"The first quarter of 2026 marked a pivotal transition for Needham Bank, following the seamless and successful integration of Provident. As a unified organization, we are advancing our technology infrastructure across a broad range of banking systems to position us for increased revenue growth, with a focus on expanding our cash management and payments capabilities and scalability. While expenses increased from front loading these strategic investment costs and the expenditure related to implementing and operating systems in parallel, necessary to preserve business and customer continuity, we anticipate these investments to drive substantial benefits for both customers and shareholders beginning in the second half of 2026, creating value as we pursue ongoing growth. We continued to execute our strategic plan with discipline, evidenced by strong core fundamentals, growing loans and core deposits on an annualized basis during the quarter by 15.0% and 15.7%, respectively, as we deepened and added more business and consumer relationships. Other key performance highlights include solid operating earnings per diluted share of $0.38, operating return on average equity of 7.43%, and consistently high credit quality. Net interest income increased 10.4% from the prior quarter, expanding net interest margin 2 basis points for the quarter and 33 basis points compared to the first quarter of 2025, showing our continued discipline on select assets and our related pricing," commented Joseph Campanelli, Chairman, President and Chief Executive Officer. "We are proud of our seamless integration, now operating as one team, and remain committed to delivering exceptional service to our customers and community while driving sustained growth and long-term value for our shareholders," Campanelli continued.
Declaration of DividendThe Board of Directors declared a quarterly cash dividend of $0.07 per share, payable on May 20, 2026, to shareholders of record as of May 6, 2026.
SELECTED FINANCIAL HIGHLIGHTS FOR THE FIRST QUARTER OF 2026
Net income of $15.0 million, or $0.36 per diluted common share, compared to net income of $7.7 million, or $0.19 per diluted common share, for the prior quarter. Operating net income(1), excluding one-time charges, amounted to $15.8 million, or $0.38 per diluted common share, compared to operating net income(1) of $21.2 million, or $0.51 per diluted common share, for the prior quarter.
One-time charges during the current quarter include:
Pre-tax trailing merger and acquisition costs of $534 thousand ($390 thousand net of tax) related to the Company's completed acquisition of Provident;
Non-recurring fees for business line expansion of $500 thousand ($366 thousand net of tax); and
Tax expense and a modified endowment contract penalty of $50 thousand related to the surrender of Bank-owned life insurance ("BOLI") policies from policies acquired from BankProv.
One-time pre-tax charges during the prior quarter include:
Pre-tax merger and acquisition costs of $15.7 million ($11.4 million, net of tax) related to the Company's completed acquisition of Provident; and
Tax expense and a modified endowment contract penalty of $2.1 million related to the surrender of BOLI policies from policies acquired from BankProv.
Net interest margin expanded by 2 basis points to 3.94% during the current quarter from 3.92% in the prior quarter.
Gross loans increased $223.8 million, or 3.7%, to $6.21 billion, from $5.99 billion the prior quarter.
Total deposits increased $243.5 million, or 4.2%, to $6.10 billion, from $5.85 billion in the prior quarter.
Core deposits, which the Company considers to be all non-brokered deposits, increased $209.1 million, or 3.9%, to $5.53 billion, from $5.32 billion in the prior quarter.
Brokered deposits increased $34.4 million, or 6.4%, to $570.1 million, from $535.7 million in the prior quarter.
Book value per share and tangible book value per share(1) were $18.83 and $18.00, respectively, compared to $18.77 and $17.94, respectively, in the prior quarter. The increase in tangible book value per share(1) was a result of $15.0 million in net income for the quarter, partially offset by the repurchase of 1,288,509 shares during the current quarter at an all-in weighted average cost of $21.55 per share and $3.2 million in dividends paid during the quarter.
BALANCE SHEETTotal assets amounted to $7.23 billion as of March 31, 2026, representing an increase of $220.3 million, or 3.1%, from $7.01 billion as of December 31, 2025.
Cash and cash equivalents decreased $32.2 million, or 7.9%, to $375.4 million from $407.6 million in the prior quarter, as a result of the increase in loans of $223.8 million and the repurchase of 1,288,509 shares totaling $27.8 million during the current quarter, partially offset by the increase in deposits of $243.5 million during the current quarter.
Net loans increased $231.0 million, or 3.9%, to $6.13 billion, from $5.90 billion in the prior quarter as demand for new loan originations and advances continued. The current quarter increase was primarily seen in commercial and industrial loans, which increased $135.4 million, or 13.4%, construction and land development loans, which increased $52.1 million, or 7.1%, multi-family residential loans, which increased $20.6 million, or 4.0% and residential real estate loans, which increased $11.6 million, or 0.9%.
Deposits increased $243.5 million, or 4.2%, to $6.10 billion from $5.85 billion in the prior quarter. The increase in deposits was the result of increases in money market accounts of $92.3 million, or 5.6%, noninterest bearing demand deposits of $44.6 million, or 5.4%, certificates of deposit of $39.1 million, or 2.0%, brokered deposits of $34.4 million, or 6.4% and NOW accounts of $30.4 million, or 4.6%.
Shareholders' equity decreased $16.2 million, or 1.9%, to $842.8 million, from $858.9 million in the prior quarter, primarily as a result of the repurchase of 1,288,509 shares of common stock at an all-in weighted average cost of $21.55 per share totaling $27.8 million and $3.2 million in dividends paid during the current quarter, partially offset by net income of $15.0 million. Shareholders' equity to total assets and tangible shareholders' equity(1) to tangible assets were 11.7% and 11.2% respectively, at the end of the current quarter, compared to 12.3% and 11.8%, respectively, at the end of the prior quarter.
NET INTEREST INCOMENet interest income was $64.9 million for the current quarter, compared to $58.8 million for the prior quarter, an increase of $6.1 million, or 10.4%. Net interest margin expanded 2 basis points to 3.94% for the current quarter, from 3.92% 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 as a result of the continued execution of our growth strategy.
The increase in interest expense for the current quarter was primarily driven by increases in the average balances of money market and certificates of deposit and individual retirement accounts, partially offset by a decrease in the weighted average rate on money market and certificates of deposit and individual retirement accounts.
The ending balance of gross loans of $6.21 billion, is $119.7 million or 2.0%, higher than the average balance of gross loans at the end of the quarter, primarily the result of one large cannabis loan of $115.0 million closing near the end of the quarter, which did not have a significant impact on the yield during the current quarter.
PROVISION FOR CREDIT LOSSESProvision for credit losses increased $7.4 million, or 695.9%, to a provision for credit losses of $6.3 million for the current quarter, compared to a release of credit losses of $1.1 million for the prior quarter.
The provision for credit losses on loans amounted to $6.4 million for the current quarter, compared to a release of $1.6 million for the prior quarter, representing an increase of $7.9 million, or 510.4%, primarily driven by growth in the balance of commercial and industrial loans, along with increased peer commercial real estate credit losses impacting quantitative reserves, and an elevated qualitative factor risk grade for the commercial and industrial portfolio.
The release of credit losses on unfunded commitments was $54 thousand for the current quarter, compared to a provision of $493 thousand for the prior quarter, representing a decrease of $547 thousand, or 111.0%, primarily driven by net unfunded commitments increasing $58 million in the prior quarter, compared to $14.5 million in the current quarter.
NONINTEREST INCOMENoninterest income was $4.5 million for the current quarter, compared to $4.4 million for the prior quarter, representing an increase of $111 thousand, or 2.5%.
Loss on sale of loans, net, was $1 thousand for the current quarter, compared to $519 thousand in the prior quarter, representing a decrease of $518 thousand, or 99.8%, resulting from the adjustment to record a $66.4 million consumer loan portfolio at fair value, which transferred to loans held for sale during the prior quarter.
Swap contract income was $201 thousand for the current quarter, compared to $677 thousand in the prior quarter, representing a decrease of $476 thousand, or 70.3%, due to decreased swap contract demand.
Customer service fees were $3.1 million for the current quarter, compared to $2.9 million in the prior quarter, representing an increase of $235 thousand, or 8.1%, due to increased cash management fees and customer transactional volume.
Other income was $210 thousand, compared to $442 thousand in the prior quarter, resulting in a decrease of $232 thousand, or 52.5%, from the recognition of a higher amount of preferred dividends from solar tax credit investments during the prior quarter.
NONINTEREST EXPENSENoninterest expense for the current quarter was $42.7 million, representing a decrease of $6.6 million, or 13.4%, from $49.3 million for the prior quarter.
Merger and acquisition expenses were $534 thousand for the current quarter, compared to $15.7 million for the prior quarter, representing a $15.2 million, or 96.6%, decrease due to the completion of the Provident acquisition in the prior quarter.
Salaries and employee benefits expenses were $25.5 million for the current quarter, compared to $21.1 million for the prior quarter, representing a $4.3 million, or 20.5%, increase resulting from a full quarter of increased headcount from the Provident acquisition and continued growth.
Director and professional service fee expenses were $4.0 million for the current quarter, compared to $2.5 million for the prior quarter, representing an increase of $1.5 million, or 62.0%, resulting from a $500 thousand one-time business expansion fee, legal fees from contract reviews and director stock compensation from grants made during the current quarter.
Data processing expenses were $4.4 million for the current quarter, compared to $3.3 million for the prior quarter, representing an increase of $1.1 million, or 32.7%, primarily driven by our significant investment in technology and systems in support of upcoming revenue initiatives, requiring the operation of systems in parallel for a period of time, as well as a full quarter of increased transactional volume from the Provident acquisition.
General and administrative expenses were $3.5 million for the current quarter, compared to $2.8 million for the prior quarter, representing an increase of $711 thousand, or 25.2%, mainly a result of a full quarter of amortization of the Provident core deposit intangible.
INCOME TAXESIncome tax expense for the current quarter was $5.4 million, representing a $1.8 million, or 25.2%, decrease from $7.2 million for the prior quarter. The decrease was primarily driven by the reduction in non-deductible merger and acquisition expenses and BOLI surrender tax and penalty. The effective tax rate and the operating effective tax rate(1) were 26.4% and 26.2%, respectively, for the current quarter, compared to 48.2% and 30.8%, respectively, for the prior quarter. The primary drivers of the decrease in the effective tax rate were gain on BOLI surrender of $6.2 million and non-deductible merger and acquisition expenses of $1.9 million during the prior quarter.
COMMERCIAL REAL ESTATE PORTFOLIOCommercial real estate loans increased $21.5 million, or 0.9%, to $2.46 billion, during the current quarter.
Cannabis facility commercial real estate loans decreased $1.2 million, or 0.6%, to $213.8 million during the current quarter. The Company's cannabis facility commercial real estate portfolio is secured entirely by the underlying commercial real estate of the borrower operation, in addition to, in most cases, a lien on all business assets. 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 $20.6 million, or 4.0%, during the current quarter to $538.2 million. The Company's multi-family real estate loan portfolio consists of properties primarily located in the Greater Boston area, all of which are adjustable-rate loans and performing at the end of the current quarter.
The Company's $323.3 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 $80.2 million as of March 31, 2026, or 1.29% of total loans, compared to $87.4 million, or 1.46% of total loans at December 31, 2025.
The Company recorded a provision for credit losses of $6.3 million during the current quarter, which included a provision for $6.4 million for loans and a release of $54 thousand for unfunded commitments, compared to a release of credit losses of $1.1 million during the prior quarter, which included a release of $1.6 million for loans and a provision of $493 thousand for unfunded commitments.
The decrease in the ACL for the current quarter was primarily driven by the $10.6 million partial charge-off of a purchased credit deteriorated ("PCD") commercial and industrial loan, which carried a $10.8 million reserve, partially offset by increases in ACL balance from provisions for credit losses as a result of loan growth, larger peer commercial real estate credit losses realized in the prior quarter impacting quantitative reserves, and an elevated qualitative factor risk grade for the commercial and industrial portfolio.
Non-performing loans ("NPLs") totaled $45.6 million as of March 31, 2026, an increase of $2.2 million, or 5.1%, from $43.4 million at the end of the prior quarter. The increase was primarily due to the increase in commercial and industrial loans on non-accrual of $2.6 million, partially offset by reductions in one-to-four family residential loans on non-accrual.
During the current quarter, the Company recorded total net charge-offs of $13.6 million, or 0.91% of average total loans on an annualized basis, which included $12.4 million and $1.2 million in net charge-offs on PCD and non-PCD loans, respectively, compared to net charge-offs of $4.4 million, or 0.32% 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 $12.4 million in charge-offs on previously reserved for PCD commercial and industrial loans. Charge-offs on non-PCD loans declined $3.2 million during the current quarter as a result of a $3.8 million charge-off on a previously reserved for commercial and industrial loan during the prior quarter.
As part of its ongoing credit risk management framework and prudent oversight, the Company periodically reviews lending relationships across all portfolios to ensure alignment with its risk appetite, regulatory expectations, and evolving market conditions.
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, mortgage warehouse 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, southern New Hampshire, eastern Connecticut and Rhode Island
(1)
Represents a non-GAAP measure. See Non-GAAP reconciliation of the corresponding GAAP measures on page 13.
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. Needham Bank also provides services to companies in the cannabis industry by providing loans and deposits, along with supporting payment platforms in this industry, such as Mosaic and Corduro.
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 MeasuresIn 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 pre-provision net revenue, operating net income, operating pre-tax 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.
Forward-Looking StatementsStatements 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; risks related to the Company's acquisitions generally, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; unforeseen integration issues or impairment of other intangibles; and the Company's inability to achieve expected revenues, cost savings, synergies, and other benefits at levels or within the timeframes originally anticipated; 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
March 31, 2026
December 31, 2025
March 31, 2025
Earnings data
Net interest income
$
64,868
$
58,752
$
43,526
Noninterest income
4,513
4,402
3,882
Total revenue
69,381
63,154
47,408
Provision for credit losses
6,328
(1,062)
1,158
Noninterest expense
42,701
49,334
28,681
Pre-tax income
20,352
14,882
17,569
Net income
14,984
7,707
12,655
Operating net income (non-GAAP)
15,791
21,200
13,693
Operating noninterest expense (non-GAAP)
41,667
33,594
27,464
Per share data
Earnings per share, basic
$
0.37
$
0.19
$
0.33
Earnings per share, diluted
0.36
0.19
0.33
Operating earnings per share, basic (non-GAAP)
0.39
0.52
0.35
Operating earnings per share, diluted (non-GAAP)
0.38
0.51
0.35
Book value per share
18.83
18.77
18.23
Tangible book value per share (non-GAAP)
18.00
17.94
18.20
Profitability
Return on average assets
0.87 %
0.49 %
1.00 %
Operating return on average assets (non-GAAP)
0.92 %
1.35 %
1.08 %
Return on average shareholders' equity
7.05 %
3.82 %
6.78 %
Operating return on average shareholders' equity (non-GAAP)
7.43 %
10.51 %
7.33 %
Net interest margin
3.94 %
3.92 %
3.61 %
Cost of deposits
2.73 %
2.86 %
3.11 %
Efficiency ratio
61.55 %
78.12 %
60.50 %
Operating efficiency ratio (non-GAAP)
60.06 %
53.19 %
57.93 %
Balance sheet, end of period
Total assets
$
7,226,437
$
7,006,130
$
5,242,157
Total loans
6,209,910
5,986,140
4,464,303
Total deposits
6,096,988
5,853,534
4,326,617
Total shareholders' equity
842,778
858,932
739,611
Asset quality
ACL
$
80,195
$
87,411
$
38,338
ACL / Total NPLs
176.0 %
201.5 %
337.1 %
Total NPLs / Total loans
0.73 %
0.72 %
0.25 %
Annualized net charge-offs / Average total loans
(0.91) %
(0.32) %
(0.13) %
Capital ratios
Shareholders' equity / Total assets
11.66 %
12.26 %
14.11 %
Tangible shareholders' equity / tangible assets (non-GAAP)
11.21 %
11.78 %
14.09 %
NB BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
As of
March 31, 2026 change from
March 31, 2026
December 31, 2025
March 31, 2025
December 31, 2025
March 31, 2025
Assets
Cash and due from banks
$
327,739
$
325,711
$
201,140
$
2,028
0.6 %
$
126,599
62.9 %
Federal funds sold
47,618
81,885
112,306
(34,267)
(41.8) %
(64,688)
(57.6) %
Total cash and cash equivalents
375,357
407,596
313,446
(32,239)
(7.9) %
61,911
19.8 %
Available-for-sale securities, at fair value
277,241
268,959
234,680
8,282
3.1 %
42,561
18.1 %
Loans held for sale, at fair value
63,971
66,447
-
(2,476)
(3.7) %
63,971
0.0 %
Loans receivable, net of deferred fees
6,209,910
5,986,140
4,464,303
223,770
3.7 %
1,745,607
39.1 %
Allowance for credit losses
(80,195)
(87,411)
(38,338)
7,216
(8.3) %
(41,857)
109.2 %
Net loans
6,129,715
5,898,729
4,425,965
230,986
3.9 %
1,703,750
38.5 %
Accrued interest receivable
27,150
25,390
19,533
1,760
6.9 %
7,617
39.0 %
Banking premises and equipment, net
47,335
46,209
34,069
1,126
2.4 %
13,266
38.9 %
Non-public investments
40,738
33,740
24,710
6,998
20.7 %
16,028
64.9 %
Bank-owned life insurance ("BOLI")
110,586
104,335
103,688
6,251
6.0 %
6,898
6.7 %
Prepaid expenses and other assets
67,749
68,079
55,305
(330)
(0.5) %
12,444
22.5 %
Goodwill
18,512
18,512
-
-
0.0 %
18,512
0.0 %
Core deposit intangible, net
18,411
19,303
1,042
(892)
(4.6) %
17,369
1666.9 %
Deferred income tax asset, net
49,672
48,831
29,719
841
1.7 %
19,953
67.1 %
Total assets
$
7,226,437
$
7,006,130
$
5,242,157
$
220,307
3.1 %
$
1,984,280
37.9 %
Liabilities and shareholders' equity
Deposits
Core deposits
$
5,526,936
$
5,317,853
$
4,017,378
$
209,083
3.9 %
$
1,509,558
37.6 %
Brokered deposits
570,052
535,681
309,239
34,371
6.4 %
260,813
84.3 %
Total deposits
6,096,988
5,853,534
4,326,617
243,454
4.2 %
1,770,371
40.9 %
Mortgagors' escrow accounts
4,858
5,193
4,464
(335)
(6.5) %
394
8.8 %
Federal Home Loan Bank ("FHLB") borrowings
189,701
196,235
90,835
(6,534)
(3.3) %
98,866
108.8 %
Accrued expenses and other liabilities
70,983
70,716
60,344
267
0.4 %
10,639
17.6 %
Accrued retirement liabilities
21,129
21,520
20,286
(391)
(1.8) %
843
4.2 %
Total liabilities
6,383,659
6,147,198
4,502,546
236,461
3.8 %
1,881,113
41.8 %
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; 44,765,178 issued and
outstanding at March 31, 2026, 45,770,128 issued and outstanding at December 31, 2025
