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NB

NB Bancorp, Inc. (NBBK)·Q3 2025 Earnings Summary

Executive Summary

  • NBBK delivered record quarterly results: GAAP diluted EPS $0.43 and operating diluted EPS $0.45, with net income $15.4M and total revenue $51.7M; EPS topped S&P Global consensus by $0.03, while net interest margin compressed 4 bps to 3.78% . EPS consensus mean was $0.42 and actual Primary EPS was $0.45*.
  • Loans and deposits grew strongly QoQ at annualized rates of 15.4% and 27.9%; loan-to-deposit ratio improved to 103% (from 106%), aided by $297.6M deposit inflows and $175.0M loan growth .
  • Credit costs improved with total provision down to $1.4M and NPLs/loans at 0.24%; ACL coverage to NPLs rose to 379% .
  • Company declared a $0.07 quarterly dividend (unchanged); strategic catalyst: all regulatory approvals received for Provident merger with targeted close around Nov 14, 2025 .
  • Headwinds: NIM compression from lower default interest, loan repricing, and hedge costs; higher noninterest expense from M&A and tech investments .

What Went Well and What Went Wrong

What Went Well

  • Strong earnings momentum: net income up to $15.4M and operating net income $16.0M, with operating diluted EPS $0.45; management highlighted “strong, record earnings” . CEO: “we continued to deliver strong, record earnings as we executed our growth strategy” .
  • Balance sheet growth and mix improvement: deposits +$297.6M (+7.0%) and loans +$175.0M (+3.9%) QoQ; L/D improved to 103% from 106% .
  • Asset quality stable-to-better: NPLs/loans fell to 0.24% and ACL/NPL jumped to 379%; provision for credit losses declined to $1.4M QoQ .

What Went Wrong

  • Margin pressure: NIM declined 4 bps to 3.78%, driven by lower default interest on workouts, loan repricing, and interest expense from two cash flow hedges to protect in a down-rate scenario .
  • Higher operating costs: noninterest expense rose $1.1M QoQ (+3.6%), including $994k M&A costs and +$418k in data processing as the company invests in cash management tech .
  • Lower fee income: noninterest income fell $627k QoQ (-15.0%) on reduced swap income (-$316k) and smaller BOLI cash value increase (-$156k) .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Net Interest Income ($M)$41.3 $47.0 $48.2
Noninterest Income ($M)$1.3 $4.2 $3.6
Total Revenue ($M)$42.6 $51.2 $51.7
Provision for Credit Losses ($M)$2.6 $3.2 $1.4
Noninterest Expense ($M)$24.6 $29.3 $30.4
Pre-tax Income ($M)$15.4 $18.7 $20.0
Net Income ($M)$8.4 $14.6 $15.4
Diluted EPS ($)$0.21 $0.39 $0.43
Operating Diluted EPS ($)$0.33 $0.40 $0.45
Net Interest Margin (%)3.51% 3.82% 3.78%
Cost of Deposits (%)3.37% 3.00% 2.92%
Efficiency Ratio (%)57.73% 57.25% 58.71%
Balance Sheet & Credit KPIsQ3 2024Q2 2025Q3 2025
Total Assets ($M)$5,002.4 $5,226.6 $5,442.4
Total Loans ($M)$4,249.1 $4,541.2 $4,716.1
Total Deposits ($M)$4,042.7 $4,268.1 $4,565.7
Shareholders’ Equity ($M)$747.4 $737.1 $737.0
Core Deposits ($M)$3,712.9 $4,013.9 $4,177.0
Brokered Deposits ($M)$329.8 $254.2 $388.7
FHLB Borrowings ($M)$116.3 $127.6 $41.5
ACL ($M)$37.6 $42.6 $43.1
NPLs/Loans (%)0.38% 0.27% 0.24%
ACL/NPLs (%)234.9% 341.4% 379.1%
Net (Charge-offs)/Recoveries (annualized, %)(0.50)% 0.00% (0.05)%
EPS vs. ConsensusQ3 2025
Primary EPS Consensus Mean ($)0.42*
Primary EPS Actual ($)0.45*
Primary EPS – # of Estimates1*

Values retrieved from S&P Global.*

Segment / Portfolio Breakdown (Commercial Real Estate)

Collateral Type (Balance, $M)Q3 2025 Balance% of CREQoQ Δ ($M)YoY Δ ($M)
Multi-Family$430.4 23% +$113.7 +$157.9
Cannabis Facility$263.9 14% -$7.0 -$53.4
Hospitality$247.5 13% +$75.4 +$90.4
Office$194.7 11% +$2.7 -$13.8
Industrial$192.4 10% -$9.6 +$29.1
Mixed-Use$168.5 9% +$0.4 +$95.9
Special Purpose$137.7 7% +$2.6 +$1.4
Retail$125.0 7% -$1.4 +$9.2
Other$120.1 6% +$13.2 +$10.9
Total CRE$1,880.1 100% +$190.0 +$327.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ3 2025$0.07 (Q2’25 declared) $0.07 payable Nov 19, 2025; record Nov 5, 2025 Maintained
Provident Merger TimingQ4 2025Announced Jun 5, 2025 (closing expected Q4) All regulatory approvals received; expected closing ~Nov 14, 2025 Clarified timeline

Company did not issue quantitative guidance for revenue, margins, OpEx, OI&E, or tax rate in Q3 materials .

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not available in our document catalog (searched Q3 date range and “earnings-call-transcript” for NBBK; no results). Themes below reflect management remarks from Q1–Q3 press releases.

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Rates & Net Interest MarginNIM expanded to 3.61% in Q1 and to 3.82% in Q2 on lower deposit costs and default interest/workouts NIM compressed 4 bps to 3.78% due to lower default interest, loan repricing, and hedge costs Moderating margin post-peak
Deposits & LiquidityQ1: Deposits +$149M, L/D 102.3% ; Q2: Core deposits flat, brokered down on maturities Deposits +$297.6M; L/D improved to 103%; brokered +$134.5M; FHLB borrowings down $86.1M Liquidity strengthened QoQ
Credit QualityQ1: NPLs fell to 0.25% of loans; net charge-offs elevated in consumer ; Q2: NPLs rose to 0.27%; strong CRE recovery NPLs down to 0.24%; ACL/NPLs 379%; provision lowered to $1.4M Stable/improving coverage
Technology & OperationsQ2: conversion to Q2 cash management/treasury services platform Data processing +$418k as tech investments continue Ongoing tech spend and platform build
M&A / StrategicQ2: Provident deal announced All regulatory approvals received; close expected ~Nov 14; integration preparation underway Near-term integration catalyst
CRE Portfolio MixQ2: Cannabis exposure reduced; mixed-use growth Multi-family +$113.7M; hospitality +$75.4M; cannabis -$7.0M; office remains suburban-focused Shift toward multi-family/hospitality

Management Commentary

  • CEO Joseph Campanelli: “we continued to deliver strong, record earnings as we executed our growth strategy…we look forward to differentiating ourselves on customer service…as we continue to grow market share and take advantage of opportunities to enhance shareholder value” .
  • On margin and hedging: NIM decline attributed to “a decrease in default interest income earned on loan workouts…along with loans re-pricing and interest expense associated with two cash flow hedges executed…to help protect the Company in a down rate environment” .
  • On merger: “now that we have received all required regulatory approvals, [we] welcome Provident customers and team members…upon the closing of the acquisition on November 14th” ; separate release confirms approvals and expected closing timing .

Q&A Highlights

  • The Q3 2025 earnings call transcript was not available; no Q&A insights could be extracted (searched NBBK “earnings-call-transcript” for 2025-09-01 to 2025-11-20; none found).

Estimates Context

  • EPS beat: Operating diluted EPS $0.45 vs S&P Global consensus $0.42*; GAAP diluted EPS was $0.43 . Primary EPS – # of estimates was 1*, suggesting thin coverage.
  • Revenue consensus: Not available; S&P Global had an “actual” total revenue of $50.33M*, while company-reported total revenue was $51.73M (net interest income + noninterest income), indicating definitional differences across sources .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Earnings quality improved: lower credit provisions and stronger deposit inflows drove higher net income despite modest NIM compression; coverage ratios are robust (ACL/NPLs 379%) .
  • Liquidity and funding mix favorable: deposits up $297.6M and FHLB down $86.1M; L/D ratio moved to 103%, providing flexibility heading into the merger close .
  • Margin vigilance needed: hedges protect against down-rate scenarios but contributed to a 4 bp NIM decline; watch default interest/workouts normalization and deposit pricing .
  • CRE mix shifting toward multi-family and hospitality with cannabis exposure trending lower; office exposure concentrated in suburban medical/traditional, not CBD towers .
  • Cost trajectory: OpEx up on M&A and tech investments; efficiency ratio rose to 58.71%—monitor integration synergies post-merger to re-bend the curve .
  • Corporate action: dividend maintained at $0.07; share repurchases continued (921,934 shares at ~$19.02), supporting TBV/share progression .
  • Near-term catalyst: merger closing around Nov 14 elevates cross-sell and balance sheet opportunities; focus on integration execution and realized synergies to sustain EPS trajectory .