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 $1.9
million, or $0.20 per diluted common share, for the quarter ended
September 30, 2015, compared to net income of $1.6 million, or
$0.16 per diluted common share, for the quarter ended September 30,
2014.
The Board of Directors has declared a cash dividend of $0.01 per
share, payable on November 20, 2015 to shareholders of record as of
November 6, 2015.
“In the quarter we originated $79 million of new loans, achieved
a net interest margin of 4.5% and held operating expenses in
check,” said Richard Wayne, President and Chief Executive
Officer. “Our Loan Acquisition and Servicing Group produced
$34 million of new loans, residential loan sales in the secondary
market were strong at $29 million, our SBA National division closed
$11 million of new loans and we grew non-maturity deposits by $23
million. Asset quality remained strong, with non-performing assets
at 1.4% of total assets.”
At September 30, 2015, total assets were $858.2 million, an
increase of $7.5 million, or 0.9%, 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
$13.7 million, or 2.2%, compared to June 30, 2015, principally on
the strength of $13.0 million of net growth in commercial loans
purchased or originated by the Bank’s Loan Acquisition and
Servicing Group (“LASG”) and net growth of $4.1 million in
commercial originations by the Bank’s Community Banking Division.
This net growth was offset by a $5.8 million decrease in the Bank’s
Community Banking Division residential and consumer loan
portfolio.
Loans generated by the LASG totaled $34.4 million for the
quarter ended September 30, 2015. The growth in LASG loans
consisted of $23.5 million of purchased loans, at an average price
of 99.5%, and $10.9 million of originated loans. Small Business
Administration (“SBA”) loans closed during the quarter totaled
$10.6 million, of which $7.3 million were funded and $5.5 million
were sold in the secondary market. Residential and consumer loan
production sold in the secondary market totaled $28.9 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 September 30, 2015 |
|
|
|
|
(Dollars in millions) |
Total Loans |
|
Purchased loans may not
exceed 40% of total loans |
|
$ |
65.3 |
Regulatory Capital |
|
Non-owner occupied
commercial real estate loans may not exceed 300% of total
risk-based capital |
|
$ |
130.5 |
|
|
|
|
|
|
An overview of the Bank’s LASG portfolio
follows:
|
LASG Portfolio |
|
|
Three Months Ended September 30, |
|
|
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 |
$ |
|
23,583 |
|
$ |
|
10,941 |
|
$ |
|
- |
|
$ |
|
34,524 |
|
|
$ |
|
16,117 |
|
$ |
|
16,358 |
|
$ |
|
24,000 |
|
$ |
|
56,475 |
|
|
Net investment basis |
|
|
23,458 |
|
|
|
10,944 |
|
|
|
- |
|
|
|
34,402 |
|
|
|
|
13,167 |
|
|
|
16,353 |
|
|
|
24,000 |
|
|
|
53,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan returns during the period: |
|
Yield |
|
|
12.07 |
% |
|
|
5.67 |
% |
|
|
0.50 |
% |
|
|
8.23 |
% |
|
|
|
12.76 |
% |
|
|
9.88 |
% |
|
|
0.42 |
% |
|
|
10.93 |
% |
|
Total Return (1) |
|
|
12.11 |
% |
|
|
5.67 |
% |
|
|
0.50 |
% |
|
|
8.26 |
% |
|
|
|
12.75 |
% |
|
|
10.53 |
% |
|
|
0.42 |
% |
|
|
11.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans as of period end: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid principal balance |
$ |
|
249,229 |
|
$ |
119,732 |
|
$ |
60,000 |
|
$ |
|
428,961 |
|
|
$ |
244,910 |
|
$ |
60,534 |
|
$ |
|
48,000 |
|
$ |
|
353,444 |
|
|
Net investment basis |
$ |
|
214,199 |
|
$ |
119,670 |
|
$ |
60,005 |
|
$ |
|
393,874 |
|
|
$ |
205,928 |
|
$ |
60,497 |
|
$ |
|
48,000 |
|
$ |
|
314,425 |
|
|
|
|
|
(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. |
|
|
2. Deposits increased by $18.7 million, or 2.8% for the quarter,
attributable primarily to growth in non-maturity accounts, which
increased by $23.0 million, or 7.0%, for the quarter ended
September 30, 2015, offset by a decrease of $4.3 million in time
deposits.
3. Stockholders’ equity increased by $977 thousand for the
quarter, due principally to earnings of $1.9 million, offset by
$548 thousand in share repurchases (representing 52,500 shares), a
decrease in accumulated other comprehensive income of $231 thousand
and $95 thousand in dividends paid on common stock.
Net income increased by $220 thousand to $1.9 million for the
quarter ended September 30, 2015, compared to $1.6 million for the
quarter ended September 30, 2014.
1. Net interest and dividend income before provision for loan
losses decreased by $230 thousand, or 2.4%, for the quarter ended
September 30, 2015, compared to the quarter ended September 30,
2014. The decrease is primarily due to lower interest income in the
purchased loan portfolio, mainly due to a decline in yield to 12.1%
in the current quarter from 12.8% earned in the quarter ended
September 30, 2014.
The various components of transactional income are set forth in
the table below entitled “Total Return on Purchased Loans.” When
compared to the three months ended September 30, 2014,
transactional interest income increased by $183 thousand. The
following table summarizes interest income and related yields
recognized on the loan portfolios:
|
Interest Income and Yield on Loans |
|
Three Months Ended September 30, |
|
2015 |
|
2014 |
|
Average |
|
Interest |
|
|
|
Average |
|
Interest |
|
|
|
Balance |
|
Income |
|
Yield |
|
Balance |
|
Income |
|
Yield |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Community Banking
Division |
$ |
238,873 |
|
$ |
2,924 |
|
|
4.86 |
% |
|
$ |
241,165 |
|
$ |
3,062 |
|
|
5.04 |
% |
LASG: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated |
|
118,574 |
|
|
1,696 |
|
|
5.67 |
% |
|
|
52,430 |
|
|
1,306 |
|
9.88%(1) |
Purchased |
|
200,385 |
|
|
6,095 |
|
|
12.07 |
% |
|
|
202,856 |
|
|
6,522 |
|
|
12.76 |
% |
Secured Loans to
Broker-Dealers |
|
60,007 |
|
|
75 |
|
|
0.50 |
% |
|
|
29,905 |
|
|
32 |
|
|
0.42 |
% |
Total LASG |
|
378,966 |
|
|
7,866 |
|
|
8.23 |
% |
|
|
285,191 |
|
|
7,860 |
|
|
10.93 |
% |
Total |
$ |
617,839 |
|
$ |
10,790 |
|
|
6.93 |
% |
|
$ |
526,356 |
|
$ |
10,922 |
|
|
8.23 |
% |
|
(1) The yield for LASG originated loans included $335 thousand
of loan fees in the quarter ended September 30, 2014, compared to
$1 thousand of loan fees in the quarter ended September 30, 2015.
The yield for LASG originated loans, excluding loan fees, was 7.35%
in the quarter ended September 30, 2014.
As noted earlier, the yield on purchased loans for the quarter
ended September 30, 2015 decreased to 12.1% from 12.8% in the
quarter ended September 30, 2014. The portfolio’s base yield,
represented by regularly scheduled interest and accretion, declined
to 7.7% from 8.8%, and was offset in part by the effect of
increased transactional interest income, which grew to $2.2 million
from $2.0 million in the quarter ended September 30, 2014. The
following table details the total return on purchased loans:
|
Total Return on Purchased Loans |
|
Three Months Ended September 30, |
|
2015 |
|
2014 |
|
Income |
|
Return (1) |
|
Income |
|
Return (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Regularly scheduled
interest and accretion |
$ |
3,887 |
|
|
7.70 |
% |
|
$ |
|
4,497 |
|
|
|
8.80 |
% |
Transactional
income: |
|
|
|
|
|
|
|
|
|
Gain (loss) on loan sales |
|
- |
|
|
0.00 |
% |
|
|
|
(4 |
) |
|
|
-0.01 |
% |
Gain on sale of real estate
owned |
|
22 |
|
|
0.04 |
% |
|
|
|
- |
|
|
|
0.00 |
% |
Other noninterest income |
|
- |
|
|
0.00 |
% |
|
|
|
- |
|
|
|
0.00 |
% |
Accelerated accretion and loan
fees |
|
2,208 |
|
|
4.37 |
% |
|
|
|
2,025 |
|
|
|
3.96 |
% |
Total transactional income |
|
2,230 |
|
|
4.41 |
% |
|
|
|
2,021 |
|
|
|
3.95 |
% |
Total |
$ |
6,117 |
|
|
12.11 |
% |
|
$ |
|
6,518 |
|
|
|
12.75 |
% |
|
(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.
2. Noninterest income increased by $551 thousand for the quarter
ended September 30, 2015, compared to the quarter ended September
30, 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 $675 thousand, compared to an $80 thousand
gain on sale of commercial loans in the quarter ended September 30,
2014.
3. Noninterest expense increased by $100 thousand for the
quarter ended September 30, 2015, compared to the quarter ended
September 30, 2014, principally due to the following:
- An increase of $177 thousand in loan acquisition and
collections expense related to the collections of two loans;
- An increase of $122 thousand in professional fees related to IT
consulting;
- An increase of $88 thousand in occupancy and equipment expense,
due to increases in rent and IT-related equipment expense; and
- A decrease of $277 thousand in salaries and employee benefits,
principally due to the current quarter benefit recognized upon the
forfeiture of stock awards and a decrease in incentive
compensation. This decrease is partially offset by an
increase in employee head count.
At September 30, 2015, nonperforming assets totaled $12.1
million, or 1.4% of total assets, as compared to $12.4 million, or
1.5% of total assets, at June 30, 2015.
At September 30, 2015, the Company’s Tier 1 Leverage Ratio was
14.2%, a decrease from 14.5% at June 30, 2015, and the Total
Capital Ratio was 20.0%, 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 quarter ended September 30, 2015.
Investor Call Information Richard Wayne,
Chief Executive Officer of Northeast Bancorp, Claire Bean, Chief
Operating Officer of Northeast Bancorp, and Brian Shaughnessy,
Chief Financial Officer of Northeast Bancorp, will host a
conference call to discuss first quarter earnings and
business outlook at 10:00 a.m. Eastern Time on Tuesday, October 27,
2015. Investors can access the call by dialing
877.878.2762 and entering the following passcode: 64428342. 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
Small Business Lending 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,
tangible book value per share, and net operating earnings.
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) |
|
September 30, 2015 |
|
June 30, 2015 |
Assets |
|
|
|
|
|
Cash and due from
banks |
$ |
|
2,979 |
|
|
$ |
|
2,789 |
|
Short-term
investments |
|
|
83,234 |
|
|
|
|
87,061 |
|
Total cash and cash
equivalents |
|
|
86,213 |
|
|
|
|
89,850 |
|
Available-for-sale
securities, at fair value |
|
|
101,344 |
|
|
|
|
101,908 |
|
|
|
|
|
|
|
Residential real estate
loans held for sale |
|
|
5,366 |
|
|
|
|
7,093 |
|
SBA loans held for
sale |
|
|
2,170 |
|
|
|
|
1,942 |
|
Total loans held for sale |
|
|
7,536 |
|
|
|
|
9,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
|
|
|
|
Commercial real estate |
|
|
363,600 |
|
|
|
|
348,676 |
|
Residential real estate |
|
|
128,264 |
|
|
|
|
132,669 |
|
Commercial and industrial |
|
|
126,734 |
|
|
|
|
123,133 |
|
Consumer |
|
|
7,244 |
|
|
|
|
7,659 |
|
Total loans |
|
|
625,842 |
|
|
|
|
612,137 |
|
Less: Allowance for loan
losses |
|
|
2,065 |
|
|
|
|
1,926 |
|
Loans, net |
|
|
623,777 |
|
|
|
|
610,211 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and equipment,
net |
|
|
8,460 |
|
|
|
|
8,253 |
|
Real estate owned and
other possessed collateral, net |
|
|
1,279 |
|
|
|
|
1,651 |
|
Federal Home Loan Bank
stock, at cost |
|
|
4,102 |
|
|
|
|
4,102 |
|
Intangible assets,
net |
|
|
2,078 |
|
|
|
|
2,209 |
|
Bank owned life
insurance |
|
|
15,387 |
|
|
|
|
15,276 |
|
Other assets |
|
|
8,073 |
|
|
|
|
8,223 |
|
Total assets |
$ |
|
858,249 |
|
|
$ |
|
850,718 |
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
Deposits |
|
|
|
|
|
Demand |
$ |
|
62,687 |
|
|
$ |
|
60,383 |
|
Savings and interest checking |
|
|
106,679 |
|
|
|
|
100,134 |
|
Money market |
|
|
182,690 |
|
|
|
|
168,527 |
|
Time |
|
|
341,422 |
|
|
|
|
345,715 |
|
Total deposits |
|
|
693,478 |
|
|
|
|
674,759 |
|
|
|
|
|
|
|
Federal Home Loan Bank
advances |
|
|
30,159 |
|
|
|
|
30,188 |
|
Wholesale repurchase
agreements |
|
|
- |
|
|
|
|
10,037 |
|
Short-term
borrowings |
|
|
2,479 |
|
|
|
|
2,349 |
|
Junior subordinated
debentures issued to affiliated trusts |
|
|
8,674 |
|
|
|
|
8,626 |
|
Capital lease
obligation |
|
|
1,312 |
|
|
|
|
1,368 |
|
Other liabilities |
|
|
8,443 |
|
|
|
|
10,664 |
|
Total liabilities |
|
|
744,545 |
|
|
|
|
737,991 |
|
Commitments and
contingencies |
|
|
- |
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity |
|
|
|
|
|
Preferred stock, $1.00 par value,
1,000,000 shares authorized; no shares |
|
|
|
|
issued and outstanding at September
30, 2015 and June 30, 2015 |
|
|
- |
|
|
|
|
- |
|
Voting common stock, $1.00 par
value, 25,000,000 shares authorized; |
|
|
|
|
|
8,569,612 and 8,575,144 shares
issued and outstanding at |
|
|
|
|
September 30, 2015 and June 30,
2015, respectively |
|
|
8,570 |
|
|
|
|
8,575 |
|
Non-voting common stock, $1.00 par
value, 3,000,000 shares authorized; |
|
|
|
|
|
1,022,717 and 1,012,739 shares
issued and outstanding at September 30, 2015 and June 30, 2015,
respectively |
|
|
1,023 |
|
|
|
1,013 |
|
Additional paid-in capital |
|
|
84,937 |
|
|
|
|
85,506 |
|
Retained earnings |
|
|
20,693 |
|
|
|
|
18,921 |
|
Accumulated other comprehensive
loss |
|
|
(1,519 |
) |
|
|
|
(1,288 |
) |
Total stockholders' equity |
|
|
113,704 |
|
|
|
|
112,727 |
|
Total liabilities and stockholders'
equity |
$ |
|
858,249 |
|
|
$ |
|
850,718 |
|
|
|
NORTHEAST BANCORP AND SUBSIDIARY |
|
CONSOLIDATED STATEMENTS OF INCOME |
|
(Unaudited) |
|
(Dollars in
thousands, except share and per share data) |
|
|
Three Months Ended September 30, |
|
|
|
|
2015 |
|
2014 |
|
|
|
Interest
and dividend income: |
|
|
|
|
|
|
|
|
Interest and fees on
loans |
$ |
|
10,790 |
|
|
$ |
|
10,922 |
|
|
|
|
Interest on
available-for-sale securities |
|
|
228 |
|
|
|
|
244 |
|
|
|
|
Other interest and
dividend income |
|
|
95 |
|
|
|
|
66 |
|
|
|
|
Total interest and
dividend income |
|
|
11,113 |
|
|
|
|
11,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense: |
|
|
|
|
|
|
|
|
Deposits |
|
|
1,365 |
|
|
|
|
1,130 |
|
|
|
|
Federal Home Loan Bank
advances |
|
|
260 |
|
|
|
|
323 |
|
|
|
|
Wholesale repurchase
agreements |
|
|
67 |
|
|
|
|
73 |
|
|
|
|
Short-term
borrowings |
|
|
9 |
|
|
|
|
9 |
|
|
|
|
Junior subordinated
debentures issued to affiliated trusts |
|
|
154 |
|
|
|
|
206 |
|
|
|
|
Obligation under
capital lease agreements |
|
|
17 |
|
|
|
|
20 |
|
|
|
|
Total interest
expense |
|
|
1,872 |
|
|
|
|
1,761 |
|
|
|
|
Net
interest and dividend income before provision for loan losses |
|
|
9,241 |
|
|
|
|
9,471 |
|
|
|
|
Provision
for loan losses |
|
|
169 |
|
|
|
|
320 |
|
|
|
|
Net
interest and dividend income after provision for loan losses |
|
|
9,072 |
|
|
|
|
9,151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
income: |
|
|
|
|
|
|
|
|
Fees for other services
to customers |
|
|
408 |
|
|
|
|
394 |
|
|
|
|
Gain on sales of
residential loans held for sale |
|
|
560 |
|
|
|
|
584 |
|
|
|
|
Gain on sales of
portfolio loans |
|
|
675 |
|
|
|
|
80 |
|
|
|
|
Loss recognized on real
estate owned and other repossessed collateral, net |
|
|
(59 |
) |
|
|
|
(23 |
) |
|
|
|
Bank-owned life
insurance income |
|
|
112 |
|
|
|
|
109 |
|
|
|
|
Other noninterest
income |
|
|
9 |
|
|
|
|
10 |
|
|
|
|
Total noninterest
income |
|
|
1,705 |
|
|
|
|
1,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
|
4,256 |
|
|
|
|
4,533 |
|
|
|
|
Occupancy and equipment
expense |
|
|
1,290 |
|
|
|
|
1,202 |
|
|
|
|
Professional fees |
|
|
430 |
|
|
|
|
308 |
|
|
|
|
Data processing
fees |
|
|
349 |
|
|
|
|
345 |
|
|
|
|
Marketing expense |
|
|
70 |
|
|
|
|
69 |
|
|
|
|
Loan acquisition and
collection expense |
|
|
451 |
|
|
|
|
274 |
|
|
|
|
FDIC insurance
premiums |
|
|
114 |
|
|
|
|
124 |
|
|
|
|
Intangible asset
amortization |
|
|
131 |
|
|
|
|
166 |
|
|
|
|
Other noninterest
expense |
|
|
719 |
|
|
|
|
689 |
|
|
|
|
Total noninterest
expense |
|
|
7,810 |
|
|
|
|
7,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income tax expense |
|
|
2,967 |
|
|
|
|
2,595 |
|
|
|
|
Income tax
expense |
|
|
1,100 |
|
|
|
|
948 |
|
|
|
|
Net
income |
$ |
|
1,867 |
|
|
$ |
|
1,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding during the period: |
|
|
|
|
|
|
|
|
Basic |
|
|
9,562,812 |
|
|
|
|
10,180,038 |
|
|
|
|
Diluted |
|
|
9,562,812 |
|
|
|
|
10,180,038 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per common share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.20 |
|
$ |
0.16 |
|
|
|
Diluted |
|
0.20 |
|
|
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends declared per common share |
$ |
0.01 |
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
NORTHEAST BANCORP AND SUBSIDIARY |
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED
YIELDS |
(Unaudited) |
(Dollars
in thousands) |
|
Three Months Ended September 30, |
|
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) |
$ |
102,241 |
|
$ |
228 |
|
|
0.88 |
% |
|
$ |
112,250 |
|
$ |
244 |
|
|
0.86 |
% |
Loans (2) (3) |
|
617,839 |
|
|
10,790 |
|
|
6.93 |
% |
|
|
526,356 |
|
|
10,922 |
|
|
8.23 |
% |
Regulatory stock |
|
4,102 |
|
|
34 |
|
|
3.29 |
% |
|
|
4,102 |
|
|
15 |
|
|
1.45 |
% |
Short-term investments (4) |
|
99,649 |
|
|
61 |
|
|
0.24 |
% |
|
|
82,762 |
|
|
51 |
|
|
0.24 |
% |
Total interest-earning
assets |
|
823,831 |
|
|
11,113 |
|
|
5.35 |
% |
|
|
725,470 |
|
|
11,232 |
|
|
6.14 |
% |
Cash and due from
banks |
|
3,026 |
|
|
|
|
|
|
|
2,712 |
|
|
|
|
|
Other non-interest
earning assets |
|
36,420 |
|
|
|
|
|
|
|
34,736 |
|
|
|
|
|
Total assets |
$ |
863,277 |
|
|
|
|
|
|
$ |
762,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
69,619 |
|
$ |
46 |
|
|
0.26 |
% |
|
$ |
63,608 |
|
$ |
41 |
|
|
0.26 |
% |
Money market accounts |
|
170,566 |
|
|
353 |
|
|
0.82 |
% |
|
|
86,294 |
|
|
110 |
|
|
0.51 |
% |
Savings accounts |
|
36,360 |
|
|
12 |
|
|
0.13 |
% |
|
|
34,361 |
|
|
11 |
|
|
0.13 |
% |
Time deposits |
|
350,867 |
|
|
954 |
|
|
1.08 |
% |
|
|
340,368 |
|
|
968 |
|
|
1.13 |
% |
Total interest-bearing
deposits |
|
627,412 |
|
|
1,365 |
|
|
0.86 |
% |
|
|
524,631 |
|
|
1,130 |
|
|
0.85 |
% |
Short-term borrowings |
|
1,950 |
|
|
9 |
|
|
1.83 |
% |
|
|
3,320 |
|
|
9 |
|
|
1.08 |
% |
Borrowed funds |
|
39,324 |
|
|
344 |
|
|
3.47 |
% |
|
|
52,979 |
|
|
416 |
|
|
3.12 |
% |
Junior subordinated debentures |
|
8,650 |
|
|
154 |
|
|
7.06 |
% |
|
|
8,461 |
|
|
206 |
|
|
9.66 |
% |
Total interest-bearing
liabilities |
|
677,336 |
|
|
1,872 |
|
|
1.10 |
% |
|
|
589,391 |
|
|
1,761 |
|
|
1.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and
escrow accounts |
|
64,008 |
|
|
|
|
|
|
|
53,245 |
|
|
|
|
|
Other liabilities |
|
8,763 |
|
|
|
|
|
|
|
7,891 |
|
|
|
|
|
Total liabilities |
|
750,107 |
|
|
|
|
|
|
|
650,527 |
|
|
|
|
|
Stockholders'
equity |
|
113,170 |
|
|
|
|
|
|
|
112,391 |
|
|
|
|
|
Total liabilities and
stockholders' equity |
$ |
863,277 |
|
|
|
|
|
|
$ |
762,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
9,241 |
|
|
|
|
|
|
$ |
9,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate
spread |
|
|
|
|
|
|
|
4.25 |
% |
|
|
|
|
|
|
|
|
4.95 |
% |
Net interest margin
(5) |
|
|
|
|
|
|
|
4.45 |
% |
|
|
|
|
|
|
|
|
5.18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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: |
|
September 30, 2015 |
|
June 30, 2015 |
|
March 31, 2015 |
|
December 31, 2014 |
|
September 30, 2014 |
Net interest
income |
$ |
9,241 |
|
|
$ |
9,350 |
|
|
$ |
9,120 |
|
|
$ |
9,426 |
|
|
$ |
9,471 |
|
Provision for loan
losses |
|
169 |
|
|
|
240 |
|
|
|
44 |
|
|
|
113 |
|
|
|
320 |
|
Noninterest income |
|
1,705 |
|
|
|
3,067 |
|
|
|
1,554 |
|
|
|
1,370 |
|
|
|
1,154 |
|
Noninterest
expense |
|
7,810 |
|
|
|
8,827 |
|
|
|
7,885 |
|
|
|
8,210 |
|
|
|
7,710 |
|
Net income |
|
1,867 |
|
|
|
2,165 |
|
|
|
1,752 |
|
|
|
1,580 |
|
|
|
1,647 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
9,562,812 |
|
|
|
9,773,228 |
|
|
|
9,833,033 |
|
|
|
10,132,349 |
|
|
|
10,180,038 |
|
Diluted |
|
9,562,812 |
|
|
|
9,773,228 |
|
|
|
9,833,033 |
|
|
|
10,132,349 |
|
|
|
10,180,038 |
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.20 |
|
|
$ |
0.22 |
|
|
$ |
0.18 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
Diluted |
|
0.20 |
|
|
|
0.22 |
|
|
|
0.18 |
|
|
|
0.16 |
|
|
|
0.16 |
|
Dividends per common
share |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets |
|
0.86 |
% |
|
|
1.04 |
% |
|
|
0.88 |
% |
|
|
0.78 |
% |
|
|
0.85 |
% |
Return on average
equity |
|
6.55 |
% |
|
|
7.72 |
% |
|
|
6.38 |
% |
|
|
5.54 |
% |
|
|
5.80 |
% |
Net interest rate
spread (1) |
|
4.25 |
% |
|
|
4.51 |
% |
|
|
4.58 |
% |
|
|
4.65 |
% |
|
|
4.95 |
% |
Net interest margin
(2) |
|
4.45 |
% |
|
|
4.70 |
% |
|
|
4.79 |
% |
|
|
4.87 |
% |
|
|
5.18 |
% |
Efficiency ratio
(3) |
|
71.35 |
% |
|
|
71.09 |
% |
|
|
73.87 |
% |
|
|
76.05 |
% |
|
|
72.56 |
% |
Noninterest expense to
average total assets |
|
3.59 |
% |
|
|
4.22 |
% |
|
|
3.96 |
% |
|
|
4.05 |
% |
|
|
4.02 |
% |
Average
interest-earning assets to average interest-bearing
liabilities |
|
121.63 |
% |
|
|
120.90 |
% |
|
|
121.89 |
% |
|
|
122.32 |
% |
|
|
123.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
As of: |
|
September 30, 2015 |
|
June 30, 2015 |
|
March 31, 2015 |
|
December 31, 2014 |
|
September 30, 2014 |
Nonperforming
loans: |
|
|
|
|
|
|
|
|
|
Originated
portfolio: |
|
|
|
|
|
|
|
|
|
Residential real estate |
$ |
3,165 |
|
|
$ |
3,021 |
|
|
$ |
3,163 |
|
|
$ |
2,706 |
|
|
$ |
2,110 |
|
Commercial real estate |
|
529 |
|
|
|
994 |
|
|
|
1,201 |
|
|
|
1,166 |
|
|
|
716 |
|
Home equity |
|
20 |
|
|
|
11 |
|
|
|
11 |
|
|
|
11 |
|
|
|
28 |
|
Commercial and industrial |
|
2 |
|
|
|
2 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Consumer |
|
153 |
|
|
|
190 |
|
|
|
225 |
|
|
|
237 |
|
|
|
145 |
|
Total originated
portfolio |
|
3,869 |
|
|
|
4,218 |
|
|
|
4,600 |
|
|
|
4,120 |
|
|
|
2,999 |
|
Total purchased
portfolio |
|
6,939 |
|
|
|
6,532 |
|
|
|
5,850 |
|
|
|
8,129 |
|
|
|
4,287 |
|
Total nonperforming
loans |
|
10,808 |
|
|
|
10,750 |
|
|
|
10,450 |
|
|
|
12,249 |
|
|
|
7,286 |
|
Real estate owned and
other possessed collateral, net |
|
1,279 |
|
|
|
1,651 |
|
|
|
3,694 |
|
|
|
2,058 |
|
|
|
2,115 |
|
Total nonperforming
assets |
$ |
12,087 |
|
|
$ |
12,401 |
|
|
$ |
14,144 |
|
|
$ |
14,307 |
|
|
$ |
9,401 |
|
|
|
|
|
|
|
|
|
|
|
Past due loans to total
loans |
|
1.35 |
% |
|
|
1.08 |
% |
|
|
2.57 |
% |
|
|
2.64 |
% |
|
|
1.40 |
% |
Nonperforming loans to
total loans |
|
1.73 |
% |
|
|
1.76 |
% |
|
|
1.80 |
% |
|
|
2.13 |
% |
|
|
1.34 |
% |
Nonperforming assets to
total assets |
|
1.41 |
% |
|
|
1.46 |
% |
|
|
1.70 |
% |
|
|
1.77 |
% |
|
|
1.20 |
% |
Allowance for loan
losses to total loans |
|
0.33 |
% |
|
|
0.31 |
% |
|
|
0.30 |
% |
|
|
0.29 |
% |
|
|
0.28 |
% |
Allowance for loan
losses to nonperforming loans |
|
19.11 |
% |
|
|
17.92 |
% |
|
|
16.66 |
% |
|
|
13.58 |
% |
|
|
21.12 |
% |
|
|
|
|
|
|
|
|
|
|
Commercial real estate
loans to risk-based capital (4) |
|
196.62 |
% |
|
|
188.49 |
% |
|
|
173.17 |
% |
|
|
190.05 |
% |
|
|
167.57 |
% |
Net loans to core
deposits (5) |
|
91.04 |
% |
|
|
91.85 |
% |
|
|
89.04 |
% |
|
|
91.79 |
% |
|
|
92.80 |
% |
Purchased loans to
total loans, including held for sale |
|
33.82 |
% |
|
|
32.61 |
% |
|
|
33.53 |
% |
|
|
37.97 |
% |
|
|
37.38 |
% |
Equity to total
assets |
|
13.25 |
% |
|
|
13.25 |
% |
|
|
13.51 |
% |
|
|
13.69 |
% |
|
|
14.48 |
% |
Common equity tier 1
capital ratio |
|
19.69 |
% |
|
|
19.82 |
% |
|
|
20.90 |
% |
|
|
- |
|
|
|
- |
|
Total capital ratio
(6) |
|
20.03 |
% |
|
|
20.14 |
% |
|
|
21.21 |
% |
|
|
21.44 |
% |
|
|
22.97 |
% |
Tier 1 leverage capital
ratio |
|
14.23 |
% |
|
|
14.49 |
% |
|
|
14.96 |
% |
|
|
14.81 |
% |
|
|
15.89 |
% |
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity |
$ |
113,704 |
|
|
$ |
112,727 |
|
|
$ |
112,487 |
|
|
$ |
110,923 |
|
|
$ |
113,242 |
|
Less: Preferred
stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Common stockholders'
equity |
|
113,704 |
|
|
|
112,727 |
|
|
|
112,487 |
|
|
|
110,923 |
|
|
|
113,242 |
|
Less: Intangible
assets |
|
(3,388 |
) |
|
|
(3,312 |
) |
|
|
(2,338 |
) |
|
|
(2,467 |
) |
|
|
(2,632 |
) |
Tangible common
stockholders' equity (non-GAAP) |
$ |
110,316 |
|
|
$ |
109,415 |
|
|
$ |
110,149 |
|
|
$ |
108,456 |
|
|
$ |
110,610 |
|
|
|
|
|
|
|
|
|
|
|
Common shares
outstanding |
|
9,592,329 |
|
|
|
9,587,883 |
|
|
|
9,819,609 |
|
|
|
9,846,387 |
|
|
|
10,248,034 |
|
Book value per common
share |
$ |
11.85 |
|
|
$ |
11.76 |
|
|
$ |
11.46 |
|
|
$ |
11.27 |
|
|
$ |
11.05 |
|
Tangible book value per
share (non-GAAP) (7) |
|
11.50 |
|
|
|
11.41 |
|
|
|
11.22 |
|
|
|
11.01 |
|
|
|
10.79 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (GAAP) to Net Operating
Earnings (non-GAAP) |
|
Three Months Ended: |
|
September 30, 2015 |
|
June 30, 2015 |
|
March 31, 2015 |
|
December 31, 2014 |
|
September 30, 2014 |
Net income (GAAP) |
$ |
1,867 |
|
|
$ |
2,165 |
|
|
$ |
1,752 |
|
|
$ |
1,580 |
|
|
$ |
1,647 |
|
Items excluded from operating
earnings, net of tax: |
|
|
|
|
|
|
|
|
|
Severance expense |
|
- |
|
|
|
- |
|
|
|
8 |
|
|
|
36 |
|
|
|
52 |
|
Net operating earnings
(non-GAAP) |
$ |
1,867 |
|
|
$ |
2,165 |
|
|
$ |
1,760 |
|
|
$ |
1,616 |
|
|
$ |
1,699 |
|
Net operating earnings
per share - basic (non-GAAP) |
$ |
0.20 |
|
|
$ |
0.22 |
|
|
$ |
0.18 |
|
|
$ |
0.16 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
|
(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) 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:
Claire S. Bean, COO
Northeast Bank, 500 Canal Street, Lewiston, ME 04240
207.786.3245 ext. 3202
www.northeastbank.com
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