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): October 26, 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)) |
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| ☐ | 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 October 26, 2020, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended September 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, October 27, 2020, to review third quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events.
| 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 October 26, 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: October 26, 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 THIRD QUARTER NET INCOME OF $35.1 MILLION, OR $0.80 PER DILUTED COMMON SHARE; ANNOUNCES DIVIDEND
NORWICH, NY (October 26, 2020) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the three and nine months ended September 30, 2020.
Net income for the three months ended September 30, 2020 was $35.1 million, or $0.80 per diluted common share. Net income was up $10.4 million from the previous quarter primarily due to lower loan loss provision and up $2.7 million from the third quarter of 2019.
Pre-provision net revenue (“PPNR”)^1^ for the third quarter of 2020 was $49.6 million compared to $50.7 million in the previous quarter and $48.2 million in the third quarter of 2019. The 2% decline in PPNR from the previous quarter reflected lower net interest income and slightly higher operating expenses, partly offset by higher noninterest income.
CEO Comments
“The continued strength of NBT’s pre-provision net revenue is reflected in our third quarter 2020 results,” said NBT President and CEO John H. Watt, Jr. “Strong fee-based income, including higher income from our retirement plan administration businesses driven by an acquisition completed in April, and focused expense management were key contributors. As we continue to work closely with our customers through the impacts of the pandemic, we are encouraged that total loan deferrals dropped to 2% in October from a peak of approximately 15% in May. Adoption of digital banking services and functionality by our customers continued to accelerate in the third quarter and, with our well-established technology roadmap, we are positioned to scale up.”
2
Third Quarter Financial Highlights
| Net Income | ◾ Net income of $35.1 million<br><br> <br>◾ Diluted earnings per share of<br> $0.80 |
|---|---|
| Net Interest<br><br> <br>Income / NIM | ◾ Net interest income on a fully<br> taxable equivalent basis was $78.3 million^1^<br><br> <br>◾ Net interest margin (“NIM”) on a<br> fully taxable equivalent basis was 3.17%^1^ |
| PPNR | ◾ PPNR^1^ was $49.6<br> million compared to $50.7 million in the second quarter of 2020 and $48.2 million in the third quarter of 2019 |
| Loans and Credit<br><br> <br>Quality | ◾ Period end loans were $7.6<br> billion, up 8%, annualized, from December 31, 2019 and consistent with June 30, 2020<br><br> <br>◾ Excluding Paycheck Protection<br> Program (“PPP”) loans of $515 million at September 30, 2020, period end loans contracted $72 million or 1% from June 30, 2020<br><br> <br>◾ Allowance for loan losses to<br> total loans of 1.51% (1.62% excluding PPP loans and related allowance)<br><br> <br>◾ Net charge-offs to average loans<br> was 0.12%, annualized (0.13% excluding PPP loans)<br><br> <br>◾ Nonperforming assets to total<br> assets was 0.37% (0.39% excluding PPP loans) |
| Capital | ◾ Tangible book value per share^2^<br> grew 3% for the quarter and 8% from prior year to $20.02 at September 30, 2020<br><br> <br>◾ Tangible equity to assets of<br> 8.27%^1^<br><br> <br>◾ CET1 ratio of 11.63%; Total<br> leverage ratio of 9.48% |
Loans
| ◾ | Period end total loans were $7.6 billion at September 30 and June 30, 2020, compared to $7.1 billion at December 31, 2019. |
|---|---|
| ◾ | Total PPP loans as of September 30, 2020 were $515 million (net of unamortized fees), with $548 million originated at an average loan size of $184 thousand and an average annual<br> fee of 3.2%. |
| --- | --- |
| ◾ | Excluding PPP loans, period end loans decreased $71.8 million from June 30, 2020. Commercial and industrial loans decreased $21.4 million to $1.3 billion; commercial real estate<br> loans increased $25.3 million to $2.3 billion; and total consumer loans decreased $75.7 million to $3.5 billion, driven by run-off of indirect auto loans. |
| --- | --- |
| ◾ | Commercial line of credit utilization rate was 25% at September 30, 2020 compared to 26% at June 30, 2020 and 33% at September 30, 2019. |
| --- | --- |
Deposits
| ◾ | Average total deposits in the third quarter of 2020 were $8.8 billion, compared to $8.6 billion in the second quarter of 2020, primarily due to increases in non-interest bearing<br> demand deposit accounts. |
|---|---|
| ◾ | Loan to deposit ratio was 84.4% at September 30, 2020, compared to 94.0% at December 31, 2019 and 86.5% at June 30, 2020. |
| --- | --- |
3
Net Interest Income and Net Interest Margin
| ◾ | Net interest income for the third quarter of 2020 was $77.9 million, down $2.5 million or 3.1% from the second quarter of 2020 and consistent with the third quarter of 2019. |
|---|---|
| ◾ | The net interest margin on a fully taxable equivalent (“FTE”) basis for the third quarter of 2020 was 3.17%, down 21 basis points (“bps”) from the second quarter of 2020 and down<br> 40 bps from the third quarter of 2019. The net impact of PPP loans and excess liquidity, both of which the Company expects to be transitory, negatively impacted the NIM by 10 bps in the third quarter versus a negative 7 bps in the second<br> quarter of 2020. Excluding the impact of PPP lending and excess liquidity from each quarter, NIM declined 18 bps from the prior quarter primarily due to the impact of asset repricing while funding costs remained stable during the quarter. |
| --- | --- |
| ◾ | Earning asset yields for the three months ended September 30, 2020 were down 23 bps from the prior quarter and down 77 bps from the same quarter in the prior year. Earning assets<br> grew $220.9 million or 2.3% from the prior quarter and grew $1.1 billion or 12.6% from the same quarter in the prior year. |
| --- | --- |
| o | Excess liquidity resulted in a $97.7 million increase in the average balances of short-term interest bearing accounts. |
| --- | --- |
| o | The average balance of investment securities increased $160.0 million while yields declined 29 bps. |
| --- | --- |
| o | Loan yields decreased 15 bps to 3.95%. |
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| ◾ | Total cost of deposits was 0.19% for the third quarter of 2020, down 4 bps from the prior quarter and down 37 bps from the same period in the prior year. |
| --- | --- |
| ◾ | The cost of interest-bearing liabilities for the three months ended September 30, 2020 was 0.45%, flat as compared to the prior quarter of 0.45% and down 51 bps from the third<br> quarter of 2019 of 0.96%. |
| --- | --- |
| 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 CECL
| ◾ | Net charge-offs to average loans were very low due to COVID-19 pandemic relief programs. |
|---|---|
| ◾ | Net charge-offs to total average loans of 12 bps (13 bps excluding PPP loans) compared to 28 bps (30 bps excluding PPP loans) in the prior quarter and 35 bps in the third quarter<br> of 2019. |
| --- | --- |
| ◾ | Nonperforming assets to total assets was 0.37% (0.39% excluding PPP loans) compared to 0.27% (0.28% excluding PPP loans) at June 30, 2020 and 0.36% at September 30, 2019. The<br> increase in nonperforming assets was primarily due to two COVID-19 impacted commercial relationships totaling $10.9 million moving to non-accrual for the quarter. |
| --- | --- |
| ◾ | Provision expense for the three months ended September 30, 2020 was $3.3 million with an increase in allowance coverage levels due to specific reserves for the two nonperforming<br> commercial relationships and a change in loan mix while net charge-offs of $2.3 million were down compared with the prior quarter. Provision expense decreased $15.6 million from the second quarter of 2020 and decreased $3.1 million from the<br> third quarter of 2019. |
| --- | --- |
| ◾ | The allowance for loan losses was $114.5 million or 1.51% (1.62% excluding PPP loans and related allowance) of total loans compared to 1.49% (1.59% excluding PPP loans and related<br> allowance) at June 30, 2020 and 1.03% September 30, 2019. |
| --- | --- |
4
| ◾ | As of October 19, 2020, 2.0% of loans (loans outstanding as of 9/30/2020; excluding PPP balances) are in payment deferral programs which is down from the second quarter 2020 peak<br> of 14.9%. |
|---|---|
| ◾ | The reserve for unfunded loan commitments remained consistent with the prior quarter at $5.5 million at September 30, 2020. |
| --- | --- |
Noninterest Income
| ◾ | Total noninterest income, excluding securities gains (losses), was $37.6 million for the three months ended September 30, 2020, up $2.8 million from the prior quarter and up $2.0<br> million from the prior year quarter. |
|---|---|
| ◾ | Service charges on deposit accounts were higher than the prior quarter but lower than the third quarter of 2019 due to lower overdraft charges during the COVID-19 pandemic that<br> recovered but continue to run lower than prior year levels. |
| --- | --- |
| ◾ | ATM and debit card fees were higher than both prior quarter and the third quarter of 2019 due to increased volume and higher per transaction rates. |
| --- | --- |
| ◾ | Retirement plan administration fees were higher than both prior quarter and the third quarter of 2019 due to the April 1, 2020 acquisition of Alliance Benefit Group of Illinois,<br> Inc. (“ABG”) contributing $1.7 million in revenues during the quarter. |
| --- | --- |
| ◾ | Wealth management fees were higher than the prior quarter due to seasonality of tax revenue and market conditions. |
| --- | --- |
| ◾ | The increase in other noninterest income from the prior year third quarter was driven by higher mortgage banking income, while the decrease from the second quarter of 2020 was<br> driven by lower loan swap fee income. |
| --- | --- |
Noninterest Expense
| ◾ | Total noninterest expense for the third quarter of 2020 was up 1.5% from the previous quarter and down 4.9% from the third quarter of 2019. |
|---|---|
| ◾ | Salaries and benefits increased from the prior quarter due to timing of medical expenses during the COVID-19 pandemic ($0.6 million) and increased from the third quarter of 2019<br> driven by the addition of ABG’s salaries and benefits. |
| --- | --- |
| ◾ | Equipment expense was higher than both the prior quarter and the third quarter of 2019 due to higher technology costs associated with several digital upgrades. |
| --- | --- |
| ◾ | FDIC expense was higher than the third quarter of 2019 due to the benefit of the FDIC insurance assessment small bank credit in the third quarter of 2019. |
| --- | --- |
| ◾ | Other expenses decreased $4.5 million from the third quarter of 2019 due to lower travel and training expenses during the pandemic, lower pension costs and $3.1 million in<br> reorganization expenses incurred during the third quarter of 2019 primarily related to branch optimization strategies to improve future operating efficiencies. |
| --- | --- |
Income Taxes
| ◾ | Effective tax rate was 23.8% for the third quarter of 2020 compared to 21.0% in the second quarter of 2020 and 22.4% in the third quarter of 2019. The higher effective tax rate<br> compared to the second quarter of 2020 was due to a higher level of taxable income relative to total income and included a true-up of tax expense to bring the full year estimated effective tax rate to 21.75%. The higher effective tax rate<br> compared to the third quarter of 2019 was due to a higher level of taxable income relative to total income. |
|---|
5
Capital
| ◾ | Capital ratios remain strong with tangible common equity to tangible assets^1^ at 8.27%. Tangible book value per share^2^ grew 3% from the prior quarter and 8%<br> from the prior year quarter to $20.02. |
|---|---|
| ◾ | September 30, 2020 CET1 capital ratio of 11.63%, total leverage ratio of 9.48% and total risk-based capital ratio of 15.43%. |
| --- | --- |
Dividend
| ◾ | The Board of Directors approved a fourth-quarter cash dividend of $0.27 per share at their meeting held today. The dividend will be paid on December 15, 2020 to shareholders of<br> record as of December 1, 2020. |
|---|
Conference Call and Webcast
The Company will host a conference call at 8:30 a.m. Eastern Time on Tuesday, October 27, 2020, to review third quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.
Corporate Overview
NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $10.8 billion at September 30, 2020. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has over 140 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine, and is currently entering Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtinsurance.com.
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 June 30, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. You should not place undue reliance on any forward-looking statements, which speak only as of the date made, and you are advised that various factors including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected. Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
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 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||
| Profitability: | |||||||||||||||
| Diluted earnings per share | $ | 0.80 | $ | 0.56 | $ | 0.23 | $ | 0.66 | $ | 0.73 | |||||
| Weighted average diluted common shares outstanding | 43,941,953 | 43,928,344 | 44,130,324 | 44,174,201 | 44,138,495 | ||||||||||
| Return on average assets^3^ | 1.29 | % | 0.94 | % | 0.43 | % | 1.20 | % | 1.34 | % | |||||
| Return on average equity^3^ | 12.09 | % | 8.76 | % | 3.69 | % | 10.36 | % | 11.83 | % | |||||
| Return on average tangible common equity^1 3^ | 16.51 | % | 12.14 | % | 5.24 | % | 14.28 | % | 16.43 | % | |||||
| Net interest margin^1 3^ | 3.17 | % | 3.38 | % | 3.52 | % | 3.52 | % | 3.57 | % | |||||
| 9 Months ended September 30, | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| Profitability: | |||||||||||||||
| Diluted earnings per share | $ | 1.60 | $ | 2.09 | |||||||||||
| Weighted average diluted common shares outstanding | 43,996,637 | 44,108,467 | |||||||||||||
| Return on average assets^3^ | 0.90 | % | 1.29 | % | |||||||||||
| Return on average equity^3^ | 8.23 | % | 11.66 | % | |||||||||||
| Return on average tangible common equity^1 3^ | 11.36 | % | 16.42 | % | |||||||||||
| Net interest margin^1 3^ | 3.35 | % | 3.61 | % | |||||||||||
| 2020 | 2019 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||
| Balance sheet data: | |||||||||||||||
| Securities available for sale | $ | 1,197,925 | $ | 1,108,443 | $ | 1,000,980 | $ | 975,340 | $ | 932,173 | |||||
| Securities held to maturity | 663,088 | 599,164 | 621,359 | 630,074 | 678,435 | ||||||||||
| Net loans | 7,446,143 | 7,514,491 | 7,147,383 | 7,063,133 | 6,941,444 | ||||||||||
| Total assets | 10,850,212 | 10,847,184 | 9,953,543 | 9,715,925 | 9,661,386 | ||||||||||
| Total deposits | 8,958,183 | 8,815,891 | 7,864,638 | 7,587,820 | 7,743,166 | ||||||||||
| Total borrowings | 446,737 | 602,988 | 714,283 | 820,682 | 628,701 | ||||||||||
| Total liabilities | 9,684,101 | 9,704,532 | 8,841,364 | 8,595,528 | 8,562,785 | ||||||||||
| Stockholders' equity | 1,166,111 | 1,142,652 | 1,112,179 | 1,120,397 | 1,098,601 | ||||||||||
| Capital: | |||||||||||||||
| Equity to assets | 10.75 | % | 10.53 | % | 11.17 | % | 11.53 | % | 11.37 | % | |||||
| Tangible equity ratio^1^ | 8.27 | % | 8.04 | % | 8.55 | % | 8.84 | % | 8.65 | % | |||||
| Book value per share | $ | 26.74 | $ | 26.20 | $ | 25.52 | $ | 25.58 | $ | 25.09 | |||||
| Tangible book value per share^2^ | $ | 20.02 | $ | 19.46 | $ | 18.96 | $ | 19.03 | $ | 18.52 | |||||
| Tier 1 leverage ratio | 9.48 | % | 9.44 | % | 10.02 | % | 10.33 | % | 10.15 | % | |||||
| Common equity tier 1 capital ratio | 11.63 | % | 11.34 | % | 10.90 | % | 11.29 | % | 11.14 | % | |||||
| Tier 1 capital ratio | 12.88 | % | 12.60 | % | 12.14 | % | 12.56 | % | 12.42 | % | |||||
| Total risk-based capital ratio | 15.43 | % | 15.15 | % | 13.36 | % | 13.52 | % | 13.38 | % | |||||
| Common stock price (end of period) | $ | 26.82 | $ | 30.06 | $ | 32.39 | $ | 40.56 | $ | 36.59 | |||||
| Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares. |
9
| NBT Bancorp Inc. and Subsidiaries | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||
| (unaudited, dollars in thousands except per share data) | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||
| Asset quality: | |||||||||||||||
| Nonaccrual loans | $ | 35,896 | $ | 25,567 | $ | 29,972 | $ | 25,174 | $ | 24,623 | |||||
| 90 days past due and still accruing | 2,579 | 2,057 | 2,280 | 3,717 | 8,342 | ||||||||||
| Total nonperforming loans | 38,475 | 27,624 | 32,252 | 28,891 | 32,965 | ||||||||||
| Other real estate owned | 1,605 | 1,783 | 2,384 | 1,458 | 2,144 | ||||||||||
| Total nonperforming assets | 40,080 | 29,407 | 34,636 | 30,349 | 35,109 | ||||||||||
| Allowance for loan losses | 114,500 | 113,500 | 100,000 | 72,965 | 72,365 | ||||||||||
| Asset quality ratios (total): | |||||||||||||||
| Allowance for loan losses to total loans | 1.51 | % | 1.49 | % | 1.38 | % | 1.02 | % | 1.03 | % | |||||
| Total nonperforming loans to total loans | 0.51 | % | 0.36 | % | 0.45 | % | 0.40 | % | 0.47 | % | |||||
| Total nonperforming assets to total assets | 0.37 | % | 0.27 | % | 0.35 | % | 0.31 | % | 0.36 | % | |||||
| Allowance for loan losses to total nonperforming loans | 297.60 | % | 410.87 | % | 310.06 | % | 252.55 | % | 219.52 | % | |||||
| Past due loans to total loans | 0.26 | % | 0.30 | % | 0.51 | % | 0.49 | % | 0.57 | % | |||||
| Net charge-offs to average loans^3^ | 0.12 | % | 0.28 | % | 0.32 | % | 0.30 | % | 0.35 | % | |||||
| Asset quality ratios (excluding paycheck protection program): | |||||||||||||||
| Allowance for loan losses to total loans | 1.62 | % | 1.59 | % | 1.38 | % | 1.02 | % | 1.03 | % | |||||
| Total nonperforming loans to total loans | 0.55 | % | 0.39 | % | 0.45 | % | 0.40 | % | 0.47 | % | |||||
| Total nonperforming assets to total assets | 0.39 | % | 0.28 | % | 0.35 | % | 0.31 | % | 0.36 | % | |||||
| Allowance for loan losses to total nonperforming loans | 297.53 | % | 410.78 | % | 310.06 | % | 252.55 | % | 219.52 | % | |||||
| Past due loans to total loans | 0.28 | % | 0.32 | % | 0.51 | % | 0.49 | % | 0.57 | % | |||||
| Net charge-offs to average loans^3^ | 0.13 | % | 0.30 | % | 0.32 | % | 0.30 | % | 0.35 | % |
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 | 167,169 | $ | 170,595 |
| Short-term interest bearing accounts | 450,291 | 46,248 | |
| Equity securities, at fair value | 30,758 | 27,771 | |
| Securities available for sale, at fair value | 1,197,925 | 975,340 | |
| Securities held to maturity (fair value 684,862 and 641,262, respectively) | 663,088 | 630,074 | |
| Federal Reserve and Federal Home Loan Bank stock | 28,484 | 44,620 | |
| Loans held for sale | 1,823 | 11,731 | |
| Loans | 7,560,643 | 7,136,098 | |
| Less allowance for loan losses | 114,500 | 72,965 | |
| Net loans | 7,446,143 | $ | 7,063,133 |
| Premises and equipment, net | 73,055 | 75,631 | |
| Goodwill | 280,541 | 274,769 | |
| Intangible assets, net | 12,557 | 12,020 | |
| Bank owned life insurance | 185,227 | 181,748 | |
| Other assets | 313,151 | 202,245 | |
| Total assets | 10,850,212 | $ | 9,715,925 |
| Liabilities and stockholders' equity | |||
| Demand (noninterest bearing) | 3,163,717 | $ | 2,414,383 |
| Savings, NOW and money market | 5,134,495 | 4,312,244 | |
| Time | 659,971 | 861,193 | |
| Total deposits | 8,958,183 | $ | 7,587,820 |
| Short-term borrowings | 183,472 | 655,275 | |
| Long-term debt | 64,126 | 64,211 | |
| Subordinated debt, net | 97,943 | - | |
| Junior subordinated debt | 101,196 | 101,196 | |
| Other liabilities | 279,181 | 187,026 | |
| Total liabilities | 9,684,101 | $ | 8,595,528 |
| Total stockholders' equity | 1,166,111 | $ | 1,120,397 |
| Total liabilities and stockholders' equity | 10,850,212 | $ | 9,715,925 |
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>September 30, | Nine Months Ended<br><br> <br>September 30, | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2020 | 2019 | 2020 | 2019 | |||||||
| Interest, fee and dividend income | ||||||||||
| Interest and fees on loans | $ | 74,998 | $ | 81,082 | $ | 230,996 | $ | 241,674 | ||
| Securities available for sale | 5,603 | 5,711 | 16,956 | 17,664 | ||||||
| Securities held to maturity | 3,734 | 4,586 | 11,751 | 14,892 | ||||||
| Other | 659 | 1,002 | 2,138 | 2,728 | ||||||
| Total interest, fee and dividend income | $ | 84,994 | $ | 92,381 | $ | 261,841 | $ | 276,958 | ||
| Interest expense | ||||||||||
| Deposits | $ | 4,267 | $ | 10,745 | $ | 18,183 | $ | 29,805 | ||
| Short-term borrowings | 446 | 1,989 | 3,215 | 7,986 | ||||||
| Long-term debt | 398 | 498 | 1,184 | 1,391 | ||||||
| Subordinated debt | 1,375 | - | 1,503 | - | ||||||
| Junior subordinated debt | 565 | 1,095 | 2,186 | 3,404 | ||||||
| Total interest expense | $ | 7,051 | $ | 14,327 | $ | 26,271 | $ | 42,586 | ||
| Net interest income | $ | 77,943 | $ | 78,054 | $ | 235,570 | $ | 234,372 | ||
| Provision for loan losses | 3,261 | 6,324 | 51,741 | 19,408 | ||||||
| Net interest income after provision for loan losses | $ | 74,682 | $ | 71,730 | $ | 183,829 | $ | 214,964 | ||
| Noninterest income | ||||||||||
| Service charges on deposit accounts | $ | 3,087 | $ | 4,330 | $ | 9,613 | $ | 12,790 | ||
| ATM and debit card fees | 7,194 | 6,277 | 19,184 | 17,958 | ||||||
| Retirement plan administration fees | 9,685 | 7,600 | 26,840 | 23,170 | ||||||
| Wealth management^4^ | 7,695 | 7,630 | 21,791 | 21,315 | ||||||
| Insurance^4^ | 3,742 | 4,000 | 11,303 | 12,291 | ||||||
| Bank owned life insurance income | 1,255 | 1,556 | 4,010 | 4,119 | ||||||
| Net securities gains (losses) | 84 | 4,036 | (548 | ) | 4,024 | |||||
| Other | 4,985 | 4,291 | 15,968 | 12,115 | ||||||
| Total noninterest income | $ | 37,727 | $ | 39,720 | $ | 108,161 | $ | 107,782 | ||
| Noninterest expense | ||||||||||
| Salaries and employee benefits | $ | 40,451 | $ | 39,352 | $ | 120,918 | $ | 117,275 | ||
| Occupancy | 5,294 | 5,335 | 16,354 | 17,053 | ||||||
| Data processing and communications | 4,058 | 4,492 | 12,370 | 13,599 | ||||||
| Professional fees and outside services | 3,394 | 3,535 | 10,694 | 10,562 | ||||||
| Equipment | 5,073 | 4,487 | 14,494 | 13,762 | ||||||
| Office supplies and postage | 1,530 | 1,667 | 4,621 | 4,835 | ||||||
| FDIC expense (credit) | 645 | (20 | ) | 1,949 | 1,946 | |||||
| Advertising | 530 | 677 | 1,461 | 1,821 | ||||||
| Amortization of intangible assets | 856 | 874 | 2,573 | 2,735 | ||||||
| Loan collection and other real estate owned, net | 620 | 976 | 2,365 | 2,722 | ||||||
| Other | 3,857 | 8,374 | 14,730 | 18,130 | ||||||
| Total noninterest expense | $ | 66,308 | $ | 69,749 | $ | 202,529 | $ | 204,440 | ||
| Income before income tax expense | $ | 46,101 | $ | 41,701 | $ | 89,461 | $ | 118,306 | ||
| Income tax expense | 10,988 | 9,322 | 19,267 | 26,245 | ||||||
| Net income | $ | 35,113 | $ | 32,379 | $ | 70,194 | $ | 92,061 | ||
| Earnings Per Share | ||||||||||
| Basic | $ | 0.80 | $ | 0.74 | $ | 1.61 | $ | 2.10 | ||
| Diluted | $ | 0.80 | $ | 0.73 | $ | 1.60 | $ | 2.09 |
12
| NBT Bancorp Inc. and Subsidiaries | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarterly Consolidated Statements of Income | ||||||||||||
| (unaudited, dollars in thousands except per share data) | ||||||||||||
| 2020 | 2019 | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||||
| Interest, fee and dividend income | ||||||||||||
| Interest and fees on loans | $ | 74,998 | $ | 77,270 | $ | 78,728 | $ | 79,800 | $ | 81,082 | ||
| Securities available for sale | 5,603 | 5,600 | 5,753 | 5,639 | 5,711 | |||||||
| Securities held to maturity | 3,734 | 3,926 | 4,091 | 4,213 | 4,586 | |||||||
| Other | 659 | 650 | 829 | 924 | 1,002 | |||||||
| Total interest, fee and dividend income | $ | 84,994 | $ | 87,446 | $ | 89,401 | $ | 90,576 | $ | 92,381 | ||
| Interest expense | ||||||||||||
| Deposits | $ | 4,267 | $ | 4,812 | $ | 9,104 | $ | 10,181 | $ | 10,745 | ||
| Short-term borrowings | 446 | 972 | 1,797 | 1,707 | 1,989 | |||||||
| Long-term debt | 398 | 393 | 393 | 484 | 498 | |||||||
| Subordinated debt | 1,375 | 128 | - | - | - | |||||||
| Junior subordinated debt | 565 | 695 | 926 | 1,021 | 1,095 | |||||||
| Total interest expense | $ | 7,051 | $ | 7,000 | $ | 12,220 | $ | 13,393 | $ | 14,327 | ||
| Net interest income | $ | 77,943 | $ | 80,446 | $ | 77,181 | $ | 77,183 | $ | 78,054 | ||
| Provision for loan losses | 3,261 | 18,840 | 29,640 | 6,004 | 6,324 | |||||||
| Net interest income after provision for loan losses | $ | 74,682 | $ | 61,606 | $ | 47,541 | $ | 71,179 | $ | 71,730 | ||
| Noninterest income | ||||||||||||
| Service charges on deposit accounts | $ | 3,087 | $ | 2,529 | $ | 3,997 | $ | 4,361 | $ | 4,330 | ||
| ATM and debit card fees | 7,194 | 6,136 | 5,854 | 5,935 | 6,277 | |||||||
| Retirement plan administration fees | 9,685 | 9,214 | 7,941 | 7,218 | 7,600 | |||||||
| Wealth management^4^ | 7,695 | 6,823 | 7,273 | 7,085 | 7,630 | |||||||
| Insurance^4^ | 3,742 | 3,292 | 4,269 | 3,479 | 4,000 | |||||||
| Bank owned life insurance income | 1,255 | 1,381 | 1,374 | 1,236 | 1,556 | |||||||
| Net securities gains (losses) | 84 | 180 | (812 | ) | 189 | 4,036 | ||||||
| Other | 4,985 | 5,456 | 5,527 | 6,738 | 4,291 | |||||||
| Total noninterest income | $ | 37,727 | $ | 35,011 | $ | 35,423 | $ | 36,241 | $ | 39,720 | ||
| Noninterest expense | ||||||||||||
| Salaries and employee benefits | $ | 40,451 | $ | 39,717 | $ | 40,750 | $ | 39,592 | $ | 39,352 | ||
| Occupancy | 5,294 | 5,065 | 5,995 | 5,653 | 5,335 | |||||||
| Data processing and communications | 4,058 | 4,079 | 4,233 | 4,719 | 4,492 | |||||||
| Professional fees and outside services | 3,394 | 3,403 | 3,897 | 4,223 | 3,535 | |||||||
| Equipment | 5,073 | 4,779 | 4,642 | 4,821 | 4,487 | |||||||
| Office supplies and postage | 1,530 | 1,455 | 1,636 | 1,744 | 1,667 | |||||||
| FDIC expense (credit) | 645 | 993 | 311 | - | (20 | ) | ||||||
| Advertising | 530 | 322 | 609 | 952 | 677 | |||||||
| Amortization of intangible assets | 856 | 883 | 834 | 844 | 874 | |||||||
| Loan collection and other real estate owned, net | 620 | 728 | 1,017 | 1,436 | 976 | |||||||
| Other | 3,857 | 3,916 | 6,957 | 6,310 | 8,374 | |||||||
| Total noninterest expense | $ | 66,308 | $ | 65,340 | $ | 70,881 | $ | 70,294 | $ | 69,749 | ||
| Income before income tax expense | $ | 46,101 | $ | 31,277 | $ | 12,083 | $ | 37,126 | $ | 41,701 | ||
| Income tax expense | 10,988 | 6,564 | 1,715 | 8,166 | 9,322 | |||||||
| Net income | $ | 35,113 | $ | 24,713 | $ | 10,368 | $ | 28,960 | $ | 32,379 | ||
| Earnings Per Share | ||||||||||||
| Basic | $ | 0.80 | $ | 0.57 | $ | 0.24 | $ | 0.66 | $ | 0.74 | ||
| Diluted | $ | 0.80 | $ | 0.56 | $ | 0.23 | $ | 0.66 | $ | 0.73 |
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 | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Q3 - 2020 | Q2 - 2020 | Q1 - 2020 | Q4 - 2019 | Q3 - 2019 | |||||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Short-term interest bearing accounts | $ | 477,946 | 0.11 | % | $ | 380,260 | 0.10 | % | $ | 74,695 | 1.28 | % | $ | 51,613 | 2.43 | % | $ | 57,530 | 1.95 | % | |||||
| Securities available for sale^1 5^ | 1,137,604 | 1.96 | % | 985,561 | 2.29 | % | 962,527 | 2.40 | % | 942,302 | 2.37 | % | 940,256 | 2.41 | % | ||||||||||
| Securities held to maturity^1 5^ | 621,812 | 2.56 | % | 613,899 | 2.75 | % | 622,398 | 2.81 | % | 651,305 | 2.73 | % | 698,617 | 2.77 | % | ||||||||||
| Investment in FRB and FHLB Banks | 29,720 | 7.08 | % | 36,604 | 6.09 | % | 39,784 | 5.97 | % | 37,842 | 6.37 | % | 40,525 | 7.04 | % | ||||||||||
| Loans^1 6^ | 7,559,218 | 3.95 | % | 7,589,032 | 4.10 | % | 7,163,114 | 4.42 | % | 7,055,288 | 4.49 | % | 6,987,476 | 4.61 | % | ||||||||||
| Total interest earning assets | $ | 9,826,300 | 3.45 | % | $ | 9,605,356 | 3.68 | % | $ | 8,862,518 | 4.07 | % | $ | 8,738,350 | 4.13 | % | $ | 8,724,404 | 4.22 | % | |||||
| Other assets | 967,194 | 961,807 | 885,570 | 861,909 | 852,616 | ||||||||||||||||||||
| Total assets | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | |||||||||||||||
| Liabilities and stockholders' equity | |||||||||||||||||||||||||
| Money market deposit accounts | $ | 2,364,606 | 0.28 | % | $ | 2,360,407 | 0.29 | % | $ | 2,101,306 | 1.00 | % | $ | 2,057,678 | 1.16 | % | $ | 2,015,297 | 1.24 | % | |||||
| NOW deposit accounts | 1,207,064 | 0.05 | % | 1,167,486 | 0.04 | % | 1,086,205 | 0.10 | % | 1,064,193 | 0.13 | % | 1,056,001 | 0.13 | % | ||||||||||
| Savings deposits | 1,447,021 | 0.05 | % | 1,383,495 | 0.05 | % | 1,276,285 | 0.06 | % | 1,251,432 | 0.06 | % | 1,274,793 | 0.06 | % | ||||||||||
| Time deposits | 684,708 | 1.31 | % | 760,803 | 1.48 | % | 842,989 | 1.62 | % | 853,353 | 1.69 | % | 893,837 | 1.75 | % | ||||||||||
| Total interest bearing deposits | $ | 5,703,399 | 0.30 | % | $ | 5,672,191 | 0.34 | % | $ | 5,306,785 | 0.69 | % | $ | 5,226,656 | 0.77 | % | $ | 5,239,928 | 0.81 | % | |||||
| Short-term borrowings | 277,890 | 0.64 | % | 427,004 | 0.92 | % | 533,516 | 1.35 | % | 475,332 | 1.42 | % | 490,694 | 1.61 | % | ||||||||||
| Long-term debt | 64,137 | 2.47 | % | 64,165 | 2.46 | % | 64,194 | 2.46 | % | 81,613 | 2.35 | % | 84,250 | 2.35 | % | ||||||||||
| Subordinated debt, net | 97,934 | 5.59 | % | 8,633 | 5.96 | % | - | - | - | - | - | - | |||||||||||||
| Junior subordinated debt | 101,196 | 2.22 | % | 101,196 | 2.76 | % | 101,196 | 3.68 | % | 101,196 | 4.00 | % | 101,196 | 4.29 | % | ||||||||||
| Total interest bearing liabilities | $ | 6,244,556 | 0.45 | % | $ | 6,273,189 | 0.45 | % | $ | 6,005,691 | 0.82 | % | $ | 5,884,797 | 0.90 | % | $ | 5,916,068 | 0.96 | % | |||||
| Demand deposits | 3,111,617 | 2,887,545 | 2,398,307 | 2,406,563 | 2,389,617 | ||||||||||||||||||||
| Other liabilities | 282,265 | 271,635 | 214,495 | 199,674 | 185,374 | ||||||||||||||||||||
| Stockholders' equity | 1,155,056 | 1,134,794 | 1,129,595 | 1,109,225 | 1,085,961 | ||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | |||||||||||||||
| Interest rate spread | 3.00 | % | 3.23 | % | 3.25 | % | 3.23 | % | 3.26 | % | |||||||||||||||
| Net interest margin (FTE)^1^ | 3.17 | % | 3.38 | % | 3.52 | % | 3.52 | % | 3.57 | % |
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 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Nine Months Ended September 30, | 2020 | 2019 | ||||||||||||
| Assets | ||||||||||||||
| Short-term interest bearing accounts | $ | 311,577 | $ | 464 | 0.20 | % | $ | 30,970 | $ | 457 | 1.97 | % | ||
| Securities available for sale^1 5^ | 1,028,962 | 16,956 | 2.20 | % | 968,517 | 17,695 | 2.44 | % | ||||||
| Securities held to maturity^1 5^ | 619,379 | 12,562 | 2.71 | % | 750,305 | 15,921 | 2.84 | % | ||||||
| Investment in FRB and FHLB Banks | 35,349 | 1,674 | 6.33 | % | 45,254 | 2,271 | 6.71 | % | ||||||
| Loans^1 6^ | 7,437,566 | 231,168 | 4.15 | % | 6,944,518 | 241,932 | 4.66 | % | ||||||
| Total interest earning assets | $ | 9,432,833 | $ | 262,824 | 3.72 | % | $ | 8,739,564 | $ | 278,276 | 4.26 | % | ||
| Other assets | 938,296 | 821,859 | ||||||||||||
| Total assets | $ | 10,371,129 | $ | 9,561,423 | ||||||||||
| Liabilities and stockholders' equity | ||||||||||||||
| Money market deposit accounts | $ | 2,275,765 | $ | 8,646 | 0.51 | % | $ | 1,912,572 | $ | 16,255 | 1.14 | % | ||
| NOW deposit accounts | 1,153,780 | 548 | 0.06 | % | 1,105,919 | 1,157 | 0.14 | % | ||||||
| Savings deposits | 1,369,219 | 553 | 0.05 | % | 1,269,723 | 550 | 0.06 | % | ||||||
| Time deposits | 762,548 | 8,436 | 1.48 | % | 929,819 | 11,843 | 1.70 | % | ||||||
| Total interest bearing deposits | $ | 5,561,312 | $ | 18,183 | 0.44 | % | $ | 5,218,033 | $ | 29,805 | 0.76 | % | ||
| Short-term borrowings | 412,312 | 3,215 | 1.04 | % | 607,155 | 7,986 | 1.76 | % | ||||||
| Long-term debt | 64,165 | 1,184 | 2.46 | % | 80,162 | 1,391 | 2.32 | % | ||||||
| Subordinated debt, net | 35,750 | 1,503 | 5.62 | % | - | - | - | |||||||
| Junior subordinated debt | 101,196 | 2,186 | 2.89 | % | 101,196 | 3,404 | 4.50 | % | ||||||
| Total interest bearing liabilities | $ | 6,174,735 | $ | 26,271 | 0.57 | % | $ | 6,006,546 | $ | 42,586 | 0.95 | % | ||
| Demand deposits | 2,800,297 | 2,332,965 | ||||||||||||
| Other liabilities | 256,226 | 166,537 | ||||||||||||
| Stockholders' equity | 1,139,871 | 1,055,375 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 10,371,129 | $ | 9,561,423 | ||||||||||
| Net interest income (FTE)^1^ | $ | 236,553 | $ | 235,690 | ||||||||||
| Interest rate spread | 3.15 | % | 3.31 | % | ||||||||||
| Net interest margin (FTE)^1^ | 3.35 | % | 3.61 | % | ||||||||||
| Taxable equivalent adjustment | $ | 983 | $ | 1,318 | ||||||||||
| Net interest income | $ | 235,570 | $ | 234,372 |
15
| NBT Bancorp Inc. and Subsidiaries |
|---|
| Consolidated Loan Balances |
| (unaudited, dollars in thousands) |
The following table presents loans by line of business, paycheck protection program loans includes $11.3 million and $14.6 million in unamortized fees as of September 30, 2020 and June 30, 2020 respectively.
| 2020 | 2019 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | ||||||
| Commercial | $ | 1,297,408 | $ | 1,318,806 | $ | 1,338,609 | $ | 1,302,209 | $ | 1,317,649 |
| Commercial real estate | 2,281,843 | 2,256,580 | 2,242,139 | 2,142,057 | 2,033,552 | |||||
| Paycheck protection program | 514,558 | 510,097 | - | - | - | |||||
| Residential real estate mortgages | 1,448,530 | 1,460,058 | 1,446,676 | 1,445,156 | 1,416,920 | |||||
| Indirect auto | 989,369 | 1,091,889 | 1,184,888 | 1,193,635 | 1,195,783 | |||||
| Specialty lending | 566,973 | 515,618 | 539,378 | 542,063 | 528,505 | |||||
| Home equity | 404,346 | 415,528 | 431,536 | 444,082 | 452,535 | |||||
| Other consumer | 57,616 | 59,415 | 64,157 | 66,896 | 68,865 | |||||
| Total loans | $ | 7,560,643 | $ | 7,627,991 | $ | 7,247,383 | $ | 7,136,098 | $ | 7,013,809 |
The following table provide loans as a percentage of total loans in industries vulnerable to the COVID-19 pandemic as of September 30, 2020:
| Industry | % of Total<br><br> <br>Loans | ||
|---|---|---|---|
| Accommodations | 2.5 | % | |
| Healthcare services and practices | 2.1 | % | |
| Restaurants and entertainment | 1.9 | % | |
| Retailers | 1.7 | % | |
| Automotive | 1.3 | % | |
| Total | 9.5 | % |
Allowance for Loan Losses as a Percentage of Loans by Segment^7^:
| Incurred | CECL | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12/31/2019 | 1/1/2020 | 3/31/2020 | 6/30/2020* | 9/30/2020* | |||||||||||
| Commercial & industrial | 0.96 | % | 0.98 | % | 1.43 | % | 1.25 | % | 1.34 | % | |||||
| Commercial real estate | 1.02 | % | 0.74 | % | 1.10 | % | 1.56 | % | 1.57 | % | |||||
| Paycheck protection program | 0.00 | % | 0.00 | % | 0.00 | % | 0.01 | % | 0.01 | % | |||||
| Residential real estate | 0.27 | % | 0.83 | % | 0.99 | % | 1.13 | % | 1.21 | % | |||||
| Auto | 0.83 | % | 0.78 | % | 1.08 | % | 0.99 | % | 0.92 | % | |||||
| Other consumer | 3.74 | % | 3.66 | % | 4.00 | % | 5.01 | % | 4.66 | % | |||||
| Total | 1.02 | % | 1.07 | % | 1.38 | % | 1.49 | % | 1.51 | % |
* Excluding PPP loans and related allowance, total allowance to loans was 1.59% and 1.62% as of June 30, 2020 and September 30, 2020 respectively.
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 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||
| Income before income tax expense | $ | 46,101 | $ | 31,277 | $ | 12,083 | $ | 37,126 | $ | 41,701 | |||||
| FTE adjustment | 325 | 329 | 329 | 349 | 374 | ||||||||||
| Provision for loan losses | 3,261 | 18,840 | 29,640 | 6,004 | 6,324 | ||||||||||
| Net securities (gains) losses | (84 | ) | (180 | ) | 812 | (189 | ) | (4,036 | ) | ||||||
| Nonrecurring expense | - | 650 | - | - | 3,800 | ||||||||||
| Unfunded loan commitments reserve | - | (200 | ) | 2,000 | - | - | |||||||||
| PPNR | $ | 49,603 | $ | 50,716 | $ | 44,864 | $ | 43,290 | $ | 48,163 | |||||
| Average Assets | $ | 10,793,494 | $ | 10,567,163 | $ | 9,748,088 | $ | 9,600,259 | $ | 9,577,020 | |||||
| Return on Average Assets^3^ | 1.29 | % | 0.94 | % | 0.43 | % | 1.20 | % | 1.34 | % | |||||
| PPNR Return on Average Assets^3^ | 1.83 | % | 1.93 | % | 1.85 | % | 1.79 | % | 2.00 | % |
PPNR is a Non-GAAP financial measure that management believes is useful in evaluating the underlying operating results of the Company excluding the volatility in loan loss provision due to CECL adoption and the impact of the COVID-19 pandemic, net securities gains (losses) and non-recurring income and/or expense.
| FTE Adjustment | 2020 | 2019 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||
| Net interest income | $ | 77,943 | $ | 80,446 | $ | 77,181 | $ | 77,183 | $ | 78,054 | |||||
| Add: FTE adjustment | 325 | 329 | 329 | 349 | 374 | ||||||||||
| Net interest income (FTE) | $ | 78,268 | $ | 80,775 | $ | 77,510 | $ | 77,532 | $ | 78,428 | |||||
| Average earning assets | $ | 9,826,300 | $ | 9,605,356 | $ | 8,862,518 | $ | 8,738,350 | $ | 8,724,404 | |||||
| Net interest margin (FTE)^3^ | 3.17 | % | 3.38 | % | 3.52 | % | 3.52 | % | 3.57 | % | |||||
| 9 Months ended September 30, | |||||||||||||||
| 2020 | 2019 | ||||||||||||||
| Net interest income | $ | 235,570 | $ | 234,372 | |||||||||||
| Add: FTE adjustment | 983 | 1,318 | |||||||||||||
| Net interest income (FTE) | $ | 236,553 | $ | 235,690 | |||||||||||
| Average earning assets | $ | 9,432,833 | $ | 8,739,564 | |||||||||||
| Net interest margin (FTE)^3^ | 3.35 | % | 3.61 | % |
Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.
| Tangible equity to tangible assets | 2020 | 2019 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||
| Total equity | $ | 1,166,111 | $ | 1,142,652 | $ | 1,112,179 | $ | 1,120,397 | $ | 1,098,601 | |||||
| Intangible assets | 293,098 | 293,954 | 285,955 | 286,789 | 287,633 | ||||||||||
| Total assets | $ | 10,850,212 | $ | 10,847,184 | $ | 9,953,543 | $ | 9,715,925 | $ | 9,661,386 | |||||
| Tangible equity to tangible assets | 8.27 | % | 8.04 | % | 8.55 | % | 8.84 | % | 8.65 | % |
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 | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 3rd Q | 2nd Q | 1st Q | 4th Q | 3rd Q | |||||||||||
| Net income | $ | 35,113 | $ | 24,713 | $ | 10,368 | $ | 28,960 | $ | 32,379 | |||||
| Amortization of intangible assets (net of tax) | 642 | 662 | 626 | 633 | 656 | ||||||||||
| Net income, excluding intangibles amortization | $ | 35,755 | $ | 25,375 | $ | 10,994 | $ | 29,593 | $ | 33,035 | |||||
| Average stockholders' equity | $ | 1,155,056 | $ | 1,134,794 | $ | 1,129,595 | $ | 1,109,225 | $ | 1,085,961 | |||||
| Less: average goodwill and other intangibles | 293,572 | 294,423 | 286,400 | 287,268 | 288,077 | ||||||||||
| Average tangible common equity | $ | 861,484 | $ | 840,371 | $ | 843,195 | $ | 821,957 | $ | 797,884 | |||||
| Return on average tangible common equity^3^ | 16.51 | % | 12.14 | % | 5.24 | % | 14.28 | % | 16.43 | % | |||||
| 9 Months ended September 30, | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| 2020 | 2019 | ||||||||||||||
| Net income | $ | 70,194 | $ | 92,061 | |||||||||||
| Amortization of intangible assets (net of tax) | 1,930 | 2,051 | |||||||||||||
| Net income, excluding intangibles amortization | $ | 72,124 | $ | 94,112 | |||||||||||
| Average stockholders' equity | $ | 1,139,871 | $ | 1,055,375 | |||||||||||
| Less: average goodwill and other intangibles | 291,472 | 288,967 | |||||||||||||
| Average tangible common equity | $ | 848,399 | $ | 766,408 | |||||||||||
| Return on average tangible common equity^3^ | 11.36 | % | 16.42 | % | |||||||||||
| ^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<br> 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<br> 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. | ||||||||||||||
| --- | --- |