UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 25, 2022



NBT BANCORP INC.
(Exact name of registrant as specified in its charter)

Delaware
000-14703
16-1268674
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)

52 South Broad Street, Norwich, New York 13815
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (607) 337-2265

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of class
Trading Symbol
Name of exchange on which registered
Common Stock, par value $0.01 per share
NBTB
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02
Results of Operations and Financial Condition

On July 25, 2022, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended June 30, 2022 and announced a 7.1% dividend increase. That press release is furnished as Exhibit 99.1 hereto. A conference call will be held at 8:30 a.m. Eastern Time on Tuesday, July 26, 2022, to review the second quarter 2022 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Event Calendar page of the Company’s website at www.nbtbancorp.com.
 
Item 9.01
Financial Statements and Exhibits.
 
(a)
Not applicable.
 
(b)
Not applicable.
 
(c)
Not applicable.
 
(d)
Exhibits.
 
Exhibit No.
 
Description
     
Press release of NBT Bancorp Inc. July 25, 2022
     
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
NBT BANCORP INC.
     
Date: July 25, 2022
By:
/s/ Scott A. Kingsley
   
Scott A. Kingsley
   
Executive Vice President
   
and Chief Financial Officer




Exhibit 99.1

1

FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS

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. ANNOUNCES SECOND QUARTER NET INCOME OF $37.8 MILLION ($0.88 PER DILUTED COMMON SHARE); APPROVES A 7.1% DIVIDEND INCREASE

NORWICH, NY (July 25, 2022) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and six months ended June 30, 2022.
 
Net income for the three months ended June 30, 2022 was $37.8 million, or $0.88 per diluted common share, compared to $40.3 million, or $0.92 per diluted share, in the second quarter of 2021 and $39.1 million, or $0.90 per diluted share in the first quarter of 2022. Net interest income recognized in the second quarter of 2022 from the Paycheck Protection Program (“PPP”) was approximately $1.3 million ($0.02 per diluted share), compared to $4.7 million ($0.08 per diluted share) in the second quarter of 2021 and $2.0 million ($0.04 per diluted share) in the first quarter of 2022, reflective of higher levels of loan forgiveness in the prior year and prior quarter. Excluding the impact of PPP loan income recognition, net interest income in the second quarter of 2022 improved in comparison to the second quarter of 2021 and the linked first quarter of 2022 due to loan growth, incremental deployment of excess liquidity into investment securities and increases in the Federal Reserve’s targeted Federal Funds rate. The Company recorded a provision for loan losses of $4.4 million ($0.08 per diluted share) in the second quarter of 2022, compared to a net benefit of $5.2 million ($0.09 per diluted share) in the second quarter of 2021 and a provision of $0.6 million ($0.01 per diluted share) in the first quarter of 2022.
 
CEO Comments

“We are very pleased with our operating results for the second quarter and first half of 2022, which reflect continued organic loan growth and solid performance by our fee-based businesses. With the increases in the targeted Fed Funds rate in the quarter, we experienced the benefits of an asset-sensitive balance sheet,” said NBT President and CEO John H. Watt, Jr. “Our asset quality continues to be excellent, with historically low levels of net charge-offs and nonperforming assets. Given our strong loan growth and increased uncertainty surrounding the domestic macro-economic outlook, we did add to our loan loss reserves at quarter-end.”

We are also pleased to have approved a $0.02, or 7.1% increase, to our quarterly dividend to stockholders,” added Watt. “The payment of a meaningful and growing dividend is an important component of our commitment to provide consistent and favorable long-term returns to our stockholders. The increase reflects the continued strength of both our current operating performance and capital position.”


2
Second Quarter Financial Highlights

Net Income
 
Net income of $37.8 million
 
Diluted earnings per share of $0.88
Net Interest
Income / NIM
 
Net interest income on a fully taxable equivalent (“FTE”) basis was $87.9 million1
 
Net interest margin (“NIM”) on a FTE basis was 3.21%1, up 26 basis points (“bps”) from the prior quarter, due primarily to higher yields on earning assets
 
Total cost of deposits of 0.07%
Noninterest Income
 
Noninterest income was $42.2 million, excluding securities gains (losses) and was 32.5% of total revenue
Pre-Provision Net
Revenue (“PPNR”)
 
PPNR1 was $54.2 million compared to $50.9 million in the first quarter of 2022 and $49.0 million in the second quarter of 2021
Loans and Credit
Quality
 
Period end total loans were $7.78 billion at June 30, 2022, up 9.9%, annualized, excluding impact of PPP loans
 
Period end loans increased $363.2 million from December 31, 2021, excluding $17.3 million and $101.2 million of PPP loans at June 30, 2022 and December 31, 2021, respectively
 
Net charge-offs to average loans was 0.04%, annualized
 
Nonperforming loans to total loans was 0.33%, down from 0.36% in the prior quarter
 
Allowance for loan losses to total loans of 1.20%, was up 2 bps from the first quarter 2022
Capital
 
Announced a $0.30 per share dividend for the third quarter, which was a $0.02 per share or 7.1% increase from the prior quarter
 
Tangible book value per share2 was $20.99 at June 30, 2022, lower than the second quarter of 2021 and the first quarter of 2022 due primarily to the impact of higher interest rates on available for sale investment securities and the related impact to accumulated other comprehensive income
 
Tangible equity to assets of 7.87%1
 
CET1 ratio of 12.14%; Leverage ratio of 9.77%

Loans


Period end total loans were $7.78 billion at June 30, 2022 and $7.50 billion at December 31, 2021.

Excluding PPP loans, period end loans increased $363.2 million from December 31, 2021. Commercial and industrial loans increased $142.8 million to $1.30 billion; commercial real estate loans increased $15.3 million to $2.67 billion; and total consumer loans increased $205.1 million to $3.79 billion.

Total PPP loans as of June 30, 2022 were $17.3 million (net of unamortized fees) with 95% of the original $836 million forgiven through the second quarter of 2022. The following PPP loan activity occurred during the second quarter of 2022:

o
$36.7 million of loans forgiven.

o
$1.3 million of interest and fees recognized into interest income, compared to $2.0 million for the first quarter of 2022 and $4.7 million for the second quarter of 2021.

Commercial line of credit utilization rate was 23% at June 30, 2022 and March 31, 2022 and compared to 22% at June 30, 2021.


3
Deposits


Total deposits at June 30, 2022 were $10.03 billion, compared to $10.23 billion at December 31, 2021, a 2% decline, which included a $100.0 million brokered deposit that matured in the quarter and seasonal declines in municipal deposits.

Loan to deposit ratio was 77.6% at June 30, 2022, compared to 73.3% at December 31, 2021.

Net Interest Income and Net Interest Margin
 

Net interest income for the second quarter of 2022 was $87.6 million, which was up $7.2 million, or 9.0%, from the first quarter of 2022 and up $8.4 million, or 10.6%, from the second quarter of 2021 primarily due to higher yields on earning assets. PPP income for the second quarter of 2022 was $1.3 million, which was $0.7 million lower compared to the prior quarter and down $3.4 million compared to the second quarter of 2021.

The NIM on a FTE basis for the second quarter of 2022 was 3.21%, up 26 bps from the first quarter of 2022 and up 21 bps from the second quarter of 2021. Excluding the impact of PPP interest and fees and excess liquidity from each quarter, the NIM increased 13 bps from the prior quarter primarily due to higher earning asset yields as the cost of interest-bearing liabilities remained flat. The net impact of PPP loans and excess liquidity negatively impacted the NIM by 9 bps in the second quarter of 2022 compared to a negative 22 bps impact in the first quarter of 2022, reflective of a lower level of excess liquidity.

Earning asset yields for the three months ended June 30, 2022 were up 26 bps from the prior quarter and up 17 bps from the same quarter in the prior year. Earning assets declined $106.1 million, or 1.0%, from the prior quarter and grew $351.9 million, or 3.3%, from the same quarter in the prior year. The following are highlights comparing the second quarter of 2022 to the prior quarter:

o
The average balances of investment securities increased $153.7 million and yields increased 6 bps.

o
The average balances of short-term interest-bearing accounts with a yield of 0.82% decreased $436.8 million resulting from the incremental deployment of excess liquidity into loans and investment securities and modestly lower deposit balances due primarily to seasonal municipal outflows and the maturity of $100 million in brokered deposits.

o
Loan yields increased 14 bps to 4.09% for the quarter. Excluding PPP loans, loan yields increased 16 bps from the prior quarter.

Total cost of deposits was 0.07% for the second quarter of 2022, consistent with the prior quarter and down 5 bps from the same period in the prior year.

The cost of interest-bearing liabilities for the three months ended June 30, 2022 was 0.23%, consistent with the prior quarter and down 6 bps from the second quarter of 2021 of 0.29%.

Credit Quality and Allowance for Credit Losses


Net charge-offs to total average loans of 4 bps compared to 14 bps in the prior quarter and 7 bps in the second quarter of 2021. Recoveries in the second quarter of 2022 were $3.3 million compared to $1.9 million in the prior quarter and $2.7 million in the second quarter of 2021.

Nonperforming assets to total assets was 0.22% compared to 0.23% at March 31, 2022 and 0.38% (0.39% excluding PPP loans) at June 30, 2021. Past due loans to total loans increased to 0.40% as of June 30, 2022 from 0.24% (0.25% excluding PPP loans) in the prior quarter almost entirely due to one commercial credit which returned to current status in early July.


4

Provision expense for the three months ended June 30, 2022 was $4.4 million with net charge-offs of $0.8 million. Provision expense was $3.8 million higher than the first quarter of 2022 and $9.6 million higher than the second quarter of 2021. The increase in provision expense from the prior quarter was driven by modest deterioration of the macro-economic forecasts and providing for loan growth, partly offset by a lower level of net charge-offs. The increase in provision expense from the second quarter of 2021 was driven both by loan growth and an increase in the level of allowance for loan losses resulting from less favorable economic forecasts in the current year relative to improved economic forecasts in the prior year.

The allowance for loan losses was $93.6 million, or 1.20% (1.21% excluding PPP loans and related allowance) of total loans at June 30, 2022, compared to 1.18% (1.18% excluding PPP loans and related allowance) of total loans at March 31, 2022 and 1.31% (1.38% excluding PPP loans and related allowance) of total loans at June 30, 2021. The increase in the level of allowance for loan losses from the prior quarter was primarily due to the deterioration in the forecast of economic conditions, which had an impact on the level of expected credit losses and the increase in loan balances.

The reserve for unfunded loan commitments increased to $5.1 million at June 30, 2022 compared to the prior quarter at $4.8 million.

Noninterest Income
 

Total noninterest income, excluding securities gains (losses), was $42.2 million for the three months ended June 30, 2022, down $0.6 million from the seasonally stronger first quarter and up $3.1 million from the prior year’s second quarter.

Service charges on deposit accounts were comparable to the prior quarter and higher than the second quarter of 2021. Early in June 2022, the Company made adjustments to customer non-sufficient funds processing practices and expects these adjustments to reduce future service charge fee income by approximately $0.5 million per quarter.

Card services income was higher than the prior quarter and the second quarter of 2021 due to increased volume. As discussed in previous quarters, the Company will be subject to the provisions of the Durbin Amendment to the Dodd-Frank Act beginning in the third quarter of 2022, which it estimates will reduce quarterly debit card interchange income by approximately $3.7 million.

Retirement plan administration fees were lower than the prior quarter driven by seasonal revenue fluctuations related to activity-based fees and higher than the second quarter of 2021 driven by higher activity-based fees and continued organic growth.

Wealth management fees were lower than the prior quarter and lower than the second quarter of 2021 driven primarily by market performance.

Other income decreased from the prior quarter and the second quarter of the prior year driven by lower commercial loan swap fees.

Noninterest Expense


Total noninterest expense for the second quarter of 2022 was up 5.5% from the previous quarter and up 6.6% from the second quarter of 2021.

Salaries and benefits increased from the prior quarter due to one additional day of payroll in the second quarter, annual merit pay increases and increased medical expenses. The increase from the second quarter of 2021 was driven by increased salaries and wages including merit pay increases, higher levels of incentive compensation and increased medical expenses.


5

Technology and data services increased from the prior quarter due to continued investment in digital platform solutions including the completion of the Company’s human resources information system conversion.

Loan collection and other real estate owned were higher than the prior quarter due to higher collection expenses and a gain on the sale of a property in the first quarter of 2022.

Other expenses increased from the linked first quarter of 2022 due to a $0.5 million increase in the provision for the reserve for unfunded commitments, higher travel and training expenses and seasonal timing of certain expenditures.
 
Income Taxes
 

The effective tax rate was 22.5% for the second quarter of 2022 compared to 22.2% for the first quarter of 2022 and 22.9% for the second quarter of 2021.

Capital


Capital ratios remain strong with tangible common equity to tangible assets1 at 7.87%. Tangible book value per share2 was $20.99 at June 30, 2022, $21.25 at March 31, 2022 and $21.50 at June 30, 2021.

Stockholders’ equity decreased $61.9 million from December 31, 2021 driven by the $101.4 million decrease in accumulated other comprehensive income due to the change in the market value of securities available for sale, dividends declared of $24.1 million and the repurchase of common stock of $14.7 million, partly offset by net income of $76.9 million.

June 30, 2022, CET1 capital ratio of 12.14%, leverage ratio of 9.77% and total risk-based capital ratio of 15.50%.

Dividend and Stock Repurchase


The Board of Directors approved a third-quarter cash dividend of $0.30 per share at a meeting held today. The dividend, which represents a $0.02, or 7.1% increase, will be paid on September 15, 2022 to stockholders of record as of September 1, 2022. The increased dividend represents a yield of 3.0% based upon the closing price of the Company’s stock on July 22, 2022. This is the Company’s tenth consecutive year of annual dividend increases.


The Company purchased 182,900 shares of common stock early in the second quarter of 2022 at a weighted average price of $35.88 including commissions. The repurchase program under which these shares were purchased expires on December 31, 2023.

Other Events


On June 30, 2022, NBT Insurance Agency, LLC, a full-service insurance agency, entered into an asset purchase agreement with Harrison A. Rogers Agency, Inc. (“H.A. Rogers”), a New York corporation, pursuant to which NBT Insurance will acquire substantially all of the assets of H.A. Rogers. H.A. Rogers is a small personal and commercial lines property and casualty insurance agency. This is a strategic regional insurance expansion into the northern New York market where NBT Bank has a long established presence. The acquisition is expected to close in the third quarter.


6
Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. (Eastern) Tuesday, July 26, 2022, to review second 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 $11.72 billion at June 30, 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.


7
Currently, one of the most significant factors that could cause actual outcomes to differ materially from the Company’s forward-looking statements is the potential adverse effect of the current COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company, its customers and the global economy and financial markets. The extent to which the COVID-19 pandemic impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, treatment developments, public adoption rates of COVID-19 vaccines, including booster shots, and their effectiveness against emerging variants of COVID-19, the impact of the COVID-19 pandemic on the Company’s customers and demand for financial services, the actions governments, businesses and individuals take in response to the pandemic, the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies, national and local economic activity, and the pace of recovery when the COVID-19 pandemic subsides, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic.

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.


8
NBT Bancorp Inc. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)
     

 
2022
   
2021
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Profitability:
                             
Diluted earnings per share
 
$
0.88
   
$
0.90
   
$
0.86
   
$
0.86
   
$
0.92
 
Weighted average diluted common shares outstanding
   
43,092,851
     
43,385,451
     
43,574,539
     
43,631,497
     
43,792,940
 
Return on average assets3
   
1.28
%
   
1.32
%
   
1.23
%
   
1.26
%
   
1.39
%
Return on average equity3
   
12.73
%
   
12.78
%
   
11.89
%
   
12.04
%
   
13.42
%
Return on average tangible common equity1 3
   
17.00
%
   
16.87
%
   
15.70
%
   
15.97
%
   
17.93
%
Net interest margin1 3
   
3.21
%
   
2.95
%
   
3.08
%
   
2.88
%
   
3.00
%
                                         
   
6 Months Ended June 30,
                       
     
2022
     
2021
                         
Profitability:
                                       
Diluted earnings per share
 
$
1.78
   
$
1.83
                         
Weighted average diluted common shares outstanding
   
43,238,248
     
43,839,060
                         
Return on average assets3
   
1.30
%
   
1.42
%
                       
Return on average equity3
   
12.76
%
   
13.49
%
                       
Return on average tangible common equity1 3
   
16.93
%
   
18.08
%
                       
Net interest margin1 3
   
3.08
%
   
3.08
%
                       
                                         
     
2022
     
2021
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Balance sheet data:
                                       
Short-term interest-bearing accounts
 
$
328,593
   
$
913,315
   
$
1,111,296
   
$
1,131,074
   
$
883,758
 
Securities available for sale
   
1,619,356
     
1,662,697
     
1,687,361
     
1,576,030
     
1,534,733
 
Securities held to maturity
   
936,512
     
895,005
     
733,210
     
683,103
     
622,351
 
Net loans
   
7,684,081
     
7,559,826
     
7,406,459
     
7,473,442
     
7,419,127
 
Total assets
   
11,720,459
     
12,147,833
     
12,012,111
     
11,994,411
     
11,574,947
 
Total deposits
   
10,028,708
     
10,461,623
     
10,234,469
     
10,195,178
     
9,785,257
 
Total borrowings
   
265,796
     
278,788
     
311,476
     
313,311
     
304,110
 
Total liabilities
   
10,531,903
     
10,945,583
     
10,761,658
     
10,752,954
     
10,349,891
 
Stockholders' equity
   
1,188,556
     
1,202,250
     
1,250,453
     
1,241,457
     
1,225,056
 
                                         
Capital:
                                       
Equity to assets
   
10.14
%
   
9.90
%
   
10.41
%
   
10.35
%
   
10.58
%
Tangible equity ratio1
   
7.87
%
   
7.70
%
   
8.20
%
   
8.13
%
   
8.28
%
Book value per share
 
$
27.75
   
$
27.96
   
$
28.97
   
$
28.65
   
$
28.19
 
Tangible book value per share2
 
$
20.99
   
$
21.25
   
$
22.26
   
$
21.95
   
$
21.50
 
Leverage ratio
   
9.77
%
   
9.52
%
   
9.41
%
   
9.47
%
   
9.40
%
Common equity tier 1 capital ratio
   
12.14
%
   
12.23
%
   
12.25
%
   
12.20
%
   
12.12
%
Tier 1 capital ratio
   
13.27
%
   
13.39
%
   
13.43
%
   
13.39
%
   
13.34
%
Total risk-based capital ratio
   
15.50
%
   
15.64
%
   
15.73
%
   
15.74
%
   
15.78
%
Common stock price (end of period)
 
$
37.59
   
$
36.13
   
$
38.52
   
$
36.12
   
$
35.97
 


9
NBT Bancorp Inc. and Subsidiaries
Asset Quality and Consolidated Loan Balances
(unaudited, dollars in thousands)

   
2022
   
2021
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Asset quality:
                             
Nonaccrual loans
 
$
23,673
   
$
25,812
   
$
30,285
   
$
35,737
   
$
40,550
 
90 days past due and still accruing
   
2,096
     
1,944
     
2,458
     
2,940
     
2,575
 
Total nonperforming loans
   
25,769
     
27,756
     
32,743
     
38,677
     
43,125
 
Other real estate owned
   
-
     
-
     
167
     
859
     
798
 
Total nonperforming assets
   
25,769
     
27,756
     
32,910
     
39,536
     
43,923
 
Allowance for loan losses
   
93,600
     
90,000
     
92,000
     
93,000
     
98,500
 
                                         
Asset quality ratios (total):
                                       
Allowance for loan losses to total loans
   
1.20
%
   
1.18
%
   
1.23
%
   
1.23
%
   
1.31
%
Total nonperforming loans to total loans
   
0.33
%
   
0.36
%
   
0.44
%
   
0.51
%
   
0.57
%
Total nonperforming assets to total assets
   
0.22
%
   
0.23
%
   
0.27
%
   
0.33
%
   
0.38
%
Allowance for loan losses to total nonperforming loans
   
363.23
%
   
324.25
%
   
280.98
%
   
240.45
%
   
228.41
%
Past due loans to total loans4
   
0.40
%
   
0.24
%
   
0.29
%
   
0.46
%
   
0.26
%
Net charge-offs to average loans3
   
0.04
%
   
0.14
%
   
0.22
%
   
0.11
%
   
0.07
%
                                         
Asset quality ratios (excluding paycheck protection program):
                                 
Allowance for loan losses to total loans
   
1.21
%
   
1.18
%
   
1.24
%
   
1.28
%
   
1.38
%
Total nonperforming loans to total loans
   
0.33
%
   
0.37
%
   
0.44
%
   
0.53
%
   
0.60
%
Total nonperforming assets to total assets
   
0.22
%
   
0.23
%
   
0.28
%
   
0.34
%
   
0.39
%
Allowance for loan losses to total nonperforming loans
   
363.27
%
   
324.24
%
   
280.96
%
   
240.42
%
   
228.36
%
Past due loans to total loans4
   
0.40
%
   
0.25
%
   
0.29
%
   
0.48
%
   
0.27
%
Net charge-offs to average loans3
   
0.04
%
   
0.14
%
   
0.22
%
   
0.12
%
   
0.07
%
                                         
   
2022
     
2021
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Allowance for loan losses as a percentage of loans by segment:
                         
Commercial & industrial
   
0.75
%
   
0.66
%
   
0.78
%
   
0.83
%
   
1.11
%
Commercial real estate
   
0.89
%
   
0.79
%
   
0.78
%
   
0.93
%
   
1.26
%
Paycheck protection program
   
0.01
%
   
0.01
%
   
0.01
%
   
0.01
%
   
0.01
%
Residential real estate
   
0.79
%
   
0.88
%
   
0.92
%
   
0.93
%
   
0.98
%
Auto
   
0.79
%
   
0.76
%
   
0.79
%
   
0.78
%
   
0.76
%
Other consumer
   
3.98
%
   
4.14
%
   
4.49
%
   
4.57
%
   
4.27
%
  Total
   
1.20
%
   
1.18
%
   
1.23
%
   
1.23
%
   
1.31
%
  Total excluding PPP loans
   
1.21
%
   
1.18
%
   
1.24
%
   
1.28
%
   
1.38
%
                                         
   
2022
     
2021
 
Loans by line of business:
 
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Commercial
 
$
1,298,072
   
$
1,214,834
   
$
1,155,240
   
$
1,148,176
   
$
1,159,591
 
Commercial real estate
   
2,670,633
     
2,709,611
     
2,655,367
     
2,638,762
     
2,585,421
 
Paycheck protection program
   
17,286
     
50,977
     
101,222
     
276,195
     
359,738
 
Residential real estate mortgages
   
1,606,188
     
1,584,551
     
1,571,232
     
1,549,684
     
1,512,354
 
Indirect auto
   
936,516
     
890,643
     
859,454
     
873,860
     
899,324
 
Residential solar
   
599,565
     
514,526
     
440,016
     
365,299
     
325,717
 
Home equity
   
313,395
     
319,180
     
330,357
     
339,316
     
351,469
 
Other consumer
   
336,026
     
365,504
     
385,571
     
375,150
     
324,013
 
  Total loans
 
$
7,777,681
   
$
7,649,826
   
$
7,498,459
   
$
7,566,442
   
$
7,517,627
 
                                         
PPP income recognized
 
$
1,301
   
$
1,976
   
$
7,545
   
$
2,861
   
$
4,732
 
PPP unamortized fees
 
$
414
   
$
1,629
   
$
3,420
   
$
10,536
   
$
12,576
 


10
NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)

   
June 30,
   
December 31,
Assets
 
2022
   
2021
Cash and due from banks
 
$
195,023
   
$
157,775
Short-term interest-bearing accounts
   
328,593
     
1,111,296
Equity securities, at fair value
   
29,974
     
33,550
Securities available for sale, at fair value
   
1,619,356
     
1,687,361
Securities held to maturity (fair value $864,234 and $735,260, respectively)
   
936,512
     
733,210
Federal Reserve and Federal Home Loan Bank stock
   
24,893
     
25,098
Loans held for sale
   
128
     
830
Loans
   
7,777,681
     
7,498,459
Less allowance for loan losses
   
93,600
     
92,000
  Net loans
 
$
7,684,081
   
$
7,406,459
Premises and equipment, net
   
69,426
     
72,093
Goodwill
   
281,112
     
280,541
Intangible assets, net
   
8,147
     
8,927
Bank owned life insurance
   
230,390
     
228,238
Other assets
   
312,824
     
266,733
Total assets
 
$
11,720,459
   
$
12,012,111
               
Liabilities and stockholders' equity
             
Demand (noninterest bearing)
 
$
3,717,899
   
$
3,689,556
Savings, NOW and money market
   
5,845,045
     
6,043,441
Time
   
465,764
     
501,472
  Total deposits
 
$
10,028,708
   
$
10,234,469
Short-term borrowings
   
62,545
     
97,795
Long-term debt
   
3,347
     
13,995
Subordinated debt, net
   
98,708
     
98,490
Junior subordinated debt
   
101,196
     
101,196
Other liabilities
   
237,399
     
215,713
Total liabilities
 
$
10,531,903
   
$
10,761,658
               
Total stockholders' equity
 
$
1,188,556
   
$
1,250,453
               
Total liabilities and stockholders' equity
 
$
11,720,459
   
$
12,012,111


11
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2022
   
2021
   
2022
   
2021
 
Interest, fee and dividend income
                       
Interest and fees on loans
 
$
78,539
   
$
74,795
   
$
151,882
   
$
149,888
 
Securities available for sale
   
7,317
     
5,762
     
14,157
     
11,306
 
Securities held to maturity
   
4,185
     
3,096
     
7,678
     
6,478
 
Other
   
1,442
     
391
     
1,967
     
682
 
  Total interest, fee and dividend income
 
$
91,483
   
$
84,044
   
$
175,684
   
$
168,354
 
Interest expense
                               
Deposits
 
$
1,756
   
$
2,862
   
$
3,598
   
$
6,034
 
Short-term borrowings
   
13
     
32
     
29
     
102
 
Long-term debt
   
33
     
88
     
120
     
212
 
Subordinated debt
   
1,359
     
1,359
     
2,718
     
2,718
 
Junior subordinated debt
   
737
     
525
     
1,286
     
1,055
 
  Total interest expense
 
$
3,898
   
$
4,866
   
$
7,751
   
$
10,121
 
Net interest income
 
$
87,585
   
$
79,178
   
$
167,933
   
$
158,233
 
Provision for loan losses
   
4,390
     
(5,216
)
   
4,986
     
(8,012
)
  Net interest income after provision for loan losses
 
$
83,195
   
$
84,394
   
$
162,947
   
$
166,245
 
Noninterest income
                               
Service charges on deposit accounts
 
$
3,763
   
$
3,028
   
$
7,451
   
$
6,055
 
Card services income
   
9,751
     
9,184
     
18,446
     
16,734
 
Retirement plan administration fees
   
12,676
     
9,779
     
25,955
     
19,877
 
Wealth management
   
8,252
     
8,406
     
16,892
     
16,316
 
Insurance services
   
3,578
     
3,508
     
7,366
     
6,969
 
Bank owned life insurance income
   
1,411
     
1,659
     
3,065
     
3,040
 
Net securities (losses) gains
   
(587
)
   
201
     
(766
)
   
668
 
Other
   
2,812
     
3,551
     
5,906
     
6,695
 
  Total noninterest income
 
$
41,656
   
$
39,316
   
$
84,315
   
$
76,354
 
Noninterest expense
                               
Salaries and employee benefits
 
$
46,716
   
$
42,671
   
$
92,224
   
$
84,272
 
Technology and data services
   
8,945
     
8,841
     
17,492
     
17,733
 
Occupancy
   
6,487
     
6,370
     
13,280
     
13,259
 
Professional fees and outside services
   
3,906
     
4,030
     
8,182
     
7,619
 
Office supplies and postage
   
1,548
     
1,615
     
2,972
     
3,114
 
FDIC expense
   
810
     
663
     
1,612
     
1,471
 
Advertising
   
730
     
468
     
1,384
     
919
 
Amortization of intangible assets
   
545
     
682
     
1,181
     
1,494
 
Loan collection and other real estate owned, net
   
757
     
663
     
1,141
     
1,253
 
Other
   
5,675
     
5,416
     
8,794
     
8,173
 
  Total noninterest expense
 
$
76,119
   
$
71,419
   
$
148,262
   
$
139,307
 
Income before income tax expense
 
$
48,732
   
$
52,291
   
$
99,000
   
$
103,292
 
Income tax expense
   
10,957
     
11,995
     
22,099
     
23,150
 
   Net income
 
$
37,775
   
$
40,296
   
$
76,901
   
$
80,142
 
Earnings Per Share
                               
Basic
 
$
0.88
   
$
0.93
   
$
1.79
   
$
1.84
 
Diluted
 
$
0.88
   
$
0.92
   
$
1.78
   
$
1.83
 


12
NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)

   
2022
   
2021
 
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
   
2nd Q
 
Interest, fee and dividend income
                         
Interest and fees on loans
 
$
78,539
   
$
73,343
   
$
79,470
   
$
72,817
   
$
74,795
 
Securities available for sale
   
7,317
     
6,840
     
6,101
     
5,898
     
5,762
 
Securities held to maturity
   
4,185
     
3,493
     
3,097
     
2,976
     
3,096
 
Other
   
1,442
     
525
     
639
     
524
     
391
 
Total interest, fee and dividend income
 
$
91,483
   
$
84,201
   
$
89,307
   
$
82,215
   
$
84,044
 
Interest expense
                                       
Deposits
 
$
1,756
   
$
1,842
   
$
2,132
   
$
2,548
   
$
2,862
 
Short-term borrowings
   
13
     
16
     
28
     
28
     
32
 
Long-term debt
   
33
     
87
     
88
     
89
     
88
 
Subordinated debt
   
1,359
     
1,359
     
1,360
     
1,359
     
1,359
 
Junior subordinated debt
   
737
     
549
     
518
     
517
     
525
 
Total interest expense
 
$
3,898
   
$
3,853
   
$
4,126
   
$
4,541
   
$
4,866
 
Net interest income
 
$
87,585
   
$
80,348
   
$
85,181
   
$
77,674
   
$
79,178
 
Provision for loan losses
   
4,390
     
596
     
3,097
     
(3,342
)
   
(5,216
)
Net interest income after provision for loan losses
 
$
83,195
   
$
79,752
   
$
82,084
   
$
81,016
   
$
84,394
 
Noninterest income
                                       
Service charges on deposit accounts
 
$
3,763
   
$
3,688
   
$
3,804
   
$
3,489
   
$
3,028
 
Card services income
   
9,751
     
8,695
     
8,847
     
9,101
     
9,184
 
Retirement plan administration fees
   
12,676
     
13,279
     
11,816
     
10,495
     
9,779
 
Wealth management
   
8,252
     
8,640
     
8,619
     
8,783
     
8,406
 
Insurance services
   
3,578
     
3,788
     
3,394
     
3,720
     
3,508
 
Bank owned life insurance income
   
1,411
     
1,654
     
1,629
     
1,548
     
1,659
 
Net securities (losses) gains
   
(587
)
   
(179
)
   
(2
)
   
(100
)
   
201
 
Other
   
2,812
     
3,094
     
3,004
     
3,293
     
3,551
 
Total noninterest income
 
$
41,656
   
$
42,659
   
$
41,111
   
$
40,329
   
$
39,316
 
Noninterest expense
                                       
Salaries and employee benefits
 
$
46,716
   
$
45,508
   
$
44,118
   
$
44,190
   
$
42,671
 
Technology and data services
   
8,945
     
8,547
     
8,563
     
8,421
     
8,841
 
Occupancy
   
6,487
     
6,793
     
6,635
     
6,154
     
6,370
 
Professional fees and outside services
   
3,906
     
4,276
     
4,903
     
3,784
     
4,030
 
Office supplies and postage
   
1,548
     
1,424
     
1,528
     
1,364
     
1,615
 
FDIC expense
   
810
     
802
     
798
     
772
     
663
 
Advertising
   
730
     
654
     
1,019
     
583
     
468
 
Amortization of intangible assets
   
545
     
636
     
651
     
663
     
682
 
Loan collection and other real estate owned, net
   
757
     
384
     
956
     
706
     
663
 
Other
   
5,675
     
3,119
     
5,934
     
6,232
     
5,416
 
Total noninterest expense
 
$
76,119
   
$
72,143
   
$
75,105
   
$
72,869
   
$
71,419
 
Income before income tax expense
 
$
48,732
   
$
50,268
   
$
48,090
   
$
48,476
   
$
52,291
 
Income tax expense
   
10,957
     
11,142
     
10,780
     
11,043
     
11,995
 
Net income
 
$
37,775
   
$
39,126
   
$
37,310
   
$
37,433
   
$
40,296
 
Earnings Per Share
                                       
Basic
 
$
0.88
   
$
0.91
   
$
0.86
   
$
0.86
   
$
0.93
 
Diluted
 
$
0.88
   
$
0.90
   
$
0.86
   
$
0.86
   
$
0.92
 


13
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
 
     
Q2 - 2022
     
Q1 - 2022
     
Q4 - 2021
     
Q3 - 2021
     
Q2 - 2021
 
Assets
                                                                     
Short-term interest-bearing accounts
 
$
553,548
     
0.82
%
 
$
990,319
     
0.17
%
 
$
1,145,794
     
0.16
%
 
$
1,014,120
     
0.16
%
 
$
974,034
     
0.09
%
Securities taxable1
   
2,439,960
     
1.74
%
   
2,284,578
     
1.67
%
   
2,081,796
     
1.57
%
   
1,923,700
     
1.63
%
   
1,864,542
     
1.69
%
Securities tax-exempt 1 5
   
256,799
     
1.83
%
   
258,513
     
1.84
%
   
257,320
     
1.85
%
   
246,685
     
1.97
%
   
193,108
     
2.59
%
FRB and FHLB stock
   
24,983
     
5.03
%
   
25,026
     
1.98
%
   
25,149
     
2.74
%
   
25,154
     
1.91
%
   
25,115
     
2.67
%
Loans1 6
   
7,707,730
     
4.09
%
   
7,530,674
     
3.95
%
   
7,507,165
     
4.20
%
   
7,517,839
     
3.84
%
   
7,574,272
     
3.96
%
Total interest-earning assets
 
$
10,983,020
     
3.35
%
 
$
11,089,110
     
3.09
%
 
$
11,017,224
     
3.23
%
 
$
10,727,498
     
3.05
%
 
$
10,631,071
     
3.18
%
Other assets
   
883,498
             
947,578
             
982,136
             
1,019,797
             
971,681
         
Total assets
 
$
11,866,518
           
$
12,036,688
           
$
11,999,360
           
$
11,747,295
           
$
11,602,752
         
Liabilities and stockholders' equity
                                                                         
Money market deposit accounts
 
$
2,577,367
     
0.14
%
 
$
2,720,338
     
0.15
%
 
$
2,678,477
     
0.16
%
 
$
2,580,570
     
0.19
%
 
$
2,605,767
     
0.21
%
NOW deposit accounts
   
1,580,132
     
0.07
%
   
1,583,091
     
0.05
%
   
1,551,846
     
0.05
%
   
1,442,678
     
0.05
%
   
1,454,751