8-K
NBT BANCORP INC (NBTB)
UNITED STATES
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): January 27, 2021
NBT BANCORP INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-14703 | 16-1268674 |
|---|---|---|
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
52 South Broad Street, Norwich, New York 13815
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (607) 337-2265
Not Applicable
(Former name or former address, if changed since last report)
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:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of class | Trading Symbol | Name of exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | NBTB | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
|---|
On January 27, 2021, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended December 31, 2020. That press release is furnished as Exhibit 99.1 hereto. A conference call will be held at 8:30 a.m. Eastern Time on Thursday, January 28, 2021, to review fourth 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.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (a) | Not applicable. |
| --- | --- |
| (b) | Not applicable. |
| --- | --- |
| (c) | Not applicable. |
| --- | --- |
| (d) | Exhibits. |
| --- | --- |
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press release of NBT Bancorp Inc. dated January 27, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
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. | ||
|---|---|---|
| Date: January 27, 2021 | By: | /s/ John V. Moran |
| John V. Moran | ||
| Executive Vice President | ||
| and Chief Financial Officer |
Exhibit 99.1
1
FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS
| 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. ANNOUNCES NET INCOME OF $104.4 MILLION ($2.37 PER DILUTED COMMON SHARE); APPROVES DIVIDEND AND INCREASE TO SHARES AVAILABLE UNDER SHARE REPURCHASE PROGRAM
NORWICH, NY (January 27, 2021) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the quarter and year ended December 31, 2020.
Net income for the year ended December 31, 2020 was $104.4 million, down 13.7% from $121.0 million for the prior year due primarily to higher provision for loan losses after the adoption of the Current Expected Credit Losses (“CECL”) accounting methodology and related to the deterioration of economic conditions caused by the COVID-19 pandemic. Diluted earnings per share for the year ended December 31, 2020 was $2.37, as compared with $2.74 for the prior year, a decrease of 13.5%. Excluding full year branch optimization charges of $4.8 million, net income and earnings per diluted share were $108.1 million and $2.46, respectively.
Pre-provision net revenue (“PPNR”)^1^ for the year ended December 31, 2020 was $193.4 million compared to $182.1 million in the prior year. The 6% increase in PPNR from the prior year reflected higher net interest income, higher noninterest income and lower noninterest expense.
Net income for the three months ended December 31, 2020 was $34.2 million, or $0.78 per diluted common share. Net income was down $0.9 million from the previous quarter primarily due to branch optimization charges for the quarter of $4.1 million and up $5.2 million from the fourth quarter of 2019 due to higher net interest income and lower provision for loan losses, partly offset by the branch optimization charges. Excluding branch optimization charges for the quarter of $4.1 million, net income and earnings per diluted share were $37.4 million and $0.85, respectively.
PPNR^1^ for the fourth quarter of 2020 was $48.2 million compared to $49.6 million in the previous quarter and $43.3 million in the fourth quarter of 2019. The 3% decline in PPNR from the previous quarter reflected higher operating expenses related to timing of initiatives, partly offset by higher net interest income.
CEO Comments
“NBT ended the year with active pipelines and building momentum. Our strong capital base provides us with the optionality we need to drive our growth in 2021,” said NBT President and CEO John H. Watt, Jr. “The strength of NBT’s pre-provision net revenue and our outsized noninterest income is reflected in our results for the full year and the fourth quarter of 2020. As we continue to navigate these challenging times and look to the future, our team is customer focused and committed to executing the critical strategies that will carry us forward.”
2
Fourth Quarter Financial Highlights
| Net Income | ◾ Net income of $34.2 million<br><br> <br>◾ Diluted earnings per share of $0.78 |
|---|---|
| Net Interest Income / NIM | ◾ Net interest income on a fully taxable equivalent basis was $80.4 million^1^<br><br> <br>◾ Net interest margin (“NIM”) on a fully taxable equivalent basis was 3.20%^1^, up 3 bps from the prior<br> quarter |
| PPNR | ◾ PPNR^1^ was $48.2 million compared to $49.6 million in the third quarter of 2020 and $43.3 million in the<br> fourth quarter of 2019 |
| Loans and Credit Quality | ◾ Period end loans were $7.5 billion, up 5% from December 31, 2019 and comparable to September 30, 2020<br><br> <br>◾ Excluding $431 million of Paycheck Protection Program (“PPP”) loans at December 31, 2020, period end loans increased $22 million or 0.3% from September 30, 2020<br><br> <br>◾ Allowance for loan losses to total loans of 1.47% (1.56% excluding PPP loans and related allowance), down 4 bps from the third quarter (down 6 bps excluding PPP loans and related<br> allowance)<br><br> <br>◾ Net charge-offs to average loans was 0.21%, annualized (0.22% excluding PPP loans)<br><br> <br>◾ Nonperforming assets to total assets was 0.45% (0.47% excluding PPP loans) |
| Capital | ◾ Tangible book value per share^2^ grew 2% for the quarter and 8% from prior year to $20.52 at December 31,<br> 2020<br><br> <br>◾ Tangible equity to assets of 8.41%^1^<br><br> <br>◾ CET1 ratio of 11.84%; Leverage ratio of 9.56% |
Loans
| ◾ | Period end total loans were $7.5 billion at December 31, 2020 and $7.6 billion at September 30, compared to $7.1 billion at December 31, 2019. |
|---|---|
| ◾ | Total PPP loans as of December 31, 2020 were $431 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 increased $22.0 million from September 30, 2020. Commercial and industrial loans decreased $29.7 million to $1.3 billion; commercial real estate loans increased $98.5 million to $2.4 billion; and total<br> consumer loans decreased $46.8 million to $3.4 billion. |
| --- | --- |
| ◾ | Commercial line of credit utilization rate was 22% at December 31, 2020 compared to 25% at September 30, 2020 and 32% at December 31, 2019. |
| --- | --- |
Deposits
| ◾ | Average total deposits in the fourth quarter of 2020 were $9.1 billion, compared to $8.8 billion in the third quarter of 2020, primarily due to increases in non-interest bearing demand deposit accounts. |
|---|---|
| ◾ | Loan to deposit ratio was 82.6% at December 31, 2020, compared to 94.0% at December 31, 2019 and 84.4% at September 30, 2020. |
| --- | --- |
3
Net Interest Income and Net Interest Margin
| ◾ | Net interest income for the fourth quarter of 2020 was $80.1 million, up $2.2 million or 2.8% from the third quarter of 2020 and up $2.9 million or 3.8% from the fourth quarter of 2019. |
|---|---|
| ◾ | The net interest margin on a fully taxable equivalent (“FTE”) basis for the fourth quarter of 2020 was 3.20%, up 3 basis points (“bps”) from the third quarter of 2020 and down 32 bps from the fourth quarter of 2019. The net impact of PPP<br> loans and excess liquidity negatively impacted the NIM by 8 bps in the fourth quarter versus a negative impact of 10 bps in the third quarter of 2020. Excluding the impact of PPP lending and excess liquidity from each quarter, NIM increased 1<br> bp from the prior quarter primarily due to a 5 bps decline in the cost of interest bearing liabilities and minimal reduction in asset yields during the quarter. |
| --- | --- |
| ◾ | Earning asset yields for the three months ended December 31, 2020 were up 1 bp from the prior quarter and down 67 bps from the same quarter in the prior year. Earning assets grew $159.3 million or 1.6% from the prior quarter and grew $1.2<br> billion or 14.3% from the same quarter in the prior year. |
| --- | --- |
| o | Excess liquidity resulted in a $74.9 million increase in the average balances of short-term interest bearing accounts. |
| --- | --- |
| o | The average balance of investment securities increased $111.4 million while yields declined 20 bps. |
| --- | --- |
| o | Loan yields increased 11 bps to 4.06% due primarily to the fees recognized due to $73 million in PPP loans forgiven during the quarter (7 bps) combined with a $45 million increase in the average balance of higher yielding consumer loans (9<br> bps). |
| --- | --- |
| ◾ | Total cost of deposits was 0.17% for the fourth quarter of 2020, down 2 bps from the prior quarter and down 36 bps from the same period in the prior year. |
| --- | --- |
| ◾ | The cost of interest-bearing liabilities for the three months ended December 31, 2020 was 0.40%, down as compared to the prior quarter of 0.45% and down 50 bps from the fourth quarter of 2019 of 0.90%. |
| --- | --- |
| o | 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 Allowance for Credit Losses
| ◾ | Net charge-offs to average loans were low due to COVID-19 pandemic relief programs for the quarter and 2020. Net charge-offs to total average loans were 23 bps for 2020 compared to 36 bps for 2019. |
|---|---|
| ◾ | Net charge-offs to total average loans of 21 bps (22 bps excluding PPP loans) compared to 12 bps (13 bps excluding PPP loans) in the prior quarter and 30 bps in the fourth quarter of 2019. The increase in charge-offs during the fourth<br> quarter of 2020 was primarily due to higher charge-offs in commercial, indirect auto and specialty lending, but continue to be at lower levels due to pandemic relief programs. |
| --- | --- |
| ◾ | Nonperforming assets to total assets was 0.45% (0.47% excluding PPP loans) compared to 0.37% (0.39% excluding PPP loans) at September 30, 2020 and 0.31% at December 31, 2019. The change in nonperforming assets was primarily related to an<br> increase in nonperforming commercial and residential real estate loans. |
| --- | --- |
| ◾ | Provision expense for the three months ended December 31, 2020 was ($0.6) million while net charge-offs of $3.9 million were up compared with the prior quarter. Provision expense decreased $3.9 million from the third quarter of 2020 and<br> decreased $6.6 million from the fourth quarter of 2019. The decrease in provision expense from the prior quarter and fourth quarter of 2019 was primarily due to the $4.5 million reduction in the level of allowance for loan losses resulting<br> from an improved economic forecast. |
| --- | --- |
4
| ◾ | The allowance for loan losses was $110.0 million or 1.47% (1.56% excluding PPP loans and related allowance) of total loans compared to 1.51% (1.62% excluding PPP loans and related allowance) at September 30, 2020 and 1.02% December 31,<br> 2019. The allowance for loans losses was calculated under the CECL accounting method in 2020 and the incurred loss accounting method in 2019. |
|---|---|
| ◾ | As of January 19, 2021, 1.5% of loans (loans outstanding as of December 31, 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 increased to $6.4 million at December 31, 2020 compared to the prior quarter at $5.5 million. |
| --- | --- |
Noninterest Income
| ◾ | Total noninterest income, excluding securities gains (losses), was $38.0 million for the three months ended December 31, 2020, up $0.3 million from the prior quarter and up $1.9 million from the prior year quarter. |
|---|---|
| ◾ | Service charges on deposit accounts were higher than the prior quarter but lower than the fourth quarter of 2019. Overdraft charges have been lower during the COVID-19 pandemic, recovering from the third quarter of 2020 but continue to run<br> lower than prior year levels. |
| --- | --- |
| ◾ | ATM and debit card fees were lower compared to the prior quarter due to seasonality and higher compared to the fourth quarter of 2019 due to increased volume and higher per transaction rates. |
| --- | --- |
| ◾ | Retirement plan administration fees were lower than the prior quarter, as third quarter fees were higher due to seasonal revenues, and higher than the fourth quarter of 2019 due to the April 1, 2020 acquisition of Alliance Benefit Group of<br> Illinois, Inc. (“ABG”) contributing $1.5 million in revenues during the fourth quarter and $1.7 million during the third quarter. |
| --- | --- |
| ◾ | The increase in other noninterest income from the prior quarter was driven by higher loan swap fee income partially offset by lower mortgage banking income. The decrease from the fourth quarter of 2019 was driven by lower loan swap fee<br> income and lower mortgage banking income. |
| --- | --- |
Noninterest Expense
| ◾ | Total noninterest expense for the fourth quarter of 2020 was up 13.4% from the previous quarter and up 7.0% from the fourth quarter of 2019, primarily due to $4.1 million in branch optimization costs incurred during the fourth quarter of<br> 2020. The branch optimization strategies charged in 2020 are expected to improve future operating expenses by about $2.5 million annually once fully implemented. |
|---|---|
| ◾ | Salaries and benefits increased from the prior quarter due to the timing of medical expenses and increased from the fourth quarter of 2019 driven by the addition of ABG’s salaries and benefits. |
| --- | --- |
| ◾ | Data processing and communication expense were down compared to the fourth quarter of 2019 due to lower transaction volumes as a result of the COVID-19 pandemic. |
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| ◾ | Professional fees and outside services were up $1.0 million compared to the prior quarter primarily due to the timing of expenses. |
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| ◾ | Equipment expense was higher than both the prior quarter and the fourth quarter of 2019 due to higher technology costs associated with several digital upgrades. |
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| ◾ | FDIC expense was higher than the fourth quarter of 2019 due to the benefit of the FDIC insurance assessment small bank credit in the fourth quarter of 2019. |
| --- | --- |
| ◾ | Other expenses increased compared to both the prior quarter and the fourth quarter of 2019 due to $4.1 million in branch optimization charges and a $0.9 million increase in the reserve for unfunded commitments. |
| --- | --- |
5
Income Taxes
| ◾ | The effective tax rate was 21.6% for the fourth quarter of 2020 compared to 23.8% for the third quarter of 2020 and 22.0% for the fourth quarter of 2019. The full year effective tax rate for 2020 was 21.6% compared to 22.1% for the full<br> year in 2019. |
|---|
Capital
| ◾ | Capital ratios remain strong with tangible common equity to tangible assets^1^ at 8.41%. Tangible book value per share^2^ grew 2% from the prior quarter and 8% from the prior year quarter to $20.52. |
|---|---|
| ◾ | December 31, 2020 CET1 capital ratio of 11.84%, leverage ratio of 9.56% and total risk-based capital ratio of 15.62%. |
| --- | --- |
Stock Repurchase Program
| ◾ | At a meeting held today, the Board of Directors approved an increase to the total number of shares authorized under the current stock repurchase program to 2 million shares from 1 million shares, previously. There have been 263,507 shares<br> repurchased under the plan. The stock repurchase plan expires on December 31, 2021. |
|---|
Dividend
| ◾ | The Board of Directors approved a first-quarter cash dividend of $0.27 per share at a meeting held today. The dividend will be paid on March 15, 2021 to shareholders of record as of March 1, 2021. |
|---|
Conference Call and Webcast
The Company will host a conference call at 8:30 a.m. Eastern Time on Thursday, January 28, 2021, to review fourth 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 $10.9 billion at December 31, 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 141 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.
6
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.
7
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 September 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.
8
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Profitability: | |||||||||||||||
| Diluted earnings per share | $ | 0.78 | $ | 0.80 | $ | 0.56 | $ | 0.23 | $ | 0.66 | |||||
| Weighted average diluted common shares outstanding | 43,973,971 | 43,941,953 | 43,928,344 | 44,130,324 | 44,174,201 | ||||||||||
| Return on average assets^3^ | 1.24 | % | 1.29 | % | 0.94 | % | 0.43 | % | 1.20 | % | |||||
| Return on average equity^3^ | 11.59 | % | 12.09 | % | 8.76 | % | 3.69 | % | 10.36 | % | |||||
| Return on average tangible common equity^1 3^ | 15.71 | % | 16.51 | % | 12.14 | % | 5.24 | % | 14.28 | % | |||||
| Net interest margin^1 3^ | 3.20 | % | 3.17 | % | 3.38 | % | 3.52 | % | 3.52 | % | |||||
| 12 Months ended December 31, | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| Profitability: | |||||||||||||||
| Diluted earnings per share | $ | 2.37 | $ | 2.74 | |||||||||||
| Weighted average diluted common shares outstanding | 43,988,623 | 44,123,698 | |||||||||||||
| Return on average assets | 0.99 | % | 1.26 | % | |||||||||||
| Return on average equity | 9.09 | % | 11.32 | % | |||||||||||
| Return on average tangible common equity^1^ | 12.48 | % | 15.85 | % | |||||||||||
| Net interest margin^1^ | 3.31 | % | 3.58 | % | |||||||||||
| 2020 | 2019 | ||||||||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Balance sheet data: | |||||||||||||||
| Securities available for sale | $ | 1,348,698 | $ | 1,197,925 | $ | 1,108,443 | $ | 1,000,980 | $ | 975,340 | |||||
| Securities held to maturity | 616,560 | 663,088 | 599,164 | 621,359 | 630,074 | ||||||||||
| Net loans | 7,388,885 | 7,446,143 | 7,514,491 | 7,147,383 | 7,063,133 | ||||||||||
| Total assets | 10,932,906 | 10,850,212 | 10,847,184 | 9,953,543 | 9,715,925 | ||||||||||
| Total deposits | 9,081,692 | 8,958,183 | 8,815,891 | 7,864,638 | 7,587,820 | ||||||||||
| Total borrowings | 406,731 | 446,737 | 602,988 | 714,283 | 820,682 | ||||||||||
| Total liabilities | 9,745,288 | 9,684,101 | 9,704,532 | 8,841,364 | 8,595,528 | ||||||||||
| Stockholders' equity | 1,187,618 | 1,166,111 | 1,142,652 | 1,112,179 | 1,120,397 | ||||||||||
| Capital: | |||||||||||||||
| Equity to assets | 10.86 | % | 10.75 | % | 10.53 | % | 11.17 | % | 11.53 | % | |||||
| Tangible equity ratio^1^ | 8.41 | % | 8.27 | % | 8.04 | % | 8.55 | % | 8.84 | % | |||||
| Book value per share | $ | 27.22 | $ | 26.74 | $ | 26.20 | $ | 25.52 | $ | 25.58 | |||||
| Tangible book value per share^2^ | $ | 20.52 | $ | 20.02 | $ | 19.46 | $ | 18.96 | $ | 19.03 | |||||
| Leverage ratio | 9.56 | % | 9.48 | % | 9.44 | % | 10.02 | % | 10.33 | % | |||||
| Common equity tier 1 capital ratio | 11.84 | % | 11.63 | % | 11.34 | % | 10.90 | % | 11.29 | % | |||||
| Tier 1 capital ratio | 13.09 | % | 12.88 | % | 12.60 | % | 12.14 | % | 12.56 | % | |||||
| Total risk-based capital ratio | 15.62 | % | 15.43 | % | 15.15 | % | 13.36 | % | 13.52 | % | |||||
| Common stock price (end of period) | $ | 32.10 | $ | 26.82 | $ | 30.06 | $ | 32.39 | $ | 40.56 |
Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares.
9
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Asset quality: | |||||||||||||||
| Nonaccrual loans | $ | 44,647 | $ | 35,896 | $ | 25,567 | $ | 29,972 | $ | 25,174 | |||||
| 90 days past due and still accruing | 3,149 | 2,579 | 2,057 | 2,280 | 3,717 | ||||||||||
| Total nonperforming loans | 47,796 | 38,475 | 27,624 | 32,252 | 28,891 | ||||||||||
| Other real estate owned | 1,458 | 1,605 | 1,783 | 2,384 | 1,458 | ||||||||||
| Total nonperforming assets | 49,254 | 40,080 | 29,407 | 34,636 | 30,349 | ||||||||||
| Allowance for loan losses | 110,000 | 114,500 | 113,500 | 100,000 | 72,965 | ||||||||||
| Asset quality ratios (total): | |||||||||||||||
| Allowance for loan losses to total loans | 1.47 | % | 1.51 | % | 1.49 | % | 1.38 | % | 1.02 | % | |||||
| Total nonperforming loans to total loans | 0.64 | % | 0.51 | % | 0.36 | % | 0.45 | % | 0.40 | % | |||||
| Total nonperforming assets to total assets | 0.45 | % | 0.37 | % | 0.27 | % | 0.35 | % | 0.31 | % | |||||
| Allowance for loan losses to total nonperforming loans | 230.14 | % | 297.60 | % | 410.87 | % | 310.06 | % | 252.55 | % | |||||
| Past due loans to total loans | 0.37 | % | 0.26 | % | 0.30 | % | 0.51 | % | 0.49 | % | |||||
| Net charge-offs to average loans^3^ | 0.21 | % | 0.12 | % | 0.28 | % | 0.32 | % | 0.30 | % | |||||
| Asset quality ratios (excluding paycheck protection program): | |||||||||||||||
| Allowance for loan losses to total loans | 1.56 | % | 1.62 | % | 1.59 | % | 1.38 | % | 1.02 | % | |||||
| Total nonperforming loans to total loans | 0.68 | % | 0.55 | % | 0.39 | % | 0.45 | % | 0.40 | % | |||||
| Total nonperforming assets to total assets | 0.47 | % | 0.39 | % | 0.28 | % | 0.35 | % | 0.31 | % | |||||
| Allowance for loan losses to total nonperforming loans | 230.10 | % | 297.53 | % | 410.78 | % | 310.06 | % | 252.55 | % | |||||
| Past due loans to total loans | 0.39 | % | 0.28 | % | 0.32 | % | 0.51 | % | 0.49 | % | |||||
| Net charge-offs to average loans^3^ | 0.22 | % | 0.13 | % | 0.30 | % | 0.32 | % | 0.30 | % |
10
| NBT Bancorp Inc. and Subsidiaries | |||
|---|---|---|---|
| Consolidated Balance Sheets | |||
| (unaudited, dollars in thousands) | |||
| December 31, | |||
| Assets | 2019 | ||
| Cash and due from banks | 159,995 | $ | 170,595 |
| Short-term interest bearing accounts | 512,686 | 46,248 | |
| Equity securities, at fair value | 30,737 | 27,771 | |
| Securities available for sale, at fair value | 1,348,698 | 975,340 | |
| Securities held to maturity (fair value 636,827 and 641,262, respectively) | 616,560 | 630,074 | |
| Federal Reserve and Federal Home Loan Bank stock | 27,353 | 44,620 | |
| Loans held for sale | 1,119 | 11,731 | |
| Loans | 7,498,885 | 7,136,098 | |
| Less allowance for loan losses | 110,000 | 72,965 | |
| Net loans | 7,388,885 | $ | 7,063,133 |
| Premises and equipment, net | 74,206 | 75,631 | |
| Goodwill | 280,541 | 274,769 | |
| Intangible assets, net | 11,735 | 12,020 | |
| Bank owned life insurance | 186,434 | 181,748 | |
| Other assets | 293,957 | 202,245 | |
| Total assets | 10,932,906 | $ | 9,715,925 |
| Liabilities and stockholders' equity | |||
| Demand (noninterest bearing) | 3,241,123 | $ | 2,414,383 |
| Savings, NOW and money market | 5,207,090 | 4,312,244 | |
| Time | 633,479 | 861,193 | |
| Total deposits | 9,081,692 | $ | 7,587,820 |
| Short-term borrowings | 168,386 | 655,275 | |
| Long-term debt | 39,097 | 64,211 | |
| Subordinated debt, net | 98,052 | - | |
| Junior subordinated debt | 101,196 | 101,196 | |
| Other liabilities | 256,865 | 187,026 | |
| Total liabilities | 9,745,288 | $ | 8,595,528 |
| Total stockholders' equity | 1,187,618 | $ | 1,120,397 |
| Total liabilities and stockholders' equity | 10,932,906 | $ | 9,715,925 |
All values are in US Dollars.
11
| NBT Bancorp Inc. and Subsidiaries | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated Statements of Income | ||||||||||
| (unaudited, dollars in thousands except per share data) | ||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||
| December 31, | December 31, | |||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||
| Interest, fee and dividend income | ||||||||||
| Interest and fees on loans | $ | 76,863 | $ | 79,800 | $ | 307,859 | $ | 321,474 | ||
| Securities available for sale | 5,478 | 5,639 | 22,434 | 23,303 | ||||||
| Securities held to maturity | 3,532 | 4,213 | 15,283 | 19,105 | ||||||
| Other | 568 | 924 | 2,706 | 3,652 | ||||||
| Total interest, fee and dividend income | $ | 86,441 | $ | 90,576 | $ | 348,282 | $ | 367,534 | ||
| Interest expense | ||||||||||
| Deposits | $ | 3,887 | $ | 10,181 | $ | 22,070 | $ | 39,986 | ||
| Short-term borrowings | 193 | 1,707 | 3,408 | 9,693 | ||||||
| Long-term debt | 369 | 484 | 1,553 | 1,875 | ||||||
| Subordinated debt | 1,339 | - | 2,842 | - | ||||||
| Junior subordinated debt | 545 | 1,021 | 2,731 | 4,425 | ||||||
| Total interest expense | $ | 6,333 | $ | 13,393 | $ | 32,604 | $ | 55,979 | ||
| Net interest income | $ | 80,108 | $ | 77,183 | $ | 315,678 | $ | 311,555 | ||
| Provision for loan losses | (607 | ) | 6,004 | 51,134 | 25,412 | |||||
| Net interest income after provision for loan losses | $ | 80,715 | $ | 71,179 | $ | 264,544 | $ | 286,143 | ||
| Noninterest income | ||||||||||
| Service charges on deposit accounts | $ | 3,588 | $ | 4,361 | $ | 13,201 | $ | 17,151 | ||
| ATM and debit card fees | 6,776 | 5,935 | 25,960 | 23,893 | ||||||
| Retirement plan administration fees | 9,011 | 7,218 | 35,851 | 30,388 | ||||||
| Wealth management^4^ | 7,456 | 7,085 | 29,247 | 28,400 | ||||||
| Insurance^4^ | 3,454 | 3,479 | 14,757 | 15,770 | ||||||
| Bank owned life insurance income | 1,733 | 1,236 | 5,743 | 5,355 | ||||||
| Net securities gains (losses) | 160 | 189 | (388 | ) | 4,213 | |||||
| Other | 5,937 | 6,738 | 21,905 | 18,853 | ||||||
| Total noninterest income | $ | 38,115 | $ | 36,241 | $ | 146,276 | $ | 144,023 | ||
| Noninterest expense | ||||||||||
| Salaries and employee benefits | $ | 41,016 | $ | 39,592 | $ | 161,934 | $ | 156,867 | ||
| Occupancy | 5,280 | 5,653 | 21,634 | 22,706 | ||||||
| Data processing and communications | 4,157 | 4,719 | 16,527 | 18,318 | ||||||
| Professional fees and outside services | 4,388 | 4,223 | 15,082 | 14,785 | ||||||
| Equipment | 5,395 | 4,821 | 19,889 | 18,583 | ||||||
| Office supplies and postage | 1,517 | 1,744 | 6,138 | 6,579 | ||||||
| FDIC expense | 739 | - | 2,688 | 1,946 | ||||||
| Advertising | 827 | 952 | 2,288 | 2,773 | ||||||
| Amortization of intangible assets | 822 | 844 | 3,395 | 3,579 | ||||||
| Loan collection and other real estate owned, net | 930 | 1,436 | 3,295 | 4,158 | ||||||
| Other | 10,133 | 6,310 | 24,863 | 24,440 | ||||||
| Total noninterest expense | $ | 75,204 | $ | 70,294 | $ | 277,733 | $ | 274,734 | ||
| Income before income tax expense | $ | 43,626 | $ | 37,126 | $ | 133,087 | $ | 155,432 | ||
| Income tax expense | 9,432 | 8,166 | 28,699 | 34,411 | ||||||
| Net income | $ | 34,194 | $ | 28,960 | $ | 104,388 | $ | 121,021 | ||
| Earnings Per Share | ||||||||||
| Basic | $ | 0.78 | $ | 0.66 | $ | 2.39 | $ | 2.76 | ||
| Diluted | $ | 0.78 | $ | 0.66 | $ | 2.37 | $ | 2.74 |
12
| NBT Bancorp Inc. and Subsidiaries | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarterly Consolidated Statements of Income | ||||||||||||
| (unaudited, dollars in thousands except per share data) | ||||||||||||
| 2020 | 2019 | |||||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | ||||||||
| Interest, fee and dividend income | ||||||||||||
| Interest and fees on loans | $ | 76,863 | $ | 74,998 | $ | 77,270 | $ | 78,728 | $ | 79,800 | ||
| Securities available for sale | 5,478 | 5,603 | 5,600 | 5,753 | 5,639 | |||||||
| Securities held to maturity | 3,532 | 3,734 | 3,926 | 4,091 | 4,213 | |||||||
| Other | 568 | 659 | 650 | 829 | 924 | |||||||
| Total interest, fee and dividend income | $ | 86,441 | $ | 84,994 | $ | 87,446 | $ | 89,401 | $ | 90,576 | ||
| Interest expense | ||||||||||||
| Deposits | $ | 3,887 | $ | 4,267 | $ | 4,812 | $ | 9,104 | $ | 10,181 | ||
| Short-term borrowings | 193 | 446 | 972 | 1,797 | 1,707 | |||||||
| Long-term debt | 369 | 398 | 393 | 393 | 484 | |||||||
| Subordinated debt | 1,339 | 1,375 | 128 | - | - | |||||||
| Junior subordinated debt | 545 | 565 | 695 | 926 | 1,021 | |||||||
| Total interest expense | $ | 6,333 | $ | 7,051 | $ | 7,000 | $ | 12,220 | $ | 13,393 | ||
| Net interest income | $ | 80,108 | $ | 77,943 | $ | 80,446 | $ | 77,181 | $ | 77,183 | ||
| Provision for loan losses | (607 | ) | 3,261 | 18,840 | 29,640 | 6,004 | ||||||
| Net interest income after provision for loan losses | $ | 80,715 | $ | 74,682 | $ | 61,606 | $ | 47,541 | $ | 71,179 | ||
| Noninterest income | ||||||||||||
| Service charges on deposit accounts | $ | 3,588 | $ | 3,087 | $ | 2,529 | $ | 3,997 | $ | 4,361 | ||
| ATM and debit card fees | 6,776 | 7,194 | 6,136 | 5,854 | 5,935 | |||||||
| Retirement plan administration fees | 9,011 | 9,685 | 9,214 | 7,941 | 7,218 | |||||||
| Wealth management^4^ | 7,456 | 7,695 | 6,823 | 7,273 | 7,085 | |||||||
| Insurance^4^ | 3,454 | 3,742 | 3,292 | 4,269 | 3,479 | |||||||
| Bank owned life insurance income | 1,733 | 1,255 | 1,381 | 1,374 | 1,236 | |||||||
| Net securities gains (losses) | 160 | 84 | 180 | (812 | ) | 189 | ||||||
| Other | 5,937 | 4,985 | 5,456 | 5,527 | 6,738 | |||||||
| Total noninterest income | $ | 38,115 | $ | 37,727 | $ | 35,011 | $ | 35,423 | $ | 36,241 | ||
| Noninterest expense | ||||||||||||
| Salaries and employee benefits | $ | 41,016 | $ | 40,451 | $ | 39,717 | $ | 40,750 | $ | 39,592 | ||
| Occupancy | 5,280 | 5,294 | 5,065 | 5,995 | 5,653 | |||||||
| Data processing and communications | 4,157 | 4,058 | 4,079 | 4,233 | 4,719 | |||||||
| Professional fees and outside services | 4,388 | 3,394 | 3,403 | 3,897 | 4,223 | |||||||
| Equipment | 5,395 | 5,073 | 4,779 | 4,642 | 4,821 | |||||||
| Office supplies and postage | 1,517 | 1,530 | 1,455 | 1,636 | 1,744 | |||||||
| FDIC expense | 739 | 645 | 993 | 311 | - | |||||||
| Advertising | 827 | 530 | 322 | 609 | 952 | |||||||
| Amortization of intangible assets | 822 | 856 | 883 | 834 | 844 | |||||||
| Loan collection and other real estate owned, net | 930 | 620 | 728 | 1,017 | 1,436 | |||||||
| Other | 10,133 | 3,857 | 3,916 | 6,957 | 6,310 | |||||||
| Total noninterest expense | $ | 75,204 | $ | 66,308 | $ | 65,340 | $ | 70,881 | $ | 70,294 | ||
| Income before income tax expense | $ | 43,626 | $ | 46,101 | $ | 31,277 | $ | 12,083 | $ | 37,126 | ||
| Income tax expense | 9,432 | 10,988 | 6,564 | 1,715 | 8,166 | |||||||
| Net income | $ | 34,194 | $ | 35,113 | $ | 24,713 | $ | 10,368 | $ | 28,960 | ||
| Earnings Per Share | ||||||||||||
| Basic | $ | 0.78 | $ | 0.80 | $ | 0.57 | $ | 0.24 | $ | 0.66 | ||
| Diluted | $ | 0.78 | $ | 0.80 | $ | 0.56 | $ | 0.23 | $ | 0.66 |
13
| NBT Bancorp Inc. and Subsidiaries<br><br> <br>Average Quarterly Balance Sheets | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands) | |||||||||||||||||||||||||
| Average Balance | Yield /<br><br> <br>Rates | Average Balance | Yield /<br><br> Rates | Average Balance | Yield /<br><br> <br>Rates | Average Balance | Yield /<br><br> <br>Rates | Average Balance | Yield /<br><br> <br>Rates | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Q4 - 2020 | Q3 - 2020 | Q2 - 2020 | Q1 - 2020 | Q4 - 2019 | |||||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Short-term interest bearing accounts | $ | 552,529 | 0.11 | % | $ | 477,946 | 0.11 | % | $ | 380,260 | 0.10 | % | $ | 74,695 | 1.28 | % | $ | 51,613 | 2.43 | % | |||||
| Securities available for sale^1 5^ | 1,230,411 | 1.77 | % | 1,137,604 | 1.96 | % | 985,561 | 2.29 | % | 962,527 | 2.40 | % | 942,302 | 2.37 | % | ||||||||||
| Securities held to maturity^1 5^ | 640,422 | 2.36 | % | 621,812 | 2.56 | % | 613,899 | 2.75 | % | 622,398 | 2.81 | % | 651,305 | 2.73 | % | ||||||||||
| Investment in FRB and FHLB Banks | 28,275 | 5.94 | % | 29,720 | 7.08 | % | 36,604 | 6.09 | % | 39,784 | 5.97 | % | 37,842 | 6.37 | % | ||||||||||
| Loans^1 6^ | 7,533,953 | 4.06 | % | 7,559,218 | 3.95 | % | 7,589,032 | 4.10 | % | 7,163,114 | 4.42 | % | 7,055,288 | 4.49 | % | ||||||||||
| Total interest earning assets | $ | 9,985,590 | 3.46 | % | $ | 9,826,300 | 3.45 | % | $ | 9,605,356 | 3.68 | % | $ | 8,862,518 | 4.07 | % | $ | 8,738,350 | 4.13 | % | |||||
| Other assets | 954,123 | 967,194 | 961,807 | 885,570 | 861,909 | ||||||||||||||||||||
| Total assets | $ | 10,939,713 | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | |||||||||||||||
| Liabilities and stockholders' equity | |||||||||||||||||||||||||
| Money market deposit accounts | $ | 2,455,510 | 0.27 | % | $ | 2,364,606 | 0.28 | % | $ | 2,360,407 | 0.29 | % | $ | 2,101,306 | 1.00 | % | $ | 2,057,678 | 1.16 | % | |||||
| NOW deposit accounts | 1,315,370 | 0.05 | % | 1,207,064 | 0.05 | % | 1,167,486 | 0.04 | % | 1,086,205 | 0.10 | % | 1,064,193 | 0.13 | % | ||||||||||
| Savings deposits | 1,465,562 | 0.05 | % | 1,447,021 | 0.05 | % | 1,383,495 | 0.05 | % | 1,276,285 | 0.06 | % | 1,251,432 | 0.06 | % | ||||||||||
| Time deposits | 645,288 | 1.15 | % | 684,708 | 1.31 | % | 760,803 | 1.48 | % | 842,989 | 1.62 | % | 853,353 | 1.69 | % | ||||||||||
| Total interest bearing deposits | $ | 5,881,730 | 0.26 | % | $ | 5,703,399 | 0.30 | % | $ | 5,672,191 | 0.34 | % | $ | 5,306,785 | 0.69 | % | $ | 5,226,656 | 0.77 | % | |||||
| Short-term borrowings | 175,597 | 0.44 | % | 277,890 | 0.64 | % | 427,004 | 0.92 | % | 533,516 | 1.35 | % | 475,332 | 1.42 | % | ||||||||||
| Long-term debt | 59,488 | 2.47 | % | 64,137 | 2.47 | % | 64,165 | 2.46 | % | 64,194 | 2.46 | % | 81,613 | 2.35 | % | ||||||||||
| Subordinated debt, net | 97,984 | 5.44 | % | 97,934 | 5.59 | % | 8,633 | 5.96 | % | - | - | - | - | ||||||||||||
| Junior subordinated debt | 101,196 | 2.14 | % | 101,196 | 2.22 | % | 101,196 | 2.76 | % | 101,196 | 3.68 | % | 101,196 | 4.00 | % | ||||||||||
| Total interest bearing liabilities | $ | 6,315,995 | 0.40 | % | $ | 6,244,556 | 0.45 | % | $ | 6,273,189 | 0.45 | % | $ | 6,005,691 | 0.82 | % | $ | 5,884,797 | 0.90 | % | |||||
| Demand deposits | 3,178,410 | 3,111,617 | 2,887,545 | 2,398,307 | 2,406,563 | ||||||||||||||||||||
| Other liabilities | 271,206 | 282,265 | 271,635 | 214,495 | 199,674 | ||||||||||||||||||||
| Stockholders' equity | 1,174,102 | 1,155,056 | 1,134,794 | 1,129,595 | 1,109,225 | ||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 10,939,713 | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | |||||||||||||||
| Interest rate spread | 3.06 | % | 3.00 | % | 3.23 | % | 3.25 | % | 3.23 | % | |||||||||||||||
| Net interest margin (FTE)^1^ | 3.20 | % | 3.17 | % | 3.38 | % | 3.52 | % | 3.52 | % |
14
| NBT Bancorp Inc. and Subsidiaries<br><br> <br>Average Year-to-Date Balance Sheets | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands) | ||||||||||||||
| Average<br><br> Balance | Interest | Yield/<br><br> Rates | Average<br><br> Balance | Interest | Yield/<br><br> Rates | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Twelve Months Ended December 31, | 2020 | 2019 | ||||||||||||
| Assets | ||||||||||||||
| Short-term interest bearing accounts | $ | 372,144 | $ | 610 | 0.16 | % | $ | 36,174 | $ | 773 | 2.14 | % | ||
| Securities available for sale^1 5^ | 1,079,600 | 22,434 | 2.08 | % | 961,909 | 23,334 | 2.43 | % | ||||||
| Securities held to maturity^1 5^ | 624,668 | 16,363 | 2.62 | % | 725,352 | 20,410 | 2.81 | % | ||||||
| Investment in FRB and FHLB Banks | 33,570 | 2,096 | 6.24 | % | 43,385 | 2,879 | 6.64 | % | ||||||
| Loans^1 6^ | 7,461,795 | 308,080 | 4.13 | % | 6,972,438 | 321,805 | 4.62 | % | ||||||
| Total interest earning assets | $ | 9,571,777 | $ | 349,583 | 3.65 | % | $ | 8,739,258 | $ | 369,201 | 4.22 | % | ||
| Other assets | 942,274 | 831,954 | ||||||||||||
| Total assets | $ | 10,514,051 | $ | 9,571,212 | ||||||||||
| Liabilities and stockholders' equity | ||||||||||||||
| Money market deposit accounts | $ | 2,320,947 | $ | 10,313 | 0.44 | % | $ | 1,949,147 | $ | 22,257 | 1.14 | % | ||
| NOW deposit accounts | 1,194,398 | 716 | 0.06 | % | 1,095,402 | 1,518 | 0.14 | % | ||||||
| Savings deposits | 1,393,436 | 745 | 0.05 | % | 1,265,112 | 733 | 0.06 | % | ||||||
| Time deposits | 733,073 | 10,296 | 1.40 | % | 910,546 | 15,478 | 1.70 | % | ||||||
| Total interest bearing deposits | $ | 5,641,854 | $ | 22,070 | 0.39 | % | $ | 5,220,207 | $ | 39,986 | 0.77 | % | ||
| Short-term borrowings | 352,809 | 3,408 | 0.97 | % | 573,927 | 9,693 | 1.69 | % | ||||||
| Long-term debt | 62,990 | 1,553 | 2.47 | % | 80,528 | 1,875 | 2.33 | % | ||||||
| Subordinated debt, net | 51,394 | 2,842 | 5.53 | % | - | - | - | |||||||
| Junior subordinated debt | 101,196 | 2,731 | 2.70 | % | 101,196 | 4,425 | 4.37 | % | ||||||
| Total interest bearing liabilities | $ | 6,210,243 | $ | 32,604 | 0.53 | % | $ | 5,975,858 | $ | 55,979 | 0.94 | % | ||
| Demand deposits | 2,895,341 | 2,351,515 | ||||||||||||
| Other liabilities | 259,992 | 174,891 | ||||||||||||
| Stockholders' equity | 1,148,475 | 1,068,948 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 10,514,051 | $ | 9,571,212 | ||||||||||
| Net interest income (FTE)^1^ | $ | 316,979 | $ | 313,222 | ||||||||||
| Interest rate spread | 3.12 | % | 3.28 | % | ||||||||||
| Net interest margin (FTE)^1^ | 3.31 | % | 3.58 | % | ||||||||||
| Taxable equivalent adjustment | $ | 1,301 | $ | 1,667 | ||||||||||
| Net interest income | $ | 315,678 | $ | 311,555 |
15
| NBT Bancorp Inc. and Subsidiaries<br><br> Consolidated Loan Balances |
|---|
| (unaudited, dollars in thousands) |
The following table presents loans by line of business, paycheck protection program loans includes $6.9 million, $11.3 million and $14.6 million in unamortized fees as of December 31, 2020 September 30, 2020 and June 30, 2020 respectively.
| 2020 | 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | ||||||
| Commercial | $ | 1,267,679 | $ | 1,297,408 | $ | 1,318,806 | $ | 1,338,609 | $ | 1,302,209 |
| Commercial real estate | 2,380,358 | 2,281,843 | 2,256,580 | 2,242,139 | 2,142,057 | |||||
| Paycheck protection program | 430,810 | 514,558 | 510,097 | - | - | |||||
| Residential real estate mortgages | 1,466,662 | 1,448,530 | 1,460,058 | 1,446,676 | 1,445,156 | |||||
| Indirect auto | 931,286 | 989,369 | 1,091,889 | 1,184,888 | 1,193,635 | |||||
| Specialty lending | 579,644 | 566,973 | 515,618 | 539,378 | 542,063 | |||||
| Home equity | 387,974 | 404,346 | 415,528 | 431,536 | 444,082 | |||||
| Other consumer | 54,472 | 57,616 | 59,415 | 64,157 | 66,896 | |||||
| Total loans | $ | 7,498,885 | $ | 7,560,643 | $ | 7,627,991 | $ | 7,247,383 | $ | 7,136,098 |
The following table provide loans as a percentage of total loans in industries vulnerable to the COVID-19 pandemic as of December 31, 2020:
| Industry | % of Total<br><br> <br>Loans | ||
|---|---|---|---|
| Accommodations | 2.5 | % | |
| Healthcare services and practices | 2.2 | % | |
| Restaurants and entertainment | 1.8 | % | |
| Retailers | 1.7 | % | |
| Automotive | 1.3 | % | |
| Total | 9.5 | % |
Allowance for Loan Losses as a Percentage of Loans by Segment^7^:
| Incurred | CECL | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12/31/2019 | 1/1/2020 | 3/31/2020 | 6/30/2020* | 9/30/2020* | 12/31/2020* | |||||||||||||
| Commercial & industrial | 0.96 | % | 0.98 | % | 1.43 | % | 1.25 | % | 1.34 | % | 1.47 | % | ||||||
| Commercial real estate | 1.02 | % | 0.74 | % | 1.10 | % | 1.56 | % | 1.57 | % | 1.43 | % | ||||||
| Paycheck protection program | 0.00 | % | 0.00 | % | 0.00 | % | 0.01 | % | 0.01 | % | 0.01 | % | ||||||
| Residential real estate | 0.27 | % | 0.83 | % | 0.99 | % | 1.13 | % | 1.21 | % | 1.07 | % | ||||||
| Auto | 0.83 | % | 0.78 | % | 1.08 | % | 0.99 | % | 0.92 | % | 0.93 | % | ||||||
| Other consumer | 3.74 | % | 3.66 | % | 4.00 | % | 5.01 | % | 4.66 | % | 4.55 | % | ||||||
| Total | 1.02 | % | 1.07 | % | 1.38 | % | 1.49 | % | 1.51 | % | 1.47 | % |
* Excluding PPP loans and related allowance, total allowance to loans was 1.59%, 1.62% and 1.56% as of June 30, 2020, September 30, 2020 and December 31, 2020 respectively.
16
^1^ The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:
| Non-GAAP measures | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands) | |||||||||||||||
| Pre-provision net revenue ("PPNR") | 2020 | 2019 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Income before income tax expense | $ | 43,626 | $ | 46,101 | $ | 31,277 | $ | 12,083 | $ | 37,126 | |||||
| FTE adjustment | 318 | 325 | 329 | 329 | 349 | ||||||||||
| Provision for loan losses | (607 | ) | 3,261 | 18,840 | 29,640 | 6,004 | |||||||||
| Net securities (gains) losses | (160 | ) | (84 | ) | (180 | ) | 812 | (189 | ) | ||||||
| Nonrecurring expense | 4,100 | - | 650 | - | - | ||||||||||
| Unfunded loan commitments reserve | 900 | - | (200 | ) | 2,000 | - | |||||||||
| PPNR | $ | 48,177 | $ | 49,603 | $ | 50,716 | $ | 44,864 | $ | 43,290 | |||||
| Average Assets | $ | 10,939,713 | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | |||||
| Return on Average Assets^3^ | 1.24 | % | 1.29 | % | 0.94 | % | 0.43 | % | 1.20 | % | |||||
| PPNR Return on Average Assets^3^ | 1.75 | % | 1.83 | % | 1.93 | % | 1.85 | % | 1.79 | % | |||||
| 12 Months ended December 31, | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| 2020 | 2019 | ||||||||||||||
| Income before income tax expense | $ | 133,087 | $ | 155,432 | |||||||||||
| FTE adjustment | 1,301 | 1,667 | |||||||||||||
| Provision for loan losses | 51,134 | 25,412 | |||||||||||||
| Net securities (gains) losses | 388 | (4,213 | ) | ||||||||||||
| Nonrecurring expense | 4,750 | 3,800 | |||||||||||||
| Unfunded loan commitments reserve | 2,700 | - | |||||||||||||
| PPNR | $ | 193,360 | $ | 182,098 | |||||||||||
| Average Assets | $ | 10,514,051 | $ | 9,571,212 | |||||||||||
| Return on Average Assets | 0.99 | % | 1.26 | % | |||||||||||
| PPNR Return on Average Assets | 1.84 | % | 1.90 | % |
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 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Net interest income | $ | 80,108 | $ | 77,943 | $ | 80,446 | $ | 77,181 | $ | 77,183 | |||||
| Add: FTE adjustment | 318 | 325 | 329 | 329 | 349 | ||||||||||
| Net interest income (FTE) | $ | 80,426 | $ | 78,268 | $ | 80,775 | $ | 77,510 | $ | 77,532 | |||||
| Average earning assets | $ | 9,985,590 | $ | 9,826,300 | $ | 9,605,356 | $ | 8,862,518 | $ | 8,738,350 | |||||
| Net interest margin (FTE)^3^ | 3.20 | % | 3.17 | % | 3.38 | % | 3.52 | % | 3.52 | % | |||||
| 12 Months ended December 31, | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| 2020 | 2019 | ||||||||||||||
| Net interest income | $ | 315,678 | $ | 311,555 | |||||||||||
| Add: FTE adjustment | 1,301 | 1,667 | |||||||||||||
| Net interest income (FTE) | $ | 316,979 | $ | 313,222 | |||||||||||
| Average earning assets | $ | 9,571,777 | $ | 8,739,258 | |||||||||||
| Net interest margin (FTE) | 3.31 | % | 3.58 | % |
Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.
17
^1^ The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:
| Non-GAAP measures | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited, dollars in thousands) | |||||||||||||||
| Tangible equity to tangible assets | 2020 | 2019 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Total equity | $ | 1,187,618 | $ | 1,166,111 | $ | 1,142,652 | $ | 1,112,179 | $ | 1,120,397 | |||||
| Intangible assets | 292,276 | 293,098 | 293,954 | 285,955 | 286,789 | ||||||||||
| Total assets | $ | 10,932,906 | $ | 10,850,212 | $ | 10,847,184 | $ | 9,953,543 | $ | 9,715,925 | |||||
| Tangible equity to tangible assets | 8.41 | % | 8.27 | % | 8.04 | % | 8.55 | % | 8.84 | % | |||||
| Return on average tangible common equity | 2020 | 2019 | |||||||||||||
| 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||
| Net income | $ | 34,194 | $ | 35,113 | $ | 24,713 | $ | 10,368 | $ | 28,960 | |||||
| Amortization of intangible assets (net of tax) | 617 | 642 | 662 | 626 | 633 | ||||||||||
| Net income, excluding intangibles amortization | $ | 34,811 | $ | 35,755 | $ | 25,375 | $ | 10,994 | $ | 29,593 | |||||
| Average stockholders' equity | $ | 1,174,102 | $ | 1,155,056 | $ | 1,134,794 | $ | 1,129,595 | $ | 1,109,225 | |||||
| Less: average goodwill and other intangibles | 292,725 | 293,572 | 294,423 | 286,400 | 287,268 | ||||||||||
| Average tangible common equity | $ | 881,377 | $ | 861,484 | $ | 840,371 | $ | 843,195 | $ | 821,957 | |||||
| Return on average tangible common equity^3^ | 15.71 | % | 16.51 | % | 12.14 | % | 5.24 | % | 14.28 | % | |||||
| 12 Months ended December 31, | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| 2020 | 2019 | ||||||||||||||
| Net income | $ | 104,388 | $ | 121,021 | |||||||||||
| Amortization of intangible assets (net of tax) | 2,546 | 2,684 | |||||||||||||
| Net income, excluding intangibles amortization | $ | 106,934 | $ | 123,705 | |||||||||||
| Average stockholders' equity | $ | 1,148,475 | $ | 1,068,948 | |||||||||||
| Less: average goodwill and other intangibles | 291,787 | 288,539 | |||||||||||||
| Average tangible common equity | $ | 856,688 | $ | 780,409 | |||||||||||
| Return on average tangible common equity | 12.48 | % | 15.85 | % |
^2^ Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.
^3^ Annualized.
^4^ Other financial services revenue previously disclosed and included with Insurance income has been reclassified and combined with Trust income and is disclosed as Wealth management income.
^5^ Securities are shown at average amortized cost.
^6^ For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
^7^ The allowance for loan losses for 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.