NBTB NBT Bancorp Inc

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 CEOScott A. Kingsley, Executive Vice President and CFONBT Bancorp Inc.52 South Broad StreetNorwich, NY 13815607-337-6589