Narragansett Bancorp, Inc. Announces Results for the Quarter Ended September 30, 2026

News provided by

Narragansett Bancorp Inc.

Oct 27, 2026, 13:10 ET

SWANSEA, Mass., Oct. 27, 2026 /PRNewswire/ -- Narragansett Financial Corporation (the "Company"), the parent company of BayCoast Bank, today announced its third quarter financial results. Following completion of the pending reorganization and related stock offering, Narragansett Bancorp, Inc. will become the consolidated reporting entity. The Company reported net income of $4.4 million, compared to net income of $3.5 million for the prior quarter, an increase of $954,000. The increase is attributed to a $1.4 million increase in net interest income, a $1.1 million decrease in provision for credit losses and a $562,000 decrease in operating expenses, partially offset by a $1.2 million decrease in non-interest income and a $929,000 increase in provision for income taxes.

BALANCE SHEET

  • Total assets were $2.96 billion at September 30, 2026, representing an increase of $87.9 million, or 3.1%, from the prior quarter.

  • Total cash and cash equivalents were $98.0 million on September 30, 2026, representing an increase of $45.2 million, or 85.8%, from the prior quarter.  The increase was due to proceeds from our minority stock offering that were being held in escrow pending the completion of the offering.

  • Investment securities totaled $390.2 million at September 30, 2026, representing an increase of $30.4 million, or 8.4%.

  • Gross loans were $2.3 billion on September 30, 2026, representing an increase of $21.6 million or 1.0% from the prior quarter as demand for new originations continued. The main driver of the new growth was in home equity loans and lines of credit and residential real estate loans, which increased $39.6 million and $7.0 million, respectively. This increase was partially offset by a $14.6 million decrease in consumer loans and an $11.3 million decrease in commercial and multi-family loans.

  • Deposits totaled $2.6 billion on September 30, 2026, representing an increase of $125.6 million, or 5.1% from the prior quarter. Demand deposits increased $105.7 million from the prior quarter due to proceeds from the minority stock offering being held in escrow. Money market accounts increased $32.7 million and interest-bearing accounts increased $9.7 million, partially offset by a $22.2 million decrease in certificates of deposit.

  • FHLB borrowings totaled $45.5 million on September 30, 2026, representing a decrease of $40.0 million, or 46.8% from the prior quarter, due to our improved liquidity position.

  • Subordinated debt was $94.8 million at September 30, 2026, representing an increase of $206,000, or 0.22%, from the prior quarter.

  • Retained earnings were $187.4 million on September 30, 2026, which represents a decrease of $1.8 million from the prior quarter. Net income of $4.4 million was offset by a $6.2 million increase in accumulated other comprehensive losses, primarily driven by unrealized losses in the U.S. Treasury portfolio resulting from higher market interest rates during the quarter.


NET INTEREST INCOME

  • Net interest income was $22.8 million for the three months ended September 30, 2026, compared to $21.4 million for the prior quarter, representing an increase of $1.4 million, or 6.7%. Net interest income was $19.5 million for the same period last year, representing an increase of $3.3 million, or 16.8%.

  • Net interest margin was 3.42% for the three months ended September 30, 2026, which represents a 21 basis point improvement from the prior quarter. Compared to the same quarter last year, net interest margin has expanded by 55 basis points.

  • The increase in interest income during the three months ended September 30, 2026, was primarily attributable to increases in loan and investment securities yields, partially offset by decreases in the average balance of loans and investment securities.

  • Interest expense for the three months ended September 30, 2026, was consistent with the prior quarter. Total average deposits increased, as well as the yield on subordinated debt; however, this was partially offset by a decrease in the average balance of other borrowings.

PROVISION FOR CREDIT LOSS & ASSET QUALITY

  • Provision for credit loss decreased by $1.1 million from the prior quarter due to an improvement in asset quality. A benefit of $250,000 was recorded during the third quarter of 2026 due to a decrease in the allowance on individually evaluated loans. 

  • The allowance for credit losses to total loans was 1.31% as of September 30, 2026, compared to 1.34% as of June 30, 2026 and 1.36% as of September 30, 2025.

  • Non-performing loans as a percentage of total loans was 1.55% as of September 30, 2026, compared to 1.90% as of June 30, 2026. The decrease was due to a commercial real estate loan and a commercial loan in the amounts of $6.0 million and $1.1 million, respectively, that paid off during the third quarter.
  • Non-performing loans as a percentage of total loans was 0.28% as of September 30, 2025. The increase in non-performing loans when compared to September 30, 2025, was due to four commercial real estate loans and one commercial loan, with total balances of $35.8 million, being placed on non-accrual status. All four loans were performing as of September 30, 2026.

NON-INTEREST INCOME

  • Non-interest income was $12.8 million for the quarter ended September 30, 2026, a decrease of $1.2 million from the prior quarter.

  • Bank owned life insurance income decreased $1.4 million during the quarter due to market-related changes in the value of assets associated with the non-qualified deferred compensation plan. 

  • Mortgage banking income decreased $328,000 during the quarter due to a decrease in loan sale volume.

  • These decreases were partially offset by a $436,000 increase in gain (loss) on portfolio loans due to more favorable pricing on private investor sales and a $249,000 increase in net loan servicing fee (expense) income due to a decrease in mortgage servicing rights amortization.

NON-INTEREST EXPENSE

  • Non-interest expense was $30.0 million for the quarter ended September 30, 2026, a $562,000 decrease from the prior quarter.

  • Salaries and employee benefits decreased $1.2 million during the quarter due to lower deferred compensation attributed to market fluctuations in the non-qualified deferred compensation plan, partially offset by an increase in bonus expense.

  • Other general and administrative expenses increased $665,000 during the quarter due primarily to a significant one-time charitable donation.

PROVISION FOR INCOME TAX

  • Income tax expense increased by $929,000 for the quarter ended September 30, 2026, due to a decrease in tax- exempt income. The effective tax rates were 24.4% and 12.6% for the quarter ended September 30, 2026 and June 30, 2026, respectively. The effective tax rate for each period was below the statutory rate due to tax-exempt income.

ABOUT BAYCOAST BANK.
Originally chartered in 1851, BayCoast Bank is a Massachusetts-chartered stock savings bank that operates from its main office and 26 full-service branch banking offices in the South Coast of Massachusetts and the State of Rhode Island, as well as two loan production offices in Massachusetts and Rhode Island. BayCoast Bank's deposits are insured in full beyond federal deposit insurance coverage limits by the Depositors Insurance Fund.     

Selected Financial Data (unaudited)






At or For the
Three Months Ended



At or For the
Nine Months Ended




September 30,
2026



June 30,
2026



September 30,
2025



September 30,
2026



September 30,
2025


Financial Condition Data:


(Dollars in Thousands)


Loans, net of allowance for credit losses


$

2,242,028



$

2,219,766



$

2,252,679



$

2,242,028



$

2,252,679


Total assets



2,962,416




2,874,485




2,874,964




2,962,416




2,874,964


Deposits



2,574,083




2,448,460




2,435,202




2,574,083




2,435,202


Total retained earnings



187,391




189,196




179,075




187,391




179,075


Performance Ratios:
















Return on average assets (1)



0.60

%



0.48

%



0.41

%



0.42

%



0.14

%

Return on average equity (1)



9.32

%



7.41

%



2.35

%



6.52

%



2.44

%

Interest rate spread (2)



3.03

%



2.80

%



2.44

%



2.79

%



2.29

%

Net interest margin (1)(3)



3.42

%



3.21

%



2.87

%



3.20

%



2.72

%

Noninterest expense to average assets (1)



4.08

%



4.25

%



4.01

%



4.14

%



3.88

%

Efficiency ratio (4)



84.25

%



86.49

%



90.70

%



86.85

%



89.99

%

Average interest-earning assets to average interest-
bearing liabilities



121.57

%



121.07

%



120.02

%



121.13

%



118.47

%

Loans to deposits ratio



88.40

%



92.05

%



93.94

%



88.40

%



93.94

%

Capital Ratios:
















Average equity to average assets



6.58

%



6.56

%



6.10

%



6.55

%



5.96

%

Asset Quality Ratios:
















Allowance for credit losses on loans as a percentage
of total loans



1.31

%



1.34

%



1.36

%



1.31

%



1.36

%

Allowance for credit losses on loans as a percentage of
non-performing loans



84.85

%



70.78

%



480.80

%



84.85

%



480.80

%

Net (charge-offs) recoveries to average outstanding loans
during the period (1)



(0.03)

%



(0.16)

%



(0.09)

%



(0.09)

%



(0.08)

%

Non-performing loans as a percentage of total loans



1.55

%



1.90

%



0.28

%



1.55

%



0.28

%

Non-performing loans as a percentage of total assets



1.19

%



1.49

%



0.23

%



1.19

%



0.23

%

Total non-performing assets as a percentage of total
assets



1.19

%



1.49

%



0.23

%



1.19

%



0.23

%

(1)

Annualized for the three-month and nine-month periods.

(2)

Represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of  interest-bearing liabilities.

(3)

Represents net interest income as a percentage of average interest-earning assets.

(4)

Represents operating expenses divided by the sum of net interest income and other income.

Consolidated Balance Sheets (Unaudited)






September 30,
2026



June 30,
2026



December 31,
2025



September 30,
2025




(In thousands)


Assets













Cash and cash equivalents


$

97,987



$

52,748



$

38,519



$

55,776


Securities available for sale, at fair value



390,202




359,819




342,292




334,465


Marketable equity securities, at fair value



2,427




2,378




2,188




2,107


Federal Home Loan Bank stock, at cost



3,389




5,082




5,787




5,441


Loans held for sale, at fair value



10,559




20,036




21,262




18,210


 Loans, net of allowance for credit losses of $29,843 at
   September 30, 2026, $30,254 at June 30, 2026, $29,078 at
   December 31, 2025 and $31,116 at September 30, 2025



2,242,028




2,219,766




2,236,274




2,252,679


Mortgage servicing rights, net



14,662




14,644




13,991




14,614


Bank-owned life insurance



43,402




43,346




40,962




40,583


Premises and equipment, net



40,598




40,869




40,701




40,942


Accrued interest receivable



10,266




9,929




10,034




9,839


Net deferred tax asset



9,576




7,460




5,841




8,653


Goodwill and other intangible assets



27,699




27,861




28,186




28,444


Equity method investments



14,447




14,439




14,196




13,853


Right of use lease asset



9,331




9,603




10,041




10,332


Other assets



45,843




46,505




48,302




39,026


Total assets


$

2,962,416



$

2,874,485



$

2,858,576



$

2,874,964


Liabilities and Retained Earnings













Non-interest bearing deposits


$

541,193



$

435,538



$

394,297



$

412,970


Interest bearing deposits



2,032,890




2,012,922




2,029,009




2,022,232


Short-term borrowings



45,157




85,000




97,533




95,000


Long-term borrowings



313




490




530




550


Subordinated debt



94,784




94,737




94,578




109,482


Lease liability



9,566




9,830




10,257




10,536


Other liabilities



51,122




46,772




45,526




45,119


Total liabilities



2,775,025




2,685,289




2,671,730




2,695,889


Retained earnings



198,538




194,113




189,395




186,582


Accumulated other comprehensive loss



(11,147)




(4,917)




(2,549)




(7,507)


Total retained earnings



187,391




189,196




186,846




179,075


Total liabilities and retained earnings


$

2,962,416



$

2,874,485



$

2,858,576



$

2,874,964


Consolidated Statements of Net Income (Unaudited)






Three Months Ended



Nine Months Ended




September 30,
2026



June 30,
2026



September 30,
2025



September 30,
2026



September 30,
2025




(In thousands)


Interest and dividend income:
















Interest and fees on loans


$

33,061



$

31,880



$

33,057



$

96,423



$

98,686


Interest on debt securities



3,421




3,005




2,484




9,209




6,790


Dividend income



99




118




210




331




703


Interest on cash and cash equivalents



183




141




586




365




1,397


Total interest and dividend income



36,764




35,144




36,337




106,328




107,576


Interest expense:
















Interest on deposits



11,480




11,175




12,852




34,057




38,773


Interest on borrowings



601




873




2,053




2,750




7,322


Interest on subordinated debt



1,886




1,722




1,917




5,185




5,738


Total interest expense



13,967




13,770




16,822




41,992




51,833


Net interest income



22,797




21,374




19,515




64,336




55,743


(Benefit) provision for credit losses



(250)




800




1,860




2,250




5,760


Net interest income, after (benefit) provision for credit losses



23,047




20,574




17,655




62,086




49,983


Other income:
















Customer service fees



2,790




2,781




2,736




8,309




7,850


Net loan servicing (expense) fee income



101




(148)




(419)




(999)




(262)


Trust department fees



1,693




1,620




1,550




4,948




4,512


Insurance and brokerage commissions



3,617




3,703




3,205




11,390




11,079


Gain (loss) on securities available for sale, net



3




—




—




206




(20)


Gain on marketable equity securities



49




130




118




238




68


Gain (loss) on sales of portfolio loans



113




(323)




(1,038)




(663)




(1,865)


Mortgage banking income



4,128




4,456




5,741




13,302




13,868


Bank-owned life insurance income



55




1,440




737




1,375




1,743


Miscellaneous



238




280




499




924




2,088


Total other income



12,787




13,939




13,129




39,030




39,061


Operating expenses:
















Salaries and employee benefits



19,604




20,797




18,830




59,465




54,930


Occupancy and equipment



3,659




3,562




3,504




11,338




10,616


Professional fees



810




839




814




2,478




2,365


Data processing



1,243




1,270




1,148




3,701




3,436


Advertising costs



560




609




532




1,777




1,711


Deposit insurance



677




703




671




2,077




2,056


Amortization of intangible assets



162




162




258




487




763


Other general and administrative



3,266




2,601




3,852




8,456




9,442


Total operating expenses



29,981




30,543




29,609




89,779




85,319


Income before income taxes



5,853




3,970




1,175




11,337




3,725


Provision for income taxes



1,429




500




112




2,195




539


Net income


$

4,424



$

3,470



$

1,063



$

9,142



$

3,186


Average Balances and Yields (unaudited)






Average Balances



Average
Yield/Rate(1)




For the Three Months Ended



For the Three Months Ended




September 30,
2026



June 30,
2026



September 30,
2025



September 30,
2026



June 30,
2026



September 30,
2025




(Dollars in thousands)











Interest-earning assets:



















Loans


$

2,266,552



$

2,278,673



$

2,316,795




5.83

%



5.60

%



5.71

%

Debt securities



351,187




354,823




328,664




3.90

%



3.39

%



3.02

%

Equity securities and mutual funds



5,488




6,669




10,564




7.21

%



7.09

%



7.99

%

Cash equivalents



40,823




26,880




64,543




1.76

%



2.08

%



3.55

%

Total interest-earning assets



2,664,050




2,667,045




2,720,566




5.52

%



5.27

%



5.34

%

Noninterest-earning assets



236,643




201,110




198,982











Total assets


$

2,900,693



$

2,868,155



$

2,919,548











Interest-bearing liabilities:



















NOW accounts


$

378,600



$

389,967



$

369,531




1.16

%



1.22

%



1.33

%

Savings accounts



286,841




290,338




291,606




0.19

%



0.20

%



0.22

%

Money market accounts



900,355




853,484




781,411




2.93

%



2.91

%



3.36

%

Certificates of deposit



470,449




485,383




532,464




3.02

%



3.03

%



3.61

%

Total interest-bearing deposits



2,036,245




2,019,172




1,975,012




2.24

%



2.22

%



2.58

%

Borrowings:



















Other Borrowings



60,423




89,024




182,368




3.89

%



3.88

%



4.41

%

Subordinated debt



94,753




94,701




109,418




7.79

%



7.19

%



6.85

%

Total interest-bearing liabilities



2,191,421




2,202,897




2,266,798




2.49

%



2.47

%



2.90

%

Noninterest-bearing liabilities:



















Demand deposits



468,751




430,745




427,145











Other



49,675




46,336




47,437











Total liabilities



2,709,847




2,679,978




2,741,380











Retained earnings



190,846




188,177




178,168











Total liabilities and retained earnings


$

2,900,693



$

2,868,155



$

2,919,548











Net interest rate spread (2)












3.03

%



2.80

%



2.44

%

Net interest-earning assets (3)


$

472,629



$

464,148



$

453,768











Net interest margin (4)












3.42

%



3.21

%



2.87

%

(1)

Annualized.

(2)

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.

(3)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4)

Net interest margin represents net interest income divided by average total interest-earning assets.

Average Balances and Yields (unaudited)






Average Balances



Average Yield/Rate(1)




For the Nine Months Ended



For the Nine Months Ended




September 30,
2026



September 30,
2025



September 30,
2026



September 30,
2025




(Dollars in thousands)








Interest-earning assets:













Loans


$

2,284,919



$

2,349,954




5.63

%



5.60

%

Debt securities



360,481




316,518




3.41

%



2.86

%

Equity securities and mutual funds



6,677




12,104




6.61

%



7.75

%

Cash equivalents



28,934




54,347




1.67

%



3.39

%

Total interest-earning assets



2,681,011




2,732,923




5.29

%



5.25

%

Noninterest-earning assets



204,028




201,378








Total assets


$

2,885,039



$

2,934,301








Interest-bearing liabilities:













NOW accounts


$

387,548



$

381,692




1.20

%



1.36

%

Savings accounts



288,539




293,051




0.20

%



0.22

%

Money market accounts



863,962




757,147




2.91

%



3.40

%

Certificates of deposit



488,426




542,397




3.10

%



3.74

%

Total interest-bearing deposits



2,028,475




1,974,287




2.24

%



2.63

%

Borrowings:













Other Borrowings



90,190




223,249




4.02

%



4.32

%

Subordinated debt



94,689




109,323




7.22

%



6.92

%

Total interest-bearing liabilities



2,213,354




2,306,859




2.50

%



2.96

%

Noninterest-bearing liabilities













Demand deposits



435,310




406,664








Other



47,407




45,963








Total liabilities



2,696,071




2,759,486








Retained earnings



188,968




174,815








Total liabilities and retained earnings


$

2,885,039



$

2,934,301








Net interest rate spread (2)









2.79

%



2.29

%

Net interest-earning assets (3)


$

467,657



$

426,064








Net interest margin (4)









3.20

%



2.72

%

(1)

Annualized.

(2)

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.

(3)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4)

Net interest margin represents net interest income divided by average total interest-earning assets.

Investor Contact
Marie Pellegrino
President
[email protected]
888-806-2872

SOURCE Narragansett Bancorp Inc.