NEWS & EVENTS

NBT Bancorp Inc. Announces Third Quarter Results and Declares Dividend

NORWICH, N.Y., Oct. 24, 2023 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and nine months ended September 30, 2023.

Net income for the three months ended September 30, 2023 was $24.6 million, or $0.54 per diluted common share, compared to $39.0 million, or $0.90 per diluted share, for the three months ended September 30, 2022, and $30.1 million, or $0.70 per diluted share, in the second quarter of 2023. Operating diluted earnings per share1, a non-GAAP measure, which excludes acquisition expense, acquisition-related provision for credit losses and securities gains (losses), net of tax, was $0.84 for the third quarter of 2023, compared to $0.91 in the third quarter of 2022 and $0.80 in the second quarter of 2023.

  • The acquisition of Salisbury Bancorp, Inc. (“Salisbury”) by the merger of Salisbury with and into NBT (“Merger”) was completed on August 11, 2023. The Merger added 13 banking offices, $1.18 billion in loans and $1.31 billion in deposits.
  • Period end total loans increased $1.52 billion from December 31, 2022. Excluding loans acquired from Salisbury, loans grew $337.2 million, or 5.5% annualized, since December 31, 2022.
  • Period end total deposits increased $1.91 billion from December 31, 2022. Excluding deposits acquired from Salisbury, deposits increased $596.5 million since December 31, 2022.
  • Noninterest income, excluding net securities gains (losses), increased 10.2% from the prior quarter and was approximately 30% of total revenue.

CEO Comments

“We delivered solid operating performance for the third quarter and through the first nine months of 2023, driven by our diversified business model and strength of our balance sheet,” said NBT President and CEO John H. Watt, Jr. “We completed our merger with Salisbury on August 11, 2023, welcoming new customers, employees, and shareholders to the NBT family and simultaneously we successfully completed the conversion to the NBT core banking systems. Our combined team is committed to providing a comprehensive suite of financial services to all of our customers and the communities we serve while also generating long-term value for our shareholders.”

Third Quarter Financial Highlights

Net Income
  • Net income of $24.6 million and diluted earnings per share of $0.54
  • Operating net income was $38.3 million and diluted operating earnings per share of $0.841
Net Interest Income / NIM
  • Net interest income on a fully taxable equivalent (“FTE”) basis was $95.5 million1
  • Net interest margin (“NIM”) on an FTE basis was 3.21%1, down 6 basis points (“bps”) from the prior quarter
  • Included in FTE net interest income was $1.4 million of acquisition-related net accretion which positively impacted NIM by 5 bps
  • Earning asset yields of 4.63%, up 21 bps from the prior quarter
  • Total cost of funds of 1.50%, up 28 bps from the prior quarter
Noninterest Income
  • Excluding net securities gains (losses), noninterest income was $40.4 million and was 29.9% of total revenues
Loans and Credit Quality
  • Period end total loans of $9.67 billion as of September 30, 2023, up $1.52 billion from December 31, 2022 which included $1.18 billion of loans acquired from Salisbury
  • Net charge-offs to average loans were 0.18%, annualized
  • Nonperforming loans to total loans was 0.25%, compared to 0.24% in the prior quarter and down from 0.28% in the third quarter of 2022
  • Allowance for loan losses to total loans of 1.19%
  • Provision for loan losses included $8.8 million of acquisition related provision for credit losses
Deposits
  • Deposits were $11.40 billion as of September 30, 2023, up $1.91 billion from December 31, 2022 which included $1.31 billion in deposits acquired from Salisbury
  • Total cost of deposits was 1.18% for the third quarter of 2023, up 33 bps from the prior quarter
  • Full cycle to-date deposit beta of 24%
  • Deposit composition is diverse and granular with over 565,000 accounts with an average per account balance of $20,160
Capital
  • Stockholders’ equity was $1.36 billion as of September 30, 2023
  • Tangible book value per share2 was $20.39 at September 30, 2023
  • Tangible equity to assets of 7.15%1
  • CET1 ratio of 11.31%; Leverage ratio of 10.23%


Loans

  • Period end total loans were $9.67 billion at September 30, 2023, $8.36 billion at June 30, 2023 and $8.15 billion at December 31, 2022.
  • Period end loans increased $1.52 billion from December 31, 2022. Commercial and industrial loans increased $158.5 million to $1.42 billion; commercial real estate loans increased $767.7 million to $3.58 billion; and total consumer loans increased $591.0 million to $4.67 billion. Included in total consumer loans is $132.6 million of a portfolio of loans in a run-off status.
  • Commercial line of credit utilization rate was 22% at September 30, 2023, compared to 23% at June 30, 2023 and September 30, 2022.

Deposits

  • Total deposits at September 30, 2023 were $11.40 billion, compared to $9.50 billion at December 31, 2022. The Company continued to experience incremental migration from noninterest bearing and low interest checking and savings accounts into higher cost money market and time deposit instruments.
  • Loan to deposit ratio was 84.8% at September 30, 2023, compared to 85.8% at December 31, 2022.

Net Interest Income and Net Interest Margin

  • Net interest income for the third quarter of 2023 was $94.9 million, which was up $5.8 million, or 6.5%, from the second quarter of 2023 and up $0.4 million, or 0.4%, from the third quarter of 2022. The increase in net interest income resulted from the Salisbury acquisition and was partially offset by the increase in cost of funds outpacing the improvement in asset yields during the quarter.
  • The NIM on an FTE basis for the third quarter of 2023 was 3.21%, a decrease of 6 bps from the second quarter of 2023 driven by the increase in the cost of interest-bearing deposits, partly offset by an increase in average earning asset yields and $1.4 million in acquisition-related net accretion. The NIM on an FTE basis decreased 30 bps from the third quarter of 2022 due to the increase in the cost of interest-bearing deposits and higher short-term borrowings costs and average balances, partially offset by higher earning asset yields.
  • Earning asset yields for the three months ended September 30, 2023 increased 21 bps from the prior quarter to 4.63% and increased 95 bps from the same quarter in the prior year. Average earning assets grew $819.7 million, or 7.5%, from the second quarter of 2023 due primarily to the Salisbury acquisition and organic loan growth.
  • Total cost of deposits, including noninterest bearing deposits, was 1.18% for the third quarter of 2023, up 33 bps from the prior quarter and up 109 bps from the same period in the prior year.
  • Total cost of funds for the three months ended September 30, 2023 was 1.50%, up 28 bps from the prior quarter and up 132 bps from the third quarter of 2022.

Asset Quality and Allowance for Loan Losses

  • Net charge-offs to total average loans was 18 bps compared to 17 bps in the prior quarter and 7 bps in the third quarter of 2022. The increase in net charge-offs from the third quarter of 2022 was due to an increase in charge-offs in the Company’s other consumer portfolio, which is in a run-off status. Net charge-offs for the portfolios in a run-off status represented the majority of total net charge-offs for the third quarter.
  • Nonperforming assets to total assets were 0.18% at September 30, 2023, compared to 0.17% at June 30, 2023 and 0.19% at September 30, 2022.
  • Provision expense for the three months ended September 30, 2023 was $12.6 million, compared to $3.6 million for the second quarter of 2023 and $4.5 million for the third quarter of 2022. Included in the provision expense in the third quarter of 2023 was $8.8 million of acquisition-related provision for loan losses.
  • The allowance for loan losses was $114.6 million, or 1.19% of total loans, at September 30, 2023, compared to 1.20% of total loans at June 30, 2023 and 1.22% of total loans at September 30, 2022. The increase in the allowance for loan losses in the third quarter included $14.5 million of allowance for acquired Salisbury loans which included both the $8.8 million of non-purchased credit deteriorated allowance recognized through the provision for loan losses and the $5.8 million of purchased credit deteriorated allowance reclassified from loans.
  • The reserve for unfunded loan commitments increased to $4.8 million at September 30, 2023 compared to the prior quarter-end at $4.4 million and to $5.3 million at September 30, 2022. The provision for unfunded loan commitments in the third quarter of 2023 included $0.8 million of acquisition-related provision for unfunded loan commitments.

Noninterest Income

  • Total noninterest income, excluding securities gains (losses), was $40.4 million for the three months ended September 30, 2023, up $3.7 million from the second quarter and up $3.1 million from the prior year’s third quarter.
  • Card services income increased $0.4 million from the prior quarter and decreased $0.2 million from the third quarter of 2022.
  • Retirement plan administration fees were up $1.1 million from the prior quarter and were $1.3 million higher than the third quarter of 2022 due primarily to seasonal activity-based fees in the quarter, favorable market conditions, new account growth and the acquisition of Retirement Direct, LLC on July 1, 2023.
  • Wealth management fees increased $1.1 million from the prior quarter and were $0.9 million higher than the third quarter of 2022 primarily due to the Salisbury acquisition and approximately $0.5 million in seasonal activity-based fees.
  • Insurance services were up $0.6 million from the prior quarter and were $0.5 million higher than the third quarter of 2022.

Noninterest Expense

  • Total noninterest expense, excluding $7.9 million of acquisition expenses in the third quarter of 2023 and $1.2 million in the second quarter of 2023, increased 6.8% compared to the previous quarter due primarily to the acquisition of Salisbury and increased 8.1% from the third quarter of 2022 due primarily to the acquisition of Salisbury and merit increases for employees.
  • Salaries and benefits increased 5.2% from the prior quarter driven by the Salisbury acquisition and increased from the third quarter of 2022 due to the Salisbury acquisition and merit increases.
  • Amortization of intangible assets increased $1.2 million from the prior quarter and $1.1 million from the third quarter of 2022 primarily due to the amortization of intangible assets related to the Salisbury acquisition. The Company recorded a core deposit intangible of $31.2 million and a wealth management customer list intangible of $4.7 million for Salisbury.
  • FDIC assessment expense increased $0.3 million in the prior quarter primarily due to the acquisition of Salisbury and increased $0.9 million from the third quarter of 2022 driven by the statutory increase in the FDIC assessment rate.

Income Taxes

  • The effective tax rate was 22.4% for the third quarter of 2023 which was consistent with the second quarter of 2023 and 22.8% for the third quarter of 2022.

Capital

  • Tangible common equity to tangible assets1 was 7.15% at September 30, 2023. Tangible book value per share2 was $20.39 at September 30, 2023, $21.55 at June 30, 2023 and $20.25 at September 30, 2022.
  • Stockholders’ equity increased $189.3 million from December 31, 2022 driven by the Salisbury acquisition adding $161.7 million of capital and net income generation of $88.3 million, partially offset by dividends declared of $40.8 million, the repurchase of common stock of $4.9 million and a $17.5 million decrease in accumulated other comprehensive income driven by the change in the market value of securities available for sale.
  • September 30, 2023, CET1 capital ratio of 11.31%, leverage ratio of 10.23% and total risk-based capital ratio of 14.45%.

Dividend

  • On October 23, 2023, the Board of Directors approved a fourth-quarter cash dividend of $0.32 per share, which represents a $0.02 per quarter, or 6.7%, increase over the dividend paid in the fourth quarter of 2022. This is the Company’s eleventh consecutive year of annual dividend increases. The dividend will be paid on December 15, 2023 to stockholders of record as of December 1, 2023.

Stock Repurchase

  • The Company purchased 68,500 shares of its common stock in the third quarter of 2023 at an average price of $31.61 per share under its previously announced share repurchase program. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. As of September 30, 2023, there were 1,444,500 shares available for repurchase under this plan.

Salisbury Bancorp, Inc. Merger

  • On August 11, 2023, NBT completed its acquisition of Salisbury. Salisbury was a Connecticut-chartered commercial bank with 13 banking offices in northwestern Connecticut, the Hudson Valley region of New York, and southwestern Massachusetts.
  • In connection with the acquisition, the Company issued 4.3 million shares and acquired approximately $1.57 billion of identifiable assets, including $1.18 billion of loans, $122.7 million in investment securities which were subsequently sold during the quarter, $31.2 million of core deposit intangibles and $4.7 million in a wealth management customer intangible, as well as $1.31 billion in deposits. As of the acquisition date, the fair value discount was $78.7 million for loans, net of the reclassification of the purchase credit deteriorated allowance, and was $3.0 million for subordinated debt, respectively.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. (Eastern) Wednesday, October 25, 2023, to review third quarter 2023 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at https://www.nbtbancorp.com/bn/presentations-events.html#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 $13.83 billion at September 30, 2023. 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 153 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, including actual or potential stress in the banking industry, 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 the perceived overall value of these products and services by users; (9) changes in consumer spending, borrowing and saving habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisition and integration of acquired businesses; (13) the possibility that NBT and Salisbury may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes; (14) the ability to increase market share and control expenses; (15) changes in the competitive environment among financial holding companies; (16) 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, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (17) 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 and other accounting standard setters; (18) changes in the Company’s organization, compensation and benefit plans; (19) 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; (20) greater than expected costs or difficulties related to the integration of new products and lines of business; 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.


NBT Bancorp Inc. and Subsidiaries          
Selected Financial Data          
(unaudited, dollars in thousands except per share data)        
           
  2023 2022
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Profitability (reported)          
Diluted earnings per share $ 0.54   $ 0.70   $ 0.78   $ 0.84   $ 0.90  
Weighted average diluted common shares outstanding   45,398,937     43,126,498     43,125,986     43,144,666     43,110,932  
Return on average assets3   0.76 %   1.02 %   1.16 %   1.23 %   1.33 %
Return on average equity3   7.48 %   9.91 %   11.47 %   12.30 %   12.87 %
Return on average tangible common equity1 3   10.73 %   13.13 %   15.31 %   16.54 %   17.12 %
Net interest margin1 3   3.21 %   3.27 %   3.55 %   3.68 %   3.51 %
           
  9 Months Ended September 30,      
  2023 2022      
Profitability (reported)          
Diluted earnings per share $ 2.01   $ 2.68        
Weighted average diluted common shares outstanding   43,896,042     43,194,037        
Return on average assets3   0.97 %   1.31 %      
Return on average equity3   9.54 %   12.79 %      
Return on average tangible common equity1 3   13.00 %   17.00 %      
Net interest margin1 3   3.34 %   3.22 %      
           
  2023 2022
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Profitability (operating)          
Diluted earnings per share1 $ 0.84   $ 0.80   $ 0.88   $ 0.86   $ 0.91  
Return on average assets1 3   1.19 %   1.17 %   1.31 %   1.26 %   1.34 %
Return on average equity1 3   11.65 %   11.40 %   12.95 %   12.61 %   12.91 %
Return on average tangible common equity1 3   16.43 %   15.08 %   17.27 %   16.95 %   17.17 %
           
  9 Months Ended September 30,      
  2023 2022      
Profitability (operating)          
Diluted earnings per share1 $ 2.53   $ 2.70        
Return on average assets1 3   1.22 %   1.32 %      
Return on average equity1 3   11.98 %   12.87 %      
Return on average tangible common equity1 3   16.25 %   17.10 %      
           
  2023 2022
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Balance sheet data          
Short-term interest-bearing accounts $ 459,296   $ 31,878   $ 68,045   $ 30,862   $ 97,303  
Securities available for sale   1,399,032     1,453,926     1,512,008     1,527,225     1,556,501  
Securities held to maturity   914,520     912,876     906,824     919,517     929,541  
Net loans   9,552,774     8,257,724     8,164,328     8,049,347     7,807,984  
Total assets   13,827,628     11,890,497     11,839,730     11,739,296     11,640,742  
Total deposits   11,401,452     9,529,919     9,681,205     9,495,933     9,918,751  
Total borrowings   740,603     880,518     703,248     787,950     277,889  
Total liabilities   12,464,807     10,680,004     10,628,071     10,565,742     10,484,196  
Stockholders' equity   1,362,821     1,210,493     1,211,659     1,173,554     1,156,546  
           
Capital          
Equity to assets   9.86 %   10.18 %   10.23 %   10.00 %   9.94 %
Tangible equity ratio1   7.15 %   7.95 %   7.99 %   7.73 %   7.64 %
Book value per share $ 28.94   $ 28.26   $ 28.24   $ 27.38   $ 27.00  
Tangible book value per share2 $ 20.39   $ 21.55   $ 21.52   $ 20.65   $ 20.25  
Leverage ratio   10.23 %   10.51 %   10.43 %   10.32 %   10.21 %
Common equity tier 1 capital ratio   11.31 %   12.29 %   12.28 %   12.12 %   12.17 %
Tier 1 capital ratio   12.23 %   13.35 %   13.34 %   13.19 %   13.27 %
Total risk-based capital ratio   14.45 %   15.50 %   15.53 %   15.38 %   15.50 %
Common stock price (end of period) $ 31.69   $ 31.85   $ 33.71   $ 43.42   $ 37.95  
           


NBT Bancorp Inc. and Subsidiaries          
Asset Quality and Consolidated Loan Balances          
(unaudited, dollars in thousands)          
           
    2023     2022  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Asset quality          
Nonaccrual loans $ 20,736   $ 16,931   $ 16,284   $ 17,233   $ 19,098  
90 days past due and still accruing   3,528     2,755     2,328     3,823     2,732  
Total nonperforming loans   24,264     19,686     18,612     21,056     21,830  
Other real estate owned   -     179     105     105     -  
Total nonperforming assets   24,264     19,865     18,717     21,161     21,830  
Allowance for loan losses   114,601     100,400     100,250     100,800     96,800  
           
Asset quality ratios          
Allowance for loan losses to total loans   1.19 %   1.20 %   1.21 %   1.24 %   1.22 %
Total nonperforming loans to total loans   0.25 %   0.24 %   0.23 %   0.26 %   0.28 %
Total nonperforming assets to total assets   0.18 %   0.17 %   0.16 %   0.18 %   0.19 %
Allowance for loan losses to total nonperforming loans   472.31 %   510.01 %   538.63 %   478.72 %   443.43 %
Past due loans to total loans4   0.49 %   0.45 %   0.30 %   0.33 %   0.30 %
Net charge-offs to average loans3   0.18 %   0.17 %   0.19 %   0.18 %   0.07 %
           
    2023     2022  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Loan net charge-offs by line of business          
Commercial & industrial $ (327 ) $ 51   $ (294 ) $ (45 ) $ (1,045 )
Commercial real estate   (17 )   41     42     8     324  
Residential real estate and home equity   (75 )   (43 )   80     (79 )   (56 )
Indirect auto   451     273     423     445     222  
Residential solar   1,253     581     656     596     43  
Other consumer   2,919     2,553     2,904     2,752     1,796  
Total loan net charge-offs $ 4,204   $ 3,456   $ 3,811   $ 3,677   $ 1,284  
           
    2023     2022  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Allowance for loan losses as a percentage of loans by segment        
Commercial & industrial   0.88%     0.86%     0.85%     0.82%     0.80%  
Commercial real estate   1.00%     0.93%     0.93%     0.91%     0.88%  
Residential real estate   0.79%     0.73%     0.73%     0.72%     0.74%  
Auto   0.82%     0.80%     0.77%     0.81%     0.78%  
Residential solar   3.19%     3.09%     3.04%     3.21%     3.08%  
Other consumer   5.23%     5.98%     6.19%     6.27%     6.67%  
Total   1.19%     1.20%     1.21%     1.24%     1.22%  
           
    2023     2022  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Loans by line of business          
Commercial & industrial $ 1,424,579   $ 1,319,093   $ 1,278,291   $ 1,266,031   $ 1,262,199  
Commercial real estate   3,575,595     2,884,264     2,845,631     2,807,941     2,724,728  
Residential real estate   2,111,670     1,666,204     1,651,918     1,649,870     1,626,528  
Indirect auto   1,099,558     1,048,739     1,031,315     989,587     952,757  
Residential solar   934,082     926,365     920,084     856,798     728,898  
Home equity   340,777     310,897     308,219     314,124     313,557  
Other consumer   181,114     202,562     229,120     265,796     296,117  
Total loans $ 9,667,375   $ 8,358,124   $ 8,264,578   $ 8,150,147   $ 7,904,784  
           


NBT Bancorp Inc. and Subsidiaries    
Consolidated Balance Sheets    
(unaudited, dollars in thousands)    
     
  September 30, December 31,
  2023 2022
Assets    
Cash and due from banks $ 213,358   $ 166,488  
Short-term interest-bearing accounts   459,296     30,862  
Equity securities, at fair value   35,600     30,784  
Securities available for sale, at fair value   1,399,032     1,527,225  
Securities held to maturity (fair value $783,986 and $812,647, respectively)   914,520     919,517  
Federal Reserve and Federal Home Loan Bank stock   50,333     44,713  
Loans held for sale   4,113     562  
Loans   9,667,375     8,150,147  
Less allowance for loan losses   114,601     100,800  
Net loans $ 9,552,774   $ 8,049,347  
Premises and equipment, net   82,837     69,047  
Goodwill   360,171     281,204  
Intangible assets, net   42,574     7,341  
Bank owned life insurance   264,537     232,409  
Other assets   448,483     379,797  
Total assets $ 13,827,628   $ 11,739,296  
     
Liabilities and stockholders' equity    
Demand (noninterest bearing) $ 3,716,309   $ 3,617,324  
Savings, NOW and money market   6,340,944     5,444,837  
Time   1,344,199     433,772  
Total deposits $ 11,401,452   $ 9,495,933  
Short-term borrowings   490,180     585,012  
Long-term debt   29,834     4,815  
Subordinated debt, net   119,393     96,927  
Junior subordinated debt   101,196     101,196  
Other liabilities   322,752     281,859  
Total liabilities $ 12,464,807   $ 10,565,742  
     
Total stockholders' equity $ 1,362,821   $ 1,173,554  
     
Total liabilities and stockholders' equity $ 13,827,628   $ 11,739,296  
     


NBT Bancorp Inc. and Subsidiaries        
Consolidated Statements of Income        
(unaudited, dollars in thousands except per share data)      
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
    2023     2022     2023     2022  
Interest, fee and dividend income        
Interest and fees on loans $ 122,097   $ 85,266   $ 329,931   $ 237,148  
Securities available for sale   7,495     7,665     22,604     21,822  
Securities held to maturity   5,281     4,854     15,307     12,532  
Other   2,221     1,429     4,033     3,396  
Total interest, fee and dividend income $ 137,094   $ 99,214   $ 371,875   $ 274,898  
Interest expense        
Deposits $ 30,758   $ 2,233   $ 61,888   $ 5,831  
Short-term borrowings   7,612     84     20,657     113  
Long-term debt   294     20     631     140  
Subordinated debt   1,612     1,360     4,281     4,078  
Junior subordinated debt   1,923     1,039     5,372     2,325  
Total interest expense $ 42,199   $ 4,736   $ 92,829   $ 12,487  
Net interest income $ 94,895   $ 94,478   $ 279,046   $ 262,411  
Provision for loan losses $ 3,883   $ 4,484   $ 11,398   $ 9,470  
Provision for loan losses - acquisition day 1 non-PCD   8,750     -     8,750     -  
Total provision for loan losses $ 12,633   $ 4,484   $ 20,148   $ 9,470  
Net interest income after provision for loan losses $ 82,262   $ 89,994   $ 258,898   $ 252,941  
Noninterest income        
Service charges on deposit accounts $ 3,979   $ 3,581   $ 11,260   $ 11,032  
Card services income   5,503     5,654     15,469     24,100  
Retirement plan administration fees   12,798     11,496     35,995     37,451  
Wealth management   9,297     8,402     25,611     25,294  
Insurance services   4,361     3,892     12,008     11,258  
Bank owned life insurance income   1,568     1,560     4,974     4,625  
Net securities (losses)   (183 )   (148 )   (9,822 )   (914 )
Other   2,913     2,735     8,195     8,641  
Total noninterest income $ 40,236   $ 37,172   $ 103,690   $ 121,487  
Noninterest expense        
Salaries and employee benefits $ 49,248   $ 48,371   $ 144,237   $ 140,595  
Technology and data services   9,677     9,096     27,989     26,588  
Occupancy   7,090     6,481     21,233     19,761  
Professional fees and outside services   4,149     3,817     12,486     11,999  
Office supplies and postage   1,700     1,469     5,004     4,441  
FDIC assessment   1,657     787     4,397     2,399  
Advertising   667     559     1,841     1,943  
Amortization of intangible assets   1,609     544     2,603     1,725  
Loan collection and other real estate owned, net   569     549     2,115     1,690  
Reserve for unfunded loan commitments   460     225     (270 )   205  
Acquisition expenses   7,917     -     9,724     -  
Other   6,054     4,796     17,554     13,610  
Total noninterest expense $ 90,797   $ 76,694   $ 248,913   $ 224,956  
Income before income tax expense $ 31,701   $ 50,472   $ 113,675   $ 149,472  
Income tax expense   7,095     11,499     25,339     33,598  
Net income $ 24,606   $ 38,973   $ 88,336   $ 115,874  
Earnings Per Share        
Basic $ 0.54   $ 0.91   $ 2.02   $ 2.70  
Diluted $ 0.54   $ 0.90   $ 2.01   $ 2.68  
         


NBT Bancorp Inc. and Subsidiaries          
Quarterly Consolidated Statements of Income          
(unaudited, dollars in thousands except per share data)        
           
    2023     2022  
  3rd Q 2nd Q 1st Q 4th Q 3rd Q
Interest, fee and dividend income          
Interest and fees on loans $ 122,097   $ 106,935   $ 100,899   $ 95,620   $ 85,266  
Securities available for sale   7,495     7,493     7,616     7,831     7,665  
Securities held to maturity   5,281     4,991     5,035     5,050     4,854  
Other   2,221     1,170     642     671     1,429  
Total interest, fee and dividend income $ 137,094   $ 120,589   $ 114,192   $ 109,172   $ 99,214  
Interest expense          
Deposits $ 30,758   $ 19,986   $ 11,144   $ 4,092   $ 2,233  
Short-term borrowings   7,612     8,126     4,919     2,510     84  
Long-term debt   294     290     47     21     20  
Subordinated debt   1,612     1,335     1,334     1,346     1,360  
Junior subordinated debt   1,923     1,767     1,682     1,424     1,039  
Total interest expense $ 42,199   $ 31,504   $ 19,126   $ 9,393   $ 4,736  
Net interest income $ 94,895   $ 89,085   $ 95,066   $ 99,779   $ 94,478  
Provision for loan losses $ 3,883   $ 3,606   $ 3,909   $ 7,677   $ 4,484  
Provision for loan losses - acquisition day 1 non-PCD   8,750     -     -     -     -  
Total provision for loan losses $ 12,633   $ 3,606   $ 3,909   $ 7,677   $ 4,484  
Net interest income after provision for loan losses $ 82,262   $ 85,479   $ 91,157   $ 92,102   $ 89,994  
Noninterest income          
Service charges on deposit accounts $ 3,979   $ 3,733   $ 3,548   $ 3,598   $ 3,581  
Card services income   5,503     5,121     4,845     4,958     5,654  
Retirement plan administration fees   12,798     11,735     11,462     10,661     11,496  
Wealth management   9,297     8,227     8,087     8,017     8,402  
Insurance services   4,361     3,716     3,931     3,438     3,892  
Bank owned life insurance income   1,568     1,528     1,878     1,419     1,560  
Net securities (losses)   (183 )   (4,641 )   (4,998 )   (217 )   (148 )
Other   2,913     2,626     2,656     2,217     2,735  
Total noninterest income $ 40,236   $ 32,045   $ 31,409   $ 34,091   $ 37,172  
Noninterest expense          
Salaries and employee benefits $ 49,248   $ 46,834   $ 48,155   $ 47,235   $ 48,371  
Technology and data services   9,677     9,305     9,007     9,124     9,096  
Occupancy   7,090     6,923     7,220     6,521     6,481  
Professional fees and outside services   4,149     4,159     4,178     4,811     3,817  
Office supplies and postage   1,700     1,676     1,628     1,699     1,469  
FDIC assessment   1,657     1,344     1,396     798     787  
Advertising   667     525     649     879     559  
Amortization of intangible assets   1,609     458     536     538     544  
Loan collection and other real estate owned, net   569     691     855     957     549  
Reserve for unfunded loan commitments   460     (100 )   (630 )   (185 )   225  
Acquisition expenses   7,917     1,189     618     967     -  
Other   6,054     5,790     5,710     6,165     4,796  
Total noninterest expense $ 90,797   $ 78,794   $ 79,322   $ 79,509   $ 76,694  
Income before income tax expense $ 31,701   $ 38,730   $ 43,244   $ 46,684   $ 50,472  
Income tax expense   7,095     8,658     9,586     10,563     11,499  
Net income $ 24,606   $ 30,072   $ 33,658   $ 36,121   $ 38,973  
Earnings Per Share          
Basic $ 0.54   $ 0.70   $ 0.78   $ 0.84   $ 0.91  
Diluted $ 0.54   $ 0.70   $ 0.78   $ 0.84   $ 0.90  
           


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
    Q3 - 2023 Q2 - 2023 Q1 - 2023 Q4 - 2022 Q3 - 2022
Assets                      
Short-term interest-bearing accounts   $ 121,384 4.26 % $ 28,473 3.62 % $ 34,215 2.26 % $ 39,573 3.31 % $ 191,463 2.51 %
Securities taxable1     2,364,809 1.90 %   2,394,027 1.90 %   2,442,732 1.92 %   2,480,959 1.88 %   2,491,315 1.83 %
Securities tax-exempt 1 5     219,427 3.34 %   201,499 2.83 %   202,321 2.81 %   208,238 2.68 %   211,306 2.47 %
FRB and FHLB stock     53,841 6.76 %   51,454 7.12 %   41,144 4.45 %   32,903 4.11 %   25,182 3.47 %
Loans1 6     9,043,582 5.36 %   8,307,894 5.17 %   8,189,520 5.00 %   8,039,442 4.72 %   7,808,025 4.34 %
Total interest-earning assets   $ 11,803,043 4.63 % $ 10,983,347 4.42 % $ 10,909,932 4.26 % $ 10,801,115 4.02 % $ 10,727,291 3.68 %
Other assets     968,220     835,424     836,879     855,410     887,378  
Total assets   $ 12,771,263   $ 11,818,771   $ 11,746,811   $ 11,656,525   $ 11,614,669  
Liabilities and stockholders' equity                      
Money market deposit accounts   $ 2,422,451 2.91 % $ 2,113,965 2.30 % $ 2,081,210 1.22 % $ 2,169,192 0.39 % $ 2,332,341 0.15 %
NOW deposit accounts     1,513,420 0.57 %   1,463,953 0.38 %   1,598,834 0.36 %   1,604,096 0.33 %   1,548,115 0.21 %
Savings deposits     1,707,094 0.04 %   1,708,874 0.03 %   1,781,465 0.03 %   1,823,056 0.03 %   1,854,122 0.03 %
Time deposits     1,178,352 3.60 %   856,305 2.97 %   639,645 2.10 %   432,110 0.41 %   455,168 0.35 %
Total interest-bearing deposits   $ 6,821,317 1.79 % $ 6,143,097 1.30 % $ 6,101,154 0.74 % $ 6,028,454 0.27 % $ 6,189,746 0.14 %
Federal funds purchased     6,033 5.39 %   48,407 5.35 %   44,334 4.92 %   56,576 4.03 %   1,522 3.39 %
Repurchase agreements     71,516 1.40 %   55,627 1.08 %   71,340 0.08 %   76,334 0.11 %   69,048 0.10 %
Short-term borrowings     540,380 5.34 %   557,818 5.27 %   357,200 4.96 %   177,533 4.28 %   6,440 3.33 %
Long-term debt     29,800 3.91 %   29,773 3.91 %   7,299 2.61 %   3,817 2.18 %   3,331 2.38 %
Subordinated debt, net     109,160 5.86 %   97,081 5.52 %   96,966 5.58 %   97,839 5.46 %   98,748 5.46 %
Junior subordinated debt     101,196 7.54 %   101,196 7.00 %   101,196 6.74 %   101,196 5.58 %   101,196 4.07 %
Total interest-bearing liabilities   $ 7,679,402 2.18 % $ 7,032,999 1.80 % $ 6,779,489 1.14 % $ 6,541,749 0.57 % $ 6,470,031 0.29 %
Demand deposits     3,498,424     3,316,955     3,502,489     3,658,965     3,708,131  
Other liabilities     287,751     251,511     274,517     290,895     234,851  
Stockholders' equity     1,305,686     1,217,306     1,190,316     1,164,916     1,201,656  
Total liabilities and stockholders' equity   $ 12,771,263   $ 11,818,771   $ 11,746,811   $ 11,656,525   $ 11,614,669  
Interest rate spread     2.45 %   2.62 %   3.12 %   3.45 %   3.39 %
Net interest margin (FTE)1     3.21 %   3.27 %   3.55 %   3.68 %   3.51 %
                       


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
Nine Months Ended September 30,     2023     2022  
Assets              
Short-term interest-bearing accounts   $ 61,677 $ 1,751 3.80 % $ 575,517 $ 2,742 0.64 %
Securities taxable1     2,400,237   34,218 1.91 %   2,406,042   31,460 1.75 %
Securities tax-exempt1 5     207,812   4,675 3.01 %   242,033   3,664 2.02 %
FRB and FHLB stock     48,860   2,282 6.24 %   25,064   654 3.49 %
Loans1 6     8,516,793   330,314 5.19 %   7,683,159   237,290 4.13 %
Total interest-earning assets   $ 11,235,379 $ 373,240 4.44 % $ 10,931,815 $ 275,810 3.37 %
Other assets     880,655       905,931    
Total assets   $ 12,116,034     $ 11,837,746    
Liabilities and stockholders' equity              
Money market deposit accounts   $ 2,207,126 $ 36,107 2.19 % $ 2,541,927 $ 2,801 0.15 %
NOW deposit accounts     1,525,089   4,989 0.44 %   1,570,318   1,260 0.11 %
Savings deposits     1,732,205   462 0.04 %   1,831,485   442 0.03 %
Time deposits     893,407   20,330 3.04 %   475,966   1,328 0.37 %
Total interest-bearing deposits   $ 6,357,827 $ 61,888 1.30 % $ 6,419,696 $ 5,831 0.12 %
Federal funds purchased     32,784   1,266 5.16 %   513   13 3.39 %
Repurchase agreements     66,162   416 0.84 %   67,279   46 0.09 %
Short-term borrowings     485,804   18,975 5.22 %   2,170   54 3.33 %
Long-term debt     22,373   631 3.77 %   7,509   140 2.49 %
Subordinated debt, net     101,114   4,281 5.66 %   98,641   4,078 5.53 %
Junior subordinated debt     101,196   5,372 7.10 %   101,196   2,325 3.07 %
Total interest-bearing liabilities   $ 7,167,260 $ 92,829 1.73 % $ 6,697,004 $ 12,487 0.25 %
Demand deposits     3,439,275       3,709,761    
Other liabilities     271,307       219,983    
Stockholders' equity     1,238,192       1,210,998    
Total liabilities and stockholders' equity $ 12,116,034     $ 11,837,746    
Net interest income (FTE)1     $ 280,411     $ 263,323  
Interest rate spread       2.71 %     3.12 %
Net interest margin (FTE)1       3.34 %     3.22 %
Taxable equivalent adjustment     $ 1,365     $ 912  
Net interest income     $ 279,046     $ 262,411  
               


             
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)          
             
      2023     2022  
    3rd Q 2nd Q 1st Q 4th Q 3rd Q
  Operating net income          
  Net income $ 24,606   $ 30,072   $ 33,658   $ 36,121   $ 38,973  
  Acquisition expenses   7,917     1,189     618     967     -  
  Acquisition-related provision for credit losses   8,750     -     -     -     -  
  Acquisition-related reserve for unfunded loan commitments   836     -     -     -     -  
  Securities losses   183     4,641     4,998     217     148  
  Adjustment to net income $ 17,686   $ 5,830   $ 5,616   $ 1,184   $ 148  
  Adjustment to net income (net of tax) $ 13,730   $ 4,525   $ 4,341   $ 913   $ 114  
  Operating net income $ 38,336   $ 34,597   $ 37,999   $ 37,034   $ 39,087  
  Operating diluted earnings per share $ 0.84   $ 0.80   $ 0.88   $ 0.86   $ 0.91  
             
    9 Months Ended September 30,      
      2023     2022        
  Operating net income          
  Net income $ 88,336   $ 115,874        
  Acquisition expenses   9,724     -        
  Acquisition-related provision for credit losses   8,750     -        
  Acquisition-related reserve for unfunded loan commitments   836     -        
  Securities losses   9,822     914        
  Adjustment to net income $ 29,132   $ 914        
  Adjustment to net income (net of tax) $ 22,577   $ 712        
  Operating net income $ 110,913   $ 116,586        
  Operating diluted earnings per share $ 2.53   $ 2.70        
             
      2023     2022  
    3rd Q 2nd Q 1st Q 4th Q 3rd Q
  FTE adjustment          
  Net interest income $ 94,895   $ 89,085   $ 95,066   $ 99,779   $ 94,478  
  Add: FTE adjustment   568     402     395     392     337  
  Net interest income (FTE) $ 95,463   $ 89,487   $ 95,461   $ 100,171   $ 94,815  
  Average earning assets $ 11,803,043   $ 10,983,347   $ 10,909,932   $ 10,801,115   $ 10,727,291  
  Net interest margin (FTE)3   3.21 %   3.27 %   3.55 %   3.68 %   3.51 %
             
    9 Months Ended September 30,      
      2023     2022        
  FTE adjustment          
  Net interest income $ 279,046   $ 262,411        
  Add: FTE adjustment   1,365     912        
  Net interest income (FTE) $ 280,411   $ 263,323        
  Average earning assets $ 11,235,379   $ 10,931,815        
  Net interest margin (FTE)3   3.34 %   3.22 %      
             
  Interest income for tax-exempt securities and loans have been adjusted to an 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 (continued)          
  (unaudited, dollars in thousands)          
             
      2023     2022  
    3rd Q 2nd Q 1st Q 4th Q 3rd Q
  Tangible equity to tangible assets          
  Total equity $ 1,362,821   $ 1,210,493   $ 1,211,659   $ 1,173,554   $ 1,156,546  
  Intangible assets   402,745     287,701     288,159     288,545     289,083  
  Total assets $ 13,827,628   $ 11,890,497   $ 11,839,730   $ 11,739,296   $ 11,640,742  
  Tangible equity to tangible assets   7.15 %   7.95 %   7.99 %   7.73 %   7.64 %
             
      2023     2022  
    3rd Q 2nd Q 1st Q 4th Q 3rd Q
  Return on average tangible common equity        
  Net income $ 24,606   $ 30,072   $ 33,658   $ 36,121   $ 38,973  
  Amortization of intangible assets (net of tax)   1,206     344     402     404     408  
  Net income, excluding intangibles amortization $ 25,812   $ 30,416   $ 34,060   $ 36,525   $ 39,381  
             
  Average stockholders' equity $ 1,305,686   $ 1,217,306   $ 1,190,316   $ 1,164,916   $ 1,201,656  
  Less: average goodwill and other intangibles   350,912     287,974     288,354     288,856     289,296  
  Average tangible common equity $ 954,774   $ 929,332   $ 901,962   $ 876,060   $ 912,360  
  Return on average tangible common equity3   10.73 %   13.13 %   15.31 %   16.54 %   17.12 %
             
    9 Months Ended September 30,      
      2023     2022        
  Return on average tangible common equity        
  Net income $ 88,336   $ 115,874        
  Amortization of intangible assets (net of tax)   1,952     1,294        
  Net income, excluding intangibles amortization $ 90,288   $ 117,168        
             
  Average stockholders' equity $ 1,238,192   $ 1,210,998        
  Less: average goodwill and other intangibles   309,309     289,366        
  Average tangible common equity $ 928,883   $ 921,632        
  Return on average tangible common equity3   13.00 %   17.00 %      
             
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.

 


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.

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