Exhibit 99.1

 
Page 1 of 13

FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS

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. ANNOUNCES RECORD NET INCOME OF $121.0 MILLION AND DILUTED EARNINGS PER SHARE OF $2.74; DECLARES CASH DIVIDEND
NORWICH, NY (January 27, 2020) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported record net income and diluted earnings per share for the year ended December 31, 2019.
Net income for the year ended December 31, 2019 was $121.0 million, up 7.5% from $112.6 million for the prior year. Diluted earnings per share for the year ended December 31, 2019 was $2.74, as compared with $2.56 for the prior year, an increase of 7.0%.
Net income for the three months ended December 31, 2019 was $29.0 million, down 10.6% from $32.4 million for the third quarter of 2019 and up 1.1% from $28.7 million for the fourth quarter of 2018. Diluted earnings per share for the three months ended December 31, 2019 was $0.66, down 9.5% as compared with $0.73 for the prior quarter and up 1.5% from $0.65 for the fourth quarter of 2018.
Highlights:

•
Diluted earnings per share up 7.0% from prior year
 

 		•
Full year 2019 net income up 7.5% from 2018
 

 		•
Loan growth for the year ended December 31, 2019 of 3.6% and 6.9% for the fourth quarter, annualized, driven by commercial and residential real estate
 

 		•
Strong asset quality continued with nonperforming loans to total loans of 0.40% down 7 basis points from prior quarter
 

 		•
Tangible equity ratio of 8.84%, up 99 bps from prior year, and tangible book value per share of $19.03, up 14.2% from 2018
 
“We are pleased to report that NBT achieved a seventh straight year of record net income in 2019 along with a new annual EPS record,” said NBT President and CEO John H. Watt, Jr. “The best team in community banking maintained focus on the fundamentals of our core banking business, including low-cost deposit gathering and prudent loan growth, while advancing our strategic priorities and executing on technology and digital initiatives. Our strong balance sheet, disciplined approach to credit and risk management, and diversified fee businesses provide NBT with optionality as we continue to grow our company, both organically and by acquisition. In the second quarter of 2020, we intend to accelerate the growth of our well-established EPIC Retirement Plan Services business with the acquisition of Alliance Benefit Group of Illinois, Inc. of Peoria, bringing the number of plan participants we support nationwide to 250,000.”

 
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Net interest income for the year ended 2019 was $311.6 million, up $5.9 million, or 1.9%, from 2018. The fully taxable equivalent (“FTE”) net interest margin of 3.58% for the year ended December 31, 2019, was comparable to 2018. Average interest-earning assets were up $144.8 million, or 1.7%, for the year ended December 31, 2019, as compared to the same period in 2018, driven by a $206.7 million increase in loans that was partially offset by an $89.9 million decrease in securities. Interest income increased $23.3 million, or 6.8%, due to the increase in earning assets combined with a 17 basis point (“bp”) improvement in loan yields. Interest expense was up $17.4 million, or 44.9% for the year ended December 31, 2019 as compared to the same period in 2018 as the cost of interest-bearing liabilities increased 29 bps, driven by interest-bearing deposit costs increasing 33 bps.
Net interest income was $77.2 million for the fourth quarter of 2019, down $0.9 million, or 1.1%, from the previous quarter. FTE net interest margin was 3.52% for the three months ended December 31, 2019, down 5 bps from the previous quarter, and interest income decreased $1.8 million, or 2.0%. The yield on average interest-earning assets decreased 9 bps to 4.13%, and average interest-earning assets were steady at $8.7 billion. The lower asset yield primarily reflects the impact of lower short-term rates on floating-rate loans, while average earning assets remained consistent driven by a smaller investment portfolio partially offset by an increase in loans. Interest expense was down $0.9 million, or 6.5%, due to a $31.3 million decrease in average interest-bearing liabilities from the prior quarter. The cost of interest-bearing liabilities decreased 6 bps to 0.90% for the quarter ended December 31, 2019, driven by a 19 bp decrease in short-term borrowings cost and a 4 bp decrease in interest-bearing deposit costs.
Noninterest income for the year ended December 31, 2019 was $144.0 million, up $19.3 million, or 15.4%, from the same period in 2018. Excluding net securities gains (losses), noninterest income for the year ended December 31, 2019 was $139.8 million, up $8.7 million or 6.6%, from the same period in 2018. The increase from the prior year was driven by higher other noninterest income primarily due to higher swap fee income, higher retirement plan administration fees due to a full year’s contribution from Retirement Plan Services, LLC (“RPS”), which was acquired in the second quarter of 2018, and higher ATM and debit card fees due to an increase in the number of accounts and usage.
Noninterest income for the three months ended December 31, 2019 was $36.2 million, down $3.5 million or 8.8%, from the prior quarter and up $10.3 million or 39.7%, from the fourth quarter of 2018. In the third quarter of 2019, the Company sold Visa Class B common stock for a gain of $4.0 million and in the fourth quarter of 2018, the Company restructured the investment portfolio by selling $109 million lower yielding bonds and reinvesting the proceeds in higher yielding bonds, which resulted in a $6.6 million loss on securities sold. Excluding net securities gains (losses), noninterest income for the three months ended December 31, 2019 was $36.1 million, up $0.4 million or 1.0%, from the prior quarter and up $3.2 million or 9.7%, from the fourth quarter of 2018. The increase from the prior quarter and from the fourth quarter of 2018 was primarily due to higher other noninterest income due primarily to higher swap fee income.
Noninterest expense for the year ended December 31, 2019 was $274.7 million, up $10.2 million or 3.8%, 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 as compared to the same period of 2018, partially offset by lower FDIC insurance expense. The increase in salaries and employee benefits was primarily due to the RPS acquisition in the second quarter of 2018 and $0.7 million in one-time charges related to efficiency initiatives and general wage and benefit increases. The $4.8 million increase in other noninterest expenses was due to $3.1 million in reorganization expenses incurred during the third quarter of 2019, primarily related to branch optimization strategies to improve future operating efficiencies and an increase in the amortization expense for pension plan actuarial costs. FDIC insurance expense decreased from 2018 due to receipt of the Small Bank Assessment Credit in 2019.

 
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Noninterest expense for the three months ended December 31, 2019 was $70.3 million, up $0.5 million or 0.8%, from the prior quarter and up $1.4 million or 2.0%, from the fourth quarter of 2018. The increase from the prior quarter was primarily driven by an increase in professional fees and loan collection expenses, which were partially offset by lower other noninterest expenses due to the previously mentioned branch optimization that occurred during the third quarter of 2019. The increase from the fourth quarter of 2018 was primarily due to increases in salaries and employee benefits and loan collection, partially offset by lower FDIC insurance expense due to the previously mentioned receipt of the Small Bank Assessment Credit in 2019.
Income tax expense for the year ended December 31, 2019 was $34.4 million, up $10.0 million, or 40.8%, from the same period of 2018. The effective tax rate of 22.1% in 2019 was up from 17.8% for the same period in the prior year. The increase in income tax expense from the prior year was due to a $5.5 million tax benefit recorded in the fourth quarter of 2018 primarily related to one-time income tax return accounting method changes, combined with a higher level of taxable income.
Income tax expense for the three months ended December 31, 2019 was $8.2 million, down $1.2 million from the prior quarter and up $7.4 million from the fourth quarter of 2018. The effective tax rate of 22.0% for the fourth quarter of 2019 was down from 22.4% from the third quarter of 2019 and up from 2.5% from the fourth quarter of 2018. The decrease in income tax expense from the prior quarter was due to lower taxable income and the increase from the fourth quarter of 2018 primarily due to one-time income tax return accounting method changes during the fourth quarter of 2018.
Asset Quality
Net charge-offs of $25.0 million for the year ended December 31, 2019 were down compared to $25.8 million for the same period of 2018. Provision expense was $25.4 million for the year ended December 31, 2019, as compared with $28.8 million for the same period of 2018. Annualized net charge-offs to average loans for the year ended December 31, 2019 was 0.36%, as compared with 0.38% for the same period of 2018.
Net charge-offs of $5.4 million for the three months ended December 31, 2019 were down as compared to $6.1 million for the prior quarter and down compared to $6.8 million for the fourth quarter of 2018. Provision expense was lower at $6.0 million for the three months ended December 31, 2019, as compared with $6.3 million for the prior quarter and $6.5 million for the fourth quarter of 2018. Annualized net charge-offs to average loans for the fourth quarter of 2019 was 0.30%, down from 0.35% for the prior quarter and down from 0.39% for the fourth quarter of 2018.
Nonperforming loans to total loans was 0.40% at December 31, 2019, down 7 bps from 0.47% at September 30, 2019 and down 4 bps from 0.44% at December 31, 2018. Past due loans as a percentage of total loans was 0.49% at December 31, 2019, down from 0.57% at September 30, 2019 and down from 0.55% at December 31, 2018.
The allowance for loan losses totaled $73.0 million at December 31, 2019, compared to $72.4 million at September 30, 2019 and $72.5 million at December 31, 2018. The allowance for loan losses as a percentage of loans was 1.02% (1.06% excluding acquired loans) at December 31, 2019, compared to 1.03% (1.08% excluding acquired loans) at September 30, 2019 and 1.05% (1.10% excluding acquired loans) at December 31, 2018.

 
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Balance Sheet
Total assets were $9.7 billion at December 31, 2019, up $159.6 million from December 31, 2018. Loans were $7.1 billion at December 31, 2019, up $248.4 million from December 31, 2018. In 2019, loan growth in commercial real estate and residential real estate was partially offset by run-off in consumer portfolios. Total deposits were $7.6 billion at December 31, 2019, up $219.6 million, or 3.0%, from December 31, 2018, reflecting growth in money market deposit accounts and non-interest-bearing demand accounts. Stockholders’ equity was $1.1 billion, representing a total equity-to-total assets ratio of 11.53% at December 31, 2019, compared with $1.0 billion or a total equity-to-total assets ratio of 10.65% at December 31, 2018. Tangible book value per share was $19.03 at December 31, 2019, an increase of 14.2% from December 31, 2018.

On January 1, 2020, the Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). While certain key assumptions to be used in NBT’s CECL model and methodologies are being finalized, as well as certain review controls, the day-one impact of adopting CECL is not expected to be material to the Company’s total capital.
Dividend
The Board of Directors approved a first-quarter 2020 cash dividend of $0.27 per share at a meeting held today. The dividend will be paid on March 13, 2020 to shareholders of record as of February 28, 2020.
Other Events
On January 24, 2020, NBT subsidiary EPIC Retirement Plan Services, a full-service 401(k) recordkeeping firm, signed a definitive agreement to purchase the assets of Alliance Benefit Group of Illinois, Inc. (“ABGIL”). ABGIL is a retirement plan services company located in Peoria, Illinois that provides full-service recordkeeping, administration, fiduciary investment advice and plan design solutions to employers nationwide. This is NBT’s fifth retirement plan services acquisition since 2015. The addition of ABGIL will strengthen NBT’s presence in retirement services and bring the number of plan participants supported by NBT to 250,000 in all 50 states. The Company expects to complete the acquisition of ABGIL in the second quarter of 2020.
2020 Annual Meeting
NBT will be moving to a virtual shareholder meeting format, and the 2020 Annual Meeting of Shareholders will be hosted online on May 19, 2020. As technology enables new types of engagement, this virtual format will allow NBT to reach more shareholders, who will have the same opportunities to participate as in past in-person meetings. Details will be provided to shareholders with proxy materials in April 2020.
Corporate Overview
NBT Bancorp Inc. is a financial holding company headquartered in Norwich, N.Y., with total assets of $9.7 billion at December 31, 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 146 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.epicrps.com and www.nbtinsurance.com.

 
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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 several 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 tax laws and accounting standards, including the estimated effects from the adoption of the CECL model on January 1, 2020, 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:
  
4th Q
    
3rd Q
    
2nd Q
    
1st Q
    
4th Q
  
Diluted earnings per share
  
$
0.66
    
$
0.73
    
$
0.69
    
$
0.66
    
$
0.65
  
Weighted average diluted common shares outstanding
    
44,174,201
      
44,138,495
      
44,120,377
      
44,081,086
      
44,059,796
  
Return on average assets (1)
    
1.20
%
    
1.34
%
    
1.28
%
    
1.24
%
    
1.20
%
Return on average equity (1)
    
10.36
%
    
11.83
%
    
11.63
%
    
11.52
%
    
11.34
%
Return on average tangible common equity (1)(3)
    
14.28
%
    
16.43
%
    
16.38
%
    
16.45
%
    
16.37
%
Net interest margin (1)(2)
    
3.52
%
    
3.57
%
    
3.61
%
    
3.64
%
    
3.61
%
                                         
   
12 Months ended December 31,
                          
Profitability:
  
2019
    
2018
                          
Diluted earnings per share
  
$
2.74
    
$
2.56
                          
Weighted average diluted common shares outstanding
    
44,123,698
      
44,019,698
                          
Return on average assets
    
1.26
%
    
1.20
%
                        
Return on average equity
    
11.32
%
    
11.49
%
                        
Return on average tangible common equity (4)
    
15.85
%
    
16.71
%
                        
Net interest margin (2)
    
3.58
%
    
3.58
%
                        
                                         
(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
  
   
4th Q
    
3rd Q
    
2nd Q
    
1st Q
    
4th Q
  
Net income
  
$
28,960
    
$
32,379
    
$
30,555
    
$
29,127
    
$
28,652
  
Amortization of intangible assets (net of tax)
    
633
      
656
      
670
      
726
      
734
  
Net income, excluding intangibles amortization
  
$
29,593
    
$
33,035
    
$
31,225
    
$
29,853
    
$
29,386
  
                                         
Average stockholders’ equity
  
$
1,109,225
    
$
1,085,961
    
$
1,053,750
    
$
1,025,753
    
$
1,002,822
  
Less: average goodwill and other intangibles
    
287,268
      
288,077
      
288,930
      
289,913
      
290,854
  
Average tangible common equity
  
$
821,957
    
$
797,884
    
$
764,820
    
$
735,840
    
$
711,968
  
                                         
(4) Non-GAAP measure - excludes amortization of intangible assets (net of tax) from net income and average tangible common equity is calculated as follows:
                                         
                                         
   
12 Months ended December 31,
                          
   
2019
    
2018
                          
Net income
  
$
121,021
    
$
112,566
                          
Amortization of intangible assets (net of tax)
    
2,684
      
3,032
                          
Net income, excluding intangibles amortization
  
$
123,705
    
$
115,598
                          
                                         
Average stockholders’ equity
  
$
1,068,948
    
$
980,005
                          
Less: average goodwill and other intangibles
    
288,539
      
288,273
                          
Average tangible common equity
  
$
780,409
    
$
691,732
                          
                                         
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
  
   
4th Q
    
3rd Q
    
2nd Q
    
1st Q
    
4th Q
  
Balance sheet data:
                              
Securities available for sale
  
$
975,340
    
$
932,173
    
$
979,696
    
$
951,859
    
$
998,496
  
Securities held to maturity
    
630,074
      
678,435
      
744,601
      
780,565
      
783,599
  
Net loans
    
7,063,133
      
6,941,444
      
6,891,108
      
6,818,907
      
6,815,204
  
Total assets
    
9,715,925
      
9,661,386
      
9,635,718
      
9,533,510
      
9,556,363
  
Total deposits
    
7,587,820
      
7,743,166
      
7,593,706
      
7,617,659
      
7,368,211
  
Total borrowings
    
820,682
      
628,701
      
794,829
      
719,775
      
1,046,616
  
Total liabilities
    
8,595,528
      
8,562,785
      
8,560,895
      
8,499,455
      
8,538,454
  
Stockholders’ equity
    
1,120,397
      
1,098,601
      
1,074,823
      
1,034,055
      
1,017,909
  
                                         
Asset quality:
                                        
Nonaccrual loans
  
$
25,174
    
$
24,623
    
$
24,669
    
$
25,632
    
$
25,487
  
90 days past due and still accruing
    
3,717
      
8,342
      
2,387
      
3,335
      
5,085
  
Total nonperforming loans
    
28,891
      
32,965
      
27,056
      
28,967
      
30,572
  
Other real estate owned
    
1,458
      
2,144
      
2,203
      
2,222
      
2,441
  
Total nonperforming assets
    
30,349
      
35,109
      
29,259
      
31,189
      
33,013
  
Allowance for loan losses
    
72,965
      
72,365
      
72,165
      
71,405
      
72,505
  
                                         
Asset quality ratios (total):
                                        
Allowance for loan losses to total loans
    
1.02
%
    
1.03
%
    
1.04
%
    
1.04
%
    
1.05
%
Total nonperforming loans to total loans
    
0.40
%
    
0.47
%
    
0.39
%
    
0.42
%
    
0.44
%
Total nonperforming assets to total assets
    
0.31
%
    
0.36
%
    
0.30
%
    
0.33
%
    
0.35
%
Allowance for loan losses to total nonperforming loans
    
252.55
%
    
219.52
%
    
266.72
%
    
246.50
%
    
237.16
%
Past due loans to total loans
    
0.49
%
    
0.57
%
    
0.52
%
    
0.52
%
    
0.55
%
Net charge-offs to average loans (1)
    
0.30
%
    
0.35
%
    
0.38
%
    
0.41
%
    
0.39
%
                                         
Asset quality ratios (originated) (2):
                                        
Allowance for loan losses to loans
    
1.06
%
    
1.08
%
    
1.08
%
    
1.09
%
    
1.10
%
Nonperforming loans to loans
    
0.39
%
    
0.47
%
    
0.38
%
    
0.41
%
    
0.43
%
Allowance for loan losses to nonperforming loans
    
269.90
%
    
231.21
%
    
287.67
%
    
265.63
%
    
254.92
%
Past due loans to loans
    
0.48
%
    
0.56
%
    
0.52
%
    
0.52
%
    
0.56
%
                                         
Capital:
                                        
Equity to assets
    
11.53
%
    
11.37
%
    
11.15
%
    
10.85
%
    
10.65
%
Tangible equity ratio (3)
    
8.84
%
    
8.65
%
    
8.41
%
    
8.06
%
    
7.85
%
Book value per share
  
$
25.58
    
$
25.09
    
$
24.56
    
$
23.64
    
$
23.31
  
Tangible book value per share (4)
  
$
19.03
    
$
18.52
    
$
17.97
    
$
17.02
    
$
16.66
  
Tier 1 leverage ratio
    
10.33
%
    
10.15
%
    
9.88
%
    
9.62
%
    
9.52
%
Common equity tier 1 capital ratio
    
11.29
%
    
11.14
%
    
10.95
%
    
10.69
%
    
10.49
%
Tier 1 capital ratio
    
12.56
%
    
12.42
%
    
12.24
%
    
11.99
%
    
11.79
%
Total risk-based capital ratio
    
13.52
%
    
13.38
%
    
13.21
%
    
12.98
%
    
12.78
%
Common stock price (end of period)
  
$
40.56
    
$
36.59
    
$
37.51
    
$
36.01
    
$
34.59
  

(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 8 of 13
NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)

Assets
  
December 31,
2019
    
December 31,
2018
  
Cash and due from banks
  
$
170,595
    
$
175,550
  
Short-term interest bearing accounts
    
46,248
      
5,405
  
Equity securities, at fair value
    
27,771
      
23,053
  
Securities available for sale, at fair value
    
975,340
      
998,496
  
Securities held to maturity (fair value $641,262 and $778,675, respectively)
    
630,074
      
783,599
  
Federal Reserve and Federal Home Loan Bank stock
    
44,620
      
53,229
  
Loans held for sale
    
11,731
      
6,943
  
Loans
    
7,136,098
      
6,887,709
  
Less allowance for loan losses
    
72,965
      
72,505
  
Net loans
  
$
7,063,133
    
$
6,815,204
  
Premises and equipment, net
    
75,631
      
78,970
  
Goodwill
    
274,769
      
274,769
  
Intangible assets, net
    
12,020
      
15,599
  
Bank owned life insurance
    
181,748
      
177,479
  
Other assets
    
202,245
      
148,067
  
Total assets
  
$
9,715,925
    
$
9,556,363
  
                 
Liabilities and stockholders’ equity
                
Demand (noninterest bearing)
  
$
2,414,383
    
$
2,361,099
  
Savings, NOW and money market
    
4,312,244
      
4,076,434
  
Time
    
861,193
      
930,678
  
Total deposits
  
$
7,587,820
    
$
7,368,211
  
Short-term borrowings
    
655,275
      
871,696
  
Long-term debt
    
64,211
      
73,724
  
Junior subordinated debt
    
101,196
      
101,196
  
Other liabilities
    
187,026
      
123,627
  
Total liabilities
  
$
8,595,528
    
$
8,538,454
  
                 
Total stockholders’ equity
  
$
1,120,397
    
$
1,017,909
  
                 
Total liabilities and stockholders’ equity
  
$
9,715,925
    
$
9,556,363
  

 
Page 9 of 13
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
Three Months Ended
December 31,
    
Twelve Months Ended
December 31,
  
   
2019
    
2018
    
2019
    
2018
  
Interest, fee and dividend income
                        
Interest and fees on loans
  
$
79,800
    
$
78,963
    
$
321,474
    
$
300,827
  
Securities available for sale
    
5,639
      
6,332
      
23,303
      
26,920
  
Securities held to maturity
    
4,213
      
4,344
      
19,105
      
13,242
  
Other
    
924
      
885
      
3,652
      
3,266
  
Total interest, fee and dividend income
  
$
90,576
    
$
90,524
    
$
367,534
    
$
344,255
  
Interest expense
                                
Deposits
  
$
10,181
    
$
6,977
    
$
39,986
    
$
22,144
  
Short-term borrowings
    
1,707
      
3,131
      
9,693
      
10,552
  
Long-term debt
    
484
      
431
      
1,875
      
1,790
  
Junior subordinated debt
    
1,021
      
1,110
      
4,425
      
4,140
  
Total interest expense
  
$
13,393
    
$
11,649
    
$
55,979
    
$
38,626
  
Net interest income
  
$
77,183
    
$
78,875
    
$
311,555
    
$
305,629
  
Provision for loan losses
    
6,004
      
6,528
      
25,412
      
28,828
  
Net interest income after provision for loan losses
  
$
71,179
    
$
72,347
    
$
286,143
    
$
276,801
  
Noninterest income
                                
Insurance and other financial services revenue
  
$
5,891
    
$
5,843
    
$
25,006
    
$
24,345
  
Service charges on deposit accounts
    
4,361
      
4,503
      
17,151
      
17,224
  
ATM and debit card fees
    
5,935
      
5,704
      
23,893
      
22,699
  
Retirement plan administration fees
    
7,218
      
7,113
      
30,388
      
26,992
  
Trust
    
4,673
      
4,573
      
19,164
      
19,524
  
Bank owned life insurance income
    
1,236
      
1,239
      
5,355
      
5,091
  
Net securities gains (losses)
    
189
      
(6,916
)
    
4,213
      
(6,341
)
Other
    
6,738
      
3,887
      
18,853
      
15,228
  
Total noninterest income
  
$
36,241
    
$
25,946
    
$
144,023
    
$
124,762
  
Noninterest expense
                                
Salaries and employee benefits
  
$
39,592
    
$
38,998
    
$
156,867
    
$
151,685
  
Occupancy
    
5,653
      
5,284
      
22,706
      
22,318
  
Data processing and communications
    
4,719
      
4,431
      
18,318
      
17,652
  
Professional fees and outside services
    
4,223
      
3,968
      
14,785
      
14,376
  
Equipment
    
4,821
      
4,529
      
18,583
      
17,037
  
Office supplies and postage
    
1,744
      
1,564
      
6,579
      
6,204
  
FDIC expense
    
-
      
1,135
      
1,946
      
4,651
  
Advertising
    
952
      
1,006
      
2,773
      
2,782
  
Amortization of intangible assets
    
844
      
978
      
3,579
      
4,042
  
Loan collection and other real estate owned, net
    
1,436
      
738
      
4,158
      
4,217
  
Other
    
6,310
      
6,273
      
24,440
      
19,597
  
Total noninterest expense
  
$
70,294
    
$
68,904
    
$
274,734
    
$
264,561
  
Income before income tax expense
  
$
37,126
    
$
29,389
    
$
155,432
    
$
137,002
  
Income tax expense
    
8,166
      
737
      
34,411
      
24,436
  
Net income
  
$
28,960
    
$
28,652
    
$
121,021
    
$
112,566
  
Earnings Per Share
                                
Basic
  
$
0.66
    
$
0.66
    
$
2.76
    
$
2.58
  
Diluted
  
$
0.66
    
$
0.65
    
$
2.74
    
$
2.56
  

 
Page 10 of 13
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
2019
    
2018
  
   
4th Q
    
3rd Q
    
2nd Q
    
1st Q
    
4th Q
  
Interest, fee and dividend income
                              
Interest and fees on loans
  
$
79,800
    
$
81,082
    
$
81,271
    
$
79,321
    
$
78,963
  
Securities available for sale
    
5,639
      
5,711
      
6,031
      
5,922
      
6,332
  
Securities held to maturity
    
4,213
      
4,586
      
5,089
      
5,217
      
4,344
  
Other
    
924
      
1,002
      
842
      
884
      
885
  
Total interest, fee and dividend income
  
$
90,576
    
$
92,381
    
$
93,233
    
$
91,344
    
$
90,524
  
Interest expense
                                        
Deposits
  
$
10,181
    
$
10,745
    
$
10,234
    
$
8,826
    
$
6,977
  
Short-term borrowings
    
1,707
      
1,989
      
2,760
      
3,237
      
3,131
  
Long-term debt
    
484
      
498
      
471
      
422
      
431
  
Junior subordinated debt
    
1,021
      
1,095
      
1,141
      
1,168
      
1,110
  
Total interest expense
  
$
13,393
    
$
14,327
    
$
14,606
    
$
13,653
    
$
11,649
  
Net interest income
  
$
77,183
    
$
78,054
    
$
78,627
    
$
77,691
    
$
78,875
  
Provision for loan losses
    
6,004
      
6,324
      
7,277
      
5,807
      
6,528
  
Net interest income after provision for loan losses
  
$
71,179
    
$
71,730
    
$
71,350
    
$
71,884
    
$
72,347
  
Noninterest income
                                        
Insurance and other financial services revenue
  
$
5,891
    
$
6,421
    
$
5,938
    
$
6,756
    
$
5,843
  
Service charges on deposit accounts
    
4,361
      
4,330
      
4,224
      
4,236
      
4,503
  
ATM and debit card fees
    
5,935
      
6,277
      
6,156
      
5,525
      
5,704
  
Retirement plan administration fees
    
7,218
      
7,600
      
7,836
      
7,734
      
7,113
  
Trust
    
4,673
      
5,209
      
4,731
      
4,551
      
4,573
  
Bank owned life insurance income
    
1,236
      
1,556
      
1,186
      
1,377
      
1,239
  
Net securities gains (losses)
    
189
      
4,036
      
(69
)
    
57
      
(6,916
)
Other
    
6,738
      
4,291
      
4,239
      
3,585
      
3,887
  
Total noninterest income
  
$
36,241
    
$
39,720
    
$
34,241
    
$
33,821
    
$
25,946
  
Noninterest expense
                                        
Salaries and employee benefits
  
$
39,592
    
$
39,352
    
$
38,567
    
$
39,356
    
$
38,998
  
Occupancy
    
5,653
      
5,335
      
5,443
      
6,275
      
5,284
  
Data processing and communications
    
4,719
      
4,492
      
4,693
      
4,414
      
4,431
  
Professional fees and outside services
    
4,223
      
3,535
      
3,359
      
3,668
      
3,968
  
Equipment
    
4,821
      
4,487
      
4,518
      
4,757
      
4,529
  
Office supplies and postage
    
1,744
      
1,667
      
1,577
      
1,591
      
1,564
  
FDIC expense (credit)
    
-
      
(20
)
    
949
      
1,017
      
1,135
  
Advertising
    
952
      
677
      
641
      
503
      
1,006
  
Amortization of intangible assets
    
844
      
874
      
893
      
968
      
978
  
Loan collection and other real estate owned, net
    
1,436
      
976
      
961
      
785
      
738
  
Other
    
6,310
      
8,374
      
4,630
      
5,126
      
6,273
  
Total noninterest expense
  
$
70,294
    
$
69,749
    
$
66,231
    
$
68,460
    
$
68,904
  
Income before income tax expense
  
$
37,126
    
$
41,701
    
$
39,360
    
$
37,245
    
$
29,389
  
Income tax expense
    
8,166
      
9,322
      
8,805
      
8,118
      
737
  
Net income
  
$
28,960
    
$
32,379
    
$
30,555
    
$
29,127
    
$
28,652
  
Earnings Per Share
                                        
Basic
  
$
0.66
    
$
0.74
    
$
0.70
    
$
0.67
    
$
0.66
  
Diluted
  
$
0.66
    
$
0.73
    
$
0.69
    
$
0.66
    
$
0.65
  

 
Page 11 of 13
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 - 2019
      
Q3 - 2019
      
Q2 - 2019
      
Q1 - 2019
      
Q4 - 2018
  
Assets
                                                                      
Short-term interest bearing accounts
  
$
51,613
      
2.43
%
  
$
57,530
      
1.95
%
  
$
25,783
      
1.28
%
  
$
9,065
      
4.07
%
  
$
3,780
      
5.25
%
Securities available for sale (1) (3)
    
942,302
      
2.37
%
    
940,256
      
2.41
%
    
981,079
      
2.47
%
    
984,704
      
2.45
%
    
1,104,198
      
2.29
%
Securities held to maturity (1) (3)
    
651,305
      
2.73
%
    
698,617
      
2.77
%
    
770,651
      
2.83
%
    
782,570
      
2.90
%
    
688,840
      
2.73
%
Investment in FRB and FHLB Banks
    
37,842
      
6.37
%
    
40,525
      
7.04
%
    
46,179
      
6.60
%
    
49,152
      
6.54
%
    
47,689
      
6.95
%
Loans (2) (3)
    
7,055,288
      
4.49
%
    
6,987,476
      
4.61
%
    
6,958,299
      
4.69
%
    
6,886,672
      
4.68
%
    
6,876,341
      
4.56
%
Total interest earning assets
  
$
8,738,350
      
4.13
%
  
$
8,724,404
      
4.22
%
  
$
8,781,991
      
4.28
%
  
$
8,712,163
      
4.28
%
  
$
8,720,848
      
4.14
%
Other assets
    
861,909
              
852,616
              
816,748
              
795,585
              
769,302
          
Total assets
  
$
9,600,259
            
$
9,577,020
            
$
9,598,739
            
$
9,507,748
            
$
9,490,150
          
                                                                                 
Liabilities and stockholders’ equity
                                                                                
Money market deposit accounts
  
$
2,057,678
      
1.16
%
  
$
2,015,297
      
1.24
%
  
$
1,916,045
      
1.16
%
  
$
1,804,053
      
0.99
%
  
$
1,745,980
      
0.65
%
NOW deposit accounts
    
1,064,193
      
0.13
%
    
1,056,001
      
0.13
%
    
1,127,413
      
0.13
%
    
1,135,213
      
0.16
%
    
1,166,383
      
0.18
%
Savings deposits
    
1,251,432
      
0.06
%
    
1,274,793
      
0.06
%
    
1,282,084
      
0.06
%
    
1,252,042
      
0.06
%
    
1,250,703
      
0.06
%
Time deposits
    
853,353
      
1.69
%
    
893,837
      
1.75
%
    
953,698
      
1.73
%
    
942,457
      
1.64
%
    
921,252
      
1.47
%
Total interest bearing deposits
  
$
5,226,656
      
0.77
%
  
$
5,239,928
      
0.81
%
  
$
5,279,240
      
0.78
%
  
$
5,133,765
      
0.70
%
  
$
5,084,318
      
0.54
%
Short-term borrowings
    
475,332
      
1.42
%
    
490,694
      
1.61
%
    
620,898
      
1.78
%
    
712,306
      
1.84
%
    
724,693
      
1.71
%
Long-term debt
    
81,613
      
2.35
%
    
84,250
      
2.35
%
    
82,414
      
2.29
%
    
73,707
      
2.32
%
    
73,735
      
2.32
%
Junior subordinated debt
    
101,196
      
4.00
%
    
101,196
      
4.29
%
    
101,196
      
4.52
%
    
101,196
      
4.68
%
    
101,196
      
4.35
%
Total interest bearing liabilities
  
$
5,884,797
      
0.90
%
  
$
5,916,068
      
0.96
%
  
$
6,083,748
      
0.96
%
  
$
6,020,974
      
0.92
%
  
$
5,983,942
      
0.77
%
Demand deposits
    
2,406,563
              
2,389,617
              
2,298,867
              
2,309,531
              
2,373,235
          
Other liabilities
    
199,674
              
185,374
              
162,374
              
151,490
              
130,151
          
Stockholders’ equity
    
1,109,225
              
1,085,961
              
1,053,750
              
1,025,753
              
1,002,822
          
Total liabilities and stockholders’ equity
  
$
9,600,259
            
$
9,577,020
            
$
9,598,739
            
$
9,507,748
            
$
9,490,150
          
                                                                                 
Interest rate spread
            
3.23
%
            
3.26
%
            
3.32
%
            
3.36
%
            
3.37
%
Net interest margin (FTE) (3)
            
3.52
%
            
3.57
%
            
3.61
%
            
3.64
%
            
3.61
%

(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 $349, $374, $445, $500 and $535 for the three months ended December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019 and December 31, 2018, respectively.
 
Page 12 of 13
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
  
Twelve Months ended December 31,
  
2019
    
2018
  
Assets
                                    
Short-term interest bearing accounts
  
$
36,174
    
$
773
      
2.14
%
  
$
3,377
    
$
183
      
5.42
%
Securities available for sale (1) (3)
    
961,909
      
23,334
      
2.43
%
    
1,210,013
      
27,081
      
2.24
%
Securities held to maturity (1) (3)
    
725,352
      
20,410
      
2.81
%
    
567,117
      
14,657
      
2.58
%
Investment in FRB and FHLB Banks
    
43,385
      
2,879
      
6.64
%
    
48,214
      
3,083
      
6.39
%
Loans (2) (3)
    
6,972,438
      
321,805
      
4.62
%
    
6,765,748
      
301,258
      
4.45
%
Total interest earning assets
  
$
8,739,258
    
$
369,201
      
4.22
%
  
$
8,594,469
    
$
346,262
      
4.03
%
Other assets
    
831,954
                      
764,670
                  
Total assets
  
$
9,571,212
                    
$
9,359,139
                  
                                                 
Liabilities and stockholders’ equity
                                                
Money market deposit accounts
  
$
1,949,147
    
$
22,257
      
1.14
%
  
$
1,706,823
    
$
8,314
      
0.49
%
NOW deposit accounts
    
1,095,402
      
1,518
      
0.14
%
    
1,191,008
      
1,894
      
0.16
%
Savings deposits
    
1,265,112
      
733
      
0.06
%
    
1,266,970
      
725
      
0.06
%
Time deposits
    
910,546
      
15,478
      
1.70
%
    
866,388
      
11,211
      
1.29
%
Total interest bearing deposits
  
$
5,220,207
    
$
39,986
      
0.77
%
  
$
5,031,189
    
$
22,144
      
0.44
%
Short-term borrowings
    
573,927
      
9,693
      
1.69
%
    
727,635
      
10,552
      
1.45
%
Long-term debt
    
80,528
      
1,875
      
2.33
%
    
80,195
      
1,790
      
2.23
%
Junior subordinated debt
    
101,196
      
4,425
      
4.37
%
    
101,196
      
4,140
      
4.09
%
Total interest bearing liabilities
  
$
5,975,858
    
$
55,979
      
0.94
%
  
$
5,940,215
    
$
38,626
      
0.65
%
Demand deposits
    
2,351,515
                      
2,321,264
                  
Other liabilities
    
174,891
                      
117,655
                  
Stockholders’ equity
    
1,068,948
                      
980,005
                  
Total liabilities and stockholders’ equity
  
$
9,571,212
                    
$
9,359,139
                  
Net interest income (FTE)
          
$
313,222
                    
$
307,636
          
Interest rate spread
                    
3.28
%
                    
3.38
%
Net interest margin (FTE) (3)
                    
3.58
%
                    
3.58
%
Taxable equivalent adjustment
          
$
1,667
                    
$
2,007
          
Net interest income
          
$
311,555
                    
$
305,629
          

(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 13 of 13
NBT Bancorp Inc. and Subsidiaries
Consolidated Loan Balances
(unaudited, dollars in thousands)

   
2019
    
2018
  
   
4th Q
    
3rd Q
    
2nd Q
    
1st Q
    
4th Q
  
Commercial
  
$
1,302,209
    
$
1,317,649
    
$
1,299,784
    
$
1,306,551
    
$
1,291,568
  
Commercial real estate
    
2,142,057
      
2,033,552
      
2,025,280
      
1,943,931
      
1,930,742
  
Residential real estate mortgages
    
1,445,156
      
1,416,920
      
1,404,079
      
1,390,411
      
1,380,836
  
Dealer finance
    
1,193,635
      
1,195,783
      
1,189,670
      
1,191,111
      
1,216,144
  
Specialty lending
    
542,063
      
528,505
      
519,974
      
529,144
      
524,928
  
Home equity
    
444,082
      
452,535
      
456,754
      
463,582
      
474,566
  
Other consumer
    
66,896
      
68,865
      
67,732
      
65,582
      
68,925
  
Total loans
  
$
7,136,098
    
$
7,013,809
    
$
6,963,273
    
$
6,890,312
    
$
6,887,709