NBT Bancorp releases 1Q 2025 earnings

Vermont Business Magazine NBT Bancorp Inc (NASDAQ: NBTB), with NBT Bank branches in Vermont, reported net income and diluted earnings per share for the three months ended March 31, 2025.

Net income for the first quarter of 2025 was $36.7 million, or $0.77 per diluted common share, compared to $33.8 million, or $0.71 per diluted common share, for the first quarter of 2024, and $36.0 million, or $0.76 per diluted common share, for the fourth quarter of 2024. Operating diluted earnings per share(1), a non-GAAP measure, was $0.80 for the first quarter of 2025, compared to $0.68 for the first quarter of 2024 and $0.77 for the fourth quarter of 2024. 

CEO Comments 

“Growth in both net interest income and noninterest income compared to the prior quarter and the first quarter of 2024 resulted in the generation of positive operating leverage by our team in the first quarter of 2025.” said NBT President and Chief Executive Officer Scott A. Kingsley. “Our capital position remains a key strength as we execute on strategic growth initiatives. We recently added new banking locations in South Burlington, VT and Webster, NY, and we look forward to completing our planned merger with Evans Bancorp, Inc. in early May. The addition of over 200 experienced bankers and 18 locations from Evans will firmly establish NBT's presence in Buffalo and Rochester, Upstate New York's two largest markets by population.”

First Quarter 2025 Financial Highlights (See Table Below)

Net Income

• Net income was $36.7 million and diluted earnings per share was $0.77

Net Interest Income / NIM

• Net interest income on a fully taxable equivalent (“FTE”) basis was $107.2 million, an increase of $1.1 million from the prior quarter(1)
• Net interest margin (“NIM”) on an FTE basis was 3.44%(1), an increase of 10 basis points (“bps”) from the prior quarter
• Included in FTE net interest income was $2.2 million of acquisition-related net accretion, which was down $0.4 million from the fourth quarter of 2024
• Earning asset yields of 4.95% were down 1 bp from the prior quarter
• Total cost of funds of 1.60% was down 11 bps from the prior quarter

Noninterest Income

• Noninterest income was $47.6 million, an increase of 12.7% from the fourth quarter of 2024, excluding net securities gains (losses)

Loans and Credit Quality

• Period end total loans were $9.98 billion as of March 31, 2025, up $10.4 million, or 0.4% annualized, from December 31, 2024
• Net charge-offs to average loans was 0.27% annualized
• Nonperforming loans to total loans was 0.48%
• Allowance for loan losses to total loans was 1.17%

Deposits

• Deposits were $11.71 billion as of March 31, 2025, up $161.8 million, or 1.4%, from December 31, 2024
• Total cost of deposits was 1.49% for the first quarter of 2025, down 11 bps from the fourth quarter of 2024

Capital

• Stockholders’ equity was $1.57 billion as of March 31, 2025
• Tangible book value per share(2) was $24.74 at March 31, 2025
• Tangible equity to assets of 8.68%(1)
• CET1 ratio of 12.12%; Leverage ratio of 10.39% 

Loans

• Period end total loans were $9.98 billion at March 31, 2025, compared to $9.97 billion at December 31, 2024.
• Period end total loans increased $10.4 million from December 31, 2024. Total commercial loans increased $23.9 million to $5.33 billion while total consumer loans decreased $13.6 million to $4.65 billion. Excluding the other consumer and residential solar portfolios, which are in a planned run-off status, period end loans increased $40.5 million, or 1.8% annualized. Residential real estate loan balances decreased $14.7 million from December 31, 2024 primarily due to seasonally lower originations and market conditions. In addition, the Company originated and sold $7.4 million of 30-year fixed rate mortgages in the first quarter of 2025.

Deposits

• Total deposits at March 31, 2025 were $11.71 billion, compared to $11.55 billion at December 31, 2024. The $161.8 million increase in deposits from December 31, 2024 was primarily due to the inflow of seasonal municipal deposits during the quarter.
• The loan to deposit ratio was 85.2% at March 31, 2025, compared to 86.3% at December 31, 2024.

Net Interest Income and Net Interest Margin

• Net interest income for the first quarter of 2025 was $107.2 million, an increase of $1.1 million, or 1.1%, from the fourth quarter of 2024 and an increase of $12.0 million, or 12.7%, from the first quarter of 2024. The increase in net interest income from the fourth quarter of 2024 resulted primarily from a decrease in the cost of deposits, partially offset by lower yields on loans and two fewer days in the first quarter of 2025.
• The NIM on an FTE basis for the first quarter of 2025 was 3.44%, an increase of 10 bps from the fourth quarter of 2024. This increase was driven by the decrease in the cost of interest-bearing deposits. The NIM on an FTE basis increased 30 bps from the first quarter of 2024 due to higher average balances of earning assets and the yields on those assets, lower average balances of short-term borrowings and the decrease in the cost of interest-bearing deposits.
• Earning asset yields for the three months ended March 31, 2025 decreased 1 bp from the prior quarter to 4.95%. Loan yields for the three months ended March 31, 2025 decreased 3 bps from the prior quarter to 5.62% primarily due to the repricing of $2.1 billion in variable rate loans from the 25 bps federal funds rate decrease in December, partially offset by loans originating at higher rates than portfolio yields during the quarter. Earnings asset yields increased 11 bps from the same quarter in the prior year as new loan yields were priced higher than portfolio yields. Average earning assets were consistent with the fourth quarter of 2024 due to the decrease in short-term interest-bearing accounts being mostly offset by an increase in securities and organic loan growth. Average earning assets grew $427.5 million, or 3.5%, from the first quarter of 2024 due to growth in average loans and securities.
• Total cost of deposits, including noninterest bearing deposits, was 1.49% for the first quarter of 2025, a decrease of 11 bps from the prior quarter and a decrease of 12 bps from the same period in the prior year.
• Total cost of funds for the three months ended March 31, 2025 was 1.60%, a decrease of 11 bps from the prior quarter and a decrease of 19 bps from the first quarter of 2024.

Asset Quality and Allowance for Loan Losses

• Net charge-offs to total average loans for the first quarter of 2025 was 27 bps compared to 23 bps in the prior quarter primarily due to an increase in consumer net charge-offs. Included in net charge-offs for the first quarter of 2025 was a $2.1 million write-down of a nonperforming commercial real estate loan to the estimated fair value.
• Nonperforming assets to total assets was 0.35% at March 31, 2025, compared to 0.38% at December 31, 2024.
• Provision expense for the three months ended March 31, 2025 was $7.6 million, compared to $2.2 million for the fourth quarter of 2024. The increase in provision expense from the prior quarter was primarily due to the deterioration in economic forecasts and a higher level of net charge-offs partially offset by the run-off of the other consumer and residential solar portfolios.
• The allowance for loan losses was $117.0 million, or 1.17% of total loans, at March 31, 2025, compared to $116.0 million, or 1.16% of total loans, at December 31, 2024.
• The reserve for unfunded loan commitments was $4.5 million at March 31, 2025, compared to $4.4 million at December 31, 2024.

Noninterest Income

• Total noninterest income, excluding securities gains (losses), was $47.6 million for the three months ended March 31, 2025, up $5.4 million, or 12.7%, from the fourth quarter of 2024, and up $4.3 million, or 10.1%, from the first quarter of 2024.
• Retirement plan administration fees were up $2.9 million from the prior quarter and increased $1.6 million from the first quarter of 2024. The increase from the prior quarter was due to higher seasonal activity-based fees in the first quarter and the additional revenue from both organic growth and the acquisition of a small third-party administrator (“TPA”) business in the fourth quarter of 2024. The increase from the first quarter of 2024 was driven by the additional revenue from new customer plans, the TPA acquisition and higher market values of assets under administration.
• Wealth management fees were consistent with the prior quarter and increased $1.2 million from the first quarter of 2024. The increase from the first quarter of 2024 was driven by market performance and growth in new customer accounts.
• Insurance revenues increased $0.9 million from the fourth quarter of 2024 due to organic growth, higher levels of policy renewals and first quarter seasonality.
• Bank owned life insurance income increased from both the fourth quarter of 2024 and the first quarter of 2024 due to a $1.3 million nonrecurring gain.

Noninterest Expense

• Total noninterest expense was $99.9 million for the first quarter of 2025, compared to $100.8 million for the fourth quarter of 2024 and $91.8 million for the first quarter of 2024. Total noninterest expense decreased 1.1% compared to the previous quarter and increased 7.5% from the first quarter of 2024, excluding $1.2 million of acquisition expenses in the first quarter of 2025 and $1.0 million in the fourth quarter of 2024, respectively.
• Salaries and benefits decreased 1.7% from the prior quarter driven by lower medical and other benefit costs, lower levels of incentive compensation and lower salaries due to two fewer payroll days in the quarter, partially offset by seasonally higher payroll taxes and stock-based compensation expenses. The increase from the first quarter of 2024 was driven by merit pay increases which were effective annually in March, an increase in employees supporting growth in our markets and higher medical and other benefit costs.
• Occupancy costs increased $1.2 million from the prior quarter primarily due to seasonal maintenance and utilities costs. The $0.9 million increase from the first quarter of 2024 was driven by higher seasonal maintenance and utilities given the harsher winter and higher facilities costs related to new banking locations.
• Other expense decreased $1.7 million from the prior quarter and was consistent with the first quarter of 2024. The decrease from the previous quarter was driven by timing of expenses and Company initiatives in the fourth quarter of 2024.

Income Taxes

The effective tax rate for the first quarter of 2025 was 22.2% which was up from 21.7% for the first quarter of 2024 primarily due to a lower level of tax-exempt income as a percentage of total taxable income. 

Capital

• Tangible common equity to tangible assets(1) was 8.68% at March 31, 2025. Tangible book value per share(2) was $24.74 at March 31, 2025 and $23.88 at December 31, 2024.
• Stockholders’ equity increased $39.6 million from December 31, 2024 driven by net income generation of $36.7 million and a $20.3 million decrease in accumulated other comprehensive loss reflecting the change in the fair value of securities available for sale, partially offset by dividends declared of $16.1 million.
• As of March 31, 2025, CET1 capital ratio of 12.12%, leverage ratio of 10.39% and total risk-based capital ratio of 15.24%.

Stock Repurchase

• The Company did not purchase shares of its common stock during the three months ended March 31, 2025. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. As of March 31, 2025, there were 1,992,400 shares available under the Company’s share repurchase program.

Evans Bancorp, Inc. Merger

• NBT and Evans anticipate completing the previously announced merger on May 2, 2025 simultaneously with the core system conversion, pending customary closing conditions. Evans had assets of $2.19 billion, deposits of $1.87 billion and net loans of $1.76 billion as of December 31, 2024. Pursuant to the merger agreement, NBT will acquire 100% of the outstanding shares of Evans in exchange for common shares of NBT. The exchange ratio will be fixed at 0.91 NBT shares for each share of Evans.

Conference Call and Webcast 

The Company will host a conference call at 10:00 a.m. (Eastern) Friday, April 25, 2025, to review the first quarter 2025 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at www.nbtbancorp.com/bn/presentations-events.html#events and will be archived for twelve months.

Corporate Overview

NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $13.86 billion at March 31, 2025. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 157 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a national benefits administration firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtbank.com/Insurance. 

Non-GAAP Measures 

This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of the Company’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.

NORWICH, NY (April 24, 2025) – NBT Bancorp Inc

To support vital journalism, access our archives and get unique features like our award-winning profiles, Book of Lists & Business-to-Business Directory, subscribe HERE!