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 SHEETTotal 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 INCOMENet 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 INCOMENoninterest 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 EXPENSENoninterest 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 TAXESIncome 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 PORTFOLIOCommercial 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 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 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 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; 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)