NBT Bancorp profit dips slightly in Q2

NORWICH, N.Y. — NBT Bancorp, Inc. (NASDAQ: NBTB) reported that its second-quarter net income dropped to $37.8 million, or 88 cents a share, from $40.3 million, or 92 cents per share, in the year-ago quarter.

Net interest income recognized in this year’s second quarter from the federal Paycheck Protection Program (PPP) was about $1.3 million, down sharply from $4.7 million in the second quarter of 2021, reflecting higher levels of loan forgiveness in the prior year. Excluding the impact of PPP loan-income recognition, NBT’s net interest income in the second quarter of 2022 improved in comparison to the same period last year, the banking company noted in its July 25 earnings report. That was mainly due to loan growth, incremental deployment of excess liquidity into investment securities, and increases in the Federal Reserve’s targeted Federal Funds rate. 

NBT recorded a provision for loan losses of $4.4 million in the second quarter, compared to a net benefit of $5.2 million in the same quarter in 2021.

“We are very pleased with our operating results for the second quarter and first half of 2022, which reflect continued organic loan growth and solid performance by our fee-based businesses,” NBT President and CEO John H. Watt, Jr. said in the earnings report. “With the increases in the targeted Fed Funds rate in the quarter, we experienced the benefits of an asset-sensitive balance sheet. Our asset quality continues to be excellent, with historically low levels of net charge-offs and nonperforming assets. Given our strong loan growth and increased uncertainty surrounding the domestic macro-economic outlook, we did add to our loan loss reserves at quarter end.”

NBT had total loans of $7.78 billion as of June 30, up from $7.52 billion a year earlier. PPP loans totaled $17.3 million, compared with $359.7 million in the second quarter of 2021. During the second quarter of this year, NBT saw $36.7 million of PPP loans forgiven.

Total deposits as of June 30 were $10.03 billion, up from $9.79 billion for the same period a year ago, but down from $10.23 billion on Dec. 31,2021.

NBT’s board of directors approved a 2 cent, or 7.1 percent, increase in its quarterly dividend paid to shareholders. The banking company will pay a third-quarter cash dividend of 30 cents per share on Sept. 15 to shareholders of record as of Sept. 1.

“The increase reflects the continued strength of both our current operating performance and capital position,” Watt said.

Acquisition

On June 30, NBT’s insurance unit — NBT Insurance Agency, LLC — entered into an asset-purchase agreement with Harrison A. Rogers Agency, Inc. to acquire all the assets of the small personal and commercial-lines property and casualty insurance agency based in the town of Norfolk in St. Lawrence County. The move will expand NBT’s insurance territory into northern New York, where NBT Bank already has an established presence. The transaction should close sometime during the third quarter. No financial terms were disclosed.

NBT Bancorp is a financial holding company based in Norwich with total assets of $11.7 billion as of June 30. The company operates through NBT Bank, N.A., a full-service community bank, and through two financial-services companies. NBT Bank has 140 branches in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine, and Connecticut. Rochester–based EPIC Retirement Plan Services is a benefits-administration firm. NBT Insurance Agency, based in Norwich, is a full-service insurance agency.