Northeast Bancorp
Apr 29, 2013

Northeast Bancorp Reports Third Quarter Results, Declares Dividend

LEWISTON, Maine--(BUSINESS WIRE)-- 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 for the quarter ended March 31, 2013, compared to $168 thousand for the quarter ended March 31, 2012. Net income for the nine months ended March 31, 2013 was $4.2 million, compared to $1.1 million for the nine months ended March 31, 2012. Net income for the nine months ended March 31, 2012 included $1.1 million from discontinued operations.

Net income available to common stockholders was $1.7 million, or $0.16 per diluted common share, for the quarter ended March 31, 2013, compared to $70 thousand, or $0.02 per diluted common share, for the quarter ended March 31, 2012. Net income available to common stockholders for the nine months ended March 31, 2013 was $3.9 million, or $0.37 per diluted common share, compared to $821 thousand, or $0.23 per diluted common share, for the nine months ended March 31, 2012. Weighted average shares outstanding increased to 10.4 million shares in each of the current year periods from 3.5 million shares in 2011 principally as a result of the Company's public offering of common stock in May 2012.

The Board of Directors has declared a cash dividend of $0.09 per share, payable on May 24, 2013 to shareholders of record as of May 10, 2013.

"We are pleased with our earnings performance this quarter, with strong returns in our loan purchasing division, and further growth in deposits through ableBanking," said Richard Wayne, Chief Executive Officer. "Our loan purchasing division realized $4.1 million of transactional income on loan payoffs and sales, which drove our total purchased loan return to 22.0% and our net interest margin to 5.07% for the quarter. AbleBanking, our online affinity deposit program grew deposits by $29.3 million. Asset quality remained strong with non-performing assets declining by 24% from the quarter ending December 31, 2012."

At March 31, 2013, total assets were $699.6 million, an increase of $30.4 million, or 4.5%, compared to June 30, 2012. The principal components of the year-to-date change in the balance sheet were as follows:

1.       The loan portfolio grew by $24.1 million, or 6.8%, principally due to net growth of $58.9 million in commercial loans purchased or originated by the Bank's Loan Acquisition and Servicing Group ("LASG"), offset by net amortization and payoffs of $34.8 million in the Community Banking Division loan portfolio.
 
Compared to the quarter ended December 31, 2012, the Bank's LASG loan portfolio declined $1.3 million, reflecting purchases and originations of $11.3 million and $2.8 million, respectively, offset by loan payoffs and asset sales totaling $15.4 million. Loan payoffs and asset sales during the quarter ended March 31, 2013 resulted in $4.1 million of transactional income, compared to $1.9 million in the quarter ended December 31, 2012 and $493 thousand in the quarter ended March 31, 2012.
 
As has been discussed in more detail in the Company's SEC filings, loan purchases by the LASG are subject to two regulatory conditions, which are summarized below, together with the remaining purchasing capacity available under each of these conditions:
 

Basis for Regulatory
Condition

    Condition    

Remaining Purchased Loan
Capacity at March 31, 2013

(Dollars in millions)
Total Loans Purchased loans may not exceed 40% of total loans $ 41.2
Regulatory Capital Commercial real estate loans may not exceed 300% of total risk-based capital $ 141.7
 
        To increase its capacity under the "Total Loans" regulatory condition, the Company is currently holding in its portfolio, as necessary and on a duration—matched basis, residential fixed and adjustable rate loans that would otherwise be sold in the secondary market.
 
An overview of the LASG portfolio follows:
 

    LASG Portfolio Overview
Three Months Ended March 31, 2013     Nine Months Ended March 31, 2013
Purchased     Originated     Total LASG Purchased     Originated     Total LASG
(Dollars in thousands)
Purchased or originated during the period:
Unpaid principal balance $ 13,971 $ 2,800 $ 16,771 $ 103,539 $ 15,625 $ 119,164
Net investment basis 11,340 2,827 14,167 75,553 15,652 91,205
 
Totals as of period end:
Unpaid principal balance $ 166,360 $ 17,871 $ 184,231
Net investment basis 130,502 17,904 148,406
 
Returns during the period:
Yield 17.76% 9.43% 16.84% 15.52% 9.55% 14.89%
Total Return (1) 22.02% 9.43% 20.64% 18.66% 9.55% 17.70%

(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.

     
2. Deposits increased by $83.4 million, or 19.8%, due primarily to a $68.0 million increase in deposits raised through ableBanking, the Bank's online affinity deposit platform. At March 31, 2013, ableBanking deposits stood at $70.8 million, consisting of $37.2 million of time deposits and $33.5 million of money market accounts.
 
3. Borrowings decreased by $49.9 million, or 41.2%, as a result of the repayment of structured repurchase agreements and FHLB advances.
 
4. Stockholders' equity decreased by $3.4 million, or 2.9%, primarily due to the redemption of TARP preferred stock and warrants totaling $4.3 million in the quarter ended December 31, 2012.
 

Net income increased by $1.5 million to $1.7 million for the quarter ended March 31, 2013, compared to $168 thousand for the quarter ended March 31, 2012. Operating results for the quarter included the following items of significance:

1.       Net interest income increased by $3.5 million, or 73.6%, to $8.3 million for the quarter compared to the quarter ended March 31, 2012, primarily due to growth in the purchased loan portfolio. This result is evident in the net interest margin, which increased to 5.07% for the quarter ended March 31, 2013, compared to 3.44% for the quarter ended March 31, 2012, and 4.28% for the quarter ended December 31, 2012.
 
2. The following table summarizes interest income and related yields recognized on the loan portfolios:
 
    Interest Income and Yield on Loans
Three Months Ended March 31,
2013     2012
Average     Interest     Average     Interest    
Balance Income Yield Balance Income Yield
(Dollars in thousands)
Community Banking Division $ 244,397 $ 3,529 5.86% $ 293,413 $ 4,211 5.77%
LASG:
Originated 16,167 376 9.43% 3,687 87 9.49%
Purchased   130,045   5,696 17.76%   51,677   1,572 12.23%
Total LASG   146,212   6,072 16.84%   55,364   1,659 12.05%
Total $ 390,609 $ 9,601 9.97% $ 348,777 $ 5,870 6.77%
 
Nine Months Ended March 31,
2013 2012
Average Interest Average Interest
Balance Income Yield Balance Income Yield
(Dollars in thousands)
Community Banking Division $ 257,760 $ 11,449 5.92% $ 303,064 $ 13,557 5.95%
LASG:
Originated 12,974 930 9.55% 2,637 194 9.79%
Purchased   110,151   12,830 15.52%   29,315   3,130 14.21%
Total LASG   123,125   13,760 14.89%   31,952   3,324 13.85%
Total $ 380,885 $ 25,209 8.82% $ 335,016 $ 16,881 6.71%
 

The yield on purchased loans was increased by unscheduled loan payoffs, which resulted in immediate recognition of the prepaid loans' discount in interest income. The following table details the "total return" on purchased loans, which includes transactional income of $4.1 million for the quarter and $7.8 million for the nine months ended March 31, 2013.

    Total Return on Purchased Loans
Three Months Ended March 31,
2013     2012
Income     Return (1) Income     Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion $ 3,043 9.40% $ 1,298 10.10%
Transactional income:
Gains on loan sales 1,218 3.76% 219 1.70%
Gain on sale of real estate owned 211 0.65% - 0.00%
Accelerated accretion and loan fees   2,653 8.20%   274 2.13%

Total transactional income

  4,082 12.61%   493 3.83%
Total $ 7,125 22.02% $ 1,791 13.94%
 
Nine Months Ended March 31,
2013 2012
Income Return (1) Income Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion $ 7,813 9.35% $ 2,374 10.78%
Transactional income:
Gains on loan sales 2,035 2.44% 219 0.99%
Gain on sale of real estate owned 684 0.82% - 0.00%
Other noninterest income 36 0.04% - 0.00%
Accelerated accretion and loan fees   5,017 6.01%   756 3.43%
Total transactional income   7,772 9.30%   975 4.42%
Total $ 15,585 18.66% $ 3,349 15.20%

(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.

      Net gains on the sale of portfolio loans of $1.2 million for the quarter, the result of a gain on the sale of one LASG loan, increased by $1.0 million compared to the quarter ended March 31, 2012.
 
3. No securities gains were realized during the quarter ended March 31, 2013, as compared to gains of $731 thousand realized for the quarter ended March 31, 2012.
 
4. Noninterest expense increased by $1.6 million for the current quarter, compared to the quarter ended March 31, 2012, principally due to the following:

At March 31, 2013, nonperforming assets were $7.4 million, or 1.1% of total assets, a decrease of $2.4 million from the quarter ended December 31, 2012, and an increase of $483 thousand compared to the amount at June 30, 2012.

At March 31, 2013, the Company's Tier 1 leverage ratio was 17.4%, a decrease from 19.9% at June 30, 2012, and the total risk-based capital ratio was 30.7%, a decrease from 33.3% at June 30, 2012.

Investor Call Information

Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Claire Bean, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss third quarter earnings and business outlook at 11:00 a.m. Eastern Time on Tuesday, April 30, 2013. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 52300502. 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. Northeast Bank offers traditional banking services through its Community Banking Division, which operates ten full-service branches, some with investment centers, and five loan production offices that serve individuals and businesses located in western and south-central Maine, southern New Hampshire and southeastern Massachusetts. Northeast Bank's Loan Acquisition and Servicing Group purchases and originates commercial loans for the Bank's portfolio. 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 Measure

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.

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 continuing 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; increasing 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.

IMPORTANT NOTE: Securities and Advisory Services offered through Commonwealth Financial Network, Member FINRA, SIPC, and a Registered Investment Adviser. Securities are not FDIC insured, not bank obligations or otherwise bank guaranteed and may lose value. Northeast Financial is located at 77 Middle Street, Portland, ME 04101.

NBN-F

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
       
March 31, 2013 June 30, 2012
Assets
Cash and due from banks $ 2,936 $ 2,538
Short-term investments   139,633     125,736
Total cash and cash equivalents 142,569 128,274
 
Available-for-sale securities, at fair value 128,549 133,264
Loans held for sale 7,768 9,882
 
Loans
Commercial real estate 223,440 180,735
Residential real estate 124,294 137,571
Construction 42 1,187
Commercial business 18,460 19,612
Consumer   14,075     17,149
Total loans 380,311 356,254
Less: Allowance for loan losses   1,033     824
Loans, net 379,278 355,430
 
Premises and equipment, net 10,013 9,205
Repossessed collateral, net 2,038 834
Federal Home Loan Bank and Federal Reserve Bank stock, at cost 5,121 5,473
Intangible assets, net 3,751 4,487
Bank owned life insurance 14,266 14,295
Other assets   6,224     8,052
Total assets $ 699,577   $ 669,196
 

Liabilities and Stockholders' Equity

Liabilities
Deposits
Demand $ 46,783 $ 45,323
Savings and interest checking 89,394 90,204
Money market 83,129 45,024
Time   286,280     241,637

Total deposits

505,586 422,188
 
Federal Home Loan Bank advances 33,117 43,450
Structured repurchase agreements 25,518 66,183
Short-term borrowings 2,360 1,209
Junior subordinated debentures issued to affiliated trusts 8,227 8,106
Capital lease obligation 1,783 1,911
Other liabilities   7,249     7,010
Total liabilities   583,840     550,057
 
Commitments and contingencies - -
 
Stockholders' equity

Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares
issued and outstanding at March 31, 2013; 4,227 shares issued and
outstanding at June 30, 2012; liquidation preference of $1,000 per share

0 4

Voting common stock, $1.00 par value, 25,000,000 and 13,500,000 shares
authorized at March 31, 2013 and June 30, 2012, respectively;
9,565,680 and 9,307,127 issued and outstanding at March 31, 2013 and
June 30, 2012, respectively

9,566 9,307

Non-voting common stock, $1.00 par value, 3,000,000 and 1,500,000
shares authorized at March 31, 2013 and June 30, 2012, respectively;
880,963 and 1,076,314 issued and outstanding at March 31, 2013 and
June 30, 2012, respectively

881 1,076
Additional paid-in capital 92,556 96,359
Retained earnings 13,260 12,235
Accumulated other comprehensive (loss) income   (526 )   158
Total stockholders' equity   115,737     119,139
Total liabilities and stockholders' equity $ 699,577   $ 669,196
 
NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
    Three Months Ended March 31,     Nine Months Ended March 31,
2013     2012 2013     2012
Interest and dividend income:
Interest on loans $ 9,601 $ 5,870 $ 25,209 $ 16,881
Interest on available-for-sale securities 234 422 929 1,602
Other interest and dividend income   85   60     283   176  
Total interest and dividend income   9,920   6,352     26,421   18,659  
Interest expense:
Deposits 1,084 875 3,090 2,548
Federal Home Loan Bank advances 232 256 750 772
Structured repurchase agreements 135 247 515 744
Short-term borrowings 4 7 15 15
Junior subordinated debentures issued to affiliated trusts 190 188 574 556
Obligation under capital lease agreements   22   25     69   76  
Total interest expense   1,667   1,598     5,013   4,711  
Net interest and dividend income before provision for loan losses 8,253 4,754 21,408 13,948
Provision for loan losses   346   100     821   634  
Net interest and dividend income after provision for loan losses   7,907   4,654     20,587   13,314  
Noninterest income:
Fees for other services to customers 430 326 1,202 1,036
Net securities gains 0 731 792 1,111
Gain on sales of loans held for sale 625 634 2,295 2,060
Gain on sales of portfolio loans 1,228 219 2,226 422
Gain (loss) recognized on repossessed collateral, net 230 (24 ) 681 11
Investment commissions 758 720 2,232 2,111
Bank-owned life insurance income 118 124 599 377
Other noninterest income   12   18     68   75  
Total noninterest income   3,401   2,748     10,095   7,203  
Noninterest expense:
Salaries and employee benefits 5,262 4,093 13,732 11,539
Occupancy and equipment expense 1,258 970 3,483 2,735
Professional fees 388 539 1,210 1,231
Data processing fees 306 260 858 823
Marketing expense 249 142 688 487
Loan acquisition and collection expense 352 244 1,285 798
FDIC insurance premiums 125 125 364 364
Intangible asset amortization 205 262 735 935
Other noninterest expense   686   598     2,112   1,836  
Total noninterest expense   8,831   7,233     24,467   20,748  

Income (loss) from continuing operations before income tax expense (benefit)

2,477

169

6,215

(231

)

Income tax expense (benefit)   811   15     2,000   (209 )
Net income (loss) from continuing operations $ 1,666 $ 154   $ 4,215 $ (22 )
Discontinued operations:
Income from discontinued operations $ 0 $ 0 $ 0 $ 186
Gain on sale of discontinued operations 0 22 0 1,551
Income tax expense   0   8     0   600  
Net income from discontinued operations $ 0 $ 14   $ 0 $ 1,137  
Net income $ 1,666 $ 168   $ 4,215 $ 1,115  
Net income available to common stockholders $ 1,666 $ 70   $ 3,860 $ 821  
Weighted-average shares outstanding:
Basic 10,425,576 3,494,498 10,397,280 3,494,498
Diluted 10,425,576 3,512,273 10,397,280 3,494,498
Earnings per common share:
Basic:
Income (loss) from continuing operations $ 0.16 $ 0.02 $ 0.37 $ (0.09 )
Income from discontinued operations   0.00   0.00     0.00   0.32  
Net income $ 0.16 $ 0.02   $ 0.37 $ 0.23  
Diluted:
Income (loss) from continuing operations $ 0.16 $ 0.02 $ 0.37 $ (0.09 )
Income from discontinued operations   0.00   0.00     0.00   0.32  
Net income $ 0.16 $ 0.02   $ 0.37 $ 0.23  
Cash dividends declared per common share $ 0.09 $ 0.09   $ 0.27 $ 0.27  
 
NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
    Three Months Ended March 31,
2013     2012
    Interest     Average     Interest     Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
(Dollars in thousands)
Assets:
Interest-earning assets:
Investment securities (1) $ 131,006 $ 234 0.72 % $ 132,681 $ 422 1.28 %
Loans (2) (3) 390,609 9,601 9.97 % 348,777 5,870 6.77 %
Regulatory stock 5,391 4 0.30 % 5,697 15 1.06 %
Short-term investments (4)   133,025   81 0.25 %   67,887   45 0.27 %
Total interest-earning assets   660,031   9,920 6.10 %   555,042   6,352 4.60 %
Cash and due from banks 3,184 2,881
Other non-interest earning assets   36,694   35,651
Total assets $ 699,909 $ 593,574
 
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
NOW accounts $ 55,068 $ 36 0.27 % $ 54,242 $ 48 0.36 %
Money market accounts 70,613 102 0.59 % 43,602 38 0.35 %
Savings accounts 32,464 11 0.14 % 32,923 12 0.15 %
Time deposits   297,555   935 1.27 %   227,182   777 1.38 %
Total interest-bearing deposits 455,700 1,084 0.96 % 357,949 875 0.98 %
Short-term borrowings 1,889 4 0.86 % 1,321 7 2.13 %
Borrowed funds 64,212 389 2.46 % 112,468 528 1.89 %
Junior subordinated debentures   8,205   190 9.39 %   8,047   188 9.40 %
Total interest-bearing liabilities   530,006   1,667 1.28 %   479,785   1,598 1.34 %
 
Interest-bearing liabilities of discontinued operations (5) 0 0
 
Non-interest bearing liabilities:
Demand deposits and escrow accounts 48,426 44,249
Other liabilities   5,921   3,972
Total liabilities 584,353 528,006
Stockholders' equity   115,556   65,568
Total liabilities and stockholders' equity $ 699,909 $ 593,574
 
Net interest income $ 8,253 $ 4,754
 
Interest rate spread 4.82 % 3.26 %
Net interest margin (6) 5.07 % 3.44 %
 

(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) The average balance of borrowings associated with discontinued operations has been excluded from interest expense, interest rate spread, and net interest margin.
(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)
    Nine Months Ended March 31,
2013     2012
    Interest     Average     Interest     Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
(Dollars in thousands)
Assets:
Interest-earning assets:
Investment securities (1) $ 132,835 $ 929 0.93 % $ 139,834 $ 1,602 1.52 %
Loans (2) (3) 380,885 25,209 8.82 % 335,016 16,881 6.71 %
Regulatory stock 5,446 42 1.03 % 5,740 48 1.11 %
Short-term investments (4)   130,991   241 0.25 %   71,243   128 0.24 %
Total interest-earning assets   650,157   26,421 5.41 %   551,833   18,659 4.50 %
Cash and due from banks 3,094 2,927
Other non-interest earning assets   37,571   37,143
Total assets $ 690,822 $ 591,903
 
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
NOW accounts $ 55,468 $ 116 0.28 % $ 55,080 $ 170 0.41 %
Money market accounts 56,739 221 0.52 % 44,613 130 0.39 %
Savings accounts 31,631 32 0.13 % 32,907 56 0.23 %
Time deposits   283,287   2,721 1.28 %   221,127   2,192 1.32 %
Total interest-bearing deposits 427,125 3,090 0.96 % 353,727 2,548 0.96 %
Short-term borrowings 1,397 15 1.43 % 1,030 15 1.94 %
Borrowed funds 81,183 1,334 2.19 % 113,109 1,592 1.87 %
Junior subordinated debentures   8,164   574 9.37 %   8,009   556 9.24 %
Total interest-bearing liabilities   517,869   5,013 1.29 %   475,875   4,711 1.32 %
 
Interest-bearing liabilities of discontinued operations (5) 0 380
 
Non-interest bearing liabilities:
Demand deposits and escrow accounts 50,192 45,771
Other liabilities   5,636   4,267
Total liabilities 573,697 526,293
Stockholders' equity   117,125   65,610
Total liabilities and stockholders' equity $ 690,822 $ 591,903
 
Net interest income $ 21,408 $ 13,948
 
Interest rate spread 4.12 % 3.18 %
Net interest margin (6) 4.39 % 3.36 %
 

(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) The average balance of borrowings associated with discontinued operations has been excluded from interest expense, interest rate spread, and net interest margin.
(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
March 31, 2013     December 31, 2012     September 30, 2012     June 30, 2012     March 31, 2012
Net interest income $ 8,253 $ 7,057 $ 6,098 $ 6,749 $ 4,754
Provision for loan losses 346 247 228 312 100
Noninterest income 3,401 3,544 3,150 2,464 2,748
Noninterest expense 8,831 8,132 7,502 7,473 7,233
Net income from discontinued operations 0 0 0 10 14
Net income 1,666 1,517 1,034 1,048 168
 
Weighted average common shares outstanding:
Basic 10,425,576 10,383,441 10,383,441 6,605,465 3,494,498
Diluted 10,425,576 10,383,441 10,383,441 6,607,171 3,512,273
Earnings per common share:
Basic $ 0.16 $ 0.12 $ 0.09 $ 0.14 $ 0.02
Diluted 0.16 0.12 0.09 0.14 0.02
Dividends per common share 0.09 0.09 0.09 0.09 0.09
 
Return on average assets 0.97 % 0.87 % 0.61 % 0.68 % 0.11 %
Return on average equity 5.85 % 5.15 % 3.45 % 4.74 % 1.03 %
Net interest rate spread (1) 4.82 % 4.02 % 3.52 % 4.41 % 3.26 %
Net interest margin (2) 5.07 % 4.28 % 3.80 % 4.63 % 3.44 %
Efficiency ratio (3) 75.78 % 76.71 % 81.12 % 81.11 % 96.42 %
Noninterest expense to average total assets 5.12 % 4.64 % 4.39 % 4.82 % 4.91 %

Average interest-earning assets to average interest-bearing liabilities

 

124.53 % 125.48 % 126.65 % 120.51 % 115.69 %
 
As of
Nonperforming loans: March 31, 2013 December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012
Originated portfolio:
Residential real estate $ 2,296 $ 3,512 $ 3,184 $ 3,090 $ 3,067
Commercial real estate 631 624 626 417 442
Construction 0 0 0 0 0
Home equity 405 620 289 220 255
Commercial business 103 123 133 1,008 1,108
Consumer   258     166     181     324     309  
3,693 5,045 4,413 5,059 5,181
Purchased portfolio:
Residential real estate 0 0 0 0 0
Commercial real estate 1,700 2,144 667 1,055 0
Commercial business   0     0     0     0     0  
  1,700     2,144     667     1,055     0  
Total nonperforming loans 5,393 7,189 5,080 6,114 5,181
Repossessed collateral   2,038     2,633     2,645     834     915  
Total nonperforming assets $ 7,431   $ 9,822   $ 7,725   $ 6,948   $ 6,096  
 
Past due loans to total loans 2.00 % 2.52 % 1.65 % 1.95 % 2.06 %
Nonperforming loans to total loans 1.42 % 1.83 % 1.35 % 1.72 % 1.50 %
Nonperforming assets to total assets 1.06 % 1.39 % 1.15 % 1.04 % 1.02 %
Allowance for loan losses to total loans 0.27 % 0.22 % 0.18 % 0.23 % 0.22 %
Allowance for loan losses to nonperforming loans 19.15 % 12.17 % 13.15 % 13.48 % 14.44 %
 
Commercial real estate loans to risk-based capital (4) 184.40 % 193.74 % 167.62 % 148.28 % 238.25 %
Net loans to core deposits (5) 77.72 % 81.01 % 86.69 % 88.29 % 88.65 %
Purchased loans to total loans, including held for sale 33.63 % 33.36 % 27.68 % 23.07 % 16.16 %
Equity to total assets 16.54 % 16.31 % 17.72 % 17.83 % 10.90 %
Tier 1 leverage capital ratio 17.41 % 17.44 % 18.37 % 19.91 % 11.85 %
Total risk-based capital ratio 30.71 % 29.35 % 31.32 % 33.34 % 19.49 %
 
Total stockholders' equity $ 115,737 $ 114,931 $ 118,857 $ 119,139 $ 64,870
Less: Preferred stock   0     0     (4,227 )   (4,227 )   (4,227 )
Common stockholders' equity $ 115,737 114,931 114,630 114,912 60,643
Less: Intangible assets   (3,751 )   (3,957 )   (4,222 )   (4,487 )   (4,749 )
Tangible common stockholders' equity (non-GAAP) $ 111,986   $ 110,974   $ 110,408   $ 110,425   $ 55,894  
 
Common shares outstanding 10,446,643 10,383,441 10,383,441 10,383,441 3,507,524
Book value per common share $ 11.08 $ 11.07 $ 11.04 $ 11.07 $ 17.29
Tangible book value per share (non-GAAP) (6) $ 10.72 $ 10.69 $ 10.63 $ 10.63 $ 15.94
 

(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 those loans defined as such by regulatory guidance, including all land development and construction loans.
(5) Core deposits includes all non-maturity deposits and maturity deposits less than $250 thousand. Net loans includes loans held-for-sale.
(6) Tangible book value per share represents total stockholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.

Northeast Bank
Claire S. Bean, 207-786-3245 ext. 3202
CFO & COO
www.northeastbank.com

Source: Northeast Bancorp

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