Good day, everyone, and welcome to this conference call hosted by NBT Bancorp Inc. regarding the definitive agreement between NBT and Salisbury Bancorp Inc. to merge Salisbury with and into NBT. This call is being recorded and has been made accessible to the public in accordance with 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 two, today's presentation may contain forward-looking statements as defined by the Securities and Exchange Commission. Actual results may differ from those projected. These forward-looking statements reflect NBT's best estimates and assumptions based on its understanding of information known to NBT today. These forward-looking statements are subject to risks and uncertainties that face NBT and Salisbury and the industry in which they operate. You are encouraged to review today's joint press release from NBT and Salisbury for more information on these risk factors, as well as both companies' SEC filings. Please also see additional legal statements at the end of the press release. 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 a 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 would now like to turn the conference over to NBT Bancorp President and CEO, John H. Watt Jr., for his opening remarks. Mr. Watt, please begin. Thank you, Carmen, and good morning and thank you for joining our call and for your interest in NBT. With me this morning is our CFO, Scott Kingsley, to discuss our merger with Salisbury Bancorp, which we announced this morning. It is with great pleasure and excitement that we announce that NBT has reached an agreement to acquire the common stock of Salisbury, which is headquartered in Lakeville, Connecticut. This transaction is a natural extension of NBT's footprint in New England and in eastern New York. It provides incremental scale for our already established Hartford, Connecticut, platform. It extends our branch network in the Berkshires, and it gives us a presence in the Hudson Valley adjacent to our franchise in the Catskills. Importantly, Salisbury Bancorp is a high-quality partner that is culturally aligned with NBT's vision, values, and mission. I've spent the last two years getting to know Salisbury CEO, Rick Cantele. During that period, we both determined that our go-to-market strategies and our cultures are very similar and that our performance would be enhanced by and benefit from this combination. I'm pleased to announce that Rick will join me on our executive management team when the transaction closes. There is no material overlap of our franchises. Therefore, we expect that all customer-facing Salisbury team members will join the NBT team. As we execute on our long-term growth strategies, it's important to note that Salisbury's presence in the Hudson Valley will extend NBT's coverage of the communities in the upstate New York Chip Corridor, beginning in Syracuse, extending to Utica, the Capital District, and now into the Hudson Valley, where IBM recently announced investment plans totaling $20 billion. Our banking footprint, both retail and commercial, is uniquely positioned to benefit from the economic growth in this Chip Corridor for many years to come. Salisbury's $1.5 billion in assets and its 14 branches will accelerate NBT's growth plans for New England, which has been a very successful long-term strategy for us. Salisbury's wealth business fits very well with NBT's wealth platform and will add $1 billion of additional assets under administration. Growth and building scale are critical to the company as we consistently drive to create value through incremental operating leverage. As you will hear from Scott, this is a financially attractive transaction which will provide strong earnings accretion to the combined shareholder base. Scott, will you walk us through the transaction terms and the pro forma outcomes, please? Thank you, John, good morning, everyone. As John indicated, we are very pleased to announce our agreement to partner with Salisbury Bancorp. I want to share some of the key transaction highlights, including certain assumptions and expected financial impacts. As indicated on pages 9 and 10 of our presentation deck, consideration will be all stock, we expect there will be 5.827 million Salisbury shares, which will be exchangeable. The deal value calculates to approximately $204 million, utilizing a level of $35 per Salisbury share and a 10-day volume-weighted average price of $46.98 per NBT share. As such, we expect to issue 4.341 million additional NBT shares at closing. Salisbury shareholders will own approximately 9% of the combined company. The purchase price represents 1.86 times Salisbury's tangible book value per share as of September 30, 2022, and 8.2 times expected annual earnings, including estimated cost saves. We expect to record credit and interest rate marks on loans of approximately 1.5% and 2% of outstanding balances, respectively. We have assumed approximately $30 million of fair value marks on Salisbury's available for sale investment securities, which are substantially reflected in their current financial statements through AOCI. We also expect to create a core deposit intangible of 2% of Salisbury's core deposits. As indicated on page 11, we expect the transaction to be 9.8% accretive to first full year GAAP earnings, while being just 2.4% dilutive to our tangible book value. We estimate the earn back period to be under 18 months. In addition, and certainly as important, we expect core earnings accretion of nearly 5%, excluding the accretion of fair value marks and the amortization of core deposit intangibles. We expect our tangible common equity ratio to remain above 7% after the closing of the transaction and our Tier One leverage ratio to remain nearly 2 times the required level to be well capitalized for regulatory purposes. With that, we're happy to answer any questions you may have at this time. Carmen? Thank you. As a reminder to ask a question, simply press star one one on your telephone. That is star one one to get in the queue. One moment please. Our first question comes from the line of Alexander Twerdahl with Piper Sandler. Please go ahead. Hey, good morning, guys. Morning, Alex. First off, I was hoping you can give us a little bit of color on through the due diligence process and, you know, specifically your conversations with the regulators, kind of the steps you went through just to make sure that Q2 2023 timeframe is reasonable given all that's happened over the past year. Happy to do that, Alex. I'll start with the regulatory calls. I participated in calls with four of our regulators on Friday, and gave them a heads up that this transaction announcement was coming. Walked them through the high level terms and conditions. Walked them through the strategic rationale. The feedback was universally positive. We received some advice on how to proceed with the application process. They asked questions about the regulatory status of both Salisbury and NBT. As we have reported in the past, the story there is a very positive one. Initially coming out of the box, the regulators are aware, supportive, and we're already hard at work preparing the joint interagency application, which we expect to file in mid-January, if not earlier. With respect to the due diligence, it was deep, far, and wide, and that's thanks in large part to the Salisbury team, who made information available to us over a period of over 6 weeks. We looked at the commercial loan portfolio in detail. Had the opportunity to look at over 50% of the total portfolio, over 60% of all the loans over $1 million. We looke We had the opportunity to look at their large residential mortgage portfolio, their risk management principles around it, the underwriting and the documentation. Again, we came out of that feeling very comfortable. Across the branch banking platform, had the opportunity to look at how they go to market with their deposit products and again, felt comfortable about that. You should be aware from a risk mitigation perspective that this will be a Fiserv to Fiserv integration, and therefore, we would expect that would help us accelerate the path towards the ultimate closing date. In addition, Scott, talk about, if you would, the look we did at the securities portfolio and their financial systems and controls. Thanks, John. I'd be happy to. As John mentioned, you know, we got to do a comprehensive review of their investment securities portfolio, which in fairness looked very much like ours. You know, amortizing mortgage-backed CMO dominated securities, durations and very, you know, logical, reasonable durations similar to ours. In terms of valuation that we ran some interest rate sensitivities associated with continued likely changes in underlying market rates to see if that actually had a significant or any impact on what we were modeling in terms of tangible book value dilution, both for ourselves and for them. Really don't think that there's a significant additional exposure attached to that. I'm reminded from time to time that to the extent that there has been additional AOCI impact across most people's portfolios for 2022, shouldn't be lost that most people are still making money. You're accreting core capital at the same time. From a practical standpoint, we feel really good about that. I think, Alex, in terms of we think it was comprehensive to John's point, they put together a lot of information in a short period of time for us. Feel good about asking all the right questions. I'll add, Alex, that we also had the opportunity to interview certain of the senior management, and that was also very positive. We have been able to obtain agreements with the leaders in the commercial business and in the wealth business to continue on with us in the combined entity, and that will also add to the momentum and the risk mitigation associated with integration. We feel good all the way around on the due diligence front, thanks to all the hard work that the Salisbury folks put into making all that information available. Great. Thanks for that color. I was just curious what kind of rate assumptions you have baked into the EPS expectations for both you guys and for Salisbury? You know, Alex, I think we're following, you know, the forward curve that would suggest that there is, you know, 50 more basis points of Fed adjustment coming in December and somewhere between 25 and 75 more coming in the first half of 2023. Then a cooling off period after that. Nothing more substantial or detailed rather than that. Great. Thanks for taking my questions. Thanks, Alex. Thanks, Alex. Thank you. One moment for our next question, please. All right. Comes from the line of Chris O'Connell with KBW. Please proceed. Hi, good morning. Hi, good morning. Wanted to talk about, you know, just the, you know, financial impact of the, you know, deal pro forma, on the margin, maybe what, you know, the IRR profile or, you know, interest rate sensitivity profile of Salisbury is and, you know, their betas last cycle. If you have the% of their loan portfolio, fixed versus variable, and how it kind of, impacts your, overall NIM sensitivity going forward. Chris, so to kind of get started with that, you know, they, their portfolio is, has more of a fixed feature to it than the NBT portfolio does. Their interest rate sensitivity today is closer to neutral, or even maybe even tending a little bit towards liability sensitive, as opposed to ours, which as of the end of the third quarter was still quite asset sensitive. I think we're complementary, if anything, to be honest. In terms of, cannot quote you deposit beta on the last cycle for them. You know, with 14 branch locations and just their sheer size, it was probably larger than ours, just because of sheer access to funding sources. Be happy to get back to you on that. I think in terms of where margin comes out, we're generally a little bit higher than them on earning asset yields today, and we generally have a little bit lower cost of funds. I would expect that, you know, there would be a little bit of contraction in the combined margin. That means that, we'd also say we know where rates are going to be in the market as of June 1st. You know, that's still been a lot of variability and volatility for us to try to prognosticate. That being said, I do think that there will be opportunities for us to look at, as an example, what's currently in their investment portfolio. We assume we will hold that, we assume we will accrete the difference between fair value and carrying value. We may find from an ALCO oversight perspective it makes sense to liquidate that portfolio. From a practical standpoint, but that we won't get to, obviously, until we get through approvals and, you know, be able to model our combined sensitivity together a little more formally. Hopefully that helps, Chris. Okay, great. Yep. That is helpful. If you could just talk about maybe like the synergies on the wealth side. It seems like they're bringing over, you know, a decent-sized franchise, you know, relative to their overall size and kind of how that fits in, to your overall, you know, wealth management business. Well, at a high level, you know, Chris, that one of the distinguishing factors of NBT is its revenue mix. This obviously just enhances the non-interest sensitive side of our revenue flows. That's check number one. Number two, this gives us a platform further into New England to really expand our wealth offerings. You know, we're strong on the retirement administration and retirement investment side. I think we can offer that through the platform that our new colleagues at Salisbury will offer. You know, obviously they're sitting in Northwest Connecticut, which has a profile that fits that product set. I think that with some enhancement of technology and product offering, that we can accelerate what is already a successful business in that market and extend towards Hartford, where we have a platform down the Hudson Valley as well. Very complimentary. The platform on which internally they manage the business is the same platform as ours, integration is going to be smoother and obviously a cost savings there as well. Looking forward to it, and find it to be very complimentary. Great. Then I may have missed it, in the opening comments, but did you guys mention the Durbin impact for Salisbury? Yeah. I think we've, we think, Chris, that's between $1 million-$1.2 million a year. Certainly that's embedded in our modeling. Great. I'll set that out for now. Thank you. Thanks, Chris. Thanks, Chris. Thank you. As a reminder to ask the question, simply press star one one on your telephone. One moment while we get another question. It's from the line of Matthew Breese with Stephens. Please proceed. Good morning. Good morning, Matt. Scott, you'd mentioned earlier, Salisbury has a bit of a, more of a fixed rate component to their portfolio, and it's a bit of a lower rate than your own. I'm just curious, as you've looked at that loan portfolio, are there any categories or asset classes that you plan on, writing off or selling off or just, you know, not emphasizing once the deal is consummated? Matt, the easy answer to that one is no. We really like their broad participation. You know, it's certainly, you know, what really makes this attractive is they're good at a lot of the things that we're already good at. You know, there's maybe a handful of additional things that they are not doing today that give us some incremental opportunities. But no plans to do that. Matter of fact, I would go the other way and say our plan is to be able to utilize a larger balance sheet to help them go after some opportunities they maybe, you know, could not participate in or could not wholly hold, you know, over the last several years. Not finding anything, you know, that quite frankly, that we don't think we would be interested in. Okay, great. You know, oppositely, I was hoping you could just talk about their deposit base a little bit. You know, obviously there's the traditional kind of categorization, I was curious about the breakdown between retail and commercial. Once integrated, you know, does their deposit base change the trajectory of deposit betas for the overall franchise? Good question. I kind of frame it this way, is that, you know, they are good at commercial deposit gathering, and they are good at retail deposit gathering. I don't have that mix sitting right in front of me, Matt. I'll follow up with you on that. Generally speaking, you know, the pricing of larger balance, more interest rate sensitive commercial customers shares very much similarities with our own. As you're managing deposit betas in this cycle, you know, there's a lot more attention probably placed on that subset of the customer base than maybe the broader retail base. We share that from an outcome standpoint. Okay. In terms of whether their outcome changes our data, you know, I think their current loan to deposit ratio is just a touch higher than ours. You know, they are fully, you know, fully invested from a balance sheet standpoint. You know, on most nightly basis today, they're probably on that same line of are they slightly selling funds, or are they slightly borrowing on an overnight basis? I think that's pretty consistent, you know, with our profile. So again, whether there is an opportunity, you know, when we get to the closing to make some decisions, and again, as I said before, probably ALCO-based decisions as to what to do with, you know, their $200 million of investments. You know, that'll be closer to, you know, post-approval and closer to a closing decision. Okay. Could you help us, you know, quantify accretion year one? Just I want to get a sense for, you know, core versus stated margin. What is that accretion number? Sure. We have everything that you see in the deck we've used as essentially first 12 months after closing. We've used our collective balance sheets as of 9/30/2022. We didn't get into the trying to extrapolate where we thought our balance sheets would both be by the, you know, whatever, wherever in the mid to late second quarter next year. I frame it this way, Matt, and I think this is in our slide deck, is, you know, roughly 5% accretion coming from core elements, which is the Salisbury earnings profile plus, you know, the cost synergy outcomes. Another 5% on top of that coming from the accretion of loan and credit and fair value marks. So I think you've heard this from us before, that we kind of think about the core as being closer to sort of a cash earnings type of an outcome, and that's probably a better barometer for dividend capacity than accretion. Because obviously over time, that accretion helps restore, you know, capital balanceThat were impacted to their highest level of acuity on day one. So it helps restore that. But that being said, it's really not a cash-based flow of earnings accretion. So I think you balance that. For us, the standard had to be, does this make sense on a core basis? Surely it passed that threshold. Okay. I'm curious within the credit mark, the $18 million, where did you spend the most time? Is it in any way indicative of where we might see stress across the entire portfolio in 2023? Ooh. That's a really interesting question because their portfolio is so clean, that I would say in terms of how to assign essentially, you know, the PCD portion of that credit mark. You know, we tried to pick, you know, something that we thought was more indicative of just the general industry type of a trend as opposed to something specific that we saw. We really didn't see anything within the detailed review that we did that said, "Oh, we really need to set aside, you know, individual specific reserves for anything we reviewed." That really didn't come up. You know, when we get closer to the closing, does that 70/30 line become 80/20 or 60/40? Could very well. I think this was just indicative of, you know, the general sense that this is what we're seeing in the market today. Got it. Okay. Last one from me. You know, maybe just stepping back on legacy NBT. You know, here we are in December. It feels like there's a little bit more anxiety around liquidity, deposits, credit quality across the entire industry. Just curious, any notable changes since we last spoke on deposit betas and costs or underlying credit quality for the legacy franchise? Matt, I will tell you that I think what we, what we communicated in our third quarter call in October, you know, I think we're still on a very consistent track to that. I will say that in terms of customers looking for better yielding opportunities on their deposit portfolio, that's pretty widespread right now. I do think that given most institutions have investment portfolios that are marginally, you know, underwater from a fair value standpoint, using that investment portfolios as people did historically to create liquidity is not quite as easy as a decision. I think you are seeing, you know, some more exception based pricing and some more specials running out there in the market. I would suspect going into December and into the first of the year, you're probably seeing some broad-based changes to people's core rates. And that's us too. I mean, we're within that process. That being said, our deposit base is just so granular, that I think we really have a very logical and methodical way to manage interest rate sensitive customers first, and then provide market rate offerings to the rest of our base over time. Great. I appreciate all the detail. That's all I had. Thank you. Thank you, Matt. Thanks, Matt. Thank you. I'm not showing any further questions. I will now turn the call back to John Watt for his closing remarks. Carmen, thank you. To all those who participated in the call, we appreciate your interest in NBT. Look forward to catching up to you after year-end with our year-end earnings results, and we'll also keep you apprised on the pace of this transaction. Again, thank you. Have a good day. Thank you, Mr. Watt. This concludes our program. You may now disconnect. Have a great day.