Financial Data and Key Metrics Changes - NBT Bancorp reported net income of $54.5 million, or $1.03 per diluted common share, with operating earnings per share at $1.05, an increase of $0.17 compared to the prior quarter [10] - Operating return on assets was 1.37%, return on equity was 12.1%, and ROTCE was 17.6%, showing continued improvement [3] - Tangible book value per share increased by 7% year-over-year to $25.51 [4] Business Line Data and Key Metrics Changes - Total loans increased by $1.6 billion year-over-year, with a diversified portfolio comprising 56% commercial and 44% consumer loans [11] - Total deposits rose to $13.7 billion, up $2.1 billion from December 2024, with growth in checking and money market accounts [12] - Non-interest income represented 28% of total revenues, with fee income increasing by 9.8% compared to the previous quarter [14][13] Market Data and Key Metrics Changes - The Western region of New York saw solid growth in deposits post-Evans Bancorp merger, with plans for new branches in Rochester and other areas [6][8] - The company is exploring new locations in the Finger Lakes and plans to break ground on a new branch near the Micron chip fabrication site in Clay, New York [8] Company Strategy and Development Direction - The company aims to support organic growth and maintain a strong capital position, with a renewed share repurchase authorization of 2 million shares through the end of 2027 [5] - NBT Bancorp is focused on filling in its franchise through opportunistic M&A and branch expansion, particularly in underrepresented markets [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a strong capital position and identified growth opportunities across all markets [16] - Future margin improvements may be challenged due to expected changes in Fed funds rates, but there is optimism for potential margin recovery in 2026 [31][58] Other Important Information - The company announced an 8.8% dividend increase, marking the 13th consecutive year of increases [5] - Total operating expenses for the quarter were $110 million, reflecting a 4.4% increase from the prior quarter [15] Q&A Session Summary Question: What are the expectations for cost savings and total expenses moving forward? - Management indicated that cost savings from the Evans integration are largely achieved, with a run rate of $110 million expected going forward, alongside typical expense increases of 3.5% to 4.5% [18][19] Question: What is the outlook for loan growth in the coming quarters? - Management anticipates low to mid-single-digit growth rates for loans, with a strong pipeline and good activity levels in the markets [20][21] Question: Are there plans for additional M&A deals? - The company is open to opportunistic M&A to fill in its franchise and is in discussions with like-minded community banks [29] Question: What is the current status of solar loans and auto loan delinquencies? - Management noted no significant pressure on auto loan delinquencies and indicated that solar loans are performing as expected, despite market volatility [35][36] Question: What is the outlook for fee income and insurance growth? - The insurance business is expected to grow at a rate of high mid-single digits, with seasonally strong performance in the third quarter [48][49] Question: What are the expectations for margin pressure and potential improvements? - Management expects some initial pressure on margins but sees potential for improvement in 2026 if the yield curve steepens [57][58]

Core Viewpoint - Berkshire Bank is facing a class action lawsuit for allegedly aiding a Ponzi scheme that defrauded investors of tens of millions of dollars, despite having knowledge of the fraudulent activities [1][10]. Group 1: Allegations and Lawsuit Details - The lawsuit claims that Berkshire Bank had specific reports indicating suspicious activities related to a customer running a Ponzi scheme, yet failed to act due to the profitability of the customer relationship [2][8]. - The complaint, filed in federal court, includes detailed allegations about the bank's handling of suspicious customer activities, with evidence obtained through a subpoena [3]. - The Ponzi scheme, orchestrated by Miles Burton Marshall, solicited approximately $90 million from around 1,000 investors, promising an 8% return [5][10]. Group 2: Customer Background and Bank's Actions - Marshall had been a customer of Berkshire since 2015 and was previously with NBT Bancorp, which had warned Berkshire about Marshall's suspicious activities [6][8]. - Berkshire Bank allegedly provided Marshall with a scanner to facilitate remote deposits of up to $300,000 per day, despite concerns about his activities [7]. - Although Berkshire Bank identified Marshall as a high-risk customer and conducted ongoing monitoring, it did not take action based on the information it had [8]. Group 3: Legal Context and Implications - The case represents a significant test of legal standards regarding banks' responsibilities when their customers commit fraud [10]. - Previous legal outcomes indicate that banks can be held accountable for their responses to customer due diligence findings, as seen in past cases involving other banks [12][13].