NBT Bancorp (NASDAQ:NBTB) reported record third-quarter earnings as loan growth, a higher net interest margin and fee-based business contributions lifted results. The company posted net income of $58 million, or $1.11 per diluted share, for the third quarter of 2026.
President and CEO Scott Kingsley said the company generated stronger earnings than in both the prior-year quarter and the second quarter of 2026. Operating return on assets was 1.41%, while operating return on tangible equity was 16.53%. Tangible book value per share reached $27.75, up 8.8% from a year earlier.
NBT raised its quarterly dividend to $0.40 per share, an 8.1% increase from the prior year. Kingsley said capital deployment priorities remain centered on supporting organic growth and maintaining annual dividend increases, while the company also evaluates strategic opportunities and measured share repurchases.
Record Net Interest Income and Loan Growth
Chief Financial Officer Annette Burns said net interest income rose to a record $143 million, increasing $5 million from the second quarter and more than 5% from the third quarter of 2025. Net interest margin expanded five basis points sequentially to 3.78%.
The sequential improvement reflected organic loan growth, higher earning-asset yields, increased purchase-accounting accretion and one additional calendar day during the quarter, Burns said.
Total loans were $11.9 billion at quarter-end. Excluding consumer runoff portfolios, loans increased $427 million, or 4%, from Dec. 31, 2025. Commercial loans grew $234 million during the first nine months of the year, while consumer loans increased $116 million. Commercial and consumer loans represented 56% and 44%, respectively, of the total portfolio.
New commercial loan originations during the quarter carried a 6.41% yield. Kingsley said the company expects fourth-quarter loan growth to be broadly consistent with its year-to-date pace, noting that construction projects typically do not generate substantial draws during the winter months.
For 2027, Kingsley identified a 3% to 5% loan-growth range as a “good starting point,” taking into account expected early payoffs and continued runoff in certain consumer portfolios. He added that semiconductor-related investment across NBT’s markets could create an opportunity for stronger growth over time.
Deposits, Expenses and Fee Revenue
Total deposits stood at $13.6 billion at the end of the quarter, up modestly from year-end. Core deposits increased 2.6% during the first nine months of 2026. Nearly 60% of deposits were in no- and low-cost checking and savings accounts, with a blended cost of 38 basis points.
Total deposit costs declined by one basis point from the prior quarter to 1.32%, while total funding costs increased one basis point to 1.42%. Burns said the company has shifted deposit mix away from higher-cost time deposits and toward checking, savings and money-market products. During the year, $99 million of brokered certificates of deposit matured and NBT redeemed $25 million of subordinated debt.
Fee income excluding securities gains totaled $52.9 million, up $3.3 million from the prior quarter and 2.9% from a year earlier. Retirement plan administration revenue increased 8.7% year over year. Combined quarterly revenue from retirement plan services, wealth management and insurance services reached approximately $34 million, a new high, according to Burns.
Non-interest income accounted for approximately 27% of total revenue. Burns cautioned that the fourth quarter is typically the lowest-revenue period for the company’s fee businesses because activity-based fees decline seasonally.
Total operating expenses increased 3% sequentially, primarily due to an additional payroll day, incentive compensation, activity-based costs and a higher reserve for unfunded loan commitments. Burns said NBT expects fourth-quarter operating expenses to remain near third-quarter levels of roughly $114 million to $115 million.
Credit Trends and Capital Position
Provision expense was $3.8 million in the third quarter, down from $6.1 million in the second quarter. Burns attributed the decline primarily to slower loan growth, a modest improvement in the economic forecast and portfolio-mix changes.
The allowance for loan losses represented 1.17% of total loans and covered nonperforming loans by two times. Burns said nonperforming loans rose modestly during the quarter but did not reflect broad industry or regional trends, instead stemming from borrower-specific situations. Criticized and classified loans declined from the prior quarter and were significantly below year-earlier levels, she said.
Kingsley said the company ended the quarter with capital levels of nearly 10% on a leverage basis, 12.5% for common equity tier 1 capital and more than 14% for risk-based capital. He said the capital position gives NBT flexibility to invest in its markets, pursue organic initiatives and consider acquisition opportunities.
Semiconductor Investment Across NBT Markets
NBT Bank President Joe Stagliano said the company’s markets are benefiting from semiconductor and advanced-manufacturing investment across upstate New York and other parts of its footprint. NBT operates about 70 branches across the affected New York corridor.
Stagliano pointed to progress on Micron’s development in Clay, New York, where construction has advanced beyond site preparation and crews began driving pilings for the first fabrication facility. Although chip production is not expected until about 2030, he said the project is already driving attention toward workforce housing, infrastructure and support services. NBT expects to open a branch about one mile from the Micron campus in the first half of 2027.
He also cited activity in the Mohawk Valley, semiconductor research led by NY Creates in the capital region, and GlobalFoundries’ plans to add two fabrication facilities in Saratoga County. GlobalFoundries also has a facility in Burlington, Vermont, where CHIPS Act-supported investments are advancing semiconductor technologies.
Kingsley said NBT believes it has strong teams in Central New York, the Mohawk Valley and the capital region to serve potential construction, contractor, housing and business-development needs tied to these projects. He said the company’s long-term growth outlook is supported by both these regional opportunities and its diversified operating model.
About NBT Bancorp (NASDAQ:NBTB)
NBT Bancorp Inc is the bank holding company for NBT Bank, a community banking institution headquartered in Norwich, New York. Through NBT Bank and its subsidiaries, the company provides banking, lending, investment, insurance and financial services to consumers, businesses, nonprofit organizations and municipalities.
NBT Bank offers checking and savings accounts, certificates of deposit, residential and commercial mortgages, consumer loans, business lending, cash-management services and agricultural financing.
