Nbt Bancorp Inc. · NASDAQ:NBTB
Nbt Bancorp — Debt Investor Presentation (June 2020)
42 slides from Nbt Bancorp's debt investor presentation, Jun 16, 2020
Slide 1: NBT Bancorp Inc. June 2020 Investor Deck
NBT Bancorp Inc. June 2020 Investor Deck
Slide 2: Speakers & Key Management
Speakers & Key Management John Watt President, CEO & Director Amy Wiles EVP & Ch Risk Officer f Credit & Has 34 years of experience in franca services + eines NBT Bank in 2014 folowing he sale of ‘tance Financ Carporaton to NBT Prayed a leaderhp len NET skategic ‘expansion n New England, estan 8 reg
Slide 3: Overview
Overview About NBT Bancorp Strategic Initiatives Financial Performance & Credit Appendix
Slide 4: Preliminary Term Sheet
Preliminary Term Sheet Issuer: NBT Bancorp Inc. (NASDAQ: NBTB) ‘Security Offered: Holding Company Fixed-to-Floating Rate Subordinated Debt Due 2030, Rating BBB Kroll Bond Rating Agency SEC Registered Term: 10 Years Call Date: 5 Years General corporate purposes and investments in NBT Bank, National A
Slide 5: Company Profile
Company Profile Financial Highlights Company Overview . ua mean ~ Burlington — 2 we [NASOAG:NSTS_ vow roo Lene #73b0 = et ssany Rigg = y a am . A co mas Son ers be .. ‘EPIC AUAM: $18: raiman Martin Dietnich BI (MRQ PPNR ROAA: 1.84% ss swoon PA 2: a ines Busine Pittsburgh Lines of Business COMMERCIAL
Slide 6: Key Highlights
Key Highlights High performing, community-focused bank that’s large enough to matter but small enough to remain nimble i yy Consistent track record of organic growth selectively balanced with bolt-on and bite-sized acquisitions Low cost, sticky, core deposits with dominant shares in “Hometown” marke
Slide 7: Market Detail
Market Deta Conta, Eats ‘+ NBTB holds signifeant marketshare in core /pometown markets ~ Approximately 50% of deposits are located in counties where [NBTB has at east a 20% marketshare ~ 97.1% of deposits come rom counties where NTE hal atop 10vank ~ Approximately 75% of depois come from counties wh
Slide 8: COVID-19 Response
COVID-19 Response * Inesponse to the COVID-19 pandemic, NBTB immediately created an Executive Task Force and engaged its established Incident Response Team under its Business Continuity Plan to execute a comprehensive pandemic response plan. ‘© NBTB has taken significant to address the needs of our
Slide 9: Overview
Overview About NBT Bancorp Strategic Initiatives Financial Performance & Credit Appendix
Slide 10: Our Strategic Initiatives
Our Strategic Initiatives CONTINUE OUR EXISTING GROWTH STRATEGY * Disciplined Acquisitions CONTINUE TO AUGMENT OUR FEE BUSINESSES Continue Growth in Insurance and Wealth Management Businesses CONTINUING OUR TRANSFORMATIVE DIGITAL EVOLUTION = "= Enhance Employee and Customer Experience Though Our Dig
Slide 11: New England Expansion
New England Expansion oO) Why New England? Banking Environment Market Dynamics" * Larger tnaneainsttwons © Lower unemployment ‘omnate markt shore 1 Higher number of businesses = Market csruption creates porcounty pperunsies Higher population density * Opening for local focused bank with arg lending
Slide 12: Disciplined Acquirer and Proven Integrator
Disciplined Acquirer and Proven Integrator © = Completed 7 whole-bank, 7 branch and 8 fee income * High retention rates in loans and deposits with bank and business acquisitions since 2000 branch deals, * Achieved or exceeded targeted cost saves Successful integration of systems. Retained key person
Slide 13: Focus on Fee-Based Businesses
Focus on Fee-Based Businesses © 1 2020 Fee Income Composition \ (%) Key Fee Revenue Verticals Over Time ® ($m) ws ama” ams "zoe monroe” 2018 ‘Retrement Plan Admin. Fees. Wealth Management. «Insurance setzuition 1] upzancompareate || "iar tevene'® a Noni toveat was compare to ‘peer median at 22% ‘nee
Slide 14: Digital Evolution
Digital Evolution © NOT operates vith a eustomersiret digital mindset, Infrastructure = Enhanced Resileney and Cybersecunty = Aale and Scalabie Core Systoms Operational Eticiencies = Robotic Process Automation + Embedded nour cuture + Focused on agit and innovation + Driven by our business lines and
Slide 15: Overview
Overview About NBT Bancorp Strategic Initiatives Financial Performance & Credit Appendix
Slide 16: Track Record of Consistent Growth
Track Record of Consistent Growth Total Assets (Sbn) Gross Loans ($bn) Fee Income ( ($mm) Deposits (sbn)
Slide 17: Strong and Stable Profitability
Strong and Stable Profitability FTE Pre Provision Net Revenue ROAA (%) FTE Pre Provision Net Revenue ROAE (%) Net Interest Margin FTE (%) Efficiency Ratio (%)
Slide 18: Financial Highlights
Financial Highlights Netincome sto4 $201 siat0 si26 amings Per Share 3023 3066 sam $256 OKA 043% 1208 120% 120% ROATCE 629% 16.25% 1587% Net nares Margin 352% 3.54%, 358% 350% ‘Tangible Book Value Per share $18.96 i702 $19.09 $18.66 “Tangible Common Equly to Tangible Aus 8SO 00% eae 785% Tangible Bo
Slide 19: Strong Asset Quality
Strong Asset Quality Net Charge-offs Nonperforming Loans" $7000 $57 gaa ce smo Tg, s2agor cs son ssace $5890 25000 ox an 20 $4000 _ oy 15000 ow i a s10000 _ 1000 8000 me cargos ($00), -@-NOOW Aa Loan) sm oneteming Leas $000) ~O-NPLs Lens) Nonperforming Assets Loan Loss Reserves $0000 urs 0% sroo0 1
Slide 20: History of Prudent Credit Culture
History of Prudent Credit Culture 18-year Cumulative NCOs / Avg. Loans vs. Banking Industry (%) CRE / Total Loans (%) Financial Crisis 2am 207% core rtaacies) (166% 253% ) ners Bonwng iauay 267% 2008Y INANCIAL PERFORMANCE & CREDIT
Slide 21: Capital Strength
Capital Strength _ “ HoldCo Total 13% 12.4% 12.4% Louis) eid 10.9% - _ = $s = , INANCIAL PERFORMANCE & CREDIT
Slide 22: Low Cost Deposit Franchise
Low Cost Deposit Franchise Total Deposits: $7.90n Cost of Deposits (%) / Total Deposits (Sbn) erie a2te ase nse "arte" arte" a3 ane” a120 ‘Souce: HP ial tat aan &congany cunts ee Copeman Saag Sch att "Cov spn ues septs es tine ena SP Gal Mat igs a; Meaningful noninterest bearing deposit growth = 201
Slide 23: Interest Rate & Liquidity Risk
Interest Rate & Liquidity Risk + Loan Portis = 509% Fixed /41% AdFoating Loans Deposits + Deposit Repiing information: “= $85-$80mm CDs re-price each quater through 4 = Exception priced MDA rates reduced in Marchand eri 1+ Offsets to Low Rate Environment: $8 10mm foating/adustale loans with floors &
Slide 24: Diversified Loan Portfolio
Diversified Loan Portfolio Total Loans: $7.2bn Indes to ea ee voce Home Eauty on Gv tae <seausral a ‘i ‘owner oecuped cee on Owne os ovauped ORE Yield on Loans (%)! Total Loans (sbn) tositcam oa yaontemes) gny 2 sos shoes Souce: HP Gihaltatt aan &corgany cura: at he que aed 3320 a ;i © 119-0120 Loan
Slide 25: Commercial Loan Portfolio
Commercial Loan Portfolio (Owner Occupied GRE ($580 million)” Detail Commercial and Industral ($1.3 billion)" Non-Owner Occupied CRE ($1.7 billion)" + 19% atone & C-Store + 18% Grocery stoves & Pramades PERFORMANCE & CRE!
Slide 26: Consumer & Residential Portfolio Detail
Consumer & Residential Portfolio Detai' ‘Consumer Lending Portfolio: $3.7 billion as of 3/31/20 Ovrect Consumer Home Equity we ResiRest ‘state oe Speciaty tending 13% Res Real Exate ——S1446676 11,729 129405 75898 Tnavet Ate Suisse 75535 i587 750~—~—«90 “Specialy tending __-Se00878 33529 «$16.83 742
Slide 27: Payment Deferrals
Payment Deferrals Bank Wide Deferrals as of 6/18/2020 Deferred Portion / Total Loan Portfolio Balance as of 4/30/20") ‘anking 1% ' shown in 0008 saazes80 $1. 1bn mania $1,758,576 Home Lenard) sera ae SS Pending Datrtts or Tota at ‘etoastaning sence "OS pa ts = <== lll os mew 0 == = Es INANCIAL PERFO
Slide 28: Sectors with Escalated Monitoring
Sectors with Escalated Monitoring
Slide 29: Consistent Profitability Backed by Strong and Diversified Balance Sheet
Consistent Profitability Backed by Strong and Diversified Balance Sheet PPNR Profitability, Capital, Reserves 1 Stong PPNR ROAA (1.84% in 202001) to suppor capital generation and absorb any potential loan losses * Diversted fee income sources ttom niche businesses wth recuing revenue steams (202001
Slide 30: Overview
Overview About NBT Bancorp Strategic Initiatives Financial Performance & Credit Appendix
Slide 31: Credit Rating Profile
Credit Rating Profile Kroll Ratings as of 6/10/2020 Kroll Bond Rating Agency (‘KBRA") Credit Profile Entity/ Type Rating Outlook NBT Bancorp ine ‘Senior Unsecured Debt BBB+ Stable Subordinated Debt Bee, Stable Shor-Term Debt Ka NA [NBT Bank, National Association ‘Senior Unsecured Debt a Stable ‘Subo
Slide 32: Historical Interest Coverage & Double Leverage
Historical Interest Coverage & Double Leverage Sarin Beis Copa DATE Sag aes pina ae Laan Sn EON T a CE ZEA) vere een Ee nae ed as aaa TT Tae Goren Gx DS awn EI ATE Se a ee srw Govengs ir Deputies gt) 0/0 ee (3Sonunen capo a0 tobe ator tance Ratan
Slide 33: Securities Portfolio Detail
ies Portfolio Detail High Quality, Liquid Securities Portfolio - $1.6bn at Fair Value PORTEOLIO COMPOSITION: ‘cov-sponsored ew atte MI tower ctee os US. Gov.agenay Cotateratized Mortgage Obigtions: 46% 16% | ‘State & Municipal: 11% Ww... ‘secures * (Sin Thousand) ‘ost ‘enns owes ate ‘aloe Gov-ponsra
Slide 34: CECL Implementation
CECL Implementation toan tee sansn019 ‘Commanial Real Exats 102% ‘euaontal Real Eaaie 027% sa 2507 100900 — seas soa s75990 sees Ee ses pq Reeve mize ey ® © ea Rese Toiaew ar fece Proven Expense chareots Restores “Suva Adjustment
Slide 35: Performance to Peer Group
Performance to Peer Group Performance Ratios PENRROAA 1.88% 159% 1.53% (ore ROAE 419% 359% 445% (Core ROATCE” 5.53% 8.08% 654% Net hierest Margin 352% 3.50% 3.33% Fee come / Revenue ™ 31.9% 22.1% 21.0% Bificency Ratio 58.8% 58.7% 60.1% Loans / Deposits 22% 47% 67% Market Ratios” Current Market Pice(
Slide 36: Payroll Protection Program
Payroll Protection Program * 2,950 total approved PPP Loans for a total of $541 million through May 18, 2020 * Average loan 2,960 Total Approved PPP Loans") '$541mm Approved PPP Loans‘) # of PPP Loans by Loan Size ‘Sof PPP Loans by Loan Size ‘Séeme of $184,000 sone SSom "aoe sop Snes Spam 73040 Seog
Slide 37: Peer Group
Peer Group Name State Ticker Berkshire Hills Bancorp, In. MA BHLB. Brookline Bancorp, Inc. MA BRKL First Busey Corporation ‘Champaign i BUSE Community Bank System, Inc. Dewitt Ny cau Customers Bancorp, Inc. Wyomissing PA cusi First Commonwealth Financial Corporation Indiana PA FCF First Financial Ba
Slide 38: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures $121,021 $76,425 son7a7 Income Tax Expense seal 2449648010 40302-40208 7.22028, 108 Provision Expense 2542 73808 30.888 BAST 18 285 «1899 aaa FTE Adjustment seer 200737903840 3.202 ask 85 ‘Secures Loss (Gain) (4213) watt (4.867) 644 (3087) (2) (1426) Unfunded Loan
Slide 39: Reconciliation of Non-GAAP Measures
ation of Non-GAAP Measures Reconci ‘Net Interest Income S77181 $7768 $311555 $905629 $289403 $264441 $252,608 $251,878 $238,079. Tex-equvalent Adjustment Ea soo seer 2007370035202 ‘Net interest income Tax Equivalent S77510 $7801 _$319222 $907,696 $287,292 $267,900 $255,000 $255,810 $241,864 ‘Average
Slide 40: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures '$70.881 (2.000) - E . 7 . . . ; ) 157 (2) 230 ca er 1337 459 1,106 em) (268) 579) (4.042) 980) 828) 48H) 50H7) (4.872) 2 = 800) : 2865) 77) (18,206) (13,120) Operating Expense $6803 S67649 $267,128 $200,749 $241,909 $200,116 $228.87 $.203260 $212,040 [Not interes
Slide 41: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (Dollars in thousands, except 102019 ‘Net Income $1068 $2027 $121,021 3112566 Amortization of Itangble Assets (Net of Tax! 650 765 2e2r 3.189 ‘Net come, Excluding intangibles Amortization) $1027 Szeem—$ 123848 $115,750 ‘Average Tangible Equity) $043.208 735860 $ 7
Slide 42: Forward-Looking Statements
Forward-Looking Statements ‘This presentation contains forward-looking statements, a= defined inthe Private Secure Ligation Reform Act of 1995. These statements may be Mentified by the use of phrases such as ‘anata “believe” "expec “Torecasts, projects, "wil,"ca,” "woul," “shoul,” “coul” "mayor othe