Nb Bancorp, Inc. · NASDAQ:NBBK
Nb Bancorp — Piper Sandler Investor Conference 2024
40 slides from Nb Bancorp's conference presentation, Nov 14, 2024
Slide 1: Piper Sandler Investor Conference
1 November 14, 2024 Piper Sandler Investor Conference
Slide 2: Forward Looking Statements
2 Forward Looking Statements Statements in this presentation that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by
Slide 3: NB Bancorp, Inc. Overview
NB Bancorp, Inc. Overview LU) NBB
Slide 4: Overview of NB Bancorp, Inc.
4 Overview of NB Bancorp, Inc. NASDAQCM: NBBK Headquartered: Needham, MA IPO: December 2023; Raised ~$410M in gross proceeds Sixth largest public community bank headquartered in Massachusetts The “Builder’s Bank” with deep community relationships and extensive expertise Full-service bank with an arr
Slide 5: Well Positioned in Highly Attractive Markets
5 1) Excludes banks with total assets greater than $10 billion; FDIC deposit data as of June 30, 2024 Source: S&P Capital IQ Pro Well Positioned in Highly Attractive Markets Boston-Cambridge-Newton, MA-NH MSA Total Population: 4,934,233 ‘24-’29 Proj. Population Change: 1.60% Median HHI: $108,079 Pro
Slide 6: Industry Drivers of Local Market
6 Largest Employers Boston MSA 2024-2029 Projected HHI Δ Massachusetts 2023 GDP by Industry Boston MSA Median HHI ($) Industry Drivers of Local Market Source: S&P Capital IQ Pro; U.S. Bureau of Economic Analysis; Massachusetts Department of Economic Research 9 4 o ton . . . . 2 o ton . . o ern ent 9
Slide 7: Experienced Institutional Leadership
7 Experienced Institutional Leadership Joseph Campanelli Chairman, President & CEO William Darcey President & CEO – Provider Insurance Group Paul J. Ayoub Chair – Nutter McClennen & Fish LLP Susan Elliott Retired EVP – Federal Home Loan Bank of Boston Angela Jackson CEO – Future Forward Strategies C
Slide 8: Investment Highlights
8 Investment Highlights Experienced management team and talent base to grow market share, invest for the future and serve the community Focused on driving franchise value via relationship-based banking and active community involvement History of consistent earnings through various market cycles Exce
Slide 9: Financial Highlights for the Third Quarter 2024
9 Financial Highlights for the Third Quarter 2024 • GAAP Net income of $8.4 million, or $0.21 per diluted share for the quarter. • Operating Net Income1 (Non-GAAP) of $13.1 million, or $0.33 per diluted share for the quarter. • Gross loans increased $151.8 million, or 3.7%, to $4.25 billion, from th
Slide 10: Financial Highlights for the Third Quarter 2024 (Continued)
10 Financial Highlights for the Third Quarter 2024 (Continued) • Total deposits increased $124.9 million or 3.2% from the prior quarter, to $4.04 billion. Maintained the loans to deposit ratio at 105% from the prior quarter while growing loans $124.9 million. • Borrowings and brokered deposits total
Slide 11: Balance Sheet Restructuring
11 Balance Sheet Restructuring • Available-for-Sale Securities: • Sold $27 million of securities at a $1.9 million net loss, with the proceeds reinvested into higher-yielding securities • Sold securities were yielding 0.97% with remaining duration of 2.4 years and were reinvested into securities wit
Slide 12: Financial Overview
Financial Overview LU) NSB
Slide 13: History of Targeted Balance Sheet Growth
13 Total Deposits ($M) Tangible Common Equity ($M) Total Assets ($M) Total Gross Loans ($M) History of Targeted Balance Sheet Growth 13 $2,454 $2,664 $2,923 $3,592 $4,533 $4,650 $4,805 $5,003 2019 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 $2,078 $2,195 $2,105 $3,015 $3,889 $3,955 $4,097 $4,249 2019 2020
Slide 14: Track Record of Strong Performance
14 Operating Return on Avg. Tangible Common Equity (%)¹ Operating Net Income ($M)1, 2 Operating Return on Average Assets (%)¹ Operating Return on Average Equity (%)¹ Track Record of Strong Performance 1) See Appendix for reconciliation of non-GAAP financial metrics 2) Q Q2 an Q ’24 operating net in
Slide 15: Track Record of Strong Performance (Cont.)
15 Operating Noninterest Income / Average Assets (%)¹ Operating Noninterest Expense / Average Assets (%)¹ Net Interest Margin (%) Efficiency Ratio (%)¹ Track Record of Strong Performance (Cont.) 1) See Appendix for reconciliation of non-GAAP financial metrics 15 2.92% 2.83% 2.81% 3.49% 3.41% 3.60% 3
Slide 16: Capital Ratios
16 14.81%¹ 11.28%¹ 17.83%² 17.91%² 17.08%² 2019 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 14.08%¹ 10.54%¹ 16.91%² 16.93%² 16.20%² 2019 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 Tier 1 Capital Ratio (%) Total Capital Ratio (%) Tangible Common Equity / Tangible Assets (%) Leverage Ratio (%) Capital Ratios 1)
Slide 17: Loan Portfolio & Asset Quality
17 Loan Portfolio & Asset Quality
Slide 18: Diversified Loan Portfolio
18 Note: Loan composition reflects regulatory holding company data Diversified Loan Portfolio Q3’24 Yield on Loans: 6.70% $4.3B Q3’24 Total 18 1-4 Family including HELOCs 29% Multifamily 6% Commercial Real Estate 30% Construction & Development 16% Commercial & Industrial 13% Consumer 6%
Slide 19: Loan Portfolio Stats
19 Loan balances above are not shown net of deferred fees Loan Portfolio Stats Loan Type Balance Wtd. Avg. Rate Wtd. Avg. Maturity (Yrs) 1-4 Family (incl. HELOCs) $1,233,943 5.12% 26.2 Multi-family 272,561 6.00% 17.2 Commercial Real Estate 1,279,954 6.66% 9.4 Construction 666,936 7.70% 3.6 C&I 566,9
Slide 20: Loan Portfolio Concentrations
20 Construction & Development / Total Risk-Based Capital (%)¹ Commercial Real Estate / Total Risk-Based Capital (%)¹ Loan Portfolio Concentrations 1) Financials reflect regulatory holding company data 20 121%² 125%² 129%² 144%² 79%² 68%² 72%² 84%² 2019 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 274% 280%
Slide 21: Commercial Real Estate Portfolio
21 Owner-Occupied CRE By Collateral Type Non-Owner-Occupied CRE By Collateral Type Commercial Real Estate Portfolio $601M Q3’24 Total $951M Q3’24 Total 21 Multi-Family 29% Cannabis Facility 2% Office 19% Hospitality 17% Retail 10% Other 6% Industrial 6% Mixed Use 7% Special Purpose Cannabis 6% Facil
Slide 22: Loans Needham Bank Makes and Doesn't Make
22 Loans Needham Bank Makes Loan Nee ha ank Doe n’t ake Needham Bank Loan Examples 22
Slide 23: Office Portfolio Overview
23 Office Portfolio Overview • Our $215.4 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. $215M Q3’24 Total 23 Office Portfolio as of 9/30/24 Weighted A
Slide 24: Overview of C&I Portfolio
24 C&I By Type C&I By Geography Overview of C&I Portfolio $567M Q3’24 Total $567M Q3’24 Total 24 Newport Beach, CA 12% Los Angeles, CA 10% Boston 9% Natick, MA 7% Branford, CT 6% Vero Beach, FL 6% Portsmouth, NH 5% Boca Raton, FL 4% Miami, FL 4% Quincy, MA 4% West Roxbury, MA 3% Pikesville, MD 3% Wy
Slide 25: Overview of Construction Lending
25 Construction By Type Construction By Geography Overview of Construction Lending $667M Q3’24 Total $667M Q3’24 Total 25 Boston, MA 23% Newton, MA 7% Natick, MA 7% Milton, MA 6% Cranston, RI 6% Needham, MA 6% Middleton, MA 6% Quincy, MA 5% Weston, MA 3% Waltham, MA 3% Fairfield, CT 3% Other 26% Mul
Slide 26: Cannabis Business Highlights
26 Cannabis Business Highlights • As of September 30, 2024, we had outstanding loan balances of $458.0 million to cannabis businesses: • $301.9 million was direct to cannabis entities • $156.1 million was indirect to cannabis entities; and, • 68% of the total outstanding loans were collateralized by
Slide 27: Asset Quality: NPA Trends
27 $14.2¹ $25.9¹ $6.0 $13.0 $10.8 $10.8 $20.7 $16.0 $3.5¹ $3.4¹ $4.5 $8.3 $0.9 2019 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 Nonaccruals ($M) TDRs ($M) OREO ($M) Reserves / Loans (%) & Reserves / NPLs (%) NPA Trends Asset Quality 1) Financials reflect bank level call report data 2) Financials reflect r
Slide 28: Historically Strong Credit Culture
28 1) Reflects annualized metrics 2) Financials reflect bank-level call report data Note: Values may not sum due to rounding Historically Strong Credit Culture NCOs / Average Loans (%)¹ • Our loan portfolio consists primarily of commercial real estate and multifamily loans, one-to four-family reside
Slide 29: Funding & Liquidity Management
29 Funding & Liquidity Management
Slide 30: Balanced Deposit Base
30 Note: Deposit composition reflects regulatory holding company data Balanced Deposit Base Q3’24 Cost of Deposits: 3.37% $4.0B Q3’24 Total 100% of the institution’s deposits are insured 30 Transaction 22% Savings & MMDA Retail 28% 11% Jumbo 31% Brokered 8%
Slide 31: Support of Strong Deposit Base
31 Note: Deposit composition reflects regulatory holding company data Support of Strong Deposit Base Cost of Deposits 1.32% 1.03% 0.43% 0.48% 2.34% 3.15% 3.33% 3.37% 0.00% 2.00% 4.00% 6.00% 2019 2020 2021 2022 2023 Q1'24 Q2'24 Q3'24 Balance WAR Balance WAR Balance ($) Balance (%) WAR Noninterest-bea
Slide 32: Upcoming Certificates of Deposit Maturities
32 Note: Deposit composition reflects regulatory holding company data Upcoming Certificates of Deposit Maturities 32 Time Deposit Maturities ($M) 5.07% 4.96% 4.90% 4.71% 1.19% $0 $200 $400 $600 $800 12/31/2024 3/31/2025 6/30/2025 9/30/2025 12/31/2025 Brokered Deposit Maturities ($M) 4.97% 4.84% 4.71
Slide 33: Overview of Securities Portfolio
33 Overview of Securities Portfolio $203M Total Q3’24 Yield on Securities: 3.44% 33 U.S. Treasuries 27% U.S. Gov't Agencies 3% Mortgage-Backed Securities 15% Corporate Bonds 44% Collateralized Mortgage Obligations 6% Municipal Obligations 5% Balance WAC Balance WAC Balance ($) WAC Corporate Bonds $8
Slide 34: Interest Rate Sensitivity
34 Interest Rate Sensitivity 34 At September 30, 2024 Change in Interest Rates Net Interest Income Year 1 Change (bps) Year 1 Forecast ($000) From Level +300 $187,265 7.9% +200 183,249 5.6% +100 179,239 3.3% - - 173,494 - - (100) 166,375 (4.1%) (200) 159,771 (7.9%) (300) 154,862 (10.7%)
Slide 35: Prudent Liquidity Management
35 Prudent Liquidity Management As of September 30, 2024, the Company had: • $116.3 million of outstanding advances from the Federal Home Loan Bank of Boston (“FHLBB”) • $329.9 million of brokered deposits • $730.7 million of unused borrowing capacity with the FHLBB • $36.6 million available with th
Slide 36: Appendix
Appendix LU) NBB
Slide 37: Notes and Reconciliation of GAAP and Non-GAAP Financial Measures
37 Notes and Reconciliation of GAAP and Non-GAAP Financial Measures In addition to results presented in accordance with accounting principles generally accepted in the United States of America (“ P”) thi pre relea e ontain ertain non-GAAP financial measures, including operating net income, operating
Slide 38: Notes and Reconciliation of GAAP and Non-GAAP Financial Measures (Cont.)
38 Notes and Reconciliation of GAAP and Non-GAAP Financial Measures (Cont.) In addition to results presented in accordance with accounting principles generally accepted in the United States of America (“ P”) thi pre relea e ontain ertain non-GAAP financial measures, including operating net income, o
Slide 39: Executive Management Biographies
39 Executive Management Biographies Joseph Campanelli Chairman, President & CEO Salvatore Rinaldi EVP & Chief Operating Officer JP Lapointe EVP & Chief Financial Officer Mr. Campanelli has served as President and Chief Executive Officer of Needham Bank since joining the Bank in January 2017 and was
Slide 40: Thank You
Thank You a) —~