NBT Bancorp (NBTB)

Regional banking company NBT Bancorp (NASDAQ:NBTB) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 26.1% year on year to $186.1 million. Its non-GAAP profit of $1.05 per share was 8.4% above analysts’ consensus estimates.

Company Overview

Tracing its roots back to 1856 when it first opened its doors in Norwich, New York, NBT Bancorp (NASDAQ:NBTB) is a community-oriented financial institution providing banking, wealth management, and insurance services to individuals and businesses across the northeastern United States.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

NBT Bancorp competes with larger regional banks like KeyBank (NYSE:KEY) and M&T Bank (NYSE:MTB), as well as with similar-sized community banks including Berkshire Hills Bancorp (NYSE:BHLB) and Community Bank System (NYSE:CBU) throughout its northeastern footprint.

Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Thankfully, NBT Bancorp’s 7.6% annualized revenue growth over the last five years was solid. Its growth beat the average banking company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. NBT Bancorp’s annualized revenue growth of 11.8% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, NBT Bancorp reported robust year-on-year revenue growth of 26.1%, and its $186.1 million of revenue topped Wall Street estimates by 1.6%.

Net interest income made up 69.5% of the company’s total revenue during the last five years, meaning lending operations are NBT Bancorp’s largest source of revenue.

Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

NBT Bancorp’s EPS grew at an unimpressive 4% compounded annual growth rate over the last five years, lower than its 7.6% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For NBT Bancorp, its two-year annual EPS growth of 1.8% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q3, NBT Bancorp reported adjusted EPS of $1.05, up from $0.80 in the same quarter last year. This print beat analysts’ estimates by 8.4%. Over the next 12 months, Wall Street expects NBT Bancorp’s full-year EPS of $3.50 to grow 17.5%.

The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.

When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. Other (and more commonly known) per-share metrics like EPS can sometimes be murky due to M&A or accounting rules allowing for loan losses to be spread out.

NBT Bancorp’s TBVPS grew at a mediocre 5% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 11.9% annually over the last two years from $20.39 to $25.51 per share.

Over the next 12 months, Consensus estimates call for NBT Bancorp’s TBVPS to grow by 10.5% to $28.19, solid growth rate.

Leverage is core to a financial firm’s business model (loans funded by deposits). To ensure economic stability and avoid a repeat of the 2008 GFC, regulators require certain levels of capital and liquidity, focusing on the Tier 1 capital ratio.

Tier 1 capital is the highest-quality capital that a firm holds, consisting primarily of common stock and retained earnings, but also physical gold. It serves as the primary cushion against losses and is the first line of defense in times of financial distress.

This capital is divided by risk-weighted assets to derive the Tier 1 capital ratio. Risk-weighted means that cash and US treasury securities are assigned little risk while unsecured consumer loans and equity investments get much higher risk weights, for example.

New regulation after the 2008 financial crisis requires that all firms must maintain a Tier 1 capital ratio greater than 4.5%. On top of this, there are additional buffers based on scale, risk profile, and other regulatory classifications, so that at the end of the day, firms generally must maintain a 7-10% ratio at minimum.

Over the last two years, NBT Bancorp has averaged a Tier 1 capital ratio of 11.8%, which is considered safe and well capitalized in the event that macro or market conditions suddenly deteriorate.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, NBT Bancorp has averaged an ROE of 10.8%, impressive for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This shows NBT Bancorp has a strong competitive moat.

It was encouraging to see NBT Bancorp beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $40.85 immediately after reporting.

Updated: December 3, 2025 at 11:27 PM EST

Are you wondering whether to buy NBT Bancorp or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

NBT Bancorp isn’t a terrible business, but it isn’t one of our picks. To begin with, its revenue growth was uninspiring over the last five years. And while its estimated net interest income growth for the next 12 months is great, the downside is its weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders. On top of that, its net interest income growth was mediocre over the last five years.

NBT Bancorp’s P/B ratio based on the next 12 months is 1.2x. While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $47.80 on the company (compared to the current share price of $42.24).