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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 27, 2015

 

NBT BANCORP INC.

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(Exact name of registrant as specified in its charter)

 

52 SOUTH BROAD STREET, NORWICH, NEW YORK 13815

(Address of principal executive offices)

Registrant's telephone number, including area code: (607) 337-2265

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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 ITEM 2.02 Results of Operations and Financial Condition

On April 27, 2015, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended March 31, 2015 and announcing a 5% dividend increase.  That press release is furnished as Exhibit 99.1 hereto.

ITEM 9.01 Financial Statements and Exhibits

(d) The following is being furnished herewith:

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 28, 2015

 

 

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Exhibit 99.1

 

FOR IMMEDIATE RELEASE

ATTENTION: FINANCIAL AND BUSINESS EDITORS

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Contact:

Martin A. Dietrich, CEO

Michael J. Chewens, CFO

NBT Bancorp Inc.

52 South Broad Street

Norwich, NY 13815

607-337-6119

NBT BANCORP INC. ANNOUNCES NET INCOME OF $18.2 MILLION FOR THE FIRST QUARTER OF 2015; ANNOUNCES 5% DIVIDEND INCREASE

NORWICH, NY (April 27, 2015) – NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported net income for the three months ended March 31, 2015 of $18.2 million, up from $18.0 million from the prior year.  Reported earnings per diluted share for the three months ended March 31, 2015 was $0.41, equivalent to the first quarter of 2014.  Core net income for the three months ended March 31, 2015 was $18.2 million, down slightly from $18.4 million for the first quarter of 2014.  Core diluted earnings per share for the three months ended March 31, 2015 was $0.41, as compared with $0.42 for the first quarter of 2014.

The reported results for the three months ended March 31, 2015 and 2014 contained items which the Company considers non-core, such as securities gains and other items not considered core to our operations.

First Quarter 2015 Highlights:

·

2015 second quarter 5% dividend increase from $0.21 per share to $0.22 per share

·

Continued positive trends in asset quality indicators

o

Past due loans to total loans improved to 0.54% at March 31, 2015 from 0.69% at December 31, 2014

o

Net charge-offs to average loans improved to 0.34% for the first quarter of 2015 from 0.70% for the fourth quarter of 2014 and 0.41% for the 2014 year

·

Net interest margin remained stable at 3.60% for the first quarter of 2015 as compared with 3.61% for both the fourth quarter and full year of 2014

“Our results for the first quarter of 2015 represent another solid quarter for our company,” said NBT President and CEO Martin Dietrich. “The Board’s approval of a 5% increase to the second-quarter cash dividend is a testament to our continued strong performance and their confidence in the long-term value we are building for our shareholders. Sustained favorable trends in our asset quality indicators and our ability to maintain a stable net interest margin demonstrate our focus on the fundamentals of banking as we make ongoing strategic investments in our people, technology and new markets.”

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Net interest income was $62.2 million for the first quarter of 2015, down 2.9% from the previous quarter, and up 1.1% from the first quarter of 2014.  FTE net interest margin was 3.60% for the three months ended March 31, 2015, down from 3.61% for the previous quarter, and down from 3.63% for the first quarter of 2014.  Average interest earning assets were down slightly for the first quarter of 2015 as compared to the prior quarter, and up $130.2 million, or 1.9%, from the same period in 2014.  The increase from the first quarter of 2014 was driven primarily by organic loan production during 2014.  Rate compression on earning assets, which decreased from 3.92% during the fourth quarter of 2014 to 3.89% for the first quarter of 2015, contributed to the decrease in net interest income and FTE net interest margin from the fourth quarter of 2014 to the first quarter of 2015.  This rate compression was driven by a 4 basis point (“bp”) decrease in loan yields from the fourth quarter of 2014 to the first quarter of 2015.  Average interest bearing liabilities decreased $42.3 million, or 0.8%, from the fourth quarter of 2014 to the first quarter of 2015, which was driven by a decrease in average short-term borrowings for the first quarter of 2015 and the continued migration of time deposits to lower cost savings and money market deposit accounts.  The rates paid on interest bearing liabilities decreased by 2 bps over the same period and partially offset the aforementioned rate compression on earning assets.  The rate compression on interest bearing liabilities from the fourth quarter of 2014 to the first quarter of 2015 was primarily driven by decreases in the rates paid on time deposits and savings accounts.

Noninterest income for the three months ended March 31, 2015 was $26.5 million, down $0.5 million or 1.9% from the prior quarter, and up $0.3 million or 1.0% from the first quarter of 2014.  The decrease from the prior quarter was driven primarily by a decrease in service charges on deposit accounts stemming from a decrease in overdraft activity during the first quarter of 2015.  In addition, trust revenue decreased $0.3 million or 7.2% from the fourth quarter of 2014 to the first quarter of 2015 due to termination fees recognized in the fourth quarter of 2014, and bank owned life insurance income decreased $0.3 million or 17.7% over the same period due to a decrease in death benefits in the first quarter of 2015.  These decreases were partially offset by a $0.4 million, or 6%, increase in insurance and other financial services revenue in the first quarter of 2015 as compared with the fourth quarter of 2014.  In addition, retirement plan administration fees were up $0.2 million, or 8%, for the first quarter of 2015 compared with the fourth quarter of 2014.

Noninterest expense for the three months ended March 31, 2015 was $57.7 million, up $1.0 million or 1.7% from the prior quarter and up $0.2 million from the first quarter of 2014.  The increase from the prior quarter was due primarily to a $0.8 million or 15.4% increase in occupancy expenses from the fourth quarter of 2014 due to seasonal expenses.  In addition, other operating expenses increased $0.3 million or 6.6% from the fourth quarter of 2014 with no significant drivers.  Income tax expense for the three month period ended March 31, 2015 was $9.2 million, up $0.3 million from the prior quarter, and up $0.5 million from the first quarter of 2014.  The increase from prior periods was due primarily to a lower level of tax exempt income as a percentage of total income during the first quarter of 2015.  The effective tax rate was 33.6% for the first quarter of 2015, 32.5% for the fourth quarter of 2014, and 32.5% for the first quarter of 2014.

Asset Quality

Net charge-offs were $4.6 million for the three months ended March 31, 2015, down from $9.9 million for the prior quarter, and up from $3.6 million from the three months ended March 31, 2014.  The decrease from the prior quarter was due primarily to a $3.0 million partial charge-off of an acquired commercial credit during the fourth quarter of 2014 which had been previously reserved for.  NBT recorded a provision for loan losses of $3.6 million for the three months ended March 31, 2015, down from $6.9 million for the prior quarter, and equal to the provision for the first quarter of 2014.  Provision expense for the first quarter of 2015 was less than charge-offs was due to the improvement in asset quality metrics.  Net charge-offs to average loans for the first quarter of 2015 was 0.34%, compared to 0.70% for the fourth quarter of 2014 and 0.27% for the same period in 2014.

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Nonperforming loans to total loans was 0.85% at March 31, 2015, up 3 bps from the prior quarter, and down 14 bps from March 31, 2014.  Past due loans as a percentage of total loans were 0.54% at March 31, 2015 as compared to 0.69% at December 31, 2014, and 0.57% at March 31, 2014.

The allowance for loan losses totaled $65.4 million at March 31, 2015, compared to $66.4 million at December 31, 2014 and $69.4 million at March 31, 2014.  The allowance for loan losses as a percentage of loans was 1.16% (1.29% excluding acquired loans with no related allowance recorded) at March 31, 2015, compared to 1.19% (1.36% excluding acquired loans with no related allowance recorded) at December 31, 2014 and 1.27% (1.51% excluding acquired loans with no related allowance recorded) at March 31, 2014.  The decrease in the allowance for loan losses as a percentage of loans from the prior year was due primarily to continued positive trends with asset quality metrics in the originated loan portfolio.

Balance Sheet

Total assets were $7.9 billion at March 31, 2015, up $65.9 million, or 0.8% from December 31, 2014.  Loans were $5.6 billion at March 31, 2015, up $27.8 million from December 31, 2014.  Total deposits were $6.5 billion at March 31, 2015, up $179.8 million, or 2.9%, from December 31, 2014, primarily due to increases in municipal deposits.  Stockholders’ equity was $877.5 million, representing a total equity-to-total assets ratio of 11.16% at March 31, 2015, compared with $864.2 million or a total equity-to-total assets ratio of 11.08% at December 31, 2014.

Stock Repurchase Program

The Company did not purchase shares of its common stock during the three months ended March 31, 2015.  As of March 31, 2015, there were 1,000,000 shares available for repurchase under a plan authorized on October 27, 2014, which expires on December 31, 2016.

Dividend

The NBT Board of Directors approved a 2015 second-quarter cash dividend of $0.22 per share at a meeting held on March 23, 2015.  The dividend, which represents a 5% increase, will be paid on June 15, 2015 to shareholders of record as of May 29, 2015.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $7.9 billion at March 31, 2015.  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 over 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.

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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 sales of securities and certain non-recurring and merger-related expenses.  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 operating results of NBT’s core business (due to the non-recurring nature of the excluded items).  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.

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NBT Bancorp Inc. and Subsidiaries

SELECTED FINANCIAL DATA

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(unaudited, dollars in thousands except per share data)

(1)	Primarily net gain on settlement of litigation and reorganization expenses for 2014.

(2)	Annualized

(3)	Calculated on a Fully Tax Equivalent (“FTE”) basis

(4)	Excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:

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NBT Bancorp Inc. and Subsidiaries

SELECTED FINANCIAL DATA

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(unaudited, dollars in thousands except per share data)

(1)	Excludes acquired loans

(2)	Stockholders' equity less goodwill and intangible assets divided by common shares outstanding

(3)	Annualized

Note:  Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.

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NBT Bancorp Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

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(unaudited, dollars in thousands)

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NBT Bancorp Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

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(unaudited, dollars in thousands except per share data)

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NBT Bancorp Inc. and Subsidiaries

AVERAGE QUARTERLY BALANCE SHEETS

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(unaudited, dollars in thousands)

 

(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

 

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		2015				2014
		1st Q				4th Q				3rd Q				2nd Q				1st Q
Residential real estate mortgages		$	1,125,600			$	1,115,589			$	1,100,139			$	1,073,207			$	1,056,793
Commercial			844,101				839,770				862,098				895,128				878,152
Commercial real estate mortgages			1,443,608				1,442,989				1,411,689				1,378,065				1,347,940
Real estate construction and development			91,382				83,750				75,874				94,019				99,295
Agricultural and agricultural real estate mortgages			105,211				107,195				108,246				109,035				110,815
Consumer			1,458,108				1,436,382				1,447,918				1,435,643				1,387,221
Home equity			555,013				569,596				581,127				589,391				601,809
Total loans		$	5,623,023			$	5,595,271			$	5,587,091			$	5,574,488			$	5,482,025