NBTB - Earnings call transcript Q3 2024

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Operator

Good day, everyone. Welcome to the conference call covering NBT Bancorp's Third Quarter 2024 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 can 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. from differ may results those projected. Actual

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

turn being reminder, and President begin. Kingsley, remarks. I call a opening Scott over is his Kingsley, As will NBT this CEO, now Mr. the for Bancorp conference to recorded. please

Scott Kingsley

NBT's Bancorp's and everyone, Chief NBT me for this us you, and Didi, joining With Burns; Annette good Thank Officer, our Bank results. covering Financial morning, Third NBT Joe for today of XXXX and are Joe thank you, President Treasurer. Quarter call Stagliano, Ondesko, N.A.;

income yields the for highlight, new revenues Our and team.Â During our quarter, strength earning and quarter performance a of higher our quarterly than diligence net XXXX we the quarter footprint our and to the loans and productively for improved the operating all-time and first costs. Noninterest as our of to X diversified margin for consecutive months deposits of collaboration quarter and increased reaching our total across balance of incrementally the up second XX% continued reflect the be sheet, asset grew the interest continues model high. funding making business a

an merge Evans New also $X.X X of years.Â In consistent dividend September, bank to dividend We in commitment $X.XX year to long-term was in dividend returns our a increases, NBT announce also last pleased represents represents billion our XX% to past we agreement and with York. headquartered favorable shareholders. the demonstrates we providing year's quarterly declared annual to a a to X.X% our $X.XX Williamsville, Inc., community consecutive cash XXth declared which The reached improvement it Bancorp, shareholders, above the and fourth increase were over that quarter. This

largest New in Buffalo Buffalo with Capital Valley, Rochester York. Rochester, District presence and New as bank the York. Central meaningful us the Upstate expansion Upstate Hudson partnership of complements community population, largest of into This footprint markets geographic and a by the Western X markets extension our the natural is York's attractive in NBT's and York, Evans Our New positioning New into

to integration belief diligently we with organization a are that with and required entered was into have they working employee near and complex the folks weeks been the past new of the date Their expect Science billion the closing.Â In are over a both chip Act, second Syracuse. and shareholder to to quarter April, and much in the approvals. agreement a have U.S. Our Commerce $XXX town X as approvals, with our through of that Micron activities invest openness it billion reaffirmed $X.X plans Evans announced grant Pending in dedicated an as professionals. customer, part in semiconductor greatly and engagement the manufacturing support those XXXX largest talented its filings will Department Technology plants provide of for under appreciated.Â We that regulatory the a community-focused CHIPS Clay

their expected moved of second and of continue commencement half has XXXX. to planning progress, to advanced Although construction activities Micron site-specific the

quarter Upstate Annette before, said turn and play will third the in to to I all this customers and review of to time, is NBT over detail. we've As in with Annette? our in results financial prospects providing uniquely a services significant you working role types the meeting corridor. At York to positioned living Chip New

Annette Burns

morning, and Scott, you, good Thank everyone.

overview of Turning earnings our to the results page presentation.

all-time high of was book and estate, the share value of portfolios page the or September per The $X.XX an income that annualized prior X.X% million solar $XX.X increased our of from a third per as we or and loans consumer and up $X.X the quarter share contractual are share, of and from increase for commercial reported net in an in $XX.XX trends second per or XX $X.XX quarter, of growth the end X% included share million For $XXX the loans. Total residential was real per $X.XX planned loans runoff at lending other shows up in auto NBT. million annualized. status, C&I, the $XXX next or year indirect were outstanding residential for portfolios.Â Excluding million quarter. Tangible

up new quarter second from Third of origination quarter higher rates. XX the loan yields continued XXXX, reflective were points of basis

diversified XX% million portfolio deposits XX% higher from of total Our commercial billion combined and municipal commercial were of total up growth and $XX.X XXXX, with and is loan $XXX.X Page balances December X, relationships deposits. consumer in well remains $X.X of a level consumer of very loans. On comprised billion with

at We have X net basis interest points in the the diversification from deposit our and which deposits deposit base. The mix our beta included XX%, quarterly shows total and a company's of our granularity full slide income changes cost and prior our increased next looks by type, was to margin. deep detailed cycle of X.XX%. The summary quarter customer of the

net prior from while from X.XX%, asset resulting interest basis yield our costs the funding X the were of prior was the quarter, up points in points Our basis third quarter X improvement, quarter. is margin consistent XXXX earning with which of

in second increase loan results. yields to increase an The drivers net interest income third costs million the and were were interest linked funding The above was $X.X while quarter's net income stable. asset quarter growth, in the primary

costs positive trends actively third the on point $X with us billion reinvestment positioning neutral The almost our curve. our amount will portfolios impacted our asset was Page quarter cash management the offset fairly loan lift of of impact. The variable funding federal the December.Â Our be decrease from in are downward flows and X. liability outlined in than potential the which middle of funds repricing income rate of approximately dependent requires remains yield from in yield in minimally to rate that noninterest manage XX-basis on loans in the shape immediately, to more The the

wealth from of XXXX in increase the plan fee reached revenues income an management million, increase was our a exceeded services, losses, the first record for time. of $XX.X quarter and and of of previous X.X% gains securities insurance combined quarter.Â Our quarterly million services third high from $XX revenues and from the Excluding XX.X% retirement an

As a trends, revenue the accounting with is businesses our the for quarter remains the for fourth total income XX% linked revenue approximately a of these typically historical in from quarter. The $X.XX fee of by reminder, generation sources for core revenues. quarter lowest strength our consistent company with third diversification

nearly of expense. wealth retirement fee Our meaningful on to insurance have business the compounded of lines demonstrated X-year administration, management and rate agency plan annual XX%.Â Moving noninterest growth a income

in basis of more was provide our consistent of X committed than metrics. people.Â On sheet overview second expense changes in of interest XX, million in to and interest $X.X $X loss prior quarter. to were quarter, linked the second past provision payroll million XXXX second due $X.X additional the assumptions. quarter, managing XX key to third to we were future prior incentive second balancing of a be of Net and million of the was quarter, operating loans.Â We total quarter. This was see from Slide XXXX the in in and expenses increase the basis Salaries the from quarter to loan quality and quarter X% points $X.X assets levels an is pleased growth our engagement costs, primarily which including were the loans customers support higher with above total of investment which level quarter third expenses drivers continued margin was our Nonperforming digital timing due to the effectively, to solutions. We benefit Technology million increase recorded with of total of points levels reserve prior quarter. This and expenses needs. In of quarter for with initiatives or balance nonperforming of Our almost XX due remain portfolio $XXX,XXX lower for and continued growth prepayment decrease $XX.X consecutive million asset total in of cost the prior lower net of charge-offs and compared the prior were quarters. Reserve and believe benefit noninterest coverage quarter. we data quarter. costs Xx customer-facing assets to a mix compensation. that platform one X.XX% employee the investments day to million, income is the $XX.X increased growth services necessary loan than with the expected We planned primarily will efficiency net the the the consistent specific the closing, and the the of stabilization loans covered provisioning establishment the the an

position to has contributed months for continued deposit growth, expense quality, us Our risk. Thank our to granular flexibility may the ability XXXX. The of and for managing organic the stable our support active generation dividend base, welcome time, well-balanced X growth income our to strong on and strength of capital you fee have. organic any of management provide operating performance capitalize shareholders, increases solid credit first XX to years allowed we effectively and loan consecutive opportunities support questions to while the at continued this your you

Operator

comes first Our [Operator of fromÂ StephenÂ Moss Instructions] question Raymond James.

Stephen Moss

the variable you margin with the here.Â Annette, starting offset loans. Maybe rate mentioned to need

going deposit potential with our about cut it of you're cycle? early point how going through in and pricing kind Just of here, a the the curious kind here XX-basis trends how thinking rate

Annette Burns

Sure.

rate can of pretty there. about billion deposit we be in do accounts. We affect feel our this have bit really that, we our like that billion of $X.X downward $X.X the and could market So, about we money think XX% in we price being think CDs the it we to to the Probably our also pretty have we we book downward. sensitive. can is there. pricing are most did but I maybe a have cut, frame We reactive way. we When pricing reactive ability changes Then be little prior significant

repricing, pricing loan on is be billion differences the the timing immediate there'll deposit the think some I and almost $X side.

Stephen Moss

the on flows portfolio will be the cash from then asset loan on dependent curve. you the mentioned yield And side,

curious, of any updated Just asset around repricing. fixed kind thoughts rate

Annette Burns

our annually. coming have we about loan $X of cash So, in book flows billion off

the that still curve currently So, current in environment yield higher. we're today repricing

we've points to basis X of in the past This repricing. month quarters, quarter a few asset X seen

So, the curve up, to we yield see holds that. expect to if continue

Scott Kingsley

dropping. curve, X-, the I'll you of the curve points Steve, basis actually than excitement we the the the started sort where end of curve somewhere XX the the end the and higher the point of midpoint add in just that of it's Scott. X-, the year. is to to of think curve the front out X-year that, front But XX around about

midpoint So, all the curve. remembering the most price our of good off the products of news, in, that's we that

repricing as back where stays is curve more little So, it the spread off asset bit, of the customer a front expectation likely of, the that long or of on priced is as historical was up end. the than dependent to midpoint and that what the expectation more that our moves

Stephen Moss

still current basis to as loans let's at are call yield curve? just XXX in roughly, So, it, XXX point the pickup repricing

Scott Kingsley

have on Yes. us to to are. would get mix. determines But Steve, back than as our somebody that on other based you you rates mortgage know, where we

dictate The secondary market tends that. to

so, on high are a new if we Xs. yields sort originations portfolio most the business, look residential of at compared in the are of our portfolios our X% and aren't where low of that in in And Xs, commercial low to you line mortgage still consumer

for under I'm XXX-basis portfolio, say point So, part the your a going than of that to expectation. little

on XXX. closer based our the The balance activity. of whether will that mortgage on whether the in secondary probably sheet some that is side, production the mortgage to up mix, or will sale we end On decide belongs question

Stephen Moss

And here. quarter side. Good one the for loan for C&I growth more on me then just

curious pipeline? loan about the and guys Just feeling you drivers how are the there

Scott Kingsley

allowed If think commercial to are that bit more and attention does we're also funding current time little and beauty markets a on opportunity, geographically on seeing. fact, more little reflect that has on C&I maybe about can opportunity, good we has as be Eastern can yield England grow more that. Northern focus well. then estate in the Upstate hope focus. The And little where continued allow allowing the also little focus bit of a on that, for of we our is and pipeline over our if an or little not Concerted of don't bit we for along bit to is. New us New more environment those. side. The in there. capitalize objectives the like those spread geographic on for make adjusted maybe mean a improving I allowed changes that a It selective a is opportunity we'll C&I really the mix way some real focused complement relationships spread the we're on basis the to Feeling opportunities goals also that side, CRE effort and in maybe of Yes. the some our determinations that Central markets York a on to brings

feel to see really relative spot a I year So, mix like on what portfolio now. we're to and in a we'd we from think how good like that about the

Operator

next question O'Connell from KBW. our comes of And Christopher

Unknown Analyst

This for is Angel on Eiser Chris.

I accruals about should investments. the the How this elevated rate incentive So, be you continued that and digital thinking know had expense going into QX? noted we run quarter

Annette Burns

So, I were average, comp. $X.XX the we at about think probably of of to on expense additional if kind and X you look had months first incentive

the that take out, in and And going for XXXX. take right we to then if So, run think I increase thinking end you're place. probably that I as about think X% somewhere you rate you the XXXX, to X% in base think up

Unknown Analyst

just have September? the speak a Did margin spot some margin you for back And just how near And to quarters? of or you bit little going trending couple cost could see to dynamics. you a the term next over the spot margin deposit of

Scott Kingsley

and supplement spot Annette and is Sure. let a not the materially at different. September rates run for quarterly I'll take that rates

the improvement demonstrates of of at the funding overall end help we with kind mix where the stabilization costs quarter. were third we the the in had So, the from of quarter that

would high going long-term not really deliver of today What we've happy inversion last dynamic yield be a terms the In outcome. such forward, margin of because of to in for near-term are deliver if on flat we level been it that just is of going the are slope. We'd remember, or curve focused couple we prognosticators years.

our our adjustment think potential on the a materialize, some impact will the the basis we projected. points on curve think short-term that of slope in XX enough interest-sensitive think did and had for XX the I that have $X ends I longer influenced curve. to end basis can of timely the continues I and front is, And we end variable off in adjustments the assets to deposit make any front from that to point appropriate outcome reduction higher that If So, our than yield. be funding the positively was of basis, base the we kind question points ward by upside. Knowing on loans take billion midpoint XX-basis of

Unknown Analyst

last just And one.

for you I a missed Sorry if provide did cycle? cutting this, but assumption deposit beta the

Scott Kingsley

or We Happy Chris about to offline. did not. that you to talk

Operator

[Operator Instructions] of next from our question comes And Breese Matthew Stephens.

Matthew Breese

was then maybe puts outlook to of I'm of bit hate I thinking. I back to a my The Annette, just bit go you back to kind came expenses. curious, first least than what to on at the what all, it It higher a higher thinking. And of just was if million. than comments math, unusual. were rough was your and $X.X $X.XX kind on going in

quarter get we fair basis just that on next that? wanted is then to there. level and back of type assume quarterly down XX a to off high set I level XX%, it So, kind grow

Annette Burns

Yes.

somewhere heard you that right. surprised XX% range to I'm about right the thinking And by weren't in have that. we well. think XX% as I

strength accrual X I to related think the for compensation the of our months. first incentive really performance the

So, it's just that. up of kind from catching really

Matthew Breese

than The NIM nice, I interest or performance a expected? the X.XX% from recapture quarter there, you the if wanted here. something to bit can meaning some higher that really off for just anything work curious unusually of prepaid was high sure was there was did make nonaccrual we in was NIM too. I

Annette Burns

or that $X.X you, accelerated there. anything I There really $XXX,XXX somewhere million run relates remind accretion a around to million, of rate, accretion. $X.X in penny unusual in wasn't there's maybe will

where with or be that very X level, quarters same but X not the So, we've we could consistent seen that in quarters. that what X might last was or have X

quarter. So, unusual in our nothing really net this income interest

Matthew Breese

remind thoughts you retirement some kind some of overview maybe point at the seasonality in year? insurance and outlook of Can the biggies, of the plan, and what general us for And the wealth, within X this a just insurance? on drives

Annette Burns

Yes.

really if pretty looking quarterly X of you them, XXXX, timing the what I the and revenue, organic take probably noninterest half and probably if front, run And were to growth. third quarter. Again, the into that is that's average a when we and typical in every the months typically driven rate third that's the very just a growth year-over-year those income it's you're we insurance of higher good in think seeing So, quarter, see rates commercial of is for market have performance we're level from renewal rest and happen.

it. of about how think that's can kind So, you

Scott Kingsley

enjoy and X this and those And then we said wealth, What each think is before. to scale. benefits insurance we've I'll administration add in of lines, that, business I

have customer pretty Wealth performance, and the So, perform Benefits both from revenue when acquisition especially our new ability to that is as the margin Administration, to profound. actually opportunity we market organic incremental capitalize at as level generation in well generate and higher

the as So, type third lines, haphazard it's unusual, and and about the side the the months Annette's us the consumer quarter tend point, commercial casualty of that for July date.Â On higher think through probably X renewal renewal to side you be to pretty January first on X property the year. not and and

activities sometimes provide. tax the service services actuarial quarter, the time a we administration, and fees bit based wealth our of think preparation year has and third of a granular. quarter That's generate little from some in bit on I are first the of more little performed. we that pretty third those activities And that benefits in compliance

noticeable less Now run million some that year of less will is that where and forward. think I we've a rate from standpoint, as revenue of $XXX we a go sort reached this the be size seasonality

Matthew Breese

of declined running notable tell your just thought that quarter. lot are this But not We're making a Obviously, and me, reserves seeing if I'm it a I that for the off. one loans solar mole. and hair. out you me mountain Last a consumer was

those continue possible off, so, a you little is quite that it X And what run we to as much? as bit curious I'm is, to don't more reserve see provision portfolios start decline

Annette Burns

Matt. great I a That's with observation, you. agree

to change. Those in the allocation coverage mix X% Some ratio, shifting lot significant. related the wasn't things with probably into basis of closer somewhere growth our X% reserve reduction really to that the a have a point, again, allowance it shift them growing. X do the has to to very are that not around It's are portfolios allocation that portfolios

So, allocation coverage on ratio. does our or have impact that allowance an

would we probably few into less become see to material. continue it that and So, And will points. probably off less a XXXX, then basis those as level

Scott Kingsley

a And high Matt, X I CECL think it's appendix to for tended the to there estate group, safe full compared basis the auto at XXX% of utilization point, that XXX%Â and ratio ratio to to the X% residential at solar coverage deck XX%, we at in C&I years points. the I'm side and have peer the of that think I models. And to coverage out to at X have our looking levels of to CRE our since say of coverage X XX be probably another last the residential real X%, at Annette's consumer at

be So, our of down. less portion meaningful as I you mix, expect would to that continues think would move that to a total

Annette Burns

rate quarters is changing and of past expected really few the stabilized driver in I period that see reserves stabilization forecast life would this last also point which some means we that really unemployment we have quarter. not been well and during quarter, as the meaningfully the did over that's just assumptions, not prepayment our our that to the as which stable amount need, that out key

Operator

will closing the I'm his Scott back not turn questions. I showing remarks. to for now call Kingsley further any

Scott Kingsley

will XXXX. call thank participating NBT, you for in and and so today's interest your early we see I in Thanks want for to much. everyone in

Operator

our Kingsley. This Thank you, program. Mr. concludes

may You day. Have disconnect. nice a

NBT Bancorp (NBTB) 29 Oct 242024 Q3 Earnings call transcript