NBT's Third-Quarter NIM Expands 5 Basis Points to 3.78%

The Tip Desk · November 8, 2026 · 3 min read

Net interest income on a fully taxable equivalent basis reached $142.7 million in the third quarter as the FTE margin widened 5 bps to 3.78%.

NBT Bancorp Inc. (NBTB), a $16.39 billion financial holding company headquartered in Norwich, N.Y., reported net income of $58.0 million, or $1.11 a share, for the three months ended September 30, 2026, up from $53.0 million, or $1.02 a share, in the second quarter. Operating diluted earnings were also $1.11 a share.

The quarter’s turn was in the net interest margin. After a 1-basis-point expansion to 3.73% in the second quarter, the FTE margin widened 5 bps to 3.78%, as a 6 bps rise in earning-asset yields more than offset a 1 bps rise in the cost of funds. Net interest income on an FTE basis was $142.7 million, up from $137.6 million in the second quarter. GAAP net interest income rose $5.1 million, or 3.7%, to $142.1 million. The company said the GAAP increase was driven by organic growth in average loans, one additional day in the third quarter and a $1.5 million increase in purchase-accounting accretion.

Loan yields rose 5 bps to 5.69%, which the company attributed to cash-flow repricing into higher rates and higher purchase-accounting accretion. Average earning assets increased $173.6 million, or 1.2%, from the second quarter. Total cost of deposits fell 1 bp to 1.32%, primarily on lower time-deposit costs, while total cost of funds ticked up 1 bp to 1.42%.

Period-end loans were $11.95 billion at September 30, 2026, up $350.4 million, or 3.0%, from December 31, 2025. Excluding the other-consumer and residential-solar portfolios in planned run-off, loans rose $427.2 million, or 3.9%. Commercial real estate was $4.96 billion and commercial & industrial $1.75 billion.

Period-end deposits were $13.59 billion. Mix shifted toward demand, interest-bearing checking, savings and money market and away from time deposits. The loan-to-deposit ratio was 87.9%.

Provision for loan losses fell to $3.8 million from $6.1 million in the second quarter, which the company tied to slower loan growth and a lower allowance. Net charge-offs to average loans were 0.14% annualized, versus 0.15% in the prior quarter. The allowance for loan losses was $140.0 million, or 1.17% of loans, down from $140.5 million, or 1.18%, at June 30, as improved economic forecasts and mix more than offset coverage of third-quarter loan growth.

Nonperforming assets to total assets rose to 0.43% from 0.40% at June 30, on more commercial relationships in nonaccrual and higher residential past-due loans. Nonperforming loans to total loans were 0.59%. Past-due loans to total loans fell 28 bps from June 30.

Noninterest income excluding securities gains was $52.9 million, up $3.3 million, or 6.7%, from the second quarter. Service charges on deposit accounts rose $0.7 million, or 13.4%, on pricing initiatives, mix and transaction fees. Retirement-plan administration fees rose $0.4 million, or 2.2%. Insurance revenues increased $1.2 million on seasonal renewals.

Noninterest expense was $115.2 million, up from $111.4 million in the second quarter. Other expenses rose $2.3 million on higher activity-based costs, and salaries and benefits rose $0.6 million on an extra payroll day and higher incentive compensation.

The CET1 ratio was 12.43% and the leverage ratio 9.99% at September 30, versus 12.24% and 9.85% at June 30. Tangible book value per share was $27.75.

The board approved a fourth-quarter cash dividend of $0.40 a share, an 8.1% increase over the third-quarter 2025 dividend and the fourteenth consecutive year of annual dividend increases. The company bought 20,118 shares for $1.0 million in the third quarter and 113,364 shares after quarter-end.