SOURCE: NBT Bancorp Inc.

April 28, 2008 18:15 ET

NBT Bancorp Inc. Announces First Quarter Earnings of $0.43 per Share, Up 54% From the Fourth Quarter of 2007; Declares Cash Dividend

NORWICH, NY--(Marketwire - April 28, 2008) - NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income per diluted share for the three months ended March 31, 2008 was $0.43 per share, compared with $0.28 per share and $0.41 per share for the three months ended December 31, 2007 and March 31, 2007, respectively. Return on average assets and return on average equity were 1.07% and 13.68%, respectively, for the three months ended March 31, 2008, compared with 0.69% and 9.06%, respectively, for the three months ended December 31, 2007 and 1.13% and 14.06%, respectively, for the three months ended March 31, 2007. Net income for the three months ended March 31, 2008 was $13.7 million, up $4.7 million, or 52.7%, from the three months ended December 31, 2007, and down $0.4 million, or 2.9%, from net income of $14.1 million reported for the three months ended March 31, 2007. The increase in net income for the three months ended March 31, 2008 as compared with the three months ended December 31, 2007 was primarily the result of an increase in net interest income as well as a decrease in the provision for loan and lease losses in the first quarter of 2008. The decrease in net income for the three months ended March 31, 2008 as compared with the same period in 2007 was primarily the result of a $4.4 million increase in the provision for loan and lease losses from the prior period, as well as an increase in noninterest expense totaling $3.2 million. These increases were partially offset by a $3.4 million, or 8.5%, increase in net interest income for the three months ended March 31, 2008 as compared to the three months ended March 31, 2007. In addition, noninterest income for the three months ended March 31, 2008 was $16.1 million, up $3.4 million or 26.8% from noninterest income of $12.7 million reported for the same period in 2007.

NBT President and CEO Martin A. Dietrich said, "The financial services industry continues to experience challenging market conditions in 2008. Given this difficult environment, I am pleased with our results for the first quarter. In particular, noninterest income was up 26.8% for the first quarter of 2008, compared with the first quarter of 2007, as we continue to focus on our fee initiatives as well as other areas of noninterest income that are so important to our future. In addition, our net interest income was up 8.5% from the first quarter of 2007, as we experienced growth in earning assets and an increase in our net interest margin of 21 basis points. We continue to closely monitor our asset quality and are encouraged by the improvement in the past due loans from $25.9 million to $19.7 million and the decrease in potential problem loans from $73.3 million to $58.5 million. As a result of the continued dedication and focus of our team, I am pleased and encouraged by our results in the first quarter of 2008."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at March 31, 2008 were $30.4 million or 0.87% of total loans and leases compared with $30.6 million or 0.88% at December 31, 2007. The allowance for loan and lease losses totaled $56.5 million at March 31, 2008, as compared to $54.2 million at December 31, 2007 and $50.6 million at March 31, 2007.

The Company recorded a provision for loan and lease losses of $6.5 million during the first quarter of 2008 compared with $13.4 million and $2.1 million for the three months ending December 31, 2007 and March 31, 2007, respectively. Net charge-offs totaled $4.2 million for the three month period ending March 31, 2008, down from $14.1 million for the three months ending December 31, 2007, and up from $2.1 million for the three months ended March 31, 2007. The decrease in the provision for loan and lease losses and net charge-offs from December 31, 2007 was due primarily to a charge-off related to one large commercial loan during the fourth quarter of 2007. The increase in the provision for loan and lease losses and net charge-offs from the three months ended March 31, 2007 was due primarily to an additional charge-off in the first quarter of 2008 related to the aforementioned commercial loan. Net charge-offs to average loans and leases for the three months ended March 31, 2008, were 0.48%, compared with 1.63% for the three months ended December 31, 2007, and 0.25% for the three months ended March 31, 2007. The Company's allowance for loan and lease losses was 1.61% of loans and leases at March 31, 2008, compared with 1.57% at December 31, 2007 and 1.49% at March 31, 2007.

Net Interest Income

Net interest income was up 5.3% to $44.1 million for the three months ended March 31, 2008 compared with the three months ended December 31, 2007, and up 8.5% compared with $40.6 million for the three months ended March 31, 2007. The Company's fully taxable equivalent (FTE) net interest margin increased from 3.61% and 3.63% for the three months ended December 31, 2007 and March 31, 2007, respectively, to 3.84% for the three months ended March 31, 2008. In addition, the Company experienced a 1.7% growth in average earning assets for the three months ending March 31, 2008 as compared to the three months ending March 31, 2007. The growth in average earning assets for the three months ended March 31, 2008, as compared to the three months ended March 31, 2007 was due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 22 basis points, the yield on interest bearing liabilities declined 49 basis points, which contributed to the increase in the net interest margin from the three months ended March 31, 2007. The yield on money market deposit accounts declined from 3.45% for the three months ended March 31, 2007 to 2.37% for the three months ended March 31, 2008, while the yield on time deposits decreased 30 basis points for the same periods. The yield on short term borrowings declined 163 basis points for the three months ended March 31, 2008 as compared to the three months ended March 31, 2007, as a result of the 300 basis points drop in the Fed Funds Target Rate from 5.25% at March 31, 2007 to 2.25% at March 31, 2008.

Noninterest Income

Noninterest income for the three months ended March 31, 2008 was $16.1 million, up $3.4 million or 26.8% from $12.7 million for the same period in 2007. The increase in noninterest income was due primarily to an increase in fees from service charges on deposit accounts and ATM and debit cards, which collectively increased $2.3 million as the Company focused on enhancing fee income through various initiatives. In addition, trust administration income increased $0.3 million for the three month period ended March 31, 2008, compared with the same period in 2007. This increase stems primarily from an increase in customer accounts resulting from successful business development. Other noninterest income increased $0.6 million for the three month period ended March 31, 2008, compared with the same period in 2007. This increase was due primarily to a $0.4 million gain from the mandatory redemption of Visa, Inc. common stock associated with its initial public offering. Net securities gains and losses for the three month periods ended March 31, 2008 and 2007 were nominal and had no significant effect on noninterest income.

Noninterest Expense and Income Tax Expense

Noninterest expense for the three months ended March 31, 2008 was $34.0 million, up from $30.9 million for the same period in 2007. Office expenses, such as supplies and postage, occupancy, equipment and data processing and communications charges were $9.9 million for the three months ended March 31, 2008, up $0.6 million, or 7.2%, from $9.3 million for the three months ended March 31, 2007. This increase was due primarily to increased expenses related to branch openings. Salaries and employee benefits increased $0.8 million, or 5.0%, for the three months ended March 31, 2008 compared with the same period in 2007. Professional fees and outside services increased $1.4 million for the three month period ended March 31, 2008, compared with the same period in 2007, due primarily to fees and costs related to the aforementioned noninterest income initiatives. Income tax expense for the three month period ended March 31, 2008 was $5.9 million, down from $6.2 million for the same period in 2007. The effective rates were 30.2% and 30.6% for the three month periods ended March 31, 2008 and 2007, respectively.

Balance Sheet

Total assets were $5.2 billion at March 31, 2008, up $28.0 million or 0.5% from $5.2 billion at December 31, 2007, and up $129.0 million or 2.5% from $5.1 billion at March 31, 2007. Loans and leases were $3.5 billion at March 31, 2008, up $49.6 million or 1.4% from $3.5 billion at December 31, 2007, and up $110.0 million or 3.2% from $3.4 billion at March 31, 2007. The increase in loans and leases for the three months ended March 31, 2008 as compared to March 31, 2007 was due in large part to an increase in consumer loans of approximately $136.9 million. This increase in consumer loans was partially offset by decreases in commercial loans and real estate loans totaling approximately $24.4 million. Total deposits were $3.9 billion at March 31, 2008, down $17.9 million or 0.5% from $3.9 billion at December 31, 2007, and down $112.4 million or 2.8% from $4.0 billion at March 31, 2007. The decrease from March 31, 2007 was due in large part to a $185.0 million, or 10.8%, decrease in time deposit accounts. This decrease was partially offset by a $48.4 million increase in demand deposit accounts and a $59.6 million increase in money market accounts from March 31, 2007 to March 31, 2008. Stockholders' equity was $405.9 million, representing a total equity to total assets ratio of 7.76% at March 31, 2008, compared with $397.3 million or a total equity to total assets ratio of 7.64% at December 31, 2007, and $407.6 million or a total equity to total assets ratio of 7.99% at March 31, 2007.

Stock Repurchase Program

Under previously disclosed stock repurchase plans, the Company purchased 272,840 shares of its common stock during the three month period ended March 31, 2008, for a total of $5.9 million at an average price of $21.77 per share. At March 31, 2008, there were 1,203,040 shares available for repurchase under previously announced plans.

Dividend Declared

The NBT Board of Directors declared a second quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on June 15, 2008, to shareholders of record as of June 1, 2008.

Corporate Overview

NBT is a financial holding company headquartered in Norwich, NY, with total assets of $5.2 billion at March 31, 2008. The Company primarily operates through NBT Bank, N.A., a full-service community bank with two divisions, and through two financial services companies. NBT Bank, N.A. has 122 locations, including 83 NBT Bank offices in upstate New York and 39 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Hathaway Insurance Agency, Inc., based in Gloversville, NY, is a full-service insurance agency. More information about NBT and its divisions can be found on the Internet at: www.nbtbancorp.com, www.nbtbank.com, www.pennstarbank.com, www.epic1st.com and www.hathawayagency.com.

Forward-Looking Statements

This news release contains forward-looking statements. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of NBT Bancorp and its subsidiaries and on the information available to management at the time that these statements were made. There are a number of factors, many of which are beyond NBT's control, that could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards and tax laws, may adversely affect the businesses in which NBT is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than NBT; and (7) adverse changes may occur in the securities markets or with respect to inflation. Forward-looking statements speak only as of the date they are made. Except as required by law, NBT does not undertake to update forward-looking statements to reflect subsequent circumstances or events.



                    NBT Bancorp Inc. and Subsidiaries
                      SELECTED FINANCIAL HIGHLIGHTS
                                (unaudited)

                                                           Net     Percent
                                  2008        2007       Change    Change
                               ----------  ----------  ----------  -------
                               (dollars in thousands,
                               except per share data)

Three Months Ended March 31,
Net Income                     $   13,716  $   14,132      ($ 416)      -3%
Diluted Earnings Per Share     $     0.43  $     0.41  $     0.02        5%
Weighted Average Diluted
 Common Shares Outstanding     32,251,700  34,457,082  -2,205,382       -6%
Return on Average Assets (1)         1.07%       1.13%      -0.06%      -5%
Return on Average Equity (1)        13.68%      14.06%      -0.38%      -3%
Net Interest Margin (2)              3.84%       3.63%       0.21%       6%
                               ==========  ==========  ==========  =======

Asset Quality                   March 31,   December 31,  March 31,
                                  2008         2007         2007
                               ----------  ----------  ----------
Nonaccrual Loans               $   29,864  $   29,697  $   16,294
90 Days Past Due and Still
 Accruing                      $      543  $      882  $    1,069
Total Nonperforming Loans      $   30,407  $   30,579  $   17,363
Other Real Estate Owned        $      480  $      560  $      632
Total Nonperforming Assets     $   30,887  $   31,139  $   17,995
Past Due Loans                 $   19,748  $   25,914  $   28,497
Allowance for Loan and Lease
 Losses                        $   56,500  $   54,183  $   50,554
Year-to-Date (YTD) Net
 Charge-Offs                   $    4,161  $   26,498  $    2,129
Allowance for Loan and Lease
 Losses to Total Loans and
 Leases                              1.61%       1.57%       1.49%
Total Nonperforming Loans to
 Total Loans and Leases              0.87%       0.88%       0.51%
Total Nonperforming Assets to
 Total Assets                        0.59%       0.60%       0.35%
Past Due Loans to Total Loans
 and Leases                          0.56%       0.75%       0.84%
Allowance for Loan and Lease
 Losses to Total Nonperforming
 Loans                             185.81%     177.19%     291.16%
Net Charge-Offs to YTD Average
 Loans and Leases                    0.48%       0.77%       0.25%
                               ==========  ==========  ==========

Capital
Equity to Assets                     7.76%       7.64%       7.99%
Book Value Per Share           $    12.65  $    12.29  $    11.99
Tangible Book Value Per Share  $     9.13  $     8.78  $     8.61
Tier 1 Leverage Ratio                7.17%       7.14%       7.60%
Tier 1 Capital Ratio                 9.75%       9.85%      10.53%
Total Risk-Based Capital Ratio      11.00%      11.10%      11.78%
                               ==========  ==========  ==========

Quarterly Common
 Stock Price                  2008               2007             2006
Quarter End              High      Low      High      Low    High      Low
                        -----     -----    -----     -----  -----     -----
March 31               $23.65    $17.95    $25.81   $21.73  $23.90   $21.02
June 30                                     23.45    21.80   23.24    21.03
September 30                                23.80    17.10   24.57    21.44
December 31                                 25.00    20.58   26.47    22.36

(1)  Annualized
(2)  Calculated on a FTE basis



                    NBT Bancorp Inc. and Subsidiaries
                      SELECTED FINANCIAL HIGHLIGHTS
                                (unaudited)

                                                           Net     Percent
                                  2008        2007       Change    Change
                               ----------- ----------- ----------  -------
                               (dollars in thousands,
                               except per share data)
Balance Sheet as of March 31,
Loans and Leases               $ 3,505,453 $ 3,395,476 $  109,977        3%
Earning Assets                 $ 4,818,733 $ 4,710,263 $  108,470        2%
Total Assets                   $ 5,229,771 $ 5,100,781 $  128,990        3%
Deposits                       $ 3,854,226 $ 3,966,655  ($112,429)      -3%
Stockholders’ Equity           $   405,863 $   407,580    ($1,717)       0%
                               =========== =========== ==========  =======

Average Balances
Three Months Ended March 31,
Loans and Leases               $ 3,466,360 $ 3,398,590 $   67,770        2%
Securities Available For Sale
 (excluding unrealized gains
 or losses)                    $ 1,120,257 $ 1,123,414    ($3,157)       0%
Securities Held To Maturity    $   152,860 $   140,856 $   12,004        9%
Regulatory Equity Investment   $    37,509 $    34,804 $    2,705        8%
Short-Term Interest Bearing
 Accounts                      $     8,400 $     9,255      ($855)      -9%
Total Earning Assets           $ 4,785,386 $ 4,706,919 $   78,467        2%
Total Assets                   $ 5,164,344 $ 5,068,491 $   95,853        2%
Interest Bearing Deposits      $ 3,232,999 $ 3,245,152   ($12,153)       0%
Non-Interest Bearing Deposits  $   659,417 $   616,938 $   42,479        7%
Short-Term Borrowings          $   303,576 $   265,347 $   38,229       14%
Long-Term Borrowings           $   500,294 $   482,025 $   18,269        4%
Total Interest Bearing
 Liabilities                   $ 4,036,869 $ 3,992,524 $   44,345        1%
Stockholders’ Equity           $   403,165 $   407,519    ($4,354)      -1%
                               =========== =========== ==========  =======



NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets         March 31,   December 31,    March 31,
 (unaudited)                          2008          2007          2007
                                  ------------- ------------- -------------
(in thousands)

ASSETS
Cash and due from banks           $     129,630 $     155,495 $     132,494
Short term interest bearing
 accounts                                 7,345         7,451        24,598
Securities available for sale, at
 fair value                           1,127,707     1,132,230     1,107,624
Securities held to maturity (fair
 value of $158,482, $149,519 and        157,353       149,111       145,760
 $145,762 at March 31, 2008,
 December 31, 2007 and
 March 31, 2007, respectively)
Federal Reserve and Federal Home
 Loan Bank stock                         41,353        38,102        30,487
Loans and leases                      3,505,453     3,455,851     3,395,476
Less allowance for loan and lease
 losses                                  56,500        54,183        50,554
                                  ============= ============= =============
 Net loans and leases                 3,448,953     3,401,668     3,344,922
Premises and equipment, net              64,302        64,042        65,784
Goodwill                                103,398       103,398       103,420
Intangible assets, net                    9,782        10,173        11,408
Bank owned life insurance                44,066        43,614        42,217
Other assets                             95,882        96,492        92,067
                                  ------------- ------------- -------------
TOTAL ASSETS                      $   5,229,771 $   5,201,776 $   5,100,781
                                  ============= ============= =============

LIABILITIES AND STOCKHOLDERS'
 EQUITY
Deposits:
 Demand (noninterest bearing)     $     672,616 $     666,698 $     624,171
 Savings, NOW, and money market       1,656,374     1,614,289     1,632,222
 Time                                 1,525,236     1,591,106     1,710,262
                                  ------------- ------------- -------------
  Total deposits                      3,854,226     3,872,093     3,966,655
Short-term borrowings                   399,992       368,467       204,421
Long-term debt                          424,858       424,887       392,792
Trust preferred debentures               75,422        75,422        75,422
Other liabilities                        69,410        63,607        53,911
                                  ------------- ------------- -------------
 Total liabilities                    4,823,908     4,804,476     4,693,201


Total stockholders' equity              405,863       397,300       407,580
                                  ============= ============= =============

TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY             $   5,229,771 $   5,201,776 $   5,100,781
                                  ============= ============= =============


                                                    Three months ended
NBT Bancorp Inc. and Subsidiaries                       March 31,
Consolidated Statements of Income (unaudited)       2008          2007
                                                ------------- ------------
(in thousands, except per share data)
Interest, fee and dividend income:
Loans and leases                                $      58,617 $     59,808
Securities available for sale                          13,746       13,467
Securities held to maturity                             1,514        1,444
Other                                                     775          740
                                                ------------- ------------
  Total interest, fee and dividend income              74,652       75,459
                                                ------------- ------------
Interest expense:
Deposits                                               22,698       25,984
Short-term borrowings                                   2,340        3,092
Long-term debt                                          4,302        4,486
Trust preferred debentures                              1,247        1,268
                                                ------------- ------------
  Total interest expense                               30,587       34,830
                                                ------------- ------------
Net interest income                                    44,065       40,629
Provision for loan and lease losses                     6,478        2,096
                                                ------------- ------------
Net interest income after provision for loan
 and lease losses                                      37,587       38,533
                                                ------------- ------------
Noninterest income:
Trust                                                   1,774        1,437
Service charges on deposit accounts                     6,525        4,469
ATM and debit card fees                                 2,097        1,896
Broker/dealer and insurance revenue                     1,107        1,083
Net securities gains (losses)                              15           (5)
Bank owned life insurance income                          452          434
Retirement plan administration fees                     1,708        1,592
Other                                                   2,417        1,784
                                                ------------- ------------
  Total noninterest income                             16,095       12,690
                                                ------------- ------------
Noninterest expense:
Salaries and employee benefits                         16,770       15,964
Office supplies and postage                             1,339        1,296
Occupancy                                               3,610        3,169
Equipment                                               1,825        1,933
Professional fees and outside services                  3,099        1,658
Data processing and communications                      3,170        2,877
Amortization of intangible assets                         391          409
Loan collection and other real estate owned               567          377
Other operating                                         3,263        3,189
                                                ------------- ------------
  Total noninterest expense                            34,034       30,872
                                                ------------- ------------
Income before income taxes                             19,648       20,351
Income taxes                                            5,932        6,219
                                                ------------- ------------
   Net income                                   $      13,716 $     14,132
                                                ------------- ------------
Earnings Per Share:
     Basic                                      $        0.43 $       0.41
     Diluted                                    $        0.43 $       0.41
                                                ============= ============



NBT Bancorp Inc. and
 Subsidiaries
Quarterly Consolidated
 Statements of Income        1Q        4Q        3Q        2Q        1Q
 (unaudited)                2008      2007      2007      2007      2007
                          --------- --------- --------- --------- --------
(in thousands, except per
 share data)
Interest, fee and
 dividend income:
Loans and leases          $  58,617 $  60,817 $  61,183 $  60,689 $ 59,808
Securities available for
 sale                        13,746    13,971    13,847    13,562   13,467
Securities held to
 maturity                     1,514     1,458     1,471     1,525    1,444
Other                           775       736       680       719      740
                          --------- --------- --------- --------- --------
  Total interest, fee and
   dividend income           74,652    76,982    77,181    76,495   75,459
                          --------- --------- --------- --------- --------
Interest expense:
Deposits                     22,698    26,578    27,062    26,950   25,984
Short-term borrowings         2,340     3,048     3,885     2,918    3,092
Long-term debt                4,302     4,233     3,770     3,997    4,486
Trust preferred
 debentures                   1,247     1,270     1,277     1,272    1,268
                          --------- --------- --------- --------- --------
  Total interest expense     30,587    35,129    35,994    35,137   34,830
                          --------- --------- --------- --------- --------
Net interest income          44,065    41,853    41,187    41,358   40,629
Provision for loan and
 lease losses                 6,478    13,440     4,788     9,770    2,096
                          --------- --------- --------- --------- --------
Net interest income after
 provision for loan and
 lease losses                37,587    28,413    36,399    31,588   38,533
                          --------- --------- --------- --------- --------
Noninterest income:
Trust                         1,774     1,584     1,701     1,792    1,437
Service charges on
 deposit accounts             6,525     7,142     6,195     4,936    4,469
ATM and debit card fees       2,097     2,089     2,159     2,041    1,896
Broker/dealer and
 insurance fees               1,107     1,052     1,027     1,093    1,083
Net securities gains
 (losses)                        15       613     1,484        21       (5)
Bank owned life insurance
 income                         452       480       467       450      434
Retirement plan
 administration fees          1,708     1,557     1,586     1,601    1,592
Other                         2,417     1,973     1,908     2,058    1,784
                          --------- --------- --------- --------- --------
  Total noninterest
   income                    16,095    16,490    16,527    13,992   12,690
                          --------- --------- --------- --------- --------
Noninterest expense:
Salaries and employee
 benefits                    16,770    14,654    15,876    13,022   15,964
Office supplies and
 postage                      1,339     1,136     1,354     1,334    1,296
Occupancy                     3,610     2,948     2,928     2,585    3,169
Equipment                     1,825     1,855     1,797     1,837    1,933
Professional fees and
 outside services             3,099     3,295     2,256     1,926    1,658
Data processing and
 communications               3,170     2,899     2,779     2,845    2,877
Amortization of
 intangible assets              391       413       413       410      409
Loan collection and other
 real estate owned              567       597       431       228      377
Other operating               3,263     4,607     3,393     3,827    3,189
                          --------- --------- --------- --------- --------
  Total noninterest
   expense                   34,034    32,404    31,227    28,014   30,872
                          --------- --------- --------- --------- --------
Income before income
 taxes                       19,648    12,499    21,699    17,566   20,351
Income taxes                  5,932     3,514     6,552     5,502    6,219
                          --------- --------- --------- --------- --------
   Net income             $  13,716 $   8,985 $  15,147 $  12,064 $ 14,132
                          ========= ========= ========= ========= ========
Earnings per share:
   Basic                  $    0.43 $    0.28 $    0.46 $    0.36 $   0.41
   Diluted                $    0.43 $    0.28 $    0.46 $    0.36 $   0.41
                          ========= ========= ========= ========= ========

Contact Information

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