What changed in this filing

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Item 1. Financial Statements

2026-05-08 compared with 2025-11-07 · 385 added, 291 removed, 719 unchanged (48% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30, 2025 (Unaudited) and December 31, 2024

March 31, 2026 (Unaudited) and December 31, 2025

(in thousands except share and per share data)

September 30, 2025

March 31, 2026

December 31, 2025

3 unchanged sentences

Available-for-sale securities, at fair value

Loans held for sale, at fair value

Loans receivable, net of deferred fees

5 unchanged sentences

Prepaid expenses and other assets

Deferred income tax asset

Core deposit intangible, net

Deferred income tax asset, net

Liabilities and shareholders' equity

3 unchanged sentences

Mortgagors' escrow accounts

FHLB borrowings

Federal Home Loan Bank ("FHLB") borrowings

Accrued expenses and other liabilities

6 unchanged sentences

44,765,178 and 45,770,128

shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

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For the Three Months Ended

For the Nine Months Ended

September 30,

INTEREST AND DIVIDEND INCOME

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Provision for credit losses - loans

Provision for (release of) credit losses - unfunded commitments

(Release of) provision for credit losses - unfunded commitments

Total provision for credit losses

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Swap contract income

Loss on sale of available-for-sale securities, net

(Loss) gain on sale of loans, net

Total noninterest income

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For the Three Months Ended

For the Nine Months Ended

September 30,

OTHER COMPREHENSIVE INCOME, NET OF TAX:

Net change in fair value of available-for-sale securities

Net change in fair value of cash flow hedges

Net change in fair value of cash flow hedge

TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX:

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Income (Loss)

Balance, June 30, 2024

Other comprehensive income, net of tax

ESOP shares committed to be released ( 43,057 shares)

Balance, September 30, 2024

Balance, June 30, 2025

Other comprehensive income, net of tax

Repurchase of common shares under share repurchase plan

Stock-based compensation

ESOP shares committed to be released ( 43,057 shares)

Dividends paid

Balance, September 30, 2025

For the Nine Months Ended

Stock Held by

Comprehensive

Income (Loss)

Balance, December 31, 2024

Adoption of ASU 2023-02

Other comprehensive income, net of tax

Costs from stock offering and issuance of common shares

Purchase of common shares held by ESOP ( 2,416,458 shares)

Repurchase of common shares under share repurchase plan

( 2,135,286 )

ESOP shares committed to be released ( 42,121 shares)

Balance, September 30, 2024

Balance, March 31, 2025

Balance, December 31, 2025

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

Repurchase of common shares under share repurchase plan

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Dividends paid

Balance, September 30, 2025

Balance, March 31, 2026

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

(Unaudited - Dollars in thousands)

For the Nine Months Ended

September 30,

(Dollars in thousands)

For the Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash from operating activities:

Net accretion of available-for-sale securities

Loss on sale of available-for-sale securities, net

Net (accretion) amortization of available-for-sale securities

Amortization of core deposit intangible

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Change in net deferred loan origination fees

Mortgage loans originated for sale

Proceeds from sale of mortgage loans held for sale

Gain on sale of mortgage loans

Loans originated for sale

Proceeds from sale of loans held for sale

Gain on sale of loans

Depreciation and amortization expense

1 unchanged sentence

Increase in cash surrender values of BOLI

Establishment of solar income tax credit investment basis reduction deferred tax liability

Deferred income tax benefit

1 unchanged sentence

Changes in operating assets and liabilities:

Net change in loans held for sale

Accrued interest receivable

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Purchases of available-for-sale securities

Proceeds from sales of available-for-sale securities

Proceeds from maturities, calls and paydowns of available-for-sale securities

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Proceeds from BOLI death benefit

Proceeds from surrender (purchases) of BOLI policies

Purchases of BOLI policies

Proceeds from surrender of BOLI policies

Purchases of banking premises and equipment

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Net change in deposits

Net costs from stock offering and issuance of common shares

Purchase of common shares held by ESOP

Repurchase of common shares under share repurchase plan

Dividends paid

Net change in mortgagors' escrow accounts

Decrease in FHLB borrowings, net

Repurchase of common shares under share repurchase plans

Dividends paid

Advances of FHLB borrowings

Paydowns of FHLB borrowings

NET CASH PROVIDED BY FINANCING ACTIVITIES

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CASH AND CASH EQUIVALENTS AT END OF PERIOD

The accompanying notes are an integral part of these unaudited consolidated financial statements.

For the Three Months Ended March 31,

Supplemental disclosure of cash paid during the period for:

Income taxes:

Massachusetts

Jurisdictions below 5 percent of total income taxes paid, net of refunds

Supplemental disclosure of non-cash transactions:

Cumulative effect adjustment of adoption of ASU 2023-02, net of income taxes

Unrealized gains (losses) on available-for-sale securities

Unrealized gains on cash flow hedges

Mortgage loans transferred to loans held for sale

Restricted stock awards granted

Initial recognition of operating lease right of use assets and lease liabilities

Increase in operating lease right of use assets and lease liabilities resulting from lease modifications

Unrealized (losses) gains on available-for-sale securities

Unrealized holding losses on cash flow hedge

Mortgage loans transferred to loans held for sale

Restricted stock awards granted

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Basis of Presentation

NB Bancorp, Inc., a Maryland corporation (the “Company”) (referred to herein as the “Company,” “we,” “us,” or “our”), is a bank holding company.

Through its wholly-owned subsidiary, Needham Bank (the “Bank”), the Company provides a variety of banking services, through its full-service bank branches, located primarily in eastern Massachusetts.

The activities of the Company are subject to the regulatory supervision of the Board of Governors of the Federal Reserve System.

The activities of the Bank are subject to the regulatory supervision of the Massachusetts Commissioner of Banks and the Federal Deposit Insurance Corporation (“FDIC”).

The Company and the activities of the Bank and its subsidiaries are also subject to various Massachusetts business and banking-related regulations.

On June 5, 2025, the Company announced the signing of a definitive merger agreement under which the Company will acquire Provident Bancorp, Inc., with the Company as the surviving entity, and the Bank will acquire BankProv, the wholly owned subsidiary of Provident Bancorp, Inc., with the Bank as the surviving entity (the “Merger”).

The transaction is valued at approximately $ 211.8 million.

The closing of the Merger, which is expected to occur during the fourth quarter of 2025, was approved by the affirmative vote of the holders of a majority of Provident Bancorp, Inc.

common stock and the receipt of required regulatory approvals from applicable state and federal regulators.

Corporate Structure and Nature of Operations

NB Bancorp, Inc., a Maryland corporation (the “Company”), is a bank holding company.

The activities of the Company and the Bank are subject to the regulatory supervision of the Board of Governors of the Federal Reserve System and the Massachusetts Commissioner of Banks.

The Company and the activities of the Bank and its subsidiaries are also subject to various Massachusetts business and banking regulations.

Effective December 27, 2023, NB Financial, MHC (the “MHC”), the Bank’s former mutual holding company and the predecessor of the Company, converted from a mutual holding company into a publicly traded stock form of organization.

In connection with the conversion, the Company sold 40,997,500 shares of common stock in a public offering at $ 10.00 per share for net offering proceeds of approximately $ 400.4 million.

Additionally, the Company donated $ 2.0 million of cash and 1,708,229 shares of common stock to the Needham Bank Charitable Foundation (the “Foundation”).

In connection with the conversion, liquidation accounts are established by the Company and the Bank in an aggregate amount equal to (i) the MHC’s ownership interest in the shareholders’ equity of NB Financial, Inc.

as of the date of the latest statement of financial condition included in the Company’s definitive prospectus dated October 12, 2023, plus (ii) the value of the net assets of the MHC as of the date of the MHC’s latest statement of financial condition before the consummation of the Conversion (excluding the MHC’s ownership interest in NB Financial, Inc.).

Each eligible account holder and supplemental eligible account holder is entitled to a proportionate share of the liquidation accounts in the event of a liquidation of (i) the Company and the Bank or (ii) the Bank, and only in such events.

This share will be reduced if the eligible account holder’s or supplemental account holder’s deposit balance falls below the amounts on the date of record and will cease to exist if the account is closed.

The liquidation account will never be increased despite any increase after conversion in the related deposit balance.

The Bank may not pay a dividend on its capital stock if the effect thereof would cause retained earnings to be reduced below the liquidation account amount or regulatory capital requirements.

Basis of Presentation

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Certain amounts, previously reported, have been reclassified to state all periods on a comparable basis and had no effect on shareholders’ equity or net income.

The accompanying Consolidated Balance Sheet as of September 30, 2025, the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Shareholders’ Equity and Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2025 and 2024 are unaudited.

The accompanying Consolidated Balance Sheet as of March 31, 2026, the Consolidated Statements of Income, of Comprehensive Income, of Changes in Shareholders’ Equity and of Cash Flows for the three months ended March 31, 2026 and 2025 are unaudited.

The Consolidated Balance Sheet as of December 31, 2025 was derived from the Audited Consolidated Financial Statements as of that date.

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In the opinion of management, the Company’s Consolidated Financial Statements reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented.

The results for the three and nine months ended September 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim period, or any future year or period.

The Company qualifies as an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of 2012 and has elected to defer the adoption of new or revised accounting standards until the nonpublic company effective dates.

The results for the three months ended March 31, 2026 are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other interim period, or any future year or period.

The Company qualifies as an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of 2012 and has the ability to defer the adoption of new or revised accounting standards until the nonpublic company effective dates.

As such, the Company will adopt standards on the nonpublic company effective dates until such time that we no longer qualify as an EGC.

Subsequent events are events or transactions that occur after the consolidated balance sheet date but before consolidated financial statements are issued.

Subsequent events are events or transactions that occur after the balance sheet date but before consolidated financial statements are issued.

Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the consolidated balance sheet, including the estimates inherent in the process of preparing consolidated financial statements.

Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the consolidated balance sheet but arose after that date.

Provident Bancorp, Inc.

and BankProv Acquisition

On November 15, 2025, the Company completed its acquisition of Provident Bancorp, Inc.

and BankProv (“Provident”).

The total consideration paid in the acquisition of Provident was $ 111.8 million in cash and the issuance of 5,943,682 shares of common stock valued at $ 114.7 million.

The acquisition added $ 1.40 billion of total assets, $ 1.23 billion of total loans and $ 1.14 billion in total deposits, each at fair value, as of the date of closing.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations .

Under this method of accounting, the respective assets acquired and liabilities assumed were recorded at their estimated fair values.

The excess of consideration paid over the estimated fair value of the net assets acquired totaled $ 18.5 million and was recorded as goodwill.

The results of Provident’s operations were included in the Company’s consolidated financial statements beginning on November 15, 2025.

The calculation of goodwill is subject to change for up to one year after the closing date of the transaction as additional information relative to closing date estimated and uncertainties becomes available.

The Company made no adjustments to Goodwill during the three months ended March 31, 2026.

Operating Segments

The Company adopted FASB ASU 2023-07 “Segment Reporting (Topic 280) - Improvement to Reportable Segment Disclosures” on January 1, 2024, which requires that information be reported about a company’s operating segments using a “management approach.” Reportable segments are identified in these standards as those revenue producing components for which separate financial information is produced internally and which are subject to evaluation by the chief operating decision maker (“CODM”).

Reportable segments are those revenue producing components for which separate financial information is produced internally and which are subject to evaluation by the chief operating decision maker (“CODM”).

The Company has determined that its CODM is its Chief Executive Officer.

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its banking business, which consists of a full range of banking lending, savings, and small business offerings.

The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company’s consolidated statements of income and other comprehensive income.

The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as net income reported in the Company’s consolidated statements of income and other comprehensive income.

The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s consolidated statements of income and other comprehensive income.

1 unchanged sentence

Use of Estimates

In preparing the Consolidated Financial Statements in conformity with U.S.

GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheets and income and expenses for the periods reported.

Actual results could differ from those estimates based on changing conditions, including economic conditions and future events.

Material estimates that are particularly susceptible to change relate to the determination of the allowance for credit losses, valuation and fair value measurements, the liabilities for benefit obligations (particularly pensions) and the provision for income taxes.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses.

Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the Allowance for Credit Losses (“ACL”) on loans, fair value determination of acquired assets and liabilities and resulting accretion and amortization of purchase accounting premiums/discounts, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of deferred tax assets, actuarial estimates related to the Company’s retirement programs, the valuation of financial instruments and impairment of goodwill and other intangibles.

In connection with the determination of the ACL and foreclosed real estate, management obtains independent appraisals for significant properties.

A majority of the Company's loan portfolio consists of one-to-four-family residential, commercial real estate and construction and land development loans in the metro-west area of Boston and its surrounding communities.

Accordingly, the ultimate collectability of a substantial portion of the Company's loan portfolio and the recovery of the carrying amount of foreclosed real estate are susceptible to changes in local market conditions.

While management uses currently available information to recognize losses on loans and foreclosed real estate, future additions to the ACL and valuation reserves on foreclosed real estate may be necessary based on changes in local economic conditions.

In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL on loans and valuation reserves on foreclosed real estate.

Such agencies may require the Company to recognize additions to the ACL on loans and valuation reserves on foreclosed real estate based on their judgments about information available to them at the time of their examination.

Because of these factors, it is reasonably possible that the ACL on loans and valuation reserves on foreclosed real estate may change in the near future.

Business Combinations – Acquisitions of businesses are accounted for using the acquisition method of accounting.

In accordance with applicable accounting guidance, we recognize assets acquired and liabilities assumed at their respective fair values as of the date of acquisition, with the related transaction costs expensed in the period incurred.

We use third party valuation specialists to assist in the determination of fair value of certain assets and liabilities at the merger date, including loans and core deposit intangibles.

While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed on the acquisition date, the estimates are inherently uncertain.

For further discussion of our methodology for estimating the fair value of acquired assets and assumed liabilities in connection with our Provident Acquisition, see Note 1 – Corporate Structure and Nature of Operations;

Basis of Presentation – Provident Bancorp, Inc.

and BankProv Acquisition .

Recent Accounting Pronouncements

Relevant standards that were recently issued but not yet adopted as of September 30, 2025:

Relevant standards that were recently issued but not yet adopted as of March 31, 2026:

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Sub Topic 220-40):

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The adoption of ASU 2024-03 is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” to improve the transparency of income tax disclosures.

The amendments are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The Company does not expect the adoption of ASU 2023-09 to have a material effect on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Note 3 – Securities

The Company's available-for-sale securities are carried at fair value.

For available-for-sale securities in an unrealized loss position, management will first evaluate whether there is intent to sell, or if it is more likely than not that the Company will be required to sell a security prior to anticipated recovery of its amortized cost basis.

The Company's available-for-sale (“AFS”) securities are carried at fair value.

For AFS securities in an unrealized loss position, management will first evaluate whether there is intent to sell, or if it is more likely than not that the Company will be required to sell a security prior to anticipated recovery of its amortized cost basis.

If either of these criteria are met, the Company will record a write-down of the security's amortized cost basis to fair value through income.

For those available-for-sale securities which do not meet the intent or requirement to sell criteria, management will evaluate whether the decline in fair value is a result of credit-related matters or other factors.

For those AFS securities which do not meet the intent or requirement to sell criteria, management will evaluate whether the decline in fair value is a result of credit related matters or other factors.

In performing this assessment, management considers the creditworthiness of the issuer including whether the security is guaranteed by the U.S.

Federal Government or other government agency, the extent to which fair value is less than amortized cost, and changes in credit rating during the period, among other factors.

If this assessment indicates the existence of credit losses, the security will be written down to fair value, as determined by a discounted cash flow analysis, through an allowance for credit losses.

If this assessment indicates the existence of credit losses, the security will be written down to fair value, as determined by a discounted cash flow analysis.

To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and is recognized in earnings.

5 unchanged sentences

Credit Losses

September 30, 2025

March 31, 2026

(in thousands)

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SBA securities

The Company did not record a provision for estimated credit losses on any available-for-sale securities for the three and nine months ended September 30, 2025 and 2024.

Excluded from the table above is accrued interest on available-for-sale securities of $ 1.7 million and $ 1.6 million at September 30, 2025 and December 31, 2024, respectively, which is included within accrued interest receivable on the consolidated balance sheets.

Additionally, the Company did no t record any write-offs of accrued interest income on available-for-sale securities for the three and nine months ended September 30, 2025 and 2024.

No securities held by the Company were delinquent on contractual payments at September 30, 2025 or December 31, 2024, no r were any securities placed on non-accrual status for the three and nine months ended September 30, 2025 and 2024.

The following is a summary of actual maturities of certain available-for-sale securities as of September 30, 2025.

The Company did not record a provision for estimated credit losses on any AFS securities for the three months ended March 31, 2026 and 2025.

Excluded from the table above is accrued interest on AFS securities of $ 2.1 million and $ 1.8 million at March 31, 2026 and December 31, 2025, respectively, which is included within accrued interest receivable on the consolidated balance sheets.

Additionally, the Company did no t record any write-offs of accrued interest income on AFS securities for the three months ended March 31, 2026 and 2025.

No securities held by the Company were delinquent on contractual payments at March 31, 2026 or December 31, 2025, no r were any securities placed on non-accrual status during the three months ended March 31, 2026 and 2025.

The following is a summary of actual maturities of certain AFS securities as of March 31, 2026.

The amortized cost and fair values are based on the contractual maturity dates.

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When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.

There were no sales of available-for-sale securities during the three and nine months ended September 30, 2025.

During the three and nine months ended September 30, 2024, the Company sold $ 29.3 million of AFS securities and recognized gross realized losses of $ 1.9 million and gross realized gains of $ 30,000 .

There were no available-for-sale securities pledged to secure borrowings as of September 30, 2025 and December 31, 2024.

There were no sales of AFS securities during the three months ended March 31, 2026 and 2025.

The carrying value of AFS securities pledged to secure advances from the FHLB were $ 216.4 million and $ 111.5 million as of March 31, 2026 and December 31, 2025, respectively.

The following tables present fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates stated.

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(Dollars in thousands)

September 30, 2025

March 31, 2026

Number of Securities

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Treasury securities

Government Agencies

Agency mortgage-backed securities

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Included in corporate bonds are investments in senior and subordinated debt of banks and bank holding companies, some of which do not have investment ratings.

At September 30, 2025, available-for-sale debt securities had unrealized losses with aggregate depreciation of 3.9 % from the Company’s amortized cost basis.

At March 31, 2026, AFS debt securities had unrealized losses with aggregate depreciation of 2.7 % from the Company’s amortized cost basis.

These unrealized losses relate to changes in market interest rates since acquiring the securities.

As management has the intent and ability to hold available-for-sale debt securities until maturity or cost recovery, no allowance for credit losses on securities is deemed necessary as of September 30, 2025 and December 31, 2024.

As management has the intent and ability to hold these securities until maturity or cost recovery, no allowance for credit losses on securities is deemed necessary as of March 31, 2026 and December 31, 2025.

Note 4 – Loans Receivable, Allowance for Credit Losses and Credit Quality

Loans Held for Sale

Loans held for sale to the secondary market are carried at the lower of cost or estimated market value on an individual loan basis.

Gains on sales of loans are recognized in the consolidated statements of income at the time of sale.

Losses on sales of loans are recognized in the consolidated statements of income when incurred.

Interest income is recognized on loans held for sale between the time the loan is funded and the loan is sold.

Direct loan origination costs and fees are deferred upon origination and are recognized in the consolidated statements of income on the date of sale.

As of March 31, 2026 and December 31, 2025, the Company had $ 64.0 million and $ 66.4 million of consumer loans held for sale, respectively.

Loans Receivable

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported as held for investment at their outstanding principal balance adjusted for any charge-offs and net of any deferred fees (including purchase accounting adjustments) and origination costs (collectively referred to as “amortized cost”).

For originated loans, loan fees and certain direct origination costs are deferred and amortized or accreted into interest income over the contractual life of the loan using the level-yield method.

When a loan is paid off, the unamortized portion is recognized in interest income.

Loan origination fees and certain direct origination costs are deferred and amortized as an adjustment of yield using the payment terms required by the loan contract.

When loans are sold or repaid, any unamortized fees and costs are recorded to interest income on loans.

Interest income on loans is accrued based upon the daily principal amount outstanding except for loans on non-accrual status.

For acquired loans with no signs of credit deterioration at acquisition, interest income is also accrued based upon the daily principal amount outstanding, adjusted further by the accretion of any discount or amortization of any premium associated with the loan .

Loans are generally placed into nonaccrual status when they are past due 90 days or more as to either principal or interest or when, in the opinion of management, the collection of principal and/or interest is in doubt.

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When cash payments are received, they are applied to principal first, then to accrued interest.

It is the Company’s policy not to record interest income on nonaccrual loans until principal has become current and the borrower demonstrated the ability to pay and remain current.

It is the Company’s policy not to record interest income on nonaccrual loans until principal has become current.

In certain instances, accruing loans that are past due 90 days or more as to principal or interest may not go on nonaccrual status if the Company determines that the loans are well-secured and are in the process of collection.

Allowance for Credit Losses

The Allowance for Credit Losses (“ACL”) represents management’s best estimate of credit losses over the remaining life of the loan portfolio.

The ACL represents management’s best estimate of credit losses over the remaining life of the loan portfolio.

Loans are charged-off against the ACL when management believes the loan balance is no longer collectible.

This determination made is based on management's review of specific facts and circumstances of the individual loan, including the expected cash flows to repay the loan, the value of the collateral and the ability and willingness of any guarantors to perform.

Subsequent recoveries of previously charged-off amounts are recorded as increases to the ACL.

The provision for credit losses on loans is an amount sufficient to bring the ACL to an estimated balance that management considers adequate to absorb lifetime expected losses in the Company’s held-for-investment loan portfolio.

The provision for credit losses is an amount sufficient to bring the ACL to an estimated balance that management considers adequate to absorb lifetime expected losses in the Company’s held-for-investment loan portfolio.

The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.

Management’s determination of the adequacy of the ACL under Financial Accounting Standards Board (“ FASB”) Accounting Standards Codification (“ASC”) 326 – Financial Instruments – Credit Losses is based on an evaluation of the composition of the loan portfolio, current economic conditions, historical loan loss experience, reasonable and supportable forecasts, and other risk factors.

The Company uses a third-party Current Expected Credit Loss (“CECL”) model as part of its estimation of the ACL on a quarterly basis.

Management’s determination of the adequacy of the ACL under FASB ASC 326 is based on an evaluation of the composition of the loan portfolio, current economic conditions, historical loan loss experience, reasonable and supportable forecasts, and other risk factors.

The Company uses a third-party CECL model as part of its estimation of the ACL on a quarterly basis.

Loans with similar risk characteristics are collectively assessed within pools (or segments).

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Using federal call codes also allows the Company to utilize and assess publicly available external information when developing its estimate of the ACL.

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 life.

In applying future economic forecasts, the Company utilizes a forecast period of up to two years.

Historical loss rates used in the quantitative model are primarily derived using both the Bank’s data, supplemented with peer bank data obtained from publicly available sources.

Management also considers qualitative adjustments when estimating credit losses in consideration of the model’s quantitative limitations.

Qualitative adjustments to quantitative loss factors, either negative or positive, may include considerations of economic conditions, volume and severity of past due loans, value of underlying collateral, experience, depth, and ability of management, and concentrations of credit.

During the three and nine months ended September 30, 2025, as part of management’s annual analysis of prepayment speeds, the historical prepayment speed analysis of the purchased consumer loans portfolio used in the ACL calculation was enhanced, transitioning from a lifetime analysis to a month-over-month analysis.

The resulting Other Consumer loans prepayment speed forecast dropped from 16.8 % to 10.1 % and resulted in a $ 1.3 million increase in the quantitative value of the Other Consumer Loans ACL.

For those loans that do not share similar risk characteristics, the Company estimates the ACL on an individual (or loan by loan) basis.

The Company considers economic forecasts of inflation, national gross domestic product, and unemployment rates sourced from the Federal Open Market Committee’s “Summary of Economic Projections” to inform the model for future loss estimation.

Additionally, interest rate forecasts sourced from CME Group’s “FedWatch”, Wells Fargo’s “U.S.

Economic Outlook,” and FHN Financial’s “Economic Forecast” publications are used for consideration of rate sensitivity in the model’s loan prepayment speed estimation.

Historical loss rates used in the quantitative model are primarily derived using both the Bank’s data and peer bank data obtained from publicly available sources (i.e., federal call reports).

The Bank’s peer group is comprised of financial institutions of relatively similar size and in similar markets (i.e., $ 10 billion or less of total assets and headquartered in New England).

The peer group used for certain loan segments is a national peer group of financial institutions of relatively similar size, where appropriate.

The changes did not have a material impact on the ACL during the year ended December 31, 2025.

Management also considers qualitative adjustments when estimating credit losses to take into account the model’s quantitative limitations.

Management continually assesses the peer group and related data used to inform the ACL calculation.

Qualitative adjustments to quantitative loss factors, either negative or positive, may include considerations of economic conditions including economic forecasts as detailed above, volume and severity of past due loans, value of underlying collateral, experience, depth, and ability of management, and concentrations of credit.

The Company made no significant changes to loss factors, assumptions nor qualitative factors within the CECL model during the three months ended March 31, 2026 and 2025.

For those loans that do not share similar risk characteristics, the Company evaluates the ACL needs on an individual (or loan by loan) basis.

This population of individually evaluated loans (or loan relationships with the same primary source of repayment) is determined on a quarterly basis and consists of:

loans with a risk rating of substandard or worse and a balance exceeding $ 500,000 , or loan terms differing significantly from other pooled loans.

In accordance with the Company’s policy, non-accrual residential real estate loans that are below $ 500,000 and well secured (loan-to-value < 60 %) are excluded from individually evaluated loans.

loans with a risk rating of substandard or worse or loan terms differing significantly from other pooled loans.

In accordance with the Company’s policy, non-accrual residential real estate loans that are below $ 500,000 and well secured (loan-to-value < 60 %) are excluded from being individually evaluated.

Measurement of credit loss is based on the expected future cash flows of an individually evaluated loan, discounted at the loan’s effective interest rate, or measured on an observable market value, if one exists, or the estimated market value of the collateral underlying the loan, discounted to consider estimated costs to sell the collateral for collateral-dependent loans.

If the net value is less than the loan’s amortized cost, a specific reserve in the ACL is recorded, which is charged-off in the period when management believes the loan balance is no longer collectible.

The Company’s Troubled Asset Resolution Committee approves the key methodologies and assumptions, as well as the ACL on at least a quarterly basis.

While management uses available information at the time of estimation to determine expected credit losses on loans, future changes in the ACL may be necessary based on changes in portfolio composition, portfolio credit quality, and/or economic conditions.

In addition, bank regulatory agencies periodically review the Bank’s ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments different than those of management.

Collateral-dependent Loans – The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty.

The underlying collateral can vary based upon the type of loan.

The following provides more detail about the types of collateral that secure collateral-dependent loans:

● Commercial real estate and multifamily loans may be secured by either owner-occupied commercial real estate or non-owner-occupied investment commercial real estate.

Typically, owner-occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties occupied by operating companies.

Repayment is generally from the cash flows of the business occupying the property.

Non-owner-occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate.

● Commercial and industrial loans may be secured by non-real estate collateral such as accounts receivable, inventory, equipment, or other similar assets.

Enterprise value is defined as imputed value for the entire underlying business.

To determine an appropriate range of enterprise value, management relies on a standardized set of valuation methodologies that take into account future projected cash flows, market-based multiples, as well as asset values.

Valuations involve both quantitative and qualitative considerations and professional judgments concerning differences in financial and operating characteristics in addition to other factors that may impact values over time.

● Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage.

● Home equity lines of credit are generally secured by second mortgages on residential real estate property.

● Consumer loans are generally secured by boat and recreational vehicles, automobiles, solar panels and other personal property.

Some consumer loans are unsecured, have no underlying collateral, and would not be considered collateral-dependent.

● Warehouse loans are primarily facility lines to non-bank mortgage origination companies.

The underlying collateral of these loans are residential real estate loans.

Purchased Credit-Deteriorated (“PCD”) Loans - PCD loans are acquired individual loans (or acquired groups of loans with similar risk characteristics) that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality, as determined by the Company’s analyses.

A PCD loan is recorded at its purchase price plus the ACL expected at the time of acquisition, or “gross up” of the amortized cost basis, if any.

Changes in the current estimate of the ACL subsequent to acquisition from the estimated allowance previously recorded are recognized in the income statement as provision for credit losses or recoveries of credit losses in subsequent periods as they arise.

Evidence that purchased loans, measured at amortized cost, have more-than-insignificant deterioration in credit quality and, therefore meet the PCD definition, may include past-due status, non-accrual status, risk rating and other standard indicators (i.e., modification due to financial difficulty, charge-offs, bankruptcy).

In the ordinary course of business, the Company enters into commitments to extend credit.

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Loans consist of the following as of the dates stated:

September 30, 2025

March 31, 2026

December 31, 2025

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Consumer, net of premium/discount

Mortgage warehouse

Deferred fees, net

Allowance for credit losses

Included in the above are approximately $ 418.6 million and $ 459.6 million in loans to borrowers in the cannabis industry at September 30, 2025 and December 31, 2024, respectively.

Of that total, $ 258.5 million and $ 321.9 million were direct loans to cannabis companies and were collateralized by real estate at September 30, 2025 and December 31, 2024, respectively.

During the three months ended September 30, 2025 and 2024, the Company purchased approximately $ 20.3 million and $ 13.3 million of consumer loan pools, respectively.

During the nine months ended September 30, 2025 and 2024, the Company purchased approximately $ 34.7 million and $ 32.9 million of consumer loan pools, respectively.

The loans purchased during the three and nine months ended September 30, 2025 included loan pools collateralized by automobiles.

The loans purchased during the three and nine months ended September 30, 2024 included loan pools collateralized by boats, recreational vehicles and automobiles.

The outstanding balances of these purchased consumer loan pools, shown net of premium (discount) are as follows as of the dates stated:

September 30, 2025

Included in the above are approximately $ 466.8 million and $ 404.8 million in loans to borrowers in the cannabis industry at March 31, 2026 and December 31, 2025, respectively.

Of that total, $ 321.0 million and $ 228.8 million were direct loans to cannabis companies and were collateralized by real estate at March 31, 2026 and December 31, 2025, respectively.

During the three months ended March 31, 2026 and 2025, the Company purchased approximately $ 14.7 million and $ 14.4 million of consumer loan pools, respectively.

The loans purchased during the three months ended March 31, 2026 and 2025 included loan pools collateralized by automobiles.

The outstanding balances of consumer purchased loans, shown net of premium (discount) are as follows as of the dates stated:

March 31, 2026

Premium (Discount)

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Student loans

Boat and RV loans

Automobile loans

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Home improvement loans

The carrying value of loans pledged to secure advances from the FHLB were $ 1.23 billion and $ 1.24 billion as of September 30, 2025 and December 31, 2024, respectively.

The carrying value of loans pledged to secure advances from the FHLB were $ 1.25 billion and $ 1.56 billion as of March 31, 2026 and December 31, 2025, respectively.

The following table presents the aging of the amortized cost of loans receivable by loan category as of the date stated:

September 30, 2025

March 31, 2026

More Past Due

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Commercial and industrial

Mortgage warehouse

December 31, 2025

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Commercial and industrial

Mortgage Warehouse

As of March 31, 2026, the Company had one commercial and industrial loan with an outstanding balance of $ 12.7 million that was ninety days past due and still accruing.

The loan is well secured and in the process of collection, as the borrower has brought the loan current.

The Company had no loans ninety days past due and still accruing as of March 31, 2025.

The following table presents the amortized cost of nonaccrual loans receivable by loan category as of the dates stated:

September 30, 2025

March 31, 2026

December 31, 2025

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Commercial and industrial

During the three and nine months ended September 30, 2025, the Company reversed $ 82,000 and $ 288,000 of interest income for loans that were placed on non-accrual respectively.

During the three and nine months ended September 30, 2024, the Company reversed $ 232,000 of interest income for loans that were placed on non-accrual.

During the three months ended March 31, 2026 and 2025, the Company reversed $ 483,000 and $ 378,000 of interest income for loans that were placed on non-accrual respectively.

Credit Quality Information

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There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected.

Non-accrual residential real estate and commercial loans are downgraded to a substandard risk rating.

Loans rated 8:

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Loans in this category are considered uncollectible (“loss”) and of such little value that their continuance as loans is not warranted.

On an annual basis, or more often if needed, the Company reviews the accuracy of risk ratings for commercial real estate, construction and land development loans, and commercial and industrial loans based on various ongoing performance characteristics and supporting information that is provided from time to time by commercial borrowers.

On an annual basis, or more often if needed, the Company reviews the accuracy of risk ratings for all commercial real estate, construction and land development loans, and commercial and industrial loans based on various ongoing performance characteristics and supporting information that is provided from time to time by commercial borrowers.

Annually, the Company engages an independent third-party to review a significant portion of loans within these segments.

Management uses the results of these reviews as part of its annual review process.

The following table presents the amortized cost of loans receivable by internal risk grade by year of origination as of September 30, 2025.

Also presented are current period gross charge-offs by loan type and vintage year for the three months ended September 30, 2025:

The following table presents the amortized cost of loans receivable by internal risk grade by year of origination as of March 31, 2026.

Also presented are current period gross charge-offs by loan type and vintage year for the three months ended March 31, 2026:

Term Loans Amortized Cost Basis by Origination Year (in thousands)

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