GlobeNewswire Inc | Jul 27, 2020 04:15PM EDT

July 27, 2020

NORWICH, N.Y., July 27, 2020 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (NBT or the Company) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the three and six months ended June 30, 2020.

Net income for the three months ended June 30, 2020 was $24.7 million, or $0.56 per diluted common share. Net income was up $14.3 million from the previous quarter primarily due to lower loan loss provision and lower noninterest expense and down $5.8 million from the second quarter of 2019 primarily due to higher provision for loan losses related to the deterioration of economic conditions caused by the COVID-19 pandemic. Excluding real estate repositioning charges of $0.7 million, net income and earnings per diluted share were $25.2 million and $0.57, respectively.

Pre-provision net revenue (PPNR)1 for the second quarter of 2020 was $50.7 million compared to $44.9 million in the previous quarter and $47.2 million in the second quarter of 2019 reflecting higher net interest income and lower noninterest expense than the previous quarter.

CEO Comments

NBT was able to grow pre-provision net revenue. Asset quality remained stable during this extraordinary quarter despite the significant challenges presented by the pandemic. Our team has demonstrated an unwavering commitment to provide superior service to our customers and participate in initiatives to support our communities during these difficult times, said NBT President and CEO, John H. Watt, Jr. Notable during the quarter was our participation in the SBAs Paycheck Protection Program to secure approval for approximately 3,000 loans and $547 million in relief to help retain more than 61,000 jobs at businesses and organizations in communities we serve. NBT'sdisciplined approach to risk management and credit practices, strong and recently enhanced capital position and liquidity continue to provide a strong foundation that will help us to meet the current challenges and to be opportunistic building our franchise.

Second Quarter Financial Highlights

# Net income of $24.7 millionNet Income # Diluted earnings per share of $0.56

# Net interest income on a fully taxable equivalent basis wasNet Interest $80.8 million^1Income / NIM # Net interest margin (?NIM?) on a fully taxable equivalent basis was 3.38%^1

# PPNR^1 was $50.7 million compared to $44.9 million in thePPNR first quarter of 2020 and $47.2 million in the second quarter 2019

# Period end loans were $7.6 billion, up 13.9%, annualized, from December 31, 2019 # Excluding Paycheck Protection Plan (?PPP?) loans of $510 million at June 30, 2020, period end loans contracted $130 million or 2% from March 31, 2020Loans and # Originated $547 million in PPP loansCredit # Allowance for loan losses to total loans of 1.49% (1.59%Quality excluding PPP loans and related allowance) # Net charge-offs to average loans was 0.28%, annualized (0.30% excluding PPP loans) # Nonperforming assets to total assets was 0.27% (0.28% excluding PPP loans)

# Completed public offering of $100 million 5.00% fixed-to-floating rate subordinated notesCapital # Tangible book value per share^3 grew 3% for the quarter and 8% from prior year to $19.46 at June 30, 2020 # Tangible equity to assets of 8.04%^1 # CET1 ratio of 11.34%; Total leverage ratio of 9.44%

Loans

-- Period end total loans were $7.6 billion at June 30, 2020, compared to $7.1 billion at December 31, 2019. -- Total PPP loans as of June 30, 2020 were $510 million (net of unamortized fees); originated $547 million with an average loan size of $185,000 and an average fee of 3.2%. -- Excluding PPP loans, period end loans decreased $130 million from March 31, 2020. Commercial and industrial loans decreased $19.8 million to $1.3 billion; commercial real estate loans increased $14.4 million to $2.3 billion; and total consumer loans decreased $124.1 million to $3.5 billion, driven by managed run-off of indirect auto loans. -- Commercial line of credit utilization rate was 26% at June 30, 2020 compared to 32% at March 31, 2020 and 36% at June 30, 2019.

Deposits

-- Average total deposits in the second quarter of 2020 were $8.6 billion, compared to $7.7 billion in the first quarter of 2020, primarily due to increases in non-interest bearing demand and money market deposit accounts. -- Loan to deposit ratio of 86.5% at June 30, 2020, compared to 94.0% at December 31, 2019.

Net Interest Income and Net Interest Margin

-- Net interest income for the second quarter of 2020 was $80.4 million, up $3.3 million from $77.2 million the first quarter of 2020 and up $1.8 million from $78.6 million for the second quarter of 2019. -- The net interest margin on a fully taxable equivalent (FTE) basis for the second quarter of 2020 was 3.38%, down 14 basis points (bps) from the first quarter of 2020 and down 23 bps from the second quarter of 2019. The net impact of PPP loans and excess liquidity, both of which the Company expects to be transitory, negatively impacted the NIM by 7 bps. Excluding the impact of PPP lending and excess liquidity, NIM declined 7 bps from the prior quarter primarily due to the impact of asset repricing, partly offset by lower funding costs. -- Earning asset yields for the three months ended June 30, 2020 were down 39 bps from the prior quarter and down 60 bps from the same quarter in the prior year. Earning assets grew $742.8 million or 8.4% from the prior quarter and grew $823.4 million or 9.4% from the same quarter in the prior year. Excess liquidity resulted in a $306 million increase in the average balances of short-term interest bearing accounts with yields declining 118 bps to 0.10%. Yields on investment securities declined 9 bps. Loan yields decreased 32 bps to 4.10%. -- Total cost of total deposits was 0.23% for the second quarter of 2020, down 25 bps from the prior quarter and down 32 bps from the same period in the prior year. -- The cost of interest-bearing liabilities for the three months ended June 30, 2020 was 0.45%, down 37 bps from the prior quarter of 0.82% and down 51 bps from the second quarter of 2019 of 0.96%. Cost of interest-bearing deposits decreased 35 bps from the prior quarter and decreased 44 bps from the same quarter in 2019.

Credit Quality and CECL

-- Asset quality metrics remained stable in the second quarter of 2020. -- Net charge-offs to total average loans of 28 bps (30 bps excluding PPP loans) compared to 32 bps in the prior quarter and 38 bps in the second quarter of 2019. -- Nonperforming assets to total assets was 0.27% (0.28% excluding PPP loans) compared to 0.35% at March 31, 2020 and 0.30% at June 30, 2019. -- Provision expense for the three months ended June 30, 2020 was $18.8 million as the economic deterioration due to COVID-19 and the related impact to expected losses continued in the second quarter while net charge-offs of $5.3 million were relatively consistent with the prior quarter. Provision expense decreased $10.8 million from the first quarter of 2020 and increased $11.6 million from the second quarter of 2019. -- The allowance for loan losses was $113.5 million or 1.49% (1.59% excluding PPP loans and related allowance) of total loans compared to 1.38% at March 31, 2020 and 1.04% June 30, 2019. -- As of July 23, 2020, 8.7% of loans (excluding PPP loans) are in payment deferral programs which is down from the second quarter 2020 peak of 14.9%. -- The reserve for unfunded loan commitments decreased $0.2 million to $5.4 million at June 30, 2020 as the increase in the allowance due to the deterioration in the economic forecast was offset by a decrease in the level of unfunded commitments.

Noninterest Income

-- Total noninterest income, excluding securities gains (losses), was $34.8 million for the three months ended June 30, 2020, down $1.4 million from the prior quarter and up $0.5 million from the prior year quarter. -- Service charges on deposit accounts were lower than both prior quarter and the second quarter of 2019 due to lower overdraft charges during the COVID-19 pandemic. -- Retirement plan administration fees were higher than both prior quarter and the second quarter of 2019 due to the April 1, 2020 acquisition of Alliance Benefit Group of Illinois, Inc. (ABG) contributing $1.8 million in revenues during the quarter. -- Wealth management fees were down $0.5 million due to market conditions, partly offset by $0.3 million in ABG fees during the quarter. -- Insurance revenues were down compared to the prior quarter due to seasonally higher insurance revenues in the first quarter. -- The increase in other noninterest income from the prior year second quarter was driven by higher swap fees.

Noninterest Expense

-- Total noninterest expense for the second quarter of 2020 was down 7.8% from the previous quarter and down 1.3% from the second quarter of 2019. -- Significant variances to the prior quarter: Salaries and benefits declined due to decreased medical expenses during the COVID-19 pandemic ($1.1 million) and lower stock-based compensation expenses ($1.0 million), partly offset by increased salaries due to the ABG acquisition ($0.9 million). Occupancy expense was $0.9 million lower due to seasonal maintenance in the prior quarter and lower expenses during the COVID-19 pandemic due to limited on-site personnel. Professional fees and outside services were down $0.5 million primarily due to the timing of expenses as a result of the COVID-19 pandemic. FDIC expense was higher as the remaining portion of the FDIC insurance assessment small bank credit was used in the first quarter of 2020. Other noninterest expense was lower in the second quarter of 2020 due primarily to a $2.0 million expense in the first quarter for the allowance for unfunded loan commitments, along with lower travel and training expenses during the pandemic. The Company recorded a $0.2 million provision credit in the second quarter of 2020 to reduce the reserve for unfunded commitments. Other noninterest expense included $0.7 million in non-recurring real estate repositioning charges for the second quarter. -- Significant variances to the second quarter of 2019: Higher salaries and benefits primarily driven by the ABG acquisition partly offset by lower medical costs ($0.6 million). Data processing and communication expense down due to lower transaction volumes as a result of the COVID-19 pandemic. Other expenses decreased $0.7 million due to lower travel and training expenses during the pandemic and lower pension costs.

Income Taxes

-- Effective tax rate was 21.0% for the second quarter of 2020 compared to 14.2% in the first quarter of 2020 and 22.4% in the second quarter 2019. The higher effective tax rate compared to the first quarter of 2020 was due to higher level of taxable income relative to total income and included a true-up of tax expense to bring the full year estimated effective tax rate to 19.5%. The lower effective tax rate compared to the second quarter of 2019 was due to a lower level of taxable income relative to total income.

Capital

-- Capital ratios remain strong with tangible common equity to tangible assets1 at 8.04%. Tangible book value per share3 grew 3% from the prior quarter and 8% from the prior year quarter to $19.46. -- June 30, 2020 CET1 capital ratio of 11.34%, total leverage ratio of 9.44% and total risk-based capital ratio of 15.15%. -- On June 23, 2020, the Company completed its public offering of $100 million 5.00% fixed-to-floating rate subordinated notes due 2030. The net proceeds were $98 million. The notes are intended to qualify as Tier 2 capital for regulatory purposes.

Dividend

-- The Board of Directors approved a third-quarter cash dividend of $0.27 per share at their regularly scheduled meeting held today. The dividend will be paid on September 15, 2020 to shareholders of record as of September 1, 2020.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. Eastern Time on Tuesday, July 28, 2020, to review second quarter 2020 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Companys Investor Relations web page at https://stockholderinfo.nbtbancorp.com/events-calendar/upcoming-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 $10.8 billion at June 30, 2020. 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 146 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine, and is currently entering Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a full-service 401(k) plan recordkeeping 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.

Forward-Looking Statements

This news 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 Companys 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 and the impact they may have on the Company and its customers and the Companys 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 or terrorism; (8) the timely development and acceptance of new products and services and perceived overall value of these products and services by users; (9) changes in consumer spending, borrowings and savings habits; (10) changes in the financial performance and/or condition of the Companys borrowers; (11) technological changes; (12) acquisitions and integration of acquired businesses; (13) the ability to increase market share and control expenses; (14) changes in the competitive environment among financial holding companies; (15) 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, Economic Growth, Regulatory Relief, Consumer Protection Act of 2018, Coronavirus Aid, Relief and Economic Security Act (CARES Act), and regulatory pronouncements around CARES Act; (16) 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 (FASB) and other accounting standard setters; (17) changes in the Companys organization, compensation and benefit plans; (18) 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; (19) greater than expected costs or difficulties related to the integration of new products and lines of business; (20) the adverse impact on the U.S. economy, including the markets in which we operate, of the novel coronavirus, which causes the Coronavirus disease 2019 (COVID-19), global pandemic; (21) the impact of a slowing U.S. economy and increased unemployment on the performance of our loan portfolio, the market value of our investment securities, the availability of sources of funding and the demand for our products; and (22) the Companys success at managing the risks involved in the foregoing items.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from the Companys forward-looking statements is the potential adverse effect of the current COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company, its customers and the global economy and financial markets. The extent to which the COVID-19 pandemic impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic and its impact on the Companys customers and demand for financial services, the actions governments, businesses and individuals take in response to the pandemic, the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies, national and local economic activity, and the pace of recovery when the COVID-19 pandemic subsides, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled Risk Factors in our Form 10-K for the year ended December 31, 2019 and in our Form 10-Q for the quarter ended March 31, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. You should not place undue reliance on any forward-looking statements, which speak only as of the date made, and you are advised that various factors including, but not limited to, those described above and other factors discussed in the Companys annual and quarterly reports previously filed with the SEC, could affect the Companys financial performance and could cause the Companys 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, 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 financial results of NBTs 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 NBTs performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of NBT.

Contact: John H. Watt, Jr., President and CEO John V. Moran, Executive Vice President and CFO NBT Bancorp Inc. 52 South Broad Street Norwich, NY 13815 607-337-6589

NBT Bancorp Inc. and SubsidiariesSelected Financial Data(unaudited, dollars in thousands except per share data) 2020 2019 2nd Q 1st Q 4th Q 3rd Q 2nd QProfitability: Dilutedearnings per $ 0.56 $ 0.23 $ 0.66 $ 0.73 $ 0.69 shareWeightedaveragediluted common 43,928,344 44,130,324 44,174,201 44,138,495 44,120,377 sharesoutstandingReturn onaverage assets 0.94 % 0.43 % 1.20 % 1.34 % 1.28 %^2Return onaverage equity 8.76 % 3.69 % 10.36 % 11.83 % 11.63 %^2Return onaveragetangible 12.14 % 5.24 % 14.28 % 16.43 % 16.38 %common equity^1 2Net interest 3.38 % 3.52 % 3.52 % 3.57 % 3.61 %margin^1 2 6 Months ended June 30, 2020 2019 Profitability: Dilutedearnings per $ 0.80 $ 1.35 shareWeightedaveragediluted common 44,026,420 44,096,681 sharesoutstandingReturn onaverage assets 0.69 % 1.26 % ^2Return onaverage equity 6.23 % 11.57 % ^2Return onaveragetangible 8.69 % 16.41 % common equity^1 2Net interest 3.45 % 3.63 % margin^1 2 2020 2019 2nd Q 1st Q 4th Q 3rd Q 2nd QBalance sheet data:Securitiesavailable for $ 1,108,443 $ 1,000,980 $ 975,340 $ 932,173 $ 979,696 saleSecuritiesheld to 599,164 621,359 630,074 678,435 744,601 maturityNet loans 7,514,491 7,147,383 7,063,133 6,941,444 6,891,108 Total assets 10,847,184 9,953,543 9,715,925 9,661,386 9,635,718 Total deposits 8,815,891 7,864,638 7,587,820 7,743,166 7,593,706 Total 602,988 714,283 820,682 628,701 794,829 borrowingsTotal 9,704,532 8,841,364 8,595,528 8,562,785 8,560,895 liabilitiesStockholders' 1,142,652 1,112,179 1,120,397 1,098,601 1,074,823 equity Capital: Equity to 10.53 % 11.17 % 11.53 % 11.37 % 11.15 %assetsTangible 8.04 % 8.55 % 8.84 % 8.65 % 8.41 %equity ratio^1Book value per $ 26.20 $ 25.52 $ 25.58 $ 25.09 $ 24.56 shareTangible bookvalue per $ 19.46 $ 18.96 $ 19.03 $ 18.52 $ 17.97 share^3Tier 1 9.44 % 10.02 % 10.33 % 10.15 % 9.88 %leverage ratioCommon equitytier 1 capital 11.34 % 10.90 % 11.29 % 11.14 % 10.95 %ratioTier 1 capital 12.60 % 12.14 % 12.56 % 12.42 % 12.24 %ratioTotalrisk-based 15.15 % 13.36 % 13.52 % 13.38 % 13.21 %capital ratioCommon stockprice (end of $ 30.06 $ 32.39 $ 40.56 $ 36.59 $ 37.51 period)Note: Year-to-date EPS may not equal sum of quarters due to differences inoutstanding shares.

NBT Bancorp Inc. and SubsidiariesSelected Financial Data(unaudited, dollars in thousands except per share data) 2020 2019 2nd Q 1st Q 4th Q 3rd Q 2nd QAsset quality:Nonaccrual $ 25,567 $ 29,972 $ 25,174 $ 24,623 $ 24,669 loans90 days pastdue and still 2,057 2,280 3,717 8,342 2,387 accruingTotalnonperforming 27,624 32,252 28,891 32,965 27,056 loansOther real 1,783 2,384 1,458 2,144 2,203 estate ownedTotalnonperforming 29,407 34,636 30,349 35,109 29,259 assetsAllowance for 113,500 100,000 72,965 72,365 72,165 loan losses Asset qualityratios (total):Allowance forloan losses 1.49 % 1.38 % 1.02 % 1.03 % 1.04 %to totalloansTotalnonperforming 0.36 % 0.45 % 0.40 % 0.47 % 0.39 %loans tototal loansTotalnonperforming 0.27 % 0.35 % 0.31 % 0.36 % 0.30 %assets tototal assetsAllowance forloan lossesto total 410.87 % 310.06 % 252.55 % 219.52 % 266.72 %nonperformingloansPast dueloans to 0.30 % 0.51 % 0.49 % 0.57 % 0.52 %total loansNetcharge-offs 0.28 % 0.32 % 0.30 % 0.35 % 0.38 %to averageloans^2 Asset quality ratios (excluding paycheck protection plan):Allowance forloan losses 1.59 % 1.38 % 1.02 % 1.03 % 1.04 %to totalloansTotalnonperforming 0.39 % 0.45 % 0.40 % 0.47 % 0.39 %loans tototal loansTotalnonperforming 0.28 % 0.35 % 0.31 % 0.36 % 0.30 %assets tototal assetsAllowance forloan lossesto total 410.78 % 310.06 % 252.55 % 219.52 % 266.72 %nonperformingloansPast dueloans to 0.32 % 0.51 % 0.49 % 0.57 % 0.52 %total loansNetcharge-offs 0.30 % 0.32 % 0.30 % 0.35 % 0.38 %to averageloans^2

NBT Bancorp Inc. and Subsidiaries Consolidated Balance Sheets (unaudited, dollars in thousands) June 30, December 31,Assets 2020 2019Cash and due from banks $ 171,264 $ 170,595 Short-term interest bearing accounts 528,228 46,248 Equity securities, at fair value 29,223 27,771 Securities available for sale, at fair value 1,108,443 975,340 Securities held to maturity (fair value $623,022 599,164 630,074 and $641,262, respectively)Federal Reserve and Federal Home Loan Bank stock 32,536 44,620 Loans held for sale 16,147 11,731 Loans 7,627,991 7,136,098 Less allowance for loan losses 113,500 72,965 Net loans $ 7,514,491 $ 7,063,133 Premises and equipment, net 74,558 75,631 Goodwill 280,541 274,769 Intangible assets, net 13,413 12,020 Bank owned life insurance 183,976 181,748 Other assets 295,200 202,245 Total assets $ 10,847,184 $ 9,715,925 Liabilities and stockholders' equity Demand (noninterest bearing) $ 3,107,528 $ 2,414,383 Savings, NOW and money market 5,000,504 4,312,244 Time 707,859 861,193 Total deposits $ 8,815,891 $ 7,587,820 Short-term borrowings 339,656 655,275 Long-term debt 64,154 64,211 Subordinated debt, net 97,982 - Junior subordinated debt 101,196 101,196 Other liabilities 285,653 187,026 Total liabilities $ 9,704,532 $ 8,595,528 Total stockholders' equity $ 1,142,652 $ 1,120,397 Total liabilities and stockholders' equity $ 10,847,184 $ 9,715,925

NBT Bancorp Inc. and SubsidiariesConsolidated Statements of Income(unaudited, dollars in thousands except per share data) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019Interest, fee and dividend incomeInterest and fees on loans $ 77,270 $ 81,271 $ 155,998 $ 160,592 Securities available for 5,600 6,031 11,353 11,953 saleSecurities held to maturity 3,926 5,089 8,017 10,306 Other 650 842 1,479 1,726 Total interest, fee and $ 87,446 $ 93,233 $ 176,847 $ 184,577 dividend incomeInterest expense Deposits $ 4,812 $ 10,234 $ 13,916 $ 19,060 Short-term borrowings 972 2,760 2,769 5,997 Long-term debt 393 471 786 893 Subordinated debt 128 - 128 - Junior subordinated debt 695 1,141 1,621 2,309 Total interest expense $ 7,000 $ 14,606 $ 19,220 $ 28,259 Net interest income $ 80,446 $ 78,627 $ 157,627 $ 156,318 Provision for loan losses 18,840 7,277 48,480 13,084 Net interest income after $ 61,606 $ 71,350 $ 109,147 $ 143,234 provision for loan lossesNoninterest income Service charges on deposit $ 2,529 $ 4,224 $ 6,526 $ 8,460 accountsATM and debit card fees 6,136 6,156 11,990 11,681 Retirement plan 9,214 7,836 17,155 15,570 administration feesWealth management^4 6,823 7,122 14,096 13,685 Insurance^4 3,292 3,547 7,561 8,291 Bank owned life insurance 1,381 1,186 2,755 2,563 incomeNet securities gains 180 (69 ) (632 ) (12 )(losses)Other 5,456 4,239 10,983 7,824 Total noninterest income $ 35,011 $ 34,241 $ 70,434 $ 68,062 Noninterest expense Salaries and employee $ 39,717 $ 38,567 $ 80,467 $ 77,923 benefitsOccupancy 5,065 5,443 11,060 11,718 Data processing and 4,079 4,693 8,312 9,107 communicationsProfessional fees and 3,403 3,359 7,300 7,027 outside servicesEquipment 4,779 4,518 9,421 9,275 Office supplies and postage 1,455 1,577 3,091 3,168 FDIC expense 993 949 1,304 1,966 Advertising 322 641 931 1,144 Amortization of intangible 883 893 1,717 1,861 assetsLoan collection and other 728 961 1,745 1,746 real estate owned, netOther 3,916 4,630 10,873 9,756 Total noninterest expense $ 65,340 $ 66,231 $ 136,221 $ 134,691 Income before income tax $ 31,277 $ 39,360 $ 43,360 $ 76,605 expenseIncome tax expense 6,564 8,805 8,279 16,923 Net income $ 24,713 $ 30,555 $ 35,081 $ 59,682 Earnings Per Share Basic $ 0.57 $ 0.70 $ 0.80 $ 1.36 Diluted $ 0.56 $ 0.69 $ 0.80 $ 1.35

NBT Bancorp Inc. and SubsidiariesQuarterly Consolidated Statements of Income(unaudited, dollars in thousands except per share data) 2020 2019 2nd Q 1st Q 4th Q 3rd Q 2nd QInterest, fee and dividend incomeInterest and fees on $ 77,270 $ 78,728 $ 79,800 $ 81,082 $ 81,271 loansSecurities available 5,600 5,753 5,639 5,711 6,031 for saleSecurities held to 3,926 4,091 4,213 4,586 5,089 maturityOther 650 829 924 1,002 842 Total interest, fee $ 87,446 $ 89,401 $ 90,576 $ 92,381 $ 93,233 and dividend incomeInterest expense Deposits $ 4,812 $ 9,104 $ 10,181 $ 10,745 $ 10,234 Short-term 972 1,797 1,707 1,989 2,760 borrowingsLong-term debt 393 393 484 498 471 Subordinated debt 128 - - - - Junior subordinated 695 926 1,021 1,095 1,141 debtTotal interest $ 7,000 $ 12,220 $ 13,393 $ 14,327 $ 14,606 expenseNet interest income $ 80,446 $ 77,181 $ 77,183 $ 78,054 $ 78,627 Provision for loan 18,840 29,640 6,004 6,324 7,277 lossesNet interest incomeafter provision for $ 61,606 $ 47,541 $ 71,179 $ 71,730 $ 71,350 loan lossesNoninterest income Service charges on $ 2,529 $ 3,997 $ 4,361 $ 4,330 $ 4,224 deposit accountsATM and debit card 6,136 5,854 5,935 6,277 6,156 feesRetirement plan 9,214 7,941 7,218 7,600 7,836 administration feesWealth management^4 6,823 7,273 7,085 7,630 7,122 Insurance^4 3,292 4,269 3,479 4,000 3,547 Bank owned life 1,381 1,374 1,236 1,556 1,186 insurance incomeNet securities gains 180 (812 ) 189 4,036 (69 )(losses)Other 5,456 5,527 6,738 4,291 4,239 Total noninterest $ 35,011 $ 35,423 $ 36,241 $ 39,720 $ 34,241 incomeNoninterest expense Salaries and $ 39,717 $ 40,750 $ 39,592 $ 39,352 $ 38,567 employee benefitsOccupancy 5,065 5,995 5,653 5,335 5,443 Data processing and 4,079 4,233 4,719 4,492 4,693 communicationsProfessional fees 3,403 3,897 4,223 3,535 3,359 and outside servicesEquipment 4,779 4,642 4,821 4,487 4,518 Office supplies and 1,455 1,636 1,744 1,667 1,577 postageFDIC expense 993 311 - (20 ) 949 (credit)Advertising 322 609 952 677 641 Amortization of 883 834 844 874 893 intangible assetsLoan collection andother real estate 728 1,017 1,436 976 961 owned, netOther 3,916 6,957 6,310 8,374 4,630 Total noninterest $ 65,340 $ 70,881 $ 70,294 $ 69,749 $ 66,231 expenseIncome before income $ 31,277 $ 12,083 $ 37,126 $ 41,701 $ 39,360 tax expenseIncome tax expense 6,564 1,715 8,166 9,322 8,805 Net income $ 24,713 $ 10,368 $ 28,960 $ 32,379 $ 30,555 Earnings Per Share Basic $ 0.57 $ 0.24 $ 0.66 $ 0.74 $ 0.70 Diluted $ 0.56 $ 0.23 $ 0.66 $ 0.73 $ 0.69

NBT Bancorp Inc. and SubsidiariesAverage Quarterly Balance Sheets(unaudited, dollars in thousands) Average Yield Average Yield / Average Yield / Average Yield / Average Yield / Balance / Balance Rates Balance Rates Balance Rates Balance Rates Rates Q2 - 2020 Q1 - 2020 Q4 - 2019 Q3 - 2019 Q2 - 2019Assets Short-terminterest $ 380,260 0.10 % $ 74,695 1.28 % $ 51,613 2.43 % $ 57,530 1.95 % $ 25,783 1.28 %bearingaccountsSecuritiesavailable for 985,561 2.29 % 962,527 2.40 % 942,302 2.37 % 940,256 2.41 % 981,079 2.47 %sale^1 5Securitiesheld to 613,899 2.75 % 622,398 2.81 % 651,305 2.73 % 698,617 2.77 % 770,651 2.83 %maturity^1 5Investment inFRB and FHLB 36,604 6.09 % 39,784 5.97 % 37,842 6.37 % 40,525 7.04 % 46,179 6.60 %BanksLoans^1 6 7,589,032 4.10 % 7,163,114 4.42 % 7,055,288 4.49 % 6,987,476 4.61 % 6,958,299 4.69 %Totalinterest $ 9,605,356 3.68 % $ 8,862,518 4.07 % $ 8,738,350 4.13 % $ 8,724,404 4.22 % $ 8,781,991 4.28 %earningassetsOther assets 961,807 885,570 861,909 852,616 816,748 Total assets $ 10,567,163 $ 9,748,088 $ 9,600,259 $ 9,577,020 $ 9,598,739 Liabilities and stockholders' equityMoney marketdeposit $ 2,360,407 0.29 % $ 2,101,306 1.00 % $ 2,057,678 1.16 % $ 2,015,297 1.24 % $ 1,916,045 1.16 %accountsNOW deposit 1,167,486 0.04 % 1,086,205 0.10 % 1,064,193 0.13 % 1,056,001 0.13 % 1,127,413 0.13 %accountsSavings 1,383,495 0.05 % 1,276,285 0.06 % 1,251,432 0.06 % 1,274,793 0.06 % 1,282,084 0.06 %depositsTime deposits 760,803 1.48 % 842,989 1.62 % 853,353 1.69 % 893,837 1.75 % 953,698 1.73 %Totalinterest $ 5,672,191 0.34 % $ 5,306,785 0.69 % $ 5,226,656 0.77 % $ 5,239,928 0.81 % $ 5,279,240 0.78 %bearingdepositsShort-term 427,004 0.92 % 533,516 1.35 % 475,332 1.42 % 490,694 1.61 % 620,898 1.78 %borrowingsLong-term 64,165 2.46 % 64,194 2.46 % 81,613 2.35 % 84,250 2.35 % 82,414 2.29 %debtSubordinated 8,633 5.96 % - - - - - - - - debt, netJuniorsubordinated 101,196 2.76 % 101,196 3.68 % 101,196 4.00 % 101,196 4.29 % 101,196 4.52 %debtTotalinterest $ 6,273,189 0.45 % $ 6,005,691 0.82 % $ 5,884,797 0.90 % $ 5,916,068 0.96 % $ 6,083,748 0.96 %bearingliabilitiesDemand 2,887,545 2,398,307 2,406,563 2,389,617 2,298,867 depositsOther 271,635 214,495 199,674 185,374 162,374 liabilitiesStockholders' 1,134,794 1,129,595 1,109,225 1,085,961 1,053,750 equityTotalliabilitiesand $ 10,567,163 $ 9,748,088 $ 9,600,259 $ 9,577,020 $ 9,598,739 stockholders'equity Interest rate 3.23 % 3.25 % 3.23 % 3.26 % 3.32 %spreadNet interestmargin (FTE)^ 3.38 % 3.52 % 3.52 % 3.57 % 3.61 %1

NBT Bancorp Inc. and SubsidiariesAverage Year-to-Date Balance Sheets(unaudited, dollars in thousands) Average Yield/ Average Yield/ Balance Interest Rates Balance Interest RatesSix MonthsEnded June 2020 201930,Assets Short-terminterest $ 227,478 $ 335 0.30 % $ 17,471 $ 174 2.01 %bearingaccountsSecuritiesavailable for 974,044 11,353 2.34 % 982,881 11,984 2.46 %sale^1 5Securitiesheld to 618,149 8,554 2.78 % 776,577 11,043 2.87 %maturity^1 5Investment inFRB and FHLB 38,194 1,144 6.02 % 47,657 1,552 6.57 %BanksLoans^1 6 7,376,072 156,119 4.26 % 6,922,684 160,768 4.68 %Totalinterest $ 9,233,937 $ 177,505 3.87 % $ 8,747,270 $ 185,521 4.28 %earningassetsOther assets 923,689 806,225 Total assets $ 10,157,626 $ 9,553,495 Liabilitiesand stockholders'equityMoney marketdeposit $ 2,230,857 $ 6,965 0.63 % $ 1,860,358 $ 9,974 1.08 %accountsNOW deposit 1,126,845 404 0.07 % 1,131,291 817 0.15 %accountsSavings 1,329,890 360 0.05 % 1,267,146 362 0.06 %depositsTime deposits 801,896 6,187 1.55 % 948,109 7,907 1.68 %Totalinterest $ 5,489,488 $ 13,916 0.51 % $ 5,206,904 $ 19,060 0.74 %bearingdepositsShort-term 480,261 2,769 1.16 % 666,349 5,997 1.81 %borrowingsLong-term 64,179 786 2.46 % 78,085 893 2.31 %debtSubordinated 4,316 128 5.96 % - - - debt, netJuniorsubordinated 101,196 1,621 3.22 % 101,196 2,309 4.60 %debtTotalinterest $ 6,139,440 $ 19,220 0.63 % $ 6,052,534 $ 28,259 0.94 %bearingliabilitiesDemand 2,642,926 2,304,169 depositsOther 243,066 156,963 liabilitiesStockholders' 1,132,194 1,039,829 equityTotalliabilitiesand $ 10,157,626 $ 9,553,495 stockholders'equityNet interestincome (FTE)^ $ 158,285 $ 157,262 1Interest rate 3.24 % 3.34 %spreadNet interestmargin (FTE)^ 3.45 % 3.63 %1Taxableequivalent $ 658 $ 944 adjustmentNet interest $ 157,627 $ 156,318 income

NBT Bancorp Inc. and SubsidiariesConsolidated Loan Balances(unaudited, dollars in thousands) The following table presents loans by line of business, paycheck protectionplans loans includes $14.6 million in unamortized fees. 2020 2019 2nd Q 1st Q 4th Q 3rd Q 2nd QCommercial $ 1,318,806 $ 1,338,609 $ 1,302,209 $ 1,317,649 $ 1,299,784Commercial 2,256,580 2,242,139 2,142,057 2,033,552 2,025,280real estatePaycheckprotection 510,097 - - - -planResidentialreal estate 1,460,058 1,446,676 1,445,156 1,416,920 1,404,079mortgagesIndirect auto 1,091,889 1,184,888 1,193,635 1,195,783 1,189,670Specialty 515,618 539,378 542,063 528,505 519,974lendingHome equity 415,528 431,536 444,082 452,535 456,754Other consumer 59,415 64,157 66,896 68,865 67,732Total loans $ 7,627,991 $ 7,247,383 $ 7,136,098 $ 7,013,809 $ 6,963,273 The following table provide loans as a percentage of total loans in industriesvulnerable to the COVID-19 pandemic as of June 30, 2020: Industry % of Total LoansAccommodations 2.6 % Healthcareservices and 2.0 % practicesRestaurantsand 1.9 % entertainmentRetailers 1.6 % Automotive 1.5 % Total 9.6 % Allowance for Loan Losses as a Percentage of Loans by Segment^ 7: Incurred CECL 12/31/2019 1/1/2020 3/31/2020 6/30/2020* Commercial & 0.96 % 0.98 % 1.43 % 1.25 % industrialCommercial 1.02 % 0.74 % 1.10 % 1.56 % real estatePaycheckprotection 0.00 % 0.00 % 0.00 % 0.01 % planResidential 0.27 % 0.83 % 0.99 % 1.13 % real estateAuto 0.83 % 0.78 % 1.08 % 0.99 % Other consumer 3.74 % 3.66 % 4.00 % 5.01 % Total 1.02 % 1.07 % 1.38 % 1.49 % * Excluding PPP loans and related allowance, total allowance to loans was 1.59%

^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) Pre-provision net revenue 2020 2019 ("PPNR") 2nd Q 1st Q 4th Q 3rd Q 2nd Q Income before income tax $ 31,277 $ 12,083 $ 37,126 $ 41,701 $ 39,360 expense FTE 329 329 349 374 445 adjustment Provision for 18,840 29,640 6,004 6,324 7,277 loan losses Net securities (180 ) 812 (189 ) (4,036 ) 69 (gains) losses Nonrecurring 650 - - 3,800 - expense Unfunded loan commitments (200 ) 2,000 - - - reserve PPNR $ 50,716 $ 44,864 $ 43,290 $ 48,163 $ 47,151 Average $ 10,567,163 $ 9,748,088 $ 9,600,259 $ 9,577,020 $ 9,598,739 Assets Return on Average 0.94 % 0.43 % 1.20 % 1.34 % 1.28 % Assets PPNR Return on Average 1.93 % 1.85 % 1.79 % 2.00 % 1.97 % Assets PPNR is a Non-GAAP financial measure that management believes is useful in evaluating the underlying operating results of the Company excluding the volatility in loan loss provision due to CECL adoption and the impact of the COVID-19 pandemic, net securities gains (losses) and non-recurring income and/ or expense. FTE 2020 2019 Adjustment 2nd Q 1st Q 4th Q 3rd Q 2nd Q Net interest $ 80,446 $ 77,181 $ 77,183 $ 78,054 $ 78,627 income Add: FTE 329 329 349 374 445 adjustment Net interest $ 80,775 $ 77,510 $ 77,532 $ 78,428 $ 79,072 income (FTE) Average earning $ 9,605,356 $ 8,862,518 $ 8,738,350 $ 8,724,404 $ 8,781,991 assets Net interest 3.38 % 3.52 % 3.52 % 3.57 % 3.61 % margin (FTE) 6 Months ended June 30, 2020 2019 Net interest $ 157,627 $ 156,318 income Add: FTE 658 944 adjustment Net interest $ 158,285 $ 157,262 income (FTE) Average earning $ 9,233,937 $ 8,747,270 assets Net interest 3.45 % 3.63 % margin (FTE) Interest income for tax-exempt securities and loans have been adjusted to a FTE basis using the statutory Federal income tax rate of 21%. Tangible equity to 2020 2019 tangible assets 2nd Q 1st Q 4th Q 3rd Q 2nd Q Total equity $ 1,142,652 $ 1,112,179 $ 1,120,397 $ 1,098,601 $ 1,074,823 Intangible 293,954 285,955 286,789 287,633 288,507 assets Total assets $ 10,847,184 $ 9,953,543 $ 9,715,925 $ 9,661,386 $ 9,635,718 Tangible equity to 8.04 % 8.55 % 8.84 % 8.65 % 8.41 % tangible assets

^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) Return on average 2020 2019 tangible common equity 2nd Q 1st Q 4th Q 3rd Q 2nd Q Net income $ 24,713 $ 10,368 $ 28,960 $ 32,379 $ 30,555 Amortization of intangible 662 626 633 656 670 assets (net of tax) Net income, excluding $ 25,375 $ 10,994 $ 29,593 $ 33,035 $ 31,225 intangibles amortization Average stockholders' $ 1,134,794 $ 1,129,595 $ 1,109,225 $ 1,085,961 $ 1,053,750 equity Less: average goodwill and 294,423 286,400 287,268 288,077 288,930 other intangibles Average tangible $ 840,371 $ 843,195 $ 821,957 $ 797,884 $ 764,820 common equity Return on average 12.14 % 5.24 % 14.28 % 16.43 % 16.38 % tangible common equity 6 Months ended June 30, 2020 2019 Net income $ 35,081 $ 59,682 Amortization of intangible 1,288 1,396 assets (net of tax) Net income, excluding $ 36,369 $ 61,078 intangibles amortization Average stockholders' $ 1,132,194 $ 1,039,829 equity Less: average goodwill and 290,411 289,419 other intangibles Average tangible $ 841,783 $ 750,410 common equity Return on average 8.69 % 16.41 % tangible common equity ^2 Annualized. ^3 Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding. Other financial services revenue previously disclosed and included with^4 Insurance income has been reclassified and combined with Trust income and is disclosed as Wealth management income.^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. The allowance for loan losses for December 31, 2019 was calculated based on the incurred losses methodology and beginning January 1, 2020, it was based on the^7 CECL methodology. The risk-based pooling of loans (segments) for incurred and CECL are not consistent. For illustrative purposes only, the loans and related incurred allowance at December 31, 2019 were grouped to conform with the CECL methodology.