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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, N.Y., July 25, 2022 (GLOBE NEWSWIRE) -- 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.”

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:
    • $36.7 million of loans forgiven.
    • $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.

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

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.

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.

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. and Subsidiaries
Selected Financial Data
(unaudited, dollars in thousands except per share data)
      
 20222021
 2nd Q1st Q4th Q3rd Q2nd 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,   
 20222021   
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%    
      
 20222021
 2nd Q1st Q4th Q3rd Q2nd 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 
 

NBT Bancorp Inc. and Subsidiaries
Asset Quality and Consolidated Loan Balances
(unaudited, dollars in thousands)
      
 20222021
 2nd Q1st Q4th Q3rd Q2nd 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% 
      
 20222021
 2nd Q1st Q4th Q3rd Q2nd 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% 
      
 20222021
Loans by line of business: 2nd Q1st Q4th Q3rd Q2nd 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 
      

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, dollars in thousands)
   
 June 30,December 31,
Assets20222021
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
   

NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
     
 Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
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 
     

NBT Bancorp Inc. and Subsidiaries
Quarterly Consolidated Statements of Income
(unaudited, dollars in thousands except per share data)
      
 20222021
 2nd Q1st Q4th Q3rd Q2nd 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 
      

NBT Bancorp Inc. and Subsidiaries
Average Quarterly Balance Sheets
(unaudited, dollars in thousands)
           
 Average BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / Rates
 Q2 - 2022Q1 - 2022Q4 - 2021Q3 - 2021Q2 - 2021
Assets          
Short-term interest-bearing accounts$ 553,548 0.82%$990,3190.17%$1,145,7940.16%$1,014,1200.16%$974,0340.09%
Securities taxable1 2,439,960 1.74% 2,284,5781.67% 2,081,7961.57% 1,923,7001.63% 1,864,5421.69%
Securities tax-exempt 1 5 256,799 1.83% 258,5131.84% 257,3201.85% 246,6851.97% 193,1082.59%
FRB and FHLB stock 24,983 5.03% 25,0261.98% 25,1492.74% 25,1541.91% 25,1152.67%
Loans1 6 7,707,730 4.09% 7,530,6743.95% 7,507,1654.20% 7,517,8393.84% 7,574,2723.96%
Total interest-earning assets$ 10,983,020 3.35%$11,089,1103.09%$11,017,2243.23%$10,727,4983.05%$10,631,0713.18%
Other assets 883,498  947,578  982,136  1,019,797  971,681 
Total assets$ 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%$2,720,3380.15%$2,678,4770.16%$2,580,5700.19%$2,605,7670.21%
NOW deposit accounts 1,580,132 0.07% 1,583,0910.05% 1,551,8460.05% 1,442,6780.05% 1,454,7510.05%
Savings deposits 1,845,128 0.03% 1,794,5490.03% 1,725,0040.05% 1,691,5390.05% 1,660,7220.05%
Time deposits 478,531 0.37% 494,6320.40% 537,8750.46% 565,2160.62% 591,1470.75%
Total interest-bearing deposits$ 6,481,158 0.11%$6,592,6100.11%$6,493,2020.13%$6,280,0030.16%$6,312,3870.18%
Federal funds purchased -- -- 65- -- --
Repurchase agreements  60,061 0.09% 72,7680.09% 97,3890.11% 99,7030.11% 95,2260.13%
Short-term borrowings -- -- 1- -- --
Long-term debt 5,336 2.48% 13,9792.52% 14,0042.49% 14,0292.52% 14,0532.51%
Subordinated debt, net 98,642 5.53% 98,5315.59% 98,4225.48% 98,3115.48% 98,2045.55%
Junior subordinated debt 101,196 2.92% 101,1962.20% 101,1962.03% 101,1962.03% 101,1962.08%
Total interest-bearing liabilities$ 6,746,393 0.23%$6,879,0840.23%$6,804,2790.24%$6,593,2420.27%$6,621,0660.29%
Demand deposits 3,711,049  3,710,124  3,719,070  3,676,883  3,542,176 
Other liabilities 218,491  206,292  231,260  244,125  235,536 
Stockholders' equity 1,190,585  1,241,188  1,244,751  1,233,045  1,203,974 
Total liabilities and stockholders' equity$ 11,866,518 $12,036,688 $11,999,360 $11,747,295 $11,602,752 
Interest rate spread  3.12% 2.86% 2.99% 2.78% 2.89%
Net interest margin (FTE)1  3.21% 2.95% 3.08% 2.88% 3.00%
           

NBT Bancorp Inc. and Subsidiaries
Average Year-to-Date Balance Sheets
(unaudited, dollars in thousands)
        
  Average Yield/Average Yield/
  BalanceInterestRates BalanceInterestRates
Six Months Ended June 30,  2022  2021 
Assets       
Short-term interest-bearing accounts $ 770,727$ 1,533 0.40% $781,764$3600.09% 
Securities taxable1  2,362,699 19,981 1.71%  1,817,008 15,8061.75% 
Securities tax-exempt 1 5  257,651 2,347 1.84%  188,998 2,5042.67% 
FRB and FHLB stock  25,004 434 3.50%  25,359 3222.56% 
Loans1 6  7,619,691 151,964 4.02%  7,574,304 149,9633.99% 
Total interest-earning assets $ 11,035,772$ 176,259 3.22% $10,387,433$168,9553.28% 
Other assets  915,361   966,367  
Total assets $ 11,951,133  $11,353,800  
Liabilities and stockholders' equity       
Money market deposit accounts $ 2,648,458$ 1,924 0.15% $2,545,280$2,7550.22% 
NOW deposit accounts  1,581,603 460 0.06%  1,407,118 3480.05% 
Savings deposits  1,819,978 293 0.03%  1,604,664 4060.05% 
Time deposits  486,537 921 0.38%  603,178 2,5250.84% 
Total interest-bearing deposits $ 6,536,576$ 3,598 0.11% $6,160,240$6,0340.20% 
Federal funds purchased  -  --  - -- 
Repurchase agreements   66,379  29 0.09%  102,525 750.15% 
Short-term borrowings  - --  2,624 272.07% 
Long-term debt  9,634 120 2.51%  16,967 2122.52% 
Subordinated debt, net  98,587 2,718 5.56%  98,149 2,7185.58% 
Junior subordinated debt  101,196 1,286 2.56%  101,196 1,0552.10% 
Total interest-bearing liabilities $ 6,812,372$ 7,751 0.23% $6,481,701$10,1210.31% 
Demand deposits  3,710,589   3,431,216  
Other liabilities  212,425   243,221  
Stockholders' equity  1,215,747   1,197,662  
Total liabilities and stockholders' equity$ 11,951,133  $11,353,800  
Net interest income (FTE)1  $ 168,508  $158,834 
Interest rate spread    2.99%   2.97% 
Net interest margin (FTE)1    3.08%   3.08% 
Taxable equivalent adjustment  $ 575  $601 
Net interest income  $ 167,933  $158,233 
        

      
1The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:
      
Non-GAAP measures     
(unaudited, dollars in thousands)     
      
Pre-provision net revenue ("PPNR")20222021
 2nd Q1st Q4th Q3rd Q2nd Q
Net income$37,775 $39,126 $37,310 $37,433 $40,296 
Income tax expense 10,957  11,142  10,780  11,043  11,995 
Provision for loan losses 4,390  596  3,097  (3,342) (5,216)
FTE adjustment 290  285  292  298  299 
Net securities losses (gains) 587  179  2  100  (201)
Provision for unfunded loan commitments reserve 240  (260) (250) (470) (80)
Nonrecurring expense -  (172) 250  2,288  1,880 
PPNR$ 54,239 $50,896 $51,481 $47,350 $48,973 
      
Average assets$ 11,866,518 $12,036,688 $11,999,360 $11,747,295 $11,602,757 
      
Return on average assets3  1.28%  1.32%  1.23%  1.26%  1.39% 
PPNR return on average assets3  1.83%  1.71%  1.70%  1.60%  1.69% 
      
 6 Months Ended June 30,   
 20222021   
Net income$ 76,901 $80,142    
Income tax expense 22,099  23,150    
Provision for loan losses 4,986  (8,012)   
FTE adjustment 575  601    
Net securities losses (gains) 766  (668)   
Provision for unfunded loan commitments reserve (20) (580)   
Nonrecurring expense (172) 1,880    
PPNR$ 105,135 $96,513    
      
Average Assets$ 11,951,133 $11,353,800    
      
Return on average assets3  1.30%  1.42%    
PPNR return on average assets3  1.77%  1.71%    
      
PPNR is a Non-GAAP financial measure that management believes is useful in evaluating the underlying operating results of the Company excluding the volatility in the provision for loan losses, net securities gains (losses) and non-recurring income and/or expense.
      
FTE adjustment20222021
 2nd Q1st Q4th Q3rd Q2nd Q
Net interest income$ 87,585 $80,348 $85,181 $77,674 $79,178 
Add: FTE adjustment 290  285  292  298  299 
Net interest income (FTE)$ 87,875 $80,633 $85,473 $77,972 $79,477 
Average earning assets$ 10,983,020 $11,089,110 $11,017,224 $10,727,498 $10,631,071 
Net interest margin (FTE)3  3.21%  2.95%  3.08%  2.88%  3.00% 
      
 6 Months Ended June 30,   
 20222021   
Net interest income$ 167,933 $158,233    
Add: FTE adjustment 575  601    
Net interest income (FTE)$ 168,508 $158,834    
Average earning assets$ 11,035,772 $10,387,433    
Net interest margin (FTE)3  3.08%  3.08%    
      
Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%.
      

      
1The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:
      
Non-GAAP measures     
(unaudited, dollars in thousands)     
      
Tangible equity to tangible assets20222021
 2nd Q1st Q4th Q3rd Q2nd Q
Total equity$ 1,188,556 $1,202,250 $1,250,453 $1,241,457 $1,225,056 
Intangible assets 289,259  288,832  289,468  290,119  290,782 
Total assets$ 11,720,459 $12,147,833 $12,012,111 $11,994,411 $11,574,947 
Tangible equity to tangible assets  7.87%  7.70%  8.20%  8.13%  8.28% 
      
Return on average tangible common equity20222021
 2nd Q1st Q4th Q3rd Q2nd Q
Net income$ 37,775 $39,126 $37,310 $37,433 $40,296 
Amortization of intangible assets (net of tax) 409  477  488  497  512 
Net income, excluding intangibles amortization$ 38,184 $39,603 $37,798 $37,930 $40,808 
      
Average stockholders' equity$ 1,190,585 $1,241,188 $1,244,751 $1,233,045 $1,203,974 
Less: average goodwill and other intangibles 289,584  289,218  289,834  290,492  291,133 
Average tangible common equity$ 901,001 $951,970 $954,917 $942,553 $912,841 
Return on average tangible common equity3  17.00%  16.87%  15.70%  15.97%  17.93% 
      
 6 Months Ended June 30,   
 20222021   
Net income$ 76,901 $80,142    
Amortization of intangible assets (net of tax) 886  1,121    
Net income, excluding intangibles amortization$ 77,787 $81,263    
      
Average stockholders' equity$ 1,215,747 $1,197,662    
Less: average goodwill and other intangibles 289,402  291,525    
Average tangible common equity$ 926,345 $906,137    
Return on average tangible common equity3  16.93%  18.08%    
      
2Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding. 
3Annualized.     
4Total past due loans, defined as loans 30 days or more past due and in an accrual status.  
5Securities are shown at average amortized cost.    
6For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
      

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