NBTB - Earnings call 4 2023 | NBT Bancorp Inc.

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Operator

Good day, everyone, and welcome to the conference call covering NBT Bancorp's Fourth Quarter and Full Year 2020 Financial Results. This call is being recorded and has been made accessible to the public in accordance with the SEC's Regulation FD. Corresponding presentation slides may be found on the company's website at nbtbancorp.com.

Before the call begins, NBT's management would like to remind listeners that, as noted on Slide 2, today's presentation may contain forward-looking statements as defined by the Securities and Exchange Commission. Actual results may differ from those projected.

measures discussed. non-GAAP certain addition, will be In Reconciliations of today's numbers are the appendix contained within presentation. for those [Operator Instructions].

As a to reminder, Watt please would and now begin. this Executive Jr. call is to Chief remarks. the being for turn the conference Mr. John over Officer; NBT opening President like Bancorp H. recorded. Watt, I

John Watt

Thank earnings year Bancorp's NBT and full call XXXX and fourth you for all thank Norma, covering you, participating this results. in quarter

Accounting Officer, me President Burns; Officer, are Stagliano. Chief Chief very Kingsley; Joining NBT. as of our quarter a active Joseph Annette Financial Treasurer, as Scott Ondesko; today Banking, Joseph It our was at our NBT's well Retail

environment. investing. experience volatile the consumer spending, small growth navigating At of integration is positions a movement will While normalized time, still our still that the NBT adjacent continue we Salisbury to strategic rate that pre-pandemic same in well environment, future markets to of we August credit observed the note for and growth. the are interest Bancorp that successful for businesses I acquisition and

businesses. take our highlight a to activity moment across me Let

First, $X.XX our Return to the earnings operating and year, tangible $X.XX share tangible the ratio the X.XX%. on for was full for equity XX.XX% year. quarter fourth year-end results for the XX% of equity include and per grew

businesses with auto acquisition, core indirect commercial commercial the of banking, participated. and diverse mortgage achieved growth we and was our Excluding X%. lending, Salisbury consumer loan That growth residential business all

consumer business As XXXX, noted owner. a in experienced and we resilient

year. to quality core each is originations up levels pandemic. our productive to we credit although originations the and experienced than quarter those million of at business with prior over of the portfolios indirect were full million Our $XXX Credit normalizing, business continues better at had $XXX for perform X% year-over-year. NPT a auto Small

as often our of lending We base.Like our risen have to seek out our funds historically customers our products. industry, cost criticized migration business, into category of some commercial has higher-yielding seen deposit rest low the in continue the

deposit Our full-cycle beta at XX%. was year-end

high account enjoy We retention continue levels. to

are to continue to we sources the in funding organic headroom XXXX. robust, have Our and execute our plans growth on we need

businesses performance solid and year. their fee-based in for the full Our continued QX

transformational generated core in and York management success X.X% at our almost a the revenues generated first dividend XX combined $XXX years with XXXX. represents chip income which growth large Board will dividend investment benefits markets corridor New quarter federal approved the dividend NBT. million. government. public non-interest private in chip our New March, of our complex the significantly, Nanotech a manufacturers in For paid businesses The we for year. drive corridor marked also of the from It's Creates in payable $X.XX and long-term semiconductor administration, the $XX increases of York positive was total wealth QX announced. the being Activity large investments and promote Upstate Albany Total economic the Monday, consecutive and insurance activity year, over of the XXXX. full increase in long-term billion along received revenue notable was along annual Most XX% On across that called commitments

year. the to in will risk to and is Scott greater for team XXXX, the management a liquidity quarter full business talk NBT about into strong highly the mix, and our detail with performance turn capital call professionals.I experienced the levels, with and outcomes of Annette associated diversified Going positioned and expanded fourth effective financial an practices over

Following your their to questions. over Annette, remarks, take you. we'll

Annette Burns

Thank you, John.

to presentation. results page Turning earnings the overview of our

share in which of of earnings an securities $X.XX interest incurred of of which a The investment impact share per per were year than August share excludes full was fourth $X.XX the $X.XX, $X.XX XXXX. and Our completed earnings quarter equity results fourth impairment acquisition, minority lower gains per Salisbury of we fourth the quarter Operating last and respectively. quarter fourth expenses, in quarter were acquisition operating linked $X.XX. The the were had the and quarter, third quarter.

from loans. of of third $X.X from experience were up fourth the The up Despite trends quarter the from funding real end have quarter in the in income costs planned were and lower auto, billion from the continued growth and included loans our estate yields, from of the page of down up We the line portfolios, interest of XXXX Salisbury. mortgage continue XXXX, and runoff of growth. of XXXX. loans book of that in commercial XX third utilization, fourth amortization quarter-end quarter $X.XX yields quarter increases billion other of Fourth improvements from million the principal per to of earning loan in December reflective exceeded outstanding XX our per share reflected third continued was Tangible solar end $XX Total origination shows $X.XX have next the higher yields. loan residential our indirect commercial were and value up consumer $X.XX acquired net portfolio residential challenged quarter the at points share asset which productive $XX.XX loans quarter basis new and loans.

well Generally, of quarters billion in high our of markets, deposits first Page year. million each in the commercial were billion $XX quarter, loans. total the and from Our At third relationships remains and $X.X comprised third $X.X third the collections million $X.XX the and loan X, deposits XX% the of fourth of quarter. XXXX the quarter end On diversified of deposits end acquired is tax deposits are total Salisbury. Municipal concentrated of municipal down included from most consumer expected. from and portfolio as up XX% $XXX in of of very were seasonally declined billion

fourth wholesale continued no interest in low very the million $XXX million market and those NBT's the industry-wide instruments arose allowed first remain over challenges, checking incremental deposits. continued remixing as time the In accounts run fourth profile the and added contractually in of near savings of off. money in such, balances of the has company to The quarter. 'XX, interest quarter following which and proactively quarter, stable, from end addition, into liquidity deposit of liquidity company $XX again higher-yielding to experience we the its to

quarter. Our basis quarterly cost XX of basis basis XXX points deposits from total third in XXX increased funds the cost linked to of and compared the to total increased points prior points quarter

was next We interest detailed have deep granularity changes fourth a in quarter, included deposit linked The at quarter looks results net the type, was by base. illustrates and quarter our our from basis and margin. income mix decline of our customer which interest summary a in $X.X slide the The million net Salisbury offset net income by impact our primarily the the above interest which diversification margin. point partially of X quarter of acquisition, third full the

quarter, fourth named the fund sold of robust position, interest most yields. incremental During NBT Fed which created given a short-term income

rate Although turn to and experienced continue of fleet additional funds quarter, a now the we of in Scott the fourth to I over we in growth cost rest will to slower XXXX. persist it the of to modest funding review pressures results. expect

Scott Kingsley

income noninterest are The summarized on Thank you, trends Annette. Page X. in

from or business from from down up our third expected. $X.X included and compliance fee the the fourth million third quarter. was are plan third XXXX million administration $XX $X.X were concentrated million Revenues certain of as seasonally from quarter securities quarter actuarial which the linked to retirement Excluding gains, XX% X% down income quarter our the and in and services,

income wealth prior from than quarter, lower insurance full the revenues third generation services the continues of tax management renewals to the advisory run of be in contribution million. comparatively offset our The reflecting combined The was but $XXX fourth generation third over were Salisbury revenue rate businesses, and quarter agency quarter of third $XXX,XXX sources company. The strength a certain the fees. Our a quarter by fourth commercial our annualized policy diversification Trust quarter preparation and core included higher quarter. non-interest

non-interest to now expense. Turning

the linked quarter expenses, XX.X% occupancy, full X% fourth quarter million an which FDIC Our employee XXXX. and of of benefits, and a assessment the was expenses. and salaries acquisition were costs advertising $X technology Salisbury and above impairment expenses increases total $XX.X charge or in excluding the above Quarter-over-quarter included operating million for quarter quarter, services,

our technology services and did to record impairment we minority million full of As equipment residential provider release, our indicated $X.X solar financial a a to installers. earnings interest in investment in

to demonstrated their ongoing their has ability we Although markets related continue of believe resulted challenges technology platform capital broad market has acceptance, to and constraints uncertainties in in operations. and network installers significant

quarter. managed third We reflective continued loans believe quarter, attributable to recorded in likely recorded non-accrual a to of loans XXXX, the its estate consistent and compared basis On the the continue single overview million We in million expected relationship X commercial was recorded provisioning prior continue Net or Nonperforming linked metrics. development of drivers quarter, X the participant, historical basis which into charge-offs were of mix the to changes. quarter. the loan third XXXX diversified XX the placed in the activity with more third X.XX% of $X.X expense sheet share slide, will from an key needs. points real growth being Day in The support fourth points of actively portfolio which to than we of we return quarter Reserve the a Salisbury $XX.X lower the provision appraised asset $X.X of coverage of changes $X.XX to relationship which quarter provision was during quarter, and million million a a linked are higher basis total mix $X.X that the end provision acquisition-related values quality in carrying fourth multi-tenant fourth in than balance charge-off loss excluding next value. is and was recent the and status continued of XX third points quarter. quarter the the increased norms be provide will future

closing resulted cost As thoughts. in lower arose I some in remarks, uncertainty pressures, funding has net The our which accelerated wrap that March interest up market volatility early prepared and margins.

and growth, on the income our allowed well-balanced income Our loan outcomes to us from fee lines offset portion constructive quality organic challenges productively of generation. credit have results interest solid a recurring net

have in at we consider future questions With you growth post-acquisition to continue this position time. any us as favorable answer may to deployment put and our happy we're Norma? that, Lastly, a levels opportunities. capital

Operator

our from moment instructions]. question, of question and comes our Raymond the James. -- [Operator Steve Moss line with for One first first

Stephen Moss

off with equation. the Maybe -- funding here of side on just the starting

deposit funding kind ahead you're half where first hikes just costs to ended of and the curious the of thinking Just here? about quarter costs of rate potential how

Scott Kingsley

Yes.

pressure the a little up watched scoot as that the New XXX seems deposit total obviously. frame mid-October, started that mid-November Steve thanks appears We've through at The Year, pronounced bit to year a about the time ended the more be So for but We not here lot. question cost. we dissipating.

And so balance both holding a standpoint stability, a much to from closer we're rate and standpoint.

Stephen Moss

here, the And we we quickly how starts just thinking curious then margin about you Got kind if think just forward. it. Okay. rate funding on maybe cutting as as get rates, costs might to you're going how cuts of and fed about the pivot

Scott Kingsley

the really standpoint. Steve, from thing pricing important Again, for us a

declines look, on have forward forward presumed there the rate Plot X in The in XXXX. suggests a somewhere probably curve middle. We that forecasting of that. we've X, Dot suggest half We're -- are or Fed

that those have costs. with of relative opportunity cuts an to We customers rate gives start, can So if funding in deposits. for our us on it get lowering dialogue front out to time a us,

of attached short-term deposits, we're a portfolio, different that. we upon our money time have discussions that's logical start market a some lower them doing once cost us from in comes exploration, and funds with customer. expiring cost for high simultaneous can the opportunity move to to So process the currently over we group we and to on to can for our little that of The had the downside, start that truly CDs, X% get that billion momentum rates $X discretionarily set really

Stephen Moss

for realize just of lending you're thoughts is Okay. it growth the feeling where be here. piece outlook -- the around That's a like loan that. going appreciate helpful, pipeline how solar about I runoff the I And side, curious a mode. on and in the Scott. looks to the bit

just But about So on that a they how that. of go might a be curious headwind. little bit of all kind

John Watt

lower Q. here's pipeline than first in The about the serve, first Mid-single-digit the slightly of is very going Steve, we is year. achievable. into still the we're how growth lower traditionally, markets rest year-over-year year. But thinking the Q

expect So pick they'll we up. would

last XXXX. On the side, going had a banking fully strong over into business expect we they to really carry year year that's that

mid-single is business, about thinking core we're the for So how digits it.

Stephen Moss

color. the all appreciate I much. very you Thank Great. Okay.

Scott Kingsley

Appreciate the question.

Operator

question comes the O'Donnell next Our from line KBW. with Chris of

Christopher O'Connell

the announcement and on Congratulations John promotions. retirement the on Scott, Annette in Joe

occurred side. to some the fourth start seasonality on mentioned the off quarter plan. you that insurance the guys fee wanted on that just and I know So in benefit

you those starting where get to rebound could hoping think XQ? for Just a to as point

Annette Burns

So and a base. fourth XXXX by rate we of about mid-single-digit to combining quarter of third as that thinking average think the the starting run as we're run how of kind of and growth the then base fourth rate. about rate. run And And third like off think XXXX with that's quarter kind about rate kind together

Christopher O'Connell

start whether could that there's Okay. us off remind as Salisbury year I to the know offsets some in like was just And of on clean maybe far there how expenses acquisition go, where Got some expense and post mean, the the in comes the some it. then in that much as you as that I we out mentioned side? some up up Can quarter. expenses things fourth brought the

Scott Kingsley

Sure, one. run Chris. at take a I'll that

to So a higher quarter year, and little in the in expenses historically yes, seasonally similar this fourth our fourth quarter. operating we're

of on the internally, think pronounced of year this out because finishing It to some put we A aside finish initiatives. relates working Some certain is things probably couple the we bit to that as little were things a about. more of we Salisbury transaction. that

and branding as in a to have not were Salisbury we As had quarter us retention customer some we otherwise access standpoint growing from activities, had retention new and on higher been because additional than they are a markets relates focused little both in it to. fourth that customer the the well, previously those for would

quarter, exception the we end a incremental of quarter with stock-based it to up when think usually in So a quarter utility that started upstate quarter, cents We and New with everyone, compensation. snow in first costs as -- for run taxes have per we in first about reminding million $XX we in $XX.X million, us, seasonal into of the payroll first another again, rate, roll cost. pick couple $X.XX Yes, usually additional associated share the share the York. has

ploughs the is heat the on. are So out in

towards first us We that for the we usually also people. do expect X.X% the change And March. the end using our a month for quarter, tail merit of of

So we'd basis. a expect on that going-forward

relative the replacement otherwise, given structural support of of that In terms terms we'll some of generation, are think to about opportunistic for thinking revenue opportunistic adding organization, how there about again, and the be very hiring incremental will and within necessary we headwinds folks structural that people our we the organization in to only need structure, but ads.

Christopher O'Connell

Great. And either growth for including target expense Salisbury year? you helpful. guys an full the or do overall have That's ex

Scott Kingsley

probably full you a to one. back with that basis, Chris, on year to have come

full little change about full than growth smaller I of percent the on And Salisbury, full think a our worth costs line Remembering at from and the so of if we savings think we've and in that looked a think for something then honestly, we quarter, in of we quarter Salisbury of acquisition. fourth thought we salaries expenses. a the a of rest quarter we got Salisbury if think got we there. worth it quarter maybe would X.X that inclusion a non-operating we benefits the or get a that cost

Christopher O'Connell

I is. types will in higher-yielding level to come environment difficult quarter products? able seasonal first products? the into of on it then do think And back decline, the volume it is types mean so, and just you if will how the of and that that, rebound? confidence the Or same the muni given it back be And Great. what's come

Scott Kingsley

Yes.

it's question. a Chris, really So good

We very counties, large bank school municipalities. villages, as we to tend don't think I districts. towns, bank very, So

they start or whether So the our it's of would mix very for as functions in most tax we product in collections said, expect roll else. what on similar them, to be to sheet that opportunities, interest-earning would second of had That being are XXXX. balance a using treasury aware someplace half they

goes base, think our base. municipal that not just I across even So the

organizations that. So very of I to themselves said, But think to wary think is likely pattern cash similar. utilization how always we're the of I have of stay being that flow

get So those estate back expect we toward were we the making done their January, levels fourth to the after where real would payments move to kind people of quarter. of end in

of As in quarter. and the it base relates think to maybe we own the commercial obligations customer pay even our of side people debt to consumer back the side, their using saw instances their fourth we money

of despite so efficiency balance robust fact X years. than thinking think, we of XX that them last to thing the just customers handle about short-term what's their provide were our the they opportunities the most that that people there along for the lines So more give or do tools and them there them obviously, do But yield enjoyed just were out it's And I much advice sheet the how treasury do. line productive efficiency. good for for to again, still

I the we to a happening about them happening because the evolve get the lower into what's we market up. with know rate to so dialogue cycle think you cycle, why on go say, and and maybe much customer actually in what's been can we've our that's way As having starts

Christopher O'Connell

And helpful. fixed me. know and of guys loans. last you floating breakdown one gave Great. Really the for I

loans that XX% adjustable do I would after you a have fund percentage or think it's But immediately floating. a of cut? Fed reprice

Scott Kingsley

Sure.

of modelling in correlation presumes for funds, I $X immediately loans used would SOFR an in that Fed down a with immediate in purposes, which and billion SOFR. reprice think I change term

type There's for us, mostly home some small. instruments for but probably commercial that there, out relatively are us. equity So it's loans

Christopher O'Connell

Appreciate it, Chris. Thank you.

John Watt

Chris. Thanks,

Operator

[Operator instructions].

Alex comes question from next San... Piper Our from

Alexander Roberts Twerdahl

color curve maybe rate any assuming the NIM far. in we time couple which the all appreciate think your thoughts you've I first But conversation. forward quarters don't get kind is NIM the kind of May cuts the what the year, until the of of today. that of just I frame, given says to for back Just so the

Scott Kingsley

Yes.

framing we of repricing catch up way, where get So there if this in In on we of have or that a cost on in say think are. where has the the haven't have, first Alex, we've with it chance Whether asset I jury improvement our increases better that that to back to new were the I thinking out just chance up need we needs think, basis a to been a X funding would much yields asset product new not, net I words, that is change. yields fact think yields still X have quarter -- the asset that, been up kept losing quarter to but funding be. points other we with

point stability reached I be where a outcome. the think could we've

we if we margin So basis quarter, somewhere or net finished fourth were the handicapping points. minus where interest X or in X around plus

Alexander Roberts Twerdahl

do then we Okay. to given as the And commentary in of kind X like on them given quickly third May for that like the all get X I reprice lower? deposits to have just quarter the think deposits and possible, trying and power guess, and the you that rate fourth cuts offset of of actually or $X cash on enough reprice that loans the year, billion as you replace pricing

Scott Kingsley

points be we or at an close Alex. that, if or X XX a could or XX basis basis have points down in think I quarter we times, X to step X orderly

that now asset multiple get there think much deposit have our They with harder and we customer just they any X don't dialogue new get because X much Remember, outcome. we that it's you're I rate go accomplish times the if to out rate. faster, changing customer. variable with or cuts your

more in takes think shepherding I it the So field. just

Alexander Roberts Twerdahl

a rate fourth is you kept guess, of guys the out you Or to commentary seeing rates quarter maybe growth going the that? coming that competition just of growth little give loan you down, more chasing in do of lower a in think that quarter after saying are market? and better bit bit the what this just and there less a kind little it subdued? are not more loan we'll overall Or happened is go in, reflective demand you're And on what growth loan I

John Watt

line couple Scott low. Alex. and And things to using I I've come down on smart excess of agree debt. A historically credit are pay to mind, customers It's been cash usage. of that focusing indicated, their

that's back. loan all that's did say we a episodic, come out that payoffs in We story the competitive to growth the of going there this eventually, not QX not couple So proven all we think time. I in anticipate, the see time. QX. that added I had It's to

to don't to can that want forever? we and do. of see So do And customer what same management been very time risk thoughtful than pricing brutally also profitability are with about different services we our a side they to competitive. all perspective, want products do the challenges are we at But what we're the loan And our on we the what No. offer from have robust it's and relationships. ensure any

year, little digit the mid-single than higher on a at us, there team that we'll has I So markets, are states be not ready sometimes identified the when that's these and do attractive in that to opportunities unusual and they're is ground table NBT off. for across an is the to X is the know all But what that.

Alexander Roberts Twerdahl

sticky helpful. wait deals, you kind a even years would are That's remained I and pricing spreads second, down it. little though coming of are have guys the come going on better. say the X -- customers is rates it has down? commercial bit wait, down the saying, in general with come the you a to do X-year Got mean, Or

Scott Kingsley

In year curve, our point a say where credits is of into a the the of or X-year question. standpoint. it's mind, of of a Alex, customers' living great pricing Weâ€™ve And we're not with customer spent that spread sure capable had actually last because we're for the of coached outcome the X, did from was of years right? the part XX we we do Yes. to what the during have our midpoint of curve. with funding short-term to certain last being X

making was the the we're have if until even through under down anyways. tenant have rates.â€ that about "Oh, this closed wasn't where we for of Xst people if naturally walk substantial what of longer So said, we were December. commitments those sometimes Xst out haven't premise, going ourselves, hire think to the December loans to So you probably in that It was -- there in remind

Alexander Roberts Twerdahl

for Got one me. it. And then just last

wind as Spring terms quarter your outlook portfolio think lower a of in remaining for $X you range the that charge-offs, charge-offs million that the Or last down $X.X Just stone been do they've gets stay as down? for they to million in go year or so?

Scott Kingsley

probably and I asset go more down in a expect end with the what of portfolio. But the or tail end up we to say at quarter. think you're as we back at right, couple fourth of it. that end quarters the down, similar amount off incurred charging numbers that keeps the to coming Needless you're things the we hopefully,

So do that have broad have our are probably customers that not their some have. people extinguished not instruments constraints some additional of section credit maybe

We're spending the time the of get the will lot year be talking anyways. of not subject by about think matter. to that we a So a end we time

Operator

And showing at call further any I'm Mr. not back for closing John the to turn this over I'll time. questions remarks. Watt

John Watt

and having opportunity a and talk about and to day. we all appreciate your Thank I XQ Please you, NBT in forward same Norma, the story the for opportunity to good going interest have in you all in look April. XXXX, forward. our thank Thanks.

Operator

today's call. for your concludes This conference you participation. Thank

day. wonderful a have Everyone, disconnect. now may You

NBT Bancorp (NBTB) 24 Jan 242023 Q4 Earnings call transcript