What changed in this filing

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Item 1. Financial Statements

2021-08-06 compared with 2021-05-06 · 213 added, 111 removed, 688 unchanged (32% of the section changed)

26 unchanged sentences

Preferred stock, $ 0.01 par value.

Authorized 2,500,000 shares at March 31, 2021 and December 31, 2020

Authorized 2,500,000 shares at June 30, 2021 and December 31, 2020

Common stock, $ 0.01 par value.

Authorized 100,000,000 shares at March 31, 2021 and December 31, 2020, issued 49,651,493 at March 31, 2021 and December 31, 2020

Authorized 100,000,000 shares at June 30, 2021 and December 31, 2020 ;

issued 49,651,493 at June 30, 2021 and December 31, 2020

Additional paid-in-capital

1 unchanged sentence

Accumulated other comprehensive (loss) income

Common stock in treasury, at cost, 6,226,291 and 6,022,399 shares at March 31, 2021 and December 31, 2020, respectively

Common stock in treasury, at cost, 6,196,130 and 6,022,399 shares at June 30, 2021 and December 31, 2020, respectively

Total stockholders’ equity

5 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands, except per share data)

17 unchanged sentences

Retirement plan administration fees

Wealth management

Wealth management fees

Insurance services

Bank owned life insurance income

6 unchanged sentences

Office supplies and postage

FDIC expenses

Amortization of intangible assets

9 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

1 unchanged sentence

Securities available for sale:

Unrealized net holding (losses) gains arising during the period, gross

Unrealized net holding (losses) gains arising during the period, net

Unrealized net holding gains (losses) arising during the period, gross

Unrealized net holding gains (losses) arising during the period, net

Reclassification adjustment for net gains in net income, gross

13 unchanged sentences

Total pension and other benefits, net

Total other comprehensive (loss) income

Total other comprehensive income (loss)

Comprehensive income

6 unchanged sentences

(In thousands, except share and per share data)

Balance at March 31, 2021

Cash dividends - $ 0.27 per share

Purchase of 23,627 treasury shares

Net issuance of 53,788 shares to employee and other stock plans

Stock-based compensation

Other comprehensive income

Balance at June 30 , 2021

Balance at March 31, 2020

Cash dividends - $ 0.00 per share

Net issuance of 20,905 shares to employee and other stock plans

Stock-based compensation

Other comprehensive income

Balance at June 30 , 2020

Comprehensive

(Loss) Income

(In thousands, except share and per share data)

Balance at December 31 , 2020

4 unchanged sentences

Other comprehensive (loss)

Balance at March 31, 2021

Balance at June 30 , 2021

Balance at December 31, 2019

5 unchanged sentences

Other comprehensive income

Balance at March 31, 2020

Balance at June 30 , 2020

See accompanying notes to unaudited interim consolidated financial statements.

2 unchanged sentences

Consolidated Statements of Cash Flows (unaudited)

Three Months Ended

Six Months Ended

(In thousands)

12 unchanged sentences

Originations of loans held for sale

Net gain on sale of loans held for sale

Net gains on sale of loans held for sale

Net security (gains) losses

Net losses on sale of other real estate owned

Net gains on sale of other real estate owned

Net change in other assets and other liabilities

1 unchanged sentence

Investing activities

Net cash used in acquisitions

Securities available for sale:

2 unchanged sentences

Proceeds from maturities, calls and principal paydowns

Proceeds from sales

Equity securities:

Proceeds from calls

Net increase in loans

2 unchanged sentences

Proceeds from settlement of bank owned life insurance

Purchases of bank owned life insurance

Purchases of premises and equipment, net

4 unchanged sentences

Net decrease in short-term borrowings

Proceeds from issuance of subordinated debt

Payment of subordinated debt issuance costs

Repayments of long-term debt

Proceeds from the issuance of shares to employee and other stock plans

Cash paid by employer for tax-withholding on stock issuance

Cash paid by employer for tax-withholdings on stock issuance

Purchase of treasury stock

7 unchanged sentences

Consolidated Statements of Cash Flows (unaudited) (continued)

Three Months Ended

Six Months Ended

Supplemental disclosure of cash flow information

4 unchanged sentences

Loans transferred to other real estate owned

Acquisitions:

Fair value of assets acquired

See accompanying notes to unaudited interim consolidated financial statements.

2 unchanged sentences

Notes to Unaudited Interim Consolidated Financial Statements

March 31, 2021

June 30, 2021

Description of Business

50 unchanged sentences

(In thousands)

As of March 31, 2021

As of June 30 , 2021

Federal agency

17 unchanged sentences

Total AFS securities

There was no allowance for credit losses on AFS securities as March 31, 2021 and December 31, 2020.

During the three months ended March 31, 2021 there were no gains or losses reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into earnings.

During the three months ended March 31, 2020 there were $ 3 thousand of gross realized gains reclassified out of AOCI and into earnings.

Included in net realized gains (losses) on AFS securities, the Company recorded gains from call of approximately $ 3 thousand for the three months ended March 31, 2020.

The amortized cost, estimated fair value and unrealized gains (losses) of securities HTM are as follows:

There was no allowance for credit losses on AFS securities as of June 30, 2021 and December 31, 2020.

During the three and six months ended June 30, 2021 there were no gains or losses reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into earnings.

During the three months ended June 30, 2020 there were no gains or losses reclassified out of AOCI and into earnings.

During the six months ended June 30, 2020, there were $ 3 thousand of gross realized gains reclassified out of AOCI and into earnings.

Included in net realized gains (losses) on AFS securities, the Company recorded gains from calls of approximately $ 3 thousand for the six months ended June 30, 2020.

The amortized cost, estimated fair value and unrealized gains (losses) of HTM securities are as follows:

(In thousands)

As of March 31, 2021

As of June 30 , 2021

Federal agency

17 unchanged sentences

Total HTM securities

At March 31, 2021 and December 31, 2020, all of the mortgaged-backed HTM securities were comprised of U.S.

At June 30, 2021 and December 31, 2020, all of the mortgaged-backed HTM securities were comprised of U.S.

government agency and Government-sponsored enterprises securities.

There was no allowance for credit losses on HTM securities as of March 31, 2021 and December 31, 2020.

Included in net realized gains (losses), the Company recorded gains from calls on HTM securities of approximately $ 15 thousand for the three months ended March 31, 2021.

There were no recorded gains from calls on HTM securities included in net realized gains (losses) for the three months ended March 31, 2020.

AFS and HTM securities with amortized costs totaling $ 1.6 billion at March 31, 2021 and $ 1.4 billion December 31, 2020 were pledged to secure public deposits and for other purposes required or permitted by law.

Additionally, at March 31, 2021 and December 31, 2020, AFS and HTM securities with an amortized cost of $ 273.2 million and $ 305.2 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following table sets forth information with regard to gains and (losses) on equity securities:

Three Months Ended March 31,

There was no allowance for credit losses on HTM securities as of June 30, 2021 and December 31, 2020.

Included in net realized gains (losses), the Company recorded no gains from calls on HTM securities for the three months ended June 30, 2021 and approximately $ 15 thousand for the six months ended June 30, 2021.

Included in net realized gains (losses), the Company recorded gains from calls on HTM securities of approximately $ 4 thousand for the three and six months ended June 30, 2020.

AFS and HTM securities with amortized costs totaling $ 1.6 billion at June 30, 2021 and $ 1.4 billion at December 31, 2020 were pledged to secure public deposits and for other purposes required or permitted by law.

Additionally, at June 30, 2021 and December 31, 2020, AFS and HTM securities with an amortized cost of $ 164.5 million and $ 305.2 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following tables set forth information with regard to gains and (losses) on equity securities:

Three Months Ended

(In thousands)

2 unchanged sentences

Unrealized gains and (losses) recognized on equity securities still held

As of March 31, 2021 and December 31, 2020, the carrying value of equity securities without readily determinable fair values was $ 2.0 million.

The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of March 31, 2021 and 2020.

There were no impairments, downward or upward adjustments recognized for equity securities without readily determinable fair values during the three months ended March 31, 2021 and 2020.

The following table sets forth information with regard to contractual maturities of debt securities at March 31, 2021:

Six Months Ended

(In thousands)

Net gains and (losses) recognized on equity securities

Net gains and (losses) recognized on equity securities sold during the period

Unrealized gains and (losses) recognized on equity securities still held

As of June 30, 2021 and December 31, 2020, the carrying value of equity securities without readily determinable fair values was $ 1.0 million and $ 2.0 million, respectively.

The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of June 30, 2021 and 2020.

There were no impairments, downward or upward adjustments recognized for equity securities without readily determinable fair values during the three months ended June 30, 2021 and 2020.

The following table sets forth information with regard to contractual maturities of debt securities at June 30, 2021:

(In thousands)

AFS debt securities:

13 unchanged sentences

Except for U.S.

Government securities and Government-sponsored enterprises securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at March 31, 2021 and December 31, 2020.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded, segregated according to the length of time the securities had been in a continuous unrealized loss position:

Government securities and Government-sponsored enterprises securities , there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at June 30, 2021 and December 31, 2020.

The following table sets forth information with regard to investment securities with unrealized losses, for which an allowance for credit losses has not been recorded at June 30, 2021, segregated according to the length of time the securities had been in a continuous unrealized loss position:

Less Than 12 Months

1 unchanged sentence

(In thousands)

As of March 31, 2021

As of June 30 , 2021

AFS securities:

19 unchanged sentences

Total securities with unrealized losses

The Company does not believe the AFS securities that were in an unrealized loss position as of March 31, 2021 and December 31, 2020, which consisted of 83 and 23 individual securities, respectively, represented a credit loss impairment.

The Company does not believe the AFS securities that were in an unrealized loss position as of June 30, 2021 and December 31, 2020, which consisted of 80 and 23 individual securities, respectively, represented a credit loss impairment.

AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly.

As of March 31, 2021 and December 31, 2020, the majority of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S.

As of June 30, 2021 and December 31, 2020, the majority of the AFS securities in an unrealized loss position consisted of debt securities issued by U.S.

government agencies or U.S.

3 unchanged sentences

The Company does not intend to sell, nor is it more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may be at maturity.

The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities disclosed throughout this footnote.

AIR on AFS debt securities totaled $ 3.2 million at March 31, 2021 and $ 3.3 million at December 31, 2020 and is excluded from the estimate of credit losses and reported in the financial statement line for other assets.

None of the bank’s HTM debt securities were past due or on non-accrual status as of March 31, 2021 and December 31, 2020.

There was no accrued interest reversed against interest income for the three months ended March 31, 2021 or the year-ended December 31, 2020 as all securities remained on accrual status.

In addition, there were no collateral-dependent HTM debt securities as of March 31, 2021 and December 31, 2020.

As of March 31, 2021 and December 31, 2020, 59 % and 65 %, respectively, of the Company’s HTM debt securities were issued by U.S.

The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities.

AIR on AFS debt securities totaled $ 3.5 million at June 30, 2021 and $ 3.3 million at December 31, 2020 and is excluded from the estimate of credit losses and reported in the financial statement line for other assets.

None of the bank’s HTM debt securities were past due or on non-accrual status as of June 30, 2021 and December 31, 2020.

There was no accrued interest reversed against interest income for the three and six months ended June 30, 2021 or the year-ended December 31, 2020 as all securities remained on accrual status.

In addition, there were no collateral-dependent HTM debt securities as of June 30, 2021 and December 31, 2020.

As of June 30, 2021 and December 31, 2020, 56 % and 65 %, respectively, of the Company’s HTM debt securities were issued by U.S.

government agencies or U.S.

2 unchanged sentences

government, are widely recognized as “risk free,” and have a long history of zero credit loss.

Therefore, the Company did not record an allowance for credit losses for these securities as of March 31, 2021 and December 31, 2020.

The remaining HTM debt securities at March 31, 2021 and December 31, 2020 were comprised of state and municipal obligations with bond ratings of A to AAA.

Utilizing the Current Expected Credit Losses (“CECL”) approach, the Company determined that the expected credit loss on its HTM municipal bond portfolio was immaterial and therefore no allowance for credit loss was recorded as of March 31, 2021 and December 31, 2020.

AIR on HTM debt securities totaled $ 2.7 million at March 31, 2021 and December 31, 2020 and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

Therefore, the Company did not record an allowance for credit losses for these securities as of June 30, 2021 and December 31, 2020.

The remaining HTM debt securities at June 30, 2021 and December 31, 2020 were comprised of state and municipal obligations with bond ratings of A to AAA.

AIR on HTM debt securities totaled $ 2.6 million and $ 2.7 million at June 30, 2021 and December 31, 2020, respectively, and is excluded from the estimate of credit losses and reported in the other assets financial statement line.

Allowance for Credit Losses and Credit Quality of Loans

The allowance for credit losses totaled $ 105.0 million at March 31, 2021, compared to $ 110.0 million at December 31, 2020.

The allowance for credit losses as a percentage of loans was 1.38 % at March 31, 2021, compared to 1.47 % at December 31, 2020.

The decrease in the allowance for credit losses from December 31, 2020 to March 31, 2021 was primarily due to the positive impact the improving economic conditions had on expected credit losses.

The allowance for credit losses totaled $ 98.5 million at June 30, 2021, compared to $ 110.0 million at December 31, 2020.

The allowance for credit losses as a percentage of loans was 1.31 % at June 30, 2021, compared to 1.47 % at December 31, 2020.

The Day 1 increase in the allowance for credit loss on loans relating to adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments was $ 3.0 million, which decreased retained earnings by $ 2.3 million and increased the deferred tax asset by $ 0.7 million.

The increase in the allowance for credit losses from Day 1 to March 31, 2020 was primarily due to macroeconomic factors surrounding the coronavirus (“COVID-19”) pandemic.

The March 31, 2021, December 31, 2020, March 31, 2020 and Day 1 allowance for credit losses calculation incorporated a 6-quarter forecast period to account for forecast economic conditions under each scenario utilized in the measurement.

The increase in the allowance for credit losses from Day 1 to June 30, 2021 was primarily due to macroeconomic factors surrounding the coronavirus (“COVID-19”) pandemic.

The June 30, 2021, March 31, 2021, December 31, 2020, June 30, 2020 and Day 1 allowance for credit losses calculation incorporated a 6-quarter forecast period to account for forecast economic conditions under each scenario utilized in the measurement.

For periods beyond the 6-quarter forecast, the model reverts to long-term economic conditions over a 4-quarter reversion period on a straight-line basis.

The Company considers a baseline, upside and downside economic forecast in measuring in the allowance.

The quantitative model as of June 30, 2021 incorporated a baseline economic outlook along with alternative upside and downside scenarios sourced from a reputable third-party to accommodate other potential economic conditions in the model.

The baseline outlook reflected an unemployment rate environment above pre-COVID-19 levels for the entire forecast period, though steadily improving to below 4% by the end of 2022.

Northeast GDP’s annualized growth (on a quarterly basis) was expected to start in the second half of 2021 in the high single digits (9.86%) and steadily fall back down to normalized levels by the end of 2022.

Other utilized economic variables showed mixed changes in their respective forecasts, with retail sales and business output being relatively unchanged and housing starts lowered from the prior quarter forecast.

Key assumptions in the baseline economic outlook included herd “resiliency” expected by summer-2021, additional legislation focused on infrastructure and social benefits enacted in the second half of 2021 and high, near-term GDP growth expectations.

The alternative downside scenario assumed deteriorated economic and epidemiological conditions from the baseline outlook.

Under this scenario, northeast unemployment rose from 8.1% in the third quarter of 2021 to a peak of 8.7% in the second quarter of 2022, remaining above 8% for the entire forecast period.

The alternative upside scenario incorporated a more optimistic outlook than the baseline scenario, with a swift return to full employment by the first quarter of 2022 and down to a low of 3.5% by the end of the forecast period.

These scenarios and their respective weightings are evaluated at each measurement date and reflect management’s expectations as of June 30, 2021.

Additional adjustments were made for COVID-19 related factors not incorporated in the forecasts, such as the mitigating impact of unprecedented stimulus in the second and third quarters of 2020, including direct payments to individuals, increased unemployment benefits, the Company’s loan deferral and modification initiatives and various government sponsored loan programs.

The Company also continued to identify a slightly higher level of criticized and classified loans in the second quarter of 2021 than those contemplated by the model during similar, historical economic conditions for which an adjustment was made to estimate potential additional losses above modeled losses.

Additionally, a qualitative adjustment was made for isolated model limitations related to modeled outputs given abnormally high retail sales and business output growth rates.

These factors were considered through separate quantitative processes and incorporated into the estimate of current expected credit losses at June 30, 2021.

The quantitative model as of March 31, 2021 incorporated a baseline economic outlook along with an alternative downside scenario sourced from a reputable third-party to accommodate other potential economic conditions in the model.

22 unchanged sentences

These factors were considered through a separate quantitative process and incorporated into the estimate for allowance for credit losses at December 31, 2020.

There were no loans purchased with credit deterioration during the three months ended March 31, 2021 or the year ended December 31, 2020.

On August 3, 2020, the Federal Financial Institutions Examination Council (“FFIEC”) issued a joint statement on additional loan accommodations related to COVID-19.

The joint statement clarifies that for loan modifications in which Section 4013 is being applied, subsequent modifications could also be eligible under Section 4013.

Accordingly, the Company is offering modifications made in response to COVID-19 to borrowers who were current and otherwise not past due in accordance with the criteria stated in Section 4013.

These include short-term, 180 days or less, modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment.

Accordingly, the Company did not account for such loan modifications as TDRs.

As of June 30, 2021, there were $ 32.3 million in loans in modification programs related to COVID-19.

On December 27, 2020, the Consolidated Appropriations Act amended section 2014 of the CARES Act extending the exemption of qualified loan modifications from classification as a troubled debt restructuring as defined by GAAP to the earlier of January 1, 2022, or 60 days after the National Emergency concerning COVID-19 ends.

There were no loans purchased with credit deterioration during the six months ended June 30, 2021 or the year ended December 31, 2020.

During 2021, the Company purchased $ 20.1 million of residential loans at a 2 % premium.

The allowance for credit losses recorded for these loans on the purchase date was $ 0.2 million.

During 2020, the Company purchased $ 51.9 million of consumer loans at a 1 % discount.

1 unchanged sentence

The Company made a policy election to report AIR in the other assets line item on the balance sheet.

AIR on loans totaled $ 22.6 million at March 31, 2021 and $ 23.7 million at December 31, 2020 and was included in the allowance for loan credit losses to estimate the impact of accrued interest receivable related to loans with modifications due to the pandemic as the length of time between interest recognition and the write-off of uncollectible interest could exceed 120 days , exempting these loans from our policy election for accrued interest receivable.

The estimated allowance for credit losses related to AIR at March 31, 2021 was $ 0.5 million and $ 0.6 million at December 31, 2020.

The following table illustrate the changes in the allowance for credit losses by our portfolio segments:

AIR on loans totaled $ 20.6 million at June 30, 2021 and $ 23.7 million at December 31, 2020 and was included in the allowance for loan credit losses to estimate the impact of accrued interest receivable related to loans with modifications due to the pandemic as the length of time between interest recognition and the write-off of uncollectible interest could exceed 120 days , exempting these loans from our policy election for accrued interest receivable.

The estimated allowance for credit losses related to AIR at June 30, 2021 was $ 0.4 million and $ 0.6 million at December 31, 2020.

The following tables present the activity in the allowance for credit losses by portfolio segment:

(In thousands)

Balance as of March 31, 2021

Ending balance as of June 30 , 2021

Balance as of March 31, 2020

Ending balance as of June 30 , 2020

(In thousands)

Balance as of December 31, 2020

Ending balance as of March 31 , 2021

Ending balance as of June 30 , 2021

Balance as of January 1, 2020 (after adoption of ASC 326)

Ending balance as of March 31 , 2020

The decrease in the allowance for credit losses from December 31, 2020 to March 31, 2021 was primarily due to an improvement in the economic forecast.

The increase in the allowance for credit losses from Day 1 to March 31, 2020 was primarily due to macroeconomic factors surrounding the COVID-19 pandemic.

Ending balance as of June 30 , 2020

The decrease in the allowance for credit losses from December 31, 2020 to March 31, 2021 and June 30, 2021 was primarily due to an improvement in the economic forecast.

The increase in the allowance for credit losses from Day 1 to March 31, 2020 and June 30, 2020 was primarily due to the deterioration of macroeconomic factors surrounding the COVID-19 pandemic.

Individually Evaluated Loans

As of March 31, 2021, there were five relationships identified to be evaluated for loss on an individual basis which had an amortized cost basis of $ 15.8 million.

These loans’ allowance for credit loss was $ 3.9 million and was determined by an estimate of the fair value of the collateral which consisted of business assets (accounts receivable, inventory and machinery and equipment).

As of December 31, 2020, the same five relationships were identified to be evaluated for loss on an individual basis which had an amortized cost basis of $ 15.2 million and the allowance for credit loss was $ 3.2 million.

As of Day 1, there were no relationships identified to be evaluated for loss on an individual basis.

As of June 30, 2021, there were five relationships identified to be evaluated for loss on an individual basis which had an amortized cost basis of $ 15.0 million.

These loans’ allowance for credit loss was $ 3.4 million and was determined by an estimate of the fair value of the collateral which consisted of business assets (accounts receivable, inventory, machinery and equipment).

As of December 31, 2020, these same five relationships were identified to be evaluated for loss on an individual basis which had an amortized cost basis of $ 15.2 million and the allowance for credit loss was $ 3.2 million.

The following table sets forth information with regard to past due and nonperforming loans by loan segment:

(In thousands)

Than 90 Days Past

Recorded Total

As of March 31 , 2021

As of June 30 , 2021

Commercial loans:

4 unchanged sentences

(In thousands)

Recorded Total

As of December 31 , 2020

4 unchanged sentences

Total consumer loans

As of March 31, 2021 and December 31, 2020, there were no loans in non-accrual without an allowance for credit losses.

As of June 30, 2021 and December 31, 2020, there were no loans in non-accrual without an allowance for credit losses.

Credit Quality Indicators

35 unchanged sentences

(In thousands)

As of March 31 , 2021

As of June 30 , 2021

By internally assigned grade:

29 unchanged sentences

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

As of March 31, 2021, the allowance for losses on unfunded commitments totaled $ 5.9 million, compared to $ 6.4 million as of December 31, 2020

As of June 30, 2021, the allowance for losses on unfunded commitments totaled $ 5.8 million, compared to $ 6.4 million as of December 31, 2020.

Troubled Debt Restructuring

11 unchanged sentences

The following tables illustrate the recorded investment and number of modifications designated as TDRs, including the recorded investment in the loans prior to a modification and the recorded investment in the loans after restructuring:

Three Months Ended March 31, 2021

Three Months Ended March 31 , 2020

Three Months Ended June 30, 2021

Three Months Ended June 30 , 2020

(Dollars in thousands)

Pre-Modification

Outstanding Recorded

Post-Modification

Outstanding Recorded

Pre-Modification

Outstanding Recorded

Post-Modification

Outstanding Recorded

Consumer loans:

Total consumer loans

Six Months Ended June 30, 2021

Six Months Ended June 30 , 2020

(Dollars in thousands)

Consumer loans:

Total consumer loans

The following table illustrates the recorded investment and number of modifications for TDRs where a concession has been made and subsequently defaulted during the period:

Three Months Ended

March 31, 2021

June 30, 2021

Three Months Ended

March 31, 2020

June 30, 2020

(Dollars in thousands)

1 unchanged sentence

Total commercial loans

Six Months Ended

June 30, 2021

Six Months Ended

June 30, 2020

(Dollars in thousands)

Commercial loans:

Total commercial loans

Consumer loans:

1 unchanged sentence

Defined Benefit Post-Retirement Plans

The Company has a qualified, noncontributory, defined benefit pension plan (“the Plan”) covering substantially all of its employees at March 31, 2021.

Benefits paid from the Plan are based on age, years of service, compensation, social security benefits and are determined in accordance with defined formulas.

The Company has a qualified, noncontributory, defined benefit pension plan (“the Plan”) covering substantially all of its employees at June 30, 2021.

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 Company’s policy is to fund the Plan in accordance with Employee Retirement Income Security Act of 1974 standards.

8 unchanged sentences

These post-retirement benefits are referred to herein as “Other Benefits”.

The Company made no voluntary contributions to the pension and other benefits plans during the three months ended March 31, 2021 and 2020.

The Company made no voluntary contributions to the pension and other benefits plans during the three and six months ended June 30, 2021 and 2020.

The components of expense for Pension Benefits and Other Benefits are set forth below:

9 unchanged sentences

Total net periodic (benefit) cost

The service cost component of net periodic (benefit) cost is included in Salaries and Employee Benefits and the interest cost, expected return on plan assets and net amortization components are included in Other Noninterest Expense on the unaudited interim consolidated statements of income.

Pension Benefits

Other Benefits

Six Months Ended

(In thousands)

Components of net periodic (benefit) cost:

Interest cost

Expected return on plan assets

Net amortization

Total net periodic (benefit) cost

The service cost component of the net periodic (benefit) cost is included in Salaries and Employee Benefits and the interest cost, expected return on plan assets and net amortization components are included in Other Noninterest Expense on the unaudited interim consolidated statements of income.

Earnings Per Share

10 unchanged sentences

Net income available to common stockholders

There was a nominal number of stock options outstanding for the three months ended March 31, 2021 and March 31, 2020, that were not considered in the calculation of diluted EPS since the stock options’ exercise prices were greater than the average market price during these periods.

Six Months Ended

(In thousands, except per share data)

Weighted average common shares outstanding

Net income available to common stockholders

Weighted average common shares outstanding

Dilutive effect of common stock options and restricted stock

Weighted average common shares and common share equivalents

Net income available to common stockholders

There was a nominal number of stock options outstanding for the three and six months ended June 30, 2021 and June 30, 2020, that were not considered in the calculation of diluted EPS since the stock options’ exercise prices were greater than the average market price during these periods.

Reclassification Adjustments Out of Other Comprehensive Income (Loss)

1 unchanged sentence

Detail About AOCI Components

Amount Reclassified from

Amount Reclassified from AOCI

Affected Line Item in the Consolidated

Statements of Comprehensive Income (Loss)

Statement of Comprehensive Income (Loss)

Three Months Ended

(In thousands)

March 31, 2021

March 31, 2020

AFS securities:

15 unchanged sentences

Total reclassifications, net of tax

Detail About AOCI Components

Amount Reclassified from AOCI

Affected Line item in the Consolidated

Statement of Comprehensive Income (Loss)

Six Months Ended

(In thousands)

AFS securities:

Gains on AFS securities

Net securities (gains) losses

Amortization of unrealized gains related to securities transfer

Interest income

Income tax (benefit)

Cash flow hedges:

Net unrealized losses on cash flow hedges reclassified to interest expense

Interest expense

Income tax (benefit)

Pension and other benefits:

Amortization of net losses

Other noninterest expense

Amortization of prior service costs

Other noninterest expense

Income tax (benefit)

Total reclassifications, net of tax

Derivative Instruments and Hedging Activities

20 unchanged sentences

As a result, the total fair values of loan level derivative assets and liabilities recognized on the Company’s financial statements are not equal and offsetting.

As of March 31, 2021 and December 31, 2020, the Company had seventeen risk participation agreements with financial institution counterparties for interest rate swaps related to participated loans.

As of June 30, 2021 and December 31, 2020, the Company had seventeen risk participation agreements with financial institution counterparties for interest rate swaps related to participated loans.

Risk participation agreements provide credit protection to the financial institution that originated the swap transaction should the borrower fail to perform on its obligation.

3 unchanged sentences

These agreements are designated as cash flow hedges.

The following table summarizes the derivatives outstanding:

T he following table summarizes the derivatives outstanding:

(In thousands)

As of March 31, 2021

As of June 30, 2021

Derivatives not designated as hedging instruments

25 unchanged sentences

(2) Cash collateral represents the amount that cannot be used to offset our derivative assets and liabilities from a gross basis to a net basis in accordance with the applicable accounting guidance.

The other collateral consist of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral.

The other collateral consists of securities and is exchanged under bilateral collateral and master netting agreements that allow us to offset the net derivative position with the related collateral.

The application of the other collateral cannot reduce the net derivative position below zero.

5 unchanged sentences

The following table indicates the effect of cash flow hedge accounting on AOCI and on the unaudited interim consolidated statement of income:

Three Months Ended

Six Months Ended

(In thousands)

D erivatives designated as hedging instruments:

Derivatives designated as hedging instruments:

Interest rate derivatives - included component

2 unchanged sentences

The following table indicates the gain or loss recognized in income on derivatives not designated as a hedging relationship:

Three Months Ended

Six Months Ended

(In thousands)

25 unchanged sentences

Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions.

Valuations are adjusted to reflect illiquidity and/or nontransferability and such adjustments are generally based on available market evidence.

Valuations are adjusted to reflect illiquidity and/or non-transferability and such adjustments are generally based on available market evidence.

In the absence of such evidence, management’s best estimate will be used.

1 unchanged sentence

Subsequent to inception, management only changes Level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets and changes in financial ratios or cash flow s.

The following tables sets forth the Company’s financial assets and liabilities measured on a recurring basis that were accounted for at fair value.

The following tables set forth the Company’s financial assets and liabilities measured on a recurring basis that were accounted for at fair value.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

(In thousands)

March 31, 2021

June 30, 2021

AFS securities

15 unchanged sentences

G AAP requires disclosure of assets and liabilities measured and recorded at fair value on a non-recurring basis such as goodwill, loans held for sale, other real estate owned, collateral-dependent impaired loans, mortgage servicing rights and HTM securities.

The non-recurring fair value measurements recorded during the three month period ended March 31, 2021 and the year ended December 31, 2020 were related to impaired loans, write-downs of other real estate owned and write-down of branch assets to fair value.

The non-recurring fair value measurements recorded during the three and six month periods ended June 30, 2021 and the year ended December 31, 2020 were related to impaired loans, write-downs of other real estate owned and write-down of branch assets to fair value.

The Company uses the fair value of underlying collateral, less costs to sell, to estimate the allowance for credit losses for individually evaluated collateral dependent loans.

1 unchanged sentence

Based on the valuation techniques used, the fair value measurements for collateral dependent individually evaluated loans are classified as Level 3.

A s of March 31, 2021, the Company had collateral dependent individually evaluated loans with a carrying value of $ 15.8 million, which had an estimated allowance for credit loss of $ 3.9 million .

A s of June 30, 2021, the Company had collateral dependent individually evaluated loans with a carrying value of $ 15.0 million, which had an estimated allowance for credit loss of $ 3.4 million .

As of December 31, 2020, the Company had collateral dependent individually evaluated loans with a carrying value of $ 15.2 million, which had an estimated allowance for credit loss of $ 3.2 million.

2 unchanged sentences

Financial instruments for which the fair value approximates carrying value include cash and cash equivalents, AFS securities, equity securities, accrued interest receivable, non-maturity deposits, short-term borrowings, accrued interest payable and derivatives.

March 31, 2021

June 30, 2021

December 31, 2020

38 unchanged sentences

The credit risk associated with commitments to extend credit and standby and commercial letters of credit is essentially the same as that involved with extending loans to customers and is subject to normal credit policies.

Collateral may be obtained based on management’s assessment of the customer’s creditworthiness.

Commitments to extend credit and unused lines of credit totaled $ 2.1 billion at March 31, 2021 and $ 2.2 billion at December 31, 2020.

Collateral may be obtained based on management’s assessment of the customer’s credit worthiness.

Commitments to extend credit and unused lines of credit totaled $ 2.3 billion at June 30, 2021 and $ 2.2 billion at December 31, 2020.

Since many loan commitments, standby letters of credit and guarantees and indemnification contracts expire without being funded in whole or in part, the contract amounts are not necessarily indicative of future cash flows.

5 unchanged sentences

therefore, the total amounts do not necessarily represent future cash requirements.

Standby letters of credit totaled $ 54.6 million at March 31, 2021 and $ 54.0 million at December 31, 2020.

A s of March 31, 2021 and December 31, 2020 , the fair value of the Company’s standby letters of credit was not significant.

NBT BANCORP INC.

Standby letters of credit totaled $ 53.7 million at June 30, 2021 and $ 54.0 million at December 31, 2020.

A s of June 30, 2021 and December 31, 2020 , the fair value of the Company’s standby letters of credit was not significant.

AND SUBSIDIARIES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements