Mark Thomas Fitzgibbon

Mark Thomas Fitzgibbon asked about the 2026 outlook for provision expense, specifically if credit costs are expected to be lower than 2025, and inquired about the effective tax rate for the new year. He also questioned the outlook for political deposits over the next couple of quarters, asking if they would surpass the previous $2 billion peak, and sought insights into pipeline fundraising strength. Finally, he asked about the strong multifamily growth, specifically its geographic distribution.

Answer

CFO Jason Darby stated that the provision outlook for 2026 is roughly similar to 2025, with potential slight improvement, attributing it to normal consumer solar portfolio charge-off activity and a conservative approach. He targeted an initial effective tax rate of 26.5%, with potential for further reduction through tax credits. CEO Priscilla Sims Brown noted that political deposit actuals consistently surpass prior cycle projections. Chief Banking Officer Sam Brown confirmed 20% quarter-over-quarter political growth, consistent with trends, and expects balances to peak about a month before the election. Jason Darby added that slightly under half of the strong multifamily growth came from outside New York City, indicating good geographic diversification and a bolstered pipeline.

Mark Thomas Fitzgibbon asked about the 2026 provision outlook, the effective tax rate for the new year, the expected trajectory of political deposits leading up to the presidential election, and the geographic distribution of the strong multifamily loan growth observed in the quarter.

Answer

Jason Darby (CFO) indicated that the provision outlook for 2026 is expected to be roughly similar to 2025, primarily due to ongoing charge-off activity in the consumer solar portfolio and a conservative approach. He also stated a target effective tax rate of 26.5% for 2026, with potential for further reduction. Priscilla Sims Brown (CEO) and Sam Brown (Chief Banking Officer) expressed confidence that political deposits would surpass previous peaks, aligning with historical trends and inflationary impacts. Jason Darby (CFO) further clarified that nearly half of the strong multifamily growth originated outside New York City, demonstrating good geographic diversification.

Mark Thomas Fitzgibbon inquired about the possibility of accelerating the exit of NBT Bancorp's solar loan portfolio and the market depth for selling such loans. He also asked if the company was observing any pressure on auto loan delinquencies. Additionally, Mr. Fitzgibbon sought clarification on the net interest margin outlook, specifically whether it was expected to decline or remain close to current levels, and requested an update on the timing for the Micron chip fabrication project.

Answer

Scott Kingsley, NBT Bancorp's CEO and President, stated that there is currently no viable way to accelerate the exit of solar loans without incurring a fair value loss, as these assets are performing as expected despite lower yields on older originations. He also reported no significant pressure on auto loan delinquencies, attributing stability to NBT's focus on A and B paper classes and the necessity of car ownership in their footprint. Annette Burns, CFO, indicated that the margin might face slight pressure in Q4 but could stabilize and potentially improve in 2026, though not at the same rate as 2025. Mr. Kingsley provided an update on the Micron project, expecting site improvement and fill activities through early to mid-2026, with actual building commencing mid to late 2026.