NBT Bancorp Inc. Announces Record Net Income of $121.0 Million and Diluted Earnings Per Share of $2.74; Declares Cash Dividend

NORWICH, N.Y., Jan. 27, 2020 (GLOBE NEWSWIRE) -- 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.”

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.

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.

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.

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.

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.

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.

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)
	December 31,			December 31,
Assets	2019			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

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	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

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

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.

NBT Bancorp Inc. and Subsidiaries
Average Year-to-Date Balance Sheets
(unaudited, dollars in thousands)
		Average				Yield/		Average				Yield/
		Balance		Interest		Rates		Balance		Interest		Rates
Twelve Months ended December 31,		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%.

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

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