NBT Bancorp (NBTB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $32.7 million, or $0.69 per share, with tangible book value per share at a record $22.54 and a 6.3% dividend increase to $0.34 per share.

• Noninterest income reached a record $43.3 million, up 18.1% year-over-year, now comprising 31% of total revenue, driven by retirement plan administration and wealth management growth.

• Total loans at period end were $9.85 billion, up $204 million year-to-date (4.2% annualized), with commercial and indirect auto portfolios driving growth.

• Deposits totaled $11.27 billion, up $302.5 million from year-end 2023, with growth in consumer and municipal balances.

• The Salisbury acquisition in August 2023 contributed to growth in assets, loans, and noninterest income.

Financial highlights

• Net interest income for Q2 2024 was $97.8 million, up $2 million sequentially and $8.1 million year-over-year; net interest margin was 3.18%, up 4 bps from Q1.

• Fee income (excluding securities losses) was $43.3 million, up 18% year-over-year and consistent with Q1.

• Noninterest expenses were $89.6 million, down $2.2 million (2.4%) from Q1, with lower salaries, technology, and occupancy costs.

• Provision for loan losses was $8.9 million, up from $3.6 million year-over-year and $5.6 million sequentially.

• Return on average tangible equity was 13.23%; tangible equity to assets was 8.11%.

Outlook and guidance

• Loan growth in Q2 exceeded expectations but is expected to moderate in the second half of 2024.

• Net interest margin is expected to remain stable, with potential for improvement depending on interest rate movements.

• $700 million in CDs are set to reprice in the second half of 2024, with opportunities for lower costs.

• Noninterest expenses are expected to step up slightly in the second half due to payroll and increased market activity.

• The company is well-positioned to benefit from Upstate NY semiconductor corridor investments and regional economic growth.