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On Monday, DA Davidson adjusted its outlook on NBT Bancorp (NASDAQ:NBTB), a $2 billion market cap regional bank, by reducing the price target to $53 from the previous $57 while reaffirming a Buy rating on the company’s stock. The adjustment followed NBT Bancorp’s recent performance, which included a stronger-than-expected pre-provision net revenue (PPNR) driven by an increase in net interest income (NII), fees, and operational expenditures. The company also reported a net interest margin (NIM) expansion of 10 basis points quarter-over-quarter, a 6% growth in deposits, and stable loan balances. According to InvestingPro data, the bank has demonstrated solid revenue growth of 13.26% over the last twelve months.
Shares of NBT Bancorp have risen approximately 2% since the announcement of the PPNR beat. DA Davidson’s analysis indicates that the first quarter of 2025 showed a better NIM than anticipated, which balanced out reduced deal-related purchase accounting adjustments (PAA) due to interest rate changes and weaker loan growth projections for 2025.
Despite the potential political risks associated with the CHIPS Act, the firm believes that NBT Bancorp’s long-term prospects remain attractive. This outlook is supported by the economic growth in upstate New York and the benefits expected from the company’s deal with Evans Bancorp (NYSE:EVBN).
NBT Bancorp’s projected return on assets (ROA) for 2026 stands at an above-peer level of 1.3%, and the stock is currently trading at a P/E ratio of 14x. The company has maintained dividend payments for 40 consecutive years, currently offering a 3.19% yield. With a 24% upside to DA Davidson’s revised price target and trading below InvestingPro’s Fair Value estimate, the firm reiterated its Buy rating, signaling confidence in the stock’s future performance. For deeper insights into NBT Bancorp’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, NBT Bancorp Inc . reported strong financial results for the first quarter of 2025, surpassing earnings expectations with an EPS of $0.80, compared to the forecasted $0.74. The company also outperformed revenue projections, posting $154.67 million against an anticipated $151.04 million. Additionally, NBT Bancorp is preparing for its upcoming merger with Evans Bancorp, expected to close on May 2, which is anticipated to dilute the tangible book value by 4% but provide $0.30 in earnings accretion. Analysts from Raymond (NSE:RYMD) James and D.A. Davidson have shown interest in the company’s strategic initiatives and credit demand stability. The merger is expected to enhance NBT Bancorp’s ability to provide financial services, particularly along the semiconductor corridor in Upstate New York. The company has also revised its loan growth expectations to 2-3%, down from a previous forecast of 3-5%. NBT Bancorp remains focused on managing deposit costs and exploring strategic acquisitions.
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