NEWS & EVENTS

NBT Bancorp Inc. Announces Full Year Net Income of $152.0 Million ($3.52 Per Diluted Common Share); Approves Dividend

NORWICH, N.Y., Jan. 23, 2023 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the quarter and year ended December 31, 2022.

Net income for the year ended December 31, 2022 was $152.0 million, or $3.52 per diluted common share, compared to $154.9 million, or $3.54 per diluted share, in the prior year.

  • Generated positive operating leverage of $21.7 million with total revenues increasing 8.1%, or $38.9 million, while operating expenses were higher by 6.0%, or $17.2 million.
  • Net interest income in 2022 improved in comparison to 2021, primarily due to higher yields on earning assets due to increases in the Federal Reserve’s targeted Federal Funds rate combined with growth in earning assets, strongly overcoming a $17.6 million ($0.31 per diluted share) year-over-year decrease in income from the Paycheck Protection Program (“PPP”).
  • The Company recorded a provision for loan losses of $17.1 million ($0.31 per diluted share) in 2022, compared to a net benefit of $8.3 million ($0.15 per diluted share) in 2021.
  • Card services income was lower than 2021 driven by the impact from the Company being subject to the statutory price cap provisions of the Durbin Amendment to the Dodd-Frank Act (“Durbin Amendment”) of approximately $8 million ($0.14 per diluted share).

Net income for the three months ended December 31, 2022 was $36.1 million, or $0.84 per diluted common share, compared to $37.3 million, or $0.86 per diluted share, in the fourth quarter of 2021.

  • Net interest income in the fourth quarter of 2022 improved in comparison to the fourth quarter of 2021 and the linked third quarter of 2022, primarily due to higher yields on earning assets due to increases in the Federal Funds rate, despite a $7.5 million ($0.13 per diluted share) decrease in income from the PPP.
  • The Company recorded a provision for loan losses of $7.7 million ($0.14 per diluted share) in the fourth quarter of 2022, compared to a provision for loan losses of $3.1 million ($0.06 per diluted share) in the fourth quarter of 2021.
  • Card services income was lower than the fourth quarter of 2021 driven by the impact from the Company being subject to the statutory price cap provisions of the Durbin Amendment of approximately $4 million ($0.07 per diluted share).
  • In the fourth quarter of 2022, the Company incurred merger expenses of $1.0 million ($0.02 per diluted share) related to the pending acquisition of Salisbury Bancorp, Inc.

CEO Comments

“Our operating results for the fourth quarter and full year of 2022 reflect strong execution by our team, including organic loan growth of over 10% and disciplined cost of funds management,” said NBT President and CEO John H. Watt, Jr. “We recognized the benefits of an asset-sensitive balance sheet in 2022 with increases in the targeted Fed Funds rate, and our credit quality continues to be excellent with low levels of net charge-offs and nonperforming assets.”

“In December, we entered into a definitive agreement to merge with Salisbury Bancorp, Inc. Aligned cultures and complementary markets support the strategic rationale for our partnership with this premier community bank franchise headquartered in Lakeville, CT. We expect the merger to close in the second quarter of 2023, pending required regulatory and shareholder approvals.”

“We were pleased to reach the milestone of 10 consecutive years of annual dividend increases in 2022,” added Watt. “The payment of a meaningful and growing dividend is an important component of our commitment to consistent and favorable long-term returns for our shareholders.”

Fourth Quarter Financial Highlights

Net Income
  • Net income of $36.1 million
  • Diluted earnings per share of $0.84
  • Excluding merger expenses and securities gains (losses), diluted earnings per share of $0.86
Net Interest Income / NIM
  • Net interest income on a fully taxable equivalent (“FTE”) basis was $100.2 million1
  • Net interest margin (“NIM”) on a FTE basis was 3.68%1, up 17 basis points (“bps”) from the prior quarter, due primarily to a 34 bp increase in the yields on earning assets
  • Total cost of deposits of 0.17%, up 8 bps from the prior quarter
  • Total cost of funds of 0.37%, up 19 bps from the prior quarter
Noninterest Income
  • Noninterest income was $34.3 million, excluding securities gains (losses) and was 25.6% of total revenue
Pre-Provision Net
Revenue (“PPNR”)
  • PPNR1 was $55.8 million, consistent with the third quarter of 2022 and was 8.3% higher than the fourth quarter of 2021
Loans and Credit Quality
  • Period end total loans of $8.15 billion at December 31, 2022, up 10.2% from December 31, 2021, excluding impact of PPP loans
  • Period end loans increased $752.0 million from December 31, 2021, excluding $0.9 million and $101.2 million of PPP loans at December 31, 2022 and December 31, 2021, respectively
  • Net charge-offs to average loans was 0.18%, annualized
  • Nonperforming loans to total loans was 0.26%, down from 0.28% in the prior quarter
  • Allowance for loan losses to total loans of 1.24%
Capital
  • Announced a $0.30 per share dividend for the first quarter of 2023, which was a $0.02 per share, or 7.1%, increase from the first quarter of 2022
  • Stockholders’ equity was $1.17 billion as of December 31, 2022
  • Tangible book value per share2 was $20.65 at December 31, 2022, modestly lower than the fourth quarter of 2021 and higher than the third quarter of 2022, due primarily to the impact of the changes in accumulated other comprehensive income (“AOCI”)
  • Tangible equity to assets of 7.73%1
  • CET1 ratio of 12.12%; Leverage ratio of 10.32%

Loans

  • Period end total loans were $8.15 billion at December 31, 2022 and $7.50 billion at December 31, 2021.
  • Excluding PPP loans, period end loans increased $752.0 million from December 31, 2021. Commercial and industrial loans increased $109.8 million to $1.27 billion; commercial real estate loans increased $152.6 million to $2.81 billion; and total consumer loans increased $489.5 million to $4.08 billion.
  • Total PPP loans as of December 31, 2022 were $0.9 million (net of unamortized fees) with over 99% of the original $836 million forgiven or extinguished through the fourth quarter of 2022. The following PPP loan activity occurred during the fourth quarter of 2022:
    • $2.2 million of loans forgiven.
    • $0.1 million of interest and fees recognized into interest income, compared to $0.3 million for the third quarter of 2022 and $7.5 million for the fourth quarter of 2021.
  • Commercial line of credit utilization rate was 21% at December 31, 2022, compared to 23% at September 30, 2022 and 21% at December 31, 2021.

Deposits

  • Total deposits at December 31, 2022 were $9.50 billion, compared to $10.23 billion at December 31, 2021. The decrease in deposits was primarily concentrated in certain larger more rate-sensitive accounts. The effects of tighter monetary policy, inflation and higher rate alternatives continued to weigh on balances. Even though deposit balances declined from 2021, year-end 2022 deposit balances are still 25.1% higher than the end of 2019.
  • Loan to deposit ratio was 85.8% at December 31, 2022, compared to 73.3% at December 31, 2021.

Net Interest Income and Net Interest Margin

  • Net interest income for the fourth quarter of 2022 was $99.8 million, which was up $5.3 million, or 5.6%, from the third quarter of 2022 and up $14.6 million, or 17.1%, from the fourth quarter of 2021 primarily due to higher yields on earning assets. PPP income for the fourth quarter of 2022 was $0.1 million, which was $0.2 million lower compared to the prior quarter and down $7.5 million compared to the fourth quarter of 2021.
  • The NIM on a FTE basis for the fourth quarter of 2022 was 3.68%, up 17 bps from the third quarter of 2022 and up 60 bps from the fourth quarter of 2021 due to higher earning asset yields partly offset by higher cost of interest-bearing liabilities.
  • Earning asset yields for the three months ended December 31, 2022 were up 34 bps from the prior quarter and up 79 bps from the same quarter in the prior year. Earning assets grew $73.8 million, or 0.7%, from the prior quarter and declined $216.1 million, or 2.0% compared to the same quarter in the prior year. The following are highlights comparing the fourth quarter of 2022 to the prior quarter:
    • Loan yields increased 38 bps to 4.72% for the quarter.
    • During the fourth quarter, the Company shifted from an excess liquidity position to an overnight borrowing position. The Company had net average short-term interest-earning assets of $185.0 million in the third quarter compared to net average short-term borrowings of $138.0 million in the fourth quarter. The impact of the change net liquidity position was approximately a $3.2 million decrease in net interest income.
  • Total cost of deposits was 0.17% for the fourth quarter of 2022, up 8 bps from the prior quarter and up 9 bps from the same period in the prior year.
  • The cost of total interest-bearing liabilities for the three months ended December 31, 2022 was 0.57%, up 28 bps from the prior quarter and up 33 bps from the fourth quarter of 2021.

Credit Quality and Allowance for Credit Losses

  • Net charge-offs to total average loans was 18 bps compared to 7 bps in the prior quarter and 22 bps in the fourth quarter of 2021. Recoveries in the fourth quarter of 2022 were $1.7 million compared to $3.4 million in the prior quarter and $2.5 million in the fourth quarter of 2021. The increase in net charge-offs from the prior quarter was driven by higher charge-offs in the other consumer portfolio and lower recoveries in the commercial and industrial portfolio.
  • Nonperforming assets to total assets was 0.18% at December 31, 2022, compared to 0.19% at September 30, 2022 and 0.27% (0.28% excluding PPP loans) at December 31, 2021.
  • Provision expense for the three months ended December 31, 2022 was $7.7 million with net charge-offs of $3.7 million. Provision expense was $3.2 million higher than the third quarter of 2022 and $4.6 million higher than the fourth quarter of 2021. The increase in provision expense from the fourth quarter of 2021 was driven by loan growth and less favorable economic forecasts in 2022 versus an improving economic forecast in the prior year.
  • The allowance for loan losses was $100.8 million, or 1.24% of total loans, at December 31, 2022, compared to 1.22% (1.23% excluding PPP loans and related allowance) of total loans at September 30, 2022 and 1.23% (1.24% excluding PPP loans and related allowance) of total loans at December 31, 2021. The reserve for unfunded loan commitments decreased to $5.1 million at December 31, 2022 compared to the prior quarter at $5.3 million and compared to the fourth quarter of 2021 at $5.1 million.

Noninterest Income

  • Total noninterest income, excluding securities gains (losses), was $34.3 million for the three months ended December 31, 2022, down $3.0 million from the third quarter and down $6.8 million from the prior year’s fourth quarter.
  • Card services income was lower than the fourth quarter of 2021 driven by the impact from the Company being subject to the statutory price cap provisions of the Durbin Amendment. Card services income was lower than the prior quarter driven primarily by lower levels of card utilization.
  • Retirement plan administration fees were lower than the prior quarter driven by market decline, seasonal revenues recognized in the third quarter and lower activity-based fees. Retirement plan administration fees were lower than the fourth quarter of 2021 driven by lower activity-based fees and market performance. In 2022, the Company recognized approximately $2.5 million of fees related to statutory plan document restatement requirements that generally recur on a six-year cycle.
  • Wealth management fees were lower than the prior quarter due to seasonal tax preparation services in the third quarter and lower than the fourth quarter of 2021 driven primarily by market performance.
  • Other income decreased from the prior quarter and the fourth quarter of 2021 driven by lower commercial loan swap fees.

Noninterest Expense

  • Total noninterest expense, excluding $1.0 million of merger expense in the fourth quarter of 2022 was up 2.4% from the previous quarter and up 4.6% from the fourth quarter of 2021.
  • Salaries and benefits decreased 2.3% from the prior quarter driven by lower benefit plan costs. The increase from the fourth quarter of 2021 was driven by increased salaries and wages, including merit pay increases and higher levels of incentive compensation accruals.
  • Technology and data services expenses were consistent with the prior quarter and increased from the fourth quarter of 2021 due to continued investment in digital platform solutions.
  • Professional fees and outside services expense were higher than the prior quarter due to seasonal expenses and timing of external services for several tactical and strategic initiatives.

Income Taxes

  • The effective tax rate was 22.6% for the fourth quarter of 2022, compared to 22.8% for the third quarter of 2022 and 22.4% for the fourth quarter of 2021.

Capital

  • Capital ratios remain strong with tangible common equity to tangible assets1 at 7.73%. Tangible book value per share2 was $20.65 at December 31, 2022, $20.25 at September 30, 2022 and $22.26 at December 31, 2021.
  • Stockholders’ equity decreased $76.9 million from December 31, 2021 driven by the $166.7 million decrease in AOCI due primarily to the change in the market value of securities available for sale, dividends declared of $49.8 million and the repurchase of common stock of $14.7 million, partly offset by net income generation of $152.0 million.
  • December 31, 2022, CET1 capital ratio of 12.12%, leverage ratio of 10.32 % and total risk-based capital ratio of 15.38%.
  • The Company purchased 400,000 shares of its common stock in the first half of 2022 at an average price of $36.78 per share under its previously announced share repurchase program. There were 1,600,000 shares available for repurchase under this plan which is set to expire on December 31, 2023.

Dividend

  • The Board of Directors approved a first-quarter cash dividend of $0.30 per share at a meeting held today, an increase of $0.02, or 7.1%, from the amount paid in the first quarter of 2022. 2022 was the tenth consecutive year of annual dividend increases by the Company. The dividend will be paid on March 15, 2023 to stockholders of record as of March 1, 2023.

Salisbury Bancorp, Inc. Merger

  • On December 5, 2022, NBT announced that it had entered into an agreement to acquire Salisbury Bancorp, Inc., a 14 branch community bank franchise headquartered in Lakeville, CT, in an all stock transaction. Salisbury Bancorp, Inc. had assets of $1.51 billion, deposits of $1.33 billion, and net loans of $1.18 billion as of September 30, 2022. The merger is expected to close in the second quarter of 2023 subject to customary closing conditions, including approval by the shareholders of Salisbury Bancorp, Inc. and required regulatory approvals.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. (Eastern) Tuesday, January 24, 2023, to review fourth quarter 2022 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $11.74 billion at December 31, 2022. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 140 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a national benefits administration firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtinsurance.com.

Forward-Looking Statements

This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control, that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war, including international military conflicts, or terrorism; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (9) changes in consumer spending, borrowings and savings habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisitions and integration of acquired businesses; (13) the ability to increase market share and control expenses; (14) changes in the competitive environment among financial holding companies; (15) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, Economic Growth, Regulatory Relief, Consumer Protection Act of 2018, Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and other legislative and regulatory responses to the coronavirus (“COVID-19”) pandemic; (16) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; (17) changes in the Company’s organization, compensation and benefit plans; (18) the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; (19) greater than expected costs or difficulties related to the integration of new products and lines of business; (20) the adverse impact on the U.S. economy, including the markets in which we operate, of the COVID-19 global pandemic; and (21) the Company’s success at managing the risks involved in the foregoing items.

The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advises readers that various factors including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected.

Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of the Company’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.

Contact: John H. Watt, Jr., President and CEO
  Scott A. Kingsley, Executive Vice President and CFO
  NBT Bancorp Inc.
  52 South Broad Street
  Norwich, NY 13815
  607-337-6589


NBT Bancorp Inc. and Subsidiaries          
Selected Financial Data          
(unaudited, dollars in thousands except per share data)        
           
  2022
2021
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Profitability:          
Diluted earnings per share $ 0.84   $ 0.90   $ 0.88   $ 0.90   $ 0.86  
Weighted average diluted common shares outstanding   43,144,666     43,110,932     43,092,851     43,385,451     43,574,539  
Return on average assets3   1.23 %   1.33 %   1.28 %   1.32 %   1.23 %
Return on average equity3   12.30 %   12.87 %   12.73 %   12.78 %   11.89 %
Return on average tangible common equity1 3   16.54 %   17.12 %   17.00 %   16.87 %   15.70 %
Net interest margin1 3   3.68 %   3.51 %   3.21 %   2.95 %   3.08 %
           
  12 Months Ended December 31,
         
  2022
2021
     
Profitability:          
Diluted earnings per share $ 3.52   $ 3.54        
Weighted average diluted common shares outstanding   43,181,312     43,718,804        
Return on average assets   1.29 %   1.33 %      
Return on average equity   12.67 %   12.71 %      
Return on average tangible common equity1   16.89 %   16.92 %      
Net interest margin1   3.34 %   3.03 %      
           
  2022
2021
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Balance sheet data:          
Short-term interest-bearing accounts $ 30,862   $ 97,303   $ 328,593   $ 913,315   $ 1,111,296  
Securities available for sale   1,527,225     1,556,501     1,619,356     1,662,697     1,687,361  
Securities held to maturity   919,517     929,541     936,512     895,005     733,210  
Net loans   8,049,347     7,807,984     7,684,081     7,559,826     7,406,459  
Total assets   11,739,296     11,640,742     11,720,459     12,147,833     12,012,111  
Total deposits   9,495,933     9,918,751     10,028,708     10,461,623     10,234,469  
Total borrowings   787,950     277,889     265,796     278,788     311,476  
Total liabilities   10,565,742     10,484,196     10,531,903     10,945,583     10,761,658  
Stockholders' equity   1,173,554     1,156,546     1,188,556     1,202,250     1,250,453  
           
Capital:          
Equity to assets   10.00 %   9.94 %   10.14 %   9.90 %   10.41 %
Tangible equity ratio1   7.73 %   7.64 %   7.87 %   7.70 %   8.20 %
Book value per share $ 27.38   $ 27.00   $ 27.75   $ 27.96   $ 28.97  
Tangible book value per share2 $ 20.65   $ 20.25   $ 20.99   $ 21.25   $ 22.26  
Leverage ratio   10.32 %   10.21 %   9.77 %   9.52 %   9.41 %
Common equity tier 1 capital ratio   12.12 %   12.17 %   12.14 %   12.23 %   12.25 %
Tier 1 capital ratio   13.19 %   13.27 %   13.27 %   13.39 %   13.43 %
Total risk-based capital ratio   15.38 %   15.50 %   15.50 %   15.64 %   15.73 %
Common stock price (end of period) $ 43.42   $ 37.95   $ 37.59   $ 36.13   $ 38.52  
           


NBT Bancorp Inc. and Subsidiaries          
Asset Quality and Consolidated Loan Balances          
(unaudited, dollars in thousands)          
           
  2022
2021
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Asset quality:          
Nonaccrual loans $ 17,233   $ 19,098   $ 23,673   $ 25,812   $ 30,285  
90 days past due and still accruing   3,823     2,732     2,096     1,944     2,458  
Total nonperforming loans   21,056     21,830     25,769     27,756     32,743  
Other real estate owned   105     -     -     -     167  
Total nonperforming assets   21,161     21,830     25,769     27,756     32,910  
Allowance for loan losses   100,800     96,800     93,600     90,000     92,000  
           
Asset quality ratios (total):          
Allowance for loan losses to total loans   1.24 %   1.22 %   1.20 %   1.18 %   1.23 %
Total nonperforming loans to total loans   0.26 %   0.28 %   0.33 %   0.36 %   0.44 %
Total nonperforming assets to total assets   0.18 %   0.19 %   0.22 %   0.23 %   0.27 %
Allowance for loan losses to total nonperforming loans   478.72 %   443.43 %   363.23 %   324.25 %   280.98 %
Past due loans to total loans4   0.33 %   0.30 %   0.40 %   0.24 %   0.29 %
Net charge-offs to average loans3   0.18 %   0.07 %   0.04 %   0.14 %   0.22 %
           
Asset quality ratios (excluding paycheck protection program):        
Allowance for loan losses to total loans   1.24 %   1.23 %   1.21 %   1.18 %   1.24 %
Total nonperforming loans to total loans   0.26 %   0.28 %   0.33 %   0.37 %   0.44 %
Total nonperforming assets to total assets   0.18 %   0.19 %   0.22 %   0.23 %   0.28 %
Allowance for loan losses to total nonperforming loans   478.72 %   443.43 %   363.27 %   324.24 %   280.96 %
Past due loans to total loans4   0.33 %   0.29 %   0.40 %   0.25 %   0.29 %
Net charge-offs to average loans3   0.18 %   0.07 %   0.04 %   0.14 %   0.22 %
           
  2022
2021
Net charge-offs by line of business: 4th Q 3rd Q 2nd Q 1st Q 4th Q
Commercial & industrial $ (45 ) $ (1,045 ) $ (298 ) $ 139   $ 1,929  
Commercial real estate   8     324     (246 )   346     372  
Residential real estate and home equity   (79 )   (56 )   (210 )   163     51  
Indirect auto   445     222     163     135     (58 )
Residential solar   596     43     153     132     170  
Other consumer   2,752     1,796     1,228     1,681     1,633  
Total net charge-offs $ 3,677   $ 1,284   $ 790   $ 2,596   $ 4,097  
           
  2022
2021
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Allowance for loan losses as a percentage of loans by segment:        
Commercial & industrial   0.82 %   0.80 %   0.75 %   0.66 %   0.78 %
Commercial real estate   0.91 %   0.88 %   0.89 %   0.79 %   0.78 %
Paycheck protection program   0.01 %   0.01 %   0.01 %   0.01 %   0.01 %
Residential real estate   0.72 %   0.74 %   0.79 %   0.88 %   0.92 %
Auto   0.81 %   0.78 %   0.79 %   0.76 %   0.79 %
Residential solar   3.21 %   3.08 %   3.00 %   2.97 %   3.04 %
Other consumer   6.27 %   6.67 %   6.19 %   6.24 %   6.66 %
Total   1.24 %   1.22 %   1.20 %   1.18 %   1.23 %
Total excluding PPP loans   1.24 %   1.23 %   1.21 %   1.18 %   1.24 %
           
  2022
2021
Loans by line of business: 4th Q 3rd Q 2nd Q 1st Q 4th Q
Commercial & industrial $ 1,265,082   $ 1,258,871   $ 1,298,072   $ 1,214,834   $ 1,155,240  
Commercial real estate   2,807,941     2,724,728     2,670,633     2,709,611     2,655,367  
Paycheck protection program   949     3,328     17,286     50,977     101,222  
Residential real estate   1,649,870     1,626,528     1,606,188     1,584,551     1,571,232  
Indirect auto   989,587     952,757     936,516     890,643     859,454  
Residential solar   856,798     728,898     599,565     514,526     440,016  
Home equity   314,124     313,557     313,395     319,180     330,357  
Other consumer   265,796     296,117     336,026     365,504     385,571  
Total loans $ 8,150,147   $ 7,904,784   $ 7,777,681   $ 7,649,826   $ 7,498,459  
           
PPP income recognized $ 71   $ 320   $ 1,301   $ 1,976   $ 7,545  
PPP unamortized fees $ 45   $ 108   $ 414   $ 1,629   $ 3,420  
           


NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)
     
  December 31, December 31,
Assets 2022
2021
Cash and due from banks $ 166,488   $ 157,775  
Short-term interest-bearing accounts   30,862     1,111,296  
Equity securities, at fair value   30,784     33,550  
Securities available for sale, at fair value   1,527,225     1,687,361  
Securities held to maturity (fair value $812,647 and $735,260, respectively)   919,517     733,210  
Federal Reserve and Federal Home Loan Bank stock   44,713     25,098  
Loans held for sale   562     830  
Loans   8,150,147     7,498,459  
Less allowance for loan losses   100,800     92,000  
Net loans $ 8,049,347   $ 7,406,459  
Premises and equipment, net   69,047     72,093  
Goodwill   281,204     280,541  
Intangible assets, net   7,341     8,927  
Bank owned life insurance   232,409     228,238  
Other assets   379,797     266,733  
Total assets $ 11,739,296   $ 12,012,111  
     
Liabilities and stockholders' equity    
Demand (noninterest bearing) $ 3,617,324   $ 3,689,556  
Savings, NOW and money market   5,444,837     6,043,441  
Time   433,772     501,472  
Total deposits $ 9,495,933   $ 10,234,469  
Short-term borrowings   585,012     97,795  
Long-term debt   4,815     13,995  
Subordinated debt, net   96,927     98,490  
Junior subordinated debt   101,196     101,196  
Other liabilities   281,859     215,713  
Total liabilities $ 10,565,742   $ 10,761,658  
     
Total stockholders' equity $ 1,173,554   $ 1,250,453  
     
Total liabilities and stockholders' equity $ 11,739,296   $ 12,012,111  
     


NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2022 2021 2022 2021
Interest, fee and dividend income        
Interest and fees on loans $ 95,620   $ 79,470   $ 332,768   $ 302,175  
Securities available for sale   7,831     6,101     29,653     23,305  
Securities held to maturity   5,050     3,097     17,582     12,551  
Other   671     639     4,067     1,845  
Total interest, fee and dividend income $ 109,172   $ 89,307   $ 384,070   $ 339,876  
Interest expense        
Deposits $ 4,092   $ 2,132   $ 9,923   $ 10,714  
Short-term borrowings   2,510     28     2,623     158  
Long-term debt   21     88     161     389  
Subordinated debt   1,346     1,360     5,424     5,437  
Junior subordinated debt   1,424     518     3,749     2,090  
Total interest expense $ 9,393   $ 4,126   $ 21,880   $ 18,788  
Net interest income $ 99,779   $ 85,181   $ 362,190   $ 321,088  
Provision for loan losses   7,677     3,097     17,147     (8,257 )
Net interest income after provision for loan losses $ 92,102   $ 82,084   $ 345,043   $ 329,345  
Noninterest income        
Service charges on deposit accounts $ 3,598   $ 3,804   $ 14,630   $ 13,348  
Card services income   4,958     8,847     29,058     34,682  
Retirement plan administration fees   10,661     11,816     48,112     42,188  
Wealth management   8,017     8,619     33,311     33,718  
Insurance services   3,438     3,394     14,696     14,083  
Bank owned life insurance income   1,419     1,629     6,044     6,217  
Net securities (losses) gains   (217 )   (2 )   (1,131 )   566  
Other   2,217     3,004     10,858     12,992  
Total noninterest income $ 34,091   $ 41,111   $ 155,578   $ 157,794  
Noninterest expense        
Salaries and employee benefits $ 47,235   $ 44,118   $ 187,830   $ 172,580  
Technology and data services   9,124     8,563     35,712     34,717  
Occupancy   6,521     6,635     26,282     26,048  
Professional fees and outside services   4,811     4,903     16,810     16,306  
Office supplies and postage   1,699     1,528     6,140     6,006  
FDIC expense   798     798     3,197     3,041  
Advertising   879     1,019     2,822     2,521  
Amortization of intangible assets   539     651     2,264     2,808  
Loan collection and other real estate owned, net   957     956     2,647     2,915  
Merger expenses   967     -     967     -  
Other   5,979     5,934     19,794     20,339  
Total noninterest expense $ 79,509   $ 75,105   $ 304,465   $ 287,281  
Income before income tax expense $ 46,684   $ 48,090   $ 196,156   $ 199,858  
Income tax expense   10,563     10,780     44,161     44,973  
Net income $ 36,121   $ 37,310   $ 151,995   $ 154,885  
Earnings Per Share        
Basic $ 0.84   $ 0.86   $ 3.54   $ 3.57  
Diluted $ 0.84   $ 0.86   $ 3.52   $ 3.54  
         


NBT Bancorp Inc. and Subsidiaries          
Quarterly Consolidated Statements of Income        
(unaudited, dollars in thousands except per share data)        
           
  2022
2021
  4th Q 3rd Q 2nd Q 1st Q 4th Q
Interest, fee and dividend income          
Interest and fees on loans $ 95,620   $ 85,266   $ 78,539   $ 73,343   $ 79,470  
Securities available for sale   7,831     7,665     7,317     6,840     6,101  
Securities held to maturity   5,050     4,854     4,185     3,493     3,097  
Other   671     1,429     1,442     525     639  
Total interest, fee and dividend income $ 109,172   $ 99,214   $ 91,483   $ 84,201   $ 89,307  
Interest expense          
Deposits $ 4,092   $ 2,233   $ 1,756   $ 1,842   $ 2,132  
Short-term borrowings   2,510     84     13     16     28  
Long-term debt   21     20     33     87     88  
Subordinated debt   1,346     1,360     1,359     1,359     1,360  
Junior subordinated debt   1,424     1,039     737     549     518  
Total interest expense $ 9,393   $ 4,736   $ 3,898   $ 3,853   $ 4,126  
Net interest income $ 99,779   $ 94,478   $ 87,585   $ 80,348   $ 85,181  
Provision for loan losses   7,677     4,484     4,390     596     3,097  
Net interest income after provision for loan losses $ 92,102   $ 89,994   $ 83,195   $ 79,752   $ 82,084  
Noninterest income          
Service charges on deposit accounts $ 3,598   $ 3,581   $ 3,763   $ 3,688   $ 3,804  
Card services income   4,958     5,654     9,751     8,695     8,847  
Retirement plan administration fees   10,661     11,496     12,676     13,279     11,816  
Wealth management   8,017     8,402     8,252     8,640     8,619  
Insurance services   3,438     3,892     3,578     3,788     3,394  
Bank owned life insurance income   1,419     1,560     1,411     1,654     1,629  
Net securities (losses)   (217 )   (148 )   (587 )   (179 )   (2 )
Other   2,217     2,735     2,812     3,094     3,004  
Total noninterest income $ 34,091   $ 37,172   $ 41,656   $ 42,659   $ 41,111  
Noninterest expense          
Salaries and employee benefits $ 47,235   $ 48,371   $ 46,716   $ 45,508   $ 44,118  
Technology and data services   9,124     9,096     8,945     8,547     8,563  
Occupancy   6,521     6,481     6,487     6,793     6,635  
Professional fees and outside services   4,811     3,817     3,906     4,276     4,903  
Office supplies and postage   1,699     1,469     1,548     1,424     1,528  
FDIC expense   798     787     810     802     798  
Advertising   879     559     730     654     1,019  
Amortization of intangible assets   539     544     545     636     651  
Loan collection and other real estate owned, net   957     549     757     384     956  
Merger expenses   967     -     -     -     -  
Other   5,979     5,021     5,675     3,119     5,934  
Total noninterest expense $ 79,509   $ 76,694   $ 76,119   $ 72,143   $ 75,105  
Income before income tax expense $ 46,684   $ 50,472   $ 48,732   $ 50,268   $ 48,090  
Income tax expense   10,563     11,499     10,957     11,142     10,780  
Net income $ 36,121   $ 38,973   $ 37,775   $ 39,126   $ 37,310  
Earnings Per Share          
Basic $ 0.84   $ 0.91   $ 0.88   $ 0.91   $ 0.86  
Diluted $ 0.84   $ 0.90   $ 0.88   $ 0.90   $ 0.86  
           


NBT Bancorp Inc. and Subsidiaries                      
Average Quarterly Balance Sheets                      
(unaudited, dollars in thousands)                      
                       
    Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
Average
Balance
Yield /
Rates
    Q4 - 2022 Q3 - 2022 Q2 - 2022 Q1 - 2022 Q4 - 2021
Assets                      
Short-term interest-bearing accounts   $ 39,573 3.31 % $ 191,463 2.51 % $ 553,548 0.82 % $ 990,319 0.17 % $ 1,145,794 0.16 %
Securities taxable1     2,480,959 1.88 %   2,491,315 1.83 %   2,439,960 1.74 %   2,284,578 1.67 %   2,081,796 1.57 %
Securities tax-exempt1 5     208,238 2.68 %   211,306 2.47 %   256,799 1.83 %   258,513 1.84 %   257,320 1.85 %
FRB and FHLB stock     32,903 4.11 %   25,182 3.47 %   24,983 5.03 %   25,026 1.98 %   25,149 2.74 %
Loans1 6     8,039,442 4.72 %   7,808,025 4.34 %   7,707,730 4.09 %   7,530,674 3.95 %   7,507,165 4.20 %
Total interest-earning assets   $ 10,801,115 4.02 % $ 10,727,291 3.68 % $ 10,983,020 3.35 % $ 11,089,110 3.09 % $ 11,017,224 3.23 %
Other assets     855,410     887,378     883,498     947,578     982,136  
Total assets   $ 11,656,525     $ 11,614,669   $ 11,866,518     $ 12,036,688     $ 11,999,360    
Liabilities and stockholders' equity                      
Money market deposit accounts   $ 2,169,192 0.39 % $ 2,332,341 0.15 % $ 2,577,367 0.14 % $ 2,720,338 0.15 % $ 2,678,477 0.16 %
NOW deposit accounts     1,604,096 0.33 %   1,548,115 0.21 %   1,580,132 0.07 %   1,583,091 0.05 %   1,551,846 0.05 %
Savings deposits     1,823,056 0.03 %   1,854,122 0.03 %   1,845,128 0.03 %   1,794,549 0.03 %   1,725,004 0.05 %
Time deposits     432,110 0.41 %   455,168 0.35 %   478,531 0.37 %   494,632 0.40 %   537,875 0.46 %
Total interest-bearing deposits   $ 6,028,454 0.27 % $ 6,189,746 0.14 % $ 6,481,158 0.11 % $ 6,592,610 0.11 % $ 6,493,202 0.13 %
Federal funds purchased     56,576 4.03 %   1,522 3.39 %   - -     - -     65 -  
Repurchase agreements     76,334 0.11 %   69,048 0.10 %   60,061 0.09 %   72,768 0.09 %   97,389 0.11 %
Short-term borrowings     177,533 4.28 %   6,440 3.33 %   - -     - -     1 -  
Long-term debt     3,817 2.18 %   3,331 2.38 %   5,336 2.48 %   13,979 2.52 %   14,004 2.49 %
Subordinated debt, net     97,839 5.46 %   98,748 5.46 %   98,642 5.53 %   98,531 5.59 %   98,422 5.48 %
Junior subordinated debt     101,196 5.58 %   101,196 4.07 %   101,196 2.92 %   101,196 2.20 %   101,196 2.03 %
Total interest-bearing liabilities   $ 6,541,749 0.57 % $ 6,470,031 0.29 % $ 6,746,393 0.23 % $ 6,879,084 0.23 % $ 6,804,279 0.24 %
Demand deposits     3,658,965     3,708,131     3,711,049     3,710,124     3,719,070  
Other liabilities     290,895     234,851     218,491     206,292     231,260  
Stockholders' equity     1,164,916     1,201,656     1,190,585     1,241,188     1,244,751  
Total liabilities and stockholders' equity   $ 11,656,525   $ 11,614,669   $ 11,866,518     $ 12,036,688     $ 11,999,360    
Interest rate spread     3.45 %   3.39 %   3.12 %   2.86 %   2.99 %
Net interest margin (FTE)1     3.68 %   3.51 %   3.21 %   2.95 %   3.08 %
                       


NBT Bancorp Inc. and Subsidiaries
Average Year-to-Date Balance Sheets
(unaudited, dollars in thousands)
               
    Average   Yield/ Average   Yield/
    Balance Interest Rates Balance Interest Rates
Twelve Months Ended December 31,   2022
2021
Assets              
Short-term interest-bearing accounts   $ 440,429   $ 3,072   0.70 % $ 932,086   $ 1,229   0.13 %
Securities taxable1     2,424,925     43,229   1.78 %   1,910,641     31,962   1.67 %
Securities tax-exempt1 5     233,515     5,070   2.17 %   220,759     4,929   2.23 %
FRB and FHLB stock     27,040     995   3.68 %   25,255     616   2.44 %
Loans1 6     7,772,962     333,008   4.28 %   7,543,149     302,331   4.01 %
Total interest-earning assets   $ 10,898,871   $ 385,374   3.54 % $ 10,631,890   $ 341,067   3.21 %
Other assets     893,197         983,809      
Total assets   $ 11,792,068       $ 11,615,699      
Liabilities and stockholders' equity              
Money market deposit accounts   $ 2,447,978   $ 4,955   0.20 % $ 2,587,748   $ 5,117   0.20 %
NOW deposit accounts     1,578,831     2,600   0.16 %   1,452,560     738   0.05 %
Savings deposits     1,829,360     592   0.03 %   1,656,893     829   0.05 %
Time deposits     464,912     1,776   0.38 %   577,150     4,030   0.70 %
Total interest-bearing deposits   $ 6,321,081   $ 9,923   0.16 % $ 6,274,351   $ 10,714   0.17 %
Federal funds purchased     14,644     588   4.02 %   17     -   -  
Repurchase agreements     69,561     67   0.10 %   100,519     132   0.13 %
Short-term borrowings     46,371     1,968   4.24 %   1,302     26   2.00 %
Long-term debt     6,579     161   2.45 %   15,479     389   2.51 %
Subordinated debt, net     98,439     5,424   5.51 %   98,259     5,437   5.53 %
Junior subordinated debt     101,196     3,749   3.70 %   101,196     2,090   2.07 %
Total interest-bearing liabilities   $ 6,657,871   $ 21,880   0.33 % $ 6,591,123   $ 18,788   0.29 %
Demand deposits     3,696,957         3,565,693      
Other liabilities     237,857         240,434      
Stockholders' equity     1,199,383         1,218,449      
Total liabilities and stockholders' equity   $ 11,792,068       $ 11,615,699      
Net interest income (FTE)1     $ 363,494       $ 322,279    
Interest rate spread       3.21 %     2.92 %
Net interest margin (FTE)1       3.34 %     3.03 %
Taxable equivalent adjustment     $ 1,304       $ 1,191    
Net interest income     $ 362,190       $ 321,088    
               


1 The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:
             
  Non-GAAP measures          
  (unaudited, dollars in thousands)          
             
  Pre-provision net revenue ("PPNR") 2022
2021
    4th Q 3rd Q 2nd Q 1st Q 4th Q
  Net income $ 36,121   $ 38,973   $ 37,775   $ 39,126   $ 37,310  
  Income tax expense   10,563     11,499     10,957     11,142     10,780  
  Provision for loan losses   7,677     4,484     4,390     596     3,097  
  FTE adjustment   392     337     290     285     292  
  Net securities losses   217     148     587     179     2  
  Provision for unfunded loan commitments reserve   (185 )   225     240     (260 )   (250 )
  Merger expense   967     -     -     -     -  
  Nonrecurring expense   -     -     -     (172 )   250  
  PPNR $ 55,752   $ 55,666   $ 54,239   $ 50,896   $ 51,481  
             
  Average assets $ 11,656,525   $ 11,614,669   $ 11,866,518   $ 12,036,688   $ 11,999,360  
             
  Return on average assets3   1.23 %   1.33 %   1.28 %   1.32 %   1.23 %
  PPNR return on average assets3   1.90 %   1.90 %   1.83 %   1.71 %   1.70 %
             
    12 Months Ended December 31,      
    2022
2021
     
  Net income $ 151,995   $ 154,885        
  Income tax expense   44,161     44,973        
  Provision for loan losses   17,147     (8,257 )      
  FTE adjustment   1,304     1,191        
  Net securities losses (gains)   1,131     (566 )      
  Provision for unfunded loan commitments reserve   20     (1,300 )      
  Merger expense   967     -        
  Nonrecurring expense   (172 )   4,418        
  PPNR $ 216,553   $ 195,344        
             
  Average Assets $ 11,792,068   $ 11,615,699        
             
  Return on average assets   1.29 %   1.33 %      
  PPNR return on average assets   1.84 %   1.68 %      
             
  PPNR is a Non-GAAP financial measure that management believes is useful in evaluating the underlying operating results of the Company excluding the volatility in the provision for loan losses, net securities gains (losses) and non-recurring income and/or expense.
 
             
  FTE adjustment 2022
2021
    4th Q 3rd Q 2nd Q 1st Q 4th Q
  Net interest income $ 99,779   $ 94,478   $ 87,585   $ 80,348   $ 85,181  
  Add: FTE adjustment   392     337     290     285     292  
  Net interest income (FTE) $ 100,171   $ 94,815   $ 87,875   $ 80,633   $ 85,473  
  Average earning assets $ 10,801,115   $ 10,727,291   $ 10,983,020   $ 11,089,110   $ 11,017,224  
  Net interest margin (FTE)3   3.68 %   3.51 %   3.21 %   2.95 %   3.08 %
             
    12 Months Ended December 31,      
    2022
2021
     
  Net interest income $ 362,190   $ 321,088        
  Add: FTE adjustment   1,304     1,191        
  Net interest income (FTE) $ 363,494   $ 322,279        
  Average earning assets $ 10,898,871   $ 10,631,890        
  Net interest margin (FTE)   3.34 %   3.03 %      
             
  Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.
             


1 The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:
             
  Non-GAAP measures          
  (unaudited, dollars in thousands)          
             
  Tangible equity to tangible assets 2022
2021
    4th Q 3rd Q 2nd Q 1st Q 4th Q
  Total equity $ 1,173,554   $ 1,156,546   $ 1,188,556   $ 1,202,250   $ 1,250,453  
  Intangible assets   288,545     289,083     289,259     288,832     289,468  
  Total assets $ 11,739,296   $ 11,640,742   $ 11,720,459   $ 12,147,833   $ 12,012,111  
  Tangible equity to tangible assets   7.73 %   7.64 %   7.87 %   7.70 %   8.20 %
             
  Return on average tangible common equity 2022
2021
    4th Q 3rd Q 2nd Q 1st Q 4th Q
  Net income $ 36,121   $ 38,973   $ 37,775   $ 39,126   $ 37,310  
  Amortization of intangible assets (net of tax)   404     408     409     477     488  
  Net income, excluding intangibles amortization $ 36,525   $ 39,381   $ 38,184   $ 39,603   $ 37,798  
             
  Average stockholders' equity $ 1,164,916   $ 1,201,656   $ 1,190,585   $ 1,241,188   $ 1,244,751  
  Less: average goodwill and other intangibles   288,856     289,296     289,584     289,218     289,834  
  Average tangible common equity $ 876,060   $ 912,360   $ 901,001   $ 951,970   $ 954,917  
  Return on average tangible common equity3   16.54 %   17.12 %   17.00 %   16.87 %   15.70 %
             
    12 Months Ended December 31,      
    2022
2021
     
  Net income $ 151,995   $ 154,885        
  Amortization of intangible assets (net of tax)   1,698     2,106        
  Net income, excluding intangibles amortization $ 153,693   $ 156,991        
             
  Average stockholders' equity $ 1,199,383   $ 1,218,449        
  Less: average goodwill and other intangibles   289,238     290,838        
  Average tangible common equity $ 910,145   $ 927,611        
  Return on average tangible common equity   16.89 %   16.92 %      
             
2 Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.  
3 Annualized.
4 Total past due loans, defined as loans 30 days or more past due and in an accrual status.    
5 Securities are shown at average amortized cost.
6 For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.

NBT Bancorp Inc.

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