NBT BANCORP INC

Previous wording

The purpose of this discussion and analysis is to provide a concise description of the consolidated financial condition and results of operations of NBT Bancorp Inc. (“NBT”) and its wholly-owned subsidiaries, including NBT Bank, National Association (the “Bank”), NBT Financial Services, Inc. (“NBT Financial”) and NBT Holdings, Inc. (“NBT Holdings”) (collectively referred to herein as the “Company”). When references to “NBT,” “we,” “our,” “us,” and “the Company” are made in this report, we mean NBT Bancorp Inc. and our consolidated subsidiaries, unless the context indicates that we refer only to the parent company, NBT Bancorp Inc. When we refer to the “Bank” in this report, we mean our only bank subsidiary, NBT Bank, National Association, and its subsidiaries. This discussion will focus on results of operations, financial condition, capital resources and asset/liability management. Reference should be made to the Company’s consolidated financial statements and footnotes thereto included in this Form 10‑Q as well as to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2024 for an understanding of the following discussion and analysis.Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results of the full year ending December 31, 2025 or any future period.

Current wording

The purpose of this discussion and analysis is to provide a concise description of the consolidated financial condition and results of operations of NBT Bancorp Inc. (“NBT”) and its wholly-owned subsidiaries, including NBT Bank, National Association (the “Bank”), NBT Financial Services, Inc. (“NBT Financial”) and NBT Holdings, Inc. (“NBT Holdings”) (collectively referred to herein as the “Company”). When references to “NBT,” “we,” “our,” “us,” and “the Company” are made in this report, we mean NBT Bancorp Inc. and our consolidated subsidiaries, unless the context indicates that we refer only to the parent company, NBT Bancorp Inc. When we refer to the “Bank” in this report, we mean our only bank subsidiary, NBT Bank, National Association, and its subsidiaries. This discussion will focus on results of operations, financial condition, capital resources and asset/liability management. Reference should be made to the Company’s consolidated financial statements and footnotes thereto included in this Form 10‑Q as well as to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2024 for an understanding of the following discussion and analysis. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results of the full year ending December 31, 2025 or any future period.

Previous wording

Certain statements in this filing and future filings by the Company with the SEC, in the Company’s press releases or other public or stockholder communications or in oral statements made with the approval of an authorized executive officer, contain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control, that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions, including actual or potential stress in the banking industry, and the impact they may have on the Company and its customers, and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”) and international trade disputes (including threatened or implemented tariffs imposed by the U.S. and threatened or implemented tariffs imposed by foreign countries in retaliation); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war, including international military conflicts, or terrorism; (8) the timely development and acceptance of new products and services and the perceived overall value of these products and services by users; (9) changes in consumer spending, borrowing and saving habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisition and integration of acquired businesses; (13) the possibility that NBT may be unable to achieve expected synergies and operating efficiencies in the Evans merger within the expected timeframes or at all or to successfully integrate Evans operations and those of NBT; (14) the ability to increase market share and control expenses; (15) changes in the competitive environment among financial holding companies; (16) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (17) the effect of changes in accounting policies and practi…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain statements in this filing and future filings by the Company with the SEC, in the Company’s press releases or other public or stockholder communications or in oral statements made with the approval of an authorized executive officer, contain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control, that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions, including actual or potential stress in the banking industry, and the impact they may have on the Company and its customers, and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”) and international trade disputes (including threatened or implemented tariffs imposed by the U.S. and threatened or implemented tariffs imposed by foreign countries in retaliation); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war, including international military conflicts, or terrorism; (8) the timely development and acceptance of new products and services and the perceived overall value of these products and services by users; (9) changes in consumer spending, borrowing and saving habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisition and integration of acquired businesses; (13) the ability to increase market share and control expenses; (14) changes in the competitive environment among financial holding companies; (15) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (16) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (17) changes in the Company’s organiz…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

One of the most significant judgments involved in estimating the Company’s allowance for credit losses relates to the macroeconomic forecasts used to estimate expected credit losses over the forecast period. As of June 30, 2025, the quantitative model incorporated a baseline economic outlook along with an alternative upside and two equally weighted downside scenarios, recessionary conditions and stagflation, sourced from a reputable third-party to accommodate other potential economic conditions in the model. At June 30, 2025, the weightings were 70%, 5% and 25% for the baseline, upside and downside economic forecasts, respectively. The baseline outlook reflected an economic environment where the Northeast unemployment rate increases from 4.3% to 4.8% during the forecast period. National GDP’s annualized growth (on a quarterly basis) is expected to start the third quarter of 2025 at approximately 0.6% and increase to 1.6% by the end of the forecast period. Key assumptions in the baseline economic outlook included the Federal Reserve cutting rates with two 25 basis point cuts at the September and December meetings and the economy remaining at full employment. The alternative upside scenario assumes improved economic conditions from the baseline outlook. Under this scenario, Northeast unemployment falls from 4.3% in the second quarter of 2025 to 3.7% in the fourth quarter of 2025 and eventually settles at 4.1% by the end of the forecast period. The alternative downside scenario with recessionary conditions assumes deteriorated economic conditions from the baseline outlook. Under this scenario, Northeast unemployment rises from 4.3% in the second quarter of 2025 to a peak of 7.7% in the third quarter of 2026. The alternative downside stagflation scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, Northeast unemployment rises from 4.3% in the second quarter of 2025 to 5.8% by the end of the forecast period in the fourth quarter of 2026, with a peak Northeast unemployment rate of 8.1% in the third quarter of 2027. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of June 30, 2025. Additional qualitative adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, reversion adjustments for the stagflation scenario and recent trends in asset value indices. Additional monitoring for industry concentrations, loan growth and policy exceptions was also conducted.

Current wording

One of the most significant judgments involved in estimating the Company’s allowance for credit losses relates to the macroeconomic forecasts used to estimate expected credit losses over the forecast period. As of September 30, 2025, the quantitative model incorporated a baseline economic outlook along with an alternative upside scenario and two equally weighted downside scenarios, recessionary conditions and stagflation, sourced from a reputable third-party to accommodate other potential economic conditions in the model. At September 30, 2025, the weightings were 65%, 5% and 30% for the baseline, upside and downside economic forecast scenarios, respectively. The baseline outlook reflected an economic environment where the Northeast unemployment rate increases from 4.4% in the fourth quarter of 2025 to 4.8% by the end of the forecast period, with a peak Northeast unemployment rate of 4.9% in the fourth quarter of 2026. National GDP’s annualized growth (on a quarterly basis) is expected to start the fourth quarter of 2025 at approximately 0.8% and increase to 1.7% by the end of the forecast period. Key assumptions in the baseline economic outlook included the Federal Reserve cutting rates with two 25 basis point cuts at the September and December meetings and the economy remaining at full employment. The alternative upside scenario assumes improved economic conditions from the baseline outlook. Under this scenario, Northeast unemployment falls from 4.3% in the third quarter of 2025 to 3.8% in the first quarter of 2026 and eventually settles at 4.1% by the end of the forecast period. The alternative downside scenario with recessionary conditions assumes deteriorated economic conditions from the baseline outlook. Under this scenario, Northeast unemployment rises from 4.3% in the third quarter of 2025 to a peak of 7.8% in the fourth quarter of 2026. The alternative downside stagflation scenario assumes deteriorated economic conditions from the baseline outlook. Under this scenario, Northeast unemployment rises from 4.3% in the third quarter of 2025 to 6% by the end of the forecast period in the first quarter of 2027, with a peak Northeast unemployment rate of 8.2% in the fourth quarter of 2027. These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of September 30, 2025. Additional qualitative adjustments were made for factors not incorporated in the forecasts or the model, such as loss rate expectations for certain loan pools, reversion adjustments for the stagflation scenario and recent trends in asset value indices. Additional monitoring for industry concentrations, loan growth and policy exceptions was also conducted.

Previous wording

To demonstrate the sensitivity of the allowance for credit losses estimate to macroeconomic forecast weightings assumptions as of June 30, 2025, the Company changed the scenario weightings, with a 10% increase to the downside scenarios, equally weighted, and a 10% decrease to the baseline scenario causing a 4% increase in the overall estimated allowance for credit losses. If instead the upside scenario was increased 10% and the baseline scenario was decreased 10%, the overall estimated allowance for credit losses decreased 1%. To further demonstrate the sensitivity of the allowance for credit losses estimate to macroeconomic forecast weightings assumptions as of June 30, 2025, the Company increased the downside scenarios, equally weighted, to 100% which resulted in a 29% increase in the overall estimated allowance for credit losses.

Current wording

To demonstrate the sensitivity of the allowance for credit losses estimate to macroeconomic forecast weightings assumptions as of September 30, 2025, the Company changed the scenario weightings, with a 10% increase to the downside scenarios, equally weighted, and a 10% decrease to the baseline scenario causing a 3% increase in the overall estimated allowance for credit losses. If instead the upside scenario was increased 10% and the baseline scenario was decreased 10%, the overall estimated allowance for credit losses decreased 1%. To further demonstrate the sensitivity of the allowance for credit losses estimate to macroeconomic forecast weightings assumptions as of September 30, 2025, the Company increased the downside scenarios, equally weighted, to 100% which resulted in a 26% increase in the overall estimated allowance for credit losses.

Previous wording

On May 2, 2025, the Company completed its acquisition of Evans, through the merger of Evans with and into the Company, with the Company merger. Total consideration for the acquisition was $221.8 million in stock. Evans, with assets of $2.19 billion at December 31, 2024, was headquartered in Williamsville, New York. Its primary subsidiary, Evans Bank, was a federally-chartered national banking association operating 18 banking locations in Western New York. The acquisition enhances the Company’s presence in Western New York, including the Buffalo and Rochester communities. In connection with the acquisition, the Company issued 5.1 million shares of common stock and acquired approximately $130.4 million of identifiable net assets, including $1.67 billion of loans, $255.5 million in AFS investment securities, which were subsequently sold during the quarter, $33.2 million of core deposit intangibles as well as $1.86 billion in deposits. As of the acquisition date, the fair value discount was $95.2 million for loans, net of the reclassification of the PCD allowance and $0.6 million net discount related to long-term debt.

Current wording

On May 2, 2025, the Company completed its acquisition of Evans, through the merger of Evans with and into the Company, with the Company surviving the merger. Total consideration for the acquisition was $221.8 million in stock. Evans, with assets of $2.19 billion at December 31, 2024, was headquartered in Williamsville, New York. Its primary subsidiary, Evans Bank, was a federally-chartered national banking association operating 18 banking locations in Western New York. The acquisition enhances the Company’s presence in Western New York, including the Buffalo and Rochester communities. In connection with the acquisition, the Company issued 5.1 million shares of common stock and acquired approximately $130.4 million of identifiable net assets, including $1.67 billion of loans, $255.5 million in AFS investment securities, which were sold during the second quarter of 2025, $33.2 million of core deposit intangibles and $1.86 billion in deposits. As of the acquisition date, the fair value discount was $95.2 million for loans, net of the reclassification of the PCD allowance and $0.6 million net discount related to long-term debt.

Previous wording

The Company incurred acquisition expenses related to the merger of $17.2 million and $18.4 million for the three and six months ended June 30, 2025, respectively.

Current wording

The Company incurred acquisition expenses related to the merger of $1.1 million and $19.5 million for the three and nine months ended September 30, 2025, respectively.

Previous wording

Net income for the three months ended June 30, 2025 was $22.5 million, down $14.2 million from the first quarter of 2025 and down $10.2 million from the second quarter of 2024. Diluted earnings per share were $0.44 for the three months ended June 30, 2025, down $0.33 from the first quarter of 2025 and down $0.25 from the second quarter of 2024. Net income for the six months ended June 30, 2025 was $59.3 million, or $1.21 per diluted common share, down $7.3 million from $66.5 million, or $1.40 per diluted common share for the six months ended June 30, 2024.

Current wording

Net income for the three months ended September 30, 2025 was $54.5 million, up $32.0 million from the second quarter of 2025 and up $16.4 million from the third quarter of 2024. Diluted earnings per share were $1.03 for the three months ended September 30, 2025, up $0.59 from the second quarter of 2025 and up $0.23 from the third quarter of 2024. Net income for the nine months ended September 30, 2025 was $113.7 million, or $2.26 per diluted common share, up $9.1 million from $104.6 million, or $2.21 per diluted common share for the nine months ended September 30, 2024.

Previous wording

Operating net income(1), a non-GAAP measure, was $44.9 million, or $0.88 per diluted common share, for the three months ended June 30, 2025, compared to $0.80 per diluted common share for the first quarter of 2025 and $0.69 per diluted common share for the second quarter of 2024. Operating net income(1), for the six months ended June 30, 2025 was $83.4 million, or $1.70 per diluted common share, up $18.5 million from $64.9 million, or $1.37 per diluted common share for the six months ended June 30, 2024.

Current wording

Operating net income(1), a non-GAAP measure, was $55.3 million, or $1.05 per diluted common share, for the three months ended September 30, 2025, compared to $0.88 per diluted common share for the second quarter of 2025 and $0.80 per diluted common share for the third quarter of 2024. Operating net income(1) for the nine months ended September 30, 2025 was $138.7 million, or $2.76 per diluted common share, up $35.6 million from $103.1 million, or $2.17 per diluted common share for the nine months ended September 30, 2024.

Previous wording

The following information should be considered in connection with the Company’s results for the three and six months ended June 30, 2025:

Current wording

The following information should be considered in connection with the Company’s results for the three and nine months ended September 30, 2025:

Previous wording

Net interest income is the difference between the interest and dividend income earned on interest-earning assets, primarily loans and securities and the interest expense paid on interest-bearing liabilities, primarily deposits and borrowings. Net interest income is affected by the interest rate spread, the difference between the yield on interest-earning assets and cost of interest-bearing liabilities, as well as the volumes of such assets and liabilities. Net interest income is one of the key determining factors in a financial institution’s performance as it is the principal source of earnings.

Current wording

Net interest income is the difference between the interest and dividend income earned on interest-earning assets, primarily loans and securities and the interest expense paid on interest-bearing liabilities, primarily deposits and borrowings. Net interest income is affected by the interest rate spread, the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities, as well as the volumes of such assets and liabilities. Net interest income is one of the key determining factors in a financial institution’s performance as it is the principal source of earnings.

Previous wording

Net interest income was $124.2 million for the second quarter of 2025, up $17.0 million, or 15.9%, from the previous quarter. The FTE NIM was 3.59% for the three months ended June 30, 2025, an increase of 15 bps from the previous quarter. Interest income increased $23.2 million, or 15.0%, as the yield on average interest-earning assets increased 17 bps from the prior quarter to 5.12%, while average interest-earning assets of $13.96 billion increased $1.26 billion from the prior quarter, primarily due to the addition of $1.95 billion in interest-earning assets in May 2025 from the Evans acquisition and organic earning asset growth. Interest expense increased $6.2 million, or 13.1%, primarily due to the addition of $1.62 billion in interest-bearing liabilities in May 2025 from the Evans acquisition. Included in net interest income was $5.0 million of acquisition-related net accretion for the three months ended June 30, 2025 compared to $2.2 million of acquisition-related net accretion in the previous quarter.

Current wording

Net interest income was $134.7 million for the third quarter of 2025, up $10.4 million, or 8.4%, from the previous quarter. The FTE NIM was 3.66% for the three months ended September 30, 2025, an increase of 7 bps from the previous quarter. Interest income increased $12.9 million, or 7.3%, as the yield on average interest-earning assets increased 6 bps from the prior quarter to 5.18%, while average interest-earning assets of $14.64 billion increased $685.1 million from the prior quarter, primarily due to the full quarter impact from the Evans acquisition. Interest expense increased $2.4 million, or 4.6%, primarily due to the full quarter impact from the Evans acquisition partially offset by the redemption of $118 million of subordinated debt in the beginning of the quarter. Included in net interest income was $6.3 million of acquisition-related net accretion for the three months ended September 30, 2025, compared to $5.0 million of acquisition-related net accretion in the previous quarter.

Previous wording

Net interest income for the six months ended June 30, 2025 was $231.4 million, up $39.1 million, or 20.3%, from the same period in 2024. The FTE NIM was 3.52% for the six months ended June 30, 2025, an increase of 36 bps from the same period in 2024. Interest income increased $34.3 million, or 11.5%, as the yield on average interest-earning assets increased 16 bps from the same period in 2024 to 5.04%. Average interest-earning assets of $13.33 billion increased $1.01 billion primarily due to the addition of $1.95 billion in interest-earning assets in May 2025 from the Evans acquisition and organic earning asset growth. Interest expense decreased $4.8 million, or 4.6%, for the six months ended June 30, 2025 as compared to the same period in 2024 driven by interest-bearing deposit costs decreasing 25 bps and lower average balances of short-term borrowings. The decrease in interest expense was partially offset by the addition of $1.62 billion in interest-bearing liabilities in May 2025 from the Evans acquisition and organic growth. Included in net interest income was $7.2 million of acquisition-related net accretion for the six months ended June 30, 2025 compared to $5.1 million of acquisition-related net accretion for the six months ended June 30, 2024.

Current wording

Net interest income for the nine months ended September 30, 2025 was $366.1 million, up $72.1 million, or 24.5%, from the same period in 2024. The FTE NIM was 3.57% for the nine months ended September 30, 2025, an increase of 37 bps from the same period in 2024. Interest income increased $68.5 million, or 15.1%, as the yield on average interest-earning assets increased 16 bps from the same period in 2024 to 5.09%. Average interest-earning assets of $13.77 billion increased $1.41 billion primarily due to the addition of $1.95 billion in interest-earning assets in May 2025 from the Evans acquisition and organic earning asset growth. Interest expense decreased $3.6 million, or 2.2%, for the nine months ended September 30, 2025 as compared to the same period in 2024 driven by interest-bearing deposit costs decreasing 27 bps, lower average balances of short-term borrowings and lower average balances of subordinated debt. The decrease in interest expense was partially offset by the addition of $1.62 billion in interest-bearing liabilities in May 2025 from the Evans acquisition and organic growth. Included in net interest income was $13.6 million of acquisition-related net accretion for the nine months ended September 30, 2025, compared to $7.8 million of acquisition-related net accretion for the nine months ended September 30, 2024.

Previous wording

Noninterest income for the three months ended June 30, 2025 was $46.9 million, down $0.5 million, or 1.1%, from the prior quarter and up $3.7 million, or 8.6%, from the second quarter of 2024. Excluding net securities gains (losses), noninterest income for the three months ended June 30, 2025 was $46.8 million, down $0.7 million, or 1.5%, from the prior quarter and up $3.5 million, or 8.1%, from the second quarter of 2024. The decrease from the prior quarter was primarily driven by the decrease in bank owned life insurance income and insurance services income, partially offset by increases in card services income. Bank owned life insurance income decreased from the prior quarter due to a $1.3 million gain recognized in the first quarter of 2025. Insurance services decreased from the prior quarter due to the seasonally higher income in the first quarter. Card services income increased from the prior quarter driven by the Evans acquisition and increased volumes. The increase from the second quarter of 2024 was driven by an increase in card services income, retirement plan administration fees and wealth management fees. Card services income increased from the second quarter of 2024, driven by the Evans acquisition and increased volumes. Retirement plan administration fees increased from the second quarter of 2024, driven by higher market values of assets under administration and the acquisition of a small third-party administrator ("TPA") business in the fourth quarter of 2024. Wealth management fees increased from the second quarter of 2024, driven by market performance and growth in new customer accounts.

Current wording

The increase from the third quarter of 2024 was driven by an increase in retirement plan administration fees and bank owned life insurance income. Retirement plan administration fees increased from the third quarter of 2024, driven by higher market values of assets under administration and the acquisition of a small third-party administrator (“TPA”) business in the fourth quarter of 2024. Bank owned life insurance income increased from the third quarter of 2024 due to a $0.9 million gain recognized in the third quarter of 2025. Service charges on deposit accounts, card services income and other noninterest income increased from the third quarter of 2024 primarily due to the Evans acquisition. Included in other noninterest income for the three months ended September 30, 2025 was a $0.6 million gain related to the finalization of a third-party contractual arrangement.

Previous wording

Noninterest income for the six months ended June 30, 2025 was $94.4 million, up $5.8 million, or 6.5%, from the same period in 2024. Excluding net securities gains (losses), noninterest income for the six months ended June 30, 2025 was $94.4 million, up $7.8 million, or 9.1%, from the same period in 2024. The increase from the prior year was primarily due to an increase in retirement plan administration fees, wealth management fees and bank owned life insurance income. The increase in retirement plan administration fees was driven by higher market values of assets under administration and the acquisition of a small TPA business in the fourth quarter of 2024. The increase in wealth management fees was driven by market performance and growth in new customer accounts. Bank owned life insurance income increased due to a $1.3 million gain recognized in the first quarter of 2025.

Current wording

Noninterest income for the nine months ended September 30, 2025 was $145.8 million, up $11.4 million, or 8.5%, from the same period in 2024. Excluding net securities (losses) gains, noninterest income for the nine months ended September 30, 2025 was $145.8 million, up $14.0 million, or 10.6%, from the same period in 2024. The increase from the prior year was primarily due to an increase in retirement plan administration fees, wealth management fees and bank owned life insurance income. The increase in retirement plan administration fees was driven by higher market values of assets under administration and the acquisition of a small TPA business in the fourth quarter of 2024. The increase in wealth management fees was driven by market performance and growth in new customer accounts. Bank owned life insurance income increased due to $2.2 million gain recognized in the first nine months of 2025. Service charges on deposit accounts, card services income and other noninterest income increased from the same period in 2024 primarily due to the Evans acquisition. Included in other noninterest income for the nine months ended September 30, 2025 was a $0.6 million gain related to the finalization of a third-party contractual arrangement.

Previous wording

Noninterest expense for the three months ended June 30, 2025 was $122.6 million, up $22.7 million, or 22.7%, from the prior quarter and up $33.0 million, or 36.9%, from the second quarter of 2024. Excluding acquisition expenses, noninterest expense for the three months ended June 30, 2025 was $105.4 million, up $6.8 million, or 6.8%, from the prior quarter and up $15.8 million, or 17.7%, from the second quarter of 2024. The increase from the prior quarter was primarily driven by the Evans acquisition. Salaries and benefits increased from the prior quarter driven by the Evans acquisition, a full quarter of merit pay increases and higher medical costs which were partially offset by lower payroll taxes and stock-based compensation expenses which are seasonally higher in the first quarter. Technology and data services increased over the prior quarter due to the Evans acquisition, the timing of planned initiatives and continued investment in digital platform solutions. The increase in amortization of intangible assets was due to the amortization of the core deposit intangible asset related to the Evans acquisition. The increase from the second quarter of 2024 was driven by higher salaries and employee benefits due to the impact of the Evans acquisition, merit pay increases, higher medical and other benefit costs. Technology and data services increased from the second quarter of 2024 primarily due to the Evans acquisition, timing of planned initiatives and continued investment in digital platform solutions. In addition, the increase in occupancy expense was impacted by additional expenses from the Evans acquisition, higher utilities and higher facilities costs related to new banking locations. Amortization of intangible assets increased due to the Company recording a core deposit intangible of $33.2 million related to the Evans acquisition.

Current wording

The increase from the third quarter of 2024 was driven by the Evans acquisition. Salaries and benefits increased from the third quarter of 2024 driven by the impact of the Evans acquisition, merit pay increases, higher medical expenses and higher incentive compensation expenses. Technology and data services increased from the third quarter of 2024 primarily due to the Evans acquisition, timing of planned activities and ongoing investment in enterprise technology initiatives. In addition, the increase in occupancy expense was impacted by additional expenses from the Evans acquisition, higher utilities and higher facilities costs related to new banking locations. Professional fees and outside services increased from the third quarter of 2024 primarily due to the Evans acquisition and the timing of various initiatives. Amortization of intangible assets increased due to the Company recording a core deposit intangible of $33.2 million related to the Evans acquisition.

Previous wording

Noninterest expense for the six months ended June 30, 2025 was $222.5 million, up $41.1 million, or 22.7%, from the same period in 2024. Excluding acquisition expenses, noninterest expense for the six months ended June 30, 2025 was $204.1 million, up $22.7 million, or 12.5%, from the same period in 2024. The increase from the prior year was driven by higher salaries and employee benefits due to the Evans acquisition, merit pay increases and higher medical and other benefit costs. The increase in technology and data services was driven by the Evans acquisition, timing of planned initiatives and continued investment in digital platform solutions. Occupancy expense was impacted by additional expenses from the Evans acquisition, higher utilities and higher facilities costs related to new banking locations. In addition, the increase in amortization of intangible assets was due to the amortization of the core deposit intangible asset related to the Evans acquisition.

Current wording

Noninterest expense for the nine months ended September 30, 2025 was $333.7 million, up $56.5 million, or 20.4%, from the same period in 2024. Excluding acquisition expenses, noninterest expense for the nine months ended September 30, 2025 was $314.1 million, up $37.6 million, or 13.6%, from the same period in 2024. The increase from the prior year was driven by higher salaries and employee benefits due to the Evans acquisition, merit pay increases, higher incentive compensation expenses and higher medical expenses and other benefit costs. The increase in technology and data services was driven by the Evans acquisition and ongoing investment in enterprise technology initiatives. Occupancy expense was impacted by additional expenses from the Evans acquisition, higher utilities and higher facilities costs related to new banking locations. Professional fees and outside services increased from the prior year primarily due to the Evans acquisition. In addition, the increase in amortization of intangible assets was due to the amortization of the core deposit intangible asset related to the Evans acquisition.

Previous wording

Income tax expense for the three months ended June 30, 2025 was $8.2 million, down $2.3 million from the prior quarter and down $1.0 million from the second quarter of 2024. The effective tax rate was 26.7% for the second quarter of 2025 compared to 22.2% for the prior quarter and 22.0% for the second quarter of 2024. The increase in the effective tax rate from the prior quarter and the second quarter of 2024 was primarily due to the estimated impact of acquisition expenses related to the Evans acquisition and a lower level of tax-exempt income as a percentage of total taxable income.

Current wording

Income tax expense for the three months ended September 30, 2025 was $17.4 million, up $9.2 million from the prior quarter and up $6.7 million from the third quarter of 2024. The effective tax rate was 24.2% for the third quarter of 2025, compared to 26.7% for the prior quarter and 21.9% for the third quarter of 2024. The decrease in the effective tax rate from the prior quarter and the increase from the third quarter of 2024 was primarily due to the impact of nondeductible acquisition expenses related to the Evans acquisition and the level of tax-exempt income as a percentage of total pretax income.

Previous wording

Income tax expense for the six months ended June 30, 2025 was $18.7 million, consistent with the same period in 2024. The effective tax rate was 24.0% for the six months ended June 30, 2025, compared to 21.8% for the six months ended June 30, 2024. The increase in the effective tax rate from 2024 was primarily due to the estimated impact of acquisition expenses related to the Evans acquisition and a lower level of tax-exempt income as a percentage of total taxable income.

Current wording

Income tax expense for the nine months ended September 30, 2025 was $36.0 million, up $6.8 million from the same period in 2024. The effective tax rate was 24.1% for the nine months ended September 30, 2025, compared to 21.9% for the nine months ended September 30, 2024. The increase in the effective tax rate from 2024 was primarily due to the estimated impact of nondeductible acquisition expenses related to the Evans acquisition and the level of tax-exempt income as a percentage of total pretax income.

Previous wording

Total securities increased $125.8 million, or 5.1%, from December 31, 2024 to June 30, 2025. The securities portfolio represented 16.1% of total assets as of June 30, 2025 as compared to 17.8% of total assets as of December 31, 2024.

Current wording

Total securities increased $174.3 million, or 7.1%, from December 31, 2024 to September 30, 2025. The securities portfolio represented 16.3% of total assets as of September 30, 2025 as compared to 17.8% of total assets as of December 31, 2024.

Previous wording

Total loans were $11.62 billion and $9.97 billion at June 30, 2025 and December 31, 2024, respectively. Period end loans increased by $1.65 billion from December 31, 2024 to June 30, 2025, which included $1.67 billion of loans acquired from Evans. Excluding the other consumer and residential solar portfolios, which are in a planned run-off status and the loans acquired from Evans, period end loans increased $38.3 million from December 31, 2024 and increased $221.0 million from June 30, 2024. C&I loans increased $265.9 million to $1.69 billion; CRE loans increased $923.8 million to $4.80 billion; and total consumer loans increased $465.1 million to $5.13 billion. Total loans represent approximately 72.6% of assets as of June 30, 2025, as compared to 72.3% as of December 31, 2024.

Current wording

Total loans were $11.60 billion and $9.97 billion at September 30, 2025 and December 31, 2024, respectively. Period end loans increased by $1.63 billion from December 31, 2024 to September 30, 2025, which included $1.67 billion of loans acquired from Evans. Excluding the other consumer and residential solar portfolios, which are in a planned run-off status and the loans acquired from Evans, period end loans increased $38.2 million from December 31, 2024 and increased $132.4 million from September 30, 2024. From December 31, 2024 to September 30, 2025 C&I loans increased $217.7 million to $1.64 billion; CRE loans increased $954.1 million to $4.83 billion; and total consumer loans increased $453.4 million to $5.12 billion. Total loans represent approximately 72.0% of assets as of September 30, 2025, as compared to 72.3% as of December 31, 2024.

Previous wording

Within the CRE portfolio, approximately 79% are comprised of Non-Owner Occupied CRE, with the remaining 21% being Owner-Occupied CRE. Non-Owner Occupied CRE includes diverse sectors across the Company’s markets such as residential rental properties (45%), and office spaces (12%), along with retail, manufacturing, mixed use, hotels and others. Notably, office CRE loans account for 4% of the total outstanding loans, predominantly serving suburban medical and professional tenants across suburban and small urban markets. These loans carry an average size of $1.7 million, with 12% maturing over the next two years. As of June 30, 2025 and December 31, 2024, the total CRE construction and development loans amounted to $423.3 million and $314.8 million, respectively.

Current wording

Within the CRE portfolio, approximately 79% are comprised of Non-Owner Occupied CRE, with the remaining 21% being Owner-Occupied CRE. Non-Owner Occupied CRE includes diverse sectors across the Company’s markets such as residential rental properties (45%), and office spaces (13%), along with retail, manufacturing, mixed use, hotels and others. As of September 30, 2025 and December 31, 2024, the total CRE construction and development loans amounted to $427.0 million and $314.8 million, respectively.

Previous wording

During the first quarter of 2025, the Company performed an annual update to its econometric, PD/LGD models. Segment specific, multi-variate regression model inputs and assumptions were updated and recent period observed losses and behavior were incorporated into the models (“model refreshment”). The incorporation of recent observations did not have a material impact on most loan class segments except for the Auto class segment which resulted in an improvement in PD/LGD outcomes. The total allowance decreased by approximately 3% as of March 31, 2025 due to the model refreshment. During the second quarter of 2025, the Company included an additional downside scenario with stagflation conditions, which is characterized as an economic environment where inflation rises alongside unemployment. Stagflation was identified as an emerging risk as tariff policies begin to impact the economy.

Current wording

During the first quarter of 2025, the Company performed an annual update to its econometric, PD/LGD models. Segment specific, multi-variate regression model inputs and assumptions were updated and recent period observed losses and behavior were incorporated into the models (“model refreshment”). The incorporation of recent observations did not have a material impact on most loan class segments except for the Auto class segment which resulted in an improvement in PD/LGD outcomes. The total allowance decreased by approximately 3% as of March 31, 2025 due to the model refreshment. Starting in the second quarter of 2025, the Company included an additional downside scenario with stagflation conditions, which is characterized as an economic environment where inflation rises alongside unemployment. Stagflation was identified as an emerging risk as tariff policies impact the economy.

Previous wording

The allowance for credit losses totaled $140.2 million at June 30, 2025, as compared to $117.0 million at March 31, 2025 and $120.5 million at June 30, 2024. The allowance for credit losses as a percentage of loans was 1.21% at June 30, 2025, compared to 1.17% at March 31, 2025 and 1.22% at June 30, 2024. The increase in the allowance for credit losses from March 31, 2025 to June 30, 2025 was primarily due to the recording of $20.7 million of allowance for acquired Evans loans as of the acquisition date, which included both the $13.0 million of non-PCD allowance recognized through the provision for loan losses and the $7.7 million of PCD allowance reclassified from loans. In addition, the allowance for credit losses increased due to a modest deterioration in the economic forecast. The increase in the allowance for credit losses from June 30, 2024 to June 30, 2025 was primarily due to the $20.7 million of allowance for acquired Evans loans and a deterioration in the economic forecast, which was partially offset by model refreshment and the shift in loan composition driven by other consumer and residential solar portfolios that are in a planned run-off status.

Current wording

The allowance for credit losses totaled $139.0 million at September 30, 2025, as compared to $140.2 million at June 30, 2025 and $119.5 million at September 30, 2024. The allowance for credit losses as a percentage of loans was 1.20% at September 30, 2025, compared to 1.21% at June 30, 2025 and 1.21% at September 30, 2024. The decrease in the allowance for credit losses from June 30, 2025 to September 30, 2025 was primarily driven by portfolio mix changes resulting from the run-off of the other consumer and residential solar portfolios which were partially offset by a modest deterioration in economic forecasts. The increase in the allowance for credit losses from September 30, 2024 to September 30, 2025 was primarily due to the recording of $20.7 million of allowance for acquired Evans loans as of the acquisition date, which included both $13.0 million of non-PCD allowance recognized through the provision for loan losses and the $7.7 million of PCD allowance reclassified from loans and a modest deterioration in the economic forecast. This increase was partially offset by model refreshment and the shift in loan composition driven by other consumer and residential solar portfolios that are in a planned run-off status.

Previous wording

The allowance for credit losses was 302.21% of nonperforming loans at June 30, 2025, compared to 245.33% at March 31, 2025 and 316.37% at June 30, 2024. The increase in the coverage of the allowance to nonperforming and nonaccrual loans from March 31, 2025 to June 30, 2025 was due to the increase in the allowance relating to acquired Evans loans. The decrease in the coverage of the allowance to nonperforming loans from June 30, 2024 to June 30, 2025 was due to an increase in nonaccrual loans which was partially offset by the increase in the allowance relating to acquired Evans loans.

Current wording

The allowance for credit losses was 260.22% of nonperforming loans at September 30, 2025, compared to 302.21% at June 30, 2025 and 320.21% at September 30, 2024. The decrease in the coverage of the allowance to nonperforming and nonaccrual loans from June 30, 2025 to September 30, 2025 was due to the increase in nonaccrual loans. The decrease in the coverage of the allowance to nonperforming loans from September 30, 2024 to September 30, 2025 was due to an increase in nonaccrual loans, partially offset by the increase in the allowance relating to acquired Evans loans.

Previous wording

The provision for loan losses was $17.8 million for the three months ended June 30, 2025, compared to $7.6 million in the prior quarter and $8.9 million for the same period in the prior year. Provision expense increased from the prior quarter and the second quarter of 2024 primarily due to $13.0 million of acquisition-related provision for loan losses for non-PCD loans acquired from Evans and a deterioration in economic forecasts, which was partially offset by a decrease in net charge-offs in the current quarter. Net charge-offs totaled $2.4 million during the three months ended June 30, 2025, compared to net charge-offs of $6.6 million during the first quarter of 2025 and $3.7 million in the second quarter of 2024. Net charge-offs to average loans were 9 bps for the three months ended June 30, 2025, compared to 27 bps for the first quarter of 2025 and 15 bps for the three months ended June 30, 2024.

Current wording

The provision for loan losses was $3.1 million for the three months ended September 30, 2025, compared to $17.8 million in the prior quarter and $2.9 million for the same period in the prior year. Provision expense decreased from the prior quarter due to the $13.0 million of acquisition-related provision for loan losses recorded in the second quarter of 2025. Provision expense increased from the third quarter of 2024 due to a slight increase in net charge-offs. Net charge-offs totaled $4.3 million during the three months ended September 30, 2025, compared to net charge-offs of $2.4 million during the second quarter of 2025 and $3.9 million in the third quarter of 2024. Net charge-offs to average loans were 15 bps for the three months ended September 30, 2025, compared to 9 bps for the second quarter of 2025 and 16 bps for the three months ended September 30, 2024.

Previous wording

The provision for loan losses was $25.4 million for the six months ended June 30, 2025, compared to $14.5 million for the six months ended June 30, 2024. Provision expense increased from the same period in the prior year primarily due to $13.0 million of acquisition-related provision for loan losses for non-PCD loans acquired from Evans and a deterioration in economic forecasts. This was partially offset by a specific reserve established in the second quarter of 2024, which was subsequently released due to a charge-off in the fourth quarter of 2024. Net charge-offs totaled $8.9 million during the six months ended June 30, 2025, compared to net charge-offs of $8.4 million during the six months ended June 30, 2024. Net charge-offs to average loans was 17 bps for the six months ended June 30, 2025 and 2024.

Current wording

The provision for loan losses was $28.5 million for the nine months ended September 30, 2025, compared to $17.4 million for the nine months ended September 30, 2024. Provision expense increased from the same period in the prior year primarily due to $13.0 million of acquisition-related provision for loan losses for non-PCD loans acquired from Evans and a deterioration in economic forecasts. This was partially offset by a specific reserve established in the second quarter of 2024, which was subsequently released due to a charge-off in the fourth quarter of 2024 and an increase in current period net charge-offs. Net charge-offs totaled $13.2 million during the nine months ended September 30, 2025, compared to net charge-offs of $12.3 million during the nine months ended September 30, 2024. Net charge-offs to average loans was 16 bps for the nine months ended September 30, 2025 and 17 bps for the nine months ended September 30, 2024.

Previous wording

As of June 30, 2025, the unfunded commitment reserve totaled $6.2 million, compared to $4.5 million as of March 31, 2025 and $4.3 million as of June 30, 2024. The increase in unfunded reserve was caused by increases in pipeline exposure and $0.5 million of acquisition-related provision for unfunded commitments established for unfunded commitments acquired in the Evans acquisition.

Current wording

As of September 30, 2025, the unfunded commitment reserve totaled $5.9 million, compared to $6.2 million as of June 30, 2025 and $4.6 million as of September 30, 2024. The decrease in the unfunded reserve from the prior quarter was caused by a slight decline in pipeline exposure. The increase from the same period in the prior year was caused by an increase in pipeline exposure and $0.5 million of acquisition-related provision for unfunded commitments established for unfunded commitments acquired in the Evans acquisition.

Previous wording

Total nonperforming assets were $46.7 million at June 30, 2025, compared to $51.8 million at December 31, 2024 and $38.2 million at June 30, 2024. Nonperforming loans at June 30, 2025 were $46.4 million or 0.40% of total loans, compared with $51.6 million or 0.52% of total loans at December 31, 2024 and $38.1 million or 0.39% of total loans at June 30, 2024. The increase in nonperforming assets from the same period in the prior year was attributable to the addition of nonperforming loans acquired from the Evans acquisition, partially offset by payoffs of nonperforming commercial real estate loans. The decrease from December 31, 2024 is attributable to the payoff of two nonaccrual loans in the second quarter of 2025, partly offset by the addition of nonperforming loans from the Evans acquisition. Total nonaccrual loans were $43.2 million or 0.37% of total loans at June 30, 2025, compared to $45.8 million or 0.46% of total loans at December 31, 2024 and $34.8 million or 0.35% of total loans at June 30, 2024. Past due loans as a percentage of total loans was 0.38% at June 30, 2025, up from 0.34% at December 31, 2024 and up from 0.30% at June 30, 2024.

Current wording

Total nonperforming assets were $53.7 million at September 30, 2025, compared to $51.8 million at December 31, 2024 and $37.4 million at September 30, 2024. Nonperforming loans at September 30, 2025 were $53.4 million or 0.46% of total loans, compared with $51.6 million or 0.52% of total loans at December 31, 2024 and $37.3 million or 0.38% of total loans at September 30, 2024. The increase in nonperforming assets from the same period in the prior year was attributable to the addition of nonperforming loans acquired from the Evans acquisition, partially offset by payoffs of nonperforming commercial real estate loans. The increase from December 31, 2024 is primarily attributable to the addition of nonperforming loans from the Evans acquisition. These increases were partially offset by the payoff of two nonaccrual loans in the second quarter of 2025. Total nonaccrual loans were $46.5 million or 0.40% of total loans at September 30, 2025, compared to $45.8 million or 0.46% of total loans at December 31, 2024 and $33.3 million or 0.34% of total loans at September 30, 2024. Past due loans as a percentage of total loans were 0.38% at September 30, 2025, up from 0.34% at December 31, 2024 and up from 0.36% at September 30, 2024.

Previous wording

In addition to nonperforming loans discussed above, the Company has also identified approximately $195.3 million in potential problem loans at June 30, 2025 as compared to $116.1 million at December 31, 2024 and $125.2 million at June 30, 2024. Potential problem loans are loans that are currently performing, with a possibility of loss if weaknesses are not corrected. Such loans may need to be disclosed as nonperforming at some time in the future. Potential problem loans are classified by the Company’s loan rating system as “substandard.” Potential problem loans have increased to more normalized levels and the increase primarily relates to a few CRE relationships reflecting changing conditions in certain CRE markets including construction delays, rising costs and delays in leasing up spaces. The increase in potential problem loans at June 30, 2025 compared to December 31, 2024 and June 30, 2024 is primarily due to the addition of $60.5 million in acquired commercial loans from Evans during the second quarter of 2025 and additional migration of commercial loan balances to substandard, the majority of which are adequately secured by the underlying real estate collateral. Most of the increase involves commercial real estate and reflects changing conditions in commercial markets including delays in construction, rising costs and delays in leasing spaces. Management cannot predict the extent to which economic conditions may worsen or other factors, which may impact borrowers and the potential problem loans. Accordingly, there can be no assurance that other loans will not become over 90 days past due, be placed on nonaccrual, become troubled loans modifications or require increased allowance coverage and provision for loan losses. To mitigate this risk the Company maintains a diversified loan portfolio, has no significant concentration in any particular industry and originates loans primarily within its footprint.

Current wording

In addition to nonperforming loans discussed above, the Company has also identified approximately $211.3 million in potential problem loans at September 30, 2025, as compared to $116.1 million at December 31, 2024 and $119.9 million at September 30, 2024. Potential problem loans are loans that are currently performing, with a possibility of loss if weaknesses are not corrected. Such loans may need to be disclosed as nonperforming at some time in the future. Potential problem loans are classified by the Company’s loan rating system as “substandard.” The increase in potential problem loans at September 30, 2025, compared to December 31, 2024 and September 30, 2024 is primarily due to the addition of $60.5 million in acquired commercial loans from Evans during the second quarter of 2025 and additional migration of commercial loan balances to substandard, the majority of which are adequately secured by the underlying real estate collateral. Most of the increase involves commercial real estate and reflects changing conditions in commercial markets including delays in construction, rising costs and delays in leasing spaces. Management cannot predict the extent to which economic conditions may worsen or other factors, which may impact borrowers and the potential problem loans. Accordingly, there can be no assurance that other loans will not become over 90 days past due, be placed on nonaccrual, become troubled loans modifications or require increased allowance coverage and provision for loan losses. To mitigate this risk the Company maintains a diversified loan portfolio, has no significant concentration in any particular industry and originates loans primarily within its footprint.

Previous wording

Total deposits were $13.52 billion at June 30, 2025, up $1.97 billion, or 17.0%, from December 31, 2024, which included $1.86 billion in deposits acquired from Evans. Excluding deposits acquired from Evans, deposits increased $104.4 million from December 31, 2024. As of June 30, 2025, there were $219.7 million of brokered time deposits, down from $295.8 million as of December 31, 2024. The Deposit mix characteristics also improved with an increase in demand deposits, interest-bearing checking and money market accounts offset by a decrease in time deposits. The Company’s composition of total deposits is diverse and granular with nearly 615,000 accounts with an average per account balance of $21,979 as of June 30, 2025. As of June 30, 2025 and December 31, 2024 the estimated amounts of uninsured deposits based on the methodologies and assumptions used for the bank regulatory reporting were $5.80 billion and $4.73 billion, respectively. Total average deposits increased $1.09 billion, or 9.8%, from the same period last year due to the $1.86 billion in deposits acquired from Evans in the second quarter of 2025.

Current wording

Total deposits were $13.66 billion at September 30, 2025, up $2.11 billion, or 18.3%, from December 31, 2024, which included $1.86 billion in deposits acquired from Evans. Excluding deposits acquired from Evans, deposits increased $250.1 million from December 31, 2024. As of September 30, 2025, there were $173.9 million of brokered time deposits, down from $295.8 million as of December 31, 2024. Excluding deposits acquired from Evans, demand, interest-bearing checking and money market accounts increased, partially offset by a decrease in time deposits. The Company’s composition of total deposits is diverse and granular with over 616,000 accounts with an average per account balance of $22,161 as of September 30, 2025. As of September 30, 2025 and December 31, 2024 the estimated amounts of uninsured deposits based on the methodologies and assumptions used for the bank regulatory reporting were $5.96 billion and $4.73 billion, respectively. Total average deposits increased $1.47 billion, or 13.2%, from the same period last year due to the $1.86 billion in deposits acquired from Evans in the second quarter of 2025.

Previous wording

The Company’s borrowed funds consist of short-term borrowings and long-term debt. Short-term borrowings totaled $113.0 million at June 30, 2025 compared to $162.9 million at December 31, 2024. Long-term debt was $44.8 million at June 30, 2025 compared to $29.6 million at December 31, 2024. The increase in long-term debt was due to a $40.0 million borrowing acquired in the Evans acquisition, partially offset by the maturity of a $25.0 million borrowing that matured in the first quarter of 2025. As of the acquisition date, the fair value discount was $0.3 million for the acquired long-term debt which is being accreted into interest expense over the life of the debt instrument.

Current wording

The Company’s borrowed funds consist of short-term borrowings and long-term debt. Short-term borrowings totaled $138.7 million at September 30, 2025 compared to $162.9 million at December 31, 2024. Long-term debt was $44.8 million at September 30, 2025 compared to $29.6 million at December 31, 2024. The increase in long-term debt was due to a $40.0 million borrowing acquired in the Evans acquisition, partially offset by the maturity of a $25.0 million borrowing that matured in the first quarter of 2025.

Previous wording

On June 23, 2020, the Company issued $100.0 million of 5.00% fixed-to-floating rate subordinated notes due 2030. The subordinated notes, which qualify as Tier 2 capital, bear interest at an annual rate of 5.00%, payable semi-annually in arrears commencing on January 1, 2021, and a floating rate of interest equivalent to the three-month SOFR plus a spread of 4.85%, payable quarterly in arrears commencing on October 1, 2025. The subordinated debt issuance cost of $2.2 million is being amortized on a straight-line basis into interest expense over five years. The Company repurchased $2.0 million of the subordinated notes in 2022 at a discount of $0.1 million. Subsequent to quarter end, on July 1, 2025, the Company redeemed these subordinated notes in full using existing liquidity sources.

Current wording

On June 23, 2020, the Company issued $100.0 million of 5.00% fixed-to-floating rate subordinated notes due 2030. The subordinated notes, which qualified as Tier 2 capital, bore interest at an annual rate of 5.00%, payable semi-annually in arrears commencing on January 1, 2021, and a floating rate of interest equivalent to the three-month SOFR plus a spread of 4.85%, payable quarterly in arrears commencing on October 1, 2025. The subordinated notes issuance costs of $2.2 million were amortized on a straight-line basis into interest expense over five years. The Company repurchased $2.0 million of the subordinated notes in 2022 at a discount of $0.1 million. On July 1, 2025, the Company redeemed these subordinated notes in full using existing liquidity sources.

Previous wording

Subordinated notes assumed in connection with the Salisbury acquisition included $25.0 million of 3.50% fixed-to-floating rate subordinated notes due 2031. The subordinated notes, which qualify as Tier 2 capital, bear interest at an annual rate of 3.50%, payable quarterly in arrears commencing on June 30, 2021, and a floating rate of interest equivalent to the three-month SOFR plus a spread of 2.80%, payable quarterly in arrears commencing on June 30, 2026. As of the acquisition date, the fair value discount was $3.0 million, which will be amortized into interest expense over the expected call or maturity date.

Current wording

The subordinated notes assumed in connection with the Salisbury acquisition included $25.0 million of 3.50% fixed-to-floating rate subordinated notes due 2031. The subordinated notes, which qualified as Tier 2 capital, bore interest at an annual rate of 3.50%, payable quarterly in arrears commencing on June 30, 2021, and a floating rate of interest equivalent to the three-month SOFR plus a spread of 2.80%, payable quarterly in arrears commencing on June 30, 2026. As of the acquisition date, the fair value discount was $3.0 million, which will be amortized into interest expense over the expected call or maturity date.

Previous wording

Subordinated notes assumed in connection with the Evans acquisition included $20.0 million of 6.00% fixed-to-floating rate subordinated notes due 2030. The subordinated notes, which qualified as Tier 2 capital, bore interest at an annual rate of 6.00%, payable semi-annually in arrears commencing on January 15, 2021, and a floating rate of interest equivalent to the three-month SOFR plus a spread of 5.90%, payable quarterly in arrears commencing on July 15, 2025. Subsequent to quarter end, on July 15, 2025, the Company redeemed these subordinated notes in full using existing liquidity sources.

Current wording

Subordinated notes assumed in connection with the Evans acquisition included $20.0 million of 6.00% fixed-to-floating rate subordinated notes due 2030. The subordinated notes, which qualified as Tier 2 capital, bore interest at an annual rate of 6.00%, payable semi-annually in arrears commencing on January 15, 2021, and a floating rate of interest equivalent to the three-month SOFR plus a spread of 5.90%, payable quarterly in arrears commencing on July 15, 2025. On July 15, 2025, the Company redeemed these subordinated notes in full using existing liquidity sources.

Previous wording

As of June 30, 2025 and December 31, 2024 the subordinated debt net of unamortized issuance costs and fair value discount was $141.9 million and $121.2 million, respectively.

Current wording

As of September 30, 2025 and December 31, 2024 the subordinated debt net of unamortized issuance costs and fair value discount was $24.2 million and $121.2 million, respectively.

Previous wording

In connection with the Evans acquisition, the Company assumed Evans Capital Trust I, a statutory business trust wholly-owned by the Company, which issued $11.0 million in aggregate principal amount of floating rate preferred capital securities due November 23, 2034 to various investors and $0.3 million of common securities. As of the acquisition date, the fair value discount was $0.9 million which is being amortized into interest expense over the life of the debt instrument.

Current wording

In connection with the Evans acquisition, the Company acquired Evans Capital Trust I, a statutory business trust wholly-owned by the Company, which issued $11.0 million in aggregate principal amount of floating rate preferred capital securities due November 23, 2034 to various investors and $0.3 million of common securities. As of the acquisition date, the fair value discount was $0.9 million which is being amortized into interest expense over the life of the debt instrument.

Previous wording

Despite the fact that the Trusts are not included in the Company’s consolidated financial statements, $108 million of the $112 million in trust preferred securities issued by these subsidiary trusts was included in the Tier 1 capital of the Company for regulatory capital purposes as allowed by the FRB (NBT Bank owns $1.0 million of CNBF Trust I securities) through March 31, 2025. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires bank holding companies with assets greater than $500 million to be subject to the same capital requirements as insured depository institutions, meaning, for instance, that such bank holding companies will not be able to count trust preferred securities issued after May 19, 2010 as Tier 1 capital. The aforementioned Trusts are grandfathered with respect to this enactment based on their date of issuance. As of June 30, 2025 in connection with the completion of the Evans acquisition and the Company exceeding $15 billion in assets, the Trusts are now included in Tier 2 capital of the Company for regulatory capital purposes.

Current wording

Despite the fact that the Trusts are not included in the Company’s consolidated financial statements, $108 million of the $112 million in trust preferred securities issued by these subsidiary trusts was included in the Tier 1 capital of the Company for regulatory capital purposes as allowed by the FRB (NBT Bank owns $1.0 million of CNBF Trust I securities) through March 31, 2025. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires bank holding companies with assets greater than $500 million to be subject to the same capital requirements as insured depository institutions, meaning, for instance, that such bank holding companies will not be able to count trust preferred securities issued after May 19, 2010 as Tier 1 capital. The aforementioned Trusts are grandfathered with respect to this enactment based on their date of issuance. As of June 30, 2025 in connection with the completion of the Evans acquisition and the Company’s assets exceeding $15 billion, the Trusts are now included in Tier 2 capital of the Company for regulatory capital purposes.

Previous wording

Stockholders’ equity of $1.81 billion represented 11.27% of total assets at June 30, 2025 compared with $1.53 billion, or 11.07% of total assets, as of December 31, 2024. Stockholders’ equity increased $279.0 million from December 31, 2024 driven by the Evans acquisition adding $221.8 million of capital, net income generation of $59.3 million for the six months ended June 30, 2025 and a decrease of $32.6 million in accumulated other comprehensive loss due primarily to the change in the fair value of securities available for sale, partially offset by dividends declared of $33.9 million.

Current wording

Stockholders’ equity of $1.85 billion represented 11.50% of total assets at September 30, 2025 compared with $1.53 billion, or 11.07% of total assets, as of December 31, 2024. Stockholders’ equity increased $327.0 million from December 31, 2024 driven by the Evans acquisition adding $221.8 million of capital, net income generation of $113.7 million for the nine months ended September 30, 2025 and a decrease of $43.2 million in accumulated other comprehensive loss due primarily to the change in the fair value of securities available for sale, partially offset by dividends declared of $53.3 million.

Previous wording

The Company did not purchase shares of its common stock during the three and six months ended June 30, 2025. Under its share repurchase program, the Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. As of June 30, 2025, there were 1,992,400 shares available for repurchase under this plan authorized on December 18, 2023, which is set to expire on December 31, 2025.

Current wording

The Company did not purchase shares of its common stock during the three and nine months ended September 30, 2025. As of September 30, 2025, there were 1,992,400 shares available for repurchase under the Company’s stock repurchase plan authorized on December 18, 2023 and set to expire on December 31, 2025. On October 27, 2025, the Company’s Board of Directors authorized and approved an amendment to the Company’s stock repurchase program. Pursuant to the amended stock repurchase program, the Company may repurchase up to 2,000,000 shares of the Company’s common stock with all repurchases under the stock repurchase program to be made by December 31, 2027. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effect of stock-based incentive plans and other potential uses of common stock for corporate purposes.

Previous wording

The Company anticipates that the trajectory of net interest income will continue to depend significantly on the timing and path of short to mid-term interest rates which are heavily driven by inflationary pressures and FOMC monetary policy. Post-pandemic, inflationary pressures have resulted in a higher overall yield curve with federal funds increases of 425 bps in 2022 with an additional 100 bps of increases in 2023. However, the tightening cycle ended in September of 2024, when the FRB lowered the federal funds rate by 50 bps, followed by consecutive 25 bps reductions in November and December of 2024 for a total of 100 bps of federal funds rate reductions by the end of 2024. While deposit rates increased meaningfully in 2023 and continued to increase in early 2024 in conjunction with elevated short-term interest rates, the recent federal funds rate reductions have provided the catalyst for the Company to begin reducing deposit rates. The Company continues to focus on managing deposit expense in an environment of still elevated but declining short-term interest rates while allowing assets to reprice upward in relation to existing portfolio asset yields.

Current wording

The Company anticipates that the trajectory of net interest income will continue to depend significantly on the timing and path of short to mid-term interest rates which are heavily driven by inflationary pressures and FOMC monetary policy. Post-pandemic, inflationary pressures resulted in a higher overall yield curve with federal funds increases of 425 bps in 2022 with an additional 100 bps of increases in 2023. However, the tightening cycle ended in September of 2024, when the FRB lowered the federal funds rate by 50 bps, followed by consecutive 25 bps reductions in November and December of 2024 for a total of 100 bps of federal funds rate reductions by the end of 2024. Additionally, one rate cut of 25 bps occured in 2025, signaling a continuation of the cutting cycle. While deposit rates increased meaningfully in 2023 and continued to increase in early 2024 in conjunction with elevated short-term interest rates, the federal funds rate reductions of 2024 and expectations for continued reductions in 2025 and 2026 have provided the catalyst for the Company to begin reducing deposit rates. The Company continues to focus on managing deposit expense in an environment of still elevated but declining short-term interest rates while allowing assets to reprice upward in relation to existing portfolio asset yields.