EX-99.1 2 ex99_1.htm EXHIBIT 99.1
Exhibit 99.1

Page 1 of 12

FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS

Contact:
John H. Watt, Jr., President and CEO
 
Michael J. Chewens, CFO
 
NBT Bancorp Inc.
 
52 South Broad Street
 
Norwich, NY 13815
 
607-337-6589

NBT BANCORP INC. ANNOUNCES NET INCOME OF $30.6 MILLION AND DILUTED EARNINGS PER SHARE OF $0.69

NORWICH, NY (July 22, 2019) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the three and six months ended June 30, 2019.

Net income for the three months ended June 30, 2019 was $30.6 million, up 4.9% from $29.1 million for the first quarter of 2019 and up 8.7% from $28.1 million for the second quarter of 2018. Diluted earnings per share for the three months ended June 30, 2019 was $0.69, as compared with $0.66 for the prior quarter, an increase of 4.5%, and $0.64 for the second quarter of 2018, an increase of 7.8%.

Net income for the six months ended June 30, 2019 was $59.7 million, up 10.3% from $54.1 million for the same period last year. Diluted earnings per share for the six months ended June 30, 2019 was $1.35, as compared with $1.23 for the same period in 2018, an increase of 9.8%.

Highlights:

  •
Quarterly diluted earnings per share up 4.5% from prior quarter and up 7.8% from prior year
 

 •
Quarter-to-date net income up 4.9% from prior quarter and up 8.7% from prior year
 

 •
FTE net interest margin of 3.63% for the six months ended June 30, 2019, up 6 bps from 2018
 

 •
Full cycle deposit beta of 14.7% through the quarter ending June 30, 20191
 

 •
Tangible equity ratio of 8.41%, up 93 bps from the second quarter of 2018
 
“For the first six months of 2019, we achieved double-digit year-over-year growth with earnings per share and net income up 10% over the same period in 2018,” said NBT President and CEO John H. Watt, Jr. “Positive trends in net interest income and tangible capital growth demonstrate we are effectively managing our business and growing earnings while investing in our long-term strategies. Our team remains focused on building shareholder value by delivering a great customer experience. Relentless focus on process improvement and digitization will permit reinvestment of the productivity gains created into the customer experience.”
 
1 The change in the Company’s quarterly deposit costs from December 31, 2015 to June 30, 2019 of 0.33% divided by the change in Federal Reserve’s target fed funds rate from December 2015 to June 2019 of 2.25%

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Net interest income was $78.6 million for the second quarter of 2019, up $0.9 million, or 1.2%, from the previous quarter. The fully taxable equivalent (“FTE”) net interest margin was 3.61% for the three months ended June 30, 2019, down 3 basis points (“bps”) from the previous quarter, as higher funding costs on average interest-bearing liabilities were partially offset by higher average interest-earning assets. Interest income increased $1.9 million, or 2.1%, as the yield on average interest-earning assets of 4.28% was comparable to the prior quarter, while average interest-earning assets of $8.8 billion increased $70 million compared with the prior quarter. Interest expense was up $1.0 million, or 7.0%, as the cost of interest-bearing liabilities increased 4 bps to 0.96% for the quarter ended June 30, 2019, driven by interest-bearing deposit costs increasing 8 bps, partially offset by the 6 bp decrease in short-term borrowings cost.

Net interest income was $78.6 million for the second quarter of 2019, up $2.9 million, or 3.8%, from the second quarter of 2018. The FTE net interest margin of 3.61% was up 4 bps from the second quarter of 2018. Interest income increased $8.5 million, or 10.0%, as the yield on average interest-earning assets increased 29 bps from the same period in 2018, and average interest-earning assets increased $209.7 million, or 2.4%, primarily due to a $207.6 million increase in average loans. Interest expense increased $5.6 million, as the cost of interest-bearing liabilities increased 35 bps, driven by interest-bearing deposit costs increasing 38 bps combined with a 39 bp increase in short-term borrowing costs.

Net interest income for the first six months of 2019 was $156.3 million, up $7.1 million, or 4.8%, from the same period in 2018. FTE net interest margin of 3.63% for the six months ended June 30, 2019, was up from 3.57% for the same period in 2018. Average interest-earning assets were up $261.6 million, or 3.1% for the six months ended June 30, 2019, as compared to the same period in 2018, driven by a $250.7 million increase in loans. Interest income increased $19.1 million, or 11.5%, due to the increase in earning assets combined with a 30 bp improvement in loan yields. Interest expense was up $12.0 million, for the six months ended June 30, 2019 as compared to the same period in 2018 as the cost of interest-bearing liabilities increased 38 bps, driven by interest-bearing deposit costs increasing 38 bps combined with a 55 bp increase in short-term borrowing costs. The Federal Reserve has raised its target fed funds rate nine times from December 2015 through June 2019 for a total increase of 225 bps. During this same cycle of increasing rates, the Company’s average cost of deposits increased by 33 bps, resulting in a full cycle deposit beta of 14.7%.

Noninterest income for the three months ended June 30, 2019 was $34.2 million, up $0.4 million, or 1.2%, from the prior quarter and comparable with the second quarter of 2018. The increase from the prior quarter was primarily driven by higher ATM and debit card fees due to an increase in the number of accounts and usage and other noninterest income due to higher swap fee income that was partially offset by lower seasonal insurance and other financial services revenue.

Noninterest income for the six months ended June 30, 2019 was $68.1 million, up $2.6 million, or 4.0%, from the same period in 2018. The increase from the prior year was driven by higher retirement plan administration fees due to the acquisition of Retirement Plan Services, LLC “RPS” in the second quarter of 2018 and higher ATM and debit card fees due to an increase in the number of accounts and usage that was partially offset by lower trust income and other noninterest income due to lower non-recurring gains recognized in the first six months of 2019.

Noninterest expense for the three months ended June 30, 2019 was $66.2 million, down $2.2 million, or 3.3%, from the prior quarter and up $1.3 million, or 2.1%, from the second quarter of 2018. The decrease from the prior quarter was primarily driven by lower seasonal occupancy expenses and timing of equity-based compensation and other noninterest expense items. The increase from the second quarter of 2018 was driven by increases in salaries and employee benefits expense and equipment expense. Salaries and employee benefits expense increased from the second quarter of 2018 due to wage increases and higher incentive compensation.

Noninterest expense for the six months ended June 30, 2019 was $134.7 million, up $5.5 million, or 4.3%, from the same period in 2018. The increase from the prior year was driven by higher salaries and employee benefits, equipment expense and other noninterest expenses in the first half of 2019 as compared to the same period of 2018. The increase in salaries and employee benefits was primarily due to the RPS acquisition in the second quarter of 2018 and the timing of incentive compensation and wage increases.

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Income tax expense for the three months ended June 30, 2019 was $8.8 million, up $0.7 million from the prior quarter and up $0.7 million from the second quarter of 2018. The effective tax rate of 22.4% for the second quarter of 2019 was up from 21.8% for the first quarter of 2019 and comparable to the second quarter of 2018. The increase in income tax expense from the prior quarter and from the second quarter of 2018 was primarily due to a higher level of taxable income.

Income tax expense for the six months ended June 30, 2019 was $16.9 million, up $1.8 million, or 11.9%, from the same period of 2018. The effective tax rate of 22.1% for the first six months of 2019 was up from 21.8% for the same period in the prior year. The increase in income tax expense from the prior year was due to a higher level of taxable income.

Asset Quality

Net charge-offs of $6.5 million for the three months ended June 30, 2019 were down as compared to $6.9 million for the prior quarter and comparable to the second quarter of 2018. Provision expense was higher at $7.3 million for the three months ended June 30, 2019, as compared with $5.8 million for the prior quarter and down from $8.8 million for the second quarter of 2018. Annualized net charge-offs to average loans for the second quarter of 2019 was 0.38%, down from 0.41% for the prior quarter and down from 0.39% for the second quarter of 2018.

Net charge-offs of $13.4 million for the six months ended June 30, 2019 compared to $13.3 million for the same period of 2018. Provision expense was $13.1 million for the six months ended June 30, 2019, as compared with $16.3 million for the same period of 2018. Annualized net charge-offs to average loans for the first six months of 2019 was 0.39% as compared with 0.40% for the first six months of 2018.

Nonperforming loans to total loans was 0.39% at June 30, 2019, down 3 bps from 0.42% at March 31, 2019 and up 1 bp from 0.38% at June 30, 2018. Past due loans as a percentage of total loans were 0.52% at June 30, 2019, comparable to March 31, 2019 and up from 0.50% at June 30, 2018.

The allowance for loan losses totaled $72.2 million at June 30, 2019, compared to $71.4 million at March 31, 2019 and $72.5 million at June 30, 2018. The allowance for loan losses as a percentage of loans was 1.04% (1.08% excluding acquired loans) at June 30, 2019, compared to 1.04% (1.09% excluding acquired loans) at March 31, 2019 and 1.06% (1.11% excluding acquired loans) at June 30, 2018.

Balance Sheet

Total assets were $9.6 billion at June 30, 2019, comparable to December 31, 2018. Loans were $7.0 billion at June 30, 2019, up $75.6 million from December 31, 2018. In the first half of 2019, loan growth in commercial and commercial real estate was partially offset by run-off in our consumer portfolios. Total deposits were $7.6 billion at June 30, 2019, up $225.5 million, or 3.1%, from December 31, 2018, reflecting growth in core and municipal deposits. Stockholders’ equity was $1.1 billion, representing a total equity-to-total assets ratio of 11.15% at June 30, 2019, compared with $1.0 billion or a total equity-to-total assets ratio of 10.65% at December 31, 2018.

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Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.6 billion at June 30, 2019. 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 149 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine. EPIC Retirement Plan Services, 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 is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epic1st.com and www.nbtinsurance.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: (1) competitive pressures among depository and other financial institutions may increase significantly, including as a result of competitors having greater financial resources than NBT; (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 business and results; (6) NBT’s ability to successfully integrate acquired businesses and employees; 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, equity and assets as well as providing a FTE yield on securities and loans. Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide 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.

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NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)

   
2019
    
2018
  
Profitability:
  
2nd Q
    
1st Q
    
4th Q
    
3rd Q
    
2nd Q
  
Diluted earnings per share
  
$
0.69
    
$
0.66
    
$
0.65
    
$
0.68
    
$
0.64
  
Weighted average diluted common shares outstanding
    
44,120,377
      
44,081,086
      
44,059,796
      
44,050,557
      
44,016,940
  
Return on average assets (1)
    
1.28
%
    
1.24
%
    
1.20
%
    
1.25
%
    
1.21
%
Return on average equity (1)
    
11.63
%
    
11.52
%
    
11.34
%
    
11.96
%
    
11.64
%
Return on average tangible common equity (1)(3)
    
16.38
%
    
16.45
%
    
16.37
%
    
17.42
%
    
17.08
%
Net interest margin (1)(2)
    
3.61
%
    
3.64
%
    
3.61
%
    
3.57
%
    
3.57
%

   
6 Months ended June 30,
                          
Profitability:
    
2019
      
2018
                          
Diluted earnings per share
  
$
1.35
    
$
1.23
                          
Weighted average diluted common shares outstanding
    
44,096,681
      
43,991,731
                          
Return on average assets (1)
    
1.26
%
    
1.18
%
                        
Return on average equity (1)
    
11.57
%
    
11.32
%
                        
Return on average tangible common equity (1)(4)
    
16.41
%
    
16.52
%
                        
Net interest margin (1)(2)
    
3.63
%
    
3.57
%
                        

(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:

   
2019
    
2018
  
   
2nd Q
    
1st Q
    
4th Q
    
3rd Q
    
2nd Q
  
Net income
  
$
30,555
    
$
29,127
    
$
28,652
    
$
29,807
    
$
28,121
  
Amortization of intangible assets (net of tax)
    
670
      
726
      
734
      
791
      
822
  
Net income, excluding intangibles amortization
  
$
31,225
    
$
29,853
    
$
29,386
    
$
30,598
    
$
28,943
  
                                         
Average stockholders' equity
  
$
1,053,750
    
$
1,025,753
    
$
1,002,822
    
$
988,551
    
$
969,029
  
Less: average goodwill and other intangibles
    
288,930
      
289,913
      
290,854
      
291,814
      
289,250
  
Average tangible common equity
  
$
764,820
    
$
735,840
    
$
711,968
    
$
696,737
    
$
679,779
  

(4) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:

   
6 Months ended June 30,
  
   
2019
    
2018
  
Net income
  
$
59,682
    
$
54,107
  
Amortization of intangible assets (net of tax)
    
1,396
      
1,508
  
Net income, excluding intangibles amortization
  
$
61,078
    
$
55,615
  
                 
Average stockholders' equity
  
$
1,039,829
    
$
964,064
  
Less: average goodwill and other intangibles
    
289,419
      
285,161
  
Average tangible common equity
  
$
750,410
    
$
678,903
  

Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares.

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NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)

   
2019
    
2018
  
   
2nd Q
    
1st Q
    
4th Q
    
3rd Q
    
2nd Q
  
Balance sheet data:
                              
Securities available for sale
  
$
979,696
    
$
951,859
    
$
998,496
    
$
1,101,074
    
$
1,192,939
  
Securities held to maturity
    
744,601
      
780,565
      
783,599
      
659,949
      
544,163
  
Net loans
    
6,891,108
      
6,818,907
      
6,815,204
      
6,814,457
      
6,785,721
  
Total assets
    
9,635,718
      
9,533,510
      
9,556,363
      
9,547,284
      
9,467,138
  
Total deposits
    
7,593,706
      
7,617,659
      
7,368,211
      
7,441,290
      
7,344,449
  
Total borrowings
    
794,829
      
719,775
      
1,046,616
      
986,656
      
1,028,971
  
Total liabilities
    
8,560,895
      
8,499,455
      
8,538,454
      
8,553,129
      
8,488,209
  
Stockholders' equity
    
1,074,823
      
1,034,055
      
1,017,909
      
994,155
      
978,929
  
                                         
Asset quality:
                                        
Nonaccrual loans
  
$
24,669
    
$
25,632
    
$
25,487
    
$
23,301
    
$
24,006
  
90 days past due and still accruing
    
2,387
      
3,335
      
5,085
      
4,734
      
2,209
  
Total nonperforming loans
    
27,056
      
28,967
      
30,572
      
28,035
      
26,215
  
Other real estate owned
    
2,203
      
2,222
      
2,441
      
3,271
      
4,349
  
Total nonperforming assets
    
29,259
      
31,189
      
33,013
      
31,306
      
30,564
  
Allowance for loan losses
    
72,165
      
71,405
      
72,505
      
72,805
      
72,450
  
                                         
Asset quality ratios (total):
                                        
Allowance for loan losses to total loans
    
1.04
%
    
1.04
%
    
1.05
%
    
1.06
%
    
1.06
%
Total nonperforming loans to total loans
    
0.39
%
    
0.42
%
    
0.44
%
    
0.41
%
    
0.38
%
Total nonperforming assets to total assets
    
0.30
%
    
0.33
%
    
0.35
%
    
0.33
%
    
0.32
%
Allowance for loan losses to total nonperforming loans
    
266.72
%
    
246.50
%
    
237.16
%
    
259.69
%
    
276.37
%
Past due loans to total loans
    
0.52
%
    
0.52
%
    
0.55
%
    
0.53
%
    
0.50
%
Net charge-offs to average loans (1)
    
0.38
%
    
0.41
%
    
0.39
%
    
0.33
%
    
0.39
%
                                         
Asset quality ratios (originated) (2):
                                        
Allowance for loan losses to loans
    
1.08
%
    
1.09
%
    
1.10
%
    
1.11
%
    
1.11
%
Nonperforming loans to loans
    
0.38
%
    
0.41
%
    
0.43
%
    
0.39
%
    
0.36
%
Allowance for loan losses to nonperforming loans
    
287.67
%
    
265.63
%
    
254.92
%
    
285.86
%
    
306.08
%
Past due loans to loans
    
0.52
%
    
0.52
%
    
0.56
%
    
0.53
%
    
0.50
%
                                         
Capital:
                                        
Equity to assets
    
11.15
%
    
10.85
%
    
10.65
%
    
10.41
%
    
10.34
%
Tangible equity ratio (3)
    
8.41
%
    
8.06
%
    
7.85
%
    
7.59
%
    
7.48
%
Book value per share
  
$
24.56
    
$
23.64
    
$
23.31
    
$
22.77
    
$
22.43
  
Tangible book value per share (4)
  
$
17.97
    
$
17.02
    
$
16.66
    
$
16.10
    
$
15.73
  
Tier 1 leverage ratio
    
9.88
%
    
9.62
%
    
9.52
%
    
9.36
%
    
9.25
%
Common equity tier 1 capital ratio
    
10.95
%
    
10.69
%
    
10.49
%
    
10.28
%
    
10.04
%
Tier 1 capital ratio
    
12.24
%
    
11.99
%
    
11.79
%
    
11.58
%
    
11.35
%
Total risk-based capital ratio
    
13.21
%
    
12.98
%
    
12.78
%
    
12.58
%
    
12.34
%
Common stock price (end of period)
  
$
37.51
    
$
36.01
    
$
34.59
    
$
38.38
    
$
38.15
  

(1) Annualized.
(2) Non-GAAP measure - Excludes acquired loans.
(3) Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by total assets less goodwill and intangible assets.
(4) Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.

Page 7 of 12

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)

Assets
  
June 30,
2019
    
December 31,
2018
  
Cash and due from banks
  
$
150,154
    
$
175,550
  
Short-term interest bearing accounts
    
39,278
      
5,405
  
Equity securities, at fair value
    
26,298
      
23,053
  
Securities available for sale, at fair value
    
979,696
      
998,496
  
Securities held to maturity (fair value $754,995 and $778,675, respectively)
    
744,601
      
783,599
  
Federal Reserve and Federal Home Loan Bank stock
    
45,996
      
53,229
  
Loans held for sale
    
15,662
      
6,943
  
Loans
    
6,963,273
      
6,887,709
  
Less allowance for loan losses
    
72,165
      
72,505
  
Net loans
  
$
6,891,108
    
$
6,815,204
  
Premises and equipment, net
    
76,652
      
78,970
  
Goodwill
    
274,769
      
274,769
  
Intangible assets, net
    
13,738
      
15,599
  
Bank owned life insurance
    
180,042
      
177,479
  
Other assets
    
197,724
      
148,067
  
Total assets
  
$
9,635,718
    
$
9,556,363
  
                 
Liabilities and stockholders' equity
                
Demand (noninterest bearing)
  
$
2,336,776
    
$
2,361,099
  
Savings, NOW and money market
    
4,280,363
      
4,076,434
  
Time
    
976,567
      
930,678
  
Total deposits
  
$
7,593,706
    
$
7,368,211
  
Short-term borrowings
    
609,366
      
871,696
  
Long-term debt
    
84,267
      
73,724
  
Junior subordinated debt
    
101,196
      
101,196
  
Other liabilities
    
172,360
      
123,627
  
Total liabilities
  
$
8,560,895
    
$
8,538,454
  
                 
Total stockholders' equity
  
$
1,074,823
    
$
1,017,909
  
                 
Total liabilities and stockholders' equity
  
$
9,635,718
    
$
9,556,363
  

Page 8 of 12

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
   
2019
    
2018
    
2019
    
2018
  
Interest, fee and dividend income
                        
Interest and fees on loans
  
$
81,271
    
$
74,172
    
$
160,592
    
$
144,615
  
Securities available for sale
    
6,031
      
7,003
      
11,953
      
13,929
  
Securities held to maturity
    
5,089
      
2,811
      
10,306
      
5,436
  
Other
    
842
      
781
      
1,726
      
1,547
  
Total interest, fee and dividend income
  
$
93,233
    
$
84,767
    
$
184,577
    
$
165,527
  
Interest expense
                                
Deposits
  
$
10,234
    
$
5,079
    
$
19,060
    
$
9,010
  
Short-term borrowings
    
2,760
      
2,455
      
5,997
      
4,421
  
Long-term debt
    
471
      
452
      
893
      
928
  
Junior subordinated debt
    
1,141
      
1,040
      
2,309
      
1,941
  
Total interest expense
  
$
14,606
    
$
9,026
    
$
28,259
    
$
16,300
  
Net interest income
  
$
78,627
    
$
75,741
    
$
156,318
    
$
149,227
  
Provision for loan losses
    
7,277
      
8,778
      
13,084
      
16,274
  
Net interest income after provision for loan losses
  
$
71,350
    
$
66,963
    
$
143,234
    
$
132,953
  
Noninterest income
                                
Insurance and other financial services revenue
  
$
5,938
    
$
5,826
    
$
12,694
    
$
12,330
  
Service charges on deposit accounts
    
4,224
      
4,246
      
8,460
      
8,218
  
ATM and debit card fees
    
6,156
      
5,816
      
11,681
      
11,089
  
Retirement plan administration fees
    
7,836
      
7,296
      
15,570
      
12,635
  
Trust
    
4,731
      
5,265
      
9,282
      
10,143
  
Bank owned life insurance income
    
1,186
      
1,217
      
2,563
      
2,564
  
Net securities (losses) gains
    
(69
)
    
91
      
(12
)
    
163
  
Other
    
4,239
      
4,401
      
7,824
      
8,293
  
Total noninterest income
  
$
34,241
    
$
34,158
    
$
68,062
    
$
65,435
  
Noninterest expense
                                
Salaries and employee benefits
  
$
38,567
    
$
37,726
    
$
77,923
    
$
74,293
  
Occupancy
    
5,443
      
5,535
      
11,718
      
11,654
  
Data processing and communications
    
4,693
      
4,508
      
9,107
      
8,787
  
Professional fees and outside services
    
3,359
      
3,336
      
7,027
      
6,828
  
Equipment
    
4,518
      
4,151
      
9,275
      
8,189
  
Office supplies and postage
    
1,577
      
1,504
      
3,168
      
3,077
  
FDIC expense
    
949
      
1,092
      
1,966
      
2,293
  
Advertising
    
641
      
700
      
1,144
      
1,037
  
Amortization of intangible assets
    
893
      
1,096
      
1,861
      
2,010
  
Loan collection and other real estate owned, net
    
961
      
908
      
1,746
      
2,245
  
Other
    
4,630
      
4,332
      
9,756
      
8,747
  
Total noninterest expense
  
$
66,231
    
$
64,888
    
$
134,691
    
$
129,160
  
Income before income tax expense
  
$
39,360
    
$
36,233
    
$
76,605
    
$
69,228
  
Income tax expense
    
8,805
      
8,112
      
16,923
      
15,121
  
Net income
  
$
30,555
    
$
28,121
    
$
59,682
    
$
54,107
  
Earnings Per Share
                                
Basic
  
$
0.70
    
$
0.64
    
$
1.36
    
$
1.24
  
Diluted
  
$
0.69
    
$
0.64
    
$
1.35
    
$
1.23
  

Page 9 of 12

NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
2019
    
2018
  
   
2nd Q
    
1st Q
    
4th Q
    
3rd Q
    
2nd Q
  
Interest, fee and dividend income
                              
Interest and fees on loans
  
$
81,271
    
$
79,321
    
$
78,963
    
$
77,249
    
$
74,172
  
Securities available for sale
    
6,031
      
5,922
      
6,332
      
6,659
      
7,003
  
Securities held to maturity
    
5,089
      
5,217
      
4,344
      
3,462
      
2,811
  
Other
    
842
      
884
      
885
      
834
      
781
  
Total interest, fee and dividend income
  
$
93,233
    
$
91,344
    
$
90,524
    
$
88,204
    
$
84,767
  
Interest expense
                                        
Deposits
  
$
10,234
    
$
8,826
    
$
6,977
    
$
6,157
    
$
5,079
  
Short-term borrowings
    
2,760
      
3,237
      
3,131
      
3,000
      
2,455
  
Long-term debt
    
471
      
422
      
431
      
431
      
452
  
Junior subordinated debt
    
1,141
      
1,168
      
1,110
      
1,089
      
1,040
  
Total interest expense
  
$
14,606
    
$
13,653
    
$
11,649
    
$
10,677
    
$
9,026
  
Net interest income
  
$
78,627
    
$
77,691
    
$
78,875
    
$
77,527
    
$
75,741
  
Provision for loan losses
    
7,277
      
5,807
      
6,528
      
6,026
      
8,778
  
Net interest income after provision for loan losses
  
$
71,350
    
$
71,884
    
$
72,347
    
$
71,501
    
$
66,963
  
Noninterest income
                                        
Insurance and other financial services revenue
  
$
5,938
    
$
6,756
    
$
5,843
    
$
6,172
    
$
5,826
  
Service charges on deposit accounts
    
4,224
      
4,236
      
4,503
      
4,503
      
4,246
  
ATM and debit card fees
    
6,156
      
5,525
      
5,704
      
5,906
      
5,816
  
Retirement plan administration fees
    
7,836
      
7,734
      
7,113
      
7,244
      
7,296
  
Trust
    
4,731
      
4,551
      
4,573
      
4,808
      
5,265
  
Bank owned life insurance income
    
1,186
      
1,377
      
1,239
      
1,288
      
1,217
  
Net securities (losses) gains
    
(69
)
    
57
      
(6,916
)
    
412
      
91
  
Other
    
4,239
      
3,585
      
3,887
      
3,048
      
4,401
  
Total noninterest income
  
$
34,241
    
$
33,821
    
$
25,946
    
$
33,381
    
$
34,158
  
Noninterest expense
                                        
Salaries and employee benefits
  
$
38,567
    
$
39,356
    
$
38,998
    
$
38,394
    
$
37,726
  
Occupancy
    
5,443
      
6,275
      
5,284
      
5,380
      
5,535
  
Data processing and communications
    
4,693
      
4,414
      
4,431
      
4,434
      
4,508
  
Professional fees and outside services
    
3,359
      
3,668
      
3,968
      
3,580
      
3,336
  
Equipment
    
4,518
      
4,757
      
4,529
      
4,319
      
4,151
  
Office supplies and postage
    
1,577
      
1,591
      
1,564
      
1,563
      
1,504
  
FDIC expense
    
949
      
1,017
      
1,135
      
1,223
      
1,092
  
Advertising
    
641
      
503
      
1,006
      
739
      
700
  
Amortization of intangible assets
    
893
      
968
      
978
      
1,054
      
1,096
  
Loan collection and other real estate owned, net
    
961
      
785
      
738
      
1,234
      
908
  
Other
    
4,630
      
5,126
      
6,273
      
4,577
      
4,332
  
Total noninterest expense
  
$
66,231
    
$
68,460
    
$
68,904
    
$
66,497
    
$
64,888
  
Income before income tax expense
  
$
39,360
    
$
37,245
    
$
29,389
    
$
38,385
    
$
36,233
  
Income tax expense
    
8,805
      
8,118
      
737
      
8,578
      
8,112
  
Net income
  
$
30,555
    
$
29,127
    
$
28,652
    
$
29,807
    
$
28,121
  
Earnings Per Share
                                        
Basic
  
$
0.70
    
$
0.67
    
$
0.66
    
$
0.68
    
$
0.64
  
Diluted
  
$
0.69
    
$
0.66
    
$
0.65
    
$
0.68
    
$
0.64
  

Page 10 of 12

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
  

   
Q2 - 2019
      
Q1 - 2019
      
Q4 - 2018
    
Q3 - 2018
    
Q2 - 2018
  
Assets
                                                                      
Short-term interest bearing accounts
  
$
25,783
      
1.28
%
  
$
9,065
      
4.07
%
  
$
3,780
      
5.25
%
  
$
3,328
      
6.08
%
  
$
3,574
      
5.16
%
Securities available for sale (1) (3)
    
981,079
      
2.47
%
    
984,704
      
2.45
%
    
1,104,198
      
2.29
%
    
1,197,910
      
2.22
%
    
1,266,304
      
2.23
%
Securities held to maturity (1) (3)
    
770,651
      
2.83
%
    
782,570
      
2.90
%
    
688,840
      
2.73
%
    
591,220
      
2.58
%
    
503,501
      
2.50
%
Investment in FRB and FHLB Banks
    
46,179
      
6.60
%
    
49,152
      
6.54
%
    
47,689
      
6.95
%
    
50,107
      
6.20
%
    
48,184
      
6.12
%
Loans (2) (3)
    
6,958,299
      
4.69
%
    
6,886,672
      
4.68
%
    
6,876,341
      
4.56
%
    
6,839,565
      
4.49
%
    
6,750,710
      
4.41
%
Total interest earning assets
  
$
8,781,991
      
4.28
%
  
$
8,712,163
      
4.28
%
  
$
8,720,848
      
4.14
%
  
$
8,682,130
      
4.05
%
  
$
8,572,273
      
3.99
%
Other assets
    
816,748
              
795,585
              
769,302
              
776,219
              
766,604
          
Total assets
  
$
9,598,739
            
$
9,507,748
            
$
9,490,150
            
$
9,458,349
            
$
9,338,877
          
                                                                                 
Liabilities and stockholders' equity
                                                                                
Money market deposit accounts
  
$
1,916,045
      
1.16
%
  
$
1,804,053
      
0.99
%
  
$
1,745,980
      
0.65
%
  
$
1,724,853
      
0.58
%
  
$
1,699,956
      
0.43
%
NOW deposit accounts
    
1,127,413
      
0.13
%
    
1,135,213
      
0.16
%
    
1,166,383
      
0.18
%
    
1,164,513
      
0.17
%
    
1,222,889
      
0.16
%
Savings deposits
    
1,282,084
      
0.06
%
    
1,252,042
      
0.06
%
    
1,250,703
      
0.06
%
    
1,279,520
      
0.06
%
    
1,289,062
      
0.06
%
Time deposits
    
953,698
      
1.73
%
    
942,457
      
1.64
%
    
921,252
      
1.47
%
    
881,792
      
1.33
%
    
858,080
      
1.22
%
Total interest bearing deposits
  
$
5,279,240
      
0.78
%
  
$
5,133,765
      
0.70
%
  
$
5,084,318
      
0.54
%
  
$
5,050,678
      
0.48
%
  
$
5,069,987
      
0.40
%
Short-term borrowings
    
620,898
      
1.78
%
    
712,306
      
1.84
%
    
724,693
      
1.71
%
    
766,372
      
1.55
%
    
706,694
      
1.39
%
Long-term debt
    
82,414
      
2.29
%
    
73,707
      
2.32
%
    
73,735
      
2.32
%
    
73,762
      
2.32
%
    
84,676
      
2.14
%
Junior subordinated debt
    
101,196
      
4.52
%
    
101,196
      
4.68
%
    
101,196
      
4.35
%
    
101,196
      
4.27
%
    
101,196
      
4.12
%
Total interest bearing liabilities
  
$
6,083,748
      
0.96
%
  
$
6,020,974
      
0.92
%
  
$
5,983,942
      
0.77
%
  
$
5,992,008
      
0.71
%
  
$
5,962,553
      
0.61
%
Demand deposits
    
2,298,867
              
2,309,531
              
2,373,235
              
2,356,216
              
2,294,023
          
Other liabilities
    
162,374
              
151,490
              
130,151
              
121,574
              
113,272
          
Stockholders' equity
    
1,053,750
              
1,025,753
              
1,002,822
              
988,551
              
969,029
          
Total liabilities and stockholders' equity
  
$
9,598,739
            
$
9,507,748
            
$
9,490,150
            
$
9,458,349
            
$
9,338,877
          
                                                                                 
Interest rate spread
            
3.32
%
            
3.36
%
            
3.37
%
            
3.34
%
            
3.38
%
Net interest margin (FTE) (3)
            
3.61
%
            
3.64
%
            
3.61
%
            
3.57
%
            
3.57
%

(1) Securities are shown at average amortized cost.
(2) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
(3) Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%. The total amount of adjustment to present yields on a FTE basis is $445, $500, $535, $529 and $478 for the three months ended June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018 and June 30, 2018, respectively.

Page 11 of 12

NBT Bancorp Inc. and Subsidiaries
Average Year-to-Date Balance Sheets
(unaudited, dollars in thousands)

   
Average
Balance
    
Interest
    
Yield/
Rates
    
Average
Balance
    
Interest
    
Yield/
Rates
  
Six Months ended June 30,
  
2019
    
2018
  
Assets
                                    
Short-term interest bearing accounts
  
$
17,471
    
$
174
      
2.01
%
  
$
3,198
    
$
82
      
5.17
%
Securities available for sale (1) (3)
    
982,881
      
11,984
      
2.46
%
    
1,269,949
      
14,017
      
2.23
%
Securities held to maturity (1) (3)
    
776,577
      
11,043
      
2.87
%
    
492,996
      
6,081
      
2.49
%
Investment in FRB and FHLB Banks
    
47,657
      
1,552
      
6.57
%
    
47,518
      
1,465
      
6.22
%
Loans (2) (3)
    
6,922,684
      
160,768
      
4.68
%
    
6,672,016
      
144,825
      
4.38
%
Total interest earning assets
  
$
8,747,270
    
$
185,521
      
4.28
%
  
$
8,485,677
    
$
166,470
      
3.96
%
Other assets
    
806,225
                      
756,444
                  
Total assets
  
$
9,553,495
                    
$
9,242,121
                  
                                                 
Liabilities and stockholders' equity
                                                
Money market deposit accounts
  
$
1,860,358
    
$
9,974
      
1.08
%
  
$
1,677,755
    
$
2,933
      
0.35
%
NOW deposit accounts
    
1,131,291
      
817
      
0.15
%
    
1,216,992
      
882
      
0.15
%
Savings deposits
    
1,267,146
      
362
      
0.06
%
    
1,268,859
      
354
      
0.06
%
Time deposits
    
948,109
      
7,907
      
1.68
%
    
830,671
      
4,841
      
1.18
%
Total interest bearing deposits
  
$
5,206,904
    
$
19,060
      
0.74
%
  
$
4,994,277
    
$
9,010
      
0.36
%
Short-term borrowings
    
666,349
      
5,997
      
1.81
%
    
709,442
      
4,421
      
1.26
%
Long-term debt
    
78,085
      
893
      
2.31
%
    
86,749
      
928
      
2.16
%
Junior subordinated debt
    
101,196
      
2,309
      
4.60
%
    
101,196
      
1,941
      
3.87
%
Total interest bearing liabilities
  
$
6,052,534
    
$
28,259
      
0.94
%
  
$
5,891,664
    
$
16,300
      
0.56
%
Demand deposits
    
2,304,169
                      
2,277,083
                  
Other liabilities
    
156,963
                      
109,310
                  
Stockholders' equity
    
1,039,829
                      
964,064
                  
Total liabilities and stockholders' equity
  
$
9,553,495
                    
$
9,242,121
                  
Net interest income (FTE)
          
$
157,262
                    
$
150,170
          
Interest rate spread
                    
3.34
%
                    
3.40
%
Net interest margin (FTE) (3)
                    
3.63
%
                    
3.57
%
Taxable equivalent adjustment
          
$
944
                    
$
943
          
Net interest income
          
$
156,318
                    
$
149,227
          

(1) Securities are shown at average amortized cost.
(2) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
(3) Interest income for tax-exempt securities and loans has been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.

Page 12 of 12

NBT Bancorp Inc. and Subsidiaries
Consolidated Loan Balances
(unaudited, dollars in thousands)

   
2019
    
2018
  
   
2nd Q
    
1st Q
    
4th Q
    
3rd Q
    
2nd Q
  
Commercial
  
$
1,299,784
    
$
1,306,551
    
$
1,291,568
    
$
1,310,262
    
$
1,299,437
  
Commercial real estate
    
2,025,280
      
1,943,931
      
1,930,742
      
1,902,315
      
1,891,119
  
Residential real estate mortgages
    
1,404,079
      
1,390,411
      
1,380,836
      
1,373,487
      
1,350,336
  
Dealer finance
    
1,189,670
      
1,191,111
      
1,216,144
      
1,229,700
      
1,252,843
  
Specialty lending
    
519,974
      
529,144
      
524,928
      
521,396
      
507,151
  
Home equity
    
456,754
      
463,582
      
474,566
      
480,761
      
488,493
  
Other consumer
    
67,732
      
65,582
      
68,925
      
69,341
      
68,792
  
Total loans
  
$
6,963,273
    
$
6,890,312
    
$
6,887,709
    
$
6,887,262
    
$
6,858,171