Northeast Bancorp
NORTHEAST BANCORP /ME/ (Form: 8-K, Received: 10/26/2016 16:13:24)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):                                         October 21, 2016

 

Commission File No. 1-14588

 

NORTHEAST BANCORP

(Exact name of registrant as specified in its charter)

 

Maine

01-0425066

(State or other jurisdiction of incorporation)

(IRS Employer Identification Number)

   

500 Canal Street
Lewiston, Maine

04240

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (207) 786-3245

 

Former name or former address, if changed since last Report: N/A

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 | | Written communications pursuant to Rule 425 under the Securities Act

 

 | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act

 

 | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

 

 | | Pre-commencement to communications pursuant to Rule 13e-4(c) under the Exchange Act

 

 
 

 

 

Item 2.02

Results of Operations and Financial Condition

 

On October 26, 2016, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the first quarter of fiscal 2017 and declaring the payment of a dividend. The full text of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information contained herein, including the exhibit attached hereto, is furnished pursuant to Item 2.02 of this Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, the information in this report (including the exhibits hereto) are not to be incorporated by reference into any of the Company's filings with the Securities and Exchange Commission, whether filed prior to or after the furnishing of these certificates, regardless of any general or specific incorporation language in such filing.

 

Item 8.01

Other Events

 

Also on October 21, 2016, the Company announced that its Board of Directors has authorized the Company to amend the existing stock repurchase program 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. Such purchases will be made in open market or in privately negotiated transactions from time to time and in such amounts as market conditions warrant. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The stock repurchase program may be suspended or terminated at any time without prior notice, and will expire on October 21, 2018.

 

 

Item 9.01

Financial Statements and Exhibits

(c)

Exhibits

 

 

Exhibit No .

Description

 

99.1

Press Release dated October 26, 2016

 

 
 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.

 

   

NORTHEAST BANCORP

   

By: /s/ Brian Shaughnessy                       

Name:

Brian Shaughnessy

Title:

Chief Financial Officer and Treasurer

 

Date: October 26, 2016

 

 
 

 

 

EXHIBIT INDEX

 

Exhibit No .

Description 

 

99.1

Press Release dated October 26, 2016

Exhibit 99.1

 

FOR IMMEDIATE RELEASE  

 

 

For More Information:

Brian Shaughnessy, CFO

Northeast Bank, 500 Canal Street, Lewiston, ME 04240

207.786.3245 ext. 3220

www.northeastbank.com

 

 

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

 

Lewiston, ME (October 26, 2016) ‒ 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)

   

Originated

   

Secured Loans to

Broker-Dealers

   

Total LASG

    Purchased    

Originated

   

Secured Loans to

Broker-Dealers

   

Total LASG

 
   

(Dollars in thousands)

 
Loans purchased or originated during the period:                                                                

Unpaid principal balance

  $ 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 27 th . 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.

 

 
 

 

 

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

               
Liabilities                

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.