NB Bancorp, Inc. (NASDAQ: NBBK)

Sector: Financial Services Industry: Banks - Regional CIK: 0001979330
Market Cap 751.82 Mn
P/B 1.02
P/E 12.92
P/S 3.97
ROIC (Qtr) 7.07
Div Yield % 1.05
Rev 1y % (Qtr) 25.93
Total Debt (Qtr) 41.45 Mn
Debt/Equity (Qtr) 0.06

About

NB Bancorp, Inc., with its ticker symbol NBBK, operates as a registered bank holding company for Needham Bank, a Massachusetts-chartered cooperative bank. The company's main business activities involve taking deposits from the general public and investing those deposits, along with funds generated from operations, in commercial real estate and multifamily loans, one-to-four-family residential real estate loans, construction and land development loans, commercial and industrial loans, and consumer loans. NB Bancorp is a Maryland corporation that...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 81.65M provides robust 1.97x coverage of total debt 41.45M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 5.44B provides 131.29x coverage of total debt 41.45M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 81.65M provides strong 16.44x coverage of stock compensation 4.97M, indicating sustainable incentive practices.
  • Robust free cash flow of 79.73M exceeds capital expenditure of 1.92M by 41.55x, indicating strong organic growth funding capability.
  • Retained earnings of 440.28M represent substantial 0.60x of equity 737.03M, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 81.65M barely covers its investment activities of (471.54M), with a coverage ratio of -0.17, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 81.65M provides thin coverage of dividend payments of (2.79M) with a -29.29 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 79.73M represents just -1.06x of debt issuance (74.88M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 440.28M provide limited buffer against comprehensive income items of (3.12M), which is -141.03x, indicating elevated exposure to market risks.
  • Operating cash flow of 81.65M is outpaced by equity issuance of (77.12M) (-1.06 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.11 0.14
EV to Cash from Ops. EV/CFO 7.60 7.21
EV to Debt EV to Debt 14.97 5.20
EV to EBIT EV/EBIT 8.22 14.98
EV to EBITDA EV/EBITDA 7.90 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 7.79 8.87
EV to Market Cap EV to Market Cap 0.83 1.04
EV to Revenue EV/Rev 3.28 -3.76
Price to Book Value [P/B] P/B 1.02 1.17
Price to Earnings [P/E] P/E 12.92 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 20.88 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 4.50 35.28
Dividend per Basic Share Div per Share (Qtr) 0.14 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 6.21 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -18.53 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -6.84 15.78
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 350.60 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 255.27 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 293.75 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 293.75 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 76.34
FCF Growth (1y) % FCF 1y % (Qtr) 137.93 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 27.66 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 41.50 147.97
EBIT Margin % EBIT Margin % (Qtr) 39.86 155.41
EBT Margin % EBT Margin % (Qtr) 39.86 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 30.70 115.63