NBTB
$30.30
NBT Bancorp
($1.26)
(3.99%)
Earnings Details
3rd Quarter September 2020
Monday, October 26, 2020 4:15:00 PM
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Summary

NBT Bancorp (NBTB) Recent Earnings

NBT Bancorp (NBTB) reported 3rd Quarter September 2020 earnings of $0.80 per share on revenue of $122.7 million. The consensus earnings estimate was $0.66 per share on revenue of $115.2 million. Revenue fell 7.1% compared to the same quarter a year ago.

NBT Bancorp Inc is a financial holding company. The Company provides commercial banking and financial services through its subsidiaries.

Results
Reported Earnings
$0.80
Earnings Whisper
-
Consensus Estimate
$0.66
Reported Revenue
$122.7 Mil
Revenue Estimate
$115.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

NBT Bancorp Inc. Announces Third Quarter Net Income of $35.1 Million, or $0.80 Per Diluted Common Share; Announces Dividend

NORWICH, N.Y., Oct. 26, 2020 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the three and nine months ended September 30, 2020.

Net income for the three months ended September 30, 2020 was $35.1 million, or $0.80 per diluted common share. Net income was up $10.4 million from the previous quarter primarily due to lower loan loss provision and up $2.7 million from the third quarter of 2019.

Pre-provision net revenue (“PPNR”)1 for the third quarter of 2020 was $49.6 million compared to $50.7 million in the previous quarter and $48.2 million in the third quarter of 2019. The 2% decline in PPNR from the previous quarter reflected lower net interest income and slightly higher operating expenses, partly offset by higher noninterest income.

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 John H. Watt, Jr. “Strong fee-based income, including higher income from our retirement plan administration businesses driven by an acquisition completed in April, and focused expense management were key contributors. As we continue to work closely with our customers through the impacts of the pandemic, we are encouraged that total loan deferrals dropped to 2% in October from a peak of approximately 15% in May. Adoption of digital banking services and functionality by our customers continued to accelerate in the third quarter and, with our well-established technology roadmap, we are positioned to scale up.”

Third Quarter Financial Highlights

Net Income
  • Net income of $35.1 million
  • Diluted earnings per share of $0.80
Net Interest Income / NIM
  • Net interest income on a fully taxable equivalent basis was $78.3 million1
  • Net interest margin (“NIM”) on a fully taxable equivalent basis was 3.17%1
PPNR
  • PPNR1 was $49.6 million compared to $50.7 million in the second quarter of 2020 and $48.2 million in the third quarter of 2019
Loans and Credit Quality
  • Period end loans were $7.6 billion, up 8%, annualized, from December 31, 2019 and consistent with June 30, 2020
  • Excluding Paycheck Protection Program (“PPP”) loans of $515 million at September 30, 2020, period end loans contracted $72 million or 1% from June 30, 2020
  • Allowance for loan losses to total loans of 1.51% (1.62% excluding PPP loans and related allowance)
  • Net charge-offs to average loans was 0.12%, annualized (0.13% excluding PPP loans)
  • Nonperforming assets to total assets was 0.37% (0.39% excluding PPP loans)
Capital
  • Tangible book value per share2 grew 3% for the quarter and 8% from prior year to $20.02 at September 30, 2020
  • Tangible equity to assets of 8.27%1
  • CET1 ratio of 11.63%; Total leverage ratio of 9.48%

Loans

  • Period end total loans were $7.6 billion at September 30 and June 30, 2020, compared to $7.1 billion at December 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 from June 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% at June 30, 2020 and 33% at September 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% at December 31, 2019 and 86.5% at June 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%.
  • 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.

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% at September 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) at June 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 at September 30, 2020.

Noninterest Income

  • Total noninterest income, excluding securities gains (losses), was $37.6 million for the three months ended September 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 of Alliance 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 the FDIC 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 on December 15, 2020 to shareholders of record as of December 1, 2020.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. Eastern Time on Tuesday, October 27, 2020, to review third quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $10.8 billion at September 30, 2020. 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 140 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine, and is currently entering Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtinsurance.com.

Forward-Looking Statements

This news release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war or terrorism; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (9) changes in consumer spending, borrowings and savings habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisitions and integration of acquired businesses; (13) the ability to increase market share and control expenses; (14) changes in the competitive environment among financial holding companies; (15) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, Economic Growth, Regulatory Relief, Consumer Protection Act of 2018, Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and regulatory pronouncements around CARES Act; (16) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; (17) changes in the Company’s organization, compensation and benefit plans; (18) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (19) greater than expected costs or difficulties related to the integration of new products and lines of business; (20) the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 (“COVID-19”), global pandemic; (21) the impact of a slowing U.S. economy and increased unemployment on the performance of our loan portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products; and (22) the Company’s success at managing the risks involved in the foregoing items.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from the Company’s forward-looking statements is the potential adverse effect of the current COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company, its customers and the global economy and financial markets. The extent to which the COVID-19 pandemic impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic and its impact on the Company’s customers and demand for financial services, the actions governments, businesses and individuals take in response to the pandemic, the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies, national and local economic activity, and the pace of recovery when the COVID-19 pandemic subsides, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2019 and in our Form 10-Q for the quarter ended June 30, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. You should not place undue reliance on any forward-looking statements, which speak only as of the date made, and you are advised that various factors including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected. Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the financial results of NBT’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider NBT’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of NBT.

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


NBT Bancorp Inc. and Subsidiaries 
Selected Financial Data 
(unaudited, dollars in thousands except per share data) 
       
  2020  2019  
 3rd Q2nd Q1st Q4th Q3rd 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 September 30,    
  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 Q2nd Q1st Q4th Q3rd 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. 
       


NBT Bancorp Inc. and Subsidiaries 
Selected Financial Data 
(unaudited, dollars in thousands except per share data) 
       
  2020  2019  
 3rd Q2nd Q1st Q4th Q3rd 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%  
       


NBT Bancorp Inc. and Subsidiaries  
Consolidated Balance Sheets 
(unaudited, dollars in thousands) 
    
 September 30,December 31,
 
Assets2020 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 $684,862 and $641,262, respectively) 663,088 630,074 
Federal Reserve and Federal Home Loan Bank stock 28,484 44,620 
Loans held for sale 1,823 11,731 
Loans 7,560,643 7,136,098 
Less allowance for loan losses 114,500 72,965 
Net loans$ 7,446,143$7,063,133 
Premises and equipment, net 73,055 75,631 
Goodwill 280,541 274,769 
Intangible assets, net 12,557 12,020 
Bank owned life insurance 185,227 181,748 
Other assets 313,151 202,245 
Total assets$ 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 
    


NBT Bancorp Inc. and Subsidiaries  
Consolidated Statements of Income 
(unaudited, dollars in thousands except per share data) 
      
 Three Months EndedNine Months Ended 
 September 30,September 30, 
 20202019 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 $117,275 
Occupancy 5,294 5,335  16,354  17,053 
Data processing and communications 4,058 4,492  12,370  13,599 
Professional fees and outside services 3,394 3,535  10,694  10,562 
Equipment 5,073 4,487  14,494  13,762 
Office supplies and postage 1,530 1,667  4,621  4,835 
FDIC expense (credit) 645 (20) 1,949  1,946 
Advertising 530 677  1,461  1,821 
Amortization of intangible assets 856 874  2,573  2,735 
Loan collection and other real estate owned, net 620 976  2,365  2,722 
Other 3,857 8,374  14,730  18,130 
Total noninterest expense$ 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 
      


NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
      
  2020  2019 
 3rd Q2nd Q1st Q4th Q3rd 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$39,352 
Occupancy 5,294 5,065 5,995  5,653 5,335 
Data processing and communications 4,058 4,079 4,233  4,719 4,492 
Professional fees and outside services 3,394 3,403 3,897  4,223 3,535 
Equipment 5,073 4,779 4,642  4,821 4,487 
Office supplies and postage 1,530 1,455 1,636  1,744 1,667 
FDIC expense (credit) 645 993 311  - (20)
Advertising 530 322 609  952 677 
Amortization of intangible assets 856 883 834  844 874 
Loan collection and other real estate owned, net 620 728 1,017  1,436 976 
Other 3,857 3,916 6,957  6,310 8,374 
Total noninterest expense$ 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 
      


NBT Bancorp Inc. and Subsidiaries 
Average Quarterly Balance Sheets 
(unaudited, dollars in thousands) 
             
  Average BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / Rates 
  Q3 - 2020Q2 - 2020Q1 - 2020Q4 - 2019Q3 - 2019 
Assets            
Short-term interest bearing accounts $ 477,9460.11%$380,2600.10%$74,6951.28%$51,6132.43%$57,5301.95% 
Securities available for sale1 5  1,137,6041.96% 985,5612.29% 962,5272.40% 942,3022.37% 940,2562.41% 
Securities held to maturity1 5  621,8122.56% 613,8992.75% 622,3982.81% 651,3052.73% 698,6172.77% 
Investment in FRB and FHLB Banks  29,7207.08% 36,6046.09% 39,7845.97% 37,8426.37% 40,5257.04% 
Loans1 6  7,559,2183.95% 7,589,0324.10% 7,163,1144.42% 7,055,2884.49% 6,987,4764.61% 
Total interest earning assets $ 9,826,3003.45%$9,605,3563.68%$8,862,5184.07%$8,738,3504.13%$8,724,4044.22% 
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 $ 2,364,6060.28%$2,360,4070.29%$2,101,3061.00%$2,057,6781.16%$2,015,2971.24% 
NOW deposit accounts  1,207,0640.05% 1,167,4860.04% 1,086,2050.10% 1,064,1930.13% 1,056,0010.13% 
Savings deposits  1,447,0210.05% 1,383,4950.05% 1,276,2850.06% 1,251,4320.06% 1,274,7930.06% 
Time deposits  684,7081.31% 760,8031.48% 842,9891.62% 853,3531.69% 893,8371.75% 
Total interest bearing deposits $ 5,703,3990.30%$5,672,1910.34%$5,306,7850.69%$5,226,6560.77%$5,239,9280.81% 
Short-term borrowings  277,8900.64% 427,0040.92% 533,5161.35% 475,3321.42% 490,6941.61% 
Long-term debt  64,1372.47% 64,1652.46% 64,1942.46% 81,6132.35% 84,2502.35% 
Subordinated debt, net  97,9345.59% 8,6335.96 --  --  --  
Junior subordinated debt  101,1962.22% 101,1962.76% 101,1963.68% 101,1964.00% 101,1964.29% 
Total interest bearing liabilities $ 6,244,5560.45%$6,273,1890.45%$6,005,6910.82%$5,884,7970.90%$5,916,0680.96% 
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% 
             


NBT Bancorp Inc. and Subsidiaries 
Average Year-to-Date Balance Sheets 
(unaudited, dollars in thousands) 
         
  Average Yield/Average Yield/ 
  BalanceInterestRates BalanceInterestRates  
Nine Months Ended September 30,   2020  2019  
Assets        
Short-term interest bearing accounts $ 311,577$ 4640.20%$30,970$4571.97% 
Securities available for sale1 5  1,028,962 16,9562.20% 968,517 17,6952.44% 
Securities held to maturity1 5  619,379 12,5622.71% 750,305 15,9212.84% 
Investment in FRB and FHLB Banks  35,349 1,6746.33% 45,254 2,2716.71% 
Loans1 6  7,437,566 231,1684.15% 6,944,518 241,9324.66% 
Total interest earning assets $ 9,432,833$ 262,8243.72%$8,739,564$278,2764.26% 
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$ 8,6460.51%$1,912,572$16,2551.14% 
NOW deposit accounts  1,153,780 5480.06% 1,105,919 1,1570.14% 
Savings deposits  1,369,219 5530.05% 1,269,723 5500.06% 
Time deposits  762,548 8,4361.48% 929,819 11,8431.70% 
Total interest bearing deposits $ 5,561,312$ 18,1830.44%$5,218,033$29,8050.76% 
Short-term borrowings  412,312 3,2151.04% 607,155 7,9861.76% 
Long-term debt  64,165 1,1842.46% 80,162 1,3912.32% 
Subordinated debt, net  35,750 1,5035.62% - --  
Junior subordinated debt  101,196 2,1862.89% 101,196 3,4044.50% 
Total interest bearing liabilities $ 6,174,735$ 26,2710.57%$6,006,546$42,5860.95% 
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  
         


NBT Bancorp Inc. and Subsidiaries 
Consolidated Loan Balances 
(unaudited, dollars in thousands) 
       
The following table presents loans by line of business, paycheck protection program loans includes $11.3 million and $14.6 million in unamortized fees as of September 30, 2020 and June 30, 2020 respectively. 
 
       
  2020  2019  
 3rd Q2nd Q1st Q4th Q3rd 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 September 30, 2020: 
       
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:   
       
 IncurredCECL    
 12/31/20191/1/20203/31/20206/30/2020*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 June 30, 2020 and September 30, 2020 respectively. 
 


        
1The 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 Q2nd Q1st Q4th Q3rd 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 Q2nd Q1st Q4th Q3rd 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 September 30,    
   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 Q2nd Q1st Q4th Q3rd 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%  
        


       
1The 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 Q2nd Q1st Q4th Q3rd 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 September 30,   
   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%    
       
2Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.
3Annualized.     
4Other 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.
5Securities are shown at average amortized cost.    
6For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
7The allowance for loan losses for December 31, 2019 was calculated based on the incurred losses methodology and beginning January 1, 2020, it was based on the CECL methodology. The risk-based pooling of loans (segments) for incurred and CECL are not consistent. For illustrative purposes only, the loans and related incurred allowance at December 31, 2019 were grouped to conform with the CECL methodology.
       

Source: NBT Bancorp Inc.