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
18,
2008
NORTHEAST
BANCORP
(Exact
Name of Registrant as Specified in its Charter)
|
Maine
|
1-14588
|
01-0425066
|
|
(State
or Other Jurisdiction Incorporation)
|
(Commission
File Number)
|
(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
|
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
|
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
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b)).
|
|
o
|
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.
|
Description
|
|
99.1
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Press
Release, dated January 18, 2008 regarding second quarter 2008 earnings
and
the declaration of a dividend.
|
Item
7.01 Regulation FD Disclosure.
On
January 18, 2008, Northeast Bancorp, a Maine corporation (the "Company"), issued
a press release announcing its earnings for the second quarter ended December
31, 2007 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, 2007 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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Date: January
23, 2008
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By:
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/s/ James
D.
Delamater
|
|
James
D. Delamater
|
||
|
President
and Chief Executive Officer
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EXHIBIT
INDEX
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Exhibit
No.
|
Description
|
|
99.1
|
Press
Release, dated January 18, 2008 regarding second quarter 2008 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 Announces 2nd
Quarter
Earnings and Dividend
And
Progress Toward Relationship Pricing
Lewiston,
MAINE (January 18,
2008)--Northeast Bancorp (NASDAQ: NBN), today announced that net
income for the second quarter was $402,428, or $0.17 per diluted share, as
compared to earnings for the same period last year of $417,356, representing
a
decline of 4%. Net income for the six months ended December 31, 2007
was $832,993, or $0.35 per diluted share, representing a 4% decrease as compared
to net income for the previous six months of $872,023, or $0.35 per diluted
share.
The
decrease in net income for the three
and six months ended December 31, 2007 compared to the same periodsone
year ago resulted primarily from
decreased net interest income due to the continuing pressure on cost of funds
which resulted in continued margin compression, as well as the impact of
additional overhead expenses related to the company’s insurance division
expansion strategy.
Noninterest
income for the quarter
ended December 31, 2007 was $2,396,885, a record 27% increase over the same
quarter of the prior year. For the six months ended December 31,
2007, noninterest income was $4,386,257, a 31% increase over the prior six
months.
The
substantial increase in noninterest
income was attributable to further implementation of the company’s business plan
to continue to diversify its revenue stream, including the acquisition of two
insurance agencies during the quarter ended December 31, 2007. With these
acquisitions, a total of seven agencies have been acquired in just over a
year. Insurance commissions have increased 159% in the past quarter
and 130% over the past six months.
“We
continue to generate strong revenue
numbers across all lines of business,” said Jim Delamater, Presidentand CEO
of Northeast Bancorp. “I
am pleased with the
results of our well-executed plan. We remain committed to growing the
revenue side of the business to increase the value of the franchise and
diversify our revenue streams. Total
noninterest income now represents
40%
of our total
revenueandgenerated
an increase of 8percentage points over
this same period last
year.”
Total
assets reported for the second
quarter ended December
31, 2007 were $588 million as
compared to $559 million
for
the same period last
year. “We’ve been talking about the interest rate environment and the
irrational pricing for the past eight quarters. With the shake up in
the credit markets, we feel that our focus on the sound management of both
our
interest rate risk and credit risk to protect the integrity of our balance
sheet,will
be validated in this
environment,”
continued
Delamater.
The
provision for loan losses of
$179,653 for the three months ended December 31, 2007 was a decrease of $195,893
compared to the same period one year ago and was due generally to a decrease
in
the loan portfolio. For the six months ended December 31, 2007, the provision
for loan losses of $369,935 was a decrease of $306,397 compared to the six
months ended December 31, 2006.
Delamater
noted, “We have experienced an
increase in delinquent loans, loans in process of foreclosure, and non-accrual
loans, but management believes that the allowance for loan losses is adequate
for the increased risk of loss suggested by these trends.”
The
allowance for loan losses has
remained unchanged from December 31, 2006 to December 31, 2007. The
allowance for loan losses as a percentage of outstanding loans was 1.41% at
December 31, 2007 compared to 1.33% for the same period one year
ago. Outstanding loans decreased compared to June 30, 2007 by
$17,335,648 and compared to December 31, 2006 by $26,388,330 to $408,235,770
at
December 31, 2007.
Delamater
said, “While the markets are
currently focused on the credit situation, we’ve remained committed to
delivering integrated financial solutions for our customers encompassing not
only banking, but insurance and investments. We believe that this strategy
is
paying off. It is for this reason that we are pleased to announce we
are moving forward with our ability to relationship price across all business
lines, a tactic that implements the strategy that we have been developing for
years.”
Relationship
pricing is the process of
analyzing each customer relationship and delivering pricing options that create
savings in terms of reduced rates and fee discounts for different lines of
business. The Company reports it is in the final stages of the
software implementation and the initial training phase for the business
development team, teaching the fundamentals of customer profitability and
product pricing for value.
Delamater
added, “It was always our goal
to create a one-stop shop for financial products and leverage the synergies
of
our product lines at the point of sale. Our business lines work
together as a team of financial professionals to provide customized pricing
structures for each customer, allowing us to build relationships one at a
time. True system-based relationship pricing is unique in the
community banking marketplace and a capability that we believe will set us
apart
from our competition.”
In
addition to announcing earnings, the
Board of Directors declared a dividend of $0.09 per share payable on February
22, 2008 to shareholders of record as of the close of business on February
1,
2008. Northeast Bancorp common shares trade on the NASDAQ stock
exchange with approximately 2.3 million shares outstanding and, as of December
31, 2007, had a book value of $17.73 per share, an increase from $16.78 at
the
end of the same period last year.
“Northeast
Bank is a strong company
with a focused business plan and a strong brand. We believe our value
lies in the diversity of our product mix, our commitment to relationship
pricing, our diligent focus on risk management and, most of all, our need-based
approach to working with our customers,” Delamater explained.
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 Seacoast 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 Bancorpor
its subsidiaries or 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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Three
Months
Ended
|
Six
Months
Ended
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|||||||||||||||||||||||
|
December
31,
|
%
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December
31,
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%
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|||||||||||||||||||||
|
2007
|
2006
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Change
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2007
|
2006
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Change
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|||||||||||||||||||
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Selected
financialinformation
|
||||||||||||||||||||||||
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Income
statement data:
|
||||||||||||||||||||||||
|
Interest
income
|
$ | 9,073 | $ | 9,036 | 0 | % | $ | 18,029 | $ | 18,058 | 0 | % | ||||||||||||
|
Interest
expense
|
5,503 | 5,034 | 9 | % | 10,867 | 9,941 | 9 | % | ||||||||||||||||
|
Net
interest income
|
3,570 | 4,002 | -11 | % | 7,162 | 8,117 | -12 | % | ||||||||||||||||
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Provision
for loan losses
|
180 | 376 | -52 | % | 370 | 676 | -45 | % | ||||||||||||||||
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Net
interest income after provision for loan
losses
|
3,390 | 3,626 | -7 | % | 6,792 | 7,441 | -9 | % | ||||||||||||||||
|
Gain
on
sale
of
loans
|
121 | 145 | -17 | % | 274 | 240 | 14 | % | ||||||||||||||||
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(Loss)
gain on securities
|
(2 | ) | 18 | -111 | % | (8 | ) | 22 | -136 | % | ||||||||||||||
|
Investment
brokerage
income
|
586 | 637 | -8 | % | 984 | 1,009 | -2 | % | ||||||||||||||||
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Insurance
agency income
|
1,099 | 425 | 159 | % | 1,965 | 854 | 130 | % | ||||||||||||||||
|
Other
noninterest income
|
592 | 662 | -11 | % | 1,171 | 1,225 | -4 | % | ||||||||||||||||
|
Noninterest
Income
|
2,396 | 1,887 | 27 | % | 4,386 | 3,350 | 31 | % | ||||||||||||||||
|
Noninterest
expense
|
5,281 | 4,964 | 6 | % | 10,122 | 9,634 | 5 | % | ||||||||||||||||
|
Operating
income
before income tax
|
505 | 549 | -8 | % | 1,056 | 1,157 | -9 | % | ||||||||||||||||
|
Income
tax expense
|
103 | 132 | -22 | % | 223 | 285 | -22 | % | ||||||||||||||||
|
Net
income
|
$ | 402 | $ | 417 | -4 | % | $ | 833 | $ | 872 | -4 | % | ||||||||||||
|
Per
share
data:
|
||||||||||||||||||||||||
|
Basic
earning per common share
|
$ | 0.17 | $ | 0.17 | 0 | % | $ | 0.35 | $ | 0.36 | -3 | % | ||||||||||||
|
Diluted
earnings per common share
|
$ | 0.17 | $ | 0.17 | 0 | % | $ | 0.35 | $ | 0.35 | 0 | % | ||||||||||||
|
Weighted
average shares outstanding:
|
||||||||||||||||||||||||
|
Basic
|
2,357,104 | 2,452,529 | -4 | % | 2,386,528 | 2,450,646 | -3 | % | ||||||||||||||||
|
Diluted
|
2,370,853 | 2,471,365 | -4 | % | 2,402,895 | 2,470,994 | -3 | % | ||||||||||||||||
|
Book
value
per share
|
$ | 17.73 | $ | 16.78 | $ | 17.73 | $ | 16.78 | ||||||||||||||||
|
Tangible
bookvalue
per share
|
$ | 11.91 | $ | 14.66 | $ | 11.91 | $ | 14.66 | ||||||||||||||||
|
Net
interest
margin
|
2.66 | % | 3.00 | % | 2.71 | % | 3.05 | % | ||||||||||||||||
|
Net
interest spread
|
2.39 | % | 2.65 | % | 2.40 | % | 2.71 | % | ||||||||||||||||
|
Return
on average assets (annualized)
|
0.28 | % | 0.29 | % | 0.29 | % | 0.31 | % | ||||||||||||||||
|
Return
on equity
(annualized)
|
3.85 | % | 4.01 | % | 4.01 | % | 4.26 | % | ||||||||||||||||
|
Tier
I leverage ratio (Bank)
|
6.89 | % | 8.63 | % | 6.89 | % | 8.63 | % | ||||||||||||||||
|
Tier
I risk-based
capital ratio (Bank)
|
9.61 | % | 11.64 | % | 9.61 | % | 11.64 | % | ||||||||||||||||
|
Total
risk-based capital ratio (Bank)
|
10.86 | % | 12.89 | % | 10.86 | % | 12.89 | % | ||||||||||||||||
|
Efficiency
ratio
|
89 | % | 84 | % | 88 | % | 84 | % | ||||||||||||||||
|
Nonperforming
loans
|
6,610 | 4,898 | 6,610 | 4,898 | ||||||||||||||||||||
|
Total
nonperforming
assets
|
6,610 | 4,902 | 6,610 | 4,902 | ||||||||||||||||||||
|
Nonperforming
loans as a % of total loans
|
1.62 | % | 1.13 | % | 1.62 | % | 1.13 | % | ||||||||||||||||
|
Nonperforming
assets as a % of total assets
|
1.12 | % | 0.88 | % | 1.12 | % | 0.88 | % | ||||||||||||||||
|
December
31,
|
%
|
|||||||||||||||||||||||
|
2007
|
2006
|
Change
|
||||||||||||||||||||||
|
Balance
sheet highlights:
|
||||||||||||||||||||||||
|
Available-for-sale
securities, at fair value
|
$ | 129,754 | $ | 82,426 | 57 | % | ||||||||||||||||||
|
Loans
held
for sale
|
706 | 946 | -25 | % | ||||||||||||||||||||
|
Loans
|
408,236 | 434,624 | -6 | % | ||||||||||||||||||||
|
Allowance
for loan losses
|
5,756 | 5,758 | 0 | % | ||||||||||||||||||||
|
Goodwill
& intangibles
|
13,537 | 5,198 | 160 | % | ||||||||||||||||||||
|
Total
assets
|
588,398 | 559,508 | 5 | % | ||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||||
|
NOW
and money market
|
63,772 | 64,118 | -1 | % | ||||||||||||||||||||
|
Savings
|
19,674 | 20,914 | -6 | % | ||||||||||||||||||||
|
Certificates
of deposits
|
225,975 | 218,652 | 3 | % | ||||||||||||||||||||
|
Brokered
time deposits
|
20,957 | 32,312 | -35 | % | ||||||||||||||||||||
|
Noninterest-bearing
deposits
|
33,271 | 35,275 | -6 | % | ||||||||||||||||||||
|
Total
deposits
|
363,649 | 371,271 | -2 | % | ||||||||||||||||||||
|
Borrowings
|
180,523 | 143,755 | 26 | % | ||||||||||||||||||||
|
Shareholders'
equity
|
41,219 | 41,155 | 0 | % | ||||||||||||||||||||
|
Shares
outstanding
|
2,324,182 | 2,452,632 | -5 | % | ||||||||||||||||||||