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NBT Bancorp Inc. Announces First Quarter Net Income of $39.1 Million ($0.90 Per Diluted Common Share)
المصدر: Nasdaq GlobeNewswire / 25 أبريل 2022 16:15:01 America/New_York
NORWICH, N.Y., April 25, 2022 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income of $39.1 million, or $0.90 per diluted share for the three months ended March 31, 2022, compared to $39.8 million, or $0.91 per diluted share, in the first quarter of 2021 and $37.3 million, or $0.86 per diluted share in the fourth quarter of 2021. Net interest income recognized in the first quarter of 2022 from the Paycheck Protection Program (“PPP”) was approximately $2.0 million, compared to $6.2 million in the first quarter of 2021, and $7.5 million in the fourth quarter of 2021, reflective of significantly higher levels of loan forgiveness in the prior year. Excluding the impact of PPP loan income recognition, net interest income in the first quarter of 2022 improved in comparison to the first quarter of 2021 and the linked fourth quarter of 2021 due to solid organic loan growth, productive incremental deployment of excess liquidity into investment securities, and lower costs of deposits. Noninterest income grew to $42.7 million in the first quarter of 2022, up 15.2% from the first quarter of 2021, and 3.8% higher than the fourth quarter of 2021. Quarterly operating expenses of $72.1 million in the first quarter of 2022 were 6.3% above the first quarter of the prior year, and seasonally 3.9% lower than the linked fourth quarter of 2021. The Company recorded a provision for loan losses of $0.6 million in the first quarter of 2022, compared to a net benefit of $2.8 million in the first quarter of 2021, and a provision of $3.1 million in the fourth quarter of 2021.
CEO Comments
“We are extremely pleased with our first quarter results, including 11% annualized loan growth, deposit growth and continued strong performances by our fee-based businesses. Our customers have navigated this difficult operating environment and have grown their businesses, and we have been there to help them,” said NBT President and CEO John H. Watt, Jr. “Our asset quality is excellent, with historically low levels of net charge-offs and nonperforming assets. We recently received two powerful affirmations of our team and their commitment to our customers. NBT Bank was named one of Forbes World’s Best Banks for 2022, and we are the highest ranked bank based in New York State. In the J.D. Power 2022 U.S. Retail Banking Satisfaction Study, NBT Bank ranked #2 in the New York Tri-State Region, which includes New York, Connecticut and New Jersey.”
First Quarter Financial Highlights
Net Income - Net income of $39.1 million
- Diluted earnings per share of $0.90
Net Interest Income / NIM - Net interest income on a fully taxable equivalent (“FTE”) basis was $80.6 million1
- Net interest margin (“NIM”) on a FTE basis was 2.95%1, down 13 basis points (“bps”) from the prior quarter, due primarily to lower PPP income recognition
- Total cost of deposits of 0.07%
Noninterest Income - Noninterest income was $42.8 million, excluding securities gains (losses) and was 34.8% of total revenue
Pre-Provision Net Revenue (“PPNR”) - PPNR1 was $50.9 million compared to $51.5 million in the fourth quarter of 2021 and $47.5 million in the first quarter of 2021
Loans and Credit Quality - Period end total loans were $7.6 billion at March 31, 2022, up 2%, from December 31, 2021
- Period end loans increased $202 million, or 3%, from December 31, 2021, excluding $51 million and $101 million of PPP loans at March 31, 2022 and December 31, 2021, respectively
- Allowance for loan losses to total loans of 1.18%, was down 5 bps from the fourth quarter 2021
- Net charge-offs to average loans was 0.14%, annualized
- Nonperforming loans to total loans was 0.36%, down from 0.44% in the prior quarter
Capital - Tangible book value per share2 was $21.25 at March 31, 2022, 3% above the first quarter of 2021 and lower than December 31, 2021 resulting primarily from the impact of higher interest rates on available for sale investment securities and the related impact to AOCI
- Tangible equity to assets of 7.70%1
- CET1 ratio of 12.23%; Leverage ratio of 9.52%
Loans
- Period end total loans were $7.6 billion at March 31, 2022 and $7.5 billion at December 31, 2021.
- Excluding PPP loans, period end loans increased $202 million from December 31, 2021. Commercial and industrial loans increased $59.6 million to $1.2 billion; commercial real estate loans increased $54.2 million to $2.7 billion; and total consumer loans increased $87.8 million to $3.7 billion.
- Total PPP loans as of March 31, 2022 were $51 million (net of unamortized fees) with 90% of the original $836 million forgiven through the first quarter of 2022. The following PPP loan activity occurred during the first quarter of 2022:
- $48.4 million of loans forgiven
- $2.0 million of interest and fees recognized into interest income, compared to $7.5 million for the fourth quarter of 2021
- Commercial line of credit utilization rate was 23% at March 31, 2022 compared to 21% at December 31, 2021 and 22% at March 31, 2021.
Deposits
- Total deposits at March 31, 2022 were $10.5 billion, compared to $10.2 billion at December 31, 2021, driven by increases in savings and money market deposit accounts primarily due to seasonal municipal inflows during the quarter.
- Loan to deposit ratio was 73.1% at March 31, 2022, compared to 73.3% at December 31, 2021.
Net Interest Income and Net Interest Margin
- Net interest income for the first quarter of 2022 was $80.3 million, which was down $4.8 million, or 5.7%, from the fourth quarter of 2021 and up $1.3 million, or 1.6%, from the first quarter of 2021. PPP income of $2.0 million was $5.6 million lower in the first quarter of 2022 compared to the prior quarter, partly offset by a $1.1 million increase in interest income on securities.
- The NIM on a FTE basis for the first quarter of 2022 was 2.95%, down 13 bps from the fourth quarter of 2021 and down 22 bps from the first quarter of 2021. Excluding the impact of PPP interest and fees and excess liquidity from each quarter, the NIM decreased 2 bps from the prior quarter primarily due to a 3 bp decrease in earning asset yields partially offset by a 1 bp decline in the cost of interest-bearing liabilities. The net impact of income from PPP loans and excess liquidity negatively impacted the NIM by 22 bps in the first quarter of 2022 compared to a negative 11 bps impact in the fourth quarter of 2021.
- Earning asset yields for the three months ended March 31, 2022 were down 14 bps from the prior quarter and down 29 bps from the same quarter in the prior year. Earning assets grew $71.9 million, or 0.7%, from the prior quarter and grew $948.0 million, or 9.3%, from the same quarter in the prior year. The following are highlights comparing the first quarter of 2022 to the prior quarter:
- The average balance of investment securities increased $204.0 million and yields increased 9 bps.
- Investment of excess liquidity resulted in a $155.5 million decrease in the average balances of short-term interest-bearing accounts with a yield of 0.17%.
- Loan yields decreased 25 bps to 3.95% for the quarter. Excluding PPP loans, loan yields declined 1 bp from the prior quarter.
- Total cost of deposits was 0.07% for the first quarter of 2022, down 1 bp from the prior quarter and down 7 bps from the same period in the prior year.
- The cost of interest-bearing liabilities for the three months ended March 31, 2022 was 0.23%, down 1 bp compared to the prior quarter of 0.24% and down 11 bps from the first quarter of 2021 of 0.34%.
Credit Quality and Allowance for Credit Losses
- Net charge-offs to total average loans of 14 bps compared to 22 bps in the prior quarter and 12 bps (13 bps excluding PPP loans) in the first quarter of 2021.
- Nonperforming assets to total assets was 0.23% compared to 0.27% (0.28% excluding PPP loans) at December 31, 2021 and 0.41% (0.43% excluding PPP loans) at March 31, 2021.
- Provision expense for the three months ended March 31, 2022 was $0.6 million with net charge-offs of $2.6 million. Provision expense was $2.5 million lower than the fourth quarter of 2021 and $3.4 million higher than the first quarter of 2021. The decrease in provision expense from the prior quarter was driven by generally positive changes in macro-economic forecasts and a lower level of charge-offs, partly offset by providing for loan growth. The increase in provision expense from the first quarter of 2021 was meaningfully influenced by positive year-over-year changes in the economic forecast, loan growth and the resultant required level of allowance for loan losses.
- The allowance for loan losses was $90.0 million, or 1.18% loans (1.18% excluding PPP loans and related allowance) of total at March 31, 2022, compared to 1.23% (1.24% excluding PPP loans and related allowance) of total loans at December 31, 2021 and 1.38% (1.48% excluding PPP loans and related allowance) of total loans at March 31, 2021. The decrease in the level of allowance for loan losses was primarily due to the positive impact the forecasted improving economic conditions had on expected credit losses partly offset by the increase in loan balances.
- The reserve for unfunded loan commitments decreased to $4.8 million at March 31, 2022 compared to the prior quarter at $5.1 million.
Noninterest Income
- Total noninterest income, excluding securities gains (losses), was $42.8 million for the three months ended March 31, 2022, up $1.7 million from the prior quarter and up $6.3 million from the prior year quarter.
- Service charges on deposit accounts were comparable to the prior quarter and higher than the first quarter of 2021. During the quarter, the Company made adjustments to customer non-sufficient funds processing practices and expects, once fully implemented, these adjustments to reduce service charge fee income by approximately $0.5 million per quarter.
- Card services income was comparable to the prior quarter and higher than the first quarter of 2021 due to increased volume. As discussed in previous quarters, the Company will be subject to the provisions of the Durbin Amendment to the Dodd-Frank Act beginning in the third quarter of 2022, which it estimates will reduce quarterly debit card interchange income by approximately $3.7 million.
- Retirement plan administration fees were higher than the prior quarter and higher than the first quarter of 2021 driven by higher activity-based fees, continued organic growth as well as the impact of positive equity market returns over the past year.
- Wealth management fees were comparable to the prior quarter and higher than the first quarter of 2021 aided by market performance and additional new customers.
Noninterest Expense
- Total noninterest expense for the first quarter of 2022 was down 3.9% from the previous quarter and up 6.3% from the first quarter of 2021.
- Salaries and benefits increased from the prior quarter due to seasonally higher payroll taxes and stock-based compensation expenses, partly offset by two less payroll days, and increased from the first quarter of 2021 due to increased salaries and wages including merit pay increases and higher levels of incentive compensation.
- Professional fees and outside services expense were lower than the prior quarter and higher than the first quarter of 2021 due to timing of costs associated with several digital and other technology-related initiatives.
- Loan collection and other real estate owned were lower than the prior quarter due to the gain on the sale of a property in the first quarter of 2022 and a write-down of a property in the fourth quarter of 2021.
- Other expenses declined from the linked fourth quarter of 2021 due principally to the seasonal timing of certain items.
Income Taxes
- The effective tax rate was 22.2% for the first quarter of 2022 compared to 22.4% for the fourth quarter of 2021 and 21.9% for the first quarter of 2021.
Capital
- Capital ratios remain strong with tangible common equity to tangible assets1 at 7.70%. Tangible book value per share2 was $21.25 at March 31, 2022, $22.26 at December 31, 2021 and $20.71 at March 31, 2021.
- Stockholder’s equity decreased $48 million driven by the $68 million decrease in accumulated other comprehensive income due to the change in the market value of securities available for sale, dividends declared of $12 million and the repurchase of common stock of $8 million, partly offset by net income of $39 million.
- March 31, 2022, CET1 capital ratio of 12.23%, leverage ratio of 9.52% and total risk-based capital ratio of 15.64%.
Stock Repurchase
- The Company purchased 217,100 shares of common stock during the first quarter of 2022 at a weighted average price of $37.55 including commissions. The repurchase program under which these shares were purchased expires on December 31, 2023. The Company purchased 182,900 shares of common stock during the month of April 2022 at a weighted average price of $35.88 including commissions.
Other Events
- On April 1, 2022, the Company completed the acquisition of Cleveland Hauswirth Investment Management (“CH”). CH is a Registered Investment Advisor located in Milwaukee, WI with $150 million in assets under management that provides investment advice and fiduciary services to individual and corporate retirement plan clients.
Conference Call and Webcast
The Company will host a conference call at 8:30 a.m. (Eastern) Tuesday, April 26, 2022, to review first quarter 2022 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-events and will be archived for twelve months.
Corporate Overview
NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $12.1 billion at March 31, 2022. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 140 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a national benefits administration firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtinsurance.com.
Forward-Looking Statements
This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war or terrorism; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (9) changes in consumer spending, borrowings and savings habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisitions and integration of acquired businesses; (13) the ability to increase market share and control expenses; (14) changes in the competitive environment among financial holding companies; (15) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, Economic Growth, Regulatory Relief, Consumer Protection Act of 2018, Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), and other legislative and regulatory responses to the coronavirus (“COVID-19”) pandemic; (16) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (“FASB”) and other accounting standard setters; (17) changes in the Company’s organization, compensation and benefit plans; (18) the costs and effects of legal and regulatory developments including the resolution of legal proceedings or regulatory or other governmental inquiries and the results of regulatory examinations or reviews; (19) greater than expected costs or difficulties related to the integration of new products and lines of business; (20) the adverse impact on the U.S. economy, including the markets in which we operate, of the COVID-19 global pandemic; and (21) the Company’s success at managing the risks involved in the foregoing items.
Currently, one of the most significant factors that could cause actual outcomes to differ materially from the Company’s forward-looking statements is the potential adverse effect of the current COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company, its customers and the global economy and financial markets. The extent to which the COVID-19 pandemic impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, treatment developments, public adoption rates of COVID-19 vaccines, including booster shots, and their effectiveness against emerging variants of COVID-19, including the Delta and Omicron variants, the impact of the COVID-19 pandemic on the Company’s customers and demand for financial services, the actions governments, businesses and individuals take in response to the pandemic, the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies, national and local economic activity, and the pace of recovery when the COVID-19 pandemic subsides, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic.
The Company cautions readers not 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 MeasuresThis press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of the Company’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.
Contact:
John H. Watt, Jr., President and CEO
Scott A. Kingsley, Executive Vice President and CFO
NBT Bancorp Inc.
52 South Broad Street
Norwich, NY 13815
607-337-6589NBT Bancorp Inc. and Subsidiaries Selected Financial Data (unaudited, dollars in thousands except per share data) 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Profitability: Diluted earnings per share $ 0.90 $ 0.86 $ 0.86 $ 0.92 $ 0.91 Weighted average diluted common shares outstanding 43,385,451 43,574,539 43,631,497 43,792,940 43,889,889 Return on average assets3 1.32 % 1.23 % 1.26 % 1.39 % 1.46 % Return on average equity3 12.78 % 11.89 % 12.04 % 13.42 % 13.57 % Return on average tangible common equity1 3 16.87 % 15.70 % 15.97 % 17.93 % 18.24 % Net interest margin1 3 2.95 % 3.08 % 2.88 % 3.00 % 3.17 % 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Balance sheet data: Short-term interest-bearing accounts $ 913,315 $ 1,111,296 $ 1,131,074 $ 883,758 $ 972,195 Securities available for sale 1,662,697 1,687,361 1,576,030 1,534,733 1,387,028 Securities held to maturity 895,005 733,210 683,103 622,351 592,999 Net loans 7,559,826 7,406,459 7,473,442 7,419,127 7,528,459 Total assets 12,147,833 12,012,111 11,994,411 11,574,947 11,537,253 Total deposits 10,461,623 10,234,469 10,195,178 9,785,257 9,815,930 Total borrowings 278,788 311,476 313,311 304,110 308,766 Total liabilities 10,945,583 10,761,658 10,752,954 10,349,891 10,346,272 Stockholders' equity 1,202,250 1,250,453 1,241,457 1,225,056 1,190,981 Capital: Equity to assets 9.90 % 10.41 % 10.35 % 10.58 % 10.32 % Tangible equity ratio1 7.70 % 8.20 % 8.13 % 8.28 % 8.00 % Book value per share $ 27.96 $ 28.97 $ 28.65 $ 28.19 $ 27.43 Tangible book value per share2 $ 21.25 $ 22.26 $ 21.95 $ 21.50 $ 20.71 Leverage ratio 9.52 % 9.41 % 9.47 % 9.40 % 9.60 % Common equity tier 1 capital ratio 12.23 % 12.25 % 12.20 % 12.12 % 12.13 % Tier 1 capital ratio 13.39 % 13.43 % 13.39 % 13.34 % 13.38 % Total risk-based capital ratio 15.64 % 15.73 % 15.74 % 15.78 % 15.92 % Common stock price (end of period) $ 36.13 $ 38.52 $ 36.12 $ 35.97 $ 39.90 NBT Bancorp Inc. and Subsidiaries Asset Quality and Consolidated Loan Balances (unaudited, dollars in thousands) 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Asset quality: Nonaccrual loans $ 25,812 $ 30,285 $ 35,737 $ 40,550 $ 43,399 90 days past due and still accruing 1,944 2,458 2,940 2,575 2,155 Total nonperforming loans 27,756 32,743 38,677 43,125 45,554 Other real estate owned - 167 859 798 1,318 Total nonperforming assets 27,756 32,910 39,536 43,923 46,872 Allowance for loan losses 90,000 92,000 93,000 98,500 105,000 Asset quality ratios (total): Allowance for loan losses to total loans 1.18 % 1.23 % 1.23 % 1.31 % 1.38 % Total nonperforming loans to total loans 0.36 % 0.44 % 0.51 % 0.57 % 0.60 % Total nonperforming assets to total assets 0.23 % 0.27 % 0.33 % 0.38 % 0.41 % Allowance for loan losses to total nonperforming loans 324.25 % 280.98 % 240.45 % 228.41 % 230.50 % Past due loans to total loans4 0.24 % 0.29 % 0.46 % 0.26 % 0.22 % Net charge-offs to average loans3 0.14 % 0.22 % 0.11 % 0.07 % 0.12 % Asset quality ratios (excluding paycheck protection program): Allowance for loan losses to total loans 1.18 % 1.24 % 1.28 % 1.38 % 1.48 % Total nonperforming loans to total loans 0.37 % 0.44 % 0.53 % 0.60 % 0.64 % Total nonperforming assets to total assets 0.23 % 0.28 % 0.34 % 0.39 % 0.43 % Allowance for loan losses to total nonperforming loans 324.24 % 280.96 % 240.42 % 228.36 % 230.44 % Past due loans to total loans4 0.25 % 0.29 % 0.48 % 0.27 % 0.23 % Net charge-offs to average loans3 0.14 % 0.22 % 0.12 % 0.07 % 0.13 % 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Allowance for loan losses as a percentage of loans by segment: Commercial & industrial 0.66 % 0.78 % 0.83 % 1.11 % 1.20 % Commercial real estate 0.79 % 0.78 % 0.93 % 1.26 % 1.48 % Paycheck protection program 0.01 % 0.01 % 0.01 % 0.01 % 0.01 % Residential real estate 0.88 % 0.92 % 0.93 % 0.98 % 1.03 % Auto 0.76 % 0.79 % 0.78 % 0.76 % 0.78 % Other consumer 4.14 % 4.49 % 4.57 % 4.27 % 4.34 % Total 1.18 % 1.23 % 1.23 % 1.31 % 1.38 % Total excluding PPP loans 1.18 % 1.24 % 1.28 % 1.38 % 1.48 % 2022 2021 Loans by line of business: 1st Q 4th Q 3rd Q 2nd Q 1st Q Commercial $ 1,214,834 $ 1,155,240 $ 1,148,176 $ 1,159,591 $ 1,141,594 Commercial real estate 2,709,611 2,655,367 2,638,762 2,585,421 2,567,536 Paycheck protection program 50,977 101,222 276,195 359,738 536,494 Residential real estate mortgages 1,584,551 1,571,232 1,549,684 1,512,354 1,478,216 Indirect auto 890,643 859,454 873,860 899,324 913,083 Specialty lending 835,546 778,291 692,919 602,585 577,509 Home equity 319,180 330,357 339,316 351,469 369,633 Other consumer 44,484 47,296 47,530 47,145 49,394 Total loans $ 7,649,826 $ 7,498,459 $ 7,566,442 $ 7,517,627 $ 7,633,459 PPP income recognized $ 1,976 $ 7,545 $ 2,861 $ 4,732 $ 6,171 PPP unamortized fees $ 1,629 $ 3,420 $ 10,536 $ 12,576 $ 14,240 NBT Bancorp Inc. and Subsidiaries Consolidated Balance Sheets (unaudited, dollars in thousands) March 31, December 31, Assets 2022 2021 Cash and due from banks $ 180,865 $ 157,775 Short-term interest-bearing accounts 913,315 1,111,296 Equity securities, at fair value 32,554 33,550 Securities available for sale, at fair value 1,662,697 1,687,361 Securities held to maturity (fair value $851,635 and $735,260, respectively) 895,005 733,210 Federal Reserve and Federal Home Loan Bank stock 25,005 25,098 Loans held for sale 263 830 Loans 7,649,826 7,498,459 Less allowance for loan losses 90,000 92,000 Net loans $ 7,559,826 $ 7,406,459 Premises and equipment, net 71,030 72,093 Goodwill 280,541 280,541 Intangible assets, net 8,291 8,927 Bank owned life insurance 228,979 228,238 Other assets 289,462 266,733 Total assets $ 12,147,833 $ 12,012,111 Liabilities and stockholders' equity Demand (noninterest bearing) $ 3,751,268 $ 3,689,556 Savings, NOW and money market 6,222,378 6,043,441 Time 487,977 501,472 Total deposits $ 10,461,623 $ 10,234,469 Short-term borrowings 65,022 97,795 Long-term debt 13,971 13,995 Subordinated debt, net 98,599 98,490 Junior subordinated debt 101,196 101,196 Other liabilities 205,172 215,713 Total liabilities $ 10,945,583 $ 10,761,658 Total stockholders' equity $ 1,202,250 $ 1,250,453 Total liabilities and stockholders' equity $ 12,147,833 $ 12,012,111 NBT Bancorp Inc. and Subsidiaries Quarterly Consolidated Statements of Income (unaudited, dollars in thousands except per share data) 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Interest, fee and dividend income Interest and fees on loans $ 73,343 $ 79,470 $ 72,817 $ 74,795 $ 75,093 Securities available for sale 6,840 6,101 5,898 5,762 5,544 Securities held to maturity 3,493 3,097 2,976 3,096 3,382 Other 525 639 524 391 291 Total interest, fee and dividend income $ 84,201 $ 89,307 $ 82,215 $ 84,044 $ 84,310 Interest expense Deposits $ 1,842 $ 2,132 $ 2,548 $ 2,862 $ 3,172 Short-term borrowings 16 28 28 32 70 Long-term debt 87 88 89 88 124 Subordinated debt 1,359 1,360 1,359 1,359 1,359 Junior subordinated debt 549 518 517 525 530 Total interest expense $ 3,853 $ 4,126 $ 4,541 $ 4,866 $ 5,255 Net interest income $ 80,348 $ 85,181 $ 77,674 $ 79,178 $ 79,055 Provision for loan losses 596 3,097 (3,342 ) (5,216 ) (2,796 ) Net interest income after provision for loan losses $ 79,752 $ 82,084 $ 81,016 $ 84,394 $ 81,851 Noninterest income Service charges on deposit accounts $ 3,688 $ 3,804 $ 3,489 $ 3,028 $ 3,027 Card services income 8,695 8,847 9,101 9,184 7,550 Retirement plan administration fees 13,279 11,816 10,495 9,779 10,098 Wealth management 8,640 8,619 8,783 8,406 7,910 Insurance services 3,788 3,394 3,720 3,508 3,461 Bank owned life insurance income 1,654 1,629 1,548 1,659 1,381 Net securities (losses) gains (179 ) (2 ) (100 ) 201 467 Other 3,094 3,004 3,293 3,551 3,144 Total noninterest income $ 42,659 $ 41,111 $ 40,329 $ 39,316 $ 37,038 Noninterest expense Salaries and employee benefits $ 45,508 $ 44,118 $ 44,190 $ 42,671 $ 41,601 Technology and data services 8,547 8,563 8,421 8,841 8,892 Occupancy 6,793 6,635 6,154 6,370 6,889 Professional fees and outside services 4,276 4,903 3,784 4,030 3,589 Office supplies and postage 1,424 1,528 1,364 1,615 1,499 FDIC expense 802 798 772 663 808 Advertising 654 1,019 583 468 451 Amortization of intangible assets 636 651 663 682 812 Loan collection and other real estate owned, net 384 956 706 663 590 Other 3,119 5,934 6,232 5,416 2,757 Total noninterest expense $ 72,143 $ 75,105 $ 72,869 $ 71,419 $ 67,888 Income before income tax expense $ 50,268 $ 48,090 $ 48,476 $ 52,291 $ 51,001 Income tax expense 11,142 10,780 11,043 11,995 11,155 Net income $ 39,126 $ 37,310 $ 37,433 $ 40,296 $ 39,846 Earnings Per Share Basic $ 0.91 $ 0.86 $ 0.86 $ 0.93 $ 0.91 Diluted $ 0.90 $ 0.86 $ 0.86 $ 0.92 $ 0.91 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 Q1 - 2022 Q4 - 2021 Q3 - 2021 Q2 - 2021 Q1 - 2021 Assets Short-term interest-bearing accounts $ 990,319 0.17 % $ 1,145,794 0.16 % $ 1,014,120 0.16 % $ 974,034 0.09 % $ 587,358 0.09 % Securities - taxable 2,284,578 1.67 % 2,081,796 1.57 % 1,923,700 1.63 % 1,864,542 1.69 % 1,768,945 1.82 % Securities - tax exempt 258,513 1.84 % 257,320 1.85 % 246,685 1.97 % 193,108 2.59 % 184,842 2.76 % FRB and FHLB stock 25,026 1.98 % 25,149 2.74 % 25,154 1.91 % 25,115 2.67 % 25,606 2.45 % Loans1 6 7,530,674 3.95 % 7,507,165 4.20 % 7,517,839 3.84 % 7,574,272 3.96 % 7,574,337 4.02 % Total interest-earning assets $ 11,089,110 3.09 % $ 11,017,224 3.23 % $ 10,727,498 3.05 % $ 10,631,071 3.18 % $ 10,141,088 3.38 % Other assets 947,578 982,136 1,019,797 971,681 960,994 Total assets $ 12,036,688 $ 11,999,360 $ 11,747,295 $ 11,602,752 $ 11,102,082 Liabilities and stockholders' equity Money market deposit accounts $ 2,720,338 0.15 % $ 2,678,477 0.16 % $ 2,580,570 0.19 % $ 2,605,767 0.21 % $ 2,484,120 0.23 % NOW deposit accounts 1,583,091 0.05 % 1,551,846 0.05 % 1,442,678 0.05 % 1,454,751 0.05 % 1,358,955 0.05 % Savings deposits 1,794,549 0.03 % 1,725,004 0.05 % 1,691,539 0.05 % 1,660,722 0.05 % 1,547,983 0.05 % Time deposits 494,632 0.40 % 537,875 0.46 % 565,216 0.62 % 591,147 0.75 % 615,343 0.93 % Total interest-bearing deposits $ 6,592,610 0.11 % $ 6,493,202 0.13 % $ 6,280,003 0.16 % $ 6,312,387 0.18 % $ 6,006,401 0.21 % Federal funds purchased - - 65 - - - - - - - Repurchase agreements $ 72,768 0.09 % 97,389 0.11 % 99,703 0.11 % 95,226 0.13 % 109,904 0.16 % Short-term borrowings - - 1 - - - - - 5,278 2.00 % Long-term debt 13,979 2.52 % 14,004 2.49 % 14,029 2.52 % 14,053 2.51 % 19,913 2.53 % Subordinated debt, net 98,531 5.59 % 98,422 5.48 % 98,311 5.48 % 98,204 5.55 % 98,095 5.62 % Junior subordinated debt 101,196 2.20 % 101,196 2.03 % 101,196 2.03 % 101,196 2.08 % 101,196 2.12 % Total interest-bearing liabilities $ 6,879,084 0.23 % $ 6,804,279 0.24 % $ 6,593,242 0.27 % $ 6,621,066 0.29 % $ 6,340,787 0.34 % Demand deposits 3,710,124 3,719,070 3,676,883 3,542,176 3,319,024 Other liabilities 206,292 231,260 244,125 235,536 250,991 Stockholders' equity 1,241,188 1,244,751 1,233,045 1,203,974 1,191,280 Total liabilities and stockholders' equity $ 12,036,688 $ 11,999,360 $ 11,747,295 $ 11,602,752 $ 11,102,082 Interest rate spread 2.86 % 2.99 % 2.78 % 2.89 % 3.04 % Net interest margin (FTE)1 2.95 % 3.08 % 2.88 % 3.00 % 3.17 % 1 The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release: Non-GAAP measures (unaudited, dollars in thousands) Pre-provision net revenue ("PPNR") 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Net income 39,126 37,310 37,433 40,296 39,846 Income tax expense 11,142 10,780 11,043 11,995 11,155 Provision for loan losses 596 3,097 (3,342 ) (5,216 ) (2,796 ) FTE adjustment 285 292 298 299 302 Net securities losses (gains) 179 2 100 (201 ) (467 ) Provision for unfunded loan commitments reserve (260 ) (250 ) (470 ) (80 ) (500 ) Nonrecurring expense (172 ) 250 2,288 1,880 - PPNR $ 50,896 $ 51,481 $ 47,350 $ 48,973 $ 47,540 Average assets $ 12,036,688 $ 11,999,360 $ 11,747,295 $ 11,602,757 $ 11,102,082 Return on average assets3 1.32 % 1.23 % 1.26 % 1.39 % 1.46 % PPNR return on average assets3 1.71 % 1.70 % 1.60 % 1.69 % 1.74 % PPNR is a Non-GAAP financial measure that management believes is useful in evaluating the underlying operating results of the Company excluding the volatility in the provision for loan losses, net securities gains (losses) and non-recurring income and/or expense. FTE adjustment 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Net interest income $ 80,348 $ 85,181 $ 77,674 $ 79,178 $ 79,055 Add: FTE adjustment 285 292 298 299 302 Net interest income (FTE) $ 80,633 $ 85,473 $ 77,972 $ 79,477 $ 79,357 Average earning assets $ 11,089,110 $ 11,017,224 $ 10,727,498 $ 10,631,071 $ 10,141,088 Net interest margin (FTE)3 2.95 % 3.08 % 2.88 % 3.00 % 3.17 % Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%. 1 The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release: Non-GAAP measures (unaudited, dollars in thousands) Tangible equity to tangible assets 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Total equity $ 1,202,250 $ 1,250,453 $ 1,241,457 $ 1,225,056 $ 1,190,981 Intangible assets 288,832 289,468 290,119 290,782 291,464 Total assets $ 12,147,833 $ 12,012,111 $ 11,994,411 $ 11,574,947 $ 11,537,253 Tangible equity to tangible assets 7.70 % 8.20 % 8.13 % 8.28 % 8.00 % Return on average tangible common equity 2022 2021 1st Q 4th Q 3rd Q 2nd Q 1st Q Net income $ 39,126 $ 37,310 $ 37,433 $ 40,296 $ 39,846 Amortization of intangible assets (net of tax) 477 488 497 512 609 Net income, excluding intangibles amortization $ 39,603 $ 37,798 $ 37,930 $ 40,808 $ 40,455 Average stockholders' equity $ 1,241,188 $ 1,244,751 $ 1,233,045 $ 1,203,974 $ 1,191,280 Less: average goodwill and other intangibles 289,218 289,834 290,492 291,133 291,921 Average tangible common equity $ 951,970 $ 954,917 $ 942,553 $ 912,841 $ 899,359 Return on average tangible common equity3 16.87 % 15.70 % 15.97 % 17.93 % 18.24 % 2 Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding. 3 Annualized. 4 Total past due loans, defined as loans 30 days or more past due and in an accrual status. 5 Securities are shown at average amortized cost. 6 For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.