UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

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

 

Date of Report (Date of earliest event reported):

October 29, 2018

 

 Commission File No. 1-14588

 

NORTHEAST BANCORP

(Exact name of registrant as specified in its charter)

 

Maine	01-0425066
(State or other jurisdiction of incorporation)	(IRS Employer Identification Number)
500 Canal Street Lewiston, Maine	04240
(Address of principal executive offices)	(Zip Code)

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Emerging growth company ☐

 

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

 

 

Item 2.02     Results of Operations and Financial Condition

 

On October 29, 2018, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the first quarter of fiscal 2019 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 October 29, 2018

 

 

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/ Jean-Pierre Lapointe
	Name:	Jean-Pierre Lapointe
	Title:	Chief Financial Officer and Treasurer

 

Date: October 29, 2018

 

 

EXHIBIT INDEX

 

Exhibit No.	Description
99.1	Press Release dated October 29, 2018

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE        For More Information: Jean-Pierre Lapointe, Chief Financial Officer Northeast Bank, 500 Canal Street, Lewiston, ME 04240 207.786.3245 ext. 3220 www.northeastbank.com

 

Northeast Bancorp Reports First Quarter Results and Declares Dividend

 

Lewiston, ME (October 29, 2018) ‒ Northeast Bancorp (“Northeast” or the “Company”) (NASDAQ: NBN), a Maine-based full-service financial services company and parent of Northeast Bank (the “Bank”), today reported net income of $4.5 million, or $0.49 per diluted common share, for the quarter ended September 30, 2018, compared to net income of $4.6 million, or $0.50 per diluted common share, for the quarter ended September 30, 2017.

 

On October 29, 2018, the Board of Directors declared a cash dividend of $0.01 per share, payable on November 23, 2018, to shareholders of record as of November 9, 2018.

 

“We started fiscal 2019 with a solid first quarter,” said Richard Wayne, President and Chief Executive Officer. “For the quarter, we earned $0.49 per diluted common share, a return on equity of 12.8%, and a return on assets of 1.5%, while keeping our operating expenses in check with an efficiency ratio of 58.8%. Our Loan Acquisition and Servicing Group produced $105.9 million of loans, including originations of $71.1 million and purchases with a recorded investment of $34.8 million during the quarter. This represents quarterly net growth in the LASG portfolio of $20.0 million, or 2.9%.”

 

As of September 30, 2018, total assets were $1.2 billion, an increase of $56.0 million, or 4.8%, from total assets of $1.2 billion as of June 30, 2018. The principal components of the changes in the balance sheet follow:

 

1.

The following table highlights the changes in the loan portfolio for the three months ended September 30, 2018:

 

		Three Months Ended September 30, 2018
		September 30, 2018 Balance				June 30, 2018 Balance				Change ($)				Change (%)
		(Dollars in thousands)
LASG Purchased		$	300,548			$	290,972			$	9,576				3.29	%
LASG Originated			407,822				397,363				10,459				2.63	%
SBA			67,212				60,156				7,056				11.73	%
Community Banking			111,614				123,311				(11,697	)			(9.49	%)
Total		$	887,196			$	871,802			$	15,394				1.77	%

 

Loans generated by the Bank's Loan Acquisition and Servicing Group ("LASG") for the quarter ended September 30, 2018 totaled $105.9 million, which consisted of $34.8 million of purchased loans, at an average price of 93.9% of unpaid principal balance, and $71.1 million of originated loans. The Bank's Small Business Administration ("SBA") Division closed $18.9 million and funded $18.6 million of new loans during the quarter ended September 30, 2018. In addition, the Company sold $12.3 million of the guaranteed portion of SBA loans in the secondary market, of which $7.4 million were originated in the current quarter and $4.9 million were originated in prior quarters. Residential loan production sold in the secondary market totaled $13.2 million for the quarter.

 

 

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

 

Basis for Regulatory Condition		Condition		Availability at September 30, 2018
				(Dollars in millions)
Total Loans		Purchased loans may not exceed 40% of total loans		$	92.7
Regulatory Capital		Non-owner occupied commercial real estate loans may not exceed 300% of total capital		$	120.2

 

An overview of the Bank’s LASG portfolio follows:

 

		LASG Portfolio
		Three Months Ended September 30,
		2018												2017
		Purchased				Originated				Total LASG				Purchased				Originated				Total LASG
		(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance		$	37,077			$	71,136			$	108,213			$	4,318			$	40,779			$	45,097
Net investment basis			34,803				71,136				105,939				3,651				40,779				44,430
Loan returns during the period:
Yield			9.46	%			7.43	%			8.31	%			12.28	%			6.35	%			8.85	%
Total Return (1)			9.46	%			7.43	%			8.31	%			12.28	%			6.35	%			8.85	%
Total loans as of period end:
Unpaid principal balance		$	336,908			$	407,822			$	744,730			$	262,144			$	340,756			$	602,900
Net investment basis			300,548				407,822				708,370				231,232				340,756				571,988

 

(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.

 

2.

Deposits increased by $60.6 million, or 6.3%, from June 30, 2018, attributable primarily to an increase in time deposits of $87.9 million, or 25.0%, partially offset by decreases in money market accounts of $22.5 million, or 5.3%, and demand deposits of $4.8 million, or 6.6%.

 

3.

Shareholders’ equity increased by $5.0 million, or 3.6%, from June 30, 2018, primarily due to earnings of $4.5 million. Additionally, there was stock-based compensation of $299 thousand and a decrease in accumulated other comprehensive loss of $529 thousand, which were partially offset by dividends paid on common stock of $89 thousand and a $180 thousand reduction in retained earnings related to the adoption of ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires companies to record changes in the fair value of equity securities as net income through the income statement as opposed to other comprehensive income. The initial adoption of this ASU requires the unrealized gains and losses on equity securities, net of tax, at the beginning of the year to be reflected as a change to retained earnings.

 

Net income decreased by $52 thousand to $4.5 million for the quarter ended September 30, 2018, compared to net income of $4.6 million for the quarter ended September 30, 2017.

 

1.

Net interest and dividend income before provision for loan losses increased by $1.0 million for the quarter ended September 30, 2018, compared to the quarter ended September 30, 2017. The increase was primarily due to higher average balances in the loan portfolio. These increases were partially offset by lower transactional income, higher funding costs and higher average deposit balances.

 

 

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

 

		Interest Income and Yield on Loans
		Three Months Ended September 30,
		2018												2017
		Average				Interest								Average				Interest
		Balance (1)				Income				Yield				Balance (1)				Income				Yield
		(Dollars in thousands)
Community Banking		$	120,340			$	1,522				5.02%			$	150,178			$	1,746				4.61%
SBA			71,165				1,285				7.16%				53,527				941				6.97%
LASG:
Originated			398,333				7,464				7.43%				328,775				5,265				6.35%
Purchased			304,107				7,254				9.46%				240,136				7,431				12.28%
Total LASG			702,440				14,718				8.31%				568,911				12,696				8.85%
Total		$	893,945			$	17,525				7.78%			$	772,616			$	15,383				7.90%

 

(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 three months ended September 30, 2017, transactional income for the three months ended September 30, 2018 decreased by $1.3 million. The total return on purchased loans for the three months ended September 30, 2018 was 9.46%. The decrease over the prior comparable period was primarily due to higher accelerated accretion and loan fees in the three months ended September 30, 2017. The following table details the total return on purchased loans:

 

		Total Return on Purchased Loans
		Three Months Ended September 30,
		2018								2017
		Income				Return (1)				Income				Return (1)
		(Dollars in thousands)
Regularly scheduled interest and accretion		$	5,761				7.51%			$	4,613				7.62%
Transactional income:
Gain on loan sales			-				0.00%				-				0.00%
Gain on sale of real estate owned			-				0.00%				-				0.00%
Other noninterest income (expense)			-				0.00%				-				0.00%
Accelerated accretion and loan fees			1,493				1.95%				2,818				4.66%
Total transactional income			1,493				1.95%				2,818				4.66%
Total		$	7,254				9.46%			$	7,431				12.28%

 

(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 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 decreased by $404 thousand for the quarter ended September 30, 2018, compared to the quarter ended September 30, 2017, principally due to the following:

●

A decrease in gain on sale of SBA loans of $168 thousand, due to lower pricing in the SBA guaranty market in the quarter; and

●

A decrease in gain on sale of residential loans of $117 thousand, due to lower volume of residential loans sold in the quarter.

 

3.

Noninterest expense increased by $641 thousand for the quarter ended September 30, 2018, compared to the quarter ended September 30, 2017, primarily due to the following:

●

An increase in salaries and employee benefits expense of $255 thousand, primarily due to increases in incentive compensation, stock-based compensation expense, and health insurance costs;

●

An increase in other noninterest expense of $167 thousand, primarily due to the quarterly valuation of SBA servicing rights;

●

An increase in professional fees of $92 thousand, primarily due to increased legal and other consulting costs; and

●

An increase in loan expense of $74 thousand, largely driven by direct expenses related to a repossessed asset.

 

 

4.

Income tax expense decreased by $123 thousand for the quarter ended September 30, 2018, compared to the quarter ended September 30, 2017, primarily due to the following:

●

A decrease in income before income tax expense of $175 thousand, which resulted in a $49 thousand decrease in income tax expense; and

●

A decrease in the federal corporate income tax rate as a result of the Tax Cuts and Jobs Act signed into law on December 22, 2017, which resulted in a $691 thousand decrease in federal income tax expense; partially offset by

●

A decrease in the income tax benefit recognized of $637 thousand arising from the treatment of vested restricted stock awards under ASU 2016-09, Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, whereby the tax effects of vested awards or exercised options are treated as a discrete item in the reporting period in which they occur.

 

As of September 30, 2018, nonperforming assets totaled $13.1 million, or 1.08% of total assets, as compared to $14.2 million, or 1.23% of total assets, as of June 30, 2018.

 

As of September 30, 2018, past due loans totaled $9.6 million, or 1.09% of total loans, as compared to past due loans totaled $7.7 million, or 0.89% of total loans as of June 30, 2018.

 

As of September 30, 2018, the Company’s Tier 1 leverage capital ratio was 12.8%, compared to 13.1% at June 30, 2018, and the Total capital ratio was 19.8%, compared to 19.3% at June 30, 2018.

 

Investor Call Information

Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Jean-Pierre Lapointe, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss first quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, October 30th. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 9408907. 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 personal and business banking services to the Maine market via ten branches. Our Loan Acquisition and Servicing Group purchases and originates commercial loans on a nationwide basis and our SBA Division supports the needs of growing businesses nationally. 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, 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; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; 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.

 

 

 

 

 

 

 

 

 

 

NBN-F

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

		September 30, 2018				June 30, 2018
Assets
Cash and due from banks		$	2,668			$	3,889
Short-term investments			203,049				153,513
Total cash and cash equivalents			205,717				157,402
Available-for-sale securities, at fair value			85,777				87,687
Residential real estate loans held for sale			1,940				3,405
SBA loans held for sale			1,350				3,750
Total loans held for sale			3,290				7,155
Loans
Commercial real estate			599,624				579,450
Commercial and industrial			191,286				188,852
Residential real estate			93,308				100,256
Consumer			2,978				3,244
Total loans			887,196				871,802
Less: Allowance for loan losses			5,288				4,807
Loans, net			881,908				866,995
Premises and equipment, net			6,314				6,591
Real estate owned and other repossessed collateral, net			1,549				2,233
Federal Home Loan Bank stock, at cost			1,652				1,652
Intangible assets, net			758				867
Loan servicing rights, net			3,010				2,970
Bank-owned life insurance			16,729				16,620
Other assets			7,013				7,564
Total assets		$	1,213,717			$	1,157,736
Liabilities and Shareholders' Equity
Deposits
Demand		$	67,500			$	72,272
Savings and interest checking			109,564				109,637
Money market			398,423				420,886
Time			440,020				352,145
Total deposits			1,015,507				954,940
Federal Home Loan Bank advances			15,000				15,000
Subordinated debt			24,043				23,958
Capital lease obligation			536				605
Other liabilities			15,240				24,803
Total liabilities			1,070,326				1,019,306
Commitments and contingencies			-				-
Shareholders' equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at September 30, 2018 and June 30, 2018			-				-
Voting common stock, $1.00 par value, 25,000,000 shares authorized; 8,226,648 and 8,056,527 shares issued and outstanding at September 30, 2018 and June 30, 2018, respectively			8,226				8,057
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 820,742 and 882,314 shares issued and outstanding at September 30, 2018 and June 30, 2018, respectively			821				882
Additional paid-in capital			77,075				77,016
Retained earnings			58,501				54,236
Accumulated other comprehensive loss			(1,232	)			(1,761	)
Total shareholders' equity			143,391				138,430
Total liabilities and shareholders' equity		$	1,213,717			$	1,157,736

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

		Three Months Ended September 30,
		2018				2017
Interest and dividend income:
Interest and fees on loans		$	17,525			$	15,383
Interest on available-for-sale securities			362				266
Other interest and dividend income			880				529
Total interest and dividend income			18,767				16,178
Interest expense:
Deposits			3,682				2,176
Federal Home Loan Bank advances			118				172
Subordinated debt			601				508
Obligation under capital lease agreements			7				11
Total interest expense			4,408				2,867
Net interest and dividend income before provision for loan losses			14,359				13,311
Provision for loan losses			532				354
Net interest and dividend income after provision for loan losses			13,827				12,957
Noninterest income:
Fees for other services to customers			492				526
Gain on sales of SBA loans			851				1,019
Gain on sales of residential loans held for sale			174				291
Net unrealized loss on equity securities			(40	)			-
Loss on real estate owned, other repossessed collateral and premises and equipment, net			(40	)			-
Bank-owned life insurance income			110				112
Other noninterest income			7				10
Total noninterest income			1,554				1,958
Noninterest expense:
Salaries and employee benefits			5,509				5,254
Occupancy and equipment expense			1,127				1,109
Professional fees			534				442
Data processing fees			601				604
Marketing expense			124				87
Loan acquisition and collection expense			439				365
FDIC insurance premiums			81				80
Intangible asset amortization			109				109
Other noninterest expense			831				664
Total noninterest expense			9,355				8,714
Income before income tax expense			6,026				6,201
Income tax expense			1,492				1,615
Net income		$	4,534			$	4,586
Weighted-average common shares outstanding:
Basic			8,995,925				8,841,511
Diluted			9,183,729				9,089,936
Earnings per common share:
Basic		$	0.50			$	0.52
Diluted			0.49				0.50
Cash dividends declared per common share		$	0.01			$	0.01

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)

		Three Months Ended September 30,
		2018												2017
						Interest				Average								Interest				Average
		Average				Income/				Yield/				Average				Income/				Yield/
		Balance				Expense				Rate				Balance				Expense				Rate
Assets:
Interest-earning assets:
Investment securities		$	87,873			$	362				1.63%			$	95,827			$	266				1.10%
Loans (1) (2) (3)			893,945				17,525				7.78%				772,616				15,393				7.90%
Federal Home Loan Bank stock			1,652				24				5.76%				1,938				20				4.09%
Short-term investments (4)			172,641				856				1.97%				160,354				509				1.26%
Total interest-earning assets			1,156,111				18,767				6.44%				1,030,735				16,188				6.23%
Cash and due from banks			2,571												3,134
Other non-interest earning assets			31,234												30,887
Total assets		$	1,189,916											$	1,064,756
Liabilities & Shareholders' Equity:
Interest-bearing liabilities:
NOW accounts		$	69,705			$	55				0.31%			$	69,577			$	51				0.29%
Money market accounts			406,104				1,548				1.51%				387,632				1,097				1.12%
Savings accounts			36,176				14				0.15%				37,033				13				0.14%
Time deposits			406,151				2,065				2.02%				312,485				1,015				1.29%
Total interest-bearing deposits			918,136				3,682				1.59%				806,727				2,176				1.07%
Federal Home Loan Bank advances			15,000				118				3.12%				20,007				172				3.41%
Subordinated debt			23,998				601				9.94%				23,661				508				8.52%
Capital lease obligations			560				7				4.96%				830				11				5.26%
Total interest-bearing liabilities			957,694				4,408				1.83%				851,225				2,867				1.34%
Non-interest bearing liabilities:
Demand deposits and escrow accounts			82,005												80,565
Other liabilities			9,740												8,464
Total liabilities			1,049,439												940,254
Shareholders' equity			140,477												124,502
Total liabilities and shareholders' equity		$	1,189,916											$	1,064,756
Net interest income (5)						$	14,359											$	13,321
Interest rate spread											4.61%												4.89%
Net interest margin (6)											4.93%												5.13%

 

(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 FHLB overnight deposits and other interest-bearing deposits. (5)  Includes tax-exempt interest income of $0 and $10 thousand for the three months ended September 30, 2018 and 2017, respectively.

(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:
		September 30, 2018				June 30, 2018				March 31, 2018				December 31, 2017				September 30, 2017
Net interest income		$	14,359			$	14,408			$	13,134			$	12,457			$	13,311
Provision for loan losses			532				254				364				437				354
Noninterest income			1,554				1,959				1,882				1,228				1,958
Noninterest expense			9,355				9,478				8,975				8,563				8,714
Net income			4,534				4,344				3,932				3,304				4,586
Weighted-average common shares outstanding:
Basic			8,995,925				8,934,038				8,927,544				8,924,495				8,841,511
Diluted			9,183,729				9,116,157				9,143,177				9,168,084				9,089,936
Earnings per common share:
Basic		$	0.50			$	0.49			$	0.44			$	0.37			$	0.52
Diluted			0.49				0.48				0.43				0.36				0.50
Dividends per common share			0.01				0.01				0.01				0.01				0.01
Return on average assets			1.51	%			1.55	%			1.43	%			1.26	%			1.71	%
Return on average equity			12.81	%			12.97	%			12.15	%			10.20	%			14.61	%
Net interest rate spread (1)			4.61	%			5.02	%			4.69	%			4.68	%			4.89	%
Net interest margin (2)			4.93	%			5.28	%			4.94	%			4.93	%			5.13	%
Efficiency ratio (non-GAAP) (3)			58.79	%			57.91	%			59.77	%			62.57	%			57.07	%
Noninterest expense to average total assets			3.12	%			3.37	%			3.27	%			3.27	%			3.25	%
Average interest-earning assets to average interest-bearing liabilities			120.72	%			120.52	%			120.27	%			122.21	%			121.09	%

 

		As of:
		September 30, 2018				June 30, 2018				March 31, 2018				December 31, 2017				September 30, 2017
Nonperforming loans:
Originated portfolio:
Residential real estate		$	2,633			$	2,914			$	3,116			$	3,783			$	3,667
Commercial real estate			1,703				1,499				1,408				2,537				2,409
Home equity			151				298				255				107				58
Commercial and industrial			1,454				1,368				636				2,555				2,629
Consumer			185				134				136				147				131
Total originated portfolio			6,126				6,213				5,551				9,129				8,894
Total purchased portfolio			5,375				5,745				8,063				8,962				7,758
Total nonperforming loans			11,501				11,958				13,614				18,091				16,652
Real estate owned and other repossessed collateral, net			1,549				2,233				947				910				2,040
Total nonperforming assets		$	13,050			$	14,191			$	14,561			$	19,001			$	18,692
Past due loans to total loans			1.09	%			0.89	%			1.37	%			3.87	%			1.60	%
Nonperforming loans to total loans			1.30	%			1.37	%			1.67	%			2.34	%			2.19	%
Nonperforming assets to total assets			1.08	%			1.23	%			1.25	%			1.84	%			1.78	%
Allowance for loan losses to total loans			0.60	%			0.55	%			0.57	%			0.56	%			0.53	%
Allowance for loan losses to nonperforming loans			45.98	%			40.20	%			34.46	%			24.07	%			24.23	%
Commercial real estate loans to total capital (4)			230.48	%			200.74	%			186.07	%			187.92	%			166.15	%
Net loans to core deposits (5)			87.17	%			91.54	%			83.65	%			91.46	%			88.68	%
Purchased loans to total loans, including held for sale			33.75	%			33.10	%			31.02	%			31.28	%			30.11	%
Equity to total assets			11.81	%			11.96	%			11.47	%			12.57	%			12.07	%
Common equity tier 1 capital ratio			16.50	%			16.02	%			16.48	%			16.74	%			16.50	%
Total capital ratio			19.81	%			19.28	%			19.92	%			20.30	%			20.04	%
Tier 1 leverage capital ratio			12.83	%			13.12	%			12.88	%			13.41	%			12.77	%
Total shareholders' equity		$	143,391			$	138,430			$	133,787			$	130,003			$	126,712
Less: Preferred stock			-				-				-				-				-
Common shareholders' equity			143,391				138,430				133,787				130,003				126,712
Less: Intangible assets (6)			(3,768	)			(3,837	)			(3,973	)			(4,087	)			(4,146	)
Tangible common shareholders' equity (non-GAAP)		$	139,623			$	134,593			$	129,814			$	125,916			$	122,566
Common shares outstanding			9,047,390				8,938,841				8,925,399				8,939,273				8,890,353
Book value per common share		$	15.85			$	15.49			$	14.99			$	14.54			$	14.25
Tangible book value per share (non-GAAP) (7)			15.43				15.06				14.54				14.09				13.79

 

 

(1)	The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
(2)	The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3)	The efficiency ratio represents noninterest expense divided by the sum of net interest income (before the loan loss provision) plus noninterest income.
(4)	For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans.
(5)	Core deposits include all non-maturity deposits and maturity deposits less than $250 thousand. Loans include loans held for sale.
(6)	Includes the core deposit intangible asset and loan servicing rights asset.
(7)	Tangible book value per share represents total shareholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.