NBT Bancorp Inc. Announces First-Quarter Results and Declares a 5.3% Increase in Quarterly Cash Dividend
NORWICH, NY, Apr 23, 2007 (MARKET WIRE via COMTEX News Network) -- NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income for the three months ended March 31, 2007, was $14.1 million, up 4.0% or $0.5 million from net income of $13.6 million reported for the same period in 2006. Net income per diluted share for the three months ended March 31, 2007, was $0.41 per share, compared with $0.40 per share for the same period in 2006. Return on average assets and return on average equity were 1.13% and 14.06%, respectively, for the three months ended March 31, 2007, compared with 1.18% and 15.11%, respectively, for the same period in 2006. The increase in net income for the three months ended March 31, 2007, was primarily the result of a $0.5 million increase in net interest income and a $1.5 million increase in noninterest income. The aforementioned increases in income were partially offset by a $0.4 million increase in noninterest expense, a $0.4 million increase in provision for loan and lease losses and a $0.7 million increase in income tax expense.
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.
NBT President and CEO Martin A. Dietrich stated, "Despite the challenges we face in the current interest rate environment, I am pleased with our earnings performance for the first quarter. Although our net interest margin continues to compress, we have been able to successfully mitigate this compression through growth in our earning assets. In addition, we have been able to reduce our reliance on interest income by continuing to post strong noninterest income results. This, coupled with the dedication, focus and perseverance of our employees, has enabled us to deliver strong earnings for the quarter. While 2007 promises to be a challenging year for the financial services industry, I am encouraged by our results for the first quarter."
Loan and Lease Quality and Provision for Loan and Lease Losses
Nonperforming loans at March 31, 2007, were $17.4 million or 0.51% of total loans and leases compared with $13.3 million or 0.41% of total loans and leases at March 31, 2006. This increase was mainly attributable to increases in nonperforming small business and agricultural loans, primarily due to regional flooding as well as falling milk prices. Net charge-offs for the three month period ended March 31, 2007, were $2.1 million, up $0.4 million from the three month period ended March 31, 2006. Net charge-offs to average loans and leases for the three months ended March 31, 2007, were 0.25%, compared with the 0.23% ratio for the three months ended March 31, 2006. For the three months ended March 31, 2007, the provision for loan and lease losses totaled $2.1 million, compared with $1.7 million for the same period in 2006. The Company's allowance for loan and lease losses was 1.49% of loans and leases at March 31, 2007, compared with 1.53% at March 31, 2006. The ratio of the allowance for loan and lease losses to nonperforming loans was 291.16% at March 31, 2007, compared with 373.56% at March 31, 2006.
Net Interest Income
Net interest income was up 1.3% to $40.6 million for the three months ended March 31, 2007, compared with $40.1 million for the same period a year ago. Despite a decrease in the Company's fully taxable equivalent (FTE) net interest margin, from 3.86% for the three months ended March 31, 2006, to 3.63% for the same period in 2007, the Company experienced an increase in net interest income that was attributable to an 8.3% growth in average earning assets. The growth in average earning assets was in large part due to organic loan growth, particularly consumer loans, as well as the acquisition of CNB in February 2006. The decline in the net interest margin is due largely to the effect from our borrowings, money market accounts and time deposits repricing in a higher interest rate environment. Earning assets, particularly those tied to a fixed rate, have not realized the benefit of the higher interest rate environment, since yields on earning assets with terms of 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 to inverted yield curve. If the yield curve remains flat or inverted, we expect net interest income to remain relatively flat through 2007.
Noninterest Income
Noninterest income for the three months ended March 31, 2007, was $12.7 million, up $1.5 million or 13.1% from $11.2 million for the same period in 2006. Fees from service charges on deposit accounts and ATM and debit cards collectively increased $0.5 million from growth in our debit card base as well as growth in our demand deposit accounts. Retirement plan administration fees for the three months ended March 31, 2007, increased $0.4 million, compared with the same period in 2006, as a result of our growing client base. Broker/dealer and insurance revenue for the three months ended March 31, 2007, increased $0.2 million in large part due to the growth in brokerage income from retail financial services as well as the addition of Hathaway Insurance Agency as part of the acquisition of CNB. Bank-owned life insurance income for the three months ended March 31, 2007, increased $0.1 million, compared with the same period in 2006. This increase was due in large part to the acquisition of CNB. Trust administration income increased $0.1 million for the three months ended March 31, 2007, compared with the same period in 2006. This increase stems from the increased market value of accounts, an increase in customer accounts as a result of the acquisition of CNB and successful business development. Other noninterest income for the three months ended March 31, 2007, decreased $0.6 million, compared with the same period in 2006, primarily as a result of a gain on the sale of a branch in 2006. Net securities losses for the three months ended March 31, 2007, were nominal, compared with net securities losses of $0.9 million for the three months ended March 31, 2006. Excluding the effect of these securities transactions, noninterest income increased $0.5 million, or 4.4%, for the three months ended March 31, 2007, compared with the same period in 2006.
Noninterest Expense and Income Tax Expense
Noninterest expense for the three months ended March 31, 2007, was $30.9 million, up from $30.5 million for the same period in 2006. Office expenses, such as supplies and postage, occupancy, equipment and data processing and communications charges, increased by $0.2 million, or 2.7%, for the three months ended March 31, 2007, compared with the same period in 2006. Salaries and employee benefits increased $0.2 million, or 1.4%, for the three months ended March 31, 2007, over the same period in 2006. Professional fees and services decreased $0.2 million, or 9.5%, for the three months ended March 31, 2007, compared with the same period in 2006 in large part due to a decrease in Information Technology and other consulting services. Amortization expense increased $0.1 million for the three months ended March 31, 2007, over the same period in 2006. This increase was due primarily to the acquisition of CNB in February 2006. Loan collection and other real estate owned expenses increased $0.2 million for the three months ended March 31, 2007, over the same period in 2006. This increase was due primarily to an increase in the amount of real estate taxes paid on foreclosures in 2007 compared with 2006. Other operating expense for the three months ended March 31, 2007, decreased $0.1 million, or 4.3%, compared with the same period in 2006. Income tax expense for the three months ended March 31, 2007, was $6.2 million, up from $5.6 million for the same period in 2006. The effective rate for the three months ended March 31, 2007, was 30.6%, up from 29.0% for the same period in 2006. The increase in the effective tax rate for the three months ended March 31, 2007, versus the same period in 2006 resulted primarily from a tax refund received in the first quarter of 2006.
Balance Sheet
Total assets were $5.1 billion at March 31, 2007, up $214.9 million from $4.9 billion at March 31, 2006. Loans and leases increased $147.6 million or 4.5% from $3.2 billion at March 31, 2006, to $3.4 billion at March 31, 2007, due primarily to growth in consumer loan products. Total deposits were $4.0 billion at March 31, 2007, up 9.6% from the same period at March 31, 2006, in large part due to growth in time deposits, money market accounts and savings accounts. Stockholders' equity was $407.6 million, representing total equity to total assets of 7.99% at March 31, 2007, compared with $385.8 million or a total equity to total asset ratio of 7.90% at March 31, 2006.
Stock Repurchase Program
On April 23, 2007, 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 363,180 shares remaining under previous authorizations. These remaining shares were combined with this new authorization, increasing the total shares available for repurchase to 1,363,180. Under the authorized programs for the period, the Company purchased 373,967 shares of its common stock during the three months ended March 31, 2007, for a total of $8.6 million at an average price of $22.90 per share.
Dividend Declared
The NBT Board of Directors declared a first-quarter cash dividend of $0.20 per share at a meeting held today, representing a $0.01 per share, or 5.3%, increase from the cash dividend of $0.19 per share declared during the
previous quarter. The dividend will be paid on June 15, 2007, to shareholders of record as of June 1, 2007.
Corporate Overview
NBT is a financial holding company headquartered in Norwich, NY, with total assets of $5.1 billion at March 31, 2007. 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 119 locations, including 80 NBT Bank offices in upstate New York and 39 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Hathaway Insurance Agency, Inc., based in Gloversville, NY, is a full-service insurance agency. More information about NBT and its divisions can be found on the Internet at: www.nbtbancorp.com, www.nbtbank.com, www.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; 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. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Net Percent
2007 2006 Change Change
----------- ----------- -------- -------
(dollars in thousands,
except per share data)
Three Months Ended March 31,
Net Income $ 14,132 $ 13,588 $ 544 4%
Diluted Earnings Per Share $ 0.41 $ 0.40 $ 0.01 2%
Weighted Average Diluted
Common Shares Outstanding 34,457,082 33,746,423 711,445 2%
Return on Average Assets (1) 1.13% 1.18% -0.05% -4%
Return on Average Equity (1) 14.06% 15.11% -1.05% -7%
Net Interest Margin (2) 3.63% 3.86% -0.23% -6%
=========== =========== ======== =======
Asset Quality March 31, December 31, March 31,
2007 2006 2006
----------- ----------- --------
Nonaccrual Loans $ 16,294 $ 13,665 $ 12,616
90 Days Past Due and Still
Accruing $ 1,069 $ 1,642 $ 720
Total Nonperforming Loans $ 17,363 $ 15,307 $ 13,336
Other Real Estate Owned (OREO) $ 632 $ 389 $ 279
Total Nonperforming Assets $ 17,995 $ 15,696 $ 13,615
Allowance for Loan and Lease
Losses $ 50,554 $ 50,587 $ 49,818
Year-to-Date (YTD) Net
Charge-Offs $ 2,129 $ 8,673 $ 1,775
Allowance for Loan and Lease
Losses to Total Loans and
Leases 1.49% 1.48% 1.53%
Total Nonperforming Loans to
Total Loans and Leases 0.51% 0.45% 0.41%
Total Nonperforming Assets to
Total Assets 0.35% 0.31% 0.28%
Allowance for Loan and Lease
Losses to Total Nonperforming
Loans 291.16% 330.48% 373.56%
Annualized Net Charge-Offs to
YTD Average Loans and Leases 0.25% 0.26% 0.23%
=========== =========== ========
Capital
Equity to Assets 7.99% 7.94% 7.90%
Book Value Per Share $ 11.99 $ 11.79 $ 11.22
Tangible Book Value Per Share $ 8.61 $ 8.42 $ 7.84
Tier 1 Leverage Ratio 7.60% 7.57% 7.77%
Tier 1 Capital Ratio 10.53% 10.42% 10.30%
Total Risk-Based Capital Ratio 11.78% 11.67% 11.56%
=========== =========== ========
Quarterly Common Stock Price 2007 2006 2005
Quarter End High Low High Low High Low
------ ------ ------ ------ ------ ------
March 31 $25.81 $21.73 $23.90 $21.02 $25.66 $21.48
June 30 23.24 21.03 24.15 20.10
September 30 24.57 21.44 25.50 22.79
December 31 26.47 22.36 23.79 20.75
(1) Annualized
(2) Calculated on a FTE basis
NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Net Percent
2007 2006 Change Change
----------- ----------- ---------- ------
(dollars in thousands,
except per share data)
Balance Sheet as of March 31,
Loans and Leases $ 3,395,476 $ 3,247,841 $ 147,635 5%
Earning Assets $ 4,718,844 $ 4,529,770 $ 189,074 4%
Total Assets $ 5,100,781 $ 4,885,851 $ 214,930 4%
Deposits $ 3,966,655 $ 3,620,061 $ 346,594 10%
Stockholders' Equity $ 407,580 $ 385,754 $ 21,826 6%
=========== =========== ========== ======
Average Balances
Quarter Ended March 31,
Loans and Leases $ 3,398,590 $ 3,147,115 $ 251,475 8%
Securities Available For Sale
(excluding unrealized gains or
losses) $ 1,123,414 $ 1,054,370 $ 69,044 7%
Securities Held To Maturity $ 140,856 $ 97,347 $ 43,509 45%
Regulatory Equity Investment $ 34,804 $ 40,549 ($ 5,745) -14%
Short-Term Interest Bearing
Accounts $ 9,255 $ 7,742 $ 1,513 20%
Total Earning Assets $ 4,706,919 $ 4,347,123 $ 359,796 8%
Total Assets $ 5,068,491 $ 4,666,163 $ 402,328 9%
Interest Bearing Deposits $ 3,245,152 $ 2,809,696 $ 435,456 15%
Non-Interest Bearing Deposits $ 616,938 $ 591,087 $ 25,851 4%
Short-Term Borrowings $ 265,347 $ 371,632 ($ 106,285) -29%
Long-Term Borrowings $ 482,025 $ 475,755 $ 6,270 1%
Total Interest Bearing
Liabilities $ 3,992,524 $ 3,657,083 $ 335,441 9%
Stockholders' Equity $ 407,519 $ 365,015 $ 42,504 12%
=========== =========== ========== ======
NBT Bancorp Inc. and Subsidiaries March 31, December 31, March 31,
Consolidated Balance Sheets 2007 2006 2006
(unaudited) ----------- ------------ -----------
(in thousands)
ASSETS
Cash and due from banks $ 132,494 $ 130,936 $ 123,593
Short-term interest bearing accounts 24,598 7,857 9,675
Securities available for sale, at fair
value 1,116,205 1,106,322 1,112,118
Securities held to maturity (fair
value of $145,762, $136,287 and
$102,338 at March 31, 2007, December
31, 2006 and March 31, 2006,
respectively) 145,760 136,314 102,754
Federal Reserve and Federal Home Loan
Bank stock 30,487 38,812 37,962
Loans and leases 3,395,476 3,412,654 3,247,841
Less allowance for loan and lease
losses 50,554 50,587 49,818
=========== ============ ===========
Net loans and leases 3,344,922 3,362,067 3,198,023
Premises and equipment, net 65,784 66,982 67,889
Goodwill 103,420 103,356 102,692
Intangible assets, net 11,408 11,984 13,632
Bank owned life insurance 42,217 41,783 40,535
Other assets 83,486 81,159 76,978
----------- ------------ -----------
TOTAL ASSETS $ 5,100,781 $ 5,087,572 $ 4,885,851
=========== ============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest bearing) $ 624,171 $ 646,377 $ 618,531
Savings, NOW, and money market 1,632,222 1,566,557 1,546,840
Time 1,710,262 1,583,304 1,454,690
----------- ------------ -----------
Total deposits 3,966,655 3,796,238 3,620,061
Short-term borrowings 204,421 345,408 329,702
Long-term debt 392,792 417,728 424,865
Trust preferred debentures 75,422 75,422 75,422
Other liabilities 53,911 48,959 50,047
----------- ------------ -----------
Total liabilities 4,693,201 4,683,755 4,500,097
Total stockholders' equity 407,580 403,817 385,754
=========== ============ ===========
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 5,100,781 $ 5,087,572 $ 4,885,851
=========== ============ ===========
Three months ended
NBT Bancorp Inc. and Subsidiaries March 31,
Consolidated Statements of Income (unaudited) 2007 2006
(in thousands, except per share data) --------- ---------
Interest, fee and dividend income:
Loans and leases $ 59,808 $ 52,833
Securities available for sale 13,467 11,877
Securities held to maturity 1,444 985
Other 740 611
--------- ---------
Total interest, fee and dividend income 75,459 66,306
--------- ---------
Interest expense:
Deposits 25,984 17,225
Short-term borrowings 3,092 3,937
Long-term debt 4,486 4,142
Trust preferred debentures 1,268 883
--------- ---------
Total interest expense 34,830 26,187
--------- ---------
Net interest income 40,629 40,119
Provision for loan and lease losses 2,096 1,728
--------- ---------
Net interest income after provision for loan and
lease losses 38,533 38,391
--------- ---------
Noninterest income:
Trust 1,437 1,358
Service charges on deposit accounts 4,469 4,219
ATM and debit card fees 1,896 1,645
Broker/dealer and insurance revenue 1,083 908
Net securities losses (5) (934)
Bank owned life insurance income 434 381
Retirement plan administration fees 1,592 1,231
Other 1,784 2,416
--------- ---------
Total noninterest income 12,690 11,224
--------- ---------
Noninterest expense:
Salaries and employee benefits 15,964 15,748
Office supplies and postage 1,296 1,181
Occupancy 3,169 2,988
Equipment 1,933 2,156
Professional fees and outside services 1,658 1,832
Data processing and communications 2,877 2,702
Amortization of intangible assets 409 323
Loan collection and other real estate owned 377 211
Other operating 3,189 3,331
--------- ---------
Total noninterest expense 30,872 30,472
--------- ---------
Income before income taxes 20,351 19,143
Income taxes 6,219 5,555
--------- ---------
Net income $ 14,132 $ 13,588
--------- ---------
Earnings Per Share:
Basic $ 0.41 $ 0.41
Diluted $ 0.41 $ 0.40
========= =========
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated
Statements of Income
(unaudited)
(in thousands, except per 1Q 4Q 3Q 2Q 1Q
share data) 2007 2006 2006 2006 2006
-------- --------- --------- --------- --------
Interest, fee and
dividend income:
Loans and leases $ 59,808 $ 60,795 $ 59,329 $ 57,085 $ 52,833
Securities available for
sale 13,467 13,296 13,342 13,084 11,877
Securities held to
maturity 1,444 1,409 1,293 1,043 985
Other 740 517 724 619 611
-------- --------- --------- --------- --------
Total interest, fee and
dividend income 75,459 76,017 74,688 71,831 66,306
-------- --------- --------- --------- --------
Interest expense:
Deposits 25,984 25,652 24,052 20,869 17,225
Short-term borrowings 3,092 3,572 3,828 4,111 3,937
Long-term debt 4,486 4,091 4,603 4,227 4,142
Trust preferred
debentures 1,268 1,277 1,285 1,255 883
-------- --------- --------- --------- --------
Total interest expense 34,830 34,592 33,768 30,462 26,187
-------- --------- --------- --------- --------
Net interest income 40,629 41,425 40,920 41,369 40,119
Provision for loan and
lease losses 2,096 3,484 2,480 1,703 1,728
-------- --------- --------- --------- --------
Net interest income after
provision for loan and
lease losses 38,533 37,941 38,440 39,666 38,391
-------- --------- --------- --------- --------
Noninterest income:
Trust 1,437 1,387 1,425 1,459 1,358
Service charges on
deposit accounts 4,469 4,418 4,460 4,493 4,219
ATM and debit card fees 1,896 1,764 1,888 1,789 1,645
Broker/dealer and
insurance fees 1,083 1,037 1,024 967 908
Net securities (losses)
gains (5) 30 7 22 (934)
Bank owned life insurance
income 434 425 431 392 381
Retirement plan
administration fees 1,592 1,424 1,450 1,431 1,231
Other 1,784 1,847 1,832 2,003 2,416
-------- --------- --------- --------- --------
Total noninterest
income 12,690 12,332 12,517 12,556 11,224
-------- --------- --------- --------- --------
Noninterest expense:
Salaries and employee
benefits 15,964 15,166 15,628 16,335 15,748
Office supplies and
postage 1,296 1,418 1,275 1,456 1,181
Occupancy 3,169 2,739 3,044 2,747 2,988
Equipment 1,933 2,069 2,040 2,067 2,156
Professional fees and
outside services 1,658 2,502 1,627 1,800 1,832
Data processing and
communications 2,877 2,466 2,637 2,649 2,702
Amortization of
intangible assets 409 389 471 466 323
Loan collection and other
real estate owned 377 629 222 289 211
Other operating 3,189 3,504 2,974 3,885 3,331
-------- --------- --------- --------- --------
Total noninterest
expense 30,872 30,882 29,918 31,694 30,472
-------- --------- --------- --------- --------
Income before income
taxes 20,351 19,391 21,039 20,528 19,143
Income taxes 6,219 5,743 6,497 6,359 5,555
-------- --------- --------- --------- --------
Net income $ 14,132 $ 13,648 $ 14,542 $ 14,169 $ 13,588
======== ========= ========= ========= ========
Earnings per share:
Basic $ 0.41 $ 0.40 $ 0.43 $ 0.41 $ 0.41
Diluted $ 0.41 $ 0.40 $ 0.43 $ 0.41 $ 0.40
======== ========= ========= ========= ========
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.