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NBT Bancorp Inc.: NBT Bancorp Inc. Announces Second Quarter Earnings of $0.34 per Share; Declares Cash Dividend

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^{Published in Business and Finance on Monday, July 27th 2009 at 15:13 GMT, Last Modified on 2009-07-27 15:13:50 by Market Wire}  

NORWICH, NY--(Marketwire - July 27, 2009) - NBT Bancorp Inc. (NBT) (NASDAQ: [ NBTB ]) reported today net income per diluted share for the three months ended June 30, 2009 of $0.34 per share, as compared with $0.45 per share for the three months ended June 30, 2008. Annualized return on average assets and return on average equity were 0.85% and 9.63%, respectively, for the three months ended June 30, 2009, compared with 1.12% and 14.49%, respectively, for the three months ended June 30, 2008. Net income for the three months ended June 30, 2009 was $11.6 million, down $3.1 million, or 21.1%, from $14.7 million for the second quarter last year. The decrease in net income for the three months ended June 30, 2009 compared with the three months ended June 30, 2008 was primarily the result of an increase in FDIC expenses, including a special assessment, and an increase in the provision for loan and lease losses.

Net income per diluted share for the six months ended June 30, 2009 was $0.74 per share, as compared with $0.88 per share for the six months ended June 30, 2008. Annualized return on average assets and return on average equity were 0.92% and 10.82%, respectively, for the six months ended June 30, 2009, compared with 1.10% and 14.09%, respectively, for the six months ended June 30, 2008. Net income for the six months ended June 30, 2009 was $24.6 million, down $3.7 million, or 13.2%, from the six months ended June 30, 2008. The decrease in net income for the six months ended June 30, 2009 compared with the six months ended June 30, 2008 was primarily the result of an increase in FDIC expenses, including a special assessment, and an increase in the provision for loan and lease losses.

Like all FDIC insured financial institutions, the Company has been subjected to substantial increases in FDIC recurring premiums, as well as a special assessment levied by the FDIC in the second quarter of 2009, which had a significant impact on 2009 second quarter and year to date earnings. For the three months ended June 30, 2009, FDIC expenses increased $3.8 million over the three months ended June 30, 2008, including the special assessment of approximately $2.5 million. For the six months ended June 30, 2009, FDIC expenses increased $5.2 million over the six months ended June 30, 2008, including the aforementioned special assessment. Excluding the effect of the FDIC premiums increases and special assessment, net income per diluted share would have been $0.41 per diluted share for the three months ended June 30, 2009 and $0.84 per diluted share for the six months ended June 30, 2009.

NBT President and CEO Martin Dietrich said: "I am pleased with our results for the first six months of the year, which are consistent with our all time record earnings in 2008, but for increased FDIC and pension expenses. In addition, asset quality indicators continue to hold up well relative to national and local trends, despite an increase in nonaccrual loans this quarter. We have continued to take advantage of our strong earnings momentum to fund new initiatives, such as expansion into Vermont, technology investments and branch upgrades. Recently, NBT received national recognition applauding our performance when we were ranked 19th on US Banker's 2009 Top 100 Mid-Tier Banks and Thrifts list and ranked 39th on the Bank Director's 2008 Bank Performance Scorecard of 150 national banks."

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at June 30, 2009 were $40.2 million or 1.10% of total loans and leases compared with $26.5 million or 0.73% at December 31, 2008. The increase in nonperforming loans at June 30, 2009 was primarily the result of an increase in nonaccrual loans, due in large part to four commercial credits and two agricultural credits which were identified as potential problem loans in prior quarters. The four commercial credits consisted of a community center, a motel, a real estate holding company and a machine and tool manufacturer. The allowance for loan and lease losses totaled $62.7 million at June 30, 2009, as compared with $58.6 million at December 31, 2008. This increase was due primarily to an increase in specific reserves on two of the aforementioned commercial credits and both of the aforementioned agricultural credits. The Company's allowance for loan and lease losses was 1.72% of loans and leases at June 30, 2009, compared with 1.60% at December 31, 2008. Past due loans as a percentage of total loans decreased to 0.81% at June 30, 2009, as compared with 0.91% at December 31, 2008.

The Company recorded a provision for loan and lease losses of $9.2 million during the second quarter of 2009 compared with $5.8 million during the second quarter of 2008. The increase in the provision for loan and lease losses for the three months ended June 30, 2009 was due primarily to an increase in specific reserves on certain impaired loans. Net charge-offs totaled $5.8 million for the three month period ending June 30, 2009, down from $7.8 million for the three months ending June 30, 2008, due primarily to a charge-off related to one large commercial loan during the second quarter of 2008. Net charge-offs to average loans and leases for the three months ended June 30, 2009 were 0.63%, compared with 0.88% for the three months ended June 30, 2008.

The Company recorded a provision for loan and lease losses of $15.7 million during the six months ended June 30, 2009 compared with $12.3 million during the six months ended June 30, 2008. The increase in the provision for loan and lease losses for the six months ended June 30, 2009 was due primarily to an increase in specific reserves on certain impaired loans. Net charge-offs totaled $11.5 million for the six month period ending June 30, 2009, down from $12.0 million for the six months ending June 30, 2008. Net charge-offs to average loans and leases for the six months ended June 30, 2009 were 0.63%, compared with 0.68% for the six months ended June 30, 2008.

Net Interest Income

Net interest income was up 4.4% to $48.1 million for the three months ended June 30, 2009 compared with $46.0 million for the three months ended June 30, 2008. The Company's fully taxable equivalent (FTE) net interest margin was 3.95% for the three months ended June 30, 2009, as compared with 3.94% for the three months ended June 30, 2008. In addition, the Company experienced a 3.5% growth in average earning assets for the three months ending June 30, 2009 as compared with the three months ending June 30, 2008, due primarily to increases in average loans and leases and average short-term interest bearing accounts. As a result of our excess liquidity, our Federal Funds sold position had a negative impact of 6 bp on our net interest margin for the three months ended June 30, 2009.

Although the yield on interest earning assets decreased 60 basis points, the yield on interest bearing liabilities declined 69 basis points, which contributed to the increase in the net interest margin for the three months ended June 30, 2009 compared to the same period for 2008. The yield on time deposits was 2.72% for the three months ended June 30, 2009, as compared with 3.72% for the three months ended June 30, 2008. The yield on money market deposit accounts was 1.33% for the three months ended June 30, 2009, as compared with 1.65% for the three months ended June 30, 2008. The yield on short term borrowings declined 172 basis points for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008 as a result of the 175 basis point drop in the Fed Funds Target Rate from 2.00% at June 30, 2008 to 0.25% at June 30, 2009.

Net interest income was up 6.8% to $96.2 million for the six months ended June 30, 2009 compared with $90.1 million for the six months ended June 30, 2008. The Company's fully taxable equivalent (FTE) net interest margin was 4.02% for the six months ended June 30, 2009, as compared with 3.89% for the six months ended June 30, 2008. In addition, the Company experienced a 3.3% growth in average earning assets for the six months ending June 30, 2009 as compared with the six months ending June 30, 2008, due primarily to an increase in average loans and leases. As a result of our excess liquidity, our Federal Funds sold position had a negative impact of 11 bp on our net interest margin for the six months ended June 30, 2009.

Although the yield on interest earning assets decreased 58 basis points, the yield on interest bearing liabilities declined 83 basis points, which contributed to the increase in the net interest margin for the six months ended June 30, 2009 compared to the same period for 2008. The yield on time deposits was 2.84% for the six months ended June 30, 2009, as compared with 3.95% for the six months ended June 30, 2008. The yield on money market deposit accounts was 1.34% for the six months ended June 30, 2009, as compared with 2.01% for the six months ended June 30, 2008. The yield on short term borrowings declined 224 basis points for the six months ended June 30, 2009 as compared to the six months ended June 30, 2008 as a result of the aforementioned drop in the Fed Funds Target Rate.

Noninterest Income

Noninterest income for the three months ended June 30, 2009 was $19.8 million, up $3.4 million or 20.9% from $16.4 million for the same period in 2008. The increase in noninterest income was due primarily to an increase in insurance and broker/dealer revenue, which increased approximately $2.9 million for the three month period ended June 30, 2009 as compared with the three month period ended June 30, 2008. This increase was due primarily to revenue generated by Mang Insurance Agency, LLC, which was acquired during the third quarter of 2008. In addition, retirement plan administration fees increased approximately $0.5 million for the three month period ended June 30, 2009 as compared with the three month period ended June 30, 2008 as a result of organic growth from new business. These increases were partially offset by a decrease in trust administration income of approximately $0.3 million for the three months ended June 30, 2009 as compared with the three months ended June 30, 2008 due primarily to a decline in the market value of trust assets under administration.

Noninterest income for the six months ended June 30, 2009 was $39.4 million, up $6.9 million or 21.3% from $32.5 million for the same period in 2008. The increase in noninterest income was due primarily to an increase in insurance and broker/dealer revenue, which increased approximately $7.1 million for the six month period ended June 30, 2009 as compared with the six month period ended June 30, 2008. This increase was due primarily to revenue generated by Mang Insurance Agency, LLC as previously mentioned. In addition, retirement plan administration fees increased approximately $0.6 million for the six month period ended June 30, 2009 as compared with the six month period ended June 30, 2008 as a result of organic growth from new business. These increases were partially offset by a decrease in trust administration income of approximately $0.7 million for the six months ended June 30, 2009 as compared with the six months ended June 30, 2008 due primarily to a decline in the market value of trust assets under administration.

Noninterest Expense and Income Tax Expense

Noninterest expense for the three months ended June 30, 2009 was $41.9 million, up from $35.4 million for the same period in 2008. FDIC expenses increased approximately $3.8 million for the three months ended June 30, 2009, compared with the same period in 2008. This increase was due in large part to the special assessment imposed by the FDIC totaling approximately $2.5 million during the second quarter of 2009. In addition, recurring FDIC premiums increased to $1.5 million for the three months ended June 30, 2009 as compared with $0.2 million for the same period last year. Salaries and employee benefits increased $3.0 million, or 18.0%, for the three months ended June 30, 2009 compared with the same period in 2008. This increase was due primarily to increases in full-time-equivalent employees during 2009, largely due to the aforementioned acquisition and new branch activity. In addition, the Company experienced increases of approximately $0.7 million and $0.4 million in pension and medical expenses, respectively, for the three months ended June 30, 2009 as compared with the same period in 2008. Amortization of intangible assets was $0.8 million for the three months ended June 30, 2009, up from $0.4 million for same period in 2008 due to the aforementioned acquisition. These increases were partially offset by a decrease in other operating expenses. For the three month period ended June 30, 2009, other operating expenses totaled $3.7 million, down $1.3 million or 25.8%, from $5.0 million for the three months ended June 30, 2008. This decrease resulted primarily from the settlement of a lease residual insurance policy for $1.2 million during the second quarter of 2009. Income tax expense for the three month period ended June 30, 2009 was $5.2 million, down from $6.5 million for the same period in 2008. The effective rates were 31.0% and 30.9% for the three month periods ended June 30, 2009 and 2008, respectively.

Noninterest expense for the six months ended June 30, 2009 was $84.2 million, up from $69.5 million for the same period in 2008. FDIC expenses increased approximately $5.2 million for the six months ended June 30, 2009, compared with the same period in 2008. This increase was due in large part to the special assessment imposed by the FDIC totaling approximately $2.5 million during the second quarter of 2009. In addition, recurring FDIC premiums increased to $3.1 million for the six months ended June 30, 2009 as compared with $0.4 million for the same period last year. Salaries and employee benefits increased $7.7 million, or 22.9%, for the six months ended June 30, 2009 compared with the same period in 2008. This increase was due primarily to increases in full-time-equivalent employees during 2009, largely due to the aforementioned acquisition and new branch activity. In addition, the Company experienced increases of approximately $1.5 million and $0.9 million in pension and medical expenses, respectively, for the six months ended June 30, 2009 as compared with the same period in 2008. Amortization of intangible assets was $1.6 million for the six months ended June 30, 2009, up from $0.8 million for same period in 2008 due to the aforementioned acquisition. Income tax expense for the six month period ended June 30, 2009 was $11.1 million, down from $12.5 million for the same period in 2008. The effective rates were 31.0% and 30.5% for the six month periods ended June 30, 2009 and 2008, respectively.

Balance Sheet

Total assets were $5.4 billion at June 30, 2009, up $81.0 million or 1.5% from $5.3 billion at December 31, 2008. Loans and leases were $3.6 billion at June 30, 2009 and December 31, 2008. Total deposits were $4.1 billion at June 30, 2009, up $134.8 million or 3.4% from December 31, 2008. The increase from December 31, 2008 was due in large part to a $216.2 million, or 11.5%, increase in NOW, savings and money market accounts, partially offset by a $124.2 million decrease in time deposits. Stockholders' equity was $482.1 million, representing a total equity-to-total assets ratio of 8.90% at June 30, 2009, compared with $431.8 million or a total equity-to-total assets ratio of 8.09% at December 31, 2008.

Stock Repurchase Program

The Company made no purchases of its common stock securities during the six months ended June 30, 2009. At June 30, 2009, there were 1,000,000 shares available for repurchase under a previously announced stock repurchase plan. This plan was authorized on January 28, 2008 in the amount of 1,000,000 shares and expires on December 31, 2009.

Dividend Declared

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

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $5.4 billion at June 30, 2009. 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 123 locations, including 84 NBT Bank offices in upstate New York, 38 Pennstar Bank offices in northeastern Pennsylvania, and one office in Burlington, Vermont. 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.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 2009 2008 Change Change ------------ ------------ ------------ ------------ (dollars in thousands, except per share data) Three Months Ended June 30, Net Income $ 11,560 $ 14,657 $ (3,097) -21% Diluted Earnings Per Share $ 0.34 $ 0.45 $ (0.11) -24% Weighted Average Diluted Common Shares Outstanding 34,314,291 32,241,642 2,072,649 6% Return on Average Assets (1) 0.85% 1.12% -0.27% -24% Return on Average Equity (1) 9.63% 14.49% -4.86% -34% Net Interest Margin (2) 3.95% 3.94% 0.01% 0% ============ ============ ============ ============ Six Months Ended June 30, Net Income $ 24,632 $ 28,373 $ (3,741) -13% Diluted Earnings Per Share $ 0.74 $ 0.88 $ (0.14) -16% Weighted Average Diluted Common Shares Outstanding 33,483,222 32,246,644 1,236,578 4% Return on Average Assets 0.92% 1.10% -0.18% -16% Return on Average Equity 10.82% 14.09% -3.27% -23% Net Interest Margin (2) 4.02% 3.89% 0.13% 3% ============ ============ ============ ============ Asset Quality June 30, December 31, 2009 2008 ------------ ------------ Nonaccrual Loans $ 37,646 $ 24,191 90 Days Past Due and Still Accruing $ 2,529 $ 2,305 Total Nonperforming Loans $ 40,175 $ 26,496 Other Real Estate Owned $ 1,688 $ 665 Total Nonperforming Assets $ 41,863 $ 27,161 Past Due Loans $ 29,545 $ 33,098 Allowance for Loan and Lease Losses $ 62,734 $ 58,564 Year-to-Date (YTD) Net Charge-Offs $ 11,480 $ 22,800 Allowance for Loan and Lease Losses to Total Loans and Leases 1.72% 1.60% Total Nonperforming Loans to Total Loans and Leases 1.10% 0.73% Total Nonperforming Assets to Total Assets 0.77% 0.51% Past Due Loans to Total Loans and Leases 0.81% 0.91% Allowance for Loan and Lease Losses to Total Nonperforming Loans 156.15% 221.03% Net Charge-Offs to YTD Average Loans and Leases 0.63% 0.64% ============ ============ ============ ============ Capital Equity to Assets 8.90% 8.09% Book Value Per Share $ 14.06 $ 13.24 Tangible Book Value Per Share $ 10.06 $ 9.01 Tier 1 Leverage Ratio 8.08% 7.17% Tier 1 Capital Ratio 11.00% 9.75% Total Risk-Based Capital Ratio 12.26% 11.00% ============ ============ ============ ============ ------------ ------------ ------------ Quarterly Common Stock Price 2009 2008 2007 Quarter End High Low High Low High Low ---- --- ---- --- ---- --- March 31 $28.37 $15.42 $23.65 $17.95 $25.81 $21.73 June 30 $25.22 $20.49 25.00 20.33 23.45 21.80 September 30 36.47 19.05 23.80 17.10 December 31 30.83 21.71 25.00 20.58 ------------ ------------ ------------ (1) Annualized (2) Calculated on a FTE basis NBT Bancorp Inc. and Subsidiaries SELECTED FINANCIAL HIGHLIGHTS (unaudited) June 30, December 31, Net Percent 2009 2008 Change Change ------------- ------------- ------------ ----- (dollars in thousands, except per share data) Balance Sheet Loans and Leases $ 3,649,546 $ 3,651,911 $ (2,365) 0% Earning Assets $ 5,006,639 $ 4,933,099 $ 73,540 1% Total Assets $ 5,417,057 $ 5,336,088 $ 80,969 2% Deposits $ 4,058,071 $ 3,923,258 $ 134,813 3% Stockholders' Equity $ 482,140 $ 431,845 $ 50,295 12% ============= ============= ============ ===== 2009 2008 ------------- ------------- (dollars in thousands, Average Balances except per share data) Three Months Ended June 30, Loans and Leases $ 3,653,166 $ 3,561,632 $ 91,534 3% Securities Available For Sale (excluding unrealized gains or losses) $ 1,085,147 $ 1,101,362 $ (16,215) -1% Securities Held To Maturity $ 138,180 $ 157,822 $ (19,642) -12% Trading Securities $ 1,854 $ 2,389 (535) -22% Regulatory Equity Investment $ 38,221 $ 41,274 $ (3,053) -7% Short-Term Interest Bearing Accounts $ 126,318 $ 7,100 $ 119,218 1679% Total Earning Assets $ 5,041,032 $ 4,869,190 $ 171,842 4% Total Assets $ 5,448,440 $ 5,241,686 $ 206,754 4% Interest Bearing Deposits $ 3,381,288 $ 3,196,393 $ 184,895 6% Non-Interest Bearing Deposits $ 707,022 $ 668,299 $ 38,723 6% Short-Term Borrowings $ 120,272 $ 257,376 $ (137,104) -53% Long-Term Borrowings $ 684,495 $ 643,758 $ 40,737 6% Total Interest Bearing Liabilities $ 4,186,055 $ 4,097,527 $ 88,528 2% Stockholders' Equity $ 481,308 $ 406,709 $ 74,599 18% ============= ============= ============ ===== Average Balances Six Months Ended June 30, Loans and Leases $ 3,655,909 $ 3,513,996 $ 141,913 4% Securities Available For Sale (excluding unrealized gains or losses) $ 1,087,317 $ 1,110,809 $ (23,492) -2% Securities Held To Maturity $ 138,439 $ 155,341 $ (16,902) -11% Trading Securities $ 1,644 $ 2,450 $ (806) -33% Regulatory Equity Investment $ 38,535 $ 39,391 $ (856) -2% Short-Term Interest Bearing Accounts $ 64,843 $ 7,750 $ 57,093 737% Total Earning Assets $ 4,985,043 $ 4,827,287 $ 157,756 3% Total Assets $ 5,400,226 $ 5,203,015 $ 197,211 4% Interest Bearing Deposits $ 3,347,130 $ 3,214,697 $ 132,433 4% Non-Interest Bearing Deposits $ 694,001 $ 663,858 $ 30,143 5% Short-Term Borrowings $ 134,282 $ 280,476 $ (146,194) -52% Long-Term Borrowings $ 695,517 $ 572,026 $ 123,491 22% Total Interest Bearing Liabilities $ 4,176,929 $ 4,067,199 $ 109,730 3% Stockholders' Equity $ 459,120 $ 404,937 $ 54,183 13% ============= ============= ============ ===== NBT Bancorp Inc. and Subsidiaries June 30, December 31, Consolidated Balance Sheets (unaudited) 2009 2008 (in thousands) ------------- ------------- ASSETS Cash and due from banks $ 102,986 $ 107,409 Short term interest bearing accounts 88,533 2,987 Securities available for sale, at fair value 1,114,330 1,119,665 Securities held to maturity (fair value of $142,286 and $141,308 at June 30, 2009 and December 31, 2008, respectively) 140,952 140,209 Trading securities 2,052 1,407 Federal Reserve and Federal Home Loan Bank stock 38,229 39,045 Loans and leases 3,649,546 3,651,911 Less allowance for loan and lease losses 62,734 58,564 ============= ============= Net loans and leases 3,586,812 3,593,347 Premises and equipment, net 64,797 65,241 Goodwill 114,942 114,838 Intangible assets, net 22,197 23,367 Bank owned life insurance 72,764 72,276 Other assets 68,463 56,297 ------------- ------------- TOTAL ASSETS $ 5,417,057 $ 5,336,088 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand (noninterest bearing) $ 728,340 $ 685,495 Savings, NOW, and money market 2,101,703 1,885,551 Time 1,228,028 1,352,212 ------------- ------------- Total deposits 4,058,071 3,923,258 Short-term borrowings 120,104 206,492 Long-term debt 604,708 632,209 Trust preferred debentures 75,422 75,422 Other liabilities 76,612 66,862 ------------- ------------- Total liabilities 4,934,917 4,904,243 Total stockholders' equity 482,140 431,845 ============= ============= TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,417,057 $ 5,336,088 ============= ============= NBT Bancorp Inc. and Subsidiaries Three months ended Six months ended Consolidated Statements of Income June 30, June 30, (unaudited) 2009 2008 2009 2008 --------- --------- --------- --------- (in thousands, except per share data) Interest, fee and dividend income: Loans and leases $ 54,886 $ 57,220 $ 110,297 $ 115,837 Securities available for sale 11,671 13,417 24,046 27,163 Securities held to maturity 1,209 1,478 2,443 2,992 Other 606 739 967 1,514 --------- --------- --------- --------- Total interest, fee and dividend income 68,372 72,854 137,753 147,506 --------- --------- --------- --------- Interest expense: Deposits 13,123 18,712 26,962 41,410 Short-term borrowings 124 1,362 271 3,702 Long-term debt 5,998 5,629 12,195 9,931 Trust preferred debentures 1,076 1,146 2,162 2,393 --------- --------- --------- --------- Total interest expense 20,321 26,849 41,590 57,436 --------- --------- --------- --------- Net interest income 48,051 46,005 96,163 90,070 Provision for loan and lease losses 9,199 5,803 15,650 12,281 --------- --------- --------- --------- Net interest income after provision for loan and lease losses 38,852 40,202 80,513 77,789 --------- --------- --------- --------- Noninterest income: Trust 1,761 2,099 3,170 3,873 Service charges on deposit accounts 6,950 6,938 13,247 13,463 ATM and debit card fees 2,368 2,225 4,550 4,322 Insurance and broker/dealer revenue 4,220 1,366 9,558 2,473 Net securities gains 17 18 17 33 Bank owned life insurance income 670 708 1,542 1,515 Retirement plan administration fees 2,194 1,671 3,935 3,379 Other 1,665 1,394 3,416 3,456 --------- --------- --------- --------- Total noninterest income 19,845 16,419 39,435 32,514 --------- --------- --------- --------- Noninterest expense: Salaries and employee benefits 19,947 16,906 41,374 33,676 Office supplies and postage 1,429 1,331 2,959 2,670 Occupancy 3,610 3,427 7,775 7,037 Equipment 2,005 1,862 4,027 3,687 Professional fees and outside services 2,407 2,521 5,129 5,620 Data processing and communications 3,324 3,115 6,619 6,285 Amortization of intangible assets 825 378 1,638 769 Loan collection and other real estate owned 674 730 1,422 1,297 FDIC expenses 4,032 184 5,561 372 Other operating 3,686 4,969 7,740 8,044 --------- --------- --------- --------- Total noninterest expense 41,939 35,423 84,244 69,457 --------- --------- --------- --------- Income before income taxes 16,758 21,198 35,704 40,846 Income taxes 5,198 6,541 11,072 12,473 --------- --------- --------- --------- Net income $ 11,560 $ 14,657 $ 24,632 $ 28,373 --------- --------- --------- --------- Earnings Per Share: Basic $ 0.34 $ 0.46 $ 0.74 $ 0.89 Diluted $ 0.34 $ 0.45 $ 0.74 $ 0.88 ========= ========= ========= ========= NBT Bancorp Inc. and Subsidiaries Quarterly Consolidated Statements of Income 2Q 1Q 4Q 3Q 2Q (unaudited) 2009 2009 2008 2008 2008 --------- --------- -------- --------- --------- (in thousands, except per share data) Interest, fee and dividend income: Loans and leases $ 54,886 $ 55,411 $ 58,164 $ 58,154 $ 57,220 Securities available for sale 11,671 12,375 13,434 13,451 13,417 Securities held to maturity 1,209 1,234 1,253 1,343 1,478 Other 606 361 436 673 739 --------- --------- -------- --------- --------- Total interest, fee and dividend income 68,372 69,381 73,287 73,621 72,854 --------- --------- -------- --------- --------- Interest expense: Deposits 13,123 13,839 16,371 18,351 18,712 Short-term borrowings 124 147 382 763 1,362 Long-term debt 5,998 6,197 6,401 6,310 5,629 Trust preferred debentures 1,076 1,086 1,200 1,154 1,146 --------- --------- -------- --------- --------- Total interest expense 20,321 21,269 24,354 26,578 26,849 --------- --------- -------- --------- --------- Net interest income 48,051 48,112 48,933 47,043 46,005 Provision for loan and lease losses 9,199 6,451 7,721 7,179 5,803 --------- --------- -------- --------- --------- Net interest income after provision for loan and lease losses 38,852 41,661 41,212 39,864 40,202 --------- --------- -------- --------- --------- Noninterest income: Trust 1,761 1,409 1,685 1,720 2,099 Service charges on deposit accounts 6,950 6,297 7,266 7,414 6,938 ATM and debit card fees 2,368 2,182 2,176 2,334 2,225 Insurance and broker/dealer revenue 4,220 5,338 3,915 2,338 1,366 Net securities gains (losses) 17 - (8) 1,510 18 Bank owned life insurance income 670 872 2,484 924 708 Retirement plan administration fees 2,194 1,741 1,468 1,461 1,671 Other 1,665 1,751 1,244 1,261 1,394 --------- --------- -------- --------- --------- Total noninterest income 19,845 19,590 20,230 18,962 16,419 --------- --------- -------- --------- --------- Noninterest expense: Salaries and employee benefits 19,947 21,427 20,633 16,850 16,906 Office supplies and postage 1,429 1,530 1,354 1,322 1,331 Occupancy 3,610 4,165 3,385 3,359 3,427 Equipment 2,005 2,022 1,944 1,908 1,862 Professional fees and outside services 2,407 2,722 2,651 2,205 2,521 Data processing and communications 3,324 3,295 3,254 3,155 3,115 Amortization of intangible assets 825 813 874 462 378 Loan collection and other real estate owned 674 748 692 505 730 Impairment on lease residual assets - - - 2,000 - FDIC expenses 4,032 1,529 827 614 184 Other operating 3,686 4,054 4,684 4,678 4,969 --------- --------- -------- --------- --------- Total noninterest expense 41,939 42,305 40,298 37,058 35,423 --------- --------- -------- --------- --------- Income before income taxes 16,758 18,946 21,144 21,768 21,198 Income taxes 5,198 5,874 6,247 6,685 6,541 --------- --------- -------- --------- --------- Net income $ 11,560 $ 13,072 $ 14,897 $ 15,083 $ 14,657 ========= ========= ======== ========= ========= Earnings per share: Basic $ 0.34 $ 0.40 $ 0.46 $ 0.47 $ 0.46 Diluted $ 0.34 $ 0.40 $ 0.45 $ 0.46 $ 0.45 ========= ========= ======== ========= ========= NBT Bancorp Inc. and Subsidiaries Average Balances and Net Interest Income Three months ended June 30, 2009 2008 (dollars in Average Yield/ Average Yield/ thousands) Balance Interest Rates Balance Interest Rates ----------- --------- ------ ----------- --------- ------ ASSETS Short-term interest bearing accounts $ 126,318 $ 63 0.20% $ 7,100 $ 47 2.64% Securities available for sale (1) (excluding unrealized gains or losses) 1,085,147 12,425 4.59% 1,101,362 14,110 5.15% Securities held to maturity (1) 138,180 1,822 5.29% 157,822 2,233 5.69% Trading securities 1,854 - 0.00% 2,389 - 5.69% Investment in FRB and FHLB Banks 38,221 543 5.70% 41,274 692 6.74% ----------- --------- ----------- --------- Loans and leases (2) 3,653,166 55,094 6.05% 3,561,632 57,434 6.49% --------- --------- Total interest earning assets 5,042,886 69,947 5.56% 4,871,579 74,516 6.16% Other assets $ 405,554 370,107 ----------- ----------- Total assets 5,448,440 5,241,686 ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Money market deposit accounts $ 1,017,217 3,381 1.33% 718,542 2,953 1.65% NOW deposit accounts $ 581,534 848 0.58% 453,364 887 0.79% Savings deposits $ 503,485 205 0.16% 472,039 504 0.43% Time deposits $ 1,279,052 8,690 2.72% 1,552,448 14,368 3.72% ----------- --------- ----------- --------- Total interest bearing deposits 3,381,288 13,124 1.56% 3,196,393 18,712 2.35% Short-term borrowings $ 120,272 124 0.41% 257,376 1,362 2.13% Trust preferred debentures $ 75,422 1,076 5.72% 75,422 1,146 6.11% Long-term debt $ 609,073 5,997 3.95% 568,336 5,629 3.98% ----------- --------- ----------- --------- Total interest bearing liabilities 4,186,055 20,321 1.95% 4,097,527 26,849 2.64% --------- --------- Demand deposits $ 707,022 668,299 Other liabilities $ 74,055 69,151 Stockholders' equity $ 481,308 406,709 ----------- ----------- Total liabilities and stockholders' equity $ 5,448,440 $ 5,241,686 ----------- ----------- Net interest income (FTE) 49,626 47,667 --------- --------- Interest rate spread 3.61% 3.52% Net interest margin 3.95% 3.94% Taxable equivalent adjustment 1,575 1,662 --------- --------- Net interest income $ 48,051 $ 46,005 (1) Securities are shown at average amortized cost (2) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding NBT Bancorp Inc. and Subsidiaries Average Balances and Net Interest Income Six months ended June 30, 2009 2008 (dollars in Average Yield/ Average Yield/ thousands) Balance Interest Rates Balance Interest Rates ----------- --------- ------ ----------- --------- ------ ASSETS Short-term interest bearing accounts $ 64,843 $ 76 0.24% $ 7,750 $ 125 3.25% Securities available for sale (1) (excluding unrealized gains or losses) 1,087,317 25,539 4.74% 1,110,809 28,530 5.16% Securities held to maturity (1) 138,439 3,682 5.36% 155,341 4,518 5.85% Trading securities 1,644 - 0.00% 2,450 - 5.85% Investment in FRB and FHLB Banks 38,535 892 4.67% 39,391 1,389 7.09% ----------- --------- ----------- --------- Loans and leases (2) 3,655,909 110,722 6.11% 3,513,996 116,264 6.65% --------- --------- Total interest earning assets 4,986,687 140,911 5.70% 4,829,737 150,826 6.28% Other assets 413,539 373,278 ----------- ----------- Total assets 5,400,226 5,203,015 ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Money market deposit accounts $ 979,927 6,489 1.34% 714,252 7,132 2.01% NOW deposit accounts 565,974 1,634 0.58% 450,608 1,882 0.84% Savings deposits 490,829 415 0.17% 466,673 1,265 0.55% Time deposits 1,310,400 18,424 2.84% 1,583,164 31,131 3.95% ----------- --------- ----------- --------- Total interest bearing deposits 3,347,130 26,962 1.62% 3,214,697 41,410 2.59% Short-term borrowings 134,282 271 0.41% 280,476 3,702 2.65% Trust preferred debentures 75,422 2,162 5.78% 75,422 2,393 6.38% Long-term debt 620,095 12,195 3.97% 496,604 9,931 4.02% ----------- --------- ----------- --------- Total interest bearing liabilities 4,176,929 41,590 2.01% 4,067,199 57,436 2.84% --------- --------- Demand deposits 694,001 663,858 Other liabilities 70,176 67,021 Stockholders' equity 459,120 404,937 ----------- ----------- Total liabilities and stockholders' equity $ 5,400,226 $ 5,203,015 ----------- ----------- Net interest income (FTE) 99,321 93,390 --------- --------- Interest rate spread 3.69% 3.44% Net interest margin 4.02% 3.89% Taxable equivalent adjustment 3,158 3,320 --------- --------- Net interest income 96,163 $ 90,070 (1) Securities are shown at average amortized cost (2) For purposes of these computations, nonaccrual loans are included in the average loan balances outstanding NBT Bancorp Inc. and Subsidiaries Loans and Leases (Unaudited) December 31, (In thousands) June 30, 2009 2008 ----------- ----------- Residential real estate mortgages $ 676,994 $ 722,723 Commercial 579,845 572,059 Commercial real estate mortgages 670,334 669,720 Real estate construction and development 71,388 67,859 Agricultural and agricultural real estate mortgages 119,932 113,566 Consumer 847,257 795,123 Home equity 607,889 627,603 Lease financing 75,907 83,258 ----------- ----------- Total loans and leases $ 3,649,546 $ 3,651,911 =========== ===========