UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022.

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.

COMMISSION FILE NUMBER 0-14703

NBT BANCORP INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware
 
16-1268674
(State of Incorporation)
 
(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

None
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Title of class
 
Trading Symbol(s)
 
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: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer 
Accelerated filer
Non-accelerated filer
Smaller reporting company
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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No

As of July 29, 2022, there were 42,838,910 shares outstanding of the Registrant’s Common Stock, $0.01 par value per share.



NBT BANCORP INC.
FORM 10-Q - Quarter Ended June 30, 2022

TABLE OF CONTENTS

PART I
 FINANCIAL INFORMATION

Item 1
Financial Statements (Unaudited)
 
     
 
3
     
 
4
     
 
5
     
 
6
     
 
7
     
 
9
     
Item 2
28
     
Item 3
43
     
Item 4
43
     
PART II
OTHER INFORMATION
 
     
Item 1
44
Item 1A
44
Item 2
44
Item 3
44
Item 4
44
Item 5
44
Item 6
45
     
  46

Item 1 – FINANCIAL STATEMENTS

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)

 
June 30,
   
December 31,
 
   
2022
   
2021
 
(In thousands, except share and per share data)
           
Assets
           
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
               
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
 
Stockholders’ equity
               
Preferred stock, $0.01 par value. Authorized 2,500,000 shares at June 30, 2022 and December 31, 2021
 
$
-
   
$
-
 
Common stock, $0.01 par value. Authorized 100,000,000 shares at June 30, 2022 and December 31, 2021; issued 49,651,493 at June 30, 2022 and December 31, 2021
   
497
     
497
 
Additional paid-in-capital
   
577,345
     
576,976
 
Retained earnings
   
909,029
     
856,203
 
Accumulated other comprehensive loss
   
(124,781
)
   
(23,344
)
Common stock in treasury, at cost, 6,815,087 and 6,483,481 shares at June 30, 2022 and December 31, 2021, respectively
   
(173,534
)
   
(159,879
)
Total stockholders’ equity
 
$
1,188,556
   
$
1,250,453
 
Total liabilities and stockholders’ equity
 
$
11,720,459
   
$
12,012,111
 

See accompanying notes to unaudited interim consolidated financial statements.

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income (unaudited)

 
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2022
   
2021
   
2022
   
2021
 
(In thousands, except per share data)
                       
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
     
16,733
 
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
     
6,696
 
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
 

See accompanying notes to unaudited interim consolidated financial statements.

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (unaudited)

 
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2022
   
2021
   
2022
   
2021
 
(In thousands)
                       
Net income
 
$
37,775
   
$
40,296
   
$
76,901
   
$
80,142
 
Other comprehensive income (loss), net of tax:
                               
                                 
Securities available for sale:
                               
Unrealized net holding (losses) gains arising during the period, gross
 
$
(44,860
)
 
$
9,408
   
$
(135,890
)
 
$
(13,903
)
Tax effect
   
11,215
     
(2,352
)
   
33,973
     
3,475
 
Unrealized net holding (losses) gains arising during the period, net
 
$
(33,645
)
 
$
7,056
   
$
(101,917
)
 
$
(10,428
)
                                 
                                 
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross
 
$
131
   
$
143
   
$
268
   
$
285
 
Tax effect
   
(32
)
   
(36
)
   
(67
)
   
(71
)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net
 
$
99
   
$
107
   
$
201
   
$
214
 
                                 
Total securities available for sale, net
 
$
(33,546
)
 
$
7,163
   
$
(101,716
)
 
$
(10,214
)
                                 
Cash flow hedges:
                               
Reclassification of net unrealized losses on cash flow hedges to interest expense, gross
 
$
-
   
$
-
   
$
-
   
$
21
 
Tax effect
   
-
     
-
     
-
     
(5
)
Reclassification of net unrealized losses on cash flow hedges to interest expense, net
 
$
-
   
$
-
   
$
-
   
$
16
 
                                 
Total cash flow hedges, net
 
$
-
   
$
-
   
$
-
   
$
16
 
                                 
Pension and other benefits:
                               
Amortization of prior service cost and actuarial losses, gross
 
$
186
   
$
326
   
$
372
   
$
652
 
Tax effect
   
(46
)
   
(82
)
   
(93
)
   
(163
)
Amortization of prior service cost and actuarial losses, net
 
$
140
   
$
244
   
$
279
   
$
489
 
                                 
Total pension and other benefits, net
 
$
140
   
$
244
   
$
279
   
$
489
 
                                 
Total other comprehensive (loss) income
 
$
(33,406
)
 
$
7,407
   
$
(101,437
)
 
$
(9,709
)
Comprehensive income (loss)
 
$
4,369
   
$
47,703
   
$
(24,536
)
 
$
70,433
 

See accompanying notes to unaudited interim consolidated financial statements.

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity (unaudited)

 
Common
Stock
   
Additional
Paid-in-
Capital
   
Retained
Earnings
   
Accumulated
Other
Comprehensive
(Loss) Income
   
Common
Stock in
Treasury
   
Total
 
(In thousands, except share and per share data)
                                   
Balance at March 31, 2022
 
$
497
   
$
577,374
   
$
883,246
   
$
(91,375
)
 
$
(167,492
)
 
$
1,202,250
 
Net income
   
-
     
-
     
37,775
     
-
     
-
     
37,775
 
Cash dividends - $0.28 per share
   
-
     
-
     
(11,992
)
   
-
     
-
     
(11,992
)
Purchase of 182,900 treasury shares
   
-
     
-
     
-
     
-
     
(6,561
)
   
(6,561
)
Net issuance of 26,983 shares to employee and other stock plans
   
-
     
(836
)
   
-
     
-
     
519
     
(317
)
Stock-based compensation
   
-
     
807
     
-
     
-
     
-
     
807
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(33,406
)
   
-
     
(33,406
)
Balance at June 30, 2022
 
$
497
   
$
577,345
   
$
909,029
   
$
(124,781
)
 
$
(173,534
)
 
$
1,188,556
 
                                                 
Balance at March 31, 2021
 
$
497
   
$
578,597
   
$
777,170
   
$
(16,699
)
 
$
(148,584
)
 
$
1,190,981
 
Net income
   
-
     
-
     
40,296
     
-
     
-
     
40,296
 
Cash dividends - $0.27 per share
   
-
     
-
     
(11,744
)
   
-
     
-
     
(11,744
)
Purchase of 23,627 treasury shares
    -       -       -       -       (851 )     (851 )
Net issuance of 53,788 shares to employee and other stock plans
   
-
     
(2,453
)
   
-
     
-
     
832
     
(1,621
)
Stock-based compensation
   
-
     
588
     
-
     
-
     
-
     
588
 
Other comprehensive income
   
-
     
-
     
-
     
7,407
     
-
     
7,407
 
Balance at June 30, 2021
 
$
497
   
$
576,732
   
$
805,722
   
$
(9,292
)
 
$
(148,603
)
 
$
1,225,056
 

 
Common
Stock
   
Additional
Paid-in-
Capital
   
Retained
Earnings
   
Accumulated
Other
Comprehensive
(Loss) Income
   
Common
Stock in
Treasury
   
Total
 
(In thousands, except share and per share data)
                                   
Balance at December 31, 2021
 
$
497
   
$
576,976
   
$
856,203
   
$
(23,344
)
 
$
(159,879
)
 
$
1,250,453
 
Net income
   
-
     
-
     
76,901
     
-
     
-
     
76,901
 
Cash dividends - $0.56 per share
   
-
     
-
     
(24,075
)
   
-
     
-
     
(24,075
)
Purchase of 400,000 treasury shares
   
-
     
-
     
-
     
-
     
(14,713
)
   
(14,713
)
Net issuance of 68,394 shares to employee and other stock plans
   
-
     
(2,910
)
   
-
     
-
     
1,058
     
(1,852
)
Stock-based compensation
   
-
     
3,279
     
-
     
-
     
-
     
3,279
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(101,437
)
   
-
     
(101,437
)
Balance at June 30, 2022
 
$
497
   
$
577,345
   
$
909,029
   
$
(124,781
)
 
$
(173,534
)
 
$
1,188,556
 
                                                 
Balance at December 31, 2020
 
$
497
   
$
578,082
   
$
749,056
   
$
417
   
$
(140,434
)
 
$
1,187,618
 
Net income
   
-
     
-
     
80,142
     
-
     
-
     
80,142
 
Cash dividends - $0.54 per share
   
-
     
-
     
(23,476
)
   
-
     
-
     
(23,476
)
Purchase of 280,658 treasury shares
   
-
     
-
     
-
     
-
     
(9,871
)
   
(9,871
)
Net issuance of 106,927 shares to employee and other stock plans
   
-
     
(4,606
)
   
-
     
-
     
1,702
     
(2,904
)
Stock-based compensation
   
-
     
3,256
     
-
     
-
     
-
     
3,256
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(9,709
)
   
-
     
(9,709
)
Balance at June 30, 2021
 
$
497
   
$
576,732
   
$
805,722
   
$
(9,292
)
 
$
(148,603
)
 
$
1,225,056
 

See accompanying notes to unaudited interim consolidated financial statements.

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)

 
Six Months Ended
June 30,
 
   
2022
   
2021
 
(In thousands)
           
Operating activities
           
Net income
 
$
76,901
   
$
80,142
 
Adjustments to reconcile net income to net cash provided by operating activities
               
Provision for loan losses
   
4,986
     
(8,012
)
Depreciation and amortization of premises and equipment
   
5,003
     
4,921
 
Net amortization on securities
   
1,927
     
3,049
 
Amortization of intangible assets
   
1,181
     
1,494
 
Amortization of operating lease right-of-use assets
   
3,341
     
3,613
 
Excess tax benefit on stock-based compensation
   
(176
)
   
(322
)
Stock-based compensation expense
   
3,279
     
3,256
 
Bank owned life insurance income
   
(3,065
)
   
(3,040
)
Amortization of subordinated debt issuance costs
   
218
     
219
 
Proceeds from sale of loans held for sale
   
2,728
     
28,667
 
Originations of loans held for sale
   
(2,139
)
   
(28,792
)
Net gains on sale of loans held for sale
   
(78
)
   
(160
)
Net security losses (gains)
   
766
     
(668
)
Net gains on sale of other real estate owned
   
(259
)
   
(19
)
Net change in other assets and other liabilities
   
8,127
     
11,339
 
Net cash provided by operating activities
 
$
102,740
   
$
95,687
 
Investing activities
               
Net cash used in acquisitions
  $
(477 )   $
-  
Securities available for sale:
               
Proceeds from maturities, calls and principal paydowns
 

133,012
   

216,468
 
Purchases
   
(201,985
)
   
(418,915
)
Securities held to maturity:
               
Proceeds from maturities, calls and principal paydowns
   
109,956
     
110,328
 
Purchases
   
(313,825
)
   
(116,360
)
Equity securities:
               
Proceeds from calls
    -       1,000  
Other:
               
Net increase in loans
   
(282,417
)
   
(22,270
)
Proceeds from Federal Home Loan Bank stock redemption
   
572
     
2,352
 
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock
   
(367
)
   
(131
)
Proceeds from settlement of bank owned life insurance
   
913
     
2,967
 
Purchases of bank owned life insurance
    -       (40,000 )
Purchases of premises and equipment, net
   
(2,267
)
   
(3,138
)
Proceeds from sales of other real estate owned
   
426
     
719
 
Net cash used in investing activities
 
$
(556,459
)
 
$
(266,980
)
Financing activities
               
Net (decrease) increase in deposits
 
$
(205,761
)
 
$
703,565
 
Net decrease in short-term borrowings
   
(35,250
)
   
(77,788
)
Repayments of long-term debt
   
(10,648
)
   
(25,052
)
Proceeds from the issuance of shares to employee and other stock plans
   
-
     
112
 
Cash paid by employer for tax-withholdings on stock issuance
   
(1,289
)
   
(1,935
)
Purchase of treasury stock
   
(14,713
)
   
(9,871
)
Cash dividends
   
(24,075
)
   
(23,476
)
Net cash (used in) provided by financing activities
 
$
(291,736
)
 
$
565,555
 
Net (decrease) increase in cash and cash equivalents
 
$
(745,455
)
 
$
394,262
 
Cash and cash equivalents at beginning of period
   
1,269,071
     
672,681
 
Cash and cash equivalents at end of period
 
$
523,616
   
$
1,066,943
 

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited) (continued)

 
Six Months Ended
June 30,
 
   
2022
   
2021
 
Supplemental disclosure of cash flow information
           
Cash paid during the period for:
           
Interest expense
 
$
8,452
   
$
11,350
 
Income taxes paid, net of refund
   
24,203
     
28,004
 
Noncash investing activities:
               
Loans transferred to other real estate owned
  $
-     $
40  
Acquisitions: