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): July 27, 2020
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)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
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 July 27, 2020, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended June 30, 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 Tuesday, July 28, 2020, to review second 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 July 27, 2020 |
| 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: July 27, 2020 | By: | /s/ John V. Moran |
| John V. Moran | ||
| Executive Vice President | ||
| and Chief Financial Officer |
Exhibit 99.1
1
| FOR IMMEDIATE RELEASE<br><br> <br>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 SECOND QUARTER NET INCOME OF $24.7 MILLION, OR $0.56 PER DILUTED COMMON SHARE
NORWICH, NY (July 27, 2020) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the three and six months ended June 30, 2020.
Net income for the three months ended June 30, 2020 was $24.7 million, or $0.56 per diluted common share. Net income was up $14.3 million from the previous quarter primarily due to lower loan loss provision and lower noninterest expense and down $5.8 million from the second quarter of 2019 primarily due to higher provision for loan losses related to the deterioration of economic conditions caused by the COVID-19 pandemic. Excluding real estate repositioning charges of $0.7 million, net income and earnings per diluted share were $25.2 million and $0.57, respectively.
Pre-provision net revenue (“PPNR”)^1^ for the second quarter of 2020 was $50.7 million compared to $44.9 million in the previous quarter and $47.2 million in the second quarter of 2019 reflecting higher net interest income and lower noninterest expense than the previous quarter.
CEO Comments
“NBT was able to grow pre-provision net revenue. Asset quality remained stable during this extraordinary quarter despite the significant challenges presented by the pandemic. Our team has demonstrated an unwavering commitment to provide superior service to our customers and participate in initiatives to support our communities during these difficult times,” said NBT President and CEO John H. Watt, Jr. “Notable during the quarter was our participation in the SBA’s Paycheck Protection Program to secure approval for approximately 3,000 loans and $547 million in relief to help retain more than 61,000 jobs at businesses and organizations in communities we serve. NBT's disciplined approach to risk management and credit practices, strong and recently enhanced capital position and liquidity continue to provide a strong foundation that will help us to meet the current challenges and to be opportunistic building our franchise.”
2
Second Quarter Financial Highlights
| Net Income | ◾ Net income of $24.7 million<br><br> <br>◾ Diluted earnings per share of $0.56 |
|---|---|
| Net Interest<br><br> <br>Income / NIM | ◾ Net interest income on a fully taxable equivalent basis was $80.8 million^1^<br><br> <br>◾ Net interest margin (“NIM”) on a fully taxable equivalent basis was 3.38%^1^ |
| PPNR | ◾ PPNR^1^ was $50.7 million<br> compared to $44.9 million in the first quarter of 2020 and $47.2 million in the second quarter 2019 |
| Loans and Credit<br><br> <br>Quality | ◾ Period end loans were $7.6 billion, up 13.9%, annualized, from December<br> 31, 2019<br><br> <br>◾ Excluding Paycheck Protection Plan<br> (“PPP”) loans of $510 million at June 30, 2020, period end loans contracted $130 million or 2% from March 31, 2020<br><br> <br>◾ Originated $547 million in PPP loans<br><br> <br>◾ Allowance for loan losses to total loans of 1.49% (1.59% excluding PPP<br> loans and related allowance)<br><br> <br>◾ Net charge-offs to average loans was 0.28%, annualized (0.30% excluding<br> PPP loans)<br><br> <br>◾ Nonperforming assets to total assets was 0.27% (0.28% excluding PPP loans) |
| Capital | ◾ Completed public offering of $100 million 5.00% fixed-to-floating rate<br> subordinated notes<br><br> <br>◾ Tangible book value per share^3^ grew 3% for the quarter and 8%<br> from prior year to $19.46 at June 30, 2020<br><br> <br>◾ Tangible equity to assets of 8.04%^1^<br><br> <br>◾ CET1 ratio of 11.34%; Total leverage ratio of 9.44% |
Loans
| ◾ | Period end total loans were $7.6 billion at June 30, 2020, compared to $7.1 billion at December 31, 2019. |
|---|---|
| ◾ | Total PPP loans as of June 30, 2020 were $510 million (net of unamortized fees); originated $547 million with an average loan size of $185,000 and an average fee of 3.2%. |
| --- | --- |
| ◾ | Excluding PPP loans, period end loans decreased $130 million from March 31, 2020. Commercial and industrial loans decreased $19.8 million to $1.3 billion; commercial real estate<br> loans increased $14.4 million to $2.3 billion; and total consumer loans decreased $124.1 million to $3.5 billion, driven by managed run-off of indirect auto loans. |
| --- | --- |
| ◾ | Commercial line of credit utilization rate was 26% at June 30, 2020 compared to 32% at March 31, 2020 and 36% at June 30, 2019. |
| --- | --- |
Deposits
| ◾ | Average total deposits in the second quarter of 2020 were $8.6 billion, compared to $7.7 billion in the first quarter of 2020, primarily due to increases in non-interest bearing<br> demand and money market deposit accounts. |
|---|---|
| ◾ | Loan to deposit ratio of 86.5% at June 30, 2020, compared to 94.0% at December 31, 2019. |
| --- | --- |
3
Net Interest Income and Net Interest Margin
| ◾ | Net interest income for the second quarter of 2020 was $80.4 million, up $3.3 million from $77.2 million the first quarter of 2020 and up $1.8 million from $78.6 million for the<br> second quarter of 2019. |
|---|---|
| ◾ | The net interest margin on a fully taxable equivalent (“FTE”) basis for the second quarter of 2020 was 3.38%, down 14 basis points (“bps”) from the first quarter of 2020 and down 23<br> bps from the second quarter of 2019. The net impact of PPP loans and excess liquidity, both of which the Company expects to be transitory, negatively impacted the NIM by 7 bps. Excluding the impact of PPP lending and excess liquidity, NIM<br> declined 7 bps from the prior quarter primarily due to the impact of asset repricing, partly offset by lower funding costs. |
| --- | --- |
| ◾ | Earning asset yields for the three months ended June 30, 2020 were down 39 bps from the prior quarter and down 60 bps from the same quarter in the prior year. Earning assets grew<br> $742.8 million or 8.4% from the prior quarter and grew $823.4 million or 9.4% from the same quarter in the prior year. |
| --- | --- |
| o | Excess liquidity resulted in a $306 million increase in the average balances of short-term interest bearing accounts with yields declining 118 bps to 0.10%. |
| --- | --- |
| o | Yields on investment securities declined 9 bps. |
| --- | --- |
| o | Loan yields decreased 32 bps to 4.10%. |
| --- | --- |
| ◾ | Total cost of total deposits was 0.23% for the second quarter of 2020, down 25 bps from the prior quarter and down 32 bps from the same period in the prior year. |
| --- | --- |
| ◾ | The cost of interest-bearing liabilities for the three months ended June 30, 2020 was 0.45%, down 37 bps from the prior quarter of 0.82% and down 51 bps from the second quarter of<br> 2019 of 0.96%. |
| --- | --- |
| o | Cost of interest-bearing deposits decreased 35 bps from the prior quarter and decreased 44 bps from the same quarter in 2019. |
| --- | --- |
Credit Quality and CECL
| ◾ | Asset quality metrics remained stable in the second quarter of 2020. |
|---|---|
| ◾ | Net charge-offs to total average loans of 28 bps (30 bps excluding PPP loans) compared to 32 bps in the prior quarter and 38 bps in the second quarter of 2019. |
| --- | --- |
| ◾ | Nonperforming assets to total assets was 0.27% (0.28% excluding PPP loans) compared to 0.35% at March 31, 2020 and 0.30% at June 30, 2019. |
| --- | --- |
| ◾ | Provision expense for the three months ended June 30, 2020 was $18.8 million as the economic deterioration due to COVID-19 and the related impact to expected losses continued in the<br> second quarter while net charge-offs of $5.3 million were relatively consistent with the prior quarter. Provision expense decreased $10.8 million from the first quarter of 2020 and increased $11.6 million from the second quarter of 2019. |
| --- | --- |
| ◾ | The allowance for loan losses was $113.5 million or 1.49% (1.59% excluding PPP loans and related allowance) of total loans compared to 1.38% at March 31, 2020 and 1.04% June 30,<br> 2019. |
| --- | --- |
| ◾ | As of July 23, 2020, 8.7% of loans (excluding PPP loans) are in payment deferral programs which is down from the second quarter 2020 peak of 14.9%. |
| --- | --- |
| ◾ | The reserve for unfunded loan commitments decreased $0.2 million to $5.4 million at June 30, 2020 as the increase in the allowance due to the deterioration in the economic forecast<br> was offset by a decrease in the level of unfunded commitments. |
| --- | --- |
4
Noninterest Income
| ◾ | Total noninterest income, excluding securities gains (losses), was $34.8 million for the three months ended June 30, 2020, down $1.4 million from the prior quarter and up $0.5<br> million from the prior year quarter. |
|---|---|
| ◾ | Service charges on deposit accounts were lower than both prior quarter and the second quarter of 2019 due to lower overdraft charges during the COVID-19 pandemic. |
| --- | --- |
| ◾ | Retirement plan administration fees were higher than both prior quarter and the second quarter of 2019 due to the April 1, 2020 acquisition of Alliance Benefit Group of Illinois,<br> Inc. (“ABG”) contributing $1.8 million in revenues during the quarter. |
| --- | --- |
| ◾ | Wealth management fees were down $0.5 million due to market conditions, partly offset by $0.3 million in ABG fees during the quarter. |
| --- | --- |
| ◾ | Insurance revenues were down compared to the prior quarter due to seasonally higher insurance revenues in the first quarter. |
| --- | --- |
| ◾ | The increase in other noninterest income from the prior year second quarter was driven by higher swap fees. |
| --- | --- |
Noninterest Expense
| ◾ | Total noninterest expense for the second quarter of 2020 was down 7.8% from the previous quarter and down 1.3% from the second quarter of 2019. |
|---|---|
| ◾ | Significant variances to the prior quarter: |
| --- | --- |
| o | Salaries and benefits declined due to decreased medical expenses during the COVID-19 pandemic ($1.1 million) and lower stock-based compensation expenses ($1.0 million), partly offset<br> by increased salaries due to the ABG acquisition ($0.9 million). |
| --- | --- |
| o | Occupancy expense was $0.9 million lower due to seasonal maintenance in the prior quarter and lower expenses during the COVID-19 pandemic due to limited on-site personnel. |
| --- | --- |
| o | Professional fees and outside services were down $0.5 million primarily due to the timing of expenses as a result of the COVID-19 pandemic. |
| --- | --- |
| o | FDIC expense was higher as the remaining portion of the FDIC insurance assessment small bank credit was used in the first quarter of 2020. |
| --- | --- |
| o | Other noninterest expense was lower in the second quarter of 2020 due primarily to a $2.0 million expense in the first quarter for the allowance for unfunded loan commitments, along<br> with lower travel and training expenses during the pandemic. The Company recorded a $0.2 million provision credit in the second quarter of 2020 to reduce the reserve for unfunded commitments. |
| --- | --- |
| o | Other noninterest expense included $0.7 million in non-recurring real estate repositioning charges for the second quarter. |
| --- | --- |
| ◾ | Significant variances to the second quarter of 2019: |
| --- | --- |
| o | Higher salaries and benefits primarily driven by the ABG acquisition partly offset by lower medical costs ($0.6 million). |
| --- | --- |
| o | Data processing and communication expense down due to lower transaction volumes as a result of the COVID-19 pandemic. |
| --- | --- |
| o | Other expenses decreased $0.7 million due to lower travel and training expenses during the pandemic and lower pension costs. |
| --- | --- |
5
Income Taxes
| ◾ | Effective tax rate was 21.0% for the second quarter of 2020 compared to 14.2% in the first quarter of 2020 and 22.4% in the second quarter 2019. The higher effective tax rate<br> compared to the first quarter of 2020 was due to higher level of taxable income relative to total income and included a true-up of tax expense to bring the full year estimated effective tax rate to 19.5%. The lower effective tax rate compared<br> to the second quarter of 2019 was due to a lower level of taxable income relative to total income. |
|---|
Capital
| ◾ | Capital ratios remain strong with tangible common equity to tangible assets^1^ at 8.04%. Tangible book value per share^3^ grew 3% from the prior quarter and 8% from<br> the prior year quarter to $19.46. |
|---|---|
| ◾ | June 30, 2020 CET1 capital ratio of 11.34%, total leverage ratio of 9.44% and total risk-based capital ratio of 15.15%. |
| --- | --- |
| ◾ | On June 23, 2020, the Company completed its public offering of $100 million 5.00% fixed-to-floating rate subordinated notes due 2030. The net proceeds were $98 million. The notes are<br> intended to qualify as Tier 2 capital for regulatory purposes. |
| --- | --- |
Dividend
| ◾ | The Board of Directors approved a third-quarter cash dividend of $0.27 per share at their regularly scheduled meeting held today. The dividend will be paid on September 15, 2020 to<br> shareholders of record as of September 1, 2020. |
|---|
Conference Call and Webcast
The Company will host a conference call at 8:30 a.m. Eastern Time on Tuesday, July 28, 2020, to review second quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.
Corporate Overview
NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $10.8 billion at June 30, 2020. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 146 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.
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 March 31, 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.
7
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 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | |||||||||||
| Profitability: | |||||||||||||||
| Diluted earnings per share | $ | 0.56 | $ | 0.23 | $ | 0.66 | $ | 0.73 | $ | 0.69 | |||||
| Weighted average diluted common shares outstanding | 43,928,344 | 44,130,324 | 44,174,201 | 44,138,495 | 44,120,377 | ||||||||||
| Return on average assets^2^ | 0.94 | % | 0.43 | % | 1.20 | % | 1.34 | % | 1.28 | % | |||||
| Return on average equity^2^ | 8.76 | % | 3.69 | % | 10.36 | % | 11.83 | % | 11.63 | % | |||||
| Return on average tangible common equity^1 2^ | 12.14 | % | 5.24 | % | 14.28 | % | 16.43 | % | 16.38 | % | |||||
| Net interest margin^1 2^ | 3.38 | % | 3.52 | % | 3.52 | % | 3.57 | % | 3.61 | % | |||||
| 6 Months ended June 30, | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| Profitability: | |||||||||||||||
| Diluted earnings per share | $ | 0.80 | $ | 1.35 | |||||||||||
| Weighted average diluted common shares outstanding | 44,026,420 | 44,096,681 | |||||||||||||
| Return on average assets^2^ | 0.69 | % | 1.26 | % | |||||||||||
| Return on average equity^2^ | 6.23 | % | 11.57 | % | |||||||||||
| Return on average tangible common equity^1 2^ | 8.69 | % | 16.41 | % | |||||||||||
| Net interest margin^1 2^ | 3.45 | % | 3.63 | % | |||||||||||
| 2020 | 2019 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | |||||||||||
| Balance sheet data: | |||||||||||||||
| Securities available for sale | $ | 1,108,443 | $ | 1,000,980 | $ | 975,340 | $ | 932,173 | $ | 979,696 | |||||
| Securities held to maturity | 599,164 | 621,359 | 630,074 | 678,435 | 744,601 | ||||||||||
| Net loans | 7,514,491 | 7,147,383 | 7,063,133 | 6,941,444 | 6,891,108 | ||||||||||
| Total assets | 10,847,184 | 9,953,543 | 9,715,925 | 9,661,386 | 9,635,718 | ||||||||||
| Total deposits | 8,815,891 | 7,864,638 | 7,587,820 | 7,743,166 | 7,593,706 | ||||||||||
| Total borrowings | 602,988 | 714,283 | 820,682 | 628,701 | 794,829 | ||||||||||
| Total liabilities | 9,704,532 | 8,841,364 | 8,595,528 | 8,562,785 | 8,560,895 | ||||||||||
| Stockholders' equity | 1,142,652 | 1,112,179 | 1,120,397 | 1,098,601 | 1,074,823 | ||||||||||
| Capital: | |||||||||||||||
| Equity to assets | 10.53 | % | 11.17 | % | 11.53 | % | 11.37 | % | 11.15 | % | |||||
| Tangible equity ratio^1^ | 8.04 | % | 8.55 | % | 8.84 | % | 8.65 | % | 8.41 | % | |||||
| Book value per share | $ | 26.20 | $ | 25.52 | $ | 25.58 | $ | 25.09 | $ | 24.56 | |||||
| Tangible book value per share^3^ | $ | 19.46 | $ | 18.96 | $ | 19.03 | $ | 18.52 | $ | 17.97 | |||||
| Tier 1 leverage ratio | 9.44 | % | 10.02 | % | 10.33 | % | 10.15 | % | 9.88 | % | |||||
| Common equity tier 1 capital ratio | 11.34 | % | 10.90 | % | 11.29 | % | 11.14 | % | 10.95 | % | |||||
| Tier 1 capital ratio | 12.60 | % | 12.14 | % | 12.56 | % | 12.42 | % | 12.24 | % | |||||
| Total risk-based capital ratio | 15.15 | % | 13.36 | % | 13.52 | % | 13.38 | % | 13.21 | % | |||||
| Common stock price (end of period) | $ | 30.06 | $ | 32.39 | $ | 40.56 | $ | 36.59 | $ | 37.51 | |||||
| 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 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | |||||||||||
| Asset quality: | |||||||||||||||
| Nonaccrual loans | $ | 25,567 | $ | 29,972 | $ | 25,174 | $ | 24,623 | $ | 24,669 | |||||
| 90 days past due and still accruing | 2,057 | 2,280 | 3,717 | 8,342 | 2,387 | ||||||||||
| Total nonperforming loans | 27,624 | 32,252 | 28,891 | 32,965 | 27,056 | ||||||||||
| Other real estate owned | 1,783 | 2,384 | 1,458 | 2,144 | 2,203 | ||||||||||
| Total nonperforming assets | 29,407 | 34,636 | 30,349 | 35,109 | 29,259 | ||||||||||
| Allowance for loan losses | 113,500 | 100,000 | 72,965 | 72,365 | 72,165 | ||||||||||
| Asset quality ratios (total): | |||||||||||||||
| Allowance for loan losses to total loans | 1.49 | % | 1.38 | % | 1.02 | % | 1.03 | % | 1.04 | % | |||||
| Total nonperforming loans to total loans | 0.36 | % | 0.45 | % | 0.40 | % | 0.47 | % | 0.39 | % | |||||
| Total nonperforming assets to total assets | 0.27 | % | 0.35 | % | 0.31 | % | 0.36 | % | 0.30 | % | |||||
| Allowance for loan losses to total nonperforming loans | 410.87 | % | 310.06 | % | 252.55 | % | 219.52 | % | 266.72 | % | |||||
| Past due loans to total loans | 0.30 | % | 0.51 | % | 0.49 | % | 0.57 | % | 0.52 | % | |||||
| Net charge-offs to average loans^2^ | 0.28 | % | 0.32 | % | 0.30 | % | 0.35 | % | 0.38 | % | |||||
| Asset quality ratios (excluding paycheck protection plan): | |||||||||||||||
| Allowance for loan losses to total loans | 1.59 | % | 1.38 | % | 1.02 | % | 1.03 | % | 1.04 | % | |||||
| Total nonperforming loans to total loans | 0.39 | % | 0.45 | % | 0.40 | % | 0.47 | % | 0.39 | % | |||||
| Total nonperforming assets to total assets | 0.28 | % | 0.35 | % | 0.31 | % | 0.36 | % | 0.30 | % | |||||
| Allowance for loan losses to total nonperforming loans | 410.78 | % | 310.06 | % | 252.55 | % | 219.52 | % | 266.72 | % | |||||
| Past due loans to total loans | 0.32 | % | 0.51 | % | 0.49 | % | 0.57 | % | 0.52 | % | |||||
| Net charge-offs to average loans^2^ | 0.30 | % | 0.32 | % | 0.30 | % | 0.35 | % | 0.38 | % |
10
| NBT Bancorp Inc. and Subsidiaries | |||
|---|---|---|---|
| Consolidated Balance Sheets | |||
| (unaudited, dollars in thousands) | |||
| Assets | December 31,<br><br> <br>2019 | ||
| --- | --- | --- | --- |
| Cash and due from banks | 171,264 | $ | 170,595 |
| Short-term interest bearing accounts | 528,228 | 46,248 | |
| Equity securities, at fair value | 29,223 | 27,771 | |
| Securities available for sale, at fair value | 1,108,443 | 975,340 | |
| Securities held to maturity (fair value 623,022 and 641,262, respectively) | 599,164 | 630,074 | |
| Federal Reserve and Federal Home Loan Bank stock | 32,536 | 44,620 | |
| Loans held for sale | 16,147 | 11,731 | |
| Loans | 7,627,991 | 7,136,098 | |
| Less allowance for loan losses | 113,500 | 72,965 | |
| Net loans | 7,514,491 | $ | 7,063,133 |
| Premises and equipment, net | 74,558 | 75,631 | |
| Goodwill | 280,541 | 274,769 | |
| Intangible assets, net | 13,413 | 12,020 | |
| Bank owned life insurance | 183,976 | 181,748 | |
| Other assets | 295,200 | 202,245 | |
| Total assets | 10,847,184 | $ | 9,715,925 |
| Liabilities and stockholders' equity | |||
| Demand (noninterest bearing) | 3,107,528 | $ | 2,414,383 |
| Savings, NOW and money market | 5,000,504 | 4,312,244 | |
| Time | 707,859 | 861,193 | |
| Total deposits | 8,815,891 | $ | 7,587,820 |
| Short-term borrowings | 339,656 | 655,275 | |
| Long-term debt | 64,154 | 64,211 | |
| Subordinated debt, net | 97,982 | - | |
| Junior subordinated debt | 101,196 | 101,196 | |
| Other liabilities | 285,653 | 187,026 | |
| Total liabilities | 9,704,532 | $ | 8,595,528 |
| Total stockholders' equity | 1,142,652 | $ | 1,120,397 |
| Total liabilities and stockholders' equity | 10,847,184 | $ | 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<br><br> <br>June 30, | Six Months Ended<br><br> <br>June 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2020 | 2019 | 2020 | 2019 | ||||||||
| Interest, fee and dividend income | |||||||||||
| Interest and fees on loans | $ | 77,270 | $ | 81,271 | $ | 155,998 | $ | 160,592 | |||
| Securities available for sale | 5,600 | 6,031 | 11,353 | 11,953 | |||||||
| Securities held to maturity | 3,926 | 5,089 | 8,017 | 10,306 | |||||||
| Other | 650 | 842 | 1,479 | 1,726 | |||||||
| Total interest, fee and dividend income | $ | 87,446 | $ | 93,233 | $ | 176,847 | $ | 184,577 | |||
| Interest expense | |||||||||||
| Deposits | $ | 4,812 | $ | 10,234 | $ | 13,916 | $ | 19,060 | |||
| Short-term borrowings | 972 | 2,760 | 2,769 | 5,997 | |||||||
| Long-term debt | 393 | 471 | 786 | 893 | |||||||
| Subordinated debt | 128 | - | 128 | - | |||||||
| Junior subordinated debt | 695 | 1,141 | 1,621 | 2,309 | |||||||
| Total interest expense | $ | 7,000 | $ | 14,606 | $ | 19,220 | $ | 28,259 | |||
| Net interest income | $ | 80,446 | $ | 78,627 | $ | 157,627 | $ | 156,318 | |||
| Provision for loan losses | 18,840 | 7,277 | 48,480 | 13,084 | |||||||
| Net interest income after provision for loan losses | $ | 61,606 | $ | 71,350 | $ | 109,147 | $ | 143,234 | |||
| Noninterest income | |||||||||||
| Service charges on deposit accounts | $ | 2,529 | $ | 4,224 | $ | 6,526 | $ | 8,460 | |||
| ATM and debit card fees | 6,136 | 6,156 | 11,990 | 11,681 | |||||||
| Retirement plan administration fees | 9,214 | 7,836 | 17,155 | 15,570 | |||||||
| Wealth management^4^ | 6,823 | 7,122 | 14,096 | 13,685 | |||||||
| Insurance^4^ | 3,292 | 3,547 | 7,561 | 8,291 | |||||||
| Bank owned life insurance income | 1,381 | 1,186 | 2,755 | 2,563 | |||||||
| Net securities gains (losses) | 180 | (69 | ) | (632 | ) | (12 | ) | ||||
| Other | 5,456 | 4,239 | 10,983 | 7,824 | |||||||
| Total noninterest income | $ | 35,011 | $ | 34,241 | $ | 70,434 | $ | 68,062 | |||
| Noninterest expense | |||||||||||
| Salaries and employee benefits | $ | 39,717 | $ | 38,567 | $ | 80,467 | $ | 77,923 | |||
| Occupancy | 5,065 | 5,443 | 11,060 | 11,718 | |||||||
| Data processing and communications | 4,079 | 4,693 | 8,312 | 9,107 | |||||||
| Professional fees and outside services | 3,403 | 3,359 | 7,300 | 7,027 | |||||||
| Equipment | 4,779 | 4,518 | 9,421 | 9,275 | |||||||
| Office supplies and postage | 1,455 | 1,577 | 3,091 | 3,168 | |||||||
| FDIC expense | 993 | 949 | 1,304 | 1,966 | |||||||
| Advertising | 322 | 641 | 931 | 1,144 | |||||||
| Amortization of intangible assets | 883 | 893 | 1,717 | 1,861 | |||||||
| Loan collection and other real estate owned, net | 728 | 961 | 1,745 | 1,746 | |||||||
| Other | 3,916 | 4,630 | 10,873 | 9,756 | |||||||
| Total noninterest expense | $ | 65,340 | $ | 66,231 | $ | 136,221 | $ | 134,691 | |||
| Income before income tax expense | $ | 31,277 | $ | 39,360 | $ | 43,360 | $ | 76,605 | |||
| Income tax expense | 6,564 | 8,805 | 8,279 | 16,923 | |||||||
| Net income | $ | 24,713 | $ | 30,555 | $ | 35,081 | $ | 59,682 | |||
| Earnings Per Share | |||||||||||
| Basic | $ | 0.57 | $ | 0.70 | $ | 0.80 | $ | 1.36 | |||
| Diluted | $ | 0.56 | $ | 0.69 | $ | 0.80 | $ | 1.35 |
12
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarterly Consolidated Statements of Income | |||||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||||
| 2020 | 2019 | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | |||||||||
| Interest, fee and dividend income | |||||||||||||
| Interest and fees on loans | $ | 77,270 | $ | 78,728 | $ | 79,800 | $ | 81,082 | $ | 81,271 | |||
| Securities available for sale | 5,600 | 5,753 | 5,639 | 5,711 | 6,031 | ||||||||
| Securities held to maturity | 3,926 | 4,091 | 4,213 | 4,586 | 5,089 | ||||||||
| Other | 650 | 829 | 924 | 1,002 | 842 | ||||||||
| Total interest, fee and dividend income | $ | 87,446 | $ | 89,401 | $ | 90,576 | $ | 92,381 | $ | 93,233 | |||
| Interest expense | |||||||||||||
| Deposits | $ | 4,812 | $ | 9,104 | $ | 10,181 | $ | 10,745 | $ | 10,234 | |||
| Short-term borrowings | 972 | 1,797 | 1,707 | 1,989 | 2,760 | ||||||||
| Long-term debt | 393 | 393 | 484 | 498 | 471 | ||||||||
| Subordinated debt | 128 | - | - | - | - | ||||||||
| Junior subordinated debt | 695 | 926 | 1,021 | 1,095 | 1,141 | ||||||||
| Total interest expense | $ | 7,000 | $ | 12,220 | $ | 13,393 | $ | 14,327 | $ | 14,606 | |||
| Net interest income | $ | 80,446 | $ | 77,181 | $ | 77,183 | $ | 78,054 | $ | 78,627 | |||
| Provision for loan losses | 18,840 | 29,640 | 6,004 | 6,324 | 7,277 | ||||||||
| Net interest income after provision for loan losses | $ | 61,606 | $ | 47,541 | $ | 71,179 | $ | 71,730 | $ | 71,350 | |||
| Noninterest income | |||||||||||||
| Service charges on deposit accounts | $ | 2,529 | $ | 3,997 | $ | 4,361 | $ | 4,330 | $ | 4,224 | |||
| ATM and debit card fees | 6,136 | 5,854 | 5,935 | 6,277 | 6,156 | ||||||||
| Retirement plan administration fees | 9,214 | 7,941 | 7,218 | 7,600 | 7,836 | ||||||||
| Wealth management^4^ | 6,823 | 7,273 | 7,085 | 7,630 | 7,122 | ||||||||
| Insurance^4^ | 3,292 | 4,269 | 3,479 | 4,000 | 3,547 | ||||||||
| Bank owned life insurance income | 1,381 | 1,374 | 1,236 | 1,556 | 1,186 | ||||||||
| Net securities gains (losses) | 180 | (812 | ) | 189 | 4,036 | (69 | ) | ||||||
| Other | 5,456 | 5,527 | 6,738 | 4,291 | 4,239 | ||||||||
| Total noninterest income | $ | 35,011 | $ | 35,423 | $ | 36,241 | $ | 39,720 | $ | 34,241 | |||
| Noninterest expense | |||||||||||||
| Salaries and employee benefits | $ | 39,717 | $ | 40,750 | $ | 39,592 | $ | 39,352 | $ | 38,567 | |||
| Occupancy | 5,065 | 5,995 | 5,653 | 5,335 | 5,443 | ||||||||
| Data processing and communications | 4,079 | 4,233 | 4,719 | 4,492 | 4,693 | ||||||||
| Professional fees and outside services | 3,403 | 3,897 | 4,223 | 3,535 | 3,359 | ||||||||
| Equipment | 4,779 | 4,642 | 4,821 | 4,487 | 4,518 | ||||||||
| Office supplies and postage | 1,455 | 1,636 | 1,744 | 1,667 | 1,577 | ||||||||
| FDIC expense (credit) | 993 | 311 | - | (20 | ) | 949 | |||||||
| Advertising | 322 | 609 | 952 | 677 | 641 | ||||||||
| Amortization of intangible assets | 883 | 834 | 844 | 874 | 893 | ||||||||
| Loan collection and other real estate owned, net | 728 | 1,017 | 1,436 | 976 | 961 | ||||||||
| Other | 3,916 | 6,957 | 6,310 | 8,374 | 4,630 | ||||||||
| Total noninterest expense | $ | 65,340 | $ | 70,881 | $ | 70,294 | $ | 69,749 | $ | 66,231 | |||
| Income before income tax expense | $ | 31,277 | $ | 12,083 | $ | 37,126 | $ | 41,701 | $ | 39,360 | |||
| Income tax expense | 6,564 | 1,715 | 8,166 | 9,322 | 8,805 | ||||||||
| Net income | $ | 24,713 | $ | 10,368 | $ | 28,960 | $ | 32,379 | $ | 30,555 | |||
| Earnings Per Share | |||||||||||||
| Basic | $ | 0.57 | $ | 0.24 | $ | 0.66 | $ | 0.74 | $ | 0.70 | |||
| Diluted | $ | 0.56 | $ | 0.23 | $ | 0.66 | $ | 0.73 | $ | 0.69 |
13
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average Quarterly Balance Sheets | |||||||||||||||||||||||||
| (unaudited, dollars in thousands) | |||||||||||||||||||||||||
| Average<br><br> <br>Balance | Yield /<br><br> <br>Rates | Average<br><br> <br>Balance | Yield /<br><br> <br>Rates | Average<br><br> <br>Balance | Yield /<br><br> <br>Rates | Average<br><br> <br>Balance | Yield /<br><br> <br>Rates | Average<br><br> <br>Balance | Yield /<br><br> <br>Rates | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Assets | Q2 - 2020 | Q1 - 2020 | Q4 - 2019 | Q3 - 2019 | Q2 - 2019 | ||||||||||||||||||||
| Short-term interest bearing accounts | $ | 380,260 | 0.10 | % | $ | 74,695 | 1.28 | % | $ | 51,613 | 2.43 | % | $ | 57,530 | 1.95 | % | $ | 25,783 | 1.28 | % | |||||
| Securities available for sale^1 5^ | 985,561 | 2.29 | % | 962,527 | 2.40 | % | 942,302 | 2.37 | % | 940,256 | 2.41 | % | 981,079 | 2.47 | % | ||||||||||
| Securities held to maturity^1 5^ | 613,899 | 2.75 | % | 622,398 | 2.81 | % | 651,305 | 2.73 | % | 698,617 | 2.77 | % | 770,651 | 2.83 | % | ||||||||||
| Investment in FRB and FHLB Banks | 36,604 | 6.09 | % | 39,784 | 5.97 | % | 37,842 | 6.37 | % | 40,525 | 7.04 | % | 46,179 | 6.60 | % | ||||||||||
| Loans^1 6^ | 7,589,032 | 4.10 | % | 7,163,114 | 4.42 | % | 7,055,288 | 4.49 | % | 6,987,476 | 4.61 | % | 6,958,299 | 4.69 | % | ||||||||||
| Total interest earning assets | $ | 9,605,356 | 3.68 | % | $ | 8,862,518 | 4.07 | % | $ | 8,738,350 | 4.13 | % | $ | 8,724,404 | 4.22 | % | $ | 8,781,991 | 4.28 | % | |||||
| Other assets | 961,807 | 885,570 | 861,909 | 852,616 | 816,748 | ||||||||||||||||||||
| Total assets | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | $ | 9,598,739 | |||||||||||||||
| Liabilities and stockholders' equity | |||||||||||||||||||||||||
| Money market deposit accounts | $ | 2,360,407 | 0.29 | % | $ | 2,101,306 | 1.00 | % | $ | 2,057,678 | 1.16 | % | $ | 2,015,297 | 1.24 | % | $ | 1,916,045 | 1.16 | % | |||||
| NOW deposit accounts | 1,167,486 | 0.04 | % | 1,086,205 | 0.10 | % | 1,064,193 | 0.13 | % | 1,056,001 | 0.13 | % | 1,127,413 | 0.13 | % | ||||||||||
| Savings deposits | 1,383,495 | 0.05 | % | 1,276,285 | 0.06 | % | 1,251,432 | 0.06 | % | 1,274,793 | 0.06 | % | 1,282,084 | 0.06 | % | ||||||||||
| Time deposits | 760,803 | 1.48 | % | 842,989 | 1.62 | % | 853,353 | 1.69 | % | 893,837 | 1.75 | % | 953,698 | 1.73 | % | ||||||||||
| Total interest bearing deposits | $ | 5,672,191 | 0.34 | % | $ | 5,306,785 | 0.69 | % | $ | 5,226,656 | 0.77 | % | $ | 5,239,928 | 0.81 | % | $ | 5,279,240 | 0.78 | % | |||||
| Short-term borrowings | 427,004 | 0.92 | % | 533,516 | 1.35 | % | 475,332 | 1.42 | % | 490,694 | 1.61 | % | 620,898 | 1.78 | % | ||||||||||
| Long-term debt | 64,165 | 2.46 | % | 64,194 | 2.46 | % | 81,613 | 2.35 | % | 84,250 | 2.35 | % | 82,414 | 2.29 | % | ||||||||||
| Subordinated debt, net | 8,633 | 5.96 | % | - | - | - | - | - | - | - | - | ||||||||||||||
| Junior subordinated debt | 101,196 | 2.76 | % | 101,196 | 3.68 | % | 101,196 | 4.00 | % | 101,196 | 4.29 | % | 101,196 | 4.52 | % | ||||||||||
| Total interest bearing liabilities | $ | 6,273,189 | 0.45 | % | $ | 6,005,691 | 0.82 | % | $ | 5,884,797 | 0.90 | % | $ | 5,916,068 | 0.96 | % | $ | 6,083,748 | 0.96 | % | |||||
| Demand deposits | 2,887,545 | 2,398,307 | 2,406,563 | 2,389,617 | 2,298,867 | ||||||||||||||||||||
| Other liabilities | 271,635 | 214,495 | 199,674 | 185,374 | 162,374 | ||||||||||||||||||||
| Stockholders' equity | 1,134,794 | 1,129,595 | 1,109,225 | 1,085,961 | 1,053,750 | ||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | $ | 9,598,739 | |||||||||||||||
| Interest rate spread | 3.23 | % | 3.25 | % | 3.23 | % | 3.26 | % | 3.32 | % | |||||||||||||||
| Net interest margin (FTE)^1^ | 3.38 | % | 3.52 | % | 3.52 | % | 3.57 | % | 3.61 | % |
14
| NBT Bancorp Inc. and Subsidiaries | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average Year-to-Date Balance Sheets | ||||||||||||||
| (unaudited, dollars in thousands) | ||||||||||||||
| Average<br><br> <br>Balance | Interest | Yield/<br><br> <br>Rates | Average<br><br> <br>Balance | Interest | Yield/<br><br> <br>Rates | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Six Months Ended June 30, | 2020 | 2019 | ||||||||||||
| Assets | ||||||||||||||
| Short-term interest bearing accounts | $ | 227,478 | $ | 335 | 0.30 | % | $ | 17,471 | $ | 174 | 2.01 | % | ||
| Securities available for sale^1 5^ | 974,044 | 11,353 | 2.34 | % | 982,881 | 11,984 | 2.46 | % | ||||||
| Securities held to maturity^1 5^ | 618,149 | 8,554 | 2.78 | % | 776,577 | 11,043 | 2.87 | % | ||||||
| Investment in FRB and FHLB Banks | 38,194 | 1,144 | 6.02 | % | 47,657 | 1,552 | 6.57 | % | ||||||
| Loans^1 6^ | 7,376,072 | 156,119 | 4.26 | % | 6,922,684 | 160,768 | 4.68 | % | ||||||
| Total interest earning assets | $ | 9,233,937 | $ | 177,505 | 3.87 | % | $ | 8,747,270 | $ | 185,521 | 4.28 | % | ||
| Other assets | 923,689 | 806,225 | ||||||||||||
| Total assets | $ | 10,157,626 | $ | 9,553,495 | ||||||||||
| Liabilities and stockholders' equity | ||||||||||||||
| Money market deposit accounts | $ | 2,230,857 | $ | 6,965 | 0.63 | % | $ | 1,860,358 | $ | 9,974 | 1.08 | % | ||
| NOW deposit accounts | 1,126,845 | 404 | 0.07 | % | 1,131,291 | 817 | 0.15 | % | ||||||
| Savings deposits | 1,329,890 | 360 | 0.05 | % | 1,267,146 | 362 | 0.06 | % | ||||||
| Time deposits | 801,896 | 6,187 | 1.55 | % | 948,109 | 7,907 | 1.68 | % | ||||||
| Total interest bearing deposits | $ | 5,489,488 | $ | 13,916 | 0.51 | % | $ | 5,206,904 | $ | 19,060 | 0.74 | % | ||
| Short-term borrowings | 480,261 | 2,769 | 1.16 | % | 666,349 | 5,997 | 1.81 | % | ||||||
| Long-term debt | 64,179 | 786 | 2.46 | % | 78,085 | 893 | 2.31 | % | ||||||
| Subordinated debt, net | 4,316 | 128 | 5.96 | % | - | - | - | |||||||
| Junior subordinated debt | 101,196 | 1,621 | 3.22 | % | 101,196 | 2,309 | 4.60 | % | ||||||
| Total interest bearing liabilities | $ | 6,139,440 | $ | 19,220 | 0.63 | % | $ | 6,052,534 | $ | 28,259 | 0.94 | % | ||
| Demand deposits | 2,642,926 | 2,304,169 | ||||||||||||
| Other liabilities | 243,066 | 156,963 | ||||||||||||
| Stockholders' equity | 1,132,194 | 1,039,829 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 10,157,626 | $ | 9,553,495 | ||||||||||
| Net interest income (FTE)^1^ | $ | 158,285 | $ | 157,262 | ||||||||||
| Interest rate spread | 3.24 | % | 3.34 | % | ||||||||||
| Net interest margin (FTE)^1^ | 3.45 | % | 3.63 | % | ||||||||||
| Taxable equivalent adjustment | $ | 658 | $ | 944 | ||||||||||
| Net interest income | $ | 157,627 | $ | 156,318 |
15
| NBT Bancorp Inc. and Subsidiaries |
|---|
| Consolidated Loan Balances |
| (unaudited, dollars in thousands) |
The following table presents loans by line of business, paycheck protection plans loans includes $14.6 million in unamortized fees.
| 2020 | 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | ||||||
| Commercial | $ | 1,318,806 | $ | 1,338,609 | $ | 1,302,209 | $ | 1,317,649 | $ | 1,299,784 |
| Commercial real estate | 2,256,580 | 2,242,139 | 2,142,057 | 2,033,552 | 2,025,280 | |||||
| Paycheck protection plan | 510,097 | - | - | - | - | |||||
| Residential real estate mortgages | 1,460,058 | 1,446,676 | 1,445,156 | 1,416,920 | 1,404,079 | |||||
| Indirect auto | 1,091,889 | 1,184,888 | 1,193,635 | 1,195,783 | 1,189,670 | |||||
| Specialty lending | 515,618 | 539,378 | 542,063 | 528,505 | 519,974 | |||||
| Home equity | 415,528 | 431,536 | 444,082 | 452,535 | 456,754 | |||||
| Other consumer | 59,415 | 64,157 | 66,896 | 68,865 | 67,732 | |||||
| Total loans | $ | 7,627,991 | $ | 7,247,383 | $ | 7,136,098 | $ | 7,013,809 | $ | 6,963,273 |
The following table provide loans as a percentage of total loans in industries vulnerable to the COVID-19 pandemic as of June 30, 2020:
| Industry | % of Total<br><br> <br>Loans | |
|---|---|---|
| Accommodations | 2.6% | |
| Healthcare services and practices | 2.0% | |
| Restaurants and entertainment | 1.9% | |
| Retailers | 1.6% | |
| Automotive | 1.5% | |
| Total | 9.6% |
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* | |||||||||
| Commercial & industrial | 0.96 | % | 0.98 | % | 1.43 | % | 1.25 | % | ||||
| Commercial real estate | 1.02 | % | 0.74 | % | 1.10 | % | 1.56 | % | ||||
| Paycheck protection plan | 0.00 | % | 0.00 | % | 0.00 | % | 0.01 | % | ||||
| Residential real estate | 0.27 | % | 0.83 | % | 0.99 | % | 1.13 | % | ||||
| Auto | 0.83 | % | 0.78 | % | 1.08 | % | 0.99 | % | ||||
| Other consumer | 3.74 | % | 3.66 | % | 4.00 | % | 5.01 | % | ||||
| Total | 1.02 | % | 1.07 | % | 1.38 | % | 1.49 | % |
* Excluding PPP loans and related allowance, total allowance to loans was 1.59%
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 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | |||||||||||
| Income before income tax expense | $ | 31,277 | $ | 12,083 | $ | 37,126 | $ | 41,701 | $ | 39,360 | |||||
| FTE adjustment | 329 | 329 | 349 | 374 | 445 | ||||||||||
| Provision for loan losses | 18,840 | 29,640 | 6,004 | 6,324 | 7,277 | ||||||||||
| Net securities (gains) losses | (180 | ) | 812 | (189 | ) | (4,036 | ) | 69 | |||||||
| Nonrecurring expense | 650 | - | - | 3,800 | - | ||||||||||
| Unfunded loan commitments reserve | (200 | ) | 2,000 | - | - | - | |||||||||
| PPNR | $ | 50,716 | $ | 44,864 | $ | 43,290 | $ | 48,163 | $ | 47,151 | |||||
| Average Assets | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | $ | 9,598,739 | |||||
| Return on Average Assets | 0.94 | % | 0.43 | % | 1.20 | % | 1.34 | % | 1.28 | % | |||||
| PPNR Return on Average Assets | 1.93 | % | 1.85 | % | 1.79 | % | 2.00 | % | 1.97 | % |
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 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | |||||||||||
| Net interest income | $ | 80,446 | $ | 77,181 | $ | 77,183 | $ | 78,054 | $ | 78,627 | |||||
| Add: FTE adjustment | 329 | 329 | 349 | 374 | 445 | ||||||||||
| Net interest income (FTE) | $ | 80,775 | $ | 77,510 | $ | 77,532 | $ | 78,428 | $ | 79,072 | |||||
| Average earning assets | $ | 9,605,356 | $ | 8,862,518 | $ | 8,738,350 | $ | 8,724,404 | $ | 8,781,991 | |||||
| Net interest margin (FTE) | 3.38 | % | 3.52 | % | 3.52 | % | 3.57 | % | 3.61 | % | |||||
| 6 Months ended June 30, | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| 2020 | 2019 | ||||||||||||||
| Net interest income | $ | 157,627 | $ | 156,318 | |||||||||||
| Add: FTE adjustment | 658 | 944 | |||||||||||||
| Net interest income (FTE) | $ | 158,285 | $ | 157,262 | |||||||||||
| Average earning assets | $ | 9,233,937 | $ | 8,747,270 | |||||||||||
| Net interest margin (FTE) | 3.45 | % | 3.63 | % |
Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.
| Tangible equity to tangible assets | 2020 | 2019 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | |||||||||||
| Total equity | $ | 1,142,652 | $ | 1,112,179 | $ | 1,120,397 | $ | 1,098,601 | $ | 1,074,823 | |||||
| Intangible assets | 293,954 | 285,955 | 286,789 | 287,633 | 288,507 | ||||||||||
| Total assets | $ | 10,847,184 | $ | 9,953,543 | $ | 9,715,925 | $ | 9,661,386 | $ | 9,635,718 | |||||
| Tangible equity to tangible assets | 8.04 | % | 8.55 | % | 8.84 | % | 8.65 | % | 8.41 | % |
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) | |||||||||||||||
| Return on average tangible common equity | 2020 | 2019 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2nd Q | 1st Q | 4th Q | 3rd Q | 2nd Q | |||||||||||
| Net income | $ | 24,713 | $ | 10,368 | $ | 28,960 | $ | 32,379 | $ | 30,555 | |||||
| Amortization of intangible assets (net of tax) | 662 | 626 | 633 | 656 | 670 | ||||||||||
| Net income, excluding intangibles amortization | $ | 25,375 | $ | 10,994 | $ | 29,593 | $ | 33,035 | $ | 31,225 | |||||
| Average stockholders' equity | $ | 1,134,794 | $ | 1,129,595 | $ | 1,109,225 | $ | 1,085,961 | $ | 1,053,750 | |||||
| Less: average goodwill and other intangibles | 294,423 | 286,400 | 287,268 | 288,077 | 288,930 | ||||||||||
| Average tangible common equity | $ | 840,371 | $ | 843,195 | $ | 821,957 | $ | 797,884 | $ | 764,820 | |||||
| Return on average tangible common equity | 12.14 | % | 5.24 | % | 14.28 | % | 16.43 | % | 16.38 | % | |||||
| 6 Months ended June 30, | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| 2020 | 2019 | ||||||||||||||
| Net income | $ | 35,081 | $ | 59,682 | |||||||||||
| Amortization of intangible assets (net of tax) | 1,288 | 1,396 | |||||||||||||
| Net income, excluding intangibles amortization | $ | 36,369 | $ | 61,078 | |||||||||||
| Average stockholders' equity | $ | 1,132,194 | $ | 1,039,829 | |||||||||||
| Less: average goodwill and other intangibles | 290,411 | 289,419 | |||||||||||||
| Average tangible common equity | $ | 841,783 | $ | 750,410 | |||||||||||
| Return on average tangible common equity | 8.69 | % | 16.41 | % | |||||||||||
| ^2^ | Annualized. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^3^ | Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding. | ||||||||||||||
| --- | --- | ||||||||||||||
| ^4^ | Other financial services revenue previously disclosed and included with Insurance income has been reclassified and combined with Trust income and is<br> 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<br> 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<br> conform with the CECL methodology. | ||||||||||||||
| --- | --- |
^^
^^
^^
^^
^^