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NBT Bancorp Inc. Announces Second Quarter Net Income of $40.3 Million ($0.92 Per Diluted Common Share); Approves a 3.7% Dividend Increase

07/26/21

NORWICH, N.Y., July 26, 2021 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and six months ended June 30, 2021.

Net income for the three months ended June 30, 2021 was $40.3 million, or $0.92 per diluted common share. Net income increased $15.6 million from the second quarter of 2020 primarily due to the estimated impact of the COVID-19 pandemic on expected credit losses in 2020, which resulted in a second quarter 2020 provision for loan losses of $18.8 million. Net income increased $0.5 million from the previous quarter primarily due to lower provision for loan losses and higher noninterest income, partly offset by higher noninterest expense.

Pre-provision net revenue (“PPNR”)1 for the second quarter of 2021 was $49.0 million compared to $47.5 million in the previous quarter and $50.7 million in the second quarter of 2020.

CEO Comments

“Through the first half of 2021 momentum at NBT has continued to build,” said NBT President and CEO John H. Watt, Jr. “Our team has driven growth with increases in total loans and pivoted quickly from supporting our customers and communities through the worst of the pandemic and the reopening of our markets to full-on execution of our strategic growth plans. We continue to prioritize our disciplined approach to the allocation of capital, including the advancement of our New England expansion with our first full-service locations in Connecticut opening in the second quarter. Our continued strong capital generation and our commitment to enhancing long-term shareholder value resulted in our decision to increase our quarterly dividend to $0.28 per share, a 3.7% increase.”

Second Quarter Financial Highlights

Net Income
  • Net income of $40.3 million
  • Diluted earnings per share of $0.92
Net Interest Income / NIM
  • Net interest income on a fully taxable equivalent basis was $79.5 million1
  • Net interest margin (“NIM”) on a fully taxable equivalent basis was 3.00%1, down 17 basis points (“bps”) from the prior quarter
PPNR
  • PPNR1 was $49.0 million compared to $47.5 million in the first quarter of 2021 and $50.7 million in the second quarter of 2020
Loans and Credit Quality
  • Period end loans were $7.5 billion, up 1%, annualized, from December 31, 2020
  • Excluding $360 million of Paycheck Protection Program (“PPP”) loans at June 30, 2021, period end loans increased $61 million or 0.9% from March 31, 2021
  • Allowance for loan losses to total loans of 1.31% (1.38% excluding PPP loans and related allowance), down 7 bps from the first quarter 2021 (down 10 bps excluding PPP loans and related allowance)
  • Net charge-offs to average loans was 0.07%, annualized (0.07% excluding PPP loans)
  • Nonperforming assets to total assets was 0.38% (0.39% excluding PPP loans)
Capital
  • Tangible book value per share2 grew 4% for the quarter and 10% from prior year to $21.50 at June 30, 2021
  • Tangible equity to assets of 8.28%1
  • CET1 ratio of 12.12%; Leverage ratio of 9.40%

Loans

  • Period end total loans were $7.5 billion at June 30, 2021 and at December 31, 2020.
  • Excluding PPP loans, period end loans increased $60.9 million from March 31, 2021. Commercial and industrial loans increased $12.4 million to $1.5 billion; commercial real estate loans increased $23.5 million to $2.3 billion; and total consumer loans increased $25.0 million to $3.4 billion.
  • Total PPP loans as of June 30, 2021 were $360 million (net of unamortized fees). The following activity occurred during the second quarter of 2021:
    • $37 million in originations
    • $232.3 million of loans forgiven
    • $4.7 million of interest and fees recognized into interest income
  • Commercial line of credit utilization rate was 22% at June 30, 2021 consistent with 22% at March 31, 2021 and compared to 26% at June 30, 2020.

Deposits

  • Average total deposits in the second quarter of 2021 were $9.9 billion, compared to $9.3 billion in the first quarter of 2021, driven by increases in non-interest bearing demand deposit accounts, money market deposit accounts and savings deposit accounts.
  • Loan to deposit ratio was 76.8% at June 30, 2021, compared to 82.6% at December 31, 2020.

Net Interest Income and Net Interest Margin

  • Net interest income for the second quarter of 2021 was $79.2 million, which was consistent with the first quarter of 2021 and down $1.3 million or 1.6% from the second quarter of 2020.
  • The NIM on a fully taxable equivalent (“FTE”) basis for the second quarter of 2021 was 3.00%, down 17 bps from the first quarter of 2021 and down 38 bps from the second quarter of 2020. The net impact of PPP loans and excess liquidity negatively impacted the NIM by 24 bps in the second quarter of 2021 compared to a negative 8 bps impact in the first quarter 2021. Excluding the impact of PPP lending and excess liquidity from each quarter, the NIM decreased 1 bp from the prior quarter primarily due to a 4 bp decline in earning asset yields partially offset by a 3 bp decline in the cost of interest bearing liabilities and a $223 million increase in average checking deposit account balances during the quarter.
  • Earning asset yields for the three months ended June 30, 2021 were down 20 bps from the prior quarter and down 50 bps from the same quarter in the prior year. Earning assets grew $490.0 million or 4.8% from the prior quarter and grew $1.0 billion or 10.7% from the same quarter in the prior year. The following are highlights from the prior quarter:
    • Excess liquidity resulted in a $386.7 million increase in the average balances of short-term interest bearing accounts with a yield of 0.09%.
    • The average balance of investment securities increased $103.9 million while yields declined 13 bps.
    • Loan yields decreased 6 bps to 3.96% for the quarter. Excluding PPP loans, yields decreased 1 bp from the prior quarter.
  • Total cost of deposits was 0.12% for the second quarter of 2021, down 2 bps from the prior quarter and down 11 bps from the same period in the prior year.
  • The cost of interest-bearing liabilities for the three months ended June 30, 2021 was 0.29%, down 5 bps compared to the prior quarter of 0.34% and down 16 bps from the second quarter of 2020 of 0.45%.
    • Cost of interest-bearing deposits decreased 3 bps from the prior quarter and decreased 16 bps from the same quarter in 2020.

Credit Quality and Allowance for Credit Losses

  • Net charge-offs to total average loans of 7 bps (7 bps excluding PPP loans) compared to 12 bps (13 bps excluding PPP loans) in the prior quarter and 28 bps (30 bps excluding PPP loans) in the second quarter of 2020. The decrease in charge-offs during the second quarter of 2021 was primarily due to lower charge-offs in the consumer loan portfolios, which continue to be at lower levels due to the support of government pandemic relief programs.
  • Nonperforming assets to total assets was 0.38% (0.39% excluding PPP loans) compared to 0.41% (0.43% excluding PPP loans) at March 31, 2021 and 0.27% (0.28% excluding PPP loans) at June 30, 2020.
  • Provision expense for the three months ended June 30, 2021 was a net benefit of $5.2 million and net charge-offs were $1.3 million. The net provision benefit was $2.4 million more than the first quarter of 2021 compared to provision expense of $18.8 million in the second quarter of 2020. The decrease in provision expense from the prior quarter and second quarter of 2020 was primarily due to the reduction in the level of allowance for loan losses resulting from an improved economic forecast and lower levels of charge-offs.
  • The allowance for loan losses was $98.5 million or 1.31% (1.38% excluding PPP loans and related allowance) of total loans compared to 1.38% (1.48% excluding PPP loans and related allowance) at March 31, 2021 and 1.49% (1.59% excluding PPP loans and related allowance) at June 30, 2020. The decrease in the level of allowance for credit losses was primarily due to the positive impact the forecasted improving economic conditions had on expected credit losses.
  • The reserve for unfunded loan commitments decreased to $5.8 million at June 30, 2021 compared to the prior quarter at $5.9 million.

Noninterest Income

  • Total noninterest income, excluding securities gains (losses), was $39.1 million for the three months ended June 30, 2021, up $2.5 million from the prior quarter and up $4.3 million from the prior year quarter.
  • Service charges on deposit accounts were comparable to the prior quarter and higher than the second quarter of 2020.
  • ATM and debit card fees were up compared to the prior quarter and the second quarter of 2020 due to increased volume and higher per transaction rates.
  • Retirement plan administration fees were lower than the prior quarter driven by seasonal revenue fluctuations, and higher than the second quarter of 2020 driven by market performance and organic growth in relationships.
  • Wealth management fees was higher than both the prior quarter and second quarter of 2020 driven by market performance and organic growth.
  • Other noninterest income increased slightly from the prior quarter and decreased from the second quarter of 2020 due to lower loan swap fee income and lower mortgage banking income.

Noninterest Expense

  • Total noninterest expense for the second quarter of 2021 was up 5.2% from the previous quarter and up 9.3% from the second quarter of 2020.
  • Salaries and benefits increased from the prior quarter and the second quarter of 2020 due to one additional day of payroll in the second quarter, annual merit pay increases and higher medical expenses, partially offset by lower stock-based compensation.
  • Occupancy expense is down from the prior quarter due to lower seasonal maintenance and utility expenses and comparable to the second quarter of 2020.
  • Data processing and communications decreased from the prior quarter and were higher compared to the second quarter of 2020 driven by continued investments in digital platform solutions including a technology-enabled PPP platform.
  • Professional fees and outside services increased from the prior quarter due to timing of initiatives, and were higher compared to the second quarter of 2020 as a result of certain projects paused during the COVID-19 pandemic.
  • Equipment expense was higher than both the prior quarter and the second quarter of 2020 due to higher technology costs associated with several digital upgrades.
  • Other expenses increased from the prior quarter and the second quarter of 2020 and included $1.9 million in non-recurring costs, including an estimated legal settlement charge.

Income Taxes

  • The effective tax rate was 22.9% for the second quarter of 2021 compared to 21.9% for the first quarter of 2021 and 21.0% for the second quarter of 2020. The increase was due to a higher level of taxable income relative to total income.

Capital

  • Capital ratios remain strong with tangible common equity to tangible assets1 at 8.28%. Tangible book value per share2 grew 4% from the prior quarter and 10% from the prior year quarter to $21.50.
  • June 30, 2021 CET1 capital ratio of 12.12%, leverage ratio of 9.40 % and total risk-based capital ratio of 15.78%.

Dividend and Stock Repurchase

  • The Board of Directors approved a third-quarter cash dividend of $0.28 per share at a meeting held today. The dividend, which represents a $0.01, or 3.7% increase, will be paid on September 15, 2021 to shareholders of record as of September 1, 2021. The increased dividend represents a yield of 3.3% based upon the closing price of the Company’s stock on July 21, 2021.
  • The Company purchased 23,627 shares of common stock during the second quarter of 2021 at a weighted average price of $36.03 excluding commissions. As of June 30, 2021, there were 1,719,342 shares available for repurchase under this plan, which expires on December 31, 2021.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. (Eastern) Tuesday, July 27, 2021, to review second quarter 2021 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $11.6 billion at June 30, 2021. 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 140 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a full-service retirement plan administration and recordkeeping firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtinsurance.com.

Forward-Looking Statements

This news release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control that could cause actual results to differ materially from those contemplated by 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) local, regional, national and international economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war or terrorism; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (9) changes in consumer spending, borrowings and savings habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisitions and integration of acquired businesses; (13) the ability to increase market share and control expenses; (14) changes in the competitive environment among financial holding companies; (15) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, Economic Growth, Regulatory Relief, Consumer Protection Act of 2018, Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and other legislative and regulatory responses to the coronavirus (“COVID-19”) pandemic; (16) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; (17) changes in the Company’s organization, compensation and benefit plans; (18) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (19) greater than expected costs or difficulties related to the integration of new products and lines of business; (20) the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes COVID-19 global pandemic; and (21) the Company’s success at managing the risks involved in the foregoing items.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from the Company’s forward-looking statements is the potential adverse effect of the current COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company, its customers and the global economy and financial markets. The extent to which the COVID-19 pandemic impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic and its impact on the Company’s customers and demand for financial services, the actions governments, businesses and individuals take in response to the pandemic, the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies, national and local economic activity, and the pace of recovery when the COVID-19 pandemic subsides, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. The Company cautions readers not place undue reliance on any forward-looking statements, which speak only as of the date made, and advises readers that various factors including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected. Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

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”). 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 provide useful information that is important to an understanding of the results of the Company’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 the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.

Contact:   John H. Watt, Jr., President and CEO
    Scott A. Kingsley, Executive Vice President and CFO
    NBT Bancorp Inc.
    52 South Broad Street
    Norwich, NY 13815
    607-337-6589


NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)
           
    2021     2020  
  2nd Q 1st Q 4th Q 3rd Q 2nd Q
Profitability:          
Diluted earnings per share $ 0.92   $ 0.91   $ 0.78   $ 0.80   $ 0.56  
Weighted average diluted common shares outstanding   43,792,940     43,889,889     43,973,971     43,941,953     43,928,344  
Return on average assets3   1.39 %   1.46 %   1.24 %   1.29 %   0.94 %
Return on average equity3   13.42 %   13.57 %   11.59 %   12.09 %   8.76 %
Return on average tangible common equity1 3   17.93 %   18.24 %   15.71 %   16.51 %   12.14 %
Net interest margin1 3   3.00 %   3.17 %   3.20 %   3.17 %   3.38 %
           
  6 Months Ended June 30,      
    2021     2020        
Profitability:          
Diluted earnings per share $ 1.83   $ 0.80        
Weighted average diluted common shares outstanding   43,839,060     44,026,420        
Return on average assets3   1.42 %   0.69 %      
Return on average equity3   13.49 %   6.23 %      
Return on average tangible common equity1 3   18.08 %   8.69 %      
Net interest margin1 3   3.08 %   3.45 %      
           
    2021     2020  
  2nd Q 1st Q 4th Q 3rd Q 2nd Q
Balance sheet data:          
Short-term interest bearing accounts $ 883,758   $ 972,195   $ 512,686   $ 450,291   $ 528,228  
Securities available for sale   1,534,733     1,387,028     1,348,698     1,197,925     1,108,443  
Securities held to maturity   622,351     592,999     616,560     663,088     599,164  
Net loans   7,419,127     7,528,459     7,388,885     7,446,143     7,514,491  
Total assets   11,574,947     11,537,253     10,932,906     10,850,212     10,847,184  
Total deposits   9,785,257     9,815,930     9,081,692     8,958,183     8,815,891  
Total borrowings   304,110     308,766     406,731     446,737     602,988  
Total liabilities   10,349,891     10,346,272     9,745,288     9,684,101     9,704,532  
Stockholders' equity   1,225,056     1,190,981     1,187,618     1,166,111     1,142,652  
           
Capital:          
Equity to assets   10.58 %   10.32 %   10.86 %   10.75 %   10.53 %
Tangible equity ratio1   8.28 %   8.00 %   8.41 %   8.27 %   8.04 %
Book value per share $ 28.19   $ 27.43   $ 27.22   $ 26.74   $ 26.20  
Tangible book value per share2 $ 21.50   $ 20.71   $ 20.52   $ 20.02   $ 19.46  
Leverage ratio   9.40 %   9.60 %   9.56 %   9.48 %   9.44 %
Common equity tier 1 capital ratio   12.12 %   12.13 %   11.84 %   11.63 %   11.34 %
Tier 1 capital ratio   13.34 %   13.38 %   13.09 %   12.88 %   12.60 %
Total risk-based capital ratio   15.78 %   15.92 %   15.62 %   15.43 %   15.15 %
Common stock price (end of period) $ 35.97   $ 39.90   $ 32.10   $ 26.82   $ 30.06  
 
           


NBT Bancorp Inc. and Subsidiaries
Asset Quality and Consolidated Loan Balances
(unaudited, dollars in thousands)
           
    2021     2020  
  2nd Q 1st Q 4th Q 3rd Q 2nd Q
Asset quality:          
Nonaccrual loans $ 40,550   $ 43,399   $ 44,647   $ 35,896   $ 25,567  
90 days past due and still accruing   2,575     2,155     3,149     2,579     2,057  
Total nonperforming loans   43,125     45,554     47,796     38,475     27,624  
Other real estate owned   798     1,318     1,458     1,605     1,783  
Total nonperforming assets   43,923     46,872     49,254     40,080     29,407  
Allowance for loan losses   98,500     105,000     110,000     114,500     113,500  
           
Asset quality ratios (total):          
Allowance for loan losses to total loans   1.31 %   1.38 %   1.47 %   1.51 %   1.49 %
Total nonperforming loans to total loans   0.57 %   0.60 %   0.64 %   0.51 %   0.36 %
Total nonperforming assets to total assets   0.38 %   0.41 %   0.45 %   0.37 %   0.27 %
Allowance for loan losses to total nonperforming loans   228.41 %   230.50 %   230.14 %   297.60 %   410.87 %
Past due loans to total loans4   0.26 %   0.22 %   0.37 %   0.26 %   0.30 %
Net charge-offs to average loans3   0.07 %   0.12 %   0.21 %   0.12 %   0.28 %
           
Asset quality ratios (excluding paycheck protection program):        
Allowance for loan losses to total loans   1.38 %   1.48 %   1.56 %   1.62 %   1.59 %
Total nonperforming loans to total loans   0.60 %   0.64 %   0.68 %   0.55 %   0.39 %
Total nonperforming assets to total assets   0.39 %   0.43 %   0.47 %   0.39 %   0.28 %
Allowance for loan losses to total nonperforming loans   228.36 %   230.44 %   230.10 %   297.53 %   410.78 %
Past due loans to total loans4   0.27 %   0.23 %   0.39 %   0.28 %   0.32 %
Net charge-offs to average loans3   0.07 %   0.13 %   0.22 %   0.13 %   0.30 %
           
    2021     2020  
  2nd Q 1st Q 4th Q 3rd Q 2nd Q
Allowance for loan losses as a percentage of loans by segment:        
Commercial & industrial 1.11% 1.20% 1.34% 1.34% 1.25%
Commercial real estate 1.26% 1.48% 1.49% 1.57% 1.56%
Paycheck protection program 0.01% 0.01% 0.01% 0.01% 0.01%
Residential real estate 0.98% 1.03% 1.07% 1.21% 1.13%
Auto 0.76% 0.78% 0.93% 0.92% 0.99%
Other consumer 4.27% 4.34% 4.55% 4.66% 5.01%
Total 1.31%
1.38% 1.47% 1.51% 1.49%
Total excluding PPP loans 1.38%
1.48% 1.56% 1.62% 1.59%
           
    2021     2020  
Loans by line of business: 2nd Q 1st Q 4th Q 3rd Q 2nd Q
Commercial $ 1,479,258   $ 1,466,841   $ 1,451,560   $ 1,458,053   $ 1,474,736  
Commercial real estate   2,265,754     2,242,289     2,196,477     2,121,198     2,100,650  
Paycheck protection program   359,738     536,494     430,810     514,558     510,097  
Residential real estate mortgages   1,512,354     1,478,216     1,466,662     1,448,530     1,460,058  
Indirect auto   899,324     913,083     931,286     989,369     1,091,889  
Specialty lending   602,585     577,509     579,644     566,973     515,618  
Home equity   351,469     369,633     387,974     404,346     415,528  
Other consumer   47,145     49,394     54,472     57,616     59,415  
Total loans $ 7,517,627   $ 7,633,459   $ 7,498,885   $ 7,560,643   $ 7,627,991  
           
PPP unamortized fees (dollars in millions) $ 12.6   $ 14.2   $ 6.9   $ 11.3   $ 14.6  


NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)
     
  June 30, December 31,
Assets 2021 2020
Cash and due from banks $ 183,185 $ 159,995
Short-term interest bearing accounts   883,758   512,686
Equity securities, at fair value   32,806   30,737
Securities available for sale, at fair value   1,534,733   1,348,698
Securities held to maturity (fair value $632,954 and $636,827, respectively)   622,351   616,560
Federal Reserve and Federal Home Loan Bank stock   25,132   27,353
Loans held for sale   1,404   1,119
Loans   7,517,627   7,498,885
Less allowance for loan losses   98,500   110,000
Net loans $ 7,419,127 $ 7,388,885
Premises and equipment, net   72,482   74,206
Goodwill   280,541   280,541
Intangible assets, net   10,241   11,735
Bank owned life insurance   226,507   186,434
Other assets   282,680   293,957
Total assets $ 11,574,947 $ 10,932,906
     
Liabilities and stockholders' equity    
Demand (noninterest bearing) $ 3,582,705 $ 3,241,123
Savings, NOW and money market   5,633,523   5,207,090
Time   569,029   633,479
Total deposits $ 9,785,257 $ 9,081,692
Short-term borrowings   90,598   168,386
Long-term debt   14,045   39,097
Subordinated debt, net   98,271   98,052
Junior subordinated debt   101,196   101,196
Other liabilities   260,524   256,865
Total liabilities $ 10,349,891 $ 9,745,288
     
Total stockholders' equity $ 1,225,056 $ 1,187,618
     
Total liabilities and stockholders' equity $ 11,574,947 $ 10,932,906
     


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,
    2021     2020   2021     2020  
Interest, fee and dividend income        
Interest and fees on loans $ 74,795   $ 77,270 $ 149,888   $ 155,998  
Securities available for sale   5,762     5,600   11,306     11,353  
Securities held to maturity   3,096     3,926   6,478     8,017  
Other   391     650   682     1,479  
Total interest, fee and dividend income $ 84,044   $ 87,446 $ 168,354   $ 176,847  
Interest expense        
Deposits $ 2,862   $ 4,812 $ 6,034   $ 13,916  
Short-term borrowings   32     972   102     2,769  
Long-term debt   88     393   212     786  
Subordinated debt   1,359     128   2,718     128  
Junior subordinated debt   525     695   1,055     1,621  
Total interest expense $ 4,866   $ 7,000 $ 10,121   $ 19,220  
Net interest income $ 79,178   $ 80,446 $ 158,233   $ 157,627  
Provision for loan losses   (5,216 )   18,840   (8,012 )   48,480  
Net interest income after provision for loan losses $ 84,394   $ 61,606 $ 166,245   $ 109,147  
Noninterest income        
Service charges on deposit accounts $ 3,028   $ 2,529 $ 6,055   $ 6,526  
ATM and debit card fees   8,309     6,136   15,171     11,990  
Retirement plan administration fees   9,779     9,214   19,877     17,155  
Wealth management fees   8,406     6,823   16,316     14,096  
Insurance services   3,508     3,292   6,969     7,561  
Bank owned life insurance income   1,659     1,381   3,040     2,755  
Net securities gains (losses)   201     180   668     (632 )
Other   4,426     5,456   8,258     10,983  
Total noninterest income $ 39,316   $ 35,011 $ 76,354   $ 70,434  
Noninterest expense        
Salaries and employee benefits $ 42,671   $ 39,717 $ 84,272   $ 80,467  
Occupancy   5,291     5,065   11,164     11,060  
Data processing and communications   4,427     4,079   9,158     8,312  
Professional fees and outside services   4,030     3,403   7,619     7,300  
Equipment   5,493     4,779   10,670     9,421  
Office supplies and postage   1,615     1,455   3,114     3,091  
FDIC expense   663     993   1,471     1,304  
Advertising   468     322   919     931  
Amortization of intangible assets   682     883   1,494     1,717  
Loan collection and other real estate owned, net   663     728   1,253     1,745  
Other   5,416     3,916   8,173     10,873  
Total noninterest expense $ 71,419   $ 65,340 $ 139,307   $ 136,221  
Income before income tax expense $ 52,291   $ 31,277 $ 103,292   $ 43,360  
Income tax expense   11,995     6,564   23,150     8,279  
Net income $ 40,296   $ 24,713 $ 80,142   $ 35,081  
Earnings Per Share        
Basic $ 0.93   $ 0.57 $ 1.84   $ 0.80  
Diluted $ 0.92   $ 0.56 $ 1.83   $ 0.80  
         


NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
           
  2021
2020
  2nd Q 1st Q 4th Q 3rd Q 2nd Q
Interest, fee and dividend income          
Interest and fees on loans $ 74,795   $ 75,093   $ 76,863   $ 74,998 $ 77,270
Securities available for sale   5,762     5,544     5,478     5,603   5,600
Securities held to maturity   3,096     3,382     3,532     3,734   3,926
Other   391     291     568     659   650
Total interest, fee and dividend income $ 84,044   $ 84,310   $ 86,441   $ 84,994 $ 87,446
Interest expense          
Deposits $ 2,862   $ 3,172   $ 3,887   $ 4,267 $ 4,812
Short-term borrowings   32     70     193     446   972
Long-term debt   88     124     369     398   393
Subordinated debt   1,359     1,359     1,339     1,375   128
Junior subordinated debt   525     530     545     565   695
Total interest expense $ 4,866   $ 5,255   $ 6,333   $ 7,051 $ 7,000
Net interest income $ 79,178   $ 79,055   $ 80,108   $ 77,943 $ 80,446
Provision for loan losses   (5,216 )   (2,796 )   (607 )   3,261   18,840
Net interest income after provision for loan losses $ 84,394   $ 81,851   $ 80,715   $ 74,682 $ 61,606
Noninterest income          
Service charges on deposit accounts $ 3,028   $ 3,027   $ 3,588   $ 3,087 $ 2,529
ATM and debit card fees   8,309     6,862     6,776     7,194   6,136
Retirement plan administration fees   9,779     10,098     9,011     9,685   9,214
Wealth management fees   8,406     7,910     7,456     7,695   6,823
Insurance services   3,508     3,461     3,454     3,742   3,292
Bank owned life insurance income   1,659     1,381     1,733     1,255   1,381
Net securities gains   201     467     160     84   180
Other   4,426     3,832     5,937     4,985   5,456
Total noninterest income $ 39,316   $ 37,038   $ 38,115   $ 37,727 $ 35,011
Noninterest expense          
Salaries and employee benefits $ 42,671   $ 41,601   $ 41,016   $ 40,451 $ 39,717
Occupancy   5,291     5,873     5,280     5,294   5,065
Data processing and communications   4,427     4,731     4,157     4,058   4,079
Professional fees and outside services   4,030     3,589     4,388     3,394   3,403
Equipment   5,493     5,177     5,395     5,073   4,779
Office supplies and postage   1,615     1,499     1,517     1,530   1,455
FDIC expense   663     808     739     645   993
Advertising   468     451     827     530   322
Amortization of intangible assets   682     812     822     856   883
Loan collection and other real estate owned, net   663     590     930     620   728
Other   5,416     2,757     10,133     3,857   3,916
Total noninterest expense $ 71,419   $ 67,888   $ 75,204   $ 66,308 $ 65,340
Income before income tax expense $ 52,291   $ 51,001   $ 43,626   $ 46,101 $ 31,277
Income tax expense   11,995     11,155     9,432     10,988   6,564
Net income $ 40,296   $ 39,846   $ 34,194   $ 35,113 $ 24,713
Earnings Per Share          
Basic $ 0.93   $ 0.91   $ 0.78   $ 0.80 $ 0.57
Diluted $ 0.92   $ 0.91   $ 0.78   $ 0.80 $ 0.56
           


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 - 2021 Q1 - 2021 Q4 - 2020 Q3 - 2020 Q2 - 2020
Assets                      
Short-term interest bearing accounts $ 974,034 0.09 % $ 587,358 0.09 % $ 552,529 0.11 % $ 477,946 0.11 % $ 380,260 0.10 %
Securities available for sale1 5     1,453,068 1.59 %   1,346,380 1.67 %   1,230,411 1.77 %   1,137,604 1.96 %   985,561 2.29 %
Securities held to maturity1 5     604,582 2.23 %   607,407 2.43 %   640,422 2.36 %   621,812 2.56 %   613,899 2.75 %
Investment in FRB and FHLB Banks   25,115 2.67 %   25,606 2.45 %   28,275 5.94 %   29,720 7.08 %   36,604 6.09 %
Loans1 6     7,574,272 3.96 %   7,574,337 4.02 %   7,533,953 4.06 %   7,559,218 3.95 %   7,589,032 4.10 %
Total interest earning assets   $ 10,631,071 3.18 % $ 10,141,088 3.38 % $ 9,985,590 3.46 % $ 9,826,300 3.45 % $ 9,605,356 3.68 %
Other assets     971,681     960,994     954,123     967,194     961,807  
Total assets   $ 11,602,752   $ 11,102,082     $ 10,939,713     $ 10,793,494     $ 10,567,163    
                       
Liabilities and stockholders' equity                  
Money market deposit accounts   $ 2,605,767 0.21 % $ 2,484,120 0.23 % $ 2,455,510 0.27 % $ 2,364,606 0.28 % $ 2,360,407 0.29 %
NOW deposit accounts     1,454,751 0.05 %   1,358,955 0.05 %   1,315,370 0.05 %   1,207,064 0.05 %   1,167,486 0.04 %
Savings deposits     1,660,722 0.05 %   1,547,983 0.05 %   1,465,562 0.05 %   1,447,021 0.05 %   1,383,495 0.05 %
Time deposits     591,147 0.75 %   615,343 0.93 %   645,288 1.15 %   684,708 1.31 %   760,803 1.48 %
Total interest bearing deposits   $ 6,312,387 0.18 % $ 6,006,401 0.21 % $ 5,881,730 0.26 % $ 5,703,399 0.30 % $ 5,672,191 0.34 %
Short-term borrowings     95,226 0.13 %   115,182 0.25 %   175,597 0.44 %   277,890 0.64 %   427,004 0.92 %
Long-term debt     14,053 2.51 %   19,913 2.53 %   59,488 2.47 %   64,137 2.47 %   64,165 2.46 %
Subordinated debt, net     98,204 5.55 %   98,095 5.62 %   97,984 5.44 %   97,934 5.59 %   8,633 5.96 %
Junior subordinated debt     101,196 2.08 %   101,196 2.12 %   101,196 2.14 %   101,196 2.22 %   101,196 2.76 %
Total interest bearing liabilities   $ 6,621,066 0.29 % $ 6,340,787 0.34 % $ 6,315,995 0.40 % $ 6,244,556 0.45 % $ 6,273,189 0.45 %
Demand deposits     3,542,176     3,319,024     3,178,410     3,111,617     2,887,545  
Other liabilities     235,536     250,991     271,206     282,265     271,635  
Stockholders' equity     1,203,974     1,191,280     1,174,102     1,155,056     1,134,794  
Total liabilities and stockholders' equity   $ 11,602,752   $ 11,102,082     $ 10,939,713     $ 10,793,494     $ 10,567,163    
                       
Interest rate spread     2.89 %   3.04 %   3.06 %   3.00 %   3.23 %
Net interest margin (FTE)1     3.00 %   3.17 %   3.20 %   3.17 %   3.38 %
                       


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,   2021
2020
Assets              
Short-term interest bearing accounts   $ 781,764 $ 360 0.09 % $ 227,478 $ 335 0.30 %
Securities available for sale1 5     1,400,019   11,306 1.63 %   974,044   11,353 2.34 %
Securities held to maturity1 5     605,987   7,004 2.33 %   618,149   8,554 2.78 %
Investment in FRB and FHLB Banks     25,359   322 2.56 %   38,194   1,144 6.02 %
Loans1 6     7,574,304   149,963 3.99 %   7,376,072   156,119 4.26 %
Total interest earning assets   $ 10,387,433 $ 168,955 3.28 % $ 9,233,937 $ 177,505 3.87 %
Other assets     966,367       923,689    
Total assets   $ 11,353,800     $ 10,157,626    
               
Liabilities and stockholders' equity              
Money market deposit accounts   $ 2,545,280 $ 2,755 0.22 % $ 2,230,857 $ 6,965 0.63 %
NOW deposit accounts     1,407,118   348 0.05 %   1,126,845   404 0.07 %
Savings deposits     1,604,664   406 0.05 %   1,329,890   360 0.05 %
Time deposits     603,178   2,525 0.84 %   801,896   6,187 1.55 %
Total interest bearing deposits   $ 6,160,240 $ 6,034 0.20 % $ 5,489,488 $ 13,916 0.51 %
Short-term borrowings     105,149   102 0.20 %   480,261   2,769 1.16 %
Long-term debt     16,967   212 2.52 %   64,179   786 2.46 %
Subordinated debt, net     98,149   2,718 5.58 %   4,316   128 5.96 %
Junior subordinated debt     101,196   1,055 2.10 %   101,196   1,621 3.22 %
Total interest bearing liabilities   $ 6,481,701 $ 10,121 0.31 % $ 6,139,440 $ 19,220 0.63 %
Demand deposits     3,431,216       2,642,926    
Other liabilities     243,221       243,066    
Stockholders' equity     1,197,662       1,132,194    
Total liabilities and stockholders' equity   $ 11,353,800     $ 10,157,626    
Net interest income (FTE)1     $ 158,834     $ 158,285  
Interest rate spread       2.97 %     3.24 %
Net interest margin (FTE)1       3.08 %     3.45 %
Taxable equivalent adjustment     $ 601     $ 658  
Net interest income     $ 158,233     $ 157,627  
               


             
1 The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:
             
  Non-GAAP measures          
  (unaudited, dollars in thousands)          
             
  Pre-provision net revenue ("PPNR") 2021
2020
    2nd Q 1st Q 4th Q 3rd Q 2nd Q
  Net income $ 40,296   $ 39,846   $ 34,194   $ 35,113   $ 24,713  
  Income tax expense   11,995     11,155     9,432     10,988     6,564  
  Provision for loan losses   (5,216 )   (2,796 )   (607 )   3,261     18,840  
  FTE adjustment   299     302     318     325     329  
  Net securities (gains)   (201 )   (467 )   (160 )   (84 )   (180 )
  Provision for unfunded loan commitments reserve   (80 )   (500 )   900     -     (200 )
  Nonrecurring expense   1,880     -     4,100     -     650  
  PPNR $ 48,973   $ 47,540   $ 48,177   $ 49,603   $ 50,716  
             
  Average Assets $ 11,602,752   $ 11,102,082   $ 10,939,713   $ 10,793,494   $ 10,567,163  
             
  Return on Average Assets3   1.39 %   1.46 %   1.24 %   1.29 %   0.94 %
  PPNR Return on Average Assets3   1.69 %   1.74 %   1.75 %   1.83 %   1.93 %
             
    6 Months Ended June 30,      
    2021
2020
     
  Net income $ 80,142   $ 35,081        
  Income tax expense   23,150     8,279        
  Provision for loan losses   (8,012 )   48,480        
  FTE adjustment   601     658        
  Net securities (gains) losses   (668 )   632        
  Provision for unfunded loan commitments reserve   (580 )   1,800        
  Nonrecurring expense   1,880     650        
  PPNR $ 96,513   $ 95,580        
             
  Average Assets $ 11,353,800   $ 10,157,626        
             
  Return on Average Assets3   1.42 %   0.69 %      
  PPNR Return on Average Assets3   1.71 %   1.89 %      
             
  PPNR is a Non-GAAP financial measure that management believes is useful in evaluating the underlying operating results of the Company excluding the volatility in the provision for loan losses, net securities gains (losses) and non-recurring income and/or expense.
 
             
  FTE Adjustment 2021
2020
    2nd Q 1st Q 4th Q 3rd Q 2nd Q
  Net interest income $ 79,178   $ 79,055   $ 80,108   $ 77,943   $ 80,446  
  Add: FTE adjustment   299     302     318     325     329  
  Net interest income (FTE) $ 79,477   $ 79,357   $ 80,426   $ 78,268   $ 80,775  
  Average earning assets $ 10,631,071   $ 10,141,088   $ 9,985,590   $ 9,826,300   $ 9,605,356  
  Net interest margin (FTE)3   3.00 %   3.17 %   3.20 %   3.17 %   3.38 %
             
    6 Months Ended June 30,      
    2021
2020
     
  Net interest income $ 158,233   $ 157,627        
  Add: FTE adjustment   601     658        
  Net interest income (FTE) $ 158,834   $ 158,285        
  Average earning assets $ 10,387,433   $ 9,233,937        
  Net interest margin (FTE)3   3.08 %   3.45 %      
             
  Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.
             


             
1 The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:
             
  Non-GAAP measures          
  (unaudited, dollars in thousands)          
             
  Tangible equity to tangible assets 2021
2020
    2nd Q 1st Q 4th Q 3rd Q 2nd Q
  Total equity $ 1,225,056   $ 1,190,981   $ 1,187,618   $ 1,166,111   $ 1,142,652  
  Intangible assets   290,782     291,464     292,276     293,098     293,954  
  Total assets $ 11,574,947   $ 11,537,253   $ 10,932,906   $ 10,850,212   $ 10,847,184  
  Tangible equity to tangible assets   8.28 %   8.00 %   8.41 %   8.27 %   8.04 %
             
  Return on average tangible common equity 2021
2020
    2nd Q 1st Q 4th Q 3rd Q 2nd Q
  Net income $ 40,296   $ 39,846   $ 34,194   $ 35,113   $ 24,713  
  Amortization of intangible assets (net of tax)   512     609     617     642     662  
  Net income, excluding intangibles amortization $ 40,808   $ 40,455   $ 34,811   $ 35,755   $ 25,375  
             
  Average stockholders' equity $ 1,203,974   $ 1,191,280   $ 1,174,102   $ 1,155,056   $ 1,134,794  
  Less: average goodwill and other intangibles   291,133     291,921     292,725     293,572     294,423  
  Average tangible common equity $ 912,841   $ 899,359   $ 881,377   $ 861,484   $ 840,371  
  Return on average tangible common equity3   17.93 %   18.24 %   15.71 %   16.51 %   12.14 %
             
    6 Months Ended June 30,      
    2021 2020      
  Net income $ 80,142   $ 35,081        
  Amortization of intangible assets (net of tax)   1,121     1,288        
  Net income, excluding intangibles amortization $ 81,263   $ 36,369        
             
  Average stockholders' equity $ 1,197,662   $ 1,132,194        
  Less: average goodwill and other intangibles   291,525     290,411        
  Average tangible common equity $ 906,137   $ 841,783        
  Return on average tangible common equity3   18.08 %   8.69 %      
             
2 Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.  
3 Annualized.          
4 Total past due loans, defined as loans 30 days or more past due and in an accrual status.    
5 Securities are shown at average amortized cost.        
6 For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
             

NBT Bancorp Inc.

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