PART I. FINANCIAL INFORMATION Presents unaudited interim consolidated financial statements and management's discussion for NBT Bancorp Inc ITEM 1. FINANCIAL STATEMENTS (Unaudited) Presents unaudited interim consolidated financial statements for Q1 2025, including balance sheets, income statements, and notes Consolidated Balance Sheets Presents the company's assets, liabilities, and stockholders' equity at March 31, 2025, and December 31, 2024 | (In thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Assets | | | | Total assets | $13,864,251 | $13,786,666 | | Liabilities | | | | Total deposits | $11,708,511 | $11,546,761 | | Total liabilities | $12,298,476 | $12,260,525 | | Stockholders' equity | | | | Total stockholders' equity | $1,565,775 | $1,526,141 | - Total assets increased by $77.6 million (0.56%) from December 31, 2024, to March 31, 2025. Total deposits increased by $161.75 million (1.4%) over the same period. Total stockholders' equity increased by $39.634 million (2.6%) from December 31, 2024, to March 31, 202511 Consolidated Statements of Income Details the company's revenues, expenses, and net income for the three months ended March 31, 2025 and 2024 | (In thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Total interest, fee and dividend income | $154,404 | $146,937 | | Total interest expense | $47,181 | $51,763 | | Net interest income | $107,223 | $95,174 | | Provision for loan losses | $7,554 | $5,579 | | Total noninterest income | $47,452 | $45,392 | | Total noninterest expense | $99,900 | $91,773 | | Net income | $36,745 | $33,823 | | Basic EPS | $0.78 | $0.72 | | Diluted EPS | $0.77 | $0.71 | - Net income increased by $2.922 million (8.6%) YoY. Diluted EPS increased by $0.06 (8.5%) YoY. Net interest income increased by $12.049 million (12.7%) YoY, while total interest expense decreased by $4.582 million (8.8%) YoY13 Consolidated Statements of Comprehensive Income (Loss) Reports net income and other comprehensive income components, showing total comprehensive income for the periods | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income | $36,745 | $33,823 | | Total other comprehensive income (loss) | $20,285 | $(3,558) | | Comprehensive income | $57,030 | $30,265 | - Total other comprehensive income (loss) significantly improved from a loss of $3.558 million in Q1 2024 to a gain of $20.285 million in Q1 2025, primarily due to unrealized net holding gains on available-for-sale securities. This led to a substantial increase in comprehensive income YoY14 Consolidated Statements of Changes in Stockholders' Equity Outlines changes in stockholders' equity, including net income, dividends, and other comprehensive income | (In thousands) | Balance at December 31, 2024 | Balance at March 31, 2025 | | :------------------------------------ | :--------------------------- | :------------------------ | | Total stockholders' equity | $1,526,141 | $1,565,775 | | Net income | - | $36,745 | | Cash dividends | - | $(16,067) | | Other comprehensive income | - | $20,285 | - Stockholders' equity increased by $39.634 million from December 31, 2024, to March 31, 2025, driven by net income and other comprehensive income, partially offset by cash dividends16 Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $42,005 | $36,745 | | Net cash used in investing activities | $(113,163) | $(13,128) | | Net cash provided by financing activities | $41,185 | $90,286 | | Net (decrease) increase in cash and cash equivalents | $(29,973) | $113,903 | | Cash and cash equivalents at end of period | $254,083 | $319,092 | - The company experienced a net decrease in cash and cash equivalents of $29.973 million in Q1 2025, a significant shift from a net increase of $113.903 million in Q1 2024. This was primarily due to a substantial increase in cash used in investing activities, which rose from $13.128 million in Q1 2024 to $113.163 million in Q1 2025, and a decrease in cash provided by financing activities18 Notes to Unaudited Interim Consolidated Financial Statements Provides detailed explanations and disclosures supporting the unaudited interim consolidated financial statements 1. Description of Business Outlines NBT Bancorp Inc.'s operations as a financial holding company and its banking and wealth management services - NBT Bancorp Inc. is a Delaware-incorporated financial holding company, primarily operating through its subsidiary NBT Bank, National Association. The company provides commercial banking, retail banking, and wealth management services across upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine, and central/northwestern Connecticut, maintaining a community-oriented financial institution philosophy2021 2. Summary of Significant Accounting Policies Highlights key accounting principles, GAAP compliance, use of estimates, and interim financial reporting - The interim consolidated financial statements are unaudited and prepared in accordance with GAAP, including normal recurring adjustments. Management emphasizes that results for interim periods are not indicative of full-year results and highlights the use of estimates, particularly for the allowance for credit losses, which are susceptible to material change2223 3. Recent Accounting Pronouncements Discusses new FASB ASUs on income tax and expense disaggregation disclosures and their expected impact - The FASB issued ASU 2023-09 (Improvements to Income Tax Disclosures), effective for annual periods after December 15, 2024, requiring enhanced income tax disclosures. Additionally, ASU 2024-03 (Expense Disaggregation Disclosures), with a revised effective date of annual periods after December 15, 2026, will require tabular disaggregation of certain income statement expenses. Neither is expected to materially impact the consolidated financial statements beyond disclosure requirements2425 4. Acquisitions Details recent acquisitions, including Evans Bancorp, Inc. and other asset purchases - On May 2, 2025, NBT Bancorp completed the acquisition of Evans Bancorp, Inc. for approximately $222 million in stock. Evans had assets of $2.19 billion at December 31, 2024. The initial accounting for this business combination is incomplete due to its proximity to the filing date. The Company incurred $1.2 million in acquisition expenses for this merger during Q1 20252627 - In November 2024, NBT Bank acquired certain assets of PACO, Inc. for $3.3 million, recording $0.7 million in goodwill. In July 2024, NBT Insurance Agency acquired substantially all assets of Karl W. Reynard, Inc. for $1.2 million, recording $0.2 million in goodwill, expanding its presence in the Catskills2829 5. Securities Presents details on available-for-sale and held-to-maturity securities, including cost, fair value, and unrealized gains/losses | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | AFS Securities | | | | Amortized Cost | $1,842,664 | $1,739,299 | | Estimated Fair Value | $1,704,677 | $1,574,664 | | Total Unrealized Losses | $(139,487) | $(164,886) | | HTM Securities | | | | Amortized Cost | $836,833 | $842,921 | | Estimated Fair Value | $756,404 | $749,945 | | Total Unrealized Losses | $(80,489) | $(93,018) | - Unrealized losses on AFS securities decreased from $(164.886) million at December 31, 2024, to $(139.487) million at March 31, 2025, indicating an improvement in fair value. Similarly, unrealized losses on HTM securities decreased from $(93.018) million to $(80.489) million. The company does not believe these unrealized losses represent credit impairment, as the majority are U.S. government-backed securities and are primarily due to interest rate changes323441 6. Loans Provides a breakdown of the loan portfolio by category at March 31, 2025, and December 31, 2024 | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Commercial & industrial | $1,436,990 | $1,426,482 | | Commercial real estate | $3,890,115 | $3,876,698 | | Residential real estate | $2,127,588 | $2,142,249 | | Home equity | $331,400 | $334,268 | | Indirect auto | $1,309,084 | $1,273,253 | | Residential solar | $800,090 | $820,079 | | Other consumer | $85,000 | $96,881 | | Total loans | $9,980,267 | $9,969,910 | - Total loans increased slightly by $10.357 million (0.1%) from December 31, 2024, to March 31, 2025. Commercial & industrial loans and Commercial real estate loans saw increases, while Residential real estate, Home equity, Residential solar, and Other consumer loans experienced decreases43 7. Allowance for Credit Losses and Credit Quality of Loans Details the allowance for credit losses, provision, nonperforming assets, and credit quality trends | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Allowance for credit losses (in millions) | $117.0 | $116.0 | | Allowance for credit losses as % of loans | 1.17% | 1.16% | | Provision for loan losses (Q1 2025, in millions) | $7.554 | $2.2 (Q4 2024) | | Net charge-offs (Q1 2025, in millions) | $6.554 | $5.7 (Q4 2024) | | Nonperforming loans (in millions) | $47.691 | $51.617 | | Total nonperforming assets (in millions) | $47.999 | $51.799 | - The allowance for credit losses increased to $117.0 million (1.17% of loans) at March 31, 2025, from $116.0 million (1.16% of loans) at December 31, 2024, primarily due to a deterioration in the economic forecast and a shift in scenario weightings. Provision for loan losses increased to $7.554 million in Q1 2025 from $5.579 million in Q1 2024. Nonperforming assets decreased to $48.0 million from $51.8 million, largely due to a $2.1 million charge-off on a nonperforming CRE relationship4551165167170 - The Company updated its econometric PD/LGD models, which resulted in an approximate 3% decrease in the total allowance as of March 31, 2025, mainly due to improved outcomes in the Auto class segment. Potential problem loans (substandard) increased to $125.2 million at March 31, 2025, from $116.1 million at December 31, 2024, reflecting changing conditions in certain CRE markets47171 8. Short-Term Borrowings Reports the company's short-term borrowing obligations, including securities sold under repurchase agreements | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Securities sold under repurchase agreements | $85,597 | $146,942 | | Other short-term borrowings | - | $16,000 | | Total short-term borrowings | $85,597 | $162,942 | - Total short-term borrowings decreased significantly by $77.345 million (47.5%) from $162.942 million at December 31, 2024, to $85.597 million at March 31, 2025, primarily due to a reduction in securities sold under repurchase agreements and the elimination of other short-term borrowings71 9. Defined Benefit Post-Retirement Plans Presents the net periodic cost or benefit for pension and other post-retirement plans for the periods | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Pension Benefits | | | | Service cost | $671 | $514 | | Interest cost | $1,068 | $1,005 | | Expected return on plan assets | $(2,045) | $(1,983) | | Net amortization | $325 | $453 | | Total net periodic cost (benefit) | $19 | $(11) | | Other Benefits | | | | Service cost | $1 | $1 | | Interest cost | $59 | $55 | | Expected return on plan assets | - | - | | Net amortization | - | $(1) | | Total net periodic cost (benefit) | $59 | $55 | - For Pension Benefits, the company recorded a net periodic cost of $19 thousand in Q1 2025, a shift from a net benefit of $(11) thousand in Q1 2024. This change was mainly due to a higher service cost and lower net amortization, partially offset by a higher expected return on plan assets. No voluntary contributions were made to either plan during both periods7374 10. Earnings Per Share Reports basic and diluted earnings per share, along with weighted average shares outstanding | (In thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Basic EPS | $0.78 | $0.72 | | Diluted EPS | $0.77 | $0.71 | | Weighted average common shares outstanding | 47,244 | 47,148 | | Dilutive effect of common stock options and restricted stock | 233 | 222 | | Weighted average common shares and common share equivalents | 47,477 | 47,370 | - Basic EPS increased by $0.06 (8.3%) and Diluted EPS increased by $0.06 (8.5%) from Q1 2024 to Q1 2025, reflecting higher net income. The dilutive effect of common stock options and restricted stock remained relatively stable76 11. Reclassification Adjustments Out of Other Comprehensive Income (Loss) Details reclassification adjustments from AOCI, net of tax, for AFS securities and pension benefits | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | AFS securities | | | | Amortization of unrealized gains related to securities transfer, net of tax | $56 | $72 | | Pension and other benefits | | | | Amortization of net losses and prior service costs, net of tax | $243 | $339 | | Total reclassifications, net of tax | $299 | $411 | - Total reclassification adjustments out of AOCI, net of tax, decreased from $411 thousand in Q1 2024 to $299 thousand in Q1 2025. This was primarily driven by a reduction in the net amortization of pension and other benefits77 12. Derivative Instruments and Hedging Activities Describes the company's use of derivative instruments for customer transactions and risk management | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Derivatives not designated as hedging instruments | | | | Interest rate derivatives (Notional Amount) | $1,401,787 | $1,374,800 | | Risk participation agreements (Notional Amount) | $98,600 | $90,725 | | Net derivative assets in the balance sheet | $67,284 | $80,847 | | Net derivative liabilities in the balance sheet | $86,910 | $104,399 | - The company uses interest rate swaps and risk participation agreements, not designated as hedging instruments, to facilitate customer transactions and manage risk. Notional amounts for interest rate derivatives increased to $1.40 billion at March 31, 2025, from $1.37 billion at December 31, 2024. Net derivative assets and liabilities decreased over the quarter, with a net gain of $21 thousand recognized in other income in Q1 202578798385 13. Fair Value Measurements and Fair Value of Financial Instruments Explains the fair value hierarchy and presents fair value measurements for assets, liabilities, and other financial instruments | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Assets at Fair Value (Recurring) | | | | Total AFS securities | $1,704,677 | $1,574,664 | | Equity securities | $41,561 | $42,372 | | Derivatives | $67,284 | $80,847 | | Liabilities at Fair Value (Recurring) | | | | Derivatives | $86,910 | $104,399 | | Financial Instruments (Fair Value vs. Carrying Amount) | | | | HTM securities (Fair Value) | $756,404 | $749,945 | | Net loans (Fair Value) | $9,567,818 | $9,458,786 | | Time deposits (Fair Value) | $1,440,657 | $1,431,942 | - The company measures financial instruments at fair value using a three-level hierarchy. AFS securities and derivatives are measured on a recurring basis, with AFS securities increasing in fair value and derivatives decreasing. HTM securities, net loans, and time deposits are disclosed with fair value estimates, which are generally lower than their carrying amounts, reflecting market conditions869194 14. Commitments and Contingencies Details off-balance sheet commitments, including credit extensions and standby letters of credit | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Commitments to extend credit and unused lines of credit | $2,790,000 | $2,840,000 | | Standby letters of credit | $56,200 | $50,800 | - Commitments to extend credit and unused lines of credit decreased by $50 million to $2.79 billion at March 31, 2025, from $2.84 billion at December 31, 2024. Standby letters of credit increased by $5.4 million to $56.2 million over the same period. The company's exposure to credit loss from these off-balance sheet instruments is managed with normal credit policies and collateral requirements103105 15. Segment Reporting Presents financial information for the Banking and Retirement Plan Administration segments - NBT Bancorp Inc. now operates through two reportable segments: Banking and Retirement Plan Administration, following a reassessment in accordance with ASU 2023-07. The Banking segment includes commercial, retail, and wealth management services, along with parent holding company activities and corporate shared service costs. The Retirement Plan Administration segment covers recordkeeping, administration, investment management, and actuarial services107108109 | (In thousands) | Banking (Q1 2025) | Retirement Plan Administration (Q1 2025) | All Other (Q1 2025) | Consolidated (Q1 2025) | | :------------------------------------ | :---------------- | :--------------------------------------- | :------------------ | :----------------------- | | Net interest income | $107,205 | $18 | $0 | $107,223 | | Total noninterest income | $28,803 | $17,009 | $1,640 | $47,452 | | Total noninterest expense | $89,477 | $10,340 | $83 | $99,900 | | Net income | $29,926 | $5,262 | $1,557 | $36,745 | | Total assets | $15,591,557 | $54,925 | $(1,782,231) | $13,864,251 | - For Q1 2025, the Banking segment generated $107.2 million in net interest income and $29.9 million in net income. The Retirement Plan Administration segment contributed $17.0 million in noninterest income and $5.3 million in net income. Total assets for the Banking segment were $15.59 billion112113 16. Subsequent Event Discloses the completion of the Evans Bancorp, Inc. acquisition post-quarter-end and its incomplete initial accounting - On May 2, 2025, the Company completed the acquisition of Evans Bancorp, Inc. for approximately $222 million in stock. The acquisition is being accounted for as a business combination, but the initial accounting is incomplete due to the timing of the 10-Q filing. Relevant disclosures will be provided in the second quarter of 2025115 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Provides a comprehensive analysis of NBT Bancorp Inc.'s financial condition and operating results Forward-Looking Statements Warns that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ - The report contains forward-looking statements, identified by terms like 'anticipate' or 'expect,' which are subject to various factors beyond the Company's control that could cause actual results to differ materially. These factors include economic conditions, changes in nonperforming assets, regulatory changes, interest rate fluctuations, and acquisition integration risks. Readers are cautioned not to place undue reliance on these statements117118 Non-GAAP Measures Explains the use of non-GAAP financial measures to provide additional insights into core business results - The report includes non-GAAP financial measures, which management believes provide useful information for understanding core business results and are standard in the financial institution industry. These measures are reconciled to comparable GAAP measures and should not be considered substitutes for GAAP-compliant financial statements120 Critical Accounting Estimates Identifies the allowance for credit losses as a critical estimate due to inherent uncertainty and management judgment - The allowance for credit losses and unfunded commitments is identified as a critical accounting estimate due to significant estimation uncertainty and potential material impact on financial results. The CECL methodology requires estimating lifetime credit losses based on past events, current conditions, and reasonable forecasts, with management judgment heavily influencing the outcome121122123 - As of March 31, 2025, the CECL model incorporated a 75% baseline and 25% downside economic forecast. A 10% decrease in the downside scenario weighting would decrease the allowance by 4%, while increasing the downside scenario to 100% would increase the allowance by 30%, demonstrating the sensitivity of the estimate to macroeconomic assumptions124125 Evans Bancorp, Inc. Merger Provides an update on the completed acquisition of Evans Bancorp, Inc., including transaction details and accounting status - On May 2, 2025, NBT Bancorp completed the acquisition of Evans Bancorp, Inc. for approximately $222 million in stock. Evans had assets of $2.19 billion at December 31, 2024. The acquisition is being accounted for as a business combination, but the initial accounting is incomplete due to the timing of the 10-Q filing. The Company incurred $1.2 million in acquisition expenses related to this merger during Q1 2025127128 Executive Summary Presents a high-level overview of key financial results and performance metrics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :------------------------------------ | :------ | :------ | :------ | | Net income (in millions) | $36.7 | $36.0 | $33.8 | | Diluted EPS | $0.77 | $0.76 | $0.71 | | Operating net income (non-GAAP, in millions) | $37.8 | $36.6 | $32.1 | | Operating diluted EPS (non-GAAP) | $0.80 | $0.77 | $0.68 | | Net interest income (in millions) | $107.2 | $106.1 | $95.2 | | Provision for loan losses (in millions) | $7.6 | $2.2 | $5.6 | | Noninterest income (excl. securities gains/losses, in millions) | $47.6 | $42.2 | $43.3 | | Noninterest expense (excl. acquisition expenses, in millions) | $98.7 | $99.8 | $91.8 | | Period end total loans (in billions) | $9.98 | $9.97 | $9.67 | | Period end total deposits (in billions) | $11.71 | $11.55 | $11.01 | | Loan to deposit ratio | 85.2% | 86.3% | 87.8% | | Net charge-offs to average loans (annualized) | 0.27% | 0.23% | 0.19% | | Allowance for loan losses to total loans | 1.17% | 1.16% | 1.19% | - Net income for Q1 2025 was $36.7 million, up $2.9 million YoY, with diluted EPS of $0.77. Operating net income (non-GAAP) was $37.8 million, or $0.80 per diluted share. Net interest income increased by $12.0 million YoY to $107.2 million. Total loans increased slightly to $9.98 billion, and total deposits grew by $161.8 million to $11.71 billion QoQ. Credit quality metrics show net charge-offs to average loans at 0.27% and allowance for loan losses to total loans at 1.17%130131132 Results of Operations Analyzes the company's financial performance, including net interest income, noninterest income, and expenses Net Interest Income Examines trends in interest income, interest expense, and net interest margin | (In thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :------------------------------------ | :------ | :------ | :------ | | Net interest income | $107,223 | $106,105 | $95,174 | | FTE Net Interest Margin | 3.44% | 3.34% | 3.14% | | Total interest, fee and dividend income | $154,404 | $157,700 | $146,937 | | Total interest expense | $47,181 | $51,763 | $51,763 | | Acquisition-related net accretion | $2,200 | $2,600 | $2,500 | - Net interest income for Q1 2025 was $107.2 million, up 1.1% QoQ and 12.7% YoY. The FTE Net Interest Margin (NIM) increased by 10 bps QoQ to 3.44% and by 30 bps YoY. The QoQ increase was driven by an 8.6% decrease in interest expense, primarily from lower interest-bearing deposit costs, despite a 2.1% decrease in interest income due to lower loan yields and fewer days138139 Noninterest Income Analyzes components of noninterest income, including fees, insurance services, and securities gains/losses | (In thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :------------------------------------ | :------ | :------ | :------ | | Total noninterest income | $47,452 | $42,426 | $45,392 | | Retirement plan administration fees | $15,858 | $12,924 | $14,287 | | Insurance services | $4,761 | $3,883 | $4,388 | | Bank owned life insurance income | $3,397 | $2,271 | $2,352 | | Net securities (losses) gains | $(104) | $222 | $2,183 | - Total noninterest income for Q1 2025 was $47.5 million, up 11.8% QoQ and 4.5% YoY. Excluding net securities gains/losses, noninterest income increased 12.7% QoQ and 10.1% YoY. Key drivers for the increase were higher retirement plan administration fees (due to seasonal activity, organic growth, and an acquisition), increased insurance services (organic growth, renewals, seasonality), and a $1.3 million gain from a bank-owned life insurance claim147 Noninterest Expense Examines trends in noninterest expenses, including salaries, benefits, occupancy, and acquisition costs | (In thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :------------------------------------ | :------ | :------ | :------ | | Total noninterest expense | $99,900 | $100,775 | $91,773 | | Salaries and employee benefits | $60,694 | $61,749 | $55,704 | | Occupancy | $9,027 | $7,786 | $8,098 | | Acquisition expenses | $1,221 | $988 | $0 | - Total noninterest expense for Q1 2025 was $99.9 million, down 0.9% QoQ but up 8.9% YoY. Excluding acquisition expenses, noninterest expense decreased 1.1% QoQ, mainly due to lower salaries and employee benefits (medical costs, incentive compensation, fewer payroll days) and a $1.6 million decrease in other expenses. The YoY increase was driven by higher salaries and employee benefits (merit increases, increased headcount, higher medical costs) and increased occupancy costs due to seasonal maintenance and new banking locations148 Income Taxes Discusses income tax expense and the effective tax rate, explaining factors influencing their changes | (In thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :------------------------------------ | :------ | :------ | :------ | | Income tax expense | $10,476 | $9,576 | $9,391 | | Effective tax rate | 22.2% | 20.9% | 21.7% | - Income tax expense for Q1 2025 was $10.5 million, up $0.9 million QoQ and $1.1 million YoY. The effective tax rate increased to 22.2% in Q1 2025 from 20.9% in Q4 2024 and 21.7% in Q1 2024, primarily due to a lower level of tax-exempt income as a percentage of total taxable income149150 ANALYSIS OF FINANCIAL CONDITION Analyzes key aspects of the company's financial position, including securities, loans, credit quality, deposits, and capital Securities Examines the composition and changes in the company's investment securities portfolio | Security Type | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Mortgage-backed securities (15 years or less) | 13% | 14% | | Mortgage-backed securities (greater than 15 years) | 8% | 8% | | Collateral mortgage obligations | 40% | 39% | | Municipal securities | 15% | 15% | | U.S. agency notes | 20% | 20% | | Corporate | 2% | 2% | | Equity securities | 2% | 2% | | Total | 100% | 100% | - Total securities increased by $123.1 million (5.0%) from December 31, 2024, to March 31, 2025, representing 18.6% of total assets. The portfolio is diversified, with a significant portion in mortgage-backed securities, U.S. agency notes, and collateralized mortgage obligations, all guaranteed by government-sponsored enterprises or agencies151152 Loans Provides a detailed breakdown of the loan portfolio, highlighting growth and segment performance | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Commercial & industrial | $1,436,990 | $1,426,482 | | Commercial real estate | $3,890,115 | $3,876,698 | | Residential real estate | $2,127,588 | $2,142,249 | | Home equity | $331,400 | $334,268 | | Indirect auto | $1,309,084 | $1,273,253 | | Residential solar | $800,090 | $820,079 | | Other consumer | $85,000 | $96,881 | | Total loans | $9,980,267 | $9,969,910 | - Total loans increased by $10.4 million (0.4% annualized) to $9.98 billion at March 31, 2025. Excluding planned run-off portfolios (other consumer and residential solar), loans increased by $40.5 million (1.8% annualized). Commercial & industrial and Commercial real estate loans saw increases, while consumer loan categories generally decreased. CRE construction and development loans totaled $316.4 million153154156 - The CRE portfolio is 81% Non-Owner Occupied, with residential rental properties (43%) and office spaces (17%) being significant sectors. Office CRE loans, representing 5% of total loans, have an average size of $1.9 million, with 9% maturing in the next two years. The company employs rigorous underwriting and monitoring for its loan portfolios155156 Allowance for Credit Losses, Provision for Loan Losses and Nonperforming Assets Analyzes the allowance for credit losses, provision, net charge-offs, and nonperforming assets | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Allowance for credit losses (in millions) | $117.0 | $116.0 | | Allowance for credit losses as % of loans | 1.17% | 1.16% | | Provision for loan losses (Q1 2025, in millions) | $7.6 | $2.2 (Q4 2024) | | Net charge-offs (Q1 2025, in millions) | $6.6 | $5.7 (Q4 2024) | | Net charge-offs to average loans (annualized) | 0.27% | 0.23% | | Total nonperforming assets (in millions) | $48.0 | $51.8 | | Total nonperforming loans (in millions) | $47.7 | $51.6 | | Total nonaccrual loans (in millions) | $44.8 | $45.8 | | Allowance for credit losses to nonperforming loans | 245.33% | 224.73% | | Allowance for credit losses to nonaccrual loans | 260.99% | 253.17% | | Potential problem loans (in millions) | $125.2 | $116.1 | - The allowance for credit losses increased to $117.0 million (1.17% of loans) at March 31, 2025, driven by a deterioration in economic forecasts, partially offset by model refreshment and loan composition shifts. Provision for loan losses was $7.6 million in Q1 2025, up from $2.2 million in Q4 2024, due to increased net charge-offs and economic forecast deterioration. Total nonperforming assets decreased to $48.0 million, largely due to a $2.1 million charge-off on a nonperforming CRE relationship. Potential problem loans increased to $125.2 million, reflecting changing conditions in certain CRE markets165166167170171 Deposits Discusses deposit trends, including growth, composition shifts, and estimated uninsured deposit levels | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Total deposits | $11,708,511 | $11,546,761 | | Brokered time deposits | $294,700 | $295,800 | | Estimated uninsured deposits | $4,850,000 | $4,730,000 | | Average per account balance | $20,834 | N/A | - Total deposits increased by $161.8 million (1.4%) to $11.71 billion at March 31, 2025, primarily due to an inflow of seasonal municipal deposits. The company continues to observe a migration from noninterest-bearing accounts to higher-cost money market and time deposits. Estimated uninsured deposits were $4.85 billion, and the average per account balance was $20,834172 Borrowed Funds Reports changes in short-term borrowings and long-term debt, including maturities and reductions | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Short-term borrowings | $85,600 | $162,900 | | Long-term debt | $4,600 | $29,600 | - Short-term borrowings decreased by $77.3 million to $85.6 million at March 31, 2025. Long-term debt decreased by $25.0 million to $4.6 million due to a maturity in Q1 2025173 Subordinated Debt Details the company's subordinated debt, including fixed-to-floating rate notes and Tier 2 capital qualification | (In thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Subordinated debt, net | $121,600 | $121,200 | | 5.00% fixed-to-floating rate subordinated notes due 2030 | $100,000 (original) | $100,000 (original) | | 3.50% fixed-to-floating rate subordinated notes due 2031 | $25,000 (original) | $25,000 (original) | - Subordinated debt, net of unamortized issuance costs and fair value discount, was $121.6 million at March 31, 2025, up slightly from $121.2 million at December 31, 2024. This includes $100.0 million of 5.00% fixed-to-floating rate notes due 2030 and $25.0 million of 3.50% fixed-to-floating rate notes due 2031, both qualifying as Tier 2 capital175176177 Capital Resources Reviews stockholders' equity, capital ratios, and book value per share, confirming 'well capitalized' status | Capital Measurement | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Stockholders' equity (in billions) | $1.57 | $1.53 | | Equity to assets | 11.29% | 11.07% | | Tier 1 leverage ratio | 10.39% | 10.24% | | Common equity tier 1 capital ratio | 12.12% | 11.93% | | Tier 1 capital ratio | 13.02% | 12.83% | | Total risk-based capital ratio | 15.24% | 15.03% | | Book value per share | $33.13 | $32.34 | | Tangible book value per share | $24.74 | $23.88 | - Stockholders' equity increased by $39.6 million to $1.57 billion at March 31, 2025, driven by net income and a decrease in accumulated other comprehensive loss, partially offset by dividends. The company remains 'well capitalized' with all capital ratios exceeding regulatory minimums. Book value per share increased to $33.13, and tangible book value per share increased to $24.74178180181 - The company did not repurchase shares in Q1 2025, with 1,992,400 shares remaining available under the repurchase program. The company adopted the CECL capital transition relief over a five-year period, phasing in the regulatory capital impact179183 Liquidity and Interest Rate Sensitivity Management Discusses management of interest rate risk and liquidity, including earnings at risk modeling and borrowing capacity - Interest rate risk is the most significant market risk, managed by the ALCO through earnings at risk modeling. The company's interest rate sensitivity is near neutral, with projected net interest income changes within internal policy limits (e.g., not more than a 5.0% reduction in +/-100 bps scenarios). The trajectory of net interest income depends on short-to-mid-term interest rates, influenced by inflation and FOMC policy185186189190 | Change in interest rates (in bps) | Percent change in net interest income | | :------------------------------------ | :------------------------------------ | | +300 | (0.60)% | | +200 | (0.02)% | | +100 | 0.29% | | -100 | (0.29)% | | -200 | (0.10)% | | -300 | 0.04% | - The company's primary liquidity measure, 'Basic Surplus,' was 16.9% of total assets ($2.34 billion) at March 31, 2025, well above the 5% minimum policy level. Available borrowing capacity includes $1.70 billion from FHLB, $1.01 billion from unpledged securities, $2.02 billion from other bank facilities, and $1.16 billion from the FRB's Borrower-in-Custody program, totaling $3.44 billion in remaining available capacity under internal policies192193 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Refers to the detailed discussion on market risk, specifically interest rate risk, within Item 2's liquidity management - Information regarding quantitative and qualitative disclosures about market risk is incorporated by reference from the 'Liquidity and Interest Rate Sensitivity Management' section within Item 2198 ITEM 4. CONTROLS AND PROCEDURES Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025 - As of March 31, 2025, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective199 PART II. OTHER INFORMATION Covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits ITEM 1. LEGAL PROCEEDINGS Reports no material legal proceedings beyond ordinary routine litigation incidental to its business - There are no material legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or of which any of their property is subject200 ITEM 1A. RISK FACTORS States no material changes to risk factors previously discussed in the 2024 Annual Report on Form 10-K - There are no material changes to the risk factors as previously discussed in Part I, Item 1A. of the Company's 2024 Annual Report on Form 10-K201 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Indicates no information to report regarding unregistered sales of equity securities or use of proceeds - No information to report for this item202 ITEM 3. DEFAULTS UPON SENIOR SECURITIES The company reports no defaults upon senior securities - No defaults upon senior securities202 ITEM 4. MINE SAFETY DISCLOSURES The company reports no mine safety disclosures - No mine safety disclosures202 ITEM 5. OTHER INFORMATION No Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers in Q1 2025 - During the three months ended March 31, 2025, no Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by any director or officer of the Company202 ITEM 6. EXHIBITS Lists all exhibits filed with the Form 10-Q, including organizational documents, executive compensation, certifications, and XBRL - Key exhibits include the Restated Certificate of Incorporation, Amended and Restated Bylaws, Certificate of Designation for Preferred Stock, an amendment to the Supplemental Executive Retirement Plan for Scott A. Kingsley, and various certifications (CEO, CFO) and XBRL documents204 SIGNATURES This section contains the official signatures certifying the accuracy and completeness of the report - The report was duly signed on behalf of NBT Bancorp Inc. by Annette L. Burns, Chief Financial Officer, on May 9, 2025206207
NBT Bancorp (NBTB) - 2025 Q1 - Quarterly Report