Attached files
| file | filename |
|---|---|
| 8-K - 8-K - NBT BANCORP INC | form8k.htm |
Exhibit 99.1
1
|
FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS
|
|
Contact:
|
John H. Watt, Jr., President and CEO
John V. Moran, Executive Vice President and CFO
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
607-337-6589
|
NBT BANCORP INC. ANNOUNCES FIRST QUARTER NET INCOME OF $10.4 MILLION, OR $0.23 PER DILUTED COMMON SHARE
NORWICH, NY (April 27, 2020) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income of $10.4 million, or $0.23 per diluted common share, for
the three months ended March 31, 2020. NBT’s results in the first quarter of 2020 reflect the Current Expected Credit Losses (“CECL”) accounting methodology, including the estimated impact of the COVID-19 pandemic on expected credit losses. Net
income was down 64% from the previous quarter and from the first quarter of 2019 primarily due to higher provision for loan losses related to the deterioration of economic conditions caused by the COVID-19 pandemic.
Pre-provision net revenue (“PPNR”)1, excluding securities gains (losses), for the first quarter was $42.5 million compared to $42.9 million from the
previous quarter and $43.0 million in the first quarter of 2019.
CEO Comments
“In the face of the rapidly changing economic conditions brought on by the COVID-19 pandemic, we have been aggressive in our response to deliver support and solutions
to our customers in distress while providing for the health and safety of our employees,” said John H. Watt, Jr. “We are extremely proud of our team members who have been able to process high volumes of loans through the SBA’s Paycheck Protection
Program that are helping businesses in the communities we serve to retain tens of thousands of workers.”
Watt continued, “Our earnings for the first quarter were significantly impacted by the COVID-19 pandemic and the resulting increase to our provision for expected
losses under CECL accounting. The quarter was marked by strong loan growth and consistent underlying operating financial performance even in the face of a 150-basis-point drop in the federal funds rate. Our strong balance sheet and capital
position, disciplined approach to credit and risk management, technology investments and diversified fee business are attributes that provide NBT with resources and flexibility to navigate these difficult times. We moved forward to complete the
acquisition of Alliance Benefit Group of Illinois, Inc. as planned on April 1, 2020 by our EPIC Retirement Plan Services business unit. Our experienced and seasoned management team and knowledgeable local bankers across 7 states will maintain focus
on the fundamentals of our business while supporting our customers, communities and shareholders to ensure we all emerge from the current challenges stronger together.”
2
First Quarter Highlights
|
Net Income
|
◾ Net income of $10.4 million
◾ Diluted earnings
per share of $0.23
|
|
|
Net Interest Income
/ NIM
|
◾ Net interest income on a fully taxable equivalent basis
was $77.5 million1
◾ Net interest margin
(“NIM”) on a fully taxable equivalent basis was 3.52%1 and flat from the fourth quarter of 2019
|
|
|
PPNR
|
◾ Pre-provision net revenue (“PPNR”)1 was $41.7
million
◾ Excluding
securities gains (losses), PPNR was $42.5 million compared to $42.9 million in the fourth quarter of 2019 and $43.0 million in the
first quarter 2019
|
|
|
Loans and Credit
Quality
|
◾ Period end loans were $7.2 billion, up 6.3%, annualized,
from December 31, 2019
◾ Allowance for loans losses to total loans of 1.38%
◾ Net charge-offs to average loans were 0.32%, annualized
◾ Nonperforming assets to total assets were 0.35%
|
|
|
Capital
|
◾ Tangible equity to assets of 8.55%1
◾ CET1 ratio of 10.90%; Total leverage ratio of 10.02%
|
Company Response to Pandemic
The COVID-19 pandemic has significantly disrupted the global and local economy and the customers and communities served by NBT. In response, the Company immediately
formed an Executive Task Force and engaged its established Incident Response Team to execute a comprehensive pandemic response plan. Actions taken to address the safety of employees and the
needs of customers are highlighted below.
| ◾ |
Employees
|
| o |
90% of non-branch employees quickly deployed to work remotely.
|
| o |
New scheduling protocols implemented to optimize social distancing for branch staff, including drive-up/ATM and appointment-only banking.
|
| o |
Additional paid time off provided to address health and childcare needs.
|
| o |
Cross-training and redeployment programs directing staff resources to areas of greatest need.
|
| o |
Internal and external communication increased to address rapidly changing business environment and personal impact to employees.
|
| ◾ |
Customers
|
| o |
82% of branches remain open for drive-up service and remaining branch staff redeployed to assist in other areas.
|
| o |
Leveraged technology tools such as robotic
process automation for payment extension requests and onboarding loans; increased use of electronic signatures.
|
| o |
Digital communication channels significantly enhanced with dedicated webpages and social media content.
|
| o |
Increased use of self-service with a 60% increase in mobile deposits and over 50% increase in mobile and online banking enrollment.
|
| o |
As of April 17, 2020, 11.6% of loans are in payment deferral programs:
|
| ◾ |
74% are commercial and 26% are consumer borrowers.
|
| o |
Over $385 million in Paycheck Protection Plan (“PPP”) loans processed through April 16; will actively participate in second PPP appropriation.
|
3
| ◾ |
Period-end total loans were $7.2 billion at March 31, 2020 compared to $7.1 billion at December 31, 2019.
|
| ◾ |
Commercial real estate increased $100.0 million to $2.2 billion; commercial and industrial loans increased $36.4 million to $1.3 billion; total consumer loans decreased $25.2 million to $3.7
billion.
|
| ◾ |
Commercial line of credit utilization rate of 32% at March 31, 2020 remained consistent with December 31, 2019 of 32% and compared to 36% at March 31, 2019.
|
| ◾ |
Average total deposits in the first quarter of 2020 were $7.7 billion, compared to $7.6 billion in the fourth quarter 2019, with annualized growth of 3.8%.
|
| ◾ |
Seasonal inflow of municipal deposits resulted in increases of $37 million on a period-average basis and $182 million on a period-end basis.
|
| ◾ |
Net interest income for the first quarter was comparable to the fourth quarter of 2019 at $77.2 million and down slightly from the first
quarter of 2019 of $77.7 million.
|
| ◾ |
The net interest margin on a fully taxable equivalent (“FTE”) basis of 3.52% was flat from the fourth quarter of 2019 and down 12 basis points
(“bps”) from the first quarter of 2019.
|
| ◾ |
Earning asset yields were down 6 bps from the prior quarter and down 21 bps from the same quarter in the prior year. Earnings assets grew $124.2 million or 1.4% from the prior quarter.
|
| ◾ |
The cost of interest-bearing liabilities decreased 8 bps from the prior quarter to 0.82% at March 31, 2020 and compared to 0.92% for the first
quarter of 2019.
|
| o |
Cost of interest-bearing deposits decreased 8 bps from the prior quarter and were 61 bps for the month of March.
|
| ◾ |
Total cost of deposits was 48 bps for the first quarter of 2020, down 6 bps from the prior quarter and flat with the same period in the prior
year.
|
Credit Quality and CECL
| ◾ |
Asset quality metrics remained stable in the first quarter of 2020.
|
| ◾ |
Net charge-offs to total average loans of 32 bps compared to 30 bps in the prior quarter and 41 bps in the first quarter of 2019.
|
| ◾ |
Nonperforming assets to total assets were 0.35% compared to 0.31% at December 31, 2019 and 0.33% at March 31, 2019, driven primarily by one
commercial credit of $4.2 million.
|
| ◾ |
Provision expense increased $23.6 million from the fourth quarter of 2019 primarily due to an increase in expected losses resulting from deterioration of the economic forecast due to the COVID-19 pandemic.
|
| ◾ |
The allowance for loan losses was $100.0 million, or 1.38%, of total loans compared to 1.02% at December 31, 2019 and 1.07% Day 1 CECL (January 1, 2020).
|
| ◾ |
Day 1 CECL impact resulted in a $3.0 million increase to the allowance for loan losses and a $2.8
million increase to the unfunded loan commitment reserve; retained earnings decreased $4.3 million (after-tax) compared to year-end 2019.
|
4
| ◾ |
Total noninterest income, excluding securities gains (losses), was consistent with the prior quarter at $36.2 million and up $2.5 million from the prior year quarter.
|
| ◾ |
As compared to the prior quarter, seasonally higher insurance revenues and retirement plan fees in the first quarter of 2020 were offset by lower levels of swap fees.
|
| ◾ |
Increase from the prior year first quarter was driven by higher swap fees in other
noninterest income and higher wealth management income partly reduced by lower insurance agency seasonal revenues.
|
| ◾ |
Securities losses of $0.8 million were driven by mark-to-market adjustments on equities
securities.
|
Noninterest Expense
| ◾ |
Total noninterest expense for the first quarter was up 0.8% from the previous quarter and up 3.5% from the first quarter of 2019.
|
| ◾ |
Significant variances to the prior quarter:
|
| o |
Salaries and benefits seasonally higher due to higher payroll taxes and stock-based compensation expenses ($1.5 million).
|
| o |
Other noninterest expense was higher in the first quarter of 2020 due to a $2.0 million
increase in reserves for unfunded loan commitments due primarily to CECL adoption and COVID-19 pandemic expected losses and was partly offset by $0.7 million lower pension costs.
|
| ◾ |
Significant variances to the first quarter of 2019:
|
| o |
Higher salaries and benefits primarily due to merit increases, higher number of employees, one additional business day and higher medical costs.
|
| o |
Other expenses increased $1.8 million due to an increase to the unfunded loan commitments reserve, partly offset by lower pension costs.
|
| ◾ |
Remaining portion of FDIC insurance assessment credit was used in the first quarter of 2020.
|
Income Taxes
| ◾ |
Effective tax rate was 14.2% for the first quarter of 2020 compared to 22.0% in the fourth quarter of 2019 and 21.8% in the first quarter 2019
due to lower level of taxable income relative to total income.
|
Capital
| ◾ |
Capital ratios remain strong with tangible common equity to tangible assets increasing 49 bps since first quarter of 2019.
|
| ◾ |
March 31, 2020 CET1 capital ratio of 10.90%, total leverage ratio of 10.02% and total risk-based capital ratio of 13.36%.
|
| ◾ |
Tangible common equity to tangible assets1 was 8.55% at the end of the first quarter compared to 8.84% at December 31, 2019 and 8.06% at March 31, 2019.
|
| ◾ |
On March 23, 2020, the Company announced a second quarter dividend of $0.27 per share, payable on June 15, 2020 to shareholders of record as
of June 1, 2020.
|
| ◾ |
On April 1, 2020, the Company completed the acquisition of Alliance Benefit Group of Illinois, Inc. (“ABG”) based in Peoria, Illinois.
|
| o |
ABG provides retirement plan solutions for over 600 qualified retirement plans with over 40,000 plan participants and accumulated assets of $3.5 billion.
|
| o |
ABG brings 70 new team members to EPIC Retirement Plan Services (“EPIC RPS”).
|
| o |
ABG further diversifies the EPIC RPS customer base and supports its mission of “Helping America Retire.”
|
Corporate Overview
NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $9.95
billion at March 31, 2020. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 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.
Forward-Looking Statements
This news release contains forward-looking statements. These forward-looking statements involve risks
and uncertainties and are based on the beliefs and assumptions of the management of NBT and its subsidiaries and on the information available to management at the time that these statements were made. There are a number of factors, many of which
are beyond NBT’s control, which could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by
such forward-looking statements include, among others: (1) competitive pressures among depository and other financial institutions may increase significantly, including competitors having greater financial resources than NBT; (2) revenues may be
lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a
deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards and tax laws, may adversely affect business and results; (6) NBT’s ability to successfully
integrate acquired businesses and employees; (7) adverse changes may occur in the securities markets or with respect to inflation; and (8) 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, and 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. Forward-looking statements speak only as
of the date they are made. Except as required by law, NBT does not update forward-looking statements to reflect subsequent circumstances or events.
6
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.
7
|
Selected Financial Data
|
|||||
|
(unaudited, dollars in thousands except per share data)
|
|
2020
|
2019
|
|||||||||||||||||||
|
Profitability:
|
1st Q
|
4th Q
|
3rd Q
|
2nd Q
|
1st Q
|
|||||||||||||||
|
Diluted earnings per share
|
$
|
0.23
|
$
|
0.66
|
$
|
0.73
|
$
|
0.69
|
$
|
0.66
|
||||||||||
|
Weighted average diluted common shares outstanding
|
44,130,324
|
44,174,201
|
44,138,495
|
44,120,377
|
44,081,086
|
|||||||||||||||
|
Return on average assets (2)
|
0.43
|
%
|
1.20
|
%
|
1.34
|
%
|
1.28
|
%
|
1.24
|
%
|
||||||||||
|
Return on average equity (2)
|
3.69
|
%
|
10.36
|
%
|
11.83
|
%
|
11.63
|
%
|
11.52
|
%
|
||||||||||
|
Return on average tangible common equity (1)(2)
|
5.24
|
%
|
14.28
|
%
|
16.43
|
%
|
16.38
|
%
|
16.45
|
%
|
||||||||||
|
Net interest margin (1)(2)
|
3.52
|
%
|
3.52
|
%
|
3.57
|
%
|
3.61
|
%
|
3.64
|
%
|
||||||||||
|
Balance sheet data:
|
||||||||||||||||||||
|
Securities available for sale
|
$
|
1,000,980
|
$
|
975,340
|
$
|
932,173
|
$
|
979,696
|
$
|
951,859
|
||||||||||
|
Securities held to maturity
|
621,359
|
630,074
|
678,435
|
744,601
|
780,565
|
|||||||||||||||
|
Net loans
|
7,147,383
|
7,063,133
|
6,941,444
|
6,891,108
|
6,818,907
|
|||||||||||||||
|
Total assets
|
9,953,543
|
9,715,925
|
9,661,386
|
9,635,718
|
9,533,510
|
|||||||||||||||
|
Total deposits
|
7,864,638
|
7,587,820
|
7,743,166
|
7,593,706
|
7,617,659
|
|||||||||||||||
|
Total borrowings
|
714,283
|
820,682
|
628,701
|
794,829
|
719,775
|
|||||||||||||||
|
Total liabilities
|
8,841,364
|
8,595,528
|
8,562,785
|
8,560,895
|
8,499,455
|
|||||||||||||||
|
Stockholders’ equity
|
1,112,179
|
1,120,397
|
1,098,601
|
1,074,823
|
1,034,055
|
|||||||||||||||
|
Asset quality:
|
||||||||||||||||||||
|
Nonaccrual loans
|
$
|
29,972
|
$
|
25,174
|
$
|
24,623
|
$
|
24,669
|
$
|
25,632
|
||||||||||
|
90 days past due and still accruing
|
2,280
|
3,717
|
8,342
|
2,387
|
3,335
|
|||||||||||||||
|
Total nonperforming loans
|
32,252
|
28,891
|
32,965
|
27,056
|
28,967
|
|||||||||||||||
|
Other real estate owned
|
2,384
|
1,458
|
2,144
|
2,203
|
2,222
|
|||||||||||||||
|
Total nonperforming assets
|
34,636
|
30,349
|
35,109
|
29,259
|
31,189
|
|||||||||||||||
|
Allowance for loan losses
|
100,000
|
72,965
|
72,365
|
72,165
|
71,405
|
|||||||||||||||
|
Asset quality ratios:
|
||||||||||||||||||||
|
Allowance for loan losses to total loans
|
1.38
|
%
|
1.02
|
%
|
1.03
|
%
|
1.04
|
%
|
1.04
|
%
|
||||||||||
|
Total nonperforming loans to total loans
|
0.45
|
%
|
0.40
|
%
|
0.47
|
%
|
0.39
|
%
|
0.42
|
%
|
||||||||||
|
Total nonperforming assets to total assets
|
0.35
|
%
|
0.31
|
%
|
0.36
|
%
|
0.30
|
%
|
0.33
|
%
|
||||||||||
|
Allowance for loan losses to total nonperforming loans
|
310.06
|
%
|
252.55
|
%
|
219.52
|
%
|
266.72
|
%
|
246.50
|
%
|
||||||||||
|
Past due loans to total loans
|
0.51
|
%
|
0.49
|
%
|
0.57
|
%
|
0.52
|
%
|
0.52
|
%
|
||||||||||
|
Net charge-offs to average loans (2)
|
0.32
|
%
|
0.30
|
%
|
0.35
|
%
|
0.38
|
%
|
0.41
|
%
|
||||||||||
|
Capital:
|
||||||||||||||||||||
|
Equity to assets
|
11.17
|
%
|
11.53
|
%
|
11.37
|
%
|
11.15
|
%
|
10.85
|
%
|
||||||||||
|
Tangible equity ratio (1)
|
8.55
|
%
|
8.84
|
%
|
8.65
|
%
|
8.41
|
%
|
8.06
|
%
|
||||||||||
|
Book value per share
|
$
|
25.52
|
$
|
25.58
|
$
|
25.09
|
$
|
24.56
|
$
|
23.64
|
||||||||||
|
Tangible book value per share (3)
|
$
|
18.96
|
$
|
19.03
|
$
|
18.52
|
$
|
17.97
|
$
|
17.02
|
||||||||||
|
Tier 1 leverage ratio
|
10.02
|
%
|
10.33
|
%
|
10.15
|
%
|
9.88
|
%
|
9.62
|
%
|
||||||||||
|
Common equity tier 1 capital ratio
|
10.90
|
%
|
11.29
|
%
|
11.14
|
%
|
10.95
|
%
|
10.69
|
%
|
||||||||||
|
Tier 1 capital ratio
|
12.14
|
%
|
12.56
|
%
|
12.42
|
%
|
12.24
|
%
|
11.99
|
%
|
||||||||||
|
Total risk-based capital ratio
|
13.36
|
%
|
13.52
|
%
|
13.38
|
%
|
13.21
|
%
|
12.98
|
%
|
||||||||||
|
Common stock price (end of period)
|
$
|
32.39
|
$
|
40.56
|
$
|
36.59
|
$
|
37.51
|
$
|
36.01
|
||||||||||
8
|
Consolidated Balance Sheets
|
|
(unaudited, dollars in thousands)
|
|
Assets
|
March 31,
2020
|
December 31,
2019
|
|||||
|
Cash and due from banks
|
$
|
160,106
|
$
|
170,595
|
|||
|
Short-term interest bearing accounts
|
123,254
|
46,248
|
|||||
|
Equity securities, at fair value
|
26,378
|
27,771
|
|||||
|
Securities available for sale, at fair value
|
1,000,980
|
975,340
|
|||||
|
Securities held to maturity (fair value $642,325 and $641,262, respectively)
|
621,359
|
630,074
|
|||||
|
Federal Reserve and Federal Home Loan Bank stock
|
41,018
|
44,620
|
|||||
|
Loans held for sale
|
6,475
|
11,731
|
|||||
|
Loans
|
7,247,383
|
7,136,098
|
|||||
|
Less allowance for loan losses
|
100,000
|
72,965
|
|||||
|
Net loans
|
$
|
7,147,383
|
$
|
7,063,133
|
|||
|
Premises and equipment, net
|
76,502
|
75,631
|
|||||
|
Goodwill
|
274,769
|
274,769
|
|||||
|
Intangible assets, net
|
11,186
|
12,020
|
|||||
|
Bank owned life insurance
|
183,122
|
181,748
|
|||||
|
Other assets
|
281,011
|
202,245
|
|||||
|
Total assets
|
$
|
9,953,543
|
$
|
9,715,925
|
|||
|
Liabilities and stockholders’ equity
|
|||||||
|
Demand (noninterest bearing)
|
$
|
2,423,077
|
$
|
2,414,383
|
|||
|
Savings, NOW and money market
|
4,598,282
|
4,312,244
|
|||||
|
Time
|
843,279
|
861,193
|
|||||
|
Total deposits
|
$
|
7,864,638
|
$
|
7,587,820
|
|||
|
Short-term borrowings
|
548,904
|
655,275
|
|||||
|
Long-term debt
|
64,183
|
64,211
|
|||||
|
Junior subordinated debt
|
101,196
|
101,196
|
|||||
|
Other liabilities
|
262,443
|
187,026
|
|||||
|
Total liabilities
|
$
|
8,841,364
|
$
|
8,595,528
|
|||
|
Total stockholders’ equity
|
$
|
1,112,179
|
$
|
1,120,397
|
|||
|
Total liabilities and stockholders’ equity
|
$
|
9,953,543
|
$
|
9,715,925
|
|||
9
|
Quarterly Consolidated Statements of Income
|
|
(unaudited, dollars in thousands except per share data)
|
|
2020
|
2019
|
||||||||||||||||||
|
1st Q
|
4th Q
|
3rd Q
|
2nd Q
|
1st Q
|
|||||||||||||||
|
Interest, fee and dividend income
|
|||||||||||||||||||
|
Interest and fees on loans
|
$
|
78,728
|
$
|
79,800
|
$
|
81,082
|
$
|
81,271
|
$
|
79,321
|
|||||||||
|
Securities available for sale
|
5,753
|
5,639
|
5,711
|
6,031
|
5,922
|
||||||||||||||
|
Securities held to maturity
|
4,091
|
4,213
|
4,586
|
5,089
|
5,217
|
||||||||||||||
|
Other
|
829
|
924
|
1,002
|
842
|
884
|
||||||||||||||
|
Total interest, fee and dividend income
|
$
|
89,401
|
$
|
90,576
|
$
|
92,381
|
$
|
93,233
|
$
|
91,344
|
|||||||||
|
Interest expense
|
|||||||||||||||||||
|
Deposits
|
$
|
9,104
|
$
|
10,181
|
$
|
10,745
|
$
|
10,234
|
$
|
8,826
|
|||||||||
|
Short-term borrowings
|
1,797
|
1,707
|
1,989
|
2,760
|
3,237
|
||||||||||||||
|
Long-term debt
|
393
|
484
|
498
|
471
|
422
|
||||||||||||||
|
Junior subordinated debt
|
926
|
1,021
|
1,095
|
1,141
|
1,168
|
||||||||||||||
|
Total interest expense
|
$
|
12,220
|
$
|
13,393
|
$
|
14,327
|
$
|
14,606
|
$
|
13,653
|
|||||||||
|
Net interest income
|
$
|
77,181
|
$
|
77,183
|
$
|
78,054
|
$
|
78,627
|
$
|
77,691
|
|||||||||
|
Provision for loan losses
|
29,640
|
6,004
|
6,324
|
7,277
|
5,807
|
||||||||||||||
|
Net interest income after provision for loan losses
|
$
|
47,541
|
$
|
71,179
|
$
|
71,730
|
$
|
71,350
|
$
|
71,884
|
|||||||||
|
Noninterest income
|
|||||||||||||||||||
|
Service charges on deposit accounts
|
$
|
3,997
|
$
|
4,361
|
$
|
4,330
|
$
|
4,224
|
$
|
4,236
|
|||||||||
|
ATM and debit card fees
|
5,854
|
5,935
|
6,277
|
6,156
|
5,525
|
||||||||||||||
|
Retirement plan administration fees
|
7,941
|
7,218
|
7,600
|
7,836
|
7,734
|
||||||||||||||
|
Wealth management (4)
|
7,273
|
7,085
|
7,630
|
7,122
|
6,563
|
||||||||||||||
|
Insurance (4)
|
4,269
|
3,479
|
4,000
|
3,547
|
4,744
|
||||||||||||||
|
Bank owned life insurance income
|
1,374
|
1,236
|
1,556
|
1,186
|
1,377
|
||||||||||||||
|
Net securities (losses) gains
|
(812
|
)
|
189
|
4,036
|
(69
|
)
|
57
|
||||||||||||
|
Other
|
5,527
|
6,738
|
4,291
|
4,239
|
3,585
|
||||||||||||||
|
Total noninterest income
|
$
|
35,423
|
$
|
36,241
|
$
|
39,720
|
$
|
34,241
|
$
|
33,821
|
|||||||||
|
Noninterest expense
|
|||||||||||||||||||
|
Salaries and employee benefits
|
$
|
40,750
|
$
|
39,592
|
$
|
39,352
|
$
|
38,567
|
$
|
39,356
|
|||||||||
|
Occupancy
|
5,995
|
5,653
|
5,335
|
5,443
|
6,275
|
||||||||||||||
|
Data processing and communications
|
4,233
|
4,719
|
4,492
|
4,693
|
4,414
|
||||||||||||||
|
Professional fees and outside services
|
3,897
|
4,223
|
3,535
|
3,359
|
3,668
|
||||||||||||||
|
Equipment
|
4,642
|
4,821
|
4,487
|
4,518
|
4,757
|
||||||||||||||
|
Office supplies and postage
|
1,636
|
1,744
|
1,667
|
1,577
|
1,591
|
||||||||||||||
|
FDIC expense (credit)
|
311
|
-
|
(20
|
)
|
949
|
1,017
|
|||||||||||||
|
Advertising
|
609
|
952
|
677
|
641
|
503
|
||||||||||||||
|
Amortization of intangible assets
|
835
|
844
|
874
|
893
|
968
|
||||||||||||||
|
Loan collection and other real estate owned, net
|
1,017
|
1,436
|
976
|
961
|
785
|
||||||||||||||
|
Other
|
6,956
|
6,310
|
8,374
|
4,630
|
5,126
|
||||||||||||||
|
Total noninterest expense
|
$
|
70,881
|
$
|
70,294
|
$
|
69,749
|
$
|
66,231
|
$
|
68,460
|
|||||||||
|
Income before income tax expense
|
$
|
12,083
|
$
|
37,126
|
$
|
41,701
|
$
|
39,360
|
$
|
37,245
|
|||||||||
|
Income tax expense
|
1,715
|
8,166
|
9,322
|
8,805
|
8,118
|
||||||||||||||
|
Net income
|
$
|
10,368
|
$
|
28,960
|
$
|
32,379
|
$
|
30,555
|
$
|
29,127
|
|||||||||
|
Earnings Per Share
|
|||||||||||||||||||
|
Basic
|
$
|
0.24
|
$
|
0.66
|
$
|
0.74
|
$
|
0.70
|
$
|
0.67
|
|||||||||
|
Diluted
|
$
|
0.23
|
$
|
0.66
|
$
|
0.73
|
$
|
0.69
|
$
|
0.66
|
|||||||||
10
|
Average Quarterly Balance Sheets
|
|||||||||||
|
(unaudited, dollars in thousands)
|
|
Average
Balance
|
Yield /
Rates
|
Average
Balance
|
Yield /
Rates
|
Average
Balance
|
Yield /
Rates
|
Average
Balance
|
Yield /
Rates
|
Average
Balance
|
Yield /
Rates
|
|||||||||||||||||||||||||||||||
|
Q1 - 2020
|
Q4 - 2019
|
Q3 - 2019
|
Q2 - 2019
|
Q1 - 2019
|
||||||||||||||||||||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||||||||||||||||||
|
Short-term interest bearing accounts
|
$
|
74,695
|
1.28
|
%
|
$
|
51,613
|
2.43
|
%
|
$
|
57,530
|
1.95
|
%
|
$
|
25,783
|
1.28
|
%
|
$
|
9,065
|
4.07
|
%
|
||||||||||||||||||||
|
Securities available for sale (1) (5)
|
962,527
|
2.40
|
%
|
942,302
|
2.37
|
%
|
940,256
|
2.41
|
%
|
981,079
|
2.47
|
%
|
984,704
|
2.45
|
%
|
|||||||||||||||||||||||||
|
Securities held to maturity (1) (5)
|
622,398
|
2.81
|
%
|
651,305
|
2.73
|
%
|
698,617
|
2.77
|
%
|
770,651
|
2.83
|
%
|
782,570
|
2.90
|
%
|
|||||||||||||||||||||||||
|
Investment in FRB and FHLB Banks
|
39,784
|
5.97
|
%
|
37,842
|
6.37
|
%
|
40,525
|
7.04
|
%
|
46,179
|
6.60
|
%
|
49,152
|
6.54
|
%
|
|||||||||||||||||||||||||
|
Loans (1) (6)
|
7,163,114
|
4.42
|
%
|
7,055,288
|
4.49
|
%
|
6,987,476
|
4.61
|
%
|
6,958,299
|
4.69
|
%
|
6,886,672
|
4.68
|
%
|
|||||||||||||||||||||||||
|
Total interest earning assets
|
$
|
8,862,518
|
4.07
|
%
|
$
|
8,738,350
|
4.13
|
%
|
$
|
8,724,404
|
4.22
|
%
|
$
|
8,781,991
|
4.28
|
%
|
$
|
8,712,163
|
4.28
|
%
|
||||||||||||||||||||
|
Other assets
|
885,570
|
861,909
|
852,616
|
816,748
|
795,585
|
|||||||||||||||||||||||||||||||||||
|
Total assets
|
$
|
9,748,088
|
$
|
9,600,259
|
$
|
9,577,020
|
$
|
9,598,739
|
$
|
9,507,748
|
||||||||||||||||||||||||||||||
|
Liabilities and stockholders’ equity
|
||||||||||||||||||||||||||||||||||||||||
|
Money market deposit accounts
|
$
|
2,101,306
|
1.00
|
%
|
$
|
2,057,678
|
1.16
|
%
|
$
|
2,015,297
|
1.24
|
%
|
$
|
1,916,045
|
1.16
|
%
|
$
|
1,804,053
|
0.99
|
%
|
||||||||||||||||||||
|
NOW deposit accounts
|
1,086,205
|
0.10
|
%
|
1,064,193
|
0.13
|
%
|
1,056,001
|
0.13
|
%
|
1,127,413
|
0.13
|
%
|
1,135,213
|
0.16
|
%
|
|||||||||||||||||||||||||
|
Savings deposits
|
1,276,285
|
0.06
|
%
|
1,251,432
|
0.06
|
%
|
1,274,793
|
0.06
|
%
|
1,282,084
|
0.06
|
%
|
1,252,042
|
0.06
|
%
|
|||||||||||||||||||||||||
|
Time deposits
|
842,989
|
1.62
|
%
|
853,353
|
1.69
|
%
|
893,837
|
1.75
|
%
|
953,698
|
1.73
|
%
|
942,457
|
1.64
|
%
|
|||||||||||||||||||||||||
|
Total interest bearing deposits
|
$
|
5,306,785
|
0.69
|
%
|
$
|
5,226,656
|
0.77
|
%
|
$
|
5,239,928
|
0.81
|
%
|
$
|
5,279,240
|
0.78
|
%
|
$
|
5,133,765
|
0.70
|
%
|
||||||||||||||||||||
|
Short-term borrowings
|
533,516
|
1.35
|
%
|
475,332
|
1.42
|
%
|
490,694
|
1.61
|
%
|
620,898
|
1.78
|
%
|
712,306
|
1.84
|
%
|
|||||||||||||||||||||||||
|
Long-term debt
|
64,194
|
2.46
|
%
|
81,613
|
2.35
|
%
|
84,250
|
2.35
|
%
|
82,414
|
2.29
|
%
|
73,707
|
2.32
|
%
|
|||||||||||||||||||||||||
|
Junior subordinated debt
|
101,196
|
3.68
|
%
|
101,196
|
4.00
|
%
|
101,196
|
4.29
|
%
|
101,196
|
4.52
|
%
|
101,196
|
4.68
|
%
|
|||||||||||||||||||||||||
|
Total interest bearing liabilities
|
$
|
6,005,691
|
0.82
|
%
|
$
|
5,884,797
|
0.90
|
%
|
$
|
5,916,068
|
0.96
|
%
|
$
|
6,083,748
|
0.96
|
%
|
$
|
6,020,974
|
0.92
|
%
|
||||||||||||||||||||
|
Demand deposits
|
2,398,307
|
2,406,563
|
2,389,617
|
2,298,867
|
2,309,531
|
|||||||||||||||||||||||||||||||||||
|
Other liabilities
|
214,495
|
199,674
|
185,374
|
162,374
|
151,490
|
|||||||||||||||||||||||||||||||||||
|
Stockholders’ equity
|
1,129,595
|
1,109,225
|
1,085,961
|
1,053,750
|
1,025,753
|
|||||||||||||||||||||||||||||||||||
|
Total liabilities and stockholders’ equity
|
$
|
9,748,088
|
$
|
9,600,259
|
$
|
9,577,020
|
$
|
9,598,739
|
$
|
9,507,748
|
||||||||||||||||||||||||||||||
|
Interest rate spread
|
3.25
|
%
|
3.23
|
%
|
3.26
|
%
|
3.32
|
%
|
3.36
|
%
|
||||||||||||||||||||||||||||||
|
Net interest margin (FTE) (1)
|
3.52
|
%
|
3.52
|
%
|
3.57
|
%
|
3.61
|
%
|
3.64
|
%
|
||||||||||||||||||||||||||||||
11
|
NBT Bancorp Inc. and Subsidiaries
|
|||||||||||||||||||
|
Consolidated Loan Balances
|
|||||||||||||||||||
|
(unaudited, dollars in thousands)
|
|||||||||||||||||||
|
2020
|
2019
|
||||||||||||||||||
|
1st Q
|
4th Q
|
3rd Q
|
2nd Q
|
1st Q
|
|||||||||||||||
|
Commercial
|
$
|
1,338,609
|
$
|
1,302,209
|
$
|
1,317,649
|
$
|
1,299,784
|
$
|
1,306,551
|
|||||||||
|
Commercial real estate
|
2,242,139
|
2,142,057
|
2,033,552
|
2,025,280
|
1,943,931
|
||||||||||||||
|
Residential real estate mortgages
|
1,446,676
|
1,445,156
|
1,416,920
|
1,404,079
|
1,390,411
|
||||||||||||||
|
Indirect auto
|
1,184,888
|
1,193,635
|
1,195,783
|
1,189,670
|
1,191,111
|
||||||||||||||
|
Specialty lending
|
539,378
|
542,063
|
528,505
|
519,974
|
529,144
|
||||||||||||||
|
Home equity
|
431,536
|
444,082
|
452,535
|
456,754
|
463,582
|
||||||||||||||
|
Other consumer
|
64,157
|
66,896
|
68,865
|
67,732
|
65,582
|
||||||||||||||
|
Total loans
|
$
|
7,247,383
|
$
|
7,136,098
|
$
|
7,013,809
|
$
|
6,963,273
|
$
|
6,890,312
|
|||||||||
|
$
|
-
|
||||||||||||||||||
|
The following table provide loans as a percentage of total loans in industries vulnerable to the COVID-19 pandemic as of March 31, 2020:
|
|||||||||||||||||||
|
Industry
|
% of Total
Loans
|
||||||||||||||||||
|
Accommodations
|
2.4
|
%
|
|||||||||||||||||
|
Healthcare services and practices
|
2.0
|
%
|
|||||||||||||||||
|
Restaurants and entertainment
|
1.9
|
%
|
|||||||||||||||||
|
Retailers
|
1.7
|
%
|
|||||||||||||||||
|
Automotive
|
1.5
|
%
|
|||||||||||||||||
|
Total
|
9.5
|
%
|
|||||||||||||||||
|
Allowance for Loan Losses as a Percentage of Loans by Segment (7):
|
|||||||||||||||||||
|
Incurred
12/31/2019
|
CECL
1/1/2020
|
3/31/2020
|
|||||||||||||||||
|
Commercial & industrial
|
0.96
|
%
|
0.98
|
%
|
1.43
|
%
|
|||||||||||||
|
Commercial real estate
|
1.02
|
%
|
0.74
|
%
|
1.10
|
%
|
|||||||||||||
|
Residential real estate
|
0.27
|
%
|
0.83
|
%
|
0.99
|
%
|
|||||||||||||
|
Auto
|
0.83
|
%
|
0.78
|
%
|
1.08
|
%
|
|||||||||||||
|
Other consumer
|
3.74
|
%
|
3.66
|
%
|
4.00
|
%
|
|||||||||||||
|
Total
|
1.02
|
%
|
1.07
|
%
|
1.38
|
%
|
|||||||||||||
12
| 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
|
||||||||||||||||||
| 1st Q |
4th Q
|
3rd Q
|
2nd Q
|
1st Q
|
||||||||||||||||
|
Income before income tax expense
|
$
|
12,083
|
$
|
37,126
|
$
|
41,701
|
$
|
39,360
|
$
|
37,245
|
||||||||||
|
Add: Provision for loan losses
|
29,640
|
6,004
|
6,324
|
7,277
|
5,807
|
|||||||||||||||
|
PPNR
|
$
|
41,723
|
$
|
43,130
|
$
|
48,025
|
$
|
46,637
|
$
|
43,052
|
||||||||||
|
Less: Net securities (losses) gains
|
(812
|
)
|
189
|
4,036
|
(69
|
)
|
57
|
|||||||||||||
|
PPNR excluding securities (losses) gains
|
$
|
42,535
|
$
|
42,941
|
$
|
43,989
|
$
|
46,706
|
$
|
42,995
|
||||||||||
|
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.
|
||||||||||||||||||||
|
FTE Adjustment
|
2020
|
2019
|
||||||||||||||||||
|
1st Q
|
4th Q
|
3rd Q
|
2nd Q
|
1st Q
|
||||||||||||||||
|
Net interest income
|
$
|
77,181
|
$
|
77,183
|
$
|
78,054
|
$
|
78,627
|
$
|
77,691
|
||||||||||
|
Add: FTE adjustment
|
329
|
349
|
374
|
445
|
500
|
|||||||||||||||
|
Net interest income (FTE)
|
$
|
77,510
|
$
|
77,532
|
$
|
78,428
|
$
|
79,072
|
$
|
78,191
|
||||||||||
|
Average earning assets
|
$
|
8,862,518
|
$
|
8,738,350
|
$
|
8,724,404
|
$
|
8,781,991
|
$
|
8,712,163
|
||||||||||
|
Net interest margin (FTE)
|
3.52
|
%
|
3.52
|
%
|
3.57
|
%
|
3.61
|
%
|
3.64
|
%
|
||||||||||
|
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
|
||||||||||||||||||
|
1st Q
|
4th Q
|
3rd Q
|
2nd Q
|
1st Q
|
||||||||||||||||
|
Total equity
|
$
|
1,112,179
|
$
|
1,120,397
|
$
|
1,098,601
|
$
|
1,074,823
|
$
|
1,034,055
|
||||||||||
|
Intangible assets
|
285,955
|
286,789
|
287,633
|
288,507
|
289,400
|
|||||||||||||||
|
Total assets
|
$
|
9,953,543
|
$
|
9,715,925
|
$
|
9,661,386
|
$
|
9,635,718
|
$
|
9,533,510
|
||||||||||
|
Tangible equity to tangible assets
|
8.55
|
%
|
8.84
|
%
|
8.65
|
%
|
8.41
|
%
|
8.06
|
%
|
||||||||||
|
Return on average tangible common equity
|
2020
|
2019
|
||||||||||||||||||
|
1st Q
|
4th Q
|
3rd Q
|
2nd Q
|
1st Q
|
||||||||||||||||
|
Net income
|
$
|
10,368
|
$
|
28,960
|
$
|
32,379
|
$
|
30,555
|
$
|
29,127
|
||||||||||
|
Amortization of intangible assets (net of tax)
|
626
|
633
|
656
|
670
|
726
|
|||||||||||||||
|
Net income, excluding intangibles amortization
|
$
|
10,994
|
$
|
29,593
|
$
|
33,035
|
$
|
31,225
|
$
|
29,853
|
||||||||||
|
Average stockholders’ equity
|
$
|
1,129,595
|
$
|
1,109,225
|
$
|
1,085,961
|
$
|
1,053,750
|
$
|
1,025,753
|
||||||||||
|
Less: average goodwill and other intangibles
|
286,400
|
287,268
|
288,077
|
288,930
|
289,913
|
|||||||||||||||
|
Average tangible common equity
|
$
|
843,195
|
$
|
821,957
|
$
|
797,884
|
$
|
764,820
|
$
|
735,840
|
||||||||||
|
Return on average tangible common equity
|
5.24
|
%
|
14.28
|
%
|
16.43
|
%
|
16.38
|
%
|
16.45
|
%
|
||||||||||
| 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 disclosed as Wealth management
income.
|
| 5 |
Securities are shown at average amortized cost.
|
| 6 |
For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
|
| 7 |
The allowance for loan losses for December 31, 2019 was calculated based on the incurred losses methodology and beginning January 1, 2020, it was based on the CECL methodology. The
risk-based pooling of loans (segments) for incurred and CECL are not consistent. For illustrative purposes only, the loans and related incurred allowance at December 31, 2019 were grouped to conform with the CECL methodology.
|