Printer Friendly Version View printer-friendly version | E-mail Alerts Receive E-mail Alerts

NBT Bancorp Inc. Announces First-Quarter Results and Declares Quarterly Cash Dividend

04/24/06

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.

Copyright © 2018 - NBT Bancorp All Right Reserved.