Northeast Bancorp
May 2, 2016

Northeast Bancorp Reports Third Quarter Results, Declares Dividend

LEWISTON, Maine, May 02, 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 March 31, 2016, compared to net income of $1.8 million, or $0.18 per diluted common share, for the quarter ended March 31, 2015. Net income for the nine months ended March 31, 2016 was $5.4 million, or $0.57 per diluted common share, compared to $5.0 million, or $0.50 per diluted common share, for the nine months ended March 31, 2015.

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on May 27, 2016 to shareholders of record as of May 13, 2016.

"Our strong growth in fiscal year 2016 continued in the third quarter," said Richard Wayne, President and Chief Executive Officer. "We generated loan volume of $84.4 million, including $49.8 million of loans produced by the Loan Acquisition and Servicing Group, $10.4 million of loans closed by the SBA National division, $15.9 million of residential mortgage loans originated, and $8.3 million originated in the community banking commercial division. We sold $11.9 million in SBA loans for a gain of $1.2 million in the quarter. And, in our continuing effort to improve returns for shareholders, we repurchased 184 thousand shares at an average price of $10.22."

As of March 31, 2016, total assets were $922.7 million, an increase of $72.0 million, or 8.5%, compared to June 30, 2015. The principal components of the change in the balance sheet follow:

1. The loan portfolio - excluding loans held for sale - has grown by $86.9 million, or 14.2%, compared to June 30, 2015, principally on the strength of $82.9 million of net growth in commercial loans purchased or originated by the Bank's Loan Acquisition and Servicing Group ("LASG"), net growth of $11.7 million in originations by the Bank's Small Business Administration ("SBA") National division and net growth of $7.5 million in commercial originations by the Bank's Community Banking Division. This net growth was offset by a $15.2 million decrease in the Bank's Community Banking Division residential and consumer loan portfolio.

Loans generated by the LASG totaled $49.8 million for the quarter ended March 31, 2016. The growth in LASG loans consisted of $21.9 million of purchased loans, at an average price of 89.9% of unpaid principal balance, and $27.8 million of originated loans. SBA loans closed during the quarter totaled $10.4 million, of which $10.3 million were fully funded in the quarter.  In addition, the Company sold $11.9 million of the guaranteed portion of SBA loans in the secondary market, of which $4.9 million were originated in the current quarter and $7.0 million were originated in prior quarters. Residential loan production sold in the secondary market totaled $19.7 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 March 31, 2016
    (Dollars in millions)
Total Loans Purchased loans may not exceed 40% of total loans $  80.2
Regulatory Capital Non-owner occupied commercial real estate loans may not exceed 300% of total capital $  104.4
      

An overview of the Bank's LASG portfolio follows:

 LASG Portfolio
 Three Months Ended March 31,
 2016 2015
   Purchased  Originated Secured Loans to 
  Broker-Dealers
 Total LASG PurchasedOriginatedSecured Loans to
Broker-Dealers
Total LASG
 (Dollars in thousands)
Loans purchased or originated during the period:                 
Unpaid principal balance$ 24,400 $ 27,846 $   -  $    52,246  $   5,484 $  18,760 $ 12,000 $  36,244 
Net investment basis   21,934     27,846   -    49,780     5,063   18,697   12,000    35,760 
Loan returns during the period:                 
Yield  9.88%   5.83%  0.50%  7.15%   12.87%  5.67%  0.46%  9.37%
Total Return (1)  9.88%  5.82%  0.50%  7.15%   13.60%  5.67%  0.46%  9.81%
                  


 Nine Months Ended March 31,
 2016 2015
   Purchased  Originated Secured Loans to 
  Broker-Dealers
 Total LASG PurchasedOriginatedSecured Loans to
Broker-Dealers
Total LASG
 (Dollars in thousands)
Loans purchased or originated during the period:                 
Unpaid principal balance$ 88,128 $ 78,752 $   -  $   166,880  $   67,909 $  50,315 $ 48,000 $  166,224 
Net investment basis   81,245     78,752   -    159,997     57,896   50,236    48,000   156,132 
Loan returns during the period:                  
Yield  11.54%  5.75%  0.50%  7.97%   12.97%  6.91%  0.47%  10.12%
Total Return (1)  11.57%  5.74%  0.50%  7.98%   13.36%  7.40%  0.47%  10.48%
                  
Total loans as of period end:                 
Unpaid principal balance$ 266,223 $ 170,085 $ 60,000 $ 496,308  $ 234,672 $ 92,542 $ 60,000 $ 387,214 
Net investment basis  233,650   170,085   60,000   463,735    195,683   92,414   60,000   348,097 


(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.  The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter. 
 

2. Deposits increased by $26.2 million, or 3.6% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $26.0 million, or 7.0%. For the nine months ended March 31, 2016, deposits increased $78.2 million, or 11.6%, primarily due to growth in money market non-maturity accounts of $70.5 million, or 21.4%, and growth in time deposits of $7.7 million, or 2.2%.

3. Stockholders' equity increased by $1.8 million from June 30, 2015, due principally to earnings of $5.4 million, offset by $3.2 million in share repurchases (representing 309,500 shares). Additionally, there was an increase in stock-based compensation of $445 thousand, offset by a decrease in accumulated other comprehensive income of $555 thousand and $287 thousand in dividends paid on common stock.

Net income increased by $57 thousand to $1.8 million for the quarter ended March 31, 2016, compared to $1.8 million for the quarter ended March 31, 2015.

1. Net interest and dividend income before provision for loan losses increased by $134 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015. The increase is primarily due to higher average loan volume in the purchased and originated loan portfolio.

The various components of transactional income are set forth in the table below entitled "Total Return on Purchased Loans." When compared to the three and nine months ended March 31, 2015, transactional interest income decreased by $1.8 million in both periods. 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,
 2016 2015
 Average Interest   Average Interest  
 Balance (1) Income Yield Balance (1) Income Yield
 (Dollars in thousands)
Community Banking Division$247,194 $   2,994  4.87% $ 232,369 $  2,823  4.93%
LASG:               
Originated  159,976    2,317  5.83%    80,567    1,127  5.67%
Purchased  224,710    5,518  9.88%   208,487    6,614  12.87%
Secured Loans to Broker-Dealers 60,001  75  0.50%  48,551  55  0.46%
Total LASG  444,687    7,910  7.15%   337,605    7,796  9.37%
Total$ 691,881 $  10,904  6.34% $ 569,974 $ 10,619  7.56%
                    
  
 Nine Months Ended March 31,
 2016 2015
 Average Interest   Average Interest  
 Balance (1) Income Yield Balance (1) Income Yield
 (Dollars in thousands)
Community Banking Division$ 242,172 $   8,850  4.86% $ 236,584 $  8,782  4.94%
LASG:               
Originated  138,760     5,991  5.75%    66,314   3,441  6.91%
Purchased  211,519     18,347   11.54%   206,747    20,125  12.97%
Secured Loans to Broker-Dealers 60,004  225  0.50%  39,054  139  0.47%
Total LASG  410,283     24,563  7.97%   312,115    23,705  10.12%
Total$ 652,455 $ 33,413  6.82% $ 548,699 $ 32,487  7.89%
 
(1) Includes loans held for sale.
 

The yield on purchased loans for the quarter ended March 31, 2016 was 9.9% as compared to 13.6% in the quarter ended March 31, 2015, due to lower transactional income in the quarter. The following table details the total return on purchased loans:

 Total Return on Purchased Loans
 Three Months Ended March 31,
 2016 2015
 Income Return (1) Income Return (1)
 (Dollars in thousands)
Regularly scheduled interest and accretion$4,606  8.25% $  4,322  8.41%
Transactional income:          
Gain on loan sales   -  0.00%    -  0.00%
Gain on sale of real estate owned   1  0.00%    379    0.73%
Other noninterest income   -   0.00%    -   0.00%
Accelerated accretion and loan fees   912  1.63%    2,292  4.46%
Total transactional income   913  1.63%    2,671  5.20%
Total$  5,519  9.88% $  6,993  13.60%


 Nine Months Ended March 31,
 2016 2015
 Income Return (1) Income Return (1)
 (Dollars in thousands)
Regularly scheduled interest and accretion$12,615  7.94% $  13,195  8.50%
Transactional income:         
Gain on loan sales    -  0.00%     190  0.12%
Gain on sale of real estate owned    23  0.01%     419    0.27%
Other noninterest income    11  0.01%     -    0.00%
Accelerated accretion and loan fees   5,732  3.61%    6,930  4.47%
Total transactional income   5,766  3.63%    7,539   4.86%
Total$  18,381   11.57% $  20,734  13.36%
 


(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, gains on real estate owned and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.  The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter. 
 

2. Noninterest income increased by $481 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015, principally due to an increase in gains realized on sale of portfolio loans. The recent quarter includes gains realized on sale of SBA loans of $1.2 million, compared to $425 thousand in the quarter ended March 31, 2015. The gain is offset by a decrease of $411 thousand in gains recognized on real estate owned and other repossessed collateral.

3. Noninterest expense increased by $527 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015, primarily due to an increase in salaries and employee benefits of $530 thousand, due to increased employee headcount.

At March 31, 2016, nonperforming assets totaled $9.4 million, or 1.0% of total assets, as compared to $12.4 million, or 1.5% of total assets, at June 30, 2015.

At March 31, 2016, the Company's Tier 1 Leverage Ratio was 13.6%, a decrease from 14.5% at June 30, 2015, and the Total Capital Ratio was 17.8%, a decrease from 20.1% at June 30, 2015. The decreases in the capital ratios resulted primarily from balance sheet growth and the effect of purchases under the Company's share repurchase program in the current fiscal year.

Investor Call Information
Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Brian Shaughnessy, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss third quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, May 3, 2016. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 95521077. The call will be available via live webcast, which can be viewed by accessing the Company's website at www.northeastbank.com and clicking on the About Us - Investor Relations section. To listen to the webcast, attendees are encouraged to visit the website at least fifteen minutes early to register, download and install any necessary audio software. Please note there will also be a slide presentation that will accompany the webcast. For those who cannot listen to the live broadcast, a replay will be available online for one year at www.northeastbank.com.

About Northeast Bancorp
Northeast Bancorp (NASDAQ:NBN) is the holding company for Northeast Bank, a full-service bank headquartered in Lewiston, Maine. We offer traditional banking services through the Community Banking Division, which operates ten full-service branches that serve customers located in western, central, and southern Maine. From our Maine and Boston locations, we also lend throughout the New England area. Our Loan Acquisition and Servicing Group ("LASG") purchases and originates commercial loans on a nationwide basis. In addition, our SBA National division supports the needs of growing businesses nationally. ableBanking, a division of Northeast Bank, offers savings products to consumers online. Information regarding Northeast Bank can be found on its website at www.northeastbank.com.

Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures, including tangible common stockholders' equity, and tangible book value per share. Northeast's management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

Forward-Looking Statements
Statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although Northeast believes that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company's control. The Company's actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in interest rates and real estate values; competitive pressures from other financial institutions; the effects of weakness in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers' ability to service and repay our loans; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; changing government regulation; the risk that the Company may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Company's financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company's Annual Report on Form 10-K and updated by the Company's Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. These statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.

NBN-F

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
 March 31, 2016 June 30, 2015
Assets     
Cash and due from banks$ 4,025  $ 2,789 
Short-term investments  87,427    87,061 
Total cash and cash equivalents  91,452    89,850 
Available-for-sale securities, at fair value  90,491    101,908 
       
Residential real estate loans held for sale  3,475    7,093 
SBA loans held for sale  1,880    1,942 
Total loans held for sale  5,355    9,035 
      
       
Loans     
Commercial real estate  423,234    348,676 
Residential real estate  119,327    132,669 
Commercial and industrial  150,217    123,133 
Consumer  6,292    7,659 
Total loans  699,070    612,137 
Less: Allowance for loan losses  2,223     1,926 
Loans, net  696,847    610,211 
      
       
Premises and equipment, net    8,101      8,253 
Real estate owned and other possessed collateral, net    690      1,651 
Federal Home Loan Bank stock, at cost    2,571      4,102 
Intangible assets, net    1,840      2,209 
Bank owned life insurance    15,612      15,276 
Other assets    9,730      8,223 
Total assets$   922,689  $   850,718 
      
Liabilities and Stockholders' Equity     
Deposits     
Demand$ 60,573  $   60,383 
Savings and interest checking    104,802      100,134 
Money market    234,142      168,527 
Time    353,432      345,715 
Total deposits    752,949      674,759 
      
Federal Home Loan Bank advances    30,103      30,188  
Wholesale repurchase agreements    -      10,037 
Short-term borrowings     2,753      2,349 
Junior subordinated debentures issued to affiliated trusts    8,771      8,626 
Capital lease obligation    1,190      1,368 
Other liabilities    12,397      10,664 
Total liabilities    808,163      737,991 
      
Commitments and contingencies    -        -   
      
Stockholders' equity     
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares    
issued and outstanding at March 31, 2016 and June 30, 2015    -        -   
Voting common stock, $1.00 par value, 25,000,000 shares authorized;     
8,103,190 and 8,575,144 shares issued and outstanding at    
March 31, 2016 and June 30, 2015, respectively    8,103       8,575 
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;     
1,227,683 and 1,012,739 shares issued and outstanding at
March 31, 2016 and June 30, 2015, respectively
    1,228     1,013 
Additional paid-in capital  82,983      85,506 
Retained earnings    24,055       18,921 
Accumulated other comprehensive loss     (1,843)      (1,288)
Total stockholders' equity    114,526       112,727 
Total liabilities and stockholders' equity$   922,689  $   850,718 



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,
 2016 2015  2016 2015
Interest and dividend income:           
Interest and fees on loans$ 10,904  $10,619 $ 33,413  $32,487
Interest on available-for-sale securities  236    222   700   697
Other interest and dividend income  119   72   295   218
Total interest and dividend income  11,259   10,913   34,408   33,402
            
Interest expense:           
Deposits  1,566   1,271   4,356   3,681
Federal Home Loan Bank advances  255   257   774   845
Wholesale repurchase agreements  -   71   65   216
Short-term borrowings  5   5   19   21
Junior subordinated debentures issued to affiliated trusts  164   171   476   566
Obligation under capital lease agreements   15   18   49   56
Total interest expense  2,005   1,793   5,739    5,385
Net interest and dividend income before provision for loan losses  9,254   9,120   28,669   28,017
Provision for loan losses  236   44   1,301   477
Net interest and dividend income after provision for loan losses  9,018   9,076   27,368   27,540
            
Noninterest income:           
Fees for other services to customers  428   303   1,264   1,089
Gain on sales of residential loans held for sale  335   355   1,292   1,384
Gain on sales of portfolio loans  1,205   425   2,558   950
(Loss) gain recognized on real estate owned and other repossessed collateral, net    (54)  357      (127)    303
Bank-owned life insurance income  112   110   336   329
Other noninterest income  9   4   39   23
Total noninterest income  2,035   1,554   5,362   4,078
            
Noninterest expense:            
Salaries and employee benefits  4,846   4,316    13,956   13,586
Occupancy and equipment expense  1,327    1,278   3,937   3,662
Professional fees  348   386   1,042    1,153
Data processing fees  394   361   1,109   1,029
Marketing expense  64   54   200   203
Loan acquisition and collection expense  297   409   961   1,096
FDIC insurance premiums  125   137   354   371
Intangible asset amortization  108   128   369   460
Other noninterest expense  903   816   2,489   2,272
Total noninterest expense  8,412    7,885   24,417   23,832
Income before income tax expense  2,641   2,745   8,313   7,786
Income tax expense  832   993   2,892   2,810
Net income  1,809   1,752   5,421   4,976
            
Weighted-average shares outstanding:           
Basic  9,456,198   9,833,033   9,526,302   10,049,983
Diluted  9,459,611   9,833,033   9,531,747   10,049,983
            
Earnings per common share:           
Basic$ 0.19  $0.18 $ 0.57  $0.50
Diluted  0.19   0.18   0.57    0.50
                 
Cash dividends declared per common share$ 0.01  $0.01 $ 0.03  $0.03


NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
 Three Months Ended March 31,
 2016 2015
   Interest Average   Interest Average
 Average Income/ Yield/ Average Income/ Yield/
 Balance Expense Rate  Balance Expense Rate
Assets:               
Interest-earning assets:               
Investment securities (1)$100,904 $  236  0.94% $   107,010 $  222  0.84%
Loans (2) (3)   691,881    10,904  6.34%     569,974     10,619  7.56%
Federal Home Loan Bank stock   2,571    22  3.44%    4,102    18  1.78%
Short-term investments (4)   80,789    97  0.48%     90,722    54  0.24%
Total interest-earning assets   876,145    11,259  5.17%     771,808     10,913  5.73%
Cash and due from banks   3,841          2,919     
Other non-interest earning assets   34,045          33,069     
Total assets$  914,031      $   807,796     
                
Liabilities & Stockholders' Equity:               
Interest-bearing liabilities:               
Interest-bearing deposits:               
NOW accounts$ 65,985 $  42  0.26% $   62,317 $  39  0.25%
Money market accounts   223,835    491  0.88%     153,487    300  0.79%
Savings accounts   36,453    12  0.13%     34,140    11  0.13%
Time deposits   357,857    1,021  1.15%     328,633     921  1.14%
Total interest-bearing deposits   684,130    1,566  0.92%     578,577    1,271  0.89%
Short-term borrowings   2,136    5  0.94%     2,356    5  0.86%
Borrowed funds   30,117    255  3.41%     43,718    328  3.04%
Junior subordinated debentures   8,746    164  7.54%     8,553    171  8.11%
Capital lease obligations   1,211    15  4.98%     1,433    18  5.09%
Total interest-bearing liabilities   726,340    2,005  1.11%     634,637     1,793  1.15%
                
Non-interest bearing liabilities:               
Demand deposits and escrow accounts  66,384          54,647     
Other liabilities   6,429          7,083     
Total liabilities   799,153          696,367     
Stockholders' equity   114,878          111,429     
Total liabilities and stockholders' equity$  914,031      $   807,796     
                 
Net interest income   $9,254      $9,120  
                
Interest rate spread       4.06%        4.58%
Net interest margin (5)       4.25%        4.79%
                
(1)  Interest income and yield are stated on a fully tax-equivalent basis using a 34% tax rate.
(2)  Includes loans held for sale.
(3)  Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4)  Short term investments include FHLB overnight deposits and other interest-bearing deposits.
(5)  Net interest margin is calculated as net interest income divided by total interest-earning assets.

 

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
 Nine Months Ended March 31,
 2016 2015
   Interest Average   Interest Average
 Average Income/ Yield/ Average Income/ Yield/
 Balance Expense Rate Balance Expense Rate
Assets:               
Interest-earning assets:               
Investment securities (1)$102,890 $  700  0.91% $   109,605 $  697  0.85%
Loans (2) (3)    652,455   33,413  6.82%     548,699     32,487  7.89%
Federal Home Loan Bank stock    3,089    90  3.88%    4,102    49  1.59%
Short-term investments (4)    84,258    205  0.32%     92,784    169  0.24%
Total interest-earning assets    842,692   34,408  5.43%     755,190     33,402  5.89%
Cash and due from banks    3,405          2,755     
Other non-interest earning assets   35,345          33,241     
Total assets$   881,442       $   791,186     
                
Liabilities & Stockholders' Equity:               
Interest-bearing liabilities:               
Interest-bearing deposits:               
NOW accounts$67,078 $130  0.26% $   62,731 $  121  0.26%
Money market accounts    197,962    1,273  0.86%     122,165    665  0.73%
Savings accounts    36,027    36  0.13%     34,049     34  0.13%
Time deposits    347,847    2,917  1.12%     339,116    2,861  1.12%
Total interest-bearing deposits    648,914     4,356  0.89%     558,061    3,681  0.88%
Short-term borrowings     2,029    19  1.25%    2,852    21  0.98%
Borrowed funds    33,207    839  3.36%    47,455    1,061  2.98%
Junior subordinated debentures   8,698    476  7.28%    8,507     566  8.86%
Capital lease obligations   1,272    49  5.13%    1,481    56  5.04%
Total interest-bearing liabilities   694,120    5,739  1.10%    618,356    5,385  1.16%
                
Non-interest bearing liabilities:               
Demand deposits and escrow accounts 66,619         54,339     
Other liabilities   6,720         6,163     
Total liabilities   767,459         678,858     
Stockholders' equity   113,983         112,328     
Total liabilities and stockholders' equity$  881,442      $  791,186     
                
Net interest income   $  28,669      $28,017  
                
Interest rate spread       4.33%        4.73%
Net interest margin (5)       4.53%        4.94%
                
(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:
 March 31, 2016  December 31, 2015 September 30, 2015  June 30, 2015 March 31, 2015
Net interest income$  9,254  $  10,172  $  9,241  $  9,350  $  9,120 
Provision for loan losses   236      896     169     240     44 
Noninterest income   2,035      1,624      1,705     3,067     1,554 
Noninterest expense   8,412      8,196     7,810     8,827     7,885 
Net income   1,809      1,744     1,867     2,165     1,752 
          
Weighted average common shares outstanding:         
Basic 9,456,198   9,559,369     9,562,812     9,773,228      9,833,033 
Diluted 9,459,611   9,569,585     9,562,812     9,773,228     9,833,033 
Earnings per common share:         
Basic$  0.19   $  0.18  $  0.20  $  0.22  $  0.18 
Diluted   0.19      0.18     0.20     0.22     0.18 
Dividends per common share   0.01      0.01     0.01     0.01     0.01 
          
Return on average assets 0.80%  0.80%  0.86%  1.04%  0.88%
Return on average equity 6.33%  6.07%  6.55%  7.72%  6.38%
Net interest rate spread (1) 4.06%  4.67%  4.25%  4.51%  4.58%
Net interest margin (2) 4.25%  4.87%  4.45%  4.70%  4.79%
Efficiency ratio (3) 74.52%  69.48%  71.35%  71.09%  73.87%
Noninterest expense to average total assets 3.70 %  3.75%  3.59%  4.22%  3.96%
Average interest-earning assets to average interest-bearing liabilities 120.62%  122.48%  121.63%  120.90%  121.89%
          
 As of:
 March 31, 2016  December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015
Nonperforming loans:         
Originated portfolio:         
Residential real estate$  3,566   $  3,263  $  3,165  $  3,021  $  3,163 
Commercial real estate   602      399     529     994     1,201 
Home equity   -      11     20     11     11 
Commercial and industrial   2       2      2      2      -  
Consumer   216      204     153     190     225 
Total originated portfolio   4,386      3,879     3,869     4,218     4,600 
Total purchased portfolio   4,364      2,221     6,939     6,532     5,850 
Total nonperforming loans   8,750      6,100     10,808      10,750     10,450 
Real estate owned and other possessed collateral, net   690      1,238     1,279      1,651     3,694 
Total nonperforming assets$  9,440   $  7,338   $  12,087  $  12,401  $  14,144 
          
Past due loans to total loans 2.52%  2.48%  1.35%  1.08%  2.57%
Nonperforming loans to total loans 1.25%  0.90%  1.73%  1.76%  1.80%
Nonperforming assets to total assets 1.02%  0.82%  1.41%  1.46%  1.70%
Allowance for loan losses to total loans 0.32%  0.31%  0.33%  0.31%  0.30%
Allowance for loan losses to nonperforming loans 25.41%  34.90%  19.11%  17.92%  16.66%
          
Commercial real estate loans to risk-based capital (4) 217.09%  204.91%  195.50%  187.32%  173.17%
Net loans to core deposits (5) 93.48%  94.37%  91.04%  91.85%  89.04%
Purchased loans to total loans, including held for sale 33.17%  32.90%  33.82%  32.61%  33.53%
Equity to total assets 12.41%  12.82%  13.25%  13.25%  13.51%
Common equity tier 1 capital ratio 17.46%  18.11%  19.69%  19.82%  20.90%
Total capital ratio (6)  17.78%  18.43%  20.03%  20.14%  21.21%
Tier 1 leverage capital ratio  13.57%  14.31%  14.23%  14.49%  14.96%
          
Total stockholders' equity$  114,526  $  114,613  $  113,704  $  112,727  $  112,487 
Less: Preferred stock   -       -      -       -      -  
Common stockholders' equity   114,526      114,613     113,704     112,727     112,487 
Less: Intangible assets (7)   (3,469)    (3,336)    (3,388)    (3,312)    (2,338)
Tangible common stockholders' equity (non-GAAP)$  111,057   $  111,277  $  110,316  $  109,415  $  110,149 
          
Common shares outstanding   9,330,873     9,519,729     9,592,329     9,587,883      9,819,609 
Book value per common share$  12.27   $   12.04  $  11.85  $  11.76  $  11.46 
Tangible book value per share (non-GAAP) (8)   11.90      11.69     11.50     11.41     11.22 
          
(1) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3) The efficiency ratio represents non-interest expense divided by the sum of net interest income (before the loan loss provision) plus non-interest income.
(4) For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans.
(5) Core deposits include all non-maturity deposits and maturity deposits less than $250 thousand. Loans include loans held-for-sale.
(6) The Company's adoption of Basel III went into effect as of March 31, 2015. The previous period ratios are the "Total Risk-Based Capital Ratio."
(7) Includes the core deposit intangible asset, as well as the servicing rights asset which is included in other assets in the consolidated balance sheets.
(8) Tangible book value per share represents total stockholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.
 

 

For More Information:

Brian Shaughnessy, CFO

Northeast Bank, 500 Canal Street, Lewiston, ME 04240

207.786.3245 ext. 3220

www.northeastbank.com

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Source: Northeast Bancorp

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