Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to
Rule 14a-12 under the Securities Exchange
Act of 1934.
NBT Bancorp Inc. & BSB Bancorp, Inc.
Merger of Equals
Investor Presentation
May 17, 2000
FORWARD-LOOKING STATEMENT
This presentation contains statements regarding NBT Bancorp Inc. and BSB
Bancorp, Inc. following the completion of the merger of equals discussed herein,
including strategies, plans and objectives, as well as estimates and statements
based on underlying estimates of future financial condition, performance and
operating efficiencies on a pro forma basis and cost savings and revenue
enhancements and accretion to reported earnings that will be realized from the
merger.
These statements and estimates constitute forward-looking statements (within the
meaning of the Private Securities Litigation Reform Act of 1995), which involve
significant risks and uncertainties. A variety of factors could cause actual
results and experience to differ materially from forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
risks and uncertainties related to the consummation of the merger, including the
realization of the level of revenues following the merger; integration costs or
difficulties; competition from both financial and non-financial institutions;
changes in interest rates, deposit flows, loan demand and accounting principles,
policies or guidelines; the timing and occurrence (or non-occurrence) of
transactions and events that may be subject to circumstances beyond the control
of NBT or BSB; and other economic, competitive, governmental, regulatory and
technological factors affecting NBT or BSB or the combined institution
specifically or the banking industry or economy generally.
Neither NBT or BSB assumes any obligation to update these forward-looking
statements or to update the reasons why actual results could differ from those
projected in the forward-looking statement.
This presentation may be deemed to be solicitation material in respect of the
proposed merger of BSB Bancorp, Inc. ("BSB") with NBT Bancorp Inc. ("NBT")
pursuant to an Agreement and Plan of Merger, dated as of April 19, 2000, and
amended as of May 17, 2000, by and between NBT and BSB (the "Agreement"). Filing
of this presentation is being made in connection with Regulation of Takeovers
and Security Holder Communications (Release No. 33-7760, 34-42055) promulgated
by the Securities and Exchange Commission ("SEC").
NBT and its directors and executive officers may be deemed to be participants in
the solicitation of proxies in respect of the transactions contemplated by the
Agreement. These directors and executive officers include the following: Daryl
R. Forsythe, Michael J. Chewens, Martin A. Dietrich, Joe C. Minor, John D.
Roberts, Everett A. Gilmour, J. Peter Chaplin, Peter B. Gregory, William C.
Gumble, Bruce D. Howe, Andrew S. Kowalczyk, Jr., Dan B. Marshman, John G.
Martines, John C. Mitchell, William L. Owens and Paul O. Stillman. As of March
31, 2000, these directors and executive officers beneficially owned in the
aggregate 1,417,878 shares, or approximately 7.83%, of NBT's outstanding common
stock. Additional information about the directors and executive officers of NBT
is included in NBT's proxy statement for its 2000 Annual Meeting of shareholders
dated April 3, 2000.
BSB and certain other persons named below may be deemed to be participants in
the solicitation of proxies of BSB's shareholders to approve the proposed merger
transaction between BSB and NBT. The participants in this solicitation may
include the directors of BSB: Ferris G. Akel, Robert W. Allen, Diana J. Bendz,
William C. Craine, John P. Driscoll, Ann G. Higbee, Thomas F. Kelly, David A.
Niermeyer, Mark T. O'Neil, Jr., William H. Rincker and Thomas L. Thorn; as well
as the executive officers of BSB: Glenn R. Small, Executive Vice President;
Arthur C. Smith, Executive Vice President; Rexford C. Decker, Senior Vice
President and Chief Financial Officer; Larry G. Denniston, Senior Vice President
and Corporate Secretary; Douglas R. Johnson, Senior Vice President; and Matthew
W. Schaefer, Executive Vice President and Chief Information Officer. As of March
31, 2000, the directors and executive officers of BSB beneficially owned in the
aggregate approximately 1,039,463 shares of BSB's outstanding common stock,
representing approximately 9.90% of BSB's outstanding common stock. Additional
information about the directors and executive officers of BSB is included in
BSB's proxy statement for its 2000 Annual Meeting of shareholders filed with the
SEC on April 3, 2000.
In connection with the proposed merger, NBT will file with the SEC a
registration statement on SEC Form S-4. The registration statement will contain
a joint proxy statement/prospectus, which will describe the proposed merger of
NBT and BSB and the proposed terms and conditions of the merger. Stockholders of
NBT and BSB are encouraged to read the registration statement and joint proxy
statement/prospectus because these documents will contain important information
about the merger. After the registration statement is filed with the SEC, it
will be available for free, both on the SEC's web site (www.sec.gov) or by
contacting NBT Bancorp Inc., 52 South Broad Street, Norwich, New York 13815,
Attention: John D. Roberts, telephone (607) 337-6541; or BSB Bancorp, Inc.,
58-68 Exchange Street, Binghamton, New York 13901, Attention: Larry G.
Denniston, telephone (607) 779-2406.
2
PRESENTERS
Daryl R. Forsythe - Chairman, President and CEO of NBT Bancorp Inc.
Thomas L. Thorn - Acting President and CEO of BSB Bancorp, Inc.
Michael J. Chewens - CFO of NBT Bancorp Inc.
Rexford C. Decker - CFO of BSB Bancorp, Inc.
3
TRANSACTION SUMMARY
Fixed Exchange Ratio: 2.00 NBTB shares for each share of BSBN
Exchange Rationale: Ownership for Earnings Basis
Transaction Value at Announcement: (1) $251 million
Accounting: Pooling / Tax Free Exchange
Due Diligence: Completed
Anticipated Expense Reduction: $7.4 million annually
Expected Closing: Fourth Quarter of 2000
(1) Based on NBT's April 19, 2000 closing price of $12.00
4
TRANSACTION SUMMARY (CONTINUED)
Holding Company Name: To Be Determined
Bank Name: To Be Determined
Principal Office: Binghamton, NY
Board of Directors:(1) 7 from BSB and 8 from NBT including 2 from
the company's Pennsylvania subsidiary
Chairman & CEO: Daryl R. Forsythe
Estimated Merger Charge: $15 to 18 million pre-tax
Cross-Options: 19.9% priced at market
Price Protection: None
(1) Provided NBT's pending transaction with Pioneer American closes.
5
TRANSACTION RATIONALE
o Exchange ratio was based upon estimated contributions to earnings in future
periods by the two participants (excluding non-recurring charges)
o Expected to be accretive to earnings per share for all participants during
2001
o Improves shareholder liquidity with projected total shares outstanding of
44.9 million
o Creates a more visible entity with pro forma assets of $4.6 billion which
should attract increased analyst coverage and increased interest of
institutional investors
o Leverages strong competitive positions in adjacent markets
6
COST SAVING ANALYSIS
Non Interest Expense (In Millions)
- -------------------- -------------
Salary & Benefits $2.9
Occupancy Expense 0.3
Professional Fees / Outside Svcs. 2.8
IS and Communications 0.2
Other Operating Expenses 1.2
----
Total $7.4
Note: Full phase in expected in 2001.
7
EPS ANALYSIS OF COST SAVES
Estimated cost saves of $7.4 million will generate approximately $0.10 per share
(1) accretion once the cost saves have been fully implemented in 2001.
(1) Utilizes 44.9 million shares and an effective tax rate of 38%.
8
PRO FORMA BALANCE SHEET (IN THOUSANDS)
DATA AS OF MARCH 31, 2000
PRO FORMA
NBT (1) BSB COMBINED
------- --- --------
Total Assets 2,444,834 2,230,864 4,675,698
Securities 723,115 395,782 1,118,897
Loans 1,540,798 1,745,959 3,286,757
Total Deposits 1,823,623 1,899,278 3,722,901
Total Equity 194,625 157,016 351,641
Shares Outstanding 44.9 million
(1) Includes pending acquisition of Pioneer American Holding Company.
9
FINANCIAL RATIOS
BASED ON ANNUALIZED FIRST QUARTER 2000 RESULTS
Pro forma With
NBT BSB Combined Cost Saves
--- --- -------- ----------
ROAA* 1.07 1.18 1.13 1.24
ROAE* 13.27 17.04 15.07 16.52
NIM 4.32 4.22 4.27 4.27
Eff. Ratio 56.62 41.63 48.86 46.64
* NBT's and BSB's net income has been normalized by adding back non-recurring
expenses of $1,122,000 for NBT and $855,000 for BSB.
10
Overview of Combined Market Area
o 102 total branches serving 19 counties in 2 states
o Commanding market presence in eight counties as measured by a deposit share
rank of 1, 2, or 3
o Leading deposit share in Binghamton and Norwich
o Growing presence in the Syracuse and Scranton markets
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[MAP OMITTED]
12
DEPOSIT SHARE AND RANK BY COUNTY
COUNTY, STATE DEPOSIT SHARE RANK
------------- ------------- ----
Broome, NY 56.5% 1
Chemung, NY 5.1% 6
Chenango, NY 84.4% 1
Clinton, NY 9.8% 4
Delaware, NY 33.9% 1
Essex, NY 25.0% 2
Fulton, NY 11.1% 4
Montgomery, NY 2.0% 6
Oneida, NY 5.3% 6
Onondaga, NY 4.7% 7
Otsego, NY 1.6% 7
Oswego, NY 0.4% 11
Tioga, NY 21.2% 2
Lackawanna, PA 11.5% 3
Luzerne, PA 0.9% 16
Monroe, PA 3.2% 6
Pike, PA 18.6% 3
Wayne, PA 17.9% 3
Wyoming, PA 0.6% 6
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SUMMARY OF ONE TIME EXPENSES
Charges (In Millions)
- ------- -------------
Professional Fees $7 to 8
Severance 3
Data Processing 3 to 5
Other 2
-------------
Total $15 to $18
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REASONS TO INVEST IN THE NEW COMPANY
o Expected to be accretive to EPS in first full year
o Similar corporate cultures that will be easily integrated
o Increased operating efficiencies
o Building on each other's strength through cross selling opportunities
15
NBTB and BSBN vs. NASDAQ Bank Index (Jan 98 to Present)
[GRAPH OMITTED]
16
NBTB BSBN NASDAQ Bank Index
1/2/1998 100% 100% 100%
1/9/1998 88% 88% 92%
1/16/1998 97% 89% 95%
1/23/1998 94% 85% 94%
1/30/1998 96% 86% 96%
2/6/1998 95% 84% 99%
2/13/1998 97% 88% 100%
2/20/1998 94% 86% 100%
2/27/1998 96% 87% 102%
3/6/1998 97% 87% 103%
3/13/1998 97% 90% 104%
3/20/1998 99% 87% 107%
3/27/1998 100% 91% 108%
4/3/1998 102% 91% 108%
4/10/1998 104% 91% 107%
4/17/1998 117% 94% 109%
4/24/1998 124% 95% 110%
5/1/1998 124% 92% 109%
5/8/1998 118% 89% 107%
5/15/1998 115% 87% 108%
5/22/1998 115% 87% 108%
5/29/1998 120% 88% 105%
6/5/1998 118% 91% 105%
6/12/1998 118% 87% 101%
6/19/1998 116% 83% 100%
6/26/1998 116% 88% 101%
7/3/1998 125% 87% 103%
7/10/1998 116% 86% 104%
7/17/1998 116% 86% 103%
7/24/1998 117% 90% 102%
7/31/1998 113% 91% 97%
8/7/1998 112% 85% 94%
8/14/1998 115% 77% 91%
8/21/1998 122% 78% 89%
8/28/1998 115% 76% 81%
9/4/1998 114% 80% 79%
9/11/1998 103% 82% 81%
9/18/1998 110% 78% 84%
9/25/1998 110% 78% 84%
10/2/1998 112% 79% 81%
10/9/1998 108% 73% 75%
17
10/16/1998 107% 71% 83%
10/23/1998 108% 77% 83%
10/30/1998 110% 78% 86%
11/6/1998 122% 84% 90%
11/13/1998 121% 80% 87%
11/20/1998 121% 82% 89%
11/27/1998 127% 81% 91%
12/4/1998 129% 81% 87%
12/11/1998 127% 82% 85%
12/18/1998 123% 83% 86%
12/25/1998 126% 92% 86%
1/1/1999 119% 92% 88%
1/8/1999 122% 84% 89%
1/15/1999 113% 81% 87%
1/22/1999 108% 80% 85%
1/29/1999 115% 75% 86%
2/5/1999 112% 75% 84%
2/12/1999 112% 73% 84%
2/19/1999 115% 73% 85%
2/26/1999 114% 75% 85%
3/5/1999 113% 73% 87%
3/12/1999 113% 75% 88%
3/19/1999 113% 73% 87%
3/26/1999 113% 71% 85%
4/2/1999 104% 68% 84%
4/9/1999 109% 70% 85%
4/16/1999 112% 75% 88%
4/23/1999 108% 73% 89%
4/30/1999 109% 72% 90%
5/7/1999 111% 74% 90%
5/14/1999 108% 69% 89%
5/21/1999 108% 71% 89%
5/28/1999 107% 71% 89%
6/4/1999 109% 71% 88%
6/11/1999 108% 75% 87%
6/18/1999 107% 77% 88%
6/25/1999 104% 74% 88%
7/2/1999 106% 75% 90%
7/9/1999 102% 75% 90%
7/16/1999 102% 76% 90%
7/23/1999 104% 76% 89%
7/30/1999 105% 76% 87%
18
8/6/1999 102% 76% 85%
8/13/1999 103% 73% 86%
8/20/1999 98% 73% 86%
8/27/1999 96% 70% 85%
9/3/1999 95% 71% 84%
9/10/1999 98% 72% 83%
9/17/1999 97% 70% 81%
9/24/1999 92% 70% 80%
10/1/1999 89% 67% 81%
10/8/1999 93% 68% 84%
10/15/1999 94% 68% 80%
10/22/1999 92% 64% 83%
10/29/1999 95% 62% 87%
11/5/1999 95% 62% 88%
11/12/1999 93% 65% 88%
11/19/1999 94% 62% 88%
11/26/1999 93% 58% 85%
12/3/1999 90% 59% 86%
12/10/1999 83% 56% 81%
12/17/1999 82% 53% 79%
12/24/1999 88% 53% 81%
12/31/1999 83% 54% 81%
1/7/2000 84% 59% 77%
1/14/2000 79% 57% 77%
1/21/2000 78% 55% 74%
1/28/2000 74% 55% 74%
2/4/2000 74% 55% 75%
2/11/2000 74% 52% 73%
2/18/2000 71% 53% 71%
2/25/2000 65% 49% 69%
3/3/2000 75% 48% 68%
3/10/2000 74% 48% 65%
3/17/2000 82% 50% 72%
3/24/2000 76% 58% 73%
3/31/2000 78% 58% 74%
4/7/2000 74% 54% 73%
4/14/2000 61% 50% 70%
4/21/2000 55% 56% 72%
4/28/2000 56% 55% 72%
5/5/2000 57% 55% 71%
5/12/2000 55% 54% 73%
19
