NB Bancorp, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income for the third quarter of 2026 was $23.1 million ($0.58 per diluted share), up from $21.1 million ($0.53 per diluted share) in the prior quarter.
• Operating net income increased 8.9% to $23.8 million ($0.60 per diluted share) from $21.9 million ($0.55 per diluted share) in the prior quarter.
• Return on average assets (ROAA) was 1.23% and return on average equity (ROAE) was 10.73%, both increasing from 1.17% and 10.03% respectively in the prior quarter.
• Operating ROAA was 1.26% and operating ROAE was 11.05%, up from 1.21% and 10.39% in the prior quarter.
• Net interest income increased 3.3% to $71.4 million from $69.1 million in the prior quarter.
• Net interest margin (NIM) declined 3 basis points to 3.97% from 4.00% in the prior quarter; NIM excluding purchase accounting adjustments declined 6 basis points to 3.81% from 3.87%.
• Noninterest income decreased 8.2% to $5.1 million from $5.6 million in the prior quarter.
• Noninterest expense increased 5.1% to $46.3 million from $44.0 million in the prior quarter.
• Efficiency ratio increased to 60.5% from 58.9% in the prior quarter; operating efficiency ratio increased to 59.3% from 57.7%.
• Provision for credit losses decreased 61.0% to $1.2 million from $3.2 million in the prior quarter.
• Net charge-offs (annualized) as a percent of average loans increased to 0.31% from 0.07% in the prior quarter.
• Total assets were $7.68 billion, an increase of 3.2% from $7.45 billion in the prior quarter.
• Gross loans increased 5.3% to $6.77 billion from $6.42 billion; net loans increased 5.5% to $6.69 billion.
• Total deposits increased 3.2% to $6.52 billion from $6.32 billion; core deposits increased 4.1% to $5.83 billion.
• Allowance for credit losses (ACL) was $78.3 million (1.16% of gross loans), down from $82.1 million (1.28% of gross loans) in the prior quarter.
• Book value per share was $19.57 and tangible book value per share was $18.91, up from $19.22 and $18.51 respectively in the prior quarter.

Guidance and Future Outlook

• Management expressed confidence in delivering sustainable growth and long-term value, citing continued momentum in franchise execution and disciplined risk management.
• The company noted strong loan demand and continued execution of its strategic plan.
• Investments in technology and systems are ongoing to support upcoming revenue initiatives.
• The company is actively reducing the non-strategic enterprise value loan portfolio acquired from BankProv, which has decreased from $207.0 million at acquisition to $95.9 million as of September 30, 2026.

Business Segments and Product Lines

• Gross loans increased primarily in commercial real estate (excluding multi-family) by 8.6% ($183.2 million), construction and land development by 10.6% ($80.8 million), residential real estate by 3.1% ($43.5 million), and mortgage warehouse loans by 9.4% ($20.4 million).
• Commercial real estate loans, including multi-family, increased 7.5% to $2.89 billion.
• Cannabis facility commercial real estate loans decreased 6.9% to $195.5 million.
• Multi-family real estate loans increased 3.0% to $585.0 million.
• The commercial real estate office portfolio ($365.0 million) consists of suburban Class A and B office space used as medical and traditional offices.
• Swap contract income increased 565.3% to $479 thousand due to increased origination of swaps.
• Customer service fees decreased 4.8% to $3.5 million due to decreased loan fee income.
• Gain on sale of loans turned into a $185 thousand loss from a $227 thousand gain in the prior quarter.

Market and Competitive Landscape

• The company continues to take market share and target "up market" new customers.
• Through the first three quarters of 2026, total loans and total deposits increased by 17.4% and 15.2% respectively on an annualized basis.
• Operating EPS increased 27% through the first three quarters of 2026.
• The loan portfolio is primarily concentrated in the Greater Boston metropolitan area and surrounding New England communities.

Risks and Challenges

• Net charge-offs increased due to a $4.0 million charge-off of a previously reserved purchased-credit-deteriorated (PCD) C&I loan from the BankProv acquisition.
• Non-performing loans increased to $36.1 million (0.53% of total loans) from $27.7 million (0.43%) in the prior quarter, primarily due to an acquired loan being placed on non-accrual.
• Accumulated other comprehensive loss increased by $7.4 million due to market rate increases.
• One-time pre-tax charges in the current quarter included $871 thousand in contract settlement fees.
• One-time pre-tax charges in the prior quarter included $649 thousand in non-recurring fees for business line expansion, $296 thousand in merger and acquisition costs related to the Provident acquisition, and $27 thousand in tax expense and penalties related to BOLI policy surrenders.

Management Commentary and Tone

• Joseph Campanelli, Chairman, President and CEO, stated that the third quarter displayed continued execution of the growth strategy, with strong earnings reflecting franchise momentum and customer trust.
• Management emphasized thoughtful expansion, investment in capabilities and talent, and maintenance of a strong balance sheet and prudent risk management.
• The tone was confident regarding the ability to deliver sustainable growth and long-term value.

Other Key Points

• The Board of Directors declared a quarterly cash dividend of $0.07 per share, payable on November 12, 2026, to shareholders of record as of October 29, 2026.
• Cash and cash equivalents decreased 33.5% to $266.1 million due to loan growth of $346.7 million and FHLB borrowings paydowns of $30.9 million.
• Accrued expenses and other liabilities increased 64.3% to $127.4 million, driven by collateral calls on derivatives, derivative value changes, and new solar tax credit investments.
• The company provides services to the cannabis industry, including loans, deposits, and payment platforms like Mosaic.
• The effective tax rate decreased to 20.3% from 23.2% in the prior quarter, primarily driven by state tax credits purchased during the quarter.