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, 2013

 

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:

 

o  Written communications pursuant to Rule 425 under the Securities Act

 

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

 

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

 

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

 

 

 



 

Item 2.02                                           Results of Operations and Financial Condition

 

On October 29, 2013, Northeast Bancorp, a Maine corporation (the “Company”), issued a press release announcing its earnings for the first quarter of fiscal 2014 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, 2013

 

2



 

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/ Claire S. Bean

 

Name:

Claire S. Bean

 

Title:

Chief Financial Officer

 

 

 

Date: October 29, 2013

 

 

 

3



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release dated October 29, 2013

 

4


Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

GRAPHIC

For More Information:

 

 

Claire S. Bean, CFO & COO

Northeast Bank, 500 Canal Street, Lewiston, ME 04240

207.786.3245 ext. 3202

www.northeastbank.com

 

 

 

 

Northeast Bancorp Reports First Quarter Results, Declares Dividend

 

Lewiston, ME (October 29, 2013) – 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 available to common shareholders of $320 thousand, or $0.03 per diluted common share, for the quarter ended September 30, 2013, compared to net income available to common shareholders of $936 thousand, or $0.09 per diluted common share, for the quarter ended September 30, 2012.

 

The current quarter included $554 thousand of expenses related to severance and an insurance recovery of $250 thousand related to a lawsuit settled in the previous quarter.  Excluding these items, which the Company considers to be non-core, net operating earnings were $521 thousand or $0.05 per diluted common share.

 

The Board of Directors has declared a cash dividend of $0.09 per share, payable on November 26, 2013 to shareholders of record as of November 12, 2013.

 

“Our results this quarter reflect the variability inherent in our loan purchasing activities, and specifically the timing of transactional income on our purchased loan portfolio, which for the quarter was $912 thousand as compared to $2.8 million for the quarter ended June 30, 2013,” said Richard Wayne, Chief Executive Officer. “Such fluctuations in loan purchasing activity and associated revenue will continue to affect our results, causing fluctuations in earnings per share, until moderated by the positive effect of growth in our balance sheet and the full leveraging of our capital. To that end, we achieved $48 million of net loan growth this quarter and produced a net interest margin of 4.24%.”

 

At September 30, 2013, total assets were $725.0 million, an increase of $54.3 million, or 8.1%, compared to June 30, 2013. The principal components of the quarterly changes in the balance sheet follow:

 

1.              The loan portfolio grew by $48.1 million, or 11.1%, compared to June 30, 2013, principally due to net growth of $35.4 million in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”) and $12.7 million of net growth in loans originated by the Bank’s Community Banking Division.  Growth in the Community Banking Division during the quarter was principally due to $27.7 million of residential loan originations held in portfolio to increase the Bank’s loan purchasing capacity under regulatory conditions.  As has been discussed in the Company’s prior 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 capacity under these conditions follows.

 

Basis for
Regulatory Condition

 

Condition

 

Purchased Loan Capacity at
September 30, 2013

 

 

 

 

 

(Dollars in millions)

 

Total Loans

 

Purchased loans may not exceed 40% of total loans

 

$

30.2

 

Regulatory Capital

 

Commercial real estate loans may not exceed 300% of total risk-based capital

 

$

157.3

 

 



 

An overview of the LASG portfolio follows.

 

 

 

Three Months Ended September 30,

 

 

 

2013

 

2012

 

 

 

Purchased

 

Originated

 

Total LASG

 

Purchased

 

Originated

 

Total LASG

 

 

 

(Dollars in thousands)

 

Purchased or originated during the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unpaid principal balance

 

$

18,331

 

$

26,426

 

$

44,757

 

$

42,273

 

$

8,799

 

$

51,072

 

Net investment basis

 

16,348

 

26,426

 

42,774

 

31,349

 

8,799

 

40,148

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Totals as of period end:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unpaid principal balance

 

$

214,159

 

$

63,588

 

$

277,747

 

$

133,510

 

$

12,594

 

$

146,104

 

Net investment basis

 

177,412

 

63,618

 

241,030

 

107,440

 

12,594

 

120,034

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Returns during the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Yield

 

10.16

%

5.71

%

9.21

%

15.13

%

9.54

%

14.58

%

Total Return (1)

 

10.62

%

5.71

%

9.57

%

17.41

%

9.54

%

16.63

%

 


(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.

 

2.              Deposits and borrowings increased by $47.4 million and $6.2 million, respectively, from June 30, 2013.  Growth in each was tied to the Company’s strategy for funding its loan growth, and in particular to mitigate the interest rate risk associated with the increase in its residential loan portfolio.  To date, the Company has duration-matched such growth with a mix of term funding raised through deposit listing services and Federal Home Loan Bank advances, the latter in conjunction with interest rate swaps.

 

Net income decreased by $714 thousand to $320 thousand for the quarter ended September 30, 2013, compared to $936 thousand for the quarter ended September 30, 2012. Pre-tax income for the quarter ended September 30, 2013 included $554 thousand of expenses related to severance and an insurance recovery of $250 thousand related to a lawsuit settled in the previous quarter.  Operating results for the quarter included the following additional items of significance:

 

1.              Net interest income increased by $1.0 million, or 16.5%, to $7.1 million for the quarter compared to the quarter ended September 30, 2012, primarily due to growth in the purchased loan portfolio. This result is evident in the net interest margin, which increased to 4.24% for the quarter ended September 30, 2013, compared to 3.80% for the quarter ended September 30, 2012.  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,

 

 

 

2013

 

2012

 

 

 

Average

 

Interest

 

 

 

Average

 

Interest

 

 

 

 

 

Balance

 

Income

 

Yield

 

Balance

 

Income

 

Yield

 

 

 

(Dollars in thousands)

 

Community Banking Division

 

$

242,700

 

$

3,342

 

5.46

%

$

270,758

 

$

3,936

 

5.77

%

LASG:

 

 

 

 

 

 

 

 

 

 

 

 

 

Originated

 

47,208

 

680

 

5.71

%

9,193

 

221

 

9.54

%

Purchased

 

173,167

 

4,435

 

10.16

%

83,475

 

3,184

 

15.13

%

Total LASG

 

220,375

 

5,115

 

9.21

%

92,668

 

3,405

 

14.58

%

Total

 

$

463,075

 

$

8,457

 

7.25

%

$

363,426

 

$

7,341

 

8.01

%

 



 

The yield on purchased loans was increased by unscheduled loan payoffs, which resulted in immediate recognition of the prepaid loans’ discount in interest income. The following table details the “total return” on purchased loans, which includes transactional income of $912 thousand for the quarter ended September 30, 2013, a decrease of $870 thousand from the quarter ended September 30, 2012 and a decrease of $1.7 million from average transactional income for the four prior quarters.

 

 

 

Total Return on Purchased Loans

 

 

 

Three Months Ended September 30,

 

 

 

2013

 

2012

 

 

 

Income

 

Return (1)

 

Income

 

Return (1)

 

 

 

(Dollars in thousands)

 

Regularly scheduled interest and accretion

 

$

3,739

 

8.54

%

$

1,911

 

9.01

%

Transactional income:

 

 

 

 

 

 

 

 

 

Gains on loan sales

 

216

 

0.49

%

 

0.00

%

Gain on sale of real estate owned

 

 

0.00

%

473

 

2.23

%

Other noninterest income

 

 

0.00

%

36

 

0.17

%

Accelerated accretion and loan fees

 

696

 

1.59

%

1,273

 

6.00

%

Total transactional income

 

912

 

2.08

%

1,782

 

8.40

%

Total

 

$

4,651

 

10.62

%

$

3,693

 

17.41

%

 


(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.

 

2.              Noninterest income decreased by $1.2 million for the current quarter, compared to the quarter ended September 30, 2012, principally due to the following:

 

·                  A decrease of $792 thousand in net securities gains.  In the quarter ended September 30, 2012, the Company sold a substantial portion of its available-for-sale investment portfolio and reinvested the sales proceeds in similar securities at lower market yields.  There were no security sales in the quarter ended September 30, 2013.

·                  A decrease of $489 thousand in gains on real estate owned.  In the quarter ended September 30, 2012, the Company recognized a gain of $473 thousand on the sale of real estate previously securing a purchased loan.

 

3.              Noninterest expense increased by $1.0 million for the current quarter, compared to the quarter ended September 30, 2012, principally due to the following:

 

·                  An increase of $1.0 million in salaries and employee benefits, principally due to severance of $554 thousand and increased headcount in the LASG and mortgage lending divisions.

·                  An increase of $277 thousand in occupancy and equipment expense, principally due to the relocation of the Company’s Boston office in the second quarter of fiscal 2013.

·                  A decrease of $143 thousand in marketing expense, principally due to a reduction in deposit marketing in the quarter ended September 30, 2013.

·                  A $250 thousand decrease in legal settlement expenses, due to an insurance recovery recognized in the quarter ended September 30, 2013.

 

At September 30, 2013, nonperforming assets totaled $8.9 million, or 1.2% of total assets, as compared to $7.0 million, or 1.1% of total assets at June 30, 2013.  The increase in nonperforming assets during the quarter was principally due to two purchased loan relationships.

 

At September 30, 2013, the Company’s Tier 1 leverage ratio was 17.2%, a decrease from 17.8% at June 30, 2013, and the total risk-based capital ratio was 25.6%, a decrease from 27.5% at June 30, 2013.

 



 

Investor Call Information

 

Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Claire Bean, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss first quarter earnings and business outlook at 11:00 a.m. Eastern Time on Wednesday, October 30, 2013. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 93619559. 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. Northeast Bank offers traditional banking services through its Community Banking Division, which operates ten full-service branches and six loan production offices that serve individuals and businesses located in western and south-central Maine, southern New Hampshire and southeastern Massachusetts. Northeast Bank’s Loan Acquisition and Servicing Group purchases and originates commercial loans for the Bank’s portfolio. ableBanking, a division of Northeast Bank, offers savings products to consumers online. Information regarding Northeast Bank can be found on its website at www.northeastbank.com.

 

Non-GAAP Financial Measure

 

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 stockholders’ equity, tangible book value per share, and net operating earnings. 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.

 

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 continuing 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; increasing government regulation; 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.

 

IMPORTANT NOTE: Securities and Advisory Services offered through Commonwealth Financial Network, Member FINRA, SIPC, and a Registered Investment Adviser. Securities are not FDIC insured, not bank obligations or otherwise bank guaranteed and may lose value. Northeast Financial is located at 77 Middle Street, Portland, ME 04101.

 

NBN-F

 



 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

 

 

 

September 30, 2013

 

June 30, 2013

 

Assets

 

 

 

 

 

Cash and due from banks

 

$

2,849

 

$

3,238

 

Short-term investments

 

74,502

 

62,696

 

Total cash and cash equivalents

 

77,351

 

65,934

 

 

 

 

 

 

 

Available-for-sale securities, at fair value

 

118,207

 

121,597

 

Loans held for sale

 

5,418

 

8,594

 

 

 

 

 

 

 

Loans

 

 

 

 

 

Commercial real estate

 

284,072

 

264,448

 

Residential real estate

 

146,620

 

127,829

 

Construction

 

42

 

42

 

Commercial and industrial

 

40,241

 

29,720

 

Consumer

 

12,511

 

13,337

 

Total loans

 

483,486

 

435,376

 

Less: Allowance for loan losses

 

1,224

 

1,143

 

Loans, net

 

482,262

 

434,233

 

 

 

 

 

 

 

Premises and equipment, net

 

9,827

 

10,075

 

Real estate owned and other possessed collateral, net

 

3,413

 

2,134

 

Federal Home Loan Bank and Federal Reserve Bank stock, at cost

 

5,721

 

5,721

 

Intangible assets, net

 

3,334

 

3,544

 

Bank owned life insurance

 

14,502

 

14,385

 

Other assets

 

4,920

 

4,422

 

Total assets

 

$

724,955

 

$

670,639

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Liabilities

 

 

 

 

 

Deposits

 

 

 

 

 

Demand

 

$

50,392

 

$

46,425

 

Savings and interest checking

 

91,330

 

90,970

 

Money market

 

85,855

 

84,416

 

Time

 

304,521

 

262,812

 

Total deposits

 

532,098

 

484,623

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

42,985

 

28,040

 

Wholesale repurchase agreements

 

15,343

 

25,397

 

Short-term borrowings

 

1,970

 

625

 

Junior subordinated debentures issued to affiliated trusts

 

8,310

 

8,268

 

Capital lease obligation

 

1,695

 

1,739

 

Other liabilities

 

8,708

 

8,145

 

Total liabilities

 

611,109

 

556,837

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at September 30, 2013 and June 30, 2013

 

 

 

Voting common stock, $1.00 par value, 25,000,000 shares authorized; 9,552,587 and 9,565,680 shares issued and outstanding at September 30, 2013 and June 30, 2013, respectively

 

9,553

 

9,566

 

Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 880,963 shares issued and outstanding at September 30, 2013 and June 30, 2013

 

881

 

881

 

Additional paid-in capital

 

93,081

 

92,745

 

Retained earnings

 

11,904

 

12,524

 

Accumulated other comprehensive loss

 

(1,573

)

(1,914

)

Total stockholders’ equity

 

113,846

 

113,802

 

Total liabilities and stockholders’ equity

 

$

724,955

 

$

670,639

 

 



 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

 

 

Three Months Ended September 30,

 

 

 

2013

 

2012

 

Interest and dividend income:

 

 

 

 

 

Interest on loans

 

$

8,457

 

$

7,341

 

Interest on available-for-sale securities

 

282

 

347

 

Other interest and dividend income

 

52

 

89

 

Total interest and dividend income

 

8,791

 

7,777

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

Deposits

 

1,047

 

978

 

Federal Home Loan Bank advances

 

323

 

259

 

Wholesale repurchase agreements

 

95

 

219

 

Short-term borrowings

 

5

 

6

 

Junior subordinated debentures issued to affiliated trusts

 

192

 

193

 

Obligation under capital lease agreements

 

22

 

24

 

Total interest expense

 

1,684

 

1,679

 

 

 

 

 

 

 

Net interest and dividend income before provision for loan losses

 

7,107

 

6,098

 

Provision for loan losses

 

77

 

228

 

Net interest and dividend income after provision for loan losses

 

7,030

 

5,870

 

 

 

 

 

 

 

Noninterest income:

 

 

 

 

 

Fees for other services to customers

 

439

 

310

 

Net securities gains

 

 

792

 

Gain on sales of loans held for sale

 

539

 

756

 

Gain on sales of portfolio loans

 

217

 

 

(Loss) gain recognized on real estate owned and other repossessed collateral, net

 

(38

)

451

 

Investment commissions

 

675

 

675

 

Bank-owned life insurance income

 

118

 

123

 

Other noninterest income

 

14

 

43

 

Total noninterest income

 

1,963

 

3,150

 

 

 

 

 

 

 

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

 

5,144

 

4,057

 

Occupancy and equipment expense

 

1,355

 

1,078

 

Professional fees

 

426

 

423

 

Data processing fees

 

314

 

268

 

Marketing expense

 

44

 

187

 

Loan acquisition and collection expense

 

473

 

454

 

FDIC insurance premiums

 

110

 

117

 

Intangible asset amortization

 

210

 

265

 

Legal settlement (recovery) expense

 

(250

)

 

Other noninterest expense

 

686

 

653

 

Total noninterest expense

 

8,512

 

7,502

 

 

 

 

 

 

 

Income before income tax expense

 

481

 

1,518

 

Income tax expense

 

161

 

484

 

Net income

 

$

320

 

$

1,034

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

320

 

$

936

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

Basic

 

10,440,513

 

10,383,441

 

Diluted

 

10,440,513

 

10,383,441

 

Earnings per common share:

 

 

 

 

 

Basic

 

$

0.03

 

$

0.09

 

Diluted

 

$

0.03

 

$

0.09

 

Cash dividends declared per common share

 

$

0.09

 

$

0.09

 

 



 

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)

 

 

 

Three Months Ended September 30,

 

 

 

2013

 

2012

 

 

 

 

 

Interest

 

Average

 

 

 

Interest

 

Average

 

 

 

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

 

 

 

Balance

 

Expense

 

Rate

 

Balance

 

Expense

 

Rate

 

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

119,298

 

$

282

 

0.94

%

$

131,796

 

$

347

 

1.04

%

Loans (2) (3)

 

463,075

 

8,457

 

7.25

%

363,426

 

7,341

 

8.01

%

Regulatory stock

 

5,721

 

4

 

0.28

%

5,473

 

6

 

0.43

%

Short-term investments (4)

 

77,408

 

48

 

0.25

%

136,143

 

83

 

0.24

%

Total interest-earning assets

 

665,502

 

8,791

 

5.24

%

636,838

 

7,777

 

4.84

%

Cash and due from banks

 

3,037

 

 

 

 

 

3,177

 

 

 

 

 

Other non-interest earning assets

 

34,012

 

 

 

 

 

37,695

 

 

 

 

 

Total assets

 

$

702,551

 

 

 

 

 

$

677,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities & Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW accounts

 

$

59,124

 

$

40

 

0.27

%

$

56,595

 

$

42

 

0.29

%

Money market accounts

 

85,688

 

112

 

0.52

%

47,349

 

53

 

0.44

%

Savings accounts

 

33,926

 

12

 

0.14

%

31,347

 

11

 

0.14

%

Time deposits

 

284,390

 

883

 

1.23

%

257,976

 

872

 

1.34

%

Total interest-bearing deposits

 

463,128

 

1,047

 

0.90

%

393,267

 

978

 

0.99

%

Short-term borrowings

 

2,278

 

5

 

0.87

%

1,251

 

6

 

1.90

%

Borrowed funds

 

59,986

 

440

 

2.91

%

100,186

 

502

 

1.99

%

Junior subordinated debentures

 

8,288

 

192

 

9.19

%

8,124

 

193

 

9.43

%

Total interest-bearing liabilities

 

533,680

 

1,684

 

1.25

%

502,828

 

1,679

 

1.32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits and escrow accounts

 

50,391

 

 

 

 

 

49,815

 

 

 

 

 

Other liabilities

 

5,561

 

 

 

 

 

6,223

 

 

 

 

 

Total liabilities

 

589,632

 

 

 

 

 

558,866

 

 

 

 

 

Stockholders’ equity

 

112,919

 

 

 

 

 

118,844

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

702,551

 

 

 

 

 

$

677,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

7,107

 

 

 

 

 

$

6,098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate spread

 

 

 

 

 

3.99

%

 

 

 

 

3.52

%

Net interest margin (5)

 

 

 

 

 

4.24

%

 

 

 

 

3.80

%

 


(1)  Interest income and yield are stated on a fully tax-equivalent basis using a 34% 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)  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, 2013

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

Net interest income

 

$

7,107

 

$

8,539

 

$

8,253

 

$

7,057

 

$

6,098

 

Provision for loan losses

 

77

 

301

 

346

 

247

 

228

 

Noninterest income

 

1,963

 

2,130

 

3,401

 

3,544

 

3,150

 

Noninterest expense

 

8,512

 

10,218

 

8,831

 

8,132

 

7,502

 

Net income

 

320

 

205

 

1,666

 

1,517

 

1,034

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

10,440,513

 

10,446,643

 

10,425,576

 

10,383,441

 

10,383,441

 

Diluted

 

10,440,513

 

10,446,643

 

10,425,576

 

10,383,441

 

10,383,441

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

$

0.02

 

$

0.16

 

$

0.12

 

$

0.09

 

Diluted

 

0.03

 

0.02

 

0.16

 

0.12

 

0.09

 

Dividends per common share

 

0.09

 

0.09

 

0.09

 

0.09

 

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.18

%

0.12

%

0.97

%

0.87

%

0.61

%

Return on average equity

 

1.12

%

0.71

%

5.85

%

5.15

%

3.45

%

Net interest rate spread (1) 

 

3.99

%

5.07

%

4.82

%

4.02

%

3.52

%

Net interest margin (2)

 

4.24

%

5.32

%

5.07

%

4.28

%

3.80

%

Efficiency ratio (3)

 

93.85

%

95.77

%

75.78

%

76.71

%

81.12

%

Noninterest expense to average total assets

 

4.81

%

6.00

%

5.12

%

4.64

%

4.39

%

Average interest-earning assets to average interest-bearing liabilities

 

124.70

%

125.27

%

124.53

%

125.48

%

126.65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of:

 

 

 

September 30, 2013

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

Nonperforming loans:

 

 

 

 

 

 

 

 

 

 

 

Originated portfolio:

 

 

 

 

 

 

 

 

 

 

 

Residential real estate

 

$

1,945

 

$

2,346

 

$

2,296

 

$

3,512

 

$

3,184

 

Commercial real estate

 

471

 

473

 

631

 

624

 

626

 

Home equity

 

229

 

334

 

405

 

620

 

289

 

Commercial and industrial

 

62

 

110

 

103

 

123

 

133

 

Consumer

 

259

 

136

 

258

 

166

 

181

 

Total originated portfolio

 

2,966

 

3,399

 

3,693

 

5,045

 

4,413

 

Total purchased portfolio

 

2,553

 

1,457

 

1,700

 

2,144

 

667

 

Total nonperforming loans

 

5,519

 

4,856

 

5,393

 

7,189

 

5,080

 

Real estate owned and other repossessed collateral, net

 

3,413

 

2,134

 

2,038

 

2,633

 

2,645

 

Total nonperforming assets

 

$

8,932

 

$

6,990

 

$

7,431

 

$

9,822

 

$

7,725

 

 

 

 

 

 

 

 

 

 

 

 

 

Past due loans to total loans

 

1.38

%

1.68

%

2.00

%

2.52

%

1.65

%

Nonperforming loans to total loans

 

1.14

%

1.12

%

1.42

%

1.83

%

1.35

%

Nonperforming assets to total assets

 

1.23

%

1.04

%

1.06

%

1.39

%

1.15

%

Allowance for loan losses to total loans

 

0.25

%

0.26

%

0.27

%

0.22

%

0.18

%

Allowance for loan losses to nonperforming loans

 

22.18

%

23.54

%

19.15

%

12.17

%

13.15

%

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate loans to risk-based capital (4)

 

171.30

%

159.07

%

184.40

%

193.74

%

167.62

%

Net loans to core deposits (5)

 

93.04

%

92.94

%

77.72

%

81.01

%

86.69

%

Purchased loans to total loans, including held for sale

 

36.29

%

37.57

%

33.63

%

33.36

%

27.68

%

Equity to total assets

 

15.70

%

16.97

%

16.54

%

16.31

%

17.72

%

Tier 1 leverage capital ratio

 

17.23

%

17.78

%

17.41

%

17.44

%

18.37

%

Total risk-based capital ratio

 

25.63

%

27.54

%

30.71

%

29.35

%

31.32

%

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

$

113,846

 

$

113,802

 

$

115,737

 

$

114,931

 

$

118,857

 

Less: Preferred stock

 

 

 

 

 

(4,227

)

Common stockholders’ equity

 

113,846

 

113,802

 

115,737

 

114,931

 

114,630

 

Less: Intangible assets

 

(3,334

)

(3,544

)

(3,751

)

(3,957

)

(4,222

)

Tangible common stockholders’ equity (non-GAAP)

 

$

110,512

 

$

110,258

 

$

111,986

 

$

110,974

 

$

110,408

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

10,433,550

 

10,446,643

 

10,446,643

 

10,383,441

 

10,383,441

 

Book value per common share

 

$

10.91

 

$

10.89

 

$

11.08

 

$

11.07

 

$

11.04

 

Tangible book value per share (non-GAAP) (6)

 

10.59

 

10.55

 

10.72

 

10.69

 

10.63

 

 

Reconciliation of Net Income Available to Common Shareholders (GAAP) to Net Operating Earnings (non-GAAP) (7)

 

 

 

Three Months Ended:

 

 

 

September 30, 2013

 

June 30, 2013

 

March 31, 2013

 

December 31, 2012

 

September 30, 2012

 

Net income available to common shareholders (GAAP)

 

$

320

 

$

205

 

$

1,666

 

$

1,259

 

$

936

 

Items excluded from operating earnings, net of tax:

 

 

 

 

 

 

 

 

 

 

 

Income from life insurance death benefits

 

 

 

 

(265

)

 

 

Severance expense

 

366

 

255

 

 

 

 

Legal settlement expense and related professional fees

 

(165

)

671

 

 

 

 

Total after-tax items

 

201

 

926

 

 

 

 

Net operating earnings (non-GAAP)

 

$

521

 

$

1,131

 

$

1,666

 

$

994

 

$

936

 

Net operating earnings per share - basic (non-GAAP)

 

$

0.05

 

$

0.11

 

$

0.16

 

$

0.10

 

$

0.09

 

 


(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 non-interest expense divided by the sum of net interest income (before the loan loss provision) plus non-interest income.

(4) For purposes of calculating this ratio, commercial real estate includes all those loans defined as such by regulatory guidance, including all land development and construction loans.  As of September 30, 2013 and June 30, 2013, commercial real estate excludes loans secured by owner-occupied properties.

(5) Core deposits includes all non-maturity deposits and maturity deposits less than $250 thousand.  Net loans includes loans held-for-sale.

(6) Tangible book value per share represents total stockholders’ equity less the sum of preferred stock and intangible assets divided by common shares outstanding.

(7) Management believes operating earnings, which exclude non-core items, provide a more meaningful representation of the Company’s performance.