NBN Northeast Bank

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