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NBT Bancorp Inc.: NBT Bancorp Inc. Announces Record Annual Earnings of $1.80 per Diluted Share, Up 19.2% From 2007; Declares Ca

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^{Published in Business and Finance on Monday, January 26th 2009 at 15:24 GMT, Last Modified on 2009-01-26 15:31:52 by Market Wire}  

NORWICH, NY--(Marketwire - January 26, 2009) - NBT Bancorp Inc. (NBT) (NASDAQ: [ NBTB ]) reported today that net income for the year ended December 31, 2008 was $58.4 million, up $8.1 million, or 15.9%, from net income of $50.3 million reported in 2007. Net income per diluted share for the year ended December 31, 2008 was $1.80 per share, compared with $1.51 per share for 2007. Return on average assets and return on average equity were 1.11% and 14.16%, respectively, for the year ended December 31, 2008, compared with 0.98% and 12.60%, respectively, for 2007.

Net income for the three months ended December 31, 2008 was $14.9 million, up $5.9 million, or 65.8%, from net income of $9.0 million reported for the same period in 2007. Net income per diluted share for the three months ended December 31, 2008 was $0.45 per share, compared with $0.28 per share for the same period in 2007. Return on average assets and return on average equity were 1.11% and 13.88%, respectively, for the three months ended December 31, 2008, compared with 0.69% and 9.06%, respectively, for the same period in 2007.

NBT President and CEO Martin Dietrich said: "Although 2008 presented many challenges for the financial services industry and the economy in general, I am extremely pleased with the record earnings we achieved in this difficult environment. While the current financial crisis has caused many banks to struggle, we were able to post record diluted earnings per share of $1.80 and record net income of $58.4 million. In addition, the return on our stock, including reinvested dividends, was up over 26% as of December 31, 2008, compared with December 31, 2007. Our strong 2008 performance can be attributed to many factors, including growth in net interest income resulting from strategic management of our earning assets and interest bearing liabilities. Our net interest margin was 3.95% in 2008, compared with 3.61% for 2007. In addition, our efforts to grow our noninterest income resulted in a 20.1% increase over 2007. We have also seen several asset quality indicators improve from 2007. Our nonperforming assets were down approximately 12.8% from 2007, and net charge-offs were down approximately 14.0% from last year. During 2008, we continued our controlled growth initiative by opening three new branches within our footprint. While 2009 may be a very challenging year given the economic environment, I am confident in our ability to successfully navigate through the challenges ahead and deliver long-term value to our shareholders and customers."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at December 31, 2008 were $26.5 million or 0.73% of total loans and leases compared with $30.6 million or 0.88% at December 31, 2007. The decrease in nonperforming loans at December 31, 2008 from December 31, 2007 was primarily the result of net charge-offs during the 12 month period ending December 31, 2008 related to two large commercial loans, both of which had been previously identified and reserved for in 2007. The allowance for loan and lease losses totaled $58.6 million at December 31, 2008, compared with $54.2 million at December 31, 2007.

The Company recorded a provision for loan and lease losses of $27.2 million for the year ended December 31, 2008, compared with $30.1 million for the 12 months ended December 31, 2007. Net charge-offs totaled $22.8 million for the 12 months ended December 31, 2008, down from $26.5 million for the same period a year ago. The decrease in net charge-offs for the 12 months ended December 31, 2008 was due primarily to charge-offs in 2007 related to one large commercial real estate loan. Net charge-offs to average loans and leases for the 12 months ended December 31, 2008 were 0.64%, compared with 0.77% for the 12 months ended December 31, 2007.

The Company recorded a provision for loan and lease losses of $7.7 million during the fourth quarter of 2008 compared with $13.4 million for the three months ending December 31, 2007. The decrease in the provision for loan and lease losses for the three months ended December 31, 2008, compared with the three months ended December 31, 2007, was due primarily to the provision in the fourth quarter of 2007 related to one large commercial non-real estate loan. Net charge-offs totaled $5.0 million for the three month period ending December 31, 2008, down from $14.1 million for the three months ended December 31, 2007. The decrease in net charge-offs for the three months ended December 31, 2008, compared with the three months ended December 31, 2007, was due primarily to charge-offs in the fourth quarter of 2007 related to the aforementioned commercial real estate loan. Annualized net charge-offs to average loans and leases for the three months ended December 31, 2008 were 0.54%, compared with 1.62% for the three months ended December 31, 2007. The Company's allowance for loan and lease losses was 1.60% of loans and leases at December 31, 2008, compared with 1.57% at December 31, 2007.

Net Interest Income

Net interest income was up 12.7% to $186.0 million for the year ended December 31, 2008, compared with $165.0 million for the year ended December 31, 2007. The Company's fully taxable equivalent (FTE) net interest margin increased from 3.61% for the year ended December 31, 2007 to 3.95% for the year ended December 31, 2008. In addition, the Company experienced a 2.8% growth in average earning assets for the year ended December 31, 2008, compared with the year ended December 31, 2007, due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 41 basis points, the yield on interest bearing liabilities declined 88 basis points, which contributed to the increase in the net interest margin from the 12 months ended December 31, 2007. The yield on money market deposit accounts declined from 3.38% for the 12 months ended December 31, 2007 to 1.85% for the 12 months ended December 31, 2008, while the yield on time deposits decreased 86 basis points for the same period. The yield on short term borrowings declined 245 basis points for the 12 months ended December 31, 2008, compared with the 12 months ended December 31, 2007, as a result of the 400 basis point drop in the Federal Reserve's target for the federal funds rate from 4.25% at December 31, 2007 to 0.25% at December 31, 2008.

Net interest income was up 16.9% to $48.9 million for the three months ended December 31, 2008 compared with $41.9 million for the three months ended December 31, 2007. The Company's FTE net interest margin increased from 3.61% for the three months ended December 31, 2007 to 4.06% for the three months ended December 31, 2008. In addition, the Company experienced a 3.7% growth in average earning assets for the three months ending December 31, 2008, compared with the three months ending December 31, 2007, due primarily to an increase in average loans and leases. Although the yield on interest earning assets decreased 51 basis points, the yield on interest bearing liabilities declined 113 basis points, which contributed to the increase in the net interest margin for the three months ended December 31, 2008, compared with the same period for 2007. The yield on money market deposit accounts declined from 3.24% for the three months ended December 31, 2007 to 1.61% for the three months ended December 31, 2008, while the yield on time deposits decreased 124 basis points for the same period. The yield on short term borrowings declined 344 basis points for the three months ended December 31, 2008, compared with the three months ended December 31, 2007, as a result of the aforementioned 400 basis point drop in the Federal Reserve's target for the federal funds rate.

Noninterest Income

Noninterest income for the year ended December 31, 2008 was $71.7 million, up $12.0 million or 20.1% from $59.7 million for the same period in 2007. The increase in noninterest income was due primarily to an increase in service charges on deposit accounts and ATM and debit card fees, which collectively increased $6.0 million due to various initiatives in 2008. In addition, trust administration income increased $0.8 million for the year ended December 31, 2008, compared with the same period in 2007. This increase stems primarily from an increase in customer accounts resulting from successful business development. Broker/dealer and insurance revenue increased approximately $4.5 million for the year ended December 31, 2008, primarily due to the acquisition of Mang Insurance Agency, LLC during the third quarter of 2008. Other noninterest income increased $0.7 million for the year ended December 31, 2008, compared with the same period in 2007. This increase was due primarily to a death benefit realized during the fourth quarter of 2008 from a life insurance policy. Net securities gains for the 12 month period ending December 31, 2008 were $1.5 million, compared with $2.1 million for the 12 month period ending December 31, 2007. Excluding the effects of these securities transactions, noninterest income increased $12.6 million, or 21.9%, for the 12 months ended December 31, 2008, compared with 2007.

Noninterest income for the three months ended December 31, 2008 was $20.2 million, up $3.7 million or 22.7% from $16.5 million for the same period in 2007. The increase in noninterest income was due primarily to an increase in broker/dealer and insurance revenue of approximately $2.9 million for the three month period ended December 31, 2008, due primarily to revenue generated by the aforementioned acquisition of Mang Insurance Agency, LLC. Other noninterest income increased $0.8 million for the three month period ended December 31, 2008, compared with the same period in 2007. This increase was due primarily to the aforementioned death benefit realized during the fourth quarter of 2008 from a life insurance policy. Net securities losses for the three month period ending December 31, 2008 were nominal, compared with $0.6 million in net securities gains during the three month period ending December 31, 2007. Excluding the effects of these securities transactions, noninterest income increased $4.4 million, or 27.5%, for the three months ended December 31, 2008, compared with the same period in 2007.

Noninterest Expense and Income Tax Expense

Noninterest expense for the year ended December 31, 2008 was $146.8 million, up from $122.5 million for the same period in 2007. Salaries and employee benefits increased $11.6 million, or 19.6%, for the year ended December 31, 2008, compared with the same period in 2007. This increase was due primarily to increases in full time equivalent employees during 2008 and reduced levels of incentive compensation in 2007 compared with 2008. The increase in full time equivalent employees was largely due to new branch activity and the aforementioned acquisition. Occupancy, equipment and data processing and communications expenses were $34.0 million for the year ended December 31, 2008, up $3.5 million, or 11.7%, from $30.5 million for the year ended December 31, 2007. This increase was due primarily to an increase in expenses related to new branch activity during the past year. Professional fees and outside services increased $1.3 million for the year ended December 31, 2008, compared with the same period in 2007, due primarily to increases in legal and audit fees incurred in 2008, as well as increases in fees related to the aforementioned noninterest income initiatives. Loan collection and other real estate owned expenses were $2.5 million for the year ended December 31, 2008, up from $1.6 million for same period in 2007. The Company recorded an other than temporary impairment charge on lease residual assets totaling $2.0 million during the third quarter of 2008 as a result of declines in the fair value of lease residual assets associated with certain leased vehicles. Other operating expenses were $19.2 million for the year ended December 31, 2008, up $4.2 million from $15.0 million for the year ended December 31, 2007. This increase resulted primarily from losses incurred from sales of certain returned lease vehicles totaling approximately $1.4 million during the period due to reduced values of those vehicles. In addition, Federal Deposit Insurance Corporation ("FDIC") insurance premiums increased approximately $1.4 million for the year ended December 31, 2008, compared with the same period in 2007. Income tax expense for the year ended December 31, 2008 was $25.4 million, up from $21.8 million for the same period in 2007. The effective rates were 30.3% and 30.2% for the years ended December 31, 2008 and 2007, respectively.

Noninterest expense for the three months ended December 31, 2008 was $40.3 million, up from $32.4 million for the same period in 2007. Salaries and employee benefits increased $6.0 million, or 40.8%, for the three months ended December 31, 2008, compared with the same period in 2007. This increase was due primarily to increases in full time equivalent employees during 2008 and reduced levels of incentive compensation in 2007. Occupancy, equipment and data processing and communications expenses were $8.6 million for the three months ended December 31, 2008, up $0.9 million, or 11.4%, from $7.7 million for the three months ended December 31, 2007. This increase was due primarily to an increase in expenses related to the aforementioned branch openings. Other operating expenses were $5.5 million for the three months ended December 31, 2008, up $0.9 million from $4.6 million for the three months ended December 31, 2007. This increase resulted primarily from an increase in FDIC insurance premiums of approximately $0.7 million for the three month period ending December 31, 2008, compared with the same period in 2007. Income tax expense for the three month period ended December 31, 2008 was $6.2 million, up from $3.5 million for the same period in 2007. The effective rates were 29.5% and 28.1% for the three month periods ended December 31, 2008 and 2007, respectively.

Balance Sheet

Total assets were $5.3 billion at December 31, 2008, up $134.3 million or 2.6% from $5.2 billion at December 31, 2007. Loans and leases were $3.7 billion at December 31, 2008, up $196.1 million or 5.7% from $3.5 billion at December 31, 2007. The increase in loans and leases at December 31, 2008, compared with December 31, 2007, was due in large part to an increase in consumer loans of approximately $186.5 million. Total deposits were $3.9 billion at December 31, 2008, up $51.2 million or 1.3% from December 31, 2007. The increase from December 31, 2007 was due in large part to a $271.3 million, or 16.8%, increase in NOW, savings and money market accounts, partially offset by a $238.9 million decrease in time deposits. Stockholders' equity was $431.8 million, representing a total equity to total assets ratio of 8.09% at December 31, 2008, compared with $397.3 million or a total equity to total assets ratio of 7.64% at December 31, 2007.

Stock Repurchase Program

Under previously disclosed stock repurchase plans, the Company purchased 272,840 shares of its common stock during the year ended December 31, 2008, for a total of $5.9 million at an average price of $21.77 per share. There were no shares purchased during the three month period ended December 31, 2008. At December 31, 2008, there were 1,203,040 shares available for repurchase under previously announced plans.

Dividend Declared

The NBT Board of Directors declared a 2009 first quarter cash dividend of $0.20 per share at a meeting held today. The dividend will be paid on March 15, 2009, to shareholders of record as of March 1, 2009.

2009 Outlook

While the Company reported record earnings for 2008, it anticipates that current global economic conditions and challenges in the financial services industry may negatively impact earnings in 2009. In particular, the Company currently expects that in 2009:

 -- premiums paid to the Federal Deposit Insurance Corporation will increase significantly; -- pension and postretirement expenses will increase significantly; -- revenue from Federal Home Loan Bank dividends may decrease significantly; -- payments representing interest and principal on currently outstanding loans and investments will most likely be reinvested at rates that are lower than the rates on currently outstanding loans and investments; and -- the economy may have an adverse affect on asset quality indicators and the provision for loan and lease losses, and therefore credit costs, which have trended higher in recent years are not expected to decline until economic indicators improve. 

Due to current uncertainty in economic conditions and the financial services industry in general, it is particularly difficult to estimate certain revenues, expenses and other related matters. There may be factors in addition to those identified above that impact 2009 results. For a discussion of risks and uncertainties that could impact the Company's future results, see "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2007 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

Corporate Overview

NBT Bancorp, Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $5.4 billion at December 31, 2008. The company primarily operates through NBT Bank, N.A., a full-service community bank with two divisions, and through three financial services companies. NBT Bank, N.A. has 122 locations, including 84 NBT Bank offices in upstate New York and 38 Pennstar Bank offices in northeastern Pennsylvania. EPIC Advisors, Inc., based in Rochester, NY, is a full-service 401(k) plan recordkeeping firm. Mang Insurance Agency, LLC, based in Binghamton, 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.hathawayagency.com ], [ www.epic1st.com ] and [ www.manginsurance.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 December 31, Net Income $ 14,897 $ 8,985 $ 5,912 66% Diluted Earnings Per Share $ 0.45 $ 0.28 $ 0.17 61% Weighted Average Diluted Common Shares Outstanding 32,758,405 32,398,179 360,226 1% Return on Average Assets (1) 1.11% 0.69% 0.42% 61% Return on Average Equity (1) 13.88% 9.06% 4.82% 53% Net Interest Margin (2) 4.06% 3.61% 0.45% 12% ============== ============== ============== ======= Twelve Months Ended December 31, Net Income $ 58,353 $ 50,328 $ 8,025 16% Diluted Earnings Per Share $ 1.80 $ 1.51 $ 0.29 19% Weighted Average Diluted Common Shares Outstanding 32,427,193 33,421,078 -993,885 -3% Return on Average Assets 1.11% 0.98% 0.13% 13% Return on Average Equity 14.16% 12.60% 1.56% 12% Net Interest Margin (2) 3.95% 3.61% 0.34% 9% ============== ============== ============== ======= Asset Quality December 31, December 31, 2008 2007 -------------- -------------- Nonaccrual Loans $ 24,191 $ 29,697 90 Days Past Due and Still Accruing $ 2,305 $ 882 Total Nonperforming Loans $ 26,496 $ 30,579 Other Real Estate Owned $ 665 $ 560 Total Nonperforming Assets $ 27,161 $ 31,139 Past Due Loans $ 33,098 $ 25,914 Allowance for Loan and Lease Losses $ 58,564 $ 54,183 Year-to-Date (YTD) Net Charge-Offs $ 22,800 $ 26,498 Allowance for Loan and Lease Losses to Total Loans and Leases 1.60% 1.57% Total Nonperforming Loans to Total Loans and Leases 0.73% 0.88% Total Nonperforming Assets to Total Assets 0.51% 0.60% Past Due Loans to Total Loans and Leases 0.91% 0.75% Allowance for Loan and Lease Losses to Total Nonperforming Loans 221.03% 177.19% Net Charge-Offs to YTD Average Loans and Leases 0.64% 0.77% ============== ============== ============== ======= Capital Equity to Assets 8.09% 7.64% Book Value Per Share $ 13.24 $ 12.29 Tangible Book Value Per Share $ 9.01 $ 8.78 Tier 1 Leverage Ratio 7.17% 7.14% Tier 1 Capital Ratio 9.75% 9.85% Total Risk-Based Capital Ratio 11.00% 11.10% ============== ============== ============== ======= -------------- -------------- -------------- 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 25.00 20.33 23.45 21.80 23.24 21.03 September 30 36.47 19.05 23.80 17.10 24.57 21.44 December 31 30.83 21.71 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 December 31, Loans and Leases $ 3,651,911 $ 3,455,851 $ 196,060 6% Earning Assets $ 4,933,099 $ 4,783,519 $ 149,580 3% Total Assets $ 5,336,088 $ 5,201,776 $ 134,312 3% Deposits $ 3,923,258 $ 3,872,093 $ 51,165 1% Stockholders’ Equity $ 431,845 $ 397,300 $ 34,545 9% =========== =========== ========== ======= Average Balances Three Months Ended December 31, Loans and Leases $ 3,634,346 $ 3,441,150 $ 193,196 6% Securities Available For Sale (excluding unrealized gains or losses) $ 1,117,469 $ 1,144,639 $ (27,170) -2% Securities Held To Maturity $ 140,141 $ 143,999 $ (3,858) -3% Regulatory Equity Investment $ 39,751 $ 35,073 $ 4,678 13% Short-Term Interest Bearing Accounts $ 17,151 $ 8,015 $ 9,136 114% Total Earning Assets $ 4,948,858 $ 4,772,876 $ 175,982 4% Total Assets $ 5,349,609 $ 5,148,099 $ 201,510 4% Interest Bearing Deposits $ 3,267,893 $ 3,273,248 $ (5,355) 0% Non-Interest Bearing Deposits $ 695,696 $ 656,784 $ 38,912 6% Short-Term Borrowings $ 181,032 $ 282,296 $ (101,264) -36% Long-Term Borrowings $ 708,867 $ 477,190 $ 231,677 49% Total Interest Bearing Liabilities $ 4,157,792 $ 4,032,734 $ 125,058 3% Stockholders’ Equity $ 426,918 $ 393,333 $ 33,585 9% =========== =========== ========== ======= Average Balances Twelve Months Ended December 31, Loans and Leases $ 3,567,299 $ 3,425,318 $ 141,981 4% Securities Available For Sale (excluding unrealized gains or losses) $ 1,113,810 $ 1,134,837 $ (21,027) -2% Securities Held To Maturity $ 149,775 $ 144,518 $ 5,257 4% Regulatory Equity Investment $ 39,735 $ 34,022 $ 5,713 17% Short-Term Interest Bearing Accounts $ 9,190 $ 8,395 $ 795 9% Total Earning Assets $ 4,879,809 $ 4,747,090 $ 132,719 3% Total Assets $ 5,264,655 $ 5,109,587 $ 155,068 3% Interest Bearing Deposits $ 3,239,029 $ 3,273,332 $ (34,303) -1% Non-Interest Bearing Deposits $ 682,656 $ 639,423 $ 43,233 7% Short-Term Borrowings $ 223,830 $ 280,162 $ (56,332) -20% Long-Term Borrowings $ 638,882 $ 459,439 $ 179,443 39% Total Interest Bearing Liabilities $ 4,101,741 $ 4,012,933 $ 88,808 2% Stockholders’ Equity $ 412,102 $ 399,299 $ 12,803 3% =========== =========== ========== ======= NBT Bancorp Inc. and Subsidiaries December 31, December 31, Consolidated Balance Sheets (unaudited) 2008 2007 ------------ ------------ (in thousands) ASSETS Cash and due from banks $ 107,409 $ 155,495 Short term interest bearing accounts 2,987 7,451 Securities available for sale, at fair value 1,119,665 1,132,230 Securities held to maturity (fair value of $141,308 and $149,519 at December 31, 2008 and December 31, 2007, respectively) 140,209 149,111 Federal Reserve and Federal Home Loan Bank stock 39,045 38,102 Loans and leases 3,651,911 3,455,851 Less allowance for loan and lease losses 58,564 54,183 ============ ============ Net loans and leases 3,593,347 3,401,668 Premises and equipment, net 65,241 64,042 Goodwill 114,838 103,398 Intangible assets, net 23,367 10,173 Bank owned life insurance 46,030 43,614 Other assets 83,950 96,492 ------------ ------------ TOTAL ASSETS $ 5,336,088 $ 5,201,776 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand (noninterest bearing) $ 685,495 $ 666,698 Savings, NOW, and money market 1,885,551 1,614,289 Time 1,352,212 1,591,106 ------------ ------------ Total deposits 3,923,258 3,872,093 Short-term borrowings 206,492 368,467 Long-term debt 632,209 424,887 Trust preferred debentures 75,422 75,422 Other liabilities 66,862 63,607 ------------ ------------ Total liabilities 4,904,243 4,804,476 Total stockholders' equity 431,845 397,300 ============ ============ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,336,088 $ 5,201,776 ============ ============ Three months ended Twelve months ended NBT Bancorp Inc. and Subsidiaries December 31, December 31, Consolidated Statements of Income (unaudited) 2008 2007 2008 2007 -------- --------- --------- --------- (in thousands, except per share data) Interest, fee and dividend income: Loans and leases $ 58,164 $ 60,817 $ 232,155 $ 242,497 Securities available for sale 13,434 13,971 54,048 54,847 Securities held to maturity 1,253 1,458 5,588 5,898 Other 436 736 2,623 2,875 -------- --------- --------- --------- Total interest, fee and dividend income 73,287 76,982 294,414 306,117 -------- --------- --------- --------- Interest expense: Deposits 16,371 26,578 76,132 106,574 Short-term borrowings 382 3,048 4,847 12,943 Long-term debt 6,401 4,233 22,642 16,486 Trust preferred debentures 1,200 1,270 4,747 5,087 -------- --------- --------- --------- Total interest expense 24,354 35,129 108,368 141,090 -------- --------- --------- --------- Net interest income 48,933 41,853 186,046 165,027 Provision for loan and lease losses 7,721 13,440 27,181 30,094 -------- --------- --------- --------- Net interest income after provision for loan and lease losses 41,212 28,413 158,865 134,933 -------- --------- --------- --------- Noninterest income: Trust 1,685 1,584 7,278 6,514 Service charges on deposit accounts 7,266 7,142 28,143 22,742 ATM and debit card fees 2,176 2,089 8,832 8,185 Broker/dealer and insurance revenue 3,915 1,052 8,726 4,255 Net securities (losses) gains (8) 613 1,535 2,113 Bank owned life insurance income 993 480 2,416 1,831 Retirement plan administration fees 1,468 1,557 6,308 6,336 Other 2,735 1,973 8,468 7,723 -------- --------- --------- --------- Total noninterest income 20,230 16,490 71,706 59,699 -------- --------- --------- --------- Noninterest expense: Salaries and employee benefits 20,633 14,654 71,159 59,516 Office supplies and postage 1,354 1,136 5,346 5,120 Occupancy 3,385 2,948 13,781 11,630 Equipment 1,944 1,855 7,539 7,422 Professional fees and outside services 2,651 3,295 10,476 9,135 Data processing and communications 3,254 2,899 12,694 11,400 Amortization of intangible assets 874 413 2,105 1,645 Loan collection and other real estate owned 692 597 2,494 1,633 Impairment on lease residual assets - - 2,000 - Other operating 5,511 4,607 19,219 15,016 -------- --------- --------- --------- Total noninterest expense 40,298 32,404 146,813 122,517 -------- --------- --------- --------- Income before income taxes 21,144 12,499 83,758 72,115 Income taxes 6,247 3,514 25,405 21,787 -------- --------- --------- --------- Net income $ 14,897 $ 8,985 $ 58,353 $ 50,328 -------- --------- --------- --------- Earnings Per Share: Basic $ 0.46 $ 0.28 $ 1.81 $ 1.52 Diluted $ 0.45 $ 0.28 $ 1.80 $ 1.51 ======== ========= ========= ========= NBT Bancorp Inc. and Subsidiaries Quarterly Consolidated Statements of Income 4Q 3Q 2Q 1Q 4Q (unaudited) 2008 2008 2008 2008 2007 -------- --------- --------- --------- --------- (in thousands, except per share data) Interest, fee and dividend income: Loans and leases $ 58,164 $ 58,154 $ 57,220 $ 58,617 $ 60,817 Securities available for sale 13,434 13,451 13,417 13,746 13,971 Securities held to maturity 1,253 1,343 1,478 1,514 1,458 Other 436 673 739 775 736 -------- --------- --------- --------- --------- Total interest, fee and dividend income 73,287 73,621 72,854 74,652 76,982 -------- --------- --------- --------- --------- Interest expense: Deposits 16,371 18,351 18,712 22,698 26,578 Short-term borrowings 382 763 1,362 2,340 3,048 Long-term debt 6,401 6,310 5,629 4,302 4,233 Trust preferred debentures 1,200 1,154 1,146 1,247 1,270 -------- --------- --------- --------- --------- Total interest expense 24,354 26,578 26,849 30,587 35,129 -------- --------- --------- --------- --------- Net interest income 48,933 47,043 46,005 44,065 41,853 Provision for loan and lease losses 7,721 7,179 5,803 6,478 13,440 -------- --------- --------- --------- --------- Net interest income after provision for loan and lease losses 41,212 39,864 40,202 37,587 28,413 -------- --------- --------- --------- --------- Noninterest income: Trust 1,685 1,720 2,099 1,774 1,584 Service charges on deposit accounts 7,266 7,414 6,938 6,525 7,142 ATM and debit card fees 2,176 2,334 2,225 2,097 2,089 Broker/dealer and insurance fees 3,915 2,338 1,366 1,107 1,052 Net securities (losses) gains (8) 1,510 18 15 613 Bank owned life insurance income 993 491 480 452 480 Retirement plan administration fees 1,468 1,461 1,671 1,708 1,557 Other 2,735 1,694 1,622 2,417 1,973 -------- --------- --------- --------- --------- Total noninterest income 20,230 18,962 16,419 16,095 16,490 -------- --------- --------- --------- --------- Noninterest expense: Salaries and employee benefits 20,633 16,850 16,906 16,770 14,654 Office supplies and postage 1,354 1,322 1,331 1,339 1,136 Occupancy 3,385 3,359 3,427 3,610 2,948 Equipment 1,944 1,908 1,862 1,825 1,855 Professional fees and outside services 2,651 2,205 2,521 3,099 3,295 Data processing and communications 3,254 3,155 3,115 3,170 2,899 Amortization of intangible assets 874 462 378 391 413 Loan collection and other real estate owned 692 505 730 567 597 Impairment on lease residual assets - 2,000 - - - Other operating 5,511 5,292 5,153 3,263 4,607 -------- --------- --------- --------- --------- Total noninterest expense 40,298 37,058 35,423 34,034 32,404 -------- --------- --------- --------- --------- Income before income taxes 21,144 21,768 21,198 19,648 12,499 Income taxes 6,247 6,685 6,541 5,932 3,514 -------- --------- --------- --------- --------- Net income $ 14,897 $ 15,083 $ 14,657 $ 13,716 $ 8,985 ======== ========= ========= ========= ========= Earnings per share: Basic $ 0.46 $ 0.47 $ 0.46 $ 0.43 $ 0.28 Diluted $ 0.45 $ 0.46 $ 0.45 $ 0.43 $ 0.28 ======== ========= ========= ========= =========