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 September 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 October 31, 2022, there were 42,839,903 shares outstanding of the Registrant’s Common Stock, $0.01 par value per share.



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

TABLE OF CONTENTS
PART I
FINANCIAL INFORMATION

Item 1
Financial Statements (Unaudited)
 
     
 
3
     
 
4
     
 
5
     
 
6
     
 
7
     
 
9
     
Item 2
29
     
Item 3
45
     
Item 4
45
     
PART II
OTHER INFORMATION
 
     
Item 1
46
Item 1A
46
Item 2
46
Item 3
46
Item 4
46
Item 5
46
Item 6
47
     
 
48

Item 1 – FINANCIAL STATEMENTS

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

 
September 30,
   
December 31,
 
   
2022
   
2021
 
(In thousands, except share and per share data)
           
Assets
           
Cash and due from banks
 
$
223,755
   
$
157,775
 
Short-term interest-bearing accounts
   
97,303
     
1,111,296
 
Equity securities, at fair value
   
30,428
     
33,550
 
Securities available for sale, at fair value
   
1,556,501
     
1,687,361
 
Securities held to maturity (fair value $814,100 and $735,260, respectively)
   
929,541
     
733,210
 
Federal Reserve and Federal Home Loan Bank stock
   
24,892
     
25,098
 
Loans held for sale
   
87
     
830
 
Loans
   
7,904,784
     
7,498,459
 
Less allowance for loan losses
   
96,800
     
92,000
 
Net loans
 
$
7,807,984
   
$
7,406,459
 
Premises and equipment, net
   
69,338
     
72,093
 
Goodwill
   
281,204
     
280,541
 
Intangible assets, net
   
7,879
     
8,927
 
Bank owned life insurance
   
230,990
     
228,238
 
Other assets
   
380,840
     
266,733
 
Total assets
 
$
11,640,742
   
$
12,012,111
 
Liabilities
               
Demand (noninterest bearing)
 
$
3,714,342
   
$
3,689,556
 
Savings, NOW and money market
   
5,758,736
     
6,043,441
 
Time
   
445,673
     
501,472
 
Total deposits
 
$
9,918,751
   
$
10,234,469
 
Short-term borrowings
   
74,554
     
97,795
 
Long-term debt
   
3,322
     
13,995
 
Subordinated debt, net
   
98,817
     
98,490
 
Junior subordinated debt
   
101,196
     
101,196
 
Other liabilities
   
287,556
     
215,713
 
Total liabilities
 
$
10,484,196
   
$
10,761,658
 
Stockholders’ equity
               
Preferred stock, $0.01 par value. Authorized 2,500,000 shares at September 30, 2022 and December 31, 2021
 
$
-
   
$
-
 
Common stock, $0.01 par value. Authorized 100,000,000 shares at September 30, 2022 and December 31, 2021; issued 49,651,493 at September 30, 2022 and December 31, 2021
   
497
     
497
 
Additional paid-in-capital
   
577,899
     
576,976
 
Retained earnings
   
935,170
     
856,203
 
Accumulated other comprehensive loss
   
(183,539
)
   
(23,344
)
Common stock in treasury, at cost, 6,812,238 and 6,483,481 shares at September 30, 2022 and December 31, 2021, respectively
   
(173,481
)
   
(159,879
)
Total stockholders’ equity
 
$
1,156,546
   
$
1,250,453
 
Total liabilities and stockholders’ equity
 
$
11,640,742
   
$
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
September 30,
   
Nine Months Ended
September 30,
 
   
2022
   
2021
   
2022
   
2021
 
(In thousands, except per share data)
                       
Interest, fee and dividend income
                       
Interest and fees on loans
 
$
85,266
   
$
72,817
   
$
237,148
   
$
222,705
 
Securities available for sale
   
7,665
     
5,898
     
21,822
     
17,204
 
Securities held to maturity
   
4,854
     
2,976
     
12,532
     
9,454
 
Other
   
1,429
     
524
     
3,396
     
1,206
 
Total interest, fee and dividend income
 
$
99,214
   
$
82,215
   
$
274,898
   
$
250,569
 
Interest expense
                               
Deposits
 
$
2,233
   
$
2,548
   
$
5,831
   
$
8,582
 
Short-term borrowings
   
84
     
28
     
113
     
130
 
Long-term debt
   
20
     
89
     
140
     
301
 
Subordinated debt
   
1,360
     
1,359
     
4,078
     
4,077
 
Junior subordinated debt
   
1,039
     
517
     
2,325
     
1,572
 
Total interest expense
 
$
4,736
   
$
4,541
   
$
12,487
   
$
14,662
 
Net interest income
 
$
94,478
   
$
77,674
   
$
262,411
   
$
235,907
 
Provision for loan losses
   
4,484
     
(3,342
)
   
9,470
     
(11,354
)
Net interest income after provision for loan losses
 
$
89,994
   
$
81,016
   
$
252,941
   
$
247,261
 
Noninterest income
                               
Service charges on deposit accounts
 
$
3,581
   
$
3,489
   
$
11,032
   
$
9,544
 
Card services income    
5,654
     
9,101
     
24,100
     
25,835
 
Retirement plan administration fees
   
11,496
     
10,495
     
37,451
     
30,372
 
Wealth management
   
8,402
     
8,783
     
25,294
     
25,099
 
Insurance services
   
3,892
     
3,720
     
11,258
     
10,689
 
Bank owned life insurance income
   
1,560
     
1,548
     
4,625
     
4,588
 
Net securities (losses) gains
   
(148
)
   
(100
)
   
(914
)
   
568
 
Other
   
2,735
     
3,293
     
8,641
     
9,988
 
Total noninterest income
 
$
37,172
   
$
40,329
   
$
121,487
   
$
116,683
 
Noninterest expense
                               
Salaries and employee benefits
 
$
48,371
   
$
44,190
   
$
140,595
   
$
128,462
 
Technology and data services
    9,096       8,421       26,588       26,154  
Occupancy
   
6,481
     
6,154
     
19,761
     
19,413
 
Professional fees and outside services
   
3,817
     
3,784
     
11,999
     
11,403
 
Office supplies and postage
   
1,469
     
1,364
     
4,441
     
4,478
 
FDIC expense
   
787
     
772
     
2,399
     
2,243
 
Advertising
   
559
     
583
     
1,943
     
1,502
 
Amortization of intangible assets
   
544
     
663
     
1,725
     
2,157
 
Loan collection and other real estate owned, net
   
549
     
706
     
1,690
     
1,959
 
Other
   
5,021
     
6,232
     
13,815
     
14,405
 
Total noninterest expense
 
$
76,694
   
$
72,869
   
$
224,956
   
$
212,176
 
Income before income tax expense
 
$
50,472
   
$
48,476
   
$
149,472
   
$
151,768
 
Income tax expense
   
11,499
     
11,043
     
33,598
     
34,193
 
Net income
 
$
38,973
   
$
37,433
   
$
115,874
   
$
117,575
 
Earnings per share
                               
Basic
 
$
0.91
   
$
0.86
   
$
2.70
   
$
2.71
 
Diluted
 
$
0.90
   
$
0.86
   
$
2.68
   
$
2.69
 

See accompanying notes to unaudited interim consolidated financial statements.

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

 
Three Months Ended
September 30,
   
Nine Months Ended
September 30,
 
   
2022
   
2021
   
2022
   
2021
 
(In thousands)
                       
Net income
 
$
38,973
   
$
37,433
   
$
115,874
   
$
117,575
 
Other comprehensive income (loss), net of tax:
                               
                                 
Securities available for sale:
                               
Unrealized net holding (losses) gains arising during the period, gross
 
$
(78,653
)
 
$
(7,426
)
 
$
(214,543
)
 
$
(21,329
)
Tax effect
   
19,663
     
1,857
     
53,636
     
5,332
 
Unrealized net holding (losses) gains arising during the period, net
 
$
(58,990
)
 
$
(5,569
)
 
$
(160,907
)
 
$
(15,997
)
                                 
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross
 
$
125
   
$
149
   
$
393
   
$
434
 
Tax effect
   
(31
)
   
(38
)
   
(98
)
   
(109
)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net
 
$
94
   
$
111
   
$
295
   
$
325
 
                                 
Total securities available for sale, net
 
$
(58,896
)
 
$
(5,458
)
 
$
(160,612
)
 
$
(15,672
)
                                 
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
 
$
185
   
$
344
   
$
557
   
$
996
 
Tax effect
   
(47
)
   
(86
)
   
(140
)
   
(249
)
Amortization of prior service cost and actuarial losses, net
 
$
138
   
$
258
   
$
417
   
$
747
 
                                 
Total pension and other benefits, net
 
$
138
   
$
258
   
$
417
   
$
747
 
                                 
Total other comprehensive (loss)
 
$
(58,758
)
 
$
(5,200
)
 
$
(160,195
)
 
$
(14,909
)
Comprehensive (loss) income
 
$
(19,785
)
 
$
32,233
   
$
(44,321
)
 
$
102,666
 

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 June 30, 2022
 
$
497
   
$
577,345
   
$
909,029
   
$
(124,781
)
 
$
(173,534
)
 
$
1,188,556
 
Net income
   
-
     
-
     
38,973
     
-
     
-
     
38,973
 
Cash dividends - $0.30 per share
   
-
     
-
     
(12,832
)
   
-
     
-
     
(12,832
)
Net issuance of 2,849 shares to employee and other stock plans
   
-
     
(116
)
   
-
     
-
     
53
     
(63
)
Stock-based compensation
   
-
     
670
     
-
     
-
     
-
     
670
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(58,758
)
   
-
     
(58,758
)
Balance at September 30, 2022
 
$
497
   
$
577,899
   
$
935,170
   
$
(183,539
)
 
$
(173,481
)
 
$
1,156,546
 
                                                 
Balance at June 30, 2021
 
$
497
   
$
576,732
   
$
805,722
   
$
(9,292
)
 
$
(148,603
)
 
$
1,225,056
 
Net income
   
-
     
-
     
37,433
     
-
     
-
     
37,433
 
Cash dividends - $0.28 per share
   
-
     
-
     
(12,138
)
   
-
     
-
     
(12,138
)
Purchase of 119,342 treasury shares
    -       -       -       -       (4,212 )     (4,212 )
Net issuance of 1,672 shares to employee and other stock plans
   
-
     
(73
)
   
-
     
-
     
28
     
(45
)
Stock-based compensation
   
-
     
563
     
-
     
-
     
-
     
563
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(5,200
)
   
-
     
(5,200
)
Balance at September 30, 2021
 
$
497
   
$
577,222
   
$
831,017
   
$
(14,492
)
 
$
(152,787
)
 
$
1,241,457
 

 
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
   
-
     
-
     
115,874
     
-
     
-
     
115,874
 
Cash dividends - $0.86 per share
   
-
     
-
     
(36,907
)
   
-
     
-
     
(36,907
)
Purchase of 400,000 treasury shares
   
-
     
-
     
-
     
-
     
(14,713
)
   
(14,713
)
Net issuance of 71,243 shares to employee and other stock plans
   
-
     
(3,026
)
   
-
     
-
     
1,111
     
(1,915
)
Stock-based compensation
   
-
     
3,949
     
-
     
-
     
-
     
3,949
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(160,195
)
   
-
     
(160,195
)
Balance at September 30, 2022
 
$
497
   
$
577,899
   
$
935,170
   
$
(183,539
)
 
$
(173,481
)
 
$
1,156,546
 
                                                 
Balance at December 31, 2020
 
$
497
   
$
578,082
   
$
749,056
   
$
417
   
$
(140,434
)
 
$
1,187,618
 
Net income
   
-
     
-
     
117,575
     
-
     
-
     
117,575
 
Cash dividends - $0.82 per share
   
-
     
-
     
(35,614
)
   
-
     
-
     
(35,614
)
Purchase of 400,000 treasury shares
   
-
     
-
     
-
     
-
     
(14,083
)
   
(14,083
)
Net issuance of 108,599 shares to employee and other stock plans
   
-
     
(4,679
)
   
-
     
-
     
1,730
     
(2,949
)
Stock-based compensation
   
-
     
3,819
     
-
     
-
     
-
     
3,819
 
Other comprehensive (loss)
   
-
     
-
     
-
     
(14,909
)
   
-
     
(14,909
)
Balance at September 30, 2021
 
$
497
   
$
577,222
   
$
831,017
   
$
(14,492
)
 
$
(152,787
)
 
$
1,241,457
 

See accompanying notes to unaudited interim consolidated financial statements.

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

 
Nine Months Ended
September 30,
 
   
2022
   
2021
 
(In thousands)
           
Operating activities
           
Net income
 
$
115,874
   
$
117,575
 
Adjustments to reconcile net income to net cash provided by operating activities
               
Provision for loan losses
   
9,470
     
(11,354
)
Depreciation and amortization of premises and equipment
   
7,581
     
7,339
 
Net amortization on securities
   
2,736
     
4,460
 
Amortization of intangible assets
   
1,725
     
2,157
 
Amortization of operating lease right-of-use assets
   
4,989
     
5,401
 
Excess tax benefit on stock-based compensation
   
(183
)
   
(321
)
Stock-based compensation expense
   
3,949
     
3,819
 
Bank owned life insurance income
   
(4,625
)
   
(4,588
)
Amortization of subordinated debt issuance costs
   
327
     
328
 
Proceeds from sale of loans held for sale
   
4,238
     
48,371
 
Originations of loans held for sale
   
(3,573
)
   
(47,996
)
Net gains on sale of loans held for sale
   
(112
)
   
(280
)
Net security losses (gains)
   
914
     
(568
)
Net gains on sale of other real estate owned
   
(259
)
   
(44
)
Net change in other assets and other liabilities
   
10,470
     
12,501
 
Net cash provided by operating activities
 
$
153,521
   
$
136,800
 
Investing activities
               
Net cash used in acquisitions
  $ (2,534 )   $ (1,550 )
Securities available for sale:
               
Proceeds from maturities, calls and principal paydowns
   
177,704
     
308,688
 
Purchases
   
(262,861
)
   
(560,884
)
Securities held to maturity:
               
Proceeds from maturities, calls and principal paydowns
   
154,194
     
149,200
 
Purchases
   
(351,390
)
   
(216,205
)
Equity securities:
               
Proceeds from calls
    -       1,000  
Purchases
    (1,000 )     -  
Other:
               
Net increase in loans
   
(410,805
)
   
(73,344
)
Proceeds from Federal Home Loan Bank stock redemption
   
6,491
     
2,355
 
Purchases of Federal Reserve Bank and Federal Home Loan Bank stock
   
(6,285
)
   
(163
)
Proceeds from settlement of bank owned life insurance
   
1,873
     
3,571
 
Purchases of bank owned life insurance
    -       (40,000 )
Purchases of premises and equipment, net
   
(4,749
)
   
(5,007
)
Proceeds from sales of other real estate owned
   
426
     
784
 
Net cash used in investing activities
 
$
(698,936
)
 
$
(431,555
)
Financing activities
               
Net (decrease) increase in deposits
 
$
(315,718
)
 
$
1,113,486
 
Net decrease in short-term borrowings
   
(23,241
)
   
(68,671
)
Repayments of long-term debt
   
(10,673
)
   
(25,077
)
Proceeds from the issuance of shares to employee and other stock plans
   
-
     
112
 
Cash paid by employer for tax-withholdings on stock issuance
   
(1,346
)
   
(1,973
)
Purchase of treasury stock
   
(14,713
)
   
(14,083
)
Cash dividends
   
(36,907
)
   
(35,614
)
Net cash (used in) provided by financing activities
 
$
(402,598
)
 
$