10-Q 1 ef20029443_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 June 30, 2024.

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 July 31, 2024, there were 47,171,305 shares outstanding of the Registrant’s Common Stock, $0.01 par value per share.

NBT BANCORP INC.
FORM 10-Q - Quarter Ended June 30, 2024

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION
  
ITEM 1.
FINANCIAL STATEMENTS (Unaudited)
  

4

5

6

7

8

10
ITEM 2.
 30
ITEM 3.
47
ITEM 4.
 47


 
PART II
OTHER INFORMATION
 
ITEM 1.
 47
ITEM 1A.
 47
ITEM 2.
 47
ITEM 3.
 47
ITEM 4.
 47
ITEM 5.
 47
ITEM 6.
 48


 

49

2
GLOSSARY OF ABBREVIATIONS AND ACRONYMS

When references to “NBT”, “we,” “our,” “us,” and “the Company” are made in this report, we mean NBT Bancorp Inc. and our consolidated subsidiaries, unless the context indicates that we refer only to the parent company, NBT Bancorp Inc. When we refer to the “Bank” in this report, we mean its only bank subsidiary, NBT Bank, National Association, and its subsidiaries.

The acronyms and abbreviations identified below are used throughout this report, including the Notes to Unaudited Interim Consolidated Financial Statements. You may find it helpful to refer to this page as you read this report.

AFS
available for sale
AIR
accrued interest receivable
AOCI
accumulated other comprehensive income (loss)
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
BP(S)
basis point(s)
C&I
Commercial & Industrial
CECL
current expected credit losses
CD
certificate of deposit
CME
Chicago Mercantile Exchange Clearing House
CRE
Commercial Real Estate
EPS
earnings per share
FASB
Financial Accounting Standards Board
FDIC
Federal Deposit Insurance Corporation
FHLB
Federal Home Loan Bank
FOMC
Federal Open Market Committee
FRB
Federal Reserve Board
FTE
fully taxable equivalent
GAAP
generally accepted accounting principles in the United States of America
HTM
held to maturity
LGD
loss given default
LIBOR
London Interbank Offered Rate
MMDA
money market deposit accounts
NASDAQ
The NASDAQ Stock Market LLC
NIM
net interest margin
NOW
negotiable order of withdrawal
OCC
Office of the Comptroller of the Currency
OREO
other real estate owned
PCD
purchased credit deteriorated
PD
probability of default
Salisbury
Salisbury Bancorp, Inc.
Salisbury Bank
Salisbury Bank and Trust Company
SEC
U.S. Securities and Exchange Commission
SOFR
Secured Overnight Financing Rate
TDRs
troubled debt restructurings

3
ITEM 1. FINANCIAL STATEMENTS

NBT Bancorp Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
 
June 30,
    
December 31,
  
(In thousands, except share and per share data)  
2024
    
2023
  
Assets
            
Cash and due from banks
  
$
172,313
    
$
173,811
  
Short-term interest-bearing accounts
    
35,207
      
31,378
  
Equity securities, at fair value
    
40,087
      
37,591
  
Securities available for sale, at fair value
    
1,439,445
      
1,430,858
  
Securities held to maturity (fair value $780,490 and $814,524, respectively)
    
878,909
      
905,267
  
Federal Reserve and Federal Home Loan Bank stock
    
38,314
      
45,861
  
Loans held for sale
    
3,183
      
3,371
  
Loans
    
9,854,347
      
9,650,713
  
Less allowance for loan losses
    
120,500
      
114,400
  
Net loans
  
$
9,733,847
    
$
9,536,313
  
Premises and equipment, net
    
78,713
      
80,675
  
Goodwill
    
361,851
      
361,851
  
Intangible assets, net
    
36,835
      
40,443
  
Bank owned life insurance
    
269,310
      
265,732
  
Other assets
    
413,895
      
395,889
  
Total assets
  
$
13,501,909
    
$
13,309,040
  
Liabilities
                
Demand (noninterest bearing)
  
$
3,333,828
    
$
3,413,829
  
Savings, NOW and money market
    
6,532,834
      
6,230,456
  
Time
    
1,404,797
      
1,324,709
  
Total deposits
  
$
11,271,459
    
$
10,968,994
  
Short-term borrowings
    
224,703
      
386,651
  
Long-term debt
    
29,721
      
29,796
  
Subordinated debt, net
    
120,462
      
119,744
  
Junior subordinated debt
    
101,196
      
101,196
  
Other liabilities
    
292,413
      
276,968
  
Total liabilities
  
$
12,039,954
    
$
11,883,349
  
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 shares issued
    
540
      
540
  
Additional paid-in-capital
    
741,933
      
740,943
  
Retained earnings
    
1,058,187
      
1,021,831
  
Accumulated other comprehensive loss
    
(162,919
)
    
(160,934
)
Common stock in treasury, at cost, 6,809,123 and 6,864,593 shares, respectively
    
(175,786
)
    
(176,689
)
Total stockholders’ equity
  
$
1,461,955
    
$
1,425,691
  
Total liabilities and stockholders’ equity
  
$
13,501,909
    
$
13,309,040
  

See accompanying notes to unaudited interim consolidated financial statements.

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

 
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
(In thousands, except per share data)  
2024
    
2023
    
2024
    
2023
  
Interest, fee and dividend income
                        
Interest and fees on loans
  
$
136,606
    
$
106,935
    
$
269,752
    
$
207,834
  
Securities available for sale
    
7,562
      
7,493
      
14,686
      
15,109
  
Securities held to maturity
    
5,190
      
4,991
      
10,493
      
10,026
  
Other
    
1,408
      
1,170
      
2,772
      
1,812
  
Total interest, fee and dividend income
  
$
150,766
    
$
120,589
    
$
297,703
    
$
234,781
  
Interest expense
                                
Deposits
  
$
46,688
    
$
19,986
    
$
91,027
    
$
31,130
  
Short-term borrowings
    
2,899
      
8,126
      
6,320
      
13,045
  
Long-term debt
    
291
      
290
      
581
      
337
  
Subordinated debt
    
1,806
      
1,335
      
3,606
      
2,669
  
Junior subordinated debt
    
1,908
      
1,767
      
3,821
      
3,449
  
Total interest expense
  
$
53,592
    
$
31,504
    
$
105,355
    
$
50,630
  
Net interest income
  
$
97,174
    
$
89,085
    
$
192,348
    
$
184,151
  
Provision for loan losses
    
8,899
      
3,606
      
14,478
      
7,515
  
Net interest income after provision for loan losses
  
$
88,275
    
$
85,479
    
$
177,870
    
$
176,636
  
Noninterest income
                                
Service charges on deposit accounts
  
$
4,219
    
$
3,733
    
$
8,336
    
$
7,281
  
Card services income    
5,587
      
5,121
      
10,782
      
9,966
  
Retirement plan administration fees
    
14,798
      
11,735
      
29,085
      
23,197
  
Wealth management
    
10,173
      
8,227
      
19,870
      
16,314
  
Insurance services
    
3,848
      
3,716
      
8,236
      
7,647
  
Bank owned life insurance income
    
1,834
      
1,528
      
4,186
      
3,406
  
Net securities (losses) gains
    
(92
)
    
(4,641
)
    
2,091
   
(9,639
)
Other
    
2,865
      
2,626
      
6,038
      
5,282
  
Total noninterest income
  
$
43,232
    
$
32,045
    
$
88,624
    
$
63,454
  
Noninterest expense
                                
Salaries and employee benefits
  
$
55,393
    
$
46,834
    
$
111,097
    
$
94,989
  
Technology and data services
     9,249       9,305       18,999       18,312  
Occupancy
    
7,671
      
6,923
      
15,769
      
14,143
  
Professional fees and outside services
    
4,565
      
4,159
      
9,418
      
8,337
  
Office supplies and postage
    
1,804
      
1,676
      
3,669
      
3,304
  
FDIC assessment
    
1,667
      
1,344
      
3,402
      
2,740
  
Advertising
    
873
      
525
      
1,685
      
1,174
  
Amortization of intangible assets
    
2,133
      
458
      
4,301
      
994
  
Loan collection and other real estate owned, net
    
715
      
691
      
1,268
      
1,546
  
Acquisition expenses
    -       1,189       -       1,807  
Other
    
5,518
      
5,690
      
11,753
      
10,770
  
Total noninterest expense
  
$
89,588
    
$
78,794
    
$
181,361
    
$
158,116
  
Income before income tax expense
  
$
41,919
    
$
38,730
    
$
85,133
    
$
81,974
  
Income tax expense
    
9,203
      
8,658
      
18,594
      
18,244
  
Net income
  
$
32,716
    
$
30,072
    
$
66,539
    
$
63,730
  
Earnings per share
                                
Basic
  
$
0.69
    
$
0.70
    
$
1.41
    
$
1.49
  
Diluted
  
$
0.69
    
$
0.70
    
$
1.40
    
$
1.48
  

See accompanying notes to unaudited interim consolidated financial statements.

5
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss) (unaudited)

 
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
(In thousands)  
2024
    
2023
    
2024
    
2023
  
Net income
  
$
32,716
    
$
30,072
    
$
66,539
    
$
63,730
  
Other comprehensive income (loss), net of tax:
                                
                                 
Securities available for sale:
                                
Unrealized net holding gains (losses) arising during the period, gross  
$
1,556
    
$
(26,783
)
  
$
(3,736
)
  
$
(11,058
)
Tax effect
    
(389
)
    
6,696
      
934
      
2,765
  
Unrealized net holding gains (losses) arising during the period, net
  
$
1,167
    
$
(20,087
)
  
$
(2,802
)
  
$
(8,293
)

                               
Reclassification adjustment for net losses in net income, gross
  $ -     $ 4,450     $ -     $ 9,450  
Tax effect
     -       (1,113 )     -       (2,363 )
Reclassification adjustment for net losses in net income, net
  $ -     $ 3,337     $ -     $ 7,087  
                                 
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, gross
  
$
91
    
$
109
    
$
187
    
$
223
  
Tax effect
    
(23
)
    
(28
)
    
(47
)
    
(56
)
Amortization of unrealized net gains for the reclassification of available for sale securities to held to maturity, net
  
$
68
    
$
81
    
$
140
    
$
167
  
                                 
Total securities available for sale, net
  
$
1,235
    
$
(16,669
)
  
$
(2,662
)
  
$
(1,039
)
                                 
Pension and other benefits:
                                
Amortization of prior service cost and actuarial losses, gross
  
$
1,451
    
$
649
    
$
1,903
    
$
1,298
  
Tax effect
    
(363
)
    
(162
)
    
(476
)
    
(325
)
Amortization of prior service cost and actuarial losses, net
  
$
1,088
    
$
487
    
$
1,427
    
$
973
  
                                 
Increase in unrecognized actuarial loss, gross   $ (1,000 )   $ -     $ (1,000 )   $ -  
Tax effect     250       -       250       -  
Increase in unrecognized actuarial loss, net   $ (750 )   $ -     $ (750 )   $ -  
                                 
Total pension and other benefits, net
  
$
338
    
$
487
    
$
677
    
$
973
  
                                 
Total other comprehensive income (loss)
  
$
1,573
    
$
(16,182
)
  
$
(1,985
)
  
$
(66
)
Comprehensive income
  
$
34,289
    
$
13,890
    
$
64,554
    
$
63,664
  

See accompanying notes to unaudited interim consolidated financial statements.

6
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 March 31, 2024
  
$
540
    
$
740,792
    
$
1,040,563
    
$
(164,492
)
  
$
(175,988
)
  
$
1,441,415
  
Net income
    
-
      
-
      
32,716
      
-
      
-
      
32,716
  
Cash dividends - $0.32 per share
    
-
      
-
      
(15,092
)
    
-
      
-
      
(15,092
)
Purchase of 5,700 treasury shares
     -       -       -       -       (188 )     (188 )
Net issuance of 16,054 shares to employee
and other stock plans
    
-
      
(766
)
    
-
      
-
      
390
      
(376
)
Stock-based compensation
    
-
      
1,907
      
-
      
-
      
-
      
1,907
  
Other comprehensive income
    
-
      
-
      
-
      
1,573
      
-
      
1,573
  
Balance at June 30, 2024
  
$
540
    
$
741,933
    
$
1,058,187
    
$
(162,919
)
  
$
(175,786
)
  
$
1,461,955
  
                                                 
Balance at March 31, 2023
  
$
497
    
$
577,952
    
$
979,722
    
$
(173,918
)
  
$
(172,594
)
  
$
1,211,659
  
Net income
    
-
      
-
      
30,072
      
-
      
-
      
30,072
  
Cash dividends - $0.30 per share
    
-
      
-
      
(12,874
)
    
-
      
-
      
(12,874
)
Purchase of 87,000 treasury shares     -       -       -       -       (2,778 )     (2,778 )
Net issuance of 9,432 shares to employee
and other stock plans
    
-
      
(477
)
    
-
      
-
      
226
      
(251
)
Stock-based compensation
    
-
      
847
      
-
      
-
      
-
      
847
  
Other comprehensive (loss)
    
-
      
-
      
-
      
(16,182
)
    
-
      
(16,182
)
Balance at June 30, 2023
  
$
497
    
$
578,322
    
$
996,920
    
$
(190,100
)
  
$
(175,146
)
  
$
1,210,493
  

(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, 2023
  
$
540
    
$
740,943
    
$
1,021,831
    
$
(160,934
)
  
$
(176,689
)
  
$
1,425,691
  
Net income
    
-
      
-
      
66,539
      
-
      
-
      
66,539
  
Cash dividends - $0.64 per share
    
-
      
-
      
(30,183
)
    
-
      
-
      
(30,183
)
Purchase of 7,600 treasury shares
     -       -       -       -       (251 )     (251 )
Net issuance of 63,070 shares to
employee and other stock plans
    
-
      
(3,201
)
    
-
      
-
      
1,154
      
(2,047
)
Stock-based compensation
    
-
      
4,191
      
-
      
-
      
-
      
4,191
  
Other comprehensive (loss)
    
-
      
-
      
-
      
(1,985
)
    
-
      
(1,985
)
Balance at June 30, 2024
  
$
540
    
$
741,933
    
$
1,058,187
    
$
(162,919
)
  
$
(175,786
)
  
$
1,461,955
  
                                                 
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
    
-
      
-
      
63,730
      
-
      
-
      
63,730
  
Cash dividends - $0.60 per share
    
-
      
-
      
(25,745
)
    
-
      
-
      
(25,745
)
Purchase of 87,000 treasury shares
    
-
      
-
      
-
      
-
      
(2,778
)
    
(2,778
)
Net issuance of 55,941 shares to
employee and other stock plans
    
-
      
(2,843
)
    
-
      
-
      
827
      
(2,016
)
Stock-based compensation
    
-
      
3,312
      
-
      
-
      
-
      
3,312
  
Other comprehensive (loss)
    
-
      
-
      
-
      
(66
)
    
-
      
(66
)
Balance at June 30, 2023
  
$
497
    
$
578,322
    
$
996,920
    
$
(190,100
)
  
$
(175,146
)
  
$
1,210,493
  

See accompanying notes to unaudited interim consolidated financial statements.

7
NBT Bancorp Inc. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
 
Six Months Ended
June 30,
  
(In thousands)  
2024
    
2023
  
Operating activities
            
Net income
  
$
66,539
    
$
63,730
  
Adjustments to reconcile net income to net cash provided by operating activities
                
Provision for loan losses
    
14,478
      
7,515
  
Depreciation and amortization of premises and equipment
    
5,721
      
5,145
  
Net amortization on securities
    
1,305
      
1,392
  
Amortization of intangible assets
    
4,301
      
994
  
Amortization of operating lease right-of-use assets
    
3,729
      
3,278
  
Excess tax benefit on stock-based compensation
    
(135
)
    
(241
)
Stock-based compensation expense
    
4,191
      
3,312
  
Bank owned life insurance income
    
(4,186
)
    
(3,406
)
Amortization of subordinated debt issuance costs
    
219
      
218
  
Proceeds from sale of loans held for sale
    
51,664
      
12,550
  
Originations of loans held for sale
    
(51,139
)
    
(13,476
)
Net gain on sale of loans held for sale
    
(72
)
    
(62
)
Net securities (gains) losses
    
(2,091
)
    
9,639
  
Net change in other assets and other liabilities
    
(7,261
)
    
(23,417
)
Net cash provided by operating activities
  
$
87,263
    
$
67,171
  
Investing activities
                
Net cash used in acquisitions
   $ (743 )   $ (2,213 )
Securities available for sale:
                
Proceeds from maturities, calls and principal paydowns
    
54,196
      
59,168
  
Proceeds from sales