NORWICH— NBT Bancorp, Inc. (NASDAQ: NBTB) says it has refinanced about $165 million of long-term debt made up of Federal Home Loan Bank (FHLB) advances and other borrowings with new FHLB advances and brokered deposits at lower interest rates.
“These actions are expected to reduce interest expense in future periods and extend the weighted average life of borrowings,” NBT said in a May 30 regulatory filing with the U.S. Securities & Exchange Commission.
However, because of the refinancing, NBT said it would incur a before-tax penalty of about $17.1 million in its second-quarter earnings. This will “substantially offset” the before-tax gains from the banking company’s previously announced sale of its equity interest in Springstone Financial, LLC in April.
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On April 17, a subsidiary of NBT sold its 20 percent ownership stake in the consumer-finance company Springstone Financial — which NBT had originally acquired in exchange for a $3 million investment — to Lending Club Corp. as part of Lending Club’s acquisition of Springstone. Lending Club paid the selling shareholders a total purchase price of $140 million in cash and preferred stock. So, NBT’s stake in Springstone was worth about $28 million.
NBT is expected to report its second-quarter earnings in late July.
Contact Rombel at arombel@cnybj.com
