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
21,
2008
NORTHEAST
BANCORP
(Exact
Name of Registrant as Specified in its Charter)
|
Maine
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1-14588
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01-0425066
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(State
or Other Jurisdiction Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification Number)
|
|
500 Canal Street,
Lewiston,
Maine
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04240
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|
(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number, including area code:
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(207)
786-3245
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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.
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425).
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12).
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)).
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240. Rule 13e-4(c)).
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Item
9.01
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Financial
Statements and Exhibits.
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(c)
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Exhibits.
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Exhibit
No.
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Description
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99.1
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Press
Release, dated April 21, 2008 regarding third quarter 2008 earnings and
the declaration of a dividend.
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Item
7.01 Regulation FD Disclosure.
On April
21, 2008, Northeast Bancorp, a Maine corporation (the "Company"), issued a press
release announcing its earnings for the third quarter ended March 31, 2008 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 7.01 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
2.02 Results of Information and Financial
Condition.
The press
release referred to under Item 7.01 above and filed as Exhibit 99.1 hereto
included disclosure regarding the earnings and financial results of Northeast
Bancorp for the third quarter ended March 31, 2008 and declaration 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.
[Rest
of Page Intentionally Blank. Signature on Following
Page.]
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 hereunto
duly authorized.
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NORTHEAST
BANCORP
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||
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Date: April
22, 2008
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By:
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/s/ James D.
Delamater
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James
D. Delamater
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||
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President
and Chief Executive Officer
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EXHIBIT
INDEX
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Exhibit
No.
|
Description
|
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99.1
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Press
Release, dated April 21, 2008 regarding third quarter 2008 earnings and
the declaration of a dividend.
|
|
FOR
IMMEDIATE RELEASE
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 |
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For
More Information:
Jim
Delamater, President & CEO
Northeast
Bank, 500 Canal Street, Lewiston, ME 04240
www.northeastbank.com
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1-800-284-5989
ext. 3569
jdelamater@northeastbank.com
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Northeast
Bancorp Announces 28% Increase in 3rd Quarter
Earnings and
Declares
Dividend
Lewiston,
MAINE (April 21, 2008)--Northeast Bancorp (NASDAQ: NBN), today
announced that net income for the third quarter ended March 31, 2008 was
$672,169, or $0.29 per diluted share, as compared to earnings for the same
period last year of $524,967, representing an increase of 28%. Net
income for the nine months ended March 31, 2008 was $1,505,162, or $0.63 per
diluted share, representing an 8% increase, as compared to net income for the
previous nine months of $1,396,991, or $0.57 per diluted share.
The
increase in net income for the three and nine months ended March 31, 2008
compared to the same periods one year ago resulted primarily from increase in
the revenue contribution from the seven insurance agency acquisitions completed
in the previous year and a half. Contingent bonuses received of
approximately $854,000 from insurance carriers exceeded expectations, as did
overall revenues.
Margin
compression primarily resulted from continuing pressure on the cost of
funds. In addition, while lower net interest margins continued to
result in decreased net interest income, the growth of noninterest income
continues to be strong.
“I am
pleased to see that our strategy for full diversification is paying off in that
our insurance acquisitions are bringing in healthy levels of revenue to offset
what is happening in the credit and deposit markets,” said Jim Delamater,
President and CEO of Northeast Bank.
Noninterest
income for the quarter ended March 31, 2008 was $3,640,833 representing a 52%
increase over the same quarter of the prior year. For the nine months
ended March 31, 2008, noninterest income was $8,027,091, a 40% increase over the
prior nine month period.
“As I’ve
indicated for the past eight quarters, we remain committed to growing the
noninterest income side of the business, creating the infrastructure that can
provide a one-stop shop for financial products and a competitive position that
we believe will sustain the Company through various cycles in the
marketplace. Numbers across all business lines exceeded or were in
line with our expectations and I am pleased with the results, especially with
noninterest income now making up 43% of our total revenue streams,” continued
Delamater.
Total
assets reported for the third quarter ended March 31, 2008 were approximately
$586 million as compared to $562 million for the same period last
year. “Making the decision to shrink our earning assets was not easy,
knowing we could experience lower earnings in the short run. We stood
firm on our decisions to maintain a conservative approach to lending and to
pricing. While the markets were focused on the credit situation, we
remained committed to working with our customers, having stayed away from
sub-prime and high-risk loan products and we believe this strategy is paying
off,” Delamater noted.
Delamater
added, “Like most banks we are seeing an increase in delinquent loans, loans in
the process of foreclosure and non-accrual loans, and we are paying strict
attention to our loan loss reserves, making the necessary adjustments as
needed. We don’t expect to experience significant credit losses from
this increase in nonaccrual loans compared to March 31, 2007 and we believe that
this credit risk is reflected appropriately in the allowance for loan
losses.
In
addition to announcing earnings, the Board of Directors declared a dividend of
$0.09 per share payable on May 23, 2008 to shareholders of record as of the
close of business on May 2, 2008. Northeast Bancorp common shares
trade on the NASDAQ stock exchange with approximately 2.3 million shares
outstanding and, as of March 31, 2008, had a book value of $18.54 per share, an
increase from $16.97 at the end of the same period last year. Our
tangible book value was $12.88 and $14.33 as of March 31, 2008 and 2007,
respectively. The decrease was attributable to the increases in
goodwill and other intangibles from the four insurance agency acquisitions
completed since March 31, 2007.
“Our
business model is sound and our franchise value strong, with our ability to
deliver the diversity of products that are independent of the rate
environment. We must continue to adapt our business model to the
changing economy in order to remain competitive, all the while focusing on the
needs of the customer,” said Delamater.
Northeast
Bancorp, headquartered at 500 Canal Street, Lewiston, ME 04240, is the holding
company for the Maine-based Northeast Bank, founded in 1872. Northeast Bank is a
leader in delivering one-stop shopping for financial
services. Together with its wholly-owned subsidiary, Northeast Bank
Insurance Group, Inc., the Company operates 25 retail and insurance locations in
Maine and now the Seacoast area of New Hampshire, and derives its income from a
combination of traditional banking services and non-traditional financial
products and services, including insurance and investments.
Management
encourages present and prospective shareholders to contact President and CEO Jim
Delamater directly to discuss the Company, its products and services, and
ongoing efforts to develop shareholder value. He can be reached at
jdelamater@northeastbank.com or toll free at 1-800-284-5989. Management also
suggests that any person wishing to utilize the services of Northeast Bancorp or
its subsidiaries or who are interested in learning more about the Company can
access its web site at www.northeastbank.com.
This
communication contains certain “forward-looking statements”. Although
the Company 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. These statements speak only as of the date of this report
and we do 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. For a more complete discussion of certain risks and
uncertainties affecting the Company, please see "Item 1.
Business-Forward-Looking Statements and Risk Factors" set forth in the Company's
Form 10-K for the year ended June 30, 2007.
Customer
access to securities is provided through Commonwealth Financial Network, Member
NASD/SIPC. Important information--Securities, annuities, and insurance products
are not deposit products, not FDIC insured, are subject to investment risk,
including the possible loss of principal, and are not an obligation of or
guaranteed by the Bank.
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NORTHEAST
BANCORP
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||||||||||||||||||||||
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(Dollars
in Thousands, Except Per Share and Shares Outstanding
Data)
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||||||||||||||||||||||
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(Unaudited)
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||||||||||||||||||||||
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Three
Months Ended
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Nine
Months Ended
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|||||||||||||||||||||
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March
31,
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%
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March
31,
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%
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|||||||||||||||||||
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2008
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2007
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Change
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2008
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2007
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Change
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|||||||||||||||||
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Selected
financial information
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||||||||||||||||||||||
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Income
statement data:
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||||||||||||||||||||||
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Interest
income
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$ | 8,796 | $ | 8,822 | 0 | % | $ | 26,825 | $ | 26,880 | 0 | % | ||||||||||
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Interest
expense
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5,393 | 5,028 | 7 | % | 16,260 | 14,969 | 9 | % | ||||||||||||||
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Net
interest income
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3,403 | 3,794 | -10 | % | 10,565 | 11,911 | -11 | % | ||||||||||||||
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Provision
for loan losses
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288 | 200 | 44 | % | 658 | 876 | -25 | % | ||||||||||||||
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Net
interest income after provision for loan losses
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3,115 | 3,594 | -13 | % | 9,907 | 11,035 | -10 | % | ||||||||||||||
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Gain
on sale of loans
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122 | 418 | -71 | % | 396 | 659 | -40 | % | ||||||||||||||
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Gain
on securities
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267 | 8 | 3238 | % | 259 | 31 | 735 | % | ||||||||||||||
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Investment
brokerage income
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680 | 664 | 2 | % | 1,665 | 1,673 | 0 | % | ||||||||||||||
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Insurance
agency income
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1,989 | 749 | 166 | % | 3,954 | 1,603 | 147 | % | ||||||||||||||
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Other
noninterest income
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583 | 549 | 6 | % | 1,753 | 1,772 | -1 | % | ||||||||||||||
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Noninterest
Income
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3,641 | 2,388 | 52 | % | 8,027 | 5,738 | 40 | % | ||||||||||||||
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Noninterest
expense
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5,847 | 5,265 | 11 | % | 15,969 | 14,899 | 7 | % | ||||||||||||||
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Operating
income before income tax
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909 | 717 | 27 | % | 1,965 | 1,874 | 5 | % | ||||||||||||||
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Income
tax expense
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237 | 192 | 23 | % | 460 | 477 | -4 | % | ||||||||||||||
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Net
income
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$ | 672 | $ | 525 | 28 | % | $ | 1,505 | $ | 1,397 | 8 | % | ||||||||||
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Per
share data:
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||||||||||||||||||||||
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Basic
earning per common share
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$ | 0.29 | $ | 0.21 | 38 | % | $ | 0.64 | $ | 0.57 | 12 | % | ||||||||||
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Diluted
earnings per common share
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$ | 0.29 | $ | 0.21 | 38 | % | $ | 0.63 | $ | 0.57 | 11 | % | ||||||||||
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Weighted
average shares outstanding:
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||||||||||||||||||||||
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Basic
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2,320,951 | 2,452,632 | -5 | % | 2,364,828 | 2,451,298 | -4 | % | ||||||||||||||
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Diluted
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2,333,212 | 2,471,476 | -6 | % | 2,380,412 | 2,471,156 | -4 | % | ||||||||||||||
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Book
value per share
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$ | 18.54 | $ | 16.97 | $ | 18.54 | $ | 16.97 | ||||||||||||||
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Tangible
book value per share
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$ | 12.88 | $ | 14.33 | $ | 12.88 | $ | 14.33 | ||||||||||||||
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Net
interest margin
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2.55 | % | 2.98 | % | 2.66 | % | 3.03 | % | ||||||||||||||
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Net
interest spread
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2.23 | % | 2.48 | % | 2.36 | % | 2.64 | % | ||||||||||||||
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Return
on average assets (annualized)
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0.46 | % | 0.38 | % | 0.35 | % | 0.33 | % | ||||||||||||||
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Return
on equity (annualized)
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6.45 | % | 5.13 | % | 4.83 | % | 4.55 | % | ||||||||||||||
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Tier
I leverage ratio (Bank)
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6.98 | % | 8.65 | % | 6.98 | % | 8.65 | % | ||||||||||||||
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Tier
I risk-based capital ratio (Bank)
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9.67 | % | 11.47 | % | 9.67 | % | 11.47 | % | ||||||||||||||
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Total
risk-based capital ratio (Bank)
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10.92 | % | 12.72 | % | 10.92 | % | 12.72 | % | ||||||||||||||
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Efficiency
ratio
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83 | % | 85 | % | 86 | % | 84 | % | ||||||||||||||
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Nonperforming
loans
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7,614 | 4,570 | 7,614 | 4,570 | ||||||||||||||||||
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Total
nonperforming assets
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7,614 | 4,570 | 7,614 | 4,570 | ||||||||||||||||||
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Nonperforming
loans as a % of total loans
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1.87 | % | 1.07 | % | 1.87 | % | 1.07 | % | ||||||||||||||
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Nonperforming
assets as a % of total assets
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1.30 | % | 0.81 | % | 1.30 | % | 0.81 | % | ||||||||||||||
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March
31,
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%
|
|||||||||||||||||||||
|
2008
|
2007
|
Change
|
||||||||||||||||||||
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Balance
sheet highlights:
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||||||||||||||||||||||
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Available-for-sale
securities, at fair value
|
$ | 128,458 | $ | 80,453 | 60 | % | ||||||||||||||||
|
Loans
held for sale
|
1,203 | 5,049 | -76 | % | ||||||||||||||||||
|
Loans
|
407,925 | 425,682 | -4 | % | ||||||||||||||||||
|
Allowance
for loan losses
|
5,756 | 5,756 | 0 | % | ||||||||||||||||||
|
Goodwill
& intangibles
|
13,115 | 6,477 | 102 | % | ||||||||||||||||||
|
Total
assets
|
586,426 | 562,113 | 4 | % | ||||||||||||||||||
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Deposits:
|
||||||||||||||||||||||
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NOW
and money market
|
68,038 | 64,275 | 6 | % | ||||||||||||||||||
|
Savings
|
19,464 | 21,484 | -9 | % | ||||||||||||||||||
|
Certificates
of deposits
|
229,138 | 224,612 | 2 | % | ||||||||||||||||||
|
Brokered
time deposits
|
13,471 | 36,511 | -63 | % | ||||||||||||||||||
|
Noninterest-bearing
deposits
|
31,155 | 35,564 | -12 | % | ||||||||||||||||||
|
Total
deposits
|
361,266 | 382,446 | -6 | % | ||||||||||||||||||
|
Borrowings
|
179,254 | 134,646 | 33 | % | ||||||||||||||||||
|
Shareholders'
equity
|
42,926 | 41,622 | 3 | % | ||||||||||||||||||
|
Shares
outstanding
|
2,315,182 | 2,452,632 | -6 | % | ||||||||||||||||||