Vermont Business Magazine NBT Bancorp Inc (NBT) (NASDAQ:NBTB) reported record net income and diluted earnings per share for both the three and nine months ended September 30, 2017. Net income for the three months ended September 30, 2017 was $22.9 million, up from $21.4 million for the second quarter of 2017 and up from $20.0 million for the third quarter of 2016. Diluted earnings per share for the three months ended September 30, 2017 was $0.52, as compared with $0.49 for the prior quarter and $0.46 per share for the third quarter of 2016.
Net income for the nine months ended September 30, 2017 was $64.5 million, up 9.7% from $58.8 million for the same period last year. Reported diluted earnings per share for the nine months ended September 30, 2017 was $1.47, as compared with $1.35 for the same period in 2016.
Highlights:
- Quarter-to-date earnings per share up 6.1% from the prior quarter and up 13.0% from prior year
- Quarter-to-date net income up 7.1% from the prior quarter and up 14.4% from the prior year
- Year to date annualized loan growth of 5.8%
- Average demand deposits for the nine months ended September 30, 2017 up 9.2% from the same period in 2016
“Once again, due to the efforts of a committed and aligned team of NBT professionals, we are able to deliver strong quarter-over-quarter and year-over-year increases in net income and earnings per share,” said NBT President and CEO John H. Watt, Jr. “Our team has built and sustained momentum supported by the prevailing tailwinds that have been created as a result of an improving domestic economy and higher consumer confidence.”
Net interest income was $71.9 million for the third quarter of 2017, up $2.3 million, or 3.3%, from the previous quarter. Fully taxable equivalent (“FTE”) net interest margin was 3.47% for the three months ended September 30, 2017 up from 3.44% for the previous quarter. The yield on average earning assets increased five basis points (“bps”) from the prior quarter to 3.80% and the cost of interest bearing liabilities increased three bps to 0.47% driven by seasonal deposit migration and higher interest rates on borrowings. Average interest earning assets were up $113.4 million, or 1.4%, as compared to the prior quarter, primarily driven by a $106.2 million increase in loans.
Net interest income was $71.9 million for the third quarter of 2017, up $5.3 million, or 7.9%, from the third quarter of 2016. FTE net interest margin of 3.47% was up seven bps from the third quarter of 2016 as the improvement in asset yields was partially offset by the increase in cost of interest bearing liabilities. Average interest earning assets were up $431.3 million, or 5.5%, from the same period in 2016, which was primarily driven by a $307.9 million increase in loans and a $129.3 million increase in securities.
Net interest income for the first nine months of 2017 was $210.0 million, up $13.0 million, or 6.6%, from the same period in 2016. FTE net interest margin of 3.46% for the nine months ended September 30, 2017, was up from 3.44% for the same period in 2016. Average interest earning assets were up $476.3 million, or 6.1%, for the nine months ended September 30, 2017, as compared to the same period in 2016, which was driven by a $307.4 million increase in loans and a $166.1 million increase in securities. Interest income increased $15.3 million, or 7.2% due to the increase in earning assets combined with a four bp improvement in asset yields. Interest expense was up $2.3 million, or 13.7%, for the nine months ended September 30, 2017 as compared to the same period in 2016 and resulted primarily from a three bp increase in rates driven by higher borrowing costs and increase in the average balance of interest bearing liabilities.
Noninterest income for the three months ended September 30, 2017 was $30.8 million, up $0.5 million, or 1.6%, from the prior quarter and up $1.1 million, or 3.8%, from the third quarter of 2016. The increase from the prior quarter was driven by higher other noninterest income due to higher swap fee income. The increase in noninterest income from the third quarter of 2016 was driven by higher retirement plan administration, ATM and debit card fees and trust revenue that were offset by lower insurance and other financial services revenue during the third quarter of 2017. Retirement plan administration fees increased in the third quarter of 2017 as compared to the third quarter of 2016 due primarily to the acquisition of Downeast Pension Services (“DPS”) in the second quarter of 2017. ATM and debit card fees increased from the prior quarters due to higher number of accounts and usage. Trust revenue increased due to account growth. The increases were partially offset by lower insurance and other financial services revenue from the same period of 2016.
Noninterest income for the nine months ended September 30, 2017 was $89.8 million, up $2.2 million, or 2.5%, from the same period of 2016. The increase in noninterest income from the prior year was driven by higher retirement plan administration, ATM and debit card fees and trust revenue that were partially offset by lower insurance and other financial services and other noninterest income during the first nine months of 2017 as compared to the same period in 2016. Retirement plan administration fees increased in 2017 as compared to the prior year due primarily to acquisitions completed in 2016 and the acquisition of DPS in the second quarter of 2017. ATM and debit card fees increased from the prior year due to higher number of accounts and usage in 2017 as compared to 2016. Trust revenue increased from the prior year due to account growth.
Noninterest expense for the three months ended September 30, 2017 was $60.6 million, up $0.3 million, or 0.5%, from the prior quarter and up $1.0 million, or 1.7%, from the third quarter of 2016. The increases from the prior quarter and the same quarter of the prior year were driven by increases in loan collection and other real estate owned due primarily to the write-down of a commercial property.
Noninterest expense for the nine months ended September 30, 2017 was $182.2 million, up $3.9 million, or 2.2%, from the same period of 2016. The increase from the prior year was driven by higher loan collection and other real estate owned expense due primarily to commercial property write-downs. Salaries and employee benefits, occupancy, equipment, data processing and communications and other noninterest expenses also increased in the first nine months of 2017 as compared to the same period of 2016.
In the first quarter of 2017, NBT adopted new accounting guidance for equity-based transactions requiring that all excess tax benefits and tax deficiencies associated with equity-based compensation be recognized as an income tax benefit or expense in the income statement. Previously, tax effects resulting from changes in NBT’s share price subsequent to the grant date were recorded through stockholders’ equity at the time of vesting or exercise. The adoption of the accounting guidance resulted in income tax benefits of $1.4 million, $0.1 million and $0.2 million, in the first, second and third quarters of 2017, respectively. The year-to-date impact to diluted earnings per share was $0.04.
Income tax expense for the three months ended September 30, 2017 was $11.3 million, up $0.7 million, or 6.2%, from the prior quarter and up $1.0 million, or 10.1%, from the third quarter of 2016. The effective tax rate of 33.1% for the third quarter of 2017 was down from 33.3% for the second quarter of 2017 and down from 34.0% for the third quarter of 2016. The increase in income tax expense from the prior quarter was due to a higher level of taxable income. The decrease in the effective tax rate from the third quarter of 2016 was due to a higher level of non-taxable income in the third quarter of 2017 as compared to the same period of the prior year. Excluding the tax benefit of the new accounting guidance, the effective tax rate was 33.6% and 33.7% for the second and third quarters of 2017, respectively.
Income tax expense for the nine months ended September 30, 2017 was $30.3 million, consistent with the same period of 2016. The effective tax rate of 32.0% for the first nine months of 2017 was down from 34.0% for the same period in the prior year. The decrease from the prior year was primarily due to the $1.7 million income tax benefit related to the adoption of new accounting guidance in 2017 offset by a higher level of taxable income in the first nine months of 2017 compared to the same period in 2016. Excluding the tax benefit of the new accounting guidance, the effective tax rate was 33.8% for the first nine months of 2017.
Asset Quality
Net charge-offs were $6.1 million for the three months ended September 30, 2017, as compared to $6.7 million for the prior quarter and $5.3 million for the third quarter of 2016. Provision expense was $7.9 million for the three months ended September 30, 2017, as compared with $7.6 million for the prior quarter and $6.4 million for the third quarter of 2016. Provision expense increased as compared to the same period of the prior year due to loan growth and higher charge-offs driven by the commercial portfolio. Annualized net charge-offs to average loans for the third quarter of 2017 was 0.38% down from 0.42% for the second quarter of 2017 and up from 0.35% for the third quarter of 2016.
Net charge-offs were $19.7 million for the nine months ended September 30, 2017, as compared to $14.6 million for the same period of 2016. Provision expense was $22.8 million for the nine months ended September 30, 2017, as compared with $17.3 million for same period of 2016. Provision expense increased as compared to the first nine months of 2016 due to loan growth and higher net charge-offs driven by the commercial portfolio. Annualized net charge-offs to average loans for the first nine months of 2017 was 0.42% compared with 0.33% for the first nine months of 2016.
Nonperforming loans to total loans was 0.42% at September 30, 2017, down eight bps from 0.50% for the prior quarter and down 31 bps from 0.73% at September 30, 2016. Past due loans as a percentage of total loans were 0.63% at September 30, 2017, as compared to 0.59% at June 30, 2017 and 0.57% at September 30, 2016.
The allowance for loan losses totaled $68.4 million at September 30, 2017, compared to $66.6 million at June 30, 2017 and $65.7 million at September 30, 2016. The allowance for loan losses as a percentage of loans was 1.06% (1.13% excluding acquired loans) at September 30, 2017, compared to 1.05% (1.13% excluding acquired loans) at June 30, 2017 and 1.07% (1.15% excluding acquired loans) at September 30, 2016.
Balance Sheet
Total assets were $9.2 billion at September 30, 2017, up $288.1 million, or 3.2%, from December 31, 2016. Loans were $6.5 billion at September 30, 2017, up $268.9 million, or 4.3%, from December 31, 2016. Total deposits were $7.2 billion at September 30, 2017, up $257.5 million, or 3.7%, from December 31, 2016. Stockholders’ equity was $955.2 million, representing a total equity-to-total assets ratio of 10.43% at September 30, 2017, compared with $913.3 million or a total equity-to-total assets ratio of 10.30% at December 31, 2016.
Stock Repurchase Program
The Company did not purchase shares of its common stock during the three or nine months ended September 30, 2017. As of September 30, 2017, there were 1,000,000 shares available for repurchase under a plan authorized on March 28, 2016, which expires on December 31, 2017. On October 23, 2017, the NBT Board of Directors authorized a new repurchase program for NBT to repurchase up to an additional 1,000,000 shares of its outstanding common stock. This plan expires on December 31, 2019.
Dividend
The NBT Board of Directors approved a 2017 fourth-quarter cash dividend of $0.23 per share at a meeting held today. The dividend will be paid on December 15, 2017 to shareholders of record as of December 1, 2017.
Corporate Overview
NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.2 billion at September 30, 2017. 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 152 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine. EPIC Advisors, Inc., based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. NBT-Mang Insurance Agency, based in Norwich, N.Y., is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epic1st.com and www.nbtmang.com.
| NBT Bancorp Inc. and Subsidiaries | ||||||||||||||||
| SELECTED FINANCIAL DATA | ||||||||||||||||
| (unaudited, dollars in thousands except per share data) | ||||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Profitability: | 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||
| Diluted Earnings Per Share | $ | 0.52 | $ | 0.49 | $ | 0.46 | $ | 0.45 | $ | 0.46 | ||||||
| Weighted Average Diluted Common Shares Outstanding | 43,914,536 | 43,901,207 | 43,883,471 | 43,703,122 | 43,562,489 | |||||||||||
| Return on Average Assets (1) | 1.00 | % | 0.95 | % | 0.92 | % | 0.89 | % | 0.92 | % | ||||||
| Return on Average Equity (1) | 9.55 | % | 9.11 | % | 8.94 | % | 8.54 | % | 8.80 | % | ||||||
| Return on Average Tangible Common Equity (1)(3) | 13.99 | % | 13.46 | % | 13.24 | % | 12.68 | % | 13.16 | % | ||||||
| Net Interest Margin (1)(2) | 3.47 | % | 3.44 | % | 3.46 | % | 3.41 | % | 3.40 | % | ||||||
| 9 Months ended September 30, | ||||||||||||||||
| Profitability: | 2017 | 2016 | ||||||||||||||
| Diluted Earnings Per Share | $ | 1.47 | $ | 1.35 | ||||||||||||
| Weighted Average Diluted Common Shares Outstanding | 43,892,221 | 43,579,161 | ||||||||||||||
| Return on Average Assets (1) | 0.96 | % | 0.92 | % | ||||||||||||
| Return on Average Equity (1) | 9.20 | % | 8.81 | % | ||||||||||||
| Return on Average Tangible Common Equity (1)(4) | 13.57 | % | 13.29 | % | ||||||||||||
| Net Interest Margin (1)(2) | 3.46 | % | 3.44 | % | ||||||||||||
| (1) Annualized. | ||||||||||||||||
| (2) Calculated on a FTE basis. | ||||||||||||||||
| (3) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows: | ||||||||||||||||
| 2017 | 2016 | |||||||||||||||
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||||||
| Net Income | $ | 22,876 | $ | 21,359 | $ | 20,279 | $ | 19,608 | $ | 20,001 | ||||||
| Amortization of intangible assets (net of tax) | 613 | 642 | 597 | 582 | 582 | |||||||||||
| Net income, excluding intangibles amortization | $ | 23,489 | $ | 22,001 | $ | 20,876 | $ | 20,190 | $ | 20,583 | ||||||
| Average stockholders' equity | $ | 950,557 | $ | 940,897 | $ | 920,047 | $ | 913,849 | $ | 904,445 | ||||||
| Less: average goodwill and other intangibles | 284,536 | 285,388 | 280,774 | 280,275 | 282,307 | |||||||||||
| Average tangible common equity | $ | 666,021 | $ | 655,509 | $ | 639,273 | $ | 633,574 | $ | 622,138 | ||||||
| (4) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows: | ||||||||||||||||
| 9 Months ended September 30, | ||||||||||||||||
| 2017 | 2016 | |||||||||||||||
| Net Income | $ | 64,514 | $ | 58,801 | ||||||||||||
| Amortization of intangible assets (net of tax) | 1,852 | 1,818 | ||||||||||||||
| Net income, excluding intangibles amortization | $ | 66,366 | $ | 60,619 | ||||||||||||
| Average stockholders' equity | $ | 937,279 | $ | 891,650 | ||||||||||||
| Less: average goodwill and other intangibles | 283,580 | 282,255 | ||||||||||||||
| Average tangible common equity | $ | 653,699 | $ | 609,395 | ||||||||||||
| Note: Year-to-date EPS may not equal sum of quarters due to share count differences. | ||||||||||||||||
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||||||
| SELECTED FINANCIAL DATA | |||||||||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||||||||
| 2017 | 2016 | ||||||||||||||||
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||||
| Balance Sheet Data: | |||||||||||||||||
| Securities Available for Sale | $ | 1,357,614 | $ | 1,365,521 | $ | 1,367,574 | $ | 1,338,290 | $ | 1,288,899 | |||||||
| Securities Held to Maturity | 494,309 | 515,628 | 515,793 | 527,948 | 485,877 | ||||||||||||
| Net Loans | 6,398,584 | 6,301,311 | 6,206,603 | 6,132,857 | 6,094,517 | ||||||||||||
| Total Assets | 9,155,396 | 9,076,418 | 8,945,485 | 8,867,268 | 8,773,024 | ||||||||||||
| Total Deposits | 7,231,236 | 7,015,284 | 7,185,051 | 6,973,688 | 6,949,238 | ||||||||||||
| Total Borrowings | 872,060 | 1,021,339 | 745,462 | 886,986 | 800,367 | ||||||||||||
| Total Liabilities | 8,200,158 | 8,136,057 | 8,018,646 | 7,953,952 | 7,863,675 | ||||||||||||
| Stockholders' Equity | 955,238 | 940,361 | 926,839 | 913,316 | 909,349 | ||||||||||||
| Asset Quality: | |||||||||||||||||
| Nonaccrual Loans | $ | 23,453 | $ | 29,134 | $ | 32,674 | $ | 35,712 | $ | 40,716 | |||||||
| 90 Days Past Due and Still Accruing | 3,388 | 2,849 | 2,392 | 4,810 | 4,444 | ||||||||||||
| Total Nonperforming Loans | 26,841 | 31,983 | 35,066 | 40,522 | 45,160 | ||||||||||||
| Other Real Estate Owned | 4,230 | 4,747 | 6,940 | 5,581 | 2,501 | ||||||||||||
| Total Nonperforming Assets | 31,071 | 36,730 | 42,006 | 46,103 | 47,661 | ||||||||||||
| Allowance for Loan Losses | 68,350 | 66,600 | 65,700 | 65,200 | 65,668 | ||||||||||||
| Asset Quality Ratios (Total): | |||||||||||||||||
| Allowance for Loan Losses to Total Loans | 1.06 | % | 1.05 | % | 1.05 | % | 1.05 | % | 1.07 | % | |||||||
| Total Nonperforming Loans to Total Loans | 0.42 | % | 0.50 | % | 0.56 | % | 0.65 | % | 0.73 | % | |||||||
| Total Nonperforming Assets to Total Assets | 0.34 | % | 0.40 | % | 0.47 | % | 0.52 | % | 0.54 | % | |||||||
| Allowance for Loan Losses to Total Nonperforming Loans | 254.65 | % | 208.24 | % | 187.36 | % | 160.90 | % | 145.41 | % | |||||||
| Past Due Loans to Total Loans | 0.63 | % | 0.59 | % | 0.54 | % | 0.64 | % | 0.57 | % | |||||||
| Net Charge-Offs to Average Loans (1) | 0.38 | % | 0.42 | % | 0.45 | % | 0.56 | % | 0.35 | % | |||||||
| Asset Quality Ratios (Originated) (2): | |||||||||||||||||
| Allowance for Loan Losses to Loans | 1.13 | % | 1.13 | % | 1.13 | % | 1.13 | % | 1.15 | % | |||||||
| Nonperforming Loans to Loans | 0.39 | % | 0.48 | % | 0.53 | % | 0.61 | % | 0.68 | % | |||||||
| Allowance for Loan Losses to Nonperforming Loans | 289.67 | % | 235.08 | % | 213.71 | % | 186.82 | % | 168.52 | % | |||||||
| Past Due Loans to Loans | 0.65 | % | 0.61 | % | 0.55 | % | 0.66 | % | 0.56 | % | |||||||
| Capital: | |||||||||||||||||
| Equity to Assets | 10.43 | % | 10.36 | % | 10.36 | % | 10.30 | % | 10.37 | % | |||||||
| Book Value Per Share | $ | 21.94 | $ | 21.61 | $ | 21.34 | $ | 21.11 | $ | 21.08 | |||||||
| Tangible Book Value Per Share (3) | $ | 15.42 | $ | 15.06 | $ | 14.88 | $ | 14.61 | $ | 14.57 | |||||||
| Tier 1 Leverage Ratio | 9.12 | % | 9.08 | % | 9.08 | % | 9.11 | % | 9.05 | % | |||||||
| Common Equity Tier 1 Capital Ratio | 10.08 | % | 9.96 | % | 10.02 | % | 9.98 | % | 9.84 | % | |||||||
| Tier 1 Capital Ratio | 11.46 | % | 11.36 | % | 11.43 | % | 11.42 | % | 11.28 | % | |||||||
| Total Risk-Based Capital Ratio | 12.45 | % | 12.32 | % | 12.40 | % | 12.39 | % | 12.27 | % | |||||||
| Common Stock Price (End of Period) | $ | 36.72 | $ | 36.95 | $ | 37.07 | $ | 41.88 | $ | 32.87 | |||||||
| (1) Annualized. | |||||||||||||||||
| (2) Non-GAAP measure - Excludes acquired loans. | |||||||||||||||||
| (3) Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding. | |||||||||||||||||
| NBT Bancorp Inc. and Subsidiaries | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| (unaudited, dollars in thousands) | ||||
| September 30, | December 31, | |||
| Assets: | 2017 | 2016 | ||
| Cash and due from banks | $ | 175,804 | $ | 147,789 |
| Short-term interest bearing accounts | 6,012 | 1,392 | ||
| Securities available for sale, at fair value | 1,357,614 | 1,338,290 | ||
| Securities held to maturity (fair value $495,411 and $525,050, respectively) | 494,309 | 527,948 | ||
| Trading securities | 10,883 | 9,259 | ||
| Federal Reserve and Federal Home Loan Bank stock | 45,070 | 47,033 | ||
| Loans | 6,466,934 | 6,198,057 | ||
| Less allowance for loan losses | 68,350 | 65,200 | ||
| Net loans | 6,398,584 | 6,132,857 | ||
| Premises and equipment, net | 81,421 | 84,187 | ||
| Goodwill | 268,043 | 265,439 | ||
| Intangible assets, net | 15,911 | 15,815 | ||
| Bank owned life insurance | 171,125 | 168,012 | ||
| Other assets | 130,620 | 129,247 | ||
| Total assets | $ | 9,155,396 | $ | 8,867,268 |
| Liabilities and stockholders' equity: | ||||
| Deposits: | ||||
| Demand (noninterest bearing) | $ | 2,312,715 | $ | 2,195,845 |
| Savings, NOW, and money market | 4,141,765 | 3,905,432 | ||
| Time | 776,756 | 872,411 | ||
| Total deposits | 7,231,236 | 6,973,688 | ||
| Short-term borrowings | 681,950 | 681,703 | ||
| Long-term debt | 88,914 | 104,087 | ||
| Junior subordinated debt | 101,196 | 101,196 | ||
| Other liabilities | 96,862 | 93,278 | ||
| Total liabilities | 8,200,158 | 7,953,952 | ||
| Total stockholders' equity | 955,238 | 913,316 | ||
| Total liabilities and stockholders' equity | $ | 9,155,396 | $ | 8,867,268 |
| NBT Bancorp Inc. and Subsidiaries | |||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||
| September 30, | September 30, | ||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||
| Interest, fee and dividend income: | |||||||||||
| Interest and fees on loans | $ | 68,086 | $ | 63,414 | $ | 197,399 | $ | 187,093 | |||
| Securities available for sale | 7,278 | 6,013 | 21,505 | 17,976 | |||||||
| Securities held to maturity | 2,746 | 2,544 | 8,263 | 7,328 | |||||||
| Other | 737 | 538 | 2,010 | 1,441 | |||||||
| Total interest, fee and dividend income | 78,847 | 72,509 | 229,177 | 213,838 | |||||||
| Interest expense: | |||||||||||
| Deposits | 3,648 | 3,607 | 10,658 | 10,809 | |||||||
| Short-term borrowings | 1,870 | 761 | 4,375 | 1,668 | |||||||
| Long-term debt | 589 | 819 | 1,794 | 2,425 | |||||||
| Junior subordinated debt | 810 | 660 | 2,308 | 1,920 | |||||||
| Total interest expense | 6,917 | 5,847 | 19,135 | 16,822 | |||||||
| Net interest income | 71,930 | 66,662 | 210,042 | 197,016 | |||||||
| Provision for loan losses | 7,889 | 6,388 | 22,835 | 17,266 | |||||||
| Net interest income after provision for loan losses | 64,041 | 60,274 | 187,207 | 179,750 | |||||||
| Noninterest income: | |||||||||||
| Insurance and other financial services revenue | 5,536 | 6,114 | 17,927 | 18,685 | |||||||
| Service charges on deposit accounts | 4,261 | 4,354 | 12,399 | 12,459 | |||||||
| ATM and debit card fees | 5,557 | 5,063 | 16,025 | 14,580 | |||||||
| Retirement plan administration fees | 5,272 | 4,129 | 14,881 | 11,937 | |||||||
| Trust | 4,927 | 4,535 | 14,620 | 13,848 | |||||||
| Bank owned life insurance income | 1,284 | 1,336 | 3,913 | 3,898 | |||||||
| Net securities (losses)gains | (4 | ) | - | (2 | ) | 30 | |||||
| Other | 3,945 | 4,113 | 10,069 | 12,188 | |||||||
| Total noninterest income | 30,778 | 29,644 | 89,832 | 87,625 | |||||||
| Noninterest expense: | |||||||||||
| Salaries and employee benefits | 32,740 | 32,783 | 99,081 | 98,155 | |||||||
| Occupancy | 5,174 | 5,035 | 16,528 | 15,780 | |||||||
| Data processing and communications | 4,399 | 4,183 | 12,826 | 12,354 | |||||||
| Professional fees and outside services | 3,107 | 3,343 | 9,748 | 9,905 | |||||||
| Equipment | 3,733 | 3,656 | 11,224 | 10,663 | |||||||
| Office supplies and postage | 1,432 | 1,438 | 4,680 | 4,661 | |||||||
| FDIC expense | 1,257 | 1,287 | 3,571 | 3,838 | |||||||
| Advertising | 665 | 634 | 1,711 | 1,733 | |||||||
| Amortization of intangible assets | 993 | 952 | 2,999 | 2,976 | |||||||
| Loan collection and other real estate owned | 1,684 | 985 | 3,627 | 2,535 | |||||||
| Other | 5,417 | 5,318 | 16,209 | 15,683 | |||||||
| Total noninterest expense | 60,601 | 59,614 | 182,204 | 178,283 | |||||||
| Income before income taxes | 34,218 | 30,304 | 94,835 | 89,092 | |||||||
| Income tax expense | 11,342 | 10,303 | 30,321 | 30,291 | |||||||
| Net income | $ | 22,876 | $ | 20,001 | $ | 64,514 | $ | 58,801 | |||
| Earnings Per Share: | |||||||||||
| Basic | $ | 0.52 | $ | 0.46 | $ | 1.48 | $ | 1.36 | |||
| Diluted | $ | 0.52 | $ | 0.46 | $ | 1.47 | $ | 1.35 | |||
| NBT Bancorp Inc. and Subsidiaries | ||||||||||||
| QUARTERLY CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| (unaudited, dollars in thousands except per share data) | ||||||||||||
| 2017 | 2016 | |||||||||||
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||
| Interest, fee and dividend income: | ||||||||||||
| Interest and fees on loans | $ | 68,086 | $ | 65,286 | $ | 64,027 | $ | 63,901 | $ | 63,414 | ||
| Securities available for sale | 7,278 | 7,218 | 7,009 | 6,057 | 6,013 | |||||||
| Securities held to maturity | 2,746 | 2,736 | 2,781 | 2,524 | 2,544 | |||||||
| Other | 737 | 654 | 619 | 627 | 538 | |||||||
| Total interest, fee and dividend income | 78,847 | 75,894 | 74,436 | 73,109 | 72,509 | |||||||
| Interest expense: | ||||||||||||
| Deposits | 3,648 | 3,536 | 3,474 | 3,557 | 3,607 | |||||||
| Short-term borrowings | 1,870 | 1,366 | 1,139 | 641 | 761 | |||||||
| Long-term debt | 589 | 599 | 606 | 779 | 819 | |||||||
| Junior subordinated debt | 810 | 772 | 726 | 707 | 660 | |||||||
| Total interest expense | 6,917 | 6,273 | 5,945 | 5,684 | 5,847 | |||||||
| Net interest income | 71,930 | 69,621 | 68,491 | 67,425 | 66,662 | |||||||
| Provision for loan losses | 7,889 | 7,567 | 7,379 | 8,165 | 6,388 | |||||||
| Net interest income after provision for loan losses | 64,041 | 62,054 | 61,112 | 59,260 | 60,274 | |||||||
| Noninterest income: | ||||||||||||
| Insurance and other financial services revenue | 5,536 | 5,621 | 6,770 | 5,711 | 6,114 | |||||||
| Service charges on deposit accounts | 4,261 | 4,161 | 3,977 | 4,270 | 4,354 | |||||||
| ATM and debit card fees | 5,557 | 5,518 | 4,950 | 4,868 | 5,063 | |||||||
| Retirement plan administration fees | 5,272 | 5,437 | 4,172 | 4,126 | 4,129 | |||||||
| Trust | 4,927 | 5,161 | 4,532 | 4,717 | 4,535 | |||||||
| Bank owned life insurance income | 1,284 | 1,218 | 1,411 | 1,297 | 1,336 | |||||||
| Net securities (losses)gains | (4 | ) | 2 | - | (674 | ) | - | |||||
| Other | 3,945 | 3,186 | 2,938 | 3,773 | 4,113 | |||||||
| Total noninterest income | 30,778 | 30,304 | 28,750 | 28,088 | 29,644 | |||||||
| Noninterest expense: | ||||||||||||
| Salaries and employee benefits | 32,740 | 32,754 | 33,587 | 31,547 | 32,783 | |||||||
| Occupancy | 5,174 | 5,184 | 6,170 | 5,160 | 5,035 | |||||||
| Data processing and communications | 4,399 | 4,229 | 4,198 | 4,141 | 4,183 | |||||||
| Professional fees and outside services | 3,107 | 3,609 | 3,032 | 3,712 | 3,343 | |||||||
| Equipment | 3,733 | 3,793 | 3,698 | 3,632 | 3,656 | |||||||
| Office supplies and postage | 1,432 | 1,640 | 1,608 | 1,507 | 1,438 | |||||||
| FDIC expense | 1,257 | 1,136 | 1,178 | 1,273 | 1,287 | |||||||
| Advertising | 665 | 656 | 390 | 823 | 634 | |||||||
| Amortization of intangible assets | 993 | 1,039 | 967 | 952 | 952 | |||||||
| Loan collection and other real estate owned | 1,684 | 664 | 1,279 | 923 | 985 | |||||||
| Other | 5,417 | 5,617 | 5,175 | 3,969 | 5,318 | |||||||
| Total noninterest expense | 60,601 | 60,321 | 61,282 | 57,639 | 59,614 | |||||||
| Income before income taxes | 34,218 | 32,037 | 28,580 | 29,709 | 30,304 | |||||||
| Income tax expense | 11,342 | 10,678 | 8,301 | 10,101 | 10,303 | |||||||
| Net income | $ | 22,876 | $ | 21,359 | $ | 20,279 | $ | 19,608 | $ | 20,001 | ||
| Earnings Per Share: | ||||||||||||
| Basic | $ | 0.52 | $ | 0.49 | $ | 0.47 | $ | 0.45 | $ | 0.46 | ||
| Diluted | $ | 0.52 | $ | 0.49 | $ | 0.46 | $ | 0.45 | $ | 0.46 | ||
| Note: Year-to-date EPS may not equal sum of quarters due to share count differences. | ||||||||||||
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||||||||||
| 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 |
||||||||||||
| Three Months ended, | Q3 - 2017 | Q2 - 2017 | Q1 - 2017 | Q4 - 2016 | Q3 - 2016 | ||||||||||||||||
| Assets: | |||||||||||||||||||||
| Short-term interest bearing accounts | $ | 9,000 | 2.42 | % | $ | 9,497 | 1.82 | % | $ | 14,342 | 1.33 | % | $ | 14,190 | 0.64 | % | $ | 21,279 | 0.54 | % | |
| Securities available for sale (1)(2) | 1,374,739 | 2.13 | % | 1,363,314 | 2.15 | % | 1,352,219 | 2.14 | % | 1,277,931 | 1.92 | % | 1,257,335 | 1.93 | % | ||||||
| Securities held to maturity (1) | 506,324 | 2.66 | % | 513,888 | 2.63 | % | 520,283 | 2.66 | % | 492,415 | 2.54 | % | 494,400 | 2.54 | % | ||||||
| Investment in FRB and FHLB Banks | 49,902 | 5.42 | % | 46,132 | 5.31 | % | 46,326 | 5.01 | % | 39,448 | 6.09 | % | 43,552 | 4.65 | % | ||||||
| Loans (3) | 6,400,287 | 4.23 | % | 6,294,056 | 4.17 | % | 6,211,058 | 4.19 | % | 6,155,985 | 4.14 | % | 6,092,371 | 4.15 | % | ||||||
| Total interest earning assets | $ | 8,340,252 | 3.80 | % | $ | 8,226,887 | 3.75 | % | $ | 8,144,228 | 3.75 | % | $ | 7,979,969 | 3.69 | % | $ | 7,908,937 | 3.69 | % | |
| Other assets | 759,636 | 753,383 | 748,476 | 760,563 | 754,813 | ||||||||||||||||
| Total assets | $ | 9,099,888 | $ | 8,980,270 | $ | 8,892,704 | $ | 8,740,532 | $ | 8,663,750 | |||||||||||
| Liabilities and stockholders' equity: | |||||||||||||||||||||
| Money market deposit accounts | $ | 1,652,730 | 0.23 | % | $ | 1,723,594 | 0.21 | % | $ | 1,688,060 | 0.21 | % | $ | 1,674,119 | 0.21 | % | $ | 1,636,815 | 0.22 | % | |
| NOW deposit accounts | 1,130,940 | 0.10 | % | 1,138,237 | 0.08 | % | 1,143,231 | 0.06 | % | 1,130,578 | 0.05 | % | 1,053,590 | 0.05 | % | ||||||
| Savings deposits | 1,232,823 | 0.06 | % | 1,232,301 | 0.06 | % | 1,176,224 | 0.05 | % | 1,145,352 | 0.06 | % | 1,146,013 | 0.06 | % | ||||||
| Time deposits | 805,435 | 1.09 | % | 824,398 | 1.08 | % | 847,410 | 1.07 | % | 890,506 | 1.06 | % | 902,185 | 1.07 | % | ||||||
| Total interest bearing deposits | $ | 4,821,928 | 0.30 | % | $ | 4,918,530 | 0.29 | % | $ | 4,854,925 | 0.29 | % | $ | 4,840,555 | 0.29 | % | $ | 4,738,603 | 0.30 | % | |
| Short-term borrowings | 773,074 | 0.96 | % | 643,971 | 0.85 | % | 657,442 | 0.70 | % | 523,708 | 0.49 | % | 611,339 | 0.50 | % | ||||||
| Long-term debt | 88,935 | 2.63 | % | 99,865 | 2.41 | % | 104,048 | 2.36 | % | 109,656 | 2.83 | % | 110,703 | 2.94 | % | ||||||
| Junior subordinated debt | 101,196 | 3.18 | % | 101,196 | 3.06 | % | 101,196 | 2.91 | % | 101,196 | 2.78 | % | 101,196 | 2.59 | % | ||||||
| Total interest bearing liabilities | $ | 5,785,133 | 0.47 | % | $ | 5,763,562 | 0.44 | % | $ | 5,717,611 | 0.42 | % | $ | 5,575,115 | 0.41 | % | $ | 5,561,841 | 0.42 | % | |
| Demand deposits | 2,260,973 | 2,181,952 | 2,159,893 | 2,136,310 | 2,079,266 | ||||||||||||||||
| Other liabilities | 103,225 | 93,859 | 95,153 | 115,258 | 118,198 | ||||||||||||||||
| Stockholders' equity | 950,557 | 940,897 | 920,047 | 913,849 | 904,445 | ||||||||||||||||
| Total liabilities and stockholders' equity | $ | 9,099,888 | $ | 8,980,270 | $ | 8,892,704 | $ | 8,740,532 | $ | 8,663,750 | |||||||||||
| Interest rate spread | 3.33 | % | 3.31 | % | 3.33 | % | 3.29 | % | 3.27 | % | |||||||||||
| Net interest margin | 3.47 | % | 3.44 | % | 3.46 | % | 3.41 | % | 3.40 | % | |||||||||||
| (1) Securities are shown at average amortized cost. | |||||||||||||||||||||
| (2) Excluding unrealized gains or losses. | |||||||||||||||||||||
| (3) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding. | |||||||||||||||||||||
| Note: Interest income for tax-exempt securities and loans has been adjusted to a FTE basis using the statutory Federal income tax rate of 35%. | |||||||||||||||||||||
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||
| AVERAGE YEAR-TO-DATE BALANCE SHEETS | |||||||||||||
| (unaudited, dollars in thousands) | |||||||||||||
| Average | Yield/ | Average | Yield/ | ||||||||||
| Balance | Interest | Rates | Balance | Interest | Rates | ||||||||
| Nine Months ended September 30, | 2017 | 2016 | |||||||||||
| Assets: | |||||||||||||
| Short-term interest bearing accounts | $ | 10,927 | $ | 144 | 1.76 | % | $ | 17,009 | $ | 72 | 0.57 | % | |
| Securities available for sale (1)(2) | 1,363,506 | 21,815 | 2.14 | % | 1,224,500 | 18,286 | 1.99 | % | |||||
| Securities held to maturity (1) | 513,447 | 10,178 | 2.65 | % | 486,299 | 9,111 | 2.50 | % | |||||
| Investment in FRB and FHLB Banks | 47,466 | 1,866 | 5.26 | % | 38,672 | 1,369 | 4.73 | % | |||||
| Loans (3) | 6,302,494 | 198,027 | 4.20 | % | 5,995,063 | 187,629 | 4.18 | % | |||||
| Total interest earning assets | $ | 8,237,840 | $ | 232,030 | 3.77 | % | 7,761,543 | $ | 216,467 | 3.73 | % | ||
| Other assets | 753,873 | 733,771 | |||||||||||
| Total assets | $ | 8,991,713 | $ | 8,495,314 | |||||||||
| Liabilities and stockholders' equity: | |||||||||||||
| Money market deposit accounts | $ | 1,687,998 | $ | 2,791 | 0.22 | % | $ | 1,666,687 | $ | 2,720 | 0.22 | % | |
| NOW deposit accounts | 1,137,424 | 682 | 0.08 | % | 1,059,787 | 400 | 0.05 | % | |||||
| Savings deposits | 1,213,990 | 509 | 0.06 | % | 1,131,768 | 491 | 0.06 | % | |||||
| Time deposits | 825,594 | 6,676 | 1.08 | % | 910,034 | 7,198 | 1.06 | % | |||||
| Total interest bearing deposits | $ | 4,865,006 | $ | 10,658 | 0.29 | % | $ | 4,768,276 | $ | 10,809 | 0.30 | % | |
| Short-term borrowings | 691,919 | 4,375 | 0.85 | % | 488,906 | 1,668 | 0.46 | % | |||||
| Long-term debt | 97,561 | 1,794 | 2.46 | % | 121,950 | 2,425 | 2.66 | % | |||||
| Junior subordinated debt | 101,196 | 2,308 | 3.05 | % | 101,196 | 1,920 | 2.53 | % | |||||
| Total interest bearing liabilities | $ | 5,755,682 | $ | 19,135 | 0.44 | % | $ | 5,480,328 | $ | 16,822 | 0.41 | % | |
| Demand deposits | 2,201,309 | 2,014,963 | |||||||||||
| Other liabilities | 97,443 | 108,373 | |||||||||||
| Stockholders' equity | 937,279 | 891,650 | |||||||||||
| Total liabilities and stockholders' equity | $ | 8,991,713 | $ | 8,495,314 | |||||||||
| Net interest income (FTE) | 212,895 | 199,645 | |||||||||||
| Interest rate spread | 3.33 | % | 3.32 | % | |||||||||
| Net interest margin | 3.46 | % | 3.44 | % | |||||||||
| Taxable equivalent adjustment | 2,853 | 2,629 | |||||||||||
| Net interest income | $ | 210,042 | $ | 197,016 | |||||||||
| (1) Securities are shown at average amortized cost. | |||||||||||||
| (2) Excluding unrealized gains or losses. | |||||||||||||
| (3) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding. | |||||||||||||
| Note: Interest income for tax-exempt securities and loans has been adjusted to a FTE basis using the statutory Federal income tax rate of 35%. | |||||||||||||
| NBT Bancorp Inc. and Subsidiaries | ||||||||||
| CONSOLIDATED LOAN BALANCES | ||||||||||
| (unaudited, dollars in thousands) | ||||||||||
| 2017 | 2016 | |||||||||
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||
| Residential real estate mortgages | $ | 1,302,577 | $ | 1,275,807 | $ | 1,275,774 | $ | 1,262,614 | $ | 1,240,337 |
| Commercial | 1,307,560 | 1,342,334 | 1,284,464 | 1,242,701 | 1,252,644 | |||||
| Commercial real estate | 1,654,727 | 1,563,980 | 1,540,472 | 1,543,301 | 1,528,498 | |||||
| Consumer | 1,700,340 | 1,684,936 | 1,669,369 | 1,641,657 | 1,625,294 | |||||
| Home equity | 501,730 | 500,854 | 502,224 | 507,784 | 513,412 | |||||
| Total loans | $ | 6,466,934 | $ | 6,367,911 | $ | 6,272,303 | $ | 6,198,057 | $ | 6,160,185 |
Source: NORWICH, N.Y., Oct. 23, 2017 (GLOBE NEWSWIRE) -- NBT Bancorp Inc.