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NBT Bancorp Inc. Announces Net Income of $82.2 Million and Diluted Earnings Per Share of $1.87; Declares Cash Dividend; Excluding the Estimated Impact of Tax Reform, Net Income Up 10.4% from 2016 to $86.6 Million and Diluted Earnings Per Share of $1.97

01/22/18

NORWICH, N.Y., Jan. 22, 2018 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ:NBTB) reported net income and diluted earnings per share for the year ended December 31, 2017.

Net income for the year ended December 31, 2017 was $82.2 million, up from $78.4 million for the prior year. Diluted earnings per share for the year ended December 31, 2017 was $1.87, up from $1.80 for the prior year. Net income excluding the $4.4 million estimated one-time, non-cash charge recorded in the provision for income taxes related to the enactment of the Tax Cuts and Jobs Act (“Tax Reform”) was up 10.4% from 2016 to $86.6 million or $1.97 diluted earnings per share. The estimate may be refined in future periods as further information becomes available.

Net income for the three months ended December 31, 2017 was $17.6 million, as compared to $22.9 million for the prior quarter and $19.6 million for the same period last year. Diluted earnings per share for the three months ended December 31, 2017 was $0.40, as compared with $0.52 for the prior quarter and $0.45 for the fourth quarter of 2016. Net income excluding the $4.4 million one-time, non-cash charge recorded in the provision for income taxes related to the enactment of Tax Reform was up 12.4% from the prior year fourth quarter to $22.0 million or $0.50 diluted earnings per share.

The Company will realize a reduction in tax expense beginning in 2018 due to Tax Reform decreasing the federal rate for corporations from 35% to 21%. As a result, the Company is raising the starting hourly pay rate of $11 to $15 per hour and employees earning $50,000 or less will receive a permanent minimum increase of 5%. This will positively impact over 61% of the Company’s workforce. Moreover, in 2018 the Company will be increasing both its investment in infrastructure to enhance customer-facing technology and contributions to nonprofit organizations in its footprint. 

Highlights:

  • Net income up 4.8% from the prior year, up 10.4% excluding the impact of Tax Reform
  • Year to date loan growth of 6.2%
  • Average demand deposits up 8.4% for the year
  • Net interest margin expands 4 basis points to 3.47%

“We delivered strong results in 2017, including record net income for the fifth straight year and a new annual EPS record,” said NBT President and CEO John H. Watt, Jr. “Our talented team of professionals has driven our success and their efforts have been supported by an improving domestic economy and higher consumer confidence. Tax reform has created an important opportunity for NBT to invest in our employees, the customer experience and our communities,” continued Watt. “Allocating resources to permanent wage increases, customer-facing technology and contributions to the organizations that serve our communities is in alignment with the intent of the tax reform act and, most important, it allows us to invest in enhancing our business, ultimately increasing the return to our shareholders.”

Net interest income was $283.5 million for the year ended December 31, 2017, up $19.1 million, or 7.2%, from 2016. Fully taxable equivalent (“FTE”) net interest margin was 3.47% for the year ended December 31, 2017 up from 3.43% for the year ended December 31, 2016. Average interest earning assets were up $457.9 million, or 5.9%, for the year ended December 31, 2017, as compared to the same period in 2016, driven by a $323.9 million increase in loans and a $132.8 million increase in securities. Interest income increased $22.5 million, or 7.8% due to the increase in earning assets combined with a 7 basis point (“bp”) improvement in asset yields. Interest expense was up $3.4 million, or 15.1%, for the year ended December 31, 2017 as compared to the same period in 2016 and resulted primarily from a $263.1 million increase in the average balance of interest bearing liabilities and a 4 bp increase in rates driven by changes in mix and higher borrowing costs.

Net interest income was $73.5 million for the fourth quarter of 2017, up $1.5 million, or 2.1%, from the previous quarter. FTE net interest margin was 3.52% for the three months ended December 31, 2017 up from 3.47% for the previous quarter. The yield on average earning assets increased 4 bps from the prior quarter to 3.84% while the cost of interest bearing liabilities remained relatively consistent at 0.46% for the quarter ended December 31, 2017. Average interest earning assets were up $42.4 million, or 0.5%, as compared to the prior quarter, primarily driven by a $128.2 million increase in loans and a $77.0 million decrease in securities.

Net interest income was $73.5 million for the fourth quarter of 2017, up $6.0 million, or 8.9%, from the fourth quarter of 2016. FTE net interest margin of 3.52% was up 11 bps from the fourth quarter of 2016 as the improvement in asset yields was partially offset by the increase in cost of interest bearing liabilities. Average interest earning assets were up $402.7 million, or 5.0%, from the same period in 2016, primarily driven by a $372.5 million increase in loans and a $33.7 million increase in securities.

Noninterest income for the year ended December 31, 2017 was $121.3 million, up $5.6 million, or 4.8%, from the same period of 2016. The increase in noninterest income from the prior year was driven by higher retirement plan administration fees, net securities gains (losses), ATM and debit card fees and trust revenues that were partially offset by lower other noninterest income and insurance and other financial services revenue during 2017 as compared to 2016. Retirement plan administration fees increased in 2017 as compared to the prior year due primarily to acquisitions completed in 2016 and the acquisition of Downeast Pension Services (“DPS”) in the second quarter of 2017. Net securities gains (losses) increased due to a gain recognized on the sale of securities in 2017 as compared to a net loss in 2016. ATM and debit card fees increased from the prior year due to a higher number of accounts and increased usage in 2017 as compared to 2016. Trust revenue increased from the prior year due to market returns and account growth. Other noninterest income decreased from 2016 to 2017 due to lower swap fee income and a net decrease in non-recurring items of $1.4 million. Insurance and other financial services revenue decreased from the prior year primarily due to the divestiture of a book of business in the third quarter of 2016.

Noninterest income for the three months ended December 31, 2017 was $31.5 million, up $0.7 million, or 2.3%, from the prior quarter and up $3.4 million, or 12.0%, from the fourth quarter of 2016. The increase from the prior quarter was driven by higher net securities gains (losses) offset by lower other noninterest income. Other noninterest income decreased due to $0.7 million in lower swap fees and a miscellaneous recovery of $0.2 million. The increase in noninterest income from the fourth quarter of 2016 was driven by higher net securities gains (losses), retirement plan administration, ATM and debit card fees and trust revenue that were offset by lower other financial services revenue during the fourth quarter of 2017. Other noninterest income decreased from the same period of 2016 due to $0.2 million reduction in swap fees and a $0.5 million equity investment dividend received in 2016 that did not occur in 2017.

Noninterest expense for the year ended December 31, 2017 was $245.6 million, up $9.7 million, or 4.1%, from the same period of 2016 due to higher salaries and employee benefits, loan collection and other real estate owned (“OREO”) expense and other noninterest expense. Other noninterest expense increased $3.9 million due to the write-down of an intangible asset no longer in use due to a change in business strategy combined with a favorable settlement of an accrual in 2016. Salaries and employee benefits increased from the prior year due to the acquisition of DPS in the second quarter of 2017 and higher medical costs. Loan collection and OREO expense increased from the prior year due primarily to commercial property write-downs.

Noninterest expense for the three months ended December 31, 2017 was $63.4 million, up $2.8 million, or 4.7%, from the prior quarter and up $5.8 million, or 10.1%, from the fourth quarter of 2016. The increase from the prior quarter was driven by higher other noninterest expense, professional fees and advertising expenses that were offset by a decrease in loan collection and OREO expenses. The increase from the fourth quarter of 2016 was driven by increases in other noninterest and salaries and employee benefits expenses. Salaries and employee benefits expense increased from the fourth quarter of 2016 due to the acquisition of DPS in the second quarter of 2017. Other noninterest expense increased from the prior quarter due to the write-down of intangible assets no longer in use. Other noninterest expense increased from the prior year quarter due to the previously mentioned intangible asset write-down combined with the favorable settlement of an accrual in the fourth quarter of 2016.

Income tax expense for the year ended December 31, 2017 was $46.0 million, up $5.6 million, or 13.9%, from $40.4 million, for the same period of 2016. The effective tax rate of 35.9% for 2017 was up from 34.0% for 2016. The increase from the prior year was primarily due to a higher level of taxable income in 2017 combined with the $4.4 million estimated non-cash charge related to the enactment of Tax Reform resulting in the re-measurement of the Company’s deferred tax assets and liabilities arising from the lower federal tax rate. The estimate may change, possibly materially, due to further analysis, guidance and changes in interpretations. Offsetting this charge was a $1.8 million income tax benefit related to the adoption of new accounting guidance in 2017. Excluding the Tax Reform charge and the tax benefit of the new accounting guidance, the effective tax rate was 33.8% for 2017.

Income tax expense for the three months ended December 31, 2017 was $15.7 million, up $4.3 million, or 38.3%, from the prior quarter and up $5.6 million, or 55.3%, from the fourth quarter of 2016. The effective tax rate of 47.1% for the fourth quarter of 2017 was up from 33.1% for the third quarter of 2017 and up from 34.0% for the fourth quarter of 2016. The increase in income tax expense from the prior quarter was due to the impact of Tax Reform. The increase in income tax expense from the same quarter of the prior year was due to a higher level of taxable income and the previously mentioned Tax Reform charge. Excluding the Tax Reform charge and the tax benefit of the new accounting guidance, the effective tax rate was 33.7% and 34.1% for the third and fourth quarters of 2017, respectively.

In the first quarter of 2017, NBT adopted new accounting guidance for equity-based transactions requiring that all excess tax benefits and tax deficiencies associated with equity-based compensation be recognized as an income tax benefit or expense in the income statement. Previously, tax effects resulting from changes in NBT’s share price subsequent to the grant date were recorded through stockholders’ equity at the time of vesting or exercise. The adoption of the accounting guidance resulted in income tax benefits of $1.4 million, $0.1 million, $0.2 million and $0.1 million, in the first, second, third and fourth quarters of 2017, respectively. The year-to-date impact to diluted earnings per share was $0.04.

Asset Quality

Net charge-offs were $26.7 million for the year ended December 31, 2017, as compared to $23.2 million for the same period of 2016. Provision expense was $31.0 million for the year ended December 31, 2017, as compared with $25.4 million for same period of 2016. Provision expense increased as compared to the year ended December 31, 2016 due to loan growth and higher net charge-offs driven by higher charge-offs in the consumer ($2.4 million) and residential ($0.6 million) portfolios. Annualized net charge-offs to average loans for the year ended December 31, 2017 was 0.42% compared with 0.39% for the same period of 2016.

Net charge-offs were $7.0 million for the three months ended December 31, 2017, as compared to $6.1 million for the prior quarter and $8.6 million for the fourth quarter of 2016. Provision expense was $8.2 million for the three months ended December 31, 2017, as compared with $7.9 million for the prior quarter and $8.2 million for the fourth quarter of 2016. Annualized net charge-offs to average loans for the fourth quarter of 2017 was 0.43%, up from 0.38% for the prior quarter of 2017 and down from 0.56% for the fourth quarter of 2016.

Nonperforming loans to total loans was 0.47% at December 31, 2017, up 5 bps from 0.42% for the prior quarter and down 18 bps from 0.65% at December 31, 2016. Past due loans as a percentage of total loans were 0.63% at December 31, 2017, which equaled the prior quarter and were comparable to 0.64% at December 31, 2016.

The allowance for loan losses totaled $69.5 million at December 31, 2017, compared to $68.4 million at September 30, 2017 and $65.2 million at December 31, 2016. The allowance for loan losses as a percentage of loans was 1.06% (1.12% excluding acquired loans) at December 31, 2017, compared to 1.06% (1.13% excluding acquired loans) at September 30, 2017 and 1.05% (1.13% excluding acquired loans) at December 31, 2016.

Balance Sheet

Total assets were $9.1 billion at December 31, 2017, up $269.5 million, or 3.0%, from December 31, 2016. Loans were $6.6 billion at December 31, 2017, up $386.7 million, or 6.2%, from December 31, 2016. Total deposits were $7.2 billion at December 31, 2017, up $196.9 million, or 2.8%, from December 31, 2016. Stockholders’ equity was $958.2 million, representing a total equity-to-total assets ratio of 10.49% at December 31, 2017, compared with $913.3 million or a total equity-to-total assets ratio of 10.30% at December 31, 2016.

Stock Repurchase Program

The Company did not purchase shares of its common stock during the three or twelve months ended December 31, 2017. As of December 31, there were 1,000,000 shares available for repurchase under a plan authorized on October 23, 2017, which expires on December 31, 2019.

Dividend

The NBT Board of Directors approved a 2018 first-quarter cash dividend of $0.23 per share at a meeting held today. The dividend will be paid on March 15, 2018 to shareholders of record as of March 1, 2018.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.1 billion at December 31, 2017. 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 152 banking locations 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 is available online 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 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, which 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 FTE 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.

Contact: 

John H. Watt, Jr., President and CEO
Michael J. Chewens, CFO
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
607-337-6119


NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, dollars in thousands except per share data)
           
  2017 2016
Profitability: 4th Q 3rd Q 2nd Q 1st Q 4th Q
Diluted Earnings Per Share $   0.40 $   0.52 $   0.49 $   0.46 $   0.45
Weighted Average Diluted Common Shares Outstanding 43,957,571 43,914,536 43,901,207 43,883,471 43,703,122
Return on Average Assets (1) 0.77% 1.00% 0.95% 0.92% 0.89%
Return on Average Equity (1) 7.27% 9.55% 9.11% 8.94% 8.54%
Return on Average Tangible Common Equity (1)(3) 10.65% 13.99% 13.46% 13.24% 12.68%
Net Interest Margin (1)(2) 3.52% 3.47% 3.44% 3.46% 3.41%
           
  12 Months ended December 31,      
Profitability: 2017 2016      
Diluted Earnings Per Share $   1.87 $   1.80      
Weighted Average Diluted Common Shares Outstanding 43,904,520 43,621,848      
Return on Average Assets 0.91% 0.92%      
Return on Average Equity 8.71% 8.74%      
Return on Average Tangible Common Equity (4) 12.82% 13.13%      
Net Interest Margin (2) 3.47% 3.43%      
           
(1) Annualized.
(2) Calculated on a FTE basis.
(3) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
 
  2017 2016
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Net Income $     17,637 $     22,876 $     21,359 $     20,279 $     19,608
Amortization of intangible assets (net of tax)   594   613   642   597   582
Net income, excluding intangibles amortization $     18,231 $     23,489 $     22,001 $     20,876 $     20,190
           
Average stockholders' equity $   962,660 $   950,557 $   940,897 $   920,047 $   913,849
Less: average goodwill and other intangibles   283,554   284,536   285,388   280,774   280,275
Average tangible common equity $   679,106 $   666,021 $   655,509 $   639,273 $   633,574
           
(4) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
 
  12 Months ended December 31,      
  2017 2016      
Net Income $     82,151 $     78,409      
Amortization of intangible assets (net of tax)   2,446   2,400      
Net income, excluding intangibles amortization $     84,597 $     80,809      
           
Average stockholders' equity $   943,676 $   897,230      
Less: average goodwill and other intangibles   283,573   281,758      
Average tangible common equity $   660,103 $   615,472      
           
Note: Year-to-date 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)
           
  2017 2016
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Balance Sheet Data:          
Securities Available for Sale $   1,255,925 $   1,357,614 $   1,365,521 $   1,367,574 $   1,338,290
Securities Held to Maturity   484,073   494,309   515,628   515,793   527,948
Net Loans   6,515,273   6,398,584   6,301,311   6,206,603   6,132,857
Total Assets   9,136,812   9,155,396   9,076,418   8,945,485   8,867,268
Total Deposits   7,170,636   7,231,236   7,015,284   7,185,051   6,973,688
Total Borrowings   909,188   872,060   1,021,339   745,462   886,986
Total Liabilities   8,178,635   8,200,158   8,136,057   8,018,646   7,953,952
Stockholders' Equity   958,177   955,238   940,361   926,839   913,316
           
Asset Quality:          
Nonaccrual Loans $   25,708 $   23,453 $   29,134 $   32,674 $   35,712
90 Days Past Due and Still Accruing   5,410   3,388   2,849   2,392   4,810
Total Nonperforming Loans   31,118   26,841   31,983   35,066   40,522
Other Real Estate Owned   4,529   4,230   4,747   6,940   5,581
Total Nonperforming Assets   35,647   31,071   36,730   42,006   46,103
Allowance for Loan Losses   69,500   68,350   66,600   65,700   65,200
           
Asset Quality Ratios (Total):          
Allowance for Loan Losses to Total Loans 1.06% 1.06% 1.05% 1.05% 1.05%
Total Nonperforming Loans to Total Loans 0.47% 0.42% 0.50% 0.56% 0.65%
Total Nonperforming Assets to Total Assets 0.39% 0.34% 0.40% 0.47% 0.52%
Allowance for Loan Losses to Total Nonperforming Loans 223.34% 254.65% 208.24% 187.36% 160.90%
Past Due Loans to Total Loans 0.63% 0.63% 0.59% 0.54% 0.64%
Net Charge-Offs to Average Loans (1) 0.43% 0.38% 0.42% 0.45% 0.56%
           
Asset Quality Ratios (Originated) (2):          
Allowance for Loan Losses to Loans 1.12% 1.13% 1.13% 1.13% 1.13%
Nonperforming Loans to Loans 0.46% 0.39% 0.48% 0.53% 0.61%
Allowance for Loan Losses to Nonperforming Loans 243.85% 289.67% 235.08% 213.71% 186.82%
Past Due Loans to Loans 0.65% 0.65% 0.61% 0.55% 0.66%
           
Capital:          
Equity to Assets 10.49% 10.43% 10.36% 10.36% 10.30%
Book Value Per Share $   22.01 $   21.94 $   21.61 $   21.34 $   21.11
Tangible Book Value Per Share (3) $   15.54 $   15.42 $   15.06 $   14.88 $   14.61
Tier 1 Leverage Ratio 9.14% 9.12% 9.08% 9.08% 9.11%
Common Equity Tier 1 Capital Ratio 10.06% 10.08% 9.96% 10.02% 9.98%
Tier 1 Capital Ratio 11.42% 11.46% 11.36% 11.43% 11.42%
Total Risk-Based Capital Ratio 12.42% 12.45% 12.32% 12.40% 12.39%
Common Stock Price (End of Period) $   36.80 $   36.72 $   36.95 $   37.07 $   41.88
           
(1)  Annualized.
(2)  Non-GAAP measure - 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)
     
  December 31, December 31,
Assets: 2017 2016
Cash and due from banks $   156,852 $   147,789
Short-term interest bearing accounts   2,812   1,392
Securities available for sale, at fair value    1,255,925   1,338,290
Securities held to maturity (fair value $481,871 and $525,050, respectively)   484,073   527,948
Trading securities   11,467   9,259
Federal Reserve and Federal Home Loan Bank stock   46,706   47,033
Loans   6,584,773   6,198,057
Less allowance for loan losses   69,500   65,200
  Net loans  6,515,273 6,132,857
Premises and equipment, net   81,305   84,187
Goodwill   268,043   265,439
Intangible assets, net   13,420   15,815
Bank owned life insurance   172,388   168,012
Other assets   128,548   129,247
Total assets $   9,136,812 $   8,867,268
     
Liabilities and stockholders' equity:    
Deposits:    
Demand (noninterest bearing) $   2,286,892 $   2,195,845
Savings, NOW, and money market   4,076,978   3,905,432
Time   806,766   872,411
  Total deposits 7,170,636 6,973,688
Short-term borrowings   719,123   681,703
Long-term debt   88,869   104,087
Junior subordinated debt   101,196   101,196
Other liabilities   98,811   93,278
  Total liabilities 8,178,635 7,953,952
     
Total stockholders' equity   958,177   913,316
     
Total liabilities and stockholders' equity $   9,136,812 $   8,867,268
     


NBT Bancorp Inc. and Subsidiaries 
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2017 2016 2017 2016
Interest, fee and dividend income:        
Interest and fees on loans $     69,697 $     63,901 $   267,096 $   250,994
Securities available for sale 7,059   6,057   28,564   24,033
Securities held to maturity 2,671   2,524   10,934   9,852
Other 803   627   2,813   2,068
  Total interest, fee and dividend income   80,230   73,109   309,407   286,947
Interest expense:        
Deposits 3,817   3,557   14,475   14,366
Short-term borrowings 1,621   641   5,996   2,309
Long-term debt 505   779   2,299   3,204
Junior subordinated debt 836   707   3,144   2,627
  Total interest expense   6,779   5,684   25,914   22,506
Net interest income   73,451   67,425   283,493   264,441
Provision for loan losses 8,153   8,165   30,988   25,431
  Net interest income after provision for loan losses   65,298   59,260   252,505   239,010
Noninterest income:        
Insurance and other financial services revenue 5,605   5,711   23,532   24,396
Service charges on deposit accounts 4,351   4,270   16,750   16,729
ATM and debit card fees 5,347   4,868   21,372   19,448
Retirement plan administration fees 5,332   4,126   20,213   16,063
Trust 4,966   4,717   19,586   18,565
Bank owned life insurance income 1,262   1,297   5,175   5,195
Net securities gains (losses)   1,869   (674)   1,867   (644)
Other 2,740   3,773   12,809   15,961
  Total noninterest income   31,472   28,088   121,304   115,713
Noninterest expense:        
Salaries and employee benefits 33,409   32,008   133,610   131,284
Occupancy 5,280   5,160   21,808   20,940
Data processing and communications 4,242   4,141   17,068   16,495
Professional fees and outside services 3,751   3,712   13,499   13,617
Equipment 4,001   3,632   15,225   14,295
Office supplies and postage 1,604   1,507   6,284   6,168
FDIC expense   1,196   1,273   4,767   5,111
Advertising  1,033   823   2,744   2,556
Amortization of intangible assets 961   952   3,960   3,928
Loan collection and other real estate owned 1,136   923   4,763   3,458
Other 6,831   3,508   21,920   18,070
  Total noninterest expense 63,444 57,639 245,648 235,922
Income before income taxes 33,326 29,709 128,161 118,801
Income tax expense 15,689   10,101   46,010   40,392
  Net income $     17,637 $     19,608 $     82,151 $     78,409
Earnings Per Share:        
  Basic $         0.40 $         0.45 $         1.89 $         1.81
  Diluted $         0.40 $         0.45 $         1.87 $         1.80
         


NBT Bancorp Inc. and Subsidiaries
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
           
  2017 2016
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Interest, fee and dividend income:          
Interest and fees on loans $  69,697 $  68,086 $  65,286 $  64,027 $  63,901
Securities available for sale  7,059    7,278 7,218 7,009 6,057
Securities held to maturity 2,671 2,746 2,736 2,781 2,524
Other 803 737 654 619 627
  Total interest, fee and dividend income 80,230 78,847 75,894 74,436 73,109
Interest expense:          
Deposits 3,817 3,648 3,536 3,474 3,557
Short-term borrowings 1,621 1,870 1,366 1,139 641
Long-term debt 505 589 599 606 779
Junior subordinated debt  836 810 772 726 707
  Total interest expense 6,779 6,917 6,273 5,945 5,684
Net interest income 73,451 71,930 69,621 68,491 67,425
Provision for loan losses   8,153    7,889   7,567   7,379 8,165
  Net interest income after provision for loan losses 65,298 64,041 62,054 61,112 59,260
Noninterest income:          
Insurance and other financial services revenue 5,605 5,536 5,621 6,770 5,711
Service charges on deposit accounts 4,351 4,261 4,161 3,977 4,270
ATM and debit card fees 5,347 5,557 5,518  4,950 4,868
Retirement plan administration fees 5,332 5,272 5,437 4,172 4,126
Trust 4,966 4,927 5,161 4,532 4,717
Bank owned life insurance income  1,262 1,284 1,218 1,411 1,297
Net securities gains (losses) 1,869    (4)    2  -  (674)
Other 2,740 3,945 3,186 2,938 3,773
  Total noninterest income 31,472 30,778 30,304 28,750 28,088
Noninterest expense:          
Salaries and employee benefits 33,409 33,309 33,081 33,811 32,008
Occupancy 5,280 5,174 5,184 6,170 5,160
Data processing and communications 4,242 4,399 4,229 4,198 4,141
Professional fees and outside services 3,751 3,107 3,609 3,032 3,712
Equipment 4,001 3,733 3,793 3,698 3,632
Office supplies and postage 1,604 1,432 1,640 1,608 1,507
FDIC expense 1,196 1,257 1,136 1,178 1,273
Advertising 1,033 665 656 390 823
Amortization of intangible assets 961 993 1,039 967 952
Loan collection and other real estate owned 1,136 1,684 664 1,279 923
Other 6,831 4,848 5,290 4,951 3,508
   Total noninterest expense 63,444 60,601 60,321 61,282 57,639
Income before income taxes 33,326 34,218 32,037 28,580 29,709
Income tax expense 15,689 11,342 10,678 8,301 10,101
  Net income $  17,637 $  22,876 $  21,359 $  20,279 $  19,608
Earnings Per Share:          
  Basic $   0.40 $    0.52 $    0.49 $    0.47 $    0.45
  Diluted $    0.40 $     0.52 $     0.49 $     0.46 $     0.45
           
Note:  Year-to-date 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
Three Months ended,  Q4 - 2017 Q3 - 2017 Q2 - 2017 Q1 - 2017 Q4 - 2016
Assets:                    
Short-term interest bearing accounts $ 5,804 2.39% $   9,000 2.42% $   9,497 1.82% $   14,342 1.33% $   14,190 0.64%
Securities available for sale (1)(2)  1,313,870 2.16%   1,374,739 2.13%   1,363,314 2.15%   1,352,219 2.14%   1,277,931 1.92%
Securities held to maturity (1)   490,182 2.68%   506,324 2.66%   513,888 2.63%   520,283 2.66%   492,415 2.54%
Investment in FRB and FHLB Banks  44,320 6.87%   49,902 5.42%   46,132 5.31%   46,326 5.01%   39,448 6.09%
Loans (3)  6,528,449 4.25%   6,400,287 4.23%   6,294,056 4.17%   6,211,058 4.19%   6,155,985 4.14%
Total interest earning assets $ 8,382,625 3.84% $   8,340,252 3.80% $   8,226,887 3.75% $   8,144,228 3.75% $   7,979,969 3.69%
Other assets 747,468     759,636     753,383     748,476     760,563  
Total assets $ 9,130,093   $   9,099,888    $ 8,980,270    $ 8,892,704   $   8,740,532  
                     
Liabilities and stockholders' equity:                    
Money market deposit accounts $ 1,725,242 0.25% $   1,652,730 0.23% $   1,723,594 0.21% $   1,688,060 0.21% $   1,674,119 0.21%
NOW deposit accounts 1,200,651 0.12%   1,130,940 0.10%   1,138,237 0.08%   1,143,231 0.06%   1,130,578 0.05%
Savings deposits 1,215,932 0.06%   1,232,823 0.06%   1,232,301 0.06%   1,176,224 0.05%   1,145,352 0.06%
Time deposits 792,969 1.10%   805,435 1.09%   824,398 1.08%   847,410 1.07%   890,506 1.06%
Total interest bearing deposits $  4,934,794 0.31% $   4,821,928 0.30% $   4,918,530 0.29% $   4,854,925 0.29% $   4,840,555 0.29%
Short-term borrowings 684,447 0.94%   773,074 0.96%   643,971 0.85%   657,442 0.70%   523,708 0.49%
Long-term debt 81,010 2.47%   88,935 2.63%   99,865 2.41%   104,048 2.36%   109,656 2.83%
Junior subordinated debt 101,196 3.28%   101,196 3.18%   101,196 3.06%   101,196 2.91%   101,196 2.78%
Total interest bearing liabilities $ 5,801,447 0.46% $   5,785,133 0.47% $   5,763,562 0.44% $   5,717,611 0.42% $   5,575,115 0.41%
Demand deposits 2,266,672     2,260,973     2,181,952     2,159,893     2,136,310  
Other liabilities 99,314     103,225     93,859     95,153     115,258  
Stockholders' equity 962,660     950,557     940,897     920,047     913,849  
Total liabilities and stockholders' equity $ 9,130,093   $   9,099,888   $   8,980,270    $ 8,892,704   $   8,740,532  
                     
Interest rate spread   3.38%   3.33%   3.31%   3.33%   3.29%
Net interest margin   3.52%   3.47%   3.44%   3.46%   3.41%
                     
(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 FTE 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 
Twelve Months ended December 30,  2017 2016
Assets:            
Short-term interest bearing accounts $   9,636 $   179 1.86% $   16,301 $   95 0.58%
Securities available for sale (1)(2)   1,350,995   28,969 2.14%   1,237,930   24,450 1.98%
Securities held to maturity (1)    507,583   13,490 2.66%   487,837   12,255 2.51%
Investment in FRB and FHLB Banks   46,673   2,634 5.64%   38,867   1,973 5.08%
Loans (3)   6,359,447   267,934 4.21%   6,035,513   251,723 4.17%
Total interest earning assets $   8,274,334 $   313,206 3.79%   7,816,448 $   290,496 3.72%
Other assets   752,258       740,506    
Total assets $   9,026,592     $   8,556,954    
             
Liabilities and stockholders' equity:            
Money market deposit accounts $   1,697,386 $   3,864 0.23% $   1,668,555 $   3,599 0.22%
NOW deposit accounts   1,153,361   1,051 0.09%   1,077,581   546 0.05%
Savings deposits   1,214,480   683 0.06%   1,135,182   652 0.06%
Time deposits   817,370   8,877 1.09%   905,126   9,569 1.06%
Total interest bearing deposits $   4,882,597 $   14,475 0.30% $   4,786,444 $   14,366 0.30%
Short-term borrowings   690,036   5,996 0.87%   497,654   2,309 0.46%
Long-term debt   93,389   2,299 2.46%   118,860   3,204 2.70%
Junior subordinated debt   101,196   3,144 3.11%   101,196   2,627 2.60%
Total interest bearing liabilities $   5,767,218 $   25,914 0.45% $   5,504,154 $   22,506 0.41%
Demand deposits   2,217,785       2,045,465    
Other liabilities   97,913       110,105    
Stockholders' equity   943,676       897,230    
Total liabilities and stockholders' equity $   9,026,592     $   8,556,954    
Net interest income (FTE)     287,292       267,990  
Interest rate spread     3.34%     3.31%
Net interest margin     3.47%     3.43%
Taxable equivalent adjustment      3,799       3,549  
Net interest income   $   283,493     $   264,441  
             
(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 FTE basis using the statutory Federal income tax rate of 35%.
 


NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED LOAN BALANCES
(unaudited, dollars in thousands)
           
  2017 2016
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Residential real estate mortgages $   1,321,695 $   1,302,577 $   1,275,807 $   1,275,774 $   1,262,614
Commercial   1,317,174   1,307,560   1,342,334   1,284,464   1,242,701
Commercial real estate   1,711,095   1,654,727   1,563,980   1,540,472   1,543,301
Consumer   1,740,038   1,700,340   1,684,936   1,669,369   1,641,657
Home equity   494,771   501,730   500,854   502,224   507,784
Total loans $   6,584,773 $   6,466,934 $   6,367,911 $   6,272,303 $   6,198,057
           

Source: NBT Bancorp Inc.

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