10-Q 1 ef20012445_10q.htm 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023.

OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.

COMMISSION FILE NUMBER 0-14703

NBT BANCORP INC.
(Exact name of registrant as specified in its charter)

Delaware
  
16-1268674
(State or other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)

52 South Broad Street, Norwich, New York 13815
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (607) 337-2265

None
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
  
NBTB
  
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

As of October 31, 2023, there were 47,087,868 shares outstanding of the Registrant’s Common Stock, $0.01 par value per share.

NBT BANCORP INC.
FORM 10-Q - Quarter Ended September 30, 2023

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION
  
     
ITEM 1.
FINANCIAL STATEMENTS (unaudited)
  
 
3
 
4
 
5
 
6
 
7
 
9
ITEM 2.
 33
ITEM 3.
 50
ITEM 4.
 50
   
 
PART II
OTHER INFORMATION
 
   
 
ITEM 1.
51
ITEM 1A.
 51
ITEM 2.
 51
ITEM 3.
51
ITEM 4.
 51
ITEM 5.
 51
ITEM 6.
 52
   
 
  53


ITEM 1. FINANCIAL STATEMENTS

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

 
September 30,
    
December 31,
  
(In thousands, except share and per share data)  
2023
    
2022
  
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 of $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
                
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
  
Stockholders’ equity
                
Preferred stock, $0.01 par value, 2,500,000 shares authorized
  
$
-
    
$
-
  
Common stock, $0.01 par value, 100,000,000 shares authorized; 53,974,492 and 49,651,493 shares
issued, respectively
   
540
      
497
  
Additional paid-in-capital
    
740,577
      
577,853
  
Retained earnings
    
1,006,459
      
958,433
  
Accumulated other comprehensive loss
    
(207,579
)
    
(190,034
)
Common stock in treasury, at cost, 6,886,895 and 6,793,670 shares, respectively
    
(177,176
)
    
(173,195
)
Total stockholders’ equity
  
$
1,362,821
    
$
1,173,554
  
Total liabilities and stockholders’ equity
  
$
13,827,628
    
$
11,739,296
  

See accompanying notes to unaudited interim consolidated financial statements.

3
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Income (unaudited)

 
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
  
(In thousands, except per share data)  
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
    
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
  
Acquisition expenses
    7,917       -       9,724       -  
Other
    
6,514
      
5,021
      
17,284
      
13,815
  
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
  

See accompanying notes to unaudited interim consolidated financial statements.

4
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss) (unaudited)

 
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
  
(In thousands)  
2023
    
2022
    
2023
    
2022
  
Net income
  
$
24,606
    
$
38,973
    
$
88,336
    
$
115,874
  
Other comprehensive income (loss), net of tax:
                                
                                 
Securities available for sale:
                                
Unrealized net holding (losses) arising during the period, gross  
$
(24,059
)
  
$
(78,653
)
  
$
(35,117
)
  
$
(214,543
)
Tax effect
    
6,015
      
19,663
      
8,780
      
53,636
  
Unrealized net holding (losses) arising during the period, net  
$
(18,044
)
  
$
(58,990
)
  
$
(26,337
)
  
$
(160,907
)

                               
Reclassification adjustment for net losses in net income, gross
  $ -     $ -     $ 9,450     $ -  
Tax effect
     -       -       (2,363 )     -  
Reclassification adjustment for net losses in net income, net
  $ -     $ -     $ 7,087     $ -  
                                 
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross
  
$
105
    
$
125
    
$
328
    
$
393
  
Tax effect
    
(26
)
    
(31
)
    
(82
)
    
(98
)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net
  
$
79
    
$
94
    
$
246
    
$
295
  
                                 
Total securities available for sale, net
  
$
(17,965
)
  
$
(58,896
)
  
$
(19,004
)
  
$
(160,612
)
                                 
Pension and other benefits:
                                
Amortization of prior service cost and actuarial losses, gross
  
$
648
    
$
185
    
$
1,946
    
$
557
  
Tax effect
    
(162
)
    
(47
)
    
(487
)
    
(140
)
Amortization of prior service cost and actuarial losses, net
  
$
486
    
$
138
    
$
1,459
    
$
417
  
                                 
Total pension and other benefits, net
  
$
486
    
$
138
    
$
1,459
    
$
417
  
                                 
Total other comprehensive (loss)
  
$
(17,479
)
  
$
(58,758
)
  
$
(17,545
)
  
$
(160,195
)
Comprehensive income (loss)
  
$
7,127
    
$
(19,785
)
  
$
70,791
    
$
(44,321
)

See accompanying notes to unaudited interim consolidated financial statements.

5
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

(In thousands, except share and per share data)  
Common
Stock
    
Additional
Paid-in-
Capital
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
(Loss) Income
    
Common
Stock in
Treasury
    
Total
  
Balance at June 30, 2023
  
$
497
    
$
578,322
    
$
996,920
    
$
(190,100
)
  
$
(175,146
)
  
$
1,210,493
  
Net income
    
-
      
-
      
24,606
      
-
      
-
      
24,606
  
Cash dividends - $0.32 per share
    
-
      
-
      
(15,067
)
    
-
      
-
      
(15,067
)
Issuance of 4,322,999 shares of common
stock for acquisition
     43       161,680       -       -       -       161,723  
Purchase of 68,500 treasury shares
     -       -       -       -       (2,166 )     (2,166 )
Net issuance of 6,334 shares to employee
and other stock plans
    
-
      
(250
)
    
-
      
-
      
136
      
(114
)
Stock-based compensation
    
-
      
825
      
-
      
-
      
-
      
825
  
Other comprehensive (loss)
    
-
      
-
      
-
      
(17,479
)
    
-
      
(17,479
)
Balance at September 30, 2023
  
$
540
    
$
740,577
    
$
1,006,459
    
$
(207,579
)
  
$
(177,176
)
  
$
1,362,821
  
                                                 
Balance at June 30, 2022
  
$
497
    
$
577,345
    
$
909,029
    
$
(124,781
)
  
$
(173,534
)
  
$
1,188,556
  
Net income
    
-
      
-
      
38,973
      
-
      
-
      
38,973
  
Cash dividends - $0.30 per share
    
-
      
-
      
(12,832
)
    
-
      
-
      
(12,832
)
Net issuance of 2,849 shares to employee
and other stock plans
    
-
      
(116
)
    
-
      
-
      
53
      
(63
)
Stock-based compensation
    
-
      
670
      
-
      
-
      
-
      
670
  
Other comprehensive (loss)
    
-
      
-
      
-
      
(58,758
)
    
-
      
(58,758
)
Balance at September 30, 2022
  
$
497
    
$
577,899
    
$
935,170
    
$
(183,539
)
  
$
(173,481
)
  
$
1,156,546
  

(In thousands, except share and per share data)  
Common
Stock
    
Additional
Paid-in-
Capital
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
(Loss) Income
    
Common
Stock in
Treasury
    
Total
  
Balance at December 31, 2022
  
$
497
    
$
577,853
    
$
958,433
    
$
(190,034
)
  
$
(173,195
)
  
$
1,173,554
  
Cumulative effect adjustment for ASU
2022-02 implementation as of January 1, 2023
    -       -       502       -       -       502  
Net income
    
-
      
-
      
88,336
      
-
      
-
      
88,336
  
Cash dividends - $0.92 per share
    
-
      
-
      
(40,812
)
    
-
      
-
      
(40,812
)
Issuance of 4,322,999 shares of common
stock for acquisition
     43       161,680       -       -       -       161,723  
Purchase of 155,500 treasury shares
     -       -       -       -       (4,944 )     (4,944 )
Net issuance of 62,275 shares to
employee and other stock plans
    
-
      
(3,093
)
    
-
      
-
      
963
      
(2,130
)
Stock-based compensation
    
-
      
4,137
      
-
      
-
      
-
      
4,137
  
Other comprehensive (loss)
    
-
      
-
      
-
      
(17,545
)
    
-
      
(17,545
)
Balance at September 30, 2023
  
$
540
    
$
740,577
    
$
1,006,459
    
$
(207,579
)
  
$
(177,176
)
  
$
1,362,821
  
                                                 
Balance at December 31, 2021
  
$
497
    
$
576,976
    
$
856,203
    
$
(23,344
)
  
$
(159,879
)
  
$
1,250,453
  
Net income
    
-
      
-
      
115,874
      
-
      
-
      
115,874
  
Cash dividends - $0.86 per share
    
-
      
-
      
(36,907
)
    
-
      
-
      
(36,907
)
Purchase of 400,000 treasury shares
    
-
      
-
      
-
      
-
      
(14,713
)
    
(14,713
)
Net issuance of 71,243 shares to
employee and other stock plans
    
-
      
(3,026
)
    
-
      
-
      
1,111
      
(1,915
)
Stock-based compensation
    
-
      
3,949
      
-
      
-
      
-
      
3,949
  
Other comprehensive (loss)
    
-
      
-
      
-
      
(160,195
)
    
-
      
(160,195
)
Balance at September 30, 2022
  
$
497
    
$
577,899
    
$
935,170
    
$
(183,539
)
  
$
(173,481
)
  
$
1,156,546
  

See accompanying notes to unaudited interim consolidated financial statements.

6
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)

 
Nine Months Ended
September 30,
  
(In thousands)  
2023
    
2022
  
Operating activities
            
Net income
  
$
88,336
    
$
115,874
  
Adjustments to reconcile net income to net cash provided by operating activities
                
Provision for loan losses
    
20,148
      
9,470
  
Depreciation and amortization of premises and equipment
    
7,808
      
7,581
  
Net amortization on securities
    
2,057
      
2,736
  
Amortization of intangible assets
    
2,603
      
1,725
  
Amortization of operating lease right-of-use assets
    
5,029
      
4,989
  
Excess tax benefit on stock-based compensation
    
(239
)
    
(183
)
Stock-based compensation expense
    
4,137
      
3,949
  
Bank owned life insurance income
    
(4,974
)
    
(4,625
)
Amortization of subordinated debt issuance costs
    
328
      
327
  
Proceeds from sale of loans held for sale
    
26,108
      
4,238
  
Originations of loans held for sale
    
(29,167
)
    
(3,573
)
Net gain on sale of loans held for sale
    
(88
)
    
(112
)
Net securities losses
    
9,822
      
914
  
Net gains on sale of other real estate owned
    
(50
)
    
(259
)
Net change in other assets and other liabilities
    
(10,054
)
    
10,470
  
Net cash provided by operating activities
  
$
121,804
    
$
153,521
  
Investing activities
                
Net cash provided by (used in) acquisitions
   $ 44,564     $ (2,534 )
Securities available for sale:
                
Proceeds from maturities, calls and principal paydowns
    
90,415
      
177,704
  
Proceeds from sales
     124,577       -  
Purchases
    
-
      
(262,861
)
Securities held to maturity:
                
Proceeds from maturities, calls and principal paydowns
    
81,949
      
154,194
  
Purchases
    
(77,930
)
    
(351,390
)
Equity securities:
                
Purchases
     (4 )     (1,000 )
Other:
                
Net increase in loans
    
(349,168
)
    
(410,805
)
Proceeds from Federal Home Loan Bank stock redemption
    
84,378
      
6,491
  
Purchases of Federal Reserve and Federal Home Loan Bank stock
    
(88,260
)
    
(6,285
)
Proceeds from settlement of bank owned life insurance
    
3,185
      
1,873