NBT Bancorp Inc. Announces First-Quarter Results and Declares Quarterly Cash Dividend
NORWICH, NY, Apr 24, 2006 (MARKET WIRE via COMTEX News Network) -- NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) today reported net income for the three months ended March 31, 2006, of $13.6 million, up 6% or $0.8 million from net income of $12.8 million reported for the same period in 2005. Net income per diluted share for the three months ended March 31, 2006, was $0.40, an increase of $0.01 from the $0.39 per diluted share earned in the same period in 2005. Return on average assets and return on average equity were 1.18% and 15.11%, respectively, for the three months ended March 31, 2006, compared with 1.23% and 15.74%, respectively, for the same period in 2005. The comparability of financial information is affected by the acquisition of CNB Bancorp, Inc. ("CNB"). Operating results include the operations of CNB from the date of acquisition, which was February 10, 2006.
The results for the three months ended March 31, 2006, were driven primarily by increases in net interest income of $1.3 million and noninterest income of $0.5 million as well as a $0.5 million decrease in income tax expense partially offset by an increase in noninterest expense of $1.6 million compared with the same period in 2005.
Results for the three months ended March 31, 2006, include $0.7 million in pre-tax share-based payment expense related to stock options resulting from the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004) (FAS 123R), "Share-Based Payment," which requires companies to measure and recognize compensation expense for all share-based payments starting in 2006. The adoption of FAS 123R lowered diluted earnings per share by $0.01 for the three months ended March 31, 2006.
In commenting on the results, NBT President and CEO Martin A. Dietrich stated, "I am very pleased with the quality of our earnings performance in the first quarter. Our operating success was driven by solid noninterest income and loan growth. In addition, we were able to further improve the credit quality of our loan portfolio. We also completed the acquisition of CNB in the first quarter and are happy to embark on our new partnership with its customers, employees, directors and stockholders. All of these successes helped drive the financial results reflected in our earnings growth."
Loan and Lease Quality and Provision for Loan and Lease Losses
Nonperforming loans totaled $13.3 million at March 31, 2006, and represented 0.41% of total loans and leases, compared with $14.3 million and 0.47% at December 31, 2005, and $17.4 million and 0.60% at March 31, 2005. Annualized net charge-offs to average loans and leases for the three months ended March 31, 2006, were 0.23%, compared with the 0.19% annualized ratio for the three months ended March 31, 2005, and the year-to-date December 31, 2005, rate of 0.23%. The allowance for loan and lease losses as a percentage of total loans and leases was 1.53% at March 31, 2006, compared with 1.57% at December 31, 2005, and March 31, 2005. The ratio of the allowance for loan and lease losses to nonperforming loans was 373.56% at March 31, 2006, compared with 331.92% at December 31, 2005 and 261.28% at March 31, 2005. For the three months ended March 31, 2006, the provision for loan and lease losses totaled $1.7 million compared with the $1.8 million provided in the same period in 2005.
Net Interest Income and Net Interest Margin
Net interest income for the three months ended March 31, 2006, increased 3% to $40.1 million from $38.8 million for the same period in 2005. The increase in net interest income was driven primarily by an increase in average earning assets of $389.5 million or 10%. The increase in average earning assets resulted primarily from a $270.3 million increase in average loans and leases, including $103.2 million of acquired loans from CNB on February 10, 2006. Organic average loan and lease growth was 6% for the three months ended March 31, 2006, compared with the same period in 2005. Average investment securities (excluding unrealized gains or losses) increased $114.1 million for the period, principally from the CNB transaction. The Company's net interest margin decreased 23 basis points ("bp") for the three months ended March 31, 2006 to 3.86% from 4.09% for the same period in 2005. The Company's net interest margin of 3.86%, declined 11 bp during the three months ended March 31, 2006, compared with the net interest margin of 3.97% for the three months ended December 31, 2005. The decline in the net interest margin is due largely to the effect from our borrowings, money market accounts and time deposits repricing in the higher interest rate environment. Meanwhile, earning assets, particularly those tied to a fixed rate, have not realized the benefit of the higher interest rate environment, since rates for earning assets with terms three years or longer have remained relatively flat during this period. The Company anticipates that margin pressure will persist into the next several quarters given the flat yield curve.
Noninterest Income
Noninterest income for the three months ended March 31, 2006, totaled $11.2 million, up $0.5 million from the $10.7 million reported in the same period of 2005. Included in noninterest income for the three months ended March 31, 2006 were $0.9 million in net losses from investment securities sales and a $0.5 million gain from a branch sale in March 2006. Excluding the effect of these transactions for the three months ended March 31, 2006, noninterest income increased $1.0 million or 9% compared with the same period in 2005. Retirement plan administration fees for the three months ended March 31, 2006, increased $0.4 million compared with the same period in 2005. This increase resulted from a full quarter of revenue for the three months ended March 31, 2006 compared with a partial quarter of revenue in the same period in 2005 when we acquired EPIC Advisors, Inc. in January 2005. Excluding the $0.5 million gain on sale of a branch mentioned above, other noninterest income increased $0.4 million compared with the same period in 2005, principally from increases in retail and commercial banking fees. Fees from service charges on deposit accounts and ATM and debit cards collectively increased $0.5 million from solid growth in demand deposit accounts. Broker/dealer and insurance revenue for the three months ended March 31, 2006, decreased $0.4 million, primarily from the sale of the Company's broker/dealer subsidiary M. Griffith Inc., in March 2005.
Noninterest Expense and Income Tax Expense
Total noninterest expense for the three months ended March 31, 2006, increased $1.6 million compared with the same period for 2005. Salaries and employee benefits for the three months ended March 31, 2006, increased $0.3 million over the same period in 2005, primarily from the previously mentioned stock option expense of $0.7 million that reflects the adoption of FAS 123R. Other operating expense increased $0.8 million for the three months ended March 31, 2006, compared with the same period in 2005, primarily from merger related expenses. Income tax expense for the quarter ended March 31, 2006, was $5.6 million, down $0.5 million from the $6.1 million recorded during the same period in 2005. The effective rate for the quarter ended March 31, 2006, was 29.0%, down from 32.1% for the same period in 2005. The decrease in tax expense and the effective tax rate for the quarter ended March 31, 2006, resulted primarily from a settlement for a tax refund claim of $0.5 million.
Balance Sheet
Total assets were $4.9 billion at March 31, 2006, up $630.4 million from $4.3 billion at March 31, 2005. The increase in total assets resulted primarily from the CNB transaction and organic loan growth. Loans and leases were $3.2 billion at March 31, 2006, up 12% from the $2.9 billion at March 31, 2005. Loan and lease growth was driven primarily by the CNB transaction, which accounted for $197.6 million of the increase; the remaining increase was driven by organic growth from commercial and consumer loans. Goodwill and intangible assets increased $64.5 million at March 31, 2006, compared with March 31, 2005, as a result of the CNB transaction. Total deposits increased $451.1 million or 14%, totaling $3.6 billion at March 31, 2006, compared with $3.2 billion at March 31, 2005. Deposits assumed from the CNB transaction totaled $336.5 million; the remaining growth for deposits was driven mainly by increases in demand deposit and time accounts. Trust preferred debentures increased $56.7 million, totaling $75.4 million at March 31, 2006, compared with $18.7 million at March 31, 2005. The increase in trust preferred debentures resulted mainly from funding the cash portion of the CNB transaction. Stockholders' equity was $385.8 million, representing a total-equity-to-total-assets ratio of 7.90% at March 31, 2006, compared with $319.2 million or a total-equity-to-total-assets ratio of 7.50% at March 31, 2005.
CNB Acquisition
On February 10, 2006, the Company completed its previously announced acquisition of CNB. With the completion of the acquisition, City National Bank and Trust Company merged into NBT Bank, N.A., adding nine full-service community banking offices to the NBT Bank division branch network. On an aggregate basis, CNB stockholders received approximately $39 million in cash and 2,059,000 shares of NBT common stock. The aggregate transaction value was approximately $89.0 million.
Stock Repurchase Program
On January 23, 2006, the NBT Board of Directors authorized a new repurchase program whereby NBT intends to repurchase up to an additional 1,000,000 shares (approximately 3%) of its outstanding common stock, as market conditions warrant in open market and privately negotiated transactions. When this repurchase was authorized, there were 503,151 shares remaining under a previous authorization that was combined with the new authorization, increasing the total shares available for repurchase to 1,503,151. Under the authorized programs for the period, the Company purchased 178,404 shares of its common stock during the three months ended March 31, 2006, for a total of $4.1 million at an average price of $22.73 per share.
Dividend Declared
The NBT Board of Directors declared a second quarter 2006 cash dividend of $0.19 per share at a meeting held today. The dividend will be paid on June 15, 2006, to shareholders of record as of June 1, 2006.
Corporate Overview
NBT is a financial holding company headquartered in Norwich, NY, with total assets of $4.9 billion at March 31, 2006. The Company primarily operates through NBT Bank, N.A., a full-service community bank with two divisions and through two financial services companies. NBT Bank, N.A. has 121 locations, including 83 NBT Bank offices in upstate New York and 38 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. More information about NBT and its divisions can be found on the Internet at www.nbtbancorp.com, www.nbtbank.com, www.pennstarbank.com, www.epic1st.com and www.hathawayagency.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; (7) NBT may fail to realize projected cost savings, revenue enhancements and the accretive effect of the CNB acquisition on our earnings; and (8) 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 undertake to update forward-looking statements to reflect subsequent circumstances or events.
NBT Bancorp Inc.
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Net Percent
2006 2005 Change Change
---------- ------------ ------------ ---------
(dollars in thousands,
except per share data)
Three Months Ended March 31,
Net Income $ 13,588 $ 12,789 $ 799 6%
Diluted Earnings Per
Share $ 0.40 $ 0.39 $ 0.01 3%
Weighted Average Diluted
Common Shares
Outstanding 33,746,423 32,977,381 769,042 2%
Return on Average Assets 1.18% 1.23% -0.05% -4%
Return on Average Equity 15.11% 15.74% -0.63% -4%
Net Interest Margin 3.86% 4.09% -0.23% -6%
---------- ------------ ------------ ---------
Asset Quality March 31, December 31, March 31,
2006 2005 2005
---------- ------------ ------------
Nonaccrual Loans $ 12,616 $ 13,419 $ 16,612
90 Days Past Due and
Still Accruing $ 720 $ 878 $ 760
Total Nonperforming
Loans $ 13,336 $ 14,297 $ 17,372
Other Real Estate Owned
(OREO) $ 279 $ 265 $ 438
Total Nonperforming
Assets $ 13,615 $ 14,562 $ 17,810
Allowance for Loan and
Lease Losses $ 49,818 $ 47,455 $ 45,389
Year-to-Date (YTD) Net
Charge-Offs $ 1,775 $ 6,941 $ 1,339
Allowance to Loans and
Leases 1.53% 1.57% 1.57%
Total Nonperforming
Loans to Loans and
Leases 0.41% 0.47% 0.60%
Total Nonperforming
Assets to Assets 0.28% 0.33% 0.42%
Allowance to
Nonperforming Loans 373.56% 331.92% 261.28%
Net Charge-Offs to
YTD Average Loans
and Leases 0.23% 0.23% 0.19%
---------- ------------ ------------ ---------
Capital
Equity to Assets 7.90% 7.54% 7.50%
Book Value Per Share $ 11.22 $ 10.34 $ 9.85
Tangible Book Value Per
Share $ 7.84 $ 8.75 $ 8.25
Tier 1 Leverage Ratio 7.77% 7.16% 6.89%
Tier 1 Capital Ratio 10.30% 9.80% 9.41%
Total Risk-Based Capital
Ratio 11.56% 11.05% 10.67%
---------- ------------ ------------ ---------
Quarterly Common
Stock Price 2006 2005 2004
Quarter End High Low High Low High Low
------ ------ ------ ------ ------ ------
March 31 $23.90 $21.02 $25.66 $21.48 $23.00 $21.21
June 30 24.15 20.10 23.18 19.92
September 30 25.50 22.79 24.34 21.02
December 31 23.79 20.75 26.84 21.94
NBT Bancorp Inc.
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Net Percent
2006 2005 Change Change
----------- ----------- --------- --------
(dollars in thousands,
except per share data)
Balance Sheet as of March 31,
Loans $ 3,247,841 $ 2,898,187 $ 349,654 12%
Earning Assets $ 4,529,770 $ 3,984,545 $ 545,225 14%
Total Assets $ 4,885,851 $ 4,255,439 $ 630,412 15%
Deposits $ 3,620,061 $ 3,168,927 $ 451,134 14%
Stockholders' Equity $ 385,754 $ 319,239 $ 66,515 21%
----------- ----------- --------- --------
Average Balances
Quarter Ended March 31,
Loans $ 3,147,115 $ 2,876,853 $ 270,262 9%
Securities Available For Sale
(excluding unrealized gains or
losses) $ 1,054,370 $ 952,848 $ 101,522 11%
Securities Held To Maturity $ 97,347 $ 84,783 $ 12,564 15%
Regulatory Equity Investment $ 40,549 $ 36,535 $ 4,014 11%
Short-Term Interest Bearing
Accounts $ 7,742 $ 6,578 $ 1,164 18%
Total Earning Assets $ 4,347,123 $ 3,957,597 $ 389,526 10%
Total Assets $ 4,666,163 $ 4,237,627 $ 428,536 10%
Interest Bearing Deposits $ 2,809,696 $ 2,604,441 $ 205,255 8%
Non-Interest Bearing Deposits $ 591,087 $ 505,457 $ 85,630 17%
Short-Term Borrowings $ 371,632 $ 329,726 $ 41,906 13%
Long-Term Borrowings $ 475,755 $ 413,233 $ 62,522 15%
Total Interest Bearing
Liabilities $ 3,657,083 $ 3,347,400 $ 309,683 9%
Stockholders' Equity $ 365,015 $ 329,947 $ 35,068 11%
----------- ----------- --------- --------
NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets March 31, December 31, March 31,
(unaudited) 2006 2005 2005
----------- ------------- -----------
(in thousands)
ASSETS
Cash and due from banks $ 123,593 $ 134,501 $ 106,520
Short term interest bearing accounts 9,675 7,987 5,783
Securities available for sale, at
fair value 1,112,118 954,474 950,555
Securities held to maturity (fair
value of $102,338, $93,701 and
$87,407 at March 31, 2006, December
31, 2005 and March 31, 2005,
respectively) 102,754 93,709 87,063
Federal Reserve and Federal Home Loan
Bank stock 37,962 40,259 36,942
Loans and leases 3,247,841 3,022,657 2,898,187
Less allowance for loan and lease
losses 49,818 47,455 45,389
----------- ------------- -----------
Net loans and leases 3,198,023 2,975,202 2,852,798
Premises and equipment, net 67,889 63,693 63,806
Goodwill 102,692 47,544 47,544
Intangible assets, net 13,632 3,808 4,234
Bank owned life insurance 40,535 33,648 32,634
Other assets 76,978 71,948 67,560
----------- ------------- -----------
TOTAL ASSETS $ 4,885,851 $ 4,426,773 $ 4,255,439
----------- ------------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest bearing) $ 618,531 $ 593,422 $ 509,077
Savings, NOW, and money market 1,546,840 1,325,166 1,467,265
Time 1,454,690 1,241,608 1,192,585
----------- ------------- -----------
Total deposits 3,620,061 3,160,196 3,168,927
Short-term borrowings 329,702 444,977 307,514
Long-term debt 424,865 414,330 394,500
Trust preferred debentures 75,422 23,875 18,720
Other liabilities 50,047 49,452 46,539
----------- ------------- -----------
Total liabilities 4,500,097 4,092,830 3,936,200
Total stockholders' equity 385,754 333,943 319,239
----------- ------------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 4,885,851 $ 4,426,773 $ 4,255,439
----------- ------------- -----------
Three months ended
NBT Bancorp Inc. and Subsidiaries March 31,
Consolidated Statements of Income (unaudited) 2006 2005
-------- --------
(in thousands, except per share data)
Interest, fee and dividend income:
Loans and leases $ 52,833 $ 43,944
Securities available for sale 11,877 10,247
Securities held to maturity 985 803
Other 611 467
-------- --------
Total interest, fee and dividend income 66,306 55,461
-------- --------
Interest expense:
Deposits 17,225 10,720
Short-term borrowings 3,937 1,861
Long-term debt 4,142 3,808
Trust preferred debentures 883 258
-------- --------
Total interest expense 26,187 16,647
-------- --------
Net interest income 40,119 38,814
Provision for loan and lease losses 1,728 1,796
-------- --------
Net interest income after provision for loan and lease
losses 38,391 37,018
-------- --------
Noninterest income:
Trust 1,358 1,252
Service charges on deposit accounts 4,219 3,929
ATM and debit card fees 1,645 1,400
Broker/dealer and insurance revenue 908 1,352
Net securities losses (934) (4)
Bank owned life insurance income 381 333
Retirement plan administration fees 1,231 863
Other 2,416 1,586
-------- --------
Total noninterest income 11,224 10,711
-------- --------
Noninterest expense:
Salaries and employee benefits 15,748 15,451
Office supplies and postage 1,181 1,150
Occupancy 2,988 2,788
Equipment 2,156 2,096
Professional fees and outside services 1,832 1,675
Data processing and communications 2,702 2,658
Amortization of intangible assets 323 118
Loan collection and other real estate owned 211 401
Other operating 3,331 2,544
-------- --------
Total noninterest expense 30,472 28,881
-------- --------
Income before income taxes 19,143 18,848
Income taxes 5,555 6,059
-------- --------
Net income $ 13,588 $ 12,789
-------- --------
Earnings Per Share:
Basic $ 0.41 $ 0.39
Diluted $ 0.40 $ 0.39
-------- --------
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated
Statements of Income 1Q 4Q 3Q 2Q 1Q
(unaudited) 2006 2005 2005 2005 2005
-------- -------- -------- -------- --------
(in thousands, except per
share data)
Interest, fee and dividend
income:
Loans $ 52,833 $ 50,726 $ 48,784 $ 46,260 $ 43,944
Securities available for
sale 11,877 10,544 10,103 10,226 10,247
Securities held to
maturity 985 913 860 831 803
Other 611 575 535 549 467
-------- -------- -------- -------- --------
Total interest, fee and
dividend income 66,306 62,758 60,282 57,866 55,461
-------- -------- -------- -------- --------
Interest expense:
Deposits 17,225 14,352 12,842 12,018 10,720
Short-term borrowings 3,937 3,911 3,005 2,207 1,861
Long-term debt 4,142 4,098 4,176 4,032 3,808
Trust preferred debentures 883 375 308 285 258
-------- -------- -------- -------- --------
Total interest expense 26,187 22,736 20,331 18,542 16,647
-------- -------- -------- -------- --------
Net interest income 40,119 40,022 39,951 39,324 38,814
Provision for loan and
lease losses 1,728 2,596 2,752 2,320 1,796
-------- -------- -------- -------- --------
Net interest income after
provision for loan and
lease losses 38,391 37,426 37,199 37,004 37,018
-------- -------- -------- -------- --------
Noninterest income:
Trust 1,358 1,234 1,292 1,251 1,252
Service charges on deposit
accounts 4,219 4,340 4,314 4,311 3,929
ATM and debit card fees 1,645 1,587 1,631 1,544 1,400
Broker/dealer and
insurance fees 908 527 571 736 1,352
Net securities (losses)
gains (934) (546) (737) 51 (4)
Bank owned life insurance
income 381 342 339 333 333
Retirement plan
administration fees 1,231 1,212 1,195 1,156 863
Other 2,416 1,736 1,746 1,673 1,586
-------- -------- -------- -------- --------
Total noninterest income 11,224 10,432 10,351 11,055 10,711
-------- -------- -------- -------- --------
Noninterest expense:
Salaries and employee
benefits 15,748 13,863 15,438 15,253 15,451
Office supplies and
postage 1,181 1,222 1,135 1,121 1,150
Occupancy 2,988 2,689 2,425 2,550 2,788
Equipment 2,156 2,120 1,971 1,931 2,096
Professional fees and
outside services 1,832 1,584 1,447 1,381 1,675
Data processing and
communications 2,702 2,548 2,613 2,530 2,658
Amortization of intangible
assets 323 142 142 142 118
Loan collection and other
real estate owned 211 278 115 208 401
Other operating 3,331 4,703 3,293 3,580 2,544
-------- -------- -------- -------- --------
Total noninterest
expense 30,472 29,149 28,579 28,696 28,881
-------- -------- -------- -------- --------
Income before income taxes 19,143 18,709 18,971 19,363 18,848
Income taxes 5,555 5,714 5,445 6,235 6,059
-------- -------- -------- -------- --------
Net income $ 13,588 $ 12,995 $ 13,526 $ 13,128 $ 12,789
-------- -------- -------- -------- --------
Earnings per share:
Basic $ 0.41 $ 0.40 $ 0.42 $ 0.41 $ 0.39
Diluted $ 0.40 $ 0.40 $ 0.41 $ 0.40 $ 0.39
-------- -------- -------- -------- --------
Contact:
Martin A. Dietrich
CEO
Michael J. Chewens
CFO
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
607-337-6119
SOURCE: NBT Bancorp Inc.