Good day, everyone. Welcome to the conference call covering NBT Bancorp's Fourth Quarter and Full Year 2024 Financial Results. This call is being recorded and has been made accessible to the public in accordance with the SEC's Regulation FD. Corresponding presentation slides can be found on the company's website at nbtbancorp.com. Before the call begins, NBT's management would like to remind listeners that as noted on Slide 2, today's presentation may contain forward-looking statements as defined by the Securities and Exchange Commission. Actual results may differ from those projected. In addition, certain non-GAAP measures will be discussed. Reconciliations for these numbers are contained within the appendix of today's presentation. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. Instructions will follow at that time. As a reminder, this call is being recorded. I will now turn the conference over to NBT Bancorp President and CEO, Scott Kingsley, for his opening remarks. Mr. Kingsley, please begin.

Thank you, Daniel. Good morning, and thank you for joining us this morning. With me in snowy Norwich today are NBT's Chief Financial Officer, Annette Burns, and Joe Stagliano, President of NBT Bank, N.A. Our operating performance for the quarter and full year 2024 continued to reflect the strength of our balance sheet, our diversified business model, and the collaboration and diligence of our team. During the fourth quarter, we productively grew loans, improved our funding profile, and boosted net interest margin for the third consecutive quarter. Incrementally lower funding costs more than offset a 5 basis points decline in earning asset yields. Non-interest income continued to be a highlight, making up 30% of total revenues for 2024 with each of our non-banking businesses achieving new record years for revenue and earnings generation. We also declared a $0.34 quarterly cash dividend to shareholders, which was 6.3% above the $0.32 dividend we declared in last year's first quarter. This represents our 12th consecutive year of annual dividend increases and demonstrates our commitment to provide consistent and favorable long-term returns to our shareholders. We added $100 million to shareholders' equity in 2024 from productive earnings generation despite the higher level of dividends paid, adding to our already desirable level of capital flexibility. Activity continued to progress across Upstate New York's semiconductor chip corridor in the fourth quarter, including several announcements about new expansion and structural investments as well as site-specific milestones being reached at Micron's planned complex outside of Syracuse. NBT is uniquely positioned to play a significant role in providing financial services to all types of customers and prospects living and working along the Upstate New York semiconductor chip corridor. In September, we announced that NBT reached an agreement to merge with Evans Bancorp, a $2.3 billion community bank headquartered in Williamsville, New York. Our partnership with Evans is a natural geographic expansion of NBT's footprint into the western region of New York. Expanding into Buffalo and Rochester, Upstate New York's largest markets by population, complements our meaningful presence in Central New York, the Capital District, and the Hudson Valley, and positions us as the community bank with the largest deposit market share in Upstate New York. In December, we received the required regulatory approvals to proceed with the merger as well as approval from Evans shareholders who demonstrated strong support for the partnership. We continue to work toward a second quarter 2025 closing and a concurrent core systems conversion. Our transition and integration activities with the Evans team these past four months have reaffirmed our belief that they are a customer, employee, and community-focused organization with dedicated and talented professionals. At this time, I'll turn the meeting over to Annette to review our fourth quarter results with you in detail. Annette?

Thank you, Scott, and good morning. Turning to the results overview page of our earnings presentation, for the fourth quarter, we reported net income of $36 million or $0.76 per share. Excluding merger costs and securities gains, our operating earnings per share were $0.77, a decrease of $0.03 per share compared to the prior quarter. Tangible book value per share of $23.88 as of December 31st was up $0.05 per share from the end of the third quarter, marking another all-time high for NBT. The next page shows trends in outstanding loans. Total loans were up $319 million for the year, or 3.3%, and included growth in our C&I, commercial real estate, indirect auto, and residential lending portfolios. Excluding the other consumer and residential solar portfolios that are in a planned contractual runoff status, loans increased $479 million or 6%. Our loan portfolio of $10 billion remains well-diversified and is comprised of 53% commercial relationships and 47% consumer loans. Fourth quarter loan yields declined by 9 basis points from the third quarter of 2024 as approximately $2.1 billion of loans repriced downward with a decrease in short-term rates. This was partially offset by the reinvestment of earning asset cash flows into instruments with rates higher than existing portfolio yields. On Page 6, total deposits of $11.6 billion were up $578 million or 5.3% from the December 2023 timeframe. 58% of our deposit portfolios consist of no and low-cost checking and savings accounts, and 42% in time and money market accounts. The company's quarterly cost of total deposits decreased 12 basis points from the third quarter to 1.60%. The next slide highlights the detailed changes in our net interest income and margin. Our net interest income in the fourth quarter of 2024 was 3.34%, which was up 7 basis points from the prior quarter, primarily due to a decrease in the cost of deposits and a more favorable funding mix, including increases in demand deposits. The fourth quarter's net interest income was $4.4 million above the linked third quarter. The primary drivers to the increase in net interest income were the decrease in the cost of interest-bearing liabilities and the $257.5 million growth in average earning assets. Our asset/liability management positioning remains fairly neutral with approximately $2.1 billion in variable rate loans repricing almost immediately with changes in short-term rates. This requires us to actively manage our funding costs downward to offset that impact, as evidenced by the 12 basis point decline in our deposit costs for the quarter. As a reminder, approximately $5 billion of our deposits are price-sensitive. The amount of potential positive lift in yield from the reinvestment of loan portfolio cash flows will be dependent on the shape of the yield curve. The trends in non-interest income are outlined on Page 8. Excluding securities gains and losses, our fee income was $42.2 million, an increase of 11.1% compared to the fourth quarter of 2023, but consistent with prior years was seasonally lower than the previous quarter. The diversification of our revenue sources remains a core strength for the company. Our fee income business lines of retirement plan administration, wealth management, and the insurance agency have demonstrated a meaningful five-year compounded annual growth rate of 9%. Total operating expenses excluding merger costs were $99.8 million for the quarter, a 4.8% increase above the linked third quarter. Salaries and employee benefit costs were $61.7 million, an increase of $2.1 million from the prior quarter. This increase is primarily driven by higher health and welfare costs and an increase in other employee benefits, including higher levels of performance-based incentive compensation. Slide 10 provides an overview of key asset quality metrics. We recorded a loan loss provision expense of $2.2 million in the fourth quarter, which was $700,000 lower than the prior quarter. This decrease was primarily due to the runoff of the other consumer and residential solar portfolios, partially offset by a higher level of net charge-offs. Net charge-offs to total loans were 23 basis points in the fourth quarter of 2024 compared to 16 basis points in the prior quarter. The increase in net charge-offs during the quarter was driven by two commercial relationships totaling $2.4 million, of which $1.7 million was previously specifically reserved. Non-performing assets to total assets increased $14.4 million from the prior quarter, attributable to a commercial real estate relationship that was placed into non-accrual status in the fourth quarter of 2024. This relationship is being actively managed, and its remaining carrying value is supported by the fair value of the underlying real estate. Reserve coverage was 1.16% of total loans and covered more than two times the level of non-performing loans. We believe that the expected balance sheet growth and continued changes in loan mix will be the drivers of future provisioning needs. In closing, net interest margin and net interest income trends are positive with growth for the three consecutive quarters. Our well-balanced loan growth, granular deposit base, stable asset quality trends, and strong fee income generation contributed to our solid operating performance in 2024. The continued strength of our capital position has provided the flexibility to deliver 12 consecutive years of dividend increases to our shareholders, the ability to support organic growth and to capitalize on opportunities, all while effectively managing risk. Thank you for your continued support. And at this time, we welcome any questions you may have.

Thank you. And our first question comes from Steve Moss with Raymond James. Your line is open.

Good morning.

Hey. Good morning, Steve.

Good morning, Steve.

Good morning, Scott. Good morning, Annette. Maybe just starting off on the margin here, good margin trends. Just kind of curious, you've talked in the past about, call it, $2 billion in annual cash flows, repricing of 75 to 100 basis points. Just kind of curious if that trend remains the same or kind of where loan pricing is these days.

Steve, that's correct. I think that's spot on. We have right around $2.2 billion in loans cash flowing annually. We expect those to reprice into higher rates, and depending on the shape of the yield curve, we typically price between that two, five to seven year on the curve. And you're correct as well, if you look at our new volume rates versus our portfolio rates, for auto, we're probably 50 basis points higher; commercial, 75 basis points to 100 basis points higher and residential still about 200 basis points higher. In addition, we also have investment securities cash flows that come in right around $325 million expected for 2025.

So Steve, to follow up on Annette's comment to your question, yes, $2.1 billion of commercial relationships that are essentially SOFR based, and so they will change anytime there's a change in short-term rates and usually change within a month of the impact and the change of Fed funds rates. So that stays about the same. There is a portion of those that probably reach a natural five-year or seven-year type renewal window over the course of the next year or two, but generally, that's what comes down immediately and we probably experienced 65% to 75% of that in the fourth quarter based on the 100 basis points of change that's happened since September.

Okay. Great. And then on the expense side, expenses stepped up this quarter. I realize there's various things on the compensation side and other. Just kind of curious how you guys are thinking about the run rate for you on a standalone basis going forward.

Sure, Steve. I think if we were to look at the run rate of the last two quarters, you're correct, the fourth quarter had some higher levels of incentive compensation and a little bit of noise in other expenses, but if we took an average of the last two quarters run rate, that's somewhere in the $97 million to $99 million a quarter. We think that that's probably a good place to think about at least the first half of the year. Just to remember a few things that happened in the first quarter, we have higher payroll costs, higher stock-based compensation costs, a little bit higher occupancy costs around snow removal and heating and things like that. So the first quarter might pick up a little higher, closer to the $99 million. And then on average, if you took a 4% to 5% increase on our full year 2024 run rate, that's probably where we're thinking operating costs will be for 2025.

Okay. Great. Appreciate that. And just one last one from me here. Just in terms of the loan loss reserve ratio trends, just kind of curious of the drivers of the decline in the consumer portfolio. I realize that's a runoff, but I guess it was a bit more of a step-off than I was thinking would happen here. And also, it looks like some of the decline in the CRE was related to that charge-off on non-performing. Just curious, do you build back the reserve on commercial real estate over time?

You are correct. The decrease in the coverage ratio related to CRE is directly related to the release of that specific reserve as we charge that portion of the loan down. So I think that if you were to look at that ex that, it's pretty consistent with where we were. So we feel like we're adequately reserved in our CRE portfolio. I wouldn't expect that to change materially from where we are at the fourth quarter unless we see changes in our forecasts or something to that effect. So overall, the reserve mix is changing. If you think about our solar and LendingClub portfolio, runs off maybe about $35 million a quarter and they have an allowance allocation of about 3.5%. So then as we build and grow new loans in our other books, the average coverage ratio for those loans is about 90 basis points. So that is having an impact on the amount of provisioning needs we need just due to that change in mix.

Yeah. Even as a follow-up to Annette's comment, Steve, if you're running off $30 million to $35 million of solar and specialty consumer and you're adding all of the other things that we're holistically trying to grow the balance sheet with, you can probably have a, quote, net neutral outcome in your provisioning and you could have $100 million to $125 million of growth in everything else just because of the net differential and the mix. And that's something we've been experiencing in 2024 essentially for every quarter, but knowing full well that the CECL modeling makes you reserve for stuff in a period of growth, a period of growth that we had in the first half of the year had a higher provision complement associated with that.

Okay. Great. I appreciate all the color there and I'll step back. Thank you very much.

Thank you, Steve.

Thank you. Our next question comes from Chris O'Connell of KBW. Your line is open.

Hey, good morning.

Hey. Good morning, Chris.

So just wanted to follow up on the expense outlook. So is the $97 million to $99 million range on an organic basis? Is that the good range that you were thinking as a run rate into 2025 organically or is it that plus the annual merit increases?

I think that that's a good run rate organically. It includes consideration for merit increases. So like I said, probably if you were to look at a full-year basis, it's somewhere between a 4% to 5% increase, which is kind of where we're at historically. As a reminder, our merit increase does happen in March of each year, so you won't have a full quarter impact of that in the first quarter, but we also have two less payroll days in the first quarter as well. So there's some offsetting there.

Okay. Got it. And then just on the fee businesses, just wondering what you're seeing in terms of growth in the primary businesses as far as your outlook into 2025 regarding the retirement business, the wealth business, the insurance businesses?

Yeah. So I am happy to take that one, Chris. And so just to give you a sort of a capsule of where we finished the year, retirement plan and administration for us is a $57 million business; wealth management, almost $42 million, and insurance, a little over $17 million. So combined, between $115 million and $120 million of revenue today for us with very attractive returns from a margin standpoint. To Annette's point, over the last five years, compounded growth rate's 9%-ish, combination of very robust organic growth with some timely acquisitions. 2024 was a really, really strong year. The market was our friend in retirement administration and in wealth management. We had solid organic account adds, customer adds from an acquisition standpoint, and the insurance business benefited from market rates moving up as well. So really bullish on those businesses going forward, really investable businesses in any way we look at those today. And remember, in those businesses, the capital complement necessary to grow those is very, very modest. If you can grow those businesses organically, which we've demonstrated we can, they just keep generating capital at a level that it's almost hard to reinvest their capital generation over some kind of extended period of time into just their businesses. So we think they're a net provider of capital that creates dividend consideration opportunities for us consistently. And again, we've reached requisite size where operating margins are very attractive.

Great. And as far as the organic growth absent the market impact here in the deal close, are you guys still thinking kind of mid to high single-digits is a good run rate for each of those or is there any change given…

Chris, we feel good about mid-single digits; mid to high single-digits when the combined outcomes were $70 million to $75 million, a little bit easier to obtain now that you're in this $120 million outcome, a little bit more of a task there, but we think we're just positioned well in terms of the breadth of the products we have in all of those enterprises. So we think that there is upside opportunity.

Thanks, Scott. Regarding the Evans merger, you received approvals much faster than what we have seen in recent years. Was there any discussion about potentially moving the closing date from the second quarter to either earlier in the second quarter or into the first quarter due to the speed of those approvals?

So Chris, regarding your point, I’m very pleased we received the approvals before the end of the year. We anticipated getting them in early 2025, so it's great that our regulators processed everything in a timely manner and asked the right questions regarding the impact. It's important to note that there is no overlap in this case. This is a market extension without overlap, which minimizes the need for discussions about market influences and competitive balance. Regarding your question about moving up the close date, we have not discussed that. The technical conversion of core systems is a significant task. While other acquirers may have processes that allow them to close legally and perform conversions later, we have never followed that path and believe it isn’t suitable for us due to the risks of managing two separate systems. It is critical for us to execute everything simultaneously. Over the next three months, we will have a comprehensive conversion process and will assess how the mapping of our products aligns with the Evans products, which makes us confident as we approach the anticipated closing period in early May.

Okay. Great. And just on the deal, you guys have had a little bit to contemplate the deal and the two balance sheets being put together. Any thoughts or anything being contemplated in terms of balance sheet actions on either the loan or securities side alongside or kind of shortly after the merger close? Basically, is there any difference in what you want the optimal balance sheet to be between now and kind of post the deal close?

Yeah. So as you know, we really don't control a lot of the balance sheet we're about to acquire for over the next handful of months, but have we thought about early deploying some cash flows on the investment portfolio side for us so that we don't end up in a position where we're either selling or buying investment securities, all in a concentrated period after the closing? Much like us and a lot of other banks, Evans also has a requirement for pledging for municipal securities. So there will definitely need to be investment portfolio assets retained or replaced prior to the closing so that we can support our customers who have those kinds of needs. Relative to the rest of the balance sheet, we have not spent a lot of time thinking about if there were certain pieces of asset classes or funding dynamics that we did not want to retain. We pretty much like everything that's on the balance sheet. So I'm certain that sometime in the first quarter, after we see full-year run rates from Evans and we get a chance to talk about fair value marks, we will recalibrate our expectations. Today, we don't think that they're far off what we communicated from an expectation standpoint in September, but obviously, changes in interest rates and changes in earnings run rates will impact that from a net accretion standpoint. But we feel pretty good about the assumptions we used in the transaction, including the synergy side and feel like we're in a great position to go forward.

Great. Thanks, Scott. I'll step out.

Thanks, Chris.

Thank you. Our next question comes from Manuel Navas with D.A. Davidson. Your line is open.

Hey, good morning.

Good morning.

Can we discuss the anticipated growth of legacy loans at this time? Is the optimism linked to the change in administration contributing to increased growth, or is it more likely to ramp up throughout the year while you remain within your previous mid-single digit guidelines for loan growth, factoring in some runoff?

So Manuel, to start, I would say we haven't seen any significant changes in our markets. Our markets performed well in 2024 and the optimism seems to have remained stable. This applies to Southern Maine, Southern New Hampshire, Vermont, and various areas in Upstate New York where there’s a general sense of optimism. This optimism stems from planned investments we anticipate, like semiconductor manufacturing opportunities in Upstate New York, as well as the overall stability in our core markets. When discussing our performance, Annette mentioned that last year we grew loans by 6%, excluding the portfolios in a planned runoff status. These factors are how we’re considering the first half of 2025 as well. Looking at our expansion into Western New York, we feel very optimistic about the growth opportunities available to us in that market. We believe every market we’re in right now feels investable and activity hasn’t slowed down or become stagnant. Our portfolio pipelines remain strong, comparable to the beginning of last year, and they appear to be spread across nearly all our markets. We have made it clear before that we, like many others, are focused on building comprehensive relationships, whether in commercial or retail banking, and we find that developing long-term customer relationships is more appealing than one-off transactions.

That's great. Earlier in your comments, you mentioned the overall picture, including announcements about the chip corridor, new expansions, and structural investments. I understand that big picture. What are some current developments that you find exciting? I know much of it is still a long way off, but what are some recent indicators you see that have you enthusiastic about the progress of this significant opportunity within the chip corridor?

Sure. Regarding the Micron opportunity, they have completed all necessary documentation and agreements with the federal government and, in some cases, with the State of New York for support of growth activities. This applies not only to Micron but also to the New York Creates organization in Albany, which is focused on nanotechnology research. There have been recent announcements involving GlobalFoundries in the Capital District and the Saratoga marketplace, as well as GlobalFoundries near Burlington, Vermont. The growth prospects remain strong and consistent, especially as we recognize the significant capital investments required for chip fabrication, research and development, or tool construction. It's essential to understand that this is a long-term endeavor; projects won't start at the beginning of a quarter and wrap up by the end of it. Additionally, there are ongoing support activities related to these opportunities. Numerous structural investments are currently in progress in Upstate New York, including improvements to highways. We are optimistic about the developments we’ve seen 14 to 16 months after our acquisition in the lower Hudson Valley and parts of northern Connecticut. One of our most productive pipelines right now is in Connecticut, where we have great opportunities stretching from West Hartford to the New York border and we look forward to further expanding those initiatives.

That's good color. Can I just tack on one thing on the NIM? Deposit costs have come down a bit. Is there more room to go or is it harder to keep cutting costs? And just how has that come together with some of the loan yield commentary before for near-term NIM?

There is more room to go. We talked about the $5 billion in assets that we think can reprice since the remaining $7 billion is low in deposit costs already. So if you break out that $5 billion, you've got right around $3.4 billion of money market accounts. We think we can react fairly quickly to changes in rates. We think that probably not all of the December rate cut was in the fourth quarter, so we'll see a little bit of that benefit into the first quarter even without any rate changes. And then the remaining $1.4 billion in CDs will lag a little due to the timing of maturities, but we'll see that benefit as well. So I think there's still some opportunity in those books to continue to reprice downward.

And this all has you headed into Evans close with a stronger NIM. And any update on kind of combined financial metrics? And I'll step back into the queue after this.

So, as Scott mentioned, we will take some time after Evans announces their full-year results to update our estimates. We should have a clearer understanding by the beginning of the first quarter.

But I think your comment, if you think about this four or five months ago, is, do we feel like our net interest income opportunities and net interest margins on a legacy basis are improved from what they probably looked like early or late in the third quarter? We do. Do we presume that that construct will probably be consistent with Evans? We do. And so to your point, feel as good, if not a little bit better than when we announced the transaction.

Looking forward to future updates. Thank you very much.

Thanks for the questions.

Thank you. Our next question comes from Matthew Breese with Stephens. Your line is open.

Hey, good morning.

Good morning, Matt.

Hi, Matt.

A lot of my questions have been answered. Maybe just a quick two or three. I guess the first one is, with Evans going to be behind you, what is the timeframe before you start thinking about additional M&A opportunities on the whole bank side? And then geography-wise, what parts of the map do you make the most sense?

Thank you for your question, Matt. We are currently focused on the Evans situation, and since we don't expect to finalize that until the second quarter, it’s our primary concern at the moment. As we’ve mentioned previously, we see significant incremental opportunities in western New York that we believe are worth pursuing. It's crucial for us to get this right first. While we don't have a specific timeline for considering other M&A opportunities, our top priority is ensuring that all our efforts are dedicated to making the Evans integration successful for both the employees and customers. We've had various parties reaching out since we completed one acquisition and have announced another that we plan to close. Regarding our franchise, with our expanded geographic coverage, there are definitely places where we can further develop within our existing structure. For instance, we have a branch set to open in South Burlington in March, and we believe there are additional chances to strengthen our presence in Vermont as we move southward into the state. Currently, our markets mainly cover Chittenden County, but we see opportunities for growth in Southern Maine and Southern New Hampshire as well. Joe has mentioned that we are likely to make a commitment in the Syracuse area, especially near the Micron project, and we’re also exploring opportunities to expand north of Syracuse into Jefferson and Lewis counties where we currently do not have coverage. We are analyzing markets in the upper and lower Hudson Valley to connect some of what we gained from the Salisbury acquisition with our legacy markets, which we see as strategic and timely. Additionally, we're looking into potential expansion into the Poconos and northeast Pennsylvania, including the Lehigh Valley, which could happen through either M&A or organic growth. We believe that various opportunities will arise over the next few years, and we are enthusiastic about enhancing our franchise after having solidified our position in key markets over the past couple of years.

Excellent. Next one from me was, Annette, what's a good tax rate for next year? It's been bouncing between 20% and 22%. Is that still the right range? I've been using kind of 22.5% to 23%.

So I think 22.5% to 23% is a good estimate for next year's tax rate.

Okay. All right. And then, Scott, maybe just going back to that last comment, the excitement is there, and from a macro standpoint, you certainly have a lot of wind at your back from a number of different fronts. I was hoping maybe you could, one, outside of some of these organic growth opportunities, where are you spending the most time, investments internally, product, services, new hires? And maybe could you paint a picture for us either in terms of potential profitability outcomes or EPS over the next handful of years as all of this kind of comes to fruition? And it certainly feels like the wind is at your back. Thank you.

Thank you for the question, Matt. It's an insightful one that touches on deeper issues. We appreciate it. Regarding your point, we are optimistic about the opportunities in the markets, particularly in terms of market activity and growth prospects, which are significant to us. This is why we believe all our markets and lines of business are worthy of investment. Currently, our focus is on enhancing the experience for both customers and employees simultaneously, while also looking at how to grow the organization and improve our processes. Given our size, we’re also focused on developing enterprise risk management to achieve a comprehensive benefit for the company. Regulatory expectations require us to continue making progress in that area. We acknowledge the advancements we've made over the past few years, but we also recognize that expectations continuously rise. This is not an unreasonable expectation as it actually aligns with what we should be doing. More advanced stress testing in our portfolios is beneficial; it helps us understand our customers better and assess our own operations, guiding us on where to prioritize future investments. While we aim to achieve some improvements through system upgrades, we also require talented individuals to help us reach our goals. We're quite satisfied with our current positioning and appreciate the positive trend and momentum we've experienced over the last two quarters. It's advantageous to operate as a company with a margin in the mid-3.30s compared to a lower 3% level. This margin provides an opportunity for revenue generation, allowing us to consider investments in both expenses and capital to enhance our organization. We believe this approach is tactical management, and we feel we have considerable flexibility in our tactical management today, similar to what we’ve experienced over the past eight quarters.

Understood. And just to slide another one in there, you had said it feels better to go to the market. Is there any sort of capital suggestion between the lines there, especially with some of the subs that come due later this year? That's all I had.

That's a great question. Pretty granular, and happy to take that up with you a little bit offline, but at the same point in time, yes, we have a sub-debt issuance that Annette worked diligently on from her house in 2020 during the pandemic that gets to remark capacity in mid-year. Should we replace that with another instrument in the capital stack or should we just pay it off, which we have the flexibility to do because we've been building cash reserves at the holding company to accomplish that, but we'd like to think about if there were opportunistic spots that we could replace that with, we'd be really interested in thinking about that. And we spend time talking about that.

Great. I'll leave it there. Thank you for taking my questions.

Sounds good. Thank you.

Thank you. And our next question comes from Steve Moss with Raymond James. Your line is open.

I have one more follow-up question regarding the commercial real estate non-performer that moved to non-performing status this quarter. I am interested in the type of loan it is and how you plan to resolve this issue. I assume this pertains to the $700,000 charge-off.

Yeah. So Steve, it's a new multifamily housing project in one of our better markets in Upstate New York, and it's just been very slow to lease up. Whether the developer or the sponsor is modestly priced differently than the market will accept today, it's a great question, but there's really not much more to it than that. But it's in a marketplace where historically the assets have performed very well, and we think over time, this one will as well.

Okay. And was this participation?

We do have a partner in this one.

Okay. Great. Appreciate all the color there. Thanks.

Thanks.

Thank you. Our next question comes from Chris O'Connell with KBW. Your line is open.

Hey, I just wanted to check if you had the spot margin or the spot interest-bearing deposit costs at the end of December 1.

I will follow up with you offline with that, Chris. From a margin perspective, we ended the year very similar to what we had for the quarter.

Okay. I'm also interested in the long-term perspective beyond the next few quarters. Do you have any updates on where you believe the residential solar runoff will eventually land after a few years? Additionally, how much of that is from other consumer aspects unrelated to LendingClub?

Sure. So Chris, while we see if we've got some of that detailed information in front of you, I would say this. The $90 million to $100 million of decline that we experienced in solar residential in 2024 is likely to be a proxy for what we would expect going forward. You remember that the instruments in solar residential, because they are essentially a home improvement, tend to have a longer duration or longer contractual maturities than the standard consumer financing, maybe even financing consistent with auto lending. So I would use that as a proxy for that. I'm going to guess this, and Annette's probably going to tell me differently, but that our consumer loan portfolio that is not the Springstone, LendingClub is in the ballpark of $50 million to $60 million today.

That's a good ballpark.

Perfect. Thank you.

Thanks, Chris.

Thank you. And our next question comes from Manuel Navas with D.A. Davidson. Your line is open.

Hey. Just wanted to hop back on to ask about the legacy fee growth in the mid-single digits. That doesn't include any potential cross-sell in Evans. And has that kind of been explored further? Is there any way we could size it yet or is that more something to consider for '26? And then my other question on fees is, how does M&A look on the fee side?

We appreciate the two questions. Firstly, I want to highlight that our teams focused on wealth management and insurance are very enthusiastic about the expansion into the marketplace in western New York. We believe this opportunity can be capitalized on soon after the closing. However, in terms of its impact on our business growth in 2025, it will likely not be significant. That said, we are optimistic about its future potential, as these solutions are currently offered at Evans, albeit in a limited capacity. Regarding mergers and acquisitions in our fee-based businesses, we are consistently looking for partners within our footprint in wealth management and insurance to create positive operating leverage by acquiring books of business. These opportunities occur sporadically, and identifying them often relies on networking with individuals who are either independent operators or whom we have other relationships with. The situation is somewhat different for retirement plan administration, which operates on a national scale and presents unique potential opportunities. Our ability to source new additions mostly stems from the networking efforts of our current business leaders. Typically, when it comes to acquiring enterprises within these sectors, we focus on firms generating between $1 million and $5 million in revenue, as that's where we excel in integration. We remain open to looking at these opportunities while staying within our existing footprint.

That's great. I appreciate the commentary. Thank you very much.

Thanks very much.

Thank you. I'm not showing any further questions at this time. I will now turn the call back to Scott Kingsley for closing remarks.

Daniel, thank you. In closing, I want to thank everyone for participating on the call with us today and your interest in NBT. And we look forward to talking to you again in the early spring. Have a great day.

Thank you, Mr. Kingsley. This concludes our program. You may disconnect. Have a great day.