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Northeast Bancorp Reports Second Quarter Results, Declares Dividend

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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
 PurchasedOriginatedSecured Loans to Broker-DealersTotal LASG PurchasedOriginatedSecured Loans to Broker-DealersTotal 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 
 PurchasedOriginatedSecured Loans to 
Broker-Dealers
Total LASG PurchasedOriginatedSecured 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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