NB Bancorp Inc.
10/22/2025 | Press release | Distributed by Public on 10/22/2025 14:31
NB Bancorp, Inc. Reports Third Quarter 2025 Financial Results, Declares Quarterly Cash Dividend Investor Contact (Form 8-K)
NB Bancorp, Inc. Reports Third Quarter 2025 Financial Results, Declares Quarterly Cash Dividend
Investor Contact
JP Lapointe, EVP and CFO
781-474-5408
Needham, MA, October 22, 2025 - NB Bancorp, Inc. (the "Company") (Nasdaq Capital Market: NBBK), the holding company of Needham Bank (the "Bank"), today announced its third quarter 2025 financial results. The Company reported net income of $15.4 million, or $0.43 per diluted common share, compared to net income of $14.6 million, or $0.39 per diluted common share, for the prior quarter. Operating net income(1), excluding one-time charges, amounted to $16.0 million, or $0.45 per diluted common share, compared to operating net income(1) of $15.0 million, or $0.40 per diluted common share for the prior quarter. The primary difference between net income and operating net income(1) for the third quarter of 2025 was merger and acquisition costs of $994 thousand (pre-tax) related to the Company's pending acquisition of Provident Bancorp, Inc. ("Provident") and its subsidiary, BankProv, which was announced on June 5, 2025.
"During the third quarter, we continued to deliver strong, record earnings as we executed our growth strategy. We look forward to the anticipated closing and conversion of our acquisition of Provident in the fourth quarter of 2025. We were able to expand new relationships with consumers and businesses across our markets resulting in an increase in both loans and deposits during the third quarter at annualized rates of 15.4% and 27.9%, respectively. We were able to reduce our loan to deposit ratio from 106% to 103% quarter over quarter. However, net interest margin declined by 4 basis points to 3.78% for the third quarter from 3.82% in the second quarter, as a result of a decrease in default interest income earned on loan workouts from the prior quarter, along with loans re-pricing and interest expense associated with two cash flow hedges executed during the third quarter to help protect the Company in a down rate environment. We look forward to the final quarter of 2025 and, now that we have received all required regulatory approvals, welcoming Provident customers and team members to the Company. We expect the final quarter to provide the team with an exciting environment and additional growth opportunities on both sides of the balance sheet," commented Joseph Campanelli, Chairman, President and Chief Executive Officer. "We look forward to differentiating ourselves on customer service, along with new product features and functionality as we continue to grow market share and take advantage of opportunities to enhance shareholder value, including our growth in the Provident market upon the closing of the acquisition on November 14th," Campanelli continued.
Declaration of Dividend
The Board of Directors declared a quarterly cash dividend of $0.07 per share, payable on November 19, 2025, to shareholders of record as of November 5, 2025.
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SELECTED FINANCIAL HIGHLIGHTS FOR THE THIRD QUARTER OF 2025
| ● | Net income of $15.4 million, or $0.43 per diluted common share, compared to net income of $14.6 million, or $0.39 per diluted common share, for the prior quarter. Operating net income(1), excluding one-time charges, amounted to $16.0 million, or $0.45 per diluted common share, compared to operating net income(1) of $15.0 million, or $0.40 per diluted common share, for the prior quarter. |
One-time pre-tax amounts during the current quarter include:
| o | Merger and acquisition costs of $994 thousand related to the Company's pending acquisition of Provident; and |
| o | State voluntary disclosure agreement tax expenses of $561 thousand for new state income tax expenses; partially offset by |
| o | Defined benefit pension termination refund of $739 thousand. |
One-time pre-tax charges during the prior quarter include:
| o | Merger and acquisition costs of $530 thousand related to the Company's pending acquisition of Provident; |
| o | BOLI surrender tax and modified endowment contract penalty of $64 thousand. |
| ● | Net interest margin declined by 4 basis points to 3.78% during the current quarter from 3.82% in the prior quarter. |
| ● | Gross loans increased $175.0 million, or 3.9%, to $4.72 billion, from $4.54 billion the prior quarter. |
| ● | Total deposits increased $297.6 million, or 7.0%, from the prior quarter. Core deposits, which the Company considers to be all non-brokered deposits, increased $163.1 million, or 4.1%, during the current quarter. Brokered deposits increased $134.5 million, or 52.9%, from the prior quarter. |
| ● | Book value per share and tangible book value per share(1) were $18.51 and $18.48, respectively, which increased from $18.09 and $18.06, respectively in the prior quarter. The increase in tangible book value per share(1) was a result of $15.4 million in net income for the quarter, along with a $3.1 million impact from a positive change in accumulated other comprehensive income, partially offset by the repurchase of 921,934 shares during the current quarter at an all-in weighted average cost of $19.02 per share and $2.8 million in dividends paid during the quarter. |
BALANCE SHEET
Total assets amounted to $5.44 billion as of September 30, 2025, representing an increase of $215.8 million, or 4.1%, from June 30, 2025.
| ● | Cash and cash equivalents increased $36.7 million, or 14.2%, to $295.4 million from $258.7 million in the prior quarter, as a result of the increase in deposits of $297.6 million, partially offset by the increase in loans of $175.0 million and a decrease in FHLB borrowings of $86.1 million. |
| ● | Net loans increased $174.5 million, or 3.9%, to $4.67 billion, from the prior quarter as demand for new loan originations and advances continued. The current quarter growth was primarily seen in multi-family residential loans, which increased $113.7 million, or 35.9%, commercial real estate loans, which increased $76.3 million, or 5.6%, commercial and industrial loans, which increased $26.5 million, or 4.2%, residential real estate loans, which increased $18.7 million, or 1.5%, and consumer loans, which increased $9.6 million, or 3.8%; partially offset by a decrease in construction and land development loans of $69.3 million, or 9.6%. |
| ● | Deposits increased $297.6 million, or 7.0%, to $4.57 billion from $4.27 billion in the prior quarter. The increase in deposits was the result of increases in brokered deposits of $134.5 million, or 52.9%, money market accounts of $120.5 million, or 11.0% and certificates of deposit of $92.1 million, or 5.5%, partially offset by a decrease in non-interest bearing demand deposits of $38.4 million, or 5.9%. |
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| ● | FHLB borrowings decreased $86.1 million, or 67.5%, to $41.5 million from $127.6 million during the current quarter as a result of overall deposit growth. |
| ● | Shareholders' equity decreased $88 thousand, or 0.0%, to $737.0 million from the prior quarter, primarily as a result of $17.5 million related to the repurchase of 921,934 shares of common stock at an all-in weighted average cost of $19.02 per share and $2.8 million in dividends paid, partially offset by $15.4 million in net income and a $3.1 million positive change in accumulated other comprehensive income. Shareholders' equity to total assets and tangible shareholders' equity(1) to tangible assets were both 13.5% at the end of the current quarter, and 14.1% at the end of the prior quarter. |
NET INTEREST INCOME
Net interest income was $48.2 million for the current quarter, compared to $47.0 million for the prior quarter, an increase of $1.2 million, or 2.5%. Net interest margin compressed 4 basis points to 3.78% for the quarter from 3.82% in the prior quarter.
| ● | The increase in interest income during the current quarter was primarily attributable to an increase in the average balance of loans. |
| ● | The increase in interest expense for the current quarter was primarily driven by increases in the average balance of FHLB advances, partially offset by declines in the weighted-average rate on certificates of deposit and individual retirement accounts. |
PROVISION FOR CREDIT LOSSES
Provision for credit losses decreased $1.8 million, or 55.8%, to $1.4 million for the current quarter, compared to $3.2 million for the prior quarter.
| ● | The provision for credit losses on loans was $1.0 million for the current quarter, compared to $4.2 million for the prior quarter, representing a decrease of $3.2 million, or 75.5%, primarily driven by construction and development loans transitioning to permanent financing in multi-family residential loans which carry lower loss rates; partially offset by loan growth. |
| ● | The provision for credit losses on unfunded commitments was a provision of $355 thousand for the current quarter, compared to a release of $1.1 million for the prior quarter, representing an increase of $1.4 million, or 132.8%, primarily driven by an increase in the balance of unfunded commitments during the current quarter. |
NONINTEREST INCOME
Noninterest income was $3.6 million for the current quarter, compared to $4.2 million for the prior quarter, representing a decrease of $627 thousand, or 15.0%.
| ● | Swap contract income was $208 thousand for the current quarter, compared to $524 thousand in the prior quarter, representing a decrease of $316 thousand, or 60.3%, due to decreased swap contract demand. |
| ● | The increase in the cash surrender value of BOLI was $631 thousand for the current quarter, compared to $787 thousand for the prior quarter, representing a smaller increase in the cash surrender value of BOLI of $156 thousand, or 19.8%, driven by the receipt of proceeds from surrendered BOLI policies during the prior quarter. |
| ● | Other income was $21 thousand, compared to $172 thousand in the prior quarter, resulting in a decrease of $151 thousand, or 87.8%, from the annual MasterCard branding bonus earned during the prior quarter. |
NONINTEREST EXPENSE
Noninterest expense for the current quarter was $30.4 million, representing an increase of $1.1 million, or 3.6%, from the prior quarter.
| ● | Merger and acquisition expenses were $994 thousand for the current quarter, compared to $530 thousand for the prior quarter, representing a $464 thousand, or 87.5%, increase due to continued expenses related to the Provident acquisition. |
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| ● | Data processing expenses increased $418 thousand, or 16.8%, to $2.9 million in the current quarter, compared to $2.5 million in the prior quarter, primarily as a result of a $218 thousand increase in electronic banking expense and an increase of $180 thousand in management information systems expense as the Company continues to invest in technology, including cash management software. |
INCOME TAXES
Income tax expense for the current quarter was $4.6 million, representing a $460 thousand, or 11.1%, increase from the prior quarter. The increase was primarily driven by $562 thousand in state voluntary disclosure agreements tax expense incurred during the current quarter. The effective tax rate and the operating effective tax rate(1) was 23.0% and 20.2%, respectively, for the current quarter, compared to 22.1% and 21.8%, respectively, for the prior quarter. The primary drivers of the increase in the effective tax rate were the state voluntary disclosure agreements tax expense incurred during the current quarter, along with non-deductible merger and acquisition expenses.
COMMERCIAL REAL ESTATE PORTFOLIO
Commercial real estate loans increased $190.0 million, or 11.2%, to $1.88 billion, during the current quarter.
| ● | Cannabis facility commercial real estate loans decreased $7.0 million, or 2.6%, during the quarter ended September 30, 2025. The Company's cannabis facility commercial real estate portfolio is secured entirely by the underlying commercial real estate of the borrower operation. The vast majority of the cannabis facility loan portfolio balances have a loan-to-value ratio of 65% or lower, with appraisal reports taking a blended approach (using both cannabis and non-cannabis use comparable real estate sales, which we believe are generally more conservative). |
| ● | The cannabis facility portfolio has geographic dispersion, with lower dollar exposure loans remaining local and larger dollar exposure loans generally tied to multi-state operators with a more national footprint. All cannabis facility loan relationships were current at the end of the current quarter. |
| ● | The Company's multi-family real estate loan portfolio increased $113.7 million, or 35.9%, during the current quarter to $430.4 million, as a result of construction and land development loans transitioning to permanent financing and continued originations. The Company's multi-family real estate loan portfolio consists of properties primarily located in the Greater Boston area, primarily all of which are adjustable-rate loans and all of which were performing at September 30, 2025. |
| ● | Hospitality commercial real estate loans increased $75.4 million, or 43.8%, during the current quarter, resulting from continued originations from increased customer demand. |
| ● | The Company's $216.9 million office portfolio consists principally of suburban Class A and B office space used as medical and traditional offices. The portfolio does not consist of high-rise towers located in Boston. |
ASSET QUALITY
| ● | The allowance for credit losses ("ACL") amounted to $43.1 million as of September 30, 2025, or 0.91% of total loans, compared to $42.6 million, or 0.94% of total loans at June 30, 2025. The Company recorded provisions for credit losses of $1.4 million during the current quarter, which included a provision of $1.0 million for loans and a provision of $355 thousand for unfunded commitments, compared to provisions for credit losses of $3.2 million during the prior quarter, which included a provision of $4.2 million for loans and a release of credit losses of $1.1 million for unfunded commitments. |
| ● | The increase in the ACL for the current quarter was the result of loan growth offset by movement of construction and development loans into permanent financing as multi-family residential loans which carry lower reserves. |
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| ● | Non-performing loans totaled $11.4 million as of September 30, 2025, a decrease of $1.1 million, or 9.0%, from $12.5 million at the end of the prior quarter. The decrease was primarily due to the decrease in commercial real estate loans on non-accrual of $1.2 million as a result of the Bale Fire loan relationship payoff, in home equity loans on non-accrual of $367 thousand as a result of the Jacqueline M. Nunez loan relationship payoff, and in one-to-four-family residential loans on non-accrual of $259 thousand, partially offset by increases in consumer loans on non-accrual of $552 thousand during the current quarter. |
| ● | During the current quarter, the Company recorded total net charge-offs of $590 thousand, or 0.05% of average total loans on an annualized basis, compared to a $19 thousand net recovery, or 0.00% of average total loans on an annualized basis, in the prior quarter. The increase in net charge-offs during the current quarter was primarily a result of a $923 thousand recovery on a previously charged-off commercial real estate participation loan during the prior quarter. |
| ● | The Company's loan portfolio consists primarily of commercial real estate and multi-family loans, one-to-four-family residential real estate loans, construction and land development loans, commercial and industrial loans and consumer loans. These loans are primarily made to individuals and businesses located in our primary lending market area, which is the Greater Boston metropolitan area and surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire and Rhode Island. |
| (1) | Represents a non-GAAP measure. See Non-GAAP reconciliation of the corresponding GAAP measures on page 12. |
ABOUT NB BANCORP, INC.
NB Bancorp, Inc. (Nasdaq Capital Market: NBBK) is the registered bank holding company of Needham Bank. Needham Bank is headquartered in Needham, Massachusetts, which is approximately 17 miles southwest of Boston's financial district. Known as the "Builder's Bank," Needham Bank has been helping individuals, businesses and non-profits build for their futures since 1892. Needham Bank offers an array of tech-forward products and services that businesses and consumers use to manage their financial needs. We have the financial expertise typically found at much larger institutions and the local knowledge and commitment you can only find at a community bank. For more information, please visit https://NeedhamBank.com. Needham Bank is a member of FDIC.
Non-GAAP Financial Measures
In addition to results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), this press release contains certain non-GAAP financial measures, including operating net income, operating noninterest expense, operating noninterest income, operating effective tax rate, operating earnings per share, basic, operating earnings per share, diluted, operating return on average assets, operating return on average shareholders' equity, operating efficiency ratio, tangible shareholders' equity, tangible assets and tangible book value per share. The Company's management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a Company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
NB Bancorp Inc. published this content on October 22, 2025, and is solely responsible for the information contained herein. Distributed via EDGAR on October 22, 2025 at 20:31 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]