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NBT Bancorp Inc. Announces Net Income of $19.9 Million for the Third Quarter of 2015; Declares Cash Dividend

NORWICH, N.Y., Oct. 26, 2015 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (NBT) (NASDAQ:NBTB) announced net income for the three months ended September 30, 2015 was $19.9 million, up from $19.3 million for the second quarter of 2015, and up from $10.9 million for the third quarter of 2014. Reported net income for the third quarter of 2014 included $8.8 million in prepayment penalties, net of tax, related to our long-term debt restructuring strategy. Reported diluted earnings per share for the three months ended September 30, 2015 was $0.45, as compared with $0.43 for the prior quarter, and $0.25 per share for the third quarter of 2014.

Core net income for the three months ended September 30, 2015 was $19.8 million, up from $19.6 million in the previous quarter, and equal to the same period last year. Core earnings per diluted share for the three months ended September 30, 2015 was $0.45, up from $0.44 for the second quarter of 2015, and equal to the third quarter of 2014.

Reported net income for the nine months ended September 30, 2015 was $57.3 million, up from $56.6 million for the same period last year. Reported net income for the nine months ended September 30, 2015 included a contingent gain recognized from the 2014 sale of our ownership interest in Springstone LLC (“Springstone”), offset by reorganization expenses incurred during the third quarter of 2015. Reported net income for the nine months ended September 30, 2014 included a gain on the sale of our ownership interest in Springstone, partially offset by prepayment penalties related to our long-term debt restructuring strategy in 2014. Reported diluted earnings per share for the nine months ended September 30, 2015 was $1.29, as compared with $1.28 for the same period in 2014.

Core net income for the nine months ended September 30, 2015 was $57.5 million, up from $57.3 million for the same period last year. Core earnings per diluted share for the nine months ended September 30, 2015 was $1.29, equal to the same period last year.

The third quarter and year to date reported results for 2015 and 2014 contained items which the Company considers non-core, such as gains on the sale of an equity investment, long-term debt restructuring prepayment penalties, reorganization expenses, and other items not considered core to our operations.

Third Quarter 2015 Highlights:

  • Third quarter organic loan growth (annualized) of 6.9% driven by:
    • Consumer – 14.5%
    • Residential mortgage – 7.8%
    • Commercial – 4.8%
  • Year to date organic loan growth (annualized) was 6.6%
  • Recognized contingent gain of $4.2 million during the third quarter of 2015 from the 2014 sale of our ownership interest in Springstone, which allowed us to further our branch optimization strategy taking $3.3 million in reorganization costs during the third quarter of 2015
  • Average demand deposits for the nine months ended September 30, 2015 were up 11.4% from the same period in 2014
  • Asset quality indicators remained strong:
    • Nonperforming loans to total loans was 0.79% at September 30, 2015, as compared with 0.82% at December 31, 2014
    • Past due loans to total loans was 0.63% at September 30, 2015, as compared with 0.69% at December 31, 2014
    • Annualized net charge-offs to average loans was 0.35% for the third quarter of 2015, as compared with 0.36% for the same period last year

“Our earnings remained strong through the third quarter of 2015 with both our reported and core net income at the second highest level in NBT’s history,” said NBT President and CEO Martin Dietrich. “Our focus on banking fundamentals, including organic loan growth, deposit gathering and asset quality, continues to drive our results. And, the efforts of our employees to provide customers with a full complement of financial services while constantly working to enhance the experience we deliver continues to make them our most important and sustainable asset.”

Net interest income was $64.2 million for the third quarter of 2015, up $1.6 million from the previous quarter, and up $0.5 million from the third quarter of 2014. FTE net interest margin was 3.48% for the three months ended September 30, 2015, down from 3.51% for the previous quarter and down from 3.61% for the third quarter of 2014. Average interest earning assets were up $159.1 million, or 2.2%, for the third quarter of 2015 as compared to the prior quarter, and up $304.0 million, or 4.3%, from the same period in 2014. The increase from the second quarter of 2015 was driven primarily by organic loan production. Annualized organic loan growth of 6.9% during the third quarter of 2015 was driven by growth in most portfolios. Yields on earning assets decreased by 2 basis points (“bps”) from 3.79% during the second quarter of 2015 to 3.77% for the third quarter of 2015. This decrease in yield was more than offset by the growth in earning assets during the third quarter of 2015, and resulted in the 2.6% growth in interest income for the third quarter of 2015 as compared to the prior quarter. The yield compression was driven primarily by a 3 bp decrease in loan yields from the second quarter of 2015 to the third quarter of 2015. Average interest bearing liabilities increased $77.5 million, or 1.5%, from the second quarter of 2015 to the third quarter of 2015, which was driven by an increase in short-term borrowings for the third quarter of 2015 due to seasonality of deposits. The rates paid on interest bearing liabilities increased 1 bp from the second quarter of 2015 to the third quarter of 2015 and contributed to the 4.2% increase in interest expense for the third quarter of 2015 as compared with the prior quarter.

Net interest income was $189.1 million for the nine months ended September 30, 2015, up $1.2 million from the same period in 2014. FTE net interest margin was 3.53% for the nine months ended September 30, 2015, down from 3.61% for the nine months ended September 30, 2014. Average interest earning assets were up $208.2 million, or 3.0%, for the nine months ended September 30, 2015 as compared to the same period in 2014. This increase from last year was driven primarily by 6.6% annualized organic loan growth during the first nine months of 2015. Yields on earning assets decreased from 3.95% during the first nine months of 2014 to 3.81% for the first nine months of 2015, more than offsetting the growth in earning assets resulting in a 0.6% decrease in interest income for the nine months ended September 30, 2015 as compared to the same period in 2014. The yield compression was driven by a 17 bp decrease in loan yields from the first nine months of 2014 to the first nine months of 2015. Average interest bearing liabilities decreased $11.6 million, or 0.2%, from the nine months ended September 30, 2014 to the nine months ended September 30, 2015. Total average deposits increased $369.0 million, or 6.1%, for the nine months ended September 30, 2015 as compared to the same period last year driven primarily by an 11.4% increase in non-interest bearing demand deposits, as well as increases in money market deposit accounts and savings deposits in the first nine months of 2015. This increase was partially offset by a decrease in average long-term borrowings of $125.3 million for the nine months ended September 30, 2015 as compared to the same period last year due to the debt restructuring strategy completed during the third quarter of 2014. In addition, average short-term borrowings decreased $67.9 million for the nine months ended September 30, 2015 as compared to the same period last year driven by deposit growth. The rates paid on interest bearing liabilities decreased by 6 bps for the nine months ended September 30, 2015 as compared to the same period in 2014. This decrease resulted primarily from a shift in deposits into lower cost core deposits as well as the aforementioned debt restructuring.

Noninterest income for the three months ended September 30, 2015 was $31.3 million, up $3.0 million from the prior quarter, and up $4.6 million from the third quarter of 2014. Excluding the contingent gain recognized totaling $4.2 in the third quarter of 2015 from the 2014 sale of Springstone and securities gains, noninterest income for the three months ended September 30, 2015 was $27.1 million, down $1.1 million from the prior quarter, and up $0.4 million from the third quarter of 2014. The decrease from the prior quarter was driven primarily by a decrease in trust revenue, which was down $0.6 million due primarily to seasonality.

Noninterest income for the nine months ended September 30, 2015 was $86.0 million, down $13.0 million from the same period last year. Excluding the gains recorded in both periods from the 2014 sale of Springstone, securities gains, and other items not considered core to our operations, noninterest income for the nine months ended September 30, 2015 was $81.8 million, up $2.9 million, or 3.7% from the same period last year. The increase from the prior year was driven primarily by increases in retirement plan administration fees, ATM and debit card fees, and other noninterest income. Retirement plan administration fees were up $0.8 million, or 9.2%, for the nine months ended September 30, 2015 as compared to the same period in 2014 due primarily to new business generation. ATM and debit card fees were up $0.8 million, or 6.5%, for the nine months ended September 30, 2015 as compared to the same period last year due primarily to an increase in debit card activity. Other noninterest income was up $1.5 million, or 19.1%, for the nine months ended September 30, 2015 as compared to the same period in 2014 due primarily to the acquired loan charge-off recoveries recognized in 2015.

Noninterest expense for the three months ended September 30, 2015 was $59.9 million, up $1.9 million from the prior quarter and down $9.2 million from the third quarter of 2014. Excluding reorganization expenses incurred in the second and third quarters of 2015, prepayment penalties incurred in the third quarter of 2014, and other items not considered core to our operations, noninterest expense was down $0.9 million from the prior quarter and up $1.0 million from the third quarter of 2014. The decrease from the prior quarter was due primarily to a $0.6 million, or 2.0%, decrease in salaries and employee benefits in the third quarter of 2015, driven by a decrease in medical expenses incurred. Income tax expense for the three month period ended September 30, 2015 was $10.8 million, up $1.0 million from the prior quarter, and up $5.2 million from the third quarter of 2014, which included the impact of the aforementioned non-core items. The increase from the prior period was due primarily to a higher level of taxable income for the third quarter of 2015. The effective tax rate was 35.2% for the third quarter of 2015 as compared with 33.6% for the second quarter of 2015, and 33.8% for the third quarter of 2014.

Noninterest expense for the nine months ended September 30, 2015 was $175.6 million, down $13.8 million or 7.3% from the same period in 2014, due primarily to $17.9 million in prepayment penalties from long-term, debt restructuring in 2014. Excluding non-core items including these prepayment penalties, reorganization expenses, and other items not considered core to our operations, noninterest expense was up $3.8 million, or 2.2%, for the first nine months of 2015 as compared to the same period last year. Salaries and employee benefits were up $1.6 million, or 1.8% for the nine months ended September 30, 2015 as compared with the same period in 2014. Excluding incentive compensation expenses recorded in 2014 related to the Springstone sale, salaries and employee benefits were up $4.1 million, or 4.7%, from the first nine months of 2014 to the first nine months of 2015. This increase was driven by higher post-retirement costs, higher medical expenses, and an increase in salaries expense. This increase in salaries and employee benefits was partially offset by a $1.0 million decrease in loan collection and other real estate owned expenses for the nine months ended September 30, 2015 as compared to the same period last year. This decrease was due primarily to gains on sales of real estate recorded in the second quarter of 2015, which offset expenses during the period. Income tax expense for the nine month period ended September 30, 2015 was $29.7 million, up $1.4 million from the same period in 2014. The effective tax rate was 34.2% for the first nine months of 2015 as compared to 33.4% for the first nine months of 2014.

Asset Quality

Net charge-offs were $5.1 million for the three months ended September 30, 2015, up from $4.3 million for the prior quarter, and equal to the third quarter of 2014. Provision expense was $5.0 million for the three months ended September 30, 2015, as compared with $3.9 million for the prior quarter, and $4.9 million for the third quarter of 2014. Annualized net charge-offs to average loans for the third quarter of 2015 was 0.35%, compared with 0.30% for the second quarter of 2015 and 0.36% for the third quarter of 2014.

Nonperforming loans to total loans was 0.79% at September 30, 2015, up slightly from 0.77% for the prior quarter, and down 3 bps from December 31, 2014. Past due loans as a percentage of total loans were 0.63% at September 30, 2015 as compared to 0.61% as of June 30, 2015 and 0.69% at December 31, 2014.

The allowance for loan losses totaled $64.9 million at September 30, 2015, compared to $65.0 million at June 30, 2015, and $66.4 million at December 31, 2014. The allowance for loan losses as a percentage of loans was 1.10% (1.21% excluding acquired loans with no related allowance recorded) at September 30, 2015, compared to 1.13% (1.24% excluding acquired loans with no related allowance recorded) at June 30, 2015 and 1.19% (1.36% excluding acquired loans with no related allowance recorded) at December 31, 2014. The decrease in the allowance for loan losses as a percentage of loans from prior periods was due primarily to continued positive trends in asset quality metrics of the originated loan portfolio.

Balance Sheet

Total assets were $8.2 billion at September 30, 2015, up $363.6 million, or 4.7% from December 31, 2014. Loans were $5.9 billion at September 30, 2015, up $275.7 million, or 4.9%, from December 31, 2014. Total deposits were $6.6 billion at September 30, 2015, up $301.0 million, or 4.8%, from December 31, 2014. Stockholders’ equity was $876.2 million, representing a total equity-to-total assets ratio of 10.74% at September 30, 2015, compared with $864.2 million or a total equity-to-total assets ratio of 11.08% at December 31, 2014.

Stock Repurchase Program

The Company purchased 1,047,152 shares of its common stock during the nine months ended September 30, 2015 at an average price of $25.59 per share under previously announced plans. As of September 30, 2015, there were 952,848 shares available for repurchase under the repurchase plan that was announced on July 27, 2015, which expires on December 31, 2016.

Dividend

The NBT Board of Directors approved a 2015 fourth-quarter cash dividend of $0.22 per share at a meeting held today. The dividend will be paid on December 15, 2015 to shareholders of record as of December 1, 2015.

Subsequent Event

On October 1, 2015, NBT Bank, N.A. acquired Third Party Administrators, Inc. (TPA, Inc.), a retirement plan services company located in Bedford, N.H. with assets under administration of over $850 million. TPA, Inc. provides administrative services for 401(k), profit sharing and defined benefit plans for over 700 businesses as well as Section 125 administration. “The addition of TPA, Inc. to our family of companies supports our strategy of enhancing our revenue from non-banking sources,” said NBT President and CEO Martin Dietrich. “The services offered by TPA, Inc. are a great complement to the retirement plan services offered by NBT Bank’s Wealth Management Division and the 401(k) recordkeeping services offered by EPIC Advisors, and we look forward to exploring the synergies between these lines of business.”

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $8.2 billion at September 30, 2015. 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 New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine. EPIC Advisors, Inc., based in Rochester, N.Y., is a full-service 401(k) plan recordkeeping firm. NBT 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.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)
2015 2014
3rd Q2nd Q1st Q4th Q3rd Q
Reconciliation of Non-GAAP Financial Measures:
Reported net income (GAAP)$19,851 $19,281 $18,166 $18,513 $10,912
Noninterest income adjustments:
Gain on sale of securities (3) (26) (14) (33) (38)
Gain on sale of Springstone (4,179) - - - -
Noninterest expense adjustments:
Prepayment penalties related to debt restructuring - - - - 13,348
Other adjustments(1) 3,290 489 - 17 126
Tax provision adjustment 753 - - - -
Total adjustments (139) 463 (14) (16) 13,436
Total adjustments, net of tax (92) 307 (9) (11) 8,891
Core net income$19,759 $19,588 $18,157 $18,502 $19,803
Profitability:
Core Diluted Earnings Per Share$0.45 $0.44 $0.41 $0.42 $0.45
Diluted Earnings Per Share$0.45 $0.43 $0.41 $0.42 $0.25
Weighted Average Diluted
Common Shares Outstanding 44,262,426 44,530,123 44,641,913 44,535,274 44,405,357
Core Return on Average Assets (2) 0.97% 0.99% 0.94% 0.94% 1.01%
Return on Average Assets (2) 0.97% 0.97% 0.94% 0.94% 0.55%
Core Return on Average Equity (2) 8.93% 8.95% 8.45% 8.45% 9.19%
Return on Average Equity (2) 8.97% 8.81% 8.46% 8.46% 5.06%
Core Return on Average Tangible Common Equity (2)(4) 13.60% 13.67% 13.07% 13.08% 14.35%
Return on Average Tangible Common Equity (2)(4) 13.66% 13.47% 13.08% 13.09% 8.15%
Net Interest Margin (2)(3) 3.48% 3.51% 3.60% 3.61% 3.61%
Nine Months Ended September 30,
Reconciliation of Non-GAAP Financial Measures: 2015 2014
Reported net income (GAAP)$57,298 $56,561
Noninterest income adjustments:
Gain on sale of securities (43) (59)
Gain on sale of Springstone (4,179) (19,401)
Other adjustments(6) - (632)
Noninterest expense adjustments:
Prepayment penalties related to debt restructuring - 17,902
Other adjustments(7) 3,779 3,418
Tax provision adjustment 753 -
Total adjustments 310 1,228
Total adjustments, net of tax 206 749
Core net income$57,504 $57,310
Profitability:
Core Diluted Earnings Per Share$1.29 $1.29
Diluted Earnings Per Share$1.29 $1.28
Weighted Average Diluted
Common Shares Outstanding 44,467,881 44,353,318
Core Return on Average Assets (2) 0.97% 0.99%
Return on Average Assets (2) 0.96% 0.98%
Core Return on Average Equity (2) 8.78% 9.09%
Return on Average Equity (2) 8.75% 8.97%
Core Return on Average Tangible Common Equity (2)(5) 13.45% 14.36%
Return on Average Tangible Common Equity (2)(5) 13.41% 14.18%
Net Interest Margin (2)(3) 3.53% 3.61%
(1) Primarily reorganization expenses for 2014 and 2015.
(2) Annualized
(3) Calculated on a Fully Tax Equivalent (“FTE”) basis
(4) Excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
2015 2014
3rd Q2nd Q1st Q4th Q3rd Q
Average stockholders' equity$ 878,305 $ 878,164 $ 871,074 $ 868,634 $ 855,164
Less: average goodwill and other intangibles 281,048 282,272 283,508 284,743 285,993
Average tangible common equity$ 597,257 $ 595,892 $ 587,566 $ 583,891 $ 569,171
(5) Excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
9 Months ended September 30,
2015 2014
Average stockholders' equity$ 875,875 $ 843,005
Less: average goodwill and other intangibles 282,267 287,778
Average tangible common equity$ 593,608 $ 555,227
(6) Primarily settlement of litigation for 2014.
(7) Primarily incentive compensation related to sale of Springstone and settlement of litigation for 2014 and reorganization expenses for 2014 and 2015.
Note: Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.

NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, dollars in thousands except per share data)
2015 2014
3rd Q2nd Q1st Q4th Q3rd Q
Balance Sheet Data:
Securities Available for Sale$1,058,397 $1,129,249 $1,071,654 $1,013,171 $1,044,502
Securities Held to Maturity 470,758 454,312 456,773 454,361 459,620
Net Loans 5,806,129 5,705,929 5,557,664 5,528,912 5,517,757
Total Assets 8,161,562 8,072,485 7,863,861 7,797,926 7,867,031
Total Deposits 6,600,627 6,371,479 6,479,437 6,299,605 6,314,939
Total Borrowings 594,163 743,893 425,143 548,943 607,889
Total Liabilities 7,285,346 7,196,514 6,986,367 6,933,745 7,009,591
Stockholders' Equity 876,216 875,971 877,494 864,181 857,440
Asset Quality:
Nonaccrual Loans$42,524 $42,286 $45,053 $41,074 $50,531
90 Days Past Due and Still Accruing 3,790 1,994 2,601 4,941 4,022
Total Nonperforming Loans 46,314 44,280 47,654 46,015 54,553
Other Real Estate Owned 4,855 4,649 4,387 3,964 1,497
Total Nonperforming Assets 51,169 48,929 52,041 49,979 56,050
Allowance for Loan Losses 64,859 64,959 65,359 66,359 69,334
Asset Quality Ratios (Total):
Allowance for Loan Losses to Total Loans 1.10% 1.13% 1.16% 1.19% 1.24%
Total Nonperforming Loans to Total Loans 0.79% 0.77% 0.85% 0.82% 0.98%
Total Nonperforming Assets to Total Assets 0.63% 0.61% 0.66% 0.64% 0.71%
Allowance for Loan Losses to Total Nonperforming Loans 140.04% 146.70% 137.15% 144.21% 127.09%
Past Due Loans to Total Loans 0.63% 0.61% 0.54% 0.69% 0.65%
Net Charge-Offs to Average Loans (3) 0.35% 0.30% 0.34% 0.70% 0.36%
Asset Quality Ratios (Originated) (1):
Allowance for Loan Losses to Loans 1.21% 1.24% 1.29% 1.36% 1.38%
Nonperforming Loans to Loans 0.63% 0.59% 0.69% 0.72% 0.83%
Allowance for Loan Losses to Nonperforming Loans 192.49% 208.99% 188.68% 187.88% 166.69%
Past Due Loans to Loans 0.67% 0.64% 0.56% 0.73% 0.70%
Capital:
Equity to Assets 10.74% 10.85% 11.16% 11.08% 10.90%
Book Value Per Share$20.29 $20.05 $19.95 $19.69 $19.62
Tangible Book Value Per Share (2)$13.80 $13.61 $13.52 $13.22 $13.09
Tier 1 Leverage Ratio 9.34% 9.57% 9.72% 9.39% 9.20%
Common Equity Tier 1 Capital Ratio 10.04% 10.22% 10.46% N/A N/A
Tier 1 Capital Ratio 11.57% 11.78% 12.05% 12.32% 11.94%
Total Risk-Based Capital Ratio 12.62% 12.84% 13.15% 13.50% 13.16%
Common Stock Price (End of Period)$26.94 $26.17 $25.06 $26.27 $22.52
(1) Excludes acquired loans
(2) Stockholders' equity less goodwill and intangible assets divided by common shares outstanding
(3) Annualized

NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(unaudited, dollars in thousands)
September 30,December 31,
ASSETS 2015 2014
Cash and due from banks$ 175,036 $ 139,635
Short term interest bearing accounts 9,964 7,001
Securities available for sale, at fair value 1,058,397 1,013,171
Securities held to maturity (fair value of $475,436 and $454,994 at 470,758 454,361
September 30, 2015 and December 31, 2014, respectively)
Trading securities 7,900 7,793
Federal Reserve and Federal Home Loan Bank stock 34,001 32,626
Loans 5,870,988 5,595,271
Less allowance for loan losses 64,859 66,359
Net loans 5,806,129 5,528,912
Premises and equipment, net 87,763 89,258
Goodwill 263,634 263,634
Intangible assets, net 16,729 20,317
Bank owned life insurance 116,128 114,251
Other assets 115,123 126,967
TOTAL ASSETS$ 8,161,562 $ 7,797,926
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest bearing)$ 1,915,482 $ 1,838,622
Savings, NOW, and money market 3,753,179 3,417,160
Time 931,966 1,043,823
Total deposits 6,600,627 6,299,605
Short-term borrowings 362,332 316,802
Long-term debt 130,635 130,945
Junior subordinated debt 101,196 101,196
Other liabilities 90,556 85,197
Total liabilities 7,285,346 6,933,745
Total stockholders' equity 876,216 864,181
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$ 8,161,562 $ 7,797,926

NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
Interest, fee and dividend income:
Loans$ 61,656 $ 61,173 $ 181,047 $ 181,747
Securities available for sale 5,125 6,095 15,214 19,464
Securities held to maturity 2,318 1,353 6,916 2,904
Other 401 513 1,276 1,552
Total interest, fee and dividend income 69,500 69,134 204,453 205,667
Interest expense:
Deposits 3,554 3,498 10,644 9,782
Short-term borrowings 296 262 561 702
Long-term debt 845 1,067 2,507 5,709
Junior subordinated debt 560 544 1,645 1,620
Total interest expense 5,255 5,371 15,357 17,813
Net interest income 64,245 63,763 189,096 187,854
Provision for loan losses 4,966 4,885 12,506 12,647
Net interest income after provision for loan losses 59,279 58,878 176,590 175,207
Noninterest income:
Insurance and other financial services revenue 5,862 6,179 18,072 18,510
Service charges on deposit accounts 4,349 4,519 12,706 13,285
ATM and debit card fees 4,780 4,440 13,707 12,869
Retirement plan administration fees 3,249 3,272 10,011 9,167
Trust 4,611 4,758 14,257 14,157
Bank owned life insurance income 931 1,095 3,418 3,455
Net securities gains 3 38 43 59
Gain on the sale of Springstone investment 4,179 - 4,179 19,401
Other 3,297 2,376 9,617 8,078
Total noninterest income 31,261 26,677 86,010 98,981
Noninterest expense:
Salaries and employee benefits 30,227 28,933 91,240 89,609
Occupancy 5,326 5,211 16,804 16,872
Data processing and communications 4,207 4,029 12,598 12,045
Professional fees and outside services 3,137 3,695 10,029 10,862
Equipment 3,352 3,199 9,917 9,447
Office supplies and postage 1,576 1,733 4,822 5,221
FDIC expenses 1,355 1,135 3,833 3,642
Advertising 421 403 1,874 1,868
Amortization of intangible assets 1,165 1,275 3,636 3,821
Loan collection and other real estate owned 699 705 1,593 2,546
Prepayment penalties on long-term debt - 13,348 - 17,902
Other operating 8,426 5,401 19,211 15,485
Total noninterest expense 59,891 69,067 175,557 189,320
Income before income taxes 30,649 16,488 87,043 84,868
Income taxes 10,798 5,576 29,745 28,307
Net income$ 19,851 $ 10,912 $ 57,298 $ 56,561
Earnings Per Share:
Basic$ 0.45 $ 0.25 $ 1.30 $ 1.29
Diluted$ 0.45 $ 0.25 $ 1.29 $ 1.28


NBT Bancorp Inc. and Subsidiaries
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
2015 2014
3rd Q2nd Q1st Q4th Q3rd Q
Interest, fee and dividend income:
Loans$ 61,656 $ 59,873 $ 59,518 $ 61,577 $ 61,173
Securities available for sale 5,125 5,144 4,945 5,000 6,095
Securities held to maturity 2,318 2,315 2,283 2,357 1,353
Other 401 395 480 480 513
Total interest, fee and dividend income 69,500 67,727 67,226 69,414 69,134
Interest expense:
Deposits 3,554 3,517 3,573 3,856 3,498
Short-term borrowings 296 144 121 143 262
Long-term debt 845 836 826 846 1,067
Junior subordinated debt 560 545 540 545 544
Total interest expense 5,255 5,042 5,060 5,390 5,371
Net interest income 64,245 62,685 62,166 64,024 63,763
Provision for loan losses 4,966 3,898 3,642 6,892 4,885
Net interest income after provision for loan losses 59,279 58,787 58,524 57,132 58,878
Noninterest income:
Insurance and other financial services revenue 5,862 5,836 6,374 6,007 6,179
Service charges on deposit accounts 4,349 4,285 4,072 4,656 4,519
ATM and debit card fees 4,780 4,679 4,248 4,266 4,440
Retirement plan administration fees 3,249 3,566 3,196 2,962 3,272
Trust 4,611 5,196 4,450 4,793 4,758
Bank owned life insurance income 931 928 1,559 1,894 1,095
Net securities gains 3 26 14 33 38
Gain on the sale of Springstone investment 4,179 - - - -
Other 3,297 3,699 2,621 2,435 2,376
Total noninterest income 31,261 28,215 26,534 27,046 26,677
Noninterest expense:
Salaries and employee benefits 30,227 30,831 30,182 30,058 28,933
Occupancy 5,326 5,412 6,066 5,256 5,211
Data processing and communications 4,207 4,288 4,103 4,092 4,029
Professional fees and outside services 3,137 3,395 3,497 3,564 3,695
Equipment 3,352 3,316 3,249 3,211 3,199
Office supplies and postage 1,576 1,627 1,619 1,762 1,733
FDIC expenses 1,355 1,280 1,198 1,302 1,135
Advertising 421 734 719 963 403
Amortization of intangible assets 1,165 1,187 1,284 1,226 1,275
Loan collection and other real estate owned 699 22 872 702 705
Prepayment penalties on long-term debt - - - - 13,348
Other operating 8,426 5,872 4,913 4,607 5,401
Total noninterest expense 59,891 57,964 57,702 56,743 69,067
Income before income taxes 30,649 29,038 27,356 27,435 16,488
Income taxes 10,798 9,757 9,190 8,922 5,576
Net income $ 19,851 $ 19,281 $ 18,166 $ 18,513 $ 10,912
Earnings per share:
Basic$ 0.45 $ 0.44 $ 0.41 $ 0.42 $ 0.25
Diluted$ 0.45 $ 0.43 $ 0.41 $ 0.42 $ 0.25
Note: Year-to-date (YTD) EPS may not equal sum of quarters due to share count differences.


NBT Bancorp Inc. and Subsidiaries
AVERAGE QUARTERLY BALANCE SHEETS
(unaudited, dollars in thousands)
Average BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / Rates
Q3 - 2015Q2 - 2015Q1 - 2015Q4 - 2014Q3 - 2014
ASSETS:
Short-term interest bearing accounts$ 8,100 0.32%$ 9,854 0.36%$ 9,156 0.30%$ 5,895 0.51%$ 4,791 0.54%
Securities available for sale (1)(2) 1,079,206 1.92% 1,067,619 1.98% 1,018,880 2.02% 1,018,505 2.00% 1,263,375 2.01%
Securities held to maturity (1) 460,252 2.44% 452,948 2.49% 454,957 2.47% 458,038 2.45% 234,403 2.84%
Investment in FRB and FHLB Banks 37,358 4.19% 31,564 4.90% 30,931 6.20% 31,274 6.01% 39,459 5.06%
Loans (3) 5,824,311 4.21% 5,688,159 4.24% 5,586,942 4.33% 5,603,268 4.37% 5,563,206 4.38%
Total interest earning assets$ 7,409,227 3.77%$ 7,250,144 3.79%$ 7,100,866 3.89%$ 7,116,980 3.92%$ 7,105,234 3.91%
Other assets 690,768 685,523 696,091 709,955 697,814
Total assets$ 8,099,995 $ 7,935,667 $ 7,796,957 $ 7,826,935 $ 7,803,048
LIABILITIES AND STOCKHOLDERS' EQUITY:
Money market deposit accounts$1,557,651 0.22%$1,598,898 0.20%$1,544,488 0.21%$1,524,881 0.20%$1,452,287 0.19%
NOW deposit accounts 963,744 0.05% 974,504 0.05% 972,263 0.05% 978,527 0.05% 927,026 0.05%
Savings deposits 1,085,680 0.06% 1,080,954 0.06% 1,040,031 0.06% 1,017,300 0.08% 1,025,795 0.07%
Time deposits 939,542 1.01% 968,714 1.00% 1,014,904 1.00% 1,058,615 1.03% 1,032,370 0.96%
Total interest bearing deposits$ 4,546,617 0.31%$ 4,623,070 0.31%$ 4,571,686 0.32%$ 4,579,323 0.33%$ 4,437,478 0.31%
Short-term borrowings 456,663 0.26% 302,693 0.19% 265,420 0.19% 299,981 0.19% 447,761 0.23%
Junior subordinated debentures 101,196 2.20% 101,196 2.16% 101,196 2.16% 101,196 2.13% 101,196 2.13%
Long-term debt 130,680 2.56% 130,743 2.56% 130,879 2.56% 131,000 2.56% 170,223 2.49%
Total interest bearing liabilities$ 5,235,156 0.40%$ 5,157,702 0.39%$ 5,069,181 0.40%$ 5,111,500 0.42%$ 5,156,658 0.41%
Demand deposits 1,894,555 1,815,705 1,770,703 1,759,482 1,708,632
Other liabilities 91,979 84,096 85,999 87,319 82,594
Stockholders' equity 878,305 878,164 871,074 868,634 855,164
Total liabilities and stockholders' equity$ 8,099,995 $ 7,935,667 $ 7,796,957 $ 7,826,935 $ 7,803,048
Interest rate spread 3.37% 3.40% 3.49% 3.50% 3.50%
Net interest margin 3.48% 3.51% 3.60% 3.61% 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
* Interest income for tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory Federal income tax rate of 35%

NBT Bancorp Inc. and Subsidiaries
AVERAGE YEAR-TO-DATE BALANCE SHEETS
(unaudited, dollars in thousands)
Average Yield/Average Yield/
BalanceInterestRates BalanceInterestRates
Nine Months ended September 30, 2015 2014
ASSETS:
Short-term interest bearing accounts$9,033 $22 0.33%$3,821 $21 0.73%
Securities available for sale (1)(2) 1,055,456 15,579 1.97% 1,340,044 20,614 2.06%
Securities held to maturity (1) 456,072 8,415 2.47% 157,784 3,727 3.16%
Investment in FRB and FHLB Banks 33,308 1,254 5.03% 41,992 1,531 4.88%
Loans (3) 5,700,673 181,619 4.26% 5,502,656 182,383 4.43%
Total interest earning assets$ 7,254,542 $ 206,889 3.81%$ 7,046,297 $ 208,276 3.95%
Other assets 690,774 685,861
Total assets$ 7,945,316 $ 7,732,158
LIABILITIES AND STOCKHOLDERS' EQUITY:
Money market deposit accounts$1,567,060 2,462 0.21%$1,435,155 1,748 0.16%
NOW deposit accounts 970,139 375 0.05% 940,064 384 0.05%
Savings deposits 1,069,056 492 0.06% 1,022,212 551 0.07%
Time deposits 974,110 7,315 1.00% 1,001,301 7,099 0.95%
Total interest bearing deposits$ 4,580,365 $ 10,644 0.31%$ 4,398,732 $ 9,782 0.30%
Short-term borrowings 342,293 561 0.22% 410,242 702 0.23%
Trust preferred debentures 101,196 1,645 2.17% 101,196 1,620 2.14%
Long-term debt 130,767 2,507 2.56% 256,084 5,709 2.98%
Total interest bearing liabilities$ 5,154,621 $ 15,357 0.40%$ 5,166,254 $ 17,813 0.46%
Demand deposits 1,827,441 1,640,097
Other liabilities 87,380 82,802
Stockholders' equity 875,874 843,005
Total liabilities and stockholders' equity$ 7,945,316 $ 7,732,158
Net interest income (FTE) 191,532 190,463
Interest rate spread 3.41% 3.49%
Net interest margin 3.53% 3.61%
Taxable equivalent adjustment 2,436 2,609
Net interest income $ 189,096 $ 187,854
(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
* Interest income for tax-exempt securities and loans has been adjusted to a taxable-equivalent basis using the statutory Federal income tax rate of 35%

NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED LOAN BALANCES
(unaudited, dollars in thousands)
2015 2014
3rd Q2nd Q1st Q4th Q3rd Q
Residential real estate mortgages$ 1,177,195 $ 1,154,416 $ 1,125,886 $ 1,115,715 $ 1,099,912
Commercial 1,167,007 1,147,586 1,140,114 1,144,761 1,179,616
Commercial real estate 1,435,378 1,423,489 1,349,940 1,334,984 1,284,775
Consumer 1,549,844 1,495,160 1,452,070 1,430,216 1,441,629
Home equity 541,564 550,237 555,013 569,595 581,159
Total loans$ 5,870,988 $ 5,770,888 $ 5,623,023 $ 5,595,271 $ 5,587,091


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

Source:NBT Bancorp Inc.