NBBK

Business Context and Reporting Period

NB Bancorp, Inc. (NBBK) is a bank holding company operating primarily through its subsidiary, Needham Bank, in eastern Massachusetts and southern New Hampshire. This Form 10-Q covers the quarterly period ended June 30, 2026. The Company is classified as an emerging growth company and an accelerated filer. A significant event impacting the current period is the acquisition of Provident Bancorp, Inc. and BankProv, completed on November 15, 2025, which added approximately $1.4 billion in assets and $1.23 billion in loans to the balance sheet.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Net interest income increased 47.1% year-over-year for the quarter, driven by a 42.4% increase in average loan balances following the Provident acquisition. Noninterest income rose 29.9%, primarily due to higher customer service fees.
• Expense Increases: Noninterest expenses surged 49.7% year-over-year. This was largely attributable to the Provident acquisition, resulting in higher salaries and benefits, data processing costs, and amortization of core deposit intangibles.
• Profitability: Net income increased 44.9% to $21.1 million for the quarter. Operating net income (non-GAAP) increased 45.4% to $21.9 million, excluding one-time merger and business expansion costs.
• Balance Sheet Expansion: Total assets grew 6.3% from the prior year-end to $7.45 billion. Net loans increased 7.5% to $6.34 billion, with significant growth in commercial real estate and commercial and industrial portfolios.
• Deposit Composition: Total deposits increased 8.0% from the prior year-end. Brokered deposits rose 34.4% to $719.9 million, while core deposits grew 5.3%.

Guidance, Outlook, and Risks

• Management Commentary: Management attributes growth to the successful integration of Provident and organic expansion in commercial and construction lending. The Company completed a share repurchase program in May 2026, purchasing 2.2 million shares for $46.3 million.
• Interest Rate Risk: The Company maintains a liability-sensitive position. Modeling indicates that a 200 basis point increase in interest rates would increase net interest income by 4.1% but decrease the Economic Value of Equity (EVE) by 4.7%.
• Credit Quality: The provision for credit losses increased 120.4% year-over-year for the six-month period, driven by loan growth and specific reserves on purchased credit-deteriorated (PCD) loans from the acquisition. Nonaccrual loans totaled $27.7 million, or 0.43% of total loans.
• Cannabis Industry Exposure: The Company has significant exposure to the cannabis industry, with loans totaling $542.4 million (up 34.0% from year-end 2025) and deposits of $522.1 million. Management notes the risk of changes in federal enforcement.
• Unusual Items: One-time charges included $649,000 in non-recurring fees for business line expansion and $296,000 in final merger costs for the quarter. BOLI surrender penalties and taxes also impacted results.

Investor Verification Checklist

• Merger Integration: Verify the ongoing impact of the Provident acquisition on expense ratios and the amortization of core deposit intangibles ($1.8 million expense YTD 2026).
• Cannabis Sector Risk: Assess the concentration risk of $542.4 million in cannabis-related loans and the potential impact of federal regulatory changes on this portfolio.
• Deposit Stability: Review the reliance on brokered deposits, which now comprise approximately 11.4% of total deposits ($719.9 million), and the cost of funding.
• Share Repurchase Completion: Confirm the cessation of the share repurchase program as of May 2026 and its impact on future capital allocation.
• Provision Trends: Monitor the provision for credit losses, which has risen significantly due to the acquisition of PCD loans and peer group adjustments.