GlobeNewswire Inc | Jan 27, 2021 04:15PM EST

January 27, 2021

NORWICH, N.Y., Jan. 27, 2021 (GLOBE NEWSWIRE) -- NBT Bancorp Inc. (NBT or the Company) (NASDAQ: NBTB) reported net income and diluted earnings per share for both the quarter and year ended December 31, 2020.

Net income for the year ended December 31, 2020 was $104.4 million, down 13.7% from $121.0 million for the prior year due primarily to higher provision for loan losses after the adoption of the Current Expected Credit Losses (CECL) accounting methodology and related to the deterioration of economic conditions caused by the COVID-19 pandemic. Diluted earnings per share for the year ended December 31, 2020 was $2.37, as compared with $2.74 for the prior year, a decrease of 13.5%. Excluding full year branch optimization charges of $4.8 million, net income and earnings per diluted share were $108.1 million and $2.46, respectively.

Pre-provision net revenue (PPNR)1 for the year ended December 31, 2020 was $193.4 million compared to $182.1 million in the prior year. The 6% increase in PPNR from the prior year reflected higher net interest income, higher noninterest income and lower noninterest expense.

Net income for the three months ended December 31, 2020 was $34.2 million, or $0.78 per diluted common share. Net income was down $0.9 million from the previous quarter primarily due to branch optimization charges for the quarter of $4.1 million and up $5.2 million from the fourth quarter of 2019 due to higher net interest income and lower provision for loan losses, partly offset by the branch optimization charges. Excluding branch optimization charges for the quarter of $4.1 million, net income and earnings per diluted share were $37.4 million and $0.85, respectively.

PPNR1 for the fourth quarter of 2020 was $48.2 million compared to $49.6 million in the previous quarter and $43.3 million in the fourth quarter of 2019. The 3% decline in PPNR from the previous quarter reflected higher operating expenses related to timing of initiatives, partly offset by higher net interest income.

CEO Comments

NBT ended the year with active pipelines and building momentum. Our strong capital base provides us with the optionality we need to drive our growth in 2021, said NBT President and CEO John H. Watt, Jr. The strength of NBTs pre-provision net revenue and our outsized noninterest income is reflected in our results for the full year and the fourth quarter of 2020. As we continue to navigate these challenging times and look to the future, our team is customer focused and committed to executing the critical strategies that will carry us forward.

Fourth Quarter Financial Highlights

# Net income of $34.2 millionNet Income # Diluted earnings per share of $0.78

Net # Net interest income on a fully taxable equivalent basis wasInterest $80.4 million^1Income / # Net interest margin (?NIM?) on a fully taxable equivalent basisNIM was 3.20%^1, up 3 bps from the prior quarter

# PPNR^1 was $48.2 million compared to $49.6 million in the thirdPPNR quarter of 2020 and $43.3 million in the fourth quarter of 2019

# Period end loans were $7.5 billion, up 5% from December 31, 2019 and comparable to September 30, 2020 # Excluding $431 million of Paycheck Protection Program (?PPP?) loans at December 31, 2020, period end loans increased $22 million or 0.3% from September 30, 2020Loans and # Allowance for loan losses to total loans of 1.47% (1.56%Credit excluding PPP loans and related allowance), down 4 bps from theQuality third quarter (down 6 bps excluding PPP loans and related allowance) # Net charge-offs to average loans was 0.21%, annualized (0.22% excluding PPP loans) # Nonperforming assets to total assets was 0.45% (0.47% excluding PPP loans)

# Tangible book value per share^2 grew 2% for the quarter and 8%Capital from prior year to $20.52 at December 31, 2020 # Tangible equity to assets of 8.41%^1 # CET1 ratio of 11.84%; Leverage ratio of 9.56%

Loans

-- Period end total loans were $7.5 billion at December 31, 2020 and $7.6 billion at September 30, compared to $7.1 billion at December 31, 2019. -- Total PPP loans as of December 31, 2020 were $431 million (net of unamortized fees), with $548 million originated at an average loan size of $184 thousand and an average annual fee of 3.2%. -- Excluding PPP loans, period end loans increased $22.0 million from September 30, 2020. Commercial and industrial loans decreased $29.7 million to $1.3 billion; commercial real estate loans increased $98.5 million to $2.4 billion; and total consumer loans decreased $46.8 million to $3.4 billion. -- Commercial line of credit utilization rate was 22% at December 31, 2020 compared to 25% at September 30, 2020 and 32% at December 31, 2019.

Deposits

-- Average total deposits in the fourth quarter of 2020 were $9.1 billion, compared to $8.8 billion in the third quarter of 2020, primarily due to increases in non-interest bearing demand deposit accounts. -- Loan to deposit ratio was 82.6% at December 31, 2020, compared to 94.0% at December 31, 2019 and 84.4% at September 30, 2020.

Net Interest Income and Net Interest Margin

-- Net interest income for the fourth quarter of 2020 was $80.1 million, up $2.2 million or 2.8% from the third quarter of 2020 and up $2.9 million or 3.8% from the fourth quarter of 2019. -- The net interest margin on a fully taxable equivalent (FTE) basis for the fourth quarter of 2020 was 3.20%, up 3 basis points (bps) from the third quarter of 2020 and down 32 bps from the fourth quarter of 2019. The net impact of PPP loans and excess liquidity negatively impacted the NIM by 8 bps in the fourth quarter versus a negative impact of 10 bps in the third quarter of 2020. Excluding the impact of PPP lending and excess liquidity from each quarter, NIM increased 1 bp from the prior quarter primarily due to a 5 bps decline in the cost of interest bearing liabilities and minimal reduction in asset yields during the quarter. -- Earning asset yields for the three months ended December 31, 2020 were up 1 bp from the prior quarter and down 67 bps from the same quarter in the prior year. Earning assets grew $159.3 million or 1.6% from the prior quarter and grew $1.2 billion or 14.3% from the same quarter in the prior year. Excess liquidity resulted in a $74.9 million increase in the average balances of short-term interest bearing accounts.The average balance of investment securities increased $111.4 million while yields declined 20 bps.Loan yields increased 11 bps to 4.06% due primarily to the fees recognized due to $73 million in PPP loans forgiven during the quarter (7 bps) combined with a $45 million increase in the average balance of higher yielding consumer loans (9 bps). -- Total cost of deposits was 0.17% for the fourth quarter of 2020, down 2 bps from the prior quarter and down 36 bps from the same period in the prior year. -- The cost of interest-bearing liabilities for the three months ended December 31, 2020 was 0.40%, down as compared to the prior quarter of 0.45% and down 50 bps from the fourth quarter of 2019 of 0.90%. Cost of interest-bearing deposits decreased 4 bps from the prior quarter and decreased 51 bps from the same quarter in 2019.

Credit Quality and Allowance for Credit Losses

-- Net charge-offs to average loans were low due to COVID-19 pandemic relief programs for the quarter and 2020. Net charge-offs to total average loans were 23 bps for 2020 compared to 36 bps for 2019. -- Net charge-offs to total average loans of 21 bps (22 bps excluding PPP loans) compared to 12 bps (13 bps excluding PPP loans) in the prior quarter and 30 bps in the fourth quarter of 2019. The increase in charge-offs during the fourth quarter of 2020 was primarily due to higher charge-offs in commercial, indirect auto and specialty lending, but continue to be at lower levels due to pandemic relief programs. -- Nonperforming assets to total assets was 0.45% (0.47% excluding PPP loans) compared to 0.37% (0.39% excluding PPP loans) at September 30, 2020 and 0.31% at December 31, 2019. The change in nonperforming assets was primarily related to an increase in nonperforming commercial and residential real estate loans. -- Provision expense for the three months ended December 31, 2020 was ($0.6) million while net charge-offs of $3.9 million were up compared with the prior quarter. Provision expense decreased $3.9 million from the third quarter of 2020 and decreased $6.6 million from the fourth quarter of 2019. The decrease in provision expense from the prior quarter and fourth quarter of 2019 was primarily due to the $4.5 million reduction in the level of allowance for loan losses resulting from an improved economic forecast. -- The allowance for loan losses was $110.0 million or 1.47% (1.56% excluding PPP loans and related allowance) of total loans compared to 1.51% (1.62% excluding PPP loans and related allowance) at September 30, 2020 and 1.02% December 31, 2019. The allowance for loans losses was calculated under the CECL accounting method in 2020 and the incurred loss accounting method in 2019. -- As of January 19, 2021, 1.5% of loans (loans outstanding as of December 31, 2020; excluding PPP balances) are in payment deferral programs which is down from the second quarter 2020 peak of 14.9%. -- The reserve for unfunded loan commitments increased to $6.4 million at December 31, 2020 compared to the prior quarter at $5.5 million.

Noninterest Income

-- Total noninterest income, excluding securities gains (losses), was $38.0 million for the three months ended December 31, 2020, up $0.3 million from the prior quarter and up $1.9 million from the prior year quarter. -- Service charges on deposit accounts were higher than the prior quarter but lower than the fourth quarter of 2019. Overdraft charges have been lower during the COVID-19 pandemic, recovering from the third quarter of 2020 but continue to run lower than prior year levels. -- ATM and debit card fees were lower compared to the prior quarter due to seasonality and higher compared to the fourth quarter of 2019 due to increased volume and higher per transaction rates. -- Retirement plan administration fees were lower than the prior quarter, as third quarter fees were higher due to seasonal revenues, and higher than the fourth quarter of 2019 due to the April 1, 2020 acquisition of Alliance Benefit Group of Illinois, Inc. (ABG) contributing $1.5 million in revenues during the fourth quarter and $1.7 million during the third quarter. -- The increase in other noninterest income from the prior quarter was driven by higher loan swap fee income partially offset by lower mortgage banking income. The decrease from the fourth quarter of 2019 was driven by lower loan swap fee income and lower mortgage banking income.

Noninterest Expense

-- Total noninterest expense for the fourth quarter of 2020 was up 13.4% from the previous quarter and up 7.0% from the fourth quarter of 2019, primarily due to $4.1 million in branch optimization costs incurred during the fourth quarter of 2020. The branch optimization strategies charged in 2020 are expected to improve future operating expenses by about $2.5 million annually once fully implemented. -- Salaries and benefits increased from the prior quarter due to the timing of medical expenses and increased from the fourth quarter of 2019 driven by the addition of ABGs salaries and benefits. -- Data processing and communication expense were down compared to the fourth quarter of 2019 due to lower transaction volumes as a result of the COVID-19 pandemic. -- Professional fees and outside services were up $1.0 million compared to the prior quarter primarily due to the timing of expenses. -- Equipment expense was higher than both the prior quarter and the fourth quarter of 2019 due to higher technology costs associated with several digital upgrades. -- FDIC expense was higher than the fourth quarter of 2019 due to the benefit of the FDIC insurance assessment small bank credit in the fourth quarter of 2019. -- Other expenses increased compared to both the prior quarter and the fourth quarter of 2019 due to $4.1 million in branch optimization charges and a $0.9 million increase in the reserve for unfunded commitments.

Income Taxes

-- The effective tax rate was 21.6% for the fourth quarter of 2020 compared to 23.8% for the third quarter of 2020 and 22.0% for the fourth quarter of 2019. The full year effective tax rate for 2020 was 21.6% compared to 22.1% for the full year in 2019.

Capital

-- Capital ratios remain strong with tangible common equity to tangible assets1 at 8.41%. Tangible book value per share2 grew 2% from the prior quarter and 8% from the prior year quarter to $20.52. -- December 31, 2020 CET1 capital ratio of 11.84%, leverage ratio of 9.56% and total risk-based capital ratio of 15.62%.

Stock Repurchase Program

-- At a meeting held today, the Board of Directors approved an increase to the total number of shares authorized under the current stock repurchase program to 2 million shares from 1 million shares, previously. There have been 263,507 shares repurchased under the plan. The stock repurchase plan expires on December 31, 2021.

Dividend

-- The Board of Directors approved a first-quarter cash dividend of $0.27 per share at a meeting held today. The dividend will be paid on March 15, 2021 to shareholders of record as of March 1, 2021.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. Eastern Time on Thursday, January 28, 2021, to review fourth 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 $10.9 billion at December 31, 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 141 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 September 30, 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 Subsidiaries Selected Financial Data (unaudited, dollars in thousands except per share data) 2020 2019 4th Q 3rd Q 2nd Q 1st Q 4th Q Profitability: Dilutedearnings per $ 0.78 $ 0.80 $ 0.56 $ 0.23 $ 0.66 shareWeightedaveragediluted common 43,973,971 43,941,953 43,928,344 44,130,324 44,174,201 sharesoutstandingReturn onaverage assets 1.24 % 1.29 % 0.94 % 0.43 % 1.20 % ^3Return onaverage equity 11.59 % 12.09 % 8.76 % 3.69 % 10.36 % ^3Return onaveragetangible 15.71 % 16.51 % 12.14 % 5.24 % 14.28 % common equity^1 3Net interest 3.20 % 3.17 % 3.38 % 3.52 % 3.52 % margin^1 3 12 Months ended December 31, 2020 2019 Profitability: Dilutedearnings per $ 2.37 $ 2.74 shareWeightedaveragediluted common 43,988,623 44,123,698 sharesoutstandingReturn on 0.99 % 1.26 % average assetsReturn on 9.09 % 11.32 % average equityReturn onaveragetangible 12.48 % 15.85 % common equity^1Net interest 3.31 % 3.58 % margin^1 2020 2019 4th Q 3rd Q 2nd Q 1st Q 4th Q Balance sheet data:Securitiesavailable for $ 1,348,698 $ 1,197,925 $ 1,108,443 $ 1,000,980 $ 975,340 saleSecuritiesheld to 616,560 663,088 599,164 621,359 630,074 maturityNet loans 7,388,885 7,446,143 7,514,491 7,147,383 7,063,133 Total assets 10,932,906 10,850,212 10,847,184 9,953,543 9,715,925 Total deposits 9,081,692 8,958,183 8,815,891 7,864,638 7,587,820 Total 406,731 446,737 602,988 714,283 820,682 borrowingsTotal 9,745,288 9,684,101 9,704,532 8,841,364 8,595,528 liabilitiesStockholders' 1,187,618 1,166,111 1,142,652 1,112,179 1,120,397 equity Capital: Equity to 10.86 % 10.75 % 10.53 % 11.17 % 11.53 % assetsTangible 8.41 % 8.27 % 8.04 % 8.55 % 8.84 % equity ratio^1Book value per $ 27.22 $ 26.74 $ 26.20 $ 25.52 $ 25.58 shareTangible bookvalue per $ 20.52 $ 20.02 $ 19.46 $ 18.96 $ 19.03 share^2Leverage ratio 9.56 % 9.48 % 9.44 % 10.02 % 10.33 % Common equitytier 1 capital 11.84 % 11.63 % 11.34 % 10.90 % 11.29 % ratioTier 1 capital 13.09 % 12.88 % 12.60 % 12.14 % 12.56 % ratioTotalrisk-based 15.62 % 15.43 % 15.15 % 13.36 % 13.52 % capital ratioCommon stockprice (end of $ 32.10 $ 26.82 $ 30.06 $ 32.39 $ 40.56 period)Note: Year-to-date EPS may not equal sum of quarters due to differences in outstanding shares.



NBT Bancorp Inc. and Subsidiaries Selected Financial Data (unaudited, dollars in thousands except per share data) 2020 2019 4th Q 3rd Q 2nd Q 1st Q 4th Q Asset quality:Nonaccrual $ 44,647 $ 35,896 $ 25,567 $ 29,972 $ 25,174 loans90 days pastdue and still 3,149 2,579 2,057 2,280 3,717 accruingTotalnonperforming 47,796 38,475 27,624 32,252 28,891 loansOther real 1,458 1,605 1,783 2,384 1,458 estate ownedTotalnonperforming 49,254 40,080 29,407 34,636 30,349 assetsAllowance for 110,000 114,500 113,500 100,000 72,965 loan losses Asset qualityratios (total):Allowance forloan losses 1.47 % 1.51 % 1.49 % 1.38 % 1.02 % to totalloansTotalnonperforming 0.64 % 0.51 % 0.36 % 0.45 % 0.40 % loans tototal loansTotalnonperforming 0.45 % 0.37 % 0.27 % 0.35 % 0.31 % assets tototal assetsAllowance forloan lossesto total 230.14 % 297.60 % 410.87 % 310.06 % 252.55 % nonperformingloansPast dueloans to 0.37 % 0.26 % 0.30 % 0.51 % 0.49 % total loansNetcharge-offs 0.21 % 0.12 % 0.28 % 0.32 % 0.30 % to averageloans^3 Asset quality ratios (excluding paycheck protection program):Allowance forloan losses 1.56 % 1.62 % 1.59 % 1.38 % 1.02 % to totalloansTotalnonperforming 0.68 % 0.55 % 0.39 % 0.45 % 0.40 % loans tototal loansTotalnonperforming 0.47 % 0.39 % 0.28 % 0.35 % 0.31 % assets tototal assetsAllowance forloan lossesto total 230.10 % 297.53 % 410.78 % 310.06 % 252.55 % nonperformingloansPast dueloans to 0.39 % 0.28 % 0.32 % 0.51 % 0.49 % total loansNetcharge-offs 0.22 % 0.13 % 0.30 % 0.32 % 0.30 % to averageloans^3

NBT Bancorp Inc. and Subsidiaries Consolidated Balance Sheets (unaudited, dollars in thousands) December 31, December 31, Assets 2020 2019 Cash and due from banks $ 159,995 $ 170,595 Short-term interest bearing accounts 512,686 46,248 Equity securities, at fair value 30,737 27,771 Securities available for sale, at fair value 1,348,698 975,340 Securities held to maturity (fair value $636,827 616,560 630,074 and $641,262, respectively)Federal Reserve and Federal Home Loan Bank stock 27,353 44,620 Loans held for sale 1,119 11,731 Loans 7,498,885 7,136,098 Less allowance for loan losses 110,000 72,965 Net loans $ 7,388,885 $ 7,063,133 Premises and equipment, net 74,206 75,631 Goodwill 280,541 274,769 Intangible assets, net 11,735 12,020 Bank owned life insurance 186,434 181,748 Other assets 293,957 202,245 Total assets $ 10,932,906 $ 9,715,925 Liabilities and stockholders' equity Demand (noninterest bearing) $ 3,241,123 $ 2,414,383 Savings, NOW and money market 5,207,090 4,312,244 Time 633,479 861,193 Total deposits $ 9,081,692 $ 7,587,820 Short-term borrowings 168,386 655,275 Long-term debt 39,097 64,211 Subordinated debt, net 98,052 - Junior subordinated debt 101,196 101,196 Other liabilities 256,865 187,026 Total liabilities $ 9,745,288 $ 8,595,528 Total stockholders' equity $ 1,187,618 $ 1,120,397 Total liabilities and stockholders' equity $ 10,932,906 $ 9,715,925



NBT Bancorp Inc. and Subsidiaries Consolidated Statements of Income (unaudited, dollars in thousands except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019 Interest, fee and dividend incomeInterest and fees on loans $ 76,863 $ 79,800 $ 307,859 $ 321,474 Securities available for 5,478 5,639 22,434 23,303 saleSecurities held to maturity 3,532 4,213 15,283 19,105 Other 568 924 2,706 3,652 Total interest, fee and $ 86,441 $ 90,576 $ 348,282 $ 367,534 dividend incomeInterest expense Deposits $ 3,887 $ 10,181 $ 22,070 $ 39,986 Short-term borrowings 193 1,707 3,408 9,693 Long-term debt 369 484 1,553 1,875 Subordinated debt 1,339 - 2,842 - Junior subordinated debt 545 1,021 2,731 4,425 Total interest expense $ 6,333 $ 13,393 $ 32,604 $ 55,979 Net interest income $ 80,108 $ 77,183 $ 315,678 $ 311,555 Provision for loan losses (607 ) 6,004 51,134 25,412 Net interest income after $ 80,715 $ 71,179 $ 264,544 $ 286,143 provision for loan lossesNoninterest income Service charges on deposit $ 3,588 $ 4,361 $ 13,201 $ 17,151 accountsATM and debit card fees 6,776 5,935 25,960 23,893 Retirement plan 9,011 7,218 35,851 30,388 administration feesWealth management^4 7,456 7,085 29,247 28,400 Insurance^4 3,454 3,479 14,757 15,770 Bank owned life insurance 1,733 1,236 5,743 5,355 incomeNet securities gains 160 189 (388 ) 4,213 (losses)Other 5,937 6,738 21,905 18,853 Total noninterest income $ 38,115 $ 36,241 $ 146,276 $ 144,023 Noninterest expense Salaries and employee $ 41,016 $ 39,592 $ 161,934 $ 156,867 benefitsOccupancy 5,280 5,653 21,634 22,706 Data processing and 4,157 4,719 16,527 18,318 communicationsProfessional fees and 4,388 4,223 15,082 14,785 outside servicesEquipment 5,395 4,821 19,889 18,583 Office supplies and postage 1,517 1,744 6,138 6,579 FDIC expense 739 - 2,688 1,946 Advertising 827 952 2,288 2,773 Amortization of intangible 822 844 3,395 3,579 assetsLoan collection and other 930 1,436 3,295 4,158 real estate owned, netOther 10,133 6,310 24,863 24,440 Total noninterest expense $ 75,204 $ 70,294 $ 277,733 $ 274,734 Income before income tax $ 43,626 $ 37,126 $ 133,087 $ 155,432 expenseIncome tax expense 9,432 8,166 28,699 34,411 Net income $ 34,194 $ 28,960 $ 104,388 $ 121,021 Earnings Per Share Basic $ 0.78 $ 0.66 $ 2.39 $ 2.76 Diluted $ 0.78 $ 0.66 $ 2.37 $ 2.74



NBT Bancorp Inc. and SubsidiariesQuarterly Consolidated Statements of Income(unaudited, dollars in thousands except per share data) 2020 2019 4th Q 3rd Q 2nd Q 1st Q 4th QInterest, fee and dividend incomeInterest and fees on $ 76,863 $ 74,998 $ 77,270 $ 78,728 $ 79,800loansSecurities available 5,478 5,603 5,600 5,753 5,639for saleSecurities held to 3,532 3,734 3,926 4,091 4,213maturityOther 568 659 650 829 924Total interest, fee and $ 86,441 $ 84,994 $ 87,446 $ 89,401 $ 90,576dividend incomeInterest expense Deposits $ 3,887 $ 4,267 $ 4,812 $ 9,104 $ 10,181Short-term borrowings 193 446 972 1,797 1,707Long-term debt 369 398 393 393 484Subordinated debt 1,339 1,375 128 - -Junior subordinated 545 565 695 926 1,021debtTotal interest expense $ 6,333 $ 7,051 $ 7,000 $ 12,220 $ 13,393Net interest income $ 80,108 $ 77,943 $ 80,446 $ 77,181 $ 77,183Provision for loan (607 ) 3,261 18,840 29,640 6,004lossesNet interest incomeafter provision for $ 80,715 $ 74,682 $ 61,606 $ 47,541 $ 71,179loan lossesNoninterest income Service charges on $ 3,588 $ 3,087 $ 2,529 $ 3,997 $ 4,361deposit accountsATM and debit card fees 6,776 7,194 6,136 5,854 5,935Retirement plan 9,011 9,685 9,214 7,941 7,218administration feesWealth management^4 7,456 7,695 6,823 7,273 7,085Insurance^4 3,454 3,742 3,292 4,269 3,479Bank owned life 1,733 1,255 1,381 1,374 1,236insurance incomeNet securities gains 160 84 180 (812 ) 189(losses)Other 5,937 4,985 5,456 5,527 6,738Total noninterest $ 38,115 $ 37,727 $ 35,011 $ 35,423 $ 36,241incomeNoninterest expense Salaries and employee $ 41,016 $ 40,451 $ 39,717 $ 40,750 $ 39,592benefitsOccupancy 5,280 5,294 5,065 5,995 5,653Data processing and 4,157 4,058 4,079 4,233 4,719communicationsProfessional fees and 4,388 3,394 3,403 3,897 4,223outside servicesEquipment 5,395 5,073 4,779 4,642 4,821Office supplies and 1,517 1,530 1,455 1,636 1,744postageFDIC expense 739 645 993 311 -Advertising 827 530 322 609 952Amortization of 822 856 883 834 844intangible assetsLoan collection andother real estate 930 620 728 1,017 1,436owned, netOther 10,133 3,857 3,916 6,957 6,310Total noninterest $ 75,204 $ 66,308 $ 65,340 $ 70,881 $ 70,294expenseIncome before income $ 43,626 $ 46,101 $ 31,277 $ 12,083 $ 37,126tax expenseIncome tax expense 9,432 10,988 6,564 1,715 8,166Net income $ 34,194 $ 35,113 $ 24,713 $ 10,368 $ 28,960Earnings Per Share Basic $ 0.78 $ 0.80 $ 0.57 $ 0.24 $ 0.66Diluted $ 0.78 $ 0.80 $ 0.56 $ 0.23 $ 0.66

NBT Bancorp Inc. and Subsidiaries Average 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 Q4 - 2020 Q3 - 2020 Q2 - 2020 Q1 - 2020 Q4 - 2019 Assets Short-terminterest $ 552,529 0.11 % $ 477,946 0.11 % $ 380,260 0.10 % $ 74,695 1.28 % $ 51,613 2.43 % bearingaccountsSecuritiesavailable for 1,230,411 1.77 % 1,137,604 1.96 % 985,561 2.29 % 962,527 2.40 % 942,302 2.37 % sale^1 5Securitiesheld to 640,422 2.36 % 621,812 2.56 % 613,899 2.75 % 622,398 2.81 % 651,305 2.73 % maturity^1 5Investment inFRB and FHLB 28,275 5.94 % 29,720 7.08 % 36,604 6.09 % 39,784 5.97 % 37,842 6.37 % BanksLoans^1 6 7,533,953 4.06 % 7,559,218 3.95 % 7,589,032 4.10 % 7,163,114 4.42 % 7,055,288 4.49 % Totalinterest $ 9,985,590 3.46 % $ 9,826,300 3.45 % $ 9,605,356 3.68 % $ 8,862,518 4.07 % $ 8,738,350 4.13 % earningassetsOther assets 954,123 967,194 961,807 885,570 861,909 Total assets $ 10,939,713 $ 10,793,494 $ 10,567,163 $ 9,748,088 $ 9,600,259 Liabilities and stockholders' equityMoney marketdeposit $ 2,455,510 0.27 % $ 2,364,606 0.28 % $ 2,360,407 0.29 % $ 2,101,306 1.00 % $ 2,057,678 1.16 % accountsNOW deposit 1,315,370 0.05 % 1,207,064 0.05 % 1,167,486 0.04 % 1,086,205 0.10 % 1,064,193 0.13 % accountsSavings 1,465,562 0.05 % 1,447,021 0.05 % 1,383,495 0.05 % 1,276,285 0.06 % 1,251,432 0.06 % depositsTime deposits 645,288 1.15 % 684,708 1.31 % 760,803 1.48 % 842,989 1.62 % 853,353 1.69 % Totalinterest $ 5,881,730 0.26 % $ 5,703,399 0.30 % $ 5,672,191 0.34 % $ 5,306,785 0.69 % $ 5,226,656 0.77 % bearingdepositsShort-term 175,597 0.44 % 277,890 0.64 % 427,004 0.92 % 533,516 1.35 % 475,332 1.42 % borrowingsLong-term 59,488 2.47 % 64,137 2.47 % 64,165 2.46 % 64,194 2.46 % 81,613 2.35 % debtSubordinated 97,984 5.44 % 97,934 5.59 % 8,633 5.96 % - - - - debt, netJuniorsubordinated 101,196 2.14 % 101,196 2.22 % 101,196 2.76 % 101,196 3.68 % 101,196 4.00 % debtTotalinterest $ 6,315,995 0.40 % $ 6,244,556 0.45 % $ 6,273,189 0.45 % $ 6,005,691 0.82 % $ 5,884,797 0.90 % bearingliabilitiesDemand 3,178,410 3,111,617 2,887,545 2,398,307 2,406,563 depositsOther 271,206 282,265 271,635 214,495 199,674 liabilitiesStockholders' 1,174,102 1,155,056 1,134,794 1,129,595 1,109,225 equityTotalliabilitiesand $ 10,939,713 $ 10,793,494 $ 10,567,163 $ 9,748,088 $ 9,600,259 stockholders'equity Interest rate 3.06 % 3.00 % 3.23 % 3.25 % 3.23 % spreadNet interestmargin (FTE)^ 3.20 % 3.17 % 3.38 % 3.52 % 3.52 % 1

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 Twelve MonthsEnded 2020 2019 December 31,Assets Short-terminterest $ 372,144 $ 610 0.16 % $ 36,174 $ 773 2.14 % bearingaccountsSecuritiesavailable for 1,079,600 22,434 2.08 % 961,909 23,334 2.43 % sale^1 5Securitiesheld to 624,668 16,363 2.62 % 725,352 20,410 2.81 % maturity^1 5Investment inFRB and FHLB 33,570 2,096 6.24 % 43,385 2,879 6.64 % BanksLoans^1 6 7,461,795 308,080 4.13 % 6,972,438 321,805 4.62 % Totalinterest $ 9,571,777 $ 349,583 3.65 % $ 8,739,258 $ 369,201 4.22 % earningassetsOther assets 942,274 831,954 Total assets $ 10,514,051 $ 9,571,212 Liabilitiesand stockholders'equityMoney marketdeposit $ 2,320,947 $ 10,313 0.44 % $ 1,949,147 $ 22,257 1.14 % accountsNOW deposit 1,194,398 716 0.06 % 1,095,402 1,518 0.14 % accountsSavings 1,393,436 745 0.05 % 1,265,112 733 0.06 % depositsTime deposits 733,073 10,296 1.40 % 910,546 15,478 1.70 % Totalinterest $ 5,641,854 $ 22,070 0.39 % $ 5,220,207 $ 39,986 0.77 % bearingdepositsShort-term 352,809 3,408 0.97 % 573,927 9,693 1.69 % borrowingsLong-term 62,990 1,553 2.47 % 80,528 1,875 2.33 % debtSubordinated 51,394 2,842 5.53 % - - - debt, netJuniorsubordinated 101,196 2,731 2.70 % 101,196 4,425 4.37 % debtTotalinterest $ 6,210,243 $ 32,604 0.53 % $ 5,975,858 $ 55,979 0.94 % bearingliabilitiesDemand 2,895,341 2,351,515 depositsOther 259,992 174,891 liabilitiesStockholders' 1,148,475 1,068,948 equityTotalliabilitiesand $ 10,514,051 $ 9,571,212 stockholders'equityNet interestincome (FTE)^ $ 316,979 $ 313,222 1Interest rate 3.12 % 3.28 % spreadNet interestmargin (FTE)^ 3.31 % 3.58 % 1Taxableequivalent $ 1,301 $ 1,667 adjustmentNet interest $ 315,678 $ 311,555 income



NBT Bancorp Inc. and Subsidiaries Consolidated Loan Balances (unaudited, dollars in thousands) The following table presents loans by line of business, paycheck protectionprogram loans includes $6.9 million, $11.3 million and $14.6 million in unamortized fees as of December 31, 2020 September 30, 2020 and June 30, 2020respectively. 2020 2019 4th Q 3rd Q 2nd Q 1st Q 4th Q Commercial $ 1,267,679 $ 1,297,408 $ 1,318,806 $ 1,338,609 $ 1,302,209 Commercial 2,380,358 2,281,843 2,256,580 2,242,139 2,142,057 real estatePaycheckprotection 430,810 514,558 510,097 - - programResidentialreal estate 1,466,662 1,448,530 1,460,058 1,446,676 1,445,156 mortgagesIndirect auto 931,286 989,369 1,091,889 1,184,888 1,193,635 Specialty 579,644 566,973 515,618 539,378 542,063 lendingHome equity 387,974 404,346 415,528 431,536 444,082 Other consumer 54,472 57,616 59,415 64,157 66,896 Total $ 7,498,885 $ 7,560,643 $ 7,627,991 $ 7,247,383 $ 7,136,098 loans The following table provide loans as a percentage of total loans in industries vulnerable to the COVID-19 pandemic as of December 31, 2020: Industry % of Total LoansAccommodations 2.5% Healthcareservices and 2.2% practicesRestaurantsand 1.8% entertainmentRetailers 1.7% Automotive 1.3% Total 9.5% Allowance for Loan Losses as a Percentage of Loans by Segment^ 7: Incurred CECL 12/31 12/31/2019 1/1/2020 3/31/2020 6/30/2020* 9/30/2020* / 2020*Commercial & 0.96% 0.98% 1.43% 1.25% 1.34% 1.47% industrialCommercial 1.02% 0.74% 1.10% 1.56% 1.57% 1.43% real estatePaycheckprotection 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% programResidential 0.27% 0.83% 0.99% 1.13% 1.21% 1.07% real estateAuto 0.83% 0.78% 1.08% 0.99% 0.92% 0.93% Other consumer 3.74% 3.66% 4.00% 5.01% 4.66% 4.55% Total 1.02% 1.07% 1.38% 1.49% 1.51% 1.47% * Excluding PPP loans and related allowance, total allowance to loans was1.59%, 1.62% and 1.56% as of June 30, 2020, September 30, 2020 and December 31, 2020 respectively.

^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") 4th Q 3rd Q 2nd Q 1st Q 4th Q Income before income tax $ 43,626 $ 46,101 $ 31,277 $ 12,083 $ 37,126 expense FTE 318 325 329 329 349 adjustment Provision for (607 ) 3,261 18,840 29,640 6,004 loan losses Net securities (160 ) (84 ) (180 ) 812 (189 ) (gains) losses Nonrecurring 4,100 - 650 - - expense Unfunded loan commitments 900 - (200 ) 2,000 - reserve PPNR $ 48,177 $ 49,603 $ 50,716 $ 44,864 $ 43,290 Average $ 10,939,713 $ 10,793,494 $ 10,567,163 $ 9,748,088 $ 9,600,259 Assets Return on Average 1.24 % 1.29 % 0.94 % 0.43 % 1.20 % Assets^3 PPNR Return on Average 1.75 % 1.83 % 1.93 % 1.85 % 1.79 % Assets^3 12 Months ended December 31, 2020 2019 Income before income tax $ 133,087 $ 155,432 expense FTE 1,301 1,667 adjustment Provision for 51,134 25,412 loan losses Net securities 388 (4,213 ) (gains) losses Nonrecurring 4,750 3,800 expense Unfunded loan commitments 2,700 - reserve PPNR $ 193,360 $ 182,098 Average $ 10,514,051 $ 9,571,212 Assets Return on Average 0.99 % 1.26 % Assets PPNR Return on Average 1.84 % 1.90 % 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 4th Q 3rd Q 2nd Q 1st Q 4th Q Net interest $ 80,108 $ 77,943 $ 80,446 $ 77,181 $ 77,183 income Add: FTE 318 325 329 329 349 adjustment Net interest $ 80,426 $ 78,268 $ 80,775 $ 77,510 $ 77,532 income (FTE) Average earning $ 9,985,590 $ 9,826,300 $ 9,605,356 $ 8,862,518 $ 8,738,350 assets Net interest margin (FTE)^ 3.20 % 3.17 % 3.38 % 3.52 % 3.52 % 3 12 Months ended December 31, 2020 2019 Net interest $ 315,678 $ 311,555 income Add: FTE 1,301 1,667 adjustment Net interest $ 316,979 $ 313,222 income (FTE) Average earning $ 9,571,777 $ 8,739,258 assets Net interest 3.31 % 3.58 % 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%.

^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) Tangible equity to 2020 2019 tangible assets 4th Q 3rd Q 2nd Q 1st Q 4th Q Total equity $ 1,187,618 $ 1,166,111 $ 1,142,652 $ 1,112,179 $ 1,120,397 Intangible 292,276 293,098 293,954 285,955 286,789 assets Total assets $ 10,932,906 $ 10,850,212 $ 10,847,184 $ 9,953,543 $ 9,715,925 Tangible equity to 8.41 % 8.27 % 8.04 % 8.55 % 8.84 % tangible assets Return on average 2020 2019 tangible common equity 4th Q 3rd Q 2nd Q 1st Q 4th Q Net income $ 34,194 $ 35,113 $ 24,713 $ 10,368 $ 28,960 Amortization of intangible 617 642 662 626 633 assets (net of tax) Net income, excluding $ 34,811 $ 35,755 $ 25,375 $ 10,994 $ 29,593 intangibles amortization Average stockholders' $ 1,174,102 $ 1,155,056 $ 1,134,794 $ 1,129,595 $ 1,109,225 equity Less: average goodwill and 292,725 293,572 294,423 286,400 287,268 other intangibles Average tangible $ 881,377 $ 861,484 $ 840,371 $ 843,195 $ 821,957 common equity Return on average tangible 15.71 % 16.51 % 12.14 % 5.24 % 14.28 % common equity ^3 12 Months ended December 31, 2020 2019 Net income $ 104,388 $ 121,021 Amortization of intangible 2,546 2,684 assets (net of tax) Net income, excluding $ 106,934 $ 123,705 intangibles amortization Average stockholders' $ 1,148,475 $ 1,068,948 equity Less: average goodwill and 291,787 288,539 other intangibles Average tangible $ 856,688 $ 780,409 common equity Return on average 12.48 % 15.85 % tangible common equity ^2 Non-GAAP measure - Stockholders' equity less goodwill and intangible assets divided by common shares outstanding.^3 Annualized. 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.