NBT Bancorp Inc. 8-K 7-24-2006


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): July 24, 2006

 
NBT BANCORP INC. 

(Exact name of registrant as specified in its charter)


DELAWARE
0-14703
16-1268674
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)


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:

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

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

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

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




ITEM 2.02 Results of Operations and Financial Condition

On July 24, 2006, NBT Bancorp Inc. issued a press release describing its results of operations for the six months and quarter ending June 30, 2006 as well as announcing a quarterly dividend of $0.19 per share to be paid on September 15, 2006 to shareholders of record on September 1, 2006. That press release is furnished as Exhibit 99.1 hereto.

 
ITEM 9.01 Financial Statements and Exhibits

(d)
The following is being furnished herewith:
 
Exhibit No.
Exhibit Description

Press release text of NBT Bancorp Inc. dated July 24, 2006


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.
 
 
NBT BANCORP INC.
 
 
(Registrant)
 
 
 
 
 
 
 
 
/s/ Michael J. Chewens
 
 
Michael J. Chewens
 
Senior Executive Vice President,
 
Chief Financial Officer and Corporate Secretary


Date: July 25, 2006
 
 

Page 1 of 10

Exhibit 99.1
FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS


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 Quarterly Earnings of $14.2 Million; Declares Cash Dividend

NORWICH, NY (July 24, 2006) - NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income for the quarter ended June 30, 2006 was $14.2 million, up 8% or $1.1 million from net income of $13.1 million reported for the same period in 2005. Net income per diluted share for the three months ended June 30, 2006 was $0.41 per share, as compared to $0.40 per share for the same period in 2005. Return on average assets and return on average equity were 1.15% and 14.71%, respectively, for the quarter ended June 30, 2006, compared with 1.22% and 16.21%, respectively, for the same period in 2005. The increase in net income for the quarter ended June 30, 2006, was primarily the result of a $2.0 million increase in net interest income and a $1.5 million increase in noninterest income. In addition, the Company experienced a decrease in the provision for loan and lease losses of $0.6 million for the quarter ended June 30, 2006 compared to the same period in 2005. The aforementioned increases in income and reduction of the provision for loan and lease losses were partially offset by a $3.0 million increase in noninterest expense. Results for the three months ended June 30, 2006, include $0.4 million in pre-tax salaries and benefits expense related to stock options resulting from the adoption on January 1, 2006 of Statement of Financial Accounting Standards No. 123 (revised 2004) (FAS 123R), “Share-Based Payment”, which requires companies to measure and recognize compensation expense for all share-based payments. The adoption of FAS 123R lowered diluted earnings per share by $0.01 for the three months ended June 30, 2006.
 
Net income for the six months ended June 30, 2006, was $27.8 million, up 7% or $1.9 million from net income of $25.9 million reported for the same period in 2005. Net income per diluted share for the six month period ended June 30, 2006 was $0.81 per share, as compared to $0.79 per share for the same period in 2005. Return on average assets and return on average equity were 1.17% and 14.93%, respectively, for the six months ended June 30, 2006, compared with 1.23% and 15.99%, respectively, for the same period in 2005. The increase in net income for the six months ended June 30, 2006 was primarily the result of a $3.4 million increase in net interest income and a $2.0 million increase in noninterest income. In addition, the Company experienced a decrease in the provision for loan and lease losses of $0.7 million for the six months ended June 30, 2006 compared to the same period in 2005. The aforementioned increases in income were partially offset by a $4.6 million increase in noninterest expense. Results for the six months ended June 30, 2006, include $1.1 million in pre-tax salaries and benefits expense related to stock options resulting from the adoption of FAS 123R on January 1, 2006. This lowered diluted earnings per share by $0.03 for the six months ended June 30, 2006.

The comparability of financial information is affected by the acquisition of CNB Bancorp, Inc. (“CNB”). Operating results include the operations of CNB from the date of acquisition, which was February 10, 2006.


Page 2 of 10

NBT President and CEO Martin A. Dietrich stated, “These are challenging times for the entire financial services industry. I am pleased by the efforts of all of our people and our ability to continue our earnings growth in this higher interest rate environment is a testament to their efforts. Despite the continuing flat yield curve environment and decline in net interest margin, we are pleased to report another solid quarter for the Company, due in large part to our solid loan and deposit growth, as well as our noninterest income growth.”

In late June, portions of NBT's market areas in New York and Pennsylvania were affected by record flooding. Dietrich said, "I am very proud of the efforts of our employees. Many went above and beyond the call of duty in safely helping us restore our banking functions in the areas most heavily hit. These efforts, in conjunction with our disaster recovery plan, allowed us to process our work with minimal interruption to our branch and ATM network. At this time, we do not believe that the flood's financial impact on our business is significant. Most of the damage to our facilities is covered by insurance. We extend our sympathies to those in our communities who suffered losses due to this devastating flood."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at June 30, 2006 were $12.9 million or 0.38% of total loans and leases compared with $13.5 million or 0.45% of total loans and leases at June 30, 2005 and $14.3 million or 0.47% of total loans and leases at December 31, 2005. Annualized net charge-offs to average loans and leases for the six months ended June 30, 2006, were 0.20%, compared with the 0.18% annualized ratio for the six months ended June 30, 2005, and the ratio for the year ended December 31, 2005 of 0.23%. The Company’s allowance for loan and lease losses was 1.50% of loans and leases at June 30, 2006 compared with 1.55% at June 30, 2005, and 1.57% at December 31, 2005. The ratio of the allowance for loan and lease losses to nonperforming loans was 390.04% at June 30, 2006 compared with 344.01% at June 30, 2005, and 331.92% at December 31, 2005.
 
For the quarter and six months ended June 30, 2006, the provision for loan and lease losses totaled $1.7 million and $3.4 million, respectively, compared with the $2.3 million and $4.1 million for the same periods in 2005. The decrease in the provision for loan and lease losses for the quarter and six months ended June 30, 2006, when compared with the same periods in 2005, was due primarily to improved credit quality.

Net Interest Income

Net interest income was up 5.2% to $41.4 million for the quarter ended June 30, 2006, compared to $39.3 million for the same period a year ago. Despite a decrease in the Company’s net interest margin, which was 3.73% for the quarter ended June 30, 2006, down from 4.02% for the same period in 2005, the increase in net interest income was attributable to 14% growth in average earning assets. The growth in average earning assets was due primarily to the acquisition of CNB. Despite a decrease in the Company’s net interest margin, which was 3.80% for the six months ended June 30, 2006, down from 4.06% for the same period in 2005, net interest income for the six months ended June 30, 2006 increased 4.3%, to $81.5 million from $78.1 million in the same period for 2005. The increase in net interest income was attributable to a 12% growth in average earning assets due primarily to the acquisition of CNB. The decline in the net interest margin is due largely to the effect from our borrowings, money market accounts and time deposits repricing in the higher interest rate environment. Earning assets, particularly those tied to a fixed rate, have not realized the benefit of the higher interest rate environment, since rates for earning assets with terms three years or longer have remained relatively flat during this period. The Company anticipates that margin pressure will persist into the next several quarters given the flat yield curve.


Page 3 of 10

Noninterest Income

Noninterest income for the quarter ended June 30, 2006 was $12.6 million, up $1.5 million or 13.6% from $11.1 million for the same period in 2005. Fees from service charges on deposit accounts and ATM and debit cards collectively increased $0.4 million from solid growth in demand deposit accounts and debit card base. Retirement plan administration fees for the three months ended June 30, 2006, increased $0.3 million compared with the same period in 2005 as a result of our growing client base. Trust administration income increased $0.2 million or 16.6% for the quarter ended June 30, 2006 compared to the same period in 2005. This increase stems from the increased market value of accounts generating greater fees, an increase in customer accounts as a result of the acquisition of CNB, and successful business development. Broker/dealer and insurance revenue for the three months ended June 30, 2006 increased $0.2 million in large part due to the addition of Hathaway Insurance Agency as part of the acquisition of CNB, as well as the planned expansion of the financial services business. Other noninterest income increased $0.3 million compared with the same period in 2005, primarily due to increases in retail and commercial banking fees.
 
Noninterest income for the six months ended June 30, 2006 was $23.8 million, up $2.0 million or 9.3% from $21.8 million for the same period in 2005. Included in noninterest income for the six months ended June 30, 2006 were $0.9 million in net losses from investment securities sales. Excluding the effect of these transactions for the six months ended June 30, 2006, noninterest income increased $3.0 million or 13.7% compared with the same period in 2005. For the six months ended June 30, 2006, fees from service charges on deposit accounts and ATM and debit cards collectively increased $1.0 million from solid growth in demand deposit accounts, which has led to an increase in the Company’s debit card base. Retirement plan administration fees for the six months ended June 30, 2006, increased $0.6 million compared with the same period in 2005 due to an increase in our client base. Trust administration income increased $0.3 million or 12.5% for the six months ended June 30, 2006 compared to the same period in 2005. This increase stems from the increased market value of accounts generating greater fees, an increase in customer accounts as a result of the acquisition of CNB, and successful business development. Other noninterest income increased $1.2 million for the six months ended June 30, 2006, compared with the same period in 2005, due to increases in retail and commercial banking fees. For the six months ended June 30, 2006, broker/dealer and insurance revenue decreased by $0.2 million as compared with the same period in 2005. While the Company experienced organic growth and acquired Hathaway Insurance Agency during the period in 2006, these increases over 2005 were offset by the sale of M. Griffith, Inc. in the first quarter of 2005.

Noninterest Expense and Income Tax Expense

Noninterest expense for the quarter ended June 30, 2006 was $31.7 million, up from $28.7 million for the same period in 2005. Salaries and employee benefits for the quarter ended June 30, 2006, increased $1.1 million over the same period in 2005, mainly from higher salaries from merit increases, the acquisition of CNB, and stock-based compensation costs associated with the adoption of FAS 123R. Office expenses such as supplies and postage, occupancy, equipment, and data processing and communications charges increased by $0.8 million for the quarter ended June 30, 2006 as compared with the same period in 2005. This 9.7% increase resulted primarily from the overall growth of the Company as well as the acquisition of CNB Bancorp on February 10, 2006. Professional fees and services increased $0.4 million for the quarter ended June 30, 2006 as compared with the same period in 2005. This increase was due to several factors including an increase in courier service expenses due to the acquisition of CNB, as well as increasing transportation costs. In addition, legal fees incurred during the quarter ended June 30, 2006 increased over the same period in 2005 as the Company was reimbursed for legal fees during the second quarter of 2005 associated with prior litigation. Amortization


Page 4 of 10

expense increased $0.3 million for the quarter ended June 30, 2006 over the same period in 2005. This increase was due primarily to the acquisition of CNB. Other operating expense for the quarter ended June 30, 2006 increased $0.3 million compared with the same period in 2005, primarily due to $0.2 million in flood related losses. Income tax expense for the quarter ended June 30, 2006 was $6.4 million, up from $6.2 million for the same period in 2005. The effective rate for the quarter ended June 30, 2006 was 31.0%, down from 32.2% for the same period in 2005. The decline in the effective tax rate during the second quarter 2006 versus the same period in 2005 is primarily a result of an increase in interest income from tax exempt sources.

Noninterest expense for the six months ended June 30, 2006 was $62.2 million, up from $57.6 million for the same period in 2005. Salaries and employee benefits for the six months ended June 30, 2006, increased $1.4 million over the same period in 2005, mainly from higher salaries from merit increases, the acquisition of CNB, and stock-based compensation costs associated with the adoption of FAS 123R. Office expenses such as supplies and postage, occupancy, equipment, and data processing and communications charges increased by $1.1 for the six months ended June 30, 2006 as compared with the same period in 2005. This 6.7% increase resulted primarily from the overall growth of the Company as well as the acquisition of CNB Bancorp on February 10, 2006. Professional fees and services increased $0.6 million for the six months ended June 30, 2006 as compared with the same period in 2005. This increase was due to several factors including an increase in courier service expenses due to the acquisition of CNB, as well as increasing transportation costs. In addition, legal fees incurred during the period increased over the same period in 2005 as the Company was reimbursed for legal fees during the second quarter of 2005 associated with prior litigation. Amortization expense increased $0.5 million for the six months ended June 30, 2006 over the same period in 2005. This increase was due primarily to the acquisition of CNB. Other operating expense for the six months ended June 30, 2006 increased $1.1 million compared with the same period in 2005, in large part due to merger expenses incurred as a result of the acquisition of CNB as well as flood related losses. Income tax expense for the six months ended June 30, 2006 was $11.9 million, down from $12.3 million for the same period in 2005. The effective rate for the six months ended June 30, 2006 was 30.0%, down from 32.2% for the same period in 2005. The decrease in tax expense and the effective tax rate for the six months ended June 30, 2006 resulted primarily from a settlement for a tax refund claim of $0.5 million during the first quarter and an increase in interest income from tax exempt sources.

Balance Sheet

Total assets were $5.0 billion at June 30, 2006 up $0.6 billion from $4.4 billion at June 30, 2005. Loans and leases increased $0.3 billion or 12% from $3.0 billion at June 30, 2005 to $3.3 billion at June 30, 2006 due in large part to the acquisition of CNB. In addition, loan growth was fueled by solid production from consumer and commercial loan products. Total deposits were $3.7 billion at June 30, 2006 up 18% from the same period at June 30, 2005, also due in large part to the acquisition of CNB. Stockholders’ equity was $377.6 million representing total equity to total assets of 7.56% at June 30, 2006 compared with $330.7 million or a total equity to total asset ratio of 7.55% at June 30, 2005.

CNB Acquisition
 
On February 10, 2006, the Company completed its previously announced acquisition of CNB. With the completion of the acquisition, City National Bank and Trust Company merged into NBT Bank, N.A., adding nine full-service community banking offices to the NBT Bank division branch network. On an aggregate basis, CNB stockholders received approximately $39 million in cash and 2,059,000 shares of NBT common stock. The aggregate transaction value was approximately $89.0 million.


Page 5 of 10

Stock Repurchase Program
 
Under previously mentioned stock repurchase plans, the Company purchased 560,100 shares of its common stock during the quarter ended June 30, 2006, for a total of $12.4 million at an average price of $22.22 per share. For the six month period ended June 30, 2006, the Company purchased 738,504 shares of its common stock for a total of $16.5 million at an average price of $22.34 per share. At June 30, 2006, there were 764,647 shares available for repurchase under previously announced plans.

Dividend Declared

The NBT Board of Directors declared a third-quarter cash dividend of $0.19 per share at a meeting held today. The dividend will be paid on September 15, 2006 to shareholders of record as of September 1, 2006.

Corporate Overview

NBT is a financial holding company headquartered in Norwich, NY, with total assets of $5.0 billion at June 30, 2006. The Company primarily operates through NBT Bank, N.A., a full-service community bank with two divisions and through two financial services companies. NBT Bank, N.A. has 121 locations, including 83 NBT Bank offices in upstate New York and 38 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Hathaway Insurance Agency, Inc., based in Gloversville, NY, 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.pennstarbank.com, www.epic1st.com and www.hathawayagency.com .

Forward-Looking Statements

This news release contains forward-looking statements. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of NBT 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; (7) NBT may fail to realize projected cost savings, revenue enhancements and the accretive effect of the CNB acquisition on our earnings; and (8) 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 undertake to update forward-looking statements to reflect subsequent circumstances or events.
 

Page 6 of 10
 
NBT Bancorp Inc.
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
  
   
2006
 
2005
 
Net
Change
 
Percent
Change
 
   
(dollars in thousands, except per share data)
     
 
 
                   
Three Months Ended June 30,
                 
Net Income
 
$
14,169
 
$
13,128
 
$
1,041
   
8
%
Diluted Earnings Per Share
 
$
0.41
 
$
0.40
 
$
0.01
   
2
%
Weighted Average Diluted
                         
Common Shares Outstanding
   
34,471,723
   
32,583,600
   
1,888,123
   
6
%
Return on Average Assets
   
1.15
%
 
1.22
%
 
-0.07
%
 
-6
%
Return on Average Equity
   
14.71
%
 
16.21
%
 
-1.50
%
 
-9
%
Net Interest Margin
   
3.73
%
 
4.02
%
 
-0.29
%
 
-7
%
                           
Six Months Ended June 30,
                         
Net Income
 
$
27,757
 
$
25,917
 
$
1,840
   
7
%
Diluted Earnings Per Share
 
$
0.81
 
$
0.79
 
$
0.02
   
3
%
Weighted Average Diluted
                         
Common Shares Outstanding
   
34,111,076
   
32,779,403
   
1,331,673
   
4
%
Return on Average Assets
   
1.17
%
 
1.23
%
 
-0.06
%
 
-5
%
Return on Average Equity
   
14.93
%
 
15.99
%
 
-1.06
%
 
-7
%
Net Interest Margin
   
3.80
%
 
4.06
%
 
-0.26
%
 
-6
%
 
   
 
       
 
       
Asset Quality
   
June 30,
2006
   
December 31,
2005
   
June 30,
2005
       
Nonaccrual Loans
 
$
12,277
 
$
13,419
 
$
13,041
       
90 Days Past Due and Still Accruing
 
$
580
 
$
878
 
$
450
       
Total Nonperforming Loans
 
$
12,857
 
$
14,297
 
$
13,491
       
Other Real Estate Owned (OREO)
 
$
423
 
$
265
 
$
395
       
Total Nonperforming Assets
 
$
13,280
 
$
14,562
 
$
13,886
       
Allowance for Loan and Lease Losses
 
$
50,148
 
$
47,455
 
$
46,411
       
Year-to-Date (YTD) Net Charge-Offs
 
$
3,148
 
$
6,941
 
$
2,637
       
Allowance to Loans and Leases
   
1.50
%
 
1.57
%
 
1.55
%
     
Total Nonperforming Loans to Loans and Leases
   
0.38
%
 
0.47
%
 
0.45
%
     
Total Nonperforming Assets to Assets
   
0.27
%
 
0.33
%
 
0.32
%
     
Allowance to Nonperforming Loans
   
390.04
%
 
331.92
%
 
344.01
%
     
Net Charge-Offs to
                         
YTD Average Loans and Leases
   
0.20
%
 
0.23
%
 
0.18
%
     
 
                         
Capital
                         
Equity to Assets
   
7.56
%
 
7.54
%
 
7.55
%
     
Book Value Per Share
 
$
11.15
 
$
10.34
 
$
10.22
       
Tangible Book Value Per Share
 
$
7.72
 
$
8.75
 
$
8.62
       
Tier 1 Leverage Ratio
   
7.27
%
 
7.16
%
 
6.91
%
     
Tier 1 Capital Ratio
   
9.90
%
 
9.80
%
 
9.23
%
     
Total Risk-Based Capital Ratio
   
11.15
%
 
11.05
%
 
10.48
%
     
 
Quarterly Common Stock Price
 
2006
 
2005
 
2004
 
Quarter End
   
High
   
Low
   
High
 
 
Low
 
 
High
 
 
Low
 
March 31
 
$
23.90
 
$
21.02
 
$
25.66
 
$
21.48
 
$
23.00
 
$
21.21
 
June 30
 
$
23.24
 
$
21.03
   
24.15
   
20.10
   
23.18
   
19.92
 
September 30
               
25.50
   
22.79
   
24.34
   
21.02
 
December 31
               
23.79
   
20.75
   
26.84
   
21.94
 
 

Page 7 of 10
 
NBT Bancorp Inc.
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
  
   
2006
 
2005
 
Net
Change
 
Percent
Change
 
   
(dollars in thousands, except per share data)
         
Balance Sheet as of June 30,
                 
Loans
 
$
3,347,876
 
$
2,995,964
 
$
351,912
   
12
%
Earning Assets
 
$
4,636,111
 
$
4,087,964
 
$
548,147
   
13
%
Total Assets
 
$
4,995,912
 
$
4,381,364
 
$
614,548
   
14
%
Deposits
 
$
3,747,901
 
$
3,178,059
 
$
569,842
   
18
%
Stockholders’ Equity
 
$
377,606
 
$
330,749
 
$
46,857
   
14
%
                           
Average Balances
                         
Quarter Ended June 30,
                         
Loans
 
$
3,302,136
 
$
2,943,631
 
$
358,505
   
12
%
Securities Available For Sale
                         
(excluding unrealized gains or losses)
 
$
1,132,330
 
$
955,166
 
$
177,164
   
19
%
Securities Held To Maturity
 
$
101,481
 
$
88,401
 
$
13,080
   
15
%
Regulatory Equity Investment
 
$
40,166
 
$
36,617
 
$
3,549
   
10
%
Short-Term Interest Bearing Accounts
 
$
7,346
 
$
6,411
 
$
935
   
15
%
Total Earning Assets
 
$
4,583,459
 
$
4,030,226
 
$
553,233
   
14
%
Total Assets
 
$
4,937,007
 
$
4,307,004
 
$
630,003
   
15
%
Interest Bearing Deposits
 
$
3,039,915
 
$
2,657,197
 
$
382,718
   
14
%
Non-Interest Bearing Deposits
 
$
614,049
 
$
521,348
 
$
92,701
   
18
%
Short-Term Borrowings
 
$
422,007
 
$
320,151
 
$
101,856
   
32
%
Long-Term Borrowings
 
$
424,176
 
$
430,452
   
($6,276
)
 
-1
%
Total Interest Bearing Liabilities
 
$
3,886,097
 
$
3,407,800
 
$
478,297
   
14
%
Stockholders’ Equity
 
$
386,183
 
$
324,801
 
$
61,382
   
19
%
                           
Average Balances
                         
Six Months Ended June 30,
                         
Loans
 
$
3,225,053
 
$
2,910,426
 
$
314,627
   
11
%
Securities Available For Sale
                         
(excluding unrealized gains or losses)
 
$
1,093,566
 
$
954,013
 
$
139,553
   
15
%
Securities Held To Maturity
 
$
99,425
 
$
86,602
 
$
12,823
   
15
%
Regulatory Equity Investment
 
$
40,357
 
$
36,576
 
$
3,781
   
10
%
Short-Term Interest Bearing Accounts
 
$
7,543
 
$
6,569
 
$
974
   
15
%
Total Earning Assets
 
$
4,465,944
 
$
3,994,186
 
$
471,758
   
12
%
Total Assets
 
$
4,802,333
 
$
4,272,507
 
$
529,826
   
12
%
Interest Bearing Deposits
 
$
2,925,441
 
$
2,630,965
 
$
294,476
   
11
%
Non-Interest Bearing Deposits
 
$
602,632
 
$
513,447
 
$
89,185
   
17
%
Short-Term Borrowings
 
$
423,639
 
$
324,912
 
$
98,727
   
30
%
Long-Term Borrowings
 
$
423,142
 
$
421,890
 
$
1,252
   
0
%
Total Interest Bearing Liabilities
 
$
3,772,222
 
$
3,377,767
 
$
394,455
   
12
%
Stockholders’ Equity
 
$
375,658
 
$
327,360
 
$
48,298
   
15
%
 

Page 8 of 10

NBT Bancorp Inc. and Subsidiaries
 
June 30,
 
December 31,
 
June 30,
 
Consolidated Balance Sheets (unaudited)
 
2006
 
2005
 
2005
 
(in thousands)
             
               
ASSETS
             
Cash and due from banks
 
$
136,005
 
$
134,501
 
$
118,358
 
Short term interest bearing accounts
   
9,575
   
7,987
   
6,078
 
Securities available for sale, at fair value
   
1,100,416
   
954,474
   
961,944
 
Securities held to maturity (fair value of $109,562, $93,701 and
   
110,331
   
93,709
   
88,771
 
$89,465 at June 30, 2006, December 31, 2005 and
                   
June 30, 2005, respectively)
                   
Federal Reserve and Federal Home Loan Bank stock
   
40,338
   
40,259
   
39,442
 
Loans and leases
   
3,347,876
   
3,022,657
   
2,995,964
 
Less allowance for loan and lease losses
   
50,148
   
47,455
   
46,411
 
Net loans and leases
   
3,297,728
   
2,975,202
   
2,949,553
 
Premises and equipment, net
   
66,948
   
63,693
   
64,133
 
Goodwill
   
102,803
   
47,544
   
47,544
 
Intangible assets, net
   
13,338
   
3,808
   
4,092
 
Bank owned life insurance
   
40,926
   
33,648
   
32,968
 
Other assets
   
77,504
   
71,948
   
68,481
 
TOTAL ASSETS
 
$
4,995,912
 
$
4,426,773
 
$
4,381,364
 
                     
LIABILITIES AND STOCKHOLDERS' EQUITY
                   
Deposits:
                   
Demand (noninterest bearing)
 
$
642,901
 
$
593,422
 
$
569,046
 
Savings, NOW, and money market
   
1,567,171
   
1,325,166
   
1,386,720
 
Time
   
1,537,829
   
1,241,608
   
1,222,293
 
Total deposits
   
3,747,901
   
3,160,196
   
3,178,059
 
Short-term borrowings
   
320,637
   
444,977
   
384,171
 
Long-term debt
   
421,736
   
414,330
   
419,377
 
Trust preferred debentures
   
75,422
   
23,875
   
18,720
 
Other liabilities
   
52,610
   
49,452
   
50,288
 
Total liabilities
   
4,618,306
   
4,092,830
   
4,050,615
 
                     
                     
Total stockholders' equity
   
377,606
   
333,943
   
330,749
 
                     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
4,995,912
 
$
4,426,773
 
$
4,381,364
 
 

Page 9 of 10

NBT Bancorp Inc. and Subsidiaries
 
Three months ended
June 30,
 
Six months ended
June 30,
 
Consolidated Statements of Income (unaudited)
 
2006
 
2005
 
2006
 
2005
 
(in thousands, except per share data)
                 
Interest, fee and dividend income:
                 
Loans and leases
 
$
57,085
 
$
46,260
 
$
109,918
 
$
90,204
 
Securities available for sale
   
13,084
   
10,226
   
24,961
   
20,473
 
Securities held to maturity
   
1,043
   
831
   
2,028
   
1,634
 
Other
   
619
   
549
   
1,230
   
1,016
 
Total interest, fee and dividend income
   
71,831
   
57,866
   
138,137
   
113,327
 
Interest expense:
                         
Deposits
   
20,869
   
12,018
   
38,094
   
22,738
 
Short-term borrowings
   
4,111
   
2,207
   
8,048
   
4,068
 
Long-term debt
   
4,227
   
4,032
   
8,369
   
7,840
 
Trust preferred debentures
   
1,255
   
285
   
2,138
   
543
 
Total interest expense
   
30,462
   
18,542
   
56,649
   
35,189
 
Net interest income
   
41,369
   
39,324
   
81,488
   
78,138
 
Provision for loan and lease losses
   
1,703
   
2,320
   
3,431
   
4,116
 
Net interest income after provision for loan and lease losses
   
39,666
   
37,004
   
78,057
   
74,022
 
Noninterest income:
                         
Trust
   
1,459
   
1,251
   
2,817
   
2,503
 
Service charges on deposit accounts
   
4,493
   
4,311
   
8,712
   
8,240
 
ATM and debit card fees
   
1,789
   
1,544
   
3,434
   
2,944
 
Broker/dealer and insurance revenue
   
967
   
736
   
1,875
   
2,088
 
Net securities gains (losses)
   
22
   
51
   
(912
)
 
47
 
Bank owned life insurance income
   
392
   
333
   
773
   
666
 
Retirement plan administration fees
   
1,431
   
1,156
   
2,662
   
2,019
 
Other
   
2,003
   
1,673
   
4,419
   
3,259
 
Total noninterest income
   
12,556
   
11,055
   
23,780
   
21,766
 
Noninterest expense:
                         
Salaries and employee benefits
   
16,335
   
15,253
   
32,083
   
30,705
 
Office supplies and postage
   
1,456
   
1,121
   
2,637
   
2,271
 
Occupancy
   
2,747
   
2,550
   
5,735
   
5,338
 
Equipment
   
2,067
   
1,931
   
4,223
   
4,027
 
Professional fees and outside services
   
1,800
   
1,381
   
3,632
   
3,056
 
Data processing and communications
   
2,649
   
2,530
   
5,351
   
5,188
 
Amortization of intangible assets
   
466
   
142
   
789
   
260
 
Loan collection and other real estate owned
   
289
   
208
   
500
   
609
 
Other operating
   
3,885
   
3,580
   
7,216
   
6,123
 
Total noninterest expense
   
31,694
   
28,696
   
62,166
   
57,577
 
Income before income taxes
   
20,528
   
19,363
   
39,671
   
38,211
 
Income taxes
   
6,359
   
6,235
   
11,914
   
12,294
 
Net income
 
$
14,169
 
$
13,128
 
$
27,757
 
$
25,917
 
Earnings Per Share:
                         
Basic
 
$
0.41
 
$
0.41
 
$
0.82
 
$
0.80
 
Diluted
 
$
0.41
 
$
0.40
 
$
0.81
 
$
0.79
 
 

Page 10 of 10

NBT Bancorp Inc. and Subsidiaries
 
2Q
 
1Q
 
4Q
 
3Q
 
2Q
 
Quarterly Consolidated Statements of Income (unaudited)
 
2006
 
2006
 
2005
 
2005
 
2005
 
(in thousands, except per share data)
                     
Interest, fee and dividend income:
                     
Loans
 
$
57,085
 
$
52,833
 
$
50,726
 
$
48,784
 
$
46,260
 
Securities available for sale
   
13,084
   
11,877
   
10,544
   
10,103
   
10,226
 
Securities held to maturity
   
1,043
   
985
   
913
   
860
   
831
 
Other
   
619
   
611
   
575
   
535
   
549
 
Total interest, fee and dividend income
   
71,831
   
66,306
   
62,758
   
60,282
   
57,866
 
Interest expense:
                               
Deposits
   
20,869
   
17,225
   
14,352
   
12,842
   
12,018
 
Short-term borrowings
   
4,111
   
3,937
   
3,911
   
3,005
   
2,207
 
Long-term debt
   
4,227
   
4,142
   
4,098
   
4,176
   
4,032
 
Trust preferred debentures
   
1,255
   
883
   
375
   
308
   
285
 
Total interest expense
   
30,462
   
26,187
   
22,736
   
20,331
   
18,542
 
Net interest income
   
41,369
   
40,119
   
40,022
   
39,951
   
39,324
 
Provision for loan and lease losses
   
1,703
   
1,728
   
2,596
   
2,752
   
2,320
 
Net interest income after provision for loan and lease losses
   
39,666
   
38,391
   
37,426
   
37,199
   
37,004
 
Noninterest income:
                               
Trust
   
1,459
   
1,358
   
1,234
   
1,292
   
1,251
 
Service charges on deposit accounts
   
4,493
   
4,219
   
4,340
   
4,314
   
4,311
 
ATM and debit card fees
   
1,789
   
1,645
   
1,587
   
1,631
   
1,544
 
Broker/dealer and insurance fees
   
967
   
908
   
527
   
571
   
736
 
Net securities gains (losses)
   
22
   
(934
)
 
(546
)
 
(737
)
 
51
 
Bank owned life insurance income
   
392
   
381
   
342
   
339
   
333
 
Retirement plan administration fees
   
1,431
   
1,231
   
1,212
   
1,195
   
1,156
 
Other
   
2,003
   
2,416
   
1,736
   
1,746
   
1,673
 
Total noninterest income
   
12,556
   
11,224
   
10,432
   
10,351
   
11,055
 
Noninterest expense:
                               
Salaries and employee benefits
   
16,335
   
15,748
   
13,863
   
15,438
   
15,253
 
Office supplies and postage
   
1,456
   
1,181
   
1,222
   
1,135
   
1,121
 
Occupancy
   
2,747
   
2,988
   
2,689
   
2,425
   
2,550
 
Equipment
   
2,067
   
2,156
   
2,120
   
1,971
   
1,931
 
Professional fees and outside services
   
1,800
   
1,832
   
1,584
   
1,447
   
1,381
 
Data processing and communications
   
2,649
   
2,702
   
2,548
   
2,613
   
2,530
 
Amortization of intangible assets
   
466
   
323
   
142
   
142
   
142
 
Loan collection and other real estate owned
   
289
   
211
   
278
   
115
   
208
 
Other operating
   
3,885
   
3,331
   
4,703
   
3,293
   
3,580
 
Total noninterest expense
   
31,694
   
30,472
   
29,149
   
28,579
   
28,696
 
Income before income taxes
   
20,528
   
19,143
   
18,709
   
18,971
   
19,363
 
Income taxes
   
6,359
   
5,555
   
5,714
   
5,445
   
6,235
 
Net income
 
$
14,169
 
$
13,588
 
$
12,995
 
$
13,526
 
$
13,128
 
Earnings per share:
                               
Basic
 
$
0.41
 
$
0.41
 
$
0.40
 
$
0.42
 
$
0.41
 
Diluted
 
$
0.41
 
$
0.40
 
$
0.40
 
$
0.41
 
$
0.40