Exhibit 99.1
FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS
| Contact: | Daryl R. Forsythe, CEO |
| | Michael J. Chewens, CFO |
| | NBT Bancorp Inc. |
| | 52 South Broad Street |
| | Norwich, NY 13815 |
| | 607-337-6416 |
NBT BANCORP ANNOUNCES QUARTERLY EARNINGS OF $13.1 MILLION;
DECLARES CASH DIVIDEND
NORWICH, NY (July 25, 2005) - NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income for the quarter ended June 30, 2005, was $13.1 million, or $0.40 per diluted share, up 5% on a per share basis from $12.6 million, or $0.38 per diluted share for the same period a year ago. Return on average assets and return on average equity were 1.22% and 16.21%, respectively, for the quarter ended June 30, 2005, compared with 1.24% and 16.05%, respectively, for the same period in 2004. The increase in net income for the quarter ended June 30, 2005, was primarily the result of a $2.6 million increase in net interest income and a $1.1 million increase in noninterest income that was partially offset by a $2.8 million increase in noninterest expense.
Net income for the six months ended June 30, 2005, was $25.9 million, or $0.79 per diluted share, up 5% on a per share basis compared with $24.9 million or $0.75 per diluted share for the first six months of 2004. Return on average assets and return on average equity were 1.23% and 15.99%, respectively, for the six months ended June 30, 2005, compared with 1.24% and 15.89%, respectively, for the same period in 2004. The increase in net income for the six months ended June 30, 2005, was primarily the result of a $4.4 million increase in net interest income and a $1.3 million increase in noninterest income that was partially offset by an increase in noninterest expense of $4.5 million.
NBT Chairman and CEO Daryl R. Forsythe stated, “We are pleased to report another solid quarter for the Company. Earnings and loan growth continued their positive trends. The combination of exceptional customer service and commercial lending expertise that we provide has attracted and retained a loyal customer base in the markets we serve. In addition, NBT’s expansion efforts into the Albany, Binghamton and northeastern Pennsylvania markets have delivered solid results in the areas of loan and deposit growth as well as noninterest income growth.”
Loan and Lease Quality and Provision for Loan and Lease Losses
Nonperforming loans at June 30, 2005 were $13.5 million or 0.45% of total loans and leases compared with $13.8 million or 0.50% of total loans and leases at June 30, 2004 and $16.2 million or 0.56% of total loans and leases at December 31, 2004. The Company’s allowance for loan and lease losses was 1.55% of loans and leases at June 30, 2005 compared with 1.58% at June 30, 2004, and 1.57% at December 31, 2004. The ratio of the allowance for loan and lease losses to nonperforming loans was 344.01% at June 30, 2005 compared with 315.52% at June 30, 2004, and 277.75% at December 31, 2004. Annualized net charge-offs to average loans and leases for the six months ended June 30, 2005, were 0.18%, compared with the 0.28% annualized ratio for the six months ended June 30, 2004, and the ratio for the year ended December 31, 2004 of 0.27%. The improvement in credit quality during the second quarter of 2005 was driven mainly by the sale of approximately $5.0 million in nonperforming loans.
For the quarter and six months ended June 30, 2005, the provision for loan and lease losses totaled $2.3 million and $4.1 million, respectively, compared with the $2.4 million and $4.6 million for the same periods in 2004. The slight decrease in the provision for loan and lease losses for the quarter and six months ended June 30, 2005, when compared with the same periods in 2004, was due primarily to improved credit quality and above-mentioned lower charge-offs offset somewhat by strong loan growth, as loans and leases were up 9% at June 30, 2005, when compared with the same period in 2004.
Net Interest Income
Net interest income was up 7% to $39.3 million for the quarter ended June 30, 2005, compared to $36.7 million for the same period a year ago. The increase in net interest income was attributable to 6% growth in average earning assets as well as a modest increase in the Company’s net interest margin, which was 4.02% for the quarter ended June 30, 2005, up from the 3.99% for the same period in 2004. Net interest income for the six months ended June 30, 2005, increased 6%, to $78.1 million from $73.8 million in the same period for 2004. The increase in net interest income was attributable to 6% growth in average earning assets for the period as well as a modest increase in the Company’s net interest margin, which was 4.06% for the six months ended June 30, 2005, up slightly from the 4.04% for the same period in 2004. The improvement in net interest margin for the quarter and the six months ended June 30, 2005, compared to the same periods in 2004 resulted primarily from earning assets repricing up faster than interest-bearing liabilities. NBT President Martin A. Dietrich commented, “Effective management of our balance sheet has enabled NBT to maintain a stable net interest margin over the past several quarters during this period of short-term rising rates.”
Noninterest Income
Noninterest income for the quarter ended June 30, 2005 was $11.1 million, up $1.1 million or 11% from $10.0 million for the same period in 2004. Retirement plan administration fees were $1.2 million. This is a new service from the acquisition of EPIC Advisors, Inc. in January 2005. Other income increased $0.5 million from increases in consumer and commercial banking fees and title search revenue. Offsetting these increases was a $1.0 million decrease in broker/dealer and insurance revenue from the sale of the Company’s broker/dealer subsidiary M. Griffith Inc. in March 2005.
Noninterest income for the six months ended June 30, 2005 was $21.8 million, up $1.3 million or 7% from $20.4 million for the same period in 2004. Retirement plan administration fees totaled $2.0 million, from the previously mentioned acquisition of EPIC Advisors, Inc. in January 2005. ATM and debit card fees increased $0.3 million compared with the same period a year ago, due to growth from transaction deposit accounts, which has led to an increase in the Company’s debit card base. Offsetting these increases was a $1.4 million decrease in broker/dealer and insurance revenue from the previously mentioned sale of the Company’s broker/dealer subsidiary M. Griffith Inc. in March 2005.
Noninterest Expense
Noninterest expense for the quarter ended June 30, 2005 was $28.7 million, up from $25.9 million for the same period in 2004. Salaries and employee benefits for the quarter ended June 30, 2005, increased $2.3 million over the same period in 2004, mainly from higher salaries from merit increases and higher incentive compensation costs. Other operating expense for the quarter ended June 30, 2005, increased $0.5 million compared with the same period in 2004, primarily from increases in insurance costs and loan underwriting expenses.
Noninterest expense for the six months ended June 30, 2005 was $57.6 million, up $4.5 million from $53.1 million for the same period in 2004. The increase in noninterest expense was driven by increases in salaries and employee benefits, occupancy and equipment expense. Salaries and employee benefits increased $3.4 million, mainly from increases in salary expense and employee benefit expense, reflecting merit increases as well as higher pension and incentive compensation costs. Occupancy expense increased $0.3 million from branch expansion in the Albany, Binghamton and northeastern Pennsylvania markets. Equipment expense increased $0.4 million, principally from ATM and technology upgrades.
Total assets were $4.4 billion at June 30, 2005 up $0.3 billion from $4.1 billion at June 30, 2004. Loans and leases increased $0.2 billion or 9% from $2.8 billion at June 30, 2004 to $3.0 billion at June 30, 2005. Loan growth was fueled by solid production from consumer and commercial loan products. Total deposits were $3.2 billion at June 30, 2005 up 5% from the same period at June 30, 2004. Stockholders’ equity was $330.7 million representing total equity to total assets of 7.55% at June 30, 2005 compared with $307.7 million or a total equity to total asset ratio of 7.46% at June 30, 2004. Under previously announced stock repurchase plans, the Company acquired 671,543 shares of its common stock at an average price of $22.84 per share totaling $15.3 million for the six months ended June 30, 2005.
Dividend Declared
The NBT Board of Directors declared a third-quarter cash dividend of $0.19 per share at a meeting held today. The dividend will be paid on September 15, 2005 to shareholders of record as of September 1, 2005.
Corporate Overview
NBT is a financial services holding company headquartered in Norwich, NY, with total assets of $4.4 billion at June 30, 2005. The Company primarily operates through NBT Bank, N.A., a full-service community bank with two divisions and through a financial services company. NBT Bank, N.A. has 114 locations, including 74 NBT Bank offices in upstate New York and 40 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. In June 2005, NBT announced that it had agreed to acquire CNB Bancorp, Inc. (CNB), with total assets of approximately $400 million, which is headquartered in Gloversville, NY. The merger is expected to close in the fourth quarter of 2005 pending regulatory and CNB shareholder approval. More information about NBT and its divisions can be found on the Internet at www.nbtbancorp.com, www.nbtbank.com, www.pennstarbank.com and www.epic1st.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 Bancorp 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, that 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, the following possibilities: (1) competitive pressures among depository and other financial institutions may increase significantly; (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 the businesses in which NBT is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than NBT; and (7) adverse changes may occur in the securities markets or with respect to inflation. Forward-looking statements speak only as of the date they are made. Except as required by law, NBT does not undertake to update forward-looking statements to reflect subsequent circumstances or events.
