Northeast Bank Reports Fourth Quarter Results, Record Annual Earnings and Declares Dividend
PORTLAND, Maine, July 28, 2021 (GLOBE NEWSWIRE) -- Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based full-service bank, today reported net income of $21.4 million, or $2.54 per diluted common share, for the quarter ended June 30, 2021, compared to net income of $11.2 million, or $1.33 per diluted common share, for the quarter ended June 30, 2020. Net income for the year ended June 30, 2021 was $71.5 million, or $8.55 per diluted common share, compared to $22.7 million, or $2.53 per diluted common share, for the year ended June 30, 2020. Net income for the quarter and year ended June 30, 2021 included $12.6 million and $46.7 million, respectively, of net gains on the sale of U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans sold during the quarter and year ended June 30, 2021, which had an after-tax earnings per diluted common share impact of $1.06 and $3.95, respectively.
The Board of Directors declared a cash dividend of $0.01 per share, payable on August 27, 2021, to shareholders of record as of August 13, 2021.
“We closed our fiscal year with another strong quarter,” said Rick Wayne, Chief Executive Officer. “For the fourth fiscal quarter, we originated $563.0 million of Round 2 PPP loans, sold $671.4 million to The Loan Source, Inc., and generated $12.6 million of net gains. For the year ended June 30, 2021, we originated $2.84 billion of PPP loans to over 30,000 borrowers with 287,000 associated jobs. Additionally, in the fourth quarter, we generated $6.7 million of correspondent fee income under the arrangement with Loan Source and ACAP SME, LLC. As correspondent, we facilitated for Loan Source purchases of $4.4 billion of PPP loans during the quarter and cumulative purchases of $11.2 billion through June 30, 2021. Our national lending business remained strong, with originated and purchased loans of $147.8 million during the quarter and $478.4 million for the year, representing 11.5% annual growth.” Mr. Wayne continued, “As a result, we are reporting earnings of $2.54 per diluted common share, a return on average equity of 38.0%, a return on average assets of 4.6%, and an efficiency ratio of 25.0% for the quarter.”
As of June 30, 2021, total assets were $2.17 billion, an increase of $916.8 million, or 72.9%, from total assets of $1.26 billion as of June 30, 2020.
| 1. | Cash and short-term investments increased by $866.8 million, or 603.4%, primarily due to the timing of a large deposit account related to PPP payoff collections and purchases that is subject to significant fluctuation given the PPP activity during the quarter ended June 30, 2021. Cash and short-term investments may fluctuate significantly and remain at an elevated level while PPP collections, including forgiveness amounts, continue, depending on the timing of receipts and remittances of cash amounts. |
| 2. | The following table highlights the changes in the loan portfolio for the three months and year ended June 30, 2021: |
| Loan Portfolio Changes | |||||||||||||||||||||
| Three Months Ended June 30, 2021 | |||||||||||||||||||||
| June 30, 2021 Balance | March 31, 2021 Balance | Change ($) | Change (%) | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| National Lending Purchased | $ | 429,054 | $ | 433,497 | $ | (4,443) | (1.02%) | ||||||||||||||
| National Lending Originated | 523,535 | 473,930 | 49,605 | 10.47% | |||||||||||||||||
| SBA National | 39,549 | 42,707 | (3,158) | (7.39%) | |||||||||||||||||
| Community Banking | 48,486 | 52,674 | (4,188) | (7.95%) | |||||||||||||||||
| Total | $ | 1,040,624 | $ | 1,002,808 | $ | 37,816 | 3.77% | ||||||||||||||
| Year Ended June 30, 2021 | |||||||||||||||||||||
| June 30, 2021 Balance | June 30, 2020 Balance | Change ($) | Change (%) | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| National Lending Purchased | $ | 429,054 | $ | 386,624 | $ | 42,430 | 10.97% | ||||||||||||||
| National Lending Originated | 523,535 | 467,612 | 55,923 | 11.96% | |||||||||||||||||
| SBA National | 39,549 | 47,095 | (7,546) | (16.02%) | |||||||||||||||||
| Community Banking | 48,486 | 70,271 | (21,785) | (31.00%) | |||||||||||||||||
| Total | $ | 1,040,624 | $ | 971,602 | $ | 69,022 | 7.10% | ||||||||||||||
Loans generated by the Bank's National Lending Division for the quarter ended June 30, 2021 totaled $147.8 million, which consisted of $33.8 million of purchased loans, at an average price of 95.1% of unpaid principal balance, and $114.0 million of originated loans.
Additionally, the Bank originated $563.0 million of loans in connection with the PPP and sold $671.4 million of PPP loans during the quarter ended June 30, 2021. The Bank recorded a net gain of $12.6 million from the sale of PPP loans, primarily resulting from the recognition of net deferred origination fees upon the sale of the loans.
An overview of the Bank’s National Lending Division portfolio follows:
| National Lending Portfolio | |||||||||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||
| Purchased | Originated | Total | Purchased | Originated | Total | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Loans purchased or originated during the period: | |||||||||||||||||||||||
| Unpaid principal balance | $ | 35,456 | $ | 114,020 | $ | 149,476 | $ | 14,611 | $ | 33,612 | $ | 48,223 | |||||||||||
| Net investment basis | 33,732 | 114,020 | 147,752 | 12,744 | 33,612 | 46,356 | |||||||||||||||||
| Loan returns during the period: | |||||||||||||||||||||||
| Yield | 8.99 | % | 6.58 | % | 7.68 | % | 9.89 | % | 7.13 | % | 8.34 | % | |||||||||||
| Total Return on Purchased Loans (1) | 8.99 | % | 6.58 | % | 7.68 | % | 9.89 | % | 7.13 | % | 8.34 | % | |||||||||||
| Years Ended June 30, | |||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||
| Purchased | Originated | Total | Purchased | Originated | Total | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Loans purchased or originated during the period: | |||||||||||||||||||||||
| Unpaid principal balance | $ | 181,591 | $ | 308,862 | $ | 490,453 | $ | 182,588 | $ | 221,484 | $ | 404,072 | |||||||||||
| Net investment basis | 169,489 | 308,862 | 478,351 | 171,262 | 221,484 | 392,746 | |||||||||||||||||
| Loan returns during the period: | |||||||||||||||||||||||
| Yield | 8.91 | % | 6.93 | % | 7.84 | % | 9.86 | % | 7.43 | % | 8.47 | % | |||||||||||
| Total Return on Purchased Loans (1) | 8.91 | % | 6.93 | % | 7.84 | % | 9.97 | % | 7.43 | % | 8.51 | % | |||||||||||
| Total loans as of period end: | |||||||||||||||||||||||
| Unpaid principal balance | $ | 466,059 | $ | 523,535 | $ | 989,594 | $ | 421,659 | $ | 467,612 | $ | 889,271 | |||||||||||
| Net investment basis | 429,054 | 523,535 | 952,589 | 386,624 | 467,612 | 854,236 | |||||||||||||||||
(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 purchased loans held for sale, on an annualized basis. The total return on purchased loans does not include the effect of purchased loan charge-offs or recoveries during the period. Total return on purchased loans is considered a non-GAAP financial measure. See reconciliation in below table entitled “Total Return on Purchased Loans.”
| 3. | Deposits increased by $850.1 million, or 84.0%, from June 30, 2020. The increase was attributable to increases in demand deposits of $877.7 million, or 926.4%, and savings and interest checking accounts of $187.2 million, or 135.9%, partially offset by a decrease in time deposits of $199.6 million, or 41.8%, due to intentional runoff. The increase in demand deposits was primarily due to the timing of a large deposit account related to PPP collections and payoffs that is subject to significant fluctuation given the PPP forgiveness activity during the quarter ended June 30, 2021. |
| 4. | Shareholders’ equity increased by $67.7 million, or 41.1%, from June 30, 2020, primarily due to net income of $71.5 million. Shareholders’ equity also increased by $965 thousand as a result of stock options exercised, which resulted in 153 thousand shares of common stock issued, and increased by $978 thousand due to stock-based compensation. Partially offsetting these increases was the repurchase of 194,317 shares of common stock at a weighted average price per share of $29.56, which resulted in a $5.7 million decrease in shareholders’ equity. |
Net income increased by $10.2 million to $21.4 million for the quarter ended June 30, 2021, compared to net income of $11.2 million for the quarter ended June 30, 2020.
| 1. | Net interest and dividend income before provision for loan losses increased by $718 thousand to $18.1 million for the quarter ended June 30, 2021, compared to $17.4 million for the quarter ended June 30, 2020. The increase was primarily due to the following: |
- A decrease in deposit interest expense of $2.4 million, due to lower interest rates and lower average balances in interest-bearing deposits; partially offset by,
- A decrease in PPP loan interest income of $677 thousand, due to lower average balances;
- A decrease in interest income earned on the National Lending Division’s originated portfolio of $509 thousand, due to lower rates earned, partially offset by higher average balances; and
- A decrease of $390 thousand in interest income earned on the Community Bank portfolio, due to lower average balances and average rates earned.
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, | |||||||||||||||||
| 2021 | 2020 | ||||||||||||||||
| Average | Interest | Average | Interest | ||||||||||||||
| Balance (1) | Income | Yield | Balance (1) | Income | Yield | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Community Banking | $ | 49,003 | $ | 585 | 4.79 | % | $ | 74,059 | $ | 975 | 5.30 | % | |||||
| SBA National | 41,331 | 606 | 5.88 | % | 48,191 | 642 | 5.36 | % | |||||||||
| National Lending: | |||||||||||||||||
| Originated | 501,646 | 8,229 | 6.58 | % | 492,612 | 8,738 | 7.13 | % | |||||||||
| Purchased | 424,102 | 9,507 | 8.99 | % | 386,212 | 9,495 | 9.89 | % | |||||||||
| Total National Lending | 925,748 | 17,736 | 7.68 | % | 878,824 | 18,233 | 8.34 | % | |||||||||
| Total excluding SBA PPP | $ | 1,016,082 | $ | 18,927 | 7.47 | % | $ | 1,001,074 | $ | 19,850 | 8.17 | % | |||||
| SBA PPP | $ | 172,787 | $ | 884 | 2.05 | % | $ | 223,804 | $ | 1,561 | 2.81 | % | |||||
| Total including SBA PPP | $ | 1,188,869 | $ | 19,811 | 6.68 | % | $ | 1,224,878 | $ | 21,411 | 7.03 | % | |||||
| Year Ended June 30, | |||||||||||||||||
| 2021 | 2020 | ||||||||||||||||
| Average | Interest | Average | Interest | ||||||||||||||
| Balance (1) | Income | Yield | Balance (1) | Income | Yield | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Community Banking | $ | 56,711 | $ | 2,746 | 4.84% | $ | 82,472 | $ | 4,470 | 5.42% | |||||||
| SBA National | 45,764 | 2,442 | 5.33% | 55,511 | 4,066 | 7.32% | |||||||||||
| National Lending: | |||||||||||||||||
| Originated | 469,632 | 32,560 | 6.93% | 479,054 | 35,572 | 7.43% | |||||||||||
| Purchased | 400,141 | 35,649 | 8.91% | 356,958 | 35,201 | 9.86% | |||||||||||
| Total National Lending | 869,773 | 68,209 | 7.84% | 836,012 | 70,773 | 8.47% | |||||||||||
| Total excluding SBA PPP | $ | 972,248 | $ | 73,396 | 7.55% | $ | 973,995 | $ | 59,459 | 8.20% | |||||||
| SBA PPP | $ | 166,230 | $ | 3,522 | 2.12% | $ | 55,649 | $ | 1,561 | 2.81% | |||||||
| Total including SBA PPP | $ | 1,138,478 | $ | 76,918 | 6.76% | $ | 1,029,644 | $ | 80,870 | 7.85% | |||||||
(1) Includes loans held for sale. | |||||||||||||||||
The components of total income on purchased loans are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the quarter ended June 30, 2020, transactional income decreased by $166 thousand for the quarter ended June 30, 2021, while regularly scheduled interest and accretion increased by $178 thousand due to the increase in average balances, partially offset by lower rates earned. The total return on purchased loans for the quarter ended June 30, 2021 was 9.0%, a decrease from 9.9% for the quarter ended June 30, 2020. The following table details the total return on purchased loans:
| Total Return on Purchased Loans | |||||||||||
| Three Months Ended June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Income | Return (1) | Income | Return (1) | ||||||||
| (Dollars in thousands) | |||||||||||
| Regularly scheduled interest and accretion | $ | 7,070 | 6.69 | % | $ | 6,892 | 7.18 | % | |||
| Transactional income: | |||||||||||
| Accelerated accretion and loan fees | 2,437 | 2.30 | % | 2,603 | 2.71 | % | |||||
| Total transactional income | 2,437 | 2.30 | % | 2,603 | 2.71 | % | |||||
| Total | $ | 9,507 | 8.99 | % | $ | 9,495 | 9.89 | % | |||
| Year Ended June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Income | Return (1) | Income | Return (1) | ||||||||
| (Dollars in thousands) | |||||||||||
| Regularly scheduled interest and accretion | $ | 27,536 | 6.88 | % | $ | 26,202 | 7.34 | % | |||
| Transactional income: | |||||||||||
| Gain on real estate owned | - | 0.00 | % | 395 | 0.11 | % | |||||
| Accelerated accretion and loan fees | 8,113 | 2.03 | % | 8,999 | 2.52 | % | |||||
| Total transactional income | 8,113 | 2.03 | % | 9,394 | 2.63 | % | |||||
| Total | $ | 35,649 | 8.91 | % | $ | 35,596 | 9.97 | % | |||
(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales and gains on real estate owned recorded during the period divided by the average invested balance, which includes purchased 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. | Provision for loan losses decreased by $2.8 million to a credit of $1.9 million for the quarter ended June 30, 2021, from a $905 thousand provision in the quarter ended June 30, 2020. The decrease in the provision for loan losses reflects decreases in certain qualitative factors during the current quarter as a result of continued improvements from the COVID-19 pandemic, primarily in the SBA loan portfolio, partially offset by an increase in loan balances during the quarter. |
| 3. | Noninterest income increased by $9.8 million for the quarter ended June 30, 2021, compared to the quarter ended June 30, 2020, principally due to the following: |
- An increase in gain on sale of PPP loans of $2.9 million, due to the sale of PPP loans with a total principal balance of $671.4 million in the quarter ended June 30, 2021, as compared to the sale of PPP loans with a total balance of $457.6 million in the quarter ended June 30, 2020, which resulted in a net gain based on the recognition of net deferred fees; and
- An increase in correspondent fee income of $6.6 million from the recognition of correspondent fees and net servicing income as a result of the correspondent arrangement entered into with The Loan Source, Inc. (“Loan Source”) during the quarter ended June 30, 2020. Under the correspondent arrangement, the Bank earns a correspondent fee when Loan Source purchases PPP loans and the Bank subsequently shares in net servicing income on such purchased PPP loans. Correspondent income for the quarter is comprised of the following components:
| Income Earned | |||||
| (In thousands) | |||||
| Correspondent Fee | $ | 1,080 | |||
| Amortization of Purchased Accrued Interest | 972 | ||||
| Earned Net Servicing Interest | 4,602 | ||||
| Total | $ | 6,654 | |||
A summary of PPP loans purchased by Loan Source and related amounts that the Bank will earn over the expected life of the loans is as follows:
| Quarter | PPP Loans Purchased by Loan Source(3) | Correspondent Fee | Purchased Accrued Interest(1) | Total(2) | ||||||||
| (In thousands) | ||||||||||||
| Q4 FY 2020 | $ | 1,272,900 | $ | 2,891 | $ | 688 | $ | 3,579 | ||||
| Q1 FY 2021 | 2,112,100 | 5,348 | 2,804 | 8,152 | ||||||||
| Q2 FY 2021 | 1,333,500 | 495 | 3,766 | 4,261 | ||||||||
| Q3 FY 2021 | 2,141,900 | - | 598 | 598 | ||||||||
| Q4 FY 2021 | 4,371,000 | 171 | 3,452 | 3,623 | ||||||||
| Total | $ | 11,231,400 | $ | 8,905 | $ | 11,308 | $ | 20,213 | ||||
| Less amounts recognized in Q4 FY 21 | (1,080) | (972) | (2,052) | |||||||||
| Less amounts recognized in previous quarters | (3,001) | (1,813) | (4,814) | |||||||||
| Amount remaining to be recognized | $ | 4,824 | $ | 8,523 | $ | 13,347 | ||||||
| (1) - Northeast Bank's share |
| (2) - Expected to be recognized into income over life of loans |
| (3) - Loan Source’s ending PPP loan balance was $8.39 billion as of June 30, 2021 |
In addition to these increases:
- A decrease in loss on assets held for sale of $337 thousand due to the fair value adjustment for PPP loans held for sale at June 30, 2020, as compared to no PPP loans held for sale at June 30, 2021.
| 4. | Noninterest expense decreased by $741 thousand for the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020, primarily due to the following: |
- A decrease in salaries expense of $1.7 million, primarily due to a decrease of $1.4 million in incentive compensation due to the annual bonus true-up being recorded during the quarter ended March 31, 2021 as compared to the quarter ended June 30, 2020 and an increase of $733 thousand in deferred salaries contra-expense related to higher PPP originations, partially offset by an increase of $310 thousand in regular compensation, due to salary increases; partially offset by,
- An increase in loan expense of $648 thousand, primarily due to $522 thousand in correspondent expenses associated with the Loan Source correspondent arrangement and increased collection legal expenses;
- An increase in other noninterest expense of $158 thousand, primarily due to the quarterly valuation of the SBA servicing asset, which resulted in a $93 thousand recovery during the quarter ended June 30, 2021 as compared to a $190 thousand recovery during the quarter ended June 30, 2020; and
- An increase in marketing expense of $154 thousand, due to increased website advertising and general production in connection with National Lending Division and deposit initiatives.
| 5. | Income tax expense increased by $4.0 million to $8.9 million, or an effective tax rate of 29.4%, for the quarter ended June 30, 2021, compared to $4.9 million, or an effective tax rate of 30.4%, for the quarter ended June 30, 2020. The increase in income tax expense is due to the increase in pre-tax income. The decrease in the effective tax rate from June 30, 2020 is primarily due to a smaller year-end true-up adjustment related to state tax apportionment in the quarter ended June 30, 2021. |
As of June 30, 2021, nonperforming assets totaled $20.4 million, or 0.94% of total assets, compared to $24.4 million, or 1.94% of total assets, as of June 30, 2020. As of June 30, 2021, past due loans totaled $11.3 million, or 1.08% of total loans, compared to past due loans totaling $16.4 million, or 1.69% of total loans, as of June 30, 2020.
As of June 30, 2021, the Bank’s Tier 1 leverage capital ratio was 13.6%, compared to 13.4% at June 30, 2020, and the Total capital ratio was 24.3% at June 30, 2021, compared to 19.6% at June 30, 2020. Capital ratios were affected by earnings during the year ended June 30, 2021.
Investor Call Information
Rick Wayne, Chief Executive Officer, Jean-Pierre Lapointe, Chief Financial Officer, and Pat Dignan, Executive Vice President and Chief Credit Officer of Northeast Bank, will host a conference call to discuss fourth quarter earnings and business outlook at 10:00 a.m. Eastern Time on Thursday, July 29th. Investors can access the call by dialing 800.773.2954 and entering the following passcode: 50197423. The call will be available via live webcast, which can be viewed by accessing the Bank’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 Bank
Northeast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We offer personal and business banking services to the Maine market via nine branches. Our National Lending Division purchases and originates commercial loans on a nationwide basis. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found 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 on purchased loans, efficiency ratio, net interest margin excluding PPP, and net interest margin excluding PPP and collection account. The Bank’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 the Bank 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 Bank’s control. The Bank’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, the ongoing negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; general business and economic conditions on a national basis and in the local markets in which the Bank operates, including changes which adversely affect borrowers’ ability to service and repay our loans; changes in customer behavior due to changing political, business and economic conditions or legislative or regulatory initiatives; turbulence in the capital and debt markets; changes in interest rates and real estate values; increases in loan defaults and charge-off rates; decreases 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; competitive pressures from other financial institutions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; the risk that the Bank may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Bank’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 Bank’s Annual Report on Form 10-K and updated by our Quarterly Reports on Form 10-Q and other filings submitted to the Federal Deposit Insurance Corporation. These statements speak only as of the date of this release and the Bank does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.
NBN-F
| NORTHEAST BANK | |||||
| BALANCE SHEETS | |||||
| (Unaudited) | |||||
| (Dollars in thousands, except share and per share data) | |||||
| June 30, 2021 | June 30, 2020 | ||||
| Assets | |||||
| Cash and due from banks | $ | 2,850 | $ | 2,795 | |
| Short-term investments | 1,007,641 | 140,862 | |||
| Total cash and cash equivalents | 1,010,491 | 143,657 | |||
| Available-for-sale debt securities, at fair value | 59,737 | 64,918 | |||
| Equity securities, at fair value | 7,230 | 7,239 | |||
| Total investment securities | 66,967 | 72,157 | |||
| Residential real estate loans held for sale | - | 601 | |||
| SBA loans held for sale | - | 28,852 | |||
| Total loans held for sale | - | 29,453 | |||
| Loans: | |||||
| Commercial real estate | 725,287 | 679,537 | |||
| Commercial and industrial | 257,604 | 212,769 | |||
| Residential real estate | 56,591 | 77,722 | |||
| Consumer | 1,142 | 1,574 | |||
| Total loans | 1,040,624 | 971,602 | |||
| Less: Allowance for loan losses | 7,313 | 9,178 | |||
| Loans, net | 1,033,311 | 962,424 | |||
| Premises and equipment, net | 11,271 | 9,670 | |||
| Real estate owned and other repossessed collateral, net | 1,639 | 3,274 | |||
| Federal Home Loan Bank stock, at cost | 1,209 | 1,390 | |||
| Loan servicing rights, net | 2,061 | 2,113 | |||
| Bank-owned life insurance | 17,498 | 17,074 | |||
| Other assets | 29,955 | 16,423 | |||
| Total assets | $ | 2,174,402 | $ | 1,257,635 | |
| Liabilities and Shareholders' Equity | |||||
| Deposits: | |||||
| Demand | $ | 972,495 | $ | 94,749 | |
| Savings and interest checking | 325,062 | 137,824 | |||
| Money market | 287,033 | 302,343 | |||
| Time | 277,840 | 477,436 | |||
| Total deposits | 1,862,430 | 1,012,352 | |||
| Federal Home Loan Bank advances | 15,000 | 15,000 | |||
| Paycheck Protection Program Liquidity Facility advances | - | 12,440 | |||
| Subordinated debt | 15,050 | 14,940 | |||
| Lease liability | 6,061 | 4,496 | |||
| Other liabilities | 43,470 | 33,668 | |||
| Total liabilities | 1,942,011 | 1,092,896 | |||
| Commitments and contingencies | - | - | |||
| Shareholders' equity | |||||
| Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares | |||||
| issued and outstanding at June 30, 2021 and 2020 | - | - | |||
| Voting common stock, $1.00 par value, 25,000,000 shares authorized; | |||||
| 8,150,480 and 8,153,841 shares issued and outstanding at | |||||
| June 30, 2021 and 2020, respectively | 8,151 | 8,154 | |||
| Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; zero and 44,783 shares issued and outstanding at June 30, 2021 and 2020, respectively | - | 45 | |||
| Additional paid-in capital | 64,420 | 68,302 | |||
| Retained earnings | 161,132 | 89,960 | |||
| Accumulated other comprehensive loss | (1,312) | (1,722) | |||
| Total shareholders' equity | 232,391 | 164,739 | |||
| Total liabilities and shareholders' equity | $ | 2,174,402 | $ | 1,257,635 | |
| NORTHEAST BANK | ||||||||||||||||
| STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (Dollars in thousands, except share and per share data) | ||||||||||||||||
| Three Months Ended June 30, | Year Ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Interest and fees on loans | $ | 19,811 | $ | 21,411 | $ | 76,918 | $ | 80,870 | ||||||||
| Interest on available-for-sale securities | 113 | 375 | 754 | 1,695 | ||||||||||||
| Other interest and dividend income | 201 | 59 | 453 | 1,119 | ||||||||||||
| Total interest and dividend income | 20,125 | 21,845 | 78,125 | 83,684 | ||||||||||||
Interest expense: | ||||||||||||||||
| Deposits | 1,477 | 3,858 | 8,867 | 16,583 | ||||||||||||
| Federal Home Loan Bank advances | 139 | 120 | 535 | 689 | ||||||||||||
| Paycheck Protection Program Liquidity Facility | 98 | 174 | 400 | 174 | ||||||||||||
| Subordinated debt | 282 | 282 | 1,126 | 1,126 | ||||||||||||
| Obligation under capital lease agreements | 27 | 27 | 111 | 125 | ||||||||||||
| Total interest expense | 2,023 | 4,461 | 11,039 | 18,697 | ||||||||||||
| Net interest and dividend income before provision for loan losses | 18,102 | 17,384 | 67,086 | 64,987 | ||||||||||||
| Provision (credit) for loan losses | (1,926 | ) | 905 | (1,396 | ) | 4,500 | ||||||||||
| Net interest and dividend income after provision for loan losses | 20,028 | 16,479 | 68,482 | 60,487 | ||||||||||||
Noninterest income: | ||||||||||||||||
| Fees for other services to customers | 441 | 477 | 1,869 | 1,619 | ||||||||||||
| Gain on sales of PPP loans | 12,577 | 9,702 | 46,701 | 9,702 | ||||||||||||
| Gain on sales of SBA loans | - | - | - | 793 | ||||||||||||
| Gain on sales of residential loans held for sale | 1 | 37 | 107 | 600 | ||||||||||||
| Net unrealized gain (loss) on equity securities | 10 | 46 | (104 | ) | 148 | |||||||||||
| Loss on real estate owned, other repossessed collateral and premises and equipment, net | (129 | ) | (263 | ) | (473 | ) | (15 | ) | ||||||||
| Correspondent fee income | 6,654 | 20 | 23,452 | 20 | ||||||||||||
| Bank-owned life insurance income | 106 | 108 | 424 | 566 | ||||||||||||
| Loss on assets held for sale | - | (337 | ) | - | (337 | ) | ||||||||||
| Other noninterest income (loss) | (10 | ) | 22 | 57 | 88 | |||||||||||
| Total noninterest income | 19,650 | 9,812 | 72,033 | 13,184 | ||||||||||||
Noninterest expense: | ||||||||||||||||
| Salaries and employee benefits | 4,994 | 6,704 | 22,430 | 24,976 | ||||||||||||
| Occupancy and equipment expense | 912 | 922 | 3,825 | 3,588 | ||||||||||||
| Professional fees | 525 | 608 | 1,930 | 1,783 | ||||||||||||
| Data processing fees | 1,076 | 974 | 4,468 | 3,954 | ||||||||||||
| Marketing expense | 252 | 98 | 542 | 337 | ||||||||||||
| Loan acquisition and collection expense | 899 | 251 | 3,267 | 2,059 | ||||||||||||
| FDIC insurance premiums (credits) | 109 | - | 283 | (15 | ) | |||||||||||
| Intangible asset amortization | - | 109 | - | 434 | ||||||||||||
| Other noninterest expense | 660 | 502 | 2,681 | 3,277 | ||||||||||||
| Total noninterest expense | 9,427 | 10,168 | 39,426 | 40,393 | ||||||||||||
| Income before income tax expense | 30,251 | 16,123 | 101,089 | 33,278 | ||||||||||||
| Income tax expense | 8,881 | 4,904 | 29,586 | 10,541 | ||||||||||||
| Net income | $ | 21,370 | $ | 11,219 | $ | 71,503 | $ | 22,737 | ||||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 8,318,689 | 8,337,088 | 8,275,577 | 8,859,037 | ||||||||||||
| Diluted | 8,397,897 | 8,405,665 | 8,360,355 | 8,991,428 | ||||||||||||
Earnings per common share: | ||||||||||||||||
| Basic | $ | 2.57 | $ | 1.35 | $ | 8.64 | $ | 2.57 | ||||||||
| Diluted | 2.54 | 1.33 | 8.55 | 2.53 | ||||||||||||
Cash dividends declared per common share | $ | 0.01 | $ | 0.01 | $ | 0.04 | $ | 0.04 | ||||||||
| NORTHEAST BANK | |||||||||||||||||
| AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||
| 2021 | 2020 | ||||||||||||||||
| Interest | Average | Interest | Average | ||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||
| Assets: | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Investment securities | $ | 67,423 | $ | 113 | 0.67 | % | $ | 73,100 | $ | 375 | 2.06 | % | |||||
| Loans (1) (2) (3) | 1,188,869 | 19,811 | 6.68 | % | 1,224,878 | 21,411 | 7.03 | % | |||||||||
| Federal Home Loan Bank stock | 1,825 | 9 | 1.98 | % | 3,194 | 29 | 3.65 | % | |||||||||
| Short-term investments (4) | 561,813 | 192 | 0.14 | % | 126,499 | 30 | 0.10 | % | |||||||||
| Total interest-earning assets | 1,819,930 | 20,125 | 4.44 | % | 1,428,001 | 21,845 | 6.15 | % | |||||||||
| Cash and due from banks | 2,805 | 3,426 | |||||||||||||||
| Other non-interest earning assets | 60,923 | 37,222 | |||||||||||||||
| Total assets | $ | 1,883,658 | $ | 1,468,649 | |||||||||||||
| Liabilities & Shareholders' Equity: | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| NOW accounts | $ | 238,462 | $ | 167 | 0.28 | % | $ | 89,194 | $ | 124 | 0.56 | % | |||||
| Money market accounts | 311,753 | 258 | 0.33 | % | 290,643 | 828 | 1.15 | % | |||||||||
| Savings accounts | 46,087 | 19 | 0.17 | % | 35,367 | 14 | 0.16 | % | |||||||||
| Time deposits | 289,705 | 1,033 | 1.43 | % | 518,094 | 2,892 | 2.25 | % | |||||||||
| Total interest-bearing deposits | 886,007 | 1,477 | 0.67 | % | 933,298 | 3,858 | 1.66 | % | |||||||||
| Federal Home Loan Bank advances | 27,348 | 139 | 2.04 | % | 49,615 | 120 | 0.97 | % | |||||||||
| PPPLF advances | 115,571 | 98 | 0.34 | % | 202,285 | 174 | 0.35 | % | |||||||||
| Subordinated debt | 15,035 | 282 | 7.52 | % | 14,925 | 282 | 7.60 | % | |||||||||
| Capital lease obligations | 6,202 | 27 | 1.75 | % | 4,616 | 27 | 2.35 | % | |||||||||
| Total interest-bearing liabilities | 1,050,163 | 2,023 | 0.77 | % | 1,204,739 | 4,461 | 1.49 | % | |||||||||
| Non-interest bearing liabilities: | |||||||||||||||||
| Demand deposits and escrow accounts | 573,724 | 95,062 | |||||||||||||||
| Other liabilities | 34,034 | 10,197 | |||||||||||||||
| Total liabilities | 1,657,921 | 1,309,998 | |||||||||||||||
| Shareholders' equity | 225,737 | 158,651 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,883,658 | $ | 1,468,649 | |||||||||||||
| Net interest income | $ | 18,102 | $ | 17,384 | |||||||||||||
| Interest rate spread | 3.67 | % | 4.66 | % | |||||||||||||
| Net interest margin (5) | 3.99 | % | 4.90 | % | |||||||||||||
| Cost of funds (6) | 0.51 | % | 1.38 | % | |||||||||||||
| (1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory 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 Federal Reserve Bank and FHLB overnight deposits and other interest-bearing deposits. | |||||||||||||||||
| (5) Net interest margin is calculated as net interest income divided by total interest-earning assets. | |||||||||||||||||
| (6) Cost of funds is calculated as total interest expense divided by total interest-bearing liabilities plus demand deposits and escrow accounts. | |||||||||||||||||
| NORTHEAST BANK | |||||||||||||||||
| AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Year Ended June 30, | |||||||||||||||||
| 2021 | 2020 | ||||||||||||||||
| Interest | Average | Interest | Average | ||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||
| Assets: | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Investment securities | $ | 69,762 | $ | 754 | 1.08 | % | $ | 78,656 | $ | 1,695 | 2.15 | % | |||||
| Loans (1) (2) (3) | 1,138,478 | 76,918 | 6.76 | % | 1,029,644 | 80,870 | 7.85 | % | |||||||||
| Federal Home Loan Bank stock | 1,750 | 61 | 3.49 | % | 2,204 | 94 | 4.26 | % | |||||||||
| Short-term investments (4) | 314,405 | 392 | 0.12 | % | 94,586 | 1,025 | 1.08 | % | |||||||||
| Total interest-earning assets | 1,524,395 | 78,125 | 5.12 | % | 1,205,090 | 83,684 | 6.94 | % | |||||||||
| Cash and due from banks | 2,728 | 2,971 | |||||||||||||||
| Other non-interest earning assets | 50,909 | 38,363 | |||||||||||||||
| Total assets | $ | 1,578,032 | $ | 1,246,424 | |||||||||||||
| Liabilities & Shareholders' Equity: | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| NOW accounts | $ | 167,505 | $ | 495 | 0.30 | % | $ | 75,984 | $ | 364 | 0.48 | % | |||||
| Money market accounts | 312,537 | 1,517 | 0.49 | % | 276,264 | 4,096 | 1.48 | % | |||||||||
| Savings accounts | 39,844 | 57 | 0.14 | % | 34,517 | 57 | 0.17 | % | |||||||||
| Time deposits | 424,894 | 6,798 | 1.60 | % | 496,531 | 12,066 | 2.43 | % | |||||||||
| Total interest-bearing deposits | 944,780 | 8,867 | 0.94 | % | 883,296 | 16,583 | 1.88 | % | |||||||||
| Federal Home Loan Bank advances | 24,072 | 535 | 2.22 | % | 34,918 | 689 | 1.97 | % | |||||||||
| PPPLF advances | 114,341 | 400 | 0.35 | % | 50,295 | 174 | 0.35 | % | |||||||||
| Subordinated debt | 14,995 | 1,126 | 7.51 | % | 14,883 | 1,126 | 7.57 | % | |||||||||
| Capital lease obligations | 5,895 | 111 | 1.88 | % | 5,169 | 125 | 2.42 | % | |||||||||
| Total interest-bearing liabilities | 1,104,083 | 11,039 | 1.00 | % | 988,561 | 18,697 | 1.89 | % | |||||||||
| Non-interest bearing liabilities: | |||||||||||||||||
| Demand deposits and escrow accounts | 261,322 | 88,805 | |||||||||||||||
| Other liabilities | 21,643 | 9,097 | |||||||||||||||
| Total liabilities | 1,387,048 | 1,085,463 | |||||||||||||||
| Shareholders' equity | 190,984 | 159,961 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,578,032 | $ | 1,246,424 | |||||||||||||
| Net interest income | $ | 67,086 | $ | 64,987 | |||||||||||||
| Interest rate spread | 4.12 | % | 5.05 | % | |||||||||||||
| Net interest margin (5) | 4.40 | % | 5.39 | % | |||||||||||||
| Cost of funds (6) | 0.81 | % | 1.74 | % | |||||||||||||
| (1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory 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 Federal Reserve Bank and FHLB overnight deposits and other interest-bearing deposits. | |||||||||||||||||
| (5) Net interest margin is calculated as net interest income divided by total interest-earning assets. | |||||||||||||||||
| (6) Cost of funds is calculated as total interest expense divided by total interest-bearing liabilities plus demand deposits and escrow accounts. | |||||||||||||||||
| NORTHEAST BANK | |||||||||||||||||||
| SELECTED FINANCIAL HIGHLIGHTS AND OTHER DATA | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| (Dollars in thousands, except share and per share data) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |||||||||||||||
| Net interest income | $ | 18,102 | $ | 18,603 | $ | 15,388 | $ | 14,993 | $ | 17,384 | |||||||||
| Provision (credit) for loan losses | (1,926 | ) | (211 | ) | 365 | 377 | 905 | ||||||||||||
| Noninterest income | 19,650 | 39,469 | 6,497 | 6,416 | 9,812 | ||||||||||||||
| Noninterest expense | 9,427 | 9,636 | 10,428 | 9,933 | 10,168 | ||||||||||||||
| Net income | 21,370 | 34,162 | 8,176 | 7,794 | 11,219 | ||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||
| Basic | 8,318,689 | 8,344,797 | 8,244,068 | 8,196,828 | 8,337,088 | ||||||||||||||
| Diluted | 8,397,897 | 8,421,247 | 8,309,252 | 8,315,096 | 8,405,665 | ||||||||||||||
Earnings per common share: | |||||||||||||||||||
| Basic | $ | 2.57 | $ | 4.09 | $ | 0.99 | $ | 0.95 | $ | 1.35 | |||||||||
| Diluted | 2.54 | 4.06 | 0.98 | 0.94 | 1.33 | ||||||||||||||
| Dividends declared per common share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||
| Return on average assets | 4.55 | % | 6.99 | % | 2.66 | % | 2.49 | % | 3.07 | % | |||||||||
| Return on average equity | 37.97 | % | 71.06 | % | 18.37 | % | 18.50 | % | 28.44 | % | |||||||||
| Net interest rate spread (1) | 3.67 | % | 3.79 | % | 4.92 | % | 4.65 | % | 4.60 | % | |||||||||
| Net interest margin (2) | 3.99 | % | 3.93 | % | 5.23 | % | 4.95 | % | 4.90 | % | |||||||||
| Net interest margin, excluding PPP (Non-GAAP) (3) | 4.55 | % | 4.64 | % | 5.23 | % | 5.00 | % | 5.34 | % | |||||||||
| Net interest margin, excluding PPP and collection account (Non-GAAP) (4) | 5.56 | % | 5.06 | % | 5.23 | % | 5.00 | % | 5.34 | % | |||||||||
| Efficiency ratio (non-GAAP) (5) | 24.97 | % | 16.59 | % | 47.65 | % | 46.40 | % | 37.29 | % | |||||||||
| Noninterest expense to average total assets | 2.01 | % | 1.97 | % | 3.40 | % | 3.17 | % | 2.78 | % | |||||||||
| Average interest-earning assets to average interest-bearing liabilities | 173.30 | % | 125.53 | % | 129.68 | % | 127.02 | % | 118.53 | % | |||||||||
| As of: | |||||||||||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | June 30, 2020 | |||||||||||||||
| Nonperforming loans: | |||||||||||||||||||
| Originated portfolio: | |||||||||||||||||||
| Residential real estate | $ | 696 | $ | 643 | $ | 6,676 | $ | 704 | $ | 832 | |||||||||
| Commercial real estate | 5,756 | 4,790 | 8,329 | 6,856 | 6,861 | ||||||||||||||
| Commercial and industrial | 286 | 1,408 | 1,978 | 2,013 | 2,058 | ||||||||||||||
| Consumer | 43 | 23 | 30 | 26 | 29 | ||||||||||||||
| Total originated portfolio | 6,781 | 6,864 | 17,013 | 9,599 | 9,780 | ||||||||||||||
| Total purchased portfolio | 11,977 | 16,059 | 13,497 | 11,848 | 11,325 | ||||||||||||||
| Total nonperforming loans | 18,758 | 22,923 | 30,510 | 21,447 | 21,105 | ||||||||||||||
| Real estate owned and other repossessed collateral, net | 1,639 | 2,885 | 2,866 | 4,102 | 3,274 | ||||||||||||||
| Total nonperforming assets | $ | 20,397 | $ | 25,808 | $ | 33,376 | $ | 25,549 | $ | 24,379 | |||||||||
| Past due loans to total loans | 1.08 | % | 1.67 | % | 2.31 | % | 2.03 | % | 1.69 | % | |||||||||
| Nonperforming loans to total loans | 1.80 | % | 2.29 | % | 3.05 | % | 2.30 | % | 2.17 | % | |||||||||
| Nonperforming assets to total assets | 0.94 | % | 1.51 | % | 2.70 | % | 2.03 | % | 1.94 | % | |||||||||
| Allowance for loan losses to total loans | 0.70 | % | 0.88 | % | 0.99 | % | 1.02 | % | 0.94 | % | |||||||||
| Allowance for loan losses to nonperforming loans | 38.99 | % | 38.48 | % | 32.53 | % | 44.46 | % | 43.49 | % | |||||||||
| Commercial real estate loans to total capital (6) | 215.38 | % | 223.09 | % | 251.00 | % | 248.47 | % | 281.32 | % | |||||||||
| Net loans to core deposits (7) | 55.71 | % | 76.99 | % | 101.86 | % | 91.74 | % | 96.38 | % | |||||||||
| Purchased loans to total loans, including held for sale | 41.23 | % | 43.22 | % | 41.79 | % | 38.40 | % | 39.77 | % | |||||||||
| Equity to total assets | 10.69 | % | 12.65 | % | 14.74 | % | 13.73 | % | 13.10 | % | |||||||||
| Common equity tier 1 capital ratio | 22.16 | % | 21.07 | % | 17.93 | % | 18.57 | % | 17.13 | % | |||||||||
| Total capital ratio | 24.29 | % | 23.39 | % | 20.37 | % | 21.19 | % | 19.61 | % | |||||||||
| Tier 1 leverage capital ratio | 13.63 | % | 14.32 | % | 15.07 | % | 14.02 | % | 13.36 | % | |||||||||
| Total shareholders' equity | $ | 232,391 | $ | 216,862 | $ | 181,962 | $ | 172,551 | $ | 164,739 | |||||||||
| Less: Preferred stock | - | - | - | - | - | ||||||||||||||
| Common shareholders' equity | 232,391 | 216,862 | 181,962 | 172,551 | 164,739 | ||||||||||||||
| Less: Intangible assets (8) | (2,061 | ) | (2,149 | ) | (2,035 | ) | (2,323 | ) | (2,113 | ) | |||||||||
| Tangible common shareholders' equity (non-GAAP) | $ | 230,330 | $ | 214,713 | $ | 179,927 | $ | 170,228 | $ | 162,626 | |||||||||
| Common shares outstanding | 8,150,480 | 8,344,797 | 8,344,797 | 8,191,786 | 8,198,624 | ||||||||||||||
| Book value per common share | $ | 28.51 | $ | 25.99 | $ | 21.81 | $ | 21.06 | $ | 20.09 | |||||||||
| Tangible book value per share (non-GAAP) (9) | 28.26 | 25.73 | 21.56 | 20.78 | 19.84 | ||||||||||||||
| (1) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period. | |||||||||||||||||||
| (2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period. | |||||||||||||||||||
| (3) Net interest margin excluding PPP removes the effects of the following: PPP loan interest income of $884 thousand, $2.6 million, $80 thousand, and $1.6 million, PPPLF interest expense of $98 thousand, $300 thousand, $2 thousand, and $174 thousand, and brokered CD interest expense of $0, $99 thousand, $0, and $0, as well as PPP loan average balances of $172.8 million, $481.9 million, $16.9 million and $223.8 million, for the quarters ended June 30, 2021, March 31, 2021, September 30, 2020 and June 30, 2020, respectively. | |||||||||||||||||||
| (4) Net interest margin excluding PPP and collection account removes the PPP impact above and removes the effects of the cash held by the Bank from the correspondent’s collection account in short-term investments, which had an average balance of $405.9 million and $121.7 million and earned $100 thousand and $29 thousand in interest income for the quarters ended June 30, 2021 and March 31, 2021, respectively. | |||||||||||||||||||
| (5) The efficiency ratio represents noninterest expense divided by the sum of net interest income (before the loan loss provision) plus noninterest income. | |||||||||||||||||||
| (6) For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans. | |||||||||||||||||||
| (7) Core deposits exclude all maturity deposits greater than $250 thousand. Loans include loans held for sale, excluding PPP loans held for sale. | |||||||||||||||||||
| (8) Includes the loan servicing rights asset. | |||||||||||||||||||
| (9) Tangible book value per share represents total shareholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding. | |||||||||||||||||||
For More Information:
Jean-Pierre Lapointe, Chief Financial Officer
Northeast Bank, 27 Pearl Street, Portland, ME 04101
207.786.3245 ext. 3220
www.northeastbank.com