LEWISTON, Maine, July 30, 2018 (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 $4.3 million, or $0.48 per diluted common share, for the quarter ended June 30, 2018, compared to net income of $4.0 million, or $0.45 per diluted common share, for the quarter ended June 30, 2017. Net income for the year ended June 30, 2018 was $16.2 million, or $1.77 per diluted common share, compared to $12.3 million, or $1.38 per diluted common share, for the year ended June 30, 2017.

On July 30, 2018, the Board of Directors declared a cash dividend of $0.01 per share, payable on August 24, 2018, to shareholders of record as of August 10, 2018.

“We closed the year with a strong quarter,” said Richard Wayne, President and Chief Executive Officer. “For the quarter, we earned $0.48 per diluted common share, a return on equity of 13.0%, a return on assets of 1.5%, and an efficiency ratio of 57.9%. For the fiscal year, we earned $1.77 per diluted common share, compared to $1.38 for the prior fiscal year, representing an increase of 28%. For the quarter, our Loan Acquisition and Servicing Group ("LASG") produced $119.2 million of loans, including originations of $66.6 million and purchases with a recorded investment of $52.6 million. This represents quarterly net growth in the LASG portfolio of $51.6 million, or 8.1%, and annual net growth of $111.4 million, or 19.3%.”

As of June 30, 2018, total assets were $1.2 billion, an increase of $80.9 million, or 7.5%, from total assets of $1.1 billion as of June 30, 2017. The principal components of the change in the balance sheet follow:

1. The following table highlights the changes in the loan portfolio for the three months and year ended June 30, 2018 compared to the same periods in the prior year:

	Loan Portfolio Changes
	Three Months Ended June 30, 2018
	June 30, 2018 Balance			March 31, 2018 Balance					Change ($)								Change (%)
	(Dollars in thousands)
LASG Purchased	$	290,972		$	254,700				$		36,272								14.24				%
LASG Originated		397,363			381,990						15,373								4.02				%
SBA		60,156			50,583						9,573								18.93				%
Community Banking		123,311			129,156						(5,845				)				(4.53				%)
Total	$	871,802		$	816,429				$		55,373								6.78				%
	Year Ended June 30, 2018
	June 30, 2018 Balance			June 30, 2017 Balance					Change ($)								Change (%)
	(Dollars in thousands)
LASG Purchased	$	290,972		$	246,388					$	44,584						18.10				%
LASG Originated		397,363			330,515						66,848						20.23				%
SBA		60,156			52,965						7,191						13.58				%
Community Banking		123,311			149,327						(26,016				)		(17.42				%)
Total	$	871,802		$	779,195					$	92,607						11.88				%

Loans generated by the Bank's Loan Acquisition and Servicing Group ("LASG") for the quarter ended June 30, 2018 totaled $119.2 million, which consisted of $52.6 million of purchased loans, at an average price of 93.6% of unpaid principal balance, and $66.6 million of originated loans. The Bank's Small Business Administration ("SBA") Division closed $23.9 million and funded $21.3 million of new loans during the quarter ended June 30, 2018. In addition, the Company sold $10.9 million of the guaranteed portion of SBA loans in the secondary market, of which $7.5 million were originated in the current quarter and $3.4 million were originated or purchased in prior quarters. Residential loan production sold in the secondary market totaled $10.7 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, 2018
				(Dollars in millions)
Total Loans		Purchased loans may not exceed 40% of total loans		$	101.0
Regulatory Capital		Non-owner occupied commercial real estate loans may not exceed 300% of total capital		$	166.3

An overview of the Bank’s LASG portfolio follows:

	LASG Portfolio
	Three Months Ended June 30,
	2018														2017
	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	$	56,233		$	66,588		$		-		$	122,821			$		50,202			$		67,860			$			-		$	118,062
Net investment basis		52,637			66,588				-			119,225					45,060					67,860						-			112,920
Loan returns during the period:
Yield		10.87	%		7.45	%			0.00	%		8.83	%				13.64		%			6.45		%				0.00	%		9.61	%
Total Return (1)		11.49	%		7.45	%			0.00	%		9.08	%				13.78		%			6.45		%				0.00	%		9.68	%

 

	Twelve Months Ended June 30,
	2018																			2017
	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	$	137,249		$	224,546			$	-		$		361,795							$	126,713			$	237,691			$	-			$	364,404
Net investment basis		124,111			224,546				-				348,657								112,807				237,691				-				350,498
Loan returns during the period:
Yield		11.35	%		6.80		%		0.00	%			8.66	%							12.24	%			6.21	%			0.82	%			8.69		%
Total Return (1)		11.73	%		6.80		%		0.00	%			8.82	%							12.30	%			6.21	%			0.82	%			8.72		%
Total loans as of period end:
Unpaid principal balance	$	326,855		$	397,363			$	-		$		724,218							$	279,854			$	330,515			$	-			$	610,369
Net investment basis		290,972			397,363				-				688,335								246,388				330,515				-				576,903

(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, which includes purchased loans held for sale, on an annualized basis.  The total return on purchased loans does not include the effect of purchased loan charge-offs or recoveries during the period. Total return on purchased loans is considered a non-GAAP financial measure.

2. Deposits increased by $65.1 million, or 7.3%, from June 30, 2017 to June 30, 2018, attributable primarily to increases in money market accounts of $46.3 million, or 12.4%, and time deposits of $15.1 million, or 4.5%.
    
3. Shareholders’ equity increased by $15.6 million, or 12.7%, from June 30, 2017 to June 30, 2018, primarily due to earnings of $16.2 million. Earnings were partially offset by stock option exercises which decreased additional paid-in-capital by $1.2 million. Additionally, there was stock based compensation of $870 thousand, an increase in accumulated other comprehensive loss of $129 thousand, and dividends paid on common stock of $355 thousand.

Net income increased by $317 thousand to $4.3 million for the quarter ended June 30, 2018, compared to net income of $4.0 million for the quarter ended June 30, 2017.

1. Net interest and dividend income before provision for loan losses increased by $651 thousand for the quarter ended June 30, 2018, compared to the quarter ended June 30, 2017. The increase is primarily due to higher average balances in the loan portfolio. These increases were partially offset by higher funding costs and higher average deposit balances.

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,
		2018									2017
		Average			Interest						Average			Interest
		Balance (1)			Income			Yield			Balance (1)			Income			Yield
		(Dollars in thousands)
Community Banking		$	128,296		$	1,630		5.10	%		$	163,997		$	1,949		4.77	%
SBA			56,088			1,116		7.98	%			55,229			848		6.16	%
LASG:
Originated			381,783			7,088		7.45	%			301,988			4,859		6.45	%
Purchased			259,119			7,021		10.87	%			237,306			8,068		13.64	%
Total LASG			640,902			14,109		8.83	%			539,294			12,927		9.61	%
Total		$	825,286		$	16,855		8.19	%		$	758,520		$	15,724		8.31	%
									Year Ended June 30,
		2018									2017
		Average			Interest						Average			Interest
		Balance (1)			Income			Yield			Balance (1)			Income			Yield
		(Dollars in thousands)
Community Banking		$	139,239		$	6,871		4.93	%		$	190,704		$	9,102		4.77	%
SBA			53,030			3,888		7.33	%			42,946			2,619		6.10	%
LASG:
Originated			350,427			23,834		6.80	%			239,796			14,883		6.21	%
Purchased			242,652			27,553		11.35	%			236,937			28,997		12.24	%
Secured Loans to Broker-Dealers			-			-		0.00	%			31,085			256		0.82	%
Total LASG			593,079			51,387		8.66	%			507,818			44,136		8.69	%
Total		$	785,348		$	62,146		7.91	%		$	741,468		$	55,857		7.53	%
	(1) Includes loans held for sale.

The components of total income on purchased loans are set forth in the table below entitled “Total Return on Purchased Loans.” Wh­en compared to the three months and year ended June 30, 2017, transactional income for the three months and year ended June 30, 2018 decreased by $1.2 million and $439 thousand, respectively. The total return on p­­­­­­­­urchased loans for the three months and year ended June 30, 2018 was 11.49% and 11.73%, respectively. The decrease over the prior comparable periods was primarily due to higher accelerated accretion in the three months and year ended June 30, 2017. The following table details the total return on purchased loans:

	Total Return on Purchased Loans
	Three Months Ended June 30,
	2018						2017
	Income			Return (1)			Income				Return (1)
	(Dollars in thousands)
Regularly scheduled interest and accretion	$	5,043		7.81%			$	4,588			7.76%
Transactional income:
Gain on loan sales		402		0.62%				-			0.00%
Gain on sale of real estate owned		-		0.00%				93			0.16%
Other noninterest income (expense)		-		0.00%				(10	)		-0.02%
Accelerated accretion and loan fees		1,978		3.06%				3,480			5.88%
Total transactional income		2,380		3.68%				3,563			6.02%
Total	$	7,423		11.49%			$	8,151			13.78%

 

	Year Ended June 30,
	2018						2017
	Income			Return (1)			Income				Return (1)
	(Dollars in thousands)
Regularly scheduled interest and accretion	$	18,752		7.73%			$	18,975			8.01%
Transactional income:
Gain on loan sales		918		0.38%				-			0.00%
Gain on sale of real estate owned		-		0.00%				148			0.06%
Other noninterest income (expense)		-		0.00%				(12	)		0.00%
Accelerated accretion and loan fees		8,801		3.62%				10,022			4.23%
Total transactional income		9,719		4.00%				10,158			4.29%
Total	$	28,471		11.73%			$	29,133			12.30%

(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, which includes purchased loans held for sale, on an annualized basis.  The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter. Total return is considered a non-GAAP financial measure.

2. Noninterest income decreased by $931 thousand for the quarter ended June 30, 2018, compared to the quarter ended June 30, 2017, principally due to the following:

• A decrease in gain on sale of SBA loans of $833 thousand, due to a lower volume of SBA loans sold in the quarter;
• A decrease in fees for other services to customers of $161 thousand, due to lower commercial loan servicing fees; and
• A decrease in gain on sale of residential loans of $134 thousand, due to lower volume of residential loans sold in the quarter.
• The decreases in noninterest income were partially offset by an increase in gain on sale of other loans of $402 thousand, due to the sale of two LASG purchased loans in the quarter. 

3. Noninterest expense increased by $114 thousand for the quarter ended June 30, 2018, compared to the quarter ended June 30, 2017, primarily due to the following:

• An increase in data processing fees of $142 thousand, primarily due to the increased cost associated with the outsourcing of data processing;
• An increase in loan expense of $123 thousand, largely driven by higher expense related to loan acquisition and refinance activity; and
• An increase in other noninterest expense of $43 thousand, primarily due to increased travel expense.
• The increases in noninterest expense were partially offset by a decrease in salaries and employee benefits of $219 thousand, primarily due to lower headcount, and a decrease in incentive compensation for the quarter.   

4. Income tax expense decreased by $576 thousand for the quarter ended June 30, 2018, compared to the quarter ended June 30, 2017, primarily due to the following:

• A decrease in the federal corporate income tax rate as a result of the Tax Cuts and Jobs Act signed into law on December 22, 2017, which resulted in a $464 thousand decrease in federal income tax expense; and
• A decrease in income tax expense as a result of a $114 thousand income tax benefit arising from the treatment of stock options exercised under ASU 2016-09, Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, whereby the tax effects of exercised options are treated as a discrete item in the reporting period in which they occur.

As of June 30, 2018, nonperforming assets totaled $14.2 million, or 1.23% of total assets, as compared to $14.6 million, or 1.25% of total assets, as of March 31, 2018, and $14.8 million, or 1.37% of total assets, as of June 30, 2017.

As of June 30, 2018, past due loans totaled $7.7 million, or 0.89% of total loans, as compared to $11.2 million, or 1.37% of total loans as of March 31, 2018, and $13.4 million, or 1.72% of total loans as of June 30, 2017.

As of June 30, 2018, the Company’s Tier 1 leverage capital ratio was 13.1%, compared to 12.8% at June 30, 2017, and the Total capital ratio was 19.3%, compared to 19.5% at June 30, 2017.

Investor Call Information
Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Jean-Pierre Lapointe, 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 Tuesday, July 31st. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 5291318. 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 personal and business banking services to the Maine market via ten branches. Our Loan Acquisition and Servicing Group purchases and originates commercial loans on a nationwide basis and our SBA Division supports the needs of growing businesses nationally. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found 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 shareholders’ equity, tangible book value per share, total return on purchased loans, and efficiency ratio. 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; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; 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.

 

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
	June 30, 2018				June 30, 2017
Assets
Cash and due from banks	$	3,889			$	3,582
Short-term investments		153,513				159,701
Total cash and cash equivalents		157,402				163,283
Available-for-sale securities, at fair value		87,687				96,693
Residential real estate loans held for sale		3,405				4,508
SBA loans held for sale		3,750				191
Total loans held for sale		7,155				4,699
Loans
Commercial real estate		579,450				498,004
Commercial and industrial		188,852				175,654
Residential real estate		100,256				101,168
Consumer		3,244				4,369
Total loans		871,802				779,195
Less: Allowance for loan losses		4,807				3,665
Loans, net		866,995				775,530
Premises and equipment, net		6,591				6,937
Real estate owned and other repossessed collateral, net		2,233				826
Federal Home Loan Bank stock, at cost		1,652				1,938
Intangible assets, net		867				1,300
Loan servicing rights, net		2,970				2,846
Bank-owned life insurance		16,620				16,179
Other assets		7,564				6,643
Total assets	$	1,157,736			$	1,076,874
Liabilities and Shareholders' Equity
Deposits
Demand	$	72,272			$	69,827
Savings and interest checking		109,637				108,417
Money market		420,886				374,569
Time		352,145				337,037
Total deposits		954,940				889,850
Federal Home Loan Bank advances		15,000				20,011
Subordinated debt		23,958				23,620
Capital lease obligation		605				873
Other liabilities		24,803				19,723
Total liabilities		1,019,306				954,077
Commitments and contingencies		-				-
Shareholders' equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares
issued and outstanding at June 30, 2018 and June 30, 2017		-				-
Voting common stock, $1.00 par value, 25,000,000 shares authorized;
8,056,527 and 7,840,460 shares issued and outstanding
at June 30, 2018 and June 30, 2017, respectively		8,057				7,841
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;
882,314 and 991,194 shares issued and outstanding at June 30, 2018 and June 30, 2017, respectively		882				991
Additional paid-in capital		77,016				77,455
Retained earnings		54,236				38,142
Accumulated other comprehensive loss		(1,761)				(1,632)
Total shareholders' equity		138,430				122,797
Total liabilities and shareholders' equity	$	1,157,736			$	1,076,874

 

 

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,
	2018				2017						2018				2017
Interest and dividend income:
Interest and fees on loans	$	16,855			$	15,724					$	62,146			$	55,857
Interest on available-for-sale securities		298				271						1,111				1,018
Other interest and dividend income		819				376						2,636				1,046
Total interest and dividend income		17,972				16,371						65,893				57,921
Interest expense:
Deposits		2,896				1,949						9,897				7,357
Federal Home Loan Bank advances		109				166						547				800
Subordinated debt		552				487						2,102				1,888
Obligation under capital lease agreements		7				12						38				51
Total interest expense		3,564				2,614						12,584				10,096
Net interest and dividend income before provision for loan losses		14,408				13,757						53,309				47,825
Provision for loan losses		254				389						1,410				1,594
Net interest and dividend income after provision for loan losses		14,154				13,368						51,899				46,231
Noninterest income:
Fees for other services to customers		386				547						1,822				1,952
Gain on sales of residential loans held for sale		159				293						931				1,452
Gain on sales of SBA loans		1,033				1,866						2,955				5,277
Gain on sales of other loans		402				-						918				365
Loss on real estate owned, other repossessed collateral and premises and equipment, net		(138	)			(31		)				(123	)			(23		)
Bank-owned life insurance income		109				114						441				454
Other noninterest income		8				101						84				219
Total noninterest income		1,959				2,890						7,028				9,696
Noninterest expense:
Salaries and employee benefits		5,809				6,028						21,565				21,706
Occupancy and equipment expense		1,166				1,222						4,585				5,002
Professional fees		458				401						1,749				1,666
Data processing fees		601				459						2,447				1,744
Marketing expense		143				120						472				392
Loan acquisition and collection expense		356				233						1,354				1,734
FDIC insurance premiums		80				79						317				303
Intangible asset amortization		108				108						433				432
Other noninterest expense		757				714						2,808				2,810
Total noninterest expense		9,478				9,364						35,730				35,789
Income before income tax expense		6,635				6,894						23,197				20,138
Income tax expense		2,291				2,867						7,031				7,799
Net income	$	4,344			$	4,027					$	16,166			$	12,339
Weighted-average common shares outstanding:
Basic		8,934,038				8,823,679						8,906,710				8,898,448
Diluted		9,116,157				8,979,471						9,129,152				8,952,614
Earnings per common share:
Basic	$	0.49			$	0.46					$	1.81			$	1.39
Diluted		0.48				0.45						1.77				1.38
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,
	2018									2017
				Interest			Average						Interest			Average
	Average			Income/			Yield/			Average			Income/			Yield/
	Balance			Expense			Rate			Balance			Expense			Rate
Assets:
Interest-earning assets:
Investment securities	$	88,933		$	298		1.34%			$	98,033		$	271		1.11	%
Loans (1) (2) (3)		825,286			16,855		8.19%				758,520			15,741		8.32	%
Federal Home Loan Bank stock		1,655			24		5.82%				1,938			19		3.93	%
Short-term investments (4)		178,244			795		1.79%				137,570			357		1.04	%
Total interest-earning assets		1,094,118			17,972		6.59%				996,061			16,388		6.60	%
Cash and due from banks		2,611									2,753
Other non-interest earning assets		30,430									31,910
Total assets	$	1,127,159								$	1,030,724
Liabilities & Shareholders' Equity:
Interest-bearing liabilities:
NOW accounts	$	73,357		$	59		0.32%			$	71,209		$	51		0.29	%
Money market accounts		447,775			1,580		1.42%				345,352			878		1.02	%
Savings accounts		37,799			14		0.15%				37,863			13		0.14	%
Time deposits		309,362			1,243		1.61%				323,399			1,007		1.25	%
Total interest-bearing deposits		868,293			2,896		1.34%				777,823			1,949		1.01	%
Federal Home Loan Bank advances		15,000			109		2.91%				20,014			166		3.33	%
Subordinated debt		23,915			552		9.26%				23,579			487		8.28	%
Capital lease obligations		629			7		4.46%				896			12		5.37	%
Total interest-bearing liabilities		907,837			3,564		1.57%				822,312			2,614		1.28	%
Non-interest bearing liabilities:
Demand deposits and escrow accounts		76,368									80,188
Other liabilities		8,654									7,181
Total liabilities		992,859									909,681
Shareholders' equity		134,300									121,043
Total liabilities and shareholders' equity	$	1,127,159								$	1,030,724
Net interest income (5)				$	14,408								$	13,774
Interest rate spread							5.02%									5.32	%
Net interest margin (6)							5.28%									5.55	%
(1)  Interest income and yield are stated on a fully tax-equivalent basis using the statutory 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)  Includes tax-exempt interest income of $0 and $17 thousand for the three months ended June 30, 2018 and June 30, 2017, respectively.
(6)  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,
	2018									2017
				Interest			Average						Interest			Average
	Average			Income/			Yield/			Average			Income/			Yield/
	Balance			Expense			Rate			Balance			Expense			Rate
Assets:
Interest-earning assets:
Investment securities	$	92,599		$	1,111		1.20%			$	95,624		$	1,018		1.06	%
Loans (1) (2) (3)		785,348			62,156		7.91%				741,468			55,928		7.54	%
Federal Home Loan Bank stock		1,803			89		4.94%				2,172			90		4.14	%
Short-term investments (4)		171,360			2,547		1.49%				133,599			956		0.72	%
Total interest-earning assets		1,051,110			65,903		6.27%				972,863			57,992		5.96	%
Cash and due from banks		2,889									2,833
Other non-interest earning assets		31,550									32,394
Total assets	$	1,085,549								$	1,008,090
Liabilities & Shareholders' Equity:
Interest-bearing liabilities:
NOW accounts	$	70,486		$	210		0.30%			$	70,912		$	204		0.29	%
Money market accounts		407,680			5,145		1.26%				322,011			3,120		0.97	%
Savings accounts		37,514			57		0.15%				36,438			50		0.14	%
Time deposits		311,544			4,485		1.44%				326,601			3,983		1.22	%
Total interest-bearing deposits		827,224			9,897		1.20%				755,962			7,357		0.97	%
Federal Home Loan Bank advances		16,947			547		3.23%				24,334			800		3.29	%
Subordinated debt		23,787			2,102		8.84%				23,468			1,888		8.04	%
Capital lease obligations		730			38		5.21%				992			51		5.14	%
Total interest-bearing liabilities		868,688			12,584		1.45%				804,756			10,096		1.25	%
Non-interest bearing liabilities:
Demand deposits and escrow accounts		79,767									79,560
Other liabilities		7,472									7,599
Total liabilities		955,927									891,915
Shareholders' equity		129,622									116,175
Total liabilities and shareholders' equity	$	1,085,549								$	1,008,090
Net interest income (5)				$	53,319								$	47,896
Interest rate spread							4.82%									4.71	%
Net interest margin (6)							5.07%									4.92	%
(1)  Interest income and yield are stated on a fully tax-equivalent basis using the statutory 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)  Includes tax-exempt interest income of $10 thousand and $71 thousand for the year ended June 30, 2018 and June 30, 2017, respectively.
(6)  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, 2018				March 31, 2018				December 31, 2017				September 30, 2017				June 30, 2017
Net interest income	$	14,408			$	13,134			$	12,457			$	13,311			$	13,757
Provision for loan losses		254				364				437				354				389
Noninterest income		1,959				1,882				1,228				1,958				2,890
Noninterest expense		9,478				8,975				8,563				8,714				9,364
Net income		4,344				3,932				3,304				4,586				4,027
Weighted-average common shares outstanding:
Basic		8,934,038				8,927,544				8,924,495				8,841,511				8,823,679
Diluted		9,116,157				9,143,177				9,168,084				9,089,936				8,979,471
Earnings per common share:
Basic	$	0.49			$	0.44			$	0.37			$	0.52			$	0.46
Diluted		0.48				0.43				0.36				0.50				0.45
Dividends per common share		0.01				0.01				0.01				0.01				0.01
Return on average assets		1.55	%			1.43	%			1.26	%			1.71	%			1.57	%
Return on average equity		12.97	%			12.15	%			10.20	%			14.61	%			13.34	%
Net interest rate spread (1)		5.02	%			4.69	%			4.68	%			4.89	%			5.32	%
Net interest margin (2)		5.28	%			4.94	%			4.93	%			5.13	%			5.55	%
Efficiency ratio (non-GAAP) (3)		57.91	%			59.77	%			62.57	%			57.07	%			56.25	%
Noninterest expense to average total assets		3.37	%			3.27	%			3.27	%			3.25	%			3.64	%
Average interest-earning assets to average interest-bearing liabilities		120.52	%			120.27	%			122.21	%			121.09	%			121.13	%
	As of:
	June 30,2018				March 31, 2018				December 31, 2017				September 30, 2017				June 30, 2017
Nonperforming loans:
Originated portfolio:
Residential real estate	$	2,914			$	3,116			$	3,783			$	3,667			$	3,337
Commercial real estate		1,499				1,408				2,537				2,409				413
Home equity		298				255				107				58				58
Commercial and industrial		1,368				636				2,555				2,629				2,600
Consumer		134				136				147				131				103
Total originated portfolio		6,213				5,551				9,129				8,894				6,511
Total purchased portfolio		5,745				8,063				8,962				7,758				7,452
Total nonperforming loans		11,958				13,614				18,091				16,652				13,963
Real estate owned and other repossessed collateral, net		2,233				947				910				2,040				826
Total nonperforming assets	$	14,191			$	14,561			$	19,001			$	18,692			$	14,789
Past due loans to total loans		0.89	%			1.37	%			3.87	%			1.60	%			1.72	%
Nonperforming loans to total loans		1.37	%			1.67	%			2.34	%			2.19	%			1.79	%
Nonperforming assets to total assets		1.23	%			1.25	%			1.84	%			1.78	%			1.37	%
Allowance for loan losses to total loans		0.55	%			0.57	%			0.56	%			0.53	%			0.47	%
Allowance for loan losses to nonperforming loans		40.20	%			34.46	%			24.07	%			24.23	%			26.25	%
Commercial real estate loans to risk-based capital (4)		200.74	%			186.07	%			187.92	%			166.15	%			181.23	%
Net loans to core deposits (5)		91.54	%			83.65	%			91.46	%			88.68	%			87.68	%
Purchased loans to total loans, including held for sale		33.10	%			31.02	%			31.28	%			30.11	%			31.43	%
Equity to total assets		11.96	%			11.47	%			12.57	%			12.07	%			11.40	%
Common equity tier 1 capital ratio		16.02	%			16.48	%			16.74	%			16.50	%			16.00	%
Total capital ratio		19.28	%			19.92	%			20.30	%			20.04	%			19.48	%
Tier 1 leverage capital ratio		13.12	%			12.88	%			13.41	%			12.77	%			12.81	%
Total shareholders' equity	$	138,430			$	133,787			$	130,003			$	126,712			$	122,797
Less: Preferred stock		-				-				-				-				-
Common shareholders' equity		138,430				133,787				130,003				126,712				122,797
Less: Intangible assets (6)		(3,837	)			(3,973	)			(4,087	)			(4,146	)			(4,146	)
Tangible common shareholders' equity (non-GAAP)	$	134,593			$	129,814			$	125,916			$	122,566			$	118,651
Common shares outstanding		8,938,841				8,925,399				8,939,273				8,890,353				8,831,654
Book value per common share	$	15.49			$	14.99			$	14.54			$	14.25			$	13.90
Tangible book value per share (non-GAAP) (7)		15.06				14.54				14.09				13.79				13.43
(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 noninterest expense divided by the sum of net interest income (before the loan loss provision) plus noninterest 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) Includes the core deposit intangible asset and loan servicing rights asset.
(7) Tangible book value per share represents total shareholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.

For More Information:

Jean-Pierre Lapointe, Chief Financial Officer
Northeast Bank, 500 Canal Street, Lewiston, ME 04240
207.786.3245 ext. 3220
www.northeastbank.com

 

Source: Northeast Bancorp