2019 ANNUAL REPORT to our shareholders Fellow Shareholders, As we write this letter, the COVID-19 pandemic is spreading across our country. The impact on our society and on our economy— while not yet fully known—is significant and unprecedented. In this time of disruption, we have been working in real time to protect the health and safety of our team while quickly providing the support and solutions needed for our customers and our communities as they face new challenges. Even though last year feels like a long time ago, it is important for you to know that NBT Bancorp Inc. (NBT) recorded our most profitable year ever in 2019. Specifically, NBT posted the following full-year results: • Seventh straight year of record net income at $121 million and record earnings with diluted earnings per share of $2.74— $121 MILLION Record Net Income up 7.5% and 7%, respectively, from the prior year; • Net interest margin at 3.58% and 2% growth in net interest income; • Growth in loans of 3.6% and deposits of 3%; Outstanding 2019 financial results are clearly important to us all as shareholders. However, in the current operating environment our strong balance sheet, disciplined approach to credit and risk management, and diversified fee businesses are arguably even more important. These attributes provide NBT with significant flexibility as we protect and build on the long-term value of your investment. We had assets of $9.7 billion at December 31, 2019. Importantly in this environment, our tangible common equity (TCE) ratio for 2019 of 8.84% was up 99 basis points from the prior year, and our tangible equity has grown 39% or $235 million since 2015. NBT’s key regulatory capital ratios have likewise continued to grow, and they are comfortably in excess of “well capitalized” levels as defined by the Office of the Comptroller of the Currency. We ended 2019 with a Common Equity Tier 1 Capital Ratio of 11.3% and Total Risk-Based Capital of 13.5%. Both our TCE and regulatory ratios demonstrate the strength and growth of our capital position. It is important that you know your investment in NBT is supported by a platform that was purpose-built to endure difficult times. NBT was established in 1856 and has weathered numerous storms. Many of our bankers and executives possess • Year-over-year growth across all business lines in our relevant experience from several economic challenges and New England Region, which represented 18% of NBT’s events we have faced over the last 20-plus years. Your Executive assets at year-end; and • Continued delivery of consistent dividends, with 2019 being the 162nd year of uninterrupted dividend payments to shareholders. company profile • NBT Bancorp Inc. is a financial holding company incorporated in 1986 in the state of Delaware. • The Company primarily operates through NBT Bank, N.A. and two financial services companies. • NBT Bank, N.A. offers personal banking, commercial banking and wealth management services through online and mobile channels and 146 locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire and Maine. NBT Bank is currently entering Connecticut. • EPIC Retirement Plan Services is a full-service 401(k) recordkeeping firm based in Rochester, NY. • NBT Insurance Agency, LLC is a full-service insurance agency based in Norwich, NY. Management Team averages 25 years of experience in banking. Your Board of Directors is seasoned with many serving through both 9/11 and the 2008 financial crisis. Our team is applying lessons learned from those periods to the new challenges we face today. We are putting the deep knowledge our local bankers have of their markets and customers to work, addressing client needs, and managing risk and capital in a disciplined fashion. Our technology investments over the past several years have positioned us to be responsive and resilient in the face of adverse conditions. We have long regarded our approach to technology as a source of differentiation and competitive advantage over typical community banks, and the current environment is putting those resources and investments to the test. When the Coronavirus began to dominate headlines early in 2020, we engaged our team to execute a well-developed pandemic response plan to prevent service disruptions and immediately address the most critical issues. We moved swiftly to deploy the vast majority of our non-branch team members to work remotely. We quickly stood up relief programs for clients. To accelerate the speed of our response, we applied our agile project management approach to further streamline and digitize our workflows and processes. We changed the way we conduct business in our retail branches by shifting service hours and pivoting to drive-up and financial highlights (all dollar amounts in thousands except share and per share data) ATM service to protect our employees and customers. We will not FOR THE YEAR 2019 2018 waiver in our commitment to providing excellent service and supporting the health and financial security of our customers and communities. In good times and through challenges, NBT’s culture remains our firm foundation. We strive to recruit, retain and develop a diverse workforce, and we promote an environment of inclusion and professional growth. In the face of the current challenge, we could not be happier to have added two strong new performers to our Executive Management Team in 2019. We welcomed Angela Kelley to the Company in August as Executive Vice President, General Counsel and Corporate Secretary. John Moran joined us in November as Executive Vice President and Chief Financial Officer to succeed the retiring Michael Chewens. We are thankful to Mike for his energy, insight and focus on operational excellence as a 25-year member of NBT’s leadership team. These are challenging times for all of us, and the entire NBT team stands with you. It is in our DNA to be at our best in times of disruption and adversity. We have a long-established history of emerging from such times a stronger organization. We also have a proud heritage of building long-term relationships with individuals, businesses and organizations of all sizes, and we remain dedicated to delivering high-quality service to customers and value to shareholders. PERFORMANCE Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on average assets . . . . . . . . . . . . . . . Return on average tangible equity . . . . . . Net interest margin . . . . . . . . . . . . . . . . . . . . . PER COMMON SHARE DATA Diluted earnings . . . . . . . . . . . . . . . . . . . . . . . . Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . $121,021 $112,566 1.26% 15.85% 3.58% $2.74 $1.05 2.59% 1.20% 16.71% 3.58% $2.56 $0.99 2.86% Tangible book value per share . . . . . . . . . . $19.03 $16.66 AT DECEMBER 31 BALANCE SHEET DATA Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,715,925 $9,556,363 Total loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,136,098 $6,887,709 Allowance for loan losses . . . . . . . . . . . . . . . $72,965 $72,505 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,587,820 $7,368,211 Total shareholders’ equity . . . . . . . . . . . . . . . $1,120,397 $1,017,909 ASSET QUALITY Net charge-offs to average loans . . . . . . . . Nonperforming loans to total loans . . . . . Nonperforming assets to total assets . . . Allowance for loan losses to total loans . . 0.36% 0.40% 0.31% 1.02% 11.29% 12.56% 13.52% 0.38% 0.44% 0.35% 1.05% 10.49% 11.79% 12.78% By remaining focused on the fundamentals of our business and by taking care of our employees, customers and communities, CAPITAL we will emerge stronger together. Common equity tier 1 capital ratio . . . . . . Tier 1 capital ratio. . . . . . . . . . . . . . . . . . . . . . . Total risk-based capital ratio . . . . . . . . . . . . John H. Watt, Jr. President and Chief Executive Officer Martin A. Dietrich Chairman of the Board Forward-Looking Statements This letter contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to a number of risks and uncertainties. Such statements are not guarantees of future performance and actual results may differ materially from any forward-looking statements contained in this letter. For a discussion of the factors that might cause such differences, please refer to our filings with the Securities and Exchange Commission. Closing stock price . . . . . . . . . . . . . . . . . . . . . $40.56 $34.59 Market capitalization . . . . . . . . . . . . . . . . . . . $1,776,391 $1,510,648 2020 annual meeting Tuesday, May 19, 2020 10:00 a.m. www.virtualshareholdermeeting.com/NBTB2020 NBT’s Annual Meeting of Shareholders will be held online as a virtual shareholder meeting. Shareholders will have the opportunity to listen to the proceedings, view the presentation, submit questions and vote shares. Complete details are provided in the proxy materials. 2019 ANNUAL REPORT leadership Executive Management Team John H. Watt, Jr. President and Chief Executive Officer Timothy L. Brenner Executive Vice President and President of Wealth Management Matthew K. Durkee Executive Vice President and President of New England Region Sarah A. Halliday Executive Vice President and President of Commercial Banking Shauna M. Hyle Executive Vice President, Consumer Lending Operating Committee The following NBT leaders served on the Operating Committee in 2019 with the Executive Management Team: Kurt T. Edwards Senior Vice President and Chief Consumer Credit Officer Kenneth J. Entenmann, cfa® Senior Vice President and Chief Investment Officer Amy S. Hurta Senior Vice President, Senior Director of Operations and Chief Diversity Officer David Krupski Regional President Capital Region Angela Wolfe Kelley Executive Vice President, General Counsel and Corporate Secretary John V. Moran, cfa® Executive Vice President and Chief Financial Officer Catherine M. Scarlett Executive Vice President and Chief Ethics and Human Resources Officer Joseph R. Stagliano Executive Vice President and President of Retail Community Banking Amy Wiles Executive Vice President and Chief Credit and Risk Officer Jeffrey D. Lake Regional President Greater Binghamton Tucker H. Lounsbury, cIc President NBT Insurance Agency, LLC Mark R. Mershon Corporate Senior Vice President and Treasurer Richard J. Shirtz Regional President Central New York David R. Theleman Senior Vice President and Chief Commercial Credit Officer shareholder information Corporate Headquarters NBT Bancorp Inc. 52 South Broad Street Norwich, NY 13815 800.NBT.BANK Stock Symbol: NBTB Market: Nasdaq Global Select Independent Auditors KPMG LLP 515 Broadway Albany, NY 12207 Financial Reports and Releases Copies of the Company’s annual report to the Securities and Exchange Commission on Form 10-K, quarterly reports on Form 10-Q, and news releases may be obtained without charge by visiting our website at www.nbtbancorp.com or by writing to Chief Financial Officer John V. Moran at the corporate headquarters address. Board of Directors Martin A. Dietrich Chairman John H. Watt, Jr. President and Chief Executive Officer Patricia T. Civil Timothy E. Delaney James H. Douglas Andrew S. Kowalczyk, III, Esq. John C. Mitchell V. Daniel Robinson, II Matthew J. Salanger Joseph A. Santangelo Lowell A. Seifter, Esq. Robert A. Wadsworth Jack H. Webb Regional Presidents Andreas A. Kapetanopoulos Connecticut David A. Kavney Mohawk Valley David Krupski Capital Region Jeffrey D. Lake Greater Binghamton Stephen P. Lubelczyk New Hampshire Richard J. Shirtz Central New York Kimberly J. Twitchell Maine NBT Bank Honorary Directors Richard Chojnowski Daryl R. Forsythe Paul D. Horger, Esq. Janet H. Ingraham Andrew S. Kowalczyk, Jr., Esq. Van Ness D. Robinson Paul M. Solomon Paul O. Stillman Additional information regarding our Executive Management Team and Board of Directors can be found in the proxy statement for our 2020 Annual Meeting of Shareholders. EPIC Retirement Plan Services Manuel Marques, cpc, qpa, qka, qpfc, aIf® President NBT Insurance Agency, LLC Tucker H. Lounsbury, cIc President NBTB Shareholder Relations Information regarding the Company, our dividend reinvestment and stock purchase plan, and direct deposit of dividends can be found on our website at www.nbtbancorp.com. Those seeking additional information should contact Shareholder Relations by phone at 800.NBT.BANK (800.628.2265, Option 7), or by mail to: NBT Bank, 52 South Broad Street, Norwich, NY 13815. Stock Transfer and Registrar Agent American Stock Transfer & Trust Company, LLC 6201 15th Avenue Brooklyn, NY 11219 800.NBT.BANK (800.628.2265, Option 7) www.astfinancial.com help@astfinancial.com www.nbtbancorp.com | 800.NBT.BANK www.nbtinsurance.com www.nbtbank.com www.epicrps.com