10q10k10q10k.net
NB Bancorp, Inc.

NB Bancorp, Inc.NBBK财报

Nasdaq · 金融 · 非联邦特许储蓄机构

NB Bancorp, Inc. is a U.S.-based bank holding company operating through its fully owned banking subsidiary. It provides a full range of retail and commercial banking services including various deposit products, consumer loans, residential mortgages, and small business financing solutions, primarily catering to individual and small-to-mid-sized enterprise customers across the New York metropolitan area.

What changed in NB Bancorp, Inc.'s 10-K — 2024 vs 2025

Top changes in NB Bancorp, Inc.'s 2025 10-K

696 paragraphs added · 706 removed · 487 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

261 edited+85 added−85 removed108 unchanged
The guidance focuses on those CRE loans for which the cash flow from the real estate is the primary source of repayment rather than loans to a borrower for which real estate collateral is taken as a secondary source of repayment or through an abundance of caution.
The guidance focuses on those CRE loans for which the cash flow from real estate is the primary source of repayment rather than loans to a borrower for which real estate collateral is taken as a secondary source of repayment or through an abundance of caution.
TAXATION Federal Taxation General. The Company and the Bank are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below.
The Company and the Bank are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below.
The Bank was organized in 1892 and has operated continuously in Needham, Massachusetts, which is approximately 17 miles southwest of Boston’s financial district, since this time. Our headquarters are still located in Needham, and we have branch locations in Wellesley, Westwood, Dedham, Medfield, Medford, Dover, Ashland, Millis, Natick and Boston (Mission Hill).
The Bank was organized in 1892 and has operated continuously in Needham, Massachusetts, which is approximately 17 miles southwest of Boston’s financial district, since this time. Our headquarters are still located in Needham, and we have branch locations in Massachusetts, including Ashland, Boston (Mission Hill), Dedham, Dover, Medfield, Medford, Millis, Natick, Wellesley, Westwood.
We also require flood insurance if the improved property is determined to be in a flood zone area. Delinquencies and Non-Performing Assets Delinquency Procedures. When a borrower fails to make required payments on a loan, we take a number of steps to induce the borrower to cure the delinquency and restore the loan to current status.
We also require flood insurance if the improved property is determined to be in a flood zone. ​ Delinquencies and Non-Performing Assets Delinquency Procedures. When a borrower fails to make required payments on a loan, we take a number of steps to induce the borrower to cure the delinquency and restore the loan to current status.
When an insured institution classifies problem assets as “loss,” it is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge-off such amount.
When an insured depository institution classifies problem assets as “loss,” it is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge-off such amount.
Under the Company’s Liquidity Policy, we test access to all off-balance sheet liquidity sources periodically, but no less than annually. Subsidiary and Other Activities Needham Bank is the wholly owned subsidiary of NB Bancorp, Inc. Needham Bank has three subsidiaries: Needco-op Investment Corporation, Inc. (“Needco”), a Massachusetts corporation, which is engaged in the buying, selling and holding of securities.
Under the Company’s Liquidity Policy, we test access to all off-balance sheet liquidity sources periodically, but no less than annually. ​ Subsidiary and Other Activities Needham Bank is the wholly-owned subsidiary of NB Bancorp, Inc. ​ Needham Bank has five subsidiaries: Needco-op Investment Corporation, Inc. (“Needco”), a Massachusetts corporation, which is engaged in the buying, selling and holding of securities.
General allowances represent loss allowances which have been established to cover probable accrued losses associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets.
General allowances represent loss allowances which have been established to cover probable losses associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets.
Loan operations are also subject to state and federal laws applicable to credit transactions, such as the: ● Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; ● Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; ● Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and ● Rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
Loan operations are also subject to state and federal laws applicable to credit transactions, such as the: ​ 37 Table of Contents ● Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; ● Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; ● Fair Credit Reporting Act, governing the use and provision of information to credit reporting agencies; and ● Rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
At December 31, 2024 and 2023, we do not believe that we have significant concentrations among our larger deposit accounts from venture capital funds, or their portfolio companies, or from out-of-market businesses. Interest rates, maturity terms, service fees and withdrawal penalties are established on a periodic basis.
At December 31, 2025 and 2024, we do not believe that we have significant concentrations among our larger deposit accounts from venture capital funds, or their portfolio companies, or from out-of-market businesses. ​ Interest rates, maturity terms, service fees and withdrawal penalties are established on a periodic basis.
The Federal Reserve Board is required, with certain exceptions, to appoint a receiver or conservator for an insured state non-member bank if that bank was “critically undercapitalized” on average during the calendar quarter beginning 270 days after the date on which the institution became “critically undercapitalized.” The Federal Reserve Board may also appoint itself as conservator or receiver for an insured state non-member bank under specified circumstances, including: (1) insolvency; (2) substantial dissipation of assets or earnings through violations of law or unsafe or unsound practices; (3) existence of an unsafe or unsound condition to transact business; (4) insufficient capital; or (5) the incurrence of losses that will deplete substantially all of the institution’s capital with no reasonable prospect of replenishment without federal assistance.
The Federal Reserve Board is required, with certain exceptions, to appoint a receiver or conservator for an insured state non-member bank if that bank was “critically undercapitalized” on average during the calendar quarter beginning 270 days after the date on which the institution became “critically undercapitalized.” The Federal Reserve Board may also appoint itself as conservator or receiver for an insured state non-member bank under specified circumstances, including: (1) insolvency; (2) substantial dissipation of assets or earnings through violations of law or unsafe or unsound practices; (3) existence of an unsafe or unsound condition to transact business; (4) insufficient capital; or (5) the incurrence of losses that will deplete substantially all of the institution’s capital with no reasonable prospect of replenishment without federal assistance. ​ Standards for Safety and Soundness.
Generally, however, they contain one or more of the following elements: (i) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country and prohibitions on “U.S. persons” engaging in financial or other transactions relating to a sanctioned country or with certain designated persons and entities; (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons); and 33 Table of Contents (iii) restrictions on transactions with or involving certain persons or entities.
Generally, however, they contain one or more of the following elements: (i) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country and prohibitions on “U.S. persons” engaging in financial or other transactions relating to a sanctioned country or with certain designated persons and entities; (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons); and (iii) restrictions on transactions with or involving certain persons or entities.
Among other things, these provisions generally require that extensions of credit to insiders: ● be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and 30 Table of Contents ● not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Bank’s capital.
Among other things, these provisions generally require that extensions of credit to insiders: ​ ● be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and ● not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Bank’s capital.
The following tables set forth the contractual maturities of our loan portfolio at December 31, 2024. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. The tables present contractual maturities and do not reflect repricing or the effect of prepayments.
The following tables set forth the contractual maturities of our loan portfolio at December 31, 2025. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. The tables present contractual maturities and do not reflect repricing or the effect of prepayments.
The ability of a holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized. ​ 35 Table of Contents The policy statement also states that a holding company should inform the Federal Reserve Board supervisory staff before redeeming or repurchasing common stock or perpetual preferred stock if the holding company is experiencing financial weaknesses or if the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.
The ability of a holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized. ​ The policy statement also states that a holding company should inform the Federal Reserve Board supervisory staff before redeeming or repurchasing common stock or perpetual preferred stock if the holding company is experiencing financial weaknesses or if the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred.
Protection of Personal Information. Massachusetts banking regulations contain requirements intended to protect personal information and are similar to federal laws such as the Gramm-Leach-Bliley Act, discussed below under “Federal Regulations Applicable to the Bank” and “Other Regulations,” that require organizations to establish written information security programs to prevent identity theft.
Massachusetts banking regulations contain requirements intended to protect personal information and are similar to federal laws such as the Gramm-Leach-Bliley Act, discussed below under “Federal Regulations Applicable to the Bank” and “Other Regulations,” that require organizations to establish written information security programs to prevent identity theft.
At December 31, 2024, each of the construction and land development loans underlying our 25 largest construction and land development loan relationships was performing in accordance with its repayment terms. Commercial and Industrial Loans. We offer a broad range of commercial and industrial loans, including lines of credit and terms loans, to a variety of commercial businesses and industrial borrowers.
At December 31, 2025, each of the construction and land development loans underlying our 25 largest loan relationships was performing in accordance with its repayment terms. ​ Commercial and Industrial Loans. We offer a broad range of commercial and industrial loans, including lines of credit and terms loans, to a variety of commercial businesses and industrial borrowers.
In recent years, most of the one-to-four-family residential real estate loans that we originated and sold to the secondary market were sold with servicing retained. ​ 10 Table of Contents We generally do not offer “interest-only” loans on one-to-four-family residential real estate loans nor do we offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on their loan, resulting in an increased principal balance during the life of the loan.
In recent years, most of the one-to-four-family residential real estate loans that we originated and sold to the secondary market were sold with servicing retained. ​ We generally do not offer “interest-only” loans on one-to-four-family residential real estate loans nor do we offer loans that provide for negative amortization of principal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on their loan, resulting in an increased principal balance during the life of the loan.
At December 31, 2024 and 2023 we also had an additional line of credit from the FHLB in the amount of $6.1 million. We had no borrowings outstanding under this line of credit at December 31, 2024 and 2023. ​ Additionally, we have a line of credit agreement with the FRB of Boston for usage of the discount window.
At December 31, 2025 and 2024 we also had an additional line of credit from the FHLB in the amount of $6.1 million. We had no borrowings outstanding under this line of credit at December 31, 2025 and 2024. ​ Additionally, we have a line of credit agreement with the FRB of Boston for usage of the discount window.
Loans for residential real estate of greater than $2.5 million require approval by the Credit Committee, which consists of the Chief Executive Officer (“CEO”), Chief Operating Officer (“COO”), Chief Credit Officer (“CCO”), SVP – Managed Assets Group Leader and managers of the Bank’s lending departments.
Loans for residential real estate of greater than $2.5 million require approval by the Credit Committee, which consists of the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Operating Officer (“COO”), Chief Credit Officer (“CCO”), SVP – Managed Assets Group Leader and managers of the Bank’s lending departments.
Although our commercial real estate and multifamily loans are made to a diversified pool of unrelated borrowers across numerous businesses, adverse developments in our market area could have an adverse impact on this portfolio of loans and the Company’s income and financial position. 11 Table of Contents The federal banking agencies (the “Agencies”) issued guidance in 2006 (the “Guidance”) which addresses institutions with increased concentrations of commercial real estate (“CRE”) loans.
Although our commercial real estate and multifamily loans are made to a diversified pool of unrelated borrowers across numerous businesses, adverse developments in our market area could have an adverse impact on this portfolio of loans and the Company’s income and financial position. ​ The federal banking agencies (the “Agencies”) issued guidance in 2006 (the “Guidance”) which addresses institutions with increased concentrations of commercial real estate (“CRE”) loans.
The Bank also is a member of and owns stock in the FHLB, which is one of the eleven regional banks in the FHLB System. 26 Table of Contents Under this system of regulation, the regulatory authorities have extensive discretion in connection with their supervisory, enforcement, rulemaking and examination activities and policies, including rules or policies that: establish minimum capital levels; restrict the timing and amount of dividend payments; govern the classification of assets; provide oversight for the adequacy of loan loss reserves for regulatory purposes and the adequacy of its risk management framework; and establish the timing and amounts of assessments and fees imposed by the regulatory agencies.
The Bank also is a member of and owns stock in the FHLB of Boston, which is one of the eleven regional banks in the FHLB System. ​ Under this system of regulation, the regulatory authorities have extensive discretion in connection with their supervisory, enforcement, rulemaking and examination activities and policies, including rules or policies that: establish minimum capital levels; restrict the timing and amount of dividend payments; govern the classification of assets; provide oversight for the adequacy of loan loss reserves for regulatory purposes and the adequacy of its risk management framework; and establish the timing and amounts of assessments and fees imposed by the regulatory agencies.
Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.
Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific allowance is not warranted.
In addition, under the USA PATRIOT Act financial institutions are required to take steps to monitor their correspondent banking and private banking relationships as well as, if applicable, their relationships with “shell banks.” Office of Foreign Assets Control (“OFAC”). The U.S. has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others.
In addition, under the USA PATRIOT Act financial institutions are required to take steps to monitor their correspondent banking and private banking relationships as well as, if applicable, their relationships with “shell banks.” ​ 36 Table of Contents Office of Foreign Assets Control (“OFAC”). The U.S. has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others.
Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the Bank. A bank holding company is generally prohibited from engaging in non-banking activities, or acquiring direct or indirect control of more than 5% of the voting securities of any company engaged in non-banking activities.
Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the Bank. ​ 38 Table of Contents A bank holding company is generally prohibited from engaging in non-banking activities, or acquiring direct or indirect control of more than 5% of the voting securities of any company engaged in non-banking activities.
Payments of dividends by the Bank are also subject to other banking law restrictions, such as the Federal Reserve Board’s authority to prevent a bank from paying dividends if such payment would constitute an unsafe or unsound banking practice or reduce a bank’s capital below safe and sound levels and Massachusetts banking law restrictions which require dividends to be paid from net profits for the current and two previous years, and which preclude a Massachusetts bank from paying dividends if its capital is, or would become, impaired.
Payments of dividends by the Bank are also subject to other banking law restrictions, such as the Federal Reserve Board’s authority to prevent a bank from paying dividends if such payment would constitute an unsafe or unsound banking practice or reduce a bank’s capital below safe and sound levels and Massachusetts banking law restrictions, which require dividends to be paid from net profits for the current and two previous years, and which preclude a Massachusetts bank from paying dividends if its capital is, or would become, impaired. ​ CRA and Fair Lending Laws.
The variety of deposit accounts that we offer allows us to be competitive in generating deposits and to respond with flexibility to changes in our customers’ demands. ​ 24 Table of Contents Our ability to gather deposits is impacted by the competitive market in which we operate, which includes numerous financial institutions of varying sizes offering a wide range of products.
The variety of deposit accounts that we offer allows us to be competitive in generating deposits and to respond with flexibility to changes in our customers’ demands. ​ Our ability to gather deposits is impacted by the competitive market in which we operate, which includes numerous financial institutions of varying sizes offering a wide range of products.
In addition, we receive funds from scheduled loan payments, investment payments/maturities, loan prepayments, loan sales, retained earnings and income on earning assets. While scheduled loan payments and income on interest-earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition. Deposits.
In addition, we receive funds from scheduled loan payments, investment payments/maturities, loan prepayments, loan sales, retained earnings and income on earning assets. ​ 26 Table of Contents While scheduled loan payments and income on interest-earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition. ​ Deposits.
During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio as defined by the Agency Guidance, by 71.0%. The management team has extensive experience in underwriting commercial real estate loans and has implemented and continues to maintain heightened risk management procedures and strong underwriting criteria with respect to its commercial real estate portfolio.
During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio as defined by the Agency Guidance, by 37.0%. The management team has extensive experience in underwriting CRE loans and has implemented and continues to maintain heightened risk management procedures and strong underwriting criteria with respect to its CRE portfolio.
Competition for deposits and the origination of loans could limit our growth in the future. We expect to continue to emphasize originations of larger structured finance credit facilities. In recent years, most of our larger, structured commercial and industrial loans have been to customers in the cannabis or solar industries and bridge financing.
Competition for deposits and the origination of loans could limit our growth in the future. 9 Table of Contents We expect to continue to emphasize originations of larger structured finance credit facilities. In recent years, most of our larger, structured commercial and industrial loans have been to customers in the cannabis or solar industries and bridge financing.
An affiliate is generally a company that controls, or is under common control with, an insured depository institution such as the Bank. NB Bancorp, Inc. is an affiliate of the Bank because of its control of the Bank. In general, transactions between an insured depository institution and its affiliates are subject to certain quantitative limits and collateral requirements.
An affiliate is generally a company that controls, or is under common control with, an insured depository institution such as the Bank. The Company is an affiliate of the Bank because of its control of the Bank. In general, transactions between an insured depository institution and its affiliates are subject to certain quantitative limits and collateral requirements.
Changing legislation and government policy with respect to these industries could increase competition even further on a jurisdictional or industry-specific basis. 8 Table of Contents We do not believe that our ability to compete is dependent on our existing relationships in these areas but we believe our experience could provide a competitive advantage versus lenders who enter these business lines in the future.
Changing legislation and government policy with respect to these industries could increase competition even further on a jurisdictional or industry-specific basis. ​ We do not believe that our ability to compete is dependent on our existing relationships in these areas, but we believe our experience could provide a competitive advantage versus lenders who enter these business lines in the future.
In addition, Needham Bank and NB Bancorp have entered into an agreement to establish a method for allocating and for reimbursing the payment of their consolidated tax liability. Personnel At December 31, 2024 and 2023, we had 376 and 342 full-time equivalent employees, respectively. Our employees are not represented by any collective bargaining group.
In addition, Needham Bank and NB Bancorp have entered into an agreement to establish a method for allocating and for reimbursing the payment of their consolidated tax liability. ​ Personnel At December 31, 2025 and 2024, we had 526 and 376 full-time equivalent employees, respectively. Our employees are not represented by any collective bargaining group.
As a member of the FHLB, the Bank is eligible to obtain advances upon the security of the FHLB common stock owned and certain pledged residential mortgage, commercial real estate and multifamily loans, provided certain standards related to credit-worthiness have been met.
As a member of the FHLB, the Bank is eligible to obtain advances upon the security of the FHLB common stock owned and certain pledged one-to-four-family residential mortgage, commercial real estate and multifamily loans, provided certain standards related to credit-worthiness have been met.
We believe our Structured Finance division’s portfolio is well diversified with 49 commercial relationships at December 31, 2024. Our Small Business and Middle Market commercial and industrial loans are generally secured by all business assets of the borrower, including but not limited to equipment, accounts receivable, inventory, specific project assets and contracts, and real estate.
We believe our Structured Finance division’s portfolio is well diversified with 115 commercial relationships at December 31, 2025. ​ Our Small Business and Middle Market commercial and industrial loans are generally secured by all business assets of the borrower, including but not limited to equipment, accounts receivable, inventory, specific project assets and contracts, and real estate.
There were no other loans at December 31, 2024 that are not already disclosed where there is information about possible credit problems of borrowers that caused management to have serious doubts about the ability of the borrowers to comply with present loan repayment terms and that may result in disclosure of such loans in the future. Provision for Credit Losses.
There were no other loans at December 31, 2025 that are not already disclosed where there is information about possible credit problems of borrowers that caused management to have serious doubts about the ability of the borrowers to comply with present loan repayment terms and that may result in disclosure of such loans in the future. ​ Allowance for Credit Losses.
CRA and Fair Lending Laws. All insured depository institutions have a responsibility under the CRA and related regulations to help meet the credit needs of their communities, including low- and moderate-income borrowers, consistent with its safe and sound banking operations.
All insured depository institutions have a responsibility under the CRA and related regulations to help meet the credit needs of their communities, including low- and moderate-income borrowers, consistent with its safe and sound banking operations.
In evaluating the property securing the loan, among other factors, we consider the net operating income of the mortgaged property before debt service and depreciation, the debt service coverage ratio (the ratio of net operating income to debt service) to ensure that, subject to certain exceptions, it is at least 1.20x for multifamily loans and 1.25x for commercial real estate loans, and the ratio of the loan amount to the appraised value of the mortgaged property.
In evaluating the property securing the loan, among other factors, we consider the net operating income of the mortgaged property before debt service and depreciation, the debt service coverage ratio (the ratio of net operating income to debt service) to ensure that, subject to certain exceptions, it is at least 1.20x for multifamily loans and 1.25x for CRE loans, and the ratio of the loan amount to the appraised value of the mortgaged property.
Information on our website is not incorporated into this Annual Report on Form 10-K and should not be considered part of this Annual Report on Form 10-K. BUSINESS OF NEEDHAM BANK General The Bank is a Massachusetts-chartered cooperative bank headquartered in Needham, Massachusetts.
Information on our website is not incorporated into and should not be considered part of this Annual Report on Form 10-K. ​ 5 Table of Contents BUSINESS OF NEEDHAM BANK General The Bank is a Massachusetts-chartered cooperative bank headquartered in Needham, Massachusetts.
The Bank’s most recent November 2023 CRA performance rating under Massachusetts law was “High Satisfactory.” Transactions with Related Parties. An insured depository institution’s authority to engage in transactions with its affiliates is generally limited by Sections 23A and 23B of the Federal Reserve Act and federal regulation.
The Bank’s most recent CRA performance rating, in March 2025, under Massachusetts law was “High Satisfactory.” ​ Transactions with Related Parties. An insured depository institution’s authority to engage in transactions with its affiliates is generally limited by Sections 23A and 23B of the Federal Reserve Act and federal regulation.
Massachusetts Banking Laws and Supervision Applicable to the Bank General. As a Massachusetts-chartered cooperative bank, the Bank is subject to supervision, regulation and examination by the Commissioner and to various Massachusetts statutes and regulations which govern, among other things, investment powers, lending and deposit-taking activities, borrowings, maintenance of surplus and reserve accounts, distribution of earnings and payment of dividends.
As a Massachusetts-chartered cooperative bank, the Bank is subject to supervision, regulation and examination by the Commissioner and to various Massachusetts statutes and regulations which govern, among other things, investment powers, lending and deposit-taking activities, borrowings, maintenance of surplus and reserve accounts, distribution of earnings and payment of dividends.
The Company will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the completion of the conversion and offering; (ii) the first fiscal year after our annual gross revenues are $1.235 billion (adjusted for inflation) or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million at the end of the second quarter of that fiscal year.
Such an election is irrevocable during the period a company is an emerging growth company. ​ The Company will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the completion of the conversion and offering; (ii) the first fiscal year after our annual gross revenues are $1.235 billion (adjusted for inflation) or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million at the end of the second quarter of that fiscal year. ​ TAXATION Federal Taxation General.
These factors affect the demand for residential homes, multifamily apartments, office buildings, shopping centers, industrial warehouses and other commercial properties. According to the United States Census Bureau (the “Census”), at July 2023, the Greater Boston metropolitan area is the eleventh largest metropolitan area in the United States.
These factors affect the demand for residential homes, multifamily apartments, office buildings, shopping centers, industrial warehouses and other commercial properties. ​ According to the United States Census Bureau (the “Census”), at July 2024, the Greater Boston metropolitan area is the tenth largest metropolitan area in the United States.
See “Originations, Sales and Purchases of Loans.” Our one-to-four-family residential real estate loans are generally underwritten according to Fannie Mae guidelines, and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed- and adjustable-rate one-to-four-family residential real estate loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency (“FHFA”), which was $766,550 as of December 31, 2024.
See “Originations, Sales and Purchases of Loans.” ​ Our one-to-four-family residential real estate loans are generally underwritten according to Fannie Mae guidelines, and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed- and adjustable-rate one-to-four-family residential real estate loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency (“FHFA”), which was $806,500 as of December 31, 2025.
Loans to a Bank’s Insiders. Under Massachusetts law, a Massachusetts-chartered bank must comply with Regulation O of the Federal Reserve Board and the Commissioner retains examination and enforcement authority to ensure compliance. Investment Activities.
Under Massachusetts law, a Massachusetts-chartered bank must comply with Regulation O of the Federal Reserve Board and the Commissioner retains examination and enforcement authority to ensure compliance. ​ Investment Activities.
The following table sets forth information regarding our non-performing assets as of December 31, 2024 and 2023.
The following table sets forth information regarding our non-performing assets as of December 31, 2025 and 2024.
In order to form a financial subsidiary, a state-chartered bank must be “well capitalized,” and such banks must comply with certain capital deduction, risk management and affiliate transaction rules, among other requirements. ​ 31 Table of Contents Brokered Deposits.
In order to form a financial subsidiary, a state-chartered bank must be “well capitalized,” and such banks must comply with certain capital deduction, risk management and affiliate transaction rules, among other requirements. ​ Brokered Deposits.
Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt. Also included in Tier 2 capital is the allowance for credit losses limited to a maximum of 1.25% of risk-weighted assets.
Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt. Also included in Tier 2 capital is the ACL limited to a maximum of 1.25% of risk-weighted assets.
Accordingly, the decrease in the FHLB stock from December 31, 2023 to December 31, 2024 is due to the decrease in FHLB borrowings. The FHLB may declare dividends from time to time. We maintain shares in the FRB of Boston in order to meet criteria for membership in the Federal Reserve System.
Accordingly, the increase in the FHLB stock from December 31, 2024 to December 31, 2025 is due to the increase in FHLB borrowings. The FHLB may declare dividends from time to time. ​ We maintain shares in the FRB of Boston in order to meet criteria for membership in the Federal Reserve System.
However, at December 31, 2024 and 2023, we had no securities which we designated held-to-maturity. Some of our securities are callable by the issuer.
However, at December 31, 2025 and 2024, we had no securities which we designated as held-to-maturity. ​ Some of our securities are callable by the issuer.
The Bank is required to file reports with, and is periodically examined by the Federal Reserve Board and the Commissioner of the Massachusetts Division of Banks (the “Commissioner”) concerning its activities and financial condition and must obtain regulatory approvals prior to entering into certain transactions, including, but not limited to, mergers with or acquisitions of other financial institutions.
The Bank is required to file reports with, and is periodically examined by, the Federal Reserve Board and the Commissioner of the Massachusetts Division of Banks (the “Commissioner”) concerning its activities and financial condition and must obtain regulatory approvals prior to entering into certain transactions, including, but not limited to, mergers with or acquisitions of other financial institutions. ​ As a registered bank holding company, the Company is regulated by the Federal Reserve Board.
The deposit operations of the Bank also are subject to, among others, the: ● Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; ● Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; and ● Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services. 34 Table of Contents FHLB System The Bank is a member of the FHLB System, which consists of eleven regional FHLBs.
The deposit operations of the Bank also are subject to, among others, the: ​ ● Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; ● Check Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; and ● Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.
Federal regulations provide that each insured savings institution classify its assets on a regular basis.
Federal regulations provide that each insured depository institution classify its assets on a regular basis.
However, regulatory agencies are not directly involved in the process for establishing the allowance for credit losses on loans as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management.
However, regulatory agencies are not directly involved in the process for establishing the ACL on loans as the process is our responsibility and any increase or decrease in the ACL on loans is the responsibility of management.
We held an investment in FHLB stock of $6.7 million and $14.6 million as of December 31, 2024 and 2023, respectively. The amount of stock we are required to purchase is in proportion to our FHLB borrowings and level of total assets.
We held an investment in FHLB stock of $10.3 million and $6.7 million as of December 31, 2025 and 2024, respectively. ​ The amount of stock we are required to purchase is in proportion to our FHLB borrowings and level of total assets.
The Bank is prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer obtain some additional service from the institution or its affiliates or not obtain services of a competitor of the institution.
The Bank is prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer obtain some additional service from the institution or its affiliates or not obtain services of a competitor of the institution. ​ Consumer Protection and Fair Lending Regulations.
Dividends are paid semi-annually at the statutory rate of 6.0%. At December 31, 2024, we held 242,844 shares of stock in the approximate amount of $12.1 million, compared to 206,450 shares of stock in the approximate amount of $10.3 million at December 31, 2023. We also invest in certain equity method investments which offer favorable tax treatment.
Dividends are paid semi-annually at the statutory rate of 6.0%. ​ At December 31, 2025, we held 125,538 shares of stock in the approximate amount of $6.3 million, compared to 242,844 shares of stock in the approximate amount of $12.1 million at December 31, 2024. ​ We also invest in certain equity method investments which offer favorable tax treatment.
Excluded from the scope of the Guidance are loans secured by nonfarm nonresidential properties where the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property.
Excluded from the scope of the Guidance are loans secured by non-farm non-residential properties where the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property.
Consumer Protection and Fair Lending Regulations. The Bank is subject to a variety of federal and Massachusetts statutes and regulations that are intended to protect consumers and prohibit discrimination in the granting of credit.
The Bank is subject to a variety of federal and Massachusetts statutes and regulations that are intended to protect consumers and prohibit discrimination in the granting of credit.
At December 31, 2024, our highest combined participations purchased with one bank was approximately 7.8% of our total capital and was comprised of one commercial real estate loan and one multi-family residential loan. Loan Portfolio Composition.
At December 31, 2024, our highest combined participation loans purchased with one bank was approximately 7.0% of our total capital and was comprised of one commercial real estate loan and one multi-family residential loan. ​ Loan Portfolio Composition.
One of the primary focuses of our lending has long been the origination of long-term loans secured by mortgages on primarily owner-occupied, one-to-four-family residences. At December 31, 2024, $1.13 billion, or 26.1%, of our total loan portfolio, consisted of one-to-four-family residential real estate loans.
One of the primary focuses of our lending has long been the origination of long-term loans secured by mortgages on primarily owner-occupied, one-to-four-family residences. At December 31, 2025, $1.18 billion, or 19.6%, of our total loan portfolio, consisted of one-to-four-family residential real estate loans.
The objectives of the investment policy are to: (i) provide and maintain liquidity within the guidelines of the Massachusetts banking laws and regulations for loan demand and deposit fluctuations, and to allow us to alter our liquidity position to meet both day-to-day and long-term changes in assets and liabilities; (ii) manage interest rate risk in accordance with our interest rate risk policy; (iii) provide collateral for pledging requirements; (iv) maximize return on our investments; and (v) maintain a balance of high-quality, diversified investments to minimize risk.
The objectives of the investment policy are to: (i) provide and maintain liquidity within the guidelines of the Massachusetts banking laws and regulations for loan demand and deposit fluctuations, and to allow us to alter our liquidity position to meet both day-to-day and long-term changes in assets and liabilities; (ii) manage interest rate risk in accordance with our interest rate risk policy; (iii) provide collateral for pledging requirements; (iv) maximize return on our investments; and (v) maintain a balance of high-quality, diversified investments to minimize risk. ​ Our investment policy is reviewed annually by the Board of Directors and all policy changes recommended by management must be approved by the Board of Directors.
Historically, we have emphasized residential mortgage lending, including for the construction of single-family homes, and at December 31, 2024, one-to-four-family residential real estate loans totaled $1.13 billion, or 26.1% of our total loan portfolio, compared with $1.10 billion, or 28.2% of our total loan portfolio, at December 31, 2023.
Historically, we have emphasized residential mortgage lending, including for the construction of single-family homes, and at December 31, 2025, one-to-four-family residential real estate loans totaled $1.18 billion, or 19.6% of our total loan portfolio, compared with $1.13 billion, or 26.1% of our total loan portfolio, at December 31, 2024.
Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the Federal Reserve Board.
We cannot predict what assessment rates will be in the future. ​ Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the Federal Reserve Board.
At December 31, 2024, the Company had no minimum tax credit carryovers. Net Operating Loss Carryovers. As a result of the Tax Cuts and Jobs Act generally, a financial institution may carry net operating losses forward indefinitely. At December 31, 2024, the Company had no federal net operating loss carryforwards. 37 Table of Contents Capital Loss Carryovers.
At December 31, 2025, the Company had no minimum tax credit carryovers. ​ 41 Table of Contents Net Operating Loss Carryovers. As a result of the Tax Cuts and Jobs Act generally, a financial institution may carry net operating losses forward indefinitely.
Loans secured by a first mortgage on residential property occupied by the borrower are excluded from this limit. At December 31, 2024, our regulatory limit on loans-to-one borrower was $131.2 million. At December 31, 2024, our general internal limit on an aggregate loan relationship-to-one borrower (and related entities) was $55.0 million.
Loans secured by a first mortgage on residential property occupied by the borrower are excluded from this limit. At December 31, 2025, our regulatory limit on loans-to-one borrower was $158.3 million. ​ At December 31, 2025, our general internal limit on an aggregate loan relationship-to-one borrower (and related entities) was $90.0 million.
Most of our largest loan relationships are to borrowers who have multiple loans with the Bank and are collateralized by commercial real estate, commercial and industrial and construction and land development loans.
Most of our largest loan relationships are to borrowers who have multiple loans with the Bank and are CRE, commercial and industrial and construction and land development loans.
FHLB advances are available pursuant to several credit programs, each of which has its own interest rate and range of maturities. ​ At December 31, 2024 and 2023, we had the ability to borrow an additional $754.1 million and $508.0 million from the FHLB, respectively, subject to certain collateral requirements and had outstanding advances of $120.8 million and $283.3 million at December 31, 2024 and 2023, respectively.
FHLB advances are available pursuant to several credit programs, each of which has its own interest rate and range of maturities. ​ At December 31, 2025 and 2024, we had the ability to borrow an additional $913.7 million and $754.1 million from the FHLB, respectively, subject to certain collateral requirements and had outstanding advances of $196.2 million and $120.8 million at December 31, 2025 and 2024, respectively.
In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities. Originations, Sales and Purchases of Loans Our loan originations are generated by our banking personnel operating at our banking office and mortgage brokers.
In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities. ​ Originations, Sales and Purchases of Loans ​ Our loan originations are generated by our banking personnel operating at our banking offices and mortgage brokers. ​ Additionally, in recent years, we have purchased a variety of consumer loans.
ITEM 1. Business FORWARD-LOOKING STATEMENTS This Annual Report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “contemplate,” “continue,” “could,” “potential,” “target” and words of similar meaning.
These forward-looking statements can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “contemplate,” “continue,” “could,” “potential,” “target” and words of similar meaning.
Under current Massachusetts law, the Bank can establish a branch in Massachusetts or in any other state. All branch applications require prior approval of the Commissioner and the FDIC. Finally, the Bank may also establish banking offices in other states by merging with banks or by purchasing banking offices of other banks in other states, subject to certain restrictions. Acquisitions.
All branch applications require prior approval of the Commissioner and the FDIC. Finally, the Bank may also establish banking offices in other states by merging with banks or by purchasing banking offices of other banks in other states, subject to certain restrictions. ​ Acquisitions.
The vast majority of the loans are extended on a secured basis, with a limited number of unsecured lines of credit with additional covenants. At December 31, 2024, we had commitments to fund $24.3 million of unsecured lines of credit with $124,000 outstanding.
The vast majority of the loans are extended on a secured basis, with a limited number of unsecured lines of credit with additional covenants. ​ At December 31, 2025, we had commitments to fund $36.4 million of unsecured lines of credit with $428,000 outstanding.
During the year ended December 31, 2024, the Foundation made $1.3 million in contributions to local non-profit charities and organizations. 7 Table of Contents Market Area We consider our primary market area to be any counties, towns or municipalities within a 100-mile radius of Needham, which generally covers the Greater Boston metropolitan area as well as surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire and Rhode Island.
The purpose of this foundation is to make contributions to support various charitable organizations operating in our community now and in the future. 8 Table of Contents During the year ended December 31, 2025, the Foundation made $1.8 million in contributions to local non-profit charities and organizations. ​ Market Area We consider our primary market area to be any counties, towns or municipalities within a 100-mile radius of Needham, which generally covers the Greater Boston metropolitan area as well as surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire and Rhode Island.
Consistent with our interest rate risk strategy, we originate and sell a portion of the long-term, fixed-rate, one- to-four-family residential real estate loans on a servicing-retained, limited or no recourse basis, while generally retaining shorter-term fixed-rate and all adjustable-rate one-to-four-family residential real estate loans in order to manage the duration and repricing of our loan portfolio.
Our volume of real estate loan originations is influenced significantly by market interest rates, and, accordingly, the volume of our real estate loan originations can vary from period to period. ​ Consistent with our interest rate risk strategy, we originate and sell a portion of the long-term, fixed-rate, one- to-four-family residential real estate loans on a servicing-retained, limited or no recourse basis, while generally retaining shorter-term fixed-rate and all adjustable-rate one-to-four-family residential real estate loans in order to manage the duration and repricing of our loan portfolio.
In recent years we have also purchased a variety of consumer loan portfolios and expect to continue to purchase consumer loans from several established third-party originators.
Participation loans are periodically reported to the Board of Directors. In recent years we have also purchased a variety of consumer loan portfolios and expect to continue to purchase consumer loans from several established third-party originators.
The execution of specific actions with respect to securities held by the Company rests with management within the scope of the established investment policy. We have legal authority to invest in various types of liquid assets, including U.S.
Authority to make investments under the approved guidelines are delegated to appropriate officers. The execution of specific actions with respect to securities held by the Company rests with management within the scope of the established investment policy. ​ We have legal authority to invest in various types of liquid assets, including U.S.
Federal law permits insured state banks to engage in interstate branching if the laws of the state where the new banking office is to be established would permit the establishment of the banking office if it were chartered by a bank in such state.
Federal law permits insured state banks to engage in interstate branching if the laws of the state where the new banking office is to be established would permit the establishment of the banking office if it were chartered by a bank in such state. ​ Under current Massachusetts law, the Bank can establish a branch in Massachusetts or in any other state.
At the present time, we employ only persons who are officers of the Bank who also serve as officers of the Company. We use the support staff of the Bank from time to time and pay a fee to the Bank for the time devoted to the Company by employees of the Bank.
We neither own nor lease any property. At the present time, we employ only persons who are officers of the Bank who also serve as officers of the Company. We use the employees of the Bank from time to time and pay a fee to the Bank for the time devoted to the Company by employees of the Bank.
We invest in BOLI to provide us with a funding source for our benefit plan obligations. BOLI also generally provides us noninterest income that is non-taxable. Applicable regulations generally limit our investment in BOLI to 25% of the Bank’s Tier 1 capital plus our allowance for credit losses, which in the aggregate was $163.2 million as of December 31, 2024.
We invest in BOLI to provide us with a funding source for our benefit plan obligations. BOLI also generally provides us with non-taxable noninterest income. Applicable regulations generally limit our investment in BOLI to 25% of the Bank’s Tier 1 capital plus our ACL, which in the aggregate was $207.6 million as of December 31, 2025.
The Company is subject to the Federal Reserve Board’s capital adequacy guidelines for bank holding companies (on a consolidated basis). The Dodd-Frank Act required the Federal Reserve Board to promulgate consolidated capital requirements for depository institution holding companies that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to the depository institutions themselves.
The Dodd-Frank Act required the Federal Reserve Board to promulgate consolidated capital requirements for depository institution holding companies that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to the depository institutions themselves.
Some of the principal activities that the Federal Reserve Board has determined by regulation to be so closely related to banking are: (i) making or servicing loans; (ii) performing certain data processing services; (iii) providing discount brokerage services; (iv) acting as fiduciary, investment or financial advisor; (v) leasing personal or real property; (vi) making investments in corporations or projects designed primarily to promote community welfare; and (vii) acquiring a savings association whose direct and indirect activities are limited to those permitted for bank holding companies.
One of the principal exceptions to this prohibition is for activities found by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. ​ Some of the principal activities that the Federal Reserve Board has determined by regulation to be so closely related to banking are: (i) making or servicing loans; (ii) performing certain data processing services; (iii) providing discount brokerage services; (iv) acting as fiduciary, investment or financial advisor; (v) leasing personal or real property; (vi) making investments in corporations or projects designed primarily to promote community welfare; and (vii) acquiring a savings association whose direct and indirect activities are limited to those permitted for bank holding companies. ​ The Company is subject to the Federal Reserve Board’s capital adequacy guidelines for bank holding companies (on a consolidated basis).

… 351 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

106 edited+56 added−40 removed118 unchanged
The minimum capital requirements are: (1) a common equity Tier 1 capital ratio of 4.5%; (2) a Tier 1 to risk-based assets capital ratio of 6%; (3) a total capital ratio of 8.0%; and (4) a Tier 1 leverage ratio of 4.0%.
The minimum capital requirements are: (1) a common equity Tier 1 capital ratio of 4.5%; (2) a Tier 1 to risk-based assets capital ratio of 6.0%; (3) a total capital ratio of 8.0%; and (4) a Tier 1 leverage ratio of 4.0%.
If we do not manage our growth effectively, our financial condition and operating results could be negatively affected. Furthermore, there can be considerable costs involved in expanding lending capacity, and generally a period of time is required to generate the necessary revenues to offset these costs, especially in areas in which we do not have an established presence.
If we do not manage our growth prudently and effectively, our financial condition and operating results could be negatively affected. ​ Furthermore, there can be considerable costs involved in expanding lending capacity, and generally a period of time is required to generate the necessary revenues to offset these costs, especially in areas in which we do not have an established presence.
Risks Related to our Business Strategy Our business strategy includ es growth, and our financial condi tion and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Growing our operations could also cause our expenses to increase faster than our revenues.
Risks Related to our Business Strategy Our business strategy includ es growth, and our financial condi tion and results of operations could be negatively affected if we fail to grow or fail to manage our growth prudently and effectively. Growing our operations could also cause our expenses to increase faster than our revenues.
This provision was recently renewed as part of the Consolidated Appropriations Act of 2022. 42 Table of Contents While this provision has been re-enacted every year since 2014, and is expected to continue to be re-enacted in future federal spending bills, if Congress and the President of the United States fail to further renew the provision, then the ability of medical cannabis businesses to act in this area, and our ability to provide banking products and services to such businesses, may be impeded.
This provision was recently renewed as part of the Consolidated Appropriations Act of 2022. ​ 51 Table of Contents While this provision has been re-enacted every year since 2014, and is expected to continue to be re-enacted in future federal spending bills, if Congress and the President of the United States fail to further renew the provision, then the ability of medical cannabis businesses to act in this area, and our ability to provide banking products and services to such businesses, may be impeded.
Changes in interest rates, prepayment speeds and other factors may also cause the value of our loans held for sale to change. ​ Although we have implemented risk management strategies, as well as policies and procedures designed to manage the risks associated with changes in market interest rates, changes in interest rates have had and may continue to have an adverse effect on our operating results and financial condition. ​ If our ongoing assumptions regarding borrower or depositor behavior or overall economic conditions are significantly different than we anticipate, then our risk mitigation may be insufficient to protect against interest rate risk and our operating results and financial condition would be adversely affected. ​ Changes in interest rates could reduce our profits and asset values.
Changes in interest rates, prepayment speeds and other factors may also cause the value of our loans held for sale to change. ​ Although we have implemented risk management strategies, as well as policies and procedures designed to manage the risks associated with changes in market interest rates, changes in interest rates have had and may continue to have an adverse effect on our operating results and financial condition. ​ If our ongoing assumptions regarding borrower or depositor behavior or overall economic conditions are significantly different than we anticipate, then our risk mitigation may be insufficient to protect against interest rate risk and our operating results and financial condition would be adversely affected. ​ 53 Table of Contents Changes in interest rates could reduce our profits and asset values.
We primarily serve individuals and businesses located in the Greater Boston metropolitan area and surrounding communities, including eastern Connecticut, southern New Hampshire and Rhode Island. At December 31, 2024, the vast majority of our total loans were primarily secured by real estate in this market area, defined as within a 100-mile radius of the company headquarters in Needham, Massachusetts.
We primarily serve individuals and businesses located in the Greater Boston metropolitan area and surrounding communities, including eastern Connecticut, southern New Hampshire and Rhode Island. At December 31, 2025, the vast majority of our total loans were primarily secured by real estate in this market area, defined as within a 100-mile radius of the company headquarters in Needham, Massachusetts.
Additionally, interest rate hedging could fail to protect us or adversely affect us because, among other things: ● available interest rate hedging may not correspond directly with the interest rate risk for which protection is sought; ● the duration of the hedge may not match the duration of the related liability; ● the party owing money in the hedging transaction may default on its obligation to pay; ● the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; ● the value of derivatives used for hedging may be adjusted from time to time in accordance with U.S.
Additionally, interest rate hedging could fail to protect us or adversely affect us because, among other things: ​ ● available interest rate hedging may not correspond directly with the interest rate risk for which protection is sought; ● the duration of the hedge may not match the duration of the related liability; ● the party owing money in the hedging transaction may default on its obligation to pay; 54 Table of Contents ● the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; ● the value of derivatives used for hedging may be adjusted from time to time in accordance with U.S.
For as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
For as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, 60 Table of Contents and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Information technology systems are critical to our business. Our business requires us to collect, process, transmit and store significant amounts of confidential information regarding our customers, employees and our own business, operations, plans and business strategies. We use various technology systems to manage our customer relationships, general ledger, investments, deposits, and loans.
Our business requires us to collect, process, transmit and store significant amounts of confidential information regarding our customers, employees and our own business, operations, plans and business strategies. ​ We use various technology systems to manage our customer relationships, general ledger, investments, deposits, and loans.
In addition, if a court were to find this exclusive forum provision to be inapplicable or unenforceable in a particular action, we may incur additional costs associated with resolving the action in another jurisdiction, which could have a material adverse effect on our financial condition and results of operations. 56 Table of Contents ITEM 1B. Unresolved Staff Comments None.
In addition, if a court were to find this exclusive forum provision to be inapplicable or unenforceable in a particular action, we may incur additional costs associated with resolving the action in another jurisdiction, which could have a material adverse effect on our financial condition and results of operations. ​ ITEM 1B. Unresolved Staff Comments None. ​
Our efforts to take these risks into account in making lending and other decisions, including by increasing our business with climate-friendly companies, may not be effective in protecting us from the negative impact of new laws and regulations or changes in consumer or business behavior. Various factors may make takeover attempts more difficult to achieve.
Our efforts to take these risks into account in making lending and other decisions, including by increasing our business with climate-friendly companies, may not be effective in protecting us from the negative impact of new laws and regulations or changes in consumer or business behavior. ​ 65 Table of Contents Various factors may make takeover attempts more difficult to achieve.
An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital level falls below the capital conservation buffer amount. 50 Table of Contents The application of these capital requirements could, among other things, result in lower returns on equity, and result in regulatory actions if we are unable to comply with such requirements.
An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital level falls below the capital conservation buffer amount. ​ The application of these capital requirements could, among other things, result in lower returns on equity, and result in regulatory actions if we are unable to comply with such requirements.
These laws and regulations require us to, among other things, implement specific policies and procedures related to those business lines, including enhanced licensing procedures and policies, and anti-money laundering, anti-bribery and corruption, fraud, compliance, suspicious activities, currency transaction reporting, and due diligence on new and existing customers. ​ 49 Table of Contents With respect to cannabis-related businesses, the Controlled Substances Act makes it illegal under federal law to manufacture, distribute, or dispense cannabis, and therefore federal law, including the money laundering statutes and the BSA, apply to cannabis-related conduct.
These laws and regulations require us to, among other things, implement specific policies and procedures related to those business lines, including enhanced licensing procedures and policies, and anti-money laundering, anti-bribery and corruption, fraud, compliance, suspicious activities, currency transaction reporting, and due diligence on new and existing customers. ​ With respect to cannabis-related businesses, the Controlled Substances Act makes it illegal under federal law to manufacture, distribute, or dispense cannabis, and therefore federal law, including the money laundering statutes and the BSA, apply to cannabis-related conduct.
Our operational risks include the risk of malfeasance by employees or persons outside our company, errors relating to transaction processing and technology, systems failures or interruptions, breaches of our internal control systems and compliance requirements, and business continuation and disaster recovery. There have been increasing efforts by third parties to breach data security at financial institutions.
Our operational risks include the risk of malfeasance by employees or persons outside our company, errors relating to transaction processing and technology, systems failures or interruptions, breaches of our internal control systems and compliance requirements, and business continuation and disaster recovery. ​ 63 Table of Contents There have been increasing efforts by third parties to breach data security at financial institutions.
Thus, any borrowing or funds needed to raise capital required to make a capital injection becomes more difficult and expensive and could have an adverse effect on our business, financial condition and results of operations. ​ 51 Table of Contents We may become subject to enforcement actions even though noncompliance was inadvertent or unintentional.
Thus, any borrowing or funds needed to raise capital required to make a capital injection becomes more difficult and expensive and could have an adverse effect on our business, financial condition and results of operations. We may become subject to enforcement actions even though noncompliance was inadvertent or unintentional.
However, the existence of cyber-attacks or security breaches at third parties with access to our data, such as vendors, may not be disclosed to us in a timely manner. 54 Table of Contents Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes.
However, the existence of cyber-attacks or security breaches at third parties with access to our data, such as vendors, may not be disclosed to us in a timely manner. ​ Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes.
A deterioration in economic conditions, especially local conditions, could have the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations, and could more negatively affect us compared to a financial institution that operates with more geographic diversity: ● demand for our products and services may decline; ● loan delinquencies, problem assets and foreclosures may increase; ● collateral for loans, especially real estate, may decline in value, thereby reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans, causing an increase in our allowance for credit losses; and ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.
Local and regional economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans. ​ A deterioration in economic conditions, especially local conditions, could have the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations, and could more negatively affect us compared to a financial institution that operates with more geographic diversity: ​ ● demand for our products and services may decline; ● loan delinquencies, problem assets and foreclosures may increase; ● collateral for loans, especially real estate, may decline in value, thereby reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans, causing an increase in our allowance for credit losses; and ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.
Some of these impacts might occur even in the absence of an actual default but as a consequence of extended political negotiations around the threat of such a default and a government shutdown. We have a high concentration of loans secured by real estate in our market area.
Some of these impacts might occur even in the absence of an actual default but as a consequence of extended political negotiations around the threat of such a default and a government shutdown. ​ 55 Table of Contents We have a high concentration of loans secured by real estate in our market area.
This may result in a material adverse effect on collateral values and our ability to minimize its losses. 43 Table of Contents Risks Related to Market Interest Rates The reversal of the high interest rate environment may adversely affect our net interest income and profitability.
This may result in a material adverse effect on collateral values and our ability to minimize its losses. ​ Risks Related to Market Interest Rates The reversal of the high-interest rate environment may adversely affect our net interest income and profitability.
Additional rate cuts may occur if inflationary pressures continue towards the FOMC’s 2% target and employment weakens. Decreases to the target range for the federal funds rate, combined with ongoing geopolitical instability, could signal the risk of an economic recession.
Additional rate cuts may occur if inflationary pressures continue towards the FOMC’s 2% target and employment continues to weaken. Decreases to the target range for the federal funds rate, combined with ongoing geopolitical instability, could signal the risk of an economic recession.
The guidance states that management should employ heightened risk management practices including board and management oversight and strategic planning, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing. ​ 39 Table of Contents While we believe we have implemented policies and procedures with respect to our commercial real estate loan portfolio consistent with this guidance, bank regulators could require us to implement additional policies and procedures consistent with their interpretation of the guidance that may result in additional costs to us or that may result in a curtailment of our commercial real estate lending, including multifamily and construction and land development lending, and/or the requirement that we maintain higher levels of regulatory capital, either of which would adversely affect our loan originations and profitability.
The guidance states that management should employ heightened risk management practices including board and management oversight and strategic planning, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing. ​ 48 Table of Contents While we believe we have implemented policies and procedures with respect to our commercial real estate loan portfolio consistent with this guidance, bank regulators could require us to implement additional policies and procedures consistent with their interpretation of the guidance that may result in additional costs to us or that may result in a curtailment of our commercial real estate lending, including multifamily and construction and land development lending, and/or the requirement that we maintain higher levels of regulatory capital, either of which would adversely affect our loan originations and profitability. ​ Our construction and land development loans involve credit risks that could adversely affect our financial condition and results of operations.
At December 31, 2024, $147.0 million in loans were reported as out of territory, excluding Structured Finance loans, which have a broader geographical targeted footprint. Therefore, our success is largely dependent on the economic conditions, including employment levels, population growth, income levels, savings trends and government policies, in this market area.
At December 31, 2025, $434.1 million in loans were reported as out of territory, excluding Structured Finance loans, which have a broader geographical targeted footprint. Therefore, our success is largely dependent on the economic conditions, including employment levels, population growth, income levels, savings trends and government policies, in this market area.
The fair value of our AFS securities can fluctuate due to factors outside of our control. Factors beyond our control can significantly influence the fair value of AFS securities in our portfolio and can cause potential adverse changes to the fair value of these AFS securities.
Factors beyond our control can significantly influence the fair value of AFS securities in our portfolio and can cause potential adverse changes to the fair value of these AFS securities.
Subsequent valuations, in light of factors prevailing at that time, may result in significant changes in the values of these AFS securities in future periods. Any of these factors could require us to recognize further impairments in the value of our AFS securities portfolio, which may have an adverse effect on our results of operations in future periods.
Subsequent valuations, in light of factors prevailing at that time, may result in significant changes in the values of these AFS securities in future periods. ​ Any of these factors could require us to recognize further impairments in the value of our AFS securities portfolio, which may have an adverse effect on our results of operations in future periods. ​ The fair value of our AFS securities can fluctuate due to factors outside of our control.
For more information about our market area, please see the section titled “Business of Needham Bank – Market Area.” 41 Table of Contents If our allowance for credit losses on loans is not sufficient to cover actual credit losses, our earnings could decrease.
For more information about our market area, please see the section titled “Business of Needham Bank – Market Area.” ​ If our ACL on loans is not sufficient to cover actual credit losses, our earnings could decrease.
Significant negative changes to valuations could result in credit losses on our AFS securities portfolio, which could have an adverse effect on our financial condition or results of operations. As of December 31, 2024, we had approximately $8.2 million of accumulated other comprehensive losses.
Significant negative changes to valuations could result in credit losses on our AFS securities portfolio, which could have an adverse effect on our financial condition or results of operations. As of December 31, 2025, we had approximately $3.1 million of accumulated other comprehensive losses.
Accordingly, our operations are exposed to the risk that these vendors will not perform in accordance with our contractual agreements with them, or we also could be adversely affected if such an agreement is not renewed by the third-party vendor or is renewed on terms less favorable to us.
We outsource a majority of our data processing requirements to third-party providers. ​ Accordingly, our operations are exposed to the risk that these vendors will not perform in accordance with our contractual agreements with them, or we also could be adversely affected if such an agreement is not renewed by the third-party vendor or is renewed on terms less favorable to us.
Environmental liability associated with our lending activities could result in losses. In the course of business, we may acquire, through foreclosure, properties securing loans originated or purchased that are in default. Particularly in commercial real estate lending, there is a risk that material environmental violations could be discovered on these properties.
In the course of business, we may acquire, through foreclosure, properties securing loans originated or purchased that are in default. Particularly in commercial real estate lending, there is a risk that material environmental violations could be discovered on these properties.
A worsening of business and economic conditions generally or specifically in the principal markets in which we conduct business could have adverse effects on our business, including the following: ● a decrease in the demand for, or the availability of, loans and other products and services offered by us; ● a decrease in the value of our loans or other assets secured by residential or commercial real estate; ● a decrease in interest income from variable rate loans due to declines in interest rates; and ● an increase in the number of customers and counterparties who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to us, which could result in a higher level of nonperforming assets, net charge-offs, provisions for credit losses, and valuation adjustments on loans held for sale.
Decreases in local real estate values caused by economic conditions or other events could adversely affect the value of the property used as collateral for our loans, which could cause us to realize a loss in the event of foreclosure. ​ A worsening of business and economic conditions generally or specifically in the principal markets in which we conduct business could have adverse effects on our business, including the following: ​ ● a decrease in the demand for, or the availability of, loans and other products and services offered by us; ● a decrease in the value of our loans or other assets secured by residential or commercial real estate; ● a decrease in interest income from variable rate loans due to declines in interest rates; and ● an increase in the number of customers and counterparties who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to us, which could result in a higher level of nonperforming assets, net charge-offs, provisions for credit losses, and valuation adjustments on loans held for sale.
The policies and procedures we have adopted that are designed to assist in compliance with these laws and regulations may not be effective in preventing violations of these laws and regulations. Furthermore, these rules and regulations continue to evolve and expand.
The policies and procedures we have adopted that are designed to assist in compliance with these laws and regulations may not be effective in preventing violations of these laws and regulations.
Among other things, a downgrade in the U.S. government’s credit rating could adversely impact the value of our AFS securities portfolio and may trigger requirements that we post additional collateral for trades relative to these AFS securities.
Such ratings actions could result in a significant adverse impact on us. ​ Among other things, a downgrade in the U.S. government’s credit rating could adversely impact the value of our AFS securities portfolio and may trigger requirements that we post additional collateral for trades relative to these AFS securities.
See “Supervision and Regulation – Banking Regulation – Capital Requirements.” We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors. The Company is an emerging growth company.
Business – Supervision and Regulation – Federal Regulations Applicable to the Bank – Capital Requirements.” ​ We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors. The Company is an emerging growth company.
We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations; however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there was in place at the time systems and procedures designed to ensure compliance.
Enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. ​ We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations; however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there was in place at the time systems and procedures designed to ensure compliance.
During the year ended December 31, 2024, we had $3.7 million of after-tax other comprehensive income, which resulted primarily from $4.9 million in unrealized valuation gains on AFS securities. 47 Table of Contents Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings and financial condition.
During the year ended December 31, 2025, we had $5.0 million of after-tax other comprehensive income, which resulted primarily from $6.4 million in pre-tax unrealized valuation gains on AFS securities. ​ Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings and financial condition.
We derive our income mainly from the difference or “spread” between the interest earned on loans, securities and other interest-earning assets and interest paid on deposits, borrowings and other interest-bearing liabilities. In general, the larger the spread, the more we earn.
We derive our income mainly from the difference or “spread” between the interest earned on loans, securities and other interest-earning assets and interest paid on deposits, borrowings and other interest-bearing liabilities.
Our net interest income and our earnings would be similarly affected if the interest rates on our interest-bearing liabilities increased at a faster pace than the interest rates on our interest-earning assets. ​ The FOMC cut the target range for the federal funds during 2024 by one percentage point.
Our net interest income and our earnings would be similarly affected if the interest rates on our interest-bearing liabilities increased at a faster pace than the interest rates on our interest-earning assets. ​ The FOMC cut the target range for the federal funds during 2025 by 75 basis points.
Whether customer claims and legal action related to the performance of our responsibilities are founded or unfounded, if such claims and legal actions are not resolved in a manner favorable to us, they may result in significant expenses, attention from management and financial liability.
From time to time, customers and others make claims and take legal action pertaining to the performance of our responsibilities. 61 Table of Contents Whether customer claims and legal action related to the performance of our responsibilities are founded or unfounded, if such claims and legal actions are not resolved in a manner favorable to us, they may result in significant expenses, and attention from management and financial liability.
Additionally, in recent years, we have grown our Structured Finance loan portfolio significantly, including through lending relationships to cannabis and solar companies and bridge financing. These industries can entail unique regulatory and operational risks and we believe we have experienced team members who are able to understand and assess these risks when originating and managing these relationships.
Any one of them could be difficult to replace. ​ Additionally, in recent years, we have grown our Structured Finance loan portfolio significantly, including through lending relationships to cannabis and solar companies and bridge financing. 62 Table of Contents These industries can entail unique regulatory and operational risks and we believe we have experienced team members who are able to understand and assess these risks when originating and managing these relationships.
Investors may find our common stock less attractive since we have chosen to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.
Investors may find our common stock less attractive since we have chosen to rely on these exemptions. ​ If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile. ​ Potential impact of losing the benefits of excess deposit insurance provided by the DIF.
Our construction and land development loans involve credit risks that could adversely affect our financial condition and results of operations.
These loans involve credit risks that could adversely affect our financial condition and results of operations.
For example, a reduction in interest rates generally results in increased prepayments of loans and mortgage-backed securities, as borrowers refinance their debt to reduce their borrowing cost.
In addition, changes in interest rates can affect the average life of loans and securities. For example, a reduction in interest rates generally results in increased prepayments of loans and mortgage-backed securities, as borrowers refinance their debt to reduce their borrowing cost.
Due to the unique industry-specific risks of this business, if we were forced to terminate this business line, we could lose many or most of these deposits, all of which are core deposits. 48 Table of Contents Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.
Due to the unique industry-specific risks of this business, if we were forced to terminate this business line, we could lose many or most of these deposits, all of which are core deposits. ​ Our funding sources may prove insufficient to replace deposits at maturity and support our future growth. ​ We must maintain sufficient funds to respond to the needs of depositors and borrowers.
If we are not able to increase our lower-cost transactional deposits at a level necessary to fund our asset growth or deposit outflows, we may be forced to seek other sources of funds, including other certificates of deposit, FHLB advances, FRB borrowings, brokered deposits and lines of credit to meet the borrowing and deposit withdrawal requirements of our customers, which may be more expensive and have an adverse effect on our net interest margin and profitability.
Moreover, deposit balances can decrease if customers perceive alternative investments as providing a better risk/return tradeoff. 57 Table of Contents If we are not able to increase our lower-cost transactional deposits at a level necessary to fund our asset growth or deposit outflows, we may be forced to seek other sources of funds, including other certificates of deposit, FHLB advances, FRB borrowings, brokered deposits and lines of credit to meet the borrowing and deposit withdrawal requirements of our customers, which may be more expensive and have an adverse effect on our net interest margin and profitability.
We depend on the services of the members of our senior management team who direct our strategy and operations. Our executive officers and lending personnel possess substantial expertise, extensive knowledge of our markets and key business relationships. Any one of them could be difficult to replace.
We depend on the services of the members of our senior management team who direct our strategy and operations. Our executive officers and lending personnel possess substantial expertise, extensive knowledge of our markets and key business relationships.
A downgrade may also adversely affect the market value of such instruments. We cannot predict if, when or how any changes to the credit ratings or perceived creditworthiness of these organizations will affect economic conditions. Such ratings actions could result in a significant adverse impact on us.
A downgrade may also adversely affect the market value of such instruments. We cannot predict if, when or how any changes to the credit ratings or perceived creditworthiness of these organizations will affect economic conditions.
The guidance focuses on exposure to commercial real estate loans that is dependent on the cash flow from the real estate held as collateral and that is likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution).
The guidance focuses on exposure to commercial real estate loans that is dependent on the cash flow from the real estate held as collateral and that is likely to be at greater risk to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution). ​ The guidance assists banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations.
A significant amount of our commercial and industrial and commercial real estate, including multi-family residential real estate loans, are adjustable-rate loans and a decrease in the general level of interest rates may adversely affect our interest income levels.
Generally, in falling interest rate environments, loan prepayment rates are likely to increase, and in rising interest rate environments, loan prepayment rates are likely to decline. ​ A significant amount of our commercial and industrial and commercial real estate, including multi-family residential real estate loans, are adjustable-rate loans and a decrease in the general level of interest rates may adversely affect our interest income levels.
Negative publicity regarding our business, employees, or customers, with or without merit, may result in the loss of customers and employees, costly litigation and increased governmental regulation, any or all of which could adversely affect our business and operating results.
Negative publicity regarding our business, employees, or customers, with or without merit, may result in the loss of customers and employees, costly litigation and increased governmental regulation, any or all of which could adversely affect our business and operating results. ​ Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers.
Needham Bank’s ability to pay dividends to NB Bancorp would be limited if it does not maintain the capital conservation buffer required by the capital rules, which may limit NB Bancorp’s ability to pay dividends to its stockholders.
The Bank’s ability to pay dividends to the Company would be limited if it does not maintain the capital conservation buffer required by the capital rules, which may limit the Company’s ability to pay dividends to its stockholders. See “Item 1.
In the event of a breakdown in our internal control systems, improper operation of systems or improper employee actions, or a breach of our security systems, including if confidential or proprietary information were to be mishandled, misused or lost, we could suffer financial loss, loss of customers and damage to our reputation, and face regulatory action or civil litigation.
Because the techniques used to cause security breaches change frequently, we may be unable to proactively address these techniques or to implement adequate preventative measures. ​ In the event of a breakdown in our internal control systems, improper operation of systems or improper employee actions, or a breach of our security systems, including if confidential or proprietary information were to be mishandled, misused or lost, we could suffer financial loss, loss of customers and damage to our reputation, and face regulatory action or civil litigation.
Non-compliance with the USA PATRIOT Act, BSA, or other laws and regulations could result in fines or sanctions. The USA PATRIOT and BSA require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are suspected, financial institutions are obligated to file suspicious activity reports with FinCEN.
The USA PATRIOT and BSA require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are suspected, financial institutions are obligated to file suspicious activity reports with FinCEN.
We must maintain sufficient funds to respond to the needs of depositors and borrowers. As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments.
As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments.
A financial institution may have a concentration in commercial real estate lending if, among other factors, (i) total reported loans for construction, land acquisition and development, and other land represent 100% or more of total capital, or (ii) total reported loans secured by multifamily and non-farm residential properties, loans for construction, land acquisition and development and other land, and loans otherwise sensitive to the general commercial real estate market, including loans to non-owner occupied commercial real estate related entities, represent 300% or more of total capital.
A financial institution may have a concentration in commercial real estate lending if, among other factors, (i) total reported loans for construction, land acquisition and development, and other land represent 100% or more of total capital, or (ii) total reported loans secured by multifamily and non-farm residential properties, loans for construction, land acquisition and development and other land, and loans otherwise sensitive to the general commercial real estate market, including loans to non-owner occupied commercial real estate related entities, represent 300% or more of total capital. ​ Based on these factors we could be deemed to have a concentration in commercial real estate lending, as such loans represent approximately 294.2% and 249.9% of the Bank’s total capital as of December 31, 2025 and 2024, respectively.
In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.
In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance. ​ Further, a U.S. government debt default would have a material adverse impact on our business and financial performance, including a decrease in the value of U.S.
Our loss of these persons, or our inability to hire additional qualified personnel, could impact our ability to implement our business strategy and could have a material adverse effect on our results of operations and our ability to compete in our markets.
Our loss of these persons, or our inability to hire additional qualified personnel, could impact our ability to implement our business strategy and could have a material adverse effect on our results of operations and our ability to compete in our markets. ​ Development of new products and services may impose additional costs on us and may expose us to increased operational risk.
Additionally, as the possession and use of cannabis remains illegal under the CSA, we may be deemed to be aiding and abetting illegal activities through the services that we provide to these customers and could have legal action taken against us by the Federal government, including imprisonment and fines.
Any change in the federal government’s enforcement position, could cause us to immediately cease providing banking services to the medical-use cannabis industry in the states where we operate. ​ Additionally, as the possession and use of cannabis remains illegal under the CSA, we may be deemed to be aiding and abetting illegal activities through the services that we provide to these customers and could have legal action taken against us by the Federal government, including imprisonment and fines.
Additionally, there is no guarantee that the Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.
Additionally, there is no guarantee that the Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion. ​ Our AFS securities portfolio performance in difficult market conditions could have adverse effects on our results of operations.
Our ability to generate gains on sales of mortgage loans is significantly dependent on the level of originations. Cash flows are affected by changes in market interest rates. Generally, in falling interest rate environments, loan prepayment rates are likely to increase, and in rising interest rate environments, loan prepayment rates are likely to decline.
Our ability to generate gains on sales of mortgage loans is significantly dependent on the level of originations. Cash flows are affected by changes in market interest rates.
Federal prosecutors have significant discretion and there can be no assurance that a federal prosecutor in any of the federal districts in which we operate will not choose to strictly enforce the federal laws governing cannabis, including medical-use cannabis, or that any of these federal courts will follow the Ninth Circuit’s ruling in USA v. McIntosh .
As of the date of filing this Annual Report on Form 10-K, we are aware of no federal or state court in or for Massachusetts that has addressed the merits of the McIntosh ruling. ​ Federal prosecutors have significant discretion and there can be no assurance that a federal prosecutor in any of the federal districts in which we operate will not choose to strictly enforce the federal laws governing cannabis, including medical-use cannabis, or that any of these federal courts will follow the Ninth Circuit’s ruling in USA v.
In addition, our credit risk may be exacerbated when the collateral held by us cannot be liquidated or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due to us. There is no assurance that any such losses would not materially and adversely affect our results of operations.
In addition, our credit risk may be exacerbated when the collateral held by us cannot be liquidated or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due to us.
The longer timelines have been the result of additional consumer protection initiatives related to the foreclosure process, increased documentary requirements and judicial scrutiny, and, both voluntary and mandatory programs under which lenders may consider loan modifications or other alternatives to foreclosure.
The judicial foreclosure process is protracted, which delays our ability to resolve non-performing loans through the sale of the underlying collateral. ​ 52 Table of Contents The longer timelines have been the result of additional consumer protection initiatives related to the foreclosure process, increased documentary requirements and judicial scrutiny, and, both voluntary and mandatory programs under which lenders may consider loan modifications or other alternatives to foreclosure.
If we raise capital through the issuance of additional shares of our common stock or other securities, it would dilute the ownership interests of stockholders and may dilute the per share book value of our common stock.
If we raise capital through the issuance of additional shares of our common stock or other securities, it would dilute the ownership interests of stockholders and may dilute the per share book value of our common stock. New investors may also have rights, preferences and privileges senior to our current stockholders, which may adversely impact our current stockholders.
Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations. In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions.
Furthermore, these rules and regulations continue to evolve and expand. ​ Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations. In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Board.
These estimates and assumptions are based on management’s best estimates and experience as of that date and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known. The area requiring significant estimates and assumptions by management include our evaluation of the adequacy of our allowance for credit losses.
These estimates and assumptions are based on management’s best estimates and experience as of that date and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known.
These events could have an adverse effect on our financial condition and results of operations. The foreclosure process may adversely impact our recoveries on non-performing loans. The judicial foreclosure process is protracted, which delays our ability to resolve non-performing loans through the sale of the underlying collateral.
These events could have an adverse effect on our financial condition and results of operations. ​ The foreclosure process may adversely impact our recoveries on non-performing loans.
Our AFS securities portfolio performance in difficult market conditions could have adverse effects on our results of operations. Unrealized losses on AFS securities result from changes in credit spreads and liquidity issues in the marketplace, along with changes in the credit profile of individual securities issuers. Under U.S.
Unrealized losses on AFS securities result from changes in credit spreads and liquidity issues in the marketplace, along with changes in the credit profile of individual securities issuers. Under U.S.
GAAP to reflect changes in fair value; and/or ● downward adjustments, or “mark-to-market” losses, would reduce our stockholders’ equity. 45 Table of Contents Risks Related to Economic Conditions A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings.
Risks Related to Economic Conditions A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings.
At December 31, 2024, construction loans and loans to finance the acquisition of developable land which we refer to as “land development loans” totaled $583.8 million, or 13.5%, of our loan portfolio and 88.8% of the Bank’s total capital compared to $622.8 million, or 16.0%, of our loan portfolio and 100.4% of the Bank’s total capital at December 31, 2023.
At December 31, 2025, construction loans and loans to finance the acquisition of developable land which we refer to as “land development loans” totaled $730.6 million, or 12.2%, of our loan portfolio and 91.6% of the Bank’s total capital (reflective of the impact of the Provident Acquisition) compared to $583.8 million, or 13.5%, of our loan portfolio and 85.8% of the Bank’s total capital at December 31, 2024.
Our day one CECL adjustment on January 1, 2023, was $2.1 million, net of tax. In addition, bank regulators periodically review our allowance for credit losses on loans and, as a result of such reviews, we may be required to increase our provision for credit losses on loans or recognize further loan charge-offs.
Material additions to our allowance for credit losses on loans would materially decrease our net income. ​ In addition, bank regulators periodically review our allowance for credit losses on loans and, as a result of such reviews, we may be required to increase our provision for credit losses on loans or recognize further loan charge-offs.
Other negative impacts could be volatile capital markets, an adverse impact on the U.S. economy and the U.S. dollar, as well as increased default rates among borrowers in light of increased economic uncertainty.
Treasury securities and other government securities held by us, which could negatively impact our capital position and our ability to meet regulatory requirements. Other negative impacts could be volatile capital markets, an adverse impact on the U.S. economy and the U.S. dollar, as well as increased default rates among borrowers in light of increased economic uncertainty.
Reducing excess deposits by taking any of the above risk-mitigating measures, which allows deposits to run off, reduces our overall level of deposits and increases the extent to which we may need to rely in the future on other, more expensive or less stable sources for funding, including FHLB advances, which would reduce net income.
Losing excess deposit insurance could result in deposit run off, reduce our overall level of deposits and increase the extent to which we may need to rely in the future on other, more expensive or less stable sources for funding, including FHLB advances or brokered deposits, which would reduce net income.
Our articles of incorporation provide that, subject to limited exception, state and federal courts in the State of Maryland are the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, and other employees.
Taken as a whole, these statutory or regulatory provisions and provisions in our articles of incorporation and bylaws could result in the Company, Inc. being less attractive to a potential acquirer and therefore could adversely affect the market price of our common stock. ​ Our articles of incorporation provide that, subject to limited exception, state and federal courts in the State of Maryland are the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, and other employees.
The majority of our loans are inside of our primary market area and, as a result, we have a greater risk of loan defaults and losses in the event of a further economic downturn in our market area, as adverse economic conditions may have a negative effect on the ability of our borrowers to make timely payments of their loans.
The majority of our loans are inside of our primary market area and, as a result, we have a greater risk of loan defaults and losses in the event of a further economic downturn in our market area, as adverse economic conditions may have a negative effect on the ability of our borrowers to make timely payments of their loans. ​ A return of recessionary conditions and/or negative developments in the domestic and international credit markets may significantly affect the markets in which we do business, the value of our loans, investments, and collateral securing our loans, and our ongoing operations, costs and profitability.
Moreover, a significant decline in general economic conditions, caused by inflation, recession, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, unemployment, public health crises or other factors beyond our control could further impact these local economic conditions and could further negatively affect the financial results of our banking operations.
Moreover, a significant decline in general economic conditions, caused by inflation, recession, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, unemployment, public health crises or other factors beyond our control could further impact these local economic conditions and could further negatively affect the financial results of our banking operations. 50 Table of Contents In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.
Similarly, weaker economic conditions caused by recessions, unemployment, inflation, a decline in real estate values or other factors beyond our control may adversely affect the ability of our borrowers to service their debt obligations and could result in higher loan losses and lower net income for us.
Similarly, weaker economic conditions caused by recessions, unemployment, inflation, a decline in real estate values or other factors beyond our control may adversely affect the ability of our borrowers to service their debt obligations and could result in higher loan losses and lower net income for us. ​ Although there is not a single employer or industry in our market area on which a significant number of our customers are dependent, a substantial portion of our loan portfolio is composed of loans secured by property located in the Greater Boston metropolitan area.
Our cannabis-related, money service and ATM business present compliance risks that are different in kind or degree compared to those that we are accustomed to managing and have required us to implement new or enhance existing procedures, systems and controls.
Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations. ​ Our cannabis-related, money service and ATM business present compliance risks that are different in kind or degree compared to those that we are accustomed to managing and have required us to implement new or enhance existing procedures, systems and controls.
Any adverse change in this FinCEN guidance, any new regulations or legislation, any change in existing regulations or oversight, whether a change in regulatory policy or a change in a regulator’s interpretation of a law or regulation, could have a negative impact on our interest income and noninterest income, as well as the cost of our operations, increasing our cost of regulatory compliance and of doing business, and/or otherwise affect us, which may materially affect our profitability.
Any adverse change in this FinCEN guidance, any new regulations or legislation, any change in existing regulations or oversight, whether a change in regulatory policy or a change in a regulator’s interpretation of a law or regulation, could have a negative impact on our interest income and noninterest income, as well as the cost of our operations, increasing our cost of regulatory compliance and of doing business, and/or otherwise affect us, which may materially affect our profitability. ​ On December 18, 2025, President Trump signed an executive order directing the Department of Justice to move cannabis from a Schedule I to a Schedule III substance, a category for substances with accepted medical use and lower abuse potential.
Other Risks Related to Our Business We operate as a community bank and our ability to maintain our reputation, which is critical to the success of our business, may materially adversely affect our performance. We are a community bank, and our reputation is one of the most valuable components of our business.
In some cases, we could be required to apply new or revised guidance retroactively. ​ Other Risks Related to Our Business We operate as a community bank and our ability to maintain our reputation, which is critical to the success of our business, may materially adversely affect our performance.
Any of these negative events may result in higher-than-expected loan delinquencies, increase our levels of nonperforming and classified assets, and reduce demand for our products and services, which may cause us to incur losses and may adversely affect our capital, liquidity and financial condition. 46 Table of Contents Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations.
Any of these negative events may result in higher-than-expected loan delinquencies, increase our levels of nonperforming and classified assets, and reduce demand for our products and services, which may cause us to incur losses and may adversely affect our capital, liquidity and financial condition. ​ Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations. ​ Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. ​ Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.
It will take several years to determine our borrowers’ payment histories, with respect to many of these new lending relationships and, as a result, we may not be able to reliably evaluate the quality of the loan portfolio until that time. Our historical emphasis on residential mortgage loans exposes us to lending risks .
It will take several years to determine our borrowers’ payment histories, with respect to many of these new lending relationships and, as a result, we may not be able to reliably evaluate the quality of the loan portfolio until that time. ​ Our historical emphasis on residential mortgage loans exposes us to lending risks . ​ At December 31, 2025, $1.18 billion, or 19.6% of our loan portfolio, was secured by one-to-four-family residential real estate compared to $1.13 billion or 26.1%, of our loan portfolio, as of December 31, 2024, and we intend to continue to provide this type of lending for the foreseeable future.

… 122 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

15 edited+3 added−6 removed15 unchanged
The CIO is responsible for implementing and maintaining the IRP, which includes: ● Identifying the incident response team (“IRT”) and any appropriate sub-teams to address specific information security incidents, or categories of information security incidents; ● Coordinating IRT activities, including developing, maintaining, and following appropriate procedures to respond to and document identified information security incidents; ● Conducting post-incident reviews to gather feedback on information security incident response procedures and address any identified gaps in security measures; 59 Table of Contents ● Providing training and conducting periodic exercises to promote employee and stakeholder preparedness and awareness of the IRP; ● Reviewing the IRP at least annually, or whenever there is a material change in the Company’s business practices that may reasonably affect its cyber incident response procedures and ● Report up to the Executive Incident Response Committee, as needed.
The CIO is responsible for implementing and maintaining the IRP, which includes: ​ ● Identifying the incident response team (“IRT”) and any appropriate sub-teams to address specific information security incidents, or categories of information security incidents; ● Coordinating IRT activities, including developing, maintaining, and following appropriate procedures to respond to and document identified information security incidents; ● Conducting post-incident reviews to gather feedback on information security incident response procedures and address any identified gaps in security measures; ● Providing training and conducting periodic exercises to promote employee and stakeholder preparedness and awareness of the IRP; ● Reviewing the IRP at least annually, or whenever there is a material change in the Company’s business practices that may reasonably affect its cyber incident response procedures and ● Report up to the Executive Incident Response Committee, as needed. ​ ​ ​ 69 Table of Contents
In response to identified risks, management may take certain steps to correct and respond to security vulnerabilities, which may include: ● Eliminating unwarranted risks by applying vendor-provided software fixes, commonly called patches; ● Ensuring that changes to security configurations are documented, approved, and tested; ● Ensuring that exploitable files and services are assessed and removed or disabled based upon known vulnerabilities and business needs; ● Updating vulnerability scanning and intrusion detection tools to identify known vulnerabilities and related unauthorized activities; ● Investing in additional technologies or resources to aid in the evaluation, identification and mitigation of risks; ● Conducting subsequent penetration testing and vulnerability assessments, as warranted; and ● Reviewing performance with service providers to ensure security maintenance and reporting responsibilities are operating according to contract provisions and that service providers provide notification of system security breaches that may affect the Company. 58 Table of Contents Internal Controls, Audit, and Testing.
In response to identified risks, management may take certain steps to correct and respond to security vulnerabilities, which may include: ​ ● Eliminating unwarranted risks by applying vendor-provided software fixes, commonly called patches; ● Ensuring that changes to security configurations are documented, approved, and tested; ● Ensuring that exploitable files and services are assessed and removed or disabled based upon known vulnerabilities and business needs; ● Updating vulnerability scanning and intrusion detection tools to identify known vulnerabilities and related unauthorized activities; ● Investing in additional technologies or resources to aid in the evaluation, identification and mitigation of risks; ● Conducting subsequent penetration testing and vulnerability assessments, as warranted; and ● Reviewing performance with service providers to ensure security maintenance and reporting responsibilities are operating according to contract provisions and that service providers provide notification of system security breaches that may affect the Company.
ITEM 1C. Cybersecurity The Company recognizes the importance of cybersecurity and the potential risks posed to our business operations, financial performance, and reputation. Cybersecurity is a significant and integrated component of the Company’s risk management strategy.
ITEM 1C. Cybers ecurity The Company recognizes the importance of cybersecurity and the potential risks posed to our business operations, financial performance, and reputation. Cybersecurity is a significant and integrated component of the Company’s risk management strategy.
The Bank’s Information Technology (“IT”) Steering Committee in conjunction with the Bank’s Project Management Office oversees the development and implementation of our cybersecurity strategy, financial planning, and capital allocation. 57 Table of Contents The Risk Committee provides executive management oversight, from a risk perspective, of information systems security.
The Bank’s Information Technology (“IT”) Steering Committee in conjunction with the Bank’s Project Management Office oversees the development and implementation of our cybersecurity strategy, financial planning, and capital allocation. ​ The Risk Committee provides executive management oversight, from a risk perspective, of information systems security. As referenced above, the CIO provides information security updates to the Risk Committee periodically.
As referenced above, the CIO provides information security updates to the Risk Committee at each meeting. In addition, as discussed below, the Company has implemented an Incident Response Plan to provide a structured and systematic incident response process for information security incidents that affect any of the information technology systems, network, or data of the Company.
In addition, as discussed below, the Company has implemented an Incident Response Plan to provide a structured and systematic incident response process for information security incidents that affect any of the information technology systems, network, or data of the Company.
Cybersecurity risks and threats include, but are not limited to, unauthorized access, use, disclosure, modification, or destruction of our information systems, data, or network; denial of service attacks; malware; ransomware; phishing; social engineering; and cyberattacks by hackers, state-sponsored actors, or other malicious third parties and is compounded by the advent and availability of artificial intelligence tools.
Cybersecurity risks and threats include, but are not limited to, unauthorized access, use, disclosure, modification, or destruction of our information systems, data, or network; denial of service attacks; malware; ransomware; phishing; social engineering; and cyberattacks by hackers, state-sponsored actors, or other malicious third parties and is compounded by the advent and availability of artificial intelligence tools. ​ 66 Table of Contents To prepare and respond to incidents, the Company has implemented a multi-layered cybersecurity strategy, integrating people, technology, and processes.
Any of these factors could have a material adverse effect on our business, financial condition, results of operations, and reputation. Despite our efforts to enhance our cybersecurity posture, we cannot guarantee that our processes and controls will be sufficient to prevent or mitigate all cybersecurity risks and threats that we face.
We may also experience reputational harm or loss of customer confidence or trust as a result of cybersecurity incidents. 67 Table of Contents Any of these factors could have a material adverse effect on our business, financial condition, results of operations, and reputation. ​ Despite our efforts to enhance our cybersecurity posture, we cannot guarantee that our processes and controls will be sufficient to prevent or mitigate all cybersecurity risks and threats that we face.
At least annually, the CIO reports to the Board of Directors, directly or through the ERM Committee, the overall status of the Information Security Program and the Company’s compliance with the Interagency Guidelines for Safeguarding Customer Information.
Notable services include security monitoring and response, continuous vulnerability scanning, third-party monitoring, and threat intelligence. ​ Board Reporting. At least annually, the CIO reports to the Board of Directors, directly or through the ERM Committee, the overall status of the Information Security Program and the Company’s compliance with the Interagency Guidelines for Safeguarding Customer Information.
Regular internal monitoring is integral to the Company’s risk assessment process, which includes regular testing of internal key controls, systems, and procedures. In addition, independent third-party penetration testing to test the effectiveness of security controls and preparedness measures is conducted at least annually or more often, if warranted by the risk assessment or other external factors.
In addition, independent third-party penetration testing to test the effectiveness of security controls and preparedness measures is conducted at least annually or more often, if warranted by the risk assessment or other external factors. Management determines the scope and objectives of the penetration analysis, which may identify additional risks or require additional costs to remediate. ​ Service Providers.
The Company engages third-party consultants and independent auditors to, among other things, conduct penetration tests and perform cybersecurity risk assessments and audits to regularly evaluate our cybersecurity posture in conjunction with obtaining cybersecurity insurance coverage to mitigate the potential financial impact of cybersecurity incidents.
The Company engages third-party consultants and independent auditors to, among other things, conduct penetration tests and perform cybersecurity risk assessments and audits to regularly evaluate our cybersecurity posture in conjunction with obtaining cybersecurity insurance coverage to mitigate the potential financial impact of cybersecurity incidents. ​ The Board Enterprise Risk Management (“ERM”) Committee provides governance oversight of all risks faced by the Company, including cybersecurity and information technology general controls. ​ The Chief Information Officer (“CIO”) manages the IT Department and reports to the ERM and Chief Risk Officer (“CRO”) on these matters.
In order to mitigate the operational, informational and other risks associated with the use of vendors, the Company maintains a Vendor Risk Management Program, which is implemented through a Vendor Risk Management Policy and includes a detailed onboarding process and periodic reviews of vendors with access to sensitive Company data.
Many of these vendors, especially in the financial services industry, have access to sensitive and proprietary information. ​ In order to mitigate the operational, informational and other risks associated with the use of vendors, the Company maintains a Vendor Risk Management Program, which is implemented through a Vendor Risk Management Policy and includes a detailed onboarding process and periodic reviews of vendors with access to sensitive Company data. ​ 68 Table of Contents The Vendor Risk Management Policy applies to any business arrangement between the Company and another individual or entity, by contract or otherwise, in compliance with the Interagency Guidance on Third Party Relationships: Risk Management.
The Board of Directors recognizes the importance of the FFIEC for Safeguarding Customer Information and has incorporated those elements in its ongoing oversight of the Information Security Program. We continually monitor and evaluate the evolving cybersecurity landscape and the potential impact of cybersecurity incidents on our business.
Information security metrics are reported to both management level committees and the ERM Committee and Risk Committee on a quarterly basis. ​ The Board of Directors recognizes the importance of the FFIEC for Safeguarding Customer Information and has incorporated those elements in its ongoing oversight of the Information Security Program. ​ We continually monitor and evaluate the evolving cybersecurity landscape and the potential impact of cybersecurity incidents on our business. ​ We may incur additional costs to enhance our cybersecurity processes and controls, to comply with new or changing laws, regulations, or contractual obligations, or to respond to or recover from cybersecurity incidents.
Notable technologies include firewalls, intrusion detection systems, security automation and response capabilities, user behavior analytics, multi-factor authentication, data backups to immutable storage and business continuity applications. Notable services include security monitoring and response, continuous vulnerability scanning, third-party monitoring, and threat intelligence. Board Reporting.
In addition to training, employees are supported with solutions designed to identify, prevent, detect, respond to, and recover from incidents. Notable technologies include firewalls, intrusion detection systems, security automation and response capabilities, user behavior analytics, multi-factor authentication, data backups to immutable storage and business continuity applications.
Employees are the first line of defense against cybersecurity measures. Each employee is responsible for protecting Company and client information. Employees are provided training at initial onboarding and thereafter regarding information security and cybersecurity-related policies and procedures applicable to their respective roles within the organization.
Employees are provided training at initial onboarding and thereafter regarding information security and cybersecurity-related policies and procedures applicable to their respective roles within the organization. In addition, employees are subjected to regular simulated phishing assessments, designed to sharpen threat detection and reporting capabilities.
The Incident Response Plan is implemented and maintained by the CIO and ISO and is subject to annual review and approval by the Risk Committee. Cybersecurity metrics are reported to both management level committees and the ERM Committee and Risk Committee on a quarterly basis.
The Incident Response Plan is implemented and maintained by members of senior management and is subject to annual review and periodic updates.
Removed
To prepare and respond to incidents, the Company has implemented a multi-layered cybersecurity strategy, integrating people, technology, and processes.
Added
Internal Controls, Audit, and Testing. Regular internal monitoring is integral to the Company’s risk assessment process, which includes regular testing of internal key controls, systems, and procedures.
Removed
The Board Enterprise Risk Management (“ERM”) Committee provides governance oversight of all risks faced by the Company, including cybersecurity and information technology general controls. The Chief Information Officer (“CIO”) manages the IT Department and reports to the ERM and Chief Risk Officer (“CRO”) on these matters.
Added
The Company relies, in part, on third-party vendor solutions to support its operations.
Removed
We may incur additional costs to enhance our cybersecurity processes and controls, to comply with new or changing laws, regulations, or contractual obligations, or to respond to or recover from cybersecurity incidents. We may also experience reputational harm or loss of customer confidence or trust as a result of cybersecurity incidents.
Added
The Vendor Risk Management Program is subject to periodic audit based on the Company’s annual Internal Audit Risk Assessment. ​ Employees and Training. Employees are the first line of defense against cybersecurity measures. Each employee is responsible for protecting Company and client information.
Removed
Management determines the scope and objectives of the penetration analysis, which may identify additional risks or require additional costs to remediate. Service Providers. The Company relies, in part, on third-party vendor solutions to support its operations. Many of these vendors, especially in the financial services industry, have access to sensitive and proprietary information.
Removed
The Vendor Risk Management Policy applies to any business arrangement between the Company and another individual or entity, by contract or otherwise, in compliance with the Interagency Guidance on Vendor Relationships: Risk Management. The Vendor Risk Management Program is audited as part of the Company’s annual Internal Audit Risk Assessment. Employees and Training.
Removed
In addition, employees are subjected to regular simulated phishing assessments, designed to sharpen threat detection and reporting capabilities. In addition to training, employees are supported with solutions designed to identify, prevent, detect, respond to, and recover from incidents.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed0 unchanged
ITEM 2. Properties We conduct our business through our main office located in Needham, Massachusetts and our branch offices located in Wellesley, Westwood, Dedham, Medfield, Medford, Dover, Ashland, Millis, Natick and Boston (Mission Hill), Massachusetts. Additionally, we have two administrative offices in Needham, Massachusetts and one in Wellesley, Massachusetts.
ITEM 2. Properties We conduct our business through our main office located in Needham, Massachusetts and our branch offices located in Amesbury, Ashland, Boston (Mission Hill), Dedham, Dover, Medfield, Medford, Millis, Natick, Newburyport, Wellesley and Westwood, Massachusetts; Bedford, Exeter, Portsmouth and Seabrook, New Hampshire; and a warehouse lending center in Ponte Vedra Beach, Florida.
We own four of our branch offices, including our main office, and our two administrative offices in Needham, Massachusetts and we lease seven of our branch offices and our administrative office in Wellesley, Massachusetts. At December 31, 2024 the total net book value of our land, buildings, leasehold improvements, furniture, fixtures and equipment was $34.7 million.
The Company acquired three owned and four leased branch locations in the Provident Acquisition totaling $11.2 million in land, buildings, leasehold improvements, furniture, fixtures and equipment at fair value. At December 31, 2025, the total net book value of our land, buildings, leasehold improvements, furniture, fixtures and equipment was $46.2 million. ​
Added
Additionally, we have two administrative offices in Needham, Massachusetts and one in Wellesley, Massachusetts. We own six of our branch offices, including our main office, and our two administrative offices in Needham, Massachusetts and we lease ten of our branch offices and our administrative office in Wellesley, Massachusetts.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−1 removed1 unchanged
ITEM 3. Legal Proceedings Legal Proceedings Among other things, the activities of the Bank, including with respect to disclosures about and implementation of numerous consumer products, are subject to various laws and numerous regulations, including those related to unfair or deceptive acts or practices.
ITEM 3. Legal Proceedings Among other things, the activities of the Bank, including with respect to disclosures about and implementation of numerous consumer products, are subject to various laws and numerous regulations, including those related to unfair or deceptive acts or practices.
In addition, as a result of the extensive regulation, supervision and examination of our business described elsewhere in this Annual Report on Form 10-K, we are also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business, certain of which may result in adverse judgments, settlements, fines, penalties, public or private censure, increased costs, required remediation, restriction on business activities or other impacts on us.
In addition, as a result of the extensive regulation, supervision and examination of our business described elsewhere in this Annual Report on Form 10-K, we are also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business, certain of which may result in adverse judgments, settlements, fines, penalties, public or private censure, increased costs, required remediation, restriction on business activities or other impacts on us. ​ We are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at December 31, 2025, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations. ​ ITEM 4.
Removed
We are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at December 31, 2024, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations. ITEM 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+8 added−2 removed0 unchanged
Federal Reserve Board guidance also provides for prior regulatory consultation with respect to capital distributions in certain circumstances such as where the holding company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or the holding company’s overall rate or earnings retention is inconsistent with its capital needs and overall financial condition.
Federal Reserve Board guidance also provides for prior regulatory consultation with respect to capital distributions in certain circumstances such as where a holding company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or the holding company’s overall rate of earnings retention is inconsistent with its capital needs and overall financial condition.
Special cash dividends, stock dividends or returns of capital, to the extent permitted by regulations and policies of the Federal Reserve Board and the Commissioner, may be paid in addition to, or in lieu of, regular cash dividends. Other than its ESOP, the Company does not have any equity compensation plans that were not approved by stockholders.
Special cash dividends, stock dividends or returns of capital, to the extent permitted by regulations and policies of the Federal Reserve Board and the Commissioner, may be paid in addition to, or in lieu of, regular cash dividends. ​ Other than its ESOP and the 2025 Equity Incentive Plan, the Company does not have any equity compensation plans that were not approved by stockholders.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market, Holder and Dividend Information. The Company’s common stock is listed on the Nasdaq Capital Market under the symbol “NBBK.” The approximate number of holders of record of NB Bancorp, Inc. common stock as of December 31, 2024 was 1,234.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market, Holder and Dividend Information: The Company’s common stock is listed on the Nasdaq Capital Market under the symbol “NBBK.” The approximate number of holders of record of NB Bancorp, Inc. common stock as of December 31, 2025 was 1,673.
See “Item 1. Business—Supervision and Regulation—Federal Banking Regulation—Capital Distributions.” The Federal Reserve Board has issued supervisory policies providing that dividends should be paid only out of current earnings and only if our prospective rate of earnings retention is consistent with our capital needs, asset quality and overall financial condition.
See “Item 1. Business – Supervision and Regulation – Federal Regulations Applicable to the Bank – Capital Distributions.” ​ The Federal Reserve Board has issued supervisory policies providing that dividends should be paid only out of current earnings and only if our prospective rate of earnings retention is consistent with our capital needs, asset quality and overall financial condition.
In addition, Needham Bank’s ability to pay dividends would be limited if it does not have the capital conservation buffer required by the capital rules, which may limit our ability to pay dividends to stockholders. No assurances can be given that any dividends will be paid or that, if paid, will not be reduced or eliminated in the future.
In addition, the Bank’s ability to pay dividends would be limited if it does not have the capital conservation buffer required by the capital rules, which may limit our ability to pay dividends to stockholders. 71 Table of Contents No assurances can be given that any dividends will be paid or that, if paid, will not be reduced or eliminated in the future.
NB Bancorp, Inc. does not currently pay cash dividends on its common stock. 60 Table of Contents Dividend payments by NB Bancorp, Inc. are dependent, in part, on dividends it receives from the Bank, because NB Bancorp, Inc. has no significant source of income other than dividends from the Bank, earnings from the investment of proceeds from the sale of shares of common stock in the stock offering which closed in December 2023 retained by NB Bancorp, Inc. and interest payments with respect to our loan to the Employee Stock Ownership Plan (“ESOP”).
Dividends will be dependent on the Company’s future earnings, capital requirements, and financial condition. ​ Dividend payments by the Company may be dependent, in part, on dividends it receives from the Bank, because the Company has no significant source of income other than dividends from the Bank, earnings from the investment of proceeds from the sale of shares of common stock in the stock offering which closed in December 2023 retained by the Company and interest payments with respect to our loan to the ESOP.
Certain shares of NB Bancorp, Inc. are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
Certain shares of NB Bancorp, Inc. are held in “nominee” or “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number. ​ Comparative Stock Performance Graph: The stock performance graph below and associated table compare the cumulative total shareholder return of our common stock from December 28, 2023 to December 31, 2025 to the cumulative total return of the Russell 2000 Index and the KBW Regional Banking Index.
The Company currently has no other equity compensation plans. Report of Offering of Securities and Use of Proceeds Therefrom. Not applicable. Issuer Purchases of Equity Securities. On January 22, 2025, the Company announced the commencement of a stock repurchase program to acquire up to 2,135,287 shares, or 5% of the Company’s then outstanding common stock.
The Company currently has no other equity compensation plans. ​ Report of Offering of Securities and Use of Proceeds Therefrom. Not applicable. Issuer Purchases of Equity Securities.
Removed
Repurchases will be made from time to time depending on market conditions and other factors, and will be conducted through open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the SEC.
Added
The lines in the graph and the numbers in the table below represent annual index levels derived from the compounded daily returns that include reinvestment or retention of all dividends. If the annual interval, based on the last day of a year, was not a trading day, the preceding trading day was used.
Removed
There is no guarantee as to the exact number of shares to be repurchased by the Company. ITEM 6. [Reserved] ​
Added
The index value for all of the series was set to $100.00 on December 28, 2023 (which assumes that $100.00 was invested in each of the series on December 28, 2023). ​ The following information in this Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18 of the Exchange Act and will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, 70 Table of Contents except to the extent we specifically incorporate it by reference into such a filing.
Added
The stock price performance shown on the stock performance graph and associated table below is not necessarily indicative of future price performance.
Added
Information used in the graph and table was obtained from a third-party provider, a source believed to be reliable, but we are not responsible for any errors or omission in such information. ​ ​ ​ ​ ​ ​ ​ Date Ending Index 12/27/2023 12/31/2024 12/31/2025 NB Bancorp, Inc. 100.00 180.60 199.60 S&P U.S.
Added
SmallCap Banks 100.00 116.25 127.84 Russell 2000 100.00 109.49 123.51 ​ Dividends: On July 23, 2025, the Company announced the initiation of a quarterly cash dividend of $0.07 per share.
Added
The Bank intends to continue to pay regular cash dividends to shareholders of its common stock; however, any future determination to declare and pay cash dividends, if any, will be made at the discretion of the Board of Directors and will depend on a variety of factors, including applicable laws, the Company’s financial condition, results of operations, business prospects, general business or financial market conditions, regulatory environment and other factors the Board of Directors may deem relevant.
Added
During the year ended December 31, 2025, the Company announced the commencement of two stock repurchase programs to acquire up to 4,163,808 shares, or 10% of the Company’s outstanding common stock at each repurchase program’s respective commencement date.
Added
As previously reported on the Company’s Quarterly Reports on Form 10-Qs, t he Company completed these stock repurchase programs on July 15, 2025. There were no stock repurchase during the quarter ended December 31, 2025 ​ ​ ​ ITEM 6. [Reserved] ​

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
ITEM 6. [RESERVED] 61 ​ ​ ​ ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 61 ​ ​ ​ ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 81 ​ ​ ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 81 ​ ​ ​
ITEM 6. [RESERVED] 72 ​ ​ ​ ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 72 ​ ​ ​ ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 93 ​ ​ ​ ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 93 ​ ​ ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

92 edited+56 added−85 removed24 unchanged
The following tables set forth average consolidated balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. Non-accrual loans were included in the computation of average balances. All average balances are daily average balances.
The following tables set forth average consolidated balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. Non-accrual loans were included in the computation of average balances. All average balances are daily average balances.
The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate).
The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate).
The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume.
The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume.
We have implemented the following strategies to manage our interest rate risk: ● maintaining capital levels that exceed the thresholds for well-capitalized status under federal regulations; ● maintaining a prudent level of liquidity; ● maintaining a prudent level of off-balance sheet funding capacity; ● growing our volume of core deposit accounts; 77 Table of Contents ● utilizing our AFS securities portfolio and interest rate swaps as part of our balance sheet asset and liability and interest rate risk management strategy to reduce the impact of movements in interest rates on net interest income and the economic value of equity; ● managing our utilization of wholesale funding with borrowings from the FHLB and brokered deposits in a prudent manner; ● continuing to diversify our loan portfolio by adding more commercial-related loans and consumer loans, which typically have shorter maturities and/or balloon payments; and ● continuing to price our one-to-four family residential real estate loan products in a way that encourages borrowers to select our adjustable-rate loans as opposed to longer-term, fixed-rate loans.
We have implemented the following strategies to manage our interest rate risk: ​ ● maintaining capital levels that exceed the thresholds for well-capitalized status under federal regulations; ● maintaining a prudent level of liquidity; ● maintaining a prudent level of off-balance sheet funding capacity; ● growing our volume of core deposit accounts; ● utilizing our AFS securities portfolio and interest rate swaps as part of our balance sheet asset and liability and interest rate risk management strategy to reduce the impact of movements in interest rates on net interest income and the economic value of equity; 89 Table of Contents ● managing our utilization of wholesale funding with borrowings from the FHLB and brokered deposits in a prudent manner; ● continuing to diversify our loan portfolio by adding more commercial-related loans and consumer loans, which typically have shorter maturities and/or balloon payments; and ● continuing to price our one-to-four family residential real estate loan products in a way that encourages borrowers to select our adjustable-rate loans as opposed to longer-term, fixed-rate loans.
Net interest income was $161.2 million for the year ended December 31, 2024, compared to $131.7 million for the year ended December 31, 2023, representing an increase of $29.5 million, or 22.4%, primarily due to a $787.0 million, or 20.8%, increase in the average balance of interest-earning assets to $4.57 billion for the year ended December 31, 2024 from $3.78 billion for the year ended December 31, 2023 and an increase in the weighted average yield on interest-earning assets of 53 basis points to 6.40% at December 31, 2024 from 5.87% at December 31, 2023.
Net interest income was $161.2 million for the year ended December 31, 2024, compared to $131.7 million for the year ended December 31, 2023, representing an increase of $29.5 million, or 22.4%, primarily due to a $787.1 million, or 20.8%, increase in the average balance of interest-earning assets to $4.57 billion for the year ended December 31, 2024 from $3.78 billion for the year ended December 31, 2023 and an increase in the weighted average yield on interest-earning assets of 53 basis points to 6.40% at December 31, 2024 from 5.87% at December 31, 2023.
However, if a substantial portion of these time deposits is not retained, we may utilize advances from the FHLB or the FRB, brokered deposits or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense. Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations.
However, if a substantial portion of these time deposits are not retained, we may utilize advances from the FHLB or the FRB, brokered deposits or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense. ​ Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon.
As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon.
(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets. (4) Other investments are comprised of FRB stock, FHLB stock and swap collateral accounts. Short-term investments are comprised of cash and cash equivalents. ​ ​ 72 Table of Contents Rate/Volume Analysis.
(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets. (4) Other investments are comprised of FRB stock, FHLB stock and swap collateral accounts. Short-term investments are comprised of cash and cash equivalents. ​ ​ 84 Table of Contents Rate/Volume Analysis.
(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets. (4) Other investments are comprised of FRB stock, FHLB stock and swap collateral accounts. Short-term investments are comprised of cash and cash equivalents. ​ ​ 76 Table of Contents Rate/Volume Analysis.
(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets. (4) Other investments are comprised of FRB stock, FHLB stock and swap collateral accounts. Short-term investments are comprised of cash and cash equivalents. ​ ​ 88 Table of Contents Rate/Volume Analysis.
The information in this section has been derived from the consolidated financial statements that appear beginning on page 79 of this Annual Report on Form 10-K.
The information in this section has been derived from the consolidated financial statements that appear beginning on page 98 of this Annual Report on Form 10-K.
The increase in interest and fees on loans was primarily due to an increase of $625.6 million, or 18.1%, in the average balance of the loan portfolio to $4.09 billion for the year ended December 31, 2024 from $3.46 billion for the year ended December 31, 2023 and an increase of 50 basis points in the weighted average yield for the loan portfolio to 6.62% for the year ended December 31, 2024 from 6.12% for the year ended December 31, 2023, reflecting the growth of our commercial and consumer loan portfolios.
The increase in interest and fees on loans was primarily due to an increase of $625.7 million, or 18.1%, in the average balance of the loan portfolio to $4.09 billion for the year ended December 31, 2024 from $3.46 billion for the year ended December 31, 2023 and an increase of 49 basis points in the weighted average yield for the loan portfolio to 6.62% for the year ended December 31, 2024 from 6.13% for the year ended December 31, 2023, reflecting the growth of our commercial and consumer loan portfolios.
The increase in interest and dividends cash equivalents and other was primarily due to an increase of $179.5 million, or 251.2%, in the average balance of short-term investments to $250.9 million for the year ended December 31, 2024 from $71.4 million for the year ended December 31, 2023, along with a 105 basis point increase in the average yield on short-term investments. ​ Average interest-earning assets increased $787.0 million, or 20.8% to $4.57 billion for the year ended December 31, 2024 from $3.78 billion for the year ended December 31, 2023.
The increase in interest and dividends cash equivalents and other was primarily due to an increase of $179.5 million, or 251.6%, in the average balance of short-term investments to $250.9 million for the year ended December 31, 2024 from $71.4 million for the year ended December 31, 2023, along with a 104 basis point increase in the average yield on short-term investments. ​ Average interest-earning assets increased $787.1 million, or 20.8% to $4.57 billion for the year ended December 31, 2024 from $3.78 billion for the year ended December 31, 2023.
For example, decreases in market interest rates can increase the fair values of our loans, mortgage servicing rights, deposits and borrowings. Liquidity and Capital Resources Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business.
For example, decreases in market interest rates can increase the fair values of our loans, deposits, derivatives and borrowings. ​ Liquidity and Capital Resources Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business.
Provision for Credit Losses. Based on management’s analysis of the adequacy of allowance for credit losses, a provision of $12.1 million was recorded for the year ended December 31, 2024, compared to a provision of $13.9 million for the year ended December 31, 2023.
Based on management’s analysis of the adequacy of the ACL, a provision of $12.1 million was recorded for the year ended December 31, 2024, compared to a provision of $13.9 million for the year ended December 31, 2023.
GAAP, this annual report on Form 10-K contains certain non-GAAP financial measures, including operating net income, operating noninterest expense, operating noninterest income, operating earnings per share, basic, operating earnings per share, diluted, operating return on average assets, operating return on average shareholders’ equity, operating efficiency ratio, tangible shareholders’ equity, tangible assets, tangible book value per share, and efficiency ratio.
GAAP, this Annual Report on Form 10-K contains certain non-GAAP financial measures, including pre-provision net revenue, operating net income, operating pre-tax income, operating noninterest expense, operating noninterest income, operating effective tax rate, operating earnings per share, basic, operating earnings per share, diluted, operating return on average assets, operating return on average shareholders’ equity, operating efficiency ratio, tangible shareholders’ equity, tangible assets and tangible book value per share.
The effective tax rate increased during 2024 primarily as a result of income tax expense of $18.5 million related to the adoption of ASU 2023-02, a smaller impact from tax credits and the $1.7 million income tax and penalty on the surrender of BOLI policies during the year ended December 31, 2024, offset partially by a reduction in 162(m) compensation during the year ended December 31, 2024. ​ 71 Table of Contents Average Balances and Yields.
The effective tax rate was 28.1% and 17.0% for the years ended December 31, 2024 and 2023, respectively. ​ 87 Table of Contents The effective tax rate increased during 2024 primarily as a result of income tax expense of $18.5 million related to the adoption of ASU 2023-02, a smaller impact from tax credits and the $1.7 million income tax and penalty on the surrender of BOLI policies during the year ended December 31, 2024, offset partially by a reduction in 162(m) compensation during the year ended December 31, 2024. ​ Average Balances and Yields.
The decrease in the average balance was due to our strategy to utilize brokered deposits to support loan growth and for liquidity management. ​ 69 Table of Contents Net Interest Income.
The decrease in the average balance was due to our strategy to utilize brokered deposits to support loan growth and for liquidity management. ​ Net Interest Income.
These amounts are not included in the calculation of the tax impact on the non-GAAP adjustments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 65 Table of Contents ​ At and For the Year Ended ​ December 31, 2024 ​ December 31, 2023 ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (U.S.
These amounts are not included in the calculation of the tax impact on the non-GAAP adjustments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At and For the Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (U.S.
Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We are also able to borrow from the FHLB and FRB.
Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities.
The table above indicates that at December 31, 2024, we would have experienced a 5.2% increase in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 5.8% decrease in net interest income in the event of an instantaneous 200 basis point decrease in market interest rates. 78 Table of Contents Economic Value of Equity (“EVE”) .
The table above indicates that at December 31, 2025, we would have experienced a 6.2% increase in net interest income in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 4.5% decrease in net interest income in the event of an instantaneous 200 basis point decrease in market interest rates. ​ Economic Value of Equity (“EVE”) .
We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.
We currently utilize a third-party modeling program, prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors. ​ We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates.
The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances.
We consider the accounting policies discussed below to be critical accounting policies. ​ The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances.
GAAP) $ 42,149 ​ $ 9,825 ​ $ 30,065 ​ ​ ​ ​ ​ ​ ​ ​ ​ Add (Subtract): ​ ​ ​ ​ ​ ​ ​ ​ Adjustments to net income: ​ ​ ​ ​ ​ ​ ​ ​ Losses on sales of securities available for sale, net ​ 1,868 ​ ​ - ​ ​ - BOLI surrender tax and managed endowment contract penalty (1) ​ 1,705 ​ ​ - ​ ​ - 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 ​ 390 ​ ​ 1,900 ​ ​ - Permanent tax differences resulting from public company tax laws (1) ​ - ​ ​ 3,680 ​ ​ - Total adjustments to net income $ 3,963 ​ $ 32,593 ​ $ - Less net tax benefit associated with losses on sales of securities available for sale, net and reversal of previously taken ​ ​ ​ ​ ​ ​ ​ ​ amortization of solar tax credit investments ​ 634 ​ ​ 8,096 ​ ​ - Non-GAAP adjustments, net of tax ​ 3,329 ​ ​ 24,497 ​ ​ - Operating net income (non-GAAP) $ 45,478 ​ $ 34,322 ​ $ 30,065 ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) These amounts are reflected in income tax expense and reflect amounts related to 2024 BOLI surrender taxes and ​ ​ ​ ​ ​ ​ ​ ​ penalties and 2023 compensation and writedown for future LTIP vesting amounts that are not expected to be deductible ​ ​ ​ ​ ​ ​ ​ ​ on a tax return, respectively.
GAAP) $ 50,302 ​ $ 42,149 ​ $ 9,825 ​ ​ ​ ​ ​ ​ ​ ​ ​ Add (Subtract): ​ ​ ​ ​ ​ ​ ​ ​ Adjustments to net income: ​ ​ ​ ​ ​ ​ ​ ​ Merger and acquisition expenses ​ 17,265 ​ ​ - ​ ​ - State tax expense - voluntary disclosure agreements ​ 561 ​ ​ - ​ ​ - Losses on sales of securities available for sale, net ​ - ​ ​ 1,868 ​ ​ - BOLI surrender tax and managed endowment contract penalty (1) ​ 2,310 ​ ​ 1,705 ​ ​ - 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 ​ 480 ​ ​ 390 ​ ​ 1,900 Permanent tax differences resulting from public company tax laws (1) ​ - ​ ​ - ​ ​ 3,680 Total adjustments to net income $ 20,616 ​ $ 3,963 ​ $ 32,593 Less net tax benefit associated with pre-tax non-GAAP adjustments to net income ​ 4,739 ​ ​ 634 ​ ​ 8,096 Non-GAAP adjustments, net of tax ​ 15,877 ​ ​ 3,329 ​ ​ 24,497 Operating net income (non-GAAP) $ 66,179 ​ $ 45,478 ​ $ 34,322 ​ (1) These amounts are included in income tax expense and reflect amounts related to 2025 and 2024 BOLI surrender taxes and penalties and 2023 compensation and writedown for future LTIP vesting amounts that are not expected to be deductible on a tax return, respectively.
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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NB BANCORP, INC. ​ ​ ​ ​ ​ ​ ​ ​ NON-GAAP RECONCILIATION ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, 2024 ​ December 31, 2023 ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (U.S.
GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. ​ ​ 75 Table of Contents 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NB BANCORP, INC. ​ ​ ​ ​ ​ ​ ​ ​ NON-GAAP RECONCILIATION ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2025 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (U.S.
Our allowance for credit losses on these unfunded commitments amounted to $3.2 million. We anticipate that we will have sufficient funds available to meet our current lending commitments. Time deposits that are scheduled to mature in less than one year from December 31, 2024 totaled $1.9 billion. Management expects that a substantial portion of these time deposits will be retained.
We anticipate that we will have sufficient funds available to meet our current lending commitments. Time deposits that are scheduled to mature in less than one year from December 31, 2025 totaled $2.5 billion. Management expects that a substantial portion of these time deposits will be retained.
Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.
Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation.
Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates.
Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates.
Noninterest expense for the year ended December 31, 2024 was $102.0 million, representing a decrease of $19.4 million, or 16.0%, from $121.3 million for the year ended December 31, 2023.
Noninterest expense for the year ended December 31, 2024 was $103.0 million, representing a decrease of $18.3 million, or 15.1%, from $121.3 million for the year ended December 31, 2023.
The preparation of these consolidated financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be significant accounting policies.
GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses.
Income tax expense increased $14.5 million, or 715.7%, to $16.5 million for the year ended December 31, 2024 from $2.0 million for the year ended December 31, 2023. The effective tax rate was 28.1% and 17.0% for the years ended December 31, 2024 and 2023, respectively.
Income tax expense increased $14.5 million, or 715.7%, to $16.5 million for the year ended December 31, 2024 from $2.0 million for the year ended December 31, 2023.
Interest expense on deposits increased $50.5 million, or 66.1%, to $126.9 million for the year ended December 31, 2024 from $76.4 million for the year ended December 31, 2023, due to an increase in the average balance of interest-bearing deposits of $493.9 million, or 18.4%, to $3.18 billion for the year ended December 31, 2024 from $2.69 billion for the year ended December 31, 2023 and an increase in the weighted average rate on interest-bearing deposits of 115 basis points to 3.99% for the year ended December 31, 2024 from 2.84% for the year ended December 31, 2023.
Interest expense on deposits increased $50.5 million, or 66.1%, to $126.9 million for the year ended December 31, 2024 from $76.4 million for the year ended December 31, 2023, due to an increase in the average balance of interest-bearing deposits of $600.2 million, or 22.2%, to $3.30 billion for the year ended December 31, 2024 from $2.70 billion for the year ended December 31, 2023 and an increase in the weighted average rate on interest-bearing deposits of 102 basis points to 3.84% for the year ended December 31, 2024 from 2.83% for the year ended December 31, 2023. ​ Interest expense on FHLB advances decreased $9.7 million, or 68.7%, to $4.4 million for the year ended December 31, 2024 from $14.1 million for the year ended December 31, 2023.
Such commitments are subject to the same credit policies and approval process accorded to loans we make. At December 31, 2024, the unfunded portion of construction loans, home equity lines of credit, commercial lines of credit and other lines of credit, along with letters of credit, totaled $952.3 million.
Such commitments are subject to the same credit policies and approval process on loans we originate. At December 31, 2025, the unfunded portion of construction loans, home equity lines of credit, commercial lines of credit and other lines of credit, along with letters of credit, totaled $1.2 million. Our ACL on these unfunded commitments amounted to $3.3 million.
Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates.
The Bank’s most significant form of market risk is interest rate risk as the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates.
Recent Accounting Pronouncements See Note 21 to the notes to the consolidated financial statements for a description of recent accounting pronouncements that may affect our financial condition and results of operations. 80 Table of Contents Impact of Inflation and Changing Prices The consolidated financial statements and related data presented in this Annual Report on Form 10-K have been prepared in accordance with U.S.
Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities. ​ Recent Accounting Pronouncements See Note 23 to the notes to the consolidated financial statements for a description of recent accounting pronouncements that may affect our financial condition and results of operations. ​ Impact of Inflation and Changing Prices The consolidated financial statements and related data presented in this Annual Report on Form 10-K have been prepared in accordance with U.S.
You should read the information in this section in conjunction with the business and financial information regarding the Company and the Bank and the consolidated financial statements provided in this Annual Report on Form 10-K for the Company and, with respect to the years ended December 31, 2023 and 2022, the Company had not engaged in any material activities prior to December 28, 2023, the date of the consummation of the mutual to stock conversion.
You should read the information in this section in conjunction with the business and financial information regarding the Company and the Bank and the consolidated financial statements provided in this Annual Report on Form 10-K for the Company and, with respect to the years ended December 31, 2025, 2024 and 2023, the Company had not engaged in any material activities prior to December 28, 2023, the date of the consummation of the mutual to stock conversion. ​ Our results of operations depend primarily on our net interest income. ​ Net interest income is the difference between the interest income we earn on our interest-earning assets and the interest we pay on our interest-bearing liabilities.
The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense; such fees, discounts and premiums were not material for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, 2024 ​ December 31, 2023 ​ Average ​ ​ ​ Average ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ Average ​ Outstanding ​ ​ ​ ​ Average ​ ​ Balance ​ Interest ​ Yield/Rate ​ Balance ​ Interest ​ Yield/Rate ​ ​ (Dollars in thousands) Interest-earning assets: ​ ​ ​ ​ ​ ​ Loans ​ $ 4,090,276 ​ $ 270,764 6.62 % $ 3,464,692 ​ $ 212,198 6.12 % Securities ​ 204,323 ​ 6,853 3.35 % 217,392 ​ 4,773 2.20 % Other investments (4) ​ 25,759 ​ 1,525 5.92 % 30,774 ​ 2,134 6.93 % Short-term investments (4) ​ 250,904 ​ 13,374 5.33 % 71,443 ​ 3,060 4.28 % Total interest-earning assets ​ 4,571,262 ​ 292,516 6.40 % 3,784,301 ​ 222,165 5.87 % Non-interest-earning assets ​ 251,181 ​ ​ ​ ​ ​ 218,769 ​ ​ ​ ​ Allowance for credit losses ​ (36,064) ​ ​ ​ ​ ​ (30,041) ​ ​ Total assets ​ $ 4,786,379 ​ ​ ​ ​ ​ $ 3,973,029 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ Savings accounts ​ $ 119,868 ​ 60 0.05 % $ 142,985 ​ 72 0.05 % NOW accounts ​ 325,619 ​ 804 0.25 % 351,436 ​ 537 0.15 % Money market accounts ​ 879,363 ​ 34,303 3.90 % 777,474 ​ 20,427 2.63 % Certificates of deposit and individual retirement accounts ​ 1,859,425 ​ 91,756 4.93 % 1,418,482 ​ 55,358 3.90 % Total interest-bearing deposits ​ 3,184,275 ​ 126,923 3.99 % 2,690,377 ​ 76,394 2.84 % FHLB borrowings ​ 85,498 ​ 4,395 5.14 % 259,478 ​ 14,050 5.41 % Total interest-bearing liabilities ​ 3,269,773 ​ 131,318 4.02 % 2,949,855 ​ 90,444 3.07 % Non-interest-bearing deposits ​ 686,411 ​ ​ ​ 581,017 ​ ​ Other non-interest-bearing liabilities ​ 83,863 ​ ​ ​ ​ 77,037 ​ ​ Total liabilities ​ 4,040,047 ​ ​ ​ ​ 3,607,909 ​ ​ Shareholders' equity ​ 746,332 ​ ​ ​ ​ 365,120 ​ ​ Total liabilities and shareholders' equity ​ $ 4,786,379 ​ ​ ​ ​ $ 3,973,029 ​ ​ Net interest income ​ ​ ​ $ 161,198 ​ ​ $ 131,721 ​ Net interest rate spread (1) ​ ​ ​ ​ ​ 2.38 % ​ 2.80 % Net interest-earning assets (2) ​ $ 1,301,489 ​ ​ ​ ​ $ 834,446 ​ ​ ​ ​ Net interest margin (3) ​ ​ ​ ​ ​ ​ 3.53 % ​ 3.48 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average interest-earning assets to interest-bearing liabilities ​ 139.80 % ​ ​ ​ 128.29 % ​ ​ (1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
The yields set forth below include the effect of deferred fees, discounts, and premiums (including purchase accounting adjustments) that are amortized or accreted to interest income or interest expense; such fees, discounts and premiums were not material for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ Average ​ Outstanding ​ ​ ​ ​ Average ​ ​ Balance ​ Interest ​ Yield/Rate ​ Balance ​ Interest ​ Yield/Rate ​ ​ (Dollars in thousands) Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ $ 4,090,055 ​ $ 270,764 6.62 % $ 3,464,365 ​ $ 212,198 6.13 % Securities ​ 204,323 ​ 6,853 3.35 % 217,392 ​ 4,773 2.20 % Other investments (4) ​ 25,759 ​ 1,525 5.92 % 30,774 ​ 2,134 6.93 % Short-term investments (4) ​ 250,904 ​ 13,374 5.33 % 71,366 ​ 3,060 4.29 % Total interest-earning assets ​ 4,571,041 ​ 292,516 6.40 % 3,783,897 ​ 222,165 5.87 % Non-interest-earning assets ​ 251,402 ​ ​ ​ ​ ​ 219,173 ​ ​ ​ ​ Allowance for credit losses ​ (36,064) ​ ​ ​ ​ ​ (30,041) ​ ​ ​ ​ Total assets ​ $ 4,786,379 ​ ​ ​ ​ ​ $ 3,973,029 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Savings accounts ​ $ 116,034 ​ 60 0.05 % $ 142,359 ​ 72 0.05 % NOW accounts ​ 444,036 ​ 804 0.18 % 363,571 ​ 537 0.15 % Money market accounts ​ 883,197 ​ 34,303 3.88 % 778,100 ​ 20,427 2.63 % Certificates of deposit and individual retirement accounts ​ 1,859,425 ​ 91,756 4.93 % 1,418,482 ​ 55,358 3.90 % Total interest-bearing deposits ​ 3,302,692 ​ 126,923 3.84 % 2,702,512 ​ 76,394 2.83 % FHLB borrowings ​ 85,498 ​ 4,395 5.14 % 259,478 ​ 14,050 5.41 % Total interest-bearing liabilities ​ 3,388,190 ​ 131,318 3.88 % 2,961,990 ​ 90,444 3.05 % Non-interest-bearing deposits ​ 568,001 ​ ​ ​ ​ 568,891 ​ ​ ​ ​ Other non-interest-bearing liabilities ​ 83,856 ​ ​ ​ ​ ​ 77,028 ​ ​ ​ ​ Total liabilities ​ 4,040,047 ​ ​ ​ ​ ​ 3,607,909 ​ ​ ​ ​ Shareholders' equity ​ 746,332 ​ ​ ​ ​ ​ 365,120 ​ ​ ​ ​ Total liabilities and shareholders' equity ​ $ 4,786,379 ​ ​ ​ ​ ​ $ 3,973,029 ​ ​ ​ ​ Net interest income ​ ​ ​ ​ $ 161,198 ​ ​ ​ ​ $ 131,721 ​ ​ Net interest rate spread (1) ​ ​ ​ ​ ​ ​ 2.52 % ​ ​ ​ 2.82 % Net interest-earning assets (2) ​ $ 1,182,851 ​ ​ ​ ​ ​ $ 821,907 ​ ​ ​ ​ ​ Net interest margin (3) ​ ​ ​ ​ ​ ​ 3.53 % ​ ​ ​ 3.48 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average interest-earning assets to interest-bearing liabilities ​ 134.91 % ​ ​ ​ ​ 127.75 % ​ ​ ​ ​ (1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.
These increases were offset partially by an increase in the weighted average rate on interest-bearing liabilities of 95 basis points to 4.02% for the year ended December 31, 2024 from 3.07% for the year ended December 31, 2023 and an increase in the average balance of interest-bearing liabilities of $319.9 million, or 10.8%, to $3.27 billion for the year ended December 31, 2024 from $2.95 billion for the year ended December 31, 2023.
These increases were offset partially by an increase in the weighted average rate on interest-bearing liabilities of 83 basis points to 3.88% for the year ended December 31, 2024 from 3.05% for the year ended December 31, 2023 and an increase in the average balance of interest-bearing liabilities of $426.2 million, or 14.4%, to $3.39 billion for the year ended December 31, 2024 from $2.96 billion for the year ended December 31, 2023. ​ Provision for Credit Losses.
There were no out-of-period items or adjustments required to be excluded from the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2024 vs. 2023 ​ ​ Increase (Decrease) Due to ​ Total ​ ​ ​ ​ ​ ​ ​ ​ Increase ​ Volume Rate (Decrease) ​ ​ (In thousands) Interest-earning assets: ​ ​ ​ Loans ​ $ 40,454 ​ $ 18,112 ​ $ 58,566 Securities ​ (267) ​ 2,347 ​ 2,080 Other investments ​ (321) ​ (288) ​ (609) Short-term investments ​ 9,399 ​ 915 ​ 10,314 Total interest-earning assets ​ 49,265 ​ 21,086 ​ 70,351 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ Savings accounts ​ (12) ​ — ​ (12) NOW accounts ​ (36) ​ 303 ​ 267 Money market accounts ​ 2,953 ​ 10,923 ​ 13,876 Certificates of deposit and individual retirement accounts ​ 19,668 ​ 16,730 ​ 36,398 Total interest-bearing deposits ​ 22,573 ​ 27,956 ​ 50,529 FHLB borrowings ​ (8,977) ​ (678) ​ (9,655) Total interest-bearing liabilities ​ 13,596 ​ 27,278 ​ 40,874 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in net interest income ​ $ 35,669 ​ $ (6,192) ​ $ 29,477 ​ Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 Net Income.
There were no out-of-period items or adjustments required to be excluded from the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2024 vs. 2023 ​ ​ Increase (Decrease) Due to ​ Total ​ ​ ​ ​ ​ ​ ​ ​ Increase ​ ​ ​ ​ Volume ​ ​ ​ Rate ​ ​ ​ (Decrease) ​ ​ (In thousands) Interest-earning assets: ​ ​ ​ ​ ​ ​ Loans ​ $ 40,464 ​ $ 18,102 ​ $ 58,566 Securities ​ (267) ​ 2,347 ​ 2,080 Other investments ​ (321) ​ (288) ​ (609) Short-term investments ​ 9,405 ​ 909 ​ 10,314 Total interest-earning assets ​ 49,281 ​ 21,070 ​ 70,351 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ Savings accounts ​ (14) ​ 2 ​ (12) NOW accounts ​ 132 ​ 135 ​ 267 Money market accounts ​ 3,050 ​ 10,826 ​ 13,876 Certificates of deposit and individual retirement accounts ​ 19,667 ​ 16,731 ​ 36,398 Total interest-bearing deposits ​ 22,836 ​ 27,693 ​ 50,529 FHLB borrowings ​ (8,977) ​ (678) ​ (9,655) Total interest-bearing liabilities ​ 13,859 ​ 27,015 ​ 40,874 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in net interest income ​ $ 35,422 ​ $ (5,945) ​ $ 29,477 ​ Management of Market Risk General .
Marketing and charitable contributions expense decreased $19.6 million, or 85.0%, as a result of the $19.1 million contribution to the Needham Bank Charitable Foundation during the year ended December 31, 2023; FDIC and state insurance assessments decreased $1.9 million, or 39.5%, as a result of high capital ratios during the year ended December 31, 2024 compared to the year ended December 31, 2023; salaries and employee benefit expenses decreased $1.1 million, or 1.6%, resulting primarily from a decrease in employee bonus expense of $5.0 million, a decrease in pension expense of $3.0 million as a result of the freezing of the pension plan and a $2.0 million decrease in LTIP expenses during the year ended December 31, 2024; partially offset by an increase in employee compensation of $4.7 million due to increased headcount, a $2.8 million increase in ESOP compensation expense as the ESOP was put into place upon the mutual-to-stock conversion on December 27, 2023, a $832,000 increase in medical and dental benefits and a $549,000 increase in 401(k) match expenses, both primarily a result of increased headcount; general and administrative expenses increased $1.1 million or, 17.0%, primarily a result of the $1.8 million decrease in the loss on solar tax partnerships during the year ended December 31, 2024 from the adoption of ASU 2023-02. 70 Table of Contents These decreases were offset partially by an increase in director and professional service fees of $2.4 million, or 38.0%, primarily a result of increased use of audit, legal and human resources services of $2.2 million during the year ended December 31, 2024 and data processing expenses of $1.5 million, or 20.3%, primarily a result of increased IT infrastructure, debit card servicing, management information systems, deposit servicing systems and electronic banking expenses of $550,000, $341,000, $234,000, $183,000 and $152,000 during the year ended December 31, 2024, respectively.
Marketing and charitable contributions expense decreased $19.6 million, or 85.0%, as a result of the $19.1 million contribution to the Needham Bank Charitable Foundation during the year ended December 31, 2023; FDIC and state insurance assessments decreased $1.9 million, or 39.5%, as a result of high capital ratios during the year ended December 31, 2024 compared to the year ended December 31, 2023; salaries and employee benefit expenses decreased $1.1 million, or 1.6%, resulting primarily from a decrease in employee bonus expense of $5.0 million, a decrease in pension expense of $3.0 million as a result of the freezing of the pension plan and a $2.0 million decrease in LTIP expenses during the year ended December 31, 2024; partially offset by an increase in employee compensation of $4.7 million due to increased headcount, a $2.8 million increase in ESOP compensation expense as the ESOP was put into place upon the mutual-to-stock conversion on December 27, 2023, an $832,000 increase in medical and dental benefits and a $549,000 increase in 401(k) match expenses, both primarily a result of increased headcount.
Loans with similar risk characteristics are collectively assessed within pools (or segments). 62 Table of Contents Loss estimates within the collectively assessed population are based on a combination of pooled assumptions and loan-level characteristics.
Loss estimates within the collectively assessed population are based on a combination of pooled assumptions and loan-level characteristics.
The table above indicates that at December 31, 2024, we would have experienced a 1.6% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 1.7% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates.
The table above indicates that at December 31, 2025, we would have experienced a 3.7% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 0.5% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates. ​ Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements.
GAAP) $ 765,167 ​ $ 757,959 ​ $ 344,065 Subtract: ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets (core deposit intangible) ​ 1,079 ​ ​ 1,227 ​ ​ 1,377 Total tangible shareholders’ equity (non-GAAP) ​ 764,088 ​ ​ 756,732 ​ ​ 342,688 Total assets (U.S.
GAAP) $ 858,932 ​ $ 765,167 ​ $ 757,959 Subtract: ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets (core deposit intangible and goodwill) ​ 37,815 ​ ​ 1,079 ​ ​ 1,227 Total tangible shareholders’ equity (non-GAAP) ​ 821,117 ​ ​ 764,088 ​ ​ 756,732 Total assets (U.S.
The measurement of uncertain tax positions is adjusted when new information is available, or when an event occurs that requires a change. The Company’s policy is to analyze its tax positions for all open tax years. Interest and penalties, if any, associated with uncertain tax positions, are classified as additional income tax expense in the consolidated statements of income.
The measurement of uncertain tax positions is adjusted when new information is available, or when an event occurs that requires a change. The Company’s policy is to analyze its tax positions for all open tax years.
The table below sets forth our noninterest income for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ 2024 ​ 2023 ​ Amount ​ Percent ​ ​ (Dollars in thousands) Customer service fees ​ $ 7,784 ​ $ 7,592 ​ $ 192 ​ 2.53% Increase in cash surrender value of BOLI ​ ​ 2,269 ​ ​ 1,510 ​ ​ 759 ​ 50.26% Mortgage banking income ​ ​ 1,023 ​ ​ 581 ​ ​ 442 ​ 76.08% Swap contract income ​ ​ 1,659 ​ ​ 2,153 ​ ​ (494) ​ (22.94%) Loss on sale of available-for-sale securities, net ​ ​ (1,867) ​ ​ — ​ ​ (1,867) ​ (100.00%) Employee retention credit income ​ ​ — ​ ​ 3,452 ​ ​ (3,452) ​ (100.00%) Other income ​ ​ 664 ​ ​ 64 ​ ​ 600 ​ 937.50% Total noninterest income ​ $ 11,532 ​ $ 15,352 ​ $ (3,820) ​ (24.88%) ​ Noninterest Expense.
Noninterest income decreased $3.8 million, or 24.9%, to $11.5 million for the year ended December 31, 2024 from $15.4 million for the year ended December 31, 2023. 86 Table of Contents The decrease resulted primarily from a $3.5 million employee retention credit earned during the year ended December 31, 2023 resulting from COVID-19 impacts not recognized during the year ended December 31, 2024, an increase in losses on the sale of AFS securities of $1.9 million during the year ended December 31, 2024 compared to no losses on the sale of AFS securities during the year ended December 31, 2023, partially offset by an increase in the change in the cash surrender value of BOLI of $759,000 and an increase in other income of $600,000 million during the year ended December 31, 2024. ​ The table below sets forth our noninterest income for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ 2024 ​ 2023 ​ Amount ​ Percent ​ ​ (Dollars in thousands) Customer service fees ​ $ 7,784 ​ $ 7,592 ​ $ 192 ​ 2.53% Increase in cash surrender value of BOLI ​ ​ 2,269 ​ ​ 1,510 ​ ​ 759 ​ 50.26% Mortgage banking income ​ ​ 1,023 ​ ​ 581 ​ ​ 442 ​ 76.08% Swap contract income ​ ​ 1,659 ​ ​ 2,153 ​ ​ (494) ​ (22.94%) Loss on sale of available-for-sale securities, net ​ ​ (1,867) ​ ​ — ​ ​ (1,867) ​ 100.00% Employee retention credit income ​ ​ — ​ ​ 3,452 ​ ​ (3,452) ​ (100.00%) Other income ​ ​ 1,692 ​ ​ 64 ​ ​ 1,628 ​ 2543.75% Total noninterest income ​ $ 12,560 ​ $ 15,352 ​ $ (2,792) ​ (18.19%) ​ Noninterest Expense.
GAAP) $ 101,989 ​ $ 121,344 ​ $ 71,319 ​ ​ ​ ​ ​ ​ ​ ​ ​ Subtract (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 ​ 390 ​ ​ 1,900 ​ ​ - Total impact of non-GAAP noninterest expense adjustments $ 390 ​ $ 28,913 ​ $ - Noninterest expense on an operating basis (non-GAAP) $ 101,599 ​ $ 92,431 ​ $ 71,319 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, 2024 ​ December 31, 2023 ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income (U.S.
GAAP) $ 137,874 ​ $ 103,017 ​ $ 121,344 ​ ​ ​ ​ ​ ​ ​ ​ ​ Subtract (Add): ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expense components: ​ ​ ​ ​ ​ ​ ​ ​ Merger and acquisition expenses ​ 17,265 ​ ​ - ​ ​ - 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 ​ 480 ​ ​ 390 ​ ​ 1,900 Total impact of non-GAAP noninterest expense adjustments $ 17,745 ​ $ 390 ​ $ 28,913 Noninterest expense on an operating basis (non-GAAP) $ 120,129 ​ $ 102,627 ​ $ 92,431 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income (U.S.
Prepaid expenses and other assets consist primarily of right of use assets related to our long-term leases, derivatives with a positive fair value, prepaid expenses and income tax receivables. Prepaid expenses and other assets increased $6.4 million, or 12.0%, to $59.5 million at December 31, 2024 from $53.1 million at December 31, 2023.
Prepaid expenses and other assets consist primarily of right of use assets related to our long-term leases, derivative assets, prepaid expenses and income tax receivables. Prepaid expenses and other assets increased $9.5 million, or 16.1%, to $68.1 million at December 31, 2025 from $58.6 million at December 31, 2024.
Shortening the average term of our interest-earning assets by increasing our investments in shorter-term assets, as well as originating loans with variable interest rates, helps to match the maturities and interest rates of our assets and liabilities better, thereby reducing the exposure of our net interest income to changes in market interest rates.
Shortening the average term of our interest-earning assets by increasing our investments in shorter-term assets, as well as originating loans with variable interest rates, helps to match the maturities and interest rates of our assets and liabilities better, thereby reducing the exposure of our net interest income to changes in market interest rates. ​ On occasion, we have employed various financial risk methodologies that limit, or “hedge,” the adverse effects of rising or decreasing interest rates on our loan portfolios and short-term liabilities.
We also compute amounts by which the net present value of our assets and liabilities, or EVE, would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value.
We also compute amounts by which the net present value of our assets and liabilities, or EVE, would change in the event of a range of assumed changes in market interest rates.
The table below sets forth our noninterest expense for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ 2024 ​ 2023 ​ Amount ​ Percent ​ ​ (Dollars in thousands) Salaries and employee benefits ​ $ 67,257 ​ $ 68,344 ​ $ (1,087) ​ (1.59%) Director and professional service fees ​ ​ 8,601 ​ ​ 6,232 ​ ​ 2,369 ​ 38.01% Occupancy and equipment expenses ​ ​ 5,580 ​ ​ 5,192 ​ ​ 388 ​ 7.47% Data processing expenses ​ ​ 9,024 ​ ​ 7,500 ​ ​ 1,524 ​ 20.32% Marketing and charitable contribution expenses ​ ​ 3,459 ​ ​ 23,082 ​ ​ (19,623) ​ (85.01%) FDIC and state insurance assessments ​ ​ 2,847 ​ ​ 4,707 ​ ​ (1,860) ​ (39.52%) General and administrative expenses ​ ​ 5,221 ​ ​ 6,287 ​ ​ (1,066) ​ (16.96%) Total noninterest expense ​ $ 101,989 ​ $ 121,344 ​ $ (19,355) ​ (15.95%) ​ Income Tax Expense.
These decreases were offset partially by an increase in director and professional service fees of $2.4 million, or 38.0%, primarily a result of increased use of audit, legal and human resources services of $2.2 million during the year ended December 31, 2024 and data processing expenses of $1.5 million, or 20.3%, primarily a result of increased IT infrastructure, debit card servicing, management information systems, deposit servicing systems and electronic banking expenses of $550,000, $341,000, $234,000, $183,000 and $152,000 during the year ended December 31, 2024, respectively. ​ The table below sets forth our noninterest expense for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ ​ 2024 ​ 2023 ​ Amount ​ Percent ​ ​ (Dollars in thousands) Salaries and employee benefits ​ $ 67,257 ​ $ 68,344 ​ $ (1,087) ​ (1.59%) Director and professional service fees ​ ​ 8,601 ​ ​ 6,232 ​ ​ 2,369 ​ 38.01% Occupancy and equipment expenses ​ ​ 5,580 ​ ​ 5,192 ​ ​ 388 ​ 7.47% Data processing expenses ​ ​ 9,024 ​ ​ 7,500 ​ ​ 1,524 ​ 20.32% Marketing and charitable contribution expenses ​ ​ 3,459 ​ ​ 23,082 ​ ​ (19,623) ​ (85.01%) FDIC and state insurance assessments ​ ​ 2,847 ​ ​ 4,707 ​ ​ (1,860) ​ (39.52%) General and administrative expenses ​ ​ 6,249 ​ ​ 6,287 ​ ​ (38) ​ (0.60%) Total noninterest expense ​ $ 103,017 ​ $ 121,344 ​ $ (18,327) ​ (15.10%) ​ Income Tax Expense.
Noninterest expense currently consists primarily of expenses related to salary and employee benefits and director fees, occupancy and equipment, data processing, marketing and charitable contribution expense, professional fees, FDIC assessments and other general and administrative expenses. 61 Table of Contents Our results of operations also may be affected significantly by general and local economic and competitive conditions, changes in market interest rates, governmental policies and actions of regulatory authorities.
Noninterest expense currently consists primarily of expenses related to salary and employee benefits and director fees, occupancy and equipment, data processing, marketing and charitable contribution expense, professional fees, FDIC assessments and other general and administrative expenses. ​ Our results of operations also may be affected significantly by general and local economic and competitive conditions, changes in market interest rates, governmental policies and actions of regulatory authorities. ​ On November 15, 2025 we completed our previously announced Provident Acquisition, which resulted in the addition of approximately $1.40 billion in total assets, $1.18 billion of total net loans and $1.14 billion in total deposits, all at fair value.
Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period.
We analyze our sensitivity to changes in interest rates through a net interest income model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings.
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. For additional information, see the consolidated statements of cash flows for the years ended December 31, 2024 and 2023 included as part of the consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.
For additional information, see the consolidated statements of cash flows for the years ended December 31, 2025 and 2024 included as part of the consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. ​ We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis.
Net income was $9.8 million for the year ended December 31, 2023, compared to net income of $30.1 million for the year ended December 31, 2022, a decrease of $20.2 million, or 67.3%.
Net income was $42.1 million for the year ended December 31, 2024, compared to net income of $9.8 million for the year ended December 31, 2023, an increase of $32.3 million, or 329.0%.
During the year ended December 31, 2024, commercial real estate loans, including multi-family real estate loans, increased $316.6 million, or 22.9%; commercial and industrial loans increased $67.9 million, or 13.8%; one-to-four-family residential real estate loans, including home equity loans, increased $60.1 million, or 5.0%; and consumer loans increased $39.7 million, or 19.4%.
During the year ended December 31, 2025, commercial real estate loans, including multi-family real estate loans, increased $745.1 million, or 43.9%; commercial and industrial loans increased $447.8 million, or 80.0%; construction and land development loans increased $146.8 million, or 25.1%; and one-to-four-family residential real estate loans, including home equity loans, increased $74.9 million, or 6.0%.
Total assets increased $624.3 million, or 13.8%, to $5.16 billion as of December 31, 2024 from $4.53 billion at December 31, 2023. The increase was primarily the result of increases in net loans, cash and cash equivalents, BOLI and AFS securities. Cash and Cash Equivalents.
Total assets increased $1.85 billion, or 35.8%, to $7.01 billion as of December 31, 2025 from $5.16 billion at December 31, 2024. The increase was primarily the result of increases in net loans, cash and cash equivalents, AFS securities, banking premises and equipment, goodwill and other intangibles and deferred tax assets from the Provident Acquisition. ​ Cash and Cash Equivalents.
Noninterest income currently consists primarily of customer service fees, swap contract income, and income on BOLI.
Our results of operations also are affected by our provision for credit losses, noninterest income and noninterest expense. Noninterest income currently consists primarily of customer service fees, swap contract income, and income on BOLI.
Deposits increased $790.3 million, or 23.3%, to $4.18 billion at December 31, 2024 from $3.39 billion at December 31, 2023. Core deposits (which we define as all deposits other than brokered deposits) increased $664.1 million, or 20.7%, to $3.9 billion at December 31, 2024 from $3.2 billion at December 31, 2023.
Core deposits (which we define as all deposits other than brokered deposits) increased $1.45 billion, or 37.5%, to $5.32 billion at December 31, 2025 from $3.87 billion at December 31, 2024.
The weighted average remaining maturity (“WARM”) method is the primary credit loss estimation methodology used by the Company and involves estimating future cash flows and expected credit losses for pools of loans using their expected remaining weighted average remaining maturity In applying future economic forecasts, the Company utilizes a forecast period of up to two years.
The weighted average remaining maturity (“WARM”) method is the primary credit loss estimation methodology used by the Company and involves estimating future cash flows and expected credit losses for pools of loans using their expected remaining WARM. ​ The quantitative model estimates expected credit losses using loan level data over the estimated life of the exposure, considering the effect of prepayments.
Such gains and losses are recognized within non-interest income in the consolidated statements of income. Non-GAAP Financial Measures. In addition to results presented in accordance with U.S.
Interest and penalties, if any, associated with uncertain tax positions, are classified as additional income tax expense in the consolidated statements of income (see Note 11). ​ Non-GAAP Financial Measures. In addition to results presented in accordance with U.S.
The following table sets forth, as of December 31, 2024, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve. ​ ​ ​ ​ ​ ​ ​ At December 31, 2024 Change in Interest Rates Net Interest Income Year 1 Change from (basis points) (1) ​ Year 1 Forecast ​ Level (Dollars in thousands) ​ 400 ​ $ 202,121 9.0 % 300 ​ ​ 198,794 7.2 % 200 ​ 195,159 5.2 % 100 ​ 191,506 3.3 % Level ​ 185,432 — % (100) ​ 179,705 (3.1) % (200) ​ 174,599 (5.8) % (300) ​ 170,827 (7.9) % (400) ​ 168,011 (9.4) % (1) Assumes an immediate uniform change in interest rates at all maturities.
An increase in interest rates from 3% to 4% would mean, for example, a 100-basis point increase in the “Change in Interest Rates” column below. ​ The following table sets forth, as of December 31, 2025, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve. ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2025 Change in Interest Rates ​ ​ ​ Net Interest Income ​ ​ ​ Year 1 Change from (basis points) (1) ​ Year 1 Forecast ​ Level (Dollars in thousands) ​ 400 ​ $ 257,507 3.3 % 300 ​ ​ 270,556 8.5 % 200 ​ 264,733 6.2 % 100 ​ 258,487 3.7 % Level ​ 249,268 — % (100) ​ 243,011 (2.5) % (200) ​ 238,154 (4.5) % (300) ​ 233,744 (6.2) % (400) ​ 235,216 (5.6) % (1) Assumes an immediate uniform change in interest rates at all maturities.
Net income was $42.1 million for the year ended December 31, 2024, compared to net income of $9.8 million for the year ended December 31, 2023, an increase of $32.3 million, or 329.0%. 68 Table of Contents The increase was primarily due to an increase in interest and fees on loans of $58.6 million, or 27.6%, a decrease in marketing and charitable contributions expense of $19.6 million, or 85.0%, an increase in interest and dividends on cash equivalents and other of $9.7 million, or 186.9%, and a decrease in interest expense on borrowings of $9.7 million, or 68.7%; primarily offset by an increase in interest expense on deposits of $50.5 million, or 66.1%, and an increase in income tax expense of $14.5 million, or 715.7%.
The increase was primarily due to an increase in interest and fees on loans of $58.6 million, or 27.6%, a decrease in marketing and charitable contributions expense of $19.6 million, or 85.0%, an increase in interest and dividends on cash equivalents and other of $9.7 million, or 186.9%, and a decrease in interest expense on borrowings of $9.7 million, or 68.7%; primarily offset by an increase in interest expense on deposits of $50.5 million, or 66.1%, and an increase in income tax expense of $14.5 million, or 715.7%. ​ Operating net income, excluding one-time charges, amounted to $45.5 million, or $1.15 per diluted share for the year ended December 31, 2024 compared to operating net income of $34.3 million, or $0.82 per diluted share for the year ended December 31, 2023, an increase of $11.2 million, or 32.5%. ​ The material one-time pre-tax amounts during the year ended December 31, 2024 were: ​ ◾ Loss on the sale of available-for sale securities amounting to $1.9 million; ◾ Tax expense and a managed endowment contract penalty related to the surrender of BOLI policies of $1.7 million, and; ◾ Defined benefit pension termination expense, amounting to $390,000 ​ The material one-time pre-tax amounts for the year ended December 31, 2023 included: ​ ◾ Needham Bank charitable foundation contribution as a result of the Company’s IPO of $19.1 million; ◾ One-time conversion and IPO-related compensation expense of $7.9 million; ◾ Permanent tax differences as a result of the Company’s IPO of $3.7 million; and ◾ Defined benefit pension termination expense, amounting to $1.9 million 85 Table of Contents Interest and Dividend Income.
Shareholders’ equity increased $7.2 million, or 1.0%, to $765.2 million at December 31, 2024 from $758.0 million at December 31, 2023.
Shareholders’ equity increased $93.8 million, or 12.3%, to $858.9 million at December 31, 2025 from $765.2 million at December 31, 2024.
Noninterest income decreased $3.8 million, or 24.9%, to $11.5 million for the year ended December 31, 2024 from $15.4 million for the year ended December 31, 2023.
Income tax expense increased $4.4 million, or 26.5%, to $20.8 million for the year ended December 31, 2025 from $16.5 million for the year ended December 31, 2024.
Based on management’s analysis of the adequacy of allowance for credit losses, a provision of $13.9 million was recorded for the year ended December 31, 2023 in accordance with the CECL standard, compared to a provision of $6.7 million for the year ended December 31, 2022 in accordance with the incurred loss standard.
Based on management’s analysis of the adequacy of ACL, a provision of $4.7 million was recorded for the year ended December 31, 2025, of which $4.7 million related to the provision for credit losses on loans, compared to a provision of $12.1 million for the year ended December 31, 2024, which included a $14.9 million provision for credit losses on loans.
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.
Our most liquid assets are cash and short-term investments. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period. ​ Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities.
At December 31, 2024, the Company and the Bank exceed all of their regulatory capital requirements, and were categorized as well-capitalized at that date. Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change our category. See Note 10 of the notes to consolidated financial statements on pages 120-121.
Management is not aware of any conditions or events since the most recent notification of well-capitalized status that would change our category. See Note 12 of the notes to consolidated financial statements. ​ Off-Balance Sheet Arrangements and Aggregate Contractual Obligations Commitments.
Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. The following represent our significant accounting policies: Loans Held for Investment and ACL.
Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. ​ The following represent our critical accounting policies: ​ ACL – The ACL represents management’s best estimate of credit losses over the remaining life of loans measured at amortized cost and unfunded lending commitments at the consolidated balance sheet date and is established through a provision for credit losses charged to net income.
We experienced increases in each of our loan portfolio segments except for construction and land development loans, which decreased $39.0 million, or 6.3%, to $583.8 million at December 31, 2024 from $622.8 million at December 31, 2023.
Loans, net increased $1.60 billion, or 37.4%, to $5.90 billion at December 31, 2025 from $4.29 billion at December 31, 2024. We experienced increases in each of our loan portfolio segments except for consumer loans, which decreased $41.1 million, or 16.8%, to $203.5 million at December 31, 2025 from $244.6 million at December 31, 2024.
Our hedging activity varies based on the level and volatility of interest rates and other changing market conditions. Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income model.
We also engage in hedging strategies with respect to arrangements where our customers swap floating interest rate obligations for fixed interest rate obligations, or vice versa. Our hedging activity varies based on the level and volatility of interest rates and other changing market conditions. ​ Net Interest Income.
At December 31, 2024 we also had $451.0 million available from a line under the BIC program at the FRB of Boston. 79 Table of Contents Additionally, at December 31, 2024, we had $309.8 million of brokered deposits, and pursuant to our internal liquidity policy, which allows us to utilize brokered deposits up to 25.0% of our total assets, we had an additional capacity of up to approximately $979.6 million of brokered deposits.
At December 31, 2025 we also had $939.5 million available from the discount window under the BIC program at the FRB of Boston. ​ Additionally, at December 31, 2025, we had $535.7 million of brokered deposits, and pursuant to our internal liquidity policy, which allows us to utilize brokered deposits up to 25.0% of our total assets, we had an additional capacity of up to approximately $1.22 billion of brokered deposits. ​ 91 Table of Contents While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition.
At December 31, 2024, we had outstanding borrowings of $120.8 million from the FHLB. At December 31, 2024, we had unused borrowing capacity of $754.1 million with the FHLB.
We are also able to borrow from the FHLB and FRB. ​ At December 31, 2025, we had outstanding borrowings of $196.2 million from the FHLB. At December 31, 2025, we had unused borrowing capacity of $913.7 million with the FHLB.
The yield on interest-earning assets increased 181 basis points to 5.87% for the year ended December 31, 2023 from 4.06% for the year ended December 31, 2022. Interest Expense. Total interest expense increased $74.9 million, or 481.7%, to $90.4 million for the year ended December 31, 2023 from $15.5 million for the year ended December 31, 2022.
The yield on interest-earning assets increased 4 basis points to 6.44% for the year ended December 31, 2025 from 6.40% for the year ended December 31, 2024. ​ Interest Expense.
The increase in these loan portfolio segments reflects our strategy to grow the balance sheet by continuing to diversify into higher-yielding loans to improve net margins and manage interest rate risk. In addition, to help manage interest rate risk and generate non-interest income, occasionally we sell one-to-four-family residential mortgage loans into the secondary market on a servicing-retained basis.
In addition, to help manage interest rate risk and generate non-interest income, occasionally we sell one-to-four-family residential mortgage loans into the secondary market on a servicing-retained basis. During the year ended December 31, 2025, $9.0 million of loans were sold with gains recognized of $165,000.
As a result of the surrender and purchase, BOLI increased $52.3 million, or 103.5%, to $102.8 million at December 31, 2024 from $50.5 million at December 31, 2023. Deferred Income Tax Asset, Net. Deferred tax asset, net increased $11.2 million, or 58.4%, to $30.3 million at December 31, 2024 from $19.1 million at December 31, 2023.
Deferred income tax asset, net increased $18.5 million, or 61.2%, to $48.8 million at December 31, 2025 from $30.3 million at December 31, 2024.
GAAP) ​ 5,157,737 ​ ​ 4,533,391 ​ ​ 3,592,433 Subtract: ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets (core deposit intangible) ​ 1,079 ​ ​ 1,227 ​ ​ 1,377 Total tangible assets (non-GAAP) $ 5,156,658 ​ $ 4,532,164 ​ $ 3,591,056 Tangible shareholders' equity / tangible assets (non-GAAP) ​ 14.82% ​ ​ 16.70% ​ ​ 9.54% Total common shares outstanding ​ 42,705,729 ​ ​ 42,705,729 ​ ​ N/A Tangible book value per share (non-GAAP) $ 17.89 ​ $ 17.72 ​ $ N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended ​ December 31, 2024 ​ December 31, 2023 ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expense on an operating basis (non-GAAP) $ 101,599 ​ $ 92,431 ​ $ 71,319 Total revenue (net interest income plus total noninterest income) (non-GAAP) ​ 174,598 ​ ​ 147,073 ​ ​ 114,407 Operating efficiency ratio (non-GAAP) ​ 58.19% ​ ​ 62.85% ​ ​ 62.34% ​ Comparison of Financial Condition at December 31, 2024 and 2023 Total Assets.
GAAP) ​ 7,006,130 ​ ​ 5,157,737 ​ ​ 4,533,391 Subtract: ​ ​ ​ ​ ​ ​ ​ ​ Intangible assets (core deposit intangible and goodwill) ​ 37,815 ​ ​ 1,079 ​ ​ 1,227 Total tangible assets (non-GAAP) $ 6,968,315 ​ $ 5,156,658 ​ $ 4,532,164 Tangible shareholders' equity / tangible assets (non-GAAP) ​ 11.78% ​ ​ 14.82% ​ ​ 16.70% Total common shares outstanding ​ 45,770,128 ​ ​ 42,705,729 ​ ​ 42,705,729 Tangible book value per share (non-GAAP) $ 17.94 ​ $ 17.89 ​ $ 17.72 ​ Comparison of Financial Condition at December 31, 2025 and 2024 ​ Total Assets.
Interest expense on deposit accounts increased $63.7 million, or 502.0%, to $76.4 million for the year ended December 31, 2023 from $12.7 million for the year ended December 31, 2022, due to an increase in the weighted average rate on interest-bearing deposits to 2.84% for the year ended December 31, 2023 from 0.60% for the year ended December 31, 2022 and an increase in the average balance of interest-bearing deposits of $576.2 million, or 27.3%, to $2.70 billion for the year ended December 31, 2023 from $2.11 billion for the year ended December 31, 2022.
Total interest expense increased $7.0 million, or 5.3%, to $138.3 million for the year ended December 31, 2025 from $131.3 million for the year ended December 31, 2024. ​ Interest expense on deposits increased $6.0 million, or 4.7%, to $132.9 million for the year ended December 31, 2025 from $126.9 million for the year ended December 31, 2024, due to an increase in the average balance of certificates of deposit and individual retirement accounts of $198.5 million, or 10.7%, to $2.06 billion for the year ended December 31, 2025 from $1.86 billion for the year ended December 31, 2024 and an increase in the average balance of money market accounts of $297.3 million, or 33.7%, to $1.18 billion for the year ended December 31, 2025 from $883.2 million for the year ended December 31, 2024.
The increase in interest and fees on loans was primarily due to the increase of $984.4 million in the average balance of the loan portfolio to $3.46 billion for the year ended December 31, 2023 from $2.48 billion for the year ended December 31, 2022 and an increase of 152 basis points in the weighted average yield for the loan portfolio to 6.12% for the year ended December 31, 2023 from 4.60% for the year ended December 31, 2022, reflecting the increasing rate environment year to year. 73 Table of Contents Average interest-earning assets increased $800.7 million, or 26.8%, to $3.78 billion for the year ended December 31, 2023 from $2.98 billion for the year ended December 31, 2022.
Income from the Provident Acquisition is only included in the results of 2025 since November 15, 2025. ​ 80 Table of Contents ​ The increase in interest and fees on loans was primarily due to an increase of $629.5 million, or 15.4%, in the average balance of the loan portfolio to $4.72 billion for the year ended December 31, 2025 from $4.09 billion for the year ended December 31, 2024 and an increase of 5 basis points in the weighted average yield for the loan portfolio to 6.67% for the year ended December 31, 2025 from 6.62% for the year ended December 31, 2024, reflecting the growth of our commercial loan portfolios.
At December 31, 2024 and 2023, we had $309.8 million and $183.6 million of brokered deposits, respectively, as a result of funding needs and to support overall liquidity. The Company had $395.2 million and $317.4 million in deposits from the cannabis industry as of December 31, 2024 and December 31, 2023, respectively. Borrowings.
The increase in brokered deposits was driven by the $120.0 million in brokered deposits assumed from the Provident Acquisition and additional usage of brokered deposits for liquidity and funding needs. ​ The Company had $453.0 million and $395.2 million in deposits from the cannabis industry as of December 31, 2025 and 2024, respectively. ​ 79 Table of Contents Borrowings.
Summary of Significant Accounting Policies The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with U.S. GAAP.
We issued 5.9 million shares of our common stock in the exchange and paid $111.8 million in cash, which resulted in a transaction value of approximately $226.5 million based upon the closing price of our common stock on November 14, 2025 of $19.29 per share. ​ Critical Accounting Policies and Estimates ​ The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with U.S.
Interest and Dividend Income. Interest and dividend income increased $101.1 million, or 83.6%, to $222.2 million for the year ended December 31, 2023 from $121.0 million for the year ended December 31, 2022, primarily due to a $98.1 million, or 86.0%, increase in interest and fees on loans.
Interest and dividend income increased $43.2 million, or 14.8%, to $335.7 million for the year ended December 31, 2025 from $292.5 million for the year ended December 31, 2024, primarily due to a $44.2 million, or 16.3%, increase in interest and fees on loans and a $2.7 million, or 38.7%, increase in interest on investment securities, offset by a $3.7 million, or 24.8%, decrease in interest and dividends on cash equivalents and other.

… 153 more changes not shown on this page.

Other NBBK 10-K year-over-year comparisons