NBT Bancorp Inc.

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 in slide two, 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'll conduct a question-and-answer session. Instructions will follow at that time. 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 Andesco, 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 quarter, with a return on tangible equity of 15.50%. These metrics represent meaningful improvement over the first quarter of last year and have provided incremental capital flexibility. Our tangible book value per share of $27.05 at quarter end was more than 9% higher than a year ago. The continued remix of earning assets, diligent management of funding costs, and the addition of the Evans Balance Sheet resulted in a 28 basis point improvement in net interest margin year over year. We got off to a slow start in January and February with the very difficult winter weather conditions, and we experienced a higher than expected level of commercial real estate payoffs. With that said, activity since then has been quite good, and we are very pleased with the types of customer opportunities we are seeing across our footprint as well as our current pipeline levels. Growth in non-interest income continues to be positive, highlighted by a new all-time high in quarterly revenue generation from our retirement plan administration business. Our capital utilization priorities remain focused on supporting organic growth while continuing our long-standing commitment to annual dividend growth. In addition, our strong capital levels continue to allow us to evaluate a variety of M&A opportunities. Another component of our capital planning is to return capital to shareholders through opportunistic share repurchases. Consistent with that approach, we repurchased 250,000 of our own shares again in the first quarter of 2026. One year in, the integration of our Evans Bank colleagues has gone smoothly and validated the strong cultural alignment we saw from the outset. Their customer and community focused approach continues to enhance our franchise and we remain excited about the opportunities ahead in the western region of New York. Momentum across upstate New York's semiconductor corridor continues to build. Since Micron's groundbreaking late last year and the completion of its site acquisition from Onondaga County in the first quarter, development activity has accelerated. Site development and infrastructure build-out for the first fabrication facility are now underway, and we are already seeing tangible benefits, with more than a dozen of our customers securing contracts tied to the project. Stepping back more broadly, across our seven-state footprint, we continue to see encouraging activity tied to advanced manufacturing, infrastructure investment, housing development, and workforce-driven economic initiatives. These dynamics are evident across our core markets, including manufacturing and defense activity in New England, as well as construction and community revitalization efforts throughout our legacy regions. While activity levels can vary quarter to quarter, the depth and diversity of these initiatives reinforce our confidence in the markets we serve. We believe NBT is well-positioned to support this activity through our relationship-driven model, significant balance sheet capacity, and a diversified set of financial solutions. I will now turn over the meeting to Annette to review our first quarter results with you in detail. Annette?

Thank you, Scott, and good morning. Turning to the results overview page of our earnings presentation, for the first quarter, we reported net income of $51.1 million, or 98 cents per diluted common share. We have improved earnings 27% from the first quarter of 2025, with growth in our balance sheet, net interest margin improvement, and a 4.5% year-over-year growth in our fee-based income as well. Earnings were modestly lower than the prior quarter, consistent with seasonal expectations, two fewer days in the quarter, and a normalized effective tax rate. The next page shows trends in outstanding loans. Total loans at $11.5 billion were down $50.9 million from December 31, 2025, with other consumer and residential solar portfolios in a planned runoff status representing half of that decline. In addition, we continued to experience an elevated level of commercial payoffs, similar to the prior two quarters. Our total loan portfolio remains purposely diversified and is comprised of 56% commercial relationships and 44% consumer loans. On page six, total deposits were up $244 million from December 2025, primarily due to the inflow of seasonal municipal deposits during the quarter, along with increases in consumer and commercial customer account balances. Generally, in most of our markets, municipal tax collections are concentrated in the first and third quarters of each year. We experienced a favorable change in our mix of deposits out of higher cost time deposits and into checking, savings, and money market products. 59% or $8 billion of our deposit portfolio consists of no and low cost checking and savings account at a cost of 38 basis points. The next slide highlights the detailed changes in our net interest income and margin. Our net interest margin in the first quarter increased seven basis points to 3.72% compared with the prior quarter as the nine basis point decrease in the cost of funds more than offset the two basis point decline in earning asset yields. Loan yields decreased four basis points from the prior quarter to 5.66% primarily due to the repricing of variable rate loans following the prior quarter's federal funds rate decreases. we were able to actively manage our funding costs downward to more than offset that impact as evidenced by the 10 basis point decline and our total cost of deposits to 1.34% for the quarter. Net interest income for the first quarter was $134.3 million, a decrease of $1 million compared to the prior quarter, but more than 25% above the first quarter of 2025. The decrease in net interest income from the prior quarter was driven by two fewer days in the first quarter of 2026. The opportunity for further upward movement in earning asset yields and net interest margin will depend largely on the shape of the yield curve and how we reinvest loan investment portfolio cash flows. The trends in non-interest income are outlined on page eight, excluding securities gains Our fee income was $49.7 million, consistent with the prior quarter, and increased 4.5% from the first quarter of 2025. Our combined revenues from retirement plan services, wealth management, and insurance services exceeded $32 million in quarterly revenues. Non-interest income represented 27% of total revenues in the first quarter and reflects the strength of our diversified revenue base. Total operating expenses were $112 million for the quarter, a 0.5% increase from the prior quarter. Salaries and employee benefit costs were $68.8 million, an increase of $2.8 million from the prior quarter. This increase was primarily driven by seasonally higher payroll taxes and stock-based compensation, partially offset by lower medical expenses. In addition, annual merit increases occurred in mid-March at an average rate of 3.3%. The quarter-over-quarter increase in occupancy expenses was expected, driven by increases in seasonal costs, including utilities and higher maintenance costs. The effective tax rate for the first quarter was higher than the prior quarter at 23.3%, primarily due to the finalization of the deductibility of last year's merger-related expenses and the associated impact on the full-year effective tax rate in 2025. Slide 10 provides an overview of key asset quality metrics. Provision expense for the three months ended, March 31, 2026, was $5.6 million, compared to $3.8 million for the fourth quarter of 2025. The increase in provision for loan losses was primarily due to a slightly higher level of net charge-offs and non-performing loans, resulting in a higher level of allowance for loan losses. Reserves were 1.2% of total loans and covered more than two times the level of non-performing loans. In closing, we believe the strength of our franchise positions us well for growth opportunities as they arise. We continue to see productive engagement across our markets, reflecting our ongoing investment in our people and communities. Thank you for your interest in our results. At this time, we welcome any questions you may have.