NBT Bancorp 11K
NBT
BANCORP INC.
401(k)
AND EMPLOYEE STOCK
OWNERSHIP
PLAN
Financial
Statements and Schedules
December 31,
2004 and 2003
(With
Report of Independent Registered Public Accounting Firm)
NBT
BANCORP INC.
401(k)
AND EMPLOYEE STOCK
OWNERSHIP
PLAN
Index
Report
of
Independent Registered Public Accounting Firm
Statements
of Net Assets Available for Plan Benefits at December 31, 2004 and
2003
Statements
of Changes in Net Assets Available for Plan Benefits for the years ended
December 31, 2004 and 2003
Notes
to
Financial Statements
Schedules
1.
Schedule H,
Line 4i - Schedule of Assets Held at End of Year
Report
of Independent Registered Public Accounting Firm
Plan
Administrator
NBT
Bancorp Inc. 401(k) and Employee
Stock
Ownership Plan:
We
have
audited the accompanying statements of net assets available for plan benefits
of
the NBT Bancorp Inc. 401(k) and Employee Stock Ownership Plan as of
December 31, 2004 and 2003 and the related statements of changes in
net
assets available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan’s management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for plan benefits of the Plan as
of
December 31, 2004 and 2003 and the changes in net assets available for
plan
benefits for the years then ended in conformity with U.S. generally accepted
accounting principles.
Our
audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held
at end of year is presented for the purpose of additional analysis and is not
a
required part of the basic financial statements, but is supplementary
information required by the Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act
of
1974. This supplemental schedule is the responsibility of the Plan’s management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/KPMG
Albany,
New York
June 17,
2005
NBT
BANCORP INC.
|
401(k)
AND EMPLOYEE STOCK
|
OWNERSHIP
PLAN
|
Statements
of Net Assets Available for Plan Benefits
|
December
31, 2004 and 2003
|
Assets
|
|
|
2004
|
|
|
2003
|
|
Investments,
at fair value:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
150,769
|
|
|
—
|
|
Money
market funds
|
|
|
3,233,629
|
|
|
3,303,719
|
|
Bond
mutual funds
|
|
|
1,538,706
|
|
|
1,256,397
|
|
Common
stock of NBT Bancorp Inc.
|
|
|
35,698,331
|
|
|
28,893,427
|
|
Domestic
equity mutual funds
|
|
|
14,951,228
|
|
|
12,130,459
|
|
Foreign
equity mutual funds
|
|
|
2,075,847
|
|
|
1,611,041
|
|
Participant
loans receivable
|
|
|
586,936
|
|
|
625,413
|
|
Total
investments
|
|
|
58,235,446
|
|
|
47,820,456
|
|
Employer
contribution receivable
|
|
|
645,886
|
|
|
597,260
|
|
Net
assets available for plan benefits
|
|
$
|
58,881,332
|
|
|
48,417,716
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
NBT
BANCORP INC.
|
401(k)
AND EMPLOYEE STOCK
|
OWNERSHIP
PLAN
|
Statements
of Changes in Net Assets Available for Plan Benefits
|
Years
ended December 31, 2004 and 2003
|
|
|
2004
|
|
2003
|
|
Additions
to net assets attributed to:
|
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
|
|
|
Participants
|
|
$
|
2,821,146
|
|
|
2,394,526
|
|
Employer
|
|
|
1,601,051
|
|
|
1,440,513
|
|
Total
contributions
|
|
|
4,422,197
|
|
|
3,835,039
|
|
Investment
income:
|
|
|
|
|
|
|
|
Net
realized and unrealized gain on investments (note 3)
|
|
|
7,403,921
|
|
|
8,646,765
|
|
Interest
|
|
|
38,366
|
|
|
43,036
|
|
Dividends
|
|
|
1,341,044
|
|
|
1,086,198
|
|
Net
investment income
|
|
|
8,783,331
|
|
|
9,775,999
|
|
Total
increase
|
|
|
13,205,528
|
|
|
13,611,038
|
|
Deductions
from net assets attributed to:
|
|
|
|
|
|
|
|
Distributions
|
|
|
(2,741,912
|
)
|
|
(3,807,651
|
)
|
Net
increase
|
|
|
10,463,616
|
|
|
9,803,387
|
|
Net
assets available for plan benefits:
|
|
|
|
|
|
|
|
Beginning
of year
|
|
|
48,417,716
|
|
|
38,614,329
|
|
End
of year
|
|
$
|
58,881,332
|
|
|
48,417,716
|
|
See
accompanying notes to financial statements.
|
|
|
|
|
|
|
|
NBT
BANCORP INC.
401
(K) AND EMPLOYEE STOCK
OWNERSHIP
PLAN
Notes
to
Financial Statements
December
31, 2004 and 2003
Description
of Plan
The
following description of the NBT Bancorp Inc. 401(k) and Employee Stock
Ownership Plan (the Plan) is provided for general information purposes
only. Participants should refer to the Plan agreement or summary plan document
for more complete information.
The
Plan
is a defined contribution plan as defined under Section 401(a) of the
Internal Revenue Code (IRC), sponsored by NBT Bancorp Inc. (the Sponsor).
The Sponsor is responsible for administration of the Plan. NBT Bank, N.A.
(the Trustee), a wholly owned subsidiary of NBT Bancorp Inc., is the
trustee of the Plan. The assets of the Plan are held, administered, and managed
in accordance with the terms and conditions of the Trust Agreement, which is
considered to be an integral part of the Plan. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
All
employees over age 21 who are scheduled to complete 1,000 hours of service
or have completed 1,000 hours of service are eligible to participate in the
Plan.
Participants
make pre-tax contributions in whole percentages up to IRS limitations for any
Plan year.
The
Sponsor provides a matching contribution of 100% of each participant’s
contribution up to 3% of their compensation. In addition, a discretionary
amount, determined by the Sponsor’s board of directors, may be contributed to
the Plan each year. All Sponsor contributions to the Plan are invested in the
NBT Bancorp Inc. common stock. Participants must be actively employed on the
last day of the year to share in this discretionary contribution, which is
allocated to participants based on compensation. During 2004 and 2003,
discretionary contributions of $645,886 and $597,260, respectively, were
approved by the Sponsor’s board of directors. These amounts were paid during
2005 and 2004, respectively.
(d) |
Participants’
Accounts
|
Participants
may elect to have their contributions invested among the various funds available
to the Plan, including the NBT Bancorp Inc. common stock fund. Each
participant’s account is credited with the Sponsor’s and participant’s
contributions, plan earnings, and income, expenses, gains, and losses
attributable thereto.
Participants’
contributions and any investment income thereon are 100% vested. Participants
vest in the employer contributions on a graded basis of 20% for each full year
of service (minimum 1,000 hours) up to 100% vesting. Participants are
considered 100% vested upon termination due to death, retirement, or permanent
disability.
(f) |
Participant’s
Claims Upon Plan
Termination
|
Although
it has not expressed any intention to do so, the Sponsor has the right to
discontinue contributions or terminate the Plan at any time subject to Plan
provisions. In the event of termination of the Plan, each participant’s account
would become fully vested.
Forfeitures
are applied to reduce the amount of future employer contributions otherwise
required to be paid. In 2004 and 2003, forfeitures from nonvested accounts
totaled $34,354 and $31,627, respectively. Forfeiture account balances totaled
$98,557 and $64,203 at December 31, 2004 and 2003,
respectively.
Inactive
accounts for participants who have terminated from the Plan, but for which
disbursement has not been made approximated $11,259,638 and $7,955,490 as of
December 31, 2004 and 2003, respectively.
Upon
normal or early retirement, disability, death, or termination of employment,
the
value of a participant’s account is paid in a single lump sum, as specified by
the Plan. Early retirement is allowed upon reaching age 55 and completing
5 years of service.
Participants
may borrow from their account in amounts ranging from $1,000 to the lesser
of
$50,000 or 50% of the vested 401(k) account balance (excludes Company
contributions invested in NBT Bancorp Inc. common stock). Participants
are not allowed to borrow from employer contributions made subsequent to January
1, 1997. Loans, other than loans for the purchase of a primary residence, must
be repaid over a period no longer than five years. Loans for the purchase
of a primary residence must be repaid over a period no longer than
15 years. Interest is charged at the prime rate plus 1% as of the loan
origination date. Participant loans are treated as a transfer from the
participant directed accounts into the loan fund. Principal and interest
payments on the loans are allocated to the loan fund and transferred into the
participant directed accounts based on the participants’ current investment
allocation elections.
(k) |
Administrative
Expenses
|
Expenses
of operating and administering the Plan are generally borne by the Sponsor.
The
payment of these expenses is not mandated by the Plan and is done so at the
discretion of the Sponsor. Loan fees are paid by the borrower.
With
respect to participant account balances that are invested in shares of the
Sponsor’s stock, each participant is entitled to exercise voting rights
attributable to the shares allocated to his or her account and is notified
by
the Trustee prior to the time that such rights are to be exercised.
Summary
of Significant Accounting Policies
(m) |
Basis
of Presentation
|
The
accompanying financial statements have been prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America. Amounts in the prior year’s financial statements are
reclassified when necessary to conform with the current year’s
presentation.
(n) |
Investments
Held in Trust
|
Mutual
funds and the common stock of the Sponsor are stated at fair value, based on
published market quotations. Money market funds are short-term investments
carried at cost, which approximates fair value. Loans to participants are
carried at the unpaid principal balance, which approximates fair
value.
Purchases
and sales of securities are recorded on a trade-date basis. Interest income
is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date.
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets available
for plan benefits, disclosure of contingent assets and liabilities, the reported
amount of increases and decreases in net assets available for plan benefits
and
the fair value of investments. Actual results could differ from those
estimates.
(p) |
Risks
and Uncertainties
|
The
Plan
invests in various types of investment securities. Investment securities are
exposed to various risks, such as interest rate, market, and credit risks.
Due
to the level of risk associated with certain investment securities, it is at
least reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect the
amounts reported in the statement of net assets available for
benefits.
Investments
Investments
that represent 5% or more of the net assets available for plan benefits at
December 31, 2004 or 2003 are as follows:
|
|
2004
|
|
2003
|
|
Money
market funds:
|
|
|
|
|
|
|
|
Federated
Capital Preservation Fund
|
|
$
|
3,220,488
|
|
|
3,303,719
|
|
Domestic
equity mutual funds:
|
|
|
|
|
|
|
|
American
Funds Growth Fund of America
|
|
|
3,572,122
|
|
|
3,063,266
|
|
Federated
Capital Appreciation Fund
|
|
|
2,646,905
|
|
|
2,849,034
|
|
Common
stock:
|
|
|
|
|
|
|
|
NBT
Bancorp Inc.
|
|
|
35,698,331
|
|
|
28,893,427
|
|
During
2004 and 2003, the Plan’s investments appreciated (depreciated) in value
(including realized gains and losses on investments bought, sold, and held
during the year) as follows:
|
|
Year
ended December 31
|
|
|
|
2004
|
|
2003
|
|
Bond
mutual funds
|
|
$
|
(9,302
|
)
|
|
(10,229
|
)
|
Common
stock of NBT Bancorp Inc.
|
|
|
5,826,441
|
|
|
5,939,764
|
|
Equity
mutual funds
|
|
|
1,368,516
|
|
|
2,409,421
|
|
Foreign
equity mutual funds
|
|
|
218,266
|
|
|
307,809
|
|
|
|
$
|
7,403,921
|
|
|
8,646,765
|
|
Nonparticipant
Directed Investments
Information
about the investments relating to accumulated nonparticipant directed
contributions, including the significant components of changes in investments
related to nonparticipant directed contributions, is as follows:
Fair
value of NBT Bancorp Inc. common stock at
|
|
|
|
December
31, 2003
|
|
$
|
26,605,844
|
|
Contributions
|
|
|
1,601,051
|
|
Dividends
|
|
|
991,907
|
|
Net
realized and unrealized appreciation
|
|
|
5,234,067
|
|
Distributions
|
|
|
(1,777,758
|
)
|
Fair
value of NBT Bancorp Inc. common stock at
|
|
|
|
|
December
31, 2004
|
|
$
|
32,655,111
|
|
Income
Tax Status
The
Internal Revenue Service has determined and informed the Sponsor by a letter
dated October 30, 2001, that the Plan and underlying trust, as then
designed, were in compliance with the applicable requirements of the Internal
Revenue Code and therefore the Plan is exempt from income taxes. Management
believes that the Plan is currently being operated in compliance with the
applicable requirements of the Internal Revenue Code.
Party-in-Interest
Transactions
Certain
Plan investments are shares of NBT Bancorp Inc., the Plan’s Sponsor. Therefore,
transactions involving those shares are party-in-interest transactions.
Additionally, the trustee of the Plan is NBT Bank, N.A. which is a subsidiary
of
the Sponsor.
Schedule
1
|
NBT
BANCORP INC.
|
401(k)
AND EMPLOYEE STOCK
|
OWNERSHIP
PLAN
|
Schedule
H, Line 4i – Schedule of Assets Held at End of Year
|
December
31, 2004
|
|
|
|
|
(c)
Description of investment
|
|
|
|
|
|
|
|
(b)
Identity of issuer
|
|
including
maturity date,
|
|
|
|
|
|
|
|
borrower,
lessor,
|
|
rate
of interest, collateral,
|
|
|
|
|
|
(a)
|
|
or
similar party
|
|
par,
or maturity value
|
|
|
(d)
Cost
|
|
|
|
|
Cash
|
|
Cash
|
|
$
|
**
|
$
|
150,769
|
|
|
Federated
Prime Obligation Fund
|
|
Money
market fund
|
|
|
**
|
|
13,141
|
|
|
Federated
Capital Preservation
Fund
|
|
Money
market fund
|
|
|
**
|
|
3,220,488
|
|
|
Dodge
& Cox Income
|
|
Bond
mutual fund, 33,682 shares
|
|
|
**
|
|
432,486
|
|
|
Vanguard
Intermediate US Treasury
|
|
Bond
mutual fund, 98,243 shares
|
|
|
**
|
|
1,106,220
|
|
|
American
Funds Growth Fund of America
|
|
Equity
mutual fund, 131,812 shares
|
|
|
**
|
|
3,572,122
|
|
|
Vanguard
Capital Opportunity
|
|
Equity
mutual fund, 4,596 shares
|
|
|
**
|
|
326,689
|
|
|
Columbia
Acorn
|
|
Equity
mutual fund, 29,497 shares
|
|
|
**
|
|
780,220
|
|
|
Federated
Capital Appreciation
Fund
|
|
Equity
mutual fund, 104,414 shares
|
|
|
**
|
|
2,646,905
|
|
|
FPA
Capital
|
|
Equity
mutual fund, 15,689 shares
|
|
|
**
|
|
627,262
|
|
|
T-Rowe
Price Mid Cap Growth
|
|
Equity
mutual fund, 14,566 shares
|
|
|
**
|
|
726,587
|
|
|
Royce
Low Price Stock
|
|
Equity
mutual fund, 4,345 shares
|
|
|
**
|
|
66,623
|
|
|
Dodge
&
Cox Stock Fund
|
|
Equity
mutual fund, 10,528 shares
|
|
|
**
|
|
1,370,962
|
|
|
Dodge
& Cox Balance Fund
|
|
Equity
mutual fund, 29,841 shares
|
|
|
**
|
|
2,367,921
|
|
|
Janus
Mid Cap Value
Investment
|
|
Equity
mutual fund, 14,447 shares
|
|
|
**
|
|
319,154
|
|
|
Vanguard
500 Index Fund
|
|
Equity
mutual fund, 17,376 shares
|
|
|
**
|
|
1,939,930
|
|
|
Fidelity
Low Price Stock
|
|
Equity
mutual fund, 5,139 shares
|
|
|
**
|
|
206,853
|
|
|
American
Funds New Perspective
Fund
|
|
Foreign
equity mutual fund, 75,540 shares
|
|
|
**
|
|
2,075,847
|
*
|
|
NBT
Bancorp Inc.
|
|
Common
stock, 1,387,960 shares
|
|
|
21,778,155
***
|
|
35,698,331
|
*
|
|
Participant
loans receivable
|
|
Interest
rates – 5.25% – 12.14%
|
|
|
**
|
|
586,936
|
|
|
|
|
|
|
|
|
|
58,235,446
|
*
|
|
Party-in-interest.
|
|
|
|
|
**
|
|
Cost
omitted for these participant directed investments.
|
|
|
|
|
***
|
|
Represents
cost of NBT Bancorp Inc. common stock for which there is no participant
direction as
well as NBT Bancorp Inc. common stock for which participants have
direction.
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying independent registered public
accounting firm report.
|
|
|
|
|
Exhibits:
23 Consent
of Independent Registered Public Accounting Firm dated June 27, 2005.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
Dated:
June 28, 2005
NBT
BANCORP INC. 401 (k) AND EMPLOYEE OWNERSHIP
PLAN
By:
/s/
Thomas
R.
Delduchetto
Thomas
R.
Delduchetto
Executive
Vice President and Director of
Human
Resources and Member of the 401 (k) Plan
Administrative
Committee of the NBT Bancorp Inc.
401
(k)
and Employee Stock Ownership Plan
Exhibit
23
Consent
of Independent Registered Public Accounting Firm
The
Board
of Directors
NBT
Bancorp Inc.:
We
consent to the incorporation by reference in the registration statement (No.
333-97995) on Form S-8 of NBT Bancorp Inc. of our report dated June 17, 2005,
with respect to the statements of net assets available for plan benefits of
the
NBT Bancorp Inc. 401(k) and Employee Stock Ownership Plan as of December 31,
2004 and 2003, the related statements of changes in net assets available for
plan benefits for the years then ended, and the supplemental schedule of assets
held at end of year as of December 31, 2004, which report appears in the
December 31, 2004 annual report on Form 11-K of the NBT Bancorp Inc.
/s/KPMG
Albany,
New York
June
27,
2005