Exhibit 99.1
FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS
| Contact: | Martin A. Dietrich, CEO |
Michael J. Chewens, CFO
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
607-337-6119
NBT BANCORP INC. ANNOUNCES 2013 SECOND QUARTER EARNINGS
Highlights:
| · | Core Diluted EPS $0.40, up from $0.39 in the first quarter |
| · | Loan growth for the second quarter was 7.4% (annualized) |
| · | Net Interest Margin was stable at 3.69% |
| · | Leading asset quality indicators showed continued improvement in Q2 |
NORWICH, NY (July 22, 2013) – NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today net income for the three months ended June 30, 2013 was $16.9 million, up from $7.6 million from the prior quarter, which included $10.7 million in merger related expenses. Reported results from the second quarter of 2013 include the impact of the acquisition of Alliance Financial Corporation (“Alliance”), and $1.3 million in merger related expenses. Reported earnings per diluted share for the three months ended June 30, 2013 was $0.38 as compared to $0.21 from the previous quarter.
Core net income for the three months ended June 30, 2013 was $17.8 million, up 25.0% from $14.3 million from the previous quarter, due primarily to the full quarter impact from the March 8, 2013 acquisition of Alliance. Core diluted earnings per share for the three months ended June 30, 2013 was $0.40, up from $0.39 for the previous quarter.
Reported net income from the six months ended June 30, 2013 was $24.6 million, down from $26.9 million for the same period last year. 2013 results included the impact of the acquisition of Alliance, including approximately $12.0 million in merger related expenses. Reported diluted earnings per share for the six months ended June 30, 2013 was $0.61, as compared to $0.80 for the same period in 2012.
Core net income for the six months ended June 30, 2013 was $32.1 million, up 19.6% from $26.8 million from the same period in 2012, due primarily to the impact of the Alliance acquisition. Core diluted earnings per share for the six months ended June 30, 2013 was $0.79, as compared to $0.80 for the same period last year.
"We are pleased to report that NBT continued to produce strong results through the first two quarters of 2013," said NBT CEO Martin Dietrich. "Our recent acquisition of Alliance and our consistent ability to generate organic loan growth are key drivers of these results that demonstrate our combined focus on banking fundamentals and disciplined, strategic acquisition are yielding positive results. We continue to operate in an environment that presents both economic and regulatory challenges, but our seasoned team of financial professionals remains focused on delivering long-term value to our shareholders and customers."
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Net interest income was $61.7 million for the three months ended June 30, 2013, up 18.2% from the prior quarter. This increase was due primarily to the 16.5% increase in average earning assets and a stable net interest margin. The increase in earnings assets in the second quarter 2013 compared to the prior quarter resulted primarily from the acquisition of Alliance combined with strong loan growth during the second quarter of 2013.
The Company’s Federal Taxable Equivalent (“FTE”) net interest margin was 3.69% for the three months ended June 30, 2013, up slightly from 3.68% from the prior quarter. Rate compression on earning assets continued to negatively impact net interest margin in the second quarter of 2013 as evidenced by decreasing loan yields from 4.87% for the first quarter of 2013 to 4.76% for the second quarter of 2013. In addition, yields on available for sale securities declined 12 basis points (“bp”) in the second quarter of 2013 from the prior quarter due primarily to the reinvestment of cash flows from maturing securities into lower yielding securities in the current rate environment. The rate compression on earning assets was offset by the 14 bp decrease in the rates paid on interest bearing liabilities in the second quarter of 2013 versus the previous quarter. This decrease was primarily driven by decreases in rates paid on interest bearing deposits, most notably time deposits, as well as a reduction in the cost of long term borrowings as maturing higher cost borrowings were replaced with lower rate short term borrowings during the period.
Net interest income was $113.8 million for the six months ended June 30, 2013, up 14.8% from the same period in 2012. This increase from the previous year was due primarily to the 20.1% increase in average earning assets for the six months ended June 30, 2013 over the prior year. The acquisition of Alliance in March 2013 as well as strong loan growth during the second quarter of 2013 contributed to the growth in average earning assets.
The Company’s FTE net interest margin was 3.68% for the six months ended June 30, 2013, down from 3.86% for the same period last year. Rate compression on earning assets continued to negatively impact net interest margin for the first six months of 2013 as evidenced by decreasing loan yields from 5.25% for the first six months of 2012 to 4.81% for the first six months of 2013. In addition, yields on available for sale securities declined 54 bp in the first six months of 2013 as compared to the same period in 2012. The rate compression on earning assets was partially offset by the 22 bp decrease in the rates paid on interest bearing liabilities in the first six months of 2013 as compared to the same period in 2012.
Noninterest income for the three months ended June 30, 2013 was $25.5 million, up 1.2% from the prior quarter. Substantial increases in trust revenue (up $1.8 million) and ATM and debit card fees (up $0.8 million) for the second quarter of 2013 versus the prior quarter were primarily driven by the acquisition of Alliance. These increases were partially offset by a 16.5% decrease in insurance and other financial services revenue from the previous quarter, due primarily to insurance contingent revenue recorded during the first quarter.
Noninterest income for the six months ended June 30, 2013 was $50.8 million, up 16.1% from the same period in 2012, with the primary drivers being the aforementioned increases in trust revenue and ATM and debit card fees. In addition, the Company experienced a significant increase (10.6%) in insurance and financial services revenue for the six months ended June 30, 2013 as compared to the same period in 2012, due primarily to an increase in insurance contingent revenue in 2013. Retirement plan administration fees were also up 18.9% for the six months ended June 30, 2013 as compared to the same period in 2012 due to growth in new business of 2012.
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Noninterest expense for the three months ended June 30, 2013 was $56.5 million, down $4.3 million or 7.0%, from the prior quarter. Excluding merger expenses totaling $1.3 million and $10.7 million during the second quarter and first quarter of 2013, respectively, noninterest expense was up $5.2 million, or 10.3%, for the second quarter of 2013 as compared to the prior quarter. Salaries and employee benefits were up 7.8% for the three months ended June 30, 2013 as compared to the prior quarter due primarily to the acquisition of Alliance. Income tax expense for the three month period ended June 30, 2013 was $7.4 million, up from $3.4 million from the previous quarter due to the increase in pre-tax income during the second quarter. The effective tax rate was 30.5% for the first and second quarters of 2013.
Noninterest expense for the six months ended June 30, 2013 was $117.2 million, up $21.3 million or 22.2%, from the same period in 2012. Excluding merger expenses totaling $12.0 million and $1.3 million for the six months ended June 30, 2013 and 2012, respectively, noninterest expense was up $10.7 million, or 11.3%, for the first six months of 2013 as compared to the same period in 2012. Several noninterest expense categories were affected by the acquisition of Alliance and Hampshire First Bank with salaries and employee benefits and occupancy expenses being the primary drivers of the increase over last year. Income tax expense for the six months ended June 30, 2013 was $10.8 million, down from $11.5 million from the same period in 2012 due to the decrease in pre-tax income for the first six months of 2013, offset slightly by the increase in the effective tax rate to 30.5% for the six months ended June 30, 2013 as compared with 30.0% for the same period last year.
Asset Quality
The Company recorded a provision for loan losses of $6.4 million for the three months ended June 30, 2013, compared with $5.7 million for the previous quarter. This increase was due primarily to a $1.4 million specific reserve established on a commercial real estate loan during the second quarter and loan growth during the period, partially offset by a general improvement in asset quality indicators. Net charge-offs were $4.0 million for the three months ended June 30, 2013, down from $6.3 million for the previous quarter, due primarily to the first quarter charge-off of one large commercial loan that was previously reserved for. Annualized net charge-offs to average loans for the three months ended June 30, 2013 was 0.30%, compared to 0.56% for the previous quarter.
The Company recorded a provision for loan losses of $12.1 million for the six months ended June 30, 2013, compared with $8.6 million for the same period in 2012. This increase was due primarily to the aforementioned specific reserve in the second quarter of 2013 and organic loan growth during the period, partially offset by a general improvement in asset quality indicators. Net charge-offs were $10.2 million for the six months ended June 30, 2013, up from $9.2 million from the same period in 2012 due primarily to the 2013 first quarter charge-off of one large commercial loan that was previously reserved for. Annualized net charge-offs to average loans for the six months ended June 30, 2013 was 0.42%, compared to 0.48% for the same period last year.
Nonperforming loans to total loans improved to 0.80% at June 30, 2013, down 3 bps from the prior quarter, and down from 0.98% at December 31, 2012. Past due loans as a percentage of total loans was 0.71% at June 30, 2013, down from 0.81% at March 31, 2013.
The allowance for loan losses totaled $71.2 million at June 30, 2013, compared to $68.7 million at March 31, 2013 and $69.3 million at December 31, 2012. The allowance for loan losses as a percentage of loans was 1.35% (1.68% excluding acquired loans with no related allowance recorded) at June 30, 2013, compared to 1.32% (1.69% excluding acquired loans with no related allowance recorded) at March 31, 2013 and 1.62% (1.72% excluding acquired loans with no related allowance recorded) at December 31, 2012.
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Balance Sheet
Total assets were $7.5 billion at June 30, 2013, up $1.5 billion (approximately $1.4 billion from Alliance acquisition) or 24.7% from December 31, 2012. Loans were $5.3 billion at June 30, 2013, up $1.0 billion from December 31, 2012, primarily due to approximately $904 million from the Alliance acquisition coupled with strong organic loan growth during the second quarter of 2013. Total deposits were $5.9 billion at June 30, 2013, up $1.1 billion from December 31, 2012, primarily due to the Alliance acquisition. Stockholders’ equity was $791.6 million, representing a total equity-to-total assets ratio of 10.51% at June 30, 2013, compared with $582.3 million or a total equity-to-total assets ratio of 9.64% at December 31, 2012.
Stock Repurchase Program
Under a previously disclosed stock repurchase plan, the Company purchased 267,425 shares of its common stock during the six month period ended June 30, 2013, for a total of $5.5 million at an average price of $20.42 per share. At June 30, 2013, there were 480,588 shares available for repurchase under this repurchase plan, which expires on December 31, 2013.
On July 22, 2013, the NBT Board of Directors authorized a new repurchase program for NBT to repurchase up to an additional 1,000,000 shares (approximately 2%) of its outstanding common stock, effective July 24, 2013, as market conditions warrant in open market and privately negotiated transactions. This plan expires on December 31, 2014.
Dividend
The NBT Board of Directors declared a 2013 third-quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on September 15, 2013 to shareholders of record as of September 1, 2013.
Corporate Overview
NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $7.5 billion at June 30, 2013. The company primarily operates through NBT Bank, N.A., a full-service community bank with three geographic divisions, and through two financial services companies. NBT Bank, N.A. has 161 locations, including 121 NBT Bank offices in upstate New York, northwestern Vermont and western Massachusetts, 35 Pennstar Bank offices in northeastern Pennsylvania, and 5 Hampshire First Bank offices in southern New Hampshire. EPIC Advisors, Inc., based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. Mang Insurance Agency, LLC, based in Norwich, N.Y., is a full-service insurance agency. More information about NBT and its divisions can be found on the Internet at: www.nbtbancorp.com, www.nbtbank.com, www.pennstarbank.com, www.hampshirefirst.com, www.epic1st.com and www.manginsurance.com.
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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; (7) adverse changes may occur in the securities markets or with respect to inflation; (8) operating costs, customer losses and business disruption following the recently completed acquisition of alliance, including adverse effects of relationships with employees, may be greater than expected; and (9) the risk that the anticipated benefits, costs savings and any other savings from the merger may not be fully realized or may take longer than expected to realize. 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.
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). These measures adjust GAAP measures to exclude the effects of sales of securities and certain non-recurring and merger-related expenses. Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provided useful information that is important to an understanding of the operating results of NBT’s core business (due to the non-recurring nature of the excluded items). Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company.
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| NBT Bancorp Inc. and Subsidiaries |
| SELECTED FINANCIAL DATA |
| (unaudited, dollars in thousands except per share data) |
| | 2013 | | | 2012 | |
| | 2nd Q | | | 1st Q | | | 4th Q | | | 3rd Q | | | 2nd Q | |
| Reconciliation of Non-GAAP Financial Measures: | | | | | | | | | | | | | | | |
| Reported net income (GAAP) | | $ | 16,916 | | | $ | 7,649 | | | $ | 13,116 | | | $ | 14,535 | | | $ | 13,257 | |
| Adj: Loss / (Gain) on sale of securities, net | | | 61 | | | | (1,145 | ) | | | (21 | ) | | | (26 | ) | | | (97 | ) |
| Adj: Other adjustments (1) | | | - | | | | - | | | | - | | | | (792 | ) | | | (115 | ) |
| Plus: Merger related expenses | | | 1,269 | | | | 10,681 | | | | 713 | | | | 558 | | | | 826 | |
| Total Adjustments | | | 1,330 | | | | 9,536 | | | | 692 | | | | (260 | ) | | | 614 | |
| Income tax effect on adjustments | | | (406 | ) | | | (2,908 | ) | | | (211 | ) | | | 79 | | | | (187 | ) |
| Core net income | | $ | 17,840 | | | $ | 14,277 | | | $ | 13,597 | | | $ | 14,354 | | | $ | 13,684 | |
| | | | | | | | | | | | | | | | | | | | |
| Profitability: | | | | | | | | | | | | | | | | | | | | |
| Core Diluted Earnings Per Share | | $ | 0.40 | | | $ | 0.39 | | | $ | 0.40 | | | $ | 0.42 | | | $ | 0.41 | |
| Diluted Earnings Per Share | | $ | 0.38 | | | $ | 0.21 | | | $ | 0.39 | | | $ | 0.43 | | | $ | 0.40 | |
| Weighted Average Diluted | | | | | | | | | | | | | | | | | | | | |
| Common Shares Outstanding | | | 44,316,531 | | | | 36,794,356 | | | | 33,987,465 | | | | 33,961,375 | | | | 33,492,659 | |
| Core Return on Average Assets (2) | | | 0.95 | % | | | 0.90 | % | | | 0.89 | % | | | 0.96 | % | | | 0.95 | % |
| Return on Average Assets (2) | | | 0.90 | % | | | 0.48 | % | | | 0.86 | % | | | 0.97 | % | | | 0.92 | % |
| Core Return on Average Equity (2) | | | 8.88 | % | | | 9.01 | % | | | 9.34 | % | | | 10.00 | % | | | 9.97 | % |
| Return on Average Equity (2) | | | 8.42 | % | | | 4.83 | % | | | 9.01 | % | | | 10.13 | % | | | 9.66 | % |
| Core Return on Average Tangible Common Equity (2)(4) | | | 14.57 | % | | | 13.58 | % | | | 13.71 | % | | | 14.74 | % | | | 14.35 | % |
| Return on Average Tangible Common Equity (2)(4) | | | 13.85 | % | | | 7.49 | % | | | 13.25 | % | | | 14.93 | % | | | 13.92 | % |
| Net Interest Margin (3) | | | 3.69 | % | | | 3.68 | % | | | 3.83 | % | | | 3.90 | % | | | 3.82 | % |
| Six Months Ended June 30, | | | | | | |
| | | | | | |
| Reconciliation of Non-GAAP Financial Measures: | | 2013 | | | 2012 | |
| Reported net income (GAAP) | | $ | 24,565 | | | $ | 26,907 | |
| Adj: Loss / (Gain) on sale of securities, net | | | (1,084 | ) | | | (552 | ) |
| Adj: Other adjustments (5) | | | - | | | | (865 | ) |
| Plus: Merger related expenses | | | 11,950 | | | | 1,337 | |
| Total Adjustments | | | 10,866 | | | | (80 | ) |
| Income tax effect on adjustments | | | (3,314 | ) | | | 24 | |
| Core net income | | $ | 32,117 | | | $ | 26,851 | |
| | | | | | | | |
| Profitability: | | | | | | | | |
| Core Diluted Earnings Per Share | | $ | 0.79 | | | $ | 0.80 | |
| Diluted Earnings Per Share | | $ | 0.61 | | | $ | 0.80 | |
| Weighted Average Diluted | | | | | | | | |
| Common Shares Outstanding | | | 40,574,934 | | | | 33,452,970 | |
| Core Return on Average Assets (2) | | | 0.93 | % | | | 0.94 | % |
| Return on Average Assets (2) | | | 0.71 | % | | | 0.94 | % |
| Core Return on Average Equity (2) | | | 8.93 | % | | | 9.86 | % |
| Return on Average Equity (2) | | | 6.83 | % | | | 9.89 | % |
| Core Return on Average Tangible Common Equity (2)(4) | | | 14.11 | % | | | 14.18 | % |
| Return on Average Tangible Common Equity (2)(4) | | | 10.93 | % | | | 14.21 | % |
| Net Interest Margin (3) | | | 3.68 | % | | | 3.86 | % |
| (1) | Other adjustments were primarily flood insurance recoveries |
| (3) | Calculated on a FTE basis |
| (4) | Excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows: |
| Average stockholders' equity | | $ | 806,200 | | | $ | 642,693 | | | $ | 579,211 | | | $ | 570,880 | | | $ | 551,865 | |
| Less: average goodwill and other intangibles | | | 292,775 | | | | 200,779 | | | | 169,612 | | | | 169,445 | | | | 154,058 | |
| Average tangible common equity | | $ | 513,425 | | | $ | 441,914 | | | $ | 409,599 | | | $ | 401,435 | | | $ | 397,807 | |
| (5) | Other adjustments for the six months ended June 30, 2012 were a $750 prepayment penalty fee and a flood insurance recovery |
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| NBT Bancorp Inc. and Subsidiaries |
| SELECTED FINANCIAL DATA |
| (unaudited, dollars in thousands except per share data) |
| | 2013 | | | 2012 | |
| | 2nd Q | | | 1st Q | | | 4th Q | | | 3rd Q | | | 2nd Q | |
| Balance Sheet Data: | | | | | | | | | | | | | | | |
| Securities Available for Sale | | $ | 1,390,403 | | | $ | 1,465,791 | | | $ | 1,147,999 | | | $ | 1,191,107 | | | $ | 1,221,706 | |
| Securities Held to Maturity | | | 122,302 | | | | 62,474 | | | | 60,563 | | | | 61,302 | | | | 64,387 | |
| Net Loans | | | 5,219,526 | | | | 5,126,299 | | | | 4,208,282 | | | | 4,180,385 | | | | 4,090,480 | |
| Total Assets | | | 7,534,518 | | | | 7,610,831 | | | | 6,042,259 | | | | 6,028,916 | | | | 5,967,568 | |
| Total Deposits | | | 5,878,176 | | | | 6,015,963 | | | | 4,784,349 | | | | 4,806,015 | | | | 4,688,907 | |
| Total Borrowings | | | 795,918 | | | | 715,728 | | | | 605,855 | | | | 579,931 | | | | 654,772 | |
| Total Liabilities | | | 6,742,943 | | | | 6,807,536 | | | | 5,459,986 | | | | 5,452,255 | | | | 5,401,063 | |
| Stockholders' Equity | | | 791,575 | | | | 803,295 | | | | 582,273 | | | | 576,661 | | | | 566,505 | |
| | | | | | | | | | | | | | | | | | | | |
| Asset Quality: | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual Loans | | $ | 40,525 | | | $ | 41,726 | | | $ | 39,676 | | | $ | 42,661 | | | $ | 43,924 | |
| 90 Days Past Due and Still Accruing | | | 2,004 | | | | 1,651 | | | | 2,448 | | | | 2,963 | | | | 1,629 | |
| Total Nonperforming Loans | | | 42,529 | | | | 43,377 | | | | 42,124 | | | | 45,624 | | | | 45,553 | |
| Other Real Estate Owned | | | 3,757 | | | | 2,864 | | | | 2,276 | | | | 1,863 | | | | 1,815 | |
| Total Nonperforming Assets | | | 46,286 | | | | 46,241 | | | | 44,400 | | | | 47,487 | | | | 47,368 | |
| Allowance for Loan Losses | | | 71,184 | | | | 68,734 | | | | 69,334 | | | | 70,734 | | | | 70,734 | |
| Allowance for Loan Losses to Total Originated Loans (6) | | | 1.68 | % | | | 1.69 | % | | | 1.72 | % | | | 1.77 | % | | | 1.81 | % |
| Allowance for Loan Losses to Total Loans | | | 1.35 | % | | | 1.32 | % | | | 1.62 | % | | | 1.66 | % | | | 1.70 | % |
| Total Nonperforming Loans to Total Loans | | | 0.80 | % | | | 0.83 | % | | | 0.98 | % | | | 1.07 | % | | | 1.09 | % |
| Total Nonperforming Assets to Total Assets | | | 0.61 | % | | | 0.61 | % | | | 0.73 | % | | | 0.79 | % | | | 0.79 | % |
| Past Due Loans to Total Loans | | | 0.71 | % | | | 0.81 | % | | | 0.71 | % | | | 0.65 | % | | | 0.54 | % |
| Allowance for Loan Losses to Total Nonperforming Loans | | | 167.38 | % | | | 158.46 | % | | | 164.60 | % | | | 155.04 | % | | | 155.28 | % |
| Net Charge-Offs to Average Loans (2) | | | 0.30 | % | | | 0.56 | % | | | 0.78 | % | | | 0.45 | % | | | 0.48 | % |
| | | | | | | | | | | | | | | | | | | | |
| Capital: | | | | | | | | | | | | | | | | | | | | |
| Equity to Assets | | | 10.51 | % | | | 10.55 | % | | | 9.64 | % | | | 9.56 | % | | | 9.49 | % |
| Book Value Per Share | | $ | 18.18 | | | $ | 18.36 | | | $ | 17.24 | | | $ | 17.09 | | | $ | 16.79 | |
| Tangible Book Value Per Share (7) | | $ | 11.46 | | | $ | 11.67 | | | $ | 12.23 | | | $ | 12.06 | | | $ | 11.76 | |
| Tier 1 Leverage Ratio (8) | | | 8.72 | % | | | 10.25 | % | | | 8.54 | % | | | 8.51 | % | | | 8.59 | % |
| Tier 1 Capital Ratio | | | 11.20 | % | | | 11.33 | % | | | 11.00 | % | | | 10.82 | % | | | 10.78 | % |
| Total Risk-Based Capital Ratio | | | 12.45 | % | | | 12.58 | % | | | 12.25 | % | | | 12.07 | % | | | 12.03 | % |
| Common Stock Price (End of Period) | | $ | 21.17 | | | $ | 22.15 | | | $ | 20.27 | | | $ | 22.07 | | | $ | 21.59 | |
| (6) | Excludes acquired loans with no related allowance recorded |
| (7) | Stockholders' equity less goodwill and intangible assets divided by common shares outstanding |
| (8) | The Tier 1 Leverage Ratio for the first quarter of 2013 was impacted by timing of the acquisition of Alliance on March 8, 2013 |
Note: Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.
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| NBT Bancorp Inc. and Subsidiaries |
| CONSOLIDATED BALANCE SHEETS |
| (unaudited, dollars in thousands) |
| | June 30, | | | December 31, | |
| ASSETS | | 2013 | | | 2012 | |
| Cash and due from banks | | $ | 142,570 | | | $ | 157,094 | |
| Short term interest bearing accounts | | | 1,117 | | | | 6,574 | |
| Securities available for sale, at fair value | | | 1,390,403 | | | | 1,147,999 | |
Securities held to maturity fair value of $121,069 and $61,535 at June 30, 2013 and December 31, 2012, respectively) | | | 122,302 | | | | 60,563 | |
| Trading securities | | | 5,092 | | | | 3,918 | |
| Federal Reserve and Federal Home Loan Bank stock | | | 43,491 | | | | 29,920 | |
| Loans | | | 5,290,710 | | | | 4,277,616 | |
| Less allowance for loan losses | | | 71,184 | | | | 69,334 | |
| Net loans | | | 5,219,526 | | | | 4,208,282 | |
| Premises and equipment, net | | | 87,811 | | | | 77,875 | |
| Goodwill | | | 264,376 | | | | 152,373 | |
| Intangible assets, net | | | 28,204 | | | | 16,962 | |
| Bank owned life insurance | | | 112,907 | | | | 80,702 | |
| Other assets | | | 116,719 | | | | 99,997 | |
| TOTAL ASSETS | | $ | 7,534,518 | | | $ | 6,042,259 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| Deposits: | | | | | | | | |
| Demand (noninterest bearing) | | $ | 1,516,385 | | | $ | 1,242,712 | |
| Savings, NOW, and money market | | | 3,256,753 | | | | 2,558,376 | |
| Time | | | 1,105,038 | | | | 983,261 | |
| Total deposits | | | 5,878,176 | | | | 4,784,349 | |
| Short-term borrowings | | | 385,611 | | | | 162,941 | |
| Long-term debt | | | 309,111 | | | | 367,492 | |
| Trust preferred debentures | | | 101,196 | | | | 75,422 | |
| Other liabilities | | | 68,849 | | | | 69,782 | |
| Total liabilities | | | 6,742,943 | | | | 5,459,986 | |
| | | | | | | | |
| Total stockholders' equity | | | 791,575 | | | | 582,273 | |
| | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 7,534,518 | | | $ | 6,042,259 | |
Page 9 of 12
| NBT Bancorp Inc. and Subsidiaries |
| CONSOLIDATED STATEMENTS OF INCOME |
| (unaudited, dollars in thousands except per share data) |
| | Three Months Ended | | | Six Months Ended | |
| | June 30, | | | June 30, | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| Interest, fee and dividend income: | | | | | | | | | | | | |
| Loans | | $ | 62,031 | | | $ | 50,509 | | | $ | 115,726 | | | $ | 100,717 | |
| Securities available for sale | | | 6,537 | | | | 7,108 | | | | 12,283 | | | | 14,474 | |
| Securities held to maturity | | | 548 | | | | 617 | | | | 1,073 | | | | 1,257 | |
| Other | | | 488 | | | | 413 | | | | 891 | | | | 805 | |
| Total interest, fee and dividend income | | | 69,604 | | | | 58,647 | | | | 129,973 | | | | 117,253 | |
| Interest expense: | | | | | | | | | | | | | | | | |
| Deposits | | | 4,296 | | | | 4,834 | | | | 8,446 | | | | 9,977 | |
| Short-term borrowings | | | 67 | | | | 48 | | | | 109 | | | | 89 | |
| Long-term debt | | | 3,026 | | | | 3,580 | | | | 6,635 | | | | 7,161 | |
| Trust preferred debentures | | | 560 | | | | 434 | | | | 988 | | | | 883 | |
| Total interest expense | | | 7,949 | | | | 8,896 | | | | 16,178 | | | | 18,110 | |
| Net interest income | | | 61,655 | | | | 49,751 | | | | 113,795 | | | | 99,143 | |
| Provision for loan losses | | | 6,402 | | | | 4,103 | | | | 12,060 | | | | 8,574 | |
| Net interest income after provision for loan losses | | | 55,253 | | | | 45,648 | | | | 101,735 | | | | 90,569 | |
| Noninterest income: | | | | | | | | | | | | | | | | |
| Insurance and other financial services revenue | | | 5,755 | | | | 5,279 | | | | 12,648 | | | | 11,433 | |
| Service charges on deposit accounts | | | 4,933 | | | | 4,571 | | | | 9,256 | | | | 8,912 | |
| ATM and debit card fees | | | 4,044 | | | | 3,063 | | | | 7,286 | | | | 6,025 | |
| Retirement plan administration fees | | | 2,957 | | | | 2,411 | | | | 5,639 | | | | 4,744 | |
| Trust | | | 4,699 | | | | 2,312 | | | | 7,612 | | | | 4,441 | |
| Bank owned life insurance income | | | 886 | | | | 618 | | | | 1,735 | | | | 1,589 | |
| Net securities (losses) gains | | | (61 | ) | | | 97 | | | | 1,084 | | | | 552 | |
| Other | | | 2,324 | | | | 2,331 | | | | 5,506 | | | | 6,042 | |
| Total noninterest income | | | 25,537 | | | | 20,682 | | | | 50,766 | | | | 43,738 | |
| Noninterest expense: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 29,160 | | | | 24,992 | | | | 56,207 | | | | 51,717 | |
| Occupancy | | | 5,219 | | | | 4,222 | | | | 10,196 | | | | 8,713 | |
| Data processing and communications | | | 3,854 | | | | 3,431 | | | | 7,309 | | | | 6,689 | |
| Professional fees and outside services | | | 3,237 | | | | 2,388 | | | | 6,138 | | | | 5,113 | |
| Equipment | | | 2,910 | | | | 2,409 | | | | 5,492 | | | | 4,789 | |
| Office supplies and postage | | | 1,656 | | | | 1,574 | | | | 3,246 | | | | 3,245 | |
| FDIC expenses | | | 1,273 | | | | 942 | | | | 2,403 | | | | 1,873 | |
| Advertising | | | 1,000 | | | | 805 | | | | 1,723 | | | | 1,607 | |
| Amortization of intangible assets | | | 1,351 | | | | 841 | | | | 2,202 | | | | 1,660 | |
| Loan collection and other real estate owned | | | 421 | | | | 799 | | | | 1,139 | | | | 1,437 | |
| Merger related | | | 1,269 | | | | 826 | | | | 11,950 | | | | 1,337 | |
| Other operating | | | 5,100 | | | | 4,161 | | | | 9,150 | | | | 7,684 | |
| Total noninterest expense | | | 56,450 | | | | 47,390 | | | | 117,155 | | | | 95,864 | |
| Income before income taxes | | | 24,340 | | | | 18,940 | | | | 35,346 | | | | 38,443 | |
| Income taxes | | | 7,424 | | | | 5,683 | | | | 10,781 | | | | 11,536 | |
| Net income | | $ | 16,916 | | | $ | 13,257 | | | $ | 24,565 | | | $ | 26,907 | |
| Earnings Per Share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.39 | | | $ | 0.40 | | | $ | 0.61 | | | $ | 0.81 | |
| Diluted | | $ | 0.38 | | | $ | 0.40 | | | $ | 0.61 | | | $ | 0.80 | |
Note: Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.
Page 10 of 12
| NBT Bancorp Inc. and Subsidiaries |
| QUARTERLY CONSOLIDATED STATEMENTS OF INCOME |
| (unaudited, dollars in thousands except per share data) |
| | 2013 | | | 2012 | | | | |
| | 2nd Q | | | 1st Q | | | 4th Q | | | 3rd Q | | | 2nd Q | | | 1st Q | |
| Interest, fee and dividend income: | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 62,031 | | | $ | 53,695 | | | $ | 53,924 | | | $ | 53,817 | | | $ | 50,509 | | | $ | 50,208 | |
| Securities available for sale | | | 6,537 | | | | 5,746 | | | | 5,981 | | | | 6,550 | | | | 7,108 | | | | 7,366 | |
| Securities held to maturity | | | 548 | | | | 525 | | | | 549 | | | | 572 | | | | 617 | | | | 640 | |
| Other | | | 488 | | | | 403 | | | | 403 | | | | 348 | | | | 413 | | | | 392 | |
| Total interest, fee and dividend income | | | 69,604 | | | | 60,369 | | | | 60,857 | | | | 61,287 | | | | 58,647 | | | | 58,606 | |
| Interest expense: | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 4,296 | | | | 4,150 | | | | 4,327 | | | | 4,544 | | | | 4,834 | | | | 5,143 | |
| Short-term borrowings | | | 67 | | | | 42 | | | | 39 | | | | 60 | | | | 48 | | | | 41 | |
| Long-term debt | | | 3,026 | | | | 3,609 | | | | 3,627 | | | | 3,640 | | | | 3,580 | | | | 3,581 | |
| Trust preferred debentures | | | 560 | | | | 428 | | | | 411 | | | | 436 | | | | 434 | | | | 449 | |
| Total interest expense | | | 7,949 | | | | 8,229 | | | | 8,404 | | | | 8,680 | | | | 8,896 | | | | 9,214 | |
| Net interest income | | | 61,655 | | | | 52,140 | | | | 52,453 | | | | 52,607 | | | | 49,751 | | | | 49,392 | |
| Provision for loan losses | | | 6,402 | | | | 5,658 | | | | 6,940 | | | | 4,755 | | | | 4,103 | | | | 4,471 | |
| Net interest income after provision for loan losses | | | 55,253 | | | | 46,482 | | | | 45,513 | | | | 47,852 | | | | 45,648 | | | | 44,921 | |
| Noninterest income: | | | | | | | | | | | | | | | | | | | | | | | | |
| Insurance and other financial services revenue | | | 5,755 | | | | 6,893 | | | | 5,363 | | | | 5,591 | | | | 5,279 | | | | 6,154 | |
| Service charges on deposit accounts | | | 4,933 | | | | 4,323 | | | | 4,687 | | | | 4,626 | | | | 4,571 | | | | 4,341 | |
| ATM and debit card fees | | | 4,044 | | | | 3,242 | | | | 2,955 | | | | 3,378 | | | | 3,063 | | | | 2,962 | |
| Retirement plan administration fees | | | 2,957 | | | | 2,682 | | | | 2,635 | | | | 2,718 | | | | 2,411 | | | | 2,333 | |
| Trust | | | 4,699 | | | | 2,913 | | | | 2,489 | | | | 2,242 | | | | 2,312 | | | | 2,129 | |
| Bank owned life insurance income | | | 886 | | | | 849 | | | | 849 | | | | 639 | | | | 618 | | | | 971 | |
| Net securities (losses) gains | | | (61 | ) | | | 1,145 | | | | 21 | | | | 26 | | | | 97 | | | | 455 | |
| Other | | | 2,324 | | | | 3,182 | | | | 2,963 | | | | 2,407 | | | | 2,331 | | | | 3,711 | |
| Total noninterest income | | | 25,537 | | | | 25,229 | | | | 21,962 | | | | 21,627 | | | | 20,682 | | | | 23,056 | |
| Noninterest expense: | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 29,160 | | | | 27,047 | | | | 26,457 | | | | 26,641 | | | | 24,992 | | | | 26,725 | |
| Occupancy | | | 5,219 | | | | 4,977 | | | | 4,265 | | | | 4,437 | | | | 4,222 | | | | 4,491 | |
| Data processing and communications | | | 3,854 | | | | 3,455 | | | | 3,396 | | | | 3,352 | | | | 3,431 | | | | 3,258 | |
| Professional fees and outside services | | | 3,237 | | | | 2,901 | | | | 2,615 | | | | 2,735 | | | | 2,388 | | | | 2,725 | |
| Equipment | | | 2,910 | | | | 2,582 | | | | 2,403 | | | | 2,435 | | | | 2,409 | | | | 2,380 | |
| Office supplies and postage | | | 1,656 | | | | 1,590 | | | | 1,647 | | | | 1,597 | | | | 1,574 | | | | 1,671 | |
| FDIC expenses | | | 1,273 | | | | 1,130 | | | | 1,020 | | | | 939 | | | | 942 | | | | 931 | |
| Advertising | | | 1,000 | | | | 723 | | | | 581 | | | | 701 | | | | 805 | | | | 802 | |
| Amortization of intangible assets | | | 1,351 | | | | 851 | | | | 864 | | | | 870 | | | | 841 | | | | 819 | |
| Loan collection and other real estate owned | | | 421 | | | | 718 | | | | 509 | | | | 614 | | | | 799 | | | | 638 | |
| Merger | | | 1,269 | | | | 10,681 | | | | 713 | | | | 558 | | | | 826 | | | | 511 | |
| Other operating | | | 5,100 | | | | 4,050 | | | | 4,122 | | | | 4,552 | | | | 4,161 | | | | 3,523 | |
| Total noninterest expense | | | 56,450 | | | | 60,705 | | | | 48,592 | | | | 49,431 | | | | 47,390 | | | | 48,474 | |
| Income before income taxes | | | 24,340 | | | | 11,006 | | | | 18,883 | | | | 20,048 | | | | 18,940 | | | | 19,503 | |
| Income taxes | | | 7,424 | | | | 3,357 | | | | 5,767 | | | | 5,513 | | | | 5,683 | | | | 5,853 | |
| Net income | | $ | 16,916 | | | $ | 7,649 | | | $ | 13,116 | | | $ | 14,535 | | | $ | 13,257 | | | $ | 13,650 | |
| Earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.39 | | | $ | 0.21 | | | $ | 0.39 | | | $ | 0.43 | | | $ | 0.40 | | | $ | 0.41 | |
| Diluted | | $ | 0.38 | | | $ | 0.21 | | | $ | 0.39 | | | $ | 0.43 | | | $ | 0.40 | | | $ | 0.41 | |
Note: Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.
Page 11 of 12
| NBT Bancorp Inc. and Subsidiaries |
| AVERAGE 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 | |
| ASSETS: | | Q2 - 2013 | | | Q1 - 2013 | | | Q4 - 2012 | | | Q3 - 2012 | | | Q2 - 2012 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term interest bearing accounts | | $ | 41,313 | | | | 0.57 | % | | $ | 75,110 | | | | 0.21 | % | | $ | 72,660 | | | | 0.26 | % | | $ | 10,392 | | | | 0.43 | % | | $ | 102,192 | | | | 0.33 | % |
| Securities available for sale (1)(2) | | | 1,428,864 | | | | 1.97 | % | | | 1,197,238 | | | | 2.09 | % | | | 1,123,110 | | | | 2.27 | % | | | 1,168,326 | | | | 2.39 | % | | | 1,208,384 | | | | 2.53 | % |
| Securities held to maturity (1) | | | 62,463 | | | | 5.23 | % | | | 52,905 | | | | 6.06 | % | | | 60,651 | | | | 5.42 | % | | | 62,746 | | | | 5.46 | % | | | 68,472 | | | | 5.47 | % |
| Investment in FRB and FHLB Banks | | | 35,497 | | | | 4.85 | % | | | 31,312 | | | | 4.75 | % | | | 29,801 | | | | 4.75 | % | | | 28,706 | | | | 4.67 | % | | | 27,886 | | | | 4.73 | % |
| Loans and leases (3) | | | 5,243,534 | | | | 4.76 | % | | | 4,492,106 | | | | 4.87 | % | | | 4,264,680 | | | | 5.05 | % | | | 4,197,046 | | | | 5.12 | % | | | 3,938,592 | | | | 5.18 | % |
| Total interest earning assets | | $ | 6,811,671 | | | | 4.16 | % | | $ | 5,848,671 | | | | 4.25 | % | | $ | 5,550,902 | | | | 4.43 | % | | $ | 5,467,216 | | | | 4.53 | % | | $ | 5,345,526 | | | | 4.49 | % |
| Other assets | | | 705,869 | | | | | | | | 554,355 | | | | | | | | 503,124 | | | | | | | | 504,194 | | | | | | | | 465,058 | | | | | |
| Total assets | | $ | 7,517,540 | | | | | | | $ | 6,403,026 | | | | | | | $ | 6,054,026 | | | | | | | $ | 5,971,410 | | | | | | | $ | 5,810,584 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Money market deposit accounts | | $ | 1,402,429 | | | | 0.15 | % | | $ | 1,190,555 | | | | 0.14 | % | | $ | 1,149,248 | | | | 0.14 | % | | $ | 1,111,624 | | | | 0.18 | % | | $ | 1,115,812 | | | | 0.19 | % |
| NOW deposit accounts | | | 927,037 | | | | 0.19 | % | | | 799,219 | | | | 0.23 | % | | | 752,737 | | | | 0.25 | % | | | 686,768 | | | | 0.22 | % | | | 704,896 | | | | 0.27 | % |
| Savings deposits | | | 983,413 | | | | 0.09 | % | | | 770,559 | | | | 0.08 | % | | | 694,226 | | | | 0.08 | % | | | 706,927 | | | | 0.08 | % | | | 676,794 | | | | 0.08 | % |
| Time deposits | | | 1,136,511 | | | | 1.10 | % | | | 1,015,711 | | | | 1.26 | % | | | 1,006,581 | | | | 1.31 | % | | | 1,035,868 | | | | 1.35 | % | | | 973,051 | | | | 1.52 | % |
| Total interest bearing deposits | | $ | 4,449,390 | | | | 0.39 | % | | $ | 3,776,044 | | | | 0.45 | % | | $ | 3,602,792 | | | | 0.48 | % | | $ | 3,541,187 | | | | 0.51 | % | | $ | 3,470,553 | | | | 0.56 | % |
| Short-term borrowings | | | 229,906 | | | | 0.12 | % | | | 168,783 | | | | 0.10 | % | | | 150,372 | | | | 0.10 | % | | | 178,277 | | | | 0.13 | % | | | 171,545 | | | | 0.11 | % |
| Trust preferred debentures | | | 101,196 | | | | 2.22 | % | | | 82,295 | | | | 2.11 | % | | | 75,422 | | | | 2.17 | % | | | 75,422 | | | | 2.30 | % | | | 75,422 | | | | 2.31 | % |
| Long-term debt | | | 355,702 | | | | 3.41 | % | | | 382,177 | | | | 3.83 | % | | | 367,312 | | | | 3.93 | % | | | 367,146 | | | | 3.94 | % | | | 368,251 | | | | 3.91 | % |
| Total interest bearing liabilities | | $ | 5,136,194 | | | | 0.62 | % | | $ | 4,409,299 | | | | 0.76 | % | | $ | 4,195,898 | | | | 0.80 | % | | $ | 4,162,032 | | | | 0.83 | % | | $ | 4,085,771 | | | | 0.88 | % |
| Demand deposits | | | 1,496,486 | | | | | | | | 1,283,737 | | | | | | | | 1,210,440 | | | | | | | | 1,173,638 | | | | | | | | 1,111,804 | | | | | |
| Other liabilities | | | 78,660 | | | | | | | | 67,297 | | | | | | | | 68,477 | | | | | | | | 64,860 | | | | | | | | 61,144 | | | | | |
| Stockholders' equity | | | 806,200 | | | | | | | | 642,693 | | | | | | | | 579,211 | | | | | | | | 570,880 | | | | | | | | 551,865 | | | | | |
| Total liabilities and stockholders' equity | | $ | 7,517,540 | | | | | | | $ | 6,403,026 | | | | | | | $ | 6,054,026 | | | | | | | $ | 5,971,410 | | | | | | | $ | 5,810,584 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest rate spread | | | | | | | 3.54 | % | | | | | | | 3.49 | % | | | | | | | 3.63 | % | | | | | | | 3.70 | % | | | | | | | 3.61 | % |
| Net interest margin | | | | | | | 3.69 | % | | | | | | | 3.68 | % | | | | | | | 3.83 | % | | | | | | | 3.90 | % | | | | | | | 3.82 | % |
| (1) | Securities are shown at average amortized cost |
| (2) | Excluding unrealized gains or losses |
| (3) | For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding |
Page 12 of 12
| NBT Bancorp Inc. and Subsidiaries |
| CONSOLIDATED LOAN BALANCES |
| (unaudited, dollars in thousands) |
| | | | | | | | | | | | | | 2013 | |
| | 2013 | | | 2012 | | | Acquired | |
| | 2nd Q | | | 1st Q | | | 4th Q | | | 3rd Q | | | 2nd Q | | | Balances * | |
| Residential real estate mortgages | | $ | 1,001,642 | | | $ | 996,925 | | | $ | 651,107 | | | $ | 650,448 | | | $ | 630,791 | | | $ | 333,105 | |
| Commercial | | | 867,513 | | | | 829,766 | | | | 694,799 | | | | 697,213 | | | | 691,055 | | | | 179,672 | |
| Commercial real estate mortgages | | | 1,241,271 | | | | 1,233,763 | | | | 1,072,807 | | | | 1,083,675 | | | | 1,066,039 | | | | 117,752 | |
| Real estate construction and development | | | 152,548 | | | | 136,402 | | | | 123,078 | | | | 99,181 | | | | 99,236 | | | | - | |
| Agricultural and agricultural real estate mortgages | | | 107,565 | | | | 107,023 | | | | 112,687 | | | | 112,822 | | | | 107,337 | | | | - | |
| Consumer | | | 1,284,888 | | | | 1,253,645 | | | | 1,047,856 | | | | 1,031,572 | | | | 993,586 | | | | 200,470 | |
| Home equity | | | 635,283 | | | | 637,509 | | | | 575,282 | | | | 576,208 | | | | 573,170 | | | | 73,474 | |
| Total loans | | $ | 5,290,710 | | | $ | 5,195,033 | | | $ | 4,277,616 | | | $ | 4,251,119 | | | $ | 4,161,214 | | | $ | 904,473 | |
| * | Balances are as of Alliance acquisition date of March 8, 2013 |
