Northeast Bancorp
NORTHEAST BANCORP /ME/ (Form: 8-K, Received: 04/25/2017 16:34:39)

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):

April 25, 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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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 April 25, 2017, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the third 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 April 25, 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: April 25, 2017  

 

 
 

 

 

EXHIBIT INDEX

 

Exhibit No .

Description

 

 

99.1

Press Release dated April 25, 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 and Declares Dividend

 

Lewiston, ME (April 25, 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 $3.5 million, or $0.39 per diluted common share, for the quarter ended March 31, 2017, compared to net income of $1.8 million, or $0.19 per diluted common share, for the quarter ended March 31, 2016. Net income for the nine months ended March 31, 2017 was $8.3 million, or $0.93 per diluted common share, compared to $5.4 million, or $0.57 per diluted common share, for the nine months ended March 31, 2016.

 

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on May 22, 2017 to shareholders of record as of May 8, 2017.

 

“Our strong growth in fiscal year 2017 continued in the third quarter,” said Richard Wayne, President and Chief Executive Officer. “We achieved record earnings of 39 cents per share through solid loan volume, purchased loan transactional income and SBA gains. Our Loan Acquisition and Servicing Group produced $89.7 million of loans, our SBA Division closed $22.6 million of loans, the purchased loan portfolio yielded 11.9%, and the SBA gain on sale was $951 thousand. In addition, in the current quarter, we strategically repositioned our balance sheet with the payoff of $48.0 million of secured loans to broker-dealers and the sale of a commercial loan portfolio of $18.3 million. The payoff of these lower yielding assets provides capacity for higher yielding loan growth in the future. This quarterly activity helped drive our return on equity to 12.0%, our return on assets to 1.4%, and our efficiency ratio to 59.9%.”

 

As of March 31, 2017, total assets were $1.0 billion, an increase of $40.9 million, or 4.2%, from total assets of $986.2 million as of June 30, 2016. The principal components of the change in the balance sheet follow:

 

 

1.

Bank wide, the Company originated $125.4 million of loans during the quarter ended March 31, 2017. Loans generated by the Bank’s Loan Acquisition and Servicing Group (“LASG”) totaled $89.7 million, which consisted of $7.9 million of purchased loans, at an average price of 91.3% of unpaid principal balance, and $81.8 million of originated loans. The Bank’s Small Business Administration and United States Department of Agriculture (“SBA”) Division closed $22.6 million of new loans during the quarter, of which $16.5 million were funded. In addition, the Company sold $9.9 million of the guaranteed portion of SBA loans in the secondary market, of which $2.6 million were originated in the current quarter and $7.3 million were originated or purchased in prior quarters. Residential loan production sold in the secondary market totaled $15.5 million for the quarter.

 

In totality, the loan portfolio – excluding loans held for sale – increased by $49.3 million, or 7.1%, compared to June 30, 2016, and decreased by $25.2 million, or 3.3%, compared to December 31, 2016. The decrease from December 31, 2016 is primarily attributable to the payoff of $48.0 million of secured loans to broker-dealers and the sale of a commercial loan portfolio of $18.3 million which, combined, had a weighted average yield of 1.92%.

 

 
 

 

   

The following table highlights the changes in the loan portfolio for the three and nine months ended March 31, 2017:

 

   

Loan Portfolio Changes

 
   

Three months ended

March 31, 2017

   

Nine months ended

March 31, 2017

 
   

(Dollars in thousands)

 

LASG originations and acquisitions

  $ 89,667     $ 237,578  

SBA and USDA funded originations

    16,549       56,853  

Community Banking Division originations

    13,036       63,776  

Payoff of secured loans to broker-dealers

    (48,000 )     (48,000 )

Commercial loan portfolio sale

    (18,259 )     (18,259 )

SBA and residential loan sales

    (25,471 )     (92,956 )

Payoffs, pay-downs and amortization, net

    (52,732 )     (149,700 )

Net change

  $ (25,210 )   $ 49,292  

 

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

 

Basis for

Regulatory Condition

 

Condition

 

Availability at March 31, 2017

       

(Dollars in millions)

Total Loans

 

Purchased loans may not exceed 40% of total loans

 

$

                101.0

Regulatory Capital

 

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

 

$

               172.3

 

An overview of the Bank’s LASG portfolio follows :

 

    LASG Portfolio  
    Three Months Ended March 31,  
    2017     2016  
    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

  $ 8,609     $ 81,806     $ -     $ 90,415     $ 24,400     $ 27,846     $ -     $ 52,246  

Net investment basis

    7,861       81,806       -       89,667       21,934       27,846       -       49,780  

Loan returns during the period:

                                                               

Yield

    11.89 %     6.44 %     1.13 %     8.68 %     9.88 %     5.83 %     0.50 %     7.15 %

Total Return (2)

    11.95 %     6.44 %     1.13 %     8.71 %     9.88 %     5.82 %     0.50 %     7.15 %

 

    Nine Months Ended March 31,  
    2017     2016  
    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

  $ 76,511     $ 169,831     $ -     $ 246,342     $ 88,128     $ 78,752     $ -     $ 166,880  

Net investment basis

    67,747       169,831       -       237,578       81,245       78,752       -       159,997  

Loan returns during the period:

                                                               

Yield

    11.77 %     6.10 %     0.82 %     8.36 %     11.54 %     5.75 %     0.50 %     7.97 %

Total Return (2)

    11.80 %     6.10 %     0.82 %     8.37 %     11.57 %     5.74 %     0.50 %     7.98 %
                                                                 

Total loans as of period end:

                                                               

Unpaid principal balance

  $ 268,651     $ 299,340     $ -     $ 567,991     $ 266,223     $ 170,085     $ 60,000     $ 496,308  

Net investment basis

    237,569       299,340       -       536,909       233,650       170,085       60,000       463,735  

 

(1) Purchased loan balances include loans held for sale of $973 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 $9.9 million, or 1.2% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $24.5 million, or 4.9%, offset by a decrease in time deposits of $14.6 million, or 4.3%. For the nine months ended March 31, 2017, deposits increased $49.0 million, or 6.1%, due to growth in non-maturity accounts of $79.2 million, or 17.6%, offset by a decrease in time deposits of $30.1 million, or 8.6%.

 

 

3.

Shareholders’ equity increased by $2.1 million from June 30, 2016, primarily due to earnings of $8.3 million, offset by $6.9 million in share repurchases (representing 645,238 shares). Additionally, there was stock-based compensation of $689 thousand, a decrease in accumulated other comprehensive loss of $313 thousand and $268 thousand in dividends paid on common stock.

 

Net income increased by $1.7 million to $3.5 million for the quarter ended March 31, 2017, compared to $1.8 million for the quarter ended March 31, 2016.

 

 

1.

Net interest and dividend income before provision for loan losses increased by $3.2 million for the quarter ended March 31, 2017, compared to the quarter ended March 31, 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 March 31,

 
   

2017

   

2016

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income

   

Yield

   

Balance (1)

   

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking Division

  $ 188,748     $ 2,402       5.16 %   $ 219,001     $ 2,592       4.76 %

SBA

    44,538       678       6.17 %     28,193       402       5.73 %

LASG:

                                               

Originated

    256,778       4,075       6.44 %     159,976       2,317       5.83 %

Purchased

    245,135       7,184       11.89 %     224,710       5,518       9.88 %

Secured Loans to Broker-Dealers

    27,933       78       1.13 %     60,001       75       0.50 %

Total LASG

    529,846       11,337       8.68 %     444,687       7,910       7.15 %

Total

  $ 763,132     $ 14,417       7.66 %   $ 691,881     $ 10,904       6.34 %

 

 

   

Nine Months Ended March 31,

 
   

2017

   

2016

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income

   

Yield

   

Balance (1)

   

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking Division

  $ 199,566     $ 7,150       4.77 %   $ 220,582     $ 7,893       4.76 %

SBA

    38,867       1,771       6.07 %     21,590       957       5.90 %

LASG:

                                               

Originated

    219,140       10,030       6.10 %     138,760       5,991       5.75 %

Purchased

    236,822       20,925       11.77 %     211,519       18,347       11.54 %

Secured Loans to Broker-

Dealers

    41,409       256       0.82 %     60,004       225       0.50 %

Total LASG

    497,371       31,211       8.36 %     410,283       24,563       7.97 %

Total

  $ 735,804     $ 40,132       7.27 %   $ 652,455     $ 33,413       6.82 %

 

(1)      Includes loans held for sale.

 

 
 

 

   

The various components of transactional income are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the three and nine months ended March 31, 2016, transactional income increased by $1.4 million and $831 thousand, respectively. The total return on purchased loans for the three and nine months ended March 31, 2017 was 11.95% and 11.80%, respectively. The increase over the prior comparable periods was primarily due to higher average balances and transactional income in the three and nine months ended March 31, 2017. The following table details the total return on purchased loans:

 

 

   

Total Return on Purchased Loans

 
   

Three Months Ended March 31,

 
   

2017

   

2016

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 4,914       8.13 %   $ 4,606       8.25 %

Transactional income:

                               

Gain on loan sales

    -       0.00 %     -       0.00 %

Gain on sale of real estate owned

    36       0.06 %     1       0.00 %

Other noninterest income

    -       0.00 %     -       0.00 %

Accelerated accretion and loan fees

    2,270       3.76 %     912       1.63 %

Total transactional income

    2,306       3.82 %     913       1.63 %

Total

  $ 7,220       11.95 %   $ 5,519       9.88 %

 

 

   

Nine Months Ended March 31,

 
   

2017

   

2016

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 14,383       8.09 %   $ 12,615       7.94 %

Transactional income:

                               

Gain on loan sales

    -       0.00 %     -       0.00 %

Gain on sale of real estate owned

    55       0.03 %     23       0.01 %

Other noninterest income

    -       0.00 %     11       0.01 %

Accelerated accretion and loan fees

    6,542       3.68 %     5,732       3.61 %

Total transactional income

    6,597       3.71 %     5,766       3.63 %

Total

  $ 20,980       11.80 %   $ 18,381       11.57 %

   

 

(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 $273 thousand for the quarter ended March 31, 2017, compared to the quarter ended March 31, 2016, principally due to the following:

 

An increase in gain on sale of other loans of $365 thousand, due to the sale of a Community Banking Division commercial loan portfolio;

 

An increase in fees for other services to customers of $88 thousand, due to an increase in SBA loan servicing fees; and

 

An increase in gain recognized on real estate owned and other repossessed collateral, net of $74 thousand, due to the sale of Community Banking Division real estate owned (“REO”).

 

The increases in noninterest income were partially offset by a decrease in gain on sale of SBA loans of $254 thousand, due to a lower volume sold in the quarter.

 

 

3.

Noninterest expense increased by $430 thousand for the quarter ended March 31, 2017, compared to the quarter ended March 31, 2016, primarily due to the following:

 

An increase in loan expense of $431 thousand, largely driven by the expense related to increased loan acquisition and refinance activity, as well as increased REO activity and expense in the period; and

 

An increase in salaries and employee benefits of $357 thousand, primarily due to severance expense of $304 thousand recognized in the three months ended March 31, 2017.

 

The increases in noninterest expense were partially offset by a decrease in other noninterest expense of $390 thousand, primarily resulting from a mortgage insurance recovery from a legacy mortgage insurance premium plan of $167 thousand and a decrease in impairment on servicing assets as no impairment was booked in the three months ended March 31, 2017.

   

 
 

 

 

As of March 31, 2017, nonperforming assets totaled $18.6 million, or 1.81% of total assets, as compared to $13.3 million, or 1.32% of total assets, as of December 31, 2016, and $9.5 million, or 0.96% of total assets, as of June 30, 2016. The increase of $5.3 million from December 31, 2016 is primarily due to three loans placed on non-accrual totaling $4.6 million.

 

As of March 31, 2017, past due loans totaled $24.1 million, or 3.25% of total loans, as compared to $21.9 million, or 2.85% of total loans, as of December 31, 2016, and $6.9 million, or 1.00% of total loans as of June 30, 2016. The increase of $2.2 million from December 31, 2016 includes two loans totaling $2.1 million which were 30-59 days past due as of March 31, 2017, and have been paid current in April.

 

As of March 31, 2017, the Company’s Tier 1 Leverage Ratio was 12.5%, compared to 13.3% at June 30, 2016, and the Total Capital Ratio was 19.3%, 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 third quarter earnings and business outlook at 10:00 a.m. Eastern Time on Wednesday, April 26 th . Investors can access the call by dialing 877.878.2762 and entering the following passcode: 10568713 . 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)

 

   

March 31, 2017

   

June 30, 2016

 

Assets

               

Cash and due from banks

  $ 3,559     $ 2,459  

Short-term investments

    143,883       148,698  

Total cash and cash equivalents

    147,442       151,157  
                 

Available-for-sale securities, at fair value

    98,865       100,572  
                 

Residential real estate loans held for sale

    1,424       6,449  

SBA loans held for sale

    3,210       1,070  

Total loans held for sale

    4,634       7,519  
                 

Loans

               

Commercial real estate

    479,260       426,568  

Residential real estate

    103,254       113,962  

Commercial and industrial

    154,343       145,956  

Consumer

    4,871       5,950  

Total loans

    741,728       692,436  

Less: Allowance for loan losses

    3,375       2,350  

Loans, net

    738,353       690,086  
                 

Premises and equipment, net

    7,002       7,801  

Real estate owned and other repossessed collateral, net

    3,761       1,652  

Federal Home Loan Bank stock, at cost

    1,938       2,408  

Intangible assets, net

    1,408       1,732  

Bank owned life insurance

    16,065       15,725  

Other assets

    7,578       7,501  

Total assets

  $ 1,027,046     $ 986,153  

Liabilities and Shareholders' Equity

               

Deposits

               

Demand

  $ 72,369     $ 66,686  

Savings and interest checking

    108,507       107,218  

Money market

    347,658       275,437  

Time

    320,945       351,091  

Total deposits

    849,479       800,432  
                 

Federal Home Loan Bank advances

    20,017       30,075  

Subordinated debt

    23,544       23,331  

Capital lease obligation

    938       1,128  

Other liabilities

    14,393       14,596  

Total liabilities

    908,371       869,562  
                 

Commitments and contingencies

    -       -  
                 

Shareholders' equity

               

Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at March 31, 2017 and June 30, 2016

    -       -  

Voting common stock, $1.00 par value, 25,000,000 shares authorized; 7,824,085 and 8,089,790 shares issued and outstanding at March 31, 2017 and June 30, 2016, respectively

    7,824       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 March 31, 2017 and June 30, 2016, respectively

    991       1,228  

Additional paid-in capital

    77,249       83,020  

Retained earnings

    34,204       26,160  

Accumulated other comprehensive loss

    (1,593 )     (1,906 )

Total shareholders' equity

    118,675       116,591  

Total liabilities and shareholders' equity

  $ 1,027,046     $ 986,153  

 

 
 

 

   

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

   

Three Months Ended March 31,

   

Nine Months Ended March 31,

 
   

2017

   

2016

   

2017

   

2016

 

Interest and dividend income:

                               

Interest and fees on loans

  $ 14,417     $ 10,904     $ 40,132     $ 33,413  

Interest on available-for-sale securities

    261       236       748       700  

Other interest and dividend income

    282       119       669       295  

Total interest and dividend income

    14,960       11,259       41,549       34,408  
                                 

Interest expense:

                               

Deposits

    1,855       1,566       5,407       4,356  

Federal Home Loan Bank advances

    159       255       634       774  

Wholesale repurchase agreements

    -       -       -       65  

Short-term borrowings

    -       5       -       19  

Subordinated debt

    475       164       1,401       476  

Obligation under capital lease agreements

    12       15       39       49  

Total interest expense

    2,501       2,005       7,481       5,739  

Net interest and dividend income before provision for loan losses

    12,459       9,254       34,068       28,669  

Provision for loan losses

    384       236       1,205       1,301  

Net interest and dividend income after provision for loan losses

    12,075       9,018       32,863       27,368  
                                 

Noninterest income:

                               

Fees for other services to customers

    516       428       1,405       1,264  

Gain on sales of residential loans held for sale

    281       335       1,160       1,292  

Gain on sales of SBA loans

    951       1,205       3,411       2,558  

Gain on sale of other loans

    365       -       365       -  

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

    20       (54 )     9       (127 )

Bank-owned life insurance income

    113       112       341       336  

Other noninterest income

    62       9       115       39  

Total noninterest income

    2,308       2,035       6,806       5,362  
                                 

Noninterest expense:

                               

Salaries and employee benefits

    5,203       4,846       15,678       13,956  

Occupancy and equipment expense

    1,299       1,327       3,781       3,937  

Professional fees

    370       348       1,265       1,042  

Data processing fees

    455       394       1,286       1,109  

Marketing expense

    89       64       272       200  

Loan acquisition and collection expense

    728       297       1,502       961  

FDIC insurance premiums

    78       125       224       354  

Intangible asset amortization

    107       108       324       369  

Other noninterest expense

    513       903       2,093       2,489  

Total noninterest expense

    8,842       8,412       26,425       24,417  

Income before income tax expense

    5,541       2,641       13,244       8,313  

Income tax expense

    2,080       832       4,932       2,892  

Net income

    3,461       1,809       8,312       5,421  
                                 

Weighted-average shares outstanding:

                               

Basic

    8,830,442       9,456,198       8,923,280       9,526,302  

Diluted

    8,893,534       9,459,611       8,963,483       9,531,747  
                                 

Earnings per common share:

                               

Basic

  $ 0.39     $ 0.19     $ 0.93     $ 0.57  

Diluted

    0.39       0.19       0.93       0.57  
                                 

Cash dividends declared per common share

  $ 0.01     $ 0.01     $ 0.03     $ 0.03  

   

 
 

 

   

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)

 

   

Three Months Ended March 31,

 
   

2017

   

2016

 
           

Interest

   

Average

           

Interest

   

Average

 
   

Average

   

Income/

   

Yield/

   

Average

   

Income/

   

Yield/

 
   

Balance

   

Expense

   

Rate

   

Balance

   

Expense

   

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities

  $ 96,868     $ 261       1.09%     $ 100,904     $ 236       0.94%  

Loans (1) (2) (3)

    763,132       14,435       7.67%       691,881       10,922       6.35%  

Federal Home Loan Bank stock

    1,938       24       5.02%       2,571       22       3.44%  

Short-term investments (4)

    128,082       258       0.82%       80,789       97       0.48%  

Total interest-earning assets

    990,020       14,978       6.14%       876,145       11,277       5.18%  

Cash and due from banks

    2,875                       3,841                  

Other non-interest earning assets

    31,606                       34,045                  

Total assets

  $ 1,024,501                     $ 914,031                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

NOW accounts

  $ 69,773     $ 49       0.28%     $ 65,985     $ 42       0.28%  

Money market accounts

    338,662       807       0.97%       223,835       491       0.88%  

Savings accounts

    36,940       13       0.14%       36,453       12       0.13%  

Time deposits

    329,442       986       1.21%       357,857       1,021       1.15%  

Total interest-bearing deposits

    774,817       1,855       0.97%       684,130       1,566       0.92%  

Short-term borrowings

    -       -       0.00%       2,136       5       0.94%  

Federal Home Loan Bank advances

    20,021       159       3.22%       30,117       255       3.41%  

Subordinated debt

    23,506       475       8.20%       8,746       164       7.54%  

Capital lease obligations

    961       12       5.06%       1,211       15       4.98%  

Total interest-bearing liabilities

    819,305       2,501       1.24%       726,340       2,005       1.11%  
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    81,901                       66,384                  

Other liabilities

    6,659                       6,429                  

Total liabilities

    907,865                       799,153                  

Stockholders' equity

    116,636                       114,878                  

Total liabilities and stockholders' equity

  $ 1,024,501                     $ 914,031                  
                                                 

Net interest income (5)

          $ 12,477                     $ 9,272          
                                                 

Interest rate spread

                    4.90%                       4.07%  

Net interest margin (6)

                    5.11%                       4.26%  

 

(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 March 31, 2017 and March 31, 2016.
(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)

 

   

Nine Months Ended March 31,

 
   

2017

   

2016

 
           

Interest

   

Average

           

Interest

   

Average

 
   

Average

   

Income/

   

Yield/

   

Average

   

Income/

   

Yield/

 
   

Balance

   

Expense

   

Rate

   

Balance

   

Expense

   

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities

  $ 94,824     $ 748       1.05%     $ 102,890     $ 700       0.91%  

Loans (1) (2) (3)

    735,804       40,185       7.28%       652,455       33,467       6.83%  

Federal Home Loan Bank stock

    2,250       70       4.14%       3,089       90       3.88%  

Short-term investments (4)

    132,280       599       0.60%       84,258       205       0.32%  

Total interest-earning assets

    965,158       41,602       5.74%       842,692       34,462       5.44%  

Cash and due from banks

    2,860                       3,405                  

Other non-interest earning assets

    32,554                       35,345                  

Total assets

  $ 1,000,572                     $ 881,442                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

NOW accounts

  $ 70,814     $ 152       0.29%     $ 67,078     $ 130       0.26%  

Money market accounts

    314,259       2,242       0.95%       197,962       1,273       0.86%  

Savings accounts

    35,964       37       0.14%       36,027       36       0.13%  

Time deposits

    327,664       2,976       1.21%       347,847       2,917       1.12%  

Total interest-bearing deposits

    748,701       5,407       0.96%       648,914       4,356       0.89%  

Short-term borrowings

    -       -       0.00%       2,029       19       1.25%  

Federal Home Loan Bank advances

    25,768       634       3.28%       33,207       839       3.36%  

Subordinated debt

    23,431       1,401       7.97%       8,698       476       7.28%  

Capital lease obligations

    1,024       39       5.07%       1,272       49       5.13%  

Total interest-bearing liabilities

    798,924       7,481       1.25%       694,120       5,739       1.10%  
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    79,352                       66,619                  

Other liabilities

    7,738                       6,720                  

Total liabilities

    886,014                       767,459                  

Stockholders' equity

    114,558                       113,983                  

Total liabilities and stockholders' equity

  $ 1,000,572                     $ 881,442                  
                                                 

Net interest income (5)

          $ 34,121                     $ 28,723          
                                                 

Interest rate spread

                    4.49%                       4.34%  

Net interest margin (6)