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DATE

Friday, Apr. 24, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Scott A. Kingsley
  • Chief Financial Officer — Annette L. Burns
  • President, NBT Bank — Joseph R. Stagliano
  • Treasurer — Joe Ondesco

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TAKEAWAYS

  • Net Income -- $51.1 million, translating to $0.98 per diluted common share, grew 27% from 2025.
  • Operating ROA and ROTCE -- 1.29% and 15.5%, both representing notable improvement from the prior year.
  • Tangible Book Value Per Share -- $27.05, more than 9% higher year over year.
  • Net Interest Margin -- 3.72%, a 7 basis point increase from the prior quarter and 28 basis point improvement year over year.
  • Net Interest Income -- $134.3 million, down $1 million from the previous quarter due to two fewer days, but more than 25% above the previous year.
  • Total Loans -- $11.5 billion, decreased by $50.9 million since Dec. 31, 2025; planned runoff in consumer and residential solar portfolios represented half of that decline.
  • Loan Portfolio Mix -- 56% commercial relationships and 44% consumer loans, indicating diversification.
  • Commercial Real Estate Payoffs -- Experienced a higher-than-expected level, consistent with prior two quarters.
  • Total Deposits -- Up $244 million since Dec. 2025, driven by seasonal municipal inflows and growth in consumer and commercial balances.
  • Deposit Mix and Costs -- 59% in no- and low-cost checking/savings; blended cost for these funds was 38 basis points.
  • Total Deposit Cost -- 1.34%, declining 10 basis points quarter over quarter.
  • Loan Yields -- 5.66%, down 4 basis points from the prior quarter due to variable rate repricing following Fed rate cuts.
  • Fee-Based (Noninterest) Income -- $49.7 million, flat versus prior quarter and up 4.5% year over year; retirement plan services, wealth management, and insurance services exceeded $32 million.
  • Expense Levels -- Operating expenses were $112 million, up 0.5% from the prior quarter; salaries and employee benefits increased $2.8 million on seasonal payroll/tax and stock-based comp, with 3.3% average merit increases.
  • Provision for Loan Losses -- $5.6 million, up compared to $3.8 million in 2025, reflecting higher net charge-offs and nonperforming loans.
  • Allowance Coverage -- Allowance for loan losses is 1.2% of total loans, covering more than 2X nonperforming loans.
  • Shares Repurchased -- 250,000 shares were bought back in 2026.
  • Loan Accretion -- $6.5 million for the quarter, with future quarters expected to remain in the $6.0-$6.5 million range; intangible asset amortization was approximately $3.5 million.
  • Runoff Portfolios -- Residential solar portfolio declined $25 million in the quarter, in line with the annual ~$100 million runoff expectation.
  • Operating Expense Guidance -- Management forecasts annual growth of 3%-4% in operating expenses for 2026.
  • Noninterest Income Proportion -- Represented 27% of total revenue in the quarter, reinforcing revenue diversity.
  • Securities Portfolio Cash Flows -- Approximately $20-$25 million per month expected over the next several quarters.
  • Effective Tax Rate -- 23.3%, higher than the previous quarter due to final 2025 merger-related deductions.
  • Spot Net Interest Margin -- March NIM consistent with the quarterly average of 3.72%.

SUMMARY

Management emphasized growth in fee-based income and capital flexibility, along with the successful integration of Evans Bancorp. Deposit growth was attributed to seasonal municipal inflows and increases in key account types, as well as a favorable shift away from higher-cost time deposits. Commercial real estate payoffs remained elevated but were offset by a resilient loan production pipeline and continued investment in core growth markets. Expenses remained close to guidance, with confirmation of a 3%-4% annual growth target, and operating leverage improved due to disciplined balance sheet actions. Strategic commentary included ongoing evaluation of M&A, targeted branch expansion in underserved geographies, and cautious asset origination in competitive lending segments.

  • Management stated, "Our margin stands at 3.72%. We think that is a really great place to be and is generating meaningful earnings."
  • Fee growth expectations for 2026 were described as mid-single-digit growth rates for fee-based businesses, driven by momentum in retirement plan services, wealth, and insurance.
  • Pressure on indirect auto loan pricing led the company to reduce origination activity in that segment due to rates that were barely above Fed funds.
  • Progress in the Upstate New York semiconductor corridor, including customer wins linked to the Micron project, was highlighted as a source of economic tailwinds and loan opportunities.
  • Loan yield and investment securities portfolios retain 20-175 basis points of repricing opportunity, suggesting a potentially positive margin outlook depending on yield curve movements.
  • Management affirmed, "We are not opposed to share buybacks, but they are not top of our priority list. We can fund what we have done for the last two quarters because our earnings generation has been robust, though opportunistic repurchases may continue when warranted."
  • Key asset quality trends included C&I NPL increases in Western New York, with management asserting effective reserve coverage and active borrower engagement across commercial and consumer books.
  • Loan and deposit growth plans will focus on tested relationship banking in legacy markets and accelerated expansion—both organic and through M&A—in targeted upstate New York, Maine, and New Hampshire markets.

INDUSTRY GLOSSARY

  • Loan Accretion: Periodic recognition of the discount earned as previously acquired loans are repaid or repriced, contributing to net interest income.
  • Indirect Auto: Auto loans originated through dealership partnerships rather than directly to consumers via the bank’s branches.
  • Provision Expense: The charge to earnings representing anticipated future loan losses, as determined by management estimates.
  • Nonperforming Loans (NPLs): Loans on which borrowers are not making scheduled payments, indicating heightened credit risk.
  • Tangible Book Value Per Share: Net asset value of a company excluding intangible assets, divided by common shares outstanding—used as a measure of underlying equity strength.

Full Conference Call Transcript

Scott A. Kingsley: Thank you. Good morning, and thank you for joining us for this earnings call covering NBT Bancorp Inc.'s first quarter 2026 results. With me today are Annette L. Burns, NBT Bancorp Inc.'s Chief Financial Officer; Joseph R. Stagliano, President of NBT Bancorp Inc. Bank; and Joe Ondesco, 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 15.5%.

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 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 noninterest income continued 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 thousand of our own shares again in 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 the Upstate New York 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 Bancorp Inc. 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 the call over to Annette to review our first quarter results with you in detail. Annette? Thank you, Scott, and good morning.

Annette L. Burns: Turning to the results overview page of our earnings presentation, for the first quarter, we reported net income of $51.1 million, or $0.98 per diluted common share. We have improved earnings 27% from 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.

Fifty-nine percent, or $8 billion, of our deposit portfolio consists of no- and low-cost checking and savings accounts at a cost of 38 basis points. The next slide highlights the detailed changes in our net income and margin. Our net interest margin in the first quarter increased 7 basis points to 3.72% compared with the prior quarter, as the 9 basis point decrease in the cost of funds more than offset the 2 basis point decline in earning asset yields. Loan yields decreased 4 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 in 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 2025. The decrease in net interest income from the prior quarter was driven by two fewer days in 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 and investment portfolio cash flows.

The trends in noninterest 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 2025. Our combined revenues from retirement plan services, wealth management, and insurance services exceeded $32 million in quarterly revenues. Noninterest 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 03/31/2026 was $5.6 million compared to $3.8 million for 2025.

The increase in provision for loan losses was primarily due to a slightly higher level of net charge-offs and nonperforming 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 nonperforming 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.

Operator: We will now open the call for questions. To ask a question, please press 11 on your telephone. Wait for your name to be announced. To withdraw your question, please press 11 again. One moment, please. And our first question comes from the line of an analyst with KBW.

Analyst: Hey, good morning. So expenses came in a little bit better than we were expecting despite the seasonal factors there. Could you update us on your outlook and what is an appropriate run rate for the year?

Annette L. Burns: Sure. I will take that. Yes, there was some seasonality in our first quarter expenses, primarily higher levels of salaries and benefit costs related to payroll taxes and stock-based compensation, as well as some higher level of occupancy costs. As we look into the next quarter and we think about salaries and benefit costs, we will probably see some increased costs related to our merit increases, as well as an additional payroll day. Our occupancy expense seasonal increase will probably be offset in the second quarter by increased productivity across our markets, like higher travel, training, as well as technology initiatives. With all that being said, our run rate in the first quarter was right around $112 million.

That will probably be a good place to be in the second quarter. We still think our overall operating expenses typically run between 3–4% annually. We still think that is where we are landing for 2026.

Scott A. Kingsley: Great. And we had some costs in the third and fourth quarter of last year on the operating expense side that were a little bit higher than standard run rate, some specific initiatives or specific costs that we incurred in those quarters. So it is not unusual for the other expense line to be a little bit lower in the first quarter, with, as Annette mentioned, the costs associated with stock-based compensation and payroll taxes to be the higher ones.

Analyst: That is helpful. Thank you. Then looking at NIM and deposit costs, which are really strong, given the current rate environment maybe seeming more flat, are you seeing increased deposit competition in your markets, and what do you expect for deposit costs from here?

Annette L. Burns: If I think about the margin over the last two quarters, as expected with the federal funds rate cuts, our loan repricing happened immediately, and then we had a little bit of time to work through our deposit rate changes. We actively managed that, and I think we were successful through 2026. Our margin stands at 3.72%. We think that is a really great place to be and is generating meaningful earnings. As we look forward, our funding costs have stabilized. There is probably a little bit of opportunity to work them down a bit, but that will probably be offset by some of our deposit growth initiatives as well, so I would say stabilized there.

For earning asset yields, there are repricing opportunities, primarily in our investment securities book as well as our residential mortgage book. The shape of the yield curve will influence margin improvements over the next couple of quarters, particularly where we reprice our assets in the two- to five-year range of that yield curve, which had seen some improvements and a positively sloped curve starting in March. So as we look forward, it is stabilization as well as maybe a few basis points of improvement depending on the yield curve. As for deposit pricing, there is competition for deposits, but it is fairly disciplined. We do not see anything terribly aggressive, maybe a few pockets here and there.

Scott A. Kingsley: I would add that, in most of our markets—and we have some pretty diverse markets—deposit gathering has not been focused on additional share grab. Most of the people we compete with, even the large banks, find that the cost of funding in our markets, where we compete with them, is probably lower than some of the larger metropolitan areas that they do business in. On the asset pricing side, there has been a competitive landscape as people look for yielding assets. There has been a little bit of give-up in spread, whether that is on the commercial side or business banking.

In the first quarter, we thought that there were some who mispriced indirect auto, so we chose not to participate in that at the same level that historically we might have from a growth standpoint. In a difficult quarter for pure auto sales, some others were trying to sustain their portfolios. We think we are really good at that portfolio from a total operational management standpoint. The duration of that portfolio is somewhere between 24 and 28 months, so reengaging in that when the economics make a little bit more sense is how we look at that.

Analyst: Awesome. Appreciate all the color. I will step back in the queue. Thank you.

Scott A. Kingsley: Thanks.

Operator: Thank you. And our next question comes from the line of Freddie Strickland with Hovde Group.

Freddie Strickland: Hey, good morning. Scott, I think you addressed this in your opening comments, but can you talk generally about sentiment among commercial customers? Are you seeing clients pull back at all on some of the economic uncertainty and interest rate uncertainty, or do trends in the footprint, like the chip manufacturing facilities, still pull the local economies forward regardless? And could you also give us an update on the M&A conversations? It sounds like those are ongoing. Are current conditions making that more of a priority for some potential partners, or is that a headwind?

Scott A. Kingsley: Thanks for that opportunity. Across the markets, customers are feeling pretty good about themselves. I do not think we started the year thinking they could possibly have more uncertainty than they went through in 2025, but we appear to have topped that in early 2026. We have said before that uncertainty does not inspire action, but I do not think things have been held up. We do not have customers saying they will pass on fulfilling capital expenditure projects that they had planned, either for capacity improvements in their businesses or just general recurring costs associated with being technically better. We have not seen any of that.

In the first quarter, we had a number of really exciting and robust construction projects that did not get underway in the timeline we expected, but most of them, as the grass is turning a little greener, are finding their way to get out and start to work. There was probably a little bit of a backup in the first quarter that will get taken care of in the second quarter, but nothing that we are seeing that is falling away.

Some of our very astute customers who use our capable treasury management tools, in some cases, are paying down some of their leverage because their opportunity to earn yield on that is not at the same level that it was 18–24 months ago. Much like our balance sheet, there is a lot of tactical management going on with our customers today, and sentiment is quite good across the franchise. On M&A, we have ongoing conversations with like-minded smaller community banks across our seven-state footprint. Our priority is to do some fill-in work, whether that is a practical M&A transaction or building out concentration in some of our markets ourselves.

In Greater Rochester, New York, and into the Finger Lakes, our strategy is a build-out strategy. We recognize we do not have the market coverage we need, so getting closer into the city of Rochester and maybe in the western and southern suburbs is a priority for us—something you will see us act on in the next 12–18 months. We feel a little bit similar in Southern New Hampshire and Southern Maine, where our concentration of locations in the market is not that strong, but we have great commercial lending teams in both markets. We opened another branch in Bayside in Portland during the quarter.

We are going to make a commitment in Scarborough going into the second half of the year or early next year, and we would like to find a couple more spots in Southern New Hampshire to give our folks enhanced branding. Across the rest of our franchise, there are spots where we are still missing participation in markets where we think we would thrive, and it does not require us to move our geography another 100–200 miles. These are within the existing footprint. Regarding priority for certain other people and maybe some who are not necessarily experienced acquirers, there have been a handful of transactions in our marketplace that we think present a disruption opportunity.

There was a substantive transaction in the Mohawk Valley in the Greater Utica area; we think that will present some opportunities for us. There are a handful of things going on in Western New England, Western Massachusetts, and Connecticut—some large transactions and a couple of small transactions where small community banks are getting together. We have some very specific and pointed initiatives attached to that from a disruption standpoint and are pretty confident, given past results, that we will see some productive gains.

Freddie Strickland: Super helpful color. Just one more quick one for Annette. Did you have the loan discount accretion number for the quarter and expectations for that number going forward?

Annette L. Burns: Sure. Our loan accretion for the quarter was right around $6.5 million. That is a little bit down from what we had in the fourth quarter. I would expect it to run somewhere in the $6.0–$6.5 million range. That corresponds with our intangible asset amortization around $3.5 million a quarter, so aligned with that. Where we marked those loans, we think we are capable of getting pretty close to those rates as we reinvest those cash flows in our loan book.

Scott A. Kingsley: I would reinforce Annette’s comment that the size of the marks in either our residential mortgage portfolio or commercial portfolio from both Salisbury and Evans does not leave us with yields that are above current market yields.

Operator: And our next question comes from the line of Manuel Navis with Piper Sandler.

Manuel Navis: Hey, good morning. Can you speak to loan growth this year and the makeup of the loan pipeline? How do things look with the runoff portfolios and the pullback in indirect auto, just to level set as we move across the year? And can you also remind me about fee growth expectations—where the largest opportunities are and where you would like to see better growth? Lastly, any extra color on the NPL build?

Scott A. Kingsley: Sure. On runoff, primarily residential solar, we have said before that is roughly $100 million a year. That is exactly what we incurred in the first quarter, so about $25 million in the quarter, and our expectation is that continues. The prepayment patterns in that portfolio are similar to home mortgage—probably not unexpected since the equipment sits on the house. To the extent that we are incurring some losses in that portfolio from customers not paying us back timely, that is as expected, and we carry reserves around 4% of that portfolio, so we think we are well covered relative to expected future results as that portfolio runs off. Indirect auto is interesting. We are really good at this portfolio.

We like the short duration, and we like the asset because customers in our market need that asset. Our performance from a quality standpoint has been very solid—sub-30 basis point charge-off levels for quite a while now. In the first quarter, we saw a handful of institutions, probably more dominated by credit unions, offering really low rates—rates that made no sense, barely above Fed funds. That is not where we will participate to add to our portfolio. For the rest of the pipeline, there is a nice mix of commercial real estate and C&I.

We like the construction projects out there; a couple got underway a little later than we hoped, but there is a lot of infrastructure build going on across the footprint, creating opportunities for our contracting clients and those who service those industries. Historically, the first quarter is not our most robust quarter of growth, and that was evidenced this quarter. We think we get back to low- to mid-single-digit growth rates for the balance of the year.

Annette L. Burns: On fee-based income, there is some seasonality with the first and third quarters usually being the most robust and the second and fourth being a little lighter. We are excited about growth opportunities, especially retirement plan services, which had great wins in 2026, evident in their numbers. We also feel that wealth and insurance have good opportunities, particularly as we bring the whole bank to markets like Western New York. For full-year growth expectations, looking back to our historical performance over the past couple of years, mid-single-digit growth rates for our fee-based businesses are achievable. Deposit service charges and banking fees are generally lighter in the first quarter and will build as we get into the next few quarters.

On NPLs, the majority of our increase during the quarter was related to a C&I relationship in the Western New York region. We are actively working through that; it is a specific customer circumstance. We have a handful of other nonperforming loans that we continue to actively engage and work through as well, primarily commercial real estate-based. We feel good about our capacity to work through those and feel very good about our allowance positioning associated with them. Our consumer delinquencies have performed in line with, and in some cases better than, expectations through the first quarter.

Scott A. Kingsley: And we are coming off such a low base that one relationship or a couple of relationships can make a difference relative to the size of nonperforming. The important point is we think we have the capacity to work through these. We also do a really good job identifying customers that may just be going through a difficult period but where we like everything about what they do. This does not have to be us moving quickly to sell assets and remove them from our portfolio. We have a standard of working through situations.

Operator: Thank you. Our next question comes from the line of Stephen M. Moss with Raymond James. Good morning.

Scott A. Kingsley: Good morning, Steve.

Stephen M. Moss: Most of my questions have been asked and answered. Just following up on deposit costs—there was a healthy step down. Is this a good bottom to your deposit costs, or as you enter relatively more suburban markets in Upstate New York, do you feel a bit more upward pressure if rates are flat here? Also, on securities, what is the amount of cash flows you have for the upcoming 12 months?

Scott A. Kingsley: Good question. In the fourth quarter, there were three Fed funds changes in the last four months of the year, and the impact on our variable rate assets was immediate. We knew we had a responsibility to cover that and maybe a little more. It was difficult to get all that in the same quarter, particularly in December. We had active management across all deposit portfolios and achieved that lower rate in the first quarter, arguably in January, to get back to levels of beta performance that we think are sustainable for us. If we end up in more suburban or light metro markets with some of our growth plans, the cost of entry might be a little higher.

But the product we are really leading with is checking. If it is necessary for some larger commercial or municipal customers to have a higher rate to secure the relationship, long term it is total cost of funds in the relationship that matters. If you think about a growth rate of 4–5% on a $13.5 billion base, that is roughly a half billion dollars of new deposit balances annually. Even if those are a little above the blended cost of our existing deposit portfolio, we can handle that small dilution.

Annette L. Burns: Securities cash flows probably run somewhere in the $20–$25 million per month pretty consistently, maybe out in 2027–2028 where there might be a little more lumpiness, but pretty consistent over the next several quarters.

Stephen M. Moss: On auto loans, you mentioned competition with regard to pricing. Was it just incrementally tighter that you were not willing to put on this quarter, or a meaningful step down that might extend for a bit?

Scott A. Kingsley: In the first quarter, and we are already seeing a little bit of rationality in the second quarter, there were offerings out there that were 150–200 basis points below ours.

Annette L. Burns: You can combine that with generally lower auto sales as well.

Stephen M. Moss: Appreciate all the color. Thank you very much.

Scott A. Kingsley: Thanks, Steve.

Operator: Thank you. Again, if you have a question, please press 11 on your telephone. Your next question comes from the line of an analyst with Stephens. Hey, good morning.

Scott A. Kingsley: Morning.

Analyst: A few from me. First, Annette, could you help with new loan yield originations this quarter and roll-on versus roll-off dynamics—how positive is that still? And if loan growth remains subdued, may we see some tactical changes, like more consistent or aggressive buybacks, or leading with lending in disrupted markets like Connecticut to drive growth? Should we think about consistent buybacks given the 250 thousand in the last couple of quarters? Lastly, an update on chip manufacturing activity beyond Micron—New York Creates, GlobalFoundries—what is going on and when might that translate into more loan growth?

Annette L. Burns: Looking at our book, residential mortgage probably still has somewhere around 120–125 basis points to reprice. Our commercial yields have come in a little bit, particularly with the 75 basis point drop in the yield curve over the past 12 months, but there is probably still about 20–25 basis points of repricing opportunity in our commercial book. In our indirect auto book, new origination rates are a little bit below where our portfolio yields are, so they are fully priced and a little bit underwater at this point. Our investment securities portfolio has probably 150–175 basis points of repricing opportunity.

Scott A. Kingsley: On strategy, I do not think it changes holistically. There will be tactical opportunities in disrupted markets where it is faster to lead with the asset product. That could be Northwest or North Central Connecticut, the Berkshires, or spots in Central New York. We are experiencing an opportunity to hire very high-quality people in several of our markets today, either from larger bank competitors or those displaced via disruption. We have probably added a half dozen people to our mix in the last six months that two years ago we were not sure we would ever get access to. That is a net positive. Has that shown up on the balance sheet yet?

Probably not, but going forward, we expect opportunities to come out of that. Tactically, we are adept at moving with situations, and as logical opportunities present themselves, we will be there and in a position to win. Where pricing dynamics do not make sense for us long term, we are unlikely to chase. On buybacks, generating and retaining capital is hard-earned. We are not opposed to share buybacks, but they are not top of our priority list. We can fund what we have done for the last two quarters because our earnings generation has been robust.

We are unlikely to do something like buy 9% of our shares in a quarter, but if the market is not recognizing our value, we want to be participatory. On chip manufacturing, the build-out of GlobalFoundries in Saratoga is a great model to watch relative to what one might expect with other fabrication facilities coming online and the total vendor environment needed to service that facility. You have watched housing developments and demographic improvements in that area for a number of years, and that ought to continue. We are engaged not only in lending at New York Creates, but also in the activity it generates. It is important for Micron and GlobalFoundries and for others interested in pretesting their product.

It is a very important economic stimulator for future development. We are not disappointed that the pace has been a little slower than initially expected given the sheer size of these projects. What is really important is the sponsor. GlobalFoundries is doing very well. Micron is doing exceptionally well. The strength of the sponsor is really important, and they are committed to these build-outs on a long-term basis.

Operator: Thank you. Our next question comes from the line of an analyst with D.A. Davidson.

Analyst: Hey, good morning, Scott. Just two quick questions. Did you have a spot NIM for the month of March? And you talked about commercial payoffs in the quarter being relatively consistent with the past couple quarters. Looking ahead, with loan growth getting back to low- to mid-single digits, are payoffs and paydowns factored into that? Are they slowing? Any perspective there, and any particular geographies or loan types?

Annette L. Burns: The spot NIM for March was pretty consistent with where we landed for the quarter.

Scott A. Kingsley: On payoffs, in the first quarter of last year we had about $45–$50 million of early payoffs. That was pretty consistent with the second quarter. Starting in the third quarter, the number went above $100 million, and for the first quarter this year, about $105 million. A lot of that has to do with the valuation of some customers' assets—either the holistic business or a piece of real estate. As people look for yield from performing assets, those have been in consideration. I do not think early payoffs go back to zero, but we are seeing signs that our production levels are capable of handling a higher level of payoff and still demonstrating balance sheet growth.

We are already in that phase. As to specifics, it is a wide variety. We saw a couple of very attractive operating businesses and some real estate projects where the owner probably thought they would be the holder for five to seven years and were able to go into an agency instrument earlier than expected. It is a wide variety and across geographies. Importantly, there is none of our geography today where we are not seeing good growth attributes or good opportunities. It is widespread on the payoff side and widespread on the growth side.

Operator: I am not showing any further questions. I will now turn the call back to Scott A. Kingsley for his closing remarks.

Scott A. Kingsley: Thanks. In closing, I want to thank everyone on the call for participating today. Thanks for your continued interest in NBT Bancorp Inc. Talk to you next time.

Operator: Thank you, Mr. Kingsley. This concludes our program. You may disconnect. Have a great day.