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NBT Bancorp Inc. Announces Record Net Income of $78.4 Million; Declares Cash Dividend

NORWICH, N.Y., Jan. 23, 2017 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (NBT) (NASDAQ:NBTB) reported net income for the year ended December 31, 2016 of $78.4 million, up from $76.4 million from the prior year. Earnings per diluted share for the year ended December 31, 2016 was $1.80, up from $1.72 for the prior year.

Net income for the three months ended December 31, 2016 was $19.6 million, up from $19.1 million for the same period last year. Diluted earnings per share for the three months ended December 31, 2016 was $0.45, up from $0.43 for the same period last year.

2016 Highlights:

  • EPS increased 4.7% over prior year
  • Loan growth of 5.4%
  • Average demand deposits up 10.1% from 2015
  • Improved operating efficiencies resulting in flat noninterest expense year over year

“NBT completed an excellent 2016, posting record net income for the fourth consecutive year. This accomplishment was driven by our strong growth in loans, deposits and fee income generation, all of which can be attributed the hard work of our customer-focused team,” said President and CEO John H. Watt Jr. “As we move forward in 2017, we will build on the momentum initiated and led by my predecessor, Marty Dietrich, and we will focus on executing on our defined strategies that are grounded in organic growth as our team continues to collaborate to deliver returns for the benefit of our shareholders.”

Net interest income was $264.4 million for the year ended December 31, 2016, up $11.8 million, or 4.7%, from 2015. Fully taxable equivalent (“FTE”) net interest margin was 3.43% for the year ended December 31, 2016, down from 3.50% for the year ended December 31, 2015. Average interest earning assets were up $510.5 million, or 7.0%, for the year ended December 31, 2016 as compared to 2015. This increase from last year was driven primarily by $314.9, or 5.4%, loan growth and a $220.7 million, or 13.4%, increase in investment securities in 2016. The benefit of earning asset growth was partially offset by a 6 basis points (“bps”) decrease in earning asset yields, driven by a 5 bp decrease in loan yields from 2015 to 2016. Average interest bearing liabilities increased $330.7 million, or 6.4%, from the year ended December 31, 2015 to the year ended December 31, 2016. Total average deposits increased $373.2 million, or 5.8%, for the year ended December 31, 2016 as compared to the prior year, driven primarily by a 10.1% increase in non-interest bearing demand deposits, as well as increases in money market deposit accounts, NOW and savings deposits in 2016. Average short-term borrowings increased $157.8 million for the year ended December 31, 2016 as compared to the prior year funding earning asset growth. The rates paid on interest bearing liabilities increased by 1 bp for the year ended December 31, 2016 as compared to 2015.

Net interest income was $67.4 million for the fourth quarter of 2016, up $0.8 million, or 1.1%, from the previous quarter and up $3.9 million, or 6.2%, from the fourth quarter of 2015. FTE net interest margin was 3.41% for the three months ended December 31, 2016, up from 3.40% for the previous quarter and down from 3.42% for the fourth quarter of 2015. Average interest earning assets were up $71.0 million, or 0.9%, for the fourth quarter of 2016 as compared to the prior quarter and up $521.5 million, or 7.0%, from the same period in 2015. The increases from the third quarter of 2016 and the fourth quarter of 2015 were driven primarily by growth in both loans and investments. Yields on earning assets remained consistent in the third and fourth quarters of 2016 at 3.69% and decreased by 1 bp from 3.70% in the fourth quarter of 2015. Average interest bearing liabilities increased $13.3 million, or 0.2%, from the third quarter of 2016, and $332.5 million, or 6.4%, to the fourth quarter of 2016. The rate paid on interest bearing liabilities was 0.41% for the fourth quarter of 2016, compared to 0.42% paid in the prior quarter and 0.40% in the fourth quarter of 2015.

Noninterest income for the year ended December 31, 2016 was $115.7 million, down $2.8 million, or 2.3%, from the year ended December 31, 2015. The decrease was primarily due to the gain of $4.2 million recognized in the third quarter of 2015 from the 2014 sale of Springstone LLC. In addition, net securities income was down $3.7 million from 2015 due to a $0.7 million securities loss in 2016 versus a net securities gain for $3.0 million in 2015. The decreases were offset by increases in retirement plan and administration fees, other noninterest income, ATM and debit card fees, bank owned life insurance income and insurance and other financial services revenue. Retirement plan administration fees were up $1.9 million, or 13.6%, from 2015 due primarily to the 2015 fourth quarter acquisition of Third Party Administrators, Inc. and the 2016 third quarter acquisition of Actuarial Designs & Solutions, Inc. Other noninterest income was up $1.8 million, or 12.4%, primarily due to higher swap fee income in 2016 than in 2015, an increase in mortgage banking income and a $0.9 million gain on the sale of equity investments for compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act in the third quarter of 2016.

Noninterest income for the three months ended December 31, 2016 was $28.1 million, down $1.6 million, or 5.2%, from the prior quarter and down $4.4 million, or 13.5%, from the fourth quarter of 2015. The decrease from the third quarter of 2016 is primarily due to the aforementioned $0.7 million securities loss and decreases in insurance and other financial services revenue in the fourth quarter of 2016. In addition, other noninterest income decreased from the third quarter of 2016 due to lower mortgage banking income and swap fees that were offset by an equity investment dividend. Net securities income was down $3.7 million from 2015 due to the aforementioned $0.7 million securities loss versus a net securities gain of $3.0 million in the fourth quarter of 2015. Other noninterest income decreased from the fourth quarter of 2015 due to a $1.6 million favorable settlement of an accrual in the fourth quarter of 2015 offset by higher swap fees in the fourth quarter of 2016.

Noninterest expense for the year ended December 31, 2016 was $235.9 million, down $0.3 million, or 0.1%, from 2015. This decrease was driven by lower other noninterest expense during 2016 than 2015 primarily due to reorganization expenses incurred during the third quarter of 2015, offset by higher salaries and employee benefits expense in 2016. Salaries and employee benefits expense increased $5.4 million, or 4.3%, from 2015 to 2016, due to higher salaries and medical insurance costs that were partially offset by lower pension credit and contract termination costs. Income tax expense for 2016 was $40.4 million, up $0.2 million, or 0.5%, from the prior year. The effective tax rate was 34.0% for 2016 down from 34.5% for 2015.

Noninterest expense for the three months ended December 31, 2016 was $57.6 million, down $2.0 million, or 3.3%, from the previous quarter and down $3.0 million, or 4.9%, from the same period in 2015. The decrease from the prior quarter is due to lower other operating expenses, primarily due to a $1.4 million favorable accrual adjustment and lower salaries and employee benefits expenses partially offset by higher professional and outside services in the fourth quarter of 2016. The decrease from the fourth quarter of 2015 is due to lower salaries and employee benefits expenses due primarily to contract termination costs in the fourth quarter of 2015 and lower other operating expenses in the fourth quarter of 2016 due to the aforementioned favorable accrual adjustment. Income tax expenses for the three month period ended December 31, 2016 was $10.1 million, down $0.2 million, or 2.0%, from the third quarter of 2016, and down $0.4 million, or 3.4%, from the fourth quarter of 2015. The effective tax rate of 34.0% for the fourth quarter of 2016 was consistent with the prior quarter and down from 35.3% for the fourth quarter of 2015.

Asset Quality

Net charge-offs were $23.2 million for the year ended December 31, 2016, up from $21.6 million for the year ended December 31, 2015. Provision expense was $25.4 million for the year ended December 31, 2016, as compared with $18.3 million for 2015; the increase in provision expense was primarily due to loan growth. Net charge-offs to average loans for 2016 was 0.39%, compared with 0.38% for 2015.

Net charge-offs were $8.6 million for the three months ended December 31, 2016, up from $5.3 million for the prior quarter and up from $7.6 million for the fourth quarter of 2015. In the prior quarter, higher charge-offs from the commercial and consumer portfolios accounted for the increase. Commercial loans charge-offs were elevated due to the write-down of an individual credit that was previously identified and provided for which was subsequently transferred into other real estate owned. Charge-offs increased from the fourth quarter of 2015 due to higher consumer loan charge-offs than the same quarter of 2015. Provision expense was $8.2 million for the three months ended December 31, 2016, as compared with $6.4 million for the prior quarter and $5.8 million for the fourth quarter of 2015; the increases in provision expense were primarily due to loan growth and the higher level of charge-offs in 2016 than in 2015. Annualized net charge-offs to average loans for the fourth quarter of 2016 was 0.56%, compared with 0.35% for the third quarter of 2016 and 0.51% for the fourth quarter of 2015.

Nonperforming loans to total loans was 0.65% at December 31, 2016, down from 0.73% at September 30, 2016 and up from 0.64% at December 31, 2015. Past due loans as a percentage of total loans were 0.64% at December 31, 2016, up from 0.57% at September 30, 2016 and up from 0.62% at December 31, 2015.

The allowance for loan losses totaled $65.2 million at December 31, 2016, compared to $65.7 million at September 30, 2016 and $63.0 million at December 31, 2015. The allowance for loan losses as a percentage of loans was 1.05% (1.13% excluding acquired loans with no related allowance recorded) at December 31, 2016, compared to 1.07% (1.15% excluding acquired loans with no related allowance recorded) at September 30, 2016 and 1.07% (1.18% excluding acquired loans with no related allowance recorded) at December 31, 2015.

Balance Sheet

Total assets were $8.9 billion at December 31, 2016, up $604.6 million, or 7.3% from December 31, 2015. Loans were $6.2 billion at December 31, 2016, up $314.9 million, or 5.4% from December 31, 2015. Total deposits were $7.0 billion at December 31, 2016, up $368.8 million, or 5.6%, from December 31, 2015. Stockholders’ equity was $913.3 million, representing a total equity-to-total assets ratio of 10.30% at December 31, 2016, compared with $882.0 million or a total equity-to-total assets ratio of 10.67% at December 31, 2015.

Stock Repurchase Program

The Company purchased 675,535 shares of its common stock during the year ended December 31, 2016 at an average price of $25.45 per share under a previously announced plan that expired on December 31, 2016. On March 28, 2016, the NBT Board of Directors authorized a new repurchase program for NBT to repurchase up to 1,000,000 shares of its outstanding common stock. This plan expires on December 31, 2017.

Dividend

The NBT Board of Directors declared a 2017 first-quarter cash dividend of $0.23 per share at a meeting held today. The dividend will be paid on March 15, 2017 to shareholders of record as of March 1, 2017.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $8.9 billion at December 31, 2016. 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 154 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-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 acquisition related intangible amortization expense on earnings and equity as well as providing a fully taxable equivalent yield on securities and loans. 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 results of NBT’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider NBT’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of NBT.

NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, dollars in thousands except per share data)
2016 2015
Profitability:4th Q3rd Q2nd Q1st Q4th Q
Diluted Earnings Per Share$0.45 $0.46 $0.46 $0.43 $0.43
Weighted Average Diluted
Common Shares Outstanding 43,703,122 43,562,489 43,453,674 43,707,489 44,072,049
Return on Average Assets (1) 0.89% 0.92% 0.94% 0.92% 0.93%
Return on Average Equity (1) 8.54% 8.80% 9.00% 8.63% 8.58%
Return on Average Tangible Common Equity (1)(3) 12.68% 13.16% 13.54% 13.17% 13.04%
Net Interest Margin (1)(2) 3.41% 3.40% 3.44% 3.47% 3.42%
12 Months ended December 31,
Profitability: 2016 2015
Diluted Earnings Per Share$1.80 $1.72
Weighted Average Diluted
Common Shares Outstanding 43,621,848 44,389,356
Return on Average Assets 0.92% 0.96%
Return on Average Equity 8.74% 8.70%
Return on Average Tangible Common Equity (4) 13.13% 13.31%
Net Interest Margin (2) 3.43% 3.50%
(1) Annualized
(2) Calculated on a Fully Taxable Equivalent ("FTE") basis
(3) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
2016 2015
4th Q3rd Q2nd Q1st Q4th Q
Net Income$19,608 $20,001 $19,909 $18,891 $19,127
Amortization of intangible assets (net of tax) 582 582 567 670 750
$20,190 $20,583 $20,476 $19,561 $19,877
Average stockholders' equity$913,850 $904,445 $890,053 $880,311 $884,743
Less: average goodwill and other intangibles 280,275 282,307 281,709 282,751 279,904
Average tangible common equity$633,575 $622,138 $608,344 $597,560 $604,839
(4) Non-GAAP measure - 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,
2016 2015
Net Income$78,409 $76,425
Amortization of intangible assets (net of tax) 2,400 2,971
$80,809 $79,396
Average stockholders' equity$897,230 $878,110
Less: average goodwill and other intangibles 281,758 281,671
Average tangible common equity$615,472 $596,439
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)
2016 2015
4th Q3rd Q2nd Q1st Q4th Q
Balance Sheet Data:
Securities Available for Sale$ 1,338,290 $ 1,288,899 $ 1,271,596 $ 1,259,874 $ 1,174,544
Securities Held to Maturity 527,948 485,877 500,840 466,914 471,031
Net Loans 6,132,857 6,094,517 5,974,825 5,903,491 5,820,115
Total Assets 8,867,268 8,773,024 8,624,780 8,472,964 8,262,646
Total Deposits 6,973,688 6,949,238 6,740,416 6,905,042 6,604,843
Total Borrowings 886,986 800,367 877,926 579,441 674,124
Total Liabilities 7,953,952 7,863,675 7,728,427 7,591,237 7,380,642
Stockholders' Equity 913,316 909,349 896,353 881,727 882,004
Asset Quality:
Nonaccrual Loans$ 35,712 $ 40,716 $ 37,397 $ 38,944 $ 33,744
90 Days Past Due and Still Accruing 4,810 4,444 1,613 2,185 3,662
Total Nonperforming Loans 40,522 45,160 39,010 41,129 37,406
Other Real Estate Owned 5,581 2,501 2,211 2,716 4,666
Total Nonperforming Assets 46,103 47,661 41,221 43,845 42,072
Allowance for Loan Losses 65,200 65,668 64,568 64,318 63,018
Asset Quality Ratios (Total):
Allowance for Loan Losses to Total Loans 1.05% 1.07% 1.07% 1.08% 1.07%
Total Nonperforming Loans to Total Loans 0.65% 0.73% 0.65% 0.69% 0.64%
Total Nonperforming Assets to Total Assets 0.52% 0.54% 0.48% 0.52% 0.51%
Allowance for Loan Losses to Total Nonperforming Loans 160.90% 145.41% 165.52% 156.38% 168.47%
Past Due Loans to Total Loans 0.64% 0.57% 0.60% 0.50% 0.62%
Net Charge-Offs to Average Loans (1) 0.56% 0.35% 0.30% 0.33% 0.51%
Asset Quality Ratios (Originated) (2):
Allowance for Loan Losses to Loans 1.13% 1.15% 1.16% 1.18% 1.18%
Nonperforming Loans to Loans 0.61% 0.68% 0.62% 0.67% 0.61%
Allowance for Loan Losses to Nonperforming Loans 186.82% 168.52% 186.71% 175.40% 193.00%
Past Due Loans to Loans 0.66% 0.56% 0.61% 0.51% 0.64%
Capital:
Equity to Assets 10.30% 10.37% 10.39% 10.41% 10.67%
Book Value Per Share$ 21.11 $ 21.08 $ 20.85 $ 20.57 $ 20.31
Tangible Book Value Per Share (3)$ 14.61 $ 14.57 $ 14.31 $ 13.99 $ 13.79
Tier 1 Leverage Ratio 9.11% 9.05% 9.03% 9.15% 9.44%
Common Equity Tier 1 Capital Ratio 9.98% 9.84% 9.83% 9.79% 10.20%
Tier 1 Capital Ratio 11.42% 11.28% 11.29% 11.28% 11.73%
Total Risk-Based Capital Ratio 12.39% 12.27% 12.29% 12.29% 12.74%
Common Stock Price (End of Period)$ 41.88 $ 32.87 $ 28.63 $ 26.95 $ 27.88
(1) Annualized
(2) Non-GAAP measure - Excludes acquired loans
(3) Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding

NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(unaudited, dollars in thousands)
December 31,December 31,
ASSETS 2016 2015
Cash and due from banks$ 147,789 $130,593
Short term interest bearing accounts 1,392 9,704
Securities available for sale, at fair value 1,338,290 1,174,544
Securities held to maturity (fair value of $525,049 and $473,140 at 527,948 471,031
December 31, 2016 and December 31, 2015, respectively)
Trading securities 9,259 8,377
Federal Reserve and Federal Home Loan Bank stock 47,033 36,673
Loans 6,198,057 5,883,133
Less allowance for loan losses 65,200 63,018
Net loans 6,132,857 5,820,115
Premises and equipment, net 84,187 88,826
Goodwill 265,439 265,957
Intangible assets, net 15,815 17,265
Bank owned life insurance 168,012 117,044
Other assets 129,247 122,517
TOTAL ASSETS$ 8,867,268 $8,262,646
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest bearing)$ 2,195,845 $1,998,165
Savings, NOW, and money market 3,905,432 3,697,851
Time 872,411 908,827
Total deposits 6,973,688 6,604,843
Short-term borrowings 681,703 442,481
Long-term debt 104,087 130,447
Junior subordinated debt 101,196 101,196
Other liabilities 93,278 101,675
Total liabilities 7,953,952 7,380,642
Total stockholders' equity 913,316 882,004
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$ 8,867,268 $8,262,646

NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2016 2015 2016 2015
Interest, fee and dividend income:
Loans$ 63,901 $60,781 $ 250,994 $241,828
Securities available for sale 6,057 5,204 24,033 20,418
Securities held to maturity 2,524 2,317 9,852 9,233
Other 627 469 2,068 1,745
Total interest, fee and dividend income 73,109 68,771 286,947 273,224
Interest expense:
Deposits 3,557 3,613 14,366 14,257
Short-term borrowings 641 222 2,309 783
Long-term debt 779 848 3,204 3,355
Junior subordinated debt 707 576 2,627 2,221
Total interest expense 5,684 5,259 22,506 20,616
Net interest income 67,425 63,512 264,441 252,608
Provision for loan losses 8,165 5,779 25,431 18,285
Net interest income after provision for loan losses 59,260 57,733 239,010 234,323
Noninterest income:
Insurance and other financial services revenue 5,711 6,139 24,396 24,211
Service charges on deposit accounts 4,270 4,350 16,729 17,056
ATM and debit card fees 4,868 4,541 19,448 18,248
Retirement plan administration fees 4,126 4,135 16,063 14,146
Trust fees 4,717 4,769 18,565 19,026
Bank owned life insurance income 1,297 916 5,195 4,334
Net securities (losses) gains (674) 3,044 (644) 3,087
Gain on the sale of Springstone investment - - - 4,179
Other 3,773 4,577 15,961 14,194
Total noninterest income 28,088 32,471 115,713 118,481
Noninterest expense:
Salaries and employee benefits 31,547 33,078 129,702 124,318
Occupancy 5,160 5,291 20,940 22,095
Data processing and communications 4,141 3,990 16,495 16,588
Professional fees and outside services 3,712 3,378 13,617 13,407
Equipment 3,632 3,491 14,295 13,408
Office supplies and postage 1,507 1,545 6,168 6,367
FDIC insurance 1,273 1,312 5,111 5,145
Advertising 823 780 2,556 2,654
Amortization of intangible assets 952 1,228 3,928 4,864
Loan collection and other real estate owned 923 1,027 3,458 2,620
Other operating 3,969 5,499 19,652 24,710
Total noninterest expense 57,639 60,619 235,922 236,176
Income before income taxes 29,709 29,585 118,801 116,628
Income taxes 10,101 10,458 40,392 40,203
Net income$ 19,608 $19,127 $ 78,409 $76,425
Earnings Per Share:
Basic$ 0.45 $0.44 $ 1.81 $1.74
Diluted$ 0.45 $0.43 $ 1.80 $1.72


NBT Bancorp Inc. and Subsidiaries
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
2016 2015
4th Q3rd Q2nd Q1st Q4th Q
Interest, fee and dividend income:
Loans$ 63,901 $ 63,414$62,449$61,230$60,781
Securities available for sale 6,057 6,013 5,976 5,987 5,204
Securities held to maturity 2,524 2,544 2,496 2,288 2,317
Other 627 538 454 449 469
Total interest, fee and dividend income 73,109 72,509 71,375 69,954 68,771
Interest expense:
Deposits 3,557 3,607 3,605 3,597 3,613
Short-term borrowings 641 761 579 328 222
Long-term debt 779 819 773 833 848
Junior subordinated debt 707 660 641 619 576
Total interest expense 5,684 5,847 5,598 5,377 5,259
Net interest income 67,425 66,662 65,777 64,577 63,512
Provision for loan losses 8,165 6,388 4,780 6,098 5,779
Net interest income after provision for loan losses 59,260 60,274 60,997 58,479 57,733
Noninterest income:
Insurance and other financial services revenue 5,711 6,114 5,625 6,946 6,139
Service charges on deposit accounts 4,270 4,354 4,166 3,939 4,350
ATM and debit card fees 4,868 5,063 4,934 4,583 4,541
Retirement plan administration fees 4,126 4,129 4,054 3,754 4,135
Trust fees 4,717 4,535 4,937 4,376 4,769
Bank owned life insurance income 1,297 1,336 1,271 1,291 916
Net securities (losses) gains (674) - 1 29 3,044
Gain on the sale of Springstone investment - - - - -
Other 3,773 4,113 4,626 3,449 4,577
Total noninterest income 28,088 29,644 29,614 28,367 32,471
Noninterest expense:
Salaries and employee benefits 31,547 32,783 32,931 32,441 33,078
Occupancy 5,160 5,035 5,254 5,491 5,291
Data processing and communications 4,141 4,183 4,121 4,050 3,990
Professional fees and outside services 3,712 3,343 3,331 3,231 3,378
Equipment 3,632 3,656 3,547 3,460 3,491
Office supplies and postage 1,507 1,438 1,676 1,547 1,545
FDIC insurance 1,273 1,287 1,293 1,258 1,312
Advertising 823 634 595 504 780
Amortization of intangible assets 952 952 928 1,096 1,228
Loan collection and other real estate owned 923 985 845 705 1,027
Other operating 3,969 5,318 5,924 4,441 5,499
Total noninterest expense 57,639 59,614 60,445 58,224 60,619
Income before income taxes 29,709 30,304 30,166 28,622 29,585
Income taxes 10,101 10,303 10,257 9,731 10,458
Net income $ 19,608 $ 20,001$19,909$18,891$19,127
Earnings per share:
Basic$ 0.45 $ 0.46$0.46$0.44$0.44
Diluted$ 0.45 $ 0.46$0.46$0.43$0.43
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
Three Months ended, Q4 - 2016Q3 - 2016Q2 - 2016Q1 - 2016Q4 - 2015
ASSETS:
Short-term interest bearing accounts$ 14,190 0.64%$21,2790.54%$16,0630.53%$13,6390.63%$13,4940.34%
Securities available for sale (1)(2) 1,277,931 1.92% 1,257,3351.93% 1,227,3671.99% 1,188,4372.06% 1,070,6431.97%
Securities held to maturity (1) 492,415 2.54% 494,4002.54% 498,4932.49% 465,9162.48% 470,0272.43%
Investment in FRB and FHLB Banks 39,448 6.09% 43,5524.65% 38,9394.47% 33,4705.14% 32,2635.63%
Loans (3) 6,155,985 4.14% 6,092,3714.15% 6,007,6774.19% 5,884,0734.20% 5,872,0114.12%
Total interest earning assets$ 7,979,969 3.69%$7,908,9373.69%$7,788,5393.73%$7,585,5353.75%$7,458,4383.70%
Other assets 760,563 754,813 747,074 699,194 693,981
Total assets$ 8,740,532 $8,663,750 $8,535,613 $8,284,729 $8,152,419
LIABILITIES AND STOCKHOLDERS' EQUITY:
Money market deposit accounts$1,674,119 0.21%$1,636,8150.22%$1,709,6440.22%$1,653,9300.22%$1,626,6440.22%
NOW deposit accounts 1,130,578 0.05% 1,053,5900.05% 1,073,8810.05% 1,051,9590.05% 1,039,5630.05%
Savings deposits 1,145,352 0.06% 1,146,0130.06% 1,143,6540.06% 1,105,4800.06% 1,079,7570.06%
Time deposits 890,506 1.06% 902,1851.07% 906,2501.06% 921,7541.04% 918,8751.05%
Total interest bearing deposits$ 4,840,555 0.29%$4,738,6030.30%$4,833,4290.30%$4,733,1230.31%$4,664,8390.31%
Short-term borrowings 523,708 0.49% 611,3390.50% 484,5900.48% 369,4430.36% 332,7420.26%
Long-term debt 109,656 2.83% 110,7032.94% 124,8512.55% 130,4202.57% 130,5222.58%
Junior subordinated debt 101,196 2.78% 101,1962.59% 101,1962.49% 101,1962.46% 101,1962.26%
Total interest bearing liabilities$ 5,575,115 0.41%$5,561,8410.42%$5,544,0660.41%$5,334,1820.41%$5,229,2990.40%
Demand deposits 2,136,310 2,079,266 1,994,601 1,970,315 1,944,820
Other liabilities 115,258 118,198 106,893 99,921 93,557
Stockholders' equity 913,849 904,445 890,053 880,311 884,743
Total liabilities and stockholders' equity$ 8,740,532 $8,663,750 $8,535,613 $8,284,729 $8,152,419
Interest rate spread 3.29% 3.27% 3.32% 3.34% 3.30%
Net interest margin 3.41% 3.40% 3.44% 3.47% 3.42%
(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
Note: Interest income for tax-exempt securities and loans has been adjusted to a Fully Taxable-Equivalent ("FTE") 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
Twelve Months ended December 31, 2016 2015
ASSETS:
Short-term interest bearing accounts$ 16,301 $ 95 0.58%$ 10,157$ 330.33%
Securities available for sale (1)(2) 1,237,930 24,450 1.98% 1,059,284 20,8881.97%
Securities held to maturity (1) 487,837 12,255 2.51% 459,589 11,2962.46%
Investment in FRB and FHLB Banks 38,867 1,973 5.08% 33,044 1,7125.18%
Loans (3) 6,035,513 251,723 4.17% 5,743,860 242,5874.22%
Total interest earning assets$ 7,816,448 $ 290,496 3.72% 7,305,934$ 276,5163.78%
Other assets 740,506 691,583
Total assets$ 8,556,954 $ 7,997,517
LIABILITIES AND STOCKHOLDERS' EQUITY:
Money market deposit accounts$ 1,668,555 $ 3,599 0.22%$ 1,582,078$ 3,3510.21%
NOW deposit accounts 1,077,581 546 0.05% 987,638 5150.05%
Savings deposits 1,135,182 652 0.06% 1,071,753 6510.06%
Time deposits 905,126 9,569 1.06% 960,188 9,7401.01%
Total interest bearing deposits$ 4,786,444 $ 14,366 0.30%$ 4,601,657$ 14,2570.31%
Short-term borrowings 497,654 2,309 0.46% 339,885 7830.23%
Long-term debt 118,860 3,204 2.70% 130,705 3,3552.57%
Junior subordinated debt 101,196 2,627 2.60% 101,196 2,2212.19%
Total interest bearing liabilities$ 5,504,154 $ 22,506 0.41%$ 5,173,443$ 20,6160.40%
Demand deposits 2,045,465 1,857,027
Other liabilities 110,105 88,937
Stockholders' equity 897,230 878,110
Total liabilities and stockholders' equity$ 8,556,954 $ 7,997,517
Net interest income (FTE) 267,990 255,900
Interest rate spread 3.31% 3.38%
Net interest margin 3.43% 3.50%
Taxable equivalent adjustment 3,549 3,292
Net interest income $ 264,441 $ 252,608
(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
Note: Interest income for tax-exempt securities and loans has been adjusted to a Fully Taxable-Equivalent ("FTE") basis using the statutory Federal income tax rate of 35%

NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED LOAN BALANCES
(unaudited, dollars in thousands)
2016 2015
4th Q3rd Q2nd Q1st Q4th Q
Residential real estate mortgages$ 1,262,614 $ 1,240,337$ 1,219,388$ 1,211,821$ 1,196,780
Commercial 1,242,701 1,252,644 1,176,008 1,168,191 1,159,089
Commercial real estate 1,543,301 1,528,498 1,497,683 1,448,920 1,430,618
Consumer 1,641,657 1,625,294 1,629,836 1,620,669 1,568,204
Home equity 507,784 513,412 516,478 518,208 528,442
Total loans$ 6,198,057 $ 6,160,185$ 6,039,393$ 5,967,809$ 5,883,133


Contact: John H. Watt Jr., President and CEO Michael J. Chewens, CFO NBT Bancorp Inc. 52 South Broad Street Norwich, NY 13815 607-337-6119

Source:NBT Bancorp Inc.