NB Bancorp, Inc. Reports Second Quarter 2024 Financial Results

About this update from Nb Bancorp, Inc.

NEEDHAM, Mass. , July 24, 2024 /PRNewswire/ -- NB Bancorp, Inc. (the "Company") (Nasdaq Capital Market: NBBK), the holding company of Needham Bank , today announced its second quarter 2024 financial results. SELECTED FINANCIAL HIGHLIGHTS FOR THE SECOND QUARTER OF 2024 Net income of $9.5 million , or $0.24 per diluted share, compared to net income of $8.7 million , or $0.22 per diluted share, for the prior quarter. Gross loans increased $142.7 million , or 3.6%, to $4.10 billion , from the prior quarter. Net interest margin on a fully-tax equivalent basis decreased 15 basis points to 3.45%. Asset quality remains strong: Annualized net charge-offs of 0.09% of average total loans and non-performing loans of $20.7 million , or 0.51% of total loans. All of the charge-offs in the quarter were in the purchased consumer loan portfolio. The increase in non-performing loans was primarily due to a $6.2 million office loan that was placed on non-accrual during the quarter. The Company also reserved $1.0 million against this loan during the quarter in the allowance for credit losses ("ACL"). Provision for the ACL was $3.7 million , down from $4.4 million in the prior quarter and contributing to an increase in the ACL of $3.6 million , increasing ACL as a percentage of total loans to 0.92%. Total deposits increased $145.9 million , or 3.9%, from the prior quarter. There was no change in the brokered deposit balance, therefore the $145.9 million increase represents core deposit growth of 4.2%, for the quarter. Borrowings and brokered deposits totaled 7.5% of total assets, compared to 7.8% in the prior quarter. Strong capital position with 15.5% shareholders' equity to total assets and 15.5% tangible shareholders' equity to tangible assets. Book value per share and tangible book value per share were $17.43 and $17.41 , respectively. "We had a very successful second quarter, with loans growing 3.6% during the quarter while deposit growth continues to outpace the loan growth. We continue to see strong loan demand in our market and have continued to show that we can generate deposits to keep pace with the loan demand. Net income was $0.24 per share for the quarter, and we are poised to head into the third quarter in a strong balance sheet position," said Joseph Campanelli , Chairman, President and Chief Executive Officer. "Tangible book value per share grew $0.25 during the quarter and the Company continues to be disciplined in our capital management." BALANCE SHEET Total assets were $4.81 billion as of June 30, 2024 , representing an increase of $155.4 million , or 3.3%, from March 31, 2024 . Cash and cash equivalents increased to $328.9 million from $315.0 million , a $13.9 million , or 4.4%, increase from the prior quarter as a result of net income, deposit growth outpacing loan growth and cash received from investment paydowns. Available-for-sale securities decreased $2.1 million , or 1.0%, from the prior quarter, to $205.1 million , due to paydowns and maturities that were replaced after the end of the quarter. Net loans increased to $4.06 billion , representing an increase of $139.1 million , or 3.5%, from the prior quarter as demand for new originations continued. The main driver of the new growth was in commercial and industrial loans, which increased $87.3 million , or 17.5%, construction and land development loans, which increased $43.1 million or 8.0%, commercial real estate loans, which increased $28.8 million , or 2.4%, and residential real estate loans, which increased $22.3 million , or 1.9%, partially offset by a decline in multi-family residential loans of $53.6 million , or 16.7%. Deposits totaled $3.92 billion representing an increase of $145.9 million , or 3.9%, from the prior quarter. The increase in deposits was the result of growth in customer deposits, primarily certificates of deposit, which increased $131.3 million , or 9.0%, from the prior quarter, along with NOW accounts, which increased $16.2 million , or 4.8%. Shareholders' equity was $744.5 million , representing an increase of $10.6 million , or 1.4%, from the prior quarter, primarily as a result of $9.5 million from net income during the quarter. NET INTEREST INCOME Net interest income was $38.7 million for the quarter ended June 30, 2024 , compared to $38.6 million for the prior quarter, representing an increase of $89 thousand , or 0.2%. The increase in interest income during the quarter ended June 30, 2024 was primarily attributable to increases in the average balance of loans and other interest-earning assets, which contributed $2.9 million . The increase in interest expense for the quarter ended June 30, 2024 was primarily driven by increases in rates on interest-bearing deposits, which increased interest expense by $1.9 million , along with increases in volume on interest-bearing deposits, which increased interest expense by $1.5 million . NONINTEREST INCOME Noninterest income was $3.0 million for the quarter ended June 30, 2024 , compared to $3.5 million for the prior quarter, representing a decrease of $520 thousand , or 14.9%. Other income was $12 thousand , compared to $623 thousand in the prior quarter, representing a decrease of $611 thousand , or 98.1%, due to a one-time debit card brand signing bonus in the prior quarter. Swap contract income was $265 thousand , compared to $487 thousand in the prior quarter, representing a decrease of $222 thousand , or 45.6%, due to fewer swap contract originations. Mortgage banking income increased $318 thousand , or 289.1%, from the prior quarter, primarily driven by a higher volume of residential loan sales during the current quarter. NONINTEREST EXPENSE Noninterest expense for the quarter ended June 30, 2024 was $26.2 million , representing an increase of $649 thousand , or 2.5%, from the prior quarter. Director and professional service fees increased $362 thousand during the quarter ended June 30, 2024 due to increases in professional service fees during the current quarter. Marketing and charitable contributions increased $353 thousand during the quarter ended June 30, 2024 , primarily as a result of increased public relations costs of $149 thousand , agency fees of $67 thousand and promotional costs of $71 thousand . Data processing expenses increased $330 thousand during the quarter ended June 30, 2024 due to investments in information systems and technology resulting in $198 thousand in increased management information systems expenses, $52 thousand in electronic banking expenses and $45 thousand in information technology infrastructure systems. Federal Deposit Insurance Corporation and state insurance assessments expense increased $272 thousand , or 75.3%, to $633 thousand , due to asset growth. Salaries and employee benefits were $16.7 million for the quarter ended June 30, 2024 , representing a decrease of $814 thousand , or 4.6%, from the prior quarter, primarily due to a decline in payroll taxes of $655 thousand , decreased salaries expense of $375 thousand and a one-time $390 thousand pension termination charge in the prior quarter, partially offset by an increase in long-term incentive plan expenses of $375 thousand and increased employee bonus expenses of $94 thousand . INCOME TAXES Income tax expense for the quarter ended June 30, 2024 was $2.4 million , representing a $1.1 million decrease, or 31.1%, from the prior quarter. The decrease was primarily driven by investment tax credits received in the current quarter. The effective tax rate for the current quarter was 20.0%, compared to 28.3% in the prior quarter due to income tax credits received in the current quarter, compared to none received in the prior quarter. COMMERCIAL REAL ESTATE PORTFOLIO Commercial real estate loans decreased $24.8 million , or 1.6%, to $1.49 billion , during the quarter ended June 30, 2024 . Multi-family loans decreased $53.6 million , or 16.7%, as a result of a significant loan payoff, along with fewer originations during the quarter. Decreases noted above were partially offset by an increase in other commercial real estate loans of $30.9 million , or 45.2%, during the quarter resulting from continued originations. The Company's $267.5 million multi-family real estate loan portfolio consists of high-quality, performing loans primarily located in the Greater Boston area, primarily all of which are adjustable-rate loans. The Company's $199.1 million office portfolio is predominantly located in the Greater Boston suburbs and mostly consists of Class A and B office space. The majority of these office loans are medical and lab space and do not consist of high-rise towers located in Boston . ASSET QUALITY The allowance for credit losses was $37.9 million as of June 30, 2024 , or 0.92% of total gross loans, compared to $34.3 million , or 0.87% of total loans at March 31, 2024 . The Company recorded provisions for credit losses of $3.7 million during the quarter ended June 30, 2024 , compared to $4.4 million for the prior quarter, which included a provision of $4.4 million for loans and a credit of $762 thousand for unfunded commitments from a reduction in commitments. Non-performing loans totaled $20.7 million as of June 30, 2024 , an increase of $9.9 million , or 91.8%, from $10.8 million at the end of the prior quarter. The increase was primarily due to one office loan that was placed on non-accrual during the quarter. During the quarter ended June 30, 2024 , the Company recorded total net charge-offs of $878 thousand , or 0.09% of average total loans on an annualized basis, compared to $1.8 million , or 0.19% on an annualized basis of average total loans in the prior quarter. The net charge-offs during the quarter ended June 30, 2024 were due to charge-offs of purchased consumer loans, primarily home improvement and solar loans. 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 . 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 and DIF. 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 net income excluding conversion and IPO-related expenses, noninterest expense excluding conversion and IPO-related expenses, earnings per share excluding conversion and IPO-related expenses, return on average assets excluding conversion and IPO-related expenses, return on average shareholders' equity excluding conversion and IPO-related expenses, efficiency ratio excluding conversion and IPO-related expenses, tangible shareholders' equity, tangible assets, tangible book value per share, and efficiency ratio. 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. Forward-Looking Statements Statements in this press release 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 the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Securities and Exchange Commission (the " SEC "), in our annual reports to our stockholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "outlook," "will," "should," and other expressions that predict or indicate future events and trends and which do not relate to historical matters. Although the Company believes that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company's control. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in general business and economic conditions on a national basis and in the local markets in which the Company operates, including changes which adversely affect borrowers' ability to service and repay loans; changes in customer behavior due to political, business and economic conditions, including inflation and concerns about liquidity; turbulence in the capital and debt markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balances and mix of loans and deposits; changes in interest rates and real estate values; changes in loan collectability and increases in defaults and charge-off rates; decreases in the value of securities and other assets, adequacy of credit loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; changing government regulation; competitive pressures from other financial institutions; changes in legislation or regulation and accounting principles, policies and guidelines; cybersecurity incidents, fraud , natural disasters, and future pandemics; the risk that the Company may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Company's financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company's Form 10-K and updated by our Quarterly Report on Form 10-Q and other filings submitted to the SEC . These statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events. NB BANCORP, INC SELECTED FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share data) As of and for the three months ended June 30, 2024 March 31, 2024 June 30, 2023 Earnings data Net interest income $ 38,722 $ 38,633 $ 31,741 Noninterest income 2,981 3,501 3,095 Total revenue 41,703 42,134 34,836 Provision for credit losses 3,667 4,429 4,044 Noninterest expense 26,214 25,565 22,337 Pre-tax income 11,822 12,140 8,455 Net income 9,453 8,701 6,225 Net income excluding conversion and IPO-related expenses (non-GAAP) 9,453 8,980 6,225 Noninterest expense excluding conversion andIPO-related expenses(non-GAAP) 26,214 25,175 22,337 Per share data Earnings per share $ 0.24 $ 0.22 N/A Earnings per share excluding conversion and IPO-related expenses(non-GAAP) 0.24 0.23 N/A Book value per share 17.43 17.18 N/A Tangible book value per share (non-GAAP) 17.41 17.16 N/A Profitability Return on average assets 0.81 % 0.78 % 0.65 % Return on average assets excluding conversion and IPO-related expenses(non-GAAP) 0.81 % 0.80 % 0.65 % Return on average shareholders' equity 5.13 % 4.77 % 7.01 % Return on average shareholders' equity excluding conversion and IPO-related expenses (non-GAAP) 5.13 % 4.92 % 7.01 % Net interest margin 3.45 % 3.60 % 3.48 % Cost of deposits 3.33 % 3.17 % 2.21 % Efficiency ratio 62.86 % 60.68 % 64.12 % Efficiency ratio excluding conversion and IPO-related expenses (non-GAAP) 62.86 % 59.75 % 64.12 % Balance sheet, end of period Total assets $ 4,805,401 $ 4,650,019 $ 4,028,617 Total loans 4,097,278 3,954,623 3,521,513 Total deposits 3,917,905 3,772,053 3,261,671 Total shareholders' equity 744,462 733,838 356,973 Asset quality Allowance for credit losses (ACL) $ 37,857 $ 34,306 $ 31,473 ACL / Total non-performing loans (NPLs) 182.6 % 317.5 % 235.6 % Total NPLs / Total loans 0.51 % 0.27 % 0.38 % Net charge-offs (annualized) / Average total loans (0.09) % (0.19) % (0.05) % Capital ratios Shareholders' equity / Total assets 15.49 % 15.78 % 8.86 % Tangible shareholders' equity / tangible assets (non-GAAP) 15.47 % 15.76 % 8.83 % NB BANCORP, INC CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except share and per share data) As of June 30, 2024 change from June 30, 2024 March 31, 2024 June 30, 2023 March 31, 2024 June 30, 2023 Assets Cash and due from banks $ 170,255 $ 163,657 $ 81,861 $ 6,598 4.0 % $ 88,394 108.0 % Federal funds sold 158,687 151,374 31,659 7,313 4.8 % 127,028 401.2 % Total cash and cash equivalents 328,942 315,031 113,520 13,911 4.4 % 215,422 189.8 % Available-for-sale securities, at fair value 205,065 207,169 213,977 (2,104) (1.0) % (8,912) (4.2) % Loans receivable 4,097,278 3,954,623 3,521,513 142,655 3.6 % 575,765 16.3 % Allowance for credit losses (37,857) (34,306) (31,473) (3,551) 10.4 % (6,384) 20.3 % Net loans 4,059,421 3,920,317 3,490,040 139,104 3.5 % 569,381 16.3 % Accrued interest receivable 19,007 17,843 12,763 1,164 6.5 % 6,244 48.9 % Banking premises and equipment, net 35,290 35,106 35,982 184 0.5 % (692) (1.9) % Federal Home Loan Bank stock, at cost 4,767 4,357 16,585 410 9.4 % (11,818) (71.3) % Federal Reserve Bank stock, at cost 11,333 10,319 9,435 1,014 9.8 % 1,898 20.1 % Non-public investments 16,053 13,619 11,807 2,434 17.9 % 4,246 36.0 % Bank-owned life insurance ("BOLI") 51,321 50,917 49,749 404 0.8 % 1,572 3.2 % Prepaid expenses and other assets 55,330 56,289 62,502 (959) (1.7) % (7,172) (11.5) % Deferred income tax asset 18,872 19,052 12,257 (180) (0.9) % 6,615 54.0 % Total assets $ 4,805,401 $ 4,650,019 $ 4,028,617 $ 155,382 3.3 % $ 776,784 19.3 % Liabilities and shareholders' equity Deposits $ 3,917,905 $ 3,772,053 $ 3,261,671 $ 145,852 3.9 % $ 656,234 20.1 % Mortgagors' escrow accounts 4,022 4,300 3,741 (278) (6.5) % 281 7.5 % FHLB borrowings 60,835 60,837 337,637 (2) 0.0 % (276,802) (82.0) % Accrued expenses and other liabilities 58,098 60,760 55,500 (2,662) (4.4) % 2,598 4.7 % Accrued retirement liabilities 20,079 18,231 13,095 1,848 10.1 % 6,984 53.3 % Total liabilities 4,060,939 3,916,181 3,671,644 144,758 3.7 % 389,295 10.6 % Commitments and contingencies Shareholders' equity: Preferred stock, $0.01 par value, 5,000,000 shares authorized; no shares issued and outstanding - - - - 0.0 % - 0.0 % Common stock, $0.01 par value, 120,000,000 shares authorized; 42,705,729 issued and outstanding at June 30 and March 31, 2024 , respectively, no shares issued and outstanding at June 30, 2023 427 427 - - 0.0 % 427 0.0 % Additional paid-in capital 416,845 416,812 - 33 0.0 % 416,845 0.0 % Unallocated ESOP common stock (46,002) (46,590) - 588 (1.3) % (46,002) 0.0 % Retained earnings 384,328 374,874 371,325 9,454 2.5 % 13,003 3.5 % Accumulated other comprehensive loss (11,136) (11,685) (14,352) 549 (4.7) % 3,216 (22.4) % Total shareholders' equity 744,462 733,838 356,973 10,624 1.4 % 387,489 108.5 % Total liabilities and shareholders' equity $ 4,805,401 4,650,019 $ 4,028,617 $ 155,382 3.3 % $ 776,784 19.3 % NB BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except share and per share data) For the Three Months Ended Three Months Ended June 30, 2024 Change From Three Months Ended June 30, 2024 March 31, 2024 June 30, 2023 March 31, 2024 June 30, 2023 INTEREST AND DIVIDEND INCOME Interest and fees on loans $ 65,271 $ 64,000 $ 50,040 $ 1,271 2.0 % $ 15,231 30.4 % Interest and dividends on investment securities 1,690 1,279 1,390 411 32.1 % 300 21.6 % Interest on cash equivalents and other 4,161 2,914 818 1,247 42.8 % 3,343 408.7 % Total interest and dividend income 71,122 68,193 52,248 2,929 4.3 % 18,874 36.1 % INTEREST EXPENSE Interest on deposits 31,579 28,217 17,467 3,362 11.9 % 14,112 80.8 % Interest on borrowings 821 1,343 3,040 (522) (38.9) % (2,219) (73.0) % Total interest expense 32,400 29,560 20,507 2,840 9.6 % 11,893 58.0 % NET INTEREST INCOME 38,722 38,633 31,741 89 0.2 % 6,981 22.0 % PROVISION FOR CREDIT LOSSES Provision for credit losses - loans 4,429 3,890 3,958 539 13.9 % 471 11.9 % (Benefit) provision for credit losses - unfunded commitments (762) 539 86 (1,301) (241.4) % (848) (986.0) % Total provision for credit losses 3,667 4,429 4,044 (762) (17.2) % (377) (9.3) % NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 35,055 34,204 27,697 851 2.5 % 7,358 26.6 % NONINTEREST INCOME Customer service fees 1,872 1,880 1,573 (8) (0.4) % 299 19.0 % Increase in cash surrender value of BOLI 404 401 372 3 0.7 % 32 8.6 % Mortgage banking income 428 110 138 318 289.1 % 290 210.1 % Swap contract income 265 487 1,001 (222) (45.6) % (736) (73.5) % Other income 12 623 11 (611) (98.1) % 1 9.1 % Total noninterest income 2,981 3,501 3,095 (520) (14.9) % (114) (3.7) % NONINTEREST EXPENSE Salaries and employee benefits 16,746 17,560 14,398 (814) (4.6) % 2,348 16.3 % Director and professional service fees 2,270 1,908 1,712 362 19.0 % 558 32.6 % Occupancy and equipment expenses 1,461 1,336 1,272 125 9.4 % 189 14.9 % Data processing expenses 2,325 1,995 1,722 330 16.5 % 603 35.0 % Marketing and charitable contribution expenses 1,095 742 864 353 47.6 % 231 26.7 % FDIC and state insurance assessments 633 361 937 272 75.3 % (304) (32.4) % General and administrative expenses 1,684 1,663 1,432 21 1.3 % 252 17.6 % Total noninterest expense 26,214 25,565 22,337 649 2.5 % 3,877 17.4 % INCOME BEFORE TAXES 11,822 12,140 8,455 (318) (2.6) % 3,367 39.8 % INCOME TAXES 2,369 3,439 2,230 (1,070) (31.1) % 139 6.2 % NET INCOME $ 9,453 $ 8,701 $ 6,225 $ 752 8.6 % $ 3,228 51.9 % Weighted average common shares outstanding, basic 39,289,271 39,689,644 N/A (400,373) (1.0) % N/A N/A Weighted average common shares outstanding, diluted 39,289,271 39,689,644 N/A (400,373) (1.0) % N/A N/A Earnings per share, basic $ 0.24 $ 0.22 $ N/A $ 0.02 9.7 % $ N/A N/A Earnings per share, diluted $ 0.24 $ 0.22 $ N/A $ 0.02 9.7 % $ N/A N/A NB BANCORP, INC. AVERAGE BALANCES, INTEREST EARNED/PAID & AVERAGE YIELDS (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2024 March 31, 2024 June 30, 2023 Average Average Average Outstanding Average Outstanding Average Outstanding Average Balance Interest Yield/Rate (4) Balance Interest Yield/Rate (4) Balance Interest Yield/Rate (4) Interest-earning assets: Loans $ 3,987,452 $ 65,271 6.58 % $ 3,903,044 $ 64,000 6.60 % $ 3,347,553 $ 50,040 6.00 % Securities 204,336 1,690 3.33 % 193,296 1,279 2.66 % 236,826 1,390 2.35 % Other investments 39,924 299 3.01 % 38,724 416 4.32 % 40,097 387 3.87 % Short-term investments 279,559 3,862 5.56 % 175,616 2,498 5.72 % 34,951 431 4.95 % Total interest-earning assets 4,511,271 71,122 6.34 % 4,310,680 68,193 6.36 % 3,659,427 52,248 5.73 % Non-interest-earning assets 226,920 217,883 199,540 Allowance for credit losses (34,735) (32,744) (29,070) Total assets $ 4,703,456 $ 4,495,819 $ 3,829,897 Interest-bearing liabilities: Savings accounts $ 117,701 15 0.05 % $ 127,487 16 0.05 % $ 141,315 18 0.05 % NOW accounts 328,192 204 0.25 % 320,392 136 0.17 % 368,886 148 0.16 % Money market accounts 836,757 8,384 4.03 % 851,077 7,772 3.67 % 817,435 5,362 2.63 % Certificates of deposit and individual retirement accounts 1,834,480 22,976 5.04 % 1,669,490 20,293 4.89 % 1,321,866 11,939 3.62 % Total interest-bearing deposits 3,117,130 31,579 4.07 % 2,968,446 28,217 3.82 % 2,649,502 17,467 2.64 % FHLB advances 61,968 821 5.33 % 98,886 1,343 5.46 % 232,109 3,040 5.25 % Total interest-bearing liabilities 3,179,098 32,400 4.10 % 3,067,332 29,560 3.88 % 2,881,611 20,507 2.85 % Non-interest-bearing deposits 694,669 611,305 529,948 Other non-interest-bearing liabilities 88,364 83,487 62,072 Total liabilities 3,962,131 3,762,124 3,473,631 Shareholders' equity 741,325 733,695 356,266 Total liabilities and shareholders' equity $ 4,703,456 $ 4,495,819 $ 3,829,897 Net interest income $ 38,722 $ 38,633 $ 31,741 Net interest rate spread (1) 2.24 % 2.48 % 2.88 % Net interest-earning assets (2) $ 1,332,173 $ 1,243,348 $ 777,816 Net interest margin (3) 3.45 % 3.60 % 3.48 % Average interest-earning assets to interest-bearing liabilities 141.90 % 140.54 % 126.99 % (1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities. (2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets. (4) Annualized NB BANCORP, INC. COMMERCIAL REAL ESTATE BY COLLATERAL TYPE (Unaudited) (Dollars in thousands) June 30, 2024 Owner-Occupied Non-Owner-Occupied Balance Percentage Industrial $ 359,496 $ 67,550 $ 427,046 29 % Multi-Family — 267,544 267,544 18 % Office 32,793 166,276 199,069 13 % Hospitality 61 148,955 149,016 10 % Special Purpose 85,455 59,909 145,364 10 % Retail 29,675 102,562 132,237 9 % Other 27,247 72,041 99,288 7 % Mixed-Use 8,563 63,628 72,191 5 % Total commercial real estate $ 543,290 $ 948,465 $ 1,491,755 100 % March 31, 2024 Change From Three Months Ended June 30, 2024 Owner-Occupied Non-Owner-Occupied Balance Percentage Owner-Occupied Non-Owner-Occupied Balance Percentage Industrial $ 359,022 $ 70,178 $ 429,200 28 % $ 474 $ (2,628) $ (2,154) (1) % Multi-Family — 321,124 321,124 21 % — (53,580) (53,580) (17) % Office 34,369 163,620 197,989 13 % (1,576) 2,656 1,080 1 % Hospitality 63 148,244 148,307 10 % (2) 711 709 0 % Special Purpose 85,235 59,950 145,185 10 % 220 (41) 179 0 % Retail 30,136 105,063 135,199 9 % (461) (2,501) (2,962) (2) % Other 26,961 41,402 68,363 5 % 286 30,639 30,925 45 % Mixed-Use 8,611 62,536 71,147 5 % (48) 1,092 1,044 1 % Total commercial real estate $ 544,397 $ 972,117 $ 1,516,514 100 % $ (1,107) $ (23,652) $ (24,759) (2) % June 30, 2023 Change From Three Months Ended June 30, 2024 Owner-Occupied Non-Owner-Occupied Balance Percentage Owner-Occupied Non-Owner-Occupied Balance Percentage Industrial $ 184,953 $ 69,973 $ 254,926 21 % $ 174,543 $ (2,423) $ 172,120 68 % Multi-Family — 201,776 201,776 16 % — 65,768 65,768 33 % Office 28,751 170,599 199,350 16 % 4,042 (4,323) (281) 0 % Hospitality 38 162,451 162,489 13 % 23 (13,496) (13,473) (8) % Special Purpose 74,939 75,617 150,556 12 % 10,516 (15,708) (5,192) (3) % Retail 26,763 103,056 129,819 10 % 2,912 (494) 2,418 2 % Other 15,322 34,573 49,895 4 % 11,925 37,468 49,393 99 % Mixed-Use 8,911 85,487 94,398 8 % (348) (21,859) (22,207) (24) % Total commercial real estate $ 339,677 $ 903,532 $ 1,243,209 100 % $ 203,613 $ 44,933 $ 248,546 20 % NB BANCORP, INC. NON-GAAP RECONCILIATION (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2024 March 31, 2024 June 30, 2023 Net income (GAAP) $ 9,453 $ 8,701 $ 6,225 Add: Noninterest expense components: Defined benefit pension termination expense $ - $ 390 $ - Less net tax benefit associated with non-GAAP adjustments - 111 - Non-GAAP adjustments, net of tax - 279 - Net income excluding conversion and IPO-related expenses (non-GAAP) $ 9,453 $ 8,980 $ 6,225 Weighted average common shares outstanding 39,289,271 39,689,644 N/A Earnings per share excluding conversion and IPO-related expenses (non-GAAP) 0.24 0.23 N/A For the Three Months Ended June 30, 2024 March 31, 2024 June 30, 2023 Noninterest expense (GAAP) $ 26,214 $ 25,565 $ 22,337 Subtract: Noninterest expense components: Defined benefit pension termination expense - 390 - Total impact of non-GAAP noninterest expense adjustments $ - $ 390 $ - Noninterest expense excluding conversion and IPO-related expenses (non-GAAP) $ 26,214 $ 25,175 $ 22,337 For the Three Months Ended June 30, 2024 March 31, 2024 June 30, 2023 Net income excluding conversion and IPO-related expenses (non-GAAP) $ 9,453 $ 8,980 $ 6,225 Average assets 4,703,456 4,495,819 3,829,897 Return on average assets excluding conversion and IPO-related expenses (non-GAAP) 0.81 % 0.80 % 0.65 % Average shareholders' equity 741,325 733,695 356,266 Return on average shareholders' equity excluding conversion and IPO-related expenses (non-GAAP) 5.13 % 4.92 % 7.01 % As of June 30, 2024 March 31, 2024 June 30, 2023 Total shareholders' equity (GAAP) $ 744,462 $ 733,838 $ 356,973 Subtract: Intangible assets (core deposit intangible) 1,153 1,191 1,302 Total tangible shareholders' equity (non-GAAP) 743,309 732,647 355,671 Total assets (GAAP) 4,805,401 4,650,019 4,028,617 Subtract: Intangible assets (core deposit intangible) 1,153 1,191 1,302 Total tangible assets (non-GAAP) $ 4,804,248 $ 4,648,828 $ 4,027,315 Tangible shareholders' equity / tangible assets (non-GAAP) 15.47 % 15.76 % 8.83 % Total common shares outstanding 42,705,729 42,705,729 N/A Tangible book value per share (non-GAAP) $ 17.41 $ 17.16 $ N/A For the Three Months Ended June 30, 2024 March 31, 2024 June 30, 2023 Noninterest expense excluding conversion and IPO-related expenses (non-GAAP) $ 26,214 $ 25,175 $ 22,337 Total revenue (net interest income plus total noninterest income) 41,703 42,134 34,836 Efficiency ratio excluding conversion and IPO-related expenses (non-GAAP) 62.86 % 59.75 % 64.12 % NB BANCORP, INC. ASSET QUALITY – NON-PERFORMING ASSETS (1) (Unaudited) (Dollars in thousands) June 30, 2024 March 31, 2024 June 30, 2023 Real estate loans: One to four-family residential $ 4,251 $ 4,281 $ 5,155 Home equity 636 586 570 Commercial real estate 7,056 422 670 Construction and land development 2,237 10 10 Commercial and industrial 4,575 4,125 5,304 Consumer 1,974 1,382 1,648 Total $ 20,729 $ 10,806 $ 13,357 Total non-performing loans to total loans 0.51 % 0.27 % 0.38 % Total non-performing assets to total assets 0.43 % 0.23 % 0.33 % (1) Non-performing loans and assets are comprised of non-accrual loans NB BANCORP, INC. ASSET QUALITY – PROVISION, ALLOWANCE, AND NET (CHARGE-OFFS) RECOVERIES (Unaudited) (Dollars in thousands) For the Three Months Ended June 30, 2024 March 31, 2024 June 30, 2023 Allowance for credit losses at beginning of the period $ 34,306 $ 32,222 $ 27,931 Provision for credit losses 4,429 3,890 3,958 Charge-offs: Commercial and Industrial — 369 — Consumer 945 1,573 633 Total charge-offs 945 1,942 633 Recoveries of loans previously charged off: Commercial and Industrial 12 36 12 Consumer 55 100 205 Total recoveries 67 136 217 Net (charge-offs) recoveries (878) (1,806) (416) Allowance for credit losses at end of the period $ 37,857 $ 34,306 $ 31,473 Allowance to non-performing loans 183 % 317 % 236 % Allowance to total loans outstanding at the end of the period 0.92 % 0.87 % 0.89 % Net (charge-offs) recoveries (annualized) to average loans outstanding during the period (0.09) % (0.19) % (0.05) % View original content: https://www.prnewswire.com/news-releases/nb-bancorp-inc-reports-second-quarter-2024-financial-results-302206072.html SOURCE Needham Bank

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