NBT Bancorp Inc. Announces Third Quarter Net Income of $35.1 Million, or $0.80 Per Diluted Common Share; Announces Dividend
Net income for the three months ended
Pre-provision net revenue (“PPNR”)1 for the third quarter of 2020 was
CEO Comments
“The continued strength of NBT’s pre-provision net revenue is reflected in our third quarter 2020 results,” said NBT President and CEO
Third Quarter Financial Highlights
Net Income |
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Net Interest Income / NIM |
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PPNR |
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Loans and Credit Quality |
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Capital |
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Loans
- Period end total loans were
$7.6 billion atSeptember 30 andJune 30, 2020 , compared to$7.1 billion atDecember 31, 2019 . - Total PPP loans as of
September 30, 2020 were$515 million (net of unamortized fees), with$548 million originated at an average loan size of$184 thousand and an average annual fee of 3.2%. - Excluding PPP loans, period end loans decreased
$71.8 million fromJune 30, 2020 . Commercial and industrial loans decreased$21.4 million to$1.3 billion ; commercial real estate loans increased$25.3 million to$2.3 billion ; and total consumer loans decreased$75.7 million to$3.5 billion , driven by run-off of indirect auto loans. - Commercial line of credit utilization rate was 25% at
September 30, 2020 compared to 26% atJune 30, 2020 and 33% atSeptember 30, 2019 .
Deposits
- Average total deposits in the third quarter of 2020 were
$8.8 billion , compared to$8.6 billion in the second quarter of 2020, primarily due to increases in non-interest bearing demand deposit accounts. - Loan to deposit ratio was 84.4% at
September 30, 2020 , compared to 94.0% atDecember 31, 2019 and 86.5% atJune 30, 2020 .
Net Interest Income and Net Interest Margin
- Net interest income for the third quarter of 2020 was
$77.9 million , down$2.5 million or 3.1% from the second quarter of 2020 and consistent with the third quarter of 2019. - The net interest margin on a fully taxable equivalent (“FTE”) basis for the third quarter of 2020 was 3.17%, down 21 basis points (“bps”) from the second quarter of 2020 and down 40 bps from the third quarter of 2019. The net impact of PPP loans and excess liquidity, both of which the Company expects to be transitory, negatively impacted the NIM by 10 bps in the third quarter versus a negative 7 bps in the second quarter of 2020. Excluding the impact of PPP lending and excess liquidity from each quarter, NIM declined 18 bps from the prior quarter primarily due to the impact of asset repricing while funding costs remained stable during the quarter.
- Earning asset yields for the three months ended
September 30, 2020 were down 23 bps from the prior quarter and down 77 bps from the same quarter in the prior year. Earning assets grew$220.9 million or 2.3% from the prior quarter and grew$1.1 billion or 12.6% from the same quarter in the prior year.- Excess liquidity resulted in a
$97.7 million increase in the average balances of short-term interest bearing accounts. - The average balance of investment securities increased
$160.0 million while yields declined 29 bps. - Loan yields decreased 15 bps to 3.95%.
- Excess liquidity resulted in a
- Total cost of deposits was 0.19% for the third quarter of 2020, down 4 bps from the prior quarter and down 37 bps from the same period in the prior year.
- The cost of interest-bearing liabilities for the three months ended
September 30, 2020 was 0.45%, flat as compared to the prior quarter of 0.45% and down 51 bps from the third quarter of 2019 of 0.96%.- Cost of interest-bearing deposits decreased 4 bps from the prior quarter and decreased 51 bps from the same quarter in 2019.
- Cost of interest-bearing deposits decreased 4 bps from the prior quarter and decreased 51 bps from the same quarter in 2019.
Credit Quality and CECL
- Net charge-offs to average loans were very low due to COVID-19 pandemic relief programs.
- Net charge-offs to total average loans of 12 bps (13 bps excluding PPP loans) compared to 28 bps (30 bps excluding PPP loans) in the prior quarter and 35 bps in the third quarter of 2019.
- Nonperforming assets to total assets was 0.37% (0.39% excluding PPP loans) compared to 0.27% (0.28% excluding PPP loans) at
June 30, 2020 and 0.36% atSeptember 30, 2019 . The increase in nonperforming assets was primarily due to two COVID-19 impacted commercial relationships totaling$10.9 million moving to non-accrual for the quarter. - Provision expense for the three months ended
September 30, 2020 was$3.3 million with an increase in allowance coverage levels due to specific reserves for the two nonperforming commercial relationships and a change in loan mix while net charge-offs of$2.3 million were down compared with the prior quarter. Provision expense decreased$15.6 million from the second quarter of 2020 and decreased$3.1 million from the third quarter of 2019. - The allowance for loan losses was
$114.5 million or 1.51% (1.62% excluding PPP loans and related allowance) of total loans compared to 1.49% (1.59% excluding PPP loans and related allowance) atJune 30, 2020 and 1.03%September 30, 2019 . - As of
October 19, 2020 , 2.0% of loans (loans outstanding as of 9/30/2020; excluding PPP balances) are in payment deferral programs which is down from the second quarter 2020 peak of 14.9%. - The reserve for unfunded loan commitments remained consistent with the prior quarter at
$5.5 million atSeptember 30, 2020 .
Noninterest Income
- Total noninterest income, excluding securities gains (losses), was
$37.6 million for the three months endedSeptember 30, 2020 , up$2.8 million from the prior quarter and up$2.0 million from the prior year quarter. - Service charges on deposit accounts were higher than the prior quarter but lower than the third quarter of 2019 due to lower overdraft charges during the COVID-19 pandemic that recovered but continue to run lower than prior year levels.
- ATM and debit card fees were higher than both prior quarter and the third quarter of 2019 due to increased volume and higher per transaction rates.
- Retirement plan administration fees were higher than both prior quarter and the third quarter of 2019 due to the
April 1, 2020 acquisition ofAlliance Benefit Group of Illinois, Inc. (“ABG”) contributing$1.7 million in revenues during the quarter. - Wealth management fees were higher than the prior quarter due to seasonality of tax revenue and market conditions.
- The increase in other noninterest income from the prior year third quarter was driven by higher mortgage banking income, while the decrease from the second quarter of 2020 was driven by lower loan swap fee income.
Noninterest Expense
- Total noninterest expense for the third quarter of 2020 was up 1.5% from the previous quarter and down 4.9% from the third quarter of 2019.
- Salaries and benefits increased from the prior quarter due to timing of medical expenses during the COVID-19 pandemic (
$0.6 million ) and increased from the third quarter of 2019 driven by the addition of ABG’s salaries and benefits. - Equipment expense was higher than both the prior quarter and the third quarter of 2019 due to higher technology costs associated with several digital upgrades.
FDIC expense was higher than the third quarter of 2019 due to the benefit of theFDIC insurance assessment small bank credit in the third quarter of 2019.- Other expenses decreased
$4.5 million from the third quarter of 2019 due to lower travel and training expenses during the pandemic, lower pension costs and$3.1 million in reorganization expenses incurred during the third quarter of 2019 primarily related to branch optimization strategies to improve future operating efficiencies.
Income Taxes
- Effective tax rate was 23.8% for the third quarter of 2020 compared to 21.0% in the second quarter of 2020 and 22.4% in the third quarter of 2019. The higher effective tax rate compared to the second quarter of 2020 was due to a higher level of taxable income relative to total income and included a true-up of tax expense to bring the full year estimated effective tax rate to 21.75%. The higher effective tax rate compared to the third quarter of 2019 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 8.27%. Tangible book value per share2 grew 3% from the prior quarter and 8% from the prior year quarter to
$20.02 . September 30, 2020 CET1 capital ratio of 11.63%, total leverage ratio of 9.48% and total risk-based capital ratio of 15.43%.
Dividend
- The Board of Directors approved a fourth-quarter cash dividend of
$0.27 per share at their meeting held today. The dividend will be paid onDecember 15, 2020 to shareholders of record as ofDecember 1, 2020 .
Conference Call and Webcast
The Company will host a conference call at
Corporate Overview
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
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
Non-GAAP Measures
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in
Contact: | |
607-337-6589 |
Selected Financial Data | ||||||||||||||||
(unaudited, dollars in thousands except per share data) | ||||||||||||||||
2020 | 2019 | |||||||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||||||
Profitability: | ||||||||||||||||
Diluted earnings per share | $ | 0.80 | $ | 0.56 | $ | 0.23 | $ | 0.66 | $ | 0.73 | ||||||
Weighted average diluted common shares outstanding | 43,941,953 | 43,928,344 | 44,130,324 | 44,174,201 | 44,138,495 | |||||||||||
Return on average assets3 | 1.29% | 0.94% | 0.43% | 1.20% | 1.34% | |||||||||||
Return on average equity3 | 12.09% | 8.76% | 3.69% | 10.36% | 11.83% | |||||||||||
Return on average tangible common equity1 3 | 16.51% | 12.14% | 5.24% | 14.28% | 16.43% | |||||||||||
Net interest margin1 3 | 3.17% | 3.38% | 3.52% | 3.52% | 3.57% | |||||||||||
9 Months ended |
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2020 | 2019 | |||||||||||||||
Profitability: | ||||||||||||||||
Diluted earnings per share | $ | 1.60 | $ | 2.09 | ||||||||||||
Weighted average diluted common shares outstanding | 43,996,637 | 44,108,467 | ||||||||||||||
Return on average assets3 | 0.90% | 1.29% | ||||||||||||||
Return on average equity3 | 8.23% | 11.66% | ||||||||||||||
Return on average tangible common equity1 3 | 11.36% | 16.42% | ||||||||||||||
Net interest margin1 3 | 3.35% | 3.61% | ||||||||||||||
2020 | 2019 | |||||||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||||||
Balance sheet data: | ||||||||||||||||
Securities available for sale | $ | 1,197,925 | $ | 1,108,443 | $ | 1,000,980 | $ | 975,340 | $ | 932,173 | ||||||
Securities held to maturity | 663,088 | 599,164 | 621,359 | 630,074 | 678,435 | |||||||||||
Net loans | 7,446,143 | 7,514,491 | 7,147,383 | 7,063,133 | 6,941,444 | |||||||||||
Total assets | 10,850,212 | 10,847,184 | 9,953,543 | 9,715,925 | 9,661,386 | |||||||||||
Total deposits | 8,958,183 | 8,815,891 | 7,864,638 | 7,587,820 | 7,743,166 | |||||||||||
Total borrowings | 446,737 | 602,988 | 714,283 | 820,682 | 628,701 | |||||||||||
Total liabilities | 9,684,101 | 9,704,532 | 8,841,364 | 8,595,528 | 8,562,785 | |||||||||||
Stockholders' equity | 1,166,111 | 1,142,652 | 1,112,179 | 1,120,397 | 1,098,601 | |||||||||||
Capital: | ||||||||||||||||
Equity to assets | 10.75% | 10.53% | 11.17% | 11.53% | 11.37% | |||||||||||
Tangible equity ratio1 | 8.27% | 8.04% | 8.55% | 8.84% | 8.65% | |||||||||||
Book value per share | $ | 26.74 | $ | 26.20 | $ | 25.52 | $ | 25.58 | $ | 25.09 | ||||||
Tangible book value per share2 | $ | 20.02 | $ | 19.46 | $ | 18.96 | $ | 19.03 | $ | 18.52 | ||||||
Tier 1 leverage ratio | 9.48% | 9.44% | 10.02% | 10.33% | 10.15% | |||||||||||
Common equity tier 1 capital ratio | 11.63% | 11.34% | 10.90% | 11.29% | 11.14% | |||||||||||
Tier 1 capital ratio | 12.88% | 12.60% | 12.14% | 12.56% | 12.42% | |||||||||||
Total risk-based capital ratio | 15.43% | 15.15% | 13.36% | 13.52% | 13.38% | |||||||||||
Common stock price (end of period) | $ | 26.82 | $ | 30.06 | $ | 32.39 | $ | 40.56 | $ | 36.59 | ||||||
Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares. | ||||||||||||||||
Selected Financial Data | ||||||||||||||||
(unaudited, dollars in thousands except per share data) | ||||||||||||||||
2020 | 2019 | |||||||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||||||
Asset quality: | ||||||||||||||||
Nonaccrual loans | $ | 35,896 | $ | 25,567 | $ | 29,972 | $ | 25,174 | $ | 24,623 | ||||||
90 days past due and still accruing | 2,579 | 2,057 | 2,280 | 3,717 | 8,342 | |||||||||||
Total nonperforming loans | 38,475 | 27,624 | 32,252 | 28,891 | 32,965 | |||||||||||
Other real estate owned | 1,605 | 1,783 | 2,384 | 1,458 | 2,144 | |||||||||||
Total nonperforming assets | 40,080 | 29,407 | 34,636 | 30,349 | 35,109 | |||||||||||
Allowance for loan losses | 114,500 | 113,500 | 100,000 | 72,965 | 72,365 | |||||||||||
Asset quality ratios (total): | ||||||||||||||||
Allowance for loan losses to total loans | 1.51% | 1.49% | 1.38% | 1.02% | 1.03% | |||||||||||
Total nonperforming loans to total loans | 0.51% | 0.36% | 0.45% | 0.40% | 0.47% | |||||||||||
Total nonperforming assets to total assets | 0.37% | 0.27% | 0.35% | 0.31% | 0.36% | |||||||||||
Allowance for loan losses to total nonperforming loans | 297.60% | 410.87% | 310.06% | 252.55% | 219.52% | |||||||||||
Past due loans to total loans | 0.26% | 0.30% | 0.51% | 0.49% | 0.57% | |||||||||||
Net charge-offs to average loans3 | 0.12% | 0.28% | 0.32% | 0.30% | 0.35% | |||||||||||
Asset quality ratios (excluding paycheck protection program): | ||||||||||||||||
Allowance for loan losses to total loans | 1.62% | 1.59% | 1.38% | 1.02% | 1.03% | |||||||||||
Total nonperforming loans to total loans | 0.55% | 0.39% | 0.45% | 0.40% | 0.47% | |||||||||||
Total nonperforming assets to total assets | 0.39% | 0.28% | 0.35% | 0.31% | 0.36% | |||||||||||
Allowance for loan losses to total nonperforming loans | 297.53% | 410.78% | 310.06% | 252.55% | 219.52% | |||||||||||
Past due loans to total loans | 0.28% | 0.32% | 0.51% | 0.49% | 0.57% | |||||||||||
Net charge-offs to average loans3 | 0.13% | 0.30% | 0.32% | 0.30% | 0.35% | |||||||||||
Consolidated Balance Sheets | |||||
(unaudited, dollars in thousands) | |||||
Assets | 2020 | 2019 | |||
Cash and due from banks | $ | 167,169 | $ | 170,595 | |
Short-term interest bearing accounts | 450,291 | 46,248 | |||
Equity securities, at fair value | 30,758 | 27,771 | |||
Securities available for sale, at fair value | 1,197,925 | 975,340 | |||
Securities held to maturity (fair value |
663,088 | 630,074 | |||
28,484 | 44,620 | ||||
Loans held for sale | 1,823 | 11,731 | |||
Loans | 7,560,643 | 7,136,098 | |||
Less allowance for loan losses | 114,500 | 72,965 | |||
Net loans | $ | 7,446,143 | $ | 7,063,133 | |
Premises and equipment, net | 73,055 | 75,631 | |||
280,541 | 274,769 | ||||
Intangible assets, net | 12,557 | 12,020 | |||
Bank owned life insurance | 185,227 | 181,748 | |||
Other assets | 313,151 | 202,245 | |||
Total assets | $ | 10,850,212 | $ | 9,715,925 | |
Liabilities and stockholders' equity | |||||
Demand (noninterest bearing) | $ | 3,163,717 | $ | 2,414,383 | |
Savings, NOW and money market | 5,134,495 | 4,312,244 | |||
Time | 659,971 | 861,193 | |||
Total deposits | $ | 8,958,183 | $ | 7,587,820 | |
Short-term borrowings | 183,472 | 655,275 | |||
Long-term debt | 64,126 | 64,211 | |||
Subordinated debt, net | 97,943 | - | |||
Junior subordinated debt | 101,196 | 101,196 | |||
Other liabilities | 279,181 | 187,026 | |||
Total liabilities | $ | 9,684,101 | $ | 8,595,528 | |
Total stockholders' equity | $ | 1,166,111 | $ | 1,120,397 | |
Total liabilities and stockholders' equity | $ | 10,850,212 | $ | 9,715,925 | |
Consolidated Statements of Income | |||||||||||
(unaudited, dollars in thousands except per share data) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Interest, fee and dividend income | |||||||||||
Interest and fees on loans | $ | 74,998 | $ | 81,082 | $ | 230,996 | $ | 241,674 | |||
Securities available for sale | 5,603 | 5,711 | 16,956 | 17,664 | |||||||
Securities held to maturity | 3,734 | 4,586 | 11,751 | 14,892 | |||||||
Other | 659 | 1,002 | 2,138 | 2,728 | |||||||
Total interest, fee and dividend income | $ | 84,994 | $ | 92,381 | $ | 261,841 | $ | 276,958 | |||
Interest expense | |||||||||||
Deposits | $ | 4,267 | $ | 10,745 | $ | 18,183 | $ | 29,805 | |||
Short-term borrowings | 446 | 1,989 | 3,215 | 7,986 | |||||||
Long-term debt | 398 | 498 | 1,184 | 1,391 | |||||||
Subordinated debt | 1,375 | - | 1,503 | - | |||||||
Junior subordinated debt | 565 | 1,095 | 2,186 | 3,404 | |||||||
Total interest expense | $ | 7,051 | $ | 14,327 | $ | 26,271 | $ | 42,586 | |||
Net interest income | $ | 77,943 | $ | 78,054 | $ | 235,570 | $ | 234,372 | |||
Provision for loan losses | 3,261 | 6,324 | 51,741 | 19,408 | |||||||
Net interest income after provision for loan losses | $ | 74,682 | $ | 71,730 | $ | 183,829 | $ | 214,964 | |||
Noninterest income | |||||||||||
Service charges on deposit accounts | $ | 3,087 | $ | 4,330 | $ | 9,613 | $ | 12,790 | |||
ATM and debit card fees | 7,194 | 6,277 | 19,184 | 17,958 | |||||||
Retirement plan administration fees | 9,685 | 7,600 | 26,840 | 23,170 | |||||||
Wealth management4 | 7,695 | 7,630 | 21,791 | 21,315 | |||||||
Insurance4 | 3,742 | 4,000 | 11,303 | 12,291 | |||||||
Bank owned life insurance income | 1,255 | 1,556 | 4,010 | 4,119 | |||||||
Net securities gains (losses) | 84 | 4,036 | (548 | ) | 4,024 | ||||||
Other | 4,985 | 4,291 | 15,968 | 12,115 | |||||||
Total noninterest income | $ | 37,727 | $ | 39,720 | $ | 108,161 | $ | 107,782 | |||
Noninterest expense | |||||||||||
Salaries and employee benefits | $ | 40,451 | $ | 39,352 | $ | 120,918 | $ | 117,275 | |||
Occupancy | 5,294 | 5,335 | 16,354 | 17,053 | |||||||
Data processing and communications | 4,058 | 4,492 | 12,370 | 13,599 | |||||||
Professional fees and outside services | 3,394 | 3,535 | 10,694 | 10,562 | |||||||
Equipment | 5,073 | 4,487 | 14,494 | 13,762 | |||||||
Office supplies and postage | 1,530 | 1,667 | 4,621 | 4,835 | |||||||
645 | (20 | ) | 1,949 | 1,946 | |||||||
Advertising | 530 | 677 | 1,461 | 1,821 | |||||||
Amortization of intangible assets | 856 | 874 | 2,573 | 2,735 | |||||||
Loan collection and other real estate owned, net | 620 | 976 | 2,365 | 2,722 | |||||||
Other | 3,857 | 8,374 | 14,730 | 18,130 | |||||||
Total noninterest expense | $ | 66,308 | $ | 69,749 | $ | 202,529 | $ | 204,440 | |||
Income before income tax expense | $ | 46,101 | $ | 41,701 | $ | 89,461 | $ | 118,306 | |||
Income tax expense | 10,988 | 9,322 | 19,267 | 26,245 | |||||||
Net income | $ | 35,113 | $ | 32,379 | $ | 70,194 | $ | 92,061 | |||
Earnings Per Share | |||||||||||
Basic | $ | 0.80 | $ | 0.74 | $ | 1.61 | $ | 2.10 | |||
Diluted | $ | 0.80 | $ | 0.73 | $ | 1.60 | $ | 2.09 | |||
Quarterly Consolidated Statements of Income | ||||||||||||
(unaudited, dollars in thousands except per share data) | ||||||||||||
2020 | 2019 | |||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||
Interest, fee and dividend income | ||||||||||||
Interest and fees on loans | $ | 74,998 | $ | 77,270 | $ | 78,728 | $ | 79,800 | $ | 81,082 | ||
Securities available for sale | 5,603 | 5,600 | 5,753 | 5,639 | 5,711 | |||||||
Securities held to maturity | 3,734 | 3,926 | 4,091 | 4,213 | 4,586 | |||||||
Other | 659 | 650 | 829 | 924 | 1,002 | |||||||
Total interest, fee and dividend income | $ | 84,994 | $ | 87,446 | $ | 89,401 | $ | 90,576 | $ | 92,381 | ||
Interest expense | ||||||||||||
Deposits | $ | 4,267 | $ | 4,812 | $ | 9,104 | $ | 10,181 | $ | 10,745 | ||
Short-term borrowings | 446 | 972 | 1,797 | 1,707 | 1,989 | |||||||
Long-term debt | 398 | 393 | 393 | 484 | 498 | |||||||
Subordinated debt | 1,375 | 128 | - | - | - | |||||||
Junior subordinated debt | 565 | 695 | 926 | 1,021 | 1,095 | |||||||
Total interest expense | $ | 7,051 | $ | 7,000 | $ | 12,220 | $ | 13,393 | $ | 14,327 | ||
Net interest income | $ | 77,943 | $ | 80,446 | $ | 77,181 | $ | 77,183 | $ | 78,054 | ||
Provision for loan losses | 3,261 | 18,840 | 29,640 | 6,004 | 6,324 | |||||||
Net interest income after provision for loan losses | $ | 74,682 | $ | 61,606 | $ | 47,541 | $ | 71,179 | $ | 71,730 | ||
Noninterest income | ||||||||||||
Service charges on deposit accounts | $ | 3,087 | $ | 2,529 | $ | 3,997 | $ | 4,361 | $ | 4,330 | ||
ATM and debit card fees | 7,194 | 6,136 | 5,854 | 5,935 | 6,277 | |||||||
Retirement plan administration fees | 9,685 | 9,214 | 7,941 | 7,218 | 7,600 | |||||||
Wealth management4 | 7,695 | 6,823 | 7,273 | 7,085 | 7,630 | |||||||
Insurance4 | 3,742 | 3,292 | 4,269 | 3,479 | 4,000 | |||||||
Bank owned life insurance income | 1,255 | 1,381 | 1,374 | 1,236 | 1,556 | |||||||
Net securities gains (losses) | 84 | 180 | (812 | ) | 189 | 4,036 | ||||||
Other | 4,985 | 5,456 | 5,527 | 6,738 | 4,291 | |||||||
Total noninterest income | $ | 37,727 | $ | 35,011 | $ | 35,423 | $ | 36,241 | $ | 39,720 | ||
Noninterest expense | ||||||||||||
Salaries and employee benefits | $ | 40,451 | $ | 39,717 | $ | 40,750 | $ | 39,592 | $ | 39,352 | ||
Occupancy | 5,294 | 5,065 | 5,995 | 5,653 | 5,335 | |||||||
Data processing and communications | 4,058 | 4,079 | 4,233 | 4,719 | 4,492 | |||||||
Professional fees and outside services | 3,394 | 3,403 | 3,897 | 4,223 | 3,535 | |||||||
Equipment | 5,073 | 4,779 | 4,642 | 4,821 | 4,487 | |||||||
Office supplies and postage | 1,530 | 1,455 | 1,636 | 1,744 | 1,667 | |||||||
645 | 993 | 311 | - | (20 | ) | |||||||
Advertising | 530 | 322 | 609 | 952 | 677 | |||||||
Amortization of intangible assets | 856 | 883 | 834 | 844 | 874 | |||||||
Loan collection and other real estate owned, net | 620 | 728 | 1,017 | 1,436 | 976 | |||||||
Other | 3,857 | 3,916 | 6,957 | 6,310 | 8,374 | |||||||
Total noninterest expense | $ | 66,308 | $ | 65,340 | $ | 70,881 | $ | 70,294 | $ | 69,749 | ||
Income before income tax expense | $ | 46,101 | $ | 31,277 | $ | 12,083 | $ | 37,126 | $ | 41,701 | ||
Income tax expense | 10,988 | 6,564 | 1,715 | 8,166 | 9,322 | |||||||
Net income | $ | 35,113 | $ | 24,713 | $ | 10,368 | $ | 28,960 | $ | 32,379 | ||
Earnings Per Share | ||||||||||||
Basic | $ | 0.80 | $ | 0.57 | $ | 0.24 | $ | 0.66 | $ | 0.74 | ||
Diluted | $ | 0.80 | $ | 0.56 | $ | 0.23 | $ | 0.66 | $ | 0.73 | ||
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 | |||||||||||||
Q3 - 2020 | Q2 - 2020 | Q1 - 2020 | Q4 - 2019 | Q3 - 2019 | ||||||||||||||||||
Assets | ||||||||||||||||||||||
Short-term interest bearing accounts | $ | 477,946 | 0.11 | % | $ | 380,260 | 0.10 | % | $ | 74,695 | 1.28 | % | $ | 51,613 | 2.43 | % | $ | 57,530 | 1.95 | % | ||
Securities available for sale1 5 | 1,137,604 | 1.96 | % | 985,561 | 2.29 | % | 962,527 | 2.40 | % | 942,302 | 2.37 | % | 940,256 | 2.41 | % | |||||||
Securities held to maturity1 5 | 621,812 | 2.56 | % | 613,899 | 2.75 | % | 622,398 | 2.81 | % | 651,305 | 2.73 | % | 698,617 | 2.77 | % | |||||||
Investment in FRB and FHLB Banks | 29,720 | 7.08 | % | 36,604 | 6.09 | % | 39,784 | 5.97 | % | 37,842 | 6.37 | % | 40,525 | 7.04 | % | |||||||
Loans1 6 | 7,559,218 | 3.95 | % | 7,589,032 | 4.10 | % | 7,163,114 | 4.42 | % | 7,055,288 | 4.49 | % | 6,987,476 | 4.61 | % | |||||||
Total interest earning assets | $ | 9,826,300 | 3.45 | % | $ | 9,605,356 | 3.68 | % | $ | 8,862,518 | 4.07 | % | $ | 8,738,350 | 4.13 | % | $ | 8,724,404 | 4.22 | % | ||
Other assets | 967,194 | 961,807 | 885,570 | 861,909 | 852,616 | |||||||||||||||||
Total assets | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | ||||||||||||
Liabilities and stockholders' equity | ||||||||||||||||||||||
Money market deposit accounts | $ | 2,364,606 | 0.28 | % | $ | 2,360,407 | 0.29 | % | $ | 2,101,306 | 1.00 | % | $ | 2,057,678 | 1.16 | % | $ | 2,015,297 | 1.24 | % | ||
NOW deposit accounts | 1,207,064 | 0.05 | % | 1,167,486 | 0.04 | % | 1,086,205 | 0.10 | % | 1,064,193 | 0.13 | % | 1,056,001 | 0.13 | % | |||||||
Savings deposits | 1,447,021 | 0.05 | % | 1,383,495 | 0.05 | % | 1,276,285 | 0.06 | % | 1,251,432 | 0.06 | % | 1,274,793 | 0.06 | % | |||||||
Time deposits | 684,708 | 1.31 | % | 760,803 | 1.48 | % | 842,989 | 1.62 | % | 853,353 | 1.69 | % | 893,837 | 1.75 | % | |||||||
Total interest bearing deposits | $ | 5,703,399 | 0.30 | % | $ | 5,672,191 | 0.34 | % | $ | 5,306,785 | 0.69 | % | $ | 5,226,656 | 0.77 | % | $ | 5,239,928 | 0.81 | % | ||
Short-term borrowings | 277,890 | 0.64 | % | 427,004 | 0.92 | % | 533,516 | 1.35 | % | 475,332 | 1.42 | % | 490,694 | 1.61 | % | |||||||
Long-term debt | 64,137 | 2.47 | % | 64,165 | 2.46 | % | 64,194 | 2.46 | % | 81,613 | 2.35 | % | 84,250 | 2.35 | % | |||||||
Subordinated debt, net | 97,934 | 5.59 | % | 8,633 | 5.96 | % | - | - | - | - | - | - | ||||||||||
Junior subordinated debt | 101,196 | 2.22 | % | 101,196 | 2.76 | % | 101,196 | 3.68 | % | 101,196 | 4.00 | % | 101,196 | 4.29 | % | |||||||
Total interest bearing liabilities | $ | 6,244,556 | 0.45 | % | $ | 6,273,189 | 0.45 | % | $ | 6,005,691 | 0.82 | % | $ | 5,884,797 | 0.90 | % | $ | 5,916,068 | 0.96 | % | ||
Demand deposits | 3,111,617 | 2,887,545 | 2,398,307 | 2,406,563 | 2,389,617 | |||||||||||||||||
Other liabilities | 282,265 | 271,635 | 214,495 | 199,674 | 185,374 | |||||||||||||||||
Stockholders' equity | 1,155,056 | 1,134,794 | 1,129,595 | 1,109,225 | 1,085,961 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | ||||||||||||
Interest rate spread | 3.00 | % | 3.23 | % | 3.25 | % | 3.23 | % | 3.26 | % | ||||||||||||
Net interest margin (FTE)1 | 3.17 | % | 3.38 | % | 3.52 | % | 3.52 | % | 3.57 | % | ||||||||||||
Average Year-to-Date Balance Sheets | ||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||
Average | Yield/ | Average | Yield/ | |||||||||||
Balance | Interest | Rates | Balance | Interest | Rates | |||||||||
Nine Months Ended |
2020 | 2019 | ||||||||||||
Assets | ||||||||||||||
Short-term interest bearing accounts | $ | 311,577 | $ | 464 | 0.20 | % | $ | 30,970 | $ | 457 | 1.97 | % | ||
Securities available for sale1 5 | 1,028,962 | 16,956 | 2.20 | % | 968,517 | 17,695 | 2.44 | % | ||||||
Securities held to maturity1 5 | 619,379 | 12,562 | 2.71 | % | 750,305 | 15,921 | 2.84 | % | ||||||
Investment in FRB and FHLB Banks | 35,349 | 1,674 | 6.33 | % | 45,254 | 2,271 | 6.71 | % | ||||||
Loans1 6 | 7,437,566 | 231,168 | 4.15 | % | 6,944,518 | 241,932 | 4.66 | % | ||||||
Total interest earning assets | $ | 9,432,833 | $ | 262,824 | 3.72 | % | $ | 8,739,564 | $ | 278,276 | 4.26 | % | ||
Other assets | 938,296 | 821,859 | ||||||||||||
Total assets | $ | 10,371,129 | $ | 9,561,423 | ||||||||||
Liabilities and stockholders' equity | ||||||||||||||
Money market deposit accounts | $ | 2,275,765 | $ | 8,646 | 0.51 | % | $ | 1,912,572 | $ | 16,255 | 1.14 | % | ||
NOW deposit accounts | 1,153,780 | 548 | 0.06 | % | 1,105,919 | 1,157 | 0.14 | % | ||||||
Savings deposits | 1,369,219 | 553 | 0.05 | % | 1,269,723 | 550 | 0.06 | % | ||||||
Time deposits | 762,548 | 8,436 | 1.48 | % | 929,819 | 11,843 | 1.70 | % | ||||||
Total interest bearing deposits | $ | 5,561,312 | $ | 18,183 | 0.44 | % | $ | 5,218,033 | $ | 29,805 | 0.76 | % | ||
Short-term borrowings | 412,312 | 3,215 | 1.04 | % | 607,155 | 7,986 | 1.76 | % | ||||||
Long-term debt | 64,165 | 1,184 | 2.46 | % | 80,162 | 1,391 | 2.32 | % | ||||||
Subordinated debt, net | 35,750 | 1,503 | 5.62 | % | - | - | - | |||||||
Junior subordinated debt | 101,196 | 2,186 | 2.89 | % | 101,196 | 3,404 | 4.50 | % | ||||||
Total interest bearing liabilities | $ | 6,174,735 | $ | 26,271 | 0.57 | % | $ | 6,006,546 | $ | 42,586 | 0.95 | % | ||
Demand deposits | 2,800,297 | 2,332,965 | ||||||||||||
Other liabilities | 256,226 | 166,537 | ||||||||||||
Stockholders' equity | 1,139,871 | 1,055,375 | ||||||||||||
Total liabilities and stockholders' equity | $ | 10,371,129 | $ | 9,561,423 | ||||||||||
Net interest income (FTE)1 | $ | 236,553 | $ | 235,690 | ||||||||||
Interest rate spread | 3.15 | % | 3.31 | % | ||||||||||
Net interest margin (FTE)1 | 3.35 | % | 3.61 | % | ||||||||||
Taxable equivalent adjustment | $ | 983 | $ | 1,318 | ||||||||||
Net interest income | $ | 235,570 | $ | 234,372 | ||||||||||
Consolidated Loan Balances | ||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||
The following table presents loans by line of business, paycheck protection program loans includes |
||||||||||||||||
2020 | 2019 | |||||||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||||||
Commercial | $ | 1,297,408 | $ | 1,318,806 | $ | 1,338,609 | $ | 1,302,209 | $ | 1,317,649 | ||||||
Commercial real estate | 2,281,843 | 2,256,580 | 2,242,139 | 2,142,057 | 2,033,552 | |||||||||||
Paycheck protection program | 514,558 | 510,097 | - | - | - | |||||||||||
Residential real estate mortgages | 1,448,530 | 1,460,058 | 1,446,676 | 1,445,156 | 1,416,920 | |||||||||||
Indirect auto | 989,369 | 1,091,889 | 1,184,888 | 1,193,635 | 1,195,783 | |||||||||||
Specialty lending | 566,973 | 515,618 | 539,378 | 542,063 | 528,505 | |||||||||||
Home equity | 404,346 | 415,528 | 431,536 | 444,082 | 452,535 | |||||||||||
Other consumer | 57,616 | 59,415 | 64,157 | 66,896 | 68,865 | |||||||||||
Total loans | $ | 7,560,643 | $ | 7,627,991 | $ | 7,247,383 | $ | 7,136,098 | $ | 7,013,809 | ||||||
The following table provide loans as a percentage of total loans in industries vulnerable to the COVID-19 pandemic as of |
||||||||||||||||
Industry | % of Total Loans | |||||||||||||||
Accommodations | 2.5 | % | ||||||||||||||
Healthcare services and practices | 2.1 | % | ||||||||||||||
Restaurants and entertainment | 1.9 | % | ||||||||||||||
Retailers | 1.7 | % | ||||||||||||||
Automotive | 1.3 | % | ||||||||||||||
Total | 9.5 | % | ||||||||||||||
Allowance for Loan Losses as a Percentage of Loans by Segment7: | ||||||||||||||||
Incurred | CECL | |||||||||||||||
6/30/2020* | 9/30/2020* | |||||||||||||||
Commercial & industrial | 0.96 | % | 0.98 | % | 1.43 | % | 1.25 | % | 1.34 | % | ||||||
Commercial real estate | 1.02 | % | 0.74 | % | 1.10 | % | 1.56 | % | 1.57 | % | ||||||
Paycheck protection program | 0.00 | % | 0.00 | % | 0.00 | % | 0.01 | % | 0.01 | % | ||||||
Residential real estate | 0.27 | % | 0.83 | % | 0.99 | % | 1.13 | % | 1.21 | % | ||||||
Auto | 0.83 | % | 0.78 | % | 1.08 | % | 0.99 | % | 0.92 | % | ||||||
Other consumer | 3.74 | % | 3.66 | % | 4.00 | % | 5.01 | % | 4.66 | % | ||||||
Total | 1.02 | % | 1.07 | % | 1.38 | % | 1.49 | % | 1.51 | % | ||||||
* Excluding PPP loans and related allowance, total allowance to loans was 1.59% and 1.62% as of |
||||||||||||||||
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") | 2020 | 2019 | |||||||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||||
Income before income tax expense | $ | 46,101 | $ | 31,277 | $ | 12,083 | $ | 37,126 | $ | 41,701 | |||||||
FTE adjustment | 325 | 329 | 329 | 349 | 374 | ||||||||||||
Provision for loan losses | 3,261 | 18,840 | 29,640 | 6,004 | 6,324 | ||||||||||||
Net securities (gains) losses | (84 | ) | (180 | ) | 812 | (189 | ) | (4,036 | ) | ||||||||
Nonrecurring expense | - | 650 | - | - | 3,800 | ||||||||||||
Unfunded loan commitments reserve | - | (200 | ) | 2,000 | - | - | |||||||||||
PPNR | $ | 49,603 | $ | 50,716 | $ | 44,864 | $ | 43,290 | $ | 48,163 | |||||||
Average Assets | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | |||||||
Return on Average Assets3 | 1.29% | 0.94% | 0.43% | 1.20% | 1.34% | ||||||||||||
PPNR Return on Average Assets3 | 1.83% | 1.93% | 1.85% | 1.79% | 2.00% | ||||||||||||
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 loan loss provision due to CECL adoption and the impact of the COVID-19 pandemic, net securities gains (losses) and non-recurring income and/or expense. | |||||||||||||||||
FTE Adjustment | 2020 | 2019 | |||||||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||||
Net interest income | $ | 77,943 | $ | 80,446 | $ | 77,181 | $ | 77,183 | $ | 78,054 | |||||||
Add: FTE adjustment | 325 | 329 | 329 | 349 | 374 | ||||||||||||
Net interest income (FTE) | $ | 78,268 | $ | 80,775 | $ | 77,510 | $ | 77,532 | $ | 78,428 | |||||||
Average earning assets | $ | 9,826,300 | $ | 9,605,356 | $ | 8,862,518 | $ | 8,738,350 | $ | 8,724,404 | |||||||
Net interest margin (FTE)3 | 3.17% | 3.38% | 3.52% | 3.52% | 3.57% | ||||||||||||
9 Months ended |
|||||||||||||||||
2020 | 2019 | ||||||||||||||||
Net interest income | $ | 235,570 | $ | 234,372 | |||||||||||||
Add: FTE adjustment | 983 | 1,318 | |||||||||||||||
Net interest income (FTE) | $ | 236,553 | $ | 235,690 | |||||||||||||
Average earning assets | $ | 9,432,833 | $ | 8,739,564 | |||||||||||||
Net interest margin (FTE)3 | 3.35% | 3.61% | |||||||||||||||
Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%. | |||||||||||||||||
Tangible equity to tangible assets | 2020 | 2019 | |||||||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||||
Total equity | $ | 1,166,111 | $ | 1,142,652 | $ | 1,112,179 | $ | 1,120,397 | $ | 1,098,601 | |||||||
Intangible assets | 293,098 | 293,954 | 285,955 | 286,789 | 287,633 | ||||||||||||
Total assets | $ | 10,850,212 | $ | 10,847,184 | $ | 9,953,543 | $ | 9,715,925 | $ | 9,661,386 | |||||||
Tangible equity to tangible assets | 8.27% | 8.04% | 8.55% | 8.84% | 8.65% | ||||||||||||
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) | ||||||||||||||||
Return on average tangible common equity | 2020 | 2019 | ||||||||||||||
3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||||||
Net income | $ | 35,113 | $ | 24,713 | $ | 10,368 | $ | 28,960 | $ | 32,379 | ||||||
Amortization of intangible assets (net of tax) | 642 | 662 | 626 | 633 | 656 | |||||||||||
Net income, excluding intangibles amortization | $ | 35,755 | $ | 25,375 | $ | 10,994 | $ | 29,593 | $ | 33,035 | ||||||
Average stockholders' equity | $ | 1,155,056 | $ | 1,134,794 | $ | 1,129,595 | $ | 1,109,225 | $ | 1,085,961 | ||||||
Less: average goodwill and other intangibles | 293,572 | 294,423 | 286,400 | 287,268 | 288,077 | |||||||||||
Average tangible common equity | $ | 861,484 | $ | 840,371 | $ | 843,195 | $ | 821,957 | $ | 797,884 | ||||||
Return on average tangible common equity3 | 16.51% | 12.14% | 5.24% | 14.28% | 16.43% | |||||||||||
9 Months ended |
||||||||||||||||
2020 | 2019 | |||||||||||||||
Net income | $ | 70,194 | $ | 92,061 | ||||||||||||
Amortization of intangible assets (net of tax) | 1,930 | 2,051 | ||||||||||||||
Net income, excluding intangibles amortization | $ | 72,124 | $ | 94,112 | ||||||||||||
Average stockholders' equity | $ | 1,139,871 | $ | 1,055,375 | ||||||||||||
Less: average goodwill and other intangibles | 291,472 | 288,967 | ||||||||||||||
Average tangible common equity | $ | 848,399 | $ | 766,408 | ||||||||||||
Return on average tangible common equity3 | 11.36% | 16.42% | ||||||||||||||
2 | Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding. | |||||||||||||||
3 | Annualized. | |||||||||||||||
4 | Other financial services revenue previously disclosed and included with Insurance income has been reclassified and combined with Trust income and is disclosed as Wealth management income. | |||||||||||||||
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. | |||||||||||||||
7 | The allowance for loan losses for |
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Source: NBT Bancorp Inc.