UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 24, 2023



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

Delaware
000-14703
16-1268674
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(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

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of class
Trading Symbol
Name of 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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐



Item 2.02
Results of Operations and Financial Condition

On October 24, 2023, NBT Bancorp Inc. issued a press release describing its results of operations for the quarter ended September 30, 2023. That press release is furnished as Exhibit 99.1 hereto. A conference call will be held at 8:30 a.m. Eastern Time on Wednesday, October 25, 2023, to review the third quarter 2023 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Event Calendar page of the Company’s website at www.nbtbancorp.com.
 
Item 9.01
Financial Statements and Exhibits.
 
(a)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Exhibits.

Exhibit No.

Description




Press release of NBT Bancorp Inc. October 24, 2023
104

Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


NBT BANCORP INC.


Date: October 24, 2023
By:
/s/ Scott A. Kingsley

 
Scott A. Kingsley

 
Executive Vice President and Chief Financial Officer




Exhibit 99.1

FOR IMMEDIATE RELEASE
ATTENTION: FINANCIAL AND BUSINESS EDITORS


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
 
607-337-6589

NBT BANCORP INC. ANNOUNCES THIRD QUARTER RESULTS AND DECLARES DIVIDEND

NORWICH, NY (October 24, 2023) – NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and nine months ended September 30, 2023.
 
Net income for the three months ended September 30, 2023 was $24.6 million, or $0.54 per diluted common share, compared to $39.0 million, or $0.90 per diluted share, for the three months ended September 30, 2022, and $30.1 million, or $0.70 per diluted share, in the second quarter of 2023. Operating diluted earnings per share1, a non-GAAP measure, which excludes acquisition expense, acquisition-related provision for credit losses and securities gains (losses), net of tax, was $0.84 for the third quarter of 2023, compared to $0.91 in the third quarter of 2022 and $0.80 in the second quarter of 2023.
 

The acquisition of Salisbury Bancorp, Inc. (“Salisbury”) by the merger of Salisbury with and into NBT (“Merger”) was completed on August 11, 2023. The Merger added 13 banking offices, $1.18 billion in loans and $1.31 billion in deposits.

Period end total loans increased $1.52 billion from December 31, 2022. Excluding loans acquired from Salisbury, loans grew $337.2 million, or 5.5% annualized, since December 31, 2022.

Period end total deposits increased $1.91 billion from December 31, 2022. Excluding deposits acquired from Salisbury, deposits increased $596.5 million since December 31, 2022.

Noninterest income, excluding net securities gains (losses), increased 10.2% from the prior quarter and was approximately 30% of total revenue.

CEO Comments

“We delivered solid operating performance for the third quarter and through the first nine months of 2023, driven by our diversified business model and strength of our balance sheet,” said NBT President and CEO John H. Watt, Jr. “We completed our merger with Salisbury on August 11, 2023, welcoming new customers, employees, and shareholders to the NBT family and simultaneously we successfully completed the conversion to the NBT core banking systems. Our combined team is committed to providing a comprehensive suite of financial services to all of our customers and the communities we serve while also generating long-term value for our shareholders.”


2
Third Quarter Financial Highlights
 
Net Income
    Net income of $24.6 million and diluted earnings per share of $0.54
    Operating net income was $38.3 million and diluted operating earnings per share of $0.841
Net Interest Income / NIM
    Net interest income on a fully taxable equivalent (“FTE”) basis was $95.5 million1
    Net interest margin (“NIM”) on an FTE basis was 3.21%1, down 6 basis points (“bps”) from the prior quarter
    Included in FTE net interest income was $1.4 million of acquisition-related net accretion which positively  impacted NIM by 5 bps
    Earning asset yields of 4.63%, up 21 bps from the prior quarter
    Total cost of funds of 1.50%, up 28 bps from the prior quarter
Noninterest Income
    Excluding net securities gains (losses), noninterest income was $40.4 million and was 29.9% of total revenues
Loans and Credit Quality
    Period end total loans of $9.67 billion as of September 30, 2023, up $1.52 billion from December 31, 2022 which included $1.18 billion of loans acquired from Salisbury
    Net charge-offs to average loans were 0.18%, annualized
    Nonperforming loans to total loans was 0.25%, compared to 0.24% in the prior quarter and down from 0.28% in the third quarter of 2022
    Allowance for loan losses to total loans of 1.19%
    Provision for loan losses included $8.8 million of acquisition related provision for credit losses
Deposits
    Deposits were $11.40 billion as of September 30, 2023, up $1.91 billion from December 31, 2022 which included $1.31 billion in deposits acquired from Salisbury
    Total cost of deposits was 1.18% for the third quarter of 2023, up 33 bps from the prior quarter
    Full cycle to-date deposit beta of 24%
    Deposit composition is diverse and granular with over 565,000 accounts with an average per account balance of $20,160
Capital
    Stockholders’ equity was $1.36 billion as of September 30, 2023
    Tangible book value per share2 was $20.39 at September 30, 2023
    Tangible equity to assets of 7.15%1
    CET1 ratio of 11.31%; Leverage ratio of 10.23%

Loans


Period end total loans were $9.67 billion at September 30, 2023, $8.36 billion at June 30, 2023 and $8.15 billion at December 31, 2022.

Period end loans increased $1.52 billion from December 31, 2022. Commercial and industrial loans increased $158.5 million to $1.42 billion; commercial real estate loans increased $767.7 million to $3.58 billion; and total consumer loans increased $591.0 million to $4.67 billion. Included in total consumer loans is $132.6 million of a portfolio of loans in a run-off status.

Commercial line of credit utilization rate was 22% at September 30, 2023, compared to 23% at June 30, 2023 and September 30, 2022.


3
Deposits


Total deposits at September 30, 2023 were $11.40 billion, compared to $9.50 billion at December 31, 2022. The Company continued to experience incremental migration from noninterest bearing and low interest checking and savings accounts into higher cost money market and time deposit instruments.

Loan to deposit ratio was 84.8% at September 30, 2023, compared to 85.8% at December 31, 2022.

Net Interest Income and Net Interest Margin
 

Net interest income for the third quarter of 2023 was $94.9 million, which was up $5.8 million, or 6.5%, from the second quarter of 2023 and up $0.4 million, or 0.4%, from the third quarter of 2022. The increase in net interest income resulted from the Salisbury acquisition and was partially offset by the increase in cost of funds outpacing the improvement in asset yields during the quarter.

The NIM on an FTE basis for the third quarter of 2023 was 3.21%, a decrease of 6 bps from the second quarter of 2023 driven by the increase in the cost of interest-bearing deposits, partly offset by an increase in average earning asset yields and $1.4 million in acquisition-related net accretion. The NIM on an FTE basis decreased 30 bps from the third quarter of 2022 due to the increase in the cost of interest-bearing deposits and higher short-term borrowings costs and average balances, partially offset by higher earning asset yields.

Earning asset yields for the three months ended September 30, 2023 increased 21 bps from the prior quarter to 4.63% and increased 95 bps from the same quarter in the prior year. Average earning assets grew $819.7 million, or 7.5%, from the second quarter of 2023 due primarily to the Salisbury acquisition and organic loan growth.

Total cost of deposits, including noninterest bearing deposits, was 1.18% for the third quarter of 2023, up 33 bps from the prior quarter and up 109 bps from the same period in the prior year.

Total cost of funds for the three months ended September 30, 2023 was 1.50%, up 28 bps from the prior quarter and up 132 bps from the third quarter of 2022.

Asset Quality and Allowance for Loan Losses


Net charge-offs to total average loans was 18 bps compared to 17 bps in the prior quarter and 7 bps in the third quarter of 2022. The increase in net charge-offs from the third quarter of 2022 was due to an increase in charge-offs in the Company’s other consumer portfolio, which is in a run-off status. Net charge-offs for the portfolios in a run-off status represented the majority of total net charge-offs for the third quarter.

Nonperforming assets to total assets were 0.18% at September 30, 2023, compared to 0.17% at June 30, 2023 and 0.19% at September 30, 2022.

Provision expense for the three months ended September 30, 2023 was $12.6 million, compared to $3.6 million for the second quarter of 2023 and $4.5 million for the third quarter of 2022. Included in the provision expense in the third quarter of 2023 was $8.8 million of acquisition-related provision for loan losses.

The allowance for loan losses was $114.6 million, or 1.19% of total loans, at September 30, 2023, compared to 1.20% of total loans at June 30, 2023 and 1.22% of total loans at September 30, 2022. The increase in the allowance for loan losses in the third quarter included $14.5 million of allowance for acquired Salisbury loans which included both the $8.8 million of non-purchased credit deteriorated allowance recognized through the provision for loan losses and the $5.8 million of purchased credit deteriorated allowance reclassified from loans.

The reserve for unfunded loan commitments increased to $4.8 million at September 30, 2023 compared to the prior quarter-end at $4.4 million and to $5.3 million at September 30, 2022. The provision for unfunded loan commitments in the third quarter of 2023 included $0.8 million of acquisition-related provision for unfunded loan commitments.


4
Noninterest Income
 

Total noninterest income, excluding securities gains (losses), was $40.4 million for the three months ended September 30, 2023, up $3.7 million from the second quarter and up $3.1 million from the prior year’s third quarter.

Card services income increased $0.4 million from the prior quarter and decreased $0.2 million from the third quarter of 2022.

Retirement plan administration fees were up $1.1 million from the prior quarter and were $1.3 million higher than the third quarter of 2022 due primarily to seasonal activity-based fees in the quarter, favorable market conditions, new account growth and the acquisition of Retirement Direct, LLC on July 1, 2023.

Wealth management fees increased $1.1 million from the prior quarter and were $0.9 million higher than the third quarter of 2022 primarily due to the Salisbury acquisition and approximately $0.5 million in seasonal activity-based fees.

Insurance services were up $0.6 million from the prior quarter and were $0.5 million higher than the third quarter of 2022.

Noninterest Expense


Total noninterest expense, excluding $7.9 million of acquisition expenses in the third quarter of 2023 and $1.2 million in the second quarter of 2023, increased 6.8% compared to the previous quarter due primarily to the acquisition of Salisbury and increased 8.1% from the third quarter of 2022 due primarily to the acquisition of Salisbury and merit increases for employees.

Salaries and benefits increased 5.2% from the prior quarter driven by the Salisbury acquisition and increased from the third quarter of 2022 due to the Salisbury acquisition and merit increases.

Amortization of intangible assets increased $1.2 million from the prior quarter and $1.1 million from the third quarter of 2022 primarily due to the amortization of intangible assets related to the Salisbury acquisition. The Company recorded a core deposit intangible of $31.2 million and a wealth management customer list intangible of $4.7 million for Salisbury.

FDIC assessment expense increased $0.3 million in the prior quarter primarily due to the acquisition of Salisbury and increased $0.9 million from the third quarter of 2022 driven by the statutory increase in the FDIC assessment rate.

Income Taxes


The effective tax rate was 22.4% for the third quarter of 2023 which was consistent with the second quarter of 2023 and 22.8% for the third quarter of 2022.

Capital


Tangible common equity to tangible assets1 was 7.15% at September 30, 2023. Tangible book value per share2 was $20.39 at September 30, 2023, $21.55 at June 30, 2023 and $20.25 at September 30, 2022.

Stockholders’ equity increased $189.3 million from December 31, 2022 driven by the Salisbury acquisition adding $161.7 million of capital and net income generation of $88.3 million, partially offset by dividends declared of $40.8 million, the repurchase of common stock of $4.9 million and a $17.5 million decrease in accumulated other comprehensive income driven by the change in the market value of securities available for sale.

September 30, 2023, CET1 capital ratio of 11.31%, leverage ratio of 10.23% and total risk-based capital ratio of 14.45%.


5
Dividend


On October 23, 2023, the Board of Directors approved a fourth-quarter cash dividend of $0.32 per share, which represents a $0.02 per quarter, or 6.7%, increase over the dividend paid in the fourth quarter of 2022. This is the Company’s eleventh consecutive year of annual dividend increases. The dividend will be paid on December 15, 2023 to stockholders of record as of December 1, 2023.

Stock Repurchase


The Company purchased 68,500 shares of its common stock in the third quarter of 2023 at an average price of $31.61 per share under its previously announced share repurchase program. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. As of September 30, 2023, there were 1,444,500 shares available for repurchase under this plan.

Salisbury Bancorp, Inc. Merger


On August 11, 2023, NBT completed its acquisition of Salisbury. Salisbury was a Connecticut-chartered commercial bank with 13 banking offices in northwestern Connecticut, the Hudson Valley region of New York, and southwestern Massachusetts.

In connection with the acquisition, the Company issued 4.3 million shares and acquired approximately $1.57 billion of identifiable assets, including $1.18 billion of loans, $122.7 million in investment securities which were subsequently sold during the quarter, $31.2 million of core deposit intangibles and $4.7 million in a wealth management customer intangible, as well as $1.31 billion in deposits. As of the acquisition date, the fair value discount was $78.7 million for loans, net of the reclassification of the purchase credit deteriorated allowance, and was $3.0 million for subordinated debt, respectively.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. (Eastern) Wednesday, October 25, 2023, to review third quarter 2023 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at https://www.nbtbancorp.com/bn/presentations-events.html#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 $13.83 billion at September 30, 2023. 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 153 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.


6
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, including actual or potential stress in the banking industry, 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, including international military conflicts, or terrorism; (8) the timely development and acceptance of new products and services and the perceived overall value of these products and services by users; (9) changes in consumer spending, borrowing and saving habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisition and integration of acquired businesses; (13) the possibility that NBT and Salisbury may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes; (14) the ability to increase market share and control expenses; (15) changes in the competitive environment among financial holding companies; (16) 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, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (17) 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 and other accounting standard setters; (18) changes in the Company’s organization, compensation and benefit plans; (19) 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; (20) greater than expected costs or difficulties related to the integration of new products and lines of business; and (21) the Company’s success at managing the risks involved in the foregoing items.

The Company cautions readers not to 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 Measures

This 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.


7
NBT Bancorp Inc. and Subsidiaries
                             
Selected Financial Data
                             
(unaudited, dollars in thousands except per share data)
                             
                               
   
2023
 
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Profitability (reported)
                             
Diluted earnings per share
 
$
0.54
   
$
0.70
   
$
0.78
   
$
0.84
   
$
0.90
 
Weighted average diluted common shares outstanding
   
45,398,937
     
43,126,498
     
43,125,986
     
43,144,666
     
43,110,932
 
Return on average assets3
   
0.76
%
   
1.02
%
   
1.16
%
   
1.23
%
   
1.33
%
Return on average equity3
   
7.48
%
   
9.91
%
   
11.47
%
   
12.30
%
   
12.87
%
Return on average tangible common equity1 3
   
10.73
%
   
13.13
%
   
15.31
%
   
16.54
%
   
17.12
%
Net interest margin1 3
   
3.21
%
   
3.27
%
   
3.55
%
   
3.68
%
   
3.51
%
                                         
   
9 Months Ended September 30,
                         
     
2023
     
2022
                         
Profitability (reported)
                                       
Diluted earnings per share
 
$
2.01
   
$
2.68
                         
Weighted average diluted common shares outstanding
   
43,896,042
     
43,194,037
                         
Return on average assets3
   
0.97
%
   
1.31
%
                       
Return on average equity3
   
9.54
%
   
12.79
%
                       
Return on average tangible common equity1 3
   
13.00
%
   
17.00
%
                       
Net interest margin1 3
   
3.34
%
   
3.22
%
                       
                                         
     
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Profitability (operating)
                                       
Diluted earnings per share1
 
$
0.84
   
$
0.80
   
$
0.88
   
$
0.86
   
$
0.91
 
Return on average assets1 3
   
1.19
%
   
1.17
%
   
1.31
%
   
1.26
%
   
1.34
%
Return on average equity1 3
   
11.65
%
   
11.40
%
   
12.95
%
   
12.61
%
   
12.91
%
Return on average tangible common equity1 3
   
16.43
%
   
15.08
%
   
17.27
%
   
16.95
%
   
17.17
%
                                         
   
9 Months Ended September 30,
                         
     
2023
     
2022
                         
Profitability (operating)
                                       
Diluted earnings per share1
 
$
2.53
   
$
2.70
                         
Return on average assets1 3
   
1.22
%
   
1.32
%
                       
Return on average equity1 3
   
11.98
%
   
12.87
%
                       
Return on average tangible common equity1 3
   
16.25
%
   
17.10
%
                       
                                         
     
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Balance sheet data
                                       
Short-term interest-bearing accounts
 
$
459,296
   
$
31,878
   
$
68,045
   
$
30,862
   
$
97,303
 
Securities available for sale
   
1,399,032
     
1,453,926
     
1,512,008
     
1,527,225
     
1,556,501
 
Securities held to maturity
   
914,520
     
912,876
     
906,824
     
919,517
     
929,541
 
Net loans
   
9,552,774
     
8,257,724
     
8,164,328
     
8,049,347
     
7,807,984
 
Total assets
   
13,827,628
     
11,890,497
     
11,839,730
     
11,739,296
     
11,640,742
 
Total deposits
   
11,401,452
     
9,529,919
     
9,681,205
     
9,495,933
     
9,918,751
 
Total borrowings
   
740,603
     
880,518
     
703,248
     
787,950
     
277,889
 
Total liabilities
   
12,464,807
     
10,680,004
     
10,628,071
     
10,565,742
     
10,484,196
 
Stockholders' equity
   
1,362,821
     
1,210,493
     
1,211,659
     
1,173,554
     
1,156,546
 
                                         
Capital
                                       
Equity to assets
   
9.86
%
   
10.18
%
   
10.23
%
   
10.00
%
   
9.94
%
Tangible equity ratio1
   
7.15
%
   
7.95
%
   
7.99
%
   
7.73
%
   
7.64
%
Book value per share
 
$
28.94
   
$
28.26
   
$
28.24
   
$
27.38
   
$
27.00
 
Tangible book value per share2
 
$
20.39
   
$
21.55
   
$
21.52
   
$
20.65
   
$
20.25
 
Leverage ratio
   
10.23
%
   
10.51
%
   
10.43
%
   
10.32
%
   
10.21
%
Common equity tier 1 capital ratio
   
11.31
%
   
12.29
%
   
12.28
%
   
12.12
%
   
12.17
%
Tier 1 capital ratio
   
12.23
%
   
13.35
%
   
13.34
%
   
13.19
%
   
13.27
%
Total risk-based capital ratio
   
14.45
%
   
15.50
%
   
15.53
%
   
15.38
%
   
15.50
%
Common stock price (end of period)
 
$
31.69
   
$
31.85
   
$
33.71
   
$
43.42
   
$
37.95
 


8
NBT Bancorp Inc. and Subsidiaries
                             
Asset Quality and Consolidated Loan Balances
                             
(unaudited, dollars in thousands)
                             
                               
   
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Asset quality
                             
Nonaccrual loans
 
$
20,736
   
$
16,931
   
$
16,284
   
$
17,233
   
$
19,098
 
90 days past due and still accruing
   
3,528
     
2,755
     
2,328
     
3,823
     
2,732
 
Total nonperforming loans
   
24,264
     
19,686
     
18,612
     
21,056
     
21,830
 
Other real estate owned
   
-
     
179
     
105
     
105
     
-
 
Total nonperforming assets
   
24,264
     
19,865
     
18,717
     
21,161
     
21,830
 
Allowance for loan losses
   
114,601
     
100,400
     
100,250
     
100,800
     
96,800
 
                                         
Asset quality ratios
                                       
Allowance for loan losses to total loans
   
1.19
%
   
1.20
%
   
1.21
%
   
1.24
%
   
1.22
%
Total nonperforming loans to total loans
   
0.25
%
   
0.24
%
   
0.23
%
   
0.26
%
   
0.28
%
Total nonperforming assets to total assets
   
0.18
%
   
0.17
%
   
0.16
%
   
0.18
%
   
0.19
%
Allowance for loan losses to total nonperforming loans
   
472.31
%
   
510.01
%
   
538.63
%
   
478.72
%
   
443.43
%
Past due loans to total loans4
   
0.49
%
   
0.45
%
   
0.30
%
   
0.33
%
   
0.30
%
Net charge-offs to average loans3
   
0.18
%
   
0.17
%
   
0.19
%
   
0.18
%
   
0.07
%
                                         
     
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Loan net charge-offs by line of business
                                       
Commercial & industrial
 
$
(327
)
 
$
51
   
$
(294
)
 
$
(45
)
 
$
(1,045
)
Commercial real estate
   
(17
)
   
41
     
42
     
8
     
324
 
Residential real estate and home equity
   
(75
)
   
(43
)
   
80
     
(79
)
   
(56
)
Indirect auto
   
451
     
273
     
423
     
445
     
222
 
Residential solar
   
1,253
     
581
     
656
     
596
     
43
 
Other consumer
   
2,919
     
2,553
     
2,904
     
2,752
     
1,796
 
Total loan net charge-offs
 
$
4,204
   
$
3,456
   
$
3,811
   
$
3,677
   
$
1,284
 
                                         
     
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Allowance for loan losses as a percentage of loans by segment
                                 
Commercial & industrial
   
0.88
%
   
0.86
%
   
0.85
%
   
0.82
%
   
0.80
%
Commercial real estate
   
1.00
%
   
0.93
%
   
0.93
%
   
0.91
%
   
0.88
%
Residential real estate
   
0.79
%
   
0.73
%
   
0.73
%
   
0.72
%
   
0.74
%
Auto
   
0.82
%
   
0.80
%
   
0.77
%
   
0.81
%
   
0.78
%
Residential solar
   
3.19
%
   
3.09
%
   
3.04
%
   
3.21
%
   
3.08
%
Other consumer
   
5.23
%
   
5.98
%
   
6.19
%
   
6.27
%
   
6.67
%
Total
   
1.19
%
   
1.20
%
   
1.21
%
   
1.24
%
   
1.22
%
                                         
     
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Loans by line of business
                                       
Commercial & industrial
 
$
1,424,579
   
$
1,319,093
   
$
1,278,291
   
$
1,266,031
   
$
1,262,199
 
Commercial real estate
   
3,575,595
     
2,884,264
     
2,845,631
     
2,807,941
     
2,724,728
 
Residential real estate
   
2,111,670
     
1,666,204
     
1,651,918
     
1,649,870
     
1,626,528
 
Indirect auto
   
1,099,558
     
1,048,739
     
1,031,315
     
989,587
     
952,757
 
Residential solar
   
934,082
     
926,365
     
920,084
     
856,798
     
728,898
 
Home equity
   
340,777
     
310,897
     
308,219
     
314,124
     
313,557
 
Other consumer
   
181,114
     
202,562
     
229,120
     
265,796
     
296,117
 
Total loans
 
$
9,667,375
   
$
8,358,124
   
$
8,264,578
   
$
8,150,147
   
$
7,904,784
 


9
NBT Bancorp Inc. and Subsidiaries
           
Consolidated Balance Sheets
           
(unaudited, dollars in thousands)
           
             
   
September 30,
   
December 31,
 
   
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 $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 and stockholders' equity
               
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
 
                 
Total stockholders' equity
 
$
1,362,821
   
$
1,173,554
 
                 
Total liabilities and stockholders' equity
 
$
13,827,628
   
$
11,739,296
 


10
NBT Bancorp Inc. and Subsidiaries
                       
Consolidated Statements of Income
                       
(unaudited, dollars in thousands except per share data)
                   
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
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
 
$
3,883
   
$
4,484
   
$
11,398
   
$
9,470
 
Provision for loan losses - acquisition day 1 non-PCD
   
8,750
     
-
     
8,750
     
-
 
Total 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
 
Reserve for unfunded loan commitments
   
460
     
225
     
(270
)
   
205
 
Acquisition expenses
   
7,917
     
-
     
9,724
     
-
 
Other
   
6,054
     
4,796
     
17,554
     
13,610
 
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
 


11
NBT Bancorp Inc. and Subsidiaries
                             
Quarterly Consolidated Statements of Income
                             
(unaudited, dollars in thousands except per share data)
                             
                               
   
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Interest, fee and dividend income
                             
Interest and fees on loans
 
$
122,097
   
$
106,935
   
$
100,899
   
$
95,620
   
$
85,266
 
Securities available for sale
   
7,495
     
7,493
     
7,616
     
7,831
     
7,665
 
Securities held to maturity
   
5,281
     
4,991
     
5,035
     
5,050
     
4,854
 
Other
   
2,221
     
1,170
     
642
     
671
     
1,429
 
Total interest, fee and dividend income
 
$
137,094
   
$
120,589
   
$
114,192
   
$
109,172
   
$
99,214
 
Interest expense
                                       
Deposits
 
$
30,758
   
$
19,986
   
$
11,144
   
$
4,092
   
$
2,233
 
Short-term borrowings
   
7,612
     
8,126
     
4,919
     
2,510
     
84
 
Long-term debt
   
294
     
290
     
47
     
21
     
20
 
Subordinated debt
   
1,612
     
1,335
     
1,334
     
1,346
     
1,360
 
Junior subordinated debt
   
1,923
     
1,767
     
1,682
     
1,424
     
1,039
 
Total interest expense
 
$
42,199
   
$
31,504
   
$
19,126
   
$
9,393
   
$
4,736
 
Net interest income
 
$
94,895
   
$
89,085
   
$
95,066
   
$
99,779
   
$
94,478
 
Provision for loan losses
 
$
3,883
   
$
3,606
   
$
3,909
   
$
7,677
   
$
4,484
 
Provision for loan losses - acquisition day 1 non-PCD
   
8,750
     
-
     
-
     
-
     
-
 
Total provision for loan losses
 
$
12,633
   
$
3,606
   
$
3,909
   
$
7,677
   
$
4,484
 
Net interest income after provision for loan losses
 
$
82,262
   
$
85,479
   
$
91,157
   
$
92,102
   
$
89,994
 
Noninterest income
                                       
Service charges on deposit accounts
 
$
3,979
   
$
3,733
   
$
3,548
   
$
3,598
   
$
3,581
 
Card services income
   
5,503
     
5,121
     
4,845
     
4,958
     
5,654
 
Retirement plan administration fees
   
12,798
     
11,735
     
11,462
     
10,661
     
11,496
 
Wealth management
   
9,297
     
8,227
     
8,087
     
8,017
     
8,402
 
Insurance services
   
4,361
     
3,716
     
3,931
     
3,438
     
3,892
 
Bank owned life insurance income
   
1,568
     
1,528
     
1,878
     
1,419
     
1,560
 
Net securities (losses)
   
(183
)
   
(4,641
)
   
(4,998
)
   
(217
)
   
(148
)
Other
   
2,913
     
2,626
     
2,656
     
2,217
     
2,735
 
Total noninterest income
 
$
40,236
   
$
32,045
   
$
31,409
   
$
34,091
   
$
37,172
 
Noninterest expense
                                       
Salaries and employee benefits
 
$
49,248
   
$
46,834
   
$
48,155
   
$
47,235
   
$
48,371
 
Technology and data services
   
9,677
     
9,305
     
9,007
     
9,124
     
9,096
 
Occupancy
   
7,090
     
6,923
     
7,220
     
6,521
     
6,481
 
Professional fees and outside services
   
4,149
     
4,159
     
4,178
     
4,811
     
3,817
 
Office supplies and postage
   
1,700
     
1,676
     
1,628
     
1,699
     
1,469
 
FDIC assessment
   
1,657
     
1,344
     
1,396
     
798
     
787
 
Advertising
   
667
     
525
     
649
     
879
     
559
 
Amortization of intangible assets
   
1,609
     
458
     
536
     
538
     
544
 
Loan collection and other real estate owned, net
   
569
     
691
     
855
     
957
     
549
 
Reserve for unfunded loan commitments
   
460
     
(100
)
   
(630
)
   
(185
)
   
225
 
Acquisition expenses
   
7,917
     
1,189
     
618
     
967
     
-
 
Other
   
6,054
     
5,790
     
5,710
     
6,165
     
4,796
 
Total noninterest expense
 
$
90,797
   
$
78,794
   
$
79,322
   
$
79,509
   
$
76,694
 
Income before income tax expense
 
$
31,701
   
$
38,730
   
$
43,244
   
$
46,684
   
$
50,472
 
Income tax expense
   
7,095
     
8,658
     
9,586
     
10,563
     
11,499
 
Net income
 
$
24,606
   
$
30,072
   
$
33,658
   
$
36,121
   
$
38,973
 
Earnings Per Share
                                       
Basic
 
$
0.54
   
$
0.70
   
$
0.78
   
$
0.84
   
$
0.91
 
Diluted
 
$
0.54
   
$
0.70
   
$
0.78
   
$
0.84
   
$
0.90
 


12
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
 
     
Q3 - 2023
   
Q2 - 2023
   
Q1 - 2023
   
Q4 - 2022
   
Q3 - 2022
 
Assets
                                                                     
Short-term interest-bearing accounts
 
$
121,384
     
4.26
%
 
$
28,473
     
3.62
%
 
$
34,215
     
2.26
%
 
$
39,573
     
3.31
%
 
$
191,463
     
2.51
%
Securities taxable1
   
2,364,809
     
1.90
%
   
2,394,027
     
1.90
%
   
2,442,732
     
1.92
%
   
2,480,959
     
1.88
%
   
2,491,315
     
1.83
%
Securities tax-exempt 1 5
   
219,427
     
3.34
%
   
201,499
     
2.83
%
   
202,321
     
2.81
%
   
208,238
     
2.68
%
   
211,306
     
2.47
%
FRB and FHLB stock
   
53,841
     
6.76
%
   
51,454
     
7.12
%
   
41,144
     
4.45
%
   
32,903
     
4.11
%
   
25,182
     
3.47
%
Loans1 6
   
9,043,582
     
5.36
%
   
8,307,894
     
5.17
%
   
8,189,520
     
5.00
%
   
8,039,442
     
4.72
%
   
7,808,025
     
4.34
%
Total interest-earning assets
 
$
11,803,043
     
4.63
%
 
$
10,983,347
     
4.42
%
 
$
10,909,932
     
4.26
%
 
$
10,801,115
     
4.02
%
 
$
10,727,291
     
3.68
%
Other assets
   
968,220
             
835,424
             
836,879
             
855,410
             
887,378
         
Total assets
 
$
12,771,263
           
$
11,818,771
           
$
11,746,811
           
$
11,656,525
           
$
11,614,669
         
Liabilities and stockholders' equity
                                                                               
Money market deposit accounts
 
$
2,422,451
     
2.91
%
 
$
2,113,965
     
2.30
%
 
$
2,081,210
     
1.22
%
 
$
2,169,192
     
0.39
%
 
$
2,332,341
     
0.15
%
NOW deposit accounts
   
1,513,420
     
0.57
%
   
1,463,953
     
0.38
%
   
1,598,834
     
0.36
%
   
1,604,096
     
0.33
%
   
1,548,115
     
0.21
%
Savings deposits
   
1,707,094
     
0.04
%
   
1,708,874
     
0.03
%
   
1,781,465
     
0.03
%
   
1,823,056
     
0.03
%
   
1,854,122
     
0.03
%
Time deposits
   
1,178,352
     
3.60
%
   
856,305
     
2.97
%
   
639,645
     
2.10
%
   
432,110
     
0.41
%
   
455,168
     
0.35
%
Total interest-bearing deposits
 
$
6,821,317
     
1.79
%
 
$
6,143,097
     
1.30
%
 
$
6,101,154
     
0.74
%
 
$
6,028,454
     
0.27
%
 
$
6,189,746
     
0.14
%
Federal funds purchased
   
6,033
     
5.39
%
   
48,407
     
5.35
%
   
44,334
     
4.92
%
   
56,576
     
4.03
%
   
1,522
     
3.39
%
Repurchase agreements
   
71,516
     
1.40
%
   
55,627
     
1.08
%
   
71,340
     
0.08
%
   
76,334
     
0.11
%
   
69,048
     
0.10
%
Short-term borrowings
   
540,380
     
5.34
%
   
557,818
     
5.27
%
   
357,200
     
4.96
%
   
177,533
     
4.28
%
   
6,440
     
3.33
%
Long-term debt
   
29,800
     
3.91
%
   
29,773
     
3.91
%
   
7,299
     
2.61
%
   
3,817
     
2.18
%
   
3,331
     
2.38
%
Subordinated debt, net
   
109,160
     
5.86
%
   
97,081
     
5.52
%
   
96,966
     
5.58
%
   
97,839
     
5.46
%
   
98,748
     
5.46
%
Junior subordinated debt
   
101,196
     
7.54
%
   
101,196
     
7.00
%
   
101,196
     
6.74
%
   
101,196
     
5.58
%
   
101,196
     
4.07
%
Total interest-bearing liabilities
 
$
7,679,402
     
2.18
%
 
$
7,032,999
     
1.80
%
 
$
6,779,489
     
1.14
%
 
$
6,541,749
     
0.57
%
 
$
6,470,031
     
0.29
%
Demand deposits
   
3,498,424
             
3,316,955
             
3,502,489
             
3,658,965
             
3,708,131
         
Other liabilities
   
287,751
             
251,511
             
274,517
             
290,895
             
234,851
         
Stockholders' equity
   
1,305,686
             
1,217,306
             
1,190,316
             
1,164,916
             
1,201,656
         
Total liabilities and stockholders' equity
 
$
12,771,263
           
$
11,818,771
           
$
11,746,811
           
$
11,656,525
           
$
11,614,669
         
Interest rate spread
           
2.45
%
           
2.62
%
           
3.12
%
           
3.45
%
           
3.39
%
Net interest margin (FTE)1
           
3.21
%
           
3.27
%
           
3.55
%
           
3.68
%
           
3.51
%


13
NBT Bancorp Inc. and Subsidiaries
                                   
Average Year-to-Date Balance Sheets
                                   
(unaudited, dollars in thousands)
                                   
                                     
   
Average
         
Yield/
   
Average
         
Yield/
 
   
Balance
   
Interest
   
Rates
   
Balance
   
Interest
   
Rates
 
Nine Months Ended September 30,
 
2023
   
2022
 
Assets
                                   
Short-term interest-bearing accounts
 
$
61,677
   
$
1,751
     
3.80
%
 
$
575,517
   
$
2,742
     
0.64
%
Securities taxable1
   
2,400,237
     
34,218
     
1.91
%
   
2,406,042
     
31,460
     
1.75
%
Securities tax-exempt1 5
   
207,812
     
4,675
     
3.01
%
   
242,033
     
3,664
     
2.02
%
FRB and FHLB stock
   
48,860
     
2,282
     
6.24
%
   
25,064
     
654
     
3.49
%
Loans1 6
   
8,516,793
     
330,314
     
5.19
%
   
7,683,159
     
237,290
     
4.13
%
Total interest-earning assets
 
$
11,235,379
   
$
373,240
     
4.44
%
 
$
10,931,815
   
$
275,810
     
3.37
%
Other assets
   
880,655
                     
905,931
                 
Total assets
 
$
12,116,034
                   
$
11,837,746
                 
Liabilities and stockholders' equity
                                               
Money market deposit accounts
 
$
2,207,126
   
$
36,107
     
2.19
%
 
$
2,541,927
   
$
2,801
     
0.15
%
NOW deposit accounts
   
1,525,089
     
4,989
     
0.44
%
   
1,570,318
     
1,260
     
0.11
%
Savings deposits
   
1,732,205
     
462
     
0.04
%
   
1,831,485
     
442
     
0.03
%
Time deposits
   
893,407
     
20,330
     
3.04
%
   
475,966
     
1,328
     
0.37
%
Total interest-bearing deposits
 
$
6,357,827
   
$
61,888
     
1.30
%
 
$
6,419,696
   
$
5,831
     
0.12
%
Federal funds purchased
   
32,784
     
1,266
     
5.16
%
   
513
     
13
     
3.39
%
Repurchase agreements
   
66,162
     
416
     
0.84
%
   
67,279
     
46
     
0.09
%
Short-term borrowings
   
485,804
     
18,975
     
5.22
%
   
2,170
     
54
     
3.33
%
Long-term debt
   
22,373
     
631
     
3.77
%
   
7,509
     
140
     
2.49
%
Subordinated debt, net
   
101,114
     
4,281
     
5.66
%
   
98,641
     
4,078
     
5.53
%
Junior subordinated debt
   
101,196
     
5,372
     
7.10
%
   
101,196
     
2,325
     
3.07
%
Total interest-bearing liabilities
 
$
7,167,260
   
$
92,829
     
1.73
%
 
$
6,697,004
   
$
12,487
     
0.25
%
Demand deposits
   
3,439,275
                     
3,709,761
                 
Other liabilities
   
271,307
                     
219,983
                 
Stockholders' equity
   
1,238,192
                     
1,210,998
                 
Total liabilities and stockholders' equity
 
$
12,116,034
                   
$
11,837,746
                 
Net interest income (FTE)1
         
$
280,411
                   
$
263,323
         
Interest rate spread
                   
2.71
%
                   
3.12
%
Net interest margin (FTE)1
                   
3.34
%
                   
3.22
%
Taxable equivalent adjustment
         
$
1,365
                   
$
912
         
Net interest income
         
$
279,046
                   
$
262,411
         


14
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)
                             
                               
   
2023
 
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Operating net income
                             
Net income
 
$
24,606
   
$
30,072
   
$
33,658
   
$
36,121
   
$
38,973
 
Acquisition expenses
   
7,917
     
1,189
     
618
     
967
     
-
 
Acquisition-related provision for credit losses
   
8,750
     
-
     
-
     
-
     
-
 
Acquisition-related reserve for unfunded loan commitments
   
836
     
-
     
-
     
-
     
-
 
Securities losses
   
183
     
4,641
     
4,998
     
217
     
148
 
Adjustment to net income
 
$
17,686
   
$
5,830
   
$
5,616
   
$
1,184
   
$
148
 
Adjustment to net income (net of tax)
 
$
13,730
   
$
4,525
   
$
4,341
   
$
913
   
$
114
 
Operating net income
 
$
38,336
   
$
34,597
   
$
37,999
   
$
37,034
   
$
39,087
 
Operating diluted earnings per share
 
$
0.84
   
$
0.80
   
$
0.88
   
$
0.86
   
$
0.91
 
                                         
   
9 Months Ended September 30,
                       
     
2023
     
2022
                         
Operating net income
                                       
Net income
 
$
88,336
   
$
115,874
                         
Acquisition expenses
   
9,724
     
-
                         
Acquisition-related provision for credit losses
   
8,750
     
-
                         
Acquisition-related reserve for unfunded loan commitments
   
836
     
-
                         
Securities losses
   
9,822
     
914
                         
Adjustment to net income
 
$
29,132
   
$
914
                         
Adjustment to net income (net of tax)
 
$
22,577
   
$
712
                         
Operating net income
 
$
110,913
   
$
116,586
                         
Operating diluted earnings per share
 
$
2.53
   
$
2.70
                         
                                         
     
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
FTE adjustment
                                       
Net interest income
 
$
94,895
   
$
89,085
   
$
95,066
   
$
99,779
   
$
94,478
 
Add: FTE adjustment
   
568
     
402
     
395
     
392
     
337
 
Net interest income (FTE)
 
$
95,463
   
$
89,487
   
$
95,461
   
$
100,171
   
$
94,815
 
Average earning assets
  $
    11,803,043
   
$
10,983,347
   
$
10,909,932
   
$
10,801,115
   
$
10,727,291
 
Net interest margin (FTE)3
   
3.21
%
   
3.27
%
   
3.55
%
   
3.68
%
   
3.51
%
                                         
   
9 Months Ended September 30,
                         
     
2023
     
2022
                         
FTE adjustment
                                       
Net interest income
 
$
279,046
   
$
262,411
                         
Add: FTE adjustment
   
1,365
     
912
                         
Net interest income (FTE)
 
$
280,411
   
$
263,323
                         
Average earning assets
  $
 11,235,379
   
$
10,931,815
                         
Net interest margin (FTE)3
   
3.34
%
   
3.22
%
                       

Interest income for tax-exempt securities and loans have been adjusted to an FTE basis using the statutory Federal income tax rate of 21%.


15
1
The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:

Non-GAAP measures (continued)
                             
(unaudited, dollars in thousands)
                             
                               
   
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Tangible equity to tangible assets
                             
Total equity
 
$
1,362,821
   
$
1,210,493
   
$
1,211,659
   
$
1,173,554
   
$
1,156,546
 
Intangible assets
   
402,745
     
287,701
     
288,159
     
288,545
     
289,083
 
Total assets
 
$
13,827,628
   
$
11,890,497
   
$
11,839,730
   
$
11,739,296
   
$
11,640,742
 
Tangible equity to tangible assets
   
7.15
%
   
7.95
%
   
7.99
%
   
7.73
%
   
7.64
%
                                         
   
2023
   
2022
 
   
3rd Q
   
2nd Q
   
1st Q
   
4th Q
   
3rd Q
 
Return on average tangible common equity
                                 
Net income
 
$
24,606
   
$
30,072
   
$
33,658
   
$
36,121
   
$
38,973
 
Amortization of intangible assets (net of tax)
   
1,206
     
344
     
402
     
404
     
408
 
Net income, excluding intangibles amortization
 
$
25,812
   
$
30,416
   
$
34,060
   
$
36,525
   
$
39,381
 
                                         
Average stockholders' equity
 
$
1,305,686
   
$
1,217,306
   
$
1,190,316
   
$
1,164,916
   
$
1,201,656
 
Less: average goodwill and other intangibles
   
350,912
     
287,974
     
288,354
     
288,856
     
289,296
 
Average tangible common equity
 
$
954,774
   
$
929,332
   
$
901,962
   
$
876,060
   
$
912,360
 
Return on average tangible common equity3
   
10.73
%
   
13.13
%
   
15.31
%
   
16.54
%
   
17.12
%
                                         
   
9 Months Ended September 30,
                         
     
2023
     
2022
                         
Return on average tangible common equity
                                       
Net income
 
$
88,336
   
$
115,874
                         
Amortization of intangible assets (net of tax)
   
1,952
     
1,294
                         
Net income, excluding intangibles amortization
 
$
90,288
   
$
117,168
                         
                                         
Average stockholders' equity
 
$
1,238,192
   
$
1,210,998
                         
Less: average goodwill and other intangibles
   
309,309
     
289,366
                         
Average tangible common equity
 
$
928,883
   
$
921,632
                         
Return on average tangible common equity3
   
13.00
%
   
17.00
%
                       

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.