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NBT Bancorp Inc. Announces Record Net Income of $22.9 Million and Record Diluted Earnings Per Share of $0.52; Declares Cash Dividend

NORWICH, N.Y., Oct. 23, 2017 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (NBT) (NASDAQ:NBTB) reported record net income and diluted earnings per share for both the three and nine months ended September 30, 2017.

Net income for the three months ended September 30, 2017 was $22.9 million, up from $21.4 million for the second quarter of 2017 and up from $20.0 million for the third quarter of 2016. Diluted earnings per share for the three months ended September 30, 2017 was $0.52, as compared with $0.49 for the prior quarter and $0.46 per share for the third quarter of 2016.

Net income for the nine months ended September 30, 2017 was $64.5 million, up 9.7% from $58.8 million for the same period last year. Reported diluted earnings per share for the nine months ended September 30, 2017 was $1.47, as compared with $1.35 for the same period in 2016.

Highlights:

  • Quarter-to-date earnings per share up 6.1% from the prior quarter and up 13.0% from prior year
  • Quarter-to-date net income up 7.1% from the prior quarter and up 14.4% from the prior year
  • Year to date annualized loan growth of 5.8%
  • Average demand deposits for the nine months ended September 30, 2017 up 9.2% from the same period in 2016

“Once again, due to the efforts of a committed and aligned team of NBT professionals, we are able to deliver strong quarter-over-quarter and year-over-year increases in net income and earnings per share,” said NBT President and CEO John H. Watt, Jr. “Our team has built and sustained momentum supported by the prevailing tailwinds that have been created as a result of an improving domestic economy and higher consumer confidence.”

Net interest income was $71.9 million for the third quarter of 2017, up $2.3 million, or 3.3%, from the previous quarter. Fully taxable equivalent (“FTE”) net interest margin was 3.47% for the three months ended September 30, 2017 up from 3.44% for the previous quarter. The yield on average earning assets increased five basis points (“bps”) from the prior quarter to 3.80% and the cost of interest bearing liabilities increased three bps to 0.47% driven by seasonal deposit migration and higher interest rates on borrowings. Average interest earning assets were up $113.4 million, or 1.4%, as compared to the prior quarter, primarily driven by a $106.2 million increase in loans.

Net interest income was $71.9 million for the third quarter of 2017, up $5.3 million, or 7.9%, from the third quarter of 2016. FTE net interest margin of 3.47% was up seven bps from the third quarter of 2016 as the improvement in asset yields was partially offset by the increase in cost of interest bearing liabilities. Average interest earning assets were up $431.3 million, or 5.5%, from the same period in 2016, which was primarily driven by a $307.9 million increase in loans and a $129.3 million increase in securities.

Net interest income for the first nine months of 2017 was $210.0 million, up $13.0 million, or 6.6%, from the same period in 2016. FTE net interest margin of 3.46% for the nine months ended September 30, 2017, was up from 3.44% for the same period in 2016. Average interest earning assets were up $476.3 million, or 6.1%, for the nine months ended September 30, 2017, as compared to the same period in 2016, which was driven by a $307.4 million increase in loans and a $166.1 million increase in securities. Interest income increased $15.3 million, or 7.2% due to the increase in earning assets combined with a four bp improvement in asset yields. Interest expense was up $2.3 million, or 13.7%, for the nine months ended September 30, 2017 as compared to the same period in 2016 and resulted primarily from a three bp increase in rates driven by higher borrowing costs and increase in the average balance of interest bearing liabilities.

Noninterest income for the three months ended September 30, 2017 was $30.8 million, up $0.5 million, or 1.6%, from the prior quarter and up $1.1 million, or 3.8%, from the third quarter of 2016. The increase from the prior quarter was driven by higher other noninterest income due to higher swap fee income. The increase in noninterest income from the third quarter of 2016 was driven by higher retirement plan administration, ATM and debit card fees and trust revenue that were offset by lower insurance and other financial services revenue during the third quarter of 2017. Retirement plan administration fees increased in the third quarter of 2017 as compared to the third quarter of 2016 due primarily to the acquisition of Downeast Pension Services (“DPS”) in the second quarter of 2017. ATM and debit card fees increased from the prior quarters due to higher number of accounts and usage. Trust revenue increased due to account growth. The increases were partially offset by lower insurance and other financial services revenue from the same period of 2016.

Noninterest income for the nine months ended September 30, 2017 was $89.8 million, up $2.2 million, or 2.5%, from the same period of 2016. The increase in noninterest income from the prior year was driven by higher retirement plan administration, ATM and debit card fees and trust revenue that were partially offset by lower insurance and other financial services and other noninterest income during the first nine months of 2017 as compared to the same period in 2016. Retirement plan administration fees increased in 2017 as compared to the prior year due primarily to acquisitions completed in 2016 and the acquisition of DPS in the second quarter of 2017. ATM and debit card fees increased from the prior year due to higher number of accounts and usage in 2017 as compared to 2016. Trust revenue increased from the prior year due to account growth.

Noninterest expense for the three months ended September 30, 2017 was $60.6 million, up $0.3 million, or 0.5%, from the prior quarter and up $1.0 million, or 1.7%, from the third quarter of 2016. The increases from the prior quarter and the same quarter of the prior year were driven by increases in loan collection and other real estate owned due primarily to the write-down of a commercial property.

Noninterest expense for the nine months ended September 30, 2017 was $182.2 million, up $3.9 million, or 2.2%, from the same period of 2016. The increase from the prior year was driven by higher loan collection and other real estate owned expense due primarily to commercial property write-downs. Salaries and employee benefits, occupancy, equipment, data processing and communications and other noninterest expenses also increased in the first nine months of 2017 as compared to the same period of 2016.

In the first quarter of 2017, NBT adopted new accounting guidance for equity-based transactions requiring that all excess tax benefits and tax deficiencies associated with equity-based compensation be recognized as an income tax benefit or expense in the income statement. Previously, tax effects resulting from changes in NBT’s share price subsequent to the grant date were recorded through stockholders’ equity at the time of vesting or exercise. The adoption of the accounting guidance resulted in income tax benefits of $1.4 million, $0.1 million and $0.2 million, in the first, second and third quarters of 2017, respectively. The year-to-date impact to diluted earnings per share was $0.04.

Income tax expense for the three months ended September 30, 2017 was $11.3 million, up $0.7 million, or 6.2%, from the prior quarter and up $1.0 million, or 10.1%, from the third quarter of 2016. The effective tax rate of 33.1% for the third quarter of 2017 was down from 33.3% for the second quarter of 2017 and down from 34.0% for the third quarter of 2016. The increase in income tax expense from the prior quarter was due to a higher level of taxable income. The decrease in the effective tax rate from the third quarter of 2016 was due to a higher level of non-taxable income in the third quarter of 2017 as compared to the same period of the prior year. Excluding the tax benefit of the new accounting guidance, the effective tax rate was 33.6% and 33.7% for the second and third quarters of 2017, respectively.

Income tax expense for the nine months ended September 30, 2017 was $30.3 million, consistent with the same period of 2016. The effective tax rate of 32.0% for the first nine months of 2017 was down from 34.0% for the same period in the prior year. The decrease from the prior year was primarily due to the $1.7 million income tax benefit related to the adoption of new accounting guidance in 2017 offset by a higher level of taxable income in the first nine months of 2017 compared to the same period in 2016. Excluding the tax benefit of the new accounting guidance, the effective tax rate was 33.8% for the first nine months of 2017.

Asset Quality

Net charge-offs were $6.1 million for the three months ended September 30, 2017, as compared to $6.7 million for the prior quarter and $5.3 million for the third quarter of 2016. Provision expense was $7.9 million for the three months ended September 30, 2017, as compared with $7.6 million for the prior quarter and $6.4 million for the third quarter of 2016. Provision expense increased as compared to the same period of the prior year due to loan growth and higher charge-offs driven by the commercial portfolio. Annualized net charge-offs to average loans for the third quarter of 2017 was 0.38% down from 0.42% for the second quarter of 2017 and up from 0.35% for the third quarter of 2016.

Net charge-offs were $19.7 million for the nine months ended September 30, 2017, as compared to $14.6 million for the same period of 2016. Provision expense was $22.8 million for the nine months ended September 30, 2017, as compared with $17.3 million for same period of 2016. Provision expense increased as compared to the first nine months of 2016 due to loan growth and higher net charge-offs driven by the commercial portfolio. Annualized net charge-offs to average loans for the first nine months of 2017 was 0.42% compared with 0.33% for the first nine months of 2016.

Nonperforming loans to total loans was 0.42% at September 30, 2017, down eight bps from 0.50% for the prior quarter and down 31 bps from 0.73% at September 30, 2016. Past due loans as a percentage of total loans were 0.63% at September 30, 2017, as compared to 0.59% at June 30, 2017 and 0.57% at September 30, 2016.

The allowance for loan losses totaled $68.4 million at September 30, 2017, compared to $66.6 million at June 30, 2017 and $65.7 million at September 30, 2016. The allowance for loan losses as a percentage of loans was 1.06% (1.13% excluding acquired loans) at September 30, 2017, compared to 1.05% (1.13% excluding acquired loans) at June 30, 2017 and 1.07% (1.15% excluding acquired loans) at September 30, 2016.

Balance Sheet

Total assets were $9.2 billion at September 30, 2017, up $288.1 million, or 3.2%, from December 31, 2016. Loans were $6.5 billion at September 30, 2017, up $268.9 million, or 4.3%, from December 31, 2016. Total deposits were $7.2 billion at September 30, 2017, up $257.5 million, or 3.7%, from December 31, 2016. Stockholders’ equity was $955.2 million, representing a total equity-to-total assets ratio of 10.43% at September 30, 2017, compared with $913.3 million or a total equity-to-total assets ratio of 10.30% at December 31, 2016.

Stock Repurchase Program

The Company did not purchase shares of its common stock during the three or nine months ended September 30, 2017. As of September 30, 2017, there were 1,000,000 shares available for repurchase under a plan authorized on March 28, 2016, which expires on December 31, 2017. On October 23, 2017, the NBT Board of Directors authorized a new repurchase program for NBT to repurchase up to an additional 1,000,000 shares of its outstanding common stock. This plan expires on December 31, 2019.

Dividend

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

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.2 billion at September 30, 2017. 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 152 banking locations 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 is available online 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 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, which 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 FTE 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.

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


NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, dollars in thousands except per share data)
2017 2016
Profitability:3rd Q2nd Q1st Q4th Q3rd Q
Diluted Earnings Per Share$ 0.52 $ 0.49 $ 0.46 $ 0.45 $ 0.46
Weighted Average Diluted Common Shares Outstanding 43,914,536 43,901,207 43,883,471 43,703,122 43,562,489
Return on Average Assets (1) 1.00% 0.95% 0.92% 0.89% 0.92%
Return on Average Equity (1) 9.55% 9.11% 8.94% 8.54% 8.80%
Return on Average Tangible Common Equity (1)(3) 13.99% 13.46% 13.24% 12.68% 13.16%
Net Interest Margin (1)(2) 3.47% 3.44% 3.46% 3.41% 3.40%
9 Months ended September 30,
Profitability: 2017 2016
Diluted Earnings Per Share$ 1.47 $ 1.35
Weighted Average Diluted Common Shares Outstanding 43,892,221 43,579,161
Return on Average Assets (1) 0.96% 0.92%
Return on Average Equity (1) 9.20% 8.81%
Return on Average Tangible Common Equity (1)(4) 13.57% 13.29%
Net Interest Margin (1)(2) 3.46% 3.44%
(1) Annualized.
(2) Calculated on a 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:
2017 2016
3rd Q2nd Q1st Q4th Q3rd Q
Net Income$ 22,876 $ 21,359 $ 20,279 $ 19,608 $ 20,001
Amortization of intangible assets (net of tax) 613 642 597 582 582
Net income, excluding intangibles amortization$ 23,489 $ 22,001 $ 20,876 $ 20,190 $ 20,583
Average stockholders' equity$ 950,557 $ 940,897 $ 920,047 $ 913,849 $ 904,445
Less: average goodwill and other intangibles 284,536 285,388 280,774 280,275 282,307
Average tangible common equity$ 666,021 $ 655,509 $ 639,273 $ 633,574 $ 622,138
(4) Non-GAAP measure - 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,
2017 2016
Net Income$ 64,514 $ 58,801
Amortization of intangible assets (net of tax) 1,852 1,818
Net income, excluding intangibles amortization$ 66,366 $ 60,619
Average stockholders' equity$ 937,279 $ 891,650
Less: average goodwill and other intangibles 283,580 282,255
Average tangible common equity$ 653,699 $ 609,395
Note: Year-to-date 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)
2017 2016
3rd Q2nd Q1st Q4th Q3rd Q
Balance Sheet Data:
Securities Available for Sale$ 1,357,614 $ 1,365,521 $ 1,367,574 $ 1,338,290 $ 1,288,899
Securities Held to Maturity 494,309 515,628 515,793 527,948 485,877
Net Loans 6,398,584 6,301,311 6,206,603 6,132,857 6,094,517
Total Assets 9,155,396 9,076,418 8,945,485 8,867,268 8,773,024
Total Deposits 7,231,236 7,015,284 7,185,051 6,973,688 6,949,238
Total Borrowings 872,060 1,021,339 745,462 886,986 800,367
Total Liabilities 8,200,158 8,136,057 8,018,646 7,953,952 7,863,675
Stockholders' Equity 955,238 940,361 926,839 913,316 909,349
Asset Quality:
Nonaccrual Loans$ 23,453 $ 29,134 $ 32,674 $ 35,712 $ 40,716
90 Days Past Due and Still Accruing 3,388 2,849 2,392 4,810 4,444
Total Nonperforming Loans 26,841 31,983 35,066 40,522 45,160
Other Real Estate Owned 4,230 4,747 6,940 5,581 2,501
Total Nonperforming Assets 31,071 36,730 42,006 46,103 47,661
Allowance for Loan Losses 68,350 66,600 65,700 65,200 65,668
Asset Quality Ratios (Total):
Allowance for Loan Losses to Total Loans 1.06% 1.05% 1.05% 1.05% 1.07%
Total Nonperforming Loans to Total Loans 0.42% 0.50% 0.56% 0.65% 0.73%
Total Nonperforming Assets to Total Assets 0.34% 0.40% 0.47% 0.52% 0.54%
Allowance for Loan Losses to Total Nonperforming Loans 254.65% 208.24% 187.36% 160.90% 145.41%
Past Due Loans to Total Loans 0.63% 0.59% 0.54% 0.64% 0.57%
Net Charge-Offs to Average Loans (1) 0.38% 0.42% 0.45% 0.56% 0.35%
Asset Quality Ratios (Originated) (2):
Allowance for Loan Losses to Loans 1.13% 1.13% 1.13% 1.13% 1.15%
Nonperforming Loans to Loans 0.39% 0.48% 0.53% 0.61% 0.68%
Allowance for Loan Losses to Nonperforming Loans 289.67% 235.08% 213.71% 186.82% 168.52%
Past Due Loans to Loans 0.65% 0.61% 0.55% 0.66% 0.56%
Capital:
Equity to Assets 10.43% 10.36% 10.36% 10.30% 10.37%
Book Value Per Share$ 21.94 $ 21.61 $ 21.34 $ 21.11 $ 21.08
Tangible Book Value Per Share (3)$ 15.42 $ 15.06 $ 14.88 $ 14.61 $ 14.57
Tier 1 Leverage Ratio 9.12% 9.08% 9.08% 9.11% 9.05%
Common Equity Tier 1 Capital Ratio 10.08% 9.96% 10.02% 9.98% 9.84%
Tier 1 Capital Ratio 11.46% 11.36% 11.43% 11.42% 11.28%
Total Risk-Based Capital Ratio 12.45% 12.32% 12.40% 12.39% 12.27%
Common Stock Price (End of Period)$ 36.72 $ 36.95 $ 37.07 $ 41.88 $ 32.87
(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)
September 30,December 31,
Assets: 2017 2016
Cash and due from banks$ 175,804 $ 147,789
Short-term interest bearing accounts 6,012 1,392
Securities available for sale, at fair value 1,357,614 1,338,290
Securities held to maturity (fair value $495,411 and $525,050, respectively) 494,309 527,948
Trading securities 10,883 9,259
Federal Reserve and Federal Home Loan Bank stock 45,070 47,033
Loans 6,466,934 6,198,057
Less allowance for loan losses 68,350 65,200
Net loans 6,398,584 6,132,857
Premises and equipment, net 81,421 84,187
Goodwill 268,043 265,439
Intangible assets, net 15,911 15,815
Bank owned life insurance 171,125 168,012
Other assets 130,620 129,247
Total assets$ 9,155,396 $ 8,867,268
Liabilities and stockholders' equity:
Deposits:
Demand (noninterest bearing)$ 2,312,715 $ 2,195,845
Savings, NOW, and money market 4,141,765 3,905,432
Time 776,756 872,411
Total deposits 7,231,236 6,973,688
Short-term borrowings 681,950 681,703
Long-term debt 88,914 104,087
Junior subordinated debt 101,196 101,196
Other liabilities 96,862 93,278
Total liabilities 8,200,158 7,953,952
Total stockholders' equity 955,238 913,316
Total liabilities and stockholders' equity$ 9,155,396 $ 8,867,268

NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
Three Months EndedNine Months Ended
September 30,September 30,
2017 2016 2017 2016
Interest, fee and dividend income:
Interest and fees on loans$ 68,086 $ 63,414$ 197,399 $ 187,093
Securities available for sale 7,278 6,013 21,505 17,976
Securities held to maturity 2,746 2,544 8,263 7,328
Other 737 538 2,010 1,441
Total interest, fee and dividend income 78,847 72,509 229,177 213,838
Interest expense:
Deposits 3,648 3,607 10,658 10,809
Short-term borrowings 1,870 761 4,375 1,668
Long-term debt 589 819 1,794 2,425
Junior subordinated debt 810 660 2,308 1,920
Total interest expense 6,917 5,847 19,135 16,822
Net interest income 71,930 66,662 210,042 197,016
Provision for loan losses 7,889 6,388 22,835 17,266
Net interest income after provision for loan losses 64,041 60,274 187,207 179,750
Noninterest income:
Insurance and other financial services revenue 5,536 6,114 17,927 18,685
Service charges on deposit accounts 4,261 4,354 12,399 12,459
ATM and debit card fees 5,557 5,063 16,025 14,580
Retirement plan administration fees 5,272 4,129 14,881 11,937
Trust 4,927 4,535 14,620 13,848
Bank owned life insurance income 1,284 1,336 3,913 3,898
Net securities (losses) gains (4) - (2) 30
Other 3,945 4,113 10,069 12,188
Total noninterest income 30,778 29,644 89,832 87,625
Noninterest expense:
Salaries and employee benefits 32,740 32,783 99,081 98,155
Occupancy 5,174 5,035 16,528 15,780
Data processing and communications 4,399 4,183 12,826 12,354
Professional fees and outside services 3,107 3,343 9,748 9,905
Equipment 3,733 3,656 11,224 10,663
Office supplies and postage 1,432 1,438 4,680 4,661
FDIC expense 1,257 1,287 3,571 3,838
Advertising 665 634 1,711 1,733
Amortization of intangible assets 993 952 2,999 2,976
Loan collection and other real estate owned 1,684 985 3,627 2,535
Other 5,417 5,318 16,209 15,683
Total noninterest expense 60,601 59,614 182,204 178,283
Income before income taxes 34,218 30,304 94,835 89,092
Income tax expense 11,342 10,303 30,321 30,291
Net income$ 22,876 $ 20,001$ 64,514 $ 58,801
Earnings Per Share:
Basic$ 0.52 $ 0.46$ 1.48 $ 1.36
Diluted$ 0.52 $ 0.46$ 1.47 $ 1.35


NBT Bancorp Inc. and Subsidiaries
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(unaudited, dollars in thousands except per share data)
20172016
3rd Q2nd Q 1st Q4th Q 3rd Q
Interest, fee and dividend income:
Interest and fees on loans$ 68,086 $ 65,286$ 64,027$ 63,901 $ 63,414
Securities available for sale 7,278 7,218 7,009 6,057 6,013
Securities held to maturity 2,746 2,736 2,781 2,524 2,544
Other 737 654 619 627 538
Total interest, fee and dividend income 78,847 75,894 74,436 73,109 72,509
Interest expense:
Deposits 3,648 3,536 3,474 3,557 3,607
Short-term borrowings 1,870 1,366 1,139 641 761
Long-term debt 589 599 606 779 819
Junior subordinated debt 810 772 726 707 660
Total interest expense 6,917 6,273 5,945 5,684 5,847
Net interest income 71,930 69,621 68,491 67,425 66,662
Provision for loan losses 7,889 7,567 7,379 8,165 6,388
Net interest income after provision for loan losses 64,041 62,054 61,112 59,260 60,274
Noninterest income:
Insurance and other financial services revenue 5,536 5,621 6,770 5,711 6,114
Service charges on deposit accounts 4,261 4,161 3,977 4,270 4,354
ATM and debit card fees 5,557 5,518 4,950 4,868 5,063
Retirement plan administration fees 5,272 5,437 4,172 4,126 4,129
Trust 4,927 5,161 4,532 4,717 4,535
Bank owned life insurance income 1,284 1,218 1,411 1,297 1,336
Net securities (losses) gains (4) 2 - (674) -
Other 3,945 3,186 2,938 3,773 4,113
Total noninterest income 30,778 30,304 28,750 28,088 29,644
Noninterest expense:
Salaries and employee benefits 32,740 32,754 33,587 31,547 32,783
Occupancy 5,174 5,184 6,170 5,160 5,035
Data processing and communications 4,399 4,229 4,198 4,141 4,183
Professional fees and outside services 3,107 3,609 3,032 3,712 3,343
Equipment 3,733 3,793 3,698 3,632 3,656
Office supplies and postage 1,432 1,640 1,608 1,507 1,438
FDIC expense 1,257 1,136 1,178 1,273 1,287
Advertising 665 656 390 823 634
Amortization of intangible assets 993 1,039 967 952 952
Loan collection and other real estate owned 1,684 664 1,279 923 985
Other 5,417 5,617 5,175 3,969 5,318
Total noninterest expense 60,601 60,321 61,282 57,639 59,614
Income before income taxes 34,218 32,037 28,580 29,709 30,304
Income tax expense 11,342 10,678 8,301 10,101 10,303
Net income$ 22,876 $ 21,359$ 20,279$ 19,608 $ 20,001
Earnings Per Share:
Basic$ 0.52 $ 0.49$ 0.47$ 0.45 $ 0.46
Diluted$ 0.52 $ 0.49$ 0.46$ 0.45 $ 0.46
Note: Year-to-date 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
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Three Months ended, Q3 - 2017Q2 - 2017Q1 - 2017Q4 - 2016Q3 - 2016
Assets:
Short-term interest bearing accounts$ 9,000 2.42%$ 9,4971.82%$ 14,3421.33%$ 14,1900.64%$ 21,2790.54%
Securities available for sale (1)(2) 1,374,739 2.13% 1,363,3142.15% 1,352,2192.14% 1,277,9311.92% 1,257,3351.93%
Securities held to maturity (1) 506,324 2.66% 513,8882.63% 520,2832.66% 492,4152.54% 494,4002.54%
Investment in FRB and FHLB Banks 49,902 5.42% 46,1325.31% 46,3265.01% 39,4486.09% 43,5524.65%
Loans (3) 6,400,287 4.23% 6,294,0564.17% 6,211,0584.19% 6,155,9854.14% 6,092,3714.15%
Total interest earning assets$ 8,340,252 3.80%$ 8,226,8873.75%$ 8,144,2283.75%$ 7,979,9693.69%$ 7,908,9373.69%
Other assets 759,636 753,383 748,476 760,563 754,813
Total assets$ 9,099,888 $ 8,980,270 $ 8,892,704 $ 8,740,532 $ 8,663,750
Liabilities and stockholders' equity:
Money market deposit accounts$1,652,730 0.23%$1,723,5940.21%$1,688,0600.21%$1,674,1190.21%$1,636,8150.22%
NOW deposit accounts 1,130,940 0.10% 1,138,2370.08% 1,143,2310.06% 1,130,5780.05% 1,053,5900.05%
Savings deposits 1,232,823 0.06% 1,232,3010.06% 1,176,2240.05% 1,145,3520.06% 1,146,0130.06%
Time deposits 805,435 1.09% 824,3981.08% 847,4101.07% 890,5061.06% 902,1851.07%
Total interest bearing deposits$ 4,821,928 0.30%$ 4,918,5300.29%$ 4,854,9250.29%$ 4,840,5550.29%$ 4,738,6030.30%
Short-term borrowings 773,074 0.96% 643,9710.85% 657,4420.70% 523,7080.49% 611,3390.50%
Long-term debt 88,935 2.63% 99,8652.41% 104,0482.36% 109,6562.83% 110,7032.94%
Junior subordinated debt 101,196 3.18% 101,1963.06% 101,1962.91% 101,1962.78% 101,1962.59%
Total interest bearing liabilities$ 5,785,133 0.47%$ 5,763,5620.44%$ 5,717,6110.42%$ 5,575,1150.41%$ 5,561,8410.42%
Demand deposits 2,260,973 2,181,952 2,159,893 2,136,310 2,079,266
Other liabilities 103,225 93,859 95,153 115,258 118,198
Stockholders' equity 950,557 940,897 920,047 913,849 904,445
Total liabilities and stockholders' equity$ 9,099,888 $ 8,980,270 $ 8,892,704 $ 8,740,532 $ 8,663,750
Interest rate spread 3.33% 3.31% 3.33% 3.29% 3.27%
Net interest margin 3.47% 3.44% 3.46% 3.41% 3.40%
(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 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
Nine Months ended September 30, 2017 2016
Assets:
Short-term interest bearing accounts$ 10,927 $ 144 1.76%$ 17,009$ 720.57%
Securities available for sale (1)(2) 1,363,506 21,815 2.14% 1,224,500 18,2861.99%
Securities held to maturity (1) 513,447 10,178 2.65% 486,299 9,1112.50%
Investment in FRB and FHLB Banks 47,466 1,866 5.26% 38,672 1,3694.73%
Loans (3) 6,302,494 198,027 4.20% 5,995,063 187,6294.18%
Total interest earning assets$ 8,237,840 $ 232,030 3.77% 7,761,543$ 216,4673.73%
Other assets 753,873 733,771
Total assets$ 8,991,713 $ 8,495,314
Liabilities and stockholders' equity:
Money market deposit accounts$ 1,687,998 $ 2,791 0.22%$ 1,666,687$ 2,7200.22%
NOW deposit accounts 1,137,424 682 0.08% 1,059,787 4000.05%
Savings deposits 1,213,990 509 0.06% 1,131,768 4910.06%
Time deposits 825,594 6,676 1.08% 910,034 7,1981.06%
Total interest bearing deposits$ 4,865,006 $ 10,658 0.29%$ 4,768,276$ 10,8090.30%
Short-term borrowings 691,919 4,375 0.85% 488,906 1,6680.46%
Long-term debt 97,561 1,794 2.46% 121,950 2,4252.66%
Junior subordinated debt 101,196 2,308 3.05% 101,196 1,9202.53%
Total interest bearing liabilities$ 5,755,682 $ 19,135 0.44%$ 5,480,328$ 16,8220.41%
Demand deposits 2,201,309 2,014,963
Other liabilities 97,443 108,373
Stockholders' equity 937,279 891,650
Total liabilities and stockholders' equity$ 8,991,713 $ 8,495,314
Net interest income (FTE) 212,895 199,645
Interest rate spread 3.33% 3.32%
Net interest margin 3.46% 3.44%
Taxable equivalent adjustment 2,853 2,629
Net interest income $ 210,042 $ 197,016
(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 FTE basis using the statutory Federal income tax rate of 35%.

NBT Bancorp Inc. and Subsidiaries
CONSOLIDATED LOAN BALANCES
(unaudited, dollars in thousands)
2017 2016
3rd Q2nd Q1st Q4th Q3rd Q
Residential real estate mortgages$ 1,302,577 $ 1,275,807$ 1,275,774$ 1,262,614$ 1,240,337
Commercial 1,307,560 1,342,334 1,284,464 1,242,701 1,252,644
Commercial real estate 1,654,727 1,563,980 1,540,472 1,543,301 1,528,498
Consumer 1,700,340 1,684,936 1,669,369 1,641,657 1,625,294
Home equity 501,730 500,854 502,224 507,784 513,412
Total loans$ 6,466,934 $ 6,367,911$ 6,272,303$ 6,198,057$ 6,160,185

Source:NBT Bancorp Inc.