NBT Bancorp Profile
NBT Bancorp Inc. operates as the bank holding company for NBT Bank, National Association that provides commercial banking, retail banking and wealth management services primarily to customers in its market area, which includes central and upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine and central Connecticut.
The company’s subsidiaries include NBT Financial Services, Inc. (‘NBT Financial’), NBT Holdings, Inc. (‘NBT Holdings’), CNBF Capital Trust I, NBT Statutory Trust I, NBT Statutory Trust II, Alliance Financial Capital Trust I and Alliance Financial Capital Trust II (collectively, the ‘Trusts’).
The company has been, and intends to continue to be, a community-oriented financial institution offering a variety of financial services. The company’s business philosophy is to operate as a community bank with local decision-making, providing a broad array of banking and financial services to retail, commercial and municipal customers.
The Bank, a full service commercial bank, provides a broad range of financial products to individuals, corporations and municipalities throughout central and upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine and central Connecticut.
Through its network of branch locations, the bank offers a wide range of products and services tailored to individuals, businesses and municipalities. Deposit products offered by the bank include demand deposit accounts, savings accounts, negotiable order of withdrawal (‘NOW’) accounts, money market deposit accounts (‘MMDA’), and certificate of deposit (‘CD’) accounts. The bank offers various types of each deposit account to accommodate the needs of its customers with varying rates, terms and features. Loan products offered by the bank include indirect and direct consumer loans, home equity loans, mortgages, business banking loans and commercial loans, with varying rates, terms and features to accommodate the needs of its customers. The bank also offers various other products and services through its branch network, such as trust and investment services and financial planning and life insurance services. In addition to its branch network, the bank also offers access to certain products and services electronically through 24-hour online, mobile and telephone channels that enable customers to check balances, make deposits, transfer funds, pay bills, access statements, apply for loans and access various other products and services.
NBT Financial Services, Inc.
Through NBT Financial, the company operates EPIC Advisors, Inc. (‘EPIC’), a retirement plan administrator. EPIC offers services, including retirement plan consulting and recordkeeping services. EPIC’s headquarters are located in Rochester, New York.
NBT Holdings, Inc.
Through NBT Holdings, the company operates NBT Insurance Agency, LLC (‘NBT Insurance’), a full-service insurance agency acquired by the company on September 1, 2008. NBT Insurance’s headquarters are located in Norwich, New York. NBT Insurance offers a full array of insurance products, including personal property and casualty, business liability and commercial insurance, tailored to serve the specific insurance needs of individuals, as well as businesses in a range of industries operating in the markets served by the company.
Operating Subsidiaries of the bank
The bank has three operating subsidiaries, NBT Capital Corp.; Broad Street Property Associates, Inc.; and NBT Capital Management, Inc. NBT Capital Corp. is a venture capital corporation. Broad Street Property Associates, Inc. is a property management company. NBT Capital Management, Inc. is a registered investment advisor that provides investment management and financial consulting services. One operating subsidiary, CNB Realty Trust, was a real estate investment trust, which was dissolved during 2021.
Products
The company offers a comprehensive array of financial products and services for consumers and businesses with options that are beneficial to unbanked and underbanked individuals. Deposit accounts include low balance savings and checking options that feature minimal or no monthly service fees, provide assistance rebuilding positive deposit relationships, and assistance for those just starting a new banking relationship. The new NBT iSelect Account was introduced in 2021 and certified as meeting the bank On National Account Standards for 2021-2022 and again for 2023-2024. Over 3,200 NBT iSelect Accounts have been opened. These accounts feature no monthly charges for maintenance, inactivity or dormancy, no overdraft fees and no minimum balance requirement. An enhanced digital banking platform incorporates ready access through online and mobile services to current credit score information and a personal financial management tool for budget and expense tracking.
The company is focused on making home ownership accessible to everyone in the communities the company serves. The company’s suite of home lending products features innovative and flexible options, including government guaranteed programs like Federal Housing Administration (‘FHA’) and the U.S. Department of Veterans Affairs (‘VA’) loans, as well as programs developed in-house like the company’s First Home Loan, Habitat for Humanity, Home in the City and Portfolio 97 programs. The company’s home lending team includes affordable housing loan originators, and the company maintains longstanding relationships with affordable housing agency partners across the company’s banking footprint that offer first-time homebuyer education programs and assistance with down payments and closing costs.
Environmental
The company is focused on the environment and committed to business practices and activities that encourage sustainability and minimize the company’s environmental impact. In larger facilities, the company conserves energy through the use of building energy management systems and motion sensor lighting controls. In new construction and renovations, the company incorporates high-efficiency mechanical equipment, LED lighting, and modern building techniques to reduce the company’s carbon footprint wherever possible. The company has an ongoing initiative to replace existing lighting with LED lighting to reduce energy consumption.
The company offers a financing product to homeowners on a national basis, which provides an opportunity to power their homes with sustainable solar energy and reduce their carbon footprint at an affordable price. Services like mobile and online banking, remote deposit capture, electronic loan payments, eStatements and combined statements enable the company to support all customers in their efforts to consume less fuel and paper. The company continues to digitize loan origination and deposit account opening processes, reducing trips to the bank and paper documents for the company’s customers. Across the company’s footprint, the company hosts community shred days with multiple confidential document destruction companies to promote safe document disposal and recycling.
Commercial Loans
The company offers a variety of commercial loan products. The company’s underwriting analysis for commercial loans typically includes credit verification, independent appraisals, a review of the borrower’s financial condition and a detailed analysis of the borrower’s underlying cash flows.
Commercial and Industrial (‘C&I’) – The company offers a variety of loan options to meet the specific needs of the company’s C&I customers, including term loans, time notes and lines of credit. Such loans are made available to businesses for working capital needs and are typically collateralized by business assets, such as equipment, accounts receivable and perishable agricultural products, which are exposed to industry price volatility.
Paycheck Protection Program (‘PPP’) – Section 1102 of the Coronavirus Aid, Relief and Economic Security Act (‘CARES Act’) created the Paycheck Protection Program, a program administered by the Small Business Administration (the ‘SBA’) to provide loans to small businesses for payroll and other basic expenses during the coronavirus (‘COVID-19’) pandemic. The company has been a participant in the PPP as a lender. Loans made under the PPP are fully guaranteed by the SBA, whose guarantee is backed by the full faith and credit of the United States government. PPP covered loans also afford borrowers forgiveness up to the principal amount of the PPP covered loan, plus accrued interest, if the loan proceeds are used to retain workers and maintain payroll or to make certain mortgage interest, lease and utility payments, and certain other criteria are satisfied. The SBA will reimburse PPP lenders for any amount of a PPP covered loan that is forgiven, and PPP lenders will not be held liable for any representations made by PPP borrowers in connection with their requests for loan forgiveness. Lenders receive pre-determined fees for processing and servicing PPP loans. In addition, PPP loans are risk-weighted at zero percent under the generally applicable Standardized Approach used to calculate risk-weighted assets for regulatory capital purposes. The company processed approximately 6,100 loans.
Commercial Real Estate (‘CRE’) – The company offers CRE loans to finance real estate purchases, refinancing’s, expansions and improvements to commercial and agricultural properties. CRE loans are loans that are secured by liens on real estate, which may include both owner-occupied and nonowner-occupied properties, such as apartments, commercial structures, health care facilities and other facilities. Government loan guarantees may be obtained to provide further support for agricultural property.
Consumer Loans
The company offers a variety of Consumer loan products, including Auto and Other Consumer loans.
Auto – The company provides both direct and indirect financing of automobiles (‘Auto’). The company maintains relationships with many dealers primarily in the communities that the company serves. Through these relationships, the company primarily finances the purchases of automobiles indirectly through dealer relationships. Most of these loans carry a fixed rate of interest with principal repayment terms typically ranging from three to six years, based upon the nature of the collateral and the size of the loan.
Other Consumer – The Other Consumer loan segment consists primarily of unsecured consumer loans, residential solar loans and direct consumer loans. The company offers unsecured consumer loans across a national footprint originated through the company’s relationships with national technology-driven consumer lending companies to finance such things as dental and medical procedures, K-12 tuition, solar energy installations and other consumer purpose loans. In 2017, the company partnered with Sungage Financial, Inc. to offer financing to consumers for solar ownership with the program tailored for delivery through solar installers. Advances of credit through this business line are to prime borrowers and are subject to the company’s underwriting standards. Typically, the company collects origination fees that are deferred and recognized into interest income over the estimated life of the loan. The company offers a variety of direct consumer installment loans to finance various personal expenditures. In addition to installment loans, the company offers personal lines of credit, overdraft protection, debt consolidation, education and other uses. Direct consumer installment loans carry a fixed rate of interest with principal repayment terms typically ranging from one to fifteen years, based upon the nature of the collateral and the size of the loan. Consumer installment loans are often secured with collateral consisting of a perfected lien on the asset being purchased or a perfected lien on a consumer’s deposit account.
Residential
Residential loans consist primarily of loans secured by a first or second mortgage on primary residences, home equity loans and lines of credit in first and second lien positions and residential construction loans. The company originates adjustable-rate and fixed rate, one-to-four-family residential loans for the construction or purchase of a residential property or the refinancing of a mortgage. These loans are collateralized by properties located in the company’s market area.
Securities Portfolio
As of December 31, 2022, the company’s securities were U.S. treasury, federal agency securities, state and municipal securities, mortgage-backed securities, collateralized mortgage obligations, and corporate securities.
Supervision and Regulation
The company is a registered bank holding company and financial holding company under the Bank Holding Company Act of 1956, as amended (the ‘BHC Act’), and is subject to the supervision of, and regular examination by, the Board of Governors of the Federal Reserve System (the ‘Federal Reserve Board’ or ‘FRB’) as its primary federal regulator. The company is also subject to the jurisdiction of the Securities and Exchange Commission (‘SEC’) and is subject to the disclosure and other regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’), as administered by the SEC. The company’s common stock is listed on the NASDAQ Global Select market under the ticker symbol, ‘NBTB,’ and the company is subject to the NASDAQ stock market rules.
The bank is chartered as a national banking association under the National Bank Act. The bank is subject to the supervision of, and to regular examination by, the Office of the Comptroller of the Currency (‘OCC’) as its chartering authority and primary federal regulator. The bank is also subject to the supervision and regulation, to a limited extent, of the FDIC as its deposit insurer. Financial products and services offered by the company and the bank are subject to federal consumer protection laws and implementing regulations promulgated by the Consumer Financial Protection Bureau (‘CFPB’).
The company and the bank are also subject to oversight by state attorneys general for compliance with state consumer protection laws. The bank’s deposits are insured by the FDIC (Federal Deposit Insurance Corporation) up to the applicable deposit insurance limits in accordance with FDIC laws and regulations. The non-bank subsidiaries of the company and the bank are subject to federal and state laws and regulations, including regulations of the FRB and the OCC, respectively.
Transactions between the bank and its affiliates, including the company, are governed by Sections 23A and 23B of the Federal Reserve Act (the ‘FRA’) and the FRB’s implementing Regulation W.
Section 22(h) of the FRA and its implementing Regulation O restricts loans to the bank’s and its affiliates’ directors, executive officers and principal stockholders (‘Insiders’). Section 22(g) of the FRA places additional limitations on loans to the bank’s and its affiliates’ executive officers.
The bank’s deposit accounts are fully insured by the FDIC Deposit Insurance Fund (the ‘DIF’) up to the deposit insurance limits in accordance with applicable laws and regulations. The bank is also a member of the Federal Home Loan Bank (‘FHLB’) of New York.
Many of the Coronavirus Aid, Relief and Economic Security Act’s (CARES Act’s) programs are dependent upon the direct involvement of the U.S. financial institutions, such as the company and the bank; and have been implemented through rules and guidance adopted by federal departments and agencies, including the U.S. Department of Treasury, the Federal Reserve and other federal banking agencies, including those with direct supervisory jurisdiction over the company and the bank. The company continues to assess the impact of the CARES Act and other statutes, regulations and supervisory guidance related to the COVID-19 (coronavirus) pandemic.
The company participated in the PPP (Paycheck Protection Program) as a lender. These loans are eligible to be forgiven if certain conditions are satisfied and are fully guaranteed by the Small Business Administration (SBA).
The company is subject to the CFPB’s examination authority with regard to compliance with federal consumer financial laws and regulations, in addition to the OCC as the primary regulatory of the bank.
The company is subject to federal consumer financial statutes and the regulations promulgated thereunder, including but not limited to, the Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; the Equal Credit Opportunity Act (‘ECOA’), prohibiting discrimination in connection with the extension of credit; the Home Mortgage Disclosure Act (‘HMDA’), requiring home mortgage lenders, including the bank, to make available to the public expanded information regarding the pricing of home mortgage loans, including the ‘rate spread’ between the annual percentage rate and the average prime offer rate for mortgage loans of a comparable type; the Fair Credit Reporting Act (‘FCRA’), governing the provision of consumer information to credit reporting agencies and the use of consumer information; and the Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected by collection agencies.
The company has a BSA (Bank Secrecy Act) and the USA PATRIOT Act (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001) board-approved compliance program commensurate with its risk profile.
The company and the bank are subject to federal laws, including the Gramm-Leach Bliley Act of 2001 (GLBA) and certain state laws containing consumer privacy protection provisions.
The bank is also subject to data security standards, privacy and data breach notice requirements, primarily those issued by the OCC.
The bank has a responsibility under the Community Reinvestment Act of 1977 (CRA), as implemented by OCC regulations, to help meet the credit needs of the communities it serves, including low- and moderate-income neighborhoods.
History
NBT Bancorp Inc. was founded in 1856. The company was incorporated in the state of Delaware in 1986.
