Executive Summary

Q2 2025 EPS was $0.17 with net income of $2.8M, improving from $0.13 and $2.2M in Q1 2025 and reversing a $3.3M loss in Q2 2024; NIM rose to 3.77% from 3.65% QoQ as spread widened to 2.79% .
EPS beat consensus by $0.05 and “Revenue” (S&P definition) beat by $1.14M; coverage was thin (one estimate each). Bold beat: EPS +$0.05, Revenue +$1.14M (consensus 0.12*, $15.00M*; actual 0.17, $16.14M*)*.
Cost of funds declined YoY, with interest expense on deposits down 24% YoY and total cost of interest-bearing liabilities at 3.15% (−74 bps YoY); deposits grew $73.5M QoQ while borrowings fell $93.0M as liquidity improved .
Strategic catalysts: proposed merger with NB Bancorp/Needham Bank (closing anticipated Q4 2025), plus $745K gain from main-office sale/leaseback; noninterest expense included $543K merger costs and a loss contingency related to an SEC Wells Notice .

What Went Well and What Went Wrong

What Went Well

Earnings and margin momentum: net income up QoQ to $2.8M; NIM expanded to 3.77% and spread to 2.79% on lower deposit costs and disciplined funding .
Balance sheet actions: deposits +$73.5M QoQ; borrowings −$93.0M QoQ; management emphasized active funding optimization and strategic rebalancing of sources .
Strategic progress: announced Needham merger and executed sale/leaseback, recognizing a $745K gain; CEO: “We’re pleased to report improvements… merger… closing anticipated in the fourth quarter of 2025” .

What Went Wrong

Asset quality mixed: non-accrual loans rose to $34.4M (2.24% of assets), driven by enterprise value exposures; ACL coverage vs NPLs declined to 60.4% .
Elevated operating costs: noninterest expense rose QoQ to $12.1M, including $543K merger-related fees and a loss contingency tied to the SEC Wells Notice .
Borrowing costs up: interest expense on borrowings increased QoQ (+$176K) on a 100 bps higher borrowing cost to 3.83% (despite overall funding cost improvements) .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Net Interest & Dividend Income ($USD Millions)	$13.643	$12.875	$13.527
Noninterest Income ($USD Millions)	$1.325	$1.380	$2.231
Net Income ($USD Millions)	$4.882	$2.170	$2.824
Diluted EPS ($USD)	$0.29	$0.13	$0.17
Net Interest Margin (%)	3.62%	3.65%	3.77%
Interest Rate Spread (%)	2.53%	2.62%	2.79%
Efficiency Ratio (%)	67.57%	80.20%	76.73%

Consensus vs Actual (Q2 2025):

EPS ($USD): Consensus 0.12*, Actual 0.17
Revenue ($USD): Consensus $15.00M*, Actual $16.136M*

Segment breakdown – Loan portfolio balances:

Loan Segment ($USD Millions)	Dec 31, 2024	Mar 31, 2025	Jun 30, 2025
Commercial Real Estate	$559.325	$587.541	$580.750
Construction & Land Development	$28.097	$32.401	$37.362
Residential Real Estate	$6.008	$5.647	$4.936
Mortgage Warehouse	$259.181	$276.069	$284.154
Commercial	$163.927	$168.087	$160.596
Enterprise Value	$309.786	$262.445	$246.382
Total Loans	$1,326.595	$1,332.355	$1,314.265

Key KPIs:

KPI	Q4 2024	Q1 2025	Q2 2025
Non-accrual Loans ($USD Millions)	$20.887	$31.419	$34.440
NPLs / Total Loans (%)	1.57%	2.36%	2.62%
ACL / Total Loans (%)	1.59%	1.59%	1.58%
ACL / NPL Coverage (%)	100.96%	67.35%	60.38%
Total Assets ($USD Billions)	$1.593	$1.554	$1.541
Total Deposits ($USD Billions)	$1.309	$1.185	$1.258
Total Borrowings ($USD Millions)	$44.563	$127.529	$34.495
Shareholders’ Equity ($USD Millions)	$231.087	$234.035	$237.371
Book Value per Share ($USD)	$12.99	$13.16	$13.34
Equity / Assets (%)	14.50%	15.06%	15.40%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal quantitative guidance	2025	None	None provided	Maintained
Merger closing timeline	Q4 2025	N/A	Closing anticipated in Q4 2025	New update
Effective tax rate drivers	Q2 2025	N/A	30.2% in Q2 due to non-deductible merger expenses	New disclosure
Capital action – sale/leaseback	Q2 2025	N/A	$745K gain recognized	New action

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Balance sheet repositioning (reduce enterprise value, grow CRE/warehouse)	EV loans −$38.4M QoQ; CRE +$10.3M QoQ; strategic mix shift	EV loans −$47.3M QoQ; warehouse +$16.9M QoQ; management reaffirmed shift	EV loans −$16.1M QoQ and −$63.4M YTD; CRE +$21.4M YTD; construction +$9.3M YTD; warehouse +$25.0M YTD	Improving risk mix
Funding costs / deposit mix	Reduced cost of deposits; core deposit growth; total cost liabilities 3.61%	Cost of interest-bearing deposits down to 3.25%; aimed to reduce high-cost deposits	Cost of interest-bearing deposits 3.11%; deposits +$73.5M QoQ; brokered +$40.0M QoQ	Improving overall, tactical
Asset quality	Non-accrual ↓ to $20.9M; strong workout outcomes	Non-accrual ↑ to $31.4M; added EV loan to non-accrual	Non-accrual ↑ to $34.4M; EV workout executed; remains on non-accrual	Mixed/deteriorating NPLs
Liquidity/borrowings	Borrowings ↓ $80.0M QoQ; improved liquidity	Borrowings ↑ to meet short-term liquidity after deposit declines	Borrowings ↓ $93.0M QoQ; improved liquidity management	Improving
M&A / Strategic actions	Efficiency gains and cost control foundation for 2025	N/A	Needham merger announced; sale/leaseback gain $745K	Positive strategic
Regulatory/legal	N/A	N/A	SEC Wells Notice-related loss contingency in other expenses	Headwind

Note: No Q2 2025 earnings call transcript was available in our document catalog; Q&A commentary not accessible.

Management Commentary

“We’re pleased to report improvements in earnings… proposed merger with Needham Bank… closing anticipated in the fourth quarter of 2025… sale/leaseback of our Main Office building” — Joseph Reilly, CEO .
“We are pleased to report financial results consistent with expectations… focused on execution of our strategic plan and… safety and security of our customers’ financial assets (DIF coverage)” — Joseph Reilly, CEO (Q1 2025) .
“These earnings reflect the success we have seen in the execution of our strategic plan… proactive management of funding costs and operating expenses will set the foundation for a strong 2025” — Joseph Reilly, CEO (Q4 2024) .

Q&A Highlights

No publicly available Q2 2025 earnings call transcript was found; therefore, Q&A highlights and any verbal guidance clarifications are unavailable based on current source documents.

Estimates Context

Q2 EPS beat: Actual $0.17 vs consensus $0.12*; one estimate covered EPS*. Bold beat: +$0.05 .
Q2 “Revenue” beat (S&P definition): Actual $16.14M* vs consensus $15.00M*; one estimate covered revenue*. Bold beat: +$1.14M.
Note: Company-reported net interest & dividend income ($13.53M) plus noninterest income ($2.23M) implies ~$15.76M “operating revenue” by traditional bank framing; S&P’s revenue actual ($16.14M*) may reflect different methodology, creating a small discrepancy vs reported components .
Coverage is thin (one estimate each), so model dispersion is limited*.

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

EPS and margin momentum are improving (NIM 3.77%, spread 2.79%), driven by lower deposit costs and disciplined funding; this underpins near-term earnings resilience .
Funding mix pivot is working: deposits rose $73.5M QoQ while borrowings fell $93.0M, easing liquidity and cost pressures—supportive for further NIM stabilization .
Asset quality warrants monitoring: non-accruals increased to $34.4M, concentrated in enterprise value loans; ACL coverage vs NPLs fell to 60%—expect continued workout-driven variability .
Noninterest income benefited from a $745K sale/leaseback gain, but operating expense was elevated by merger-related costs and an SEC Wells Notice contingency—near-term OpEx could stay choppy until integration completes .
Strategic catalyst: NB Bancorp/Needham Bank merger (target close Q4 2025) could unlock cost synergies and scale; watch shareholder and regulatory approvals and integration execution milestones .
Consensus beats were meaningful but coverage is limited (one estimate each); estimate revisions may be modest, with a bigger driver likely the merger timeline and credit outcomes*.
Near-term trading: positive skew on M&A and margin stabilization vs headline risk from NPLs/EV workouts and any legal overhang; medium-term thesis hinges on successful integration, balance sheet de-risking, and sustained deposit cost control .