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NBT Bancorp Inc. Announces Full Year Net Income and Declares Dividend

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NBT Bancorp Inc. reported net income and diluted earnings per share for the three and twelve months ended December 31, 2023. Net income was $30.4 million for the fourth quarter, down from $36.1 million in the same period in 2022. Full year net income was $118.8 million, compared to $152.0 million in the prior year. The company's CEO highlighted growth in loans and deposits, strong asset quality, and the acquisition of Salisbury Bancorp, Inc.
Positive
  • Net income of $30.4 million for the fourth quarter
  • Full year net income of $118.8 million
  • Growth in loans and deposits
  • Strong asset quality
  • Acquisition of Salisbury Bancorp, Inc.
Negative
  • Decrease in net income from the same period in 2022
  • Full year net income decrease from the prior year

Insights

The reported decrease in net income and diluted earnings per share for NBT Bancorp Inc. for both the three-month and twelve-month periods ending December 31, 2023, signifies a contraction in profitability year-over-year. This is a critical metric for investors as it can influence the company's stock performance and valuation. The decline in net income from $36.1 million to $30.4 million for the quarter and from $152.0 million to $118.8 million for the full year, suggests that the company faced headwinds that may have included increased competition, higher costs, or a less favorable interest rate environment.

However, the operating diluted earnings per share, a non-GAAP measure, provides an alternative view of profitability by excluding certain items. The reported operating EPS of $0.72 for Q4 2023, despite being lower than the previous year's $0.86, may offer a more normalized perspective on core operational efficiency. It is important for stakeholders to assess both GAAP and non-GAAP measures to gain a comprehensive understanding of the company's financial health.

The acquisition of Salisbury Bancorp, Inc. is a strategic move that has contributed to loan and deposit growth. The expansion is reflected in the year-over-year increase in total loans and deposits, which could be a positive indicator of the company's market reach and potential for future earnings growth. However, the cost of deposits and funds has risen significantly, which may compress margins if the yield on assets does not increase proportionately.

The competitive landscape in the banking sector is increasingly challenging, with interest rates and economic conditions exerting considerable influence on net interest margins (NIM). NBT Bancorp's reported decrease in NIM from 3.21% to 3.15% quarter-over-quarter reflects this pressure. The 6 basis point drop may seem modest, but in the banking industry, where margins are often tight, this can have a meaningful impact on profitability.

Moreover, the reported loan to deposit ratio of 88.0% is an indicator of the bank's liquidity management. A higher ratio can imply more aggressive lending, which can be profitable in a stable economy but may pose risks if economic conditions deteriorate. Conversely, a lower ratio may suggest a more conservative approach, potentially leaving interest income on the table.

Asset quality metrics, such as the increase in nonperforming loans from 0.25% to 0.39%, warrant attention as they can be early indicators of credit quality issues. While still relatively low, any upward trend in this ratio could signal future provisioning needs that could affect earnings.

The disclosure of a $4.8 million impairment of a minority interest equity investment is significant, as it reflects the company's assessment of the investment's recoverability. Investors should be aware that such impairments can affect net income and may reflect broader issues within the invested entity or the industry it operates in. The financial and legal implications of this impairment, particularly in terms of potential future write-downs or recoveries, should be closely monitored.

The announcement of a dividend increase and a new stock repurchase program illustrates the company's commitment to returning value to shareholders. However, these actions also have legal and regulatory considerations. The repurchase program, for instance, must comply with securities laws and regulations and its execution depends on market conditions and corporate governance practices.

NORWICH, N.Y., Jan. 23, 2024 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and twelve months ended December 31, 2023.

Net income for the three months ended December 31, 2023 was $30.4 million, or $0.64 per diluted common share, compared to $36.1 million, or $0.84 per diluted common share, for the three months ended December 31, 2022, and $24.6 million, or $0.54 per diluted common share, in the third quarter of 2023. Operating diluted earnings per share1, a non-GAAP measure, which excludes acquisition expenses, acquisition-related provision for credit losses, securities gains (losses) and impairment of a minority interest equity investment, net of tax, was $0.72 for the fourth quarter of 2023, compared to $0.86 in the fourth quarter of 2022 and $0.84 in the third quarter of 2023.

Net income for the year ended December 31, 2023 was $118.8 million, or $2.65 per diluted common share, compared to $152.0 million, or $3.52 per diluted common share, in the prior year. Operating diluted earnings per share1 was $3.23 for the year ended December 31, 2023, compared to $3.56 in the prior year.

CEO Comments

“NBT’s fourth quarter and full year results reflect our consistent dedication to improving our traditional banking franchise while growing our diversified revenue sources,” said NBT President and CEO John H. Watt, Jr. “In a year characterized by unprecedented market volatility, we grew loans and deposits, maintained strong asset quality, improved our capital position, completed the high-value acquisition of Salisbury Bancorp, Inc., and continued to deliver best-in-class customer service.”

Fourth Quarter Financial Highlights

Net Income
  • Net income of $30.4 million and diluted earnings per share of $0.64
  • Operating net income was $33.9 million and diluted operating earnings per share of $0.721
Net Interest Income / NIM
  • Net interest income on a fully taxable equivalent (“FTE”) basis was $99.8 million1
  • Net interest margin (“NIM”) on an FTE basis was 3.15%1, down 6 basis points (“bps”) from the prior quarter
  • Included in FTE net interest income was $2.6 million of acquisition-related net accretion which positively impacted NIM by 8 bps
  • Earning asset yields of 4.79% were up 16 bps from the prior quarter
  • Total cost of funds of 1.72% was up 22 bps from the prior quarter
Noninterest Income
  • Excluding net securities gains (losses), noninterest income was $38.0 million, or 27.7% of total revenues
Loans and Credit Quality
  • Period end total loans of $9.65 billion as of December 31, 2023, up $1.50 billion from December 31, 2022, and included $1.18 billion of loans acquired from Salisbury Bancorp, Inc. (“Salisbury”)
  • Excluding loans acquired from Salisbury, loans grew $320.6 million, or 3.9%, year-over-year
  • Net charge-offs to average loans were 0.22%
  • Nonperforming loans to total loans were 0.39%, compared to 0.25% in the prior quarter and 0.26% in the fourth quarter of 2022
  • Allowance for loan losses to total loans was 1.19%
Deposits
  • Deposits were $10.97 billion as of December 31, 2023, up $1.47 billion from December 31, 2022, and included $1.31 billion in deposits acquired from Salisbury
  • Total cost of deposits was 1.51% for the fourth quarter of 2023, up 33 bps from the third quarter
  • Full cycle to-date deposit beta of 28%
  • Composition of total deposits is diverse and granular with over 563,000 accounts with an average per account balance of $19,483
Capital
  • Stockholders’ equity was $1.43 billion as of December 31, 2023
  • Tangible book value per share2 was $21.72 at December 31, 2023
  • Tangible equity to assets grew 11% to 7.93%1
  • CET1 ratio of 11.57%; Leverage ratio of 9.71%


Loans

  • Period end total loans were $9.65 billion at December 31, 2023, consistent with the end of the third quarter of 2023 and were $8.15 billion at December 31, 2022.
  • Period end total loans increased $1.50 billion from December 31, 2022, including loans acquired from Salisbury. Commercial and industrial loans increased $88.2 million to $1.35 billion; commercial real estate loans increased $819.0 million to $3.63 billion; and total consumer loans increased $593.4 million to $4.67 billion.
  • Commercial line of credit utilization rate was 20% at December 31, 2023, compared to 22% at September 30, 2023 and 21% at December 31, 2022.

Deposits

  • Total deposits at December 31, 2023 were $10.97 billion, compared to $9.50 billion at December 31, 2022. The Company continued to experience incremental migration from noninterest bearing and low interest checking and savings accounts into higher cost money market and time deposit instruments, during each quarter of 2023.
  • Loan to deposit ratio was 88.0% at December 31, 2023, compared to 85.8% at December 31, 2022. Consistent with historical trends and as seasonally expected, ending deposits declined from September 30, 2023 to December 31, 2023.

Net Interest Income and Net Interest Margin

  • Net interest income for the fourth quarter of 2023 was $99.2 million, which was up $4.3 million, or 4.5%, from the third quarter of 2023 and down $0.6 million, or 0.6%, from the fourth quarter of 2022. The increase in net interest income resulted from the benefit of the full quarter impact of the Salisbury acquisition and was partially offset by the increase in cost of funds outpacing the improvement in asset yields during the quarter.
  • The NIM on an FTE basis for the fourth quarter of 2023 was 3.15%, a decrease of 6 bps from the third quarter of 2023, driven by an increase in the cost of interest-bearing deposits, partly offset by an increase in average earning asset yields and a full quarter impact of acquisition-related net accretion. The NIM on an FTE basis decreased 53 bps from the fourth quarter of 2022 due to the increase in the cost of interest-bearing deposits and higher short-term borrowings costs and average balances, partially offset by higher earning asset yields.
  • Earning asset yields for the three months ended December 31, 2023 increased 16 bps from the prior quarter to 4.79% and increased 77 bps from the same quarter in the prior year. Average earning assets grew $761.0 million, or 6.4%, from the third quarter of 2023 due to the Salisbury acquisition and organic loan growth.
  • Total cost of deposits, including noninterest bearing deposits, was 1.51% for the fourth quarter of 2023, an increase of 33 bps from the prior quarter and up 134 bps from the same period in the prior year.
  • Total cost of funds for the three months ended December 31, 2023 was 1.72%, up 22 bps from the prior quarter and up 135 bps from the fourth quarter of 2022.

Asset Quality and Allowance for Loan Losses

  • Net charge-offs to total average loans was 22 bps compared to 18 bps in both the prior quarter and in the fourth quarter of 2022. Net charge-offs for the portfolios in a planned run-off status represented the majority of total net charge-offs for the quarter and full year.
  • Nonperforming assets to total assets were 0.28% at December 31, 2023, compared to 0.18% at both September 30, 2023 and December 31, 2022. The increase in nonperforming assets was attributable to a diversified, multi-tenant commercial real estate development relationship that was placed into a nonaccrual status in the fourth quarter of 2023, in which NBT is a participant. The relationship is being actively managed and recent appraised values continue to support its carrying value, and as such, no specific reserve has been established.
  • Provision expense for the three months ended December 31, 2023 was $5.1 million, compared to $12.6 million for the third quarter of 2023 and $7.7 million for the fourth quarter of 2022. Included in the provision expense in the third quarter of 2023 was $8.8 million of acquisition-related provision for loan losses.
  • The allowance for loan losses was $114.4 million, or 1.19% of total loans, at December 31, 2023, consistent with September 30, 2023 and 1.24% of total loans at December 31, 2022. The allowance was consistent with the third quarter of 2023 and the increase in the allowance for loan losses from the fourth quarter of 2022 was due to $14.5 million of allowance for acquired Salisbury loans which included both the $8.8 million of non-purchased credit deteriorated allowance recognized through the provision for loan losses and the $5.8 million of purchased credit deteriorated allowance reclassified from loans.
  • The reserve for unfunded loan commitments increased to $5.1 million at December 31, 2023 compared to the prior quarter-end at $4.8 million and to $5.1 million at December 31, 2022. The provision for unfunded loan commitments in the third quarter of 2023 included $0.8 million of acquisition-related provision for unfunded loan commitments.

Noninterest Income        

  • Total noninterest income, excluding securities gains (losses), was $38.0 million for the three months ended December 31, 2023, down $2.4 million from the seasonally high third quarter, and $3.7 million higher, or 10.7%, from the fourth quarter of 2022.
  • Service charges on deposit accounts were higher than the prior quarter and the fourth quarter of 2022 due primarily to the Salisbury acquisition and new account growth.
  • Retirement plan administration fees were down $1.6 million from the prior quarter and were $0.6 million higher than the fourth quarter of 2022. The decrease from the prior quarter, as expected, was due to certain seasonal activity-based fees in the third quarter. The increase from the fourth quarter of 2022 included the impact from the acquisition of Retirement Direct, LLC on July 1, 2023.
  • Wealth management fees were consistent with the prior quarter as certain prior quarter seasonal activity-based fees were offset by the full quarter addition of Salisbury revenues and were $1.1 million higher than the fourth quarter of 2022.
  • Insurance services were down $0.7 million from the third quarter which has comparatively higher levels of policy renewals than the fourth quarter.

Noninterest Expense

  • Total noninterest expense was $92.8 million for the fourth quarter of 2023 compared to $90.8 million in the third quarter of 2023 and $79.5 million in the fourth quarter of 2022. Total noninterest expense, excluding $0.3 million of acquisition expenses in the fourth quarter of 2023, $7.9 million in the third quarter of 2023 and $1.0 million in the fourth quarter of 2022, and the $4.8 million impairment of a minority interest equity investment in the fourth quarter of 2023 increased 5.9% compared to the previous quarter primarily due to a full quarter impact of the Salisbury acquisition and higher professional service fees and increased 11.7% from the fourth quarter of 2022.
  • Salaries and benefits increased 1.6% from the prior quarter driven by the full quarter impact of the Salisbury acquisition and was partially offset by lower quarterly incentive costs.
  • Technology and data services, professional fees and outside services, and advertising increased from the prior quarter and the fourth quarter of 2022 due to the timing of initiatives that occurred following the completion of the Salisbury acquisition in the third quarter.
  • Amortization of intangible assets increased $0.5 million from the prior quarter and $1.6 million from the fourth quarter of 2022 primarily due to the amortization of intangible assets related to the Salisbury acquisition.
  • FDIC assessment expense increased $0.2 million in the prior quarter primarily due to the acquisition of Salisbury and increased $1.1 million from the fourth quarter of 2022 driven by the statutory increase in the FDIC assessment rate.
  • In the fourth quarter of 2023, the Company recorded a full $4.8 million ($0.08 per diluted share) impairment of its minority interest equity investment in a provider of financial and technology services to residential solar equipment installers, due to the uncertainty in the realizability of the investment.

Income Taxes

  • The effective tax rate was 23.5% for the fourth quarter of 2023 which was up from 22.4% in the third quarter of 2023 and 22.6% for the fourth quarter of 2022 and primarily to adjust to a full year tax rate for 2023 of 22.6%, including assessment of acquisition related items.

Capital

  • Tangible common equity to tangible assets1 was 7.93% at December 31, 2023. Tangible book value per share2 was $21.72 at December 31, 2023, $20.39 at September 30, 2023 and $20.65 at December 31, 2022.
  • Stockholders’ equity increased $252.1 million from December 31, 2022 driven by the Salisbury acquisition adding $161.7 million of capital, net income generation of $118.8 million and a $29.1 million increase in accumulated other comprehensive income driven by the change in the market value of securities available for sale, partially offset by dividends declared of $55.9 million and the repurchase of common stock of $4.9 million.
  • December 31, 2023, CET1 capital ratio of 11.57%, leverage ratio of 9.71% and total risk-based capital ratio of 14.75%.

Dividend

  • On January 22, 2024, the Board of Directors approved a first-quarter cash dividend of $0.32 per share, which represents a $0.02 per quarter, or 6.7%, increase over the dividend paid in the first quarter of 2023. The dividend will be paid on March 15, 2024 to stockholders of record as of March 1, 2024.

Stock Repurchase

  • The Company purchased 155,500 shares of its common stock during 2023 at an average price of $31.79 per share under its previously announced share repurchase program. The repurchase program under which these shares were purchased expired on December 31, 2023.
  • On December 18, 2023, the Board of Directors authorized and approved an amendment to the Company’s previously announced stock repurchase program. Pursuant to the amended stock repurchase program, the Company may repurchase up to 2,000,000 of the currently outstanding shares of its common stock with all repurchases under the stock repurchase program to be made by December 31, 2025. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. (Eastern) Wednesday, January 24, 2024, to review fourth quarter 2023 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at https://www.nbtbancorp.com/bn/presentations-events.html#events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $13.31 billion at December 31, 2023. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 153 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a national benefits administration firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtinsurance.com.

Forward-Looking Statements

This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control, that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions, including actual or potential stress in the banking industry, and the impact they may have on the Company and its customers and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war, including international military conflicts, or terrorism; (8) the timely development and acceptance of new products and services and the perceived overall value of these products and services by users; (9) changes in consumer spending, borrowing and saving habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisition and integration of acquired businesses; (13) the possibility that NBT may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes; (14) the ability to increase market share and control expenses; (15) changes in the competitive environment among financial holding companies; (16) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (17) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (18) changes in the Company’s organization, compensation and benefit plans; (19) the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; (20) greater than expected costs or difficulties related to the integration of new products and lines of business; and (21) the Company’s success at managing the risks involved in the foregoing items.

The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advises readers that various factors, including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected.

Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of the Company’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.

      
NBT Bancorp Inc. and Subsidiaries     
Selected Financial Data     
(unaudited, dollars in thousands except per share data)    
      
 2023
2022
 4th Q3rd Q2nd Q1st Q4th Q
Profitability (reported)     
Diluted earnings per share$ 0.64 $0.54 $0.70 $0.78 $0.84 
Weighted average diluted common shares outstanding 47,356,899  45,398,937  43,126,498  43,125,986  43,144,666 
Return on average assets3 0.89% 0.76% 1.02% 1.16% 1.23%
Return on average equity3 8.79% 7.48% 9.91% 11.47% 12.30%
Return on average tangible common equity1 3 13.08% 10.73% 13.13% 15.31% 16.54%
Net interest margin1 3 3.15% 3.21% 3.27% 3.55% 3.68%
      
 12 Months Ended December 31,   
  2023  2022    
Profitability (reported)     
Diluted earnings per share$ 2.65 $3.52    
Weighted average diluted common shares outstanding 44,770,171  43,181,312    
Return on average assets 0.95% 1.29%   
Return on average equity 9.34% 12.67%   
Return on average tangible common equity1 13.02% 16.89%   
Net interest margin1 3.29% 3.34%   
      
  2023  2022 
 4th Q3rd Q2nd Q1st Q4th Q
Profitability (operating)     
Diluted earnings per share1$ 0.72 $0.84 $0.80 $0.88 $0.86 
Return on average assets1 3 0.99% 1.19% 1.17% 1.31% 1.26%
Return on average equity1 3 9.79% 11.65% 11.40% 12.95% 12.61%
Return on average tangible common equity1 3 14.49% 16.43% 15.08% 17.27% 16.95%
      
 12 Months Ended December 31,   
  2023  2022    
Profitability (operating)     
Diluted earnings per share1$ 3.23 $3.56    
Return on average assets1 1.16% 1.30%   
Return on average equity1 11.38% 12.81%   
Return on average tangible common equity1 15.78% 17.06%   
      
  2023  2022 
 4th Q3rd Q2nd Q1st Q4th Q
Balance sheet data     
Short-term interest-bearing accounts$ 31,378 $459,296 $31,878 $68,045 $30,862 
Securities available for sale 1,430,858  1,399,032  1,453,926  1,512,008  1,527,225 
Securities held to maturity 905,267  914,520  912,876  906,824  919,517 
Net loans 9,536,313  9,552,774  8,257,724  8,164,328  8,049,347 
Total assets 13,309,040  13,827,628  11,890,497  11,839,730  11,739,296 
Total deposits 10,968,994  11,401,452  9,529,919  9,681,205  9,495,933 
Total borrowings 637,387  740,603  880,518  703,248  787,950 
Total liabilities 11,883,349  12,464,807  10,680,004  10,628,071  10,565,742 
Stockholders' equity 1,425,691  1,362,821  1,210,493  1,211,659  1,173,554 
      
Capital     
Equity to assets 10.71% 9.86% 10.18% 10.23% 10.00%
Tangible equity ratio1 7.93% 7.15% 7.95% 7.99% 7.73%
Book value per share$ 30.26 $28.94 $28.26 $28.24 $27.38 
Tangible book value per share2$ 21.72 $20.39 $21.55 $21.52 $20.65 
Leverage ratio 9.71% 10.23% 10.51% 10.43% 10.32%
Common equity tier 1 capital ratio 11.57% 11.31% 12.29% 12.28% 12.12%
Tier 1 capital ratio 12.50% 12.23% 13.35% 13.34% 13.19%
Total risk-based capital ratio 14.75% 14.45% 15.50% 15.53% 15.38%
Common stock price (end of period)$ 41.91 $31.69 $31.85 $33.71 $43.42 
      


NBT Bancorp Inc. and Subsidiaries     
Asset Quality and Consolidated Loan Balances     
(unaudited, dollars in thousands)     
      
  2023  2022 
 4th Q3rd Q2nd Q1st Q4th Q
Asset quality     
Nonaccrual loans$ 34,213 $20,736 $16,931 $16,284 $17,233 
90 days past due and still accruing 3,661  3,528  2,755  2,328  3,823 
Total nonperforming loans 37,874  24,264  19,686  18,612  21,056 
Other real estate owned -  -  179  105  105 
Total nonperforming assets 37,874  24,264  19,865  18,717  21,161 
Allowance for loan losses 114,400  114,601  100,400  100,250  100,800 
      
Asset quality ratios     
Allowance for loan losses to total loans 1.19% 1.19% 1.20% 1.21% 1.24%
Total nonperforming loans to total loans 0.39% 0.25% 0.24% 0.23% 0.26%
Total nonperforming assets to total assets 0.28% 0.18% 0.17% 0.16% 0.18%
Allowance for loan losses to total nonperforming loans 302.05% 472.31% 510.01% 538.63% 478.72%
Past due loans to total loans4 0.32% 0.49% 0.45% 0.30% 0.33%
Net charge-offs to average loans3 0.22% 0.18% 0.17% 0.19% 0.18%
      
  2023  2022 
 4th Q3rd Q2nd Q1st Q4th Q
Loan net charge-offs by line of business     
Commercial$ 1,107 $(344)$92 $(252)$(37)
Residential real estate and home equity 11  (75) (43) 80  (79)
Indirect auto 399  451  273  423  445 
Residential solar 1,081  1,253  581  656  596 
Other consumer 2,729  2,919  2,553  2,904  2,752 
Total loan net charge-offs$ 5,327 $4,204 $3,456 $3,811 $3,677 
      
  2023  2022 
 4th Q3rd Q2nd Q1st Q4th Q
Allowance for loan losses as a percentage of loans by segment    
Commercial & industrial 0.84% 0.87% 0.86% 0.85% 0.82%
Commercial real estate 0.99% 1.00% 0.93% 0.93% 0.91%
Residential real estate 0.84% 0.79% 0.73% 0.73% 0.72%
Auto 0.83% 0.82% 0.80% 0.77% 0.81%
Residential solar 3.28% 3.19% 3.09% 3.04% 3.21%
Other consumer 4.70% 5.23% 5.98% 6.19% 6.27%
Total 1.19% 1.19% 1.20% 1.21% 1.24%
      
  2023  2022 
 4th Q3rd Q2nd Q1st Q4th Q
Loans by line of business     
Commercial & industrial$ 1,354,248 $1,424,579 $1,319,093 $1,278,291 $1,266,031 
Commercial real estate 3,626,910  3,575,595  2,884,264  2,845,631  2,807,941 
Residential real estate 2,125,804  2,111,670  1,666,204  1,651,918  1,649,870 
Indirect auto 1,130,132  1,099,558  1,048,739  1,031,315  989,587 
Residential solar 917,755  934,082  926,365  920,084  856,798 
Home equity 337,214  340,777  310,897  308,219  314,124 
Other consumer 158,650  181,114  202,562  229,120  265,796 
Total loans$ 9,650,713 $9,667,375 $8,358,124 $8,264,578 $8,150,147 
      


NBT Bancorp Inc. and Subsidiaries   
Consolidated Balance Sheets  
(unaudited, dollars in thousands)  
   
 December 31,December 31,
 20232022
Assets  
Cash and due from banks$ 173,811$166,488
Short-term interest-bearing accounts 31,378 30,862
Equity securities, at fair value 37,591 30,784
Securities available for sale, at fair value 1,430,858 1,527,225
Securities held to maturity (fair value $814,524 and $812,647, respectively) 905,267 919,517
Federal Reserve and Federal Home Loan Bank stock 45,861 44,713
Loans held for sale 3,371 562
Loans 9,650,713 8,150,147
Less allowance for loan losses 114,400 100,800
Net loans$ 9,536,313$8,049,347
Premises and equipment, net 80,675 69,047
Goodwill 361,851 281,204
Intangible assets, net 40,443 7,341
Bank owned life insurance 265,732 232,409
Other assets 395,889 379,797
Total assets$ 13,309,040$11,739,296
   
Liabilities and stockholders' equity  
Demand (noninterest bearing)$ 3,413,829$3,617,324
Savings, NOW and money market 6,230,456 5,444,837
Time 1,324,709 433,772
Total deposits$ 10,968,994$9,495,933
Short-term borrowings 386,651 585,012
Long-term debt 29,796 4,815
Subordinated debt, net 119,744 96,927
Junior subordinated debt 101,196 101,196
Other liabilities 276,968 281,859
Total liabilities$ 11,883,349$10,565,742
   
Total stockholders' equity$ 1,425,691$1,173,554
   
Total liabilities and stockholders' equity$ 13,309,040$11,739,296
   


NBT Bancorp Inc. and Subsidiaries     
Consolidated Statements of Income    
(unaudited, dollars in thousands except per share data)   
     
 Three Months EndedTwelve Months Ended
 December 31,December 31,
 2023202220232022
Interest, fee and dividend income    
Interest and fees on loans$ 132,738$95,620 $ 462,669 $332,768 
Securities available for sale 7,208 7,831  29,812  29,653 
Securities held to maturity 5,374 5,050  20,681  17,582 
Other 5,594 671  9,627  4,067 
Total interest, fee and dividend income$ 150,914$109,172 $ 522,789 $384,070 
Interest expense    
Deposits$ 42,753$4,092 $ 104,641 $9,923 
Short-term borrowings 4,951 2,510  25,608  2,623 
Long-term debt 294 21  925  161 
Subordinated debt 1,795 1,346  6,076  5,424 
Junior subordinated debt 1,948 1,424  7,320  3,749 
Total interest expense$ 51,741$9,393 $ 144,570 $21,880 
Net interest income$ 99,173$99,779 $ 378,219 $362,190 
Provision for loan losses$ 5,126$7,677 $ 16,524 $17,147 
Provision for loan losses - acquisition day 1 non-PCD - -  8,750  - 
Total provision for loan losses$ 5,126$7,677 $ 25,274 $17,147 
Net interest income after provision for loan losses$ 94,047$92,102 $ 352,945 $345,043 
Noninterest income    
Service charges on deposit accounts$ 4,165$3,598 $ 15,425 $14,630 
Card services income 5,360 4,958  20,829  29,058 
Retirement plan administration fees 11,226 10,661  47,221  48,112 
Wealth management 9,152 8,017  34,763  33,311 
Insurance services 3,659 3,438  15,667  14,696 
Bank owned life insurance income 1,776 1,419  6,750  6,044 
Net securities gains (losses) 507 (217) (9,315) (1,131)
Other 2,643 2,217  10,838  10,858 
Total noninterest income$ 38,488$34,091 $ 142,178 $155,578 
Noninterest expense    
Salaries and employee benefits$ 50,013$47,235 $ 194,250 $187,830 
Technology and data services 10,174 9,124  38,163  35,712 
Occupancy 7,175 6,521  28,408  26,282 
Professional fees and outside services 5,115 4,811  17,601  16,810 
Office supplies and postage 1,913 1,699  6,917  6,140 
FDIC assessment 1,860 798  6,257  3,197 
Advertising 1,213 879  3,054  2,822 
Amortization of intangible assets 2,131 538  4,734  2,263 
Loan collection and other real estate owned, net 503 957  2,618  2,647 
Reserve for unfunded loan commitments 300 (185) 30  20 
Impairment of a minority interest equity investment 4,750 -  4,750  - 
Acquisition expenses 254 967  9,978  967 
Other 7,350 6,165  24,904  19,775 
Total noninterest expense$ 92,751$79,509 $ 341,664 $304,465 
Income before income tax expense$ 39,784$46,684 $ 153,459 $196,156 
Income tax expense 9,338 10,563  34,677  44,161 
Net income$ 30,446$36,121 $ 118,782 $151,995 
Earnings Per Share    
Basic$ 0.65$0.84 $ 2.67 $3.54 
Diluted$ 0.64$0.84 $ 2.65 $3.52 
     


NBT Bancorp Inc. and Subsidiaries     
Quarterly Consolidated Statements of Income     
(unaudited, dollars in thousands except per share data)    
      
  2023  2022 
 4th Q3rd Q2nd Q1st Q4th Q
Interest, fee and dividend income     
Interest and fees on loans$ 132,738$122,097 $106,935 $100,899 $95,620 
Securities available for sale 7,208 7,495  7,493  7,616  7,831 
Securities held to maturity 5,374 5,281  4,991  5,035  5,050 
Other 5,594 2,221  1,170  642  671 
Total interest, fee and dividend income$ 150,914$137,094 $120,589 $114,192 $109,172 
Interest expense     
Deposits$ 42,753$30,758 $19,986 $11,144 $4,092 
Short-term borrowings 4,951 7,612  8,126  4,919  2,510 
Long-term debt 294 294  290  47  21 
Subordinated debt 1,795 1,612  1,335  1,334  1,346 
Junior subordinated debt 1,948 1,923  1,767  1,682  1,424 
Total interest expense$ 51,741$42,199 $31,504 $19,126 $9,393 
Net interest income$ 99,173$94,895 $89,085 $95,066 $99,779 
Provision for loan losses$ 5,126$3,883 $3,606 $3,909 $7,677 
Provision for loan losses - acquisition day 1 non-PCD - 8,750  -  -  - 
Total provision for loan losses$ 5,126$12,633 $3,606 $3,909 $7,677 
Net interest income after provision for loan losses$ 94,047$82,262 $85,479 $91,157 $92,102 
Noninterest income     
Service charges on deposit accounts$ 4,165$3,979 $3,733 $3,548 $3,598 
Card services income 5,360 5,503  5,121  4,845  4,958 
Retirement plan administration fees 11,226 12,798  11,735  11,462  10,661 
Wealth management 9,152 9,297  8,227  8,087  8,017 
Insurance services 3,659 4,361  3,716  3,931  3,438 
Bank owned life insurance income 1,776 1,568  1,528  1,878  1,419 
Net securities gains (losses) 507 (183) (4,641) (4,998) (217)
Other 2,643 2,913  2,626  2,656  2,217 
Total noninterest income$ 38,488$40,236 $32,045 $31,409 $34,091 
Noninterest expense     
Salaries and employee benefits$ 50,013$49,248 $46,834 $48,155 $47,235 
Technology and data services 10,174 9,677  9,305  9,007  9,124 
Occupancy 7,175 7,090  6,923  7,220  6,521 
Professional fees and outside services 5,115 4,149  4,159  4,178  4,811 
Office supplies and postage 1,913 1,700  1,676  1,628  1,699 
FDIC assessment 1,860 1,657  1,344  1,396  798 
Advertising 1,213 667  525  649  879 
Amortization of intangible assets 2,131 1,609  458  536  538 
Loan collection and other real estate owned, net 503 569  691  855  957 
Reserve for unfunded loan commitments 300 460  (100) (630) (185)
Impairment of a minority interest equity investment 4,750 -  -  -  - 
Acquisition expenses 254 7,917  1,189  618  967 
Other 7,350 6,054  5,790  5,710  6,165 
Total noninterest expense$ 92,751$90,797 $78,794 $79,322 $79,509 
Income before income tax expense$ 39,784$31,701 $38,730 $43,244 $46,684 
Income tax expense 9,338 7,095  8,658  9,586  10,563 
Net income$ 30,446$24,606 $30,072 $33,658 $36,121 
Earnings Per Share     
Basic$ 0.65$0.54 $0.70 $0.78 $0.84 
Diluted$ 0.64$0.54 $0.70 $0.78 $0.84 
      



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
  Q4 - 2023Q3 - 2023Q2 - 2023Q1 - 2023Q4 - 2022
Assets           
Short-term interest-bearing accounts $ 319,9075.59%$121,3844.26%$28,4733.62%$34,2152.26%$39,5733.31%
Securities taxable1  2,310,4091.88% 2,364,8091.90% 2,394,0271.90% 2,442,7321.92% 2,480,9591.88%
Securities tax-exempt 1 5  232,5753.51% 219,4273.34% 201,4992.83% 202,3212.81% 208,2382.68%
FRB and FHLB stock  47,9948.98% 53,8416.76% 51,4547.12% 41,1444.45% 32,9034.11%
Loans1 6  9,653,1915.47% 9,043,5825.36% 8,307,8945.17% 8,189,5205.00% 8,039,4424.72%
Total interest-earning assets $ 12,564,0764.79%$11,803,0434.63%$10,983,3474.42%$10,909,9324.26%$10,801,1154.02%
Other assets  1,052,024  968,220  835,424  836,879  855,410 
Total assets $ 13,616,100 $12,771,263 $11,818,771 $11,746,811 $11,656,525 
Liabilities and stockholders' equity           
Money market deposit accounts $ 3,045,5313.43%$2,422,4512.91%$2,113,9652.30%$2,081,2101.22%$2,169,1920.39%
NOW deposit accounts  1,645,4010.80% 1,513,4200.57% 1,463,9530.38% 1,598,8340.36% 1,604,0960.33%
Savings deposits  1,666,9150.04% 1,707,0940.04% 1,708,8740.03% 1,781,4650.03% 1,823,0560.03%
Time deposits  1,343,5483.81% 1,178,3523.60% 856,3052.97% 639,6452.10% 432,1100.41%
Total interest-bearing deposits $ 7,701,3952.20%$6,821,3171.79%$6,143,0971.30%$6,101,1540.74%$6,028,4540.27%
Federal funds purchased  2175.48% 6,0335.39% 48,4075.35% 44,3344.92% 56,5764.03%
Repurchase agreements  82,3871.59% 71,5161.40% 55,6271.08% 71,3400.08% 76,3340.11%
Short-term borrowings  345,2505.31% 540,3805.34% 557,8185.27% 357,2004.96% 177,5334.28%
Long-term debt  29,8093.91% 29,8003.91% 29,7733.91% 7,2992.61% 3,8172.18%
Subordinated debt, net  119,5315.96% 109,1605.86% 97,0815.52% 96,9665.58% 97,8395.46%
Junior subordinated debt  101,1967.64% 101,1967.54% 101,1967.00% 101,1966.74% 101,1965.58%
Total interest-bearing liabilities $ 8,379,7852.45%$7,679,4022.18%$7,032,9991.80%$6,779,4891.14%$6,541,7490.57%
Demand deposits  3,535,815  3,498,424  3,316,955  3,502,489  3,658,965 
Other liabilities  326,857  287,751  251,511  274,517  290,895 
Stockholders' equity  1,373,643  1,305,686  1,217,306  1,190,316  1,164,916 
Total liabilities and stockholders' equity $ 13,616,100 $12,771,263 $11,818,771 $11,746,811 $11,656,525 
Interest rate spread  2.34% 2.45% 2.62% 3.12% 3.45%
Net interest margin (FTE)1  3.15% 3.21% 3.27% 3.55% 3.68%
            



NBT Bancorp Inc. and Subsidiaries       
Average Year-to-Date Balance Sheets      
(unaudited, dollars in thousands)       
        
  Average Yield/Average Yield/
  BalanceInterestRates BalanceInterestRates
Twelve Months Ended December 31, 20232022
Assets       
Short-term interest-bearing accounts $ 126,765$ 6,2594.94%$440,429$3,0720.70%
Securities taxable1  2,377,596 45,1761.90% 2,424,925 43,2291.78%
Securities tax-exempt1 5  214,053 6,7303.14% 233,515 5,0702.17%
FRB and FHLB stock  48,641 3,3686.92% 27,040 9953.68%
Loans1 6  8,803,228 463,2905.26% 7,772,962 333,0084.28%
Total interest-earning assets $ 11,570,283$ 524,8234.54%$10,898,871$385,3743.54%
Other assets  923,850   893,197  
Total assets $ 12,494,133  $11,792,068  
Liabilities and stockholders' equity       
Money market deposit accounts $ 2,418,450$ 62,4752.58%$2,447,978$4,9550.20%
NOW deposit accounts  1,555,414 8,2980.53% 1,578,831 2,6000.16%
Savings deposits  1,715,749 6500.04% 1,829,360 5920.03%
Time deposits  1,006,867 33,2183.30% 464,912 1,7760.38%
Total interest-bearing deposits $ 6,696,480$ 104,6411.56%$6,321,081$9,9230.16%
Federal funds purchased  24,575 1,2695.16% 14,644 5884.02%
Repurchase agreements  70,251 7471.06% 69,561 670.10%
Short-term borrowings  450,377 23,5925.24% 46,371 1,9684.24%
Long-term debt  24,247 9253.81% 6,579 1612.45%
Subordinated debt, net  105,756 6,0765.75% 98,439 5,4245.51%
Junior subordinated debt  101,196 7,3207.23% 101,196 3,7493.70%
Total interest-bearing liabilities $ 7,472,882$ 144,5701.93%$6,657,871$21,8800.33%
Demand deposits  3,463,608   3,696,957  
Other liabilities  285,310   237,857  
Stockholders' equity  1,272,333   1,199,383  
Total liabilities and stockholders' equity $ 12,494,133  $11,792,068  
Net interest income (FTE)1  $ 380,253  $363,494 
Interest rate spread   2.61%  3.21%
Net interest margin (FTE)1   3.29%  3.34%
Taxable equivalent adjustment  $ 2,034  $1,304 
Net interest income  $ 378,219  $362,190 
        


       
1The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release: 
       
 Non-GAAP measures     
 (unaudited, dollars in thousands)     
       
  20232022
  4th Q3rd Q2nd Q1st Q4th Q
 Operating net income     
 Net income$ 30,446 $24,606 $30,072 $33,658 $36,121 
 Acquisition expenses 254  7,917  1,189  618  967 
 Acquisition-related provision for credit losses -  8,750  -  -  - 
 Acquisition-related reserve for unfunded loan commitments -  836  -  -  - 
 Impairment of a minority interest equity investment 4,750  -  -  -  - 
 Securities (gains) losses (507) 183  4,641  4,998  217 
 Adjustment to net income$ 4,497 $17,686 $5,830 $5,616 $1,184 
 Adjustment to net income (net of tax)$ 3,435 $13,730 $4,525 $4,341 $913 
 Operating net income$ 33,881 $38,336 $34,597 $37,999 $37,034 
 Operating diluted earnings per share$ 0.72 $0.84 $0.80 $0.88 $0.86 
       
  12 Months Ended December 31,   
   2023  2022    
 Operating net income     
 Net income$ 118,782 $151,995    
 Acquisition expenses 9,978  967    
 Acquisition-related provision for credit losses 8,750  -    
 Acquisition-related reserve for unfunded loan commitments 836  -    
 Impairment of a minority interest equity investment 4,750  -    
 Securities losses 9,315  1,131    
 Adjustment to net income$ 33,629 $2,098    
 Adjustment to net income (net of tax)$ 25,965 $1,623    
 Operating net income$ 144,747 $153,618    
 Operating diluted earnings per share$ 3.23 $3.56    
       
  20232022
  4th Q3rd Q2nd Q1st Q4th Q
 FTE adjustment     
 Net interest income$ 99,173 $94,895 $89,085 $95,066 $99,779 
 Add: FTE adjustment 669  568  402  395  392 
 Net interest income (FTE)$ 99,842 $95,463 $89,487 $95,461 $100,171 
 Average earning assets$ 12,564,076 $11,803,043 $10,983,347 $10,909,932 $10,801,115 
 Net interest margin (FTE)3 3.15% 3.21% 3.27% 3.55% 3.68%
       
  12 Months Ended December 31,   
   2023  2022    
 FTE adjustment     
 Net interest income$ 378,219 $362,190    
 Add: FTE adjustment 2,034  1,304    
 Net interest income (FTE)$ 380,253 $363,494    
 Average earning assets$ 11,570,283 $10,898,871    
 Net interest margin (FTE) 3.29% 3.34%   
       
 Interest income for tax-exempt securities and loans have been adjusted to an 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 (continued)     
 (unaudited, dollars in thousands)     
       
  20232022
  4th Q3rd Q2nd Q1st Q4th Q
 Tangible equity to tangible assets     
 Total equity$ 1,425,691 $1,362,821 $1,210,493 $1,211,659 $1,173,554 
 Intangible assets 402,294  402,745  287,701  288,159  288,545 
 Total assets$ 13,309,040 $13,827,628 $11,890,497 $11,839,730 $11,739,296 
 Tangible equity to tangible assets 7.93% 7.15% 7.95% 7.99% 7.73%
       
  20232022
  4th Q3rd Q2nd Q1st Q4th Q
 Return on average tangible common equity    
 Net income$ 30,446 $24,606 $30,072 $33,658 $36,121 
 Amortization of intangible assets (net of tax) 1,599  1,206  344  402  404 
 Net income, excluding intangibles amortization$ 32,045 $25,812 $30,416 $34,060 $36,525 
       
 Average stockholders' equity$ 1,373,643 $1,305,686 $1,217,306 $1,190,316 $1,164,916 
 Less: average goodwill and other intangibles 401,978  350,912  287,974  288,354  288,856 
 Average tangible common equity$ 971,665 $954,774 $929,332 $901,962 $876,060 
 Return on average tangible common equity3 13.08% 10.73% 13.13% 15.31% 16.54%
       
  12 Months Ended December 31,   
   2023  2022    
 Return on average tangible common equity    
 Net income$ 118,782 $151,995    
 Amortization of intangible assets (net of tax) 3,551  1,698    
 Net income, excluding intangibles amortization$ 122,333 $153,693    
       
 Average stockholders' equity$ 1,272,333 $1,199,383    
 Less: average goodwill and other intangibles 332,667  289,238    
 Average tangible common equity$ 939,666 $910,145    
 Return on average tangible common equity 13.02% 16.89%   
       
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.


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

FAQ

What was NBT Bancorp Inc.'s net income for the fourth quarter of 2023?

NBT Bancorp Inc.'s net income for the fourth quarter of 2023 was $30.4 million.

What was the full year net income for NBT Bancorp Inc. in 2023?

NBT Bancorp Inc.'s full year net income for 2023 was $118.8 million.

What did the CEO highlight in the report?

The CEO highlighted growth in loans and deposits, strong asset quality, and the acquisition of Salisbury Bancorp, Inc.

How did NBT Bancorp Inc.'s net income compare to the same period in 2022?

NBT Bancorp Inc.'s net income for the fourth quarter of 2023 was lower than the same period in 2022.

NBT Bancorp Inc

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