A community bank, like a local Wells Fargo for Rhode Island.

Similar to a small, regional version of TD Bank, serving specific towns in Rhode Island.

Think of it as your local, traditional bank, like a small-scale Chase Bank for its community.

• Deposit Services: The company accepts funds from customers into various accounts, including checking, savings, money market, and certificates of deposit.
• Lending Services: It provides funds to individuals and businesses through mortgage loans, commercial loans, and consumer loans.

Narragansett Bancorp primarily serves the following categories of customers:

• Retail Customers: This category includes individuals and families who utilize a range of personal banking services such as checking and savings accounts, certificates of deposit, residential mortgages, home equity loans, and various other consumer loans.
• Small to Medium-Sized Businesses: Local and regional businesses comprise a significant customer segment, relying on the bank for commercial loans, lines of credit, business checking and savings accounts, treasury management services, and other business banking solutions to support their operations and growth.
• Commercial Real Estate Clients: This segment consists of real estate investors, developers, and businesses seeking financing for the acquisition, development, or refinancing of commercial properties, including office buildings, retail spaces, and multi-family housing.

Nicholas M. Christ

Marie Pellegrino

Diana M. Taxiera

Nicholas L. Christ

Carl W. Taber

The most significant risk is the **deteriorating credit quality, particularly reflected in a significant rise in non-accrual loans.** The company reported a substantial increase in non-accrual loans, reaching $42.7 million, primarily attributed to a decline in credit quality within its commercial real estate and business loan portfolios.

Another key risk stems from **widening unrealized losses on its available-for-sale (AFS) securities portfolio.** The accumulated other comprehensive loss nearly doubled, indicating growing unrealized losses in this segment, which can impact the company's equity and financial flexibility, especially in a changing interest rate environment.

Additionally, Narragansett Bancorp is exposed to the risk of **negative mortgage/loan servicing income.** The company experienced a considerable shift from a gain to a loss of $1,100K in net loan servicing income for the six-month period, suggesting potential issues with mortgage servicing rights valuation or hedging performance.

Narragansett Bancorp (NARA) is a bank holding company that operates primarily through its subsidiary, BayCoast Bank, serving communities in southeastern Massachusetts and Rhode Island. The company's main products and services include commercial banking, real estate loans (mortgages), and general deposit services.

The estimated addressable market sizes for Narragansett Bancorp's primary products and services in its operating regions are as follows:

• Commercial Banking: The market size for commercial banking in Rhode Island is approximately $3.3 billion in 2026. The commercial banking market size in Massachusetts is estimated to be $104.9 billion in 2026.
• Real Estate Loans/Mortgages: The Real Estate Loans & Collateralized Debt industry in Rhode Island is projected to be $863.3 million in 2026, based on industry revenue. In 2022, Rhode Island had 8,515 home sales with an average mortgage of $335,834, indicating a substantial mortgage market. The total value of mortgage originations in Massachusetts was $60.2 billion in 2022.
• Deposits: Total bank deposits in Rhode Island amounted to $42.55 billion as of June 30, 2024. Community banks in Rhode Island held $13.23 billion in deposits as of December 13, 2024. The total deposits in Massachusetts were approximately $627.5 billion as of June 30, 2023.

Narragansett Bancorp (NARA) is expected to drive future revenue growth over the next 2-3 years through a combination of strategic initiatives and operational focus. The company, a newly formed Maryland corporation, is becoming the mid-tier holding company for BayCoast Bank and is undergoing a significant reorganization and stock offering.

Here are 3-5 expected drivers of future revenue growth:

1. Strategic Reorganization and Capital Enhancement to Fund Growth: The ongoing two-tier holding company reorganization and associated stock offering are designed to enhance Narragansett Bancorp's capital base. This strengthened capital position is anticipated to provide greater financial flexibility, enabling the company to structure and finance the expansion of its operations, potentially including new lending programs, branch expansion, or investments in technology to attract more customers and increase market share.
2. Growth in Commercial Lending: While residential loan portfolios have seen sales, recent performance indicates growth in commercial loans. A continued strategic focus on expanding the commercial lending portfolio could significantly boost net interest income by increasing the volume of interest-earning assets.
3. Optimized Net Interest Margin (NIM) through Efficient Interest Expense Management: Narragansett Bancorp has demonstrated an ability to reduce interest expenses at a faster rate than its interest income, partly by effectively managing Federal Home Loan Bank (FHLB) advances. Sustained efforts in optimizing funding costs and strategically managing its interest rate spread are expected to lead to improved net interest margins, thereby contributing positively to net interest income.
4. Continued Mortgage Banking Income from Residential Loan Sales: Despite some reductions in loan portfolios, the company experienced a significant surge in mortgage banking income in the first quarter of 2026, primarily due to higher residential loan sales. Maintaining a robust strategy for originating and selling residential loans can serve as a consistent source of non-interest income.
5. Enhanced Customer and Employee Engagement for Market Share Expansion: The company's management believes that the reorganization will foster greater customer interest in BayCoast Bank and aid in attracting and retaining qualified employees. Increased customer engagement can lead to growth in both deposit and loan volumes, while a stable and skilled employee base can drive operational efficiency and superior customer service, ultimately contributing to an expanded customer base and market share.

Share Issuance

• Narragansett Bancorp, Inc. is conducting a stock offering as part of a two-tier holding company reorganization of BayCoast Bank and Narragansett Financial Corporation.
• The offering involves up to 7,912,000 shares of common stock, with a potential increase to up to 9,098,800 shares.
• The gross proceeds from the IPO are expected to be approximately $67.05 million for 6,705,124 shares at a price of $10.00 per share, or $79.12 million for 7,912,000 shares at $10.00 per share.
• The purpose of the share issuance is to enhance capital, provide equity ownership, support the reorganization, and for general corporate purposes, including contributing to a charitable foundation.

Share Repurchases

• Narragansett Bancorp, Inc. will be permitted to repurchase shares in the future, though generally not within the first year following the offering.

Outbound Investments

• BayCoast Bank expects to utilize net proceeds from the stock offering to originate loans and acquire securities, in line with its investment policy, and to organically expand its banking franchise.