NBT Bancorp Q4 Earnings Call Highlights

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• NIM positioning is 'neutral' and margin expansion expectations are modest, around 2 to 3 basis points per quarter

  80% confidence

• Operating return on assets was 1.37% for the second consecutive quarter, with return on tangible equity of 17.02%

  80% confidence

• Management estimated $150 million to $175 million of unscheduled CRE payoffs in 2025, driven in part by agency financing and private funding in certain markets, and said they were planning for continued payoff risk in 2026

  80% confidence

• Charge-off expectations have shifted lower as higher-loss unsecured consumer portfolios have wound down, with a more normalized range described as roughly 15 to 20 basis points

  80% confidence

• The combination of net interest income and fee-based revenues produced 'meaningful positive operating leverage' as the company navigated three federal funds rate cuts late in 2025

  80% confidence

• Core operating earnings were $1.05 per share, consistent with the prior quarter

  80% confidence

• Fourth-quarter operating expenses excluding acquisition costs were $112 million, up 1.5% sequentially, reflecting higher technology costs, year-end charitable contributions, and marketing costs

  80% confidence

• Residential mortgages have 125 to 130 basis points of 'room' for repricing

  80% confidence

• A higher allowance against the solar book reflected 'recalibration' of coverage as the portfolio runs off, not a fundamental negative change

  80% confidence

• The company still has a solar loan portfolio just under $800 million that is running off by roughly $100 million per year

  80% confidence

• 58% of deposits, or $7.8 billion, consisted of no- and low-cost checking and savings accounts at a cost of 80 basis points

  80% confidence

• On potential sale of the solar portfolio, rates on those assets are low and management is waiting for customers to pay down the loans and redeploy proceeds rather than selling at an unfavorable outcome

  80% confidence

• Net interest margin (NIM) was 3.65% in the fourth quarter, down 1 basis point from the prior quarter

  80% confidence

• Mid- to lower-single-digit loan growth in 2026 'is' a reasonable expectation

  80% confidence

• Integration of the Evans team over the prior eight months had been 'highly successful'

  80% confidence

• The company's capital position supports pursuing growth opportunities across its markets

  80% confidence

• The company repurchased 250,000 shares in the fourth quarter, describing buybacks as part of capital planning alongside organic growth, dividend increases, and evaluating M&A opportunities

  80% confidence

• Provision expense was $3.8 million for the quarter, compared to $3.1 million in the third quarter, reflecting slightly higher net charge-offs

  80% confidence

• The effective tax rate was 20.3% for the fourth quarter, lower than the prior quarter, attributed to finalizing the assessment of deductibility of merger-related expenses and the impact on the full-year effective tax rate of 23%

  80% confidence

• Fee income can include items that are harder to predict, such as $1.0 million to $1.5 million of bank-owned life insurance (BOLI) gains and other securities gains

  80% confidence

• Fee income (excluding securities gains) was $49.6 million, down $1.8 million from the seasonally strong third quarter but up 17.4% from the fourth quarter of 2024

  80% confidence

• A 'normal run rate' for BOLI is about $2.4 million

  80% confidence

• Commercial production remained strong during 2025, though the company saw higher commercial real estate (CRE) payoffs

  80% confidence

• Site development and construction of the first Micron fabrication facility is expected to commence immediately, with completion targeted in 2030

  80% confidence

• Combined quarterly revenues from retirement plan services, wealth management, and insurance services exceeded $30 million, and non-interest income represented 27% of total revenues in the quarter

  80% confidence

• Roughly $300,000 to $400,000 of wealth-related revenue in the quarter was seasonal activity-based fees

  80% confidence

• The fourth-quarter buyback—described as a little over $10 million—was driven by valuation and the company's capacity to 'self-fund' repurchases without impacting capital ratios, adding that NBT believes it could self-fund that level on a quarterly basis

  80% confidence

• The company typically experiences seasonally higher operating costs in the first quarter—citing higher costs for plowing and heating, along with higher payroll and stock-based compensation expense tied to the timing of award grants—suggesting a $0.04 to $0.05 per share headwind from first-quarter seasonality versus other quarters

  80% confidence

• About 77% of the CD book reprices over the next two quarters

  80% confidence

• Approximately $3 billion of earning assets reprice almost immediately with changes in the federal funds rate, while around $6 billion of deposits—principally money market and CD accounts—remain price sensitive

  80% confidence