NORWICH — Profit fell slightly in the first quarter at NBT Bancorp (NASDAQ: NBTB), but the good news outweighs the bad at the Norwich–based banking and financial-services company, NBT officials contend.
NBT reported net income of $13.7 million in the quarter, down by $600,000, or 4.6 percent, from the first quarter of 2011. Earnings per share stayed steady at 41 cents.
NBT released its earnings April 23 after the market close. The company’s stock, which closed at $21.10 that day, opened at $21.04 on April 24 and traded as high as $21.12, before closing at $20.96 — down 14 cents, or 0.7 percent, for the day. Year to date, NBT shares were down 5.3 percent.
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During the first quarter, the company closed on the purchase of three Legacy Banks branches in Greene County and the customer balances at another branch office in Schoharie County; opened a fifth branch in Lenox, Mass. on Feb. 7; and moved forward with the planned second-quarter acquisition of Hampshire First Bank in New Hampshire.
“While the still-fragile economy poses ongoing challenges, NBT continues to invest in the future and expand delivery of our unique brand of community banking,” NBT President and CEO Martin Dietrich said in a news release. “Our consistent ability to generate loan growth, coupled with our strong fundamentals and quality team of community-minded bankers will enable NBT to continue to navigate the challenges ahead.”
NBT’s earnings matched the estimate of Damon DelMonte, an analyst in the Hartford, Conn. office of New York City–based equity-research firm Keefe, Bruyette & Woods, Inc. In spite of that, DelMonte, in his report on NBT, indicates concerns that the company’s performance is not sustainable because it benefited from $2 million in one-time gains this quarter.
“We expect the lower run rate on revenues and higher run rate on expenses to weigh on earnings in the coming quarters,” DelMonte wrote in his report. For the second quarter, he forecast earnings of 38 cents per share and lowered his full-year estimate to $1.61.
During the first quarter, NBT boosted its provision for loan and lease losses to $4.5 million from $4 million in the year-ago period.
Net charge-offs totaled $4.5 million for the first quarter of 2012, down from $5.3 million for the same period in 2011. That was mainly because of the charge-off of one large commercial loan in the first quarter of 2011. The annualized net charge-off ratio for the three months ended March 31, 2012, was 0.47 percent, compared to 0.59 percent in the year-ago period.
Net interest income increased slightly to $49.4 million in the first quarter from $49.3 million a year earlier, while non interest income grew 14.6 percent to $23.1 million in the first quarter, from $20.1 million in the year-ago quarter. That gain stems from an increase in insurance and other financial-services revenue of $400,000 and an increase in ATM and debit-card fees of $300,000. NBT also benefited from a $1.1 million payoff gain on a purchased commercial real-estate loan as well as a prepayment penalty fee collected totaling $800,000 during the first quarter of 2012.
Non interest expenses grew 7.6 percent to $48.5 million in the latest quarter, as the company’s employment increased with branch acquisitions. NBT said it also spent $700,000 on professional fees and outside services, including $300,000 in legal expenses related to a class-action lawsuit.
NBT reported total assets of $5.8 billion on March 31, 2012, up by 3.3 percent from Dec. 31, 2011.
Loans and leases totaled $3.8 billion as of March 31, up by $18.5 million since the end of 2011. Deposits grew by $200.3 million since Dec. 31 to total $4.6 billion on March 31.
Headquartered in Norwich, NBT Bancorp is a financial holding company that operates 132 NBT Bank, N.A. locations and 35 Pennstar Bank locations; EPIC Advisors, Inc., a Rochester–based 401(k) plan recordkeeping firm; and Mang Insurance Agency, LLC, a Norwich–based insurance agency.
