Northeast Bancorp
NORTHEAST BANCORP /ME/ (Form: 8-K, Received: 07/27/2017 16:30:47)

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):          July 27, 2017

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 



 
 

 

 

Item 2.02

Results of Operations and Financial Condition

 

On July 27, 2017, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the fourth 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.

 

 

Item9.01

Financial Statements and Exhibits

(c)

Exhibits

 

 

Exhibit No .

Description

   
99.1 Press Release dated July 27, 2017

 

 
 

 

 

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: July 27, 2017

 

 
 

 

 

EXHIBIT INDEX

 

Exhibit No .

Description 

 

99.1 Press Release dated July 27, 2017

 

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 Record Quarterly Results and Declares Dividend

 

Lewiston, ME (July 27, 2017) ‒ Northeast Bancorp (“Northeast” or the “Company”) (NASDAQ: NBN), a Maine-based full-service financial services company and parent of Northeast Bank (the “Bank”), today reported net income of $4.0 million, or $0.45 per diluted common share, for the quarter ended June 30, 2017, compared to net income of $2.2 million, or $0.24 per diluted common share, for the quarter ended June 30, 2016. Net income for the year ended June 30, 2017 was $12.3 million, or $1.38 per diluted common share, compared to $7.6 million, or $0.80 per diluted common share, for the year ended June 30, 2016.

 

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on August 25, 2017 to shareholders of record as of August 11, 2017.

 

“We closed the year with a strong quarter,” said Richard Wayne, President and Chief Executive Officer. “For the quarter, our earnings of $0.45 per diluted common share helped us achieve a return on equity of 13.3%, a return on assets of 1.6% and an efficiency ratio of 56.3%. These solid results were driven by continued growth in our LASG portfolio, purchased loan total return of 13.8%, and SBA gains on sale of $1.9 million. In addition to earnings growth, in the fourth quarter we generated loan volume of $152.2 million, which included $113.0 million of loans produced by the Loan Acquisition and Servicing Group, $19.0 million of loans closed by the SBA division and $20.2 million of residential and commercial community bank loans. The growth of our balance sheet and earnings compliments our growth strategy and positions us well for the future.”

 

As of June 30, 2017, total assets were $1.1 billion, an increase of $90.7 million, or 9.2%, from total assets of $986.2 million as of June 30, 2016. The principal components of the change in the balance sheet follow:

 

 

1.

The Company originated $152.2 million of new loans during the quarter ended June 30, 2017. Loans generated by the Bank’s Loan Acquisition and Servicing Group (“LASG”) totaled $113.0 million, which consisted of $45.1 million of purchased loans, at an average price of 89.8% of unpaid principal balance, and $67.9 million of originated loans. The Bank’s Small Business Administration and United States Department of Agriculture (“SBA”) Division closed $19.0 million of new loans during the quarter, of which $18.4 million were funded. In addition, the Company sold $19.0 million of the guaranteed portion of SBA loans in the secondary market, of which $10.2 million were originated in the current quarter and $8.8 million were originated or purchased in prior quarters. Residential loan production sold in the secondary market totaled $16.5 million for the quarter. The loan portfolio, excluding both loans held for sale and the $48.0 million of secured loans to broker-dealers repaid in the prior quarter, increased by $134.8 million, or 19.5%, compared to June 30, 2016.

 

As previously discussed in the Company’s SEC filings, the Company made certain commitments to the Board of Governors of the Federal Reserve System in connection with the merger of FHB Formation LLC with and into the Company in December 2010. The Company’s loan purchase and commercial real estate loan availability under these conditions follow:

 

Basis for

Regulatory Condition

 

Condition

 

Availability at June 30, 2017

 
       

(Dollars in millions)

 

Total Loans

 

Purchased loans may not exceed 40% of total loans

  $ 111.9  

Regulatory Capital

 

Non-owner occupied commercial real estate loans may not exceed 300% of total capital

  $ 178.5  

 

 
 

 

 

An overview of the Bank’s LASG portfolio follows :

 

    LASG Portfolio  
    Three Months Ended June 30,  
    2017     2016  
    Purchased     Originated    

Secured Loans to

Broker-Dealers

    Total LASG     Purchased     Originated    

Secured Loans to

Broker-Dealers

    Total LASG  
    (Dollars in thousands)  
Loans purchased or originated during the period:                                                                

Unpaid principal balance

  $ 50,202     $ 67,860     $ -     $ 118,062     $ 20,588     $ 31,826     $ -     $ 52,414  

Net investment basis

    45,060       67,860       -       112,920       18,754       31,826       -       50,580  
                                                                 

Loan returns during the period:

                                                               

Yield (1)

    13.64 %     6.45 %     0.00 %     9.61 %     10.88 %     6.98 %     0.51 %     8.19 %

Total Return (1) (2)

    13.78 %     6.45 %     0.00 %     9.68 %     10.88 %     6.98 %     0.51 %     8.19 %

 

    Year Ended June 30,  
    2017     2016  
    Purchased     Originated    

Secured Loans to

Broker-Dealers

    Total LASG     Purchased     Originated    

Secured Loans to

Broker-Dealers

    Total LASG  
    (Dollars in thousands)  

Loans purchased or originated during the period:

                                                               

Unpaid principal balance

  $ 126,713     $ 237,691     $ -     $ 364,404     $ 108,716     $ 110,578     $ -     $ 219,294  

Net investment basis

    112,807       237,691       -       350,498       99,999       110,578       -       210,577  
                                                                 

Loan returns during the period:

                                                               

Yield (1)

    12.24 %     6.21 %     0.82 %     8.69 %     11.37 %     6.11 %     0.50 %     8.03 %

Total Return (1) (2)

    12.30 %     6.21 %     0.82 %     8.72 %     11.38 %     6.10 %     0.50 %     8.04 %
                                                                 
                                                                 

Total loans as of period end:

                                                               

Unpaid principal balance

  $ 279,854     $ 330,515     $ -     $ 610,369     $ 271,268     $ 174,918     $ 48,000     $ 494,186  

Net investment basis

    246,388       330,515       -       576,903       239,709       174,918       48,000       462,627  

 

(1) The yield and total return on LASG originated loans includes $385 thousand of fees related to one loan in the quarter ended June 30, 2016.

(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 $40.4 million, or 4.8%, from March 31, 2017, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $24.3 million, or 4.6%, and an increase in time deposits of $16.1 million, or 5.0%. Deposits increased by $89.4 million, or 11.2%, from June 30, 2016 due to growth in non-maturity accounts of $103.5 million, or 23.0%, offset by a decrease in time deposits of $14.1 million, or 4.0%.

 

 

3.

Shareholders’ equity increased by $6.2 million from June 30, 2016, primarily due to earnings of $12.3 million, offset by $6.9 million in share repurchases (representing 645,238 shares). Additionally, there was stock-based compensation of $945 thousand, a decrease in accumulated other comprehensive loss of $274 thousand and $357 thousand in dividends paid on common stock.

 

Net income increased by $1.8 million to $4.0 million for the quarter ended June 30, 2017, compared to $2.2 million for the quarter ended June 30, 2016.

 

 
 

 

 

 

1.

Net interest and dividend income before provision for loan losses increased by $3.0 million for the quarter ended June 30, 2017, compared to the quarter ended June 30, 2016. The increase is primarily due to higher transactional income on purchased loans and higher average balances in the total loan portfolio. This increase was partially offset by higher rates and volume in the deposit portfolio and the effect of the issuance of subordinated debt.

 

The following table summarizes interest income and related yields recognized on the loan portfolios:

 

   

Interest Income and Yield on Loans

 
   

Three Months Ended June 30,

 
   

2017

   

2016

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income

   

Yield

   

Balance (1)

   

Income (2)

   

Yield

 
   

(Dollars in thousands)

 

Community Banking Division

  $ 163,997     $ 1,949       4.77 %   $ 212,625     $ 2,589       4.90 %

SBA

    55,229       848       6.16 %     30,599       490       6.44 %

LASG:

                                               

Originated

    301,988       4,859       6.45 %     172,678       2,996       6.98 %

Purchased

    237,306       8,068       13.64 %     232,610       6,294       10.88 %

Secured Loans to Broker-Dealers

    -       -       0.00 %     54,001       68       0.51 %

Total LASG

    539,294       12,927       9.61 %     459,289       9,358       8.19 %

Total

  $ 758,520     $ 15,724       8.31 %   $ 702,513     $ 12,437       7.12 %

 

   

Year Ended June 30,

 
   

2017

   

2016

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income

   

Yield

   

Balance (1)

   

Income (2)

   

Yield

 
   

(Dollars in thousands)

 

Community Banking Division

  $ 190,704     $ 9,102       4.77 %   $ 218,649     $ 10,483       4.79 %

SBA

    42,946       2,619       6.10 %     23,786       1,448       6.09 %

LASG:

                                               

Originated

    239,796       14,883       6.21 %     147,193       8,987       6.11 %

Purchased

    236,937       28,997       12.24 %     216,763       24,638       11.37 %

Secured Loans to Broker-Dealers

    31,085       256       0.82 %     58,511       293       0.50 %

Total LASG

    507,818       44,136       8.69 %     422,467       33,918       8.03 %

Total

  $ 741,468     $ 55,857       7.53 %   $ 664,902     $ 45,849       6.90 %

 

(1) Includes loans held for sale.

(2) SBA interest income includes SBA fees of $21 thousand and $33 thousand for the quarter and year ended June 30, 2016, respectively.

 

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 and year ended June 30, 2016, transactional income increased by $2.0 million and $2.9 million, respectively. The total return on purchased loans for the three months and year ended June 30, 2017 was 13.78% and 12.30%, respectively. The increase over the prior comparable periods was primarily due to higher average balances and transactional income in the three months and year ended June 30, 2017. The following table details the total return on purchased loans:

 

 

   

Total Return on Purchased Loans

 
   

Three Months Ended June 30,

 
   

2017

   

2016

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 4,588       7.76 %   $ 4,770       8.25 %

Transactional income:

                               

Gain on loan sales

    -       0.00 %     -       0.00 %

Gain on sale of real estate owned

    93       0.16 %     -       0.00 %

Other noninterest income

    (10 )     -0.02 %     1       0.00 %

Accelerated accretion and loan fees

    3,480       5.88 %     1,524       2.63 %

Total transactional income

    3,563       6.02 %     1,525       2.63 %

Total

  $ 8,151       13.78 %   $ 6,295       10.88 %

 

 
 

 

 

   

Year Ended June 30,

 
   

2017

   

2016

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 18,975       8.01 %   $ 17,382       8.02 %

Transactional income:

                               

Gain on loan sales

    -       0.00 %     -       0.00 %

Gain on sale of real estate owned

    148       0.06 %     23       0.01 %

Other noninterest income

    (12 )     0.00 %     12       0.00 %

Accelerated accretion and loan fees

    10,022       4.23 %     7,256       3.35 %

Total transactional income

    10,158       4.29 %     7,291       3.36 %

Total

  $ 29,133       12.30 %   $ 24,673       11.38 %

 

 

(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. Total return is considered a non-GAAP financial measure.

   

 

 

2.

Noninterest income increased by $479 thousand for the quarter ended June 30, 2017, compared to the quarter ended June 30, 2016, principally due to the following:

 

An increase in gain on sale of SBA loans of $246 thousand, due to a higher volume sold in the quarter;

 

An increase in fees for other services to customers of $154 thousand, due to higher loan servicing fees on SBA loans sold; and

 

A decrease in loss recognized on real estate owned and other repossessed collateral, net of $96 thousand, due to the sale of real estate owned (“REO”).

 

This net increase in noninterest income was partially offset by a lower gain on sale of residential loans held for sale of $99 thousand, due to a lower volume sold in the quarter.

 

 

 

3.

Noninterest expense decreased by $32 thousand for the quarter ended June 30, 2017, compared to the quarter ended June 30, 2016, primarily due to the following:

 

A decrease in other noninterest expense of $264 thousand, primarily due to a decrease in impairment on servicing assets as no impairment was booked in the three months ended June 30, 2017; and

 

A decrease in loan expense of $174 thousand, largely driven by lower expense related to loan acquisition and refinance activity.

 

The decreases in noninterest expense were partially offset by an increase in salaries and employee benefits of $436 thousand, primarily due to higher incentive compensation recognized in the three months ended June 30, 2017.

 

As of June 30, 2017, nonperforming assets totaled $14.8 million, or 1.37% of total assets, as compared to $9.5 million, or 0.96% of total assets, as of June 30, 2016.

 

As of June 30, 2017, past due loans totaled $13.4 million, or 1.72% of total loans, as compared to $6.9 million, or 1.00% of total loans as of June 30, 2016.

 

As of June 30, 2017, the Company’s Tier 1 Leverage Ratio was 12.8%, compared to 13.3% at June 30, 2016, and the Total Capital Ratio was 19.5%, compared to 20.4% at June 30, 2016. The decreases 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 fourth quarter earnings and business outlook at 10:00 a.m. Eastern Time on Friday, July 28 th . Investors can access the call by dialing 877.878.2762 and entering the following passcode: 58436017 . 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, total return, and efficiency ratio. Northeast’s management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.


Forward-Looking Statements  

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

 

 
 

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share data)

 

   

June 30, 2017

   

June 30, 2016

 

Assets

               

Cash and due from banks

  $ 3,582     $ 2,459  

Short-term investments

    159,701       148,698  

Total cash and cash equivalents

    163,283       151,157  
                 
                 

Available-for-sale securities, at fair value

    96,693       100,572  
                 

Residential real estate loans held for sale

    4,508       6,449  

SBA loans held for sale

    191       1,070  

Total loans held for sale

    4,699       7,519  
                 
                 

Loans

               

Commercial real estate

    498,004       426,568  

Residential real estate

    101,168       113,962  

Commercial and industrial

    175,654       145,956  

Consumer

    4,369       5,950  

Total loans

    779,195       692,436  

Less: Allowance for loan losses

    3,665       2,350  

Loans, net

    775,530       690,086  
                 
                 

Premises and equipment, net

    6,937       7,801  

Real estate owned and other repossessed collateral, net

    826       1,652  

Federal Home Loan Bank stock, at cost

    1,938       2,408  

Intangible assets, net

    1,300       1,732  

Servicing rights, net

    2,846       1,771  

Bank owned life insurance

    16,179       15,725  

Other assets

    6,643       5,730  

Total assets

  $ 1,076,874     $ 986,153  
                 

Liabilities and Shareholders' Equity

               

Deposits

               

Demand

  $ 69,827     $ 66,686  

Savings and interest checking

    108,417       107,218  

Money market

    374,569       275,437  

Time

    337,037       351,091  

Total deposits

    889,850       800,432  
                 

Federal Home Loan Bank advances

    20,011       30,075  

Subordinated debt

    23,620       23,331  

Capital lease obligation

    873       1,128  

Other liabilities

    19,723       14,596  

Total liabilities

    954,077       869,562  
                 

Commitments and contingencies

    -       -  
                 

Shareholders' equity

               

Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at June 30, 2017 and June 30, 2016

    -       -  

Voting common stock, $1.00 par value, 25,000,000 shares authorized; 7,840,460 and 8,089,790 shares issued and outstanding at June 30, 2017 and June 30, 2016, respectively

    7,841       8,089  

Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 991,194 and 1,227,683 shares issued and outstanding at June 30, 2017 and June 30, 2016, respectively

    991       1,228  

Additional paid-in capital

    77,455       83,020  

Retained earnings

    38,142       26,160  

Accumulated other comprehensive loss

    (1,632 )     (1,906 )

Total shareholders' equity

    122,797       116,591  

Total liabilities and shareholders' equity

  $ 1,076,874     $ 986,153  

 

 
 

 

   

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except share and per share data)  

 

   

Three Months Ended June 30,

   

Year Ended June 30,

 
   

2017

   

2016

   

2017

   

2016

 

Interest and dividend income:

                               

Interest and fees on loans

  $ 15,724     $ 12,437     $ 55,857     $ 45,849  

Interest on available-for-sale securities

    271       230       1,018       930  

Other interest and dividend income

    376       161       1,046       456  

Total interest and dividend income

    16,371       12,828       57,921       47,235  
                                 

Interest expense:

                               

Deposits

    1,949       1,671       7,357       6,027  

Federal Home Loan Bank advances

    166       253       800       1,027  

Wholesale repurchase agreements

    -       -       -       67  

Short-term borrowings

    -       1       -       20  

Subordinated debt

    487       175       1,888       651  

Obligation under capital lease agreements

    12       15       51       63  

Total interest expense

    2,614       2,115       10,096       7,855  
                                 

Net interest and dividend income before provision for loan losses

    13,757       10,713       47,825       39,380  

Provision for loan losses

    389       317       1,594       1,618  

Net interest and dividend income after provision for loan losses

    13,368       10,396       46,231       37,762  
                                 

Noninterest income:

                               

Fees for other services to customers

    547       393       1,952       1,657  

Gain on sales of residential loans held for sale

    293       392       1,452       1,684  

Gain on sales of SBA loans

    1,866       1,620       5,277       4,178  

Gain on sale of other loans

    -       -       365       -  

Loss recognized on real estate owned and other repossessed collateral, net

    (31 )     (127 )     (23 )     (255 )

Bank-owned life insurance income

    114       113       454       449  

Other noninterest income

    101       20       219       60  

Total noninterest income

    2,890       2,411       9,696       7,773  
                                 

Noninterest expense:

                               

Salaries and employee benefits

    6,028       5,592       21,706       19,548  

Occupancy and equipment expense

    1,222       1,291       5,002       5,227  

Professional fees

    401       421       1,666       1,463  

Data processing fees

    459       379       1,744       1,487  

Marketing expense

    120       85       392       285  

Loan acquisition and collection expense

    233       407       1,734       1,368  

FDIC insurance premiums

    79       135       303       489  

Intangible asset amortization

    108       108       432       477  

Other noninterest expense

    714       978       2,810       3,468  

Total noninterest expense

    9,364       9,396       35,789       33,812  
                                 

Income before income tax expense

    6,894       3,411       20,138       11,723  

Income tax expense

    2,867       1,212       7,799       4,104  

Net income

  $ 4,027     $ 2,199     $ 12,339     $ 7,619  
                                 

Weighted-average shares outstanding:

                               

Basic

    8,823,679       9,319,522       8,898,448       9,474,999  

Diluted

    8,979,471       9,342,439       8,952,614       9,484,635  

 

                               
Earnings per common share:                                

Basic

  $ 0.46     $ 0.24     $ 1.39     $ 0.80  

Diluted

    0.45       0.24       1.38       0.80  
                                 

Cash dividends declared per common share

  $ 0.01     $ 0.01     $ 0.04     $ 0.04  

 

 
 

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)  

 

   

Three Months Ended June 30,

 
   

2017

   

2016

 
           

Interest

   

Average

           

Interest

   

Average

 
   

Average

   

Income/

   

Yield/

   

Average

   

Income/

   

Yield/

 
   

Balance

   

Expense

   

Rate

   

Balance

   

Expense

   

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities

  $ 98,033     $ 271       1.11%     $ 93,289     $ 230       0.99%  

Loans (1) (2) (3)

    758,520       15,741       8.32%       702,513       12,455       7.13%  

Federal Home Loan Bank stock

    1,938       19       3.93%       2,570       23       3.60%  

Short-term investments (4)

    137,570       357       1.04%       113,636       138       0.49%  

Total interest-earning assets

    996,061       16,388       6.60%       912,008       12,846       5.67%  

Cash and due from banks

    2,753                       4,171                  

Other non-interest earning assets

    31,910                       36,411                  

Total assets

  $ 1,030,724                     $ 952,590                  
                                                 

Liabilities & Shareholders' Equity:

                                               

Interest-bearing liabilities:

                                               

NOW accounts

  $ 71,209     $ 51       0.29%     $ 72,012     $ 51       0.28%  

Money market accounts

    345,352       878       1.02%       254,833       573       0.90%  

Savings accounts

    37,863       13       0.14%       36,167       12       0.13%  

Time deposits

    323,399       1,007       1.25%       356,418       1,035       1.17%  

Total interest-bearing deposits

    777,823       1,949       1.01%       719,430       1,671       0.93%  

Short-term borrowings

    -       -       0.00%       441       1       0.91%  

Federal Home Loan Bank advances

    20,014       166       3.33%       30,089       253       3.38%  

Subordinated debt

    23,579       487       8.28%       8,954       175       7.86%  

Capital lease obligations

    896       12       5.37%       1,149       15       5.25%  

Total interest-bearing liabilities

    822,312       2,614       1.28%       760,063       2,115       1.12%  
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    80,188                       68,314                  

Other liabilities

    7,181                       8,863                  

Total liabilities

    909,681                       837,240                  

Shareholders' equity

    121,043                       115,350                  

Total liabilities and shareholders' equity

  $ 1,030,724                     $ 952,590                  
                                                 

Net interest income (5)

          $ 13,774                     $ 10,731          
                                                 

Interest rate spread

                    5.32%                       4.55%  

Net interest margin (6)

                    5.55%                       4.73%  

 

(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)  Includes tax exempt interest income of $17 thousand and $18 thousand for the three months ended June 30, 2017 and June 30, 2016, respectively.

(6)  Net interest margin is calculated as net interest income divided by total interest-earning assets.

 

 
 

 

   

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)  

 

   

Year Ended June 30,

 
   

2017

   

2016

 
           

Interest

   

Average

           

Interest

   

Average

 
   

Average

   

Income/

   

Yield/

   

Average

   

Income/

   

Yield/

 
   

Balance

   

Expense

   

Rate

   

Balance

   

Expense

   

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities

  $ 95,624     $ 1,018       1.06%     $ 100,503     $ 930       0.93%  

Loans (1) (2) (3)

    741,468       55,928       7.54%       664,902       45,921       6.91%  

Federal Home Loan Bank stock

    2,172       90       4.14%       2,960       113       3.82%  

Short-term investments (4)

    133,599       956       0.72%       91,563       343       0.37%  

Total interest-earning assets

    972,863       57,992       5.96%       859,928       47,307       5.50%  

Cash and due from banks

    2,833                       3,596                  

Other non-interest earning assets

    32,394                       35,607                  

Total assets

  $ 1,008,090                     $ 899,131                  
                                                 

Liabilities & Shareholders' Equity:

                                               

Interest-bearing liabilities:

                                               

NOW accounts

  $ 70,912     $ 204       0.29%     $ 68,304     $ 182       0.27%  

Money market accounts

    322,011       3,120       0.97%       212,102       1,845       0.87%  

Savings accounts

    36,438       50       0.14%       36,062       48       0.13%  

Time deposits

    326,601       3,983       1.22%       349,978       3,952       1.13%  

Total interest-bearing deposits

    755,962       7,357       0.97%       666,446       6,027       0.90%  

Short-term borrowings

    -       -       0.00%       1,634       20       1.22%  

Federal Home Loan Bank advances

    24,334       800       3.29%