NBT Bancorp Inc. (NASDAQ:NBTB) Q1 2023 Earnings Conference Call April 25, 2023 8:30 AM ET

Company Participants

John H. Watt, Jr. – President and Chief Executive Officer

Scott Kingsley – Chief Financial Officer

Conference Call Participants

Alex Twerdahl – Piper Sandler & Co

Steve Moss – Raymond James

Chris O’Connell – KBW

Matt Breese – Stephens Inc.

Operator

Good day, everyone. Welcome to the NBT Bancorp’s First Quarter 2023 Financial Results Conference Call. 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. Actual results may differ from those projected. In addition, certain non-GAAP measures will be discussed. Reconciliations for these numbers are contained within the appendix of today’s presentation. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will follow at that time. As a reminder, this call is being recorded.

I would now like to turn the conference over to NBT Bancorp President and CEO, John H. Watt, Jr. for his opening remarks. Mr. Watt, please begin.

John H. Watt, Jr.

Thank you, Bella. Good morning and thank you all for participating in our earnings call covering NBT Bancorp’s first quarter 2023 results. Joining me today are NBT’s Chief Financial Officer, Scott Kingsley; our Chief Accounting Officer, Annette Burns, and our Treasurer, Joe Ondesko. In a volatile macro environment, we are pleased with our operating results for the first Q of 2023, including earnings per share of $0.88, return on average assets of 1.3% and return on average tangible common equity of 17.2%, excluding merger expenses and securities losses.

We drove 5% annualized loan growth with our commercial banking, business banking, residential solar and indirect auto businesses, all contributing. In the markets we serve it is clear to us that our customers are successfully navigating the challenging operating environment, and we are on the ground helping them every day. Looking forward loan pipelines across the platform are active, but are moderating. Credit quality remains strong across our commercial and consumer businesses. Non-performing assets are at all time lows.

We’re happy to report today that both total deposits and core deposits grew in Q1 driven in part by seasonal growth of municipal deposits. Scott will talk more about this growth and about the diversity and granularity of our deposit base that is the hallmark of our franchise. In addition, we enjoy access to significant and diverse liquidity sources, and our capital levels are strong. We have provided detail on the accompanying slides. Our net interest margin did experience pressure in the first quarter due to re-pricing actions that positioned NBT to stay competitive in our markets. With that said, relative to our peer group and the broad market are cycled to date deposit beta as of the end of March rose to a modest 12%.