NBT BANCORP INC (NBTB): what the price assumes

In the published model solve dated 2026-Q2, anchored at $53.20, NBT BANCORP INC (NBTB) is priced for 11.5% return on equity. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/NBTB

Headline

FieldValue
TickerNBTB
CompanyNBT BANCORP INC
Current price$53.20/sh
CompositionBanking 90% / Retirement Plan Administration 10%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Return on equity needed11.5%
Return on equity now8.9%
ROE gap+2.6pp
Price-to-book1.45x

Solve inputs: computed at a 9.2% cost of equity with 4% terminal growth over a 10-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~1.5pp.

How unusual the bet is: within-range

ReferenceValue
vs own history+1.06σ
cohort percentile (of 166 peers)63
sustained it ~10 years at this level71%
implied end-window share0%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.37x3expensive
Earnings1.39x1expensive
Relative—0—
Growth1.22x1expensive

Families that justify the price: Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.0%); the inversion above states its own rate.

Per-Model Detail (n=5)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$27.321.95xyesTBVPS $26.99 × 1.01x (ROE (TTM) 9.6% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.21% allowance/loans → ×0.94, NPL 0.51% → ×1.00)
Relative ValuationRelative——noP/E 11.53x (blended: static sector reference 10x + trailing (TTM) 15x), scenarios: 9.3x / 11.5x / 13.8x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth$43.561.22xyesStage 1: 15% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$38.091.40xyesBV/sh $36.73, ROE (TTM) 9.6%, ke 9.3%
Two-Stage Excess ReturnAsset$38.771.37xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth——noRev $0.5B, growth 28% (input: historical growth; tapered), Terminal P/S: 4.2x / 5.2x / 6.3x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative——noEPS $3.54, growth 15% (input: historical EPS growth), PEG=0.98 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$54.090.98xyes√(22.5 × EPS $3.54 × BVPS $36.73) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——noEPS $3.54 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative——noEPS $3.54 × (PEG 1.5 × growth 15.3% (input: historical EPS growth)) → PE 23.0x
Earnings YieldEarnings$38.271.39xyesEPS $3.54 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

The issuer is a funded financial business. Debt, interest, and cash flows are operating inputs, so industrial EV, net-debt, WACC, and free-cash-flow lenses do not apply; value the common-equity claim with book, earnings, capital, and payout economics.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Bankingfinancialequity0.6B reported-currency—withheldunresolved standalone equity facts required
Retirement Plan Administrationfinancialequity0.1B reported-currency—withheldunresolved standalone equity facts required

No unit-level total common-equity value is stated. Each financial unit requires supported standalone common equity, normalized earnings, capital adequacy, and payout capacity. Consolidated debt, interest, and cash are operating balances, not an enterprise-to-equity bridge; company-level book, earnings, capital, and payout lenses remain the coherent cross-checks.

Solvency

FieldValue
Share count CAGR (dilution)4.8%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

NBT Bancorp is an upstate New York regional bank, about 90% banking and 10% retirement-plan administration. The earnings trajectory is improving: the most recent quarter delivered net income of $51.1 million and diluted EPS of $0.98, up from $0.77 a year earlier, with the net interest margin rising to 3.72% as funding costs fell faster than asset yields.

A bank is worth the return it earns on its capital, so the price is read off book value. At $46.74 the stock trades around 1.3x book, implying a sustained return on equity near 10.6% against a recent standard-measure run rate closer to 8.9%, though the operating return on tangible common equity in the latest quarter was a much higher 15.5%.

Unusually for a bank this size, every valuation family supports the price: asset, earnings-power, peer-multiple, and growth methods all land at or above it. This reads as a value and asset-supported name, not a growth bet, with the central question being whether the recent margin and acquisition-fueled momentum holds.

Bull Case

The direction of NBT's earnings is the bull case, and it is moving the right way on the two levers that matter for a bank: margin and scale. The most recent quarter showed net income of $51.1 million and diluted EPS of $0.98, up sharply from $0.77 a year earlier, with the net interest margin rising 7 basis points to 3.72%. The quality of that margin gain matters: it came from a 9 basis point drop in the cost of funds that more than offset a 2 basis point decline in earning-asset yields. Funding costs falling faster than asset yields is the textbook tailwind for a bank as the rate cycle turns, and it shows up directly in the bottom line.

The scale lever is the Evans Bancorp acquisition, completed in May 2025, which added about $1.67 billion in loans, $1.86 billion in deposits, and 18 banking locations in Western New York. That deal drove year-over-year growth of roughly 15.7% in interest-earning assets and loans and 17.4% in deposits, and the bank now expects organic loan growth to settle into the low-to-mid single digits for the rest of the year. The filing shows the underlying momentum even before the full-year acquisition benefit: net interest income for 2025 was $501.5 million, up 25.3%, with the FTE net interest margin up 36 basis points to 3.59% (FY2025 10-K, accession 0001140361-26-007179). A bank that can grow net interest income at that pace while expanding margin is compounding on both axes.

The returns confirm the franchise is high quality. Operating return on average tangible common equity reached 15.5% in the quarter and operating return on assets was 1.29%, both strong figures for a community bank. Those returns sit well above the roughly 10.6% return on equity the current price implies, which is the gap the bull is leaning on. With the retirement-plan-administration business adding fee income that is not rate-sensitive, NBT has a more diversified earnings stream than a pure spread lender, and the price asks for less than the recent results have delivered.

Bear Case

The assumption most exposed in the price is that the recent margin expansion persists, and the filing names the exact mechanism that could undo it. NBT warns that it may experience customer attrition due to competitor pricing on both deposits and loans, and that if the cost of interest-bearing deposits rises faster than the yield on earning assets, net interest income will be negatively affected (FY2025 10-K, accession 0001140361-26-007179). The latest margin gain depended on funding costs falling, the favorable side of that dynamic. In a competitive deposit market, that can reverse: customers migrate from low-cost accounts to higher-yielding ones, and the spread compresses. The whole earnings trajectory the bull cites rests on the funding-cost tailwind continuing, which is not guaranteed.

The second fragile input is the growth rate now that the Evans deal has lapped. Much of the headline 15.7% loan growth came from the acquisition, and management itself guides organic loan growth back to low-to-mid single digits. Stripped of the one-time deal contribution, NBT is a steadily growing community bank in mature upstate and Western New York markets, not a high-growth franchise. The price implies a sustained return on equity near 10.6% versus a recent standard-measure return closer to 8.9%, so it is asking the bank to lift its through-the-cycle return, not merely to hold it, even as the acquisition boost fades.

The third risk is acquisition execution and credit. Integrating Evans added 200 employees and 18 locations, and acquired loan books carry integration and credit uncertainty that surfaces in later quarters, particularly if the regional economy softens. None of this points to distress, the bank is well-capitalized and profitable, but it frames the bear case honestly: the downside is not collapse, it is that a value-priced bank delivers a return closer to its lower historical average than to the elevated post-deal quarter, in which case 1.3x book is the right price rather than a cheap one.

Valuation

A bank is valued on the return it earns on its capital, so the price is read off price-to-book rather than an operating multiple. At $46.74 (June 27, 2026) the market is paying about 1.3x book and assuming a sustained return on equity near 10.6%, against a recent standard-measure run rate of about 8.9%. The solve runs at a cost of equity near 9.2% with 4% terminal growth on common book equity, and each point of cost of equity moves the implied return by roughly 1.3 points. Keep these approximate; they are a single inversion.

What stands out is the breadth of support. Unlike many bank quotes that lean on one frame, here the asset-based, earnings-power, peer-multiple, and growth methods all land at or above the price. None of the families flags the stock as expensive, which is why this reads as a value and asset-supported name rather than a growth bet. The reverse-DCF range centers below the current price but the high end sits right at it, with an acceptable reliability flag, consistent with a profitable franchise priced near fair.

The tension is the spread between the implied return and the trailing one. The implied 10.6% is within reach of what NBT has earned in its better periods, the price-to-book is in the lower half of the peer group, and the latest operating return on tangible common equity of 15.5% comfortably clears the bar. The base rate is reasonable: about 74% of firms earning this return sustained it for roughly a decade. So the valuation case is sound if the recent margin and return strength holds; it tightens if the return reverts toward the high single digits once the acquisition benefit and the funding-cost tailwind fade.

Catalysts

The most recent event was the Q1 2026 report (April 2026): net income of $51.1 million and diluted EPS of $0.98, up from $0.77 a year earlier, with the net interest margin rising to 3.72%, up 7 basis points, on a 9 basis point drop in the cost of funds. Operating return on tangible common equity was 15.5% and operating return on assets was 1.29%. Some coverage noted the quarter missed revenue estimates even as profit and margin improved, so the market read was mixed.

The defining recent transaction was the Evans Bancorp acquisition, completed May 2, 2025, which added about $1.67 billion in loans, $1.86 billion in deposits, 200 employees, and 18 banking locations in Western New York. That deal drove the elevated year-over-year growth, and its integration, deposit retention, and credit performance are the near-term operational catalysts as the acquired book seasons.

Forward, management guided organic loan growth to low-to-mid single digits for the rest of the year, so the next quarterly prints test whether the margin holds and whether organic growth fills in as the deal contribution laps. The watch items are deposit-cost trends and competitor pricing, the pace of loan growth post-Evans, and credit quality in the upstate and Western New York markets. A stable-to-rising margin with steady organic growth would confirm the trajectory; a funding-cost reversal or a growth stall would point toward the lower historical return. Sources: NBT Bancorp Q1 2026 results and earnings coverage (globenewswire.com; stocktitan.net; investing.com; stockstory.org), April 2026.

Peer Cohorts (Per Segment, With Filing Citations)

Banking (reported)

Retirement Plan Administration (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive NBTB report on boothcheck