts reclassified from interest, fee and dividend income on securities available for sale to other noninterest income for the current periods, related to the adoption of Accounting Standard Update No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, in the first quarter of 2018. | ||||||||||||
| (2) Amounts reclassified for the prior periods from salaries and employee benefits to other expenses related to the adoption of Accounting Standard Update No. 2017-07, Compensation – Retirement Benefits (Topic 715), in the first quarter of 2018. | ||||||||||||
| 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 |
||||||||||||
| Three Months ended, | Q4 – 2018 | Q3 – 2018 | Q2 – 2018 | Q1 – 2018 | Q4 – 2017 | ||||||||||||||||
| Assets: | |||||||||||||||||||||
| Short-term interest bearing accounts | $ | 3,780 | 5.25 | % | $ | 3,328 | 6.08 | % | $ | 3,574 | 5.16 | % | $ | 2,818 | 5.18 | % | $ | 5,804 | 2.39 | % | |
| Securities available for sale (1)(3) | 1,104,198 | 2.29 | % | 1,197,910 | 2.22 | % | 1,266,304 | 2.23 | % | 1,273,634 | 2.22 | % | 1,313,870 | 2.16 | % | ||||||
| Securities held to maturity (1) | 688,840 | 2.73 | % | 591,220 | 2.58 | % | 503,501 | 2.50 | % | 482,375 | 2.48 | % | 490,182 | 2.68 | % | ||||||
| Investment in FRB and FHLB Banks | 47,689 | 6.95 | % | 50,107 | 6.20 | % | 48,184 | 6.12 | % | 46,844 | 6.32 | % | 44,320 | 6.87 | % | ||||||
| Loans (2) | 6,876,341 | 4.56 | % | 6,839,565 | 4.49 | % | 6,750,710 | 4.41 | % | 6,592,447 | 4.34 | % | 6,528,449 | 4.25 | % | ||||||
| Total interest earning assets | $ | 8,720,848 | 4.14 | % | $ | 8,682,130 | 4.05 | % | $ | 8,572,273 | 3.99 | % | $ | 8,398,118 | 3.92 | % | $ | 8,382,625 | 3.84 | % | |
| Other assets (3) | 769,302 | 776,219 | 766,604 | 746,172 | 747,468 | ||||||||||||||||
| Total assets | $ | 9,490,150 | $ | 9,458,349 | $ | 9,338,877 | $ | 9,144,290 | $ | 9,130,093 | |||||||||||
| Liabilities and stockholders’ equity: | |||||||||||||||||||||
| Money market deposit accounts | $ | 1,745,980 | 0.65 | % | $ | 1,724,853 | 0.58 | % | $ | 1,699,956 | 0.43 | % | $ | 1,655,308 | 0.27 | % | $ | 1,725,242 | 0.25 | % | |
| NOW deposit accounts | 1,166,383 | 0.18 | % | 1,164,513 | 0.17 | % | 1,222,889 | 0.16 | % | 1,211,029 | 0.13 | % | 1,200,651 | 0.12 | % | ||||||
| Savings deposits | 1,250,703 | 0.06 | % | 1,279,520 | 0.06 | % | 1,289,062 | 0.06 | % | 1,248,432 | 0.06 | % | 1,215,932 | 0.06 | % | ||||||
| Time deposits | 921,252 | 1.47 | % | 881,792 | 1.33 | % | 858,080 | 1.22 | % | 802,959 | 1.13 | % | 792,969 | 1.10 | % | ||||||
| Total interest bearing deposits | $ | 5,084,318 | 0.54 | % | $ | 5,050,678 | 0.48 | % | $ | 5,069,987 | 0.40 | % | $ | 4,917,728 | 0.32 | % | $ | 4,934,794 | 0.31 | % | |
| Short-term borrowings | 724,693 | 1.71 | % | 766,372 | 1.55 | % | 706,694 | 1.39 | % | 712,220 | 1.12 | % | 684,447 | 0.94 | % | ||||||
| Long-term debt | 73,735 | 2.32 | % | 73,762 | 2.32 | % | 84,676 | 2.14 | % | 88,844 | 2.17 | % | 81,010 | 2.47 | % | ||||||
| Junior subordinated debt | 101,196 | 4.35 | % | 101,196 | 4.27 | % | 101,196 | 4.12 | % | 101,196 | 3.61 | % | 101,196 | 3.28 | % | ||||||
| Total interest bearing liabilities | $ | 5,983,942 | 0.77 | % | $ | 5,992,008 | 0.71 | % | $ | 5,962,553 | 0.61 | % | $ | 5,819,988 | 0.51 | % | $ | 5,801,447 | 0.46 | % | |
| Demand deposits | 2,373,235 | 2,356,216 | 2,294,023 | 2,259,955 | 2,266,672 | ||||||||||||||||
| Other liabilities | 130,151 | 121,574 | 113,272 | 105,303 | 99,314 | ||||||||||||||||
| Stockholders’ equity | 1,002,822 | 988,551 | 969,029 | 959,044 | 962,660 | ||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 9,490,150 | $ | 9,458,349 | $ | 9,338,877 | $ | 9,144,290 | $ | 9,130,093 | |||||||||||
| Interest rate spread | 3.37 | % | 3.34 | % | 3.38 | % | 3.41 | % | 3.38 | % | |||||||||||
| Net interest margin (FTE) | 3.61 | % | 3.57 | % | 3.57 | % | 3.57 | % | 3.52 | % | |||||||||||
| (1) Securities are shown at average amortized cost. | |||||||||||||||||||||
| (2) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding. | |||||||||||||||||||||
| (3) For purposes of the average balance sheet presentation, equity securities amounts reclassified for the current periods from securities available for sale to other assets, related to the adoption of Accounting Standard Update No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, in the first quarter of 2018. | |||||||||||||||||||||
| Note: Interest income for tax-exempt securities and loans has been adjusted to a FTE basis using the statutory Federal income tax rate of 21% for 2018 and 35% for 2017. | |||||||||||||||||||||
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||
| Average Year-to-Date Balance Sheets | |||||||||||||
| (unaudited, dollars in thousands) | |||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||
| Balance | Interest | Rates | Balance | Interest | Rates | ||||||||
| Twelve Months ended December 31, | 2018 | 2017 | |||||||||||
| Assets: | |||||||||||||
| Short-term interest bearing accounts | $ | 3,377 | $ | 183 | 5.42 | % | $ | 9,636 | $ | 179 | 1.86 | % | |
| Securities available for sale (1)(3) | 1,210,013 | 27,081 | 2.24 | % | 1,350,995 | 28,969 | 2.14 | % | |||||
| Securities held to maturity (1) | 567,117 | 14,657 | 2.58 | % | 507,583 | 13,490 | 2.66 | % | |||||
| Investment in FRB and FHLB Banks | 48,214 | 3,083 | 6.39 | % | 46,673 | 2,634 | 5.64 | % | |||||
| Loans (2) | 6,765,748 | 301,258 | 4.45 | % | 6,359,447 | 267,934 | 4.21 | % | |||||
| Total interest earning assets | $ | 8,594,469 | $ | 346,262 | 4.03 | % | $ | 8,274,334 | $ | 313,206 | 3.79 | % | |
| Other assets (3) | 764,670 | 752,258 | |||||||||||
| Total assets | $ | 9,359,139 | $ | 9,026,592 | |||||||||
| Liabilities and stockholders’ equity: | |||||||||||||
| Money market deposit accounts | $ | 1,706,823 | $ | 8,314 | 0.49 | % | $ | 1,697,386 | $ | 3,864 | 0.23 | % | |
| NOW deposit accounts | 1,191,008 | 1,894 | 0.16 | % | 1,153,361 | 1,051 | 0.09 | % | |||||
| Savings deposits | 1,266,970 | 725 | 0.06 | % | 1,214,480 | 683 | 0.06 | % | |||||
| Time deposits | 866,388 | 11,211 | 1.29 | % | 817,370 | 8,877 | 1.09 | % | |||||
| Total interest bearing deposits | $ | 5,031,189 | $ | 22,144 | 0.44 | % | $ | 4,882,597 | $ | 14,475 | 0.30 | % | |
| Short-term borrowings | 727,635 | 10,552 | 1.45 | % | 690,036 | 5,996 | 0.87 | % | |||||
| Long-term debt | 80,195 | 1,790 | 2.23 | % | 93,389 | 2,299 | 2.46 | % | |||||
| Junior subordinated debt | 101,196 | 4,140 | 4.09 | % | 101,196 | 3,144 | 3.11 | % | |||||
| Total interest bearing liabilities | $ | 5,940,215 | $ | 38,626 | 0.65 | % | $ | 5,767,218 | $ | 25,914 | 0.45 | % | |
| Demand deposits | 2,321,264 | 2,217,785 | |||||||||||
| Other liabilities | 117,655 | 97,913 | |||||||||||
| Stockholders’ equity | 980,005 | 943,676 | |||||||||||
| Total liabilities and stockholders’ equity | $ | 9,359,139 | $ | 9,026,592 | |||||||||
| Net interest income (FTE) | $ | 307,636 | $ | 287,292 | |||||||||
| Interest rate spread | 3.38 | % | 3.34 | % | |||||||||
| Net interest margin (FTE) | 3.58 | % | 3.47 | % | |||||||||
| Taxable equivalent adjustment | $ | 2,007 | $ | 3,799 | |||||||||
| Net interest income | $ | 305,629 | $ | 283,493 | |||||||||
| (1) Securities are shown at average amortized cost. | |||||||||||||
| (2) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding. | |||||||||||||
| (3) For purposes of the average balance sheet presentation, equity securities amounts reclassified for the current period from securities available for sale to other assets, related to the adoption of Accounting Standard Update No. 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, in the first quarter of 2018. | |||||||||||||
| Note: Interest income for tax-exempt securities and loans has been adjusted to a FTE basis using the statutory Federal income tax rate of 21% for 2018 and 35% for 2017. | |||||||||||||
| NBT Bancorp Inc. and Subsidiaries | ||||||||||
| Consolidated Loan Balances | ||||||||||
| (unaudited, dollars in thousands) | ||||||||||
| 2018 | 2017 | |||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | ||||||
| Commercial | $ | 1,291,568 | $ | 1,310,262 | $ | 1,299,437 | $ | 1,252,729 | $ | 1,258,212 |
| Commercial real estate | 1,930,742 | 1,902,315 | 1,891,119 | 1,795,101 | 1,769,620 | |||||
| Residential real estate mortgages | 1,380,836 | 1,373,487 | 1,350,336 | 1,331,587 | 1,320,370 | |||||
| Dealer finance | 1,216,144 | 1,229,700 | 1,252,843 | 1,238,051 | 1,227,870 | |||||
| Specialty lending | 524,928 | 521,396 | 507,151 | 469,268 | 438,866 | |||||
| Home equity | 474,566 | 480,761 | 488,493 | 491,807 | 498,179 | |||||
| Other consumer | 68,925 | 69,341 | 68,792 | 67,179 | 70,522 | |||||
| Total loans | $ | 6,887,709 | $ | 6,887,262 | $ | 6,858,171 | $ | 6,645,722 | $ | 6,583,639 |