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NBT Bancorp Inc. Announces Third Quarter Results and Declares Dividend

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NBT Bancorp Inc. reported net income of $24.6 million for Q3 2023, compared to $39.0 million in Q3 2022. Diluted earnings per share were $0.54, down from $0.90 in the same period last year. The company completed its merger with Salisbury Bancorp, adding 13 banking offices, $1.18 billion in loans, and $1.31 billion in deposits. Period end total loans increased $1.52 billion, while total deposits increased $1.91 billion. Noninterest income increased 10.2% from the previous quarter. Net interest margin (NIM) decreased 6 basis points to 3.21%. Nonperforming loans to total loans increased slightly to 0.25%.
Positive
  • NBT Bancorp reported solid operating performance for Q3 2023, driven by the completion of the Salisbury merger and growth in loans and deposits. Noninterest income increased 10.2% from the previous quarter. The company added 13 banking offices, $1.18 billion in loans, and $1.31 billion in deposits through the merger. Net interest margin (NIM) remained stable at 3.21%. The company's diverse business model and strong balance sheet contribute to long-term value for shareholders.
Negative
  • Net income for NBT Bancorp decreased from $39.0 million in Q3 2022 to $24.6 million in Q3 2023. Diluted earnings per share also decreased from $0.90 to $0.54. Nonperforming loans to total loans increased slightly to 0.25%. The increase in net charge-offs from the previous year was due to an increase in charge-offs in the company's other consumer portfolio.

NORWICH, N.Y., Oct. 24, 2023 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and nine months ended September 30, 2023.

Net income for the three months ended September 30, 2023 was $24.6 million, or $0.54 per diluted common share, compared to $39.0 million, or $0.90 per diluted share, for the three months ended September 30, 2022, and $30.1 million, or $0.70 per diluted share, in the second quarter of 2023. Operating diluted earnings per share1, a non-GAAP measure, which excludes acquisition expense, acquisition-related provision for credit losses and securities gains (losses), net of tax, was $0.84 for the third quarter of 2023, compared to $0.91 in the third quarter of 2022 and $0.80 in the second quarter of 2023.

  • The acquisition of Salisbury Bancorp, Inc. (“Salisbury”) by the merger of Salisbury with and into NBT (“Merger”) was completed on August 11, 2023. The Merger added 13 banking offices, $1.18 billion in loans and $1.31 billion in deposits.
  • Period end total loans increased $1.52 billion from December 31, 2022. Excluding loans acquired from Salisbury, loans grew $337.2 million, or 5.5% annualized, since December 31, 2022.
  • Period end total deposits increased $1.91 billion from December 31, 2022. Excluding deposits acquired from Salisbury, deposits increased $596.5 million since December 31, 2022.
  • Noninterest income, excluding net securities gains (losses), increased 10.2% from the prior quarter and was approximately 30% of total revenue.

CEO Comments

“We delivered solid operating performance for the third quarter and through the first nine months of 2023, driven by our diversified business model and strength of our balance sheet,” said NBT President and CEO John H. Watt, Jr. “We completed our merger with Salisbury on August 11, 2023, welcoming new customers, employees, and shareholders to the NBT family and simultaneously we successfully completed the conversion to the NBT core banking systems. Our combined team is committed to providing a comprehensive suite of financial services to all of our customers and the communities we serve while also generating long-term value for our shareholders.”

Third Quarter Financial Highlights

Net Income
  • Net income of $24.6 million and diluted earnings per share of $0.54
  • Operating net income was $38.3 million and diluted operating earnings per share of $0.841
Net Interest Income / NIM
  • Net interest income on a fully taxable equivalent (“FTE”) basis was $95.5 million1
  • Net interest margin (“NIM”) on an FTE basis was 3.21%1, down 6 basis points (“bps”) from the prior quarter
  • Included in FTE net interest income was $1.4 million of acquisition-related net accretion which positively impacted NIM by 5 bps
  • Earning asset yields of 4.63%, up 21 bps from the prior quarter
  • Total cost of funds of 1.50%, up 28 bps from the prior quarter
Noninterest Income
  • Excluding net securities gains (losses), noninterest income was $40.4 million and was 29.9% of total revenues
Loans and Credit Quality
  • Period end total loans of $9.67 billion as of September 30, 2023, up $1.52 billion from December 31, 2022 which included $1.18 billion of loans acquired from Salisbury
  • Net charge-offs to average loans were 0.18%, annualized
  • Nonperforming loans to total loans was 0.25%, compared to 0.24% in the prior quarter and down from 0.28% in the third quarter of 2022
  • Allowance for loan losses to total loans of 1.19%
  • Provision for loan losses included $8.8 million of acquisition related provision for credit losses
Deposits
  • Deposits were $11.40 billion as of September 30, 2023, up $1.91 billion from December 31, 2022 which included $1.31 billion in deposits acquired from Salisbury
  • Total cost of deposits was 1.18% for the third quarter of 2023, up 33 bps from the prior quarter
  • Full cycle to-date deposit beta of 24%
  • Deposit composition is diverse and granular with over 565,000 accounts with an average per account balance of $20,160
Capital
  • Stockholders’ equity was $1.36 billion as of September 30, 2023
  • Tangible book value per share2 was $20.39 at September 30, 2023
  • Tangible equity to assets of 7.15%1
  • CET1 ratio of 11.31%; Leverage ratio of 10.23%


Loans

  • Period end total loans were $9.67 billion at September 30, 2023, $8.36 billion at June 30, 2023 and $8.15 billion at December 31, 2022.
  • Period end loans increased $1.52 billion from December 31, 2022. Commercial and industrial loans increased $158.5 million to $1.42 billion; commercial real estate loans increased $767.7 million to $3.58 billion; and total consumer loans increased $591.0 million to $4.67 billion. Included in total consumer loans is $132.6 million of a portfolio of loans in a run-off status.
  • Commercial line of credit utilization rate was 22% at September 30, 2023, compared to 23% at June 30, 2023 and September 30, 2022.

Deposits

  • Total deposits at September 30, 2023 were $11.40 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.
  • Loan to deposit ratio was 84.8% at September 30, 2023, compared to 85.8% at December 31, 2022.

Net Interest Income and Net Interest Margin

  • Net interest income for the third quarter of 2023 was $94.9 million, which was up $5.8 million, or 6.5%, from the second quarter of 2023 and up $0.4 million, or 0.4%, from the third quarter of 2022. The increase in net interest income resulted from 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 third quarter of 2023 was 3.21%, a decrease of 6 bps from the second quarter of 2023 driven by the increase in the cost of interest-bearing deposits, partly offset by an increase in average earning asset yields and $1.4 million in acquisition-related net accretion. The NIM on an FTE basis decreased 30 bps from the third 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 September 30, 2023 increased 21 bps from the prior quarter to 4.63% and increased 95 bps from the same quarter in the prior year. Average earning assets grew $819.7 million, or 7.5%, from the second quarter of 2023 due primarily to the Salisbury acquisition and organic loan growth.
  • Total cost of deposits, including noninterest bearing deposits, was 1.18% for the third quarter of 2023, up 33 bps from the prior quarter and up 109 bps from the same period in the prior year.
  • Total cost of funds for the three months ended September 30, 2023 was 1.50%, up 28 bps from the prior quarter and up 132 bps from the third quarter of 2022.

Asset Quality and Allowance for Loan Losses

  • Net charge-offs to total average loans was 18 bps compared to 17 bps in the prior quarter and 7 bps in the third quarter of 2022. The increase in net charge-offs from the third quarter of 2022 was due to an increase in charge-offs in the Company’s other consumer portfolio, which is in a run-off status. Net charge-offs for the portfolios in a run-off status represented the majority of total net charge-offs for the third quarter.
  • Nonperforming assets to total assets were 0.18% at September 30, 2023, compared to 0.17% at June 30, 2023 and 0.19% at September 30, 2022.
  • Provision expense for the three months ended September 30, 2023 was $12.6 million, compared to $3.6 million for the second quarter of 2023 and $4.5 million for the third 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 $114.6 million, or 1.19% of total loans, at September 30, 2023, compared to 1.20% of total loans at June 30, 2023 and 1.22% of total loans at September 30, 2022. The increase in the allowance for loan losses in the third quarter included $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 $4.8 million at September 30, 2023 compared to the prior quarter-end at $4.4 million and to $5.3 million at September 30, 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 $40.4 million for the three months ended September 30, 2023, up $3.7 million from the second quarter and up $3.1 million from the prior year’s third quarter.
  • Card services income increased $0.4 million from the prior quarter and decreased $0.2 million from the third quarter of 2022.
  • Retirement plan administration fees were up $1.1 million from the prior quarter and were $1.3 million higher than the third quarter of 2022 due primarily to seasonal activity-based fees in the quarter, favorable market conditions, new account growth and the acquisition of Retirement Direct, LLC on July 1, 2023.
  • Wealth management fees increased $1.1 million from the prior quarter and were $0.9 million higher than the third quarter of 2022 primarily due to the Salisbury acquisition and approximately $0.5 million in seasonal activity-based fees.
  • Insurance services were up $0.6 million from the prior quarter and were $0.5 million higher than the third quarter of 2022.

Noninterest Expense

  • Total noninterest expense, excluding $7.9 million of acquisition expenses in the third quarter of 2023 and $1.2 million in the second quarter of 2023, increased 6.8% compared to the previous quarter due primarily to the acquisition of Salisbury and increased 8.1% from the third quarter of 2022 due primarily to the acquisition of Salisbury and merit increases for employees.
  • Salaries and benefits increased 5.2% from the prior quarter driven by the Salisbury acquisition and increased from the third quarter of 2022 due to the Salisbury acquisition and merit increases.
  • Amortization of intangible assets increased $1.2 million from the prior quarter and $1.1 million from the third quarter of 2022 primarily due to the amortization of intangible assets related to the Salisbury acquisition. The Company recorded a core deposit intangible of $31.2 million and a wealth management customer list intangible of $4.7 million for Salisbury.
  • FDIC assessment expense increased $0.3 million in the prior quarter primarily due to the acquisition of Salisbury and increased $0.9 million from the third quarter of 2022 driven by the statutory increase in the FDIC assessment rate.

Income Taxes

  • The effective tax rate was 22.4% for the third quarter of 2023 which was consistent with the second quarter of 2023 and 22.8% for the third quarter of 2022.

Capital

  • Tangible common equity to tangible assets1 was 7.15% at September 30, 2023. Tangible book value per share2 was $20.39 at September 30, 2023, $21.55 at June 30, 2023 and $20.25 at September 30, 2022.
  • Stockholders’ equity increased $189.3 million from December 31, 2022 driven by the Salisbury acquisition adding $161.7 million of capital and net income generation of $88.3 million, partially offset by dividends declared of $40.8 million, the repurchase of common stock of $4.9 million and a $17.5 million decrease in accumulated other comprehensive income driven by the change in the market value of securities available for sale.
  • September 30, 2023, CET1 capital ratio of 11.31%, leverage ratio of 10.23% and total risk-based capital ratio of 14.45%.

Dividend

  • On October 23, 2023, the Board of Directors approved a fourth-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 fourth quarter of 2022. This is the Company’s eleventh consecutive year of annual dividend increases. The dividend will be paid on December 15, 2023 to stockholders of record as of December 1, 2023.

Stock Repurchase

  • The Company purchased 68,500 shares of its common stock in the third quarter of 2023 at an average price of $31.61 per share under its previously announced share repurchase program. 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. As of September 30, 2023, there were 1,444,500 shares available for repurchase under this plan.

Salisbury Bancorp, Inc. Merger

  • On August 11, 2023, NBT completed its acquisition of Salisbury. Salisbury was a Connecticut-chartered commercial bank with 13 banking offices in northwestern Connecticut, the Hudson Valley region of New York, and southwestern Massachusetts.
  • In connection with the acquisition, the Company issued 4.3 million shares and acquired approximately $1.57 billion of identifiable assets, including $1.18 billion of loans, $122.7 million in investment securities which were subsequently sold during the quarter, $31.2 million of core deposit intangibles and $4.7 million in a wealth management customer intangible, as well as $1.31 billion in deposits. As of the acquisition date, the fair value discount was $78.7 million for loans, net of the reclassification of the purchase credit deteriorated allowance, and was $3.0 million for subordinated debt, respectively.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. (Eastern) Wednesday, October 25, 2023, to review third 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 $13.83 billion at September 30, 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 and Salisbury 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)    
      
 20232022
 3rd Q2nd Q1st Q4th Q3rd Q
Profitability (reported)     
Diluted earnings per share$ 0.54 $0.70 $0.78 $0.84 $0.90 
Weighted average diluted common shares outstanding 45,398,937  43,126,498  43,125,986  43,144,666  43,110,932 
Return on average assets3 0.76% 1.02% 1.16% 1.23% 1.33%
Return on average equity3 7.48% 9.91% 11.47% 12.30% 12.87%
Return on average tangible common equity1 3 10.73% 13.13% 15.31% 16.54% 17.12%
Net interest margin1 3 3.21% 3.27% 3.55% 3.68% 3.51%
      
 9 Months Ended September 30,   
 20232022   
Profitability (reported)     
Diluted earnings per share$ 2.01 $2.68    
Weighted average diluted common shares outstanding 43,896,042  43,194,037    
Return on average assets3 0.97% 1.31%   
Return on average equity3 9.54% 12.79%   
Return on average tangible common equity1 3 13.00% 17.00%   
Net interest margin1 3 3.34% 3.22%   
      
 20232022
 3rd Q2nd Q1st Q4th Q3rd Q
Profitability (operating)     
Diluted earnings per share1$ 0.84 $0.80 $0.88 $0.86 $0.91 
Return on average assets1 3 1.19% 1.17% 1.31% 1.26% 1.34%
Return on average equity1 3 11.65% 11.40% 12.95% 12.61% 12.91%
Return on average tangible common equity1 3 16.43% 15.08% 17.27% 16.95% 17.17%
      
 9 Months Ended September 30,   
 20232022   
Profitability (operating)     
Diluted earnings per share1$ 2.53 $2.70    
Return on average assets1 3 1.22% 1.32%   
Return on average equity1 3 11.98% 12.87%   
Return on average tangible common equity1 3 16.25% 17.10%   
      
 20232022
 3rd Q2nd Q1st Q4th Q3rd Q
Balance sheet data     
Short-term interest-bearing accounts$ 459,296 $31,878 $68,045 $30,862 $97,303 
Securities available for sale 1,399,032  1,453,926  1,512,008  1,527,225  1,556,501 
Securities held to maturity 914,520  912,876  906,824  919,517  929,541 
Net loans 9,552,774  8,257,724  8,164,328  8,049,347  7,807,984 
Total assets 13,827,628  11,890,497  11,839,730  11,739,296  11,640,742 
Total deposits 11,401,452  9,529,919  9,681,205  9,495,933  9,918,751 
Total borrowings 740,603  880,518  703,248  787,950  277,889 
Total liabilities 12,464,807  10,680,004  10,628,071  10,565,742  10,484,196 
Stockholders' equity 1,362,821  1,210,493  1,211,659  1,173,554  1,156,546 
      
Capital     
Equity to assets 9.86% 10.18% 10.23% 10.00% 9.94%
Tangible equity ratio1 7.15% 7.95% 7.99% 7.73% 7.64%
Book value per share$ 28.94 $28.26 $28.24 $27.38 $27.00 
Tangible book value per share2$ 20.39 $21.55 $21.52 $20.65 $20.25 
Leverage ratio 10.23% 10.51% 10.43% 10.32% 10.21%
Common equity tier 1 capital ratio 11.31% 12.29% 12.28% 12.12% 12.17%
Tier 1 capital ratio 12.23% 13.35% 13.34% 13.19% 13.27%
Total risk-based capital ratio 14.45% 15.50% 15.53% 15.38% 15.50%
Common stock price (end of period)$ 31.69 $31.85 $33.71 $43.42 $37.95 
      


NBT Bancorp Inc. and Subsidiaries     
Asset Quality and Consolidated Loan Balances     
(unaudited, dollars in thousands)     
      
  2023  2022 
 3rd Q2nd Q1st Q4th Q3rd Q
Asset quality     
Nonaccrual loans$ 20,736 $16,931 $16,284 $17,233 $19,098 
90 days past due and still accruing 3,528  2,755  2,328  3,823  2,732 
Total nonperforming loans 24,264  19,686  18,612  21,056  21,830 
Other real estate owned -  179  105  105  - 
Total nonperforming assets 24,264  19,865  18,717  21,161  21,830 
Allowance for loan losses 114,601  100,400  100,250  100,800  96,800 
      
Asset quality ratios     
Allowance for loan losses to total loans 1.19% 1.20% 1.21% 1.24% 1.22%
Total nonperforming loans to total loans 0.25% 0.24% 0.23% 0.26% 0.28%
Total nonperforming assets to total assets 0.18% 0.17% 0.16% 0.18% 0.19%
Allowance for loan losses to total nonperforming loans 472.31% 510.01% 538.63% 478.72% 443.43%
Past due loans to total loans4 0.49% 0.45% 0.30% 0.33% 0.30%
Net charge-offs to average loans3 0.18% 0.17% 0.19% 0.18% 0.07%
      
  2023  2022 
 3rd Q2nd Q1st Q4th Q3rd Q
Loan net charge-offs by line of business     
Commercial & industrial$ (327)$51 $(294)$(45)$(1,045)
Commercial real estate (17) 41  42  8  324 
Residential real estate and home equity (75) (43) 80  (79) (56)
Indirect auto 451  273  423  445  222 
Residential solar 1,253  581  656  596  43 
Other consumer 2,919  2,553  2,904  2,752  1,796 
Total loan net charge-offs$ 4,204 $3,456 $3,811 $3,677 $1,284 
      
  2023  2022 
 3rd Q2nd Q1st Q4th Q3rd Q
Allowance for loan losses as a percentage of loans by segment    
Commercial & industrial 0.88%  0.86%  0.85%  0.82%  0.80% 
Commercial real estate 1.00%  0.93%  0.93%  0.91%  0.88% 
Residential real estate 0.79%  0.73%  0.73%  0.72%  0.74% 
Auto 0.82%  0.80%  0.77%  0.81%  0.78% 
Residential solar 3.19%  3.09%  3.04%  3.21%  3.08% 
Other consumer 5.23%  5.98%  6.19%  6.27%  6.67% 
Total 1.19%  1.20%  1.21%  1.24%  1.22% 
      
  2023  2022 
 3rd Q2nd Q1st Q4th Q3rd Q
Loans by line of business     
Commercial & industrial$ 1,424,579 $1,319,093 $1,278,291 $1,266,031 $1,262,199 
Commercial real estate 3,575,595  2,884,264  2,845,631  2,807,941  2,724,728 
Residential real estate 2,111,670  1,666,204  1,651,918  1,649,870  1,626,528 
Indirect auto 1,099,558  1,048,739  1,031,315  989,587  952,757 
Residential solar 934,082  926,365  920,084  856,798  728,898 
Home equity 340,777  310,897  308,219  314,124  313,557 
Other consumer 181,114  202,562  229,120  265,796  296,117 
Total loans$ 9,667,375 $8,358,124 $8,264,578 $8,150,147 $7,904,784 
      


NBT Bancorp Inc. and Subsidiaries   
Consolidated Balance Sheets  
(unaudited, dollars in thousands)  
   
 September 30,December 31,
 20232022
Assets  
Cash and due from banks$ 213,358 $166,488 
Short-term interest-bearing accounts 459,296  30,862 
Equity securities, at fair value 35,600  30,784 
Securities available for sale, at fair value 1,399,032  1,527,225 
Securities held to maturity (fair value $783,986 and $812,647, respectively) 914,520  919,517 
Federal Reserve and Federal Home Loan Bank stock 50,333  44,713 
Loans held for sale 4,113  562 
Loans 9,667,375  8,150,147 
Less allowance for loan losses 114,601  100,800 
Net loans$ 9,552,774 $8,049,347 
Premises and equipment, net 82,837  69,047 
Goodwill 360,171  281,204 
Intangible assets, net 42,574  7,341 
Bank owned life insurance 264,537  232,409 
Other assets 448,483  379,797 
Total assets$ 13,827,628 $11,739,296 
   
Liabilities and stockholders' equity  
Demand (noninterest bearing)$ 3,716,309 $3,617,324 
Savings, NOW and money market 6,340,944  5,444,837 
Time 1,344,199  433,772 
Total deposits$ 11,401,452 $9,495,933 
Short-term borrowings 490,180  585,012 
Long-term debt 29,834  4,815 
Subordinated debt, net 119,393  96,927 
Junior subordinated debt 101,196  101,196 
Other liabilities 322,752  281,859 
Total liabilities$ 12,464,807 $10,565,742 
   
Total stockholders' equity$ 1,362,821 $1,173,554 
   
Total liabilities and stockholders' equity$ 13,827,628 $11,739,296 
   


NBT Bancorp Inc. and Subsidiaries     
Consolidated Statements of Income    
(unaudited, dollars in thousands except per share data)   
     
 Three Months EndedNine Months Ended
 September 30,September 30,
  2023  2022  2023  2022 
Interest, fee and dividend income    
Interest and fees on loans$ 122,097 $85,266 $ 329,931 $237,148 
Securities available for sale 7,495  7,665  22,604  21,822 
Securities held to maturity 5,281  4,854  15,307  12,532 
Other 2,221  1,429  4,033  3,396 
Total interest, fee and dividend income$ 137,094 $99,214 $ 371,875 $274,898 
Interest expense    
Deposits$ 30,758 $2,233 $ 61,888 $5,831 
Short-term borrowings 7,612  84  20,657  113 
Long-term debt 294  20  631  140 
Subordinated debt 1,612  1,360  4,281  4,078 
Junior subordinated debt 1,923  1,039  5,372  2,325 
Total interest expense$ 42,199 $4,736 $ 92,829 $12,487 
Net interest income$ 94,895 $94,478 $ 279,046 $262,411 
Provision for loan losses$ 3,883 $4,484 $ 11,398 $9,470 
Provision for loan losses - acquisition day 1 non-PCD 8,750  -  8,750  - 
Total provision for loan losses$ 12,633 $4,484 $ 20,148 $9,470 
Net interest income after provision for loan losses$ 82,262 $89,994 $ 258,898 $252,941 
Noninterest income    
Service charges on deposit accounts$ 3,979 $3,581 $ 11,260 $11,032 
Card services income 5,503  5,654  15,469  24,100 
Retirement plan administration fees 12,798  11,496  35,995  37,451 
Wealth management 9,297  8,402  25,611  25,294 
Insurance services 4,361  3,892  12,008  11,258 
Bank owned life insurance income 1,568  1,560  4,974  4,625 
Net securities (losses) (183) (148) (9,822) (914)
Other 2,913  2,735  8,195  8,641 
Total noninterest income$ 40,236 $37,172 $ 103,690 $121,487 
Noninterest expense    
Salaries and employee benefits$ 49,248 $48,371 $ 144,237 $140,595 
Technology and data services 9,677  9,096  27,989  26,588 
Occupancy 7,090  6,481  21,233  19,761 
Professional fees and outside services 4,149  3,817  12,486  11,999 
Office supplies and postage 1,700  1,469  5,004  4,441 
FDIC assessment 1,657  787  4,397  2,399 
Advertising 667  559  1,841  1,943 
Amortization of intangible assets 1,609  544  2,603  1,725 
Loan collection and other real estate owned, net 569  549  2,115  1,690 
Reserve for unfunded loan commitments 460  225  (270) 205 
Acquisition expenses 7,917  -  9,724  - 
Other 6,054  4,796  17,554  13,610 
Total noninterest expense$ 90,797 $76,694 $ 248,913 $224,956 
Income before income tax expense$ 31,701 $50,472 $ 113,675 $149,472 
Income tax expense 7,095  11,499  25,339  33,598 
Net income$ 24,606 $38,973 $ 88,336 $115,874 
Earnings Per Share    
Basic$ 0.54 $0.91 $ 2.02 $2.70 
Diluted$ 0.54 $0.90 $ 2.01 $2.68 
     


NBT Bancorp Inc. and Subsidiaries     
Quarterly Consolidated Statements of Income     
(unaudited, dollars in thousands except per share data)    
      
  2023  2022 
 3rd Q2nd Q1st Q4th Q3rd Q
Interest, fee and dividend income     
Interest and fees on loans$ 122,097 $106,935 $100,899 $95,620 $85,266 
Securities available for sale 7,495  7,493  7,616  7,831  7,665 
Securities held to maturity 5,281  4,991  5,035  5,050  4,854 
Other 2,221  1,170  642  671  1,429 
Total interest, fee and dividend income$ 137,094 $120,589 $114,192 $109,172 $99,214 
Interest expense     
Deposits$ 30,758 $19,986 $11,144 $4,092 $2,233 
Short-term borrowings 7,612  8,126  4,919  2,510  84 
Long-term debt 294  290  47  21  20 
Subordinated debt 1,612  1,335  1,334  1,346  1,360 
Junior subordinated debt 1,923  1,767  1,682  1,424  1,039 
Total interest expense$ 42,199 $31,504 $19,126 $9,393 $4,736 
Net interest income$ 94,895 $89,085 $95,066 $99,779 $94,478 
Provision for loan losses$ 3,883 $3,606 $3,909 $7,677 $4,484 
Provision for loan losses - acquisition day 1 non-PCD 8,750  -  -  -  - 
Total provision for loan losses$ 12,633 $3,606 $3,909 $7,677 $4,484 
Net interest income after provision for loan losses$ 82,262 $85,479 $91,157 $92,102 $89,994 
Noninterest income     
Service charges on deposit accounts$ 3,979 $3,733 $3,548 $3,598 $3,581 
Card services income 5,503  5,121  4,845  4,958  5,654 
Retirement plan administration fees 12,798  11,735  11,462  10,661  11,496 
Wealth management 9,297  8,227  8,087  8,017  8,402 
Insurance services 4,361  3,716  3,931  3,438  3,892 
Bank owned life insurance income 1,568  1,528  1,878  1,419  1,560 
Net securities (losses) (183) (4,641) (4,998) (217) (148)
Other 2,913  2,626  2,656  2,217  2,735 
Total noninterest income$ 40,236 $32,045 $31,409 $34,091 $37,172 
Noninterest expense     
Salaries and employee benefits$ 49,248 $46,834 $48,155 $47,235 $48,371 
Technology and data services 9,677  9,305  9,007  9,124  9,096 
Occupancy 7,090  6,923  7,220  6,521  6,481 
Professional fees and outside services 4,149  4,159  4,178  4,811  3,817 
Office supplies and postage 1,700  1,676  1,628  1,699  1,469 
FDIC assessment 1,657  1,344  1,396  798  787 
Advertising 667  525  649  879  559 
Amortization of intangible assets 1,609  458  536  538  544 
Loan collection and other real estate owned, net 569  691  855  957  549 
Reserve for unfunded loan commitments 460  (100) (630) (185) 225 
Acquisition expenses 7,917  1,189  618  967  - 
Other 6,054  5,790  5,710  6,165  4,796 
Total noninterest expense$ 90,797 $78,794 $79,322 $79,509 $76,694 
Income before income tax expense$ 31,701 $38,730 $43,244 $46,684 $50,472 
Income tax expense 7,095  8,658  9,586  10,563  11,499 
Net income$ 24,606 $30,072 $33,658 $36,121 $38,973 
Earnings Per Share     
Basic$ 0.54 $0.70 $0.78 $0.84 $0.91 
Diluted$ 0.54 $0.70 $0.78 $0.84 $0.90 
      


NBT Bancorp Inc. and Subsidiaries           
Average Quarterly Balance Sheets           
(unaudited, dollars in thousands)           
            
  Average BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / RatesAverage BalanceYield / Rates
  Q3 - 2023Q2 - 2023Q1 - 2023Q4 - 2022Q3 - 2022
Assets           
Short-term interest-bearing accounts $ 121,3844.26%$28,4733.62%$34,2152.26%$39,5733.31%$191,4632.51%
Securities taxable1  2,364,8091.90% 2,394,0271.90% 2,442,7321.92% 2,480,9591.88% 2,491,3151.83%
Securities tax-exempt 1 5  219,4273.34% 201,4992.83% 202,3212.81% 208,2382.68% 211,3062.47%
FRB and FHLB stock  53,8416.76% 51,4547.12% 41,1444.45% 32,9034.11% 25,1823.47%
Loans1 6  9,043,5825.36% 8,307,8945.17% 8,189,5205.00% 8,039,4424.72% 7,808,0254.34%
Total interest-earning assets $ 11,803,0434.63%$10,983,3474.42%$10,909,9324.26%$10,801,1154.02%$10,727,2913.68%
Other assets  968,220  835,424  836,879  855,410  887,378 
Total assets $ 12,771,263 $11,818,771 $11,746,811 $11,656,525 $11,614,669 
Liabilities and stockholders' equity           
Money market deposit accounts $ 2,422,4512.91%$2,113,9652.30%$2,081,2101.22%$2,169,1920.39%$2,332,3410.15%
NOW deposit accounts  1,513,4200.57% 1,463,9530.38% 1,598,8340.36% 1,604,0960.33% 1,548,1150.21%
Savings deposits  1,707,0940.04% 1,708,8740.03% 1,781,4650.03% 1,823,0560.03% 1,854,1220.03%
Time deposits  1,178,3523.60% 856,3052.97% 639,6452.10% 432,1100.41% 455,1680.35%
Total interest-bearing deposits $ 6,821,3171.79%$6,143,0971.30%$6,101,1540.74%$6,028,4540.27%$6,189,7460.14%
Federal funds purchased  6,0335.39% 48,4075.35% 44,3344.92% 56,5764.03% 1,5223.39%
Repurchase agreements  71,5161.40% 55,6271.08% 71,3400.08% 76,3340.11% 69,0480.10%
Short-term borrowings  540,3805.34% 557,8185.27% 357,2004.96% 177,5334.28% 6,4403.33%
Long-term debt  29,8003.91% 29,7733.91% 7,2992.61% 3,8172.18% 3,3312.38%
Subordinated debt, net  109,1605.86% 97,0815.52% 96,9665.58% 97,8395.46% 98,7485.46%
Junior subordinated debt  101,1967.54% 101,1967.00% 101,1966.74% 101,1965.58% 101,1964.07%
Total interest-bearing liabilities $ 7,679,4022.18%$7,032,9991.80%$6,779,4891.14%$6,541,7490.57%$6,470,0310.29%
Demand deposits  3,498,424  3,316,955  3,502,489  3,658,965  3,708,131 
Other liabilities  287,751  251,511  274,517  290,895  234,851 
Stockholders' equity  1,305,686  1,217,306  1,190,316  1,164,916  1,201,656 
Total liabilities and stockholders' equity $ 12,771,263 $11,818,771 $11,746,811 $11,656,525 $11,614,669 
Interest rate spread  2.45% 2.62% 3.12% 3.45% 3.39%
Net interest margin (FTE)1  3.21% 3.27% 3.55% 3.68% 3.51%
            


NBT Bancorp Inc. and Subsidiaries       
Average Year-to-Date Balance Sheets      
(unaudited, dollars in thousands)       
        
  Average Yield/Average Yield/
  BalanceInterestRates BalanceInterestRates
Nine Months Ended September 30,  2023  2022 
Assets       
Short-term interest-bearing accounts $ 61,677$ 1,7513.80%$575,517$2,7420.64%
Securities taxable1  2,400,237 34,2181.91% 2,406,042 31,4601.75%
Securities tax-exempt1 5  207,812 4,6753.01% 242,033 3,6642.02%
FRB and FHLB stock  48,860 2,2826.24% 25,064 6543.49%
Loans1 6  8,516,793 330,3145.19% 7,683,159 237,2904.13%
Total interest-earning assets $ 11,235,379$ 373,2404.44%$10,931,815$275,8103.37%
Other assets  880,655   905,931  
Total assets $ 12,116,034  $11,837,746  
Liabilities and stockholders' equity       
Money market deposit accounts $ 2,207,126$ 36,1072.19%$2,541,927$2,8010.15%
NOW deposit accounts  1,525,089 4,9890.44% 1,570,318 1,2600.11%
Savings deposits  1,732,205 4620.04% 1,831,485 4420.03%
Time deposits  893,407 20,3303.04% 475,966 1,3280.37%
Total interest-bearing deposits $ 6,357,827$ 61,8881.30%$6,419,696$5,8310.12%
Federal funds purchased  32,784 1,2665.16% 513 133.39%
Repurchase agreements  66,162 4160.84% 67,279 460.09%
Short-term borrowings  485,804 18,9755.22% 2,170 543.33%
Long-term debt  22,373 6313.77% 7,509 1402.49%
Subordinated debt, net  101,114 4,2815.66% 98,641 4,0785.53%
Junior subordinated debt  101,196 5,3727.10% 101,196 2,3253.07%
Total interest-bearing liabilities $ 7,167,260$ 92,8291.73%$6,697,004$12,4870.25%
Demand deposits  3,439,275   3,709,761  
Other liabilities  271,307   219,983  
Stockholders' equity  1,238,192   1,210,998  
Total liabilities and stockholders' equity$ 12,116,034  $11,837,746  
Net interest income (FTE)1  $ 280,411  $263,323 
Interest rate spread   2.71%  3.12%
Net interest margin (FTE)1   3.34%  3.22%
Taxable equivalent adjustment  $ 1,365  $912 
Net interest income  $ 279,046  $262,411 
        


       
1The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release: 
       
 Non-GAAP measures     
 (unaudited, dollars in thousands)     
       
   2023  2022 
  3rd Q2nd Q1st Q4th Q3rd Q
 Operating net income     
 Net income$ 24,606 $30,072 $33,658 $36,121 $38,973 
 Acquisition expenses 7,917  1,189  618  967  - 
 Acquisition-related provision for credit losses 8,750  -  -  -  - 
 Acquisition-related reserve for unfunded loan commitments 836  -  -  -  - 
 Securities losses 183  4,641  4,998  217  148 
 Adjustment to net income$ 17,686 $5,830 $5,616 $1,184 $148 
 Adjustment to net income (net of tax)$ 13,730 $4,525 $4,341 $913 $114 
 Operating net income$ 38,336 $34,597 $37,999 $37,034 $39,087 
 Operating diluted earnings per share$ 0.84 $0.80 $0.88 $0.86 $0.91 
       
  9 Months Ended September 30,   
   2023  2022    
 Operating net income     
 Net income$ 88,336 $115,874    
 Acquisition expenses 9,724  -    
 Acquisition-related provision for credit losses 8,750  -    
 Acquisition-related reserve for unfunded loan commitments 836  -    
 Securities losses 9,822  914    
 Adjustment to net income$ 29,132 $914    
 Adjustment to net income (net of tax)$ 22,577 $712    
 Operating net income$ 110,913 $116,586    
 Operating diluted earnings per share$ 2.53 $2.70    
       
   2023  2022 
  3rd Q2nd Q1st Q4th Q3rd Q
 FTE adjustment     
 Net interest income$ 94,895 $89,085 $95,066 $99,779 $94,478 
 Add: FTE adjustment 568  402  395  392  337 
 Net interest income (FTE)$ 95,463 $89,487 $95,461 $100,171 $94,815 
 Average earning assets$ 11,803,043 $10,983,347 $10,909,932 $10,801,115 $10,727,291 
 Net interest margin (FTE)3 3.21% 3.27% 3.55% 3.68% 3.51%
       
  9 Months Ended September 30,   
   2023  2022    
 FTE adjustment     
 Net interest income$ 279,046 $262,411    
 Add: FTE adjustment 1,365  912    
 Net interest income (FTE)$ 280,411 $263,323    
 Average earning assets$ 11,235,379 $10,931,815    
 Net interest margin (FTE)3 3.34% 3.22%   
       
 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)     
       
   2023  2022 
  3rd Q2nd Q1st Q4th Q3rd Q
 Tangible equity to tangible assets     
 Total equity$ 1,362,821 $1,210,493 $1,211,659 $1,173,554 $1,156,546 
 Intangible assets 402,745  287,701  288,159  288,545  289,083 
 Total assets$ 13,827,628 $11,890,497 $11,839,730 $11,739,296 $11,640,742 
 Tangible equity to tangible assets 7.15% 7.95% 7.99% 7.73% 7.64%
       
   2023  2022 
  3rd Q2nd Q1st Q4th Q3rd Q
 Return on average tangible common equity    
 Net income$ 24,606 $30,072 $33,658 $36,121 $38,973 
 Amortization of intangible assets (net of tax) 1,206  344  402  404  408 
 Net income, excluding intangibles amortization$ 25,812 $30,416 $34,060 $36,525 $39,381 
       
 Average stockholders' equity$ 1,305,686 $1,217,306 $1,190,316 $1,164,916 $1,201,656 
 Less: average goodwill and other intangibles 350,912  287,974  288,354  288,856  289,296 
 Average tangible common equity$ 954,774 $929,332 $901,962 $876,060 $912,360 
 Return on average tangible common equity3 10.73% 13.13% 15.31% 16.54% 17.12%
       
  9 Months Ended September 30,   
   2023  2022    
 Return on average tangible common equity    
 Net income$ 88,336 $115,874    
 Amortization of intangible assets (net of tax) 1,952  1,294    
 Net income, excluding intangibles amortization$ 90,288 $117,168    
       
 Average stockholders' equity$ 1,238,192 $1,210,998    
 Less: average goodwill and other intangibles 309,309  289,366    
 Average tangible common equity$ 928,883 $921,632    
 Return on average tangible common equity3 13.00% 17.00%   
       
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's net income for Q3 2023?

NBT Bancorp reported a net income of $24.6 million for Q3 2023.

How did NBT Bancorp's diluted earnings per share compare to the previous year?

NBT Bancorp's diluted earnings per share decreased from $0.90 in Q3 2022 to $0.54 in Q3 2023.

What were the key factors contributing to NBT Bancorp's performance in Q3 2023?

The completion of the Salisbury merger, growth in loans and deposits, and an increase in noninterest income were key factors contributing to NBT Bancorp's performance in Q3 2023.

What was NBT Bancorp's net interest margin (NIM) for Q3 2023?

NBT Bancorp's net interest margin (NIM) for Q3 2023 was 3.21%.

How did nonperforming loans to total loans change for NBT Bancorp?

Nonperforming loans to total loans increased slightly to 0.25% for NBT Bancorp.

What is the impact of the Salisbury merger on NBT Bancorp's business?

The Salisbury merger added 13 banking offices, $1.18 billion in loans, and $1.31 billion in deposits to NBT Bancorp's business.

NBT Bancorp Inc

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