SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. X
-
For the fiscal year ended December 31, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. ____
For the transition period from _____________to _______________
Commission File No. 0-14703
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
NBT Bancorp Inc. 401(k) and Employee Stock Ownership Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive
office:
NBT Bancorp Inc., 52 South Broad Street, Norwich, New York 13815.
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
Financial Statements and Schedules
December 31, 2003 and 2002
(With Report of Independent Registered Public Accounting Firm)
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
INDEX
PAGE
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Plan Benefits at
December 31, 2003 and2002 2
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 2003 and 2002 3
Notes to Financial Statements 4
SCHEDULES
1 Schedule H, Line 4i - Schedule of Assets Held at End of Year 9
2 Schedule H, Line 4j - Schedule of Reportable Transactions 10
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 NBT Bancorp Inc. 401(k) and Employee Stock Ownership Plan as of
December 31, 2003 and 2002 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, 2003 and 2002 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 schedules of assets held
at end of year and reportable transactions are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements, but are 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. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/S/ KPMG LLP
June 10, 2004
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2003 and 2002
ASSETS 2003 2002
----------- ----------
Investments, at fair value:
Money market funds $ 3,303,719 3,184,961
Bond mutual funds 1,256,397 1,108,318
Common stock of NBT Bancorp Inc. 28,893,427 22,405,048
Equity mutual funds 12,130,459 9,254,168
Foreign equity mutual funds 1,611,041 1,379,875
Participant loans receivable 625,413 646,333
----------- ----------
Total investments 47,820,456 37,978,703
----------- ----------
Employer contribution receivable 597,260 573,708
Participant contribution receivable - 61,918
----------- ----------
Net assets available for plan benefits $48,417,716 38,614,329
=========== ==========
See accompanying notes to financial statements.
2
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2003 and 2002
2003 2002
------------ -----------
Additions to net assets attributed to:
Contributions:
Participants $ 2,394,526 2,399,111
Employer 1,440,513 1,340,724
------------ -----------
Total contributions 3,835,039 3,739,835
------------ -----------
Transfer from merged FNB Plans (note 1b) - 1,752,242
Investment income:
Net realized and unrealized gain on investments (note 3) 8,646,765 181,634
Interest 43,036 225,829
Dividends 1,086,198 1,035,694
------------ -----------
Net investment income 9,775,999 1,443,157
------------ -----------
Total increase 13,611,038 6,935,234
------------ -----------
Deductions from net assets attributed to:
Distributions (3,807,651) (4,048,690)
------------ -----------
Net increase 9,803,387 2,886,544
Net assets available for plan benefits:
Beginning of year 38,614,329 35,727,785
------------ -----------
End of year $48,417,716 38,614,329
============ ===========
See accompanying notes to financial statements.
3
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(1) 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.
(a) GENERAL
The Plan is a defined contribution plan as defined under Section 401
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).
(b) MERGER
On June 1, 2001, the Sponsor completed the acquisition of First
National Bancorp, Inc. (FNB). Effective January 1, 2002, FNB's two
defined contribution plans, First National Bank of Northern New York
Employee Profit Sharing Plan and First National Bank of Northern New
York ESOP (collectively referred to herein as the "FNB Plans"), were
merged with and into the Plan. All participants in the FNB Plans
became participants in the Plan. The net assets of FNB Plans,
consisting primarily of cash and NBT Bancorp Inc. common stock, were
transferred to the Plan's trust on January 2, 2002 and January 3,
2002. Net assets merged into the Plan from the FNB Plans totaled
$1,752,242.
(c) ELIGIBILITY
All employees over age 21 with at least one year of service and who
worked at least 1,000 hours in the first 12 months of employment are
eligible to participate in the Plan.
(d) CONTRIBUTIONS
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. Participants must
be actively employed on the last day of the year to share in this
contribution, which is allocated to participants based on
compensation. During 2003 and 2002, discretionary contributions of
$597,260 and $545,213, respectively, were approved by the Sponsor's
board of directors. These amounts were paid during 2004 and 2003,
respectively.
4 (Continued)
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(e) PARTICIPANTS' ACCOUNTS
Participants may elect to have their contributions invested among the
various funds available to the Plan. All Sponsor contributions to the
Plan are invested in the NBT Bancorp Inc. common stock. Each
participant's account is credited with the Sponsor's and participant's
contributions, plan earnings, and income, expenses, gains, and losses
attributable thereto.
(f) VESTING
Participants' contributions and any investment income thereon are
always 100% vested. Participants vest in the employer contributions on
a straight line 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.
(g) 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.
(h) FORFEITURES
Forfeitures are applied to reduce the amount of subsequent employer
contributions otherwise required to be paid. In 2003 and 2002,
forfeitures from nonvested accounts totaled $31,627 and $45,431,
respectively. Forfeiture account balances totaled $64,203 and $32,576
at December 31, 2003 and 2002, respectively.
(i) PAYMENT OF BENEFITS
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.
(j) PARTICIPANT LOANS
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). Beginning January 1, 1997, participants are not allowed
to borrow from employer contributions made subsequent to that date.
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.
5 (Continued)
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(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.
(l) VOTING RIGHTS
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.
(m) 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.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of
America on the accrual basis of accounting. Amounts in the prior
year's financial statements are reclassified when necessary to conform
with the current year's presentation.
(b) 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.
(c) USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
the use of estimates and assumptions that affect the reported amounts
of net assets and changes therein. Actual results could differ from
those estimates.
6 (Continued)
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(3) INVESTMENTS
Investments that represent 5% or more of the net assets available for plan
benefits at December 31, 2003 or 2002 are as follows:
2003 2002
----------- ----------
Money market funds:
Federated Capital Preservation Fund $ 3,303,719 -
Strong Money Market Fund - 3,184,973
Mutual funds:
American Funds Growth Fund of America 3,063,266 -
Strong Growth and Income Fund - 2,697,056
Federated Capital Appreciation Fund 2,849,034 -
Strong Large Cap Growth fund - 2,540,705
Common stock:
NBT Bancorp Inc. 28,893,427 22,405,306
During 2003 and 2002, 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
------------------------
2003 2002
----------- -----------
Bond mutual funds $ (10,229) 25,149
Common stock of NBT Bancorp Inc. 5,939,764 3,318,952
Equity mutual funds 2,409,421 (2,673,226)
Foreign equity mutual funds 307,809 (489,241)
----------- -----------
$8,646,765 181,634
=========== ===========
7 (Continued)
(4) 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
for the years ended December 31:
2003 2002
------------ -----------
Fair value of NBT Bancorp Inc. common stock at
beginning of year $22,405,048 17,380,335
Transfers from other plans - 1,390,463
Contributions and loan repayments 1,632,544 1,289,274
Dividends 923,985 883,996
Net realized and unrealized appreciation 5,939,764 3,318,952
Distributions and new loans issued (2,007,914) (1,857,972)
------------ -----------
Fair value of NBT Bancorp Inc. common stock at
end of year $28,893,427 22,405,048
============ ===========
(5) 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.
(6) 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.
8
----------------------------------------------------------------------------------------------------------
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, 2003
----------------------------------------------------------------------------------------------------------
(c) DESCRIPTION OF INVESTMENT
(b) IDENTITY OF ISSUER INCLUDING MATURITY DATE,
BORROWER, LESSOR, RATE OF INTEREST, COLLATERAL, (e) CURRENT
(a) OR SIMILAR PARTY PAR, OR MATURITY VALUE (d) COST VALUE
--- ----------------------------------- --------------------------------------- --------- ------------
Federated Capital Preservation Fund Money market fund $ ** $ 3,303,719
Dodge & Cox Income Bond mutual fund, 16,928.137 shares ** 218,711
Vanguard Intermediate US Treasury Bond mutual fund, 91,025.058 shares ** 1,037,686
American Funds Growth Fund of
America Equity mutual fund, 125,853.14 shares ** 3,063,266
Vanguard Capital Opportunity Equity mutual fund, 5,184.320 shares ** 131,734
Federated Capital Appreciation Fund Equity mutual fund, 119,356.252 shares ** 2,849,034
FPA Capital Equity mutual fund, 10,450.984 shares ** 385,120
T-Rowe Price Mid Cap Growth Equity mutual fund, 12,977.462 shares ** 556,733
Dodge & Cox Stock Fund Equity mutual fund, 7,567.282 shares ** 861,005
Dodge & Cox Balance Fund Equity mutual fund, 29,652.719 shares ** 2,165,836
Vanguard 500 Index Fund Equity mutual fund, 16,001.249 shares ** 1,642,845
Liberty Acorn Equity mutual fund, 22,410.856 shares ** 474,886
American Funds New Perspective Foreign equity mutual fund, 66,216.201
Fund shares ** 1,611,041
NBT Bancorp Inc. Common stock, 1,347,641.198 shares *** 28,893,427
Participant loans receivable Interest rates - 5.25% - 12.14% ** 625,413
------------
$ 47,820,456
============
* 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 report of independent registered public accounting firm.
9
SCHEDULE 2
NBT BANCORP INC.
401(K) AND EMPLOYEE STOCK
OWNERSHIP PLAN
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 2003
(b) DESCRIPTION OF (h) CURRENT
ASSET (INCLUDING (f) EXPENSE VALUE OF
INTEREST RATE (c) (d) (e) INCURRED ASSET ON (i) NET
(a) IDENTITY OF PARTY AND MATURITY PURCHASE SELLING LEASE WITH (g) COST OF TRANSACTION GAIN
INVOLVED IN CASE OF A LOAN) PRICE PRICE RENTAL TRANSACTION ASSET DATE (LOSS)
------------------------ ------------------- ----------- ---------- ------- ----------- ----------- ----------- ----------
Series of transactions:
-----------------------
NBT Bancorp Inc.
(series of 105
transactions) Common stock $ 4,785,584 - - - 4,785,584 4,785,584 -
NBT Bancorp Inc.
(series of 281
transactions) Common stock - 4,236,969 - - 3,135,519 4,236,969 1,101,450
Reportable transactions, for purposes of this schedule are:
(1) A single transaction within the plan year in excess of 5% of the current
value of the plan assets at the beginning of the plan year;
(2) Any series of transactions with, or in conjunction with, the same person,
involving property other than securities, which amount in the aggregate
within the plan year (regardless of the category of asset and the gain or
loss on any transaction) to more than 5% of the current value of plan
assets at the beginning of the Plan year;
(3) Any transaction within the plan year involving securities of the same issue
if within the plan year any series of transactions with respect to such
securities amount in the aggregate to more than 5% of the current value of
the plan assets at the beginning of the Plan year; and
(4) Any transaction within the plan year with respect to securities with, or in
conjunction with, a person if any prior or subsequent single transaction
within the plan year with such person, with respect to securities, exceeds
5% of the current value of plan assets at the beginning of the Plan year.
See accompanying report of independent registered public accounting firm.
10
Exhibits:
23 Consent of Independent Registered Public Accounting Firm dated June 25,
2004.
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 25, 2004 NBT BANCORP INC. 401 (k) AND EMPLOYEE STOCK
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
11
EXHIBIT INDEX
Exhibit Document
------- -----------------------------------------------------------------------------
23 Consent of Independent Registered Public Accounting Firm dated June 25, 2004.
12