EX-99.1 2 ex99_1.htm EXHIBIT 99.1 Exhibit 99.1
Page 1 of 10
 
FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS

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

NBT Bancorp Inc. Announces Annual Earnings of $55.9 Million; Declares Cash Dividend

NORWICH, NY (January 22, 2007) - NBT Bancorp Inc. (NBT) (NASDAQ: NBTB) reported today that net income for the year ended December 31, 2006 was $55.9 million, up 6.7% or $3.5 million from net income of $52.4 million reported for the same period in 2005. Net income per diluted share for the year ended December 31, 2006 was $1.64 per share, compared with $1.60 per share for the same period in 2005. Return on average assets and return on average equity were 1.14% and 14.47%, respectively, for the year ended December 31, 2006, compared with 1.21% and 15.86%, respectively, for the same period in 2005. The increase in net income for the year ended December 31, 2006, was primarily the result of a $5.7 million increase in net interest income and a $6.1 million increase in noninterest income. The aforementioned increases in income were partially offset by a $7.7 million increase in noninterest expense. Results for the year ended December 31, 2006 include $1.8 million in pre-tax salaries and benefits expense related to stock options resulting from the adoption on January 1, 2006, of Statement of Financial Accounting Standard No. 123 (revised 2004) (FAS 123R), “Share-Based Payment,” which requires companies to measure and recognize compensation expense for all share-based payments based on the fair value of those share-based payments. The adoption of FAS 123R lowered diluted earnings per share by $0.03 for the year ended December 31, 2006.
 
Net income for the three months ended December 31, 2006, was $13.6 million, up 5.0% or $0.6 million from net income of $13.0 million reported for the same period in 2005. Net income per diluted share for the three-month period ended December 31, 2006 was $0.40 per share, equal to $0.40 per share for the same period in 2005. Return on average assets and return on average equity were 1.07% and 13.31%, respectively, for the three months ended December 31, 2006, compared with 1.17% and 15.47%, respectively, for the same period in 2005. The increase in net income for the three months ended December 31, 2006 was primarily the result of a $1.4 million increase in net interest income and a $1.9 million increase in noninterest income. The aforementioned increases in income were partially offset by a $1.7 million increase in noninterest expense and an increase in the provision for loan and lease losses of $0.9 million for the three months ended December 31, 2006, compared with the same period in 2005.

The comparability of financial information is affected by the acquisition of CNB Bancorp, Inc. (“CNB”). Operating results include the operations of CNB from the date of acquisition, which was February 10, 2006.

NBT President and CEO Martin A. Dietrich stated, “While 2006 presented some unique challenges due to the higher interest rate environment, as well as the record flooding that impacted many of our customers and the communities we serve, we can look back on the year and be proud of our accomplishments in the face of adversity. Our dedicated team of employees remained focused on providing great service to our customers by paying attention to the fundamentals of our business. This helped produce another year of record earnings for our company during a most challenging period. While it is likely that the financial services industry will continue to be challenged by the interest rate environment in 2007, we look forward to continuing to strive to be the premier provider of community banking services in the markets we serve, while also delivering shareholder value.”

Page 2 of 10

Loan and Lease Quality and Provision for Loan and Lease Losses

Nonperforming loans at December 31, 2006 were $15.3 million or 0.45% of total loans and leases compared with $14.3 million or 0.47% of total loans and leases at December 31, 2005. Net charge-offs to average loans and leases for the year ended December 31, 2006, were 0.26%, compared with the 0.23% ratio for the year ended December 31, 2005. The Company’s allowance for loan and lease losses was 1.48% of loans and leases at December 31, 2006, compared with 1.57% at December 31, 2005. The ratio of the allowance for loan and lease losses to nonperforming loans was 330.48% at December 31, 2006, compared with 331.92% at December 31, 2005.
 
For the year and quarter ended December 31, 2006, the provision for loan and lease losses totaled $9.4 million and $3.5 million, respectively, compared with $9.5 million and $2.6 million, respectively, for the same periods in 2005. Year over year, the provision has remained relatively flat. Potential problem loans have decreased as a percentage of the loan portfolio, offset by an increase in net charge-offs. Primarily as a result of the acquisition of CNB, whose loan portfolio had less inherent risk than NBT, the Allowance for Loan and Lease Losses to Total Loans and Leases decreased from 1.57% at December 31, 2005 to 1.48% at December 31, 2006.

Net Interest Income

Net interest income was up 3.6% to $163.8 million for the year ended December 31, 2006, compared with $158.1 million for the same period a year ago. Despite a decrease in the Company’s fully taxable equivalent (FTE) net interest margin, from 4.01% for the year ended December 31, 2005, to 3.70% for the same period in 2006, the Company experienced an increase in net interest income that was attributable to 13.1% growth in average earning assets. The growth in average earning assets was in large part due to the acquisition of CNB as well as our organic loan growth. The Company’s net interest margin was 3.63% for the quarter ended December 31, 2006, down from 3.97% for the same period in 2005. Despite this decrease, net interest income for the quarter ended December 31, 2006, increased 3.5%, to $41.4 million, from $40.0 million in the same period for 2005, which was attributable to a 14.0% growth in average earning assets in large part due to the acquisition of CNB as well as our organic loan growth. The decline in the net interest margin is due largely to the effect from our borrowings, money market accounts and time deposits repricing in a higher interest rate environment. Earning assets, particularly those tied to a fixed rate, have not realized the benefit of the higher interest rate environment, since yields on earning assets with terms of three years or longer have remained relatively flat during this period. The Company anticipates that margin pressure will persist into the next several quarters, given the flat to inverted yield curve. If the yield curve remains flat or inverted, we expect net interest income to be relatively flat in 2007.
 
Page 3 of 10
 
Noninterest Income
 
Noninterest income for the year ended December 31, 2006 was $48.6 million, up $6.1 million or 14.3% from $42.5 million for the same period in 2005. Fees from service charges on deposit accounts and ATM and debit cards collectively increased $1.6 million from solid growth in demand deposit accounts and debit card base. Retirement plan administration fees for the year ended December 31, 2006 increased $1.1 million, compared with the same period in 2005, as a result of our growing client base. Bank-owned life insurance income for the year ended December 31, 2006 increased $0.3 million, compared with the same period in 2005, primarily due to the acquisition of CNB. Trust administration income increased $0.6 million for the year ended December 31, 2006, compared with the same period in 2005. This increase stems from the increased market value of accounts, an increase in customer accounts as a result of the acquisition of CNB and successful business development. Broker/dealer and insurance revenue for the year ended December 31, 2006 increased $0.8 million in large part due to the growth in brokerage income from retail financial services as well as the addition of Hathaway Insurance Agency as part of the acquisition of CNB. Other noninterest income for the year ended December 31, 2006 increased $1.4 million, compared with the same period in 2005, as a result of a gain on the sale of a branch, an increase in title insurance revenue, and an increase in interest income earned from our payment services vendor. Net securities losses for the year ended December 31, 2006 were $0.9 million, compared with net securities losses of $1.2 million for the year ended December 31, 2005. Excluding the effect of these securities transactions, noninterest income increased $5.7 million, or 13.1%, for the year ended December 31, 2006, compared with the same period in 2005.
 
Noninterest income for the three months ended December 31, 2006 was $12.3 million, up $1.9 million or 18.2% from $10.4 million for the same period in 2005. Fees from service charges on deposit accounts and ATM and debit cards increased $0.3 million due to demand deposit account growth. Retirement plan administration fees for the three months ended December 31, 2006 increased $0.2 million, compared with the same period in 2005, as our client base grew. Trust administration income increased $0.2 million for the three months ended December 31, 2006, compared with the same period in 2005, stemming from the increased market value of accounts generating greater fees, an increase in customer accounts as a result of the acquisition of CNB and successful business development. For the three months ended December 31, 2006, broker/dealer and insurance revenue increased by $0.5 million, compared with the same period in 2005, due to the growth in brokerage income from retail financial services as well as the addition of Hathaway Insurance Agency. Net securities losses for the three months ended December 31, 2006 were negligible, compared with a $0.5 million loss for the same period of 2005. Excluding the effect of these securities transactions, noninterest income increased $1.3 million or 12.1% for the three months ended December 31, 2006, compared with the same period in 2005.
 
Page 4 of 10
 
Noninterest Expense and Income Tax Expense
 
Noninterest expense for the year ended December 31, 2006 was $123.0 million, up from $115.3 million for the same period in 2005. Office expenses, such as supplies and postage, occupancy, equipment and data processing and communications charges, increased by $2.1 million for the year ended December 31, 2006, compared with the same period in 2005. This 6.2% increase resulted primarily from the acquisition of CNB Bancorp on February 10, 2006. Salaries and employee benefits increased $2.9 million for the year ended December 31, 2006 over the same period in 2005. This increase was due primarily to the adoption of FAS 123R in 2006, which contributed $1.8 million to the increase in salaries and employee benefits, as well as higher salaries from merit increases and the acquisition of CNB. Professional fees and services increased $1.7 million for the year ended December 31, 2006, compared with the same period in 2005. Legal fees incurred in 2006 increased over 2005 because the Company was reimbursed during the second quarter of 2005 for legal fees associated with a prior litigation. Item processing fees during the year ended December 31, 2006 increased over the same period in 2005 because the Company outsourced a portion of its item processing work as a result of flood-related damage to one of its processing centers. Amortization expense increased $1.1 million for the year ended December 31, 2006 over the same period in 2005. This increase was due primarily to the acquisition of CNB. Loan collection and other real estate owned expenses increased $0.3 million for the year ended December 31, 2006 over the same period in 2005. This increase was due primarily to an increase in the number of foreclosures in 2006 as compared to 2005. Other operating expense for the year ended December 31, 2006 decreased $0.4 million compared with the same period in 2005, primarily due to flood-related insurance recoveries. Income tax expense for the year ended December 31, 2006 was $24.2 million, up from $23.5 million for the same period in 2005. The effective rate for the year ended December 31, 2006 was 30.2%, down from 30.9% for the same period in 2005. The decrease in the effective tax rate for the year ended December 31, 2006 versus the same period in 2005 resulted primarily from an increase in interest income from tax-exempt sources.
 
Noninterest expense for the three months ended December 31, 2006 was $30.9 million, up from $29.1 million for the same period in 2005. Salaries and employee benefits for the three months ended December 31, 2006 increased $1.3 million over the same period in 2005, mainly from the adoption of FAS 123R, higher salaries from merit increases, and the acquisition of CNB. Professional fees and services increased $0.9 million for the three months ended December 31, 2006, compared with the same period in 2005. This increase was due to several factors, including an increase in courier service expenses due to the acquisition of CNB as well as increasing transportation costs. Item processing fees during the period increased because the Company outsourced a portion of its item processing work as a result of flood-related damage to one of its processing centers. Amortization expense increased $0.2 million for the three months ended December 31, 2006, over the same period in 2005. This increase was due primarily to the acquisition of CNB. Loan collection and other real estate-owned expenses increased $0.4 million for the three months ended December 31, 2006, compared with the same period in 2005. This increase was due primarily to an increase in the number of foreclosures in 2006 compared with 2005. In addition, the Company was able to recoup foreclosure-related expenses from borrowers in 2005 because properties were sold prior to foreclosure during the period. Other operating expense for the three months ended December 31, 2006 decreased $1.2 million compared with the same period in 2005. Contributing to this decrease were expenses incurred in the 4th quarter of 2005 related to branch closings in anticipation of the CNB acquisition. Income tax expense for the three months ended December 31, 2006 was $5.7 million, equivalent to the income tax expense of $5.7 million for the three months ended December 31, 2005. The effective rate for the three months ended December 31, 2006 was 29.6%, down from 30.5% for the same period in 2005. The decrease in the effective tax rate for the three months ended December 31, 2006 versus the same period in 2005 resulted primarily from an increase in interest income from tax-exempt sources.
 
Balance Sheet

Total assets were $5.1 billion at December 31, 2006, up $0.7 billion from $4.4 billion at December 31, 2005. Loans and leases increased $0.4 billion or 12.9% from $3.0 billion at December 31, 2005, to $3.4 billion at December 31, 2006, due in large part to the acquisition of CNB and growth from consumer and commercial loan products. Total deposits were $3.8 billion at December 31, 2006, up 20.1% from the same period at December 31, 2005, also due in large part to the acquisition of CNB. Stockholders’ equity was $403.8 million, representing total equity to total assets of 7.94% at December 31, 2006, compared with $333.9 million or a total equity to total asset ratio of 7.54% at December 31, 2005. In addition, the Company adopted Statement of Financial Accounting Standard No. 158 (FAS 158) “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R)” as of December 31, 2006, resulting in a decrease in total equity of $7.4 million. This adoption did not affect regulatory capital ratios at December 31, 2006.

Page 5 of 10

Stock Repurchase Program
 
Under previously disclosed stock repurchase plans, the Company purchased 766,004 shares of its common stock during the year ended December 31, 2006, for a total of $17.1 million at an average price of $22.34 per share. For the three months ended December 31, 2006, the Company did not purchase any shares of its common stock. At December 31, 2006, there were 737,147 shares available for repurchase under previously announced plans.

Dividend Declared

The NBT Board of Directors declared a fourth-quarter cash dividend of $0.19 per share at a meeting held today. The dividend will be paid on March 15, 2007, to shareholders of record as of March 1, 2007.

Corporate Overview

NBT is a financial holding company headquartered in Norwich, NY, with total assets of $5.1 billion at December 31, 2006. 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 118 locations, including 80 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. Hathaway Insurance Agency, Inc., based in Gloversville, NY, is a full-service insurance agency. More information about NBT and its divisions can be found on the Internet at: www.nbtbancorp.com, www.nbtbank.com, www.pennstarbank.com, www.epic1st.com and www.hathawayagency.com.

Forward-Looking Statements

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

Page 6 of 10
 
   
NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
          
   
2006
  
2005
  
Net
Change
  
Percent
Change
  
   
(dollars in thousands, except per share data)
          
                   
Three Months Ended December 31,
                  
Net Income
  
$
13,648
  
$
12,995
  
$
653
    
5
%
Diluted Earnings Per Share
  
$
0.40
  
$
0.40
  
$
0.00
    
0
%
Weighted Average Diluted
                         
Common Shares Outstanding
    
34,402,113
   
32,556,147
   
1,845,966
   
6
%
Return on Average Assets (1)
    
1.07
%
  
1.17
%
  
-0.10
%
  
-9
%
Return on Average Equity (1)
    
13.31
%
  
15.47
%
  
-2.16
%
  
-14
%
Net Interest Margin (2)
    
3.63
%
  
3.97
%
  
-0.34
%
  
-9
%
                           
Twelve Months Ended December 31,
                          
Net Income
  
$
55,947
  
$
52,438
  
$
3,509
    
7
%
Diluted Earnings Per Share
  
$
1.64
  
$
1.60
  
$
0.04
    
2
%
Weighted Average Diluted
                         
Common Shares Outstanding
    
34,206,070
   
32,710,425
   
1,495,645
   
5
%
Return on Average Assets
   
1.14
%
  
1.21
%
  
-0.07
%
  
-6
%
Return on Average Equity
   
14.47
%
  
15.86
%
  
-1.39
%
  
-9
%
Net Interest Margin (2)
    
3.70
%
  
4.01
%
  
-0.31
%
  
-8
%
                           
Asset Quality
   
December 31,
2006
    
December 31,
2005
              
Nonaccrual Loans
  
$
13,665
  
$
13,419
              
90 Days Past Due and Still Accruing
  
$
1,642
  
$
878
              
Total Nonperforming Loans
  
$
15,307
  
$
14,297
              
Other Real Estate Owned (OREO)
  
$
389
  
$
265
              
Total Nonperforming Assets
  
$
15,696
  
$
14,562
              
Allowance for Loan and Lease Losses
  
$
50,587
  
$
47,455
              
Year-to-Date (YTD) Net Charge-Offs
  
$
8,673
  
$
6,941
              
Allowance for Loan and Lease Losses to Total Loans and Leases
    
1.48
%
  
1.57
%
            
Total Nonperforming Loans to Total Loans and Leases
    
0.45
%
  
0.47
%
            
Total Nonperforming Assets to Total Assets
    
0.31
%
  
0.33
%
            
Allowance for Loan and Lease Losses to Total Nonperforming Loans
    
330.48
%
  
331.92
%
            
Annualized Net Charge-Offs to YTD Average Loans and Leases
    
0.26
%
  
0.23
%
            
                           
Capital
                          
Equity to Assets
    
7.94
%
  
7.54
%
            
Book Value Per Share
  
$
11.79
  
$
10.34
              
Tangible Book Value Per Share
  
$
8.42
  
$
8.75
              
Tier 1 Leverage Ratio
    
7.57
%
  
7.16
%
            
Tier 1 Capital Ratio
    
10.42
%
  
9.80
%
            
Total Risk-Based Capital Ratio
    
11.67
%
  
11.05
%
             
 
               
Quarterly Common Stock Price
  
2006
  
2005
  
2004
  
Quarter End
  
High 
  
 Low
  
  High 
  
Low
  
  High 
  
 Low
  
March 31
  
$
23.90
  
$
21.02
  
$
25.66
  
$
21.48
  
$
23.00
  
$
21.21
  
June 30
  
$
23.24
  
$
21.03
    
24.15
   
20.10
    
23.18
   
19.92
  
September 30
  
$
24.57
  
$
21.44
    
25.50
   
22.79
    
24.34
   
21.02
  
December 31
  
$
26.47
  
$
22.36
    
23.79
   
20.75
    
26.84
   
21.94
  
 
(1) Annualized
(2) Calculated on a FTE basis
 
Page 7 of 10

NBT Bancorp Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
   
2006
  
2005
  
Net
Change
  
Percent
Change
  
   
(dollars in thousands, except per share data)
          
Balance Sheet as of December 31,
                  
Loans and Leases
  
$
3,412,654
  
$
3,022,657
  
$
389,997
    
13
%
Earning Assets
  
$
4,712,085
  
$
4,129,350
  
$
582,735
    
14
%
Total Assets
  
$
5,087,572
  
$
4,426,773
  
$
660,799
    
15
%
Deposits
  
$
3,796,238
  
$
3,160,196
  
$
636,042
    
20
%
Stockholders’ Equity
  
$
403,817
  
$
333,943
  
$
69,874
    
21
%
                           
Average Balances
                         
Quarter Ended December 31,
                          
Loans and Leases
  
$
3,394,024
  
$
3,012,561
  
$
381,463
    
13
%
Securities Available For Sale
                         
(excluding unrealized gains or losses)
  
$
1,119,271
  
$
965,742
  
$
153,529
    
16
%
Securities Held To Maturity
  
$
136,511
  
$
92,054
  
$
44,457
    
48
%
Regulatory Equity Investment
  
$
36,995
  
$
39,277
    
($2,282
)
  
-6
%
Short-Term Interest Bearing Accounts
  
$
7,492
  
$
7,676
    
($184
)
  
-2
%
Total Earning Assets
  
$
4,694,293
  
$
4,117,310
  
$
576,983
    
14
%
Total Assets
  
$
5,064,116
  
$
4,393,140
  
$
670,976
    
15
%
Interest Bearing Deposits
  
$
3,206,084
  
$
2,602,145
  
$
603,939
    
23
%
Non-Interest Bearing Deposits
  
$
625,301
  
$
571,999
  
$
53,302
    
9
%
Short-Term Borrowings
 
$
294,750
  
$
396,077
    
($101,327
)
  
-26
%
Long-Term Borrowings
  
$
471,149
  
$
439,798
  
$
31,351
    
7
%
Total Interest Bearing Liabilities
  
$
3,971,983
  
$
3,438,020
  
$
533,963
    
16
%
Stockholders’ Equity
  
$
406,771
  
$
333,450
  
$
73,321
    
22
%
                           
Average Balances
                         
Twelve Months Ended December 31,
                          
Loans and Leases
  
$
3,302,080
  
$
2,959,256
  
$
342,824
    
12
%
Securities Available For Sale
                         
(excluding unrealized gains or losses)
  
$
1,110,405
  
$
954,461
  
$
155,944
    
16
%
Securities Held To Maturity
  
$
115,636
  
$
88,244
  
$
27,392
    
31
%
Regulatory Equity Investment
  
$
39,437
  
$
37,607
  
$
1,830
    
5
%
Short-Term Interest Bearing Accounts
  
$
8,116
  
$
7,298
  
$
818
    
11
%
Total Earning Assets
  
$
4,575,674
  
$
4,046,866
  
$
528,808
    
13
%
Total Assets
  
$
4,925,070
  
$
4,326,155
  
$
598,915
    
14
%
Interest Bearing Deposits
  
$
3,054,006
  
$
2,615,833
  
$
438,173
    
17
%
Non-Interest Bearing Deposits
  
$
614,055
  
$
543,077
  
$
70,978
    
13
%
Short-Term Borrowings
 
$
331,255
  
$
353,644
    
($22,389
)
  
-6
%
Long-Term Borrowings
  
$
485,031
  
$
430,487
  
$
54,544
    
13
%
Total Interest Bearing Liabilities
  
$
3,870,292
  
$
3,399,964
  
$
470,328
    
14
%
Stockholders’ Equity
  
$
386,553
  
$
330,676
  
$
55,877
    
17
%
 
Page 8 of 10
 
NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
  
December 31,
2006
  
December 31,
2005
  
(in thousands)
          
           
ASSETS
          
Cash and due from banks
  
$
130,936
  
$
134,501
  
Short term interest bearing accounts
    
7,857
   
7,987
 
Securities available for sale, at fair value
   
1,106,322
   
954,474
 
Securities held to maturity (fair value of $136,287 and $93,701 at December 31, 2006 and December 31, 2005)
   
136,314
   
93,709
 
Federal Reserve and Federal Home Loan Bank stock
    
38,812
   
40,259
 
Loans and leases
    
3,412,654
   
3,022,657
 
Less allowance for loan and lease losses
    
50,587
   
47,455
 
Net loans and leases
    
3,362,067
   
2,975,202
 
Premises and equipment, net
    
66,982
   
63,693
 
Goodwill
    
103,356
   
47,544
 
Intangible assets, net
    
11,984
   
3,808
 
Bank owned life insurance
    
41,783
   
33,648
 
Other assets
    
81,159
   
71,948
 
TOTAL ASSETS
  
$
5,087,572
  
$
4,426,773
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Deposits:
              
Demand (noninterest bearing)
  
$
646,377
  
$
593,422
  
Savings, NOW, and money market
    
1,566,557
   
1,325,166
 
Time
    
1,583,304
   
1,241,608
 
Total deposits
    
3,796,238
   
3,160,196
 
Short-term borrowings
    
345,408
   
444,977
 
Long-term debt
    
417,728
   
414,330
 
Trust preferred debentures
    
75,422
   
23,875
 
Other liabilities
    
48,959
   
49,452
 
Total liabilities
    
4,683,755
   
4,092,830
 
               
               
Total stockholders' equity
    
403,817
   
333,943
 
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
5,087,572
  
$
4,426,773
  
 
Page 9 of 10


NBT Bancorp Inc. and Subsidiaries
  
Three months ended
December 31,
  
Twelve months ended
December 31,
  
Consolidated Statements of Income (unaudited)
  
2006
  
2005
  
2006
  
2005
  
(in thousands, except per share data)
  
 
  
 
  
Interest, fee and dividend income:
                  
Loans and leases
  
$
60,795
  
$
50,726
  
$
230,042
  
$
189,714
  
Securities available for sale
    
13,296
    
10,544
    
51,599
    
41,120
  
Securities held to maturity
    
1,409
    
913
    
4,730
    
3,407
  
Other
    
517
    
575
    
2,471
    
2,126
  
Total interest, fee and dividend income
    
76,017
    
62,758
    
288,842
    
236,367
  
Interest expense:
                          
Deposits
    
25,652
    
14,352
    
87,798
    
49,932
  
Short-term borrowings
    
3,572
    
3,911
    
15,448
    
10,984
  
Long-term debt
    
4,091
    
4,098
    
17,063
    
16,114
  
Trust preferred debentures
    
1,277
    
375
    
4,700
    
1,226
  
Total interest expense
    
34,592
    
22,736
    
125,009
    
78,256
  
Net interest income
    
41,425
    
40,022
    
163,833
    
158,111
  
Provision for loan and lease losses
    
3,484
    
2,596
    
9,395
    
9,464
  
Net interest income after provision for loan and lease losses
    
37,941
    
37,426
    
154,438
    
148,647
  
Noninterest income:
                          
Trust
    
1,387
    
1,234
    
5,629
    
5,029
  
Service charges on deposit accounts
    
4,418
    
4,340
    
17,590
    
16,894
  
ATM and debit card fees
    
1,764
    
1,587
    
7,086
    
6,162
  
Broker/dealer and insurance revenue
    
1,037
    
527
    
3,936
    
3,186
  
Net securities gains (losses)
    
30
    
(546
)
  
(875
)
  
(1,236
)
Bank owned life insurance income
    
425
    
342
    
1,629
    
1,347
  
Retirement plan administration fees
    
1,424
    
1,212
    
5,536
    
4,426
  
Other
    
1,847
    
1,736
    
8,098
    
6,741
  
Total noninterest income
    
12,332
    
10,432
    
48,629
    
42,549
  
Noninterest expense:
                          
Salaries and employee benefits
    
15,166
    
13,863
    
62,877
    
60,005
  
Office supplies and postage
    
1,418
    
1,222
    
5,330
    
4,628
  
Occupancy
    
2,739
    
2,689
    
11,518
    
10,452
  
Equipment
    
2,069
    
2,120
    
8,332
    
8,118
  
Professional fees and outside services
    
2,502
    
1,584
    
7,761
    
6,087
  
Data processing and communications
    
2,466
    
2,548
    
10,454
    
10,349
  
Amortization of intangible assets
    
389
    
142
    
1,649
    
544
  
Loan collection and other real estate owned
    
629
    
278
    
1,351
    
1,002
  
Other operating
    
3,504
    
4,703
    
13,694
    
14,120
  
Total noninterest expense
    
30,882
    
29,149
    
122,966
    
115,305
  
Income before income taxes
    
19,391
    
18,709
    
80,101
    
75,891
  
Income taxes
    
5,743
    
5,714
    
24,154
    
23,453
  
Net income
  
$
13,648
  
$
12,995
  
$
55,947
  
$
52,438
  
Earnings Per Share:
                          
Basic
  
$
0.40
  
$
0.40
  
$
1.65
  
$
1.62
  
Diluted
  
$
0.40
  
$
0.40
  
$
1.64
  
$
1.60
  
 
Page 10 of 10

NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income (unaudited)
  
4Q
2006
  
3Q
2006
  
2Q
2006
  
1Q
2006
  
4Q
2005
  
(in thousands, except per share data)
                      
Interest, fee and dividend income:
                      
Loans and leases
  
$
60,795
  
$
59,329
  
$
57,085
  
$
52,833
  
$
50,726
  
Securities available for sale
    
13,296
   
13,342
   
13,084
   
11,877
   
10,544
 
Securities held to maturity
    
1,409
   
1,293
   
1,043
   
985
   
913
 
Other
    
517
   
724
   
619
   
611
   
575
 
Total interest, fee and dividend income
    
76,017
   
74,688
   
71,831
   
66,306
   
62,758
 
Interest expense:
                                
Deposits
    
25,652
   
24,052
   
20,869
   
17,225
   
14,352
 
Short-term borrowings
    
3,572
   
3,828
   
4,111
   
3,937
   
3,911
 
Long-term debt
    
4,091
   
4,603
   
4,227
   
4,142
   
4,098
 
Trust preferred debentures
    
1,277
   
1,285
   
1,255
   
883
   
375
 
Total interest expense
    
34,592
   
33,768
   
30,462
   
26,187
   
22,736
 
Net interest income
    
41,425
   
40,920
   
41,369
   
40,119
   
40,022
 
Provision for loan and lease losses
    
3,484
   
2,480
   
1,703
   
1,728
   
2,596
 
Net interest income after provision for loan and lease losses
    
37,941
   
38,440
   
39,666
   
38,391
   
37,426
 
Noninterest income:
                                
Trust
   
1,387
   
1,425
   
1,459
   
1,358
   
1,234
 
Service charges on deposit accounts
    
4,418
   
4,460
   
4,493
   
4,219
   
4,340
 
ATM and debit card fees
    
1,764
   
1,888
   
1,789
   
1,645
   
1,587
 
Broker/dealer and insurance fees
    
1,037
   
1,024
   
967
   
908
   
527
 
Net securities gains (losses)
    
30
   
7
   
22
   
(934
)
  
(546
)
Bank owned life insurance income
    
425
   
431
   
392
   
381
   
342
 
Retirement plan administration fees
    
1,424
   
1,450
   
1,431
   
1,231
   
1,212
 
Other
    
1,847
   
1,832
   
2,003
   
2,416
   
1,736
 
Total noninterest income
    
12,332
   
12,517
   
12,556
   
11,224
   
10,432
 
Noninterest expense:
                                
Salaries and employee benefits
    
15,166
   
15,628
   
16,335
   
15,748
   
13,863
 
Office supplies and postage
    
1,418
   
1,275
   
1,456
   
1,181
   
1,222
 
Occupancy
    
2,739
   
3,044
   
2,747
   
2,988
   
2,689
 
Equipment
    
2,069
   
2,040
   
2,067
   
2,156
   
2,120
 
Professional fees and outside services
    
2,502
   
1,627
   
1,800
   
1,832
   
1,584
 
Data processing and communications
    
2,466
   
2,637
   
2,649
   
2,702
   
2,548
 
Amortization of intangible assets
    
389
   
471
   
466
   
323
   
142
 
Loan collection and other real estate owned
    
629
   
222
   
289
   
211
   
278
 
Other operating
    
3,504
   
2,974
   
3,885
   
3,331
   
4,703
 
Total noninterest expense
    
30,882
   
29,918
   
31,694
   
30,472
   
29,149
 
Income before income taxes
    
19,391
   
21,039
   
20,528
   
19,143
   
18,709
 
Income taxes
    
5,743
   
6,497
   
6,359
   
5,555
   
5,714
 
Net income
 
$
13,648
  
$
14,542
  
$
14,169
  
$
13,588
  
$
12,995
  
Earnings per share:
                                
Basic
  
$
0.40
  
$
0.43
  
$
0.41
  
$
0.41
  
$
0.40
  
Diluted
  
$
0.40
  
$
0.43
  
$
0.41
  
$
0.40
  
$
0.40