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): January
20,
2010
NORTHEAST
BANCORP
(Exact
Name of Registrant as Specified in its Charter)
|
Maine
|
1-14588
|
01-0425066
|
|
(State
or Other Jurisdiction Incorporation)
|
(Commission
File Number)
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(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.
|
o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425).
|
|
o
|
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 January 20, 2010 regarding second quarter 2010 earnings and
the declaration of a dividend.
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Item
7.01 Regulation FD Disclosure.
On
January 20, 2010, Northeast Bancorp, a Maine corporation (the "Company"), issued
a press release announcing its earnings for the second quarter ended December
31, 2009 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 second quarter ended December 31, 2009 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:
January 21, 2010
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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 January 20, 2010 regarding second quarter 2010 earnings and
the declaration of a dividend.
|
|
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 |
Northeast
Bancorp Six-Month Earnings Trending Up, Increase 216%
Lewiston,
MAINE (January 20, 2010)—Northeast Bancorp (NASDAQ: NBN), a Maine-based
full-service financial company and parent of Northeast Bank (https://www.northeastbank.com),
today announced net income was $649,313, or $0.25 per diluted share, for its
second quarter ended December 31, 2009, an increase of 121% compared to the
$293,575, or $0.12 per diluted share, earned for the quarter ended December 31,
2008.
Net
income for the six months ended December 31, 2009 was $1,144,982, or $0.44
diluted share, an increase of 216% compared to the $362,690, or $0.15 per
diluted share, earned for the six months ended December 31, 2008.
The
increase in both quarterly and six month net income year over year was primarily
due to continued growth in net interest margin, gains from the sale of real
estate mortgages into the secondary market and the ongoing development of non
interest income.
Jim
Delamater, President and CEO of Northeast Bancorp said, “As a community banker,
I’m pleased with our earnings and positive about the future of our company. I’m
confident that our long term strategic plan is still on the mark and that we
have been able to avoid the kind of high risk lending that has plagued other
banks.”
“We were
an early adopter of a strategic risk management strategy and, as a result, we
believe we have properly identified and managed both credit and interest rate
risk. We have a high level of product and income diversity, adequate loan loss
reserve coverage and consistent demand for our products and
services.”
Excluding
amortization of customer lists and intangible expenses, net income available to
common stockholders per diluted share was $0.31 for the quarter ended December
31, 2009. See footnote at the end of this release under the heading “Supplemental Reporting of
Non-GAAP-Based Financial Measures.”
Net
interest income increased 6% for the quarter ended December 31, 2009 compared to
the quarter ended December 31, 2008, and 6% for the six months ended December
31, 2009 compared to the six months ended December 31, 2008. Net interest income
increased primarily from an increased net interest margin, which increased 15
basis points and 19 basis points,
respectively, for the quarter and six months ended December 31,
2009. This increase in net interest margin was attributable to a
decrease in the cost of funds due to a shift of higher cost fixed rate deposits
to lower cost core deposits.
Noninterest
income for the quarter-ended December 31, 2009 totaled $3,102,994 and, for the
six-months period, totaled $6,007,667, representing increases of 15% and 16%
respectively, over the same periods during the previous year.
Mr.
Delamater commented further: “Northeast continues to generate approximately 41%
of its revenues from noninterest income sources. The long-term investment that
we have made to change our business model in order to achieve a high level of
income and product diversity is delivering results. Another result of our
strategy is that our, customers and the marketplace are benefitting from a
community bank that has a strong brand and a solid foundation from which to
build upon.”
“We are
starting to see the real estate markets begin to pick up, creating significant
opportunities to grow noninterest income. As such, Northeast has made a major
commitment to its mortgage loan origination division, recently announcing the
creation of new jobs and investing in the talent to enhance processing and
servicing capabilities. We have some of the best and the brightest talent and,
as a result, are seeing record pipeline growth, continued
Delamater.”
Compared
to the quarter ended September 30, 2009, the balances of delinquent loans and
non-performing loans and assets increased. We believe this reflects the current
state of the economy and the employment situation.
As a
result of the increase in nonperforming assets, the allowance for loan losses
was increased through a provision for loan losses of $527,000 during the quarter
ended December 31, 2009. The allowance represented 1.50% of total loans at
December 31, 2009 compared to 1.48% of total loans at September 30, 2009.
Management believes that the allowance for loan losses balance of $5.9 million
at December 31, 2009 is sufficient to cover losses inherent in the loan
portfolio on that date and is appropriate based on applicable accounting
standards.
The
company had over $612 million in assets at December 31, 2009 and now employs
over 244 people across Maine and New Hampshire.
In
addition to announcing earnings, the company declared payment of its regular
quarterly dividend of $0.09 per share, payable on February 19, 2010 to the
shareholders of record as of January 29, 2010. The company has paid a dividend
every quarter since going public in 1987.
"We are
focused on the core values and principles of community banking: safety and
soundness,” said Delamater. “The long-term interests of our shareholders,
customers and employees are reflected in our business decisions. The market
demands that bankers continue to adopt new ways of doing business in this
economy; we’re proud that our management team is moving in that direction and
positioning the company for continued success and growth.”
About
Northeast Bancorp
Northeast
Bancorp (NASDAQ: NBN) is the holding company for Northeast Bank, a leader in
delivering one-stop shopping for financial services. Headquartered in Lewiston,
Maine, Northeast Bank, together with its wholly owned subsidiary Northeast Bank
Insurance Group, Inc., derives its income from a combination of traditional
banking services and non-traditional financial products and services, including
insurance and investments. Northeast Bank operates eleven traditional bank
branches, fourteen insurance offices, three investment centers and a loan
production office that serve seven counties in Maine and two in New Hampshire.
Information regarding Northeast Bank can be found on its website at www.northeastbank.com or by
contacting 1-800-284-5989.
---------------------------------------------------------------------------------------------------------------------
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 release
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, 2009.
IMPORTANT NOTE: Securities and
Advisory Services offered through Commonwealth Financial Network, Member FINRA,
SIPC, a Registered Investment Advisor. Securities are not FDIC insured, not bank
obligations or otherwise bank guaranteed and may lose value. Northeast Financial
is located at 202 Rte 1, Suite 206, Falmouth ME 04105
Supplemental
Reporting of Non-GAAP-based Financial Measures
This
press release contains certain financial information determined by methods other
than in accordance with generally accepted accounting principles (GAAP).
Northeast’s management uses these non-GAAP measures in its analysis of the
Company's performance. The presentation of these non-GAAP financial measures is
intended to supplement investors' understanding of Northeast’s core business
activities. These non-GAAP disclosures should not be viewed as a substitute for
operating results determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP performance measures which may be presented by other
companies.
Earnings
per share excluding amortization of customer list and intangibles is a
non-GAAP-based financial measure calculated using non-GAAP-based amounts. The
most directly comparable measure is earnings per share which is calculated using
GAAP-based amounts. We calculate earnings per share excluding amortization of
customer list and intangibles by excluding the amortization expense for the
amortization of customer list and other intangibles recorded in connection with
the acquisitions of insurance agencies from our calculation of earnings per
share. Management uses earnings per share excluding amortization of customer
list and intangibles in order to review our core operating results. Management
believes that this is a better measure of our performance.
The
following sets forth a reconciliation of earnings per share excluding
amortization of customer list and intangibles to adjusted diluted earnings per
share:
|
Three
Months Ended
|
Six
Months Ended
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|||||||||||||||
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December
31,
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December
31,
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|||||||||||||||
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2009
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2008
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2009
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2008
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|||||||||||||
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Earnings
excluding intangible amortization
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||||||||||||||||
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Net
income
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$ | 649 | $ | 294 | $ | 1,145 | $ | 363 | ||||||||
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Add
back intangible expense, net of tax
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122 | 123 | 243 | 250 | ||||||||||||
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Adjusted
net income
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$ | 771 | $ | 417 | $ | 1,388 | $ | 613 | ||||||||
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Adjusted
net income available to common shareholders
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$ | 710 | $ | 405 | $ | 1,266 | $ | 601 | ||||||||
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Adjusted
basic earnings per share
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$ | 0.31 | $ | 0.17 | $ | 0.55 | $ | 0.26 | ||||||||
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Adjusted
diluted earnings per share
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$ | 0.31 | $ | 0.17 | $ | 0.54 | $ | 0.26 | ||||||||
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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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Six
Months Ended
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|||||||||||||||||||||||
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December
31,
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%
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December
31,
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%
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|||||||||||||||||||||
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2009
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2008
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Change
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2009
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2008
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Change
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|||||||||||||||||||
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Selected
financial information
|
||||||||||||||||||||||||
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Income
statement data:
|
||||||||||||||||||||||||
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Interest
income
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$ | 7,905 | $ | 8,653 | -9 | % | $ | 15,795 | $ | 17,248 | -8 | % | ||||||||||||
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Interest
expense
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3,419 | 4,426 | -23 | % | 7,083 | 8,980 | -21 | % | ||||||||||||||||
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Net
interest income
|
4,486 | 4,227 | 6 | % | 8,712 | 8,268 | 5 | % | ||||||||||||||||
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Provision
for loan losses
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527 | 504 | 5 | % | 1,083 | 1,024 | 6 | % | ||||||||||||||||
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Net
interest income after provision for loan losses
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3,959 | 3,723 | 6 | % | 7,629 | 7,244 | 5 | % | ||||||||||||||||
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Gain
on sale of loans
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354 | 51 | 594 | % | 566 | 113 | 401 | % | ||||||||||||||||
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Gain
(loss) on securities, net
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15 | 26 | 42 | % | 43 | (82 | ) | -152 | % | |||||||||||||||
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Investment
brokerage income
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535 | 608 | -12 | % | 988 | 1,028 | -4 | % | ||||||||||||||||
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Insurance
agency income
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1,379 | 1,431 | -4 | % | 2,964 | 2,948 | 1 | % | ||||||||||||||||
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Other
noninterest income
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820 | 575 | 43 | % | 1,447 | 1,194 | 21 | % | ||||||||||||||||
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Noninterest
Income
|
3,103 | 2,691 | 15 | % | 6,008 | 5,201 | 16 | % | ||||||||||||||||
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Noninterest
expense
|
6,240 | 6,081 | 3 | % | 12,167 | 12,120 | 0 | % | ||||||||||||||||
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Operating
income before income tax
|
822 | 333 | -147 | % | 1,470 | 325 | 352 | % | ||||||||||||||||
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Income
tax expense (benefit)
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173 | 39 | -344 | % | 325 | (38 | ) | -955 | % | |||||||||||||||
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Net
income
|
$ | 649 | $ | 294 | 121 | % | $ | 1,145 | $ | 363 | 215 | % | ||||||||||||
|
Net
income available to common stockholders
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$ | 589 | $ | 281 | 110 | % | $ | 1,023 | $ | 350 | 192 | % | ||||||||||||
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Per
share data:
|
||||||||||||||||||||||||
|
Basic
earnings per common share
|
$ | 0.25 | $ | 0.12 | 108 | % | $ | 0.44 | $ | 0.15 | 193 | % | ||||||||||||
|
Diluted
earnings per common share
|
$ | 0.25 | $ | 0.12 | 108 | % | $ | 0.44 | $ | 0.15 | 193 | % | ||||||||||||
|
Weighted
average shares outstanding:
|
||||||||||||||||||||||||
|
Basic
|
2,321,528 | 2,321,264 | 0 | % | 2,321,430 | 2,318,353 | 0 | % | ||||||||||||||||
|
Diluted
|
2,323,073 | 2,321,480 | 0 | % | 2,326,204 | 2,330,163 | 0 | % | ||||||||||||||||
|
Book
value per common share
|
$ | 19.47 | $ | 18.82 | $ | 19.47 | $ | 18.82 | ||||||||||||||||
|
Tangible
book value per common share
|
$ | 14.18 | $ | 13.46 | $ | 14.18 | $ | 13.46 | ||||||||||||||||
|
Net
interest margin
|
3.14 | % | 2.99 | % | 3.14 | % | 2.95 | % | ||||||||||||||||
|
Net
interest spread
|
2.98 | % | 2.82 | % | 2.90 | % | 2.76 | % | ||||||||||||||||
|
Return
on average assets (annualized)
|
0.42 | % | 0.19 | % | 0.37 | % | 0.12 | % | ||||||||||||||||
|
Return
on equity (annualized)
|
5.18 | % | 2.75 | % | 4.65 | % | 1.74 | % | ||||||||||||||||
|
Tier
I leverage ratio (Bank)
|
7.97 | % | 7.62 | % | 7.97 | % | 7.62 | % | ||||||||||||||||
|
Tier
I risk-based capital ratio (Bank)
|
11.60 | % | 10.85 | % | 11.60 | % | 10.85 | % | ||||||||||||||||
|
Total
risk-based capital ratio (Bank)
|
12.85 | % | 12.10 | % | 12.85 | % | 12.10 | % | ||||||||||||||||
|
Efficiency
ratio
|
82 | % | 88 | % | 83 | % | 90 | % | ||||||||||||||||
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Nonperforming
loans
|
12,294 | 7,369 | 12,294 | 7,369 | ||||||||||||||||||||
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Total
nonperforming assets
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13,168 | 8,111 | 13,168 | 8,111 | ||||||||||||||||||||
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Nonperforming
loans as a % of total loans
|
3.14 | % | 1.81 | % | 3.14 | % | 1.81 | % | ||||||||||||||||
|
Nonperforming
assets as a % of total assets
|
2.15 | % | 1.31 | % | 2.15 | % | 1.31 | % | ||||||||||||||||
|
December
31,
|
%
|
|||||||||||||||||||||||
|
|
2009 | 2008 | Change | |||||||||||||||||||||
| Balance sheet highlights: | ||||||||||||||||||||||||
|
Available-for-sale
securities, at fair value
|
$ | 168,979 | $ | 157,834 | 7 | % | ||||||||||||||||||
|
Loans
held for sale
|
1,555 | 1,357 | 15 | % | ||||||||||||||||||||
|
Loans
|
390,954 | 408,243 | -4 | % | ||||||||||||||||||||
|
Allowance
for loan losses
|
5,872 | 5,721 | 3 | % | ||||||||||||||||||||
|
Goodwill
& intangibles
|
12,276 | 12,451 | -1 | % | ||||||||||||||||||||
|
Total
assets
|
612,677 | 618,653 | -1 | % | ||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||||
|
NOW
and money market
|
91,630 | 71,221 | 29 | % | ||||||||||||||||||||
|
Savings
|
30,951 | 18,559 | 67 | % | ||||||||||||||||||||
|
Certificates
of deposits
|
213,368 | 224,943 | -5 | % | ||||||||||||||||||||
|
Brokered
time deposits
|
4,976 | 17,547 | -72 | % | ||||||||||||||||||||
|
Noninterest-bearing
deposits
|
33,509 | 32,721 | 2 | % | ||||||||||||||||||||
|
Total
deposits
|
374,434 | 364,991 | 3 | % | ||||||||||||||||||||
|
Borrowings
|
186,352 | 203,406 | -8 | % | ||||||||||||||||||||
|
Stockholders'
equity
|
49,451 | 47,914 | 3 | % | ||||||||||||||||||||
|
Shares
outstanding
|
2,322,332 | 2,321,332 | 0 | % | ||||||||||||||||||||