NBT BANCORP INC Q3 FY2024 earnings call

• Operating performance for the nine months of 2024 reflected the strength of the balance sheet, diversified business model, and team diligence. • Productively grew loans and deposits across the footprint and improved the net interest margin for the second consecutive quarter. • Noninterest income was a highlight, accounting for 31% of total revenues. • Declared a $0.34 quarterly cash dividend, representing the 12th consecutive year of annual dividend increases. • Announced the merger with Evans Bancorp, Inc., a $2.3 billion community bank, with expected closing in second quarter 2025. • Micron Technology's semiconductor plant construction in Syracuse expected to commence in the second half of 2025. • Well-balanced organic loan growth, granular deposit base, stable credit quality, strong fee income generation, and active expense management contributed to solid operating performance.

For the third quarter, NBT reported net income of $38.1 million or $0.80 per share. Total loans were $9.9 billion, with 53% from commercial relationships and 47% from consumer loans. Total deposits stood at $11.6 billion. The net interest margin in the third quarter was 3.27%, up 9 basis points from the prior quarter. Noninterest income made up 31% of total revenues for the quarter, reaching a new quarterly all-time high.

• Merger with Evans Bancorp, Inc. is expected to close in second quarter 2025. • Micron Technology's semiconductor plant construction is anticipated to commence in the second half of 2025. • Need to actively manage funding costs to offset the impact of variable rate loans repricing almost immediately.

• Interest rate fluctuations could affect the net interest margin. • Uncertainty regarding regulatory approvals for the merger with Evans Bancorp, Inc. • Risks associated with the timing and execution of Micron Technology's semiconductor plant construction.

Q: Steve Moss asked about deposit pricing trends and asset repricing in light of the 50-basis point rate cut.

A: Annette Burns discussed that about 40% of the book is price sensitive, with reactivity in money market accounts and CDs, and asset repricing dependent on the yield curve.

Q: Christopher O’Connell inquired about the expense run rate and margin trends.

A: Annette Burns mentioned expense run rate in the 92-94 range, and Scott Kingsley noted margin dependent on yield curve slope from front end to midpoint.

Q: Matthew Breese asked about expense levels, NIM composition, and seasonality in insurance.

A: Annette Burns and Scott Kingsley discussed expense normalization, NIM components, and insurance seasonality related to renewal timings and market performance.