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Northeast Bancorp Reports Fourth Quarter Results, Declares Dividend

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LEWISTON, Maine, July 27, 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 $2.2 million, or $0.24 per diluted common share, for the quarter ended June 30, 2016, compared to net income of $2.2 million, or $0.22 per diluted common share, for the quarter ended June 30, 2015. Net income for the year ended June 30, 2016 was $7.6 million, or $0.80 per diluted common share, compared to $7.1 million, or $0.72 per diluted common share, for the year ended June 30, 2015.

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on August 24, 2016 to shareholders of record as of August 10, 2016.

"We closed the year with a strong quarter," said Richard Wayne, President and Chief Executive Officer. "For the quarter, we achieved earnings of $0.24 per share driven by solid SBA gains on sale and purchased loan transactional income. In addition to earnings growth, we generated loan volume of $96.6 million, including $50.6 million of loans produced by the Loan Acquisition and Servicing Group, $17.4 million of SBA loans and $28.6 million of residential and commercial loans produced by the Community Bank.  The growth of our balance sheet and earnings, coupled with the issuance of $15.05 million of subordinated notes in June, compliments our growth strategy and positions us well for the future."

As of June 30, 2016, total assets were $986.2 million, an increase of $135.4 million, or 15.9%, 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 – has grown by $80.3 million, or 13.1%, compared to June 30, 2015, principally on the strength of $81.8 million of net growth in commercial loans purchased or originated by the Bank's Loan Acquisition and Servicing Group ("LASG"), net growth of $15.5 million in originations by the Bank's Small Business Administration ("SBA") National Division and net growth of $3.9 million in commercial originations by the Bank's Community Banking Division. This net growth was offset by a pay down of one secured loan to a broker-dealer for $12.0 million in the LASG portfolio and a $20.9 million decrease in the Bank's Community Banking Division residential and consumer loan portfolio.

Loans generated by the LASG totaled $50.6 million for the quarter ended June 30, 2016. The growth in LASG loans consisted of $18.8 million of purchased loans, at an average price of 91.1% of unpaid principal balance, and $31.8 million of originated loans. SBA loans closed during the quarter totaled $17.4 million, of which $16.1 million were fully funded in the quarter.  In addition, the Company sold $14.2 million of the guaranteed portion of SBA and United States Department of Agriculture ("USDA") loans in the secondary market, of which $9.4 million were originated in the current quarter and $4.8 million were originated in prior quarters. Residential loan production sold in the secondary market totaled $19.9 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 June 30, 2016
    (Dollars in millions)
Total Loans Purchased loans may not exceed 40% of total loans $  67.1
Regulatory Capital Non-owner occupied commercial real estate loans may not exceed 300% of total capital $  180.0
      

      An overview of the Bank's LASG portfolio follows:

 LASG Portfolio
 Three Months Ended June 30,
 2016 2015
   Purchased  Originated Secured 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$ 20,588 $ 31,826 $   -  $   52,414  $   25,785 $  29,193 $ - $  54,978 
Net investment basis   18,754     31,826   -    50,580     24,758   29,193   -   53,951 
                  
Loan returns during the period:
Yield (1)  10.88%  6.98%  0.51%  8.19%   13.11%  5.56%  0.49%  8.79%
Total Return (1) (2)  10.88%  6.98%  0.51%  8.19%   13.39%  5.56%  0.49%  9.00%
                  



 Year Ended June 30,  
 2016 2015 
    Purchased  Originated Secured 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$ 108,716 $ 110,578 $   -  $  219,294   $    93,694  $    82,502  $   48,000   $  224,196   
Net investment basis  99,999   110,578   -     210,577      82,654      82,502      48,000      213,156   
                                                
Loan returns during the period:                                               
Yield (1)  11.37%  6.11%  0.50%   8.03%     13.00%     6.44%     0.47%     9.73%  
Total Return (1) (2)  11.38%  6.10%  0.50%   8.04%     13.33%     6.75%     0.47%     10.02%  
                                                
                                                
Total loans as of period end:                                              
Unpaid principal balance$ 271,268 $ 174,918 $ 48,000 $ 494,186  $ 239,933    $ 118,416  $ 60,000   $ 418,349   
Net investment basis  239,709   174,918   48,000   462,627    202,592    118,416    60,000     381,008   
                    
(1) The yield and total return on LASG originated loans includes $385 thousand of fees related to one loan in the quarter ended June 30, 2016.  
(2) 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 $47.5 million, or 6.3% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $49.8 million, or 12.5%. For the year ended June 30, 2016, deposits increased $125.7 million, or 18.6%, primarily due to growth in non-maturity accounts of $120.3 million, or 36.6%, and growth in time deposits of $5.4 million, or 1.6%.

3. Stockholders' equity increased by $3.9 million from June 30, 2015, due principally to earnings of $7.6 million, offset by $3.4 million in share repurchases (representing 322,900 shares). Additionally, there was an increase in stock-based compensation of $613 thousand, offset by a decrease in accumulated other comprehensive income of $618 thousand and $380 thousand in dividends paid on common stock.

Net income increased by $34 thousand to $2.2 million for the quarter ended June 30, 2016, compared to $2.2 million for the quarter ended June 30, 2015.

1. Net interest and dividend income before provision for loan losses increased by $1.4 million for the quarter ended June 30, 2016, compared to the quarter ended June 30, 2015. The increase is primarily due to higher average balances in the total 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 months and year ended June 30, 2015, transactional income decreased by $906 thousand and $2.6 million, respectively. The following table summarizes interest income and related yields recognized on the loan portfolios:

 Interest Income and Yield on Loans
 Three Months Ended June 30,
 2016 2015
 Average Interest   Average Interest  
 Balance (1) Income (2) Yield Balance (1) Income Yield
 (Dollars in thousands)
Community Banking$212,625 $  2,589  4.90% $ 228,558 $  2,839  4.98%
SBA 30,599  490  6.44%  8,860  126  5.70%
LASG:               
Originated  172,678    2,996  6.98%    106,963    1,483  5.56%
Purchased  232,610    6,294  10.88%   195,016    6,375  13.11%
Secured Loans to Broker-Dealers 54,001  68  0.51%  60,003  73  0.49%
Total LASG  459,289    9,358  8.19%   361,982    7,931  8.79%
Total$ 702,513 $  12,437  7.12% $ 599,400 $ 10,896  7.29%
                    
                    
 Year Ended June 30,
 2016 2015
 Average Interest   Average Interest  
 Balance (1) Income (2) Yield Balance (1) Income Yield
 (Dollars in thousands)
Community Banking$ 218,649 $   10,483  4.79% $ 233,506 $  11,599  4.97%
SBA 23,786  1,448  6.09%  2,622  148  5.64%
LASG:               
Originated  147,193     8,987  6.11%    76,448  4,924  6.44%
Purchased  216,763     24,638  11.37%   203,822    26,500  13.00%
Secured Loans to Broker-Dealers 58,511  293  0.50%  44,942  212  0.47%
Total LASG  422,467     33,918  8.03%   325,212    31,636  9.73%
Total$ 664,902 $ 45,849  6.90% $ 561,340 $ 43,383  7.73%



(1) Includes loans held for sale.
(2) SBA interest income includes SBA fees of $21 thousand and $33 thousand for the quarter and year ended June 30, 2016, respectively.

 

The yield on purchased loans for the quarter ended June 30, 2016 was 10.9% as compared to 13.4% in the quarter ended June 30, 2015, due to lower transactional income in the quarter. The following table details the total return on purchased loans:

 Total Return on Purchased Loans
 Three Months Ended June 30,
 2016 2015
 Income Return (1) Income Return (1)
 (Dollars in thousands)
Regularly scheduled interest and accretion$4,770  8.25% $  4,132  8.43%
Transactional income:         
Gain on loan sales   -  0.00%    -  0.00%
Gain on sale of real estate owned   -  0.00%    188   0.38%
Other noninterest income   1   0.00%    -   0.00%
Accelerated accretion and loan fees   1,524  2.63%    2,243  4.58%
Total transactional income   1,525  2.63%    2,431  4.96%
Total$  6,295  10.88% $  6,563  13.39%



 Year Ended June 30,
 2016 2015
 Income Return (1) Income Return (1)
 (Dollars in thousands)
Regularly scheduled interest and accretion$17,382  8.02% $   17,327   8.48%
Transactional income:         
Gain on loan sales    -  0.00%   190   0.09%
Gain on sale of real estate owned    23  0.01%   607   0.30%
Other noninterest income (loss) 12  0.00%   (69)  -0.03%
Accelerated accretion and loan fees   7,256  3.35%     9,173   4.49%
Total transactional income   7,291  3.36%     9,901   4.85%
Total$  24,673  11.38% $   27,228   13.33%



(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 decreased by $656 thousand for the quarter ended June 30, 2016, compared to the quarter ended June 30, 2015, principally due to a decrease in gains realized on sale of portfolio loans. The recent quarter includes gains realized on sale of SBA and USDA loans of $1.6 million, compared to $1.9 million in the quarter ended June 30, 2015. Additionally, there was a decrease of $251 thousand in gain recognized on real estate owned and other repossessed collateral.

3. Noninterest expense increased by $569 thousand for the quarter ended June 30, 2016, compared to the quarter ended June 30, 2015, primarily due to an increase in salaries and employee benefits of $306 thousand, largely attributable to higher employee headcount.

At June 30, 2016, nonperforming assets totaled $9.5 million, or 0.96% of total assets, as compared to $12.4 million, or 1.46% of total assets, at June 30, 2015.

At June 30, 2016, the Company's Tier 1 Leverage Ratio was 13.3%, compared to 14.5% at June 30, 2015, and the Total Capital Ratio was 20.4%, an increase from 20.1% at June 30, 2015. The increase resulted primarily from the issuance of $15.05 million of subordinated notes which qualify as Tier 2 Capital, offset by 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 fourth quarter earnings and business outlook at 10:00 a.m. Eastern Time on Thursday, July 28th. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 49101566. 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)
 June 30, 2016 June 30, 2015
Assets     
Cash and due from banks$ 2,459  $   2,789 
Short-term investments    148,698      87,061 
Total cash and cash equivalents    151,157      89,850 
Available-for-sale securities, at fair value  100,572      101,908 
      
Residential real estate loans held for sale  6,449    7,093 
SBA loans held for sale  1,070    1,942 
Total loans held for sale  7,519      9,035 
      
Loans     
Commercial real estate  426,568      348,676 
Residential real estate    113,962      132,669 
Commercial and industrial    145,956      123,133 
Consumer  5,950      7,659 
Total loans    692,436      612,137 
Less: Allowance for loan losses    2,350      1,926 
Loans, net    690,086      610,211 
      
Premises and equipment, net    7,801      8,253 
Real estate owned and other possessed collateral, net    1,652      1,651 
Federal Home Loan Bank stock, at cost    2,408      4,102 
Intangible assets, net    1,732      2,209 
Bank owned life insurance    15,725      15,276 
Other assets    7,501      8,223 
Total assets$   986,153  $   850,718 
      
Liabilities and Stockholders' Equity     
Deposits     
Demand$ 66,686  $   60,383 
Savings and interest checking    107,218      100,134 
Money market    275,437      168,527 
Time    351,091      345,715 
Total deposits    800,432      674,759 
      
Federal Home Loan Bank advances    30,075      30,188 
Wholesale repurchase agreements    -      10,037 
Short-term borrowings    -      2,349 
Junior subordinated debentures issued to affiliated trusts    23,331      8,626 
Capital lease obligation    1,128      1,368 
Other liabilities  14,596      10,664 
Total liabilities    869,562      737,991 
Commitments and contingencies    -        -   
      
Stockholders' equity     
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares    
issued and outstanding at June 30, 2016 and June 30, 2015    -        -   
Voting common stock, $1.00 par value, 25,000,000 shares authorized;     
8,089,790 and 8,575,144 shares issued and outstanding at    
June 30, 2016 and June 30, 2015, respectively    8,089       8,575 
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;     
1,227,683 and 1,012,739 shares issued and outstanding at June 30, 2016 and June 30, 2015, respectively    1,228     1,013 
Additional paid-in capital  83,020      85,506 
Retained earnings    26,160      18,921 
Accumulated other comprehensive loss     (1,906)      (1,288)
Total stockholders' equity    116,591      112,727 
Total liabilities and stockholders' equity$   986,153  $   850,718 





NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
 Three Months Ended June 30, Year Ended June 30,
 2016 2015 2016 2015
Interest and dividend income:           
Interest and fees on loans$ 12,437  $10,896 $ 45,849  $43,383
Interest on available-for-sale securities  230   215   930   913
Other interest and dividend income  161   74   456   292
Total interest and dividend income  12,828   11,185   47,235   44,588
            
Interest expense:           
Deposits  1,671   1,329   6,027   5,010
Federal Home Loan Bank advances  253   256   1,027   1,101
Wholesale repurchase agreements  -   72   67   288
Short-term borrowings  1   8   20   29
Junior subordinated debentures issued to affiliated trusts  175   152   651   718
Obligation under capital lease agreements  15   18   63   74
Total interest expense  2,115   1,835   7,855   7,220
            
Net interest and dividend income before provision for loan losses  10,713   9,350   39,380   37,368
Provision for loan losses  317   240   1,618   717
Net interest and dividend income after provision for loan losses  10,396   9,110   37,762   36,651
            
Noninterest income:           
Fees for other services to customers  393   406   1,657   1,494
Gain on sales of residential loans held for sale  392   493   1,684   1,877
Gain on sales of portfolio loans  1,620   1,926   4,178   2,821
(Loss) gain recognized on real estate owned and other repossessed collateral, net  (127)  124   (255)  428
Bank-owned life insurance income  113   111   449   440
Other noninterest income  20   7   60   29
Total noninterest income  2,411   3,067   7,773   7,089
            
Noninterest expense:           
Salaries and employee benefits  5,592   5,286   19,548   18,817
Occupancy and equipment expense  1,291   1,277   5,227   4,939
Professional fees  421   505   1,463   1,658
Data processing fees  379   325   1,487   1,355
Marketing expense  85   41   285   244
Loan acquisition and collection expense  407   362   1,368   1,458
FDIC insurance premiums  135   133   489   504
Intangible asset amortization  108   129   477   589
Other noninterest expense  978   769   3,468   3,040
Total noninterest expense  9,396   8,827   33,812   32,604
Income before income tax expense  3,411   3,350   11,723   11,136
Income tax expense  1,212   1,185   4,104   3,995
Net income$ 2,199  $2,165 $ 7,619  $7,141
            
Weighted-average shares outstanding:           
Basic  9,319,522   9,773,228   9,474,999   9,980,733
Diluted  9,342,439   9,773,228   9,484,635   9,980,733
            
Earnings per common share:           
Basic$ 0.24  $0.22 $ 0.80  $0.72
Diluted  0.24   0.22   0.80   0.72
                
Cash dividends declared per common share$ 0.01  $0.01 $ 0.04  $0.04 



NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
 Three Months Ended June 30,
 2016 2015
   Interest Average   Interest Average
 Average Income/ Yield/ Average Income/ Yield/
 Balance Expense Rate Balance Expense Rate
Assets:               
Interest-earning assets:               
Investment securities$93,289 $  230  0.99% $   103,988 $  215  0.83%
Loans (1) (2) (3)   702,513    12,455  7.13%     599,400     10,914  7.30%
Federal Home Loan Bank stock   2,570    23  3.60%    4,102    18  1.76%
Short-term investments (4)   113,636    138  0.49%     91,060    56  0.25%
Total interest-earning assets 912,008    12,846  5.67%     798,550     11,203  5.63%
Cash and due from banks   4,171          2,553     
Other non-interest earning assets 36,411          36,334     
Total assets$  952,590      $   837,437     
                
Liabilities & Stockholders' Equity:               
Interest-bearing liabilities:               
Interest-bearing deposits:               
NOW accounts$72,012 $  51  0.28% $   64,533 $  41  0.25%
Money market accounts   254,833    573  0.90%     166,690    336  0.81%
Savings accounts   36,167    12  0.13%     35,835    12  0.13%
Time deposits   356,418    1,035  1.17%     342,849     940  1.10%
Total interest-bearing deposits   719,430    1,671  0.93%     609,907    1,329  0.87%
Short-term borrowings 441    1  0.91%     1,754    8  1.83%
Borrowed funds   30,089    253  3.38%     40,259    328  3.27%
Junior subordinated debentures   8,954    175  7.86%     8,602    152  7.09%
Capital lease obligations   1,149    15  5.25%     1,384    18  5.22%
Total interest-bearing liabilities   760,063    2,115  1.12%     661,906     1,835  1.11%
                
Non-interest bearing liabilities:               
Demand deposits and escrow accounts  68,314          56,754     
Other liabilities 8,863          6,251     
Total liabilities 837,240          724,911     
Stockholders' equity   115,350          112,526     
Total liabilities and stockholders' equity$  952,590      $   837,437     
                
Net interest income   $10,731      $9,368  
                
Interest rate spread       4.55%        4.52%
Net interest margin (5)       4.73%        4.71%
                
(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)
 Year Ended June 30,
 2016 2015
   Interest Average   Interest Average
 Average Income/ Yield/ Average Income/ Yield/
 Balance Expense Rate Balance Expense Rate
Assets:               
Interest-earning assets:               
Investment securities$100,503 $  930  0.93% $   108,204 $  913  0.84%
Loans (1) (2) (3)    664,902   45,921  6.91%     561,340     43,456  7.74%
Federal Home Loan Bank stock    2,960    113  3.82%    4,102    67  1.63%
Short-term investments (4)    91,563    343  0.37%     92,354    225  0.24%
Total interest-earning assets    859,928   47,307  5.50%     766,000     44,661  5.83%
Cash and due from banks    3,596          2,704     
Other non-interest earning assets 35,607          33,741     
Total assets$   899,131      $   802,445     
                
Liabilities & Stockholders' Equity:               
Interest-bearing liabilities:               
Interest-bearing deposits:               
NOW accounts$68,304 $182  0.27% $   63,181 $  162  0.26%
Money market accounts 212,102     1,845  0.87%     133,266    1,002  0.75%
Savings accounts    36,062    48  0.13%     34,495    46  0.13%
Time deposits    349,978    3,952  1.13%     340,046    3,800  1.12%
Total interest-bearing deposits 666,446        6,027  0.90%     570,988    5,010  0.88%
Short-term borrowings    1,634    20  1.22%    2,578    29  1.12%
Borrowed funds    32,432    1,094  3.37%    45,661    1,389  3.04%
Junior subordinated debentures   8,762    651  7.43%    8,531    718  8.42%
Capital lease obligations   1,242    63  5.07%    1,457    74  5.08%
Total interest-bearing liabilities 710,516    7,855  1.11%    629,215    7,220  1.15%
                
Non-interest bearing liabilities:               
Demand deposits and escrow accounts 67,041         54,940     
Other liabilities   7,252         5,913     
Total liabilities   784,809         690,068     
Stockholders' equity   114,322         112,377     
Total liabilities and stockholders' equity$  899,131      $  802,445     
                
Net interest income   $  39,452      $37,441  
                
Interest rate spread       4.39%        4.68%
Net interest margin (5)       4.59%        4.89%
                
(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:
 June 30, 2016 March 31, 2016 December  31, 2015 September 30, 2015 June 30, 2015
Net interest income$  10,713  $  9,254  $  10,172  $  9,241  $  9,350 
Provision for loan losses   317     236     896     169     240 
Noninterest income   2,411     2,035     1,624     1,705     3,067 
Noninterest expense   9,396     8,412     8,196     7,810     8,827 
Net income   2,199     1,809     1,744     1,867     2,165 
          
Weighted average common shares outstanding:         
 Basic 9,319,522   9,456,198   9,559,369     9,562,812     9,773,228 
 Diluted 9,342,439   9,459,611   9,569,585     9,562,812     9,773,228 
Earnings per common share:         
 Basic$  0.24  $  0.19  $  0.18  $  0.20  $  0.22 
 Diluted   0.24     0.19     0.18     0.20     0.22 
Dividends per common share   0.01     0.01     0.01     0.01     0.01 
          
Return on average assets 0.93%  0.80%  0.80%  0.86%  1.04%
Return on average equity 7.67%  6.33%  6.07%  6.55%  7.72%
Net interest rate spread (1) 4.55%  4.06%  4.67%  4.25%  4.51%
Net interest margin (2) 4.73%  4.25%  4.87%  4.45%  4.70%
Efficiency ratio (3) 71.59%  74.52%  69.48%  71.35%  71.09%
Noninterest expense to average total assets 3.97%  3.70%  3.75%  3.59%  4.22%
Average interest-earning assets to average interest-bearing liabilities 119.99%  120.62%  122.48%  121.63%  120.90%
          
 As of:
 June 30, 2016 March 31, 2016 December 31, 2015 September 30, 2015 June 30, 2015
Nonperforming loans:         
Originated portfolio:         
Residential real estate$  2,613  $  3,566  $  3,263  $  3,165  $  3,021 
Commercial real estate   474     602     399     529     994 
Home equity   48     -     11     20     11 
Commercial and industrial   17      2      2      2      2  
Consumer   163     216     204     153     190 
Total originated portfolio   3,315     4,386     3,879     3,869     4,218 
Total purchased portfolio   4,512     4,364     2,221     6,939     6,532 
Total nonperforming loans   7,827     8,750     6,100     10,808     10,750 
Real estate owned and other possessed collateral, net   1,652     690     1,238     1,279     1,651 
Total nonperforming assets$  9,479  $  9,440  $  7,338  $  12,087  $  12,401 
          
Past due loans to total loans 1.00%  2.52%  2.48%  1.35%  1.08%
Nonperforming loans to total loans 1.13%  1.25%  0.90%  1.73%  1.76%
Nonperforming assets to total assets 0.96%  1.02%  0.82%  1.41%  1.46%
Allowance for loan losses to total loans 0.34%  0.32%  0.31%  0.33%  0.31%
Allowance for loan losses to nonperforming loans 30.02%  25.41%  34.90%  19.11%  17.92%
          
Commercial real estate loans to risk-based capital (4) 174.12%  217.09%  204.91%  195.50%  187.32%
Net loans to core deposits (5) 87.15%  93.48%  94.37%  91.04%  91.85%
Purchased loans to total loans, including held for sale 34.25%  33.17%  32.90%  33.82%  32.61%
Equity to total assets 11.82%  12.41%  12.82%  13.25%  13.25%
Common equity tier 1 capital ratio 17.97%  17.46%  18.11%  19.69%  19.82%
Total capital ratio (6) 20.39%  17.78%  18.43%  20.03%  20.14%
Tier 1 leverage capital ratio 13.27%  13.57%  14.31%  14.23%  14.49%
          
Total stockholders' equity$  116,591  $  114,526  $  114,613  $  113,704  $  112,727 
Less: Preferred stock   -      -      -      -      -  
Common stockholders' equity   116,591     114,526     114,613     113,704     112,727 
Less: Intangible assets (7)   (3,503)    (3,469)    (3,336)    (3,388)    (3,312)
Tangible common stockholders' equity (non-GAAP)$  113,088  $  111,057  $  111,277  $  110,316  $  109,415 
          
Common shares outstanding   9,317,473     9,330,873     9,519,729     9,592,329     9,587,883 
Book value per common share$  12.51  $  12.27  $  12.04  $  11.85  $  11.76 
Tangible book value per share (non-GAAP) (8)   12.14     11.90     11.69     11.50     11.41 
          
(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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