Northeast Bancorp
NORTHEAST BANCORP /ME/ (Form: 8-K, Received: 01/30/2017 16:37:09)

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):

January 30, 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

 

 

 
 

 

 

Item 2.02

Results of Operations and Financial Condition

       

On January 30, 2017, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the second 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 9.01 

Financial Statements and Exhibits

(c) 

Exhibits

 

 

Exhibit No . Description
   
99.1  Press Release dated January 30, 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: January 30, 2017

 

 

 
 

 

 

EXHIBIT INDEX

 

Exhibit No .

Description

 

 

99.1

Press Release dated January 30, 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 Quarter ly Results , Surpasses

$1 Billion in Assets and Declares Dividend

 

 

Lewiston, ME (January 30, 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 $3.1 million, or $0.35 per diluted common share, for the quarter ended December 31, 2016, compared to net income of $1.7 million, or $0.18 per diluted common share, for the quarter ended December 31, 2015. Net income for the six months ended December 31, 2016 was $4.9 million, or $0.54 per diluted common share, compared to $3.6 million, or $0.38 per diluted common share, for the six months ended December 31, 2015.

 

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on February 28, 2017 to shareholders of record as of February 15, 2017.

 

“I am very pleased with the progress we made this quarter,” said Richard Wayne, President and Chief Executive Officer. “We reached a great milestone for the Company by surpassing $1 billion in assets and we also achieved record earnings of 35 cents per share. In addition, we had solid loan volume, purchased loan transactional income and SBA gains. Our Loan Acquisition and Servicing Group produced $91.7 million of loans, our SBA Division closed $25.3 million of loans, the purchased loan portfolio yielded 13%, and the SBA gain on sale was $1.7 million. This balance sheet growth and solid income from the Loan Acquisition and Servicing Group and the SBA Division helped drive our efficiency ratio to 61.7%.”

 

As of December 31, 2016, total assets were $1.0 billion, an increase of $26.5 million, or 2.7%, 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 loan portfolio – excluding loans held for sale – has grown by $74.5 million, or 10.8%, compared to June 30, 2016, principally on the strength of $70.7 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”) and net growth of $13.2 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 $9.4 million decrease in the Bank’s Community Banking Division loan portfolio.

 

Loans generated by the LASG totaled $91.7 million for the quarter ended December 31, 2016. The growth in LASG loans consisted of $46.0 million of purchased loans, at an average price of 90.1% of unpaid principal balance, and $45.7 million of originated loans. SBA loans closed during the quarter totaled $25.3 million, of which $24.7 million were fully funded in the quarter. In addition, the Company sold $17.5 million of the guaranteed portion of SBA loans in the secondary market, of which $9.3 million were originated in the current quarter and $8.2 million were originated or purchased in prior quarters. Residential loan production sold in the secondary market totaled $17.7 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 December 31, 2016

       

(Dollars in millions)

Total Loans

 

Purchased loans may not exceed 40% of total loans

 

$

                91.5

Regulatory Capital

 

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

 

$

 146.2

   

An overview of the Bank’s LASG portfolio follows  

 

    LASG Portfolio  
    Three Months Ended December 31,  
    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

  $ 51,112     $ 45,647     $ -     $ 96,759     $ 40,145     $ 39,512     $ -     $ 79,657  

Net investment basis

    46,033       45,647       -       91,680       35,855       39,512       -       75,367  
                                                                 

Loan returns during the period:

                                                               

Yield

    13.01 %     5.89 %     0.99 %     8.76 %     12.74 %     5.69 %     0.50 %     8.55 %

Total Return (2)

    13.01 %     5.89 %     0.99 %     8.76 %     12.74 %     5.69 %     0.50 %     8.55 %

   

    Six Months Ended December 31,  
    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

  $ 67,903     $ 88,025     $ -     $ 155,928     $ 63,728     $ 50,907     $ -     $ 114,635  

Net investment basis

    59,886       88,025       -       147,911       59,311       50,907       -       110,218  
                                                                 

Loan returns during the period:

                                                               

Yield

    11.71 %     5.88 %     0.74 %     8.19 %     12.41 %     5.68 %     0.50 %     8.40 %

Total Return (2)

    11.73 %     5.88 %     0.74 %     8.19 %     12.43 %     5.68 %     0.50 %     8.41 %
                                                                 
                                                                 

Total loans as of period end:

                                                               

Unpaid principal balance

  $ 288,455     $ 231,278     $ 48,000     $ 567,733     $ 258,049     $ 155,728     $ 60,000     $ 473,777  

Net investment basis

    255,048       231,278       48,000       534,326       226,014       155,728       60,000       441,742  

 

(1) Purchased loan balances include loans held for sale of $975 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 $34.2 million, or 4.2% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $20.3 million, or 4.2%, as well as an increase in time deposits of $13.8 million, or 4.3%. For the six months ended December 31, 2016, deposits increased $39.1 million, or 4.9%, due to growth in non-maturity accounts of $54.7 million, or 12.2%, offset by a decrease in time deposits of $15.6 million, or 4.4%.

 

 

 
 

 

 

 

3.

Shareholders’ equity decreased by $1.6 million from June 30, 2016, primarily due to the $6.9 million in share repurchases (representing 645,238 shares), offset by earnings of $4.9 million. Additionally, there was stock-based compensation of $483 thousand, a decrease in accumulated other comprehensive loss of $141 thousand and $181 thousand in dividends paid on common stock.

 

Net income increased by $1.4 million to $3.1 million for the quarter ended December 31, 2016, compared to $1.7 million for the quarter ended December 31, 2015.

 

 

1.

Net interest and dividend income before provision for loan losses increased by $1.7 million for the quarter ended December 31, 2016, compared to the quarter ended December 31, 2015. The increase is primarily due to higher average balances in the total loan portfolio and higher transactional income on purchased loans. This increase was partially offset by higher rates and volume in our deposit portfolio and the effect of the issuance of 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 and six months ended December 31, 2015, transactional income increased by $331 thousand and decreased by $552 thousand, respectively. The following table summarizes interest income and related yields recognized on the loan portfolios:  

 

   

Interest Income and Yield on Loans

 
   

Three Months Ended December 31,

 
   

2016

   

2015

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income

   

Yield

   

Balance (1)

   

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking

  $ 203,963     $ 2,350       4.57 %   $ 217,470     $ 2,604       4.75 %

SBA

    41,038       574       5.55 %     23,037       328       5.65 %

LASG:

                                               

Originated

    216,353       3,210       5.89 %     137,959       1,978       5.69 %

Purchased

    233,502       7,659       13.01 %     209,605       6,734       12.74 %

Secured Loans to Broker-Dealers

    48,000       120       0.99 %     60,004       75       0.50 %

Total LASG

    497,855       10,989       8.76 %     407,568       8,787       8.55 %

Total

  $ 742,856     $ 13,913       7.43 %   $ 648,075     $ 11,719       7.17 %

 

   

Six Months Ended December 31,

 
   

2016

   

2015

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income

   

Yield

   

Balance (1)

   

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking

  $ 204,864     $ 4,754       4.60 %   $ 221,400     $ 5,312       4.76 %

SBA

    36,093       1,093       6.01 %     18,289       545       5.91 %

LASG:

                                               

Originated

    200,731       5,949       5.88 %     128,267       3,673       5.68 %

Purchased

    232,751       13,740       11.71 %     204,995       12,829       12.41 %

Secured Loans to Broker-Dealers

    48,000       180       0.74 %     60,006       150       0.50 %

Total LASG

    481,482       19,869       8.19 %     393,268       16,652       8.40 %

Total

  $ 722,439     $ 25,716       7.06 %   $ 632,957     $ 22,509       7.05 %

   

  (1)        Includes loans held for sale.

 

 

 
 

 

 

The yield on purchased loans for the quarter ended December 31, 2016 was 13.0% as compared to 12.7% in the quarter ended December 31, 2015, primarily due to higher transactional income in the quarter. The following table details the total return on purchased loans:  

 

   

Total Return on Purchased Loans

 
   

Three Months Ended December 31,

 
   

2016

   

2015

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 4,716       8.01 %   $ 4,122       7.80 %

Transactional income:

                               

Gain on loan sales

    -       0.00 %     -       0.00 %

Gain on sale of real estate owned

    -       0.00 %     -       0.00 %

Other noninterest income

    -       0.00 %     -       0.00 %

Accelerated accretion and loan fees

    2,943       5.00 %     2,612       4.94 %

Total transactional income

    2,943       5.00 %     2,612       4.94 %

Total

  $ 7,659       13.01 %   $ 6,734       12.74 %

 

   

Total Return on Purchased Loans

 
   

Six Months Ended December 31,

 
   

2016

   

2015

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 9,470       8.07 %   $ 8,009       7.75 %

Transactional income:

                               

Gain on loan sales

    -       0.00 %     -       0.00 %

Gain on sale of real estate owned

    19       0.02 %     22       0.02 %

Other noninterest income

    -       0.00 %     (1 )     0.00 %

Accelerated accretion and loan fees

    4,270       3.64 %     4,820       4.66 %

Total transactional income

    4,289       3.66 %     4,841       4.68 %

Total

  $ 13,759       11.73 %   $ 12,850       12.43 %

   

 

(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 $1.1 million for the quarter ended December 31, 2016, compared to the quarter ended December 31, 2015, principally due to an increase in gains realized on sale of SBA loans of $1.1 million.

 

 

3.

Noninterest expense increased by $760 thousand for the quarter ended December 31, 2016, compared to the quarter ended December 31, 2015, primarily due to the following:

 

An increase in loan expense of $328 thousand, largely driven by the expense related to loan collection in the period;

 

An increase in salaries and employee benefits of $307 thousand, primarily due to increased incentive compensation and severance in the three months ended December 31, 2016, offset by higher deferred salaries due to an increase in loan originations;

 

An increase in professional fees of $135 thousand, largely attributable to increased consulting costs, increased audit costs relating to the Company’s transition to accelerated filer status and core system projects; and

 

An increase in other noninterest expense of $99 thousand, largely attributable to $220 thousand of expense related to the quarterly valuation of SBA servicing rights.

 

The increases in noninterest expense were partially offset by a decrease in FDIC deposit insurance premiums of $94 thousand, resulting from changes in the reserve ratio requirements.

 

As of December 31, 2016, nonperforming assets totaled $13.3 million, or 1.32% of total assets, as compared to $9.5 million, or 0.96% of total assets, as of June 30, 2016. The increase primarily relates to one loan placed on non-accrual in the quarter ended December 31, 2016, as well as one loan added to other real estate owned in the quarter ended September 30, 2016.

 

 

 
 

 

 

As of December 31, 2016, past due loans totaled $21.9 million, or 2.85% of total loans, compared to $6.9 million, or 1.00% of total loans as of June 30, 2016. The increase is primarily due to the following:

 

$6.0 million of loans purchased in December that were delinquent at month end, of which $4.5 million have been paid current in January; and

 

$6.0 million of loans that were 30 days past due as of December 31, 2016, of which $4.1 million have been paid current in January.

 

As of December 31, 2016, the Company’s Tier 1 Leverage Ratio was 12.6%, compared to 13.3% at June 30, 2016, and the Total Capital Ratio was 18.3%, 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 second quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, January 31 st . Investors can access the call by dialing 877.878.2762 and entering the following passcode: 49922895 . 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)

 

   

December 31, 2016

   

June 30, 2016

 

Assets

               

Cash and due from banks

  $ 2,586     $ 2,459  

Short-term investments

    109,610       148,698  

Total cash and cash equivalents

    112,196       151,157  
                 

Available-for-sale securities, at fair value

    90,533       100,572  
                 

Residential real estate loans held for sale

    5,217       6,449  

SBA loans held for sale

    3,762       1,070  

Total loans held for sale

    8,979       7,519  
                 
                 

Loans

               

Commercial real estate

    503,448       426,568  

Residential real estate

    106,949       113,962  

Commercial and industrial

    151,228       145,956  

Consumer

    5,313       5,950  

Total loans

    766,938       692,436  

Less: Allowance for loan losses

    3,107       2,350  

Loans, net

    763,831       690,086  
                 
                 

Premises and equipment, net

    7,179       7,801  

Real estate owned and other repossessed collateral, net

    3,145       1,652  

Federal Home Loan Bank stock, at cost

    1,938       2,408  

Intangible assets, net

    1,514       1,732  

Bank owned life insurance

    15,953       15,725  

Other assets

    7,391       7,501  

Total assets

  $ 1,012,659     $ 986,153  
                 

Liabilities and Shareholders' Equity

               

Deposits

               

Demand

  $ 76,721     $ 66,686  

Savings and interest checking

    107,386       107,218  

Money market

    319,933       275,437  

Time

    335,531       351,091  

Total deposits

    839,571       800,432  
                 

Federal Home Loan Bank advances

    20,024       30,075  

Subordinated debt

    23,469       23,331  

Capital lease obligation

    1,003       1,128  

Other liabilities

    13,650       14,596  

Total liabilities

    897,717       869,562  
                 

Commitments and contingencies

    -       -  
                 
                 

Shareholders' equity

               

Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at December 31, 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 December 31, 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 December 31, 2016 and June 30, 2016, respectively

    1,344       1,228  

Additional paid-in capital

    77,046       83,020  

Retained earnings

    30,830       26,160  

Accumulated other comprehensive loss

    (1,765 )     (1,906 )

Total shareholders' equity

    114,942       116,591  

Total liabilities and shareholders' equity

  $ 1,012,659     $ 986,153  

 

 
 

 

   

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

   

Three Months Ended December 31,

   

Six Months Ended December 31,

 
   

2016

   

2015

   

2016

   

2015

 

Interest and dividend income:

                               

Interest and fees on loans

  $ 13,913     $ 11,719     $ 25,716     $ 22,509  

Interest on available-for-sale securities

    247       236       486       464  

Other interest and dividend income

    172       80       387       176  

Total interest and dividend income

    14,332       12,035       26,589       23,149  
                                 

Interest expense:

                               

Deposits

    1,798       1,425       3,553       2,789  

Federal Home Loan Bank advances

    220       259       475       519  

Wholesale repurchase agreements

    -       -       -       67  

Short-term borrowings

    -       5       -       13  

Subordinated debt

    468       158       927       312  

Obligation under capital lease agreements

    13       16       27       33  

Total interest expense

    2,499       1,863       4,982       3,733  
                                 

Net interest and dividend income before provision for loan losses

    11,833       10,172       21,607       19,416  

Provision for loan losses

    628       896       820       1,065  

Net interest and dividend income after provision for loan losses

    11,205       9,276       20,787       18,351  
                                 

Noninterest income:

                               

Fees for other services to customers

    481       428       889       836  

Gain on sales of residential loans held for sale

    337       398       878       957  

Gain on sales of SBA loans

    1,734       679       2,476       1,354  

Gain (loss) recognized on real estate owned and other repossessed collateral, net

    3       (14 )     (11 )     (74 )

Bank-owned life insurance income

    114       112       228       224  

Other noninterest income

    21       21       38       29  

Total noninterest income

    2,690       1,624       4,498       3,326  
                                 

Noninterest expense:

                               

Salaries and employee benefits

    5,161       4,854       10,475       9,110  

Occupancy and equipment expense

    1,252       1,320       2,481       2,610  

Professional fees

    399       264       895       694  

Data processing fees

    410       366       832       714  

Marketing expense

    97       66       184       136  

Loan acquisition and collection expense

    547       219       774       663  

FDIC insurance premiums

    22       116       146       229  

Intangible asset amortization

    109       131       218       262  

Other noninterest expense

    959       860       1,577       1,589  

Total noninterest expense

    8,956       8,196       17,582       16,007  
                                 

Income before income tax expense

    4,939       2,704       7,703       5,670  

Income tax expense

    1,839       960       2,852       2,059  

Net income

    3,100       1,744       4,851       3,611  
                                 
                                 

Weighted-average shares outstanding:

                               

Basic

    8,831,235       9,559,369       8,968,690       9,560,913  

Diluted

    8,864,618       9,569,585       8,999,062       9,567,138  
                                 

Earnings per common share:

                               
                                 

Basic

  $ 0.35     $ 0.18     $ 0.54     $ 0.38  

Diluted

    0.35       0.18       0.54       0.38  
                                 

Cash dividends declared per common share

  $ 0.01     $ 0.01     $ 0.02     $ 0.02  

 

 

 
 

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)

 

   

Three Months Ended December 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

  $ 92,750     $ 247       1.06 %   $ 105,502     $ 236       0.89 %

Loans (1) (2) (3)

    742,856       13,931       7.44 %     648,075       11,737       7.19 %

Federal Home Loan Bank stock

    2,398       23       3.81 %     2,588       34       5.21 %

Short-term investments (4)

    114,276       149       0.52 %     72,299       46       0.25 %

Total interest-earning assets

    952,280       14,350       5.98 %     828,464       12,053       5.77 %

Cash and due from banks

    2,764                       3,353                  

Other non-interest earning assets

    35,213                       35,558                  

Total assets

  $ 990,257                     $ 867,375                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

NOW accounts

  $ 71,795     $ 52       0.29 %   $ 65,617     $ 42       0.25 %

Money market accounts

    312,911       753       0.95 %     199,766       429       0.85 %

Savings accounts

    35,206       12       0.14 %     35,269       11       0.12 %

Time deposits

    317,318       981       1.23 %     334,925       943       1.12 %

Total interest-bearing deposits

    737,230       1,798       0.97 %     635,577       1,425       0.89 %

Short-term borrowings

    -       -       0.00 %     2,002       5       0.99 %

Borrowed funds

    27,099       220       3.22 %     30,145       259       3.41 %

Subordinated debt

    23,430       468       7.92 %     8,699       158       7.21 %

Capital lease obligations

    1,024       13       5.04 %     1,272       16       4.99 %

Total interest-bearing liabilities

    788,783       2,499       1.26 %     677,695       1,863       1.09 %
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    80,538                       69,464                  

Other liabilities

    8,299                       6,302                  

Total liabilities

    877,620                       753,461                  

Stockholders' equity

    112,637                       113,914                  

Total liabilities and stockholders' equity

  $ 990,257                     $ 867,375                  
                                                 

Net interest income (5)

          $ 11,851                     $ 10,190          
                                                 

Interest rate spread

                    4.72 %                     4.68 %

Net interest margin (6)

                    4.94 %                     4.88 %

 

(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 $18 thousand for the three months ended December 31, 2016 and December 31, 2015.

(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)

 

   

Six Months Ended December 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

  $ 93,825     $ 486       1.03 %   $ 103,872     $ 464       0.89 %

Loans (1) (2) (3)

    722,439       25,752       7.07 %     632,957       22,545       7.07 %

Federal Home Loan Bank stock

    2,403       46       3.80 %     3,345       68       4.03 %

Short-term investments (4)

    134,334       341       0.50 %     85,974       108       0.25 %

Total interest-earning assets

    953,001       26,625       5.54 %     826,148       23,185       5.57 %

Cash and due from banks

    2,852                       3,190                  

Other non-interest earning assets

    33,012                       35,986                  

Total assets

  $ 988,865                     $ 865,324                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

NOW accounts

  $ 71,323     $ 103       0.29 %   $ 67,617     $ 88       0.26 %

Money market accounts

    302,323       1,435       0.94 %     185,166       782       0.84 %

Savings accounts

    35,488       25       0.14 %     35,816       23       0.13 %

Time deposits

    326,794       1,990       1.21 %     342,896       1,896       1.10 %

Total interest-bearing deposits

    735,928       3,553       0.96 %     631,495       2,789       0.88 %

Short-term borrowings

    -       -       0.00 %     1,976       13       1.31 %

Borrowed funds

    28,580       475       3.30 %     34,734       586       3.35 %

Subordinated debt

    23,395       927       7.86 %     8,674       312       7.14 %

Capital lease obligations

    1,056       27       5.07 %     1,302       33       5.03 %

Total interest-bearing liabilities

    788,959       4,982       1.25 %     678,181       3,733       1.09 %
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    78,104                       66,736                  

Other liabilities

    8,255                       6,868                  

Total liabilities

    875,318                       751,785                  

Stockholders' equity

    113,547                       113,539                  

Total liabilities and stockholders' equity

  $ 988,865                     $ 865,324                  
                                                 

Net interest income (5)

          $ 21,643                     $ 19,452          
                                                 

Interest rate spread

                    4.29 %                     4.48 %

Net interest margin (6)

                    4.51 %                     4.67 %

 

(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 $36 thousand for the six months ended December 31, 2016 and December 31, 2015.

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

 

 

 
 

 

 

NORTHEAST BANCORP AND SUBSIDIARY

SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA

(Unaudited)

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

 

   

Three Months Ended:

 
   

December 31,

2016

   

September 30,

2016

   

June 30,

2016

   

March 31,

2016

   

December 31,

2015

 

Net interest income

  $