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NBT Bancorp Inc. Announces Record Net Income of $75.1 Million; Declares Cash Dividend

NORWICH, N.Y., Jan. 26, 2015 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (NBT) (Nasdaq:NBTB) reported net income for the year ended December 31, 2014 of $75.1 million, up from $61.7 million from the prior year. 2013 included the impact of the acquisition of Alliance Financial Corporation ("Alliance") results from March 8, 2013, including $12.4 million in merger expenses and 2014 results included Alliance for the full year. Reported earnings per diluted share for the year ended December 31, 2014 was $1.69 as compared to $1.46 for 2013.

Core net income for the year ended December 31, 2014 was $75.8 million, up 8.5% from $69.9 million for 2013. Core diluted earnings per share for the year ended December 31, 2014 was $1.71, up from $1.65 for the prior year.

Reported net income for the three months ended December 31, 2014 was $18.5 million, up from $17.9 million for the same period last year. Reported diluted earnings per share for the three months ended December 31, 2014 was $0.42, up from $0.41 for the same period last year.

Core net income for the three months ended December 31, 2014 was $18.5 million, up from $18.4 million for the same period in 2013. Core diluted earnings per share for the three months ended December 31, 2014 was $0.42, equivalent to the same period last year.

The reported results for the years ending 2014 and 2013 and certain quarters in 2014 and 2013 contained items which the Company considers non-core, such as gain on the sale of the Springstone equity investment, prepayment penalties on long-term debt restructure, merger expenses, securities gains, and other items not considered core to our operations.

2014 Highlights:

  • Recorded record net income of $75.1 million in 2014
  • Second highest level of core diluted earnings per share in the company's history at $1.71
  • Improvement in asset quality indicators
    • Nonperforming loans to total loans improved to 0.82% at December 31, 2014 from 0.99% at December 31, 2013
    • Past due loans to total loans improved to 0.69% at December 31, 2014 from 0.77% at December 31, 2013
    • Net charge-offs to average loans improved to 0.41% for 2014 from 0.44% in 2013
  • Continued our strategic expansion in New England in 2014 with new locations in Pittsfield, Ma., Rutland, Vt. and most recently Portland, Me. with the opening of our Maine Regional Headquarters

"With our 2014 results, we achieved record net income and the second highest level of core earnings per share in NBT's history," said NBT President and CEO Martin Dietrich. "We continue to be encouraged by the strong earnings we deliver as we manage the company for the long-term value of our shareholders, making strategic investments in our people, technology and new markets. Recently, we established our presence in a sixth state with the opening of our Maine Regional Headquarters in Portland with a focus on serving the needs of commercial banking clients. We're excited about what we've built and continue to build in New England where we now have 16 locations in four states. Good financial results, strong asset quality, opportunities for organic growth and our ongoing focus on enhancing the service we deliver to customers are some of the many reasons we remain confident that NBT is well positioned to continue to achieve success in the future."

Net interest income was $251.9 million for the year ended December 31, 2014, up 5.8% from 2013. Fully taxable equivalent ("FTE") net interest margin was 3.61% for the year ended December 31, 2014, down from 3.66% for 2013. Average interest earning assets were up $450.9 million, or 6.8%, for the year ended December 31, 2014 as compared to the same period in 2013. This increase was driven primarily by the acquisition of Alliance in March 2013 as well as organic loan production during the past several quarters. The net interest impact from the increase in average interest earning assets was partially offset by rate compression on earning assets, as their yield decreased from 4.12% during the year ended December 31, 2013 to 3.94% for 2014. This rate compression was driven primarily by decreasing loan yields from 4.69% in 2013 to 4.42% for 2014. As a result of the increase in average earning assets, interest income was up 2.4% for the year ended December 31, 2014 as compared to 2013. Average interest bearing liabilities increased $211.5 million, or 4.3%, for the year ended December 31, 2014 as compared to 2013. This increase was due primarily to an increase in deposits resulting from organic deposit growth as well as the aforementioned acquisition of Alliance. The rates paid on interest bearing liabilities for 2014 decreased by 17 basis points from 2013. This decrease was primarily driven by a decrease of 8 basis points in rates paid on deposits from improved funding mix as well as a 55 basis point decrease in the rate paid on long-term debt due primarily to maturity of long-term debt in the prior year, as well as the debt restructuring completed in the third quarter of 2014.

Net interest income was $64.0 million for the fourth quarter of 2014, up slightly from the previous quarter, and up 3.2% from the same period last year. FTE net interest margin was 3.61% for the three months ended December 31, 2014, equivalent to the previous quarter and the fourth quarter of 2013. Average interest earning assets were up marginally for the fourth quarter of 2014 as compared to the prior quarter, and up $200.7 million, or 2.9%, from the same period in 2013, driven primarily by organic loan production. The net interest impact from the increase in average interest earning assets over the same period last year was partially offset by slight rate compression on earning assets, which decreased from 4.02% during the fourth quarter of 2013 to 3.92% for the fourth quarter of 2014. This rate compression was driven primarily by decreasing loan yields from 4.54% for the fourth quarter of 2013 to 4.37% for the fourth quarter of 2014. Average interest bearing liabilities decreased $45.2 million, or 0.9%, from the third quarter of 2014 to the fourth quarter of 2014, while the rates paid on interest bearing liabilities decreased by 1 basis point over the same period. This net interest impact from the decrease in average interest bearing liabilities was driven primarily by a decrease in short term borrowings, partially offset by an increase in money market deposit accounts. Average interest bearing liabilities were relatively flat for the fourth quarter of 2014, as compared with the same period in 2013. Average long-term debt decreased $178.0 million from the fourth quarter of 2013 to the fourth quarter of 2014 resulting from the 2014 debt restructuring, as $165 million of borrowings were paid down and replaced with brokered deposits. The rates paid on interest bearing liabilities decreased by 13 basis points from the fourth quarter of 2013 to the fourth quarter of 2014 due in large part to the aforementioned 2014 debt restructuring, which resulted in a 73 basis point decrease in the rate paid on long-term debt over the same period. The decrease in average long-term debt balances combined with the decrease in the rates paid on long-term debt resulted in a $1.7 million decrease in long-term debt expense from the fourth quarter of 2013 to the fourth quarter of 2014.

Noninterest income for the year ended December 31, 2014 was $126.0 million, up $22.8 million, or 22.1%, from the year ended December 31, 2013. The increase from 2013 was primarily driven by the previously disclosed sale of our ownership interest in Springstone recorded in the second quarter of 2014. Excluding this non-core gain, noninterest income for the year ended December 31, 2014 was $106.6 million, up $3.4 million, or 3.3%, from 2013. This increase from 2013 was due primarily to increases in trust and ATM and debit card fees, due in large part to the full impact from Alliance in 2014. In addition, bank owned life insurance income was up approximately $1.6 million over 2013 due to death benefits recorded in 2014. These increases were partially offset by a $1.4 million decrease in service charges on deposit accounts from 2013 and net securities gains totaling $1.4 million recorded in 2013. The decrease in service charges on deposit accounts from the prior year was primarily the result of lower nonsufficient funds fees recorded during 2014 due to changes in customer behavior, improving macroeconomic conditions, and continued customer outreach and education.

Noninterest income for the three months ended December 31, 2014 was $27.0 million, up $0.4 million from the previous quarter, and up $1.7 million from the same period in 2013. The increase from 2013 was primarily driven by increases in several categories including bank owned life insurance income due to death benefits recorded in the fourth quarter of 2014, insurance and other financial services revenue, ATM and debit card fees, and retirement plan administration fees.

Noninterest expense for the year ended December 31, 2014 was $246.1 million, up $17.1 million from 2013. Excluding the non-core $17.9 million prepayment penalties in 2014 and the non-core merger related expenses totaling $12.4 million in 2013, noninterest expense for the year ended December 31, 2014 was $228.2 million, up $11.6 million, or 5.4% from 2013. This increase from 2013 was due primarily to 2014 including the full twelve months of Alliance occupancy, salaries and employee benefits, data processing, professional fees, and equipment expenses. In addition, the increase in salaries and benefits in 2014 included incremental incentive compensation related to the Springstone transaction, partially offset by lower retirement plan expenses due mainly to plan asset performance and a previous plan amendment.

Noninterest expense for the three months ended December 31, 2014 was $56.7 million, down $12.3 million from the previous quarter, and up $1.3 million from the same period in 2013. The decrease from the prior quarter was primarily due to the aforementioned prepayment penalties totaling $13.3 million recorded during the third quarter of 2014. Excluding these non-core prepayment penalties, noninterest expense for the three months ended December 31, 2014 was up $1.0 million, or 1.8%, from the previous quarter. Salaries and employee benefits were up approximately $1.1 million for the fourth quarter of 2014 compared with the previous quarter primarily due to higher incentive compensation and medical expenses incurred.

Asset Quality

Net charge-offs were $9.9 million for the three months ended December 31, 2014, up from $5.1 million for the prior quarter, and up from $5.9 million from the three months ended December 31, 2013. This increase was due primarily to a $3.0 million partial charge-off of an acquired commercial credit during the fourth quarter of 2014 all of which was previously reserved for in prior quarters. NBT recorded a provision for loan losses of $6.9 million for the three months ended December 31, 2014, up from $4.9 million for the prior quarter, and up from $5.2 million for the fourth quarter of 2013.

Net charge-offs were $22.6 million for the year ended December 31, 2014, up slightly from $22.3 million for the year ended December 31, 2013. Net charge-offs to average loans for the year ended December 31, 2014 was 0.41%, compared to 0.44% for last year. For the originated portfolio, net charge-offs to average loans for the year ended December 31, 2014 was 0.38%, compared to 0.51% for last year. NBT recorded a provision for loan losses of $19.5 million for the year ended December 31, 2014, compared with $22.4 million for 2013. This decrease was due primarily to general improvement in asset quality in 2014.

Nonperforming loans to total loans was 0.82% at December 31, 2014, down 16 bps from the prior quarter, and down 17 bps from December 31, 2013. The decrease from the prior quarter and 2013 was due primarily to the aforementioned commercial loan charge-off, the return of one large, nonperforming commercial loan to accruing status, and the transfer of one large commercial real estate loan to other real estate owned ("OREO") during the fourth quarter of 2014. Past due loans as a percentage of total loans were 0.69% at December 31, 2014 as compared to 0.65% at September 30, 2014, and 0.77% at December 31, 2013.

The allowance for loan losses totaled $66.4 million at December 31, 2014, compared to $69.3 million at September 30, 2014 and $69.4 million at December 31, 2013. This decrease from September 30, 2014 was due primarily to the aforementioned acquired commercial loan charge-off in the fourth quarter of 2014 that was specifically reserved for in prior quarters. The allowance for loan losses as a percentage of loans was 1.19% (1.31% excluding acquired loans with no related allowance recorded) at December 31, 2014, compared to 1.24% (1.38% excluding acquired loans with no related allowance recorded) at September 30, 2014 and 1.28% (1.55% excluding acquired loans with no related allowance recorded) at December 31, 2013. The decrease in the allowance for loan losses as a percentage of loans from the prior year was due primarily to continued improving asset quality metrics of the originated loan portfolio.

Balance Sheet

Total assets were $7.8 billion at December 31, 2014, up $145.8 million, or 1.9% from December 31, 2013. Loans were $5.6 billion at December 31, 2014, up $188.5 million from December 31, 2013, due to loan growth during 2014. Total deposits were $6.3 billion at December 31, 2014, up $409.4 million, or 7.0%, from December 31, 2013, primarily due to deposit growth and the aforementioned debt restructure. Stockholders' equity was $864.2 million, representing a total equity-to-total assets ratio of 11.08% at December 31, 2014, compared with $816.6 million or a total equity-to-total assets ratio of 10.67% at December 31, 2013.

Stock Repurchase Program

The Company purchased 3,288 shares of its common stock during the year ended December 31, 2014 at an average price of $22.02 per share under a previously announced plan which expired on December 31, 2014. As of December 31, 2014, there were 1,000,000 shares available for repurchase under a plan authorized on October 27, 2014, which expires on December 31, 2016.

Dividend

The NBT Board of Directors declared a 2015 first-quarter cash dividend of $0.21 per share at a meeting held today. The dividend will be paid on March 13, 2015 to shareholders of record as of February 27, 2015.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $7.8 billion at December 31, 2014. 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 155 banking locations with offices in upstate New York, northeastern Pennsylvania, northwestern Vermont, western Massachusetts, southern New Hampshire, and southern Maine. EPIC Advisors, Inc., based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. NBT-Mang Insurance Agency, 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.epic1st.com and www.nbtmang.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 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 NBT's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of NBT.

NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, dollars in thousands except per share data)
2014 2013
4th Q 3rd Q 2nd Q 1st Q 4th Q
Reconciliation of Non-GAAP Financial Measures:
Reported net income (GAAP) $18,513 $10,912 $27,640 $18,009 $17,925
Adj: (Gain) / Loss on sale of securities, net (net of tax) (22) (25) (9) (5) (9)
Adj: Other adjustments (net of tax) (1) 11 83 (315) 430 402
Adj: Gain on sale of Springstone (net of tax and related incentive compensation) -- -- (11,168) -- --
Adj: Prepayment penalties related to debt restructuring (net of tax) -- 8,833 2,925 -- --
Plus: Merger related expenses (net of tax) -- -- -- -- 59
Total Adjustments (11) 8,891 (8,567) 425 452
Core net income $18,502 $19,803 $19,073 $18,434 $18,377
Profitability:
Core Diluted Earnings Per Share $0.42 $0.45 $0.43 $0.42 $0.42
Diluted Earnings Per Share $0.42 $0.25 $0.62 $0.41 $0.41
Weighted Average Diluted
Common Shares Outstanding 44,535,274 44,405,357 44,363,787 44,296,445 44,121,102
Core Return on Average Assets (2) 0.94% 1.01% 0.99% 0.98% 0.96%
Return on Average Assets (2) 0.94% 0.55% 1.43% 0.95% 0.94%
Core Return on Average Equity (2) 8.45% 9.19% 9.06% 9.02% 9.04%
Return on Average Equity (2) 8.46% 5.06% 13.12% 8.81% 8.81%
Core Return on Average Tangible Common Equity (2)(4) 13.08% 14.35% 14.27% 14.48% 14.77%
Return on Average Tangible Common Equity (2)(4) 13.09% 8.15% 20.43% 14.16% 14.42%
Net Interest Margin (2)(3) 3.61% 3.61% 3.60% 3.63% 3.61%
Twelve Months Ended December 31,
Reconciliation of Non-GAAP Financial Measures: 2014 2013
Reported net income (GAAP) $75,074 $61,747
Adj: Gain on sale of securities, net (net of tax) (61) (990)
Adj: Other adjustments (net of tax) (6) 209 512
Adj: Gain on sale of Springstone (net of tax and related incentive compensation) (11,168) --
Adj: Prepayment penalties related to debt restructuring (net of tax) 11,758 --
Plus: Merger related expenses (net of tax) -- 8,588
Total Adjustments 738 8,110
Core net income $75,812 $69,857
Profitability:
Core Diluted Earnings Per Share $1.71 $1.65
Diluted Earnings Per Share $1.69 $1.46
Weighted Average Diluted
Common Shares Outstanding 44,394,560 42,350,580
Core Return on Average Assets (2) 0.98% 0.96%
Return on Average Assets (2) 0.97% 0.85%
Core Return on Average Equity (2) 8.92% 9.16%
Return on Average Equity (2) 8.84% 8.09%
Core Return on Average Tangible Common Equity (2)(5) 14.03% 14.76%
Return on Average Tangible Common Equity (2)(5) 13.90% 13.11%
Net Interest Margin (2)(3) 3.61% 3.66%
(1) Primarily net gain on settlement of litigation and reorganization expenses for 2014 and reorganization expenses for 2013
(2) Annualized
(3) Calculated on a Fully Tax Equivalent ("FTE") basis
(4) Excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
2014 2013
4th Q 3rd Q 2nd Q 1st Q 4th Q
Average stockholders' equity $ 868,634 $ 855,164 $ 844,707 $ 828,588 $ 806,791
Less: average goodwill and other intangibles 284,743 285,993 287,366 290,019 291,659
Average tangible common equity $ 583,891 $ 569,171 $ 557,341 $ 538,569 $ 515,132
(5) Excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
12 Months ended December 31,
2014 2013
Average stockholders' equity $ 849,465 $ 763,026
Less: average goodwill and other intangibles 287,013 269,683
Average tangible common equity $ 562,452 $ 493,343
(6) Primarily net gain on settlement of litigation and reorganization expenses for 2014 and reorganization expenses for 2013.
NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, dollars in thousands except per share data)
2014 2013
4th Q 3rd Q 2nd Q 1st Q 4th Q
Balance Sheet Data:
Securities Available for Sale $1,013,171 $1,044,502 $1,378,799 $1,377,585 $1,364,881
Securities Held to Maturity 454,361 459,620 125,965 117,896 117,283
Net Loans 5,528,912 5,517,757 5,504,954 5,412,591 5,337,361
Total Assets 7,797,926 7,867,031 7,869,512 7,753,129 7,652,175
Total Deposits 6,299,605 6,314,939 6,042,588 6,068,898 5,890,224
Total Borrowings 548,943 607,889 886,799 766,753 866,061
Total Liabilities 6,933,745 7,009,591 7,012,371 6,920,927 6,835,606
Stockholders' Equity 864,181 857,440 857,141 832,202 816,569
Asset Quality:
Nonaccrual Loans $41,074 $50,531 $51,234 $51,464 $49,965
90 Days Past Due and Still Accruing 4,941 4,022 2,186 2,700 3,737
Total Nonperforming Loans 46,015 54,553 53,420 54,164 53,702
Other Real Estate Owned 3,964 1,497 1,953 2,564 2,904
Total Nonperforming Assets 49,979 56,050 55,373 56,728 56,606
Allowance for Loan Losses 66,359 69,334 69,534 69,434 69,434
Asset Quality Ratios (Total):
Allowance for Loan Losses to Total Loans 1.19% 1.24% 1.25% 1.27% 1.28%
Total Nonperforming Loans to Total Loans 0.82% 0.98% 0.96% 0.99% 0.99%
Total Nonperforming Assets to Total Assets 0.64% 0.71% 0.70% 0.73% 0.74%
Allowance for Loan Losses to Total Nonperforming Loans 144.21% 127.09% 130.16% 128.19% 129.29%
Past Due Loans to Total Loans 0.69% 0.65% 0.57% 0.57% 0.77%
Net Charge-Offs to Average Loans (3) 0.70% 0.36% 0.30% 0.27% 0.44%
Asset Quality Ratios (Originated) (1):
Allowance for Loan Losses to Loans 1.36% 1.38% 1.44% 1.51% 1.55%
Nonperforming Loans to Loans 0.72% 0.83% 0.81% 0.82% 0.84%
Allowance for Loan Losses to Nonperforming Loans 187.88% 166.69% 177.01% 183.29% 184.96%
Past Due Loans to Loans 0.73% 0.70% 0.59% 0.62% 0.83%
Capital:
Equity to Assets 11.08% 10.90% 10.89% 10.73% 10.67%
Book Value Per Share $19.69 $19.62 $19.61 $19.09 $18.77
Tangible Book Value Per Share (2) $13.22 $13.09 $13.06 $12.48 $12.09
Tier 1 Leverage Ratio 9.39% 9.20% 9.23% 9.05% 8.93%
Tier 1 Capital Ratio 12.32% 12.03% 11.95% 11.81% 11.74%
Total Risk-Based Capital Ratio 13.50% 13.26% 13.20% 13.06% 12.99%
Common Stock Price (End of Period) $26.27 $22.52 $24.02 $24.46 $25.90
(1) Excludes acquired loans
(2) Stockholders' equity less goodwill and intangible assets divided by common shares outstanding
(3) Annualized
Note: Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.
NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(unaudited, dollars in thousands)
ASSETS December 31,
2014
December 31,
2013
Cash and due from banks $ 139,635 $ 157,625
Short term interest bearing accounts 7,001 1,301
Securities available for sale, at fair value 1,013,171 1,364,881
Securities held to maturity (fair value of $454,994 and $113,276 at December 31, 2014 and December 31, 2013, respectively) 454,361 117,283
Trading securities 7,793 5,779
Federal Reserve and Federal Home Loan Bank stock 32,626 46,864
Loans 5,595,271 5,406,795
Less allowance for loan losses 66,359 69,434
Net loans 5,528,912 5,337,361
Premises and equipment, net 89,258 88,327
Goodwill 263,634 264,997
Intangible assets, net 20,317 25,557
Bank owned life insurance 114,251 114,966
Other assets 126,967 127,234
TOTAL ASSETS $ 7,797,926 $ 7,652,175
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest bearing) $ 1,838,622 $ 1,645,641
Savings, NOW, and money market 3,417,160 3,223,441
Time 1,043,823 1,021,142
Total deposits 6,299,605 5,890,224
Short-term borrowings 316,802 456,042
Long-term debt 130,945 308,823
Junior subordinated debt 101,196 101,196
Other liabilities 85,197 79,321
Total liabilities 6,933,745 6,835,606
Total stockholders' equity 864,181 816,569
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,797,926 $ 7,652,175
NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2014 2013 2014 2013
Interest, fee and dividend income:
Loans $ 61,577 $ 61,173 $ 243,324 $ 238,672
Securities available for sale 5,000 6,707 24,464 25,510
Securities held to maturity 2,357 783 5,261 2,660
Other 480 518 2,032 1,881
Total interest, fee and dividend income 69,414 69,181 275,081 268,723
Interest expense:
Deposits 3,856 3,845 13,638 16,290
Short-term borrowings 143 174 845 515
Long-term debt 846 2,559 6,555 11,755
Junior subordinated debt 545 545 2,165 2,084
Total interest expense 5,390 7,123 23,203 30,644
Net interest income 64,024 62,058 251,878 238,079
Provision for loan losses 6,892 5,166 19,539 22,424
Net interest income after provision for loan losses 57,132 56,892 232,339 215,655
Noninterest income:
Insurance and other financial services revenue 6,007 5,761 24,517 24,447
Service charges on deposit accounts 4,656 4,996 17,941 19,307
ATM and debit card fees 4,266 3,996 17,135 15,558
Retirement plan administration fees 2,962 2,796 12,129 11,497
Trust 4,793 4,725 18,950 16,682
Bank owned life insurance income 1,894 1,145 5,349 3,793
Net securities gains 33 13 92 1,426
Gain on the sale of Springstone investment -- -- 19,401 --
Other 2,435 1,870 10,513 10,505
Total noninterest income 27,046 25,302 126,027 103,215
Noninterest expense:
Salaries and employee benefits 30,058 28,106 119,667 113,580
Occupancy 5,256 5,262 22,128 20,720
Data processing and communications 4,092 3,985 16,137 15,353
Professional fees and outside services 3,564 3,969 14,426 13,309
Equipment 3,211 3,013 12,658 11,493
Office supplies and postage 1,762 1,677 6,983 6,563
FDIC expenses 1,302 1,272 4,944 4,960
Advertising 963 759 2,831 3,204
Amortization of intangible assets 1,226 1,324 5,047 4,872
Loan collection and other real estate owned 702 594 3,248 2,619
Merger related -- 88 -- 12,364
Prepayment penalties on long-term debt -- -- 17,902 --
Other operating 4,607 5,437 20,092 19,890
Total noninterest expense 56,743 55,486 246,063 228,927
Income before income taxes 27,435 26,708 112,303 89,943
Income taxes 8,922 8,783 37,229 28,196
Net income $ 18,513 $ 17,925 $ 75,074 $ 61,747
Earnings Per Share:
Basic $ 0.42 $ 0.41 $ 1.71 $ 1.47
Diluted $ 0.42 $ 0.41 $ 1.69 $ 1.46
NBT Bancorp Inc. and Subsidiaries
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
2014 2013
4th Q 3rd Q 2nd Q 1st Q 4th Q
Interest, fee and dividend income:
Loans $ 61,577 $ 61,173 $ 60,559 $ 60,015 $ 61,173
Securities available for sale 5,000 6,095 6,612 6,757 6,707
Securities held to maturity 2,357 1,353 783 768 783
Other 480 513 502 537 518
Total interest, fee and dividend income 69,414 69,134 68,456 68,077 69,181
Interest expense:
Deposits 3,856 3,498 3,000 3,284 3,845
Short-term borrowings 143 262 209 231 174
Long-term debt 846 1,067 2,135 2,507 2,559
Junior subordinated debt 545 544 538 538 545
Total interest expense 5,390 5,371 5,882 6,560 7,123
Net interest income 64,024 63,763 62,574 61,517 62,058
Provision for loan losses 6,892 4,885 4,166 3,596 5,166
Net interest income after provision for loan losses 57,132 58,878 58,408 57,921 56,892
Noninterest income:
Insurance and other financial services revenue 6,007 6,179 5,594 6,737 5,761
Service charges on deposit accounts 4,656 4,519 4,397 4,369 4,996
ATM and debit card fees 4,266 4,440 4,357 4,072 3,996
Retirement plan administration fees 2,962 3,272 2,977 2,918 2,796
Trust 4,793 4,758 4,953 4,446 4,725
Bank owned life insurance income 1,894 1,095 978 1,382 1,145
Net securities gains 33 38 14 7 13
Gain on the sale of Springstone investment -- -- 19,401 -- --
Other 2,435 2,376 3,356 2,346 1,870
Total noninterest income 27,046 26,677 46,027 26,277 25,302
Noninterest expense:
Salaries and employee benefits 30,058 28,933 31,142 29,534 28,106
Occupancy 5,256 5,211 5,435 6,226 5,262
Data processing and communications 4,092 4,029 4,015 4,001 3,985
Professional fees and outside services 3,564 3,695 3,752 3,415 3,969
Equipment 3,211 3,199 3,132 3,116 3,013
Office supplies and postage 1,762 1,733 1,803 1,685 1,677
FDIC expenses 1,302 1,135 1,229 1,278 1,272
Advertising 963 403 726 739 759
Amortization of intangible assets 1,226 1,275 1,236 1,310 1,324
Loan collection and other real estate owned 702 705 801 1,040 594
Merger -- -- -- -- 88
Prepayment penalties on long-term debt -- 13,348 4,554 -- --
Other operating 4,607 5,401 4,911 5,173 5,437
Total noninterest expense 56,743 69,067 62,736 57,517 55,486
Income before income taxes 27,435 16,488 41,699 26,681 26,708
Income taxes 8,922 5,576 14,059 8,672 8,783
Net income $ 18,513 $ 10,912 $ 27,640 $ 18,009 $ 17,925
Earnings per share:
Basic $ 0.42 $ 0.25 $ 0.63 $ 0.41 $ 0.41
Diluted $ 0.42 $ 0.25 $ 0.62 $ 0.41 $ 0.41
NBT Bancorp Inc. and Subsidiaries
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
Q4 - 2014 Q3 - 2014 Q2 - 2014 Q1 - 2014 Q4 - 2013
ASSETS:
Short-term interest bearing accounts $ 5,895 0.51% $ 4,791 0.54% $ 3,915 0.76% $ 2,733 1.02% $ 4,798 0.81%
Securities available for sale (1)(2) 1,018,505 2.00% 1,263,375 2.01% 1,376,314 2.05% 1,381,744 2.11% 1,383,273 2.05%
Securities held to maturity (1) 458,038 2.45% 234,403 2.84% 121,042 3.43% 116,613 3.52% 117,574 3.47%
Investment in FRB and FHLB Banks 31,274 6.01% 39,459 5.06% 42,965 4.63% 43,596 4.94% 41,115 4.92%
Loans (3) 5,603,268 4.37% 5,563,206 4.38% 5,517,315 4.42% 5,425,938 4.50% 5,369,474 4.54%
Total interest earning assets $ 7,116,980 3.92% $ 7,105,234 3.91% $ 7,061,551 3.94% $ 6,970,624 4.01% $ 6,916,234 4.02%
Other assets 709,955 697,814 680,059 679,246 680,435
Total assets $ 7,826,935 $ 7,803,048 $ 7,741,610 $ 7,649,870 $ 7,596,669
LIABILITIES AND STOCKHOLDERS' EQUITY:
Money market deposit accounts $1,524,881 0.20% $1,452,287 0.19% $1,441,284 0.15% $1,411,444 0.15% $1,419,458 0.15%
NOW deposit accounts 978,527 0.05% 927,026 0.05% 960,698 0.06% 932,528 0.05% 925,544 0.13%
Savings deposits 1,017,300 0.08% 1,025,795 0.07% 1,040,528 0.07% 1,000,029 0.07% 973,650 0.08%
Time deposits 1,058,615 1.03% 1,032,370 0.96% 971,595 0.88% 999,579 0.99% 1,042,710 1.07%
Total interest bearing deposits $ 4,579,323 0.33% $ 4,437,478 0.31% $ 4,414,105 0.27% $ 4,343,580 0.31% $ 4,361,362 0.35%
Short-term borrowings 299,981 0.19% 447,761 0.23% 383,480 0.22% 398,951 0.24% 338,476 0.20%
Junior subordinated debentures 101,196 2.13% 101,196 2.13% 101,196 2.13% 101,196 2.16% 101,196 2.14%
Long-term debt 131,000 2.56% 170,223 2.49% 290,791 2.95% 308,760 3.29% 308,969 3.29%
Total interest bearing liabilities $ 5,111,500 0.42% $ 5,156,658 0.41% $ 5,189,572 0.45% $ 5,152,487 0.52% $ 5,110,003 0.55%
Demand deposits 1,759,482 1,708,632 1,620,488 1,589,865 1,595,145
Other liabilities 87,319 82,594 86,843 78,930 84,730
Stockholders' equity 868,634 855,164 844,707 828,588 806,791
Total liabilities and stockholders' equity $ 7,826,935 $ 7,803,048 $ 7,741,610 $ 7,649,870 $ 7,596,669
Interest rate spread 3.50% 3.50% 3.49% 3.49% 3.47%
Net interest margin 3.61% 3.61% 3.60% 3.63% 3.61%
(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
NBT Bancorp Inc. and Subsidiaries
AVERAGE YEAR-TO-DATE BALANCE SHEETS
(unaudited, dollars in thousands)
Average
Balance

Interest
Yield /
Rates
Average
Balance

Interest
Yield /
Rates
Twelve Months ended December 31, 2014 2013
ASSETS:
Short-term interest bearing accounts $4,344 $28 0.65% $30,522 $116 0.38%
Securities available for sale (1)(2) 1,258,999 25,760 2.05% 1,349,887 27,357 2.03%
Securities held to maturity (1) 233,465 6,558 2.81% 88,193 3,692 4.19%
Investment in FRB and FHLB Banks 39,290 2,005 5.10% 37,998 1,771 4.66%
Loans and leases (3) 5,528,015 244,162 4.42% 5,106,607 239,572 4.69%
Total interest earning assets $ 7,064,113 $ 278,513 3.94% $ 6,613,207 $ 272,508 4.12%
Other assets 691,934 653,432
Total assets $ 7,756,047 $ 7,266,639
LIABILITIES AND STOCKHOLDERS' EQUITY:
Money market deposit accounts $1,457,770 2,532 0.17% $1,343,801 $ 2,004 0.15%
NOW deposit accounts 949,759 509 0.05% 882,629 1,468 0.17%
Savings deposits 1,020,974 760 0.07% 929,226 789 0.08%
Time deposits 1,015,748 9,837 0.97% 1,069,228 12,029 1.14%
Total interest bearing deposits $ 4,444,251 $ 13,638 0.31% $ 4,224,884 $ 16,290 0.39%
Short-term borrowings 382,451 845 0.22% 280,848 515 0.18%
Trust preferred debentures 101,196 2,165 2.14% 96,536 2,084 2.17%
Long-term debt 224,556 6,555 2.92% 338,697 11,755 3.47%
Total interest bearing liabilities $ 5,152,454 $ 23,203 0.45% $ 4,940,965 $ 30,644 0.62%
Demand deposits 1,670,188 1,484,193
Other liabilities 83,940 78,455
Stockholders' equity 849,465 763,026
Total liabilities and stockholders' equity $ 7,756,047 $ 7,266,639
Net interest income (FTE) 255,310 241,864
Interest rate spread 3.49% 3.50%
Net interest margin 3.61% 3.66%
Taxable equivalent adjustment 3,432 3,785
Net interest income $ 251,878 $ 238,079
(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
NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED LOAN BALANCES
(unaudited, dollars in thousands)
2014 2013
4th Q 3rd Q 2nd Q 1st Q 4th Q
Residential real estate mortgages $ 1,115,589 $ 1,100,139 $ 1,073,207 $ 1,056,793 $ 1,041,637
Commercial 839,770 862,098 895,128 878,152 859,026
Commercial real estate mortgages 1,442,989 1,411,689 1,378,065 1,347,940 1,328,313
Real estate construction and development 83,750 75,874 94,019 99,295 93,247
Agricultural and agricultural real estate mortgages 107,195 108,246 109,035 110,815 112,035
Consumer 1,436,382 1,447,918 1,435,643 1,387,221 1,352,638
Home equity 569,596 581,127 589,391 601,809 619,899
Total loans $ 5,595,271 $ 5,587,091 $ 5,574,488 $ 5,482,025 $ 5,406,795

CONTACT: Martin A. Dietrich, CEO Michael J. Chewens, CFO NBT Bancorp Inc. 52 South Broad Street Norwich, NY 13815 607-337-6119Source:NBT Bancorp Inc.