Nbt Bancorp Inc. · NASDAQ:NBTB

Nbt Bancorp — 2021 Virtual KBW Winter Financial Services Symposium

47 slides from Nbt Bancorp's conference presentation, Feb 10, 2021

  1. Slide 1: NBT Bancorp Inc. – 2021 Virtual KBW Winter Financial Services Symposium

    NBT Bancorp Inc. 2021 Virtual KBW Winter Financial Services Symposium February 10, 2021

  2. Slide 2: Overview

    Overview About NBT Bancorp Strategic Initiatives Financial Performance Appendix 2

  3. Slide 3: Company Profile

    Company Profile Financial Highlights Company Overview 98th Largest Bank Holding Co. Assets: $10.9bn Headquarters Norwich, NY Founded 1856 Ticker NASDAQ: NBTB Gross Loans: $7.5bn Market Cap $1.4 billion Branches 141 Employees 1,877 Deposits: $9.1bn Institutional Ownership 56% 3Mo. ADTV 142,800 Wealth

  4. 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 bolt-on and bite-sized acquisitions Low-cost, sticky core deposits with dominant shares in “Hometown” markets tha

  5. 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 40% of deposits are

  6. Slide 6: COVID-19 Update

    COVID-19 Update Immediately created Executive Task Force and engaged established Incident Response Team under NBTB’s Business Continuity Plan to execute a comprehensive pandemic response and take decisive action to address the initial and ongoing needs of impacted customers and employees. EMPLOYEES

  7. Slide 7: Overview

    Overview About NBT Bancorp Strategic Initiatives Financial Performance Appendix 7

  8. Slide 8: Our Strategic Initiatives

    Our Strategic Initiatives EXECUTE ON GROWTH STRATEGY 1  New England Expansion  Organic Growth  Disciplined Acquisitions AUGMENT OUR FEE BUSINESSES 2  Continue Growth in Retirement Plan Administration, Wealth Management and Insurance Businesses CONTINUE OUR TRANSFORMATIVE DIGITAL EVOLUTION 3  En

  9. Slide 9: New England Expansion

    New England Expansion 1 Why New England? Banking Environment Market Dynamics(1)  Larger financial  Lower unemployment institutions dominate market share  Higher number of businesses per county  Market disruption creates opportunities  Higher population density  Opening for locally- focused ban

  10. Slide 10: New England: 10 Years of Growth

    New England: 10 Years of Growth 1 Year-Over-Year Growth $2.0 Total Loans 18% Loan Growth Billion 19% Growth in Deposits Growth in Assets Under $536 Deposits 14% Management and Administration Million Local Talent with Deep Market Knowledge $855 Assets Under Management Million and Administration NBT’s

  11. Slide 11: Disciplined Acquirer & Proven Integrator

    Disciplined Acquirer & Proven Integrator 1  Completed 7 whole-bank, 7 branch and 8 fee income  High retention rates in loans and deposits with bank business acquisitions since 2000 and branch deals  Achieved or exceeded targeted cost saves  Successful integration of systems  Retained key person

  12. Slide 12: Focus on Fee-Based Businesses

    2 Focus on Fee-Based Businesses Q4 2020 Fee Income Composition (1) (%) Key Fee Revenue Verticals Over Time (2) ($million) $80 $74 Insurance $71 9.1% BOLI $15 Wealth Management 4.6% $63 19.6% $58 $59 $16 $55 $15 $15 $17 $17 $29 Other $17 $28 15.6% $29 $28 Retirement Plan $27 $26 Administration Fees $

  13. Slide 13: EPIC Retirement Plan Services

    EPIC Retirement Plan Services 2 Revenues ($000s) Customized Consulting, Recordkeeping, Actuarial and Administrative Services for All Types of Retirement Plans $37,180 $31,607 Deep Partnerships with Clients Across 50 States, Including Retirement Plan Advisors, Banks and TPAs $28,272 Proprietary Custo

  14. Slide 14: Digital Evolution

    Digital Evolution 3 NBT operates with a customer-first digital mindset. Infrastructure − Virtualization and Cloud • Informed by data Environment − Enhanced Resiliency and • Embedded in our culture Cybersecurity • Focused on agility and innovation − Agile and Scalable Core Systems • Driven by our bus

  15. Slide 15: Digital Evolution

    Digital Evolution 3 Our comprehensive technology roadmap calls for the implementation of market-leading platforms across multiple business lines that will further enhance and transform the experience NBT delivers. 2019 NBT Guided 2020 Baker Hill Zelle® 2020-2021 Investor AppLink™ Zelle and the Zelle

  16. Slide 16: Digital Adoption Rates

    Digital Adoption Rates(1) 3 31% INCREASE IN 86% INCREASE IN 82% INCREASE IN 34% INCREASE IN CONSUMER DIGITAL ONLINE ACCOUNT MOBILE DOLLARS MOBILE ITEMS ADOPTION OPENING DEPOSITED DEPOSITED 21% INCREASE IN 16% INCREASE IN 4% INCREASE IN BRANCH SELF-SERVICE ATM DEPOSITS DEBIT CARD SWIPES TRANSACTIONS

  17. Slide 17: Overview

    Overview About NBT Bancorp Strategic Initiatives Financial Performance Appendix 17

  18. Slide 18: Track Record of Consistent Growth

    Track Record of Consistent Growth Total Assets ($billion) Gross Loans ($billion) $10.9 $9.6 $9.7 $8.9 $9.1 $7.5 $8.3 $6.9 $7.1 $7.7 $7.8 $6.6 $5.9 $6.2 $5.4 $5.6 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 Fee Income(1) ($million) Deposits ($billion) $146.7 $139.8

  19. Slide 19: Strong & Stable Profitability

    Strong & Stable Profitability Pre-Provision Net Revenue ROATCE (%) Pre-Provision Net Revenue ROAA (%) 1.90% 1.86% 1.84% 26.90% 1.76% 1.73% 1.78% 25.76% 1.72% 24.96% 24.88% 1.68% 24.72% 23.40% 23.79% 22.97% 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 Net Interest M

  20. Slide 20: 2020 Results Overview

    2020 Results Overview Financial Highlights YTD Highlights(1) Change % Change Balance Sheet ($ in millions except per share data) 2020 2019 2019 Period End Balance Sheet  Loans, excluding PPP, were down $68 Total loans $ 7,498.9 $ 362.8 5.1% million from 2019 Total loans, excluding PPP 7,068.1 (68.0

  21. Slide 21: Q4 2020 Results Overview

    Q4 2020 Results Overview Financial Highlights Quarterly Highlights(1) Change % Change Balance Sheet ($ in millions except per share data) Q4 2020 Q3 2020 Q4 2019 Q3 2020 Q4 2019 Period End Balance Sheet  Loans, excluding PPP, were up $22 million Total loans $ 7,498.9 $ (61.8) $ 362.8 (0.8%) 5.1% fr

  22. Slide 22: Net Interest Income & Net Interest Margin

    Net Interest Income & Net Interest Margin Net Interest Income ($ in millions) & Net Interest Margin (%) Quarterly Highlights(1) $90.0 4.00%  Net interest income up $2.2 million $80.0 3.80% $80.8 $78.3 $80.4  Net interest margin increased 3 bps to 3.20% $77.5 $77.5 $70.0 3.60%  Net impact of exces

  23. Slide 23: Noninterest Income

    Noninterest Income Noninterest Income Trend(1) ($ in millions) Quarterly Highlights(2) $40.0  Noninterest income to total revenue was $35.0 32.1%1 $10.3 $10.4 $30.0 $10.3 $9.9 $8.7  $38.0 million1 in noninterest income, up $0.3 million from Q3 2020 $25.0 $7.2 $7.9 $9.7 $9.0  Retail banking fees (

  24. Slide 24: Noninterest Expense

    Noninterest Expense Noninterest Expense Trend ($ in millions) Quarterly Highlights(2) $80.0  Noninterest expense of $75.2 million $70.0 ($4.1 million in branch optimization costs) $60.0  Up $8.9 million (13.4%) $50.0 $39.6 $40.8 $41.0  Overhead ratio at 1.15%3 $39.7 $40.5 $40.0  Salaries & Benef

  25. Slide 25: Asset Quality

    Asset Quality Nonperforming Loans / Loans (%) 1.20% 1.09% 0.99% NBTB’s 10-year average ratio of Nonperforming Loans / 1.00% Loans is 47 basis points lower than peer median 0.80% 0.68% 0.64% 0.60% 0.47% 0.40% 0.40% 0.20% 0.00% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Asset Quality Trends Con

  26. Slide 26: Capital Strength

    Capital Strength 16% 15.62% 13% 13.52% 12.78% 12.39% 12.42% 10% 10.33% 9.52% 9.56% 9.11% 9.14% 8.84% 8.41% 7% 7.64% 7.85% 7.36% 4% 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 Tier 1 Leverage Ratio Total Capital Ratio Tangible Equity/Tangible Assets Note: Non-GAAP reconciliation for Tangib

  27. Slide 27: Loans

    Loans Total Loans: $7.5 billion(1) Portfolio Highlights(1) Indirect Auto  Q4 2019–Q4 2020 Loan Growth 5.1% 12% Specialty Lending 8%  Non-Owner Occupied CRE Home Equity Residential Real at 149% to Total Capital 5% Estate 19% Other Consumer 1%  Loan-to-Deposit Ratio of 83%  Commercial (includes C&

  28. Slide 28: Deposits

    Deposits Quarterly Highlights2 Total Deposits: $9.1billion (1)  Period end deposits grew $124 million from previous quarter Time  Core deposits grew $150 million with 7% noninterest bearing demand deposits Demand up $77 million (Noninterest Bearing)  Core deposits3 represent 93% of total deposit

  29. Slide 29: Commercial Loan Portfolio Detail

    Commercial Loan Portfolio Detail Owner Occupied CRE ($0.6 billion)(1) Commercial & Industrial ($1.3 billion)(1) Rental Real EstateConstruction All Other 6.3% Trade Manufacturing Medical 7.5% Accommodations Industries Wholesalers 8.0% 6.1% 1.6% 16.2% 8.0% Wholesalers General Retailers 6.3% Constructi

  30. Slide 30: Consumer & Residential Portfolio Detail

    Consumer & Residential Portfolio Detail Consumer Lending Portfolio: $3.4 billion as of 12/31/20 Direct Consumer 2% Home Equity 11% Resi Real Estate Specialty Lending 43% 17% Indirect Auto 27% As of 12/31/2020 Consumer Lending Portfolio Metrics Total wAve Outstandings # of Avg. Max Avg. Category ($00

  31. Slide 31: Q4 2020 Asset Quality

    Q4 2020 Asset Quality Net Charge-Offs Nonperforming Loans1 $6,000 $5,639 0.70% $50,000 $47,796 0.80% $5,404 $5,340 $5,000 0.60% 0.68%3 $38,475 0.70% $3,893 0.50% $40,000 $4,000 $32,252 0.60% 0.40% 0.55%3 0.64% $3,000 0.30%3 $28,891 $27,624 $30,000 $2,262 0.30% 0.32% 0.22%3 0.50% $2,000 0.30% 0.28% 0

  32. Slide 32: 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 CRE / Total Holding 2.67% 2.67% Company Capital (1) (%) 146% 239% 225% 34.6% 32.5% 1.64% 22.9% 1.34% 1.12% 0.77% 0.70% 0.69% 0.70% 0.64% 0.64% 0.56% 0.62% 0.56% 0

  33. Slide 33: Bank-Wide Payment Deferrals

    Bank-Wide Payment Deferrals (As of 1/19/2021) Consumer 11% Home Lending 5% Small Commercial 3% $107MM Large Commercial 81% Total Deferrals Total Deferrals % of Portfolio Customer Loan Balance % of Portfolio Outstandings Loan Category (000's) Outstandings(1) at Q2 High(2) Large Commercial(3) $85,970

  34. Slide 34: Sectors with Escalated Monitoring

    Sectors with Escalated Monitoring (9.5% of Total Loans) Automotive Industry Loan Balance(1) Retailers 1.3% Accommodations $171,924 General Retailers Healthcare $155,319 1.7% Restaurants/ Portfolio Restaurants/Entertainment $128,027 Entertainment $7.1 billion Remaining 1.8% Total Loans Outstanding He

  35. Slide 35: Overview

    Overview About NBT Bancorp Strategic Initiatives Financial Performance Appendix 35

  36. Slide 36: Performance to Peer Group

    Performance to Peer Group December 31, 2020 Performance Ratios % NBTB Peer Median Peer Average PPNR ROA (1) 1.84% 1.57% 1.30% Core ROAE (1)(2) 9.68% 6.93% 6.93% Core ROATCE (1)(2) 12.95% 9.90% 9.56% Net Interest Margin (1) 3.31% 3.29% 3.14% Fee Income / Revenue(3) 31.72% 23.09% 22.34% Overhead Ratio

  37. Slide 37: Paycheck Protection Program in 2020

    Paycheck Protection Program in 2020  2,971 total approved PPP Loans for a total of $548 million through December 31, 2020 with average loan size of $184,000  Average fee of 3.2%  $5.7 million in income earned during the quarter on PPP loans  $431 million Outstanding as of 12/31/2020; $73 million

  38. Slide 38: CECL 2020

    CECL 2020 Reserves/Loans by Segment CECL Accounting Loan Type 12/31/2019 1/1/2020 3/31/2020 6/30/2020 9/30/2020 12/31/2020 Commercial & Industrial 0.96% 0.98% 1.43% 1.25% 1.34% 1.47% Paycheck Protection Program 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% Commercial Real Estate 1.02% 0.74% 1.10% 1.56% 1.57%

  39. Slide 39: 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: − $126 million CDs re-price in Q1 2021 Time  Offsets to low-rate environment: $775 million adjustable/floating 7% l

  40. Slide 40: 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

  41. Slide 41: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures (Dollars in Thousands) 2020 2019 2018 2017 2016 2015 2014 2013 Net Income $ 104,388 $ 121,021 $ 112,566 $ 82,151 $ 78,409 $ 76,425 $ 75,074 $ 61,747 Income Tax Expense 28,699 34,411 24,436 46,010 40,392 40,203 37,229 28,196 Provision Expense 51,134 25,412 28,828 3

  42. Slide 42: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures (Dollars in Thousands) 2020 2019 2018 2017 2016 2015 2014 2013 Net Interest Income $ 315,678 $ 311,555 $ 305,629 $ 283,493 $ 264,441 $ 252,608 $ 251,878 $ 238,079 Tax-equivalent Adjustment 1,301 1,667 2,007 3,799 3,549 3,292 3,432 3,785 Net Interest Income Tax Equ

  43. Slide 43: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures (Dollars in Thousands) Q4 2020 Q3 2020 Q4 2019 Net Income $ 34,194 $ 35,113 $ 28,960 Income Tax Expense 9,432 10,988 8,166 Provision Expense (607) 3,261 6,004 FTE Adjustment 318 325 349 Net Securities (Gains) Losses (160) (84) (189) Unfunded Loan Commitments Reser

  44. Slide 44: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures (Dollars in Thousands, Except Per Share Data) Q4 2020 Q3 2020 Q4 2019 2019 2018 2017 2016 Net Income $ 34,194 $ 35,113 $ 28,960 Amortization of Intangible Assets (Net of Tax) 617 642 633 Net Income, Excluding Intangibles Amortization $ 34,811 $ 35,755 $29,593 Aver

  45. Slide 45: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures (Dollars in Thousands) Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019 Noninterest Expense $ 75,204 $ 66,308 $ 65,340 $ 70,881 $ 70,294 Gains (Losses) on OREO (147) 158 96 (11) (405) Amortization of Intangibles and Goodwill Impairment (822) (856) (883) (834) (844) Noninte

  46. Slide 46: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures (Dollars in Thousands) 2020 Net Income $ 104,388 Securities Loss (Net of Tax)(1) 307 Amortization of Intangibles (Net of Tax)(1) 3,753 Nonrecurring expense (Net of Tax)(1) 2,682 Core Net Income(2) $ 111,129 Average Stockholders’ Equity $ 1,148,475 Average Tangible

  47. Slide 47: 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,” “

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