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NBT Bancorp Inc. Announces Net Income of $19.9 Million for the Second Quarter of 2016; Announces 4.5% Dividend Increase

07/25/16

NORWICH, N.Y., July 25, 2016 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (NBT) (NASDAQ:NBTB) reported net income for the three months ended June 30, 2016 was $19.9 million, up from $18.9 million for the first quarter of 2016, and up from $19.3 million for the second quarter of 2015.  Diluted earnings per share for the three months ended June 30, 2016 was $0.46, as compared with $0.43 for the prior quarter, and $0.43 per share for the second quarter of 2015. 

Net income for the six months ended June 30, 2016 was $38.8 million, up from $37.4 million for the same period last year.  Reported diluted earnings per share for the six months ended June 30, 2016 was $0.89, as compared with $0.84 for the same period in 2015.

Second Quarter 2016 Highlights:

  • Net income for the second quarter of 2016 is up 5.4% compared to the first quarter of 2016 and up 3.3% compared to the second quarter of 2015
  • Year to date loan growth was 5.3% (annualized)
  • Average demand deposits for the six months ended June 30, 2016 were up 10.5% from the same period in 2015

“We’re pleased to report on our continued strong performance through the second quarter of 2016, particularly in the areas of income generation, loan growth and asset quality,” said NBT Chairman, President and CEO Martin Dietrich. “We remain focused on taking care of our customers, making strategic investments in the future while managing our overall cost structure, and creating opportunities to continue to grow organically across our footprint in markets like New York’s Thruway Corridor and New England. We also continue to find opportunities to engage in relationships with new customers who have been impacted by the disruption caused by mergers and acquisitions among other financial institutions.”

Net interest income was $65.8 million for the second quarter of 2016, up $1.2 million from the previous quarter, and up $3.1 million from the second quarter of 2015.  FTE net interest margin was 3.44% for the three months ended June 30, 2016, down from 3.47% for the previous quarter and down from 3.51% for the second quarter of 2015.  Average interest earning assets were up $203.0 million, or 2.7%, for the second quarter of 2016 as compared to the prior quarter, and up $538.4 million, or 7.4%, from the same period in 2015.  The increase from the first quarter of 2016 was driven primarily by loan production.  Annualized loan growth of 4.8% during the second quarter of 2016 was driven by growth in the commercial loan portfolio.  Yields on earning assets decreased by 2 basis points (“bps”) from 3.75% during the first quarter of 2016 to 3.73% for the second quarter of 2016.  Average interest bearing liabilities increased $209.9 million, or 3.9%, from the first quarter of 2016 to the second quarter of 2016, which was driven by a 2.1% increase in interest bearing deposits for the second quarter of 2016.  The rate paid on interest bearing liabilities of 0.41% during the second quarter of 2016 was unchanged from the first quarter of 2016 but slightly higher than the 0.39% paid during the second quarter of 2015 due primarily to an increase in borrowing costs.     

Net interest income was $130.4 million for the six months ended June 30, 2016, up $5.5 million from the same period in 2015.  FTE net interest margin was 3.46% for the six months ended June 30, 2016, down from 3.55% for the six months ended June 30, 2015.  Average interest earning assets were up $511.1 million, or 7.1%, for the six months ended June 30, 2016 as compared to the same period in 2015.  This increase from last year was driven primarily by 5.3% annualized loan growth during the first six months of 2016.  Yields on earning assets decreased from 3.84% during the first six months of 2015 to 3.74% for the first six months of 2016, but the decrease was more than offset by growth in earning assets resulting in a 4.4% increase in interest income for the six months ended June 30, 2016 as compared to the same period in 2015.  The yield compression was driven by a 9 bp decrease in loan yields from the first six months of 2015 to the first six months of 2016.  Average interest bearing liabilities increased $325.4 million, or 6.4%, from the six months ended June 30, 2015 to the six months ended June 30, 2016.  Total average deposits increased $374.9 million, or 5.9%, for the six months ended June 30, 2016 as compared to the same period last year driven primarily by growth in non-interest bearing demand deposits of 10.5%, combined with a $185.8 million increase in interest bearing deposits due to growth in money market deposit accounts, NOW accounts and savings accounts.  In addition, average short-term borrowings increased $142.9 million for the six months ended June 30, 2016 as compared to the same period last year.  The rates paid on interest bearing liabilities increased by 1 bp for the six months ended June 30, 2016 to 0.41% as compared to the 0.40% paid in the same period in 2015.  This increase resulted primarily from slightly higher rates paid on short-term borrowings and a change in the mix of interest bearing deposits.     

Noninterest income for the three months ended June 30, 2016 was $29.6 million, up $1.2 million, or 4.4% from the prior quarter, and up $1.4 million, or 5.0%, from the second quarter of 2015.  The increase from the prior quarter was driven primarily by increases in other noninterest income, trust income, ATM and debit card fees, retirement plan administration fees, and service charges on deposit accounts.  Other noninterest income was up $1.2 million, or 34.1%, for the second quarter of 2016 as compared to the first quarter of 2016 due primarily to the gain recognized on the sale of equity investments of $0.8 million during the second quarter.  The liquidation of these investments made by the Company in order to comply with provisions contained within the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Trust revenue was up $0.6 million, or 12.8%, for the second quarter of 2016 as compared with the first quarter of 2016 due primarily to seasonality of trust revenue.  ATM and debit card fees were up $0.4 million, or 7.7%, for the second quarter of 2016 as compared to the first quarter of 2016 due primarily to increases in debit card transactions and number of accounts.  Retirement plan administration fees were up $0.3 million, or 8.0%, for the second quarter of 2016 as compared to the first quarter of 2016 due primarily to a downturn in market conditions in the first quarter of 2016 and subsequent recovery in the second quarter.  These increases were partially offset by a $1.3 million, or 19.0%, decrease in insurance revenue in the second quarter of 2016 as compared with the first quarter of 2016 due primarily to seasonality of insurance revenue. 

Noninterest income for the six months ended June 30, 2016 was $58.0 million, up $3.2 million, or 5.9% from the same period last year.  The increase from the prior year was driven primarily by increases in other noninterest income, retirement plan administration fees, ATM and debit card fees, and insurance revenue.  Other noninterest income was up $1.8 million, or 27.8%, for the first half of 2016 as compared to the first half of 2015 due primarily to the above mentioned gain on the sale of equity investments and fee income from customer interest rate swaps.  Retirement plan administration fees were up $1.0 million, or 15.5%, for the first half of 2016 as compared to the same period in 2015 due primarily to the 2015 fourth quarter acquisition of Third Party Administrators, Inc. (“TPA, Inc.”).  ATM and debit card fees were up $0.6 million, or 6.6%, for the first half of 2016 as compared to the same period last year due primarily to increases in debit card activity and number of accounts.     

Noninterest expense for the three months ended June 30, 2016 was $60.4 million, up $2.2 million or 3.8% from the prior quarter and up $2.5 million from the second quarter of 2015.  The increase from the prior quarter was due primarily to increases in other operating expenses which increased $1.5 million or 33.4% from the first quarter of 2016 to the second quarter of 2016 due primarily to higher loan initiation fees due to the timing of loan originations and an increase in fraud losses.  In addition, salaries and employee benefits increased $0.5 million, or 1.5%, from the first quarter of 2016 to the second quarter of 2016 as contract terminations costs of $1.2 million were partly offset by $0.5 million in lower medical costs. These increases were partially offset by a decrease in occupancy expenses for the second quarter of 2016 from the first quarter of 2016 due to seasonal expenses.  Income tax expense for the three month period ended June 30, 2016 was $10.3 million, up $0.5 million from both the prior quarter and the second quarter of 2015.  The increase from the prior period was due primarily to a higher level of taxable income for the second quarter of 2016.  The effective tax rate was 34.0% for the first and second quarters of 2016, and 33.6% for the second quarter of 2015.

Noninterest expense for the six months ended June 30, 2016 was $118.7 million, up $3.0 million or 2.6% from the same period in 2015.  The increase is due primarily to an increase in salaries and benefit expense of $4.4 million or 7.1% due to increases in salaries, medical insurance costs, retirement plan costs and contract termination costs accrued in the second quarter of 2016.  Loan collection and other real estate owned expenses increased $0.7 million in the first six months of 2016 as compared to the same period in 2015 due to a higher level of gains on sales of real estate recorded in first half of 2015.  These increases were partially offset by a $0.7 million decrease in occupancy expenses for the first six months of 2016 as compared to the same period in 2015, driven by lower seasonal maintenance and utilities costs due to the mild winter conditions this year.  Income tax expense for the six month period ended June 30, 2016 was $20.0 million, up $1.0 million from the six month period ended June 30, 2015.  The increase from 2015 was due to a higher level of taxable income in 2016 compared to the first half of 2015.  The effective tax rate was 34.0% for the first six months of 2016 as compared to 33.6% for the first six months of 2015.

Asset Quality

Net charge-offs were $4.5 million for the three months ended June 30, 2016, down from $4.8 million for the prior quarter, but up slightly from $4.3 million for the second quarter of 2015.  Provision expense was $4.8 million for the three months ended June 30, 2016, as compared with $6.1 million for the prior quarter, and $3.9 million for the second quarter of 2015.  Annualized net charge-offs to average loans for the second quarter of 2016 was 0.30%, compared with 0.33% for the first quarter of 2016 and 0.30% for the second quarter of 2015.

Nonperforming loans to total loans was 0.65% at June 30, 2016, down 4 bps from the prior quarter, and down 12 bps from June 30, 2015.  Past due loans as a percentage of total loans were 0.60% at June 30, 2016 as compared to 0.61% at June 30, 2015.   

The allowance for loan losses totaled $64.6 million at June 30, 2016, compared to $64.3 million at March 31, 2016, and $65.0 million at June 30, 2015.  The allowance for loan losses as a percentage of loans was 1.07% (1.16% excluding acquired loans with no related allowance recorded) at June 30, 2016, compared to 1.08% (1.18% excluding acquired loans with no related allowance recorded) at March 31, 2016 and 1.13% (1.24% excluding acquired loans with no related allowance recorded) at June 30, 2015.  The decrease in the allowance for loan losses as a percentage of loans from prior periods was due primarily to continued positive trends in asset quality metrics of the originated loan portfolio.

Balance Sheet

Total assets were $8.6 billion at June 30, 2016, up $362.1 million, or 4.4% from December 31, 2015.  Loans were $6.0 billion at June 30, 2016, up $156.3 million, or 2.7%, from December 31, 2015.  Total deposits were $6.7 billion at June 30, 2016, up $135.6 million, or 2.1%, from December 31, 2015.  Stockholders’ equity was $896.4 million, representing a total equity-to-total assets ratio of 10.39% at June 30, 2016, compared with $882.0 million or a total equity-to-total assets ratio of 10.67% at December 31, 2015.

Stock Repurchase Program

The Company purchased 675,535 shares of its common stock during the six months ended June 30, 2016 at an average price of $25.45 per share under a previously announced plan.  As of June 30, 2016, there were 277,313 shares available for repurchase under this plan, which expires on December 31, 2016.  On March 28, 2016, the NBT Board of Directors authorized a new repurchase program for NBT to repurchase up to an additional 1,000,000 shares of its outstanding common stock.  This plan expires on December 31, 2017.

Dividend

The NBT Board of Directors approved a 2016 third-quarter cash dividend of $0.23 per share at a meeting held today.  The dividend, which represents a 4.5% increase, will be paid on September 15, 2016 to shareholders of record as of September 1, 2016.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $8.6 billion at June 30, 2016.  The company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies.  NBT Bank, N.A. has 155 banking locations with offices in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine. EPIC Advisors, Inc., based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. NBT-Mang Insurance Agency, based in Norwich, N.Y., 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.epic1st.com and www.nbtmang.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 update forward-looking statements to reflect subsequent circumstances or events.

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP).  These measures adjust GAAP measures to exclude the effects of acquisition related intangible amortization expense on earnings and equity as well as providing a fully taxable equivalent yield on securities and loans.  Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables.  Management believes that these non-GAAP measures provided useful information that is important to an understanding of the results of NBT’s core business as well as provide information standard in the financial institution industry.  Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider NBT’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of NBT.

             
NBT Bancorp Inc. and Subsidiaries            
SELECTED FINANCIAL DATA            
(unaudited, dollars in thousands except per share data)            
             
    2016     2015    
Profitability: 2nd Q 1st Q 4th Q 3rd Q 2nd Q  
Diluted Earnings Per Share $ 0.46   $ 0.43   $ 0.43   $ 0.45   $ 0.43    
Weighted Average Diluted             
  Common Shares Outstanding   43,453,674     43,707,489     44,072,049     44,262,426     44,530,123    
Return on Average Assets (1)   0.94 %   0.92 %   0.93 %   0.97 %   0.97 %  
Return on Average Equity (1)   9.00 %   8.63 %   8.58 %   8.97 %   8.81 %  
Return on Average Tangible Common Equity (1)(2)   13.54 %   13.17 %   13.04 %   13.66 %   13.47 %  
Net Interest Margin (1)(3)   3.44 %   3.47 %   3.42 %   3.48 %   3.51 %  
             
  Six Months ended June 30,      
Profitability:   2016     2015        
Diluted Earnings Per Share $ 0.89   $ 0.84    
Weighted Average Diluted             
  Common Shares Outstanding   43,583,837     44,589,358    
Return on Average Assets (1)   0.93 %   0.96 %  
Return on Average Equity (1)   8.81 %   8.63 %  
Return on Average Tangible Common Equity (1)(4)   13.35 %   13.28 %  
Net Interest Margin (1)(3)   3.46 %   3.55 %  
             
(1) Annualized            
(2) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
(3) Calculated on a Fully Tax Equivalent ("FTE") basis            
             
    2016     2015    
  2nd Q 1st Q 4th Q 3rd Q 2nd Q  
Net Income $   19,909   $   18,891   $   19,127   $   19,851   $   19,281    
Amortization of intangible assets (net of tax)     567       670       750       712       725    
  $   20,476   $   19,561   $   19,877   $   20,563   $   20,006    
             
Average stockholders' equity $   890,053   $   880,311   $   884,743   $   878,305   $   878,164    
Less: average goodwill and other intangibles     281,709       282,751       279,904       281,048       282,272    
Average tangible common equity $   608,344   $   597,560   $   604,839   $   597,257   $   595,892    
             
(4) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
             
  Six Months ended June 30,      
    2016     2015        
Net Income $   38,800   $   37,447          
Amortization of intangible assets (net of tax)     1,236       1,510          
  $   40,036   $   38,957          
             
Average stockholders' equity $   885,182   $   874,639          
Less: average goodwill and other intangibles     282,230       282,887          
Average tangible common equity $   602,952   $   591,752          
             
Note: Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.        
             
NBT Bancorp Inc. and Subsidiaries            
SELECTED FINANCIAL DATA            
(unaudited, dollars in thousands except per share data)            
             
             
    2016     2015    
  2nd Q 1st Q 4th Q 3rd Q 2nd Q  
Balance Sheet Data:            
Securities Available for Sale $ 1,271,596   $ 1,259,874   $ 1,174,544   $ 1,058,397   $ 1,129,249    
Securities Held to Maturity     500,840       466,914       471,031       470,758       454,312    
Net Loans     5,974,825       5,903,491       5,820,115       5,806,129       5,705,929    
Total Assets     8,624,780       8,472,964       8,262,646       8,178,976       8,081,892    
Total Deposits     6,740,416       6,905,042       6,604,843       6,600,627       6,371,479    
Total Borrowings     877,926       579,441       674,124       594,163       743,893    
Total Liabilities     7,728,427       7,591,237       7,380,642       7,302,760       7,205,921    
Stockholders' Equity     896,353       881,727       882,004       876,216       875,971    
             
Asset Quality:            
Nonaccrual Loans $ 37,397   $ 38,944   $ 33,744   $ 42,524   $ 42,286    
90 Days Past Due and Still Accruing     1,613       2,185       3,662       3,790       1,994    
Total Nonperforming Loans     39,010       41,129       37,406       46,314       44,280    
Other Real Estate Owned     2,211       2,716       4,666       4,855       4,649    
Total Nonperforming Assets     41,221       43,845       42,072       51,169       48,929    
Allowance for Loan Losses     64,568       64,318       63,018       64,859       64,959    
             
Asset Quality Ratios (Total):            
Allowance for Loan Losses to Total Loans   1.07 %   1.08 %   1.07 %   1.10 %   1.13 %  
Total Nonperforming Loans to Total Loans   0.65 %   0.69 %   0.64 %   0.79 %   0.77 %  
Total Nonperforming Assets to Total Assets   0.48 %   0.52 %   0.51 %   0.63 %   0.61 %  
Allowance for Loan Losses to Total Nonperforming Loans   165.52 %   156.38 %   168.47 %   140.04 %   146.70 %  
Past Due Loans to Total Loans   0.60 %   0.50 %   0.62 %   0.63 %   0.61 %  
Net Charge-Offs to Average Loans (1)   0.30 %   0.33 %   0.51 %   0.35 %   0.30 %  
             
Asset Quality Ratios (Originated) (2):            
Allowance for Loan Losses to Loans   1.16 %   1.18 %   1.18 %   1.21 %   1.24 %  
Nonperforming Loans to Loans   0.62 %   0.67 %   0.61 %   0.63 %   0.59 %  
Allowance for Loan Losses to Nonperforming Loans   186.71 %   175.40 %   193.00 %   192.49 %   208.99 %  
Past Due Loans to Loans   0.61 %   0.51 %   0.64 %   0.67 %   0.64 %  
             
Capital:            
Equity to Assets   10.39 %   10.41 %   10.67 %   10.71 %   10.84 %  
Book Value Per Share $ 20.85   $ 20.57   $ 20.31   $ 20.29   $ 20.05    
Tangible Book Value Per Share (3) $ 14.31   $ 13.99   $ 13.79   $ 13.80   $ 13.61    
Tier 1 Leverage Ratio   9.03 %   9.15 %   9.44 %   9.34 %   9.57 %  
Common Equity Tier 1 Capital Ratio   9.83 %   9.79 %   10.20 %   10.04 %   10.22 %  
Tier 1 Capital Ratio   11.29 %   11.28 %   11.73 %   11.57 %   11.78 %  
Total Risk-Based Capital Ratio   12.29 %   12.29 %   12.74 %   12.62 %   12.84 %  
Common Stock Price (End of Period) $ 28.63   $ 26.95   $ 27.88   $ 26.94   $ 26.17    
             
(1)  Annualized            
(2)  Excludes acquired loans            
(3)  Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding    
             
NBT Bancorp Inc. and Subsidiaries       
CONSOLIDATED BALANCE SHEETS      
(unaudited, dollars in thousands)      
       
  June 30, December 31,  
ASSETS   2016     2015    
Cash and due from banks $    151,775   $   130,593    
Short term interest bearing accounts     19,828       9,704    
Securities available for sale, at fair value      1,271,596       1,174,544    
Securities held to maturity (fair value of $512,349 and $473,140 at     500,840       471,031    
  June 30, 2016 and December 31, 2015, respectively)      
Trading securities     8,591       8,377    
Federal Reserve and Federal Home Loan Bank stock     45,260       36,673    
Loans     6,039,393       5,883,133    
Less allowance for loan losses     64,568       63,018    
  Net loans    5,974,825     5,820,115    
Premises and equipment, net     84,596       88,826    
Goodwill     265,957       265,957    
Intangible assets, net     15,241       17,265    
Bank owned life insurance     163,149       117,044    
Other assets     123,122       122,517    
TOTAL ASSETS $    8,624,780   $    8,262,646    
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Deposits:      
 Demand (noninterest bearing) $    2,031,078   $   1,998,165    
 Savings, NOW, and money market     3,826,626       3,697,851    
 Time     882,712       908,827    
  Total deposits   6,740,416     6,604,843    
Short-term borrowings     666,424       442,481    
Long-term debt     110,306       130,447    
Junior subordinated debt     101,196       101,196    
Other liabilities     110,085       101,675    
  Total liabilities   7,728,427     7,380,642    
       
Total stockholders' equity     896,353       882,004    
       
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $    8,624,780   $    8,262,646    
       
             
NBT Bancorp Inc. and Subsidiaries             
CONSOLIDATED STATEMENTS OF INCOME            
(unaudited, dollars in thousands except per share data)          
             
  Three Months Ended   Six Months Ended  
  June 30,   June 30,  
    2016     2015       2016     2015    
Interest, fee and dividend income:            
Loans $    62,449   $   59,873     $    123,679   $   119,391    
Securities available for sale   5,976       5,144         11,963       10,089    
Securities held to maturity   2,496       2,315         4,784       4,598    
Other   454       395         903       875    
  Total interest, fee and dividend income     71,375       67,727         141,329       134,953    
Interest expense:            
Deposits   3,605       3,517         7,202       7,090    
Short-term borrowings   579       144         907       265    
Long-term debt   773       836         1,606       1,662    
Junior subordinated debt   641       545         1,260       1,085    
  Total interest expense     5,598       5,042         10,975       10,102    
Net interest income     65,777       62,685         130,354       124,851    
Provision for loan losses   4,780       3,898         10,878       7,540    
  Net interest income after provision for loan losses     60,997       58,787         119,476       117,311    
Noninterest income:            
Insurance and other financial services revenue   5,625       5,836         12,571       12,210    
Service charges on deposit accounts   4,166       4,285         8,105       8,357    
ATM and debit card fees   4,934       4,679         9,517       8,927    
Retirement plan administration fees   4,054       3,566         7,808       6,762    
Trust   4,937       5,196         9,313       9,646    
Bank owned life insurance income   1,271       928         2,562       2,487    
Net securities gains   1       26         30       40    
Other   4,626       3,699         8,075       6,320    
  Total noninterest income     29,614       28,215         57,981       54,749    
Noninterest expense:            
Salaries and employee benefits   32,931       30,831         65,372       61,013    
Occupancy   5,254       5,412         10,745       11,478    
Data processing and communications   4,121       4,288         8,171       8,391    
Professional fees and outside services   3,331       3,395         6,562       6,892    
Equipment   3,547       3,316         7,007       6,565    
Office supplies and postage   1,676       1,627         3,223       3,246    
FDIC expenses     1,293       1,280         2,551       2,478    
Advertising    595       734         1,099       1,453    
Amortization of intangible assets   928       1,187         2,024       2,471    
Loan collection and other real estate owned   845       22         1,550       894    
Other operating   5,924       5,872         10,365       10,785    
  Total noninterest expense   60,445     57,964       118,669     115,666    
Income before income taxes   30,166     29,038       58,788     56,394    
Income taxes   10,257       9,757         19,988       18,947    
  Net income $    19,909   $   19,281     $    38,800   $   37,447    
Earnings Per Share:            
  Basic $    0.46   $   0.44     $    0.90   $   0.85    
  Diluted $    0.46   $   0.43     $    0.89   $   0.84    
             
             
NBT Bancorp Inc. and Subsidiaries            
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME            
(unaudited, dollars in thousands except per share data)            
             
    2016     2015    
  2nd Q 1st Q 4th Q 3rd Q 2nd Q  
Interest, fee and dividend income:            
Loans $   62,449   $   61,230   $   60,781   $   61,656   $   59,873    
Securities available for sale   5,976     5,987     5,204     5,125     5,144    
Securities held to maturity   2,496     2,288     2,317     2,318     2,315    
Other   454     449     469     401     395    
  Total interest, fee and dividend income   71,375     69,954     68,771     69,500     67,727    
Interest expense:            
Deposits   3,605     3,597     3,613     3,554     3,517    
Short-term borrowings   579     328     222     296     144    
Long-term debt   773     833     848     845     836    
Junior subordinated debt   641     619     576     560     545    
  Total interest expense   5,598     5,377     5,259     5,255     5,042    
Net interest income   65,777     64,577     63,512     64,245     62,685    
Provision for loan losses   4,780     6,098     5,779     4,966     3,898    
  Net interest income after provision for loan losses   60,997     58,479     57,733     59,279     58,787    
Noninterest income:            
Insurance and other financial services revenue   5,625     6,946     6,139     5,862     5,836    
Service charges on deposit accounts   4,166     3,939     4,350     4,349     4,285    
ATM and debit card fees   4,934     4,583     4,541     4,780     4,679    
Retirement plan administration fees   4,054     3,754     4,135     3,249     3,566    
Trust    4,937     4,376     4,769     4,611     5,196    
Bank owned life insurance income   1,271     1,291     916     931     928    
Net securities gains   1     29     3,044     3     26    
Gain on the sale of Springstone investment     -        -        -        4,179       -     
Other   4,626     3,449     4,577     3,297     3,699    
  Total noninterest income   29,614     28,367     32,471     31,261     28,215    
Noninterest expense:            
Salaries and employee benefits   32,931     32,441     33,078     30,227     30,831    
Occupancy   5,254     5,491     5,291     5,326     5,412    
Data processing and communications   4,121     4,050     3,990     4,207     4,288    
Professional fees and outside services   3,331     3,231     3,378     3,137     3,395    
Equipment   3,547     3,460     3,491     3,352     3,316    
Office supplies and postage   1,676     1,547     1,545     1,576     1,627    
FDIC expenses   1,293     1,258     1,312     1,355     1,280    
Advertising   595     504     780     421     734    
Amortization of intangible assets   928     1,096     1,228     1,165     1,187    
Loan collection and other real estate owned   845     705     1,027     699     22    
Other operating   5,924     4,441     5,499     8,426     5,872    
  Total noninterest expense   60,445     58,224     60,619     59,891     57,964    
Income before income taxes   30,166     28,622     29,585     30,649     29,038    
Income taxes   10,257     9,731     10,458     10,798     9,757    
  Net income  $   19,909   $   18,891   $   19,127   $   19,851   $   19,281    
Earnings per share:            
  Basic $   0.46   $   0.44   $   0.44   $   0.45   $   0.44    
  Diluted $   0.46   $   0.43   $   0.43   $   0.45   $   0.43    
             
Note:  Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.      
                     
NBT Bancorp Inc. and Subsidiaries                    
AVERAGE QUARTERLY BALANCE SHEETS                  
(unaudited, dollars in thousands)                    
  Average Balance Yield / Rates Average Balance Yield / Rates Average Balance Yield / Rates Average Balance Yield / Rates Average Balance Yield / Rates
  Q2 - 2016 Q1 - 2016 Q4 - 2015 Q3 - 2015 Q2 - 2015
ASSETS:                    
Short-term interest bearing accounts $    16,063     0.53 % $   13,639     0.63 % $   13,494     0.34 % $   8,100     0.32 % $   9,854     0.36 %
Securities available for sale (1)(2)     1,227,367     1.99 %     1,188,437     2.06 %     1,070,643     1.97 %     1,079,206     1.92 %     1,067,619     1.98 %
Securities held to maturity (1)      498,493     2.49 %     465,916     2.48 %     470,027     2.43 %     460,252     2.44 %     452,948     2.49 %
Investment in FRB and FHLB Banks     38,939     4.47 %     33,470     5.14 %     32,263     5.63 %     37,358     4.19 %     31,564     4.90 %
Loans (3)     6,007,677     4.19 %     5,884,073     4.20 %     5,872,011     4.12 %     5,824,311     4.21 %     5,688,159     4.24 %
 Total interest earning assets $   7,788,539     3.73 % $   7,585,535     3.75 % $   7,458,438     3.70 % $   7,409,227     3.77 % $   7,250,144     3.79 %
Other assets     747,074         699,194         693,981         690,768         685,523    
Total assets $   8,535,613     $   8,284,729     $   8,152,419     $   8,099,995     $   7,935,667    
                     
LIABILITIES AND STOCKHOLDERS' EQUITY:                    
Money market deposit accounts $ 1,709,644     0.22 % $ 1,653,930     0.22 % $ 1,626,644     0.22 % $ 1,557,651     0.22 % $ 1,598,898     0.20 %
NOW deposit accounts     1,073,881     0.05 %     1,051,959     0.05 %     1,039,563     0.05 %     963,744     0.05 %     974,504     0.05 %
Savings deposits     1,143,654     0.06 %     1,105,480     0.06 %     1,079,757     0.06 %     1,085,680     0.06 %     1,080,954     0.06 %
Time deposits     906,250     1.06 %     921,754     1.04 %     918,875     1.05 %     939,542     1.01 %     968,714     1.00 %
  Total interest bearing deposits $   4,833,429     0.30 % $   4,733,123     0.31 % $   4,664,839     0.31 % $   4,546,617     0.31 % $   4,623,070     0.31 %
Short-term borrowings     484,590     0.48 %     369,443     0.36 %     332,742     0.26 %     456,663     0.26 %     302,693     0.19 %
Long-term debt     124,851     2.55 %     130,420     2.57 %     130,522     2.58 %     130,680     2.56 %     130,743     2.56 %
Junior subordinated debt     101,196     2.49 %     101,196     2.46 %     101,196     2.26 %     101,196     2.20 %     101,196     2.16 %
  Total interest bearing liabilities $   5,544,066     0.41 % $   5,334,182     0.41 % $   5,229,299     0.40 % $   5,235,156     0.40 % $   5,157,702     0.39 %
Demand deposits     1,994,601         1,970,315         1,944,820         1,894,555         1,815,705    
Other liabilities     106,893         99,921         93,557         91,979         84,096    
Stockholders' equity     890,053         880,311         884,743         878,305         878,164    
Total liabilities and stockholders' equity $   8,535,613     $   8,284,729     $   8,152,419     $   8,099,995     $   7,935,667    
                     
Interest rate spread     3.32 %     3.34 %     3.30 %     3.37 %     3.40 %
Net interest margin     3.44 %     3.47 %     3.42 %     3.48 %     3.51 %
                     
(1) Securities are shown at average amortized cost                    
(2) Excluding unrealized gains or losses                    
(3) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding          
Note:  Interest income for tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory Federal income tax rate of 35%      
                     
             
NBT Bancorp Inc. and Subsidiaries            
AVERAGE YEAR-TO-DATE BALANCE SHEETS          
(unaudited, dollars in thousands)            
  Average   Yield/ Average   Yield/
  Balance Interest Rates  Balance Interest Rates 
  Six Months ended June 30,    2016     2015  
ASSETS:            
Short-term interest bearing accounts $    14,851   $    43     0.58 % $   9,507   $   16     0.33 %
Securities available for sale (1)(2)     1,207,902       12,174     2.03 %     1,043,385       10,349     2.00 %
Securities held to maturity (1)      482,204       5,953     2.48 %     453,947       5,580     2.48 %
Investment in FRB and FHLB Banks     36,205       860     4.78 %     31,250       859     5.54 %
Loans (3)     5,945,875       124,028     4.19 %     5,637,829       119,770     4.28 %
 Total interest earning assets $    7,687,037   $    143,058     3.74 %     7,175,918   $   136,574     3.84 %
Other assets     723,134           690,777      
Total assets $    8,410,171       $   7,866,695      
             
LIABILITIES AND STOCKHOLDERS' EQUITY:            
Money market deposit accounts $    1,681,787   $    1,832     0.22 % $   1,571,843   $   1,603     0.21 %
NOW deposit accounts     1,062,920       266     0.05 %     973,390       249     0.05 %
Savings deposits     1,124,567       322     0.06 %     1,060,606       324     0.06 %
Time deposits     914,002       4,782     1.05 %     991,681       4,914     1.00 %
  Total interest bearing deposits $    4,783,276   $    7,202     0.30 % $   4,597,520   $   7,090     0.31 %
Short-term borrowings     427,016       907     0.43 %     284,160       265     0.19 %
Long-term debt     127,636       1,606     2.53 %     130,811       1,662     2.56 %
Junior subordinated debt     101,196       1,260     2.50 %     101,196       1,085     2.16 %
  Total interest bearing liabilities $    5,439,124   $    10,975     0.41 % $   5,113,687   $   10,102     0.40 %
Demand deposits     1,982,458           1,793,328      
Other liabilities     103,408           85,041      
Stockholders' equity     885,181           874,639      
Total liabilities and stockholders' equity $    8,410,171       $   7,866,695      
  Net interest income (FTE)       132,083           126,472    
Interest rate spread       3.33 %       3.44 %
Net interest margin       3.46 %       3.55 %
Taxable equivalent adjustment        1,729           1,621    
Net interest income   $    130,354       $   124,851    
             
(1) Securities are shown at average amortized cost            
(2) Excluding unrealized gains or losses            
(3) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding    
Note:  Interest income for tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory Federal income tax rate of 35%
           
NBT Bancorp Inc. and Subsidiaries          
CONSOLIDATED LOAN BALANCES          
(unaudited, dollars in thousands)          
           
           
    2016     2015  
  2nd Q 1st Q 4th Q 3rd Q 2nd Q
Residential real estate mortgages $   1,219,388   $   1,211,821   $   1,196,780   $   1,177,195   $   1,154,416  
Commercial     1,176,008       1,168,191       1,159,089       1,167,007       1,147,586  
Commercial real estate     1,497,683       1,448,920       1,430,618       1,435,378       1,423,489  
Consumer     1,629,836       1,620,669       1,568,204       1,549,844       1,495,160  
Home equity     516,478       518,208       528,442       541,564       550,237  
 Total loans $   6,039,393   $   5,967,809   $   5,883,133   $   5,870,988   $   5,770,888  
           
Contact: Martin A. Dietrich, CEO
Michael J. Chewens, CFO
NBT Bancorp Inc.52 South Broad StreetNorwich, NY 13815
607-337-6119

NBT Bancorp Inc.
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