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The call presented a net positive tone: year-over-year earnings, tangible book value, net interest income and margin all showed meaningful improvement, fee income growth reached an all-time high in retirement plan services, deposits strengthened and capital flexibility allowed for buybacks and M&A optionality. Offsetting items included quarter-to-quarter loan decline driven by planned runoff and elevated commercial payoffs, an increase in provisions and some localized asset-quality deterioration (a specific C&I and several CRE credits), modest quarter-over-quarter earnings seasonality, and competitive pressure in indirect auto. Overall the company appears well-capitalized and positioned to support market opportunities while managing tactical headwinds.
Management's guidance emphasized stable operating expense and capital priorities: Q1 operating expenses ran about $112 million and are expected to track roughly at that level in Q2 with full‑year operating expense growth of about 3–4% (annual merit increases ~3.3%); loan growth is expected to reaccelerate to low- to mid-single digits for 2026. They see net interest margin at 3.72% (up 7 bps q/q, +28 bps YoY) with loan yields of 5.66% (down 4 bps q/q), deposit cost at 1.34% (down 10 bps q/q) and modest potential for a few basis points of NIM improvement depending on the yield curve; net interest income was $134.3M and net income $51.1M ($0.98/share) in Q1. Other financial cadence items: securities cash flows ~$20–25M/month, loan accretion ~$6–6.5M/quarter (intangible amortization ~$3.5M/quarter), planned residential solar runoff ~ $100M/year (~$25M/quarter), provision $5.6M in Q1, reserves 1.2% of loans covering >2x NPLs, and continued focus on organic growth, annual dividend growth and opportunistic buybacks (250,000 shares repurchased in Q1).
Net income of $51.1 million ($0.98 diluted EPS) in Q1 2026, representing a 27% increase versus Q1 2025. Operating return on assets (ROA) was 1.29% and return on tangible equity (ROTCE) was 15.50%, both reflecting meaningful year-over-year improvement.
Tangible book value per share of $27.05 at quarter end, more than 9% higher than a year ago, providing incremental capital flexibility.
Net interest margin (NIM) improved 28 basis points year-over-year and was 3.72% in Q1 2026 (up 7 bps quarter-over-quarter). Net interest income was $134.3 million, more than 25% above Q1 2025.
Total deposits increased $244 million from December 2025 (seasonal inflows), and deposit mix shifted away from higher-cost time deposits into checking/savings. 59% of deposits ($8.0 billion) are no/low-cost; total cost of deposits declined 10 bps to 1.34% in Q1.
Fee-based income (ex securities gains) was $49.7 million, stable quarter-over-quarter and up 4.5% year-over-year. Combined retirement plan services, wealth management and insurance revenues exceeded $32 million; retirement plan administration hit an all-time quarterly revenue high.
Repurchased 250,000 common shares in Q1 2026. Management cites strong capital levels that support organic growth, continued dividend commitment, opportunistic buybacks and evaluation of M&A opportunities (targeted fill-in deals within existing footprint).
One-year post-merger integration of Evans Bancorp described as smooth with cultural alignment; expansion benefits in Western New York. Positive momentum from semiconductor-related development (Micron) with more than a dozen customers securing project-related contracts.
Allowance for loan losses equal to 1.2% of loans and covering more than 2x the level of nonperforming loans, indicating a conservative reserve posture relative to current NPAs.
Loan discount accretion of approximately $6.5 million in Q1, expected to run ~$6.0–$6.5 million; intangible amortization around $3.5 million per quarter. Securities cash flows running roughly $20–$25 million per month.
Good day, everyone. Welcome to the conference call covering NBT Bancorp's First Quarter 2026 Financial Results. This call is being recorded and has been made accessible to the public in accordance with the SEC 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 [Operator Instructions] As a reminder, this call is being recorded. I will now turn the conference over to NBT Bancorp President and CEO, Scott Kingsley, for his opening remarks. Mr. Kingsley, please begin.
Thank you. Good morning, and thank you for joining us for this earnings call covering NBT Bancorp's First Quarter 2026 Results. With me today are Annette Burns, NBT's Chief Financial Officer; Joe Stagliano, President of NBT Bank; and Joe Ondesko, our Treasurer. Our solid operating performance for the first quarter was driven by disciplined balance sheet management, the growth of our diversified revenue streams and the continued benefits of integrating Evans Bancorp into our franchise following the merger in May 2025. These factors have contributed to productive gains in operating leverage. Operating return on assets was 1.29% for the first...