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): August
8,
2008
NORTHEAST
BANCORP
(Exact
Name of Registrant as Specified in its Charter)
|
Maine
|
1-14588
|
01-0425066
|
|
(State
or Other Jurisdiction Incorporation)
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(Commission
File Number)
|
(IRS
Employer Identification Number)
|
|
500
Canal Street, Lewiston,
Maine
|
04240
|
|
(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).
|
|
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 August 8, 2008 regarding fourth quarter and fiscal year
2008 earnings.
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Item
7.01 Regulation FD Disclosure.
On August
8, 2008, Northeast Bancorp, a Maine corporation (the "Company"), issued a press
release announcing its earnings for the fourth quarter ended June 30, 2008. 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 fourth quarter ended June 30, 2008. 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: August
11, 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
|
|
99.1
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Press
Release, dated August 8, 2008 regarding fourth quarter and fiscal
year 2008 earnings.
|
|
FOR
IMMEDIATE RELEASE
|
 |
For
More Information:
|
Jim
Delamater, President & CEO
Northeast
Bank, 500 Canal Street, Lewiston, ME 04240
www.northeastbank.com
|
1-800-284-5989
ext. 3569
jdelamater@northeastbank.com
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Northeast
Bancorp Announces Fourth Quarter and Year-end Earnings; Assets Approach $600
million Mark
Lewiston,
MAINE (August 08, 2008) – Northeast Bancorp (NASDAQ: NBN), the parent company for
Northeast Bank (www.northeastbank.com),
announced that earnings for the year ended June 30, 2008 were $1,931,289, or
$0.82 per diluted share, representing an increase of $44,612, or 2%, over
earnings for the prior fiscal year of $1,886,677, or $0.76 per diluted
share. As of June 30, 2008, Northeast Bancorp had total assets of
approximately $598 million, representing a 7% increase over assets at the end of
the prior fiscal year, which was approximately $557 million.
For the fourth quarter ended June 30,
2008 earnings were $426,127, or $0.18 per diluted share, representing a decrease
of $63,559, or 13%, from earnings for the same period last year which were
$489,686, or $0.20 per diluted share.
“We are pleased with the results for
this fiscal year. With the deterioration of the credit markets and the
volatility of interest rates, we are confident that our business model to
diversify our revenue streams is beginning to pay off,” said Jim Delamater,
President and CEO. “We’re closing in on the $600 million mark in total assets
and entering 2009 in an excellent position,” he continued.
Noninterest income for the year ended
June 30, 2008 increased $2,858,397, to $10,803,224 from $7,944,827 for the same
period last year. Noninterest income now makes up close to 43% of the Company’s
revenue stream. For the fourth quarter ended June 30, 2008, noninterest income
was $2,776,134, representing an increase of $568,432, or 26%, over noninterest
income for the same period last year, which was $2,207,702.
“Our growth in noninterest income is
starting to attract national attention with our level of noninterest income as a
percentage of total revenue moving closer to that of our larger, regional
competitors. Revenue diversity is essential and we are pursuing this new
business model to reshape the way in which financial products are packaged,
priced and sold,” said Delamater.
For the year ended June 30, 2008, net
interest and dividend income decreased $1,238,688, to $14,346,669 as compared to
$15,585,357 the prior year. Comparing the quarter ended June 30, 2008 to the
same period in the prior year, net interest and dividend income increased
$108,273 to $3,781,857 as net interest spreads improved. To manage margin
compression, the Company has, over the past eight quarters, reduced the amount
of originated loans held in its portfolio, resulting in a decline in outstanding
loans of $16,377,449, to $409,193,969, compared to the amount at June 30,
2007.
Northeast’s deposit portfolio decreased
$1,180,006 over the level at the end of the prior fiscal year as the Company
continued to reduce its reliance on wholesale or brokered deposits to fund asset
growth. Brokered deposits were reduced by $10.0 million, as core deposits
increased $8.8 million, with this increase reflected in the growth in time
deposits and money market accounts.
Net interest spread for the quarter
ended June 30, 2008 was 2.52%, a seven basis point improvement as compared to
2.45% for the quarter ended June 30, 2007. This improvement was due to the
decrease in the overall cost of funds of 57 basis points, to 3.78%, for the
quarter ended June 30, 2008 compared to the same period one year ago. The cost
of funds has declined due to the repricing of certificates of deposit at
maturity to lower rates and the reduction in rates paid on interest-bearing,
non-maturing deposits.
“We’ve continued to step away from
aggressive loan growth in an effort to maintain the integrity of both our
balance sheet and the credit quality of our loan portfolio. We are seeing the
results of irrational lending and pricing practices across the country, as well
as the impact of creative financing tactics. The resulting reduction in our loan
portfolio has allowed us to reduce our reliance on higher cost wholesale
deposits, thus improving both our cost of funds and our liquidity position,”
Delamater noted.
Northeast Bank’s allowance for loan
losses was $5.7 million at June 30, 2008, $0.1 million lower than at June 30,
2007. As a percentage of outstanding loans, the allowance for loan losses was
1.38% at June 30, 2008 compared to 1.35% for the same period one year ago. The
allowance of loan losses as a percentage of nonperforming loans was 74% at June
30, 2008 compared to 113% at June 30, 2007.
The decrease of 39 percentage points
was due to an increase in nonperforming commercial and commercial real estate
loans compared to same period last year. The risk of loss associated with these
loans was incorporated in determining the adequacy of the allowance for loan
losses at June 30, 2008. Northeast has also experienced an increase in
delinquent loans of $2.2 million, to $12.5 million at June 30, 2008. Although
the delinquency ratio increased from 2.42% at June 30, 2007 to 3.06% at June 30,
2008, the trend has been declining over the six months ended June 30, 2008 when
compared to the 4.12% delinquency ratio at December 31, 2007.
“Our commitment to steer clear of
sub-prime products and pricing disparities resulted in a stronger credit
portfolio in the last year, with what we believe is an appropriate level of
delinquency given the current state of the economy. In addition, our approach
supports our brand position as a “trusted advisor,” always working with our
customers’ needs and best interests in mind,” 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 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 to 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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Twelve
Months Ended
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|||||||||||||||||||||
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June
30,
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%
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June
30,
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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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$ | 8,572 | $ | 8,802 | -3 | % | $ | 35,397 | $ | 35,682 | -1 | % | ||||||||||
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Interest
expense
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4,790 | 5,128 | -7 | % | 21,051 | 20,097 | 5 | % | ||||||||||||||
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Net
interest income
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3,782 | 3,674 | 3 | % | 14,346 | 15,585 | -8 | % | ||||||||||||||
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Provision
for loan losses
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179 | 113 | 58 | % | 836 | 989 | -15 | % | ||||||||||||||
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Net
interest income afterprovision for loan losses
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3,603 | 3,561 | 1 | % | 13,510 | 14,596 | -7 | % | ||||||||||||||
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Gain
on sale of loans
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160 | 210 | -24 | % | 556 | 869 | -36 | % | ||||||||||||||
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Gain
on securities
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34 | 12 | 183 | % | 293 | 42 | 598 | % | ||||||||||||||
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Investment
brokerage income
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558 | 712 | -22 | % | 2,223 | 2,385 | -7 | % | ||||||||||||||
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Insurance
agency income
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1,411 | 728 | 94 | % | 5,364 | 2,331 | 130 | % | ||||||||||||||
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Other
noninterest income
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613 | 546 | 12 | % | 2,367 | 2,318 | 2 | % | ||||||||||||||
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Noninterest
Income
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2,776 | 2,208 | 26 | % | 10,803 | 7,945 | 36 | % | ||||||||||||||
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Noninterest
expense
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5,886 | 5,176 | 14 | % | 21,854 | 20,075 | 9 | % | ||||||||||||||
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Operating
income before income tax
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493 | 593 | -17 | % | 2,459 | 2,466 | 0 | % | ||||||||||||||
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Income
tax expense
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67 | 103 | -35 | % | 528 | 579 | -9 | % | ||||||||||||||
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Net
income
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$ | 426 | $ | 490 | -13 | % | $ | 1,931 | $ | 1,887 | 2 | % | ||||||||||
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Per
share data:
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||||||||||||||||||||||
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Basic
earning per common share
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$ | 0.18 | $ | 0.20 | -10 | % | $ | 0.82 | $ | 0.77 | 6 | % | ||||||||||
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Diluted
earnings per common share
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$ | 0.18 | $ | 0.20 | -10 | % | $ | 0.82 | $ | 0.76 | 8 | % | ||||||||||
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Weighted
average shares outstanding:
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||||||||||||||||||||||
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Basic
|
2,315,182 | 2,452,548 | -6 | % | 2,352,484 | 2,451,610 | -4 | % | ||||||||||||||
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Diluted
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2,322,869 | 2,468,978 | -6 | % | 2,366,340 | 2,470,670 | -4 | % | ||||||||||||||
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Book
value per share
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$ | 17.40 | $ | 16.68 | $ | 17.40 | $ | 16.68 | ||||||||||||||
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Tangible
book value per share
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$ | 11.85 | $ | 13.83 | $ | 11.85 | $ | 13.83 | ||||||||||||||
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Net
interest margin
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2.81 | % | 2.87 | % | 2.70 | % | 2.99 | % | ||||||||||||||
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Net
interest spread
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2.52 | % | 2.46 | % | 2.38 | % | 2.59 | % | ||||||||||||||
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Return
on average assets (annualized)
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0.29 | % | 0.36 | % | 0.33 | % | 0.34 | % | ||||||||||||||
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Return
on equity (annualized)
|
4.01 | % | 4.70 | % | 4.63 | % | 4.59 | % | ||||||||||||||
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Tier
I leverage ratio (Bank)
|
7.06 | % | 8.60 | % | 7.06 | % | 8.60 | % | ||||||||||||||
|
Tier
I risk-based capital ratio (Bank)
|
9.60 | % | 11.46 | % | 9.60 | % | 11.46 | % | ||||||||||||||
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Total
risk-based capital ratio (Bank)
|
10.85 | % | 12.71 | % | 10.85 | % | 12.71 | % | ||||||||||||||
|
Efficiency
ratio
|
90 | % | 88 | % | 87 | % | 85 | % | ||||||||||||||
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Nonperforming
loans
|
7,703 | 5,090 | 7,703 | 5,090 | ||||||||||||||||||
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Total
nonperforming assets
|
8,381 | 5,090 | 8,381 | 5,090 | ||||||||||||||||||
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Nonperforming
loans as a % of total loans
|
1.88 | % | 1.20 | % | 1.88 | % | 1.20 | % | ||||||||||||||
|
Nonperforming
assets as a % of total assets
|
1.40 | % | 0.91 | % | 1.40 | % | 0.91 | % | ||||||||||||||
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June
30,
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%
|
|||||||||||||||||||||
|
2008
|
2007
|
Change
|
||||||||||||||||||||
|
Balance
sheet highlights:
|
||||||||||||||||||||||
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Available-for-sale
securities, at fair value
|
$ | 134,483 | $ | 86,348 | 56 | % | ||||||||||||||||
|
Loans
held for sale
|
486 | 1,636 | -70 | % | ||||||||||||||||||
|
Loans
|
409,194 | 425,571 | -4 | % | ||||||||||||||||||
|
Allowance
for loan losses
|
5,656 | 5,756 | -2 | % | ||||||||||||||||||
|
Goodwill
& intangibles
|
12,835 | 6,991 | 84 | % | ||||||||||||||||||
|
Total
assets
|
598,274 | 556,994 | 7 | % | ||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||
|
NOW
and money market
|
70,138 | 61,459 | 14 | % | ||||||||||||||||||
|
Savings
|
19,906 | 21,145 | -6 | % | ||||||||||||||||||
|
Certificates
of deposits
|
225,590 | 223,071 | 1 | % | ||||||||||||||||||
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Brokered
time deposits
|
12,597 | 22,546 | -44 | % | ||||||||||||||||||
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Noninterest-bearing
deposits
|
35,143 | 36,333 | -3 | % | ||||||||||||||||||
|
Total
deposits
|
363,374 | 364,554 | 0 | % | ||||||||||||||||||
|
Borrowings
|
186,830 | 147,564 | 27 | % | ||||||||||||||||||
|
Shareholders'
equity
|
40,273 | 40,850 | -1 | % | ||||||||||||||||||
|
Shares
outstanding
|
2,315,182 | 2,448,832 | -5 | % | ||||||||||||||||||