Financial Analysis

3. Acquisitions Current and Prior Period Acquisitions On May 2, 2025, the Company completed the acquisition of Evans Bancorp, Inc. (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 common stock. Evans, with assets of $2.19 billion at December 31, 2024, was headquartered in Williamsville, New York. Its primary subsidiary, Evans Bank, National Association (Evans Bank), was a federally-chartered national banking association operating 18 banking locations in Western New York. The acquisition enhances the Companys 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 $131.2 million of identifiable net assets. Goodwill of $90.6 million was recognized as a result of the merger and is not amortizable or deductible for tax purposes. During the fourth quarter of 2025, the Company revised the accrued income taxes and deferred taxes associated with the Evans acquisition, which resulted in a $0.8 million decrease in goodwill. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since May 2, 2025. As a result of the full integration of the operations of Evans, it is not practicable to determine all revenue or net income included in the Companys operating results relating to Evans s …

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18. Commitments and Contingent Liabilities The Companys concentrations of credit risk are reflected in the consolidated balance sheets. The concentrations of credit risk with standby letters of credit, unused lines of credit, commitments to originate new loans and loans sold with recourse generally follow the loan classifications. At December 31, 2025, approximately 67% of the Companys loans were secured by real estate located in upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine and central and northwestern Connecticut. Accordingly, the ultimate collectability of a substantial portion of the Companys portfolio is susceptible to changes in market conditions of those areas. Management is not aware of any material concentrations of credit to any industry or individual borrowers. The Company is a party to certain financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, unused lines of credit, standby letters of credit and certain agricultural real estate loans sold to investors with recourse, with the sold portion having a government guarantee that is assignable back to the Company upon repurchase of the loan in the event of default. The Companys exposure to credit loss in the event of nonperformance by the other party to the commitments to extend credit, unused lines of credit, …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

10. Borrowings Short-Term Borrowings In addition to the liquidity provided by balance sheet cash flows, liquidity must also be supplemented with additional sources such as credit lines from correspondent banks as well as borrowings from the FHLB and the Federal Reserve Bank. Other funding alternatives may also be appropriate from time to time, including wholesale and retail repurchase agreements and brokered CD accounts. Short-term borrowings totaled $148.1 million and $162.9 million at December 31, 2025 and 2024, respectively, and consist of Federal funds purchased and securities sold under repurchase agreements, which generally represent overnight borrowing transactions and other short-term borrowings, primarily FHLB advances, with original maturities of one year or less. The Company has unused lines of credit with the FHLB and access to brokered deposits available for short-term financing. Those sources totaled approximately $4.38 billion and $3.46 billion at December 31, 2025 and 2024, respectively. Borrowings on the FHLB lines are secured by FHLB stock, certain securities and one-to-four family first lien mortgage loans. Securities collateralizing repurchase agreements are held in safekeeping by nonaffiliated financial institutions and are under the Companys control. Information related to short-term borrowings is summarized as follows: December 31, (Dollars in thousands) 2025 2024 2023 Federal funds purchased: Balance at year-end $ - $ - $ - Average during the year 4,11 …

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The following table presents noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606: Years Ended December 31, (In thousands) 2025 2024 2023 Noninterest income In-Scope of ASC 606: Service charges on deposit accounts $ 19,067 $ 17,087 $ 15,425 Card services income 23,988 22,331 20,829 Retirement plan administration fees 61,585 56,587 47,221 Wealth management 44,755 41,641 34,763 Insurance services 18,035 17,032 15,667 Other 15,522 11,032 10,838 Total noninterest income in-scope of ASC 606 $ 182,952 $ 165,710 $ 144,743 Total noninterest income out-of-scope of ASC 606 $ 12,541 $ 11,114 $ (2,565 ) Total noninterest income $ 195,493 $ 176,824 $ 142,178

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13. Stock-Based Compensation In May 2024, the Company adopted the NBT Bancorp Inc. 2024 Omnibus Incentive Plan (the Stock Plan) replacing the 2018 Omnibus Incentive Plan. Under the terms of the Stock Plan, equity-based awards are granted to directors and employees to increase their direct proprietary interest in the operations and success of the Company. The Stock Plan assumed all prior equity-based incentive plans and any new equity-based awards are granted under the terms of the Stock Plan. Restricted shares granted under the Plan typically vest after three or five years for employees and one year for non-employee directors. Restricted stock units granted under the Stock Plan may have different terms and conditions. Performance shares and units granted under the Stock Plan for executives may have different terms and conditions. Since 2011, the Company primarily grants restricted stock unit awards. Stock option grants since that time were reloads of existing grants which terminate ten years from the date of the grant. Under terms of the Stock Plan, stock options are granted to purchase shares of the Companys common stock at a price equal to the fair market value of the common stock on the date of the grant. Shares issued as a result of vesting of restricted stock unit awards and stock option exercises are funded from the Companys treasury stoc k. The Company has outstanding restricted stock granted from various plans at December 31, 2025. The Company recognized $5.3 million, …

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20. Fair Value Measurements and Fair Values of Financial Instruments GAAP states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are not adjusted for transaction costs. A fair value hierarchy exists within GAAP that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). A financial instruments level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The types of instruments valued ba …

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8. Goodwill and Other Intangible Assets A summary of goodwill is as follows: (In thousands) January 1, 2025 $ 362,663 Goodwill acquired 90,615 December 31, 2025 $ 453,278 January 1, 2024 $ 361,851 Goodwill acquired 812 December 31, 2024 $ 362,663 There was no impairment of goodwill recorded during the years ended December 31, 2025, 2024 and 2023. The Company has intangible assets with definite useful lives capitalized on its consolidated balance sheet in the form of core deposit and other identified intangible assets. These intangible assets are amortized over their estimated useful lives, which range primarily from one to twenty years. A summary of core deposit and other intangible assets follows: December 31, (In thousands) 2025 2024 Core deposit intangibles: Gross carrying amount $ 64,428 $ 31,188 Less: accumulated amortization 16,693 7,797 Net carrying amount $ 47,735 $ 23,391 Identified intangible assets: Gross carrying amount $ 33,810 $ 34,189 Less: accumulated amortization 23,889 21,220 Net carrying amount $ 9,921 $ 12,969 Total intangibles: Gross carrying amount $ 98,238 $ 65,377 Less: accumulated amortization 40,582 29,017 Net carrying amount $ 57,656 $ 36,360 Amortization expense on intangible assets with definite useful lives totaled $11.9 million for 2025, $8.4 million for 2024 and $4.7 million for 2023. Amortization expense on intangible assets with definite useful lives is expected to total $12.5 million for 2026, $10.8 million for 2027, $9.2 million for 2028, $ …

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11. Income Taxes The Companys income from continuing operations before income tax expense totaled $219.4 million, $179.5 million and $153.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. The significant components of income tax expense attributable to operations are as follows: Years Ended December 31, (In thousands) 2025 2024 2023 Current: Federal $ 20,098 $ 23,049 $ 22,829 State 6,538 7,039 5,890 Total current $ 26,636 $ 30,088 $ 28,719 Deferred: Federal $ 18,890 $ 8,306 $ 4,593 State 4,683 423 1,365 Total deferred $ 23,573 $ 8,729 $ 5,958 Total income tax expense: Federal $ 38,988 $ 31,355 $ 27,422 State 11,221 7,462 7,255 Total income tax expense $ 50,209 $ 38,817 $ 34,677 The Company had no income tax in foreign jurisdictions for the years ended December 31, 2025, 2024 and 2023, respectively. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, (In thousands) 2025 2024 Deferred tax assets: Allowance for loan losses $ 34,773 $ 29,229 Lease liability 8,349 7,646 Deferred compensation 13,148 10,581 Fair value adjustments on acquisitions 34,217 15,958 Loan fees 16,815 23,660 Stock-based compensation expense 2,872 3,375 Unrealized losses on securities 24,055 41,346 Other 10,712 6,382 Total deferred tax assets $ 144,941 $ 138,177 Deferred tax liabilities: Pension benefits $ 19,847 $ 16,705 Lease right-of-use asset 7,709 7,195 Amortization …

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Recently Adopted Accounting Standards In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , in response to requests from investors, lenders, creditors and other allocators of capital for enhanced income tax disclosures to support capital allocation decisions. The ASU requires enhanced disclosures primarily related to existing rate reconciliation and income taxes paid information to help investors better assess how the Companys operations and related tax risks and tax planning and operational opportunities affect the Companys tax rate and prospects for future cash flows. The ASU 2023-09 improves the transparency of income tax disclosures. The amendments in this ASU are effective for the Company for annual periods beginning after December 15, 2024, and should be applied on a prospective basis. The Company adopted ASU 2023-09 on December 31, 2025 and applied the new disclosure requirements. See Note 11 for additional information. Accounting Standards Issued Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , that addresses longstanding investor requests for more information of expenses included in the expense captions presented on the face of the income statement. The ASU will require a tabular disclosure that disaggregates certain income statement expenses including employee compensation, …

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12. Employee Benefit Plans Defined Benefit Post-Retirement Plans The Company has a qualified, noncontributory, defined benefit pension plan (the Plan) covering substantially all of its employees at December 31, 2025. Benefits paid from the Plan are based on age, years of service, compensation and social security benefits and are determined in accordance with defined formulas. The Companys policy is to fund the Plan in accordance with Employee Retirement Income Security Act of 1974 standards. Assets of the Plan are invested in publicly traded stocks, bonds and mutual funds. Prior to January 1, 2000, the Plan was a traditional defined benefit plan based on final average compensation. On January 1, 2000, the Plan was converted to a cash balance plan with grandfathering provisions for existing participants. Effective March 1, 2013, the Plan was amended. Benefit accruals for participants who, as of January 1, 2000, elected to continue participating in the traditional defined benefit plan design were frozen as of March 1, 2013. In addition to the Plan, the Company provides supplemental employee retirement plans to certain current and former executives. These supplemental employee retirement plans and the Plan are collectively referred to herein as Pension Benefits. In connection with the Evans acquisition, the Company assumed the non-contributory, qualified, defined benefit pension plan and the nonqualified supplemental executive retirement plans. Effective May 2, 2025, the Evans d …

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22. Segment Reporting In accordance with ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , management assesses its operating segment structure to enhance transparency in how financial performance is evaluated and resources are allocated by the CODM. Segments are components of an enterprise that are regularly evaluated by the CODM to allocate resources and assess performance. The Companys CODM is its Chief Executive Officer. The Company has determined that it operates through two reportable segments: Banking Provides commercial banking, retail banking, and wealth management services primarily to customers in its market area, offering a broad array of banking and financial services to retail, commercial, and municipal customers. Included in Banking are the revenue and expenses from the wealth management business and the parent holding company. The parent companys principal activities include the direct and indirect ownership of banking and non-banking subsidiaries, as well as the issuance of debt and equity. The parent companys principal sources of revenue are the management fees and dividends it receives from its subsidiaries. Banking also includes corporate shared service costs such as the majority of equity compensation expense, as well as other general and administrative shared services costs including pension, retirement plan and supplemental retirement plan costs. Currently there is no allocation of these costs to other operating …

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14. Stockholders Equity In accordance with GAAP, unrecognized prior service costs and net actuarial gains or losses associated with the Companys pension and postretirement benefit plans and unrealized gains and losses on AFS securities are included in AOCI, net of tax. For the years ended December 31, components of AOCI are: (In thousands) 2025 2024 2023 Unrecognized prior service cost and net actuarial (losses) on pension plans $ (10,420 ) $ (18,103 ) $ (21,983 ) Unrealized net holding (losses) on AFS securities (72,176 ) (123,995 ) (138,951 ) AOCI $ (82,596 ) $ (142,098 ) $ (160,934 ) Certain restrictions exist regarding the ability of the Bank to transfer funds to the Company in the form of cash dividends. The approval of the OCC is required to pay dividends when a bank fails to meet certain minimum regulatory capital standards or when such dividends are in excess of a subsidiary banks earnings retained in the current year plus retained net profits for the preceding two years as specified in applicable OCC regulations. At December 31, 2025, approximately $115.9 million of the total stockholders equity of the Bank was available for payment of dividends to the Company without approval by the OCC. The Banks ability to pay dividends also is subject to the Bank being in compliance with regulatory capital requirements. The Bank is currently in compliance with these requirements. Under the State of Delaware General Corporation Law, the Company may declare and pay dividends either …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing