Nbt Bancorp Inc. · NASDAQ:NBTB
Nbt Bancorp — Investor Presentation (January 2022)
44 slides from Nbt Bancorp's investor presentation, January 2022
Slide 1: NBT Bancorp Inc. Investor Presentation Fourth Quarter 2021
NBT Bancorp Inc. Investor Presentation Fourth Quarter 2021
Slide 2: Overview
Overview About NBT Bancorp Strategic Initiatives Financial Performance Appendix 2
Slide 3: Company Profile
Company Profile Financial Highlights Company Overview 99th Largest Bank Holding Co. Assets: $12.0bn Headquarters Norwich, NY Founded 1856 Ticker NASDAQ: NBTB Gross Loans: $7.5bn Market Cap(3) $1.67 billion Branches 140 Employees 1,781 Deposits: $10.2bn Institutional Ownership 56% 3 Mo. ADTV 115,800
Slide 4: Key Highlights
Key Highlights High-performing, community-focused bank that’s large enough to matter but small enough to remain nimble Consistent track record of organic growth selectively balanced with market and product expanding acquisitions Low-cost, core deposits with dominant shares in “Hometown” markets that
Slide 5: Market Detail
Market Detail Core Markets (1) Expansion Markets (2) Central, Eastern and Upstate NY and Northeastern PA New England De Novo Dynamic markets with attractive demographics present a runway NBTB holds significant market share in core / hometown markets for growth − Approximately 41% of deposits are
Slide 6: Overview
Overview About NBT Bancorp Strategic Initiatives Financial Performance Appendix 6
Slide 7: Our Strategic Initiatives
Our Strategic Initiatives • New England Expansion Execute on Long-Term • Leverage Market Disruption 1 Growth Strategy • Organic Growth • Disciplined Acquisitions • Continue Growth in Retirement Plan Grow and Augment Administration, Wealth Management and 2 Our Fee Businesses Insurance Businesses • En
Slide 8: New England Expansion
1 New England Expansion Why New England? Banking Environment Market Dynamics(1) Market disruption Favorable unemployment creates opportunities Higher number of Larger financial businesses per county institutions dominate market share Higher population density Opening for locally- focused
Slide 9: New England: 12 Years of Growth
1 New England: 12 Years of Growth Year-Over-Year Growth $2.0 Total Loans 12% Loan Growth Billion 23% Growth in Deposits $658 Deposits $28 Growth in Assets Under Management and Administration Million Million Local Talent with Deep Market Knowledge $883 Assets Under Management Million and Administrati
Slide 10: Disciplined Acquirer and Proven Integrator
1 Disciplined Acquirer and Proven Integrator Completed 7 whole-bank, 7 branch and 8 fee High retention rates in loans and deposits with income business acquisitions since 2000 bank and branch deals and subsequent growth Successful integration of systems Non-bank acquisitions diversify revenu
Slide 11: Focus on Fee-Based Businesses
2 Focus on Fee-Based Businesses Q4 2021 Fee Income Composition (1) (%) Key Fee Revenue Verticals Over Time (2) ($million) $90 $80 $74 $14 Wealth Management Fees $71 21.0% $63 $15 Insurance $59 $16 Services $15 8.2% $34 BOLI $15 4.0% $17 $29 $29 $28 Retirement Plan Administration Fees Other $28 28.7%
Slide 12: EPIC Retirement Plan Services
2 EPIC Retirement Plan Services Revenues ($000s) Customized Consulting, Recordkeeping, Actuarial and $43,586 Administrative Services for All Types of Retirement Plans $37,180 Deep Partnerships with Clients Across 50 States, Including Retirement Plan Advisors, Banks and TPAs $31,607 $28,272 Proprieta
Slide 13: Digital Evolution
3 Digital Evolution NBT operates with a customer-first digital mindset. Infrastructure − Virtualization and • Informed by data Cloud Environment • Embedded in our culture − Enhanced Resiliency and Cybersecurity • Focused on agility and innovation − Agile and Scalable Core Systems • Driven by our bus
Slide 14: Digital Evolution
Digital Evolution Our comprehensive rolling 3-year technology roadmap calls for continuous capital investment for the implementation of market-leading platforms across multiple business lines that will further enhance and transform the experience NBT delivers. Baker Hill Cognos FIS Workday ® Human A
Slide 15: Digital Adoption Rates
3 Digital Adoption Rates 64% INCREASE IN 84% INCREASE IN 139% INCREASE IN 57% INCREASE IN CONSUMER DIGITAL MOBILE WALLETS MOBILE DOLLARS MOBILE ITEMS ADOPTION DEPOSITED DEPOSITED 51% INCREASE IN 22% INCREASE IN 7% INCREASE IN 25% DECREASE IN SELF-SERVICE ATM DEPOSITS DEBIT CARD SWIPES BRANCH TRANSAC
Slide 16: Overview
Overview About NBT Bancorp Strategic Initiatives Financial Performance Appendix 16
Slide 17: Track Record of Consistent Growth
Track Record of Consistent Growth Total Assets ($billion) Gross Loans ($billion) $12.0 $10.9 $9.6 $9.7 $8.9 $9.1 $7.5 $7.5 $8.3 $6.9 $7.1 $7.8 $6.6 $5.9 $6.2 $5.6 2014 2015 2016 2017 2018 2019 2020 2021 2014 2015 2016 2017 2018 2019 2020 2021 Shareholders Equity ($billion) Deposits ($billion) $1.3 $
Slide 18: Strong & Stable Profitability
Strong & Stable Profitability Pre-Provision Net Revenue ROAA(1) (%) Net Interest Margin FTE (%) 1.90% 1.86% 1.84% 1.78% 3.61% 3.58% 3.58% 1.73% 1.72% 3.50% 1.68% 1.68% 3.47% 3.43% 3.31% 3.03% 2014 2015 2016 2017 2018 2019 2020 2021 2014 2015 2016 2017 2018 2019 2020 2021 Fee Income(1) ($million) Adj
Slide 19: Q4 2021 Results Overview
Q4 2021 Results Overview Financial Highlights Change % Change Quarterly Highlights1 ($ in millions except per share data) Q4 2021 Q3 2021 Q4 2020 Q3 2021 Q4 2020 Period End Balance Sheet Balance Sheet Total loans $ 7,498.5 $ (68.0) $ (0.4) (0.9%) -% Total loans, excluding PPP 7,397.2 107.0 329.2 1.5
Slide 20: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin Net Interest Income ($ in millions) & Net Interest Margin (%) Quarterly Highlights1 $90.0 3.60% $85.5 Net interest income increased $7.5 million $80.0 3.40% $80.4 to $85.5 million $79.4 $79.5 $78.0 $70.0 3.20% PPP income increased $4.7 million 3.20% 3.17
Slide 21: Noninterest Income
Noninterest Income Noninterest Income Trend1 ($ in millions) Quarterly Highlights2 $40.0 Noninterest income to total revenue was $35.0 $11.7 $11.8 $11.3 32.6%1 $10.4 $9.9 $30.0 $41.1 million1 in noninterest income, up $25.0 $0.7 million $9.0 $9.8 $10.5 $11.8 $10.1 $20.0 Retail banking fees (se
Slide 22: Noninterest Expense
Noninterest Expense Noninterest Expense Trend ($ in millions) Quarterly Highlights2 $80.0 Noninterest expense of $75.1 million $70.0 Up $2.2 million (3.1%) $60.0 Salaries & Benefits consistent with Q3 2021 $44.1 $50.0 $41.0 $44.2 $41.6 $42.7 Occupancy expense increased driven by $40.0 season
Slide 23: Asset Quality
Asset Quality Nonperforming Loans / Loans (%) 1.20% NBTB’s 10-year average ratio 1.00% 0.98% of Nonperforming Loans / Loans is 33 basis points lower than 10-year 0.82% average of peer median 0.80% 0.68% 0.65% 0.60% 0.44% 0.44% 0.40% 0.20% 0.00% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Asset
Slide 24: Capital Strength
Capital Strength 16% 15.62% 15.73% 13% 13.52% 12.42% 12.78% 10% 10.33% 9.52% 9.56% 9.41% 9.14% 8.84% 8.41% 8.20% 7% 7.64% 7.85% 4% 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 Total Capital Ratio Tier 1 Leverage Ratio Tangible Equity/Tangible Assets Note: Refer to appendix for reconciliati
Slide 25: Loans
Loans Portfolio Highlights(1) Total Loans: $7.5 billion(1) Loans, excluding PPP, were up $329 million from Indirect Auto Q4 2020 or 4.7% 12% Specialty Lending 10% Non-Owner Occupied CRE at 154% to Total Capital Home Equity Residential Real 4% Loan-to-Deposit Ratio of 73% Estate 21% Other Consu
Slide 26: Deposits
Deposits Total Deposits: $10.2 billion1 Quarterly Highlights2 Cost of total deposits of 0.08% down Time 5% 2 bps Demand Cost of interest-bearing deposits was (noninterest bearing) 0.13%, down 3 bps or 19% 36% Savings, Period end deposits increased $39 million NOW and Money Core deposits grew
Slide 27: Commercial Loan Portfolio Detail
Commercial Loan Portfolio Detail Owner Occupied CRE ($0.5 billion)1 Commercial & Industrial ($1.5 billion)1 Rental Real Manufacturing All Other Estate Construction Wholesalers Industries Trade Construction 7.4% 9.7% 6.2% 16.4% 7.1% Trade Medical 9.4% 6.5% Accommodations Wholesalers 0.8% Restaurants
Slide 28: Consumer & Residential Portfolio Detail
Consumer & Residential Portfolio Detail Consumer Lending Portfolio: $3.6 billion as of 12/31/21 Direct Consumer 1% Home Equity 9% Resi Real Estate 44% Specialty Lending 22% Indirect Auto 24% As of 12/31/2021 Consumer Lending Portfolio Metrics Total wAve Outstandings # of Avg. Max Avg. Category ($000
Slide 29: Asset Quality
Asset Quality Net Charge-Offs Nonperforming Loans1 $6,000 1.00% $50,000 $47,796 1.00% $45,554 $43,125 $4,500 $4,097 0.75% $38,677 $3,893 $40,000 0.80% 0.68%3 0.64%3 $32,743 0.60%3 $3,000 0.50% $30,000 0.53%3 0.60% $2,204 $2,158 0.64% 0.60% 0.44%3 0.22%3 0.57% $1,284 0.22%3 0.51% $1,500 0.13%3 0.25%
Slide 30: History of Prudent Credit Culture
History of Prudent Credit Culture 15-Year Cumulative NCOs / Avg. Loans vs. Banking Industry (%) CRE / Total Loans(1) (%) Financial Crisis 2.67% 2.67% CRE / Total Holding 154% 225% 224% Company Capital (1) (%) 37.80% 34.90% 1.64% 26.50% 1.34% 1.12% 0.77% 0.70% 0.69% 0.70% 0.62% 0.64% 0.56% 0.55% 0.49
Slide 31: Overview
Overview About NBT Bancorp Strategic Initiatives Financial Performance Appendix 31
Slide 32: Commitment to ESG Principles
Commitment to ESG Principles NBT’s Board of Directors recognizes the importance of Environmental, Social and Governance (ESG) principals to NBT’s stakeholders, including stockholders, customers, communities and employees. BOARD COMMITMENTS Oversight of ESG matters at Board level and active participa
Slide 33: Corporate Social Responsibility
Corporate Social Responsibility The highlights featured in this graphic depict some of the many ways the Company and our people are focused on what matters. ABOUT NBT BANCORP | STRATEGIC INITIATIVES | FINANCIAL PERFORMANCE | APPENDIX 33
Slide 34: Performance to Peer Group
Performance to Peer Group December 31, 2021 Performance Peer Peer Ratios % NBTB Median Average PPNR ROA (1) 1.68% 1.48% 1.50% Core ROAE (1)(2) 13.14% 10.22% 11.24% Core ROATCE (1)(2) 17.26% 14.79% 15.83% Net Interest Margin (1) 3.03% 3.02% 3.03% Fee Income / Revenue(3) 32.87% 22.30% 22.47% Loans / D
Slide 35: Paycheck Protection Program
Paycheck Protection Program Dollars in Thousands Q1 2021 Q2 2021 Q3 2021 Q4 2021 $ of Loans Originated 797,747 835,535 835,535 835,535 # of Loans Originated 5,492 6,060 6,060 6,060 Avg Originated Balance 145 138 138 138 Current Balance 536,494 359,738 276,195 101,222 Cumulative Forgiveness % 26% 52%
Slide 36: CECL
CECL Reserves/Loans by Segment Loan Type 1/1/2020 12/31/2020 3/31/2021 6/30/2021 9/30/2021 12/31/2021 Commercial & Industrial 0.98% 1.34% 1.20% 1.11% 0.83% 0.78% Paycheck Protection Program 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% Commercial Real Estate 0.74% 1.49% 1.48% 1.26% 0.93% 0.78% Residential Rea
Slide 37: Interest Rate & Liquidity Risk
Interest Rate & Liquidity Risk Interest Rate Risk Position1 Loan & Deposit Mix1 Loan portfolio: − 61% Fixed / 39% Adjustable/Floating Loans Deposits Deposit repricing information: − $121 million CDs re-price in Q1 2022 Time Offsets to low-rate environment: $761 million adjustable/floating 5% l
Slide 38: Peer Group
Peer Group Name Head Quarter City State Ticker Berkshire Hills Bancorp, Inc. Boston MA BHLB Brookline Bancorp Inc. Boston MA BRKL First Busey Corporation Champaign IL BUSE Community Bank System, Inc. Dewitt NY CBU Customers Bancorp, Inc. Wyomissing PA CUBI First Commonwealth Financial Corporation In
Slide 39: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Dollars in Thousands) 2021 2020 2019 2018 2017 2016 2015 2014 Net Income $ 154,885 $ 104,388 $ 121,021 $ 112,566 $ 82,151 $ 78,409 $ 76,425 $ 75,074 Income Tax Expense 44,973 28,699 34,411 24,436 46,010 40,392 40,203 37,229 Provision Expense (8,257) 51,134 25,412
Slide 40: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Dollars in Thousands) Q4 2021 Q3 2021 Q4 2020 Net Income $ 37,310 $ 37,433 $ 34,194 Income Tax Expense 10,780 11,043 9,432 Provision Expense 3,097 (3,342) (607) FTE Adjustment 292 298 318 Net Securities Losses (Gains) 2 100 (160) Provision for Unfunded Loan Commi
Slide 41: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Dollars in Thousands) 2021 2020 2019 2018 2017 2016 2015 2014 Net Interest Income $ 321,088 $ 315,678 $ 311,555 $ 305,629 $ 283,493 $ 264,441 $ 252,608 $ 251,878 FTE Adjustment 1,191 1,301 1,667 2,007 3,799 3,549 3,292 3,432 Net Interest Income Tax Equivalent $ 3
Slide 42: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Dollars in Thousands, Except Per Share Data) Q4 2021 Q3 2021 Q4 2020 2020 2019 2018 2017 Net Income $ 37,310 $ 37,433 $ 34,194 Amortization of Intangible Assets (Net of Tax) 488 497 617 Net Income, Excluding Intangibles Amortization $ 37,798 $ 37,930 $ 34,811 Ave
Slide 43: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Dollars in Thousands) 2021 Net Income $ 154,885 Securities Gain (Net of Tax)(1) (447) Amortization of Intangibles (Net of Tax)(1) 2,218 Nonrecurring expense (Net of Tax)(1) 3,490 Core Net Income(2) $ 160,146 Average Stockholders’ Equity $ 1,218,449 Average Tangib
Slide 44: Forward-Looking Statements
Forward-Looking Statements This presentation 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,” “