NBT Bancorp Inc. Announces Net Income of $104.4 Million ($2.37 Per Diluted Common Share); Approves Dividend and Increase to Shares Available Under Share Repurchase Program

ソース: Nasdaq GlobeNewswire / 27 1 2021 15:15:01 America/Chicago

NORWICH, N.Y., Jan. 27, 2021 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the quarter and year ended December 31, 2020.

Net income for the year ended December 31, 2020 was $104.4 million, down 13.7% from $121.0 million for the prior year due primarily to higher provision for loan losses after the adoption of the Current Expected Credit Losses (“CECL”) accounting methodology and related to the deterioration of economic conditions caused by the COVID-19 pandemic. Diluted earnings per share for the year ended December 31, 2020 was $2.37, as compared with $2.74 for the prior year, a decrease of 13.5%. Excluding full year branch optimization charges of $4.8 million, net income and earnings per diluted share were $108.1 million and $2.46, respectively.

Pre-provision net revenue (“PPNR”)¹ for the year ended December 31, 2020 was $193.4 million compared to $182.1 million in the prior year. The 6% increase in PPNR from the prior year reflected higher net interest income, higher noninterest income and lower noninterest expense.

Net income for the three months ended December 31, 2020 was $34.2 million, or $0.78 per diluted common share. Net income was down $0.9 million from the previous quarter primarily due to branch optimization charges for the quarter of $4.1 million and up $5.2 million from the fourth quarter of 2019 due to higher net interest income and lower provision for loan losses, partly offset by the branch optimization charges. Excluding branch optimization charges for the quarter of $4.1 million, net income and earnings per diluted share were $37.4 million and $0.85, respectively.

PPNR¹ for the fourth quarter of 2020 was $48.2 million compared to $49.6 million in the previous quarter and $43.3 million in the fourth quarter of 2019. The 3% decline in PPNR from the previous quarter reflected higher operating expenses related to timing of initiatives, partly offset by higher net interest income.

CEO Comments

“NBT ended the year with active pipelines and building momentum. Our strong capital base provides us with the optionality we need to drive our growth in 2021,” said NBT President and CEO John H. Watt, Jr. “The strength of NBT’s pre-provision net revenue and our outsized noninterest income is reflected in our results for the full year and the fourth quarter of 2020. As we continue to navigate these challenging times and look to the future, our team is customer focused and committed to executing the critical strategies that will carry us forward.”

Fourth Quarter Financial Highlights

Net Income	Net income of $34.2 million Diluted earnings per share of $0.78
Net Interest Income / NIM	Net interest income on a fully taxable equivalent basis was $80.4 million¹ Net interest margin (“NIM”) on a fully taxable equivalent basis was 3.20%¹, up 3 bps from the prior quarter
PPNR	PPNR¹ was $48.2 million compared to $49.6 million in the third quarter of 2020 and $43.3 million in the fourth quarter of 2019
Loans and Credit Quality	Period end loans were $7.5 billion, up 5% from December 31, 2019 and comparable to September 30, 2020 Excluding $431 million of Paycheck Protection Program (“PPP”) loans at December 31, 2020, period end loans increased $22 million or 0.3% from September 30, 2020 Allowance for loan losses to total loans of 1.47% (1.56% excluding PPP loans and related allowance), down 4 bps from the third quarter (down 6 bps excluding PPP loans and related allowance) Net charge-offs to average loans was 0.21%, annualized (0.22% excluding PPP loans) Nonperforming assets to total assets was 0.45% (0.47% excluding PPP loans)
Capital	Tangible book value per share² grew 2% for the quarter and 8% from prior year to $20.52 at December 31, 2020 Tangible equity to assets of 8.41%¹ CET1 ratio of 11.84%; Leverage ratio of 9.56%

Loans

Period end total loans were $7.5 billion at December 31, 2020 and $7.6 billion at September 30, compared to $7.1 billion at December 31, 2019.
Total PPP loans as of December 31, 2020 were $431 million (net of unamortized fees), with $548 million originated at an average loan size of $184 thousand and an average annual fee of 3.2%.
Excluding PPP loans, period end loans increased $22.0 million from September 30, 2020. Commercial and industrial loans decreased $29.7 million to $1.3 billion; commercial real estate loans increased $98.5 million to $2.4 billion; and total consumer loans decreased $46.8 million to $3.4 billion.
Commercial line of credit utilization rate was 22% at December 31, 2020 compared to 25% at September 30, 2020 and 32% at December 31, 2019.

Deposits

Average total deposits in the fourth quarter of 2020 were $9.1 billion, compared to $8.8 billion in the third quarter of 2020, primarily due to increases in non-interest bearing demand deposit accounts.
Loan to deposit ratio was 82.6% at December 31, 2020, compared to 94.0% at December 31, 2019 and 84.4% at September 30, 2020.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2020 was $80.1 million, up $2.2 million or 2.8% from the third quarter of 2020 and up $2.9 million or 3.8% from the fourth quarter of 2019.
The net interest margin on a fully taxable equivalent (“FTE”) basis for the fourth quarter of 2020 was 3.20%, up 3 basis points (“bps”) from the third quarter of 2020 and down 32 bps from the fourth quarter of 2019. The net impact of PPP loans and excess liquidity negatively impacted the NIM by 8 bps in the fourth quarter versus a negative impact of 10 bps in the third quarter of 2020. Excluding the impact of PPP lending and excess liquidity from each quarter, NIM increased 1 bp from the prior quarter primarily due to a 5 bps decline in the cost of interest bearing liabilities and minimal reduction in asset yields during the quarter.
Earning asset yields for the three months ended December 31, 2020 were up 1 bp from the prior quarter and down 67 bps from the same quarter in the prior year. Earning assets grew $159.3 million or 1.6% from the prior quarter and grew $1.2 billion or 14.3% from the same quarter in the prior year.
- Excess liquidity resulted in a $74.9 million increase in the average balances of short-term interest bearing accounts.
- The average balance of investment securities increased $111.4 million while yields declined 20 bps.
- Loan yields increased 11 bps to 4.06% due primarily to the fees recognized due to $73 million in PPP loans forgiven during the quarter (7 bps) combined with a $45 million increase in the average balance of higher yielding consumer loans (9 bps).
Total cost of deposits was 0.17% for the fourth quarter of 2020, down 2 bps from the prior quarter and down 36 bps from the same period in the prior year.
The cost of interest-bearing liabilities for the three months ended December 31, 2020 was 0.40%, down as compared to the prior quarter of 0.45% and down 50 bps from the fourth quarter of 2019 of 0.90%.
- Cost of interest-bearing deposits decreased 4 bps from the prior quarter and decreased 51 bps from the same quarter in 2019.

Credit Quality and Allowance for Credit Losses

Net charge-offs to average loans were low due to COVID-19 pandemic relief programs for the quarter and 2020. Net charge-offs to total average loans were 23 bps for 2020 compared to 36 bps for 2019.
Net charge-offs to total average loans of 21 bps (22 bps excluding PPP loans) compared to 12 bps (13 bps excluding PPP loans) in the prior quarter and 30 bps in the fourth quarter of 2019. The increase in charge-offs during the fourth quarter of 2020 was primarily due to higher charge-offs in commercial, indirect auto and specialty lending, but continue to be at lower levels due to pandemic relief programs.
Nonperforming assets to total assets was 0.45% (0.47% excluding PPP loans) compared to 0.37% (0.39% excluding PPP loans) at September 30, 2020 and 0.31% at December 31, 2019. The change in nonperforming assets was primarily related to an increase in nonperforming commercial and residential real estate loans.
Provision expense for the three months ended December 31, 2020 was ($0.6) million while net charge-offs of $3.9 million were up compared with the prior quarter. Provision expense decreased $3.9 million from the third quarter of 2020 and decreased $6.6 million from the fourth quarter of 2019. The decrease in provision expense from the prior quarter and fourth quarter of 2019 was primarily due to the $4.5 million reduction in the level of allowance for loan losses resulting from an improved economic forecast.
The allowance for loan losses was $110.0 million or 1.47% (1.56% excluding PPP loans and related allowance) of total loans compared to 1.51% (1.62% excluding PPP loans and related allowance) at September 30, 2020 and 1.02% December 31, 2019. The allowance for loans losses was calculated under the CECL accounting method in 2020 and the incurred loss accounting method in 2019.
As of January 19, 2021, 1.5% of loans (loans outstanding as of December 31, 2020; excluding PPP balances) are in payment deferral programs which is down from the second quarter 2020 peak of 14.9%.
The reserve for unfunded loan commitments increased to $6.4 million at December 31, 2020 compared to the prior quarter at $5.5 million.

Noninterest Income

Total noninterest income, excluding securities gains (losses), was $38.0 million for the three months ended December 31, 2020, up $0.3 million from the prior quarter and up $1.9 million from the prior year quarter.
Service charges on deposit accounts were higher than the prior quarter but lower than the fourth quarter of 2019. Overdraft charges have been lower during the COVID-19 pandemic, recovering from the third quarter of 2020 but continue to run lower than prior year levels.
ATM and debit card fees were lower compared to the prior quarter due to seasonality and higher compared to the fourth quarter of 2019 due to increased volume and higher per transaction rates.
Retirement plan administration fees were lower than the prior quarter, as third quarter fees were higher due to seasonal revenues, and higher than the fourth quarter of 2019 due to the April 1, 2020 acquisition of Alliance Benefit Group of Illinois, Inc. (“ABG”) contributing $1.5 million in revenues during the fourth quarter and $1.7 million during the third quarter.
The increase in other noninterest income from the prior quarter was driven by higher loan swap fee income partially offset by lower mortgage banking income. The decrease from the fourth quarter of 2019 was driven by lower loan swap fee income and lower mortgage banking income.

Noninterest Expense

Total noninterest expense for the fourth quarter of 2020 was up 13.4% from the previous quarter and up 7.0% from the fourth quarter of 2019, primarily due to $4.1 million in branch optimization costs incurred during the fourth quarter of 2020. The branch optimization strategies charged in 2020 are expected to improve future operating expenses by about $2.5 million annually once fully implemented.
Salaries and benefits increased from the prior quarter due to the timing of medical expenses and increased from the fourth quarter of 2019 driven by the addition of ABG’s salaries and benefits.
Data processing and communication expense were down compared to the fourth quarter of 2019 due to lower transaction volumes as a result of the COVID-19 pandemic.
Professional fees and outside services were up $1.0 million compared to the prior quarter primarily due to the timing of expenses.
Equipment expense was higher than both the prior quarter and the fourth quarter of 2019 due to higher technology costs associated with several digital upgrades.
FDIC expense was higher than the fourth quarter of 2019 due to the benefit of the FDIC insurance assessment small bank credit in the fourth quarter of 2019.
Other expenses increased compared to both the prior quarter and the fourth quarter of 2019 due to $4.1 million in branch optimization charges and a $0.9 million increase in the reserve for unfunded commitments.

Income Taxes

The effective tax rate was 21.6% for the fourth quarter of 2020 compared to 23.8% for the third quarter of 2020 and 22.0% for the fourth quarter of 2019. The full year effective tax rate for 2020 was 21.6% compared to 22.1% for the full year in 2019.

Capital

Capital ratios remain strong with tangible common equity to tangible assets¹ at 8.41%. Tangible book value per share² grew 2% from the prior quarter and 8% from the prior year quarter to $20.52.
December 31, 2020 CET1 capital ratio of 11.84%, leverage ratio of 9.56% and total risk-based capital ratio of 15.62%.

Stock Repurchase Program

At a meeting held today, the Board of Directors approved an increase to the total number of shares authorized under the current stock repurchase program to 2 million shares from 1 million shares, previously. There have been 263,507 shares repurchased under the plan. The stock repurchase plan expires on December 31, 2021.

Dividend

The Board of Directors approved a first-quarter cash dividend of $0.27 per share at a meeting held today. The dividend will be paid on March 15, 2021 to shareholders of record as of March 1, 2021.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. Eastern Time on Thursday, January 28, 2021, to review fourth quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $10.9 billion at December 31, 2020. 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 141 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine, and is currently entering Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epic rps.com and www.nbtinsurance.com.

Forward-Looking Statements

This news release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control that could cause actual results to differ materially from those contemplated by 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) local, regional, national and international economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war or terrorism; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (9) changes in consumer spending, borrowings and savings habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisitions and integration of acquired businesses; (13) the ability to increase market share and control expenses; (14) changes in the competitive environment among financial holding companies; (15) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, Economic Growth, Regulatory Relief, Consumer Protection Act of 2018, Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and regulatory pronouncements around CARES Act; (16) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; (17) changes in the Company’s organization, compensation and benefit plans; (18) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (19) greater than expected costs or difficulties related to the integration of new products and lines of business; (20) the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 (“COVID-19”), global pandemic; (21) the impact of a slowing U.S. economy and increased unemployment on the performance of our loan portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products; and (22) the Company’s success at managing the risks involved in the foregoing items.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from the Company’s forward-looking statements is the potential adverse effect of the current COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company, its customers and the global economy and financial markets. The extent to which the COVID-19 pandemic impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic and its impact on the Company’s customers and demand for financial services, the actions governments, businesses and individuals take in response to the pandemic, the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies, national and local economic activity, and the pace of recovery when the COVID-19 pandemic subsides, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2019 and in our Form 10-Q for the quarter ended September 30, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. You should not place undue reliance on any forward-looking statements, which speak only as of the date made, and you are advised that various factors including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected. Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

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”). 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 financial 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
	John V. Moran, Executive Vice President and CFO
	NBT Bancorp Inc.
	52 South Broad Street
	Norwich, NY 13815
	607-337-6589

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

		2020												2019
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Profitability:
Diluted earnings per share	$	0.78		$	0.80		$	0.56		$	0.23		$	0.66
Weighted average diluted common shares outstanding		43,973,971			43,941,953			43,928,344			44,130,324			44,174,201
Return on average assets³		1.24	%		1.29	%		0.94	%		0.43	%		1.20	%
Return on average equity³		11.59	%		12.09	%		8.76	%		3.69	%		10.36	%
Return on average tangible common equity^{1 3}		15.71	%		16.51	%		12.14	%		5.24	%		14.28	%
Net interest margin^{1 3}		3.20	%		3.17	%		3.38	%		3.52	%		3.52	%

	12 Months ended December 31,
		2020			2019
Profitability:
Diluted earnings per share	$	2.37		$	2.74
Weighted average diluted common shares outstanding		43,988,623			44,123,698
Return on average assets		0.99	%		1.26	%
Return on average equity		9.09	%		11.32	%
Return on average tangible common equity¹		12.48	%		15.85	%
Net interest margin¹		3.31	%		3.58	%

		2020												2019
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Balance sheet data:
Securities available for sale	$	1,348,698		$	1,197,925		$	1,108,443		$	1,000,980		$	975,340
Securities held to maturity		616,560			663,088			599,164			621,359			630,074
Net loans		7,388,885			7,446,143			7,514,491			7,147,383			7,063,133
Total assets		10,932,906			10,850,212			10,847,184			9,953,543			9,715,925
Total deposits		9,081,692			8,958,183			8,815,891			7,864,638			7,587,820
Total borrowings		406,731			446,737			602,988			714,283			820,682
Total liabilities		9,745,288			9,684,101			9,704,532			8,841,364			8,595,528
Stockholders' equity		1,187,618			1,166,111			1,142,652			1,112,179			1,120,397

Capital:
Equity to assets		10.86	%		10.75	%		10.53	%		11.17	%		11.53	%
Tangible equity ratio¹		8.41	%		8.27	%		8.04	%		8.55	%		8.84	%
Book value per share	$	27.22		$	26.74		$	26.20		$	25.52		$	25.58
Tangible book value per share²	$	20.52		$	20.02		$	19.46		$	18.96		$	19.03
Leverage ratio		9.56	%		9.48	%		9.44	%		10.02	%		10.33	%
Common equity tier 1 capital ratio		11.84	%		11.63	%		11.34	%		10.90	%		11.29	%
Tier 1 capital ratio		13.09	%		12.88	%		12.60	%		12.14	%		12.56	%
Total risk-based capital ratio		15.62	%		15.43	%		15.15	%		13.36	%		13.52	%
Common stock price (end of period)	$	32.10		$	26.82		$	30.06		$	32.39		$	40.56
Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares.

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

		2020												2019
	4th Q			3rd Q			2nd Q			1st Q			4th Q
Asset quality:
Nonaccrual loans	$	44,647		$	35,896		$	25,567		$	29,972		$	25,174
90 days past due and still accruing		3,149			2,579			2,057			2,280			3,717
Total nonperforming loans		47,796			38,475			27,624			32,252			28,891
Other real estate owned		1,458			1,605			1,783			2,384			1,458
Total nonperforming assets		49,254			40,080			29,407			34,636			30,349
Allowance for loan losses		110,000			114,500			113,500			100,000			72,965

Asset quality ratios (total):
Allowance for loan losses to total loans		1.47	%		1.51	%		1.49	%		1.38	%		1.02	%
Total nonperforming loans to total loans		0.64	%		0.51	%		0.36	%		0.45	%		0.40	%
Total nonperforming assets to total assets		0.45	%		0.37	%		0.27	%		0.35	%		0.31	%
Allowance for loan losses to total nonperforming loans		230.14	%		297.60	%		410.87	%		310.06	%		252.55	%
Past due loans to total loans		0.37	%		0.26	%		0.30	%		0.51	%		0.49	%
Net charge-offs to average loans³		0.21	%		0.12	%		0.28	%		0.32	%		0.30	%

Asset quality ratios (excluding paycheck protection program):
Allowance for loan losses to total loans		1.56	%		1.62	%		1.59	%		1.38	%		1.02	%
Total nonperforming loans to total loans		0.68	%		0.55	%		0.39	%		0.45	%		0.40	%
Total nonperforming assets to total assets		0.47	%		0.39	%		0.28	%		0.35	%		0.31	%
Allowance for loan losses to total nonperforming loans		230.10	%		297.53	%		410.78	%		310.06	%		252.55	%
Past due loans to total loans		0.39	%		0.28	%		0.32	%		0.51	%		0.49	%
Net charge-offs to average loans³		0.22	%		0.13	%		0.30	%		0.32	%		0.30	%


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

	December 31,		December 31,
Assets		2020		2019
Cash and due from banks	$	159,995	$	170,595
Short-term interest bearing accounts		512,686		46,248
Equity securities, at fair value		30,737		27,771
Securities available for sale, at fair value		1,348,698		975,340
Securities held to maturity (fair value $636,827 and $641,262, respectively)		616,560		630,074
Federal Reserve and Federal Home Loan Bank stock		27,353		44,620
Loans held for sale		1,119		11,731
Loans		7,498,885		7,136,098
Less allowance for loan losses		110,000		72,965
Net loans	$	7,388,885	$	7,063,133
Premises and equipment, net		74,206		75,631
Goodwill		280,541		274,769
Intangible assets, net		11,735		12,020
Bank owned life insurance		186,434		181,748
Other assets		293,957		202,245
Total assets	$	10,932,906	$	9,715,925

Liabilities and stockholders' equity
Demand (noninterest bearing)	$	3,241,123	$	2,414,383
Savings, NOW and money market		5,207,090		4,312,244
Time		633,479		861,193
Total deposits	$	9,081,692	$	7,587,820
Short-term borrowings		168,386		655,275
Long-term debt		39,097		64,211
Subordinated debt, net		98,052		-
Junior subordinated debt		101,196		101,196
Other liabilities		256,865		187,026
Total liabilities	$	9,745,288	$	8,595,528

Total stockholders' equity	$	1,187,618	$	1,120,397

Total liabilities and stockholders' equity	$	10,932,906	$	9,715,925


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,
		2020			2019		2020			2019
Interest, fee and dividend income
Interest and fees on loans	$	76,863		$	79,800	$	307,859		$	321,474
Securities available for sale		5,478			5,639		22,434			23,303
Securities held to maturity		3,532			4,213		15,283			19,105
Other		568			924		2,706			3,652
Total interest, fee and dividend income	$	86,441		$	90,576	$	348,282		$	367,534
Interest expense
Deposits	$	3,887		$	10,181	$	22,070		$	39,986
Short-term borrowings		193			1,707		3,408			9,693
Long-term debt		369			484		1,553			1,875
Subordinated debt		1,339			-		2,842			-
Junior subordinated debt		545			1,021		2,731			4,425
Total interest expense	$	6,333		$	13,393	$	32,604		$	55,979
Net interest income	$	80,108		$	77,183	$	315,678		$	311,555
Provision for loan losses		(607	)		6,004		51,134			25,412
Net interest income after provision for loan losses	$	80,715		$	71,179	$	264,544		$	286,143
Noninterest income
Service charges on deposit accounts	$	3,588		$	4,361	$	13,201		$	17,151
ATM and debit card fees		6,776			5,935		25,960			23,893
Retirement plan administration fees		9,011			7,218		35,851			30,388
Wealth management⁴		7,456			7,085		29,247			28,400
Insurance⁴		3,454			3,479		14,757			15,770
Bank owned life insurance income		1,733			1,236		5,743			5,355
Net securities gains (losses)		160			189		(388	)		4,213
Other		5,937			6,738		21,905			18,853
Total noninterest income	$	38,115		$	36,241	$	146,276		$	144,023
Noninterest expense
Salaries and employee benefits	$	41,016		$	39,592	$	161,934		$	156,867
Occupancy		5,280			5,653		21,634			22,706
Data processing and communications		4,157			4,719		16,527			18,318
Professional fees and outside services		4,388			4,223		15,082			14,785
Equipment		5,395			4,821		19,889			18,583
Office supplies and postage		1,517			1,744		6,138			6,579
FDIC expense		739			-		2,688			1,946
Advertising		827			952		2,288			2,773
Amortization of intangible assets		822			844		3,395			3,579
Loan collection and other real estate owned, net		930			1,436		3,295			4,158
Other		10,133			6,310		24,863			24,440
Total noninterest expense	$	75,204		$	70,294	$	277,733		$	274,734
Income before income tax expense	$	43,626		$	37,126	$	133,087		$	155,432
Income tax expense		9,432			8,166		28,699			34,411
Net income	$	34,194		$	28,960	$	104,388		$	121,021
Earnings Per Share
Basic	$	0.78		$	0.66	$	2.39		$	2.76
Diluted	$	0.78		$	0.66	$	2.37		$	2.74


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

		2020									2019
	4th Q			3rd Q		2nd Q		1st Q			4th Q
Interest, fee and dividend income
Interest and fees on loans	$	76,863		$	74,998	$	77,270	$	78,728		$	79,800
Securities available for sale		5,478			5,603		5,600		5,753			5,639
Securities held to maturity		3,532			3,734		3,926		4,091			4,213
Other		568			659		650		829			924
Total interest, fee and dividend income	$	86,441		$	84,994	$	87,446	$	89,401		$	90,576
Interest expense
Deposits	$	3,887		$	4,267	$	4,812	$	9,104		$	10,181
Short-term borrowings		193			446		972		1,797			1,707
Long-term debt		369			398		393		393			484
Subordinated debt		1,339			1,375		128		-			-
Junior subordinated debt		545			565		695		926			1,021
Total interest expense	$	6,333		$	7,051	$	7,000	$	12,220		$	13,393
Net interest income	$	80,108		$	77,943	$	80,446	$	77,181		$	77,183
Provision for loan losses		(607	)		3,261		18,840		29,640			6,004
Net interest income after provision for loan losses	$	80,715		$	74,682	$	61,606	$	47,541		$	71,179
Noninterest income
Service charges on deposit accounts	$	3,588		$	3,087	$	2,529	$	3,997		$	4,361
ATM and debit card fees		6,776			7,194		6,136		5,854			5,935
Retirement plan administration fees		9,011			9,685		9,214		7,941			7,218
Wealth management⁴		7,456			7,695		6,823		7,273			7,085
Insurance⁴		3,454			3,742		3,292		4,269			3,479
Bank owned life insurance income		1,733			1,255		1,381		1,374			1,236
Net securities gains (losses)		160			84		180		(812	)		189
Other		5,937			4,985		5,456		5,527			6,738
Total noninterest income	$	38,115		$	37,727	$	35,011	$	35,423		$	36,241
Noninterest expense
Salaries and employee benefits	$	41,016		$	40,451	$	39,717	$	40,750		$	39,592
Occupancy		5,280			5,294		5,065		5,995			5,653
Data processing and communications		4,157			4,058		4,079		4,233			4,719
Professional fees and outside services		4,388			3,394		3,403		3,897			4,223
Equipment		5,395			5,073		4,779		4,642			4,821
Office supplies and postage		1,517			1,530		1,455		1,636			1,744
FDIC expense		739			645		993		311			-
Advertising		827			530		322		609			952
Amortization of intangible assets		822			856		883		834			844
Loan collection and other real estate owned, net		930			620		728		1,017			1,436
Other		10,133			3,857		3,916		6,957			6,310
Total noninterest expense	$	75,204		$	66,308	$	65,340	$	70,881		$	70,294
Income before income tax expense	$	43,626		$	46,101	$	31,277	$	12,083		$	37,126
Income tax expense		9,432			10,988		6,564		1,715			8,166
Net income	$	34,194		$	35,113	$	24,713	$	10,368		$	28,960
Earnings Per Share
Basic	$	0.78		$	0.80	$	0.57	$	0.24		$	0.66
Diluted	$	0.78		$	0.80	$	0.56	$	0.23		$	0.66


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

	Average Balance		Yield / Rates		Average Balance		Yield / Rates		Average Balance		Yield / Rates		Average Balance		Yield / Rates		Average Balance		Yield / Rates
	Q4 - 2020				Q3 - 2020				Q2 - 2020				Q1 - 2020				Q4 - 2019
Assets
Short-term interest bearing accounts	$	552,529	0.11	%	$	477,946	0.11	%	$	380,260	0.10	%	$	74,695	1.28	%	$	51,613	2.43	%
Securities available for sale^{1 5}		1,230,411	1.77	%		1,137,604	1.96	%		985,561	2.29	%		962,527	2.40	%		942,302	2.37	%
Securities held to maturity^{1 5}		640,422	2.36	%		621,812	2.56	%		613,899	2.75	%		622,398	2.81	%		651,305	2.73	%
Investment in FRB and FHLB Banks		28,275	5.94	%		29,720	7.08	%		36,604	6.09	%		39,784	5.97	%		37,842	6.37	%
Loans^{1 6}		7,533,953	4.06	%		7,559,218	3.95	%		7,589,032	4.10	%		7,163,114	4.42	%		7,055,288	4.49	%
Total interest earning assets	$	9,985,590	3.46	%	$	9,826,300	3.45	%	$	9,605,356	3.68	%	$	8,862,518	4.07	%	$	8,738,350	4.13	%
Other assets		954,123				967,194				961,807				885,570				861,909
Total assets	$	10,939,713			$	10,793,494			$	10,567,163			$	9,748,088			$	9,600,259

Liabilities and stockholders' equity
Money market deposit accounts	$	2,455,510	0.27	%	$	2,364,606	0.28	%	$	2,360,407	0.29	%	$	2,101,306	1.00	%	$	2,057,678	1.16	%
NOW deposit accounts		1,315,370	0.05	%		1,207,064	0.05	%		1,167,486	0.04	%		1,086,205	0.10	%		1,064,193	0.13	%
Savings deposits		1,465,562	0.05	%		1,447,021	0.05	%		1,383,495	0.05	%		1,276,285	0.06	%		1,251,432	0.06	%
Time deposits		645,288	1.15	%		684,708	1.31	%		760,803	1.48	%		842,989	1.62	%		853,353	1.69	%
Total interest bearing deposits	$	5,881,730	0.26	%	$	5,703,399	0.30	%	$	5,672,191	0.34	%	$	5,306,785	0.69	%	$	5,226,656	0.77	%
Short-term borrowings		175,597	0.44	%		277,890	0.64	%		427,004	0.92	%		533,516	1.35	%		475,332	1.42	%
Long-term debt		59,488	2.47	%		64,137	2.47	%		64,165	2.46	%		64,194	2.46	%		81,613	2.35	%
Subordinated debt, net		97,984	5.44	%		97,934	5.59	%		8,633	5.96	%		-	-			-	-
Junior subordinated debt		101,196	2.14	%		101,196	2.22	%		101,196	2.76	%		101,196	3.68	%		101,196	4.00	%
Total interest bearing liabilities	$	6,315,995	0.40	%	$	6,244,556	0.45	%	$	6,273,189	0.45	%	$	6,005,691	0.82	%	$	5,884,797	0.90	%
Demand deposits		3,178,410				3,111,617				2,887,545				2,398,307				2,406,563
Other liabilities		271,206				282,265				271,635				214,495				199,674
Stockholders' equity		1,174,102				1,155,056				1,134,794				1,129,595				1,109,225
Total liabilities and stockholders' equity	$	10,939,713			$	10,793,494			$	10,567,163			$	9,748,088			$	9,600,259

Interest rate spread			3.06	%			3.00	%			3.23	%			3.25	%			3.23	%
Net interest margin (FTE)¹			3.20	%			3.17	%			3.38	%			3.52	%			3.52	%


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

	Average				Yield/		Average				Yield/
	Balance		Interest		Rates		Balance		Interest		Rates
Twelve Months Ended December 31,		2020						2019
Assets
Short-term interest bearing accounts	$	372,144	$	610	0.16	%	$	36,174	$	773	2.14	%
Securities available for sale^{1 5}		1,079,600		22,434	2.08	%		961,909		23,334	2.43	%
Securities held to maturity^{1 5}		624,668		16,363	2.62	%		725,352		20,410	2.81	%
Investment in FRB and FHLB Banks		33,570		2,096	6.24	%		43,385		2,879	6.64	%
Loans^{1 6}		7,461,795		308,080	4.13	%		6,972,438		321,805	4.62	%
Total interest earning assets	$	9,571,777	$	349,583	3.65	%	$	8,739,258	$	369,201	4.22	%
Other assets		942,274						831,954
Total assets	$	10,514,051					$	9,571,212

Liabilities and stockholders' equity
Money market deposit accounts	$	2,320,947	$	10,313	0.44	%	$	1,949,147	$	22,257	1.14	%
NOW deposit accounts		1,194,398		716	0.06	%		1,095,402		1,518	0.14	%
Savings deposits		1,393,436		745	0.05	%		1,265,112		733	0.06	%
Time deposits		733,073		10,296	1.40	%		910,546		15,478	1.70	%
Total interest bearing deposits	$	5,641,854	$	22,070	0.39	%	$	5,220,207	$	39,986	0.77	%
Short-term borrowings		352,809		3,408	0.97	%		573,927		9,693	1.69	%
Long-term debt		62,990		1,553	2.47	%		80,528		1,875	2.33	%
Subordinated debt, net		51,394		2,842	5.53	%		-		-	-
Junior subordinated debt		101,196		2,731	2.70	%		101,196		4,425	4.37	%
Total interest bearing liabilities	$	6,210,243	$	32,604	0.53	%	$	5,975,858	$	55,979	0.94	%
Demand deposits		2,895,341						2,351,515
Other liabilities		259,992						174,891
Stockholders' equity		1,148,475						1,068,948
Total liabilities and stockholders' equity	$	10,514,051					$	9,571,212
Net interest income (FTE)¹			$	316,979					$	313,222
Interest rate spread					3.12	%					3.28	%
Net interest margin (FTE)¹					3.31	%					3.58	%
Taxable equivalent adjustment			$	1,301					$	1,667
Net interest income			$	315,678					$	311,555


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

The following table presents loans by line of business, paycheck protection program loans includes $6.9 million, $11.3 million and $14.6 million in unamortized fees as of December 31, 2020 September 30, 2020 and June 30, 2020 respectively.



		2020								2019
	4th Q		3rd Q		2nd Q		1st Q		4th Q
Commercial	$	1,267,679	$	1,297,408	$	1,318,806	$	1,338,609	$	1,302,209
Commercial real estate		2,380,358		2,281,843		2,256,580		2,242,139		2,142,057
Paycheck protection program		430,810		514,558		510,097		-		-
Residential real estate mortgages		1,466,662		1,448,530		1,460,058		1,446,676		1,445,156
Indirect auto		931,286		989,369		1,091,889		1,184,888		1,193,635
Specialty lending		579,644		566,973		515,618		539,378		542,063
Home equity		387,974		404,346		415,528		431,536		444,082
Other consumer		54,472		57,616		59,415		64,157		66,896
Total loans	$	7,498,885	$	7,560,643	$	7,627,991	$	7,247,383	$	7,136,098

The following table provide loans as a percentage of total loans in industries vulnerable to the COVID-19 pandemic as of December 31, 2020:


Industry	% of Total Loans
Accommodations	2.5%
Healthcare services and practices	2.2%
Restaurants and entertainment	1.8%
Retailers	1.7%
Automotive	1.3%
Total	9.5%

Allowance for Loan Losses as a Percentage of Loans by Segment⁷:

	Incurred		CECL
	12/31/2019		1/1/2020		3/31/2020		6/30/2020*		9/30/2020*		12/31/2020*
Commercial & industrial	0.96%		0.98%		1.43%		1.25%		1.34%		1.47%
Commercial real estate	1.02%		0.74%		1.10%		1.56%		1.57%		1.43%
Paycheck protection program	0.00%		0.00%		0.00%		0.01%		0.01%		0.01%
Residential real estate	0.27%		0.83%		0.99%		1.13%		1.21%		1.07%
Auto	0.83%		0.78%		1.08%		0.99%		0.92%		0.93%
Other consumer	3.74%		3.66%		4.00%		5.01%		4.66%		4.55%
Total	1.02%		1.07%		1.38%		1.49%		1.51%		1.47%

* Excluding PPP loans and related allowance, total allowance to loans was 1.59%, 1.62% and 1.56% as of June 30, 2020, September 30, 2020 and December 31, 2020 respectively.


¹	The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:

	Non-GAAP measures
	(unaudited, dollars in thousands)

	Pre-provision net revenue ("PPNR")		2020												2019
		4th Q			3rd Q			2nd Q			1st Q			4th Q
	Income before income tax expense	$	43,626		$	46,101		$	31,277		$	12,083		$	37,126
	FTE adjustment		318			325			329			329			349
	Provision for loan losses		(607	)		3,261			18,840			29,640			6,004
	Net securities (gains) losses		(160	)		(84	)		(180	)		812			(189	)
	Nonrecurring expense		4,100			-			650			-			-
	Unfunded loan commitments reserve		900			-			(200	)		2,000			-
	PPNR	$	48,177		$	49,603		$	50,716		$	44,864		$	43,290

	Average Assets	$	10,939,713		$	10,793,494		$	10,567,163		$	9,748,088		$	9,600,259

	Return on Average Assets³		1.24	%		1.29	%		0.94	%		0.43	%		1.20	%
	PPNR Return on Average Assets³		1.75	%		1.83	%		1.93	%		1.85	%		1.79	%

		12 Months ended December 31,
			2020			2019
	Income before income tax expense	$	133,087		$	155,432
	FTE adjustment		1,301			1,667
	Provision for loan losses		51,134			25,412
	Net securities (gains) losses		388			(4,213	)
	Nonrecurring expense		4,750			3,800
	Unfunded loan commitments reserve		2,700			-
	PPNR	$	193,360		$	182,098

	Average Assets	$	10,514,051		$	9,571,212

	Return on Average Assets		0.99	%		1.26	%
	PPNR Return on Average Assets		1.84	%		1.90	%

	PPNR is a Non-GAAP financial measure that management believes is useful in evaluating the underlying operating results of the Company excluding the volatility in loan loss provision due to CECL adoption and the impact of the COVID-19 pandemic, net securities gains (losses) and non-recurring income and/or expense.



	FTE Adjustment		2020												2019
		4th Q			3rd Q			2nd Q			1st Q			4th Q
	Net interest income	$	80,108		$	77,943		$	80,446		$	77,181		$	77,183
	Add: FTE adjustment		318			325			329			329			349
	Net interest income (FTE)	$	80,426		$	78,268		$	80,775		$	77,510		$	77,532
	Average earning assets	$	9,985,590		$	9,826,300		$	9,605,356		$	8,862,518		$	8,738,350
	Net interest margin (FTE)³		3.20	%		3.17	%		3.38	%		3.52	%		3.52	%

		12 Months ended December 31,
			2020			2019
	Net interest income	$	315,678		$	311,555
	Add: FTE adjustment		1,301			1,667
	Net interest income (FTE)	$	316,979		$	313,222
	Average earning assets	$	9,571,777		$	8,739,258
	Net interest margin (FTE)		3.31	%		3.58	%

	Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.


¹	The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:

	Non-GAAP measures
	(unaudited, dollars in thousands)

	Tangible equity to tangible assets		2020												2019
		4th Q			3rd Q			2nd Q			1st Q			4th Q
	Total equity	$	1,187,618		$	1,166,111		$	1,142,652		$	1,112,179		$	1,120,397
	Intangible assets		292,276			293,098			293,954			285,955			286,789
	Total assets	$	10,932,906		$	10,850,212		$	10,847,184		$	9,953,543		$	9,715,925
	Tangible equity to tangible assets		8.41	%		8.27	%		8.04	%		8.55	%		8.84	%

	Return on average tangible common equity		2020												2019
		4th Q			3rd Q			2nd Q			1st Q			4th Q
	Net income	$	34,194		$	35,113		$	24,713		$	10,368		$	28,960
	Amortization of intangible assets (net of tax)		617			642			662			626			633
	Net income, excluding intangibles amortization	$	34,811		$	35,755		$	25,375		$	10,994		$	29,593

	Average stockholders' equity	$	1,174,102		$	1,155,056		$	1,134,794		$	1,129,595		$	1,109,225
	Less: average goodwill and other intangibles		292,725			293,572			294,423			286,400			287,268
	Average tangible common equity	$	881,377		$	861,484		$	840,371		$	843,195		$	821,957
	Return on average tangible common equity³		15.71	%		16.51	%		12.14	%		5.24	%		14.28	%

		12 Months ended December 31,
			2020			2019
	Net income	$	104,388		$	121,021
	Amortization of intangible assets (net of tax)		2,546			2,684
	Net income, excluding intangibles amortization	$	106,934		$	123,705

	Average stockholders' equity	$	1,148,475		$	1,068,948
	Less: average goodwill and other intangibles		291,787			288,539
	Average tangible common equity	$	856,688		$	780,409
	Return on average tangible common equity		12.48	%		15.85	%

²	Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.
³	Annualized.
⁴	Other financial services revenue previously disclosed and included with Insurance income has been reclassified and combined with Trust income and is disclosed as Wealth management income.
⁵	Securities are shown at average amortized cost.
⁶	For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
⁷	The allowance for loan losses for December 31, 2019 was calculated based on the incurred losses methodology and beginning January 1, 2020, it was based on the CECL methodology. The risk-based pooling of loans (segments) for incurred and CECL are not consistent. For illustrative purposes only, the loans and related incurred allowance at December 31, 2019 were grouped to conform with the CECL methodology.

NBT Bancorp Inc. Announces Net Income of $104.4 Million ($2.37 Per Diluted Common Share); Approves Dividend and Increase to Shares Available Under Share Repurchase Program

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