Le Lézard
Classified in: Business
Subject: ERN

NB Bancorp, Inc. Reports Full Year 2023 Financial Results


NEEDHAM, Mass., Feb. 28, 2024 /PRNewswire/ -- NB Bancorp, Inc. (the "Company") (Nasdaq Capital Market: NBBK), the holding company of Needham Bank, today announced its 2023 financial results.

Concurrent with its mutual-to-stock conversion and as described in the prospectus for its initial public offering ("IPO"), the Company made a one-time donation of $2.0 million in cash and 1.7 million shares of common stock to the Needham Bank Charitable Foundation at a total market value of $19.1 million. This contribution, in addition to a one-time conversion and IPO-related compensation, pension termination expense and tax expense related to the impact of public company tax laws resulted in net income of $9.8 million for the year ended December 31, 2023, compared to net income of $30.1 million reported for the year ended December 31, 2022. Net income excluding conversion and IPO-related expenses, which excludes these one-time amounts, was $34.3 million for the year ended December 31, 2023, compared to $30.1 million reported for the prior year.

"The capital that the Company raised from its IPO will be transformative as we move forward. It will provide us with the ability to grow in a safe and prudent manner, allowing us to be selective in how we deploy the capital into growing market share and serving our customers' needs," said Joseph Campanelli, Chairman, President and Chief Executive Officer. "The team's efforts in completing the IPO were exceptional. We look forward to continue building on our 132-year history of serving the local communities."

SELECTED FINANCIAL HIGHLIGHTS

BALANCE SHEET

Total assets were $4.53 billion as of December 31, 2023, representing an increase of $941.1 million, or 26.2%, from December 31, 2022.

NET INTEREST INCOME

Net interest income was $130.1 million for the year ended December 31, 2023, compared to $105.0 million for the prior year, representing an increase of $25.1 million, or 23.9%. The net interest margin was 3.41% for 2023, representing a decrease of eight basis points from the prior year, primarily due to the unprecedented rapid increase in interest rates, which caused an increase in the cost of liabilities used to fund the Company's loan growth. The increase in interest income was attributable to increases from both rates and volume, which contributed $53.9 million and $46.1 million, respectively. The increase in interest expense for 2023 was primarily driven by increases in rates, which increased interest expense by $54.8 million, along with increases in volume, which increased interest expense by $20.1 million.

NONINTEREST INCOME

Noninterest income was $15.6 million for 2023, compared to $9.3 million for the prior year, representing an increase of $6.3 million, or 67.9%.

NONINTEREST EXPENSE

Noninterest expense for 2023 was $119.9 million, representing an increase of $48.8 million, or 68.5%, from the prior year, and included one-time costs associated with the Company's mutual-to-stock conversion during the year ended December 31, 2023. Noninterest expense excluding conversion and IPO-related expenses for 2023 was $91.0 million, which represents a $19.9 million, or 27.9%, increase from 2022 as the Company continued to invest in infrastructure to support growth.

ASSET QUALITY

ANNOUNCEMENT OF THE 2024 ANNUAL MEETING OF SHAREHOLDERS

The Company's Board of Directors has set the date for its 2024 annual meeting of shareholders to be held on Wednesday, May 22, 2024. The annual meeting will be held over the Internet in a virtual meeting format. The record date for shareholders entitled to vote at the meeting will be Monday, April 1, 2024. Shareholders of record will receive additional details and instructions for meeting participation in the proxy materials that will be made available to them in April.

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 generally accepted accounting principles ("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 Registration Statement Form S-1 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.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)



December 31, 2023


December 31, 2022

Assets






 Cash and due from banks

$

90,485


$

131,073

 Federal funds sold


182,106



25,472

    Total cash and cash equivalents


272,591



156,545







 Available-for-sale securities, at fair value


189,465



245,480







 Total loans


3,889,279



3,015,445

 Allowance for credit losses


(32,222)



(25,028)

    Net loans


3,857,057



2,990,417







 Accrued interest receivable


17,284



10,837

 Banking premises and equipment, net


35,531



35,344

 Depositors Insurance Fund, at cost


139



139

 Federal Home Loan Bank stock, at cost


14,558



13,182

 Federal Reserve Bank stock, at cost


10,323



8,104

 Non-public investments


13,713



10,592

 Bank-owned life insurance ("BOLI")


50,516



49,006

 Prepaid expenses and other assets


53,109



57,167

 Income tax refunds receivable


-



4,134

 Deferred income tax asset


19,126



11,388

    Total assets

$

4,533,412


$

3,592,335







Liabilities and shareholders' equity












 Deposits

$

3,387,348


$

2,886,743

 Mortgagors' escrow accounts


4,229



4,064

 FHLB borrowings


283,338



293,082

 Accrued expenses and other liabilities


81,325



52,399

 Accrued retirement liabilities


19,213



11,982

    Total liabilities


3,775,453



3,248,270







 Commitments and contingencies 












Shareholders' equity












Preferred stock, $0.01 par value, 5,000,000 shares authorized; no shares issued and outstanding


-



-

Common stock, $0.01 par value, 120,000,000 shares authorized; 42,705,729 issued and outstanding    

    at December 31, 2023, no shares issued and outstanding at December 31, 2022


427



-

 Additional paid-in capital


417,030



-

 Unallocated common shares held by Employee Stock Ownership Plan


(13,774)



-

 Retained earnings


366,173



358,466

 Accumulated other comprehensive loss


(11,897)



(14,401)

    Total shareholders' equity


757,959



344,065







    Total liabilities and shareholders' equity

$

4,533,412


$

3,592,335

 

NB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)




For the years ended December 31,



2023


2022

INTEREST AND DIVIDEND INCOME







Interest and fees on loans


$

211,973


$

113,760

Interest and dividends on investment securities



4,773



4,954

Interest on cash equivalents and other



3,755



1,798

   Total interest and dividend income



220,501



120,512








INTEREST EXPENSE







Interest on deposits



76,394



12,689

Interest on FHLB borrowings



14,050



2,859

   Total interest expense



90,444



15,548








NET INTEREST INCOME



130,057



104,964








PROVISION FOR CREDIT LOSSES







Provision for credit losses ? allowance for credit losses



9,657



6,700

Provision for credit losses ? allowance for unfunded commitments



4,228



-

   Total provision for credit losses



13,885



6,700








NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES



116,172



98,264








NONINTEREST INCOME







Gain from bargain purchase and assumption agreement



-



1,070

Customer service fees



7,817



5,138

Increase in cash surrender value of BOLI



1,510



1,157

Mortgage banking income



581



595

Swap contract income



2,153



1,262

Employee retention credit income



3,452



-

Other income



64



53

   Total noninterest income



15,577



9,275








NONINTEREST EXPENSE







Salaries and employee benefits



68,344



47,466

Director and professional service fees



6,232



4,758

Occupancy and equipment expenses



5,192



4,354

Data processing expenses



7,500



5,657

Charitable contribution expense



20,335



1,066

Marketing expenses



2,747



2,338

FDIC and state insurance assessments



4,707



1,829

General and administrative expenses



4,848



3,683

   Total noninterest expense



119,905



71,151








INCOME BEFORE TAXES



11,844



36,388








INCOME TAXES



2,019



6,323








NET INCOME


$

9,825


$

30,065








Weighted average common shares outstanding



42,018,229



N/A

Earnings per share (basic)


$

0.23



N/A

 


NB BANCORP, INC.
NON-GAAP RECONCILIATION
(Unaudited)
(Dollars in thousands)





Years Ended December 31,



2023


2022









Net income (GAAP)

$

9,825


$

30,065









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


1,900



-


Permanent tax differences resulting from public company tax laws (1)


3,680



-


Total impact of non-GAAP adjustment

$

32,593


$

-


Less net tax benefit associated with non-GAAP adjustments


8,096



-


Non-GAAP adjustments, net of tax


24,497



-


Net income excluding conversion and IPO-related expenses (non-GAAP)

$

34,322


$

30,065


Weighted average common shares outstanding


42,018,229



N/A


Earnings per share excluding conversion and IPO-related expenses (non-GAAP)

$

0.82



N/A

(1)

These amounts are reflected in income tax expense and reflect amounts related to current year compensation and a write-down 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
benefit associated with non-GAAP adjustments





Years Ended December 31,



2023


2022









Noninterest expense (GAAP)

$

119,905


$

71,151









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


1,900



-


Total impact of non-GAAP noninterest expense adjustments


28,913



-


Noninterest expense excluding conversion and IPO-related expenses (non-GAAP)

$

90,992


$

71,151





Years Ended December 31,



2023


2022









Net income excluding conversion and IPO-related expenses (non-GAAP)

$

34,322


$

30,065









Average assets


3,973,093



3,118,890


Return on average assets excluding conversion and IPO-related expenses (non-GAAP)


0.86 %



0.96 %


Average shareholders' equity


365,120



331,872


Return on average shareholders' equity excluding conversion and IPO-related expenses (non-GAAP)


9.40 %



9.06 %





As of December 31,



2023


2022









Total shareholders' equity (GAAP)

$

757,959


$

344,065









Subtract:







Intangible assets (core deposit intangible)


1,227



1,377


Total tangible shareholders' equity (non-GAAP)


756,732



342,688


Total assets (GAAP)


4,533,412



3,592,335


Subtract:







Intangible assets (core deposit intangible)


1,227



1,377


Total tangible assets (non-GAAP)

$

4,532,185


$

3,590,958


Tangible stockholders' equity / tangible assets (non-GAAP)


16.7 %



9.5 %


Total common shares outstanding


42,705,729



N/A


Tangible book value per share (non-GAAP)

$

17.72



N/A









HIDDEN_ROW








Years Ended December 31,



2023


2022









Noninterest expense excluding conversion and IPO-related expenses (non-GAAP)

$

90,992


$

71,151









Total revenue


145,634



114,239


Efficiency ratio excluding conversion and IPO-related expenses (non-GAAP)


62.5 %



62.3 %

 

NB BANCORP, INC.
SELECT FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share amounts)



As of and for the years ended
December 31,


2023


2022







Earnings data






   Net interest income

$

130,057


$

104,964

   Noninterest income


15,577



9,275

   Total revenue


145,634



114,239

   Provision for credit losses


13,885



6,700

   Noninterest expense


119,905



71,151

   Pre-tax income


11,844



36,388

   Net income


9,825



30,065

   Net income excluding conversion and IPO-related expenses (non-GAAP)


34,322



30,065

   Noninterest expense excluding conversion and IPO-related expenses (non-GAAP)


90,992



71,151







Per share data






   Earnings per share

$

0.23



 N/A

   Earnings per share excluding conversion and IPO-related expenses (non-GAAP)


0.82



 N/A

   Book value per share


17.75



 N/A

   Tangible book value per share (non-GAAP)


17.72



 N/A







Profitability






   Return on average assets


0.25 %



0.96 %

   Return on average assets excluding conversion and IPO-related expenses (non-GAAP)


0.86 %



0.96 %

   Return on average shareholders' equity


2.69 %



9.06 %

   Return on average shareholders' equity excluding conversion and IPO-related expenses (non-GAAP)


9.40 %



9.06 %

   Net interest margin


3.41 %



3.49 %

   Cost of deposits


2.34 %



0.48 %

   Efficiency ratio


82.3 %



62.3 %

   Efficiency ratio excluding conversion and IPO-related expenses (non-GAAP)


62.5 %



62.3 %







Balance sheet






   Total assets

$

4,533,412


$

3,592,335

   Total loans


3,889,279



3,015,445

   Total deposits


3,387,348



2,886,743

   Total shareholders' equity


757,959



344,065







Asset quality






   Allowance for credit losses (ACL)

$

32,222


$

25,028

   ACL / Total nonperforming loans (NPLs)


297.8 %



194.5 %

   Total NPLs / Total loans


0.28 %



0.43 %

   Net charge-offs / Average total loans


0.10 %



0.00 %







Capital ratios






   Shareholders' equity / Total assets


16.7 %



9.6 %

   Tangible shareholders' equity / tangible assets (non-GAAP)


16.7 %



9.5 %

 

SOURCE Needham Bank


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