NBT Bancorp Inc. Announces First Quarter Results and Declares a 12% Increase in Quarterly Cash Dividend
NORWICH, N.Y.--(BUSINESS WIRE)--April 26, 2004--NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) today reported net income for the three months ended March 31, 2004, of $12.4 million, up $0.8 million from net income of $11.6 million reported for the same period in 2003. Net income per diluted share for the three months ended March 31, 2004, was $0.37, up $0.02 or 6% from the $0.35 per diluted share earned in the same period in 2003. Return on average assets and return on average equity were 1.23% and 15.73%, respectively, for the three months ended March 31, 2004, compared with 1.27% and 16.05%, respectively, for the same period in 2003.
The results for the three months ended March 31, 2004 were driven primarily by strong growth in total noninterest income, which increased 19% or $1.7 million for the three months ended March 31, 2004 compared with the same period in 2003. Additionally, net interest income increased $1.1 million or 3% for the three months ended March 31, 2004 compared with the same period in 2003. Offsetting these increases in revenue was an increase in total noninterest expense of $1.3 million or 5% for the three months ended March 31, 2004, compared with the same period in 2003.
In commenting on the results, NBT Chairman and CEO Daryl R. Forsythe stated, "I am extremely pleased with the sustained performance achieved by our team. In the two plus years, since the integration of Central National Bank, we have, despite the challenges of the historically low interest rate environment, consistently reported improving earnings driven by solid growth in the areas of loan production, noninterest income including our expanded offering of financial products and Trust services, and core deposits, as well as continued improvement in credit quality measures. The continued efficiencies and growth within existing and newer market areas served well positions the Company to deliver sustainable earnings growth, which should continue to enhance stockholder value into the forseeable future."
Loan and Lease Quality and Provision for Loan and Lease Losses
Nonperforming loans totaled $13.7 million at March 31, 2004, and represented 0.52% of total loans and leases, down from $14.8 million and 0.56% at December 31, 2003 and $18.4 million and 0.78% at March 31, 2003. Annualized net charge-offs to average loans for the three months ended March 31, 2004, were 0.22%, compared with the 0.17% annualized ratio for the three months ended March 31, 2003, and down from the year-to-date December 31, 2003 rate of 0.27%. The allowance for loan and lease losses as a percentage of total loans and leases was 1.64% at March 31, 2004 compared with 1.62% at December 31, 2003 and 1.73% at March 31, 2003. The ratio of the allowance for loan and lease losses to nonperforming loans was 315.25% at March 31, 2004, compared with 287.62% at December 31, 2003 and 223.00% at March 31, 2003.
For the three months ended March 31, 2004, the provision for loan and lease losses totaled $2.1 million compared with the $1.9 million provided in the same period in 2003. The increase in the provision for loan and lease losses was driven primarily by an increase in net charge-offs. The provision for loan and lease losses represents the charge against current earnings that is determined by management, through a disciplined credit review process, as the amount needed to maintain an allowance that is sufficient to absorb loan and lease losses inherent in the Company's current loan and lease portfolio.
Net Interest Income and Net Interest Margin
Net interest income for the three months ended March 31, 2004, increased 3% to $37.1 million from $36.0 million in the same period for 2003. The increase in net interest income was driven primarily by strong loan growth offset somewhat by a decline in net interest margin. Average loans increased 12% during the three months ended March 31, 2004 compared with the same period in 2003, as the Company experienced strong growth from residential real estate and consumer loans during the second half of 2003. The Company's net interest margin declined to 4.10% for the three months ended March 31, 2004 from 4.38% for the same period in 2003. The decline in net interest margin was driven primarily by earning assets repricing downward at a faster rate than interest-bearing liabilities. The Company's net interest margin of 4.10% improved slightly during the three months ended March 31, 2004, compared with the net interest margin of 4.07% for the three months ended December 31, 2003. The slight improvement in net interest margin from the previous linked quarter resulted primarily from deposit pricing adjustments and lower investment security premium amortization during the three months ended March 31, 2004.
Noninterest Income
Noninterest income for the three months ended March 31, 2004, totaled $10.4 million, up $1.7 million or 19%, from the $8.7 million reported in the same period of 2003. Service charges on deposit accounts for the three months ended March 31, 2004, increased $0.4 million or 12% over the same period in 2003, driven primarily by an increase in overdraft fees. Broker/dealer revenue for the three months ended March 31, 2004 increased $0.3 million or 24% over the same period in 2003, due primarily to the Company's initiative to offer financial service products throughout the Bank's branch network which began at the end of 2002. Trust revenue for the three months ended March 31, 2004, increased $0.2 million or 24% over the same period in 2003, primarily from increases in personal agency fees driven by growth in managed accounts and assets under management. Income from bank owned life insurance (BOLI) increased $0.4 million for the three months ended March 31, 2004, over the same period in 2003 resulting from the purchase of $30 million in BOLI in June 2003.
Noninterest Expense
Total noninterest expense for the three months ended March 31, 2004, increased $1.3 million or 5% compared with the same period in 2003. Salaries and employee benefits for the three months ended March 31, 2004 increased $1.5 million or 11% over the same period in 2003, primarily from increases in salaries, incentive compensation and medical insurance expense. Professional fees and outside services for the three months ended March 31, 2004 increased $0.3 million, primarily from increases in legal and ATM services expense. Offsetting these increases was a decrease in other expense for the three months ended March 31, 2004 of $0.4 million compared with the same period in 2003, due primarily to a $0.4 million write-down for the other-than-temporary impairment of a nonmarketable equity security in 2003.
Balance Sheet
Total assets were $4.0 billion at March 31, 2004, up $265.0 million from the $3.8 billion at March 31, 2003. Loans and leases were $2.6 billion at March 31, 2004, up 11% from the $2.4 billion at March 31, 2003. Loan growth was driven primarily by consumer loans and residential real estate mortgages, which experienced strong growth during the second half of 2003. Total deposits remained relatively unchanged, totaling $3.0 billion for March 31, 2004 and 2003. The Company's reduction in time deposits from $1.3 billion at March 31, 2003 to $1.1 billion at March 31, 2004, was offset by a $249.1 million or 15% increase in core deposits. Stockholders' equity was $322.3 million, representing a Tier 1 leverage ratio of 6.96%, at March 31, 2004, compared with $291.6 million or a Tier 1 leverage ratio of 6.71%, at March 31, 2003.
Dividend Declared
The NBT Board of Directors declared a second quarter 2004 cash dividend of $0.19 per share at a meeting held today, representing a $0.02 per share or 12% increase from the cash dividend of $0.17 per share declared during the previous quarter. The dividend will be paid on June 15, 2004, to shareholders of record as of June 1, 2004.
Mr. Forsythe commented, "This is the first dividend increase since the acquisition of the Pennsylvania banks in 2000 and Central National Bank in 2001. Since that time, we have successfully integrated these acquired companies and delivered consistent earning growth. The value generated from our solid performance is being passed to our stockholders in the form of a dividend increase, which reflects NBT's strong financial performance and solid capital position."
Corporate Overview
NBT is a financial services holding company headquartered in Norwich, NY, with total assets of $4.0 billion at March 31, 2004. The Company primarily operates through NBT Bank, N.A., a full-service community bank with three divisions and through a financial services company. NBT Bank, N.A. has 111 locations, including 44 NBT Bank offices and 27 Central National Bank offices in upstate New York and 40 Pennstar Bank offices in northeastern Pennsylvania. NBT also provides financial services products through M. Griffith, Inc. More information about NBT and its banking divisions can be found on the Internet at www.nbtbancorp.com, www.nbtbank.com, www.pennstarbank.com and www.canajocnb.com.
Forward-Looking Statements
This news release contains forward-looking statements. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of NBT Bancorp and its subsidiaries and on the information available to management at the time that these statements were made. There are a number of factors, many of which are beyond NBT's control, that could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards and tax laws, may adversely affect the businesses in which NBT is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than NBT; and (7) adverse changes may occur in the securities markets or with respect to inflation. Forward-looking statements speak only as of the date they are made. Except as required by law, NBT does not undertake to update forward-looking statements to reflect subsequent circumstances or events.
NBT Bancorp Inc.
SELECTED FINANCIAL
HIGHLIGHTS
(unaudited)
Net Percent
2004 2003 Change Change
--------------------------------------------
(dollars in thousands,
except share and per
share data)
Three Months Ended March
31,
Net Income $12,371 $11,566 $805 7%
Diluted Earnings Per Share $0.37 $0.35 $0.02 6%
Weighted Average Diluted
Common Shares
Outstanding 33,173,937 32,783,269 390,668 1%
Return on Average Assets 1.23% 1.27% -0.04% -3%
Return on Average Equity 15.73% 16.05% -0.32% -2%
Net Interest Margin 4.10% 4.38% -0.28% -6%
----------------------------------------------------------------------
----------------------------------------------------------------------
Asset Quality March 31, December 31, March 31,
2004 2003 2003
------------------------------------
Nonaccrual Loans $13,258 $13,861 $17,078
90 Days Past Due and Still
Accruing $478 $968 $1,074
Troubled Debt
Restructuring Loans $0 $0 $297
Total Nonperforming Loans $13,736 $14,829 $18,449
Other Real Estate Owned
(OREO) $757 $1,157 $2,609
Total Nonperforming Loans
and OREO $14,493 $15,986 $21,058
Nonperforming Securities $215 $395 $925
Total Nonperforming Assets $14,708 $16,381 $21,983
Allowance for Loan and
Lease Losses $43,303 $42,651 $41,141
Year-to-Date (YTD) Net
Charge-Offs $1,472 $6,627 $966
Allowance to Loans and
Leases 1.64% 1.62% 1.73%
Total Nonperforming Loans
to Loans and Leases 0.52% 0.56% 0.78%
Total Nonperforming Assets
to Assets 0.37% 0.40% 0.59%
Allowance to Nonperforming
Loans 315.25% 287.62% 223.00%
Annualized Net Charge-Offs
to YTD Average Loans and
Leases 0.22% 0.27% 0.17%
----------------------------------------------------------------------
Capital
Equity to Assets 8.02% 7.66% 7.77%
Book Value Per Share $9.80 $9.46 $9.00
Tangible Book Value Per
Share $8.29 $7.94 $7.50
Tier 1 Leverage Ratio 6.96% 6.76% 6.71%
Tier 1 Capital Ratio 10.12% 9.96% 9.77%
Total Risk-Based Capital
Ratio 11.37% 11.21% 11.02%
----------------------------------------------------------------------
Quarterly Common
Stock Price 2004 2003 2002
Quarter End High Low High Low High Low
------ ------ ------ ------ ------ ------
March 31 $23.00 $21.21 $18.60 $16.76 $15.15 $13.15
June 30 19.94 17.37 19.32 14.00
September 30 21.76 19.24 18.50 16.36
December 31 22.78 19.50 18.60 14.76
NBT Bancorp Inc.
SELECTED FINANCIAL
HIGHLIGHTS
(unaudited)
Net Percent
2004 2003 Change Change
--------------------------------------------
(dollars in thousands,
except share and per
share data)
Balance Sheet as of March
31,
Loans & Leases $2,646,674 $2,374,079 $272,595 11%
Earning Assets $3,729,845 $3,468,637 $261,208 8%
Total Assets $4,016,733 $3,751,747 $264,986 7%
Deposits $3,014,616 $2,955,893 $58,723 2%
Stockholders' Equity $322,280 $291,620 $30,660 11%
----------------------------------------------------------------------
Average Balances
Quarter Ended March 31,
Loans & Leases $2,646,114 $2,354,636 $291,478 12%
Securities AFS (excluding
unrealized gains or
losses) $964,648 $977,901 ($13,253) -1%
Securities HTM $95,954 $80,342 $15,612 19%
Trading Securities $49 $195 ($146) -75%
Regulatory Equity
Investment $33,994 $23,482 $10,512 45%
Short-Term Interest
Bearing Accounts $2,730 $4,990 ($2,260) -45%
Total Earning Assets $3,743,489 $3,441,546 $301,943 9%
Total Assets $4,032,283 $3,697,543 $334,740 9%
Interest Bearing Deposits $2,521,446 $2,475,306 $46,140 2%
Non-Interest Bearing
Deposits $468,722 $430,097 $38,625 9%
Short-Term Borrowings $289,616 $98,499 $191,117 194%
Long-Term Borrowings $369,689 $345,674 $24,015 7%
Trust Preferred Debentures $17,019 $0 $17,019 100%
Guaranteed preferred
beneficial interests in
Company's junior
subordinated debentures $0 $17,000 ($17,000) -100%
Total Interest Bearing
Liabilities $3,197,770 $2,919,479 $278,291 10%
Stockholders' Equity $316,064 $292,543 $23,521 8%
----------------------------------------------------------------------
NBT Bancorp Inc. and Subsidiaries March 31, March 31, Consolidated Balance Sheets 2004 2003 ---------------------------------------------------------------------- (in thousands) (Unaudited) ASSETS Cash and due from banks $98,552 $123,709 Short term interest bearing accounts 4,108 5,907 Trading securities, at fair value 49 188 Securities available for sale, at fair value 977,950 1,008,310 Securities held to maturity (fair value of $92,672 and $84,151 at March 31, 2004 and March 31, 2003, respectively) 91,205 82,155 Federal Reserve and Federal Home Loan Bank stock 30,648 23,122 Loans and leases 2,646,674 2,374,079 Less allowance for loan and lease losses 43,303 41,141 ---------------------------------------------------------------------- Net loans and leases 2,603,371 2,332,938 Premises and equipment, net 62,426 61,609 Goodwill 47,521 46,121 Intangible assets, net 2,260 2,636 Bank owned life insurance 31,200 - Other assets 67,443 65,052 ---------------------------------------------------------------------- TOTAL ASSETS $4,016,733 $3,751,747 ---------------------------------------------------------------------- LIABILITIES, GUARANTEED PREFERRED BENEFICIAL INTERESTS IN COMPANY'S JUNIOR SUBORDINATE DEBENTURES AND CAPITAL Deposits: Demand (noninterest bearing) $464,867 $449,051 Savings, NOW, and money market 1,482,755 1,249,424 Time 1,066,994 1,257,418 ---------------------------------------------------------------------- Total deposits 3,014,616 2,955,893 Short-term borrowings 238,093 95,103 Long-term debt 369,679 345,345 Trust preferred debentures 18,720 - Other liabilities 53,345 46,786 ---------------------------------------------------------------------- Total liabilities 3,694,453 3,443,127 Guaranteed preferred beneficial interests in Company's junior subordinated debentures - 17,000 Total stockholders' equity 322,280 291,620 ---------------------------------------------------------------------- TOTAL LIABILITIES, GUARANTEED PREFERRED BENEFICIAL INTERESTS IN COMPANY'S JUNIOR SUBORDINATE DEBENTURES AND CAPITAL $4,016,733 $3,751,747 ----------------------------------------------------------------------
Three months ended
NBT Bancorp Inc. and Subsidiaries March 31,
Consolidated Statements of Income 2004 2003
----------------------------------------------------------------------
(in thousands, except per share data) (Unaudited)
Interest, fee and dividend income:
Loans and leases $39,894 $39,615
Securities available for sale 10,769 11,805
Securities held to maturity 797 889
Other 267 326
----------------------------------------------------------------------
Total interest, fee and dividend income 51,727 52,635
----------------------------------------------------------------------
Interest expense:
Deposits 10,045 12,612
Short-term borrowings 793 289
Long-term debt 3,615 3,705
Trust preferred debentures 180 -
----------------------------------------------------------------------
Total interest expense 14,633 16,606
----------------------------------------------------------------------
Net interest income 37,094 36,029
Provision for loan and lease losses 2,124 1,940
----------------------------------------------------------------------
Net interest income after provision for loan
and lease losses 34,970 34,089
----------------------------------------------------------------------
Noninterest income:
Trust 1,107 892
Service charges on deposit accounts 4,037 3,603
Broker/dealer fees 1,731 1,392
Net securities gains (losses) 9 27
Bank owned life insurance 385 -
Other 3,174 2,828
----------------------------------------------------------------------
Total noninterest income 10,443 8,742
----------------------------------------------------------------------
Noninterest expense:
Salaries and employee benefits 14,113 12,659
Office supplies and postage 1,031 1,073
Occupancy 2,598 2,526
Equipment 1,853 1,766
Professional fees and outside services 1,632 1,302
Data processing and communications 2,692 2,721
Amortization of intangible assets 71 162
Loan collection and other real estate owned 372 280
Capital securities - 191
Other operating 2,840 3,212
----------------------------------------------------------------------
Total noninterest expense 27,202 25,892
----------------------------------------------------------------------
Income before income taxes 18,211 16,939
Income taxes 5,840 5,373
----------------------------------------------------------------------
Net income $12,371 $11,566
----------------------------------------------------------------------
Earnings Per Share:
Basic $0.38 $0.36
Diluted $0.37 $0.35
----------------------------------------------------------------------
NBT Bancorp Inc. and Subsidiaries Quarterly Consolidated 1Q 4Q 3Q 2Q 1Q Statements of Income 2004 2003 2003 2003 2003 ---------------------------------------------------------------------- (in thousands, except per (Unaudited) share data) Interest, fee and dividend income: Loans and leases $39,894 $40,082 $39,881 $39,540 $39,615 Securities available for sale 10,769 11,311 9,871 10,864 11,805 Securities held to maturity 797 805 840 857 889 Other 267 84 196 332 326 ---------------------------------------------------------------------- Total interest, fee and dividend income 51,727 52,282 50,788 51,593 52,635 ---------------------------------------------------------------------- Interest expense: Deposits 10,045 10,369 10,920 12,040 12,612 Short-term borrowings 793 808 704 370 289 Long-term debt 3,615 3,780 3,586 3,691 3,705 Trust preferred debentures 180 - - - - ---------------------------------------------------------------------- Total interest expense 14,633 14,957 15,210 16,101 16,606 ---------------------------------------------------------------------- Net interest income 37,094 37,325 35,578 35,492 36,029 Provision for loan and lease losses 2,124 3,322 2,436 1,413 1,940 ---------------------------------------------------------------------- Net interest income after provision for loan and lease losses 34,970 34,003 33,142 34,079 34,089 ---------------------------------------------------------------------- Noninterest income: Trust 1,107 1,075 958 1,116 892 Service charges on deposit accounts 4,037 4,302 4,164 3,764 3,603 Broker/dealer fees 1,731 1,964 1,763 1,750 1,392 Net securities gains (losses) 9 92 18 38 27 Bank owned life insurance 385 403 398 14 - Other 3,174 2,288 2,672 2,257 2,828 ---------------------------------------------------------------------- Total noninterest income 10,443 10,124 9,973 8,939 8,742 ---------------------------------------------------------------------- Noninterest expense: Salaries and employee benefits 14,113 12,355 12,486 12,060 12,659 Office supplies and postage 1,031 1,028 1,104 1,011 1,073 Occupancy 2,598 2,477 2,143 2,182 2,526 Equipment 1,853 2,008 1,909 1,944 1,766 Professional fees and outside services 1,632 1,470 1,421 1,240 1,302 Data processing and communications 2,692 2,671 2,640 2,720 2,721 Amortization of intangible assets 71 145 158 155 162 Loan collection and other real estate owned 372 636 448 476 280 Capital securities - 181 181 179 191 Other operating 2,840 3,823 3,493 3,881 3,212 ---------------------------------------------------------------------- Total noninterest expense 27,202 26,794 25,983 25,848 25,892 ---------------------------------------------------------------------- Income before income taxes 18,211 17,333 17,132 17,170 16,939 Income taxes 5,840 5,451 5,284 5,362 5,373 ---------------------------------------------------------------------- Net income $12,371 $11,882 $11,848 $11,808 $11,566 ---------------------------------------------------------------------- Earnings per share: Basic $0.38 $0.36 $0.36 $0.36 $0.36 Diluted $0.37 $0.36 $0.36 $0.36 $0.35 ----------------------------------------------------------------------
CONTACT: NBT Bancorp Inc., Norwich
Daryl R. Forsythe, CEO
Michael J. Chewens, CFO
607-337-6416
SOURCE: NBT Bancorp Inc.