NBT

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by: Michael McGuire

Although NBT Bancorp isn’t involved in sub-prime lending, the banking industry wasn’t immune from adverse credit and housing trends that have rippled through the economy as a whole of late.

“We knew ‘07 would be a challenging environment,” said Bank President and CEO Martin Dietrich. “We knew we had to make some adjustments to mitigate that pressure.”

This year it doesn’t look like the challenges will let up, the bank president said. But the same qualities that allowed the company to make strides in 2007 – with estimated earnings on par with record growth in 2006 – should also carry them through 2008.

“There are significant signs the economy is slowing down,” he said. “But the actions of our employees in the last 12 to 18 months leave us in a better position than it might have otherwise.”

Dietrich said a focus on expense control and growth in NBT’s non-interest income helped it navigate tough waters last year, as well as offset the ongoing rise in short-term interest rate costs and stagnate long-term returns that have been affecting the entire banking industry for the past three years.

“Despite those challenges, we were pleased with our results,” he said.

NBT stock hovered in the low $20s in 2007 and its market-cap (the stock price multiplied by the number of shares) through the first nine months of last year was $700 million. In the spring, NBT repurchased $2 million shares of its own stock in an effort to increase the stock’s value for shareholders.

As far as total earnings, 2007’s have yet to be figured, but total assets sit at $5.15 billion.

The bank’s Trust Division is the fastest growing department in the company, Dietrich said, with a 15 percent increase in the first three quarters of last year. Senior Vice President Timothy Handy said much of that growth is in retirement plan services.

“Our fastest growing line of business within the Trust Division has been in retirement plans services, in particular the growth our 401K packages,” said Handy.

The Trust Division – which handles estate settlements, wills and trusts, investment management, charitable trusts, and fiduciary and accounting preparation – also manages employee retirement plans, by way of 401Ks, for employers who in the past were responsible for providing and overseeing their own packages. Now NBT and other financial institutions outline 401K packages for employers – offering different packages for different investment fund options – and manage those investments for them and their employees.

Handy says NBT has taken greater steps to market its retirement programs in what is a highly competitive field.

“We’ve become much more sales oriented,” said Handy, explaining that in the past, the trust department worked mostly off of referrals. “Throughout NBT’s footprint we have representatives of the Trust Division developing new business and managing those relationships for us.”

NBT’s footprint continued to expand in 2007 into the Capital Region, with the opening of an office for the Greater Glens Falls area and a branch in Latham.

“There a lot of exciting things going on in that area,” Dietrich said, specifically referring to the boom in tech initiatives in and around Albany. “There’s a lot of growth and energy there, we’ve been able to leverage off of that.”

In 2008, NBT will be opening a Johnson City branch in the historic Charles F. Johnson Home on Main Street.

“We’ve worked hard with our architects to preserve this historic facility,” Dietrich said, “making sure this is an asset for many years to come.”

The bank’s Pennstar division also opened two branches in Bartonsville and East Stroudsburg.

NBT now has 82 offices in 19 counties in upstate New York and Pennstar has 39 offices in six counties in northeastern Pennsylvania. In all, the company has 1,380 employees.

Bank Director Magazine recently rated NBT the 58th best bank in America of any size. Last year it was 48th.

“We slipped a few spots. But we still stack up extremely well in the industry,” Dietrich said. “As a company that plans for the long-term, we’re going to keep moving ahead and growing for the future.”

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