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Northeast Bancorp Reports Second Quarter Results, Declares Dividend

LEWISTON, Maine, Feb. 01, 2016 (GLOBE NEWSWIRE) -- Northeast Bancorp (“Northeast” or the “Company”) (NASDAQ:NBN), a Maine-based full-service financial services company and parent of Northeast Bank (the “Bank”), today reported net income of $1.7 million, or $0.18 per diluted common share, for the quarter ended December 31, 2015, compared to net income of $1.6 million, or $0.16 per diluted common share, for the quarter ended December 31, 2014. Net income for the six months ended December 31, 2015 was $3.6 million, or $0.38 per diluted common share, compared to $3.2 million, or $0.32 per diluted common share, for the six months ended December 31, 2014.

The Board of Directors has declared a cash dividend of $0.01 per share, payable on February 29, 2016 to shareholders of record as of February 16, 2016.

“We are very pleased with the strong growth in our loan portfolio this quarter,” said Richard Wayne, President and Chief Executive Officer.  “We generated loan volume of $120 million, including $75.4 million of loans produced by the Loan Acquisition and Servicing Group, $16.3 million of loans closed by the SBA National division, $23.4 million of residential mortgage loans originated, and $5.3 million originated in the community banking commercial division.  Of the $75.4 million produced by LASG, $35.9 million were loans purchased at an average price of 89.3%.  In addition to our loan growth, we were able to grow our non-maturity deposits by $21.5 million and achieve a net interest margin of 4.9%.”

As of December 31, 2015, total assets were $894.1 million, an increase of $43.4 million, or 5.1%, compared to June 30, 2015. The principal components of the change in the balance sheet follow:

1.  The loan portfolio – excluding loans held for sale – grew by $67.3 million, or 11.0%, compared to June 30, 2015, principally on the strength of $60.9 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”), net growth of $13.2 million in originations by the Bank’s Small Business Administration (“SBA”) National division and net growth of $4.8 million in commercial originations by the Bank’s Community Banking Division. This net growth was offset by an $11.6 million decrease in the Bank’s Community Banking Division residential and consumer loan portfolio.

Loans generated by the LASG totaled $75.4 million for the quarter ended December 31, 2015. The growth in LASG loans consisted of $35.9 million of purchased loans, at an average price of 89.3% of unpaid principal balance, and $39.5 million of originated loans. SBA loans closed during the quarter totaled $16.3 million, of which $14.5 million were fully funded in the quarter.  In addition, the Company sold $7.5 million of the guaranteed portion of SBA loans in the secondary market, of which $4.7 million were originated in the current quarter and $2.8 million were originated in the prior quarter. Residential loan production sold in the secondary market totaled $20.5 million for the quarter.  

As previously discussed in the Company’s SEC filings, the Company made certain commitments to the Board of Governors of the Federal Reserve System in connection with the merger of FHB Formation LLC with and into the Company in December 2010. The Company’s loan purchase and commercial real estate loan availability under these conditions follow: 

 

Basis for
Regulatory Condition
  Condition   Availability at December 31, 2015
        (Dollars in millions)
Total Loans   Purchased loans may not exceed 40% of total loans   $ 81.3
Regulatory Capital   Non-owner occupied commercial real estate loans may not exceed 300% of total capital   $ 120.0
           

An overview of the Bank’s LASG portfolio follows:

  LASG Portfolio
  Three Months Ended December 31,
  2015   2014
  Purchased Originated Secured Loans to Broker-Dealers Total LASG   Purchased Originated Secured Loans to Broker-Dealers Total LASG
  (Dollars in thousands)
Loans purchased or originated during the period:                                          
Unpaid principal balance   $ 40,145      $ 39,512      $ -     $ 79,657        $ 46,307     $ 28,579     $ -     $ 74,886  
Net investment basis     35,855       39,512       -       75,367         39,667       28,579       -       68,246  
                                   
Loan returns during the period:
Yield     12.74 %     5.69 %     0.50 %     8.55 %       13.27 %     6.67 %     0.46 %     10.17 %
Total Return (1)     12.74 %     5.69 %     0.50 %     8.55 %       13.72 %     7.68 %     0.46 %     10.67 %
                                   

 

  Six Months Ended December 31,  
  2015   2014  
  Purchased Originated Secured Loans to 
Broker-Dealers
Total LASG   Purchased Originated Secured Loans to
Broker-Dealers
Total LASG  
  (Dollars in thousands)  
Loans purchased or originated during the period:                                    
Unpaid principal balance    $ 63,728      $ 50,907      $ -      $ 114,635        $ 62,425      $ 32,915      $ 36,000      $ 131,340    
Net investment basis     59,311       50,907       -       110,218         52,834       32,915       36,000       121,749    
                                   
Loan returns during the period:  
Yield     12.41 %     5.68 %     0.50 %     8.40 %       13.02 %     7.74 %     0.49 %     10.53 %  
Total Return (1)     12.43 %     5.68 %     0.50 %     8.41 %       13.24 %     8.54 %     0.49 %     10.85 %  
                                     
                                     
Total loans as of period end:  
Unpaid principal balance    $ 258,049      $ 155,646      $ 60,000      $ 473,695     $ 262,445     $ 78,620       48,000      $ 389,065    
Net investment basis     226,014       155,728       60,002       441,744       220,391        78,563       48,000       346,954    
                                     
   
(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.  The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.  
 

 

2.  Deposits increased by $33.3 million, or 4.8% for the quarter, attributable primarily to growth in non-maturity accounts, which increased by $21.5 million, or 6.1%, as well as growth in time deposits, which increased $11.8 million, or 3.5%. For the six months ended December 31, 2015, deposits increased $52.0 million, or 7.7%, due to growth in non-maturity accounts of $44.5 million, or 13.5%, and growth in time deposits of $7.5 million, or 2.2%.

3.  Stockholders’ equity increased by $1.9 million from June 30, 2015, due principally to earnings of $3.6 million, offset by $1.3 million in share repurchases (representing 125,100 shares). Additionally, there was an increase in stock-based compensation of $280 thousand, offset by a decrease in accumulated other comprehensive income of $484 thousand and $192 thousand in dividends paid on common stock. 

Net income increased by $164 thousand to $1.7 million for the quarter ended December 31, 2015, compared to $1.6 million for the quarter ended December 31, 2014.

1.  Net interest and dividend income before provision for loan losses increased by $746 thousand, or 7.9%, for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014. The increase is primarily due to higher loan volume and interest income in the originated loan portfolio.

The various components of transactional income are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the three and six months ended December 31, 2014, transactional interest income decreased by $1 thousand and increased by $182 thousand, respectively. The following table summarizes interest income and related yields recognized on the loan portfolios:

 

  Interest Income and Yield on Loans
  Three Months Ended December 31,
  2015   2014
  Average   Interest       Average   Interest    
  Balance   Income   Yield   Balance   Income   Yield
  (Dollars in thousands)
Community Banking Division $ 240,507   $ 2,932     4.84 %   $ 236,127   $ 2,899     4.87 %
LASG:                              
Originated   137,959     1,978     5.69 %     59,863     1,007     6.67 %
Purchased   209,605     6,734     12.74 %     208,935     6,989     13.27 %
Secured Loans to Broker-Dealers   60,004     75     0.50 %     45,304     53     0.46 %
Total LASG   407,568     8,787     8.55 %     314,102     8,049     10.17 %
Total $ 648,075   $ 11,719     7.17 %   $ 550,229   $ 10,948     7.89 %
                                       
  Six Months Ended December 31,
  2015   2014
  Average   Interest       Average   Interest    
  Balance   Income   Yield   Balance   Income   Yield
  (Dollars in thousands)
Community Banking Division $ 239,689   $ 5,857     4.85 %   $ 238,646   $ 5,960     4.95 %
LASG:                              
Originated   128,267     3,673     5.68 %     59,277     2,314     7.74 %
Purchased   204,995     12,829     12.41 %     205,896     13,511     13.02 %
Secured Loans to Broker-Dealers   60,006     150     0.50 %     34,474     85     0.49 %
Total LASG   393,268     16,652     8.40 %     299,647     15,910     10.53 %
Total $ 632,957   $ 22,509     7.05 %   $ 538,293   $ 21,870     8.06 %

 

The yield on purchased loans for the quarter ended December 31, 2015 was 12.7% as compared to 13.3% in the quarter ended December 31, 2014. The portfolio’s base yield, represented by regularly scheduled interest and accretion, declined to 7.8% from 8.3%, and the effect of transactional interest income declined to 4.9% from 5.4%. The following table details the total return on purchased loans:

 

  Total Return on Purchased Loans
  Three Months Ended December 31,
  2015   2014
  Income   Return (1)   Income   Return (1)
  (Dollars in thousands)
Regularly scheduled interest and accretion $ 4,122     7.80 %   $ 4,376     8.31 %
Transactional income:                  
Gain on loan sales   -     0.00 %     194     0.37 %
Gain on sale of real estate owned   -     0.00 %     40     0.08 %
Other noninterest income   -     0.00 %     -     0.00 %
Accelerated accretion and loan fees   2,612     4.94 %     2,613     4.96 %
Total transactional income   2,612     4.94 %     2,847     5.41 %
Total $ 6,734     12.74 %   $ 7,223     13.72 %

 

  Six Months Ended December 31,
  2015   2014
  Income   Return (1)   Income   Return (1)
  (Dollars in thousands)
Regularly scheduled interest and accretion $   8,009       7.75 %   $ 8,873     8.55 %
Transactional income:                  
Gain on loan sales     -       0.00 %     190     0.18 %
Gain on sale of real estate owned     22       0.02 %     40     0.04 %
Other noninterest income     (1 )     0.00 %     -     0.00 %
Accelerated accretion and loan fees     4,820       4.66 %     4,638     4.47 %
Total transactional income     4,841       4.68 %     4,868     4.69 %
Total $   12,850       12.43 %   $ 13,741     13.24 %
 
(1)  The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, gains on real estate owned and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.  The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.

2.  Noninterest income increased by $254 thousand for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014, principally due to an increase in gains realized on sale of portfolio loans. The recent quarter includes gains realized on sale of SBA loans of $679 thousand, compared to $445 thousand in the quarter ended December 31, 2014. 

3.  Noninterest expense decreased by $14 thousand for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014, principally due to the following:

-  a decrease of $194 thousand in loan acquisition and collections expense related to lower collection expense on purchased loans;
-  a decrease of $194 thousand in professional fees, primarily due to fees for temporary consulting services recognized in the three months ended December 31, 2014;
-  an increase of $117 thousand in salaries and employee benefits primarily due to the accelerated vesting of the former Chief Operating Officer’s shares and an increase in headcount during the three months ended December 31, 2015; and
-  an increase of $139 thousand in occupancy and equipment expense, due to increases in rent and IT-related equipment expense.

                         

At December 31, 2015, nonperforming assets totaled $7.3 million, or 0.8% of total assets, as compared to $12.4 million, or 1.5% of total assets, at June 30, 2015. 

At December 31, 2015, the Company’s Tier 1 Leverage Ratio was 14.3%, a decrease from 14.5% at June 30, 2015, and the Total Capital Ratio was 18.4%, a decrease from 20.1% at June 30, 2015. The slight decreases in the ratios resulted primarily from balance sheet growth and the effect of purchases under the Company’s share repurchase program in the current fiscal year.

Investor Call Information

Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Brian Shaughnessy, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss second quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, February 2, 2016. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 38686107. The call will be available via live webcast, which can be viewed by accessing the Company’s website at www.northeastbank.com and clicking on the About Us - Investor Relations section. To listen to the webcast, attendees are encouraged to visit the website at least fifteen minutes early to register, download and install any necessary audio software. Please note there will also be a slide presentation that will accompany the webcast. For those who cannot listen to the live broadcast, a replay will be available online for one year at www.northeastbank.com.

About Northeast Bancorp

Northeast Bancorp (NASDAQ:NBN) is the holding company for Northeast Bank, a full-service bank headquartered in Lewiston, Maine. We offer traditional banking services through the Community Banking Division, which operates ten full-service branches that serve customers located in western, central, and southern Maine. From our Maine and Boston locations, we also lend throughout the New England area. Our Loan Acquisition and Servicing Group (“LASG”) purchases and originates commercial loans on a nationwide basis. In addition, our SBA National division supports the needs of growing businesses nationally. ableBanking, a division of Northeast Bank, offers savings products to consumers online. Information regarding Northeast Bank can be found on its website at www.northeastbank.com.

Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, and tangible book value per share. Northeast’s management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

Forward-Looking Statements

Statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although Northeast believes that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company’s control. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in interest rates and real estate values; competitive pressures from other financial institutions; the effects of weakness in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers’ ability to service and repay our loans; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; changing government regulation; the risk that the Company may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Company’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K and updated by the Company’s Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. These statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.

NBN-F

 

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
  December 31, 2015   June 30, 2015
Assets          
Cash and due from banks    $ 3,485        $ 2,789  
Short-term investments     62,878         87,061  
Total cash and cash equivalents     66,363         89,850  
           
Available-for-sale securities, at fair value     104,339         101,908  
           
Residential real estate loans held for sale     7,592         7,093  
SBA loans held for sale     -         1,942  
Total loans held for sale     7,592         9,035  
           
           
Loans          
Commercial real estate     401,075         348,676  
Residential real estate     122,427         132,669  
Commercial and industrial     149,154         123,133  
Consumer     6,780         7,659  
Total loans     679,436         612,137  
Less: Allowance for loan losses     2,129         1,926  
Loans, net     677,307         610,211  
           
           
Premises and equipment, net     8,461         8,253  
Real estate owned and other possessed collateral, net     1,238         1,651  
Federal Home Loan Bank stock, at cost     2,571         4,102  
Intangible assets, net     1,947         2,209  
Bank owned life insurance     15,499         15,276  
Other assets     8,784         8,223  
Total assets    $ 894,101        $ 850,718  
           
Liabilities and Stockholders' Equity          
Deposits          
Demand    $ 64,087        $ 60,383  
Savings and interest checking     101,117         100,134  
Money market     208,324         168,527  
Time     353,238         345,715  
Total deposits     726,766         674,759  
           
Federal Home Loan Bank advances     30,131         30,188  
Wholesale repurchase agreements     -         10,037  
Short-term borrowings     2,426         2,349  
Junior subordinated debentures issued to affiliated trusts     8,723         8,626  
Capital lease obligation     1,252         1,368  
Other liabilities     10,190         10,664  
Total liabilities     779,488         737,991  
           
Commitments and contingencies     -         -  
           
Stockholders' equity          
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at December 31, 2015 and June 30, 2015     -         -  
Voting common stock, $1.00 par value, 25,000,000 shares authorized; 8,490,619 and 8,575,144 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively     8,491         8,575  
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 1,029,110 and 1,012,739 shares issued and outstanding at
December 31, 2015 and June 30, 2015, respectively
  1,029         1,013  
Additional paid-in capital     84,525         85,506  
Retained earnings     22,340         18,921  
Accumulated other comprehensive loss     (1,772 )       (1,288 )
Total stockholders' equity     114,613         112,727  
Total liabilities and stockholders' equity    $ 894,101        $ 850,718  

 

 
NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
  Three Months Ended December 31,   Six Months Ended December 31,
  2015   2014   2015   2014
Interest and dividend income:                      
Interest and fees on loans    $ 11,719        $ 10,948        $ 22,509        $ 21,870  
Interest on available-for-sale securities     236         232         464         475  
Other interest and dividend income     80         79         176         146  
Total interest and dividend income     12,035         11,259         23,149         22,491  
                       


Interest expense:
                     
Deposits     1,425         1,281         2,789         2,410  
Federal Home Loan Bank advances     259         265         519         588  
Wholesale repurchase agreements     -         73         67         145  
Short-term borrowings     5         7         13         16  
Junior subordinated debentures issued to affiliated trusts     158         188         312         394  
Obligation under capital lease agreements     16         19         33         38  
Total interest expense     1,863         1,833         3,733         3,591  
                       
Net interest and dividend income before provision for loan losses     10,172         9,426         19,416         18,900  
Provision for loan losses     896         113         1,065         433  
Net interest and dividend income after provision for loan losses     9,276         9,313         18,351         18,467  
                       


Noninterest income:
                     
Fees for other services to customers     428         392         836         786  
Gain on sales of residential loans held for sale     398         447         957         1,029  
Gain on sales of portfolio loans     679         445         1,354         525  
Loss recognized on real estate owned and other repossessed collateral, net     (14 )       (31 )       (74 )       (54 )
Bank-owned life insurance income     112         110         224         219  
Other noninterest income     21         7         29         19  
Total noninterest income     1,624         1,370         3,326         2,524  
                       
Noninterest expense:                      
Salaries and employee benefits     4,854         4,737         9,110         9,270  
Occupancy and equipment expense     1,320         1,181         2,610         2,384  
Professional fees     264         458         694         766  
Data processing fees     366         347         714         692  
Marketing expense     66         80         136         148  
Loan acquisition and collection expense     219         413         663         687  
FDIC insurance premiums     116         110         229         234  
Intangible asset amortization     131         166         262         331  
Other noninterest expense     860         718         1,589         1,437  
Total noninterest expense     8,196         8,210         16,007         15,949  
                       
Income before income tax expense     2,704         2,473         5,670         5,042  
Income tax expense     960         893         2,059         1,818  
Net income     1,744         1,580         3,611         3,224  
                       
Weighted-average shares outstanding:                      
Basic     9,559,369         10,132,349         9,560,913         10,155,598  
Diluted     9,569,585         10,132,349         9,567,138         10,155,598  


Earnings per common share:
                     
Basic    $ 0.18        $ 0.16        $ 0.38        $ 0.32  
Diluted     0.18         0.16         0.38         0.32  
                                       
Cash dividends declared per common share    $ 0.01        $ 0.01        $ 0.02        $ 0.02  
                                       

 

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
  Three Months Ended December 31,
  2015   2014
      Interest   Average       Interest   Average
  Average   Income/   Yield/   Average   Income/   Yield/
  Balance   Expense   Rate   Balance   Expense   Rate
Assets:                              
Interest-earning assets:                              
Investment securities (1) $ 105,502   $ 236     0.89 %   $ 109,498   $ 232     0.84 %
Loans (2) (3)   648,075     11,719     7.17 %     550,229     10,948     7.89 %
Federal Home Loan Bank stock   2,588     34     5.21 %     4,102     15     1.45 %
Short-term investments (4)   72,299     46     0.25 %     104,822     64     0.24 %
Total interest-earning assets   828,464     12,035     5.76 %     768,651     11,259     5.81 %
Cash and due from banks   3,353               2,637          
Other non-interest earning assets   35,558               32,500          
Total assets $ 867,375             $ 803,788          
                               
Liabilities & Stockholders' Equity:                              
Interest-bearing liabilities:                              
NOW accounts $ 65,617   $ 42     0.25 %   $ 62,259   $ 40     0.25 %
Money market accounts   199,766     429     0.85 %     127,394     241     0.75 %
Savings accounts   35,269     11     0.12 %     33,648     12     0.14 %
Time deposits   334,925     943     1.12 %     348,118     988     1.13 %
Total interest-bearing deposits   635,577     1,425     0.89 %     571,419     1,281     0.89 %
Short-term borrowings   2,002     5     0.99 %     2,869     7     0.97 %
Borrowed funds   30,145     275     3.62 %     45,587     357     3.11 %
Junior subordinated debentures   8,699     158     7.21 %     8,508     188     8.77 %
Total interest-bearing liabilities   676,423     1,863     1.09 %     628,383     1,833     1.16 %
                               
Non-interest bearing liabilities:                              
Demand deposits and escrow accounts   69,464               55,131          
Other liabilities   7,574               7,130          
Total liabilities   753,461               690,644          
Stockholders' equity   113,914               113,144          
Total liabilities and stockholders' equity $ 867,375             $ 803,788          
                               
Net interest income       $ 10,172             $ 9,426    
                               
Interest rate spread               4.67 %                 4.65 %
Net interest margin (5)               4.87 %                 4.87 %
                               
(1)  Interest income and yield are stated on a fully tax-equivalent basis using a 34% tax rate.
(2)  Includes loans held for sale.
(3)  Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4)  Short term investments include FHLB overnight deposits and other interest-bearing deposits.
(5)  Net interest margin is calculated as net interest income divided by total interest-earning assets.
 

 

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
  Six Months Ended December 31,
  2015   2014
      Interest   Average       Interest   Average
  Average   Income/   Yield/   Average   Income/   Yield/
  Balance   Expense   Rate   Balance   Expense   Rate
Assets:                              
Interest-earning assets:                              
Investment securities (1) $ 103,872   $   464     0.89 %   $    110,874   $   475     0.85 %
Loans (2) (3)     632,957       22,509     7.05 %        538,293        21,870     8.06 %
Federal Home Loan Bank stock     3,345       68     4.03 %       4,102       31     1.50 %
Short-term investments (4)     85,974       108     0.25 %        93,792       115     0.24 %
Total interest-earning assets     826,148       23,149     5.56 %        747,061        22,491     5.97 %
Cash and due from banks     3,190                  2,674          
Other non-interest earning assets     35,986                  33,326          
Total assets $   865,324             $    783,061          
                               
Liabilities & Stockholders' Equity:                              
Interest-bearing liabilities:                              
NOW accounts $ 67,617   $ 88     0.26 %   $    62,934   $   81     0.26 %
Money market accounts     185,166       782     0.84 %        106,844       365     0.68 %
Savings accounts     35,816       23     0.13 %        34,004       23     0.13 %
Time deposits     342,896       1,896     1.10 %        344,243       1,941     1.12 %
Total interest-bearing deposits     631,495       2,789     0.88 %        548,025       2,410     0.87 %
Short-term borrowings     1,976       13     1.31 %       3,095       16     1.03 %
Borrowed funds     34,734       619     3.54 %       49,283       771     3.10 %
Junior subordinated debentures     8,674       312     7.14 %       8,484       394     9.21 %
Total interest-bearing liabilities     676,879       3,733     1.09 %       608,887       3,591     1.17 %
                               
Non-interest bearing liabilities:                              
Demand deposits and escrow accounts   66,736                 54,187          
Other liabilities     8,170                 7,220          
Total liabilities     751,785                 670,294          
Stockholders' equity     113,539                 112,767          
Total liabilities and stockholders' equity $   865,324             $   783,061          
                               
Net interest income       $   19,416             $ 18,900    
                               
Interest rate spread               4.47 %                 4.80 %
Net interest margin (5)               4.66 %                 5.02 %
                               
(1)  Interest income and yield are stated on a fully tax-equivalent basis using a 34% tax rate.
(2)  Includes loans held for sale.
(3)  Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4)  Short term investments include FHLB overnight deposits and other interest-bearing deposits.
(5)  Net interest margin is calculated as net interest income divided by total interest-earning assets.
 

 

NORTHEAST BANCORP AND SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
  Three Months Ended:
  December 31, 2015   September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014
Net interest income $   10,172     $ 9,241     $ 9,350     $ 9,120     $ 9,426  
Provision for loan losses     896       169       240       44       113  
Noninterest income     1,624       1,705       3,067       1,554       1,370  
Noninterest expense     8,196       7,810       8,827       7,885       8,210  
Net income     1,744       1,867       2,165       1,752       1,580  
                   
Weighted average common shares outstanding:                  
Basic   9,559,369       9,562,812       9,773,228       9,833,033       10,132,349  
Diluted   9,569,585       9,562,812       9,773,228       9,833,033       10,132,349  
Earnings per common share:                  
Basic $   0.18     $ 0.20     $ 0.22     $ 0.18     $ 0.16  
Diluted     0.18       0.20       0.22       0.18       0.16  
Dividends per common share     0.01       0.01       0.01       0.01       0.01  
                   
Return on average assets   0.80 %     0.86 %     1.04 %     0.88 %     0.78 %
Return on average equity   6.07 %     6.55 %     7.72 %     6.38 %     5.54 %
Net interest rate spread (1)   4.67 %     4.25 %     4.51 %     4.58 %     4.65 %
Net interest margin (2)   4.87 %     4.45 %     4.70 %     4.79 %     4.87 %
Efficiency ratio (3)   69.48 %     71.35 %     71.09 %     73.87 %     76.05 %
Noninterest expense to average total assets   3.75 %     3.59 %     4.22 %     3.96 %     4.05 %
Average interest-earning assets to average interest-bearing liabilities   122.48 %     121.63 %     120.90 %     121.89 %     122.32 %
                   
  As of:
  December 31, 2015   September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014
Nonperforming loans:                  
Originated portfolio:                  
Residential real estate $   3,263     $ 3,165     $ 3,021     $ 3,163     $ 2,706  
Commercial real estate     399       529       994       1,201       1,166  
Home equity     11       20       11       11       11  
Commercial and industrial     2        2       2       -       -  
Consumer     204       153       190       225       237  
Total originated portfolio     3,879       3,869       4,218       4,600       4,120  
Total purchased portfolio     2,221       6,939       6,532       5,850       8,129  
Total nonperforming loans     6,100       10,808       10,750       10,450       12,249  
Real estate owned and other possessed collateral, net     1,238       1,279       1,651       3,694       2,058  
Total nonperforming assets $   7,338     $ 12,087     $ 12,401     $ 14,144     $ 14,307  
                   
Past due loans to total loans   2.48 %     1.35 %     1.08 %     2.57 %     2.64 %
Nonperforming loans to total loans   0.90 %     1.73 %     1.76 %     1.80 %     2.13 %
Nonperforming assets to total assets   0.82 %     1.41 %     1.46 %     1.70 %     1.77 %
Allowance for loan losses to total loans   0.31 %     0.33 %     0.31 %     0.30 %     0.29 %
Allowance for loan losses to nonperforming loans   34.90 %     19.11 %     17.92 %     16.66 %     13.58 %
                   
Commercial real estate loans to risk-based capital (4)   204.91 %     195.50 %     187.32 %     173.17 %     190.05 %
Net loans to core deposits (5)   94.37 %     91.04 %     91.85 %     89.04 %     91.79 %
Purchased loans to total loans, including held for sale   32.90 %     33.82 %     32.61 %     33.53 %     37.97 %
Equity to total assets   12.82 %     13.25 %     13.25 %     13.51 %     13.69 %
Common equity tier 1 capital ratio   18.11 %     19.69 %     19.82 %     20.90 %     -  
Total capital ratio (6)   18.43 %     20.03 %     20.14 %     21.21 %     21.44 %
Tier 1 leverage capital ratio   14.31 %     14.23 %     14.49 %     14.96 %     14.81 %
                   
Total stockholders' equity $   114,613     $ 113,704     $ 112,727     $ 112,487     $ 110,923  
Less: Preferred stock     -        -       -       -       -  
Common stockholders' equity     114,613       113,704       112,727       112,487       110,923  
Less: Intangible assets (7)     (3,336 )     (3,388 )     (3,312 )     (2,338 )     (2,467 )
Tangible common stockholders' equity (non-GAAP) $   111,277     $ 110,316     $ 109,415     $ 110,149     $ 108,456  
                   
Common shares outstanding     9,519,729       9,592,329       9,587,883       9,819,609       9,846,387  
Book value per common share $   12.04     $ 11.85     $ 11.76     $ 11.46     $ 11.27  
Tangible book value per share (non-GAAP) (8)     11.69       11.50       11.41       11.22       11.01  
                   

(1) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3) The efficiency ratio represents non-interest expense divided by the sum of net interest income (before the loan loss provision) plus non-interest income.
(4) For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans.
(5) Core deposits include all non-maturity deposits and maturity deposits less than $250 thousand. Loans include loans held-for-sale.
(6) The Company’s adoption of Basel III went into effect as of March 31, 2015. The previous period ratios are the “Total Risk-Based Capital Ratio.”
(7) Includes the core deposit intangible asset, as well as the servicing rights asset which is included in other assets in the consolidated balance sheets.
(8) Tangible book value per share represents total stockholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.
 

 

For More Information:
Brian Shaughnessy, CFO
Northeast Bank, 500 Canal Street, Lewiston, ME 04240 
207.786.3245 ext. 3220
www.northeastbank.com

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