Daily Brief Financials: Narragansett Ban and more

• Narragansett Bancorp, Inc. is a newly formed Maryland corporation becoming the mid-tier holding company for BayCoast Bank. It offers shares to enhance capital and provide equity ownership.
• Total assets were $2.90 billion and deposits $2.47 billion as of March 31, 2026. BayCoast Bank was “well capitalized” and Plimoth Investment Advisors managed $1.07 billion.
• Subordinated debt totaled $95.0 million as of March 31, 2026. The efficiency ratio was 90.58% for the three months ended March 31, 2026.

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• Structural Overhead from Subsidiaries: Narragansett’s elevated 90.58% efficiency ratio is a direct consequence of its non-bank subsidiary model—including BayCoast Mortgage, BayCoast Insurance, and Priority Funding—which requires substantial upfront payroll and operational scale, making a conventional cost-cutting strategy impractical without severe revenue impairment.
• Monetizing the Capital Infusion: The post-IPO capital strategy prioritizing Plimoth Investment Advisors (managing $1.07 billion in assets) and specialized niche lending offers superior return-on-equity prospects compared to standard commercial real estate (CRE) expansion, due to the low-capital nature of trust fees and the high yield of manufactured housing portfolios.
• The Deposit Moat and Cannabis Regulatory Arbitrage: The Depositors Insurance Fund (DIF) acts as a powerful low-cost funding engine, shielding the bank from regional deposit flight, while its early-mover advantage in cannabis banking stands to yield significant credit-quality improvements if the federal government finalizes the rescheduling of cannabis to Schedule III.