NORWICH — NBT Bancorp Inc. (NASDAQ: NBTB), parent company of NBT Bank, reported that its net income in the second quarter of this year rose to $21.4 million from $20.3 million in the first quarter, and from $19.9 million in the second quarter of 2016. 

NBT generated earnings per share of 49 cents in the latest quarter, up from 46 cents in both the prior quarter and the year-ago earnings period.

“Quarter-over-quarter and year-over-year increases in net income and earnings per share demonstrate the strong efforts of our team of professionals to develop relationships that drive growth in loans, demand deposits and noninterest income,” NBT President and CEO John H. Watt, Jr. said in in the banking company’s earnings report. “For 10 years NBT has been engaged in technology enabled point of sale consumer lending. The launch of our solar loan program with Sungage Financial, Inc. announced earlier this month leverages our experience partnering with fintech [financial technology] companies to offer affordable and responsible loans to consumers and at the same time further diversify our delivery channels and the risk on our balance sheet.”

NBT issued its earnings report after the close of regular trading on July 24. Its stock price rose slightly (0.2 percent) the next day.

The earnings numbers

NBT generated net interest income of $69.6 million for the second quarter of 2017, up 1.6 percent from the first quarter, and 5.8 percent higher than the second quarter of 2016.

The banking company’s fully taxable equivalent (FTE) net interest margin was 3.44 percent for the three months ending June 30, down from 3.46 percent in the previous quarter, but “consistent” with the second quarter of 2016, according to the earnings report.

NBT produced noninterest income of $30.3 million in this year’s second quarter, up 5.4 percent from the first quarter, and 2.3 percent higher than the second quarter of 2016. The increases in noninterest income were primarily driven by higher retirement-plan administration, trust, and ATM and debit-card fees that were offset by lower insurance and other financial-services revenue during the second quarter of 2017, NBT said. The retirement-plan administration fees, in particular, rose mostly due to acquisitions NBT completed in 2016, as well as the purchase of Downeast Pension Services (DPS) in the second quarter of 2017. 

ATM and debit-card fees increased from the prior quarters because of growth in the number of accounts and card usage. Insurance revenue decreased from the previous quarter due to “seasonality increases typically seen in the first quarter,” NBT noted. Other noninterest income declined from the year-ago earnings period due to a non-recurring gain recognized in the second quarter of 2016.

NBT said that in this year’s first quarter, it adopted new accounting guidance for equity-based transactions requiring that all excess tax benefits and tax deficiencies associated with stock-based compensation be recognized as an income-tax benefit or expense in the income statement. Previously, tax effects resulting from changes in NBT’s stock price subsequent to the grant date were recorded through stockholders’ equity at the time of vesting or exercise. The adoption of the accounting guidance resulted in $1.4 million and $100,000 income-tax benefits, in the first and second quarters of 2017, respectively. 

NBT incurred income-tax expense of $10.7 million in this year’s second quarter, up $2.4 million, or nearly 29 percent, from the first quarter, and up $0.4 million, or 4.1 percent, from the second quarter of 2016. 

The banking company’s effective tax rate of 33.3 percent for the second quarter of 2017 was up from 29 percent in the first quarter, but down from 34 percent for the second quarter of 2016. The increase from the prior quarter mainly stemmed from a decrease of nearly $1.4 million in the income-tax benefit related to adopting the new accounting guidance, as well as a higher level of taxable income in the latest quarter, NBT explained. The decrease in the effective tax rate from the year-ago quarter was mainly due to a higher level of non-taxable income as a percentage of pre-tax income in the second quarter of this year.

Asset quality

NBT’s net charge-offs totaled $6.7 million in this year’s second quarter, down from $6.9 million in the first quarter, but up from $4.5 million in the second quarter of 2016. 

The banking company’s annualized net charge-offs to average loans for the second quarter was 0.42 percent, compared to 0.45 percent in the first quarter and 0.30 percent for the second quarter of last year.

The ratio of nonperforming loans to total loans was 0.50 percent as of this June 30, down from 0.56 percent for the prior quarter, and down from 0.65 percent as of a year ago. 

The ratio of past-due loans as a percentage of total loans stood at 0.59 percent on June 30, as compared to 0.54 percent on March 31, and 0.60 percent on June 30, 2016. 

Balance sheet

NBT had total assets of $9.1 billion as of June 30, 2017, up 2.4 percent from the end of 2016. The banking company’s loans totaled $6.4 billion as of June 30, up 2.7 percent, from Dec. 31, 2016. 

NBT reported total deposits of $7 billion as of June 30, up 0.6 percent, from the end of last year. 

The NBT board of directors approved a 2017 third-quarter cash dividend of 23 cents per share. The dividend will be paid on Sept. 15, to shareholders of record as of Sept. 1.

 NBT Bancorp is a financial holding company, headquartered in Norwich, which primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial-services companies. 

NBT Bank has 154 branches in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, and Maine. EPIC Advisors, Inc., based in Rochester, is a full-service 401(k) plan recordkeeping firm. NBT-Mang Insurance Agency, based in Norwich, is a full-service insurance agency.                        

SOLVAY— Solvay Bank recently announced that it has earned honors from two organizations that produce key banking industry rankings. 

American Banker Magazine recognized Solvay Bank (OTC: SOBS) on its annual list of the “Top 200 Publicly Traded Community Banks and Thrifts,” and BauerFinancial Inc. gave Solvay Bank its highest award, a 5-star rating.

In American Banker, Solvay Bank ranked #150 and was the only Central New York–based institution to make the list, according to a Solvay Bank news release.

American Banker looks at banks with less than $2 billion in assets and focuses on a 3-year average return on equity. A total of 750 financial institutions from across the country were considered for the ranking, which was announced in its May 2017 issue. According to the Independent Community Bankers of America, the U.S. has more than 6,000 community banks. 

BauerFinancial is a national, independent bank-research firm and rating service that issues its star-based assessments from 0 to 5, based on federally reported information including risk-based capital ratios. It also studies performance indicators such as profitability and loss trends, delinquent-loan levels, assets, investment portfolios, and community reinvestment ratings when making ratings determinations. Solvay Bank earned BauerFinancial’s highest classification, the 5-star rating, the release stated.

Founded in 1917, Solvay Bank says it is the largest independent commercial bank headquartered and operating in Onondaga County. The bank celebrated its 100th anniversary on March 17 of this year. 

Solvay Bank’s main office is located at 1537 Milton Ave. in Solvay and it has eight additional branches in Camillus, Cicero, DeWitt, Fairmount, Liverpool, North Syracuse, downtown Syracuse, and Westvale. The bank also owns Solvay Bank Insurance Agency, Inc.                               

SENECA FALLS —  Generations Bank announced it has promoted Kenneth Winn to senior VP and director of credit administration.

Winn joined the organization as VP and director of credit administration earlier this year. He is a graduate of Columbia College and served in the United States Air Force.

Winn works from the bank’s Seneca Falls headquarters. 

Generations Bank has additional branch offices in Auburn (2), Union Springs, Waterloo (2), Geneva, Phelps, and Farmington.

ITHACA — Tompkins Financial Corp. (NYSE: TMP) reported net income of $16.9 million in the second quarter, up 14 percent from $14.8 million in the year-ago quarter. The rise was led by loan growth and increases in net interest income.

The Ithaca–based banking company posted net income of $32.6 million through the first six months of this year, up more than 12 percent over the same period in 2016.

Tompkins Financial’s earnings per share totaled $1.11 in the second quarter, up 13 percent over the second quarter of 2016. 

For the year-to-date period ended June 30, Tompkins Financial’s earnings per share totaled $2.13, up 11.5 percent over the same six months in 2016. The year-to-date earnings-per-share figure reflects “the best earnings through the first six months of any year in our company’s history,” the banking company said in the earnings report.

“It is especially rewarding to show strong performance through the first half of 2017, while our team was also focused on a conversion of our core banking system, which was successfully completed in May of this year,” Stephen Romaine, president and CEO of Tompkins Financial, said in the report. “Improved net interest income, which was supported by solid loan growth over the prior year, has been the primary driver of improved earnings performance in 2017.”

Tompkins Financial issued its earnings report before the open of regular trading on July 21. Its stock price fell 1 percent that day and slightly the next trading day, before rebounding strongly the following two days.

Income growth

Tompkins Financial posted net interest income of $50.3 million in the second quarter of this year, up 12 percent from the same period in 2016. For the first six months of the year, its net interest income was 

$98.3 million, up nearly 11 percent from the same period in 2016. 

Net interest income benefited from growth in average loans and deposits, Tompkins Financial said. Average loans were up $467.1 million, or 12 percent in the first six months of this year, versus the same period in 2016. Average deposits were up $260.3 million, or almost 6 percent in the first six months of 2017, compared to the same period last year. Certain loans benefited from higher short-term interest rates in 2017, resulting in an improved net interest margin in 2017. For the second quarter of the year, net interest margin improved to 3.45 percent, compared to 3.38 percent in the first quarter of 2017, and 3.36 percent in the second quarter of 2016.

Tompkins Financial’s noninterest income of $17.5 million in the second quarter was up 2 percent compared to the same period last year. Declines in insurance commissions and fees, and gains on the sale of available-for-sale securities during the quarter were offset by improved card-services income, which included about $500,000 of volume-based incentives related to the bank’s branding agreement with MasterCard, Tompkins Financial said.

Asset quality

The banking company said its asset-quality trends “remained strong” in the second quarter. Nonperforming assets represented 0.36 percent of total assets as of June 30, unchanged from the end of 2016, and up slightly from 0.32 percent a year ago. Nonperforming asset levels continue to be “well below” the most recent Federal Reserve Board peer group average of 0.55 percent, Tompkins Financial said.

Tompkins Financial’s provision for loan and lease losses was $976,000 for the second quarter of 2017, which was “in line” with the second quarter of 2016. 

The banking company’s allowance for originated loan and lease losses totaled $37 million as of June 30, and represented 0.91 percent of total originated loans and leases, compared to 0.92 percent last quarter, and 0.93 percent one year ago. 

Though most credit-quality metrics remained “relatively stable” for the quarter, the level of special-mention loans at Tompkins Financial increased during the quarter to $39 million from $21.2 million a year ago, and up from $19.4 million last quarter. “The increase is largely related to the Company’s agricultural portfolio that has been negatively impacted by lower milk prices over the past 12 months. Though lower prices have negatively impacted cash flow for this group of borrowers, payments on all of the loans in this portfolio were current as of June 30, 2017,” the banking company explained in the earnings report.

Tompkins Financial is the parent company of Tompkins Trust Company, Tompkins Bank of Castile, Tompkins Mahopac Bank, Tompkins VIST Bank, Tompkins Insurance Agencies, Inc., and offers wealth-management services through Tompkins Financial Advisors.         

ELMIRA — Chemung Financial Corp. (NASDAQ: CHMG) reported that its net income nearly doubled to $3 million, or 62 cents a share, in the second quarter, from $1.6 million, or 34 cents in the year-ago period.

Chemung Financial, parent company of Chemung Canal Trust Company, said it continues to see “solid growth” in revenues, earnings, loans, and deposits.

“Our return on average equity for the second quarter improved to 7.9 percent, compared to 4.57 percent for the same period in the prior year. The efficiency ratio has also improved year over year, improving from 77 percent to 69.28 percent,” Anders Tomson, CEO of Chemung Financial, said in the company’s earnings report.

Chemung Financial also completed the relocation of its branch in Auburn from 120 Genesee St. to 110 Genesee St, a move that allowed the banking company to “downsize our space by nearly two-thirds [which] will generate future cost savings for us,” according to Tomson. 

“I am excited for the remainder of the year and working with our employees to continue delivering long-term value for our shareholders, customers and the communities we serve,” he added.

Income numbers

Chemung Financial’s net interest income for the second quarter totaled $14 million compared with $13 million in the prior-year quarter, an increase of almost 8 percent. Interest and fees from loans increased by $500,000 and interest from investments, including interest-bearing deposits, increased $300,000. Meanwhile, interest expense on borrowed funds and securities sold under agreements to repurchase both decreased by $100,000 when compared to the same period in the prior year. 

The banking company’s non-interest income for the current quarter was 

$5 million compared with $5.2 million in the second quarter of 2016, a decrease of nearly 4 percent. The decline was due primarily to a $200,000 decline in other non-interest income related to rent income from other real estate owned and swap fees, the earnings report stated.

Chemung Financial’s assets totaled $1.72 billion as of June 30, compared with $1.66 billion as of Dec. 31, 2016, an increase of almost 4 percent.

The growth was due primarily to increases of 

$20.9 million in securities available for sale and $52.4 million in the loan portfolio, offset by a decrease of $9.6 million in cash and cash equivalents. 

The increase in total loans can be mostly attributed to increases of $36.2 million in commercial mortgages, $12.8 million in commercial and agriculture loans, 

$2.1 million in residential mortgages, and $1.2 million in indirect consumer loans. 

The rise in securities available for sale resulted from additional purchases of mortgage-backed and municipal securities. 

The decrease in cash and cash equivalents stems from an increase in deposits, offset by an increase in securities available for sale and total loans, according to Chemung Financial.

Elmira–based Chemung Financial operates 33 retail branch offices through its main subsidiary, Chemung Canal Trust Company. Established in 1833, Chemung Canal Trust says it is the oldest, locally owned and managed community bank in New York.