Northeast Bancorp
Oct 26, 2016

Northeast Bancorp Reports First Quarter Results, Announces Increase in Stock Repurchase Program and Declares Dividend

LEWISTON, Maine, Oct. 26, 2016 (GLOBE NEWSWIRE) -- Northeast Bancorp ("Northeast" or the "Company") (NASDAQ:NBN), a Maine-based full-service financial services company and parent of Northeast Bank (the "Bank"), today reported net income of $1.8 million, or $0.19 per diluted common share, for the quarter ended September 30, 2016, compared to net income of  $1.9 million, or $0.20 per diluted common share, for the quarter ended September 30, 2015.

The Board of Directors has voted to amend the existing stock repurchase program to authorize the Company to purchase an additional 500,000 shares of its common stock, representing 5.7% of the Company's outstanding common shares or approximately $5.5 million based on the Company's closing price on October 25, 2016. Under the existing program, implemented in April 2014, the Company has purchased 1,970,000 shares through October 25, 2016 and zero shares remain available for repurchase under the program on that date, prior to the 500,000 share increase in the repurchase plan. The amended stock repurchase program will expire on October 21, 2018.

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on November 18, 2016 to shareholders of record as of November 4, 2016.

"In the quarter, we produced $99.2 million of new loan volume," said Richard Wayne, President and Chief Executive Officer. "Our Loan Acquisition and Servicing Group produced $55.9 million of loans, our SBA Division closed $15.2 million of loans, residential loan sales in the secondary market were strong at $25.0 million, and we achieved net growth of $34.4 million in non-maturity deposits.  In addition, we repurchased 645,238 shares at an average price of $10.75."  Mr. Wayne continued, "We believe that our stock repurchase program provides meaningful value to our shareholders, and accordingly, the Board has approved the addition of 500,000 shares to our stock repurchase program."

As of September 30, 2016, total assets were $985.6 million, consistent with total assets of $986.2 as of June 30, 2016. The principal components of the change in the balance sheet follow:

1. The loan portfolio - excluding loans held for sale - has grown by $29.0 million, or 4.2%, compared to June 30, 2016, principally on the strength of $28.5 million of net growth in commercial loans purchased or originated by the Bank's Loan Acquisition and Servicing Group ("LASG") and net growth of $5.1 million in originations by the Bank's Small Business Administration and United States Department of Agriculture ("SBA") Division. This net growth was offset by a $4.6 million decrease in the Bank's Community Banking Division loan portfolio.

Loans generated by the LASG totaled $55.9 million for the quarter ended September 30, 2016. The growth in LASG loans consisted of $13.9 million of purchased loans, at an average price of 82.5% of unpaid principal balance, and $42.0 million of originated loans. SBA loans closed during the quarter totaled $15.2 million, of which $13.3 million were fully funded in the quarter.  In addition, the Company sold $7.4 million of the guaranteed portion of SBA loans in the secondary market, of which $6.3 million were originated in the current quarter and $1.1 million were originated in prior quarters. Residential loan production sold in the secondary market totaled $25.0 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 September 30, 2016
    (Dollars in millions)
Total Loans  Purchased loans may not exceed 40% of total loans $  90.6
Regulatory Capital Non-owner occupied commercial real estate loans may not exceed 300% of total capital $  165.8

An overview of the Bank's LASG portfolio follows:

 LASG Portfolio
 Three Months Ended September 30,
 2016 2015
  Purchased (1)OriginatedSecured 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$ 16,790 $ 42,002 $   -  $   58,792  $ 23,583 $ 10,941 $ - $ 34,524 
  Net investment basis   13,853     42,002   -    55,855     23,458   10,941   -   34,399 
                  
Loan returns during the period:
  Yield  10.40%  5.88%  0.50%   7.58%   12.07%  5.67%  0.50%  8.23%
  Total Return (2)  10.43%  5.88%  0.50%  7.59%   12.11%  5.67%  0.50%  8.26%
                  
                  
Total loans as of period end:
  Unpaid principal balance$ 269,462 $ 206,748 $ 48,000 $ 524,210  $  249,229 $ 119,732 $ 60,000 $ 428,961 
  Net investment basis  237,103   206,748   48,000   491,851    214,199   119,732   60,000   393,931 
                  
 
(1) Purchased loan balances include loans held for sale of $789 thousand.
(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, which includes 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.

2. Deposits increased by $5.0 million, or 0.6% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $34.4 million, or 7.6%, offset by a decrease in time deposits of $29.4 million, or 8.4%.

3. Shareholders' equity decreased by $5.0 million from June 30, 2016, primarily due to the $6.9 million in share repurchases (representing 645,238 shares) in the quarter, offset by earnings of $1.8 million. Additionally, there was stock-based compensation of $202 thousand, a decrease in accumulated other comprehensive loss of $45 thousand and $93 thousand in dividends paid on common stock.

Net income decreased by $116 thousand to $1.8 million for the quarter ended September 30, 2016, compared to $1.9 million for the quarter ended September 30, 2015.

1. Net interest and dividend income before provision for loan losses increased by $534 thousand for the quarter ended September 30, 2016, compared to the quarter ended September 30, 2015. The increase is primarily due to higher average balances in the total loan portfolio, offset by higher average deposit balances and the effect of the issuance of the subordinated debt.

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 ended September 30, 2015, transactional income decreased by $884 thousand. The following table summarizes interest income and related yields recognized on the loan portfolios:

 Interest Income and Yield on Loans  
 Three Months Ended September 30,  
 2016 2015  
 Average Interest   Average Interest    
 Balance (1) Income (2) Yield Balance (1) Income (2)  Yield  
 (Dollars in thousands)  
Community Banking$205,765 $  2,401  4.63% $ 225,151 $  2,707  4.77%   
SBA 31,148  519  6.61%  13,722  217  6.27%  
LASG:                 
Originated  185,109    2,742  5.88%    118,574    1,696  5.67%  
Purchased  231,999    6,081  10.40%   200,385    6,095  12.07%  
Secured Loans to Broker-Dealers 48,000  60  0.50%   60,007  75  0.50%  
Total LASG  465,108    8,883  7.58%   378,966    7,866  8.23%  
Total$  702,021 $  11,803  6.67% $ 617,839 $ 10,790  6.93%  
 
(1) Includes loans held for sale.
  
(2) SBA interest income includes fees of $50 thousand and $13 thousand for the quarters ended September 30, 2016 and 2015, respectively.  

The yield on purchased loans for the quarter ended September 30, 2016 was 10.4% as compared to 12.1% in the quarter ended September 30, 2015, primarily 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 September 30,
 2016 2015
 Income Return (1) Income Return (1)
 (Dollars in thousands)
Regularly scheduled interest and accretion$4,754  8.13% $  3,887  7.70%
Transactional income:         
Gain on loan sales   -   0.00%    -  0.00%
Gain on sale of real estate owned   19  0.03%    22   0.04%
Other noninterest income   -   0.00%    -   0.00%
Accelerated accretion and loan fees   1,327  2.27%    2,208   4.37%
Total transactional income   1,346  2.30%    2,230  4.41%
Total$  6,100  10.43% $  6,117  12.11%
 
(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 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.

2. Noninterest income increased by $103 thousand for the quarter ended September 30, 2016, compared to the quarter ended September 30, 2015, principally due to an increase in gains realized on sale of SBA loans of $68 thousand.

3. Noninterest expense increased by $816 thousand for the quarter ended September 30, 2016, compared to the quarter ended September 30, 2015, primarily due to an increase in salaries and employee benefits of $1.1 million, largely attributable to higher employee headcount and increased incentive compensation.

At September 30, 2016, nonperforming assets totaled $12.7 million, or 1.29% of total assets, as compared to $9.5 million, or 0.96% of total assets, at June 30, 2016.

At September 30, 2016, the Company's Tier 1 Leverage Ratio was 12.3%, compared to 13.3% at June 30, 2016, and the Total Capital Ratio was 18.8%, a decrease from 20.4% at June 30, 2016. The decrease resulted primarily from loan growth and the effect of purchases under the Company's share repurchase program.

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 first quarter earnings and business outlook at 10:00 a.m. Eastern Time on Thursday, October 27th. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 5193909. 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 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 shareholders' equity, tangible book value per share, and total return. 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)
 September 30, 2016 June 30, 2016
Assets     
Cash and due from banks$ 3,574  $ 2,459 
Short-term investments    122,675      148,698 
  Total cash and cash equivalents    126,249      151,157 
Available-for-sale securities, at fair value  94,583    100,572 
      
Residential real estate loans held for sale  4,623     6,449 
SBA loans held for sale  2,630    1,070 
  Total loans held for sale   7,253    7,519 
      
      
Loans     
  Commercial real estate  449,537    426,568 
  Residential real estate    110,223      113,962 
  Commercial and industrial    156,110      145,956 
  Consumer  5,548     5,950 
   Total loans    721,418      692,436 
  Less: Allowance for loan losses    2,506      2,350 
   Loans, net    718,912      690,086 
      
      
Premises and equipment, net    7,452      7,801 
Real estate owned and other repossessed collateral, net    3,774      1,652 
Federal Home Loan Bank stock, at cost    2,408      2,408 
Intangible assets, net    1,623      1,732 
Bank owned life insurance    15,839      15,725 
Other assets    7,475      7,501 
 Total assets$   985,568  $   986,153 
      
Liabilities and Shareholders' Equity     
Deposits      
 Demand$ 74,249  $ 66,686 
 Savings and interest checking    107,365      107,218  
 Money market    302,079      275,437 
 Time    321,716      351,091 
  Total deposits    805,409      800,432 
      
Federal Home Loan Bank advances    30,046      30,075 
Subordinated debt    23,393      23,331 
Capital lease obligation    1,066      1,128 
Other liabilities  14,101    14,596 
  Total liabilities    874,015      869,562 
Commitments and contingencies    -        -   
      
      
Shareholders' equity     
 Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares    
 issued and outstanding at September 30, 2016 and June 30, 2016    -        -   
 Voting common stock, $1.00 par value, 25,000,000 shares authorized;      
    7,487,552 and 8,089,790 shares issued and outstanding at    
 September 30, 2016 and June 30, 2016, respectively    7,487      8,089 
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;     
   1,343,683 and 1,227,683 shares issued and outstanding at       
    September 30, 2016 and June 30, 2016, respectively    1,344     1,228 
 Additional paid-in capital  76,765    83,020 
 Retained earnings    27,818      26,160 
 Accumulated other comprehensive loss     (1,861)      (1,906)
  Total shareholders' equity    111,553      116,591 
  Total liabilities and shareholders' equity$   985,568  $   986,153 



NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
 Three Months Ended September 30,  
 2016 2015  
Interest and dividend income:       
  Interest and fees on loans$ 11,803  $ 10,790   
  Interest on available-for-sale securities  239    228   
  Other interest and dividend income   215    95   
    Total interest and dividend income  12,257    11,113   
        
Interest expense:       
  Deposits  1,754    1,365   
  Federal Home Loan Bank advances  255    260   
  Wholesale repurchase agreements  -    67   
  Short-term borrowings  -    9   
  Subordinated debt  459    154   
  Obligation under capital lease agreements  14    17   
    Total interest expense  2,482    1,872   
Net interest and dividend income before provision for loan losses  9,775    9,241   
Provision for loan losses  193    169   
Net interest and dividend income after provision for loan losses  9,582    9,072    
        
Noninterest income:       
 Fees for other services to customers  408    408   
 Gain on sales of residential loans held for sale  542    560   
 Gain on sales of SBA loans  743    675   
Loss recognized on real estate owned and other repossessed collateral, net    (14)   (59)  
 Bank-owned life insurance income  114    112   
 Other noninterest income  15    9   
   Total noninterest income  1,808    1,705   
        
Noninterest expense:       
 Salaries and employee benefits  5,314    4,256   
 Occupancy and equipment expense  1,229    1,290   
 Professional fees  496    430   
 Data processing fees  421    349   
 Marketing expense  87    70   
 Loan acquisition and collection expense  227    451   
 FDIC insurance premiums  124    114   
 Intangible asset amortization  109    131   
 Other noninterest expense  619     719   
   Total noninterest expense  8,626    7,810   
Income before income tax expense  2,764    2,967   
Income tax expense  1,013    1,100   
Net income  1,751  $ 1,867   
        
        
Weighted-average shares outstanding:       
 Basic  9,106,144    9,562,812   
 Diluted  9,133,383    9,562,812   
        
Earnings per common share:       
 Basic$ 0.19  $ 0.20   
 Diluted  0.19    0.20   
            
Cash dividends declared per common share$ 0.01  $ 0.01   


NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
 Three Months Ended September 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$94,899 $  239  1.00% $   102,241 $  228  0.88%
Loans (1) (2) (3)   702,021    11,821  6.68%     617,839    10,808  6.94%
Federal Home Loan Bank stock   2,408    23  3.79%    4,102    34  3.29%
Short-term investments (4)   154,392    192  0.49%    99,649    61  0.24%
Total interest-earning assets 953,720    12,275  5.11%    823,831    11,131  5.36%
Cash and due from banks   2,941         3,026     
Other non-interest earning assets 30,812         36,420     
Total assets$  987,473       $  863,277     
                 
Liabilities & Stockholders' Equity:               
Interest-bearing liabilities:               
Interest-bearing deposits:                  
NOW accounts$70,850 $  51  0.29% $  69,619 $  46  0.26%
Money market accounts   291,734    682  0.93%    170,566    353  0.82%
Savings accounts   35,769    12  0.13%    36,360     12  0.13%
Time deposits   336,271    1,009  1.19%    350,867    954  1.08%
Total interest-bearing deposits   734,624    1,754  0.95%    627,412    1,365  0.86%
Short-term borrowings  -    -  0.00%    1,950    9  1.83%
Borrowed funds   30,061    255  3.37%    39,324    327  3.30%
Subordinated debt   23,360    459  7.80%    8,650    154  7.06%
Capital lease obligations   1,087    14  5.11%  1,332     17  5.06%
Total interest-bearing liabilities   789,132    2,482  1.25%  678,668     1,872  1.09%
                   
Non-interest bearing liabilities:                 
Demand deposits and escrow accounts  75,672          64,008     
Other liabilities 8,213         7,431     
Total liabilities 873,017          750,107     
Stockholders' equity   114,456           113,170     
Total liabilities and stockholders' equity$  987,473      $  863,277     
                
Net interest income   $9,793      $9,259  
                
Interest rate spread       3.86%        4.27%
Net interest margin (5)       4.07%        4.46%
                
(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:
 September 30, 2016 June 30, 2016 March 31, 2016 December  31, 2015 September 30, 2015
Net interest income$  9,775  $  10,713  $  9,254  $  10,172  $  9,241 
Provision for loan losses   193     317     236     896     169 
Noninterest income   1,808     2,411     2,035     1,624     1,705 
Noninterest expense   8,626     9,396     8,412     8,196     7,810 
Net income   1,751     2,199     1,809     1,744     1,867 
           
Weighted average common shares outstanding:         
Basic 9,106,144   9,319,522   9,456,198   9,559,369     9,562,812 
Diluted 9,133,383   9,342,439   9,459,611   9,569,585     9,562,812 
Earnings per common share:         
Basic$  0.19  $  0.24  $  0.19  $  0.18  $  0.20 
Diluted   0.19      0.24     0.19     0.18     0.20 
Dividends per common share   0.01     0.01     0.01     0.01     0.01 
          
Return on average assets 0.70%  0.93%  0.80%  0.80%  0.86%
Return on average equity 6.07%  7.67%  6.33%  6.07%  6.55%
Net interest rate spread (1) 3.86%  4.55%  4.06%  4.67%  4.27%
Net interest margin (2) 4.07%  4.73%  4.25%  4.87%  4.46%
Efficiency ratio (3) 74.47%  71.59%  74.52%  69.48%  71.35%
Noninterest expense to average total assets 3.47%  3.97%  3.70%   3.75%  3.59%
Average interest-earning assets to average interest-bearing liabilities 120.86%  119.99%  120.62%   122.48%  121.39%
           
 As of:
 September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015 September 30, 2015
Nonperforming loans:         
Originated portfolio:         
Residential real estate$  3,273  $  2,613  $  3,566  $  3,263  $  3,165 
Commercial real estate   361     474     602     399     529 
Home equity   48     48     -     11     20 
Commercial and industrial 347   17   2   2   2 
Consumer   121     163     216     204     153 
Total originated portfolio   4,150     3,315     4,386     3,879     3,869 
Total purchased portfolio   4,773     4,512     4,364     2,221     6,939 
Total nonperforming loans   8,923     7,827     8,750     6,100     10,808 
Real estate owned and other possessed collateral, net   3,774     1,652     690     1,238     1,279 
Total nonperforming assets$  12,697  $  9,479  $  9,440  $  7,338  $  12,087 
          
Past due loans to total loans 1.36%  1.00%  2.52%  2.48%  1.35%
Nonperforming loans to total loans 1.24%  1.13%  1.25%  0.90%  1.73%
Nonperforming assets to total assets  1.29%  0.96%  1.02%  0.82%  1.41%
Allowance for loan losses to total loans 0.35%  0.34%  0.32%   0.31%  0.33%
Allowance for loan losses to nonperforming loans 28.08%  30.02%  25.41%  34.90%  19.11%
          
Commercial real estate loans to risk-based capital (4) 179.96%  174.12%  217.09%  204.91%  195.50%
Net loans to core deposits (5) 90.22%  87.15%  93.48%  94.37%   91.04%
Purchased loans to total loans, including held for sale 32.54%  34.25%  33.17%  32.90%  33.82%
Equity to total assets 11.32%  11.82%  12.41%  12.82%  13.25%
Common equity tier 1 capital ratio 15.34%  17.97%  17.46%  18.11%  19.69%
Total capital ratio 18.81%  20.39%  17.78%  18.43%  20.03%
Tier 1 leverage capital ratio 12.25%  13.27%   13.57%  14.31%  14.23%
          
Total shareholders' equity$  111,553  $  116,591  $  114,526  $  114,613  $  113,704 
Less: Preferred stock   -      -      -      -      -  
Common shareholders' equity   111,553     116,591     114,526     114,613     113,704 
Less: Intangible assets (6)   (3,797)    (3,503 )    (3,469)    (3,336)    (3,388)
Tangible common shareholders' equity (non-GAAP)$  107,756  $  113,088  $  111,057  $  111,277  $  110,316 
           
Common shares outstanding   8,831,235     9,317,473     9,330,873     9,519,729     9,592,329 
Book value per common share$  12.63  $  12.51  $  12.27  $  12.04  $  11.85 
Tangible book value per share (non-GAAP) (7)   12.20     12.14     11.90     11.69     11.50 
          
(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) Includes the core deposit intangible asset, as well as the servicing rights asset which is included in other assets in the consolidated balance sheets.
(7) Tangible book value per share represents total shareholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.
Brian Shaughnessy, CFO

Northeast Bank, 500 Canal Street, Lewiston, ME 04240

207.786.3245 ext. 3220

www.northeastbank.com

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Source: Northeast Bancorp

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