NB Bancorp, Inc. Reports First Quarter 2024 Financial Results

NEEDHAM, Mass., April 24, 2024 /PRNewswire/ -- Bancorp, Inc. (the "Company") (Nasdaq Capital Market: NBBK), the holding company of Needham Bank, today announced its first quarter 2024 financial results.

SELECTED FINANCIAL HIGHLIGHTS FOR THE FIRST QUARTER OF 2024

• Net income of $8.7 million, or $0.22 per diluted share, compared to net loss of $13.6 million, or $0.32 loss per diluted share, for the prior quarter.
• Gross loans increased $65.3 million, or 1.7%, to $3.95 billion, from the prior quarter.
• The net interest margin on a fully-tax equivalent basis increased 21 basis points to 3.60%.
• Asset quality remains strong:
  • Annualized net charge-offs of 0.19% of average total loans and non-performing loans of $11.1 million, or 0.28% of total loans. All of the charge-offs in the quarter were in the purchased consumer loan portfolio.
  • Provision for the allowance for credit losses was $4.4 million, down from $5.9 million in the prior quarter and contributing to an increase in the ACL of $2.1 million.
• Total deposits increased $384.7 million or 11.4% from the prior quarter, to $3.77 billion. Core deposits, which exclude brokered deposits, increased $268.3 million or 8.4% from the prior quarter.
• Borrowings and brokered deposits totaled 7.8% of total assets, compared to 10.3% in the prior quarter.
• Strong capital position with 15.8% shareholders equity to total assets and 15.8% tangible shareholders' equity to tangible assets.
• Book value and tangible book value per share were $17.18 and $17.16, respectively.

"This was our first full quarter as a public company reporting our continued success in executing our long-term strategy, which includes growing core deposits and being prudent and patient in our deployment of capital. In today's environment, capital and liquidity are king. I'm happy to note we are well positioned on both fronts," said Joseph Campanelli, Chairman, President and Chief Executive Officer. "The Company is poised to continue to grow market share and remain disciplined in our capital management."

BALANCE SHEET
Total assets were $4.65 billion as of March 31, 2024, representing an increase of $116.6 million, or 2.6%, from December 31, 2023.

• Cash and cash equivalents increased to $315.0 million from $272.6 million, a $42.4 million, or 15.6%, increase from the prior quarter as a result of deposit growth outpacing loan and investment growth.
• Available-for-sale securities increased $17.7 million, or 9.3%, from the prior quarter, to $207.2 million, due to purchases of U.S. treasuries and government agency securities during the quarter.
• Net loans increased to $3.92 billion, representing an increase of $63.3 million, or 1.6%, from the prior quarter as demand for new originations continued. The main driver of the new growth was in commercial real estate loans, which increased $136.7 million, or 9.9%, partially offset by a decline in construction and land development loans of $87.4 million or 14.0%, as $111.0 million of construction loans converted to multi-family loans during the quarter.
• Deposits totaled $3.77 billion representing an increase of $384.7 million, or 11.4%, from the prior quarter. The increase in deposits was the result of growth in customer deposits, primarily certificates of deposit, which increased $150.2 million, or 11.4% from the prior quarter, along with money market accounts and noninterest-bearing demand deposit accounts, which increased by $76.3 million, or 8.6%, and $51.3 million, or 9.7%, respectively from the prior quarter. Additionally, brokered deposits increased $116.4 million, or 63.4%, from the prior quarter, as a result of lower rates versus alternative funding sources.
• Federal Home Loan Bank of Boston ("FHLB") advances totaled $60.8 million representing a decrease of $222.5 million, or 78.5%, from the prior quarter. The decrease in FHLB advances was the result of growth in brokered deposits due to lower rates and overall deposit growth.
• Shareholders' equity was $733.8 million, representing a decrease of $24.1 million, or 3.2%, from the prior quarter. The primary driver for the decrease was a $32.8 million increase in the unallocated shares held by the Employee Stock Ownership Plan ("ESOP") from the final purchases for the funding of the ESOP, partially offset by an $8.7 million increase in retained earnings from net income during the quarter.

NET INTEREST INCOME
Net interest income was $38.6 million for the quarter ended March 31, 2024, compared to $35.3 million for the prior quarter, representing an increase of $3.4 million, or 9.5%.

• The increase in net interest income was primarily driven by an increase in net interest margin of 21 basis points, from 3.60% during the quarter ended March 31, 2024 compared to 3.39% during the prior quarter.
• The increase in interest income during the quarter ended March 31, 2024 was attributable to increases from both volume and rates, which contributed $2.7 million and $1.2 million, respectively.
• The increase in interest expense for the quarter ended March 31, 2024 was primarily driven by increases in rates on interest-bearing deposits, which increased interest expense by $1.5 million, along with increases in volume on interest-bearing deposits, which increased interest expense by $845 thousand.

NONINTEREST INCOME
Noninterest income was $3.5 million for the quarter ended March 31, 2024, compared to $3.3 million for the prior quarter, representing an increase of $249 thousand, or 7.7%.

• Other income was $623 thousand, compared to $18 thousand in the prior quarter, representing an increase of $605 thousand, or 3,361.1%, due to a one-time debit card brand signing bonus.
• Swap contract income was $487 thousand, compared to $95 thousand in the prior quarter, representing an increase of $392 thousand, or 412.6%, due to increased swap contract originations.
• Customer service fees decreased $753 thousand, or 28.6%, from the prior quarter, primarily driven by lower one-way deposit fee income from initial public offering ("IPO") funds that had been swept off-balance sheet.

NONINTEREST EXPENSE
Noninterest expense for the quarter ended March 31, 2024 was $25.6 million, representing a decrease of $27.2 million, or 51.6%, from the prior quarter. This is directly attributable to one-time costs associated with the Company's mutual-to-stock conversion and IPO during the quarter ended December 31, 2023.

• Charitable contributions expense decreased $19.4 million for the quarter ended March 31, 2024 as a result of $19.1 million of expense during the prior quarter resulting from the contribution to the Needham Bank Charitable Foundation in connection with the Company's mutual-to-stock conversion and IPO.
• Salaries and benefits were $17.6 million for the quarter ended March 31, 2024, representing a decrease of $6.8 million, or 27.8%, from the prior quarter, primarily due to a $7.9 million decrease in discretionary employee and a $1.5 million decrease in pension expense as a result of the termination of the Company's defined benefit pension plan during the prior quarter; partially offset by increased salaries expense of $950 thousand, mostly due to increased headcount, increased FICA tax expenses of $620 thousand, due to the reset of taxes at the beginning of the year along with taxes associated with the bonus payout, and increased ESOP compensation costs of $588 thousand from the ESOP implementation.
• Federal Deposit Insurance Corporation and state insurance assessments expense decreased by $1.5 million, or 80.6%, to $361 thousand, as a result of improved capital ratios as a result of the mutual-to-stock conversion and IPO.

INCOME TAXES
Income tax expense for the quarter ended March 31, 2024 was $3.4 million, representing a $10.0 million increase, or 152.6%, from the prior quarter. The increase was primarily driven by the net loss in the prior quarter and no investment tax credits earned during the current quarter. The effective tax rate for the current quarter was 28.3%, compared to (32.5%) in the prior quarter due to income tax credits received in the prior quarter, whereas none were received in the current quarter.

COMMERCIAL REAL ESTATE PORTFOLIO
Commercial real estate loans increased $136.7 million, or 9.9%, to $1.52 billion, during the quarter ended March 31, 2024.

• Multi-family loans increased $111.1 million or 52.9%, as a result of movement from construction and land development loans, along with originations during the quarter.
• Other and mixed use commercial real estate loans increased $35.8 million and $12.6 million, respectively, during the quarter resulting from continued originations.
• Increases noted above were partially offset by a decrease in commercial real estate office loans of $23.5 million, or 10.5%, during the quarter as a result of paydowns on outstanding loans.
• The Company's $321.1 million multifamily 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 $200.1 million office portfolio is predominantly located in the Greater Boston suburbs and mostly consists of Class A and B office space. The typical use 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 $34.3 million as of March 31, 2024, or 0.87% of total gross loans, compared to $32.2 million, or 0.83% of total loans at December 31, 2023. The Company recorded provisions for credit losses of $4.4 million during the quarter ended March 31, 2024, compared to $5.9 million for the prior quarter, which included $539 thousand and $4.2 million in provision for unfunded commitments and loans, respectively.
• Non-performing loans totaled $11.1 million as of March 31, 2024, an increase of $265 thousand, or 2.45%, from $10.8 million at the end of the prior quarter.
• During the quarter ended March 31, 2024, the Company recorded total net charge-offs of $1.8 million, or 0.19% of average total loans on an annualized basis, compared to $1.3 million, or 0.14% on an annualized basis of average total loans in the prior quarter. The increase in total net charge-offs during the quarter ended March 31, 2024 was primarily 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 multifamily 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
	March 31, 2024			December 31, 2023			March 31, 2023
Earnings data
Net interest income	$	38,633		$	35,278		$	31,218
Noninterest income		3,501			3,252			5,867
Total revenue		42,134			38,530			37,085
Provision for credit losses		4,429			5,901			2,072
Noninterest expense		25,564			52,788			23,032
Pre-tax income (loss)		12,141			(20,159)			11,981
Net income (loss)		8,702			(13,617)			8,752
Net income excluding conversion and IPO-related expenses (non-GAAP)		8,981			10,880			8,752
Noninterest expense excluding conversion and IPO-related expenses (non-GAAP)		25,174			23,875			23,032
Per share data
Earnings (loss) per share	$	0.22		$	(0.32)			N/A
Earnings per share excluding conversion and IPO-related expenses (non-GAAP)		0.23			0.26			N/A
Book value per share		17.18			17.75			N/A
Tangible book value per share (non-GAAP)		17.16			17.72			N/A
Profitability
Return (loss) on average assets		0.78 %			(1.25) %			0.99 %
Return on average assets excluding conversion and IPO-related expenses (non-GAAP)		0.80 %			1.00 %			0.99 %
Return (loss) on average shareholders' equity		4.77 %			(13.75) %			10.22 %
Return on average shareholders' equity excluding conversion and IPO- related expenses (non-GAAP)		4.92 %			10.99 %			10.22 %
Net interest margin		3.60 %			3.39 %			3.70 %
Cost of deposits		3.82 %			3.56 %			1.99 %
Efficiency ratio		60.67 %			137.00 %			62.11 %
Efficiency ratio excluding conversion and IPO-related expenses (non-GAAP)		59.75 %			61.96 %			62.11 %
Balance sheet, end of period
Total assets	$	4,650,019		$	4,533,412		$	3,713,901
Total loans		3,954,623			3,889,279			3,214,008
Total deposits		3,772,053			3,387,348			3,140,839
Total shareholders' equity		733,838			757,959			351,785
Asset quality
Allowance for credit losses (ACL)	$	34,306		$	32,222		$	27,931
ACL / Total nonperforming loans (NPLs)		310.1 %			298.4 %			213.5 %
Total NPLs / Total loans		0.28 %			0.28 %			0.41 %
Net charge-offs (annualized) / Average total loans		(0.19) %			(0.14) %			(0.04) %
Capital ratios
Shareholders' equity / Total assets		15.78 %			16.72 %			9.47 %
Tangible shareholders' equity / tangible assets (non-GAAP)		15.76 %			16.70 %			9.44 %

NB BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
	As of									March 31, 2024 change from
	March 31, 2024			December 31, 2023			March 31, 2023			December 31, 2023				March 31, 2023
Assets
Cash and due from banks	$	163,657		$	90,485		$	91,216		$	73,172	80.9 %		$	72,441	79.4 %
Federal funds sold		151,374			182,106			655			(30,732)	(16.9) %			150,719	23010.5 %
Total cash and cash equivalents		315,031			272,591			91,871			42,440	15.6 %			223,160	242.9 %
Available-for-sale securities, at fair value		207,169			189,465			244,917			17,704	9.3 %			(37,748)	(15.4) %
Loans receivable		3,954,623			3,889,279			3,214,008			65,344	1.7 %			740,615	23.0 %
Allowance for credit losses		(34,306)			(32,222)			(27,931)			(2,084)	6.5 %			(6,375)	22.8 %
Net loans		3,920,317			3,857,057			3,186,077			63,260	1.6 %			734,240	23.0 %
Accrued interest receivable		17,843			17,284			11,657			559	3.2 %			6,186	53.1 %
Banking premises and equipment, net		35,106			35,531			36,043			(425)	(1.2) %			(937)	(2.6) %
Federal Home Loan Bank stock, at cost		4,357			14,558			7,862			(10,201)	(70.1) %			(3,505)	(44.6) %
Federal Reserve Bank stock, at cost		10,319			10,323			8,673			(4)	0.0 %			1,646	19.0 %
Non-public investments		13,619			13,852			10,313			(233)	(1.7) %			3,306	32.1 %
Bank-owned life insurance ("BOLI")		50,917			50,516			49,377			401	0.8 %			1,540	3.1 %
Prepaid expenses and other assets		56,289			53,109			55,239			3,180	6.0 %			1,050	1.9 %
Deferred income tax asset		19,052			19,126			11,872			(74)	(0.4) %			7,180	60.5 %
Total assets	$	4,650,019		$	4,533,412		$	3,713,901		$	116,607	2.6 %		$	936,118	25.2 %
Liabilities and shareholders' equity
Deposits	$	3,772,053		$	3,387,348		$	3,140,839		$	384,705	11.4 %		$	631,214	20.1 %
Mortgagors' escrow accounts		4,300			4,229			3,867			71	1.7 %			433	11.2 %
FHLB borrowings		60,837			283,338			160,079			(222,501)	(78.5) %			(99,242)	(62.0) %
Accrued expenses and other liabilities		60,760			81,325			45,623			(20,565)	(25.3) %			15,137	33.2 %
Accrued retirement liabilities		18,231			19,213			11,708			(982)	(5.1) %			6,523	55.7 %
Total liabilities		3,916,181			3,775,453			3,362,116			140,728	3.7 %			554,065	16.5 %
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 March 31, 2024 and December 31, 2023,
respectively, no shares issued and outstanding at March 31, 2023		427			427			-			-	0.0 %			427	0.0 %
Additional paid-in capital		416,812			417,030			-			(218)	(0.1) %			416,812	0.0 %
Unallocated ESOP common stock		(46,590)			(13,774)			-			(32,816)	238.2 %			(46,590)	0.0 %
Retained earnings		374,874			366,173			365,099			8,701	2.4 %			9,775	2.7 %
Accumulated other comprehensive loss		(11,685)			(11,897)			(13,314)			212	(1.8) %			1,629	(12.2) %
Total shareholders' equity		733,838			757,959			351,785			(24,121)	(3.2) %			382,053	108.6 %
Total liabilities and shareholders' equity	$	4,650,019			4,533,412		$	3,713,901		$	116,607	2.6 %		$	936,118	25.2 %

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 March 31, 2024 Change From Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023			December 31, 2023				March 31, 2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	64,000		$	61,696		$	43,760		$	2,304	3.7 %		$	20,240	46.3 %
Interest and dividends on investment securities		1,279			1,161			1,117			118	10.2 %			162	14.5 %
Interest on cash equivalents and other		2,914			1,445			1,140			1,469	101.7 %			1,774	155.6 %
Total interest and dividend income		68,193			64,302			46,017			3,891	6.1 %			22,176	48.2 %
INTEREST EXPENSE
Interest on deposits		28,217			25,845			12,293			2,372	9.2 %			15,924	129.5 %
Interest on borrowings		1,343			3,179			2,506			(1,836)	(57.8) %			(1,163)	(46.4) %
Total interest expense		29,560			29,024			14,799			536	1.8 %			14,761	99.7 %
NET INTEREST INCOME		38,633			35,278			31,218			3,355	9.5 %			7,415	23.8 %
PROVISION FOR CREDIT LOSSES
Provision for credit losses - loans		3,890			1,662			2,072			2,228	134.1 %			1,818	87.7 %
Provision for credit losses - unfunded commitments		539			4,239			-			(3,700)	(87.3) %			539	0.0 %
Total provision for credit losses		4,429			5,901			2,072			(1,472)	(24.9) %			2,357	113.8 %
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		34,204			29,377			29,146			4,827	16.4 %			5,058	17.4 %
NONINTEREST INCOME
Customer service fees		1,880			2,633			1,696			(753)	(28.6) %			184	10.8 %
Increase in cash surrender value of BOLI		401			394			371			7	1.8 %			30	8.1 %
Mortgage banking income		110			112			230			(2)	(1.8) %			(120)	(52.2) %
Swap contract income		487			95			107			392	412.6 %			380	355.1 %
Employee retention credit income		-			-			3,452			-	0.0 %			(3,452)	(100.0) %
Other income		623			18			11			605	3361.1 %			612	5563.6 %
Total noninterest income		3,501			3,252			5,867			249	7.7 %			(2,366)	(40.3) %
NONINTEREST EXPENSE
Salaries and employee benefits		17,560			24,311			14,977			(6,751)	(27.8) %			2,583	17.2 %
Director and professional service fees		1,908			1,247			1,664			661	53.0 %			244	14.7 %
Occupancy and equipment expenses		1,336			1,266			1,375			70	5.5 %			(39)	(2.8) %
Data processing expenses		1,995			2,044			1,717			(49)	(2.4) %			278	16.2 %
Marketing and charitable contribution expenses		742			20,110			1,190			(19,368)	(96.3) %			(448)	(37.6) %
FDIC and state insurance assessments		361			1,863			692			(1,502)	(80.6) %			(331)	(47.8) %
General and administrative expenses		1,662			1,947			1,417			(285)	(14.6) %			245	17.3 %
Total noninterest expense		25,564			52,788			23,032			(27,224)	(51.6) %			2,532	11.0 %
INCOME (LOSS) BEFORE TAXES		12,141			(20,159)			11,981			32,300	(160.2) %			160	1.3 %
INCOME TAXES		3,439			(6,542)			3,229			9,981	(152.6) %			210	6.5 %
NET INCOME (LOSS)	$	8,702		$	(13,617)		$	8,752		$	22,319	(163.9) %		$	(50)	(0.6) %
Weighted average common shares outstanding, basic		39,689,644			42,018,229			N/A			(2,328,585)	(5.5) %			N/A	N/A
Weighted average common shares outstanding, diluted		39,689,644			42,018,229			N/A			(2,328,585)	(5.5) %			N/A	N/A
Earnings (loss) per share, basic	$	0.22		$	(0.32)		$	N/A		$	0.54	(167.7) %		$	N/A	N/A
Earnings (loss) per share, diluted	$	0.22		$	(0.32)		$	N/A		$	0.54	(167.7) %		$	N/A	N/A

NB BANCORP, INC.
AVERAGE BALANCES, INTEREST EARNED/PAID & AVERAGE YIELDS
(Unaudited)
(Dollars in thousands)
		For the Three Months Ended
		March 31, 2024								December 31, 2023								March 31, 2023
		Average								Average								Average
		Outstanding						Average		Outstanding						Average		Outstanding						Average
		Balance			Interest			Yield/Rate (5)		Balance			Interest			Yield/Rate (1)		Balance			Interest			Yield/Rate (5)
Interest-earning assets:
Loans		$	3,903,044		$	64,000		6.60	%	$	3,784,363		$	61,696		6.47	%	$	3,093,708		$	43,760		5.74	%
Securities			193,296			1,279		2.66	%		194,024			1,161		2.37	%		235,243			1,117		1.93	%
Other investments			38,724			416		4.32	%		42,101			430		4.05	%		37,905			537		5.75	%
Short-term investments			175,616			2,498		5.72	%		111,067			1,015		3.63	%		57,678			603		4.24	%
Total interest-earning assets			4,310,680			68,193		6.36	%		4,131,555			64,302		6.17	%		3,424,534			46,017		5.45	%
Non-interest-earning assets			217,883								224,969								197,450
Allowance for credit losses			(32,744)								(32,638)								(26,302)
Total assets		$	4,495,819							$	4,323,886							$	3,595,682
Interest-bearing liabilities:
Savings accounts		$	127,487			16		0.05	%	$	135,629			17		0.05	%	$	159,087			20		0.05	%
NOW accounts			320,392			4,413		5.54	%		330,830			3,981		4.77	%		368,795			668		0.73	%
Money market accounts			851,077			3,495		1.65	%		829,353			3,092		1.48	%		654,043			1,933		1.20	%
Certificates of deposit and individual retirement accounts			1,669,490			20,293		4.89	%		1,580,538			18,755		4.71	%		1,322,760			9,672		2.97	%
Total interest-bearing deposits			2,968,446			28,217		3.82	%		2,876,350			25,845		3.56	%		2,504,685			12,293		1.99	%
FHLB advances			98,886			1,343		5.46	%		220,475			3,179		5.72	%		200,194			2,506		5.08	%
Total interest-bearing liabilities			3,067,332			29,560		3.88	%		3,096,825			29,024		3.72	%		2,704,879			14,799		2.22	%
Non-interest-bearing deposits			611,305								729,928								478,910
Other non-interest-bearing liabilities			83,487								104,211								64,551
Total liabilities			3,762,124								3,930,964								3,248,340
Shareholders' equity			733,695								392,922								347,342
Total liabilities and shareholders' equity		$	4,495,819							$	4,323,886							$	3,595,682
Net interest income					$	38,633							$	35,278							$	31,218
Net interest rate spread (2)								2.48	%							2.45	%							3.23	%
Net interest-earning assets (3)		$	1,243,348							$	1,034,730							$	719,655
Net interest margin (4)								3.60	%							3.39	%							3.70	%
Average interest-earning assets to interest-bearing liabilities			140.54	%							133.41	%							126.61	%

(2) 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.

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average total interest-earning assets.

(5) Annualized

NB BANCORP, INC.
COMMERCIAL REAL ESTATE BY COLLATERAL TYPE
(Unaudited)
(Dollars in thousands)
	March 31, 2024
	Owner- Occupied			Non- Owner- Occupied			Balance			Percentage
Industrial	$	210,700		$	71,950		$	282,650			19 %
Office		44,288			155,836			200,124			13 %
Multi-Family		-			321,124			321,124			21 %
Retail		86,096			105,264			191,360			13 %
Special Purpose		120,242			59,950			180,192			12 %
Hospitality		63			148,244			148,307			10 %
Other		72,489			41,402			113,891			8 %
Mixed-Use		10,518			68,348			78,866			5 %
Total commercial real estate	$	544,396		$	972,118		$	1,516,514			100 %
	December 31, 2023												Change From Three Months Ended March 31, 2024
	Owner- Occupied			Non- Owner- Occupied			Balance			Percentage			Owner- Occupied			Non- Owner- Occupied			Balance			Percentage
Industrial	$	212,246		$	72,288		$	284,534			21 %		$	(1,546)		$	(338)		$	(1,884)			(1) %
Office		39,330			184,246			223,576			16 %			4,958			(28,410)			(23,452)			(10) %
Multi-Family		-			209,982			209,982			15 %			-			111,142			111,142			53 %
Retail		84,269			104,596			188,865			14 %			1,827			668			2,495			1 %
Special Purpose		119,073			59,876			178,949			13 %			1,169			74			1,243			1 %
Hospitality		1,217			148,278			149,495			11 %			(1,154)			(34)			(1,188)			(1) %
Other		58,548			19,580			78,128			6 %			13,941			21,822			35,763			46 %
Mixed-Use		8,974			57,338			66,312			5 %			1,544			11,010			12,554			19 %
Total commercial real estate	$	523,657		$	856,184		$	1,379,841			100 %		$	20,739		$	115,934		$	136,673			10 %
	March 31, 2023												Change From Three Months Ended March 31, 2024
	Owner- Occupied			Non- Owner- Occupied			Balance			Percentage			Owner- Occupied			Non- Owner- Occupied			Balance			Percentage
Industrial	$	64,473		$	51,383		$	115,856			11 %		$	146,227		$	20,567		$	166,794			144 %
Office		34,751			128,486			163,237			15 %			9,537			27,350			36,887			23 %
Multi-Family		-			199,755			199,755			18 %			-			121,369			121,369			61 %
Retail		32,638			103,167			135,805			12 %			53,458			2,097			55,555			41 %
Special Purpose		57,079			51,162			108,241			10 %			63,163			8,788			71,951			66 %
Hospitality		1,239			108,333			109,572			10 %			(1,176)			39,911			38,735			35 %
Other		62,175			104,402			166,577			15 %			10,314			(63,000)			(52,686)			(32) %
Mixed-Use		13,419			77,747			91,166			8 %			(2,901)			(9,399)			(12,300)			(13) %
Total commercial real estate	$	265,774		$	824,435		$	1,090,209			100 %		$	278,622		$	147,683		$	426,305			39 %

NB BANCORP, INC.
NON-GAAP RECONCILIATION
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Net income (GAAP)	$	8,702		$	(13,617)		$	8,752
Add:
Noninterest expense components:
Needham Bank Charitable Foundation contribution resulting from IPO		-			19,082			-
One-time conversion and IPO-related compensation expense		-			7,931			-
Defined benefit pension termination expense		390			1,900			-
Permanent tax differences resulting from public company tax laws (1)		-			3,680			-
Total impact of non-GAAP adjustment	$	390		$	32,593		$	-
Less net tax benefit associated with non-GAAP adjustments		111			8,096			-
Non-GAAP adjustments, net of tax		279			24,497			-
Net income excluding conversion and IPO-related expenses (non-GAAP)	$	8,981		$	10,880		$	8,752
Weighted average common shares outstanding		39,689,644			42,018,229			N/A
Earnings per share excluding conversion and IPO-related expenses (non-GAAP)		0.23			0.26			N/A
(1) These amounts are reflected in income tax expense and reflect amounts related to 2023
compensation and a writedown for future LTIP vesting amounts that are not expected to be deductible
on a tax return. These amounts are not included in the calculation of the tax impact on the non-GAAP adjustments.
	For the Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Noninterest expense (GAAP)	$	25,564		$	52,788		$	23,032
Subtract:
Noninterest expense components:
Needham Bank Charitable Foundation contribution resulting from IPO		-			19,082			-
One-time conversion and IPO-related compensation expense		-			7,931			-
Defined benefit pension termination expense		390			1,900			-
Total impact of non-GAAP noninterest expense adjustments	$	390		$	28,913		$	-
Noninterest expense excluding conversion and IPO-related expenses (non-GAAP)	$	25,174		$	23,875		$	23,032
	For the Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Net income excluding conversion and IPO-related expenses (non-GAAP)	$	8,981		$	10,880		$	8,752
Average assets		4,495,819			4,323,886			3,595,682
Return on average assets excluding conversion and IPO-related expenses (non-GAAP)		0.80 %			1.00 %			0.99 %
Average shareholders' equity		733,695			392,922			347,342
Return on average shareholders' equity excluding conversion and IPO-related
expenses (non-GAAP)		4.92 %			10.99 %			10.22 %
	As of
	March 31, 2024			December 31, 2023			March 31, 2023
Total shareholders' equity (GAAP)	$	733,838		$	757,959		$	351,785
Subtract:
Intangible assets (core deposit intangible)		1,191			1,227			1,340
Total tangible shareholders' equity (non-GAAP)		732,647			756,732			350,445
Total assets (GAAP)		4,650,019			4,533,412			3,713,901
Subtract:
Intangible assets (core deposit intangible)		1,191			1,227			1,340
Total tangible assets (non-GAAP)	$	4,648,828		$	4,532,185		$	3,712,561
Tangible shareholders' equity / tangible assets (non-GAAP)		15.76 %			16.70 %			9.44 %
Total common shares outstanding		42,705,729			42,705,729			N/A
Tangible book value per share (non-GAAP)	$	17.16		$	17.72		$	N/A
	For the Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Noninterest expense excluding conversion and IPO-related expenses (non-GAAP)	$	25,174		$	23,875		$	23,032
Total revenue		42,134			38,530			37,085
Efficiency ratio excluding conversion and IPO-related expenses (non-GAAP)		59.75 %			61.96 %			62.11 %

NB BANCORP, INC.
ASSET QUALITY - NON-PERFORMING ASSETS
(Unaudited)
(Dollars in thousands)
		March 31, 2024			December 31, 2023			March 31, 2023
Real estate loans:
One to four-family residential		$	4,281		$	4,100		$	5,748
Home equity			586			590			570
Commercial real estate			422			422			670
Construction and land development			10			10			10
Commercial and industrial			4,125			4,138			5,077
Consumer			1,640			1,539			1,010
Total		$	11,064		$	10,799		$	13,085
Total non-performing loans to total loans			0.28 %			0.28 %			0.41 %
Total non-performing assets to total assets			0.24 %			0.24 %			0.35 %

NB BANCORP, INC.
ASSET QUALITY - PROVISION, ALLOWANCE, AND NET (CHARGE-OFFS) RECOVERIES
(Unaudited)
(Dollars in thousands)
	For the Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Allowance for credit losses at beginning of the period	$	32,222		$	31,889		$	25,028
Adjustment to allowance for adoption of ASU 2016-13		-			-			1,159
Provision for credit losses		3,890			1,662			2,072
Charge-offs:
Consumer		1,942			1,519			637
Total charge-offs		1,942			1,519			637
Recoveries of loans previously charged off:
Commercial Real Estate		-			12			12
Consumer		136			178			297
Total recoveries		136			190			309
Net (charge-offs) recoveries		(1,806)			(1,329)			(328)
Allowance for credit losses at end of the period	$	34,306		$	32,222		$	27,931
Allowance to non-performing loans		310 %			298 %			213 %
Allowance to total loans outstanding at the end of the period		0.87 %			0.83 %			0.87 %
Net (charge-offs) recoveries (annualized) to average loans outstanding during the period		(0.19) %			(0.14) %			(0.04) %

SOURCE Needham Bank