nbn20160201_8k.htm

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):

February 1, 2016

 

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:

 

|  |

Written communications pursuant to Rule 425 under the Securities Act

   
|  | Soliciting material pursuant to Rule 14a-12 under the Exchange Act
   
|  |  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
   
|  |  Pre-commencement to communications pursuant to Rule 13e-4(c) under the Exchange Act

 


 

 
 

 

 

Item 2.02

Results of Operations and Financial Condition

 

On February 1, 2016, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the second quarter of fiscal 2016 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 February 1, 2016

 

 
 

 

 

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/

Brian Shaughnessy

 

  Name: Brian Shaughnessy  
  Title:  Chief Financial Officer and Treasurer  

 

Date: February 1, 2016

  

 
 

 

 

EXHIBIT INDEX

 

Exhibit No.

Description

   
99.1 Press Release dated February 1, 2016

 

ex99-1.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE  

 

 

For More Information:

Brian Shaughnessy, CFO

Northeast Bank, 500 Canal Street, Lewiston, ME 04240

207.786.3245 ext. 3220

www.northeastbank.com

 

 

 

Northeast Bancorp Reports Second Quarter Results, Declares Dividend

 

 

Lewiston, ME (February 1, 2016) ‒ 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 of $1.7 million, or $0.18 per diluted common share, for the quarter ended December 31, 2015, compared to net income of $1.6 million, or $0.16 per diluted common share, for the quarter ended December 31, 2014. Net income for the six months ended December 31, 2015 was $3.6 million, or $0.38 per diluted common share, compared to $3.2 million, or $0.32 per diluted common share, for the six months ended December 31, 2014.

 

The Board of Directors has declared a cash dividend of $0.01 per share, payable on February 29, 2016 to shareholders of record as of February 16, 2016.

 

“We are very pleased with the strong growth in our loan portfolio this quarter,” said Richard Wayne, President and Chief Executive Officer. “We generated loan volume of $120 million, including $75.4 million of loans produced by the Loan Acquisition and Servicing Group, $16.3 million of loans closed by the SBA National division, $23.4 million of residential mortgage loans originated, and $5.3 million originated in the community banking commercial division. Of the $75.4 million produced by LASG, $35.9 million were loans purchased at an average price of 89.3%. In addition to our loan growth, we were able to grow our non-maturity deposits by $21.5 million and achieve a net interest margin of 4.9%.”

 

As of December 31, 2015, total assets were $894.1 million, an increase of $43.4 million, or 5.1%, compared to June 30, 2015. The principal components of the change in the balance sheet follow:

 

 

1.

The loan portfolio – excluding loans held for sale – grew by $67.3 million, or 11.0%, compared to June 30, 2015, principally on the strength of $60.9 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”), net growth of $13.2 million in originations by the Bank’s Small Business Administration (“SBA”) National division and net growth of $4.8 million in commercial originations by the Bank’s Community Banking Division. This net growth was offset by an $11.6 million decrease in the Bank’s Community Banking Division residential and consumer loan portfolio.

 

 

Loans generated by the LASG totaled $75.4 million for the quarter ended December 31, 2015. The growth in LASG loans consisted of $35.9 million of purchased loans, at an average price of 89.3% of unpaid principal balance, and $39.5 million of originated loans. SBA loans closed during the quarter totaled $16.3 million, of which $14.5 million were fully funded in the quarter. In addition, the Company sold $7.5 million of the guaranteed portion of SBA loans in the secondary market, of which $4.7 million were originated in the current quarter and $2.8 million were originated in the prior quarter. Residential loan production sold in the secondary market totaled $20.5 million for the quarter.

  

 
 

 

 

 

As previously discussed in the Company’s 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 and commercial real estate loan availability under these conditions follow:

 

Basis for

Regulatory Condition

 

Condition

 

Availability at December 31, 2015

       

(Dollars in millions)

Total Loans

 

Purchased loans may not exceed 40% of total loans

 

$

 81.3

Regulatory Capital

 

Non-owner occupied commercial real estate loans may not exceed 300% of total capital

 

$

 120.0

 

 

An overview of the Bank’s LASG portfolio follows:

 

    LASG Portfolio  
    Three Months Ended December 31,  
    2015     2014  
    Purchased     Originated    

Secured Loans 

to Broker-Dealers

    Total LASG     Purchased     Originated    

Secured Loans

to Broker-Dealers

    Total LASG  
    (Dollars in thousands)  

Loans purchased or originated during the period:

                                                               

Unpaid principal balance

  $ 40,145     $ 39,512     $ -     $ 79,657     $ 46,307     $ 28,579     $ -     $ 74,886  

Net investment basis

    35,855       39,512       -       75,367       39,667       28,579       -       68,246  
                                                                 

Loan returns during the period:

                                                               

Yield

    12.74 %     5.69 %     0.50 %     8.55 %     13.27 %     6.67 %     0.46 %     10.17 %

Total Return (1)

    12.74 %     5.69 %     0.50 %     8.55 %     13.72 %     7.68 %     0.46 %     10.67 %

 

 

 

    Six Months Ended December 31,  
    2015     2014  
    Purchased     Originated    

Secured Loans

to Broker-Dealers

    Total LASG     Purchased     Originated    

Secured Loans

to Broker-Dealers

    Total LASG  
    (Dollars in thousands)  

Loans purchased or originated during the period:

                                                               

Unpaid principal balance

  $ 63,728     $ 50,907     $ -     $ 114,635     $ 62,425     $ 32,915     $ 36,000     $ 131,340  

Net investment basis

    59,311       50,907       -       110,218       52,834       32,915       36,000       121,749  

Loan returns during the period:

                                                               

Yield

    12.41 %     5.68 %     0.50 %     8.40 %     13.02 %     7.74 %     0.49 %     10.53 %

Total Return (1)

    12.43 %     5.68 %     0.50 %     8.41 %     13.24 %     8.54 %     0.49 %     10.85 %
                                                                 

Total loans as of period end:

                                                               

Unpaid principal balance

  $ 258,049     $ 155,646     $ 60,000     $ 473,695     $ 262,445     $ 78,620     $ 48,000     $ 389,065  

Net investment basis

    226,014       155,728       60,002       441,744       220,391       78,563       48,000       346,954  

 

(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. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.

 

 

 

2.

Deposits increased by $33.3 million, or 4.8% for the quarter, attributable primarily to growth in non-maturity accounts, which increased by $21.5 million, or 6.1%, as well as growth in time deposits, which increased $11.8 million, or 3.5%. For the six months ended December 31, 2015, deposits increased $52.0 million, or 7.7%, due to growth in non-maturity accounts of $44.5 million, or 13.5%, and growth in time deposits of $7.5 million, or 2.2%.

 

 

3.

Stockholders’ equity increased by $1.9 million from June 30, 2015, due principally to earnings of $3.6 million, offset by $1.3 million in share repurchases (representing 125,100 shares). Additionally, there was an increase in stock-based compensation of $280 thousand, offset by a decrease in accumulated other comprehensive income of $484 thousand and $192 thousand in dividends paid on common stock.

 

 
 

 

 

Net income increased by $164 thousand to $1.7 million for the quarter ended December 31, 2015, compared to $1.6 million for the quarter ended December 31, 2014.

 

 

1.

Net interest and dividend income before provision for loan losses increased by $746 thousand, or 7.9%, for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014. The increase is primarily due to higher loan volume and interest income in the originated loan portfolio.

 

The various components of transactional income are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the three and six months ended December 31, 2014, transactional interest income decreased by $1 thousand and increased by $182 thousand, respectively. The following table summarizes interest income and related yields recognized on the loan portfolios:

 

   

Interest Income and Yield on Loans

 
   

Three Months Ended December 31,

 
   

2015

   

2014

 
   

Average

Balance

   

Interest

Income

   

Yield

   

Average

Balance

   

Interest

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking Division

  $ 240,507     $ 2,932     4.84%       $ 236,127     $ 2,899     4.87%    

LASG:

                                               

Originated

    137,959       1,978     5.69%         59,863       1,007     6.67%    

Purchased

    209,605       6,734     12.74%         208,935       6,989     13.27%    

Secured Loans to Broker-Dealers

    60,004       75     0.50%         45,304       53     0.46%    

Total LASG

    407,568       8,787     8.55%         314,102       8,049     10.17%    

Total

  $ 648,075     $ 11,719     7.17%       $ 550,229     $ 10,948     7.89%    

 

 

   

Six Months Ended December 31,

 
   

2015

   

2014

 
   

Average

Balance

   

Interest

Income

   

Yield

   

Average

Balance

   

Interest

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking Division

  $ 239,689     $ 5,857     4.85%       $ 238,646     $ 5,960     4.95%    

LASG:

                                               

Originated

    128,267       3,673     5.68%         59,277       2,314     7.74%    

Purchased

    204,995       12,829     12.41%         205,896       13,511     13.02%    

Secured Loans to Broker-Dealers

    60,006       150     0.50%         34,474       85     0.49%    

Total LASG

    393,268       16,652     8.40%         299,647       15,910     10.53%    

Total

  $ 632,957     $ 22,509     7.05%       $ 538,293     $ 21,870     8.06%    

 


The yield on purchased loans for the quarter ended December 31, 2015 was 12.7% as compared to 13.3% in the quarter ended December 31, 2014. The portfolio’s base yield, represented by regularly scheduled interest and accretion, declined to 7.8% from 8.3%, and the effect of transactional interest income declined to 4.9% from 5.4%. The following table details the total return on purchased loans:

 

 

   

Total Return on Purchased Loans

 
   

Three Months Ended December 31,

 
   

2015

   

2014

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 4,122       7.80%     $ 4,376       8.31%  

Transactional income:

                               

Gain on loan sales

    -       0.00%       194       0.37%  

Gain on sale of real estate owned

    -       0.00%       40       0.08%  

Other noninterest income

    -       0.00%       -       0.00%  

Accelerated accretion and loan fees

    2,612       4.94%       2,613       4.96%  

Total transactional income

    2,612       4.94%       2,847       5.41%  

Total

  $ 6,734       12.74%     $ 7,223       13.72%  

 

 
 

 

 

   

Six Months Ended December 31,

 
   

2015

   

2014

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 8,009       7.75%     $ 8,873       8.55%  

Transactional income:

                               

Gain on loan sales

    -       0.00%       190       0.18%  

Gain on sale of real estate owned

    22       0.02%       40       0.04%  

Other noninterest income

    (1 )     0.00%       -       0.00%  

Accelerated accretion and loan fees

    4,820       4.66%       4,638       4.47%  

Total transactional income

    4,841       4.68%       4,868       4.69%  

Total

  $ 12,850       12.43%     $ 13,741       13.24%  

 

 

(1)

The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, gains on real estate owned and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.

 

 

 

2.

Noninterest income increased by $254 thousand for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014, principally due to an increase in gains realized on sale of portfolio loans. The recent quarter includes gains realized on sale of SBA loans of $679 thousand, compared to $445 thousand in the quarter ended December 31, 2014.

 

 

3.

Noninterest expense decreased by $14 thousand for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014, principally due to the following:

    a decrease of $194 thousand in loan acquisition and collections expense related to lower collection expense on purchased loans;
    a decrease of $194 thousand in professional fees, primarily due to fees for temporary consulting services recognized in the three months ended December 31, 2014;
    an increase of $117 thousand in salaries and employee benefits primarily due to the accelerated vesting of the former Chief Operating Officer’s shares and an increase in headcount during the three months ended December 31, 2015; and
    an increase of $139 thousand in occupancy and equipment expense, due to increases in rent and IT-related equipment expense.

 

At December 31, 2015, nonperforming assets totaled $7.3 million, or 0.8% of total assets, as compared to $12.4 million, or 1.5% of total assets, at June 30, 2015.

 

At December 31, 2015, the Company’s Tier 1 Leverage Ratio was 14.3%, a decrease from 14.5% at June 30, 2015, and the Total Capital Ratio was 18.4%, a decrease from 20.1% at June 30, 2015. The slight decreases in the ratios resulted primarily from balance sheet growth and the effect of purchases under the Company’s share repurchase program in the current fiscal year.

 

 
 

 

 

Investor Call Information

Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Brian Shaughnessy, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss second quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, February 2, 2016. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 38686107. 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. We offer traditional banking services through the Community Banking Division, which operates ten full-service branches that serve customers located in western, central, and southern Maine. From our Maine and Boston locations, we also lend throughout the New England area. Our Loan Acquisition and Servicing Group (“LASG”) purchases and originates commercial loans on a nationwide basis. In addition, our SBA National division supports the needs of growing businesses nationally. 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 Measures

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, and tangible book value per share. 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.


Forward-Looking Statements 

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 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; changing 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.

 

 
 

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

 

   

December 31, 2015

   

June 30, 2015

 

Assets

               

Cash and due from banks

  $ 3,485     $ 2,789  

Short-term investments

    62,878       87,061  

Total cash and cash equivalents

    66,363       89,850  

Available-for-sale securities, at fair value

    104,339       101,908  
                 

Residential real estate loans held for sale

    7,592       7,093  

SBA loans held for sale

    -       1,942  

Total loans held for sale

    7,592       9,035  
                 
                 

Loans

               

Commercial real estate

    401,075       348,676  

Residential real estate

    122,427       132,669  

Commercial and industrial

    149,154       123,133  

Consumer

    6,780       7,659  

Total loans

    679,436       612,137  

Less: Allowance for loan losses

    2,129       1,926  

Loans, net

    677,307       610,211  
                 
                 

Premises and equipment, net

    8,461       8,253  

Real estate owned and other possessed collateral, net

    1,238       1,651  

Federal Home Loan Bank stock, at cost

    2,571       4,102  

Intangible assets, net

    1,947       2,209  

Bank owned life insurance

    15,499       15,276  

Other assets

    8,784       8,223  

Total assets

  $ 894,101     $ 850,718  
                 

Liabilities and Stockholders' Equity

               

Deposits

               

Demand

  $ 64,087     $ 60,383  

Savings and interest checking

    101,117       100,134  

Money market

    208,324       168,527  

Time

    353,238       345,715  

Total deposits

    726,766       674,759  
                 

Federal Home Loan Bank advances

    30,131       30,188  

Wholesale repurchase agreements

    -       10,037  

Short-term borrowings

    2,426       2,349  

Junior subordinated debentures issued to affiliated trusts

    8,723       8,626  

Capital lease obligation

    1,252       1,368  

Other liabilities

    10,190       10,664  

Total liabilities

    779,488       737,991  
                 

Commitments and contingencies

    -       -  
                 

Stockholders' equity

               

Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at December 31, 2015 and June 30, 2015

    -       -  

Voting common stock, $1.00 par value, 25,000,000 shares authorized; 8,490,619 and 8,575,144 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively

    8,491       8,575  

Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 1,029,110 and 1,012,739 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively

    1,029       1,013  

Additional paid-in capital

    84,525       85,506  

Retained earnings

    22,340       18,921  

Accumulated other comprehensive loss

    (1,772 )     (1,288 )

Total stockholders' equity

    114,613       112,727  

Total liabilities and stockholders' equity

  $ 894,101     $ 850,718  

 

 
 

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

   

Three Months Ended December 31,

   

Six Months Ended December 31,

 
   

2015

   

2014

   

2015

   

2014

 

Interest and dividend income:

                               

Interest and fees on loans

  $ 11,719     $ 10,948     $ 22,509     $ 21,870  

Interest on available-for-sale securities

    236       232       464       475  

Other interest and dividend income

    80       79       176       146  

Total interest and dividend income

    12,035       11,259       23,149       22,491  
                                 

Interest expense:

                               

Deposits

    1,425       1,281       2,789       2,410  

Federal Home Loan Bank advances

    259       265       519       588  

Wholesale repurchase agreements

    -       73       67       145  

Short-term borrowings

    5       7       13       16  

Junior subordinated debentures issued to affiliated trusts

    158       188       312       394  

Obligation under capital lease agreements

    16       19       33       38  

Total interest expense

    1,863       1,833       3,733       3,591  

Net interest and dividend income before provision for loan losses

    10,172       9,426       19,416       18,900  

Provision for loan losses

    896       113       1,065       433  

Net interest and dividend income after provision for loan losses

    9,276       9,313       18,351       18,467  
                                 

Noninterest income:

                               

Fees for other services to customers

    428       392       836       786  

Gain on sales of residential loans held for sale

    398       447       957       1,029  

Gain on sales of portfolio loans

    679       445       1,354       525  

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

    (14 )     (31 )     (74 )     (54 )

Bank-owned life insurance income

    112       110       224       219  

Other noninterest income

    21       7       29       19  

Total noninterest income

    1,624       1,370       3,326       2,524  
                                 

Noninterest expense:

                               

Salaries and employee benefits

    4,854       4,737       9,110       9,270  

Occupancy and equipment expense

    1,320       1,181       2,610       2,384  

Professional fees

    264       458       694       766  

Data processing fees

    366       347       714       692  

Marketing expense

    66       80       136       148  

Loan acquisition and collection expense

    219       413       663       687  

FDIC insurance premiums

    116       110       229       234  

Intangible asset amortization

    131       166       262       331  

Other noninterest expense

    860       718       1,589       1,437  

Total noninterest expense

    8,196       8,210       16,007       15,949  

Income before income tax expense

    2,704       2,473       5,670       5,042  

Income tax expense

    960       893       2,059       1,818  

Net income

    1,744       1,580       3,611       3,224  
                                 

Weighted-average shares outstanding:

                               

Basic

    9,559,369       10,132,349       9,560,913       10,155,598  

Diluted

    9,569,585       10,132,349       9,567,138       10,155,598  

 

                               
Earnings per common share:                                

Basic

  $ 0.18     $ 0.16     $ 0.38     $ 0.32  

Diluted

    0.18       0.16       0.38       0.32  
                                 

Cash dividends declared per common share

  $ 0.01     $ 0.01     $ 0.02     $ 0.02  

 

 
 

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)

 

   

Three Months Ended December 31,

 
   

2015

   

2014

 
   

Average

Balance

   

Interest

Income/

Expense

   

Average

Yield/

Rate

   

Average

Balance

   

Interest

Income/

Expense

   

Average

Yield/

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities (1)

  $ 105,502     $ 236       0.89%     $ 109,498     $ 232       0.84%  

Loans (2) (3)

    648,075       11,719       7.17%       550,229       10,948       7.89%  

Federal Home Loan Bank stock

    2,588       34       5.21%       4,102       15       1.45%  

Short-term investments (4)

    72,299       46       0.25%       104,822       64       0.24%  

Total interest-earning assets

    828,464       12,035       5.76%       768,651       11,259       5.81%  

Cash and due from banks

    3,353                       2,637                  

Other non-interest earning assets

    35,558                       32,500                  

Total assets

  $ 867,375                     $ 803,788                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

NOW accounts

  $ 65,617     $ 42       0.25%     $ 62,259     $ 40       0.25%  

Money market accounts

    199,766       429       0.85%       127,394       241       0.75%  

Savings accounts

    35,269       11       0.12%       33,648       12       0.14%  

Time deposits

    334,925       943       1.12%       348,118       988       1.13%  

Total interest-bearing deposits

    635,577       1,425       0.89%       571,419       1,281       0.89%  

Short-term borrowings

    2,002       5       0.99%       2,869       7       0.97%  

Borrowed funds

    30,145       275       3.62%       45,587       357       3.11%  

Junior subordinated debentures

    8,699       158       7.21%       8,508       188       8.77%  

Total interest-bearing liabilities

    676,423       1,863       1.09%       628,383       1,833       1.16%  
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    69,464                       55,131                  

Other liabilities

    7,574                       7,130                  

Total liabilities

    753,461                       690,644                  

Stockholders' equity

    113,914                       113,144                  

Total liabilities and stockholders' equity

  $ 867,375                     $ 803,788                  
                                                 

Net interest income

          $ 10,172                     $ 9,426          
                                                 

Interest rate spread

                    4.67%                       4.65%  

Net interest margin (5)

                    4.87%                       4.87%  

 

(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

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)

 

   

Six Months Ended December 31,

 
   

2015

   

2014

 
   

Average

Balance

   

Interest

Income/

Expense

   

Average

Yield/

Rate

   

Average

Balance

   

Interest

Income/

Expense

   

Average

Yield/

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities (1)

  $ 103,872     $ 464       0.89%     $ 110,874     $ 475       0.85%  

Loans (2) (3)

    632,957       22,509       7.05%       538,293       21,870       8.06%  

Federal Home Loan Bank stock

    3,345       68       4.03%       4,102       31       1.50%  

Short-term investments (4)

    85,974       108       0.25%       93,792       115       0.24%  

Total interest-earning assets

    826,148       23,149       5.56%       747,061       22,491       5.97%  

Cash and due from banks

    3,190                       2,674                  

Other non-interest earning assets

    35,986                       33,326                  

Total assets

  $ 865,324                     $ 783,061                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

NOW accounts

  $ 67,617     $ 88       0.26%     $ 62,934     $ 81       0.26%  

Money market accounts

    185,166       782       0.84%       106,844       365       0.68%  

Savings accounts

    35,816       23       0.13%       34,004       23       0.13%  

Time deposits

    342,896       1,896       1.10%       344,243       1,941       1.12%  

Total interest-bearing deposits

    631,495       2,789       0.88%       548,025       2,410       0.87%  

Short-term borrowings

    1,976       13       1.31%       3,095       16       1.03%  

Borrowed funds

    34,734       619       3.54%       49,283       771       3.10%  

Junior subordinated debentures

    8,674       312       7.14%       8,484       394       9.21%  

Total interest-bearing liabilities

    676,879       3,733       1.09%       608,887       3,591       1.17%  
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    66,736                       54,187                  

Other liabilities

    8,170                       7,220                  

Total liabilities

    751,785                       670,294                  

Stockholders' equity

    113,539                       112,767                  

Total liabilities and stockholders' equity

  $ 865,324                     $ 783,061                  
                                                 

Net interest income

          $ 19,416                     $ 18,900          
                                                 

Interest rate spread

                    4.47%                       4.80%  

Net interest margin (5)

                    4.66%                       5.02%  

 

(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:

 
   

December 31, 2015

   

September 30, 2015

   

June 30, 2015

   

March 31, 2015

   

December 31, 2014

 

Net interest income

  $ 10,172     $ 9,241     $ 9,350     $ 9,120     $ 9,426  

Provision for loan losses

    896       169       240       44       113  

Noninterest income

    1,624       1,705       3,067       1,554       1,370  

Noninterest expense

    8,196       7,810       8,827       7,885       8,210  

Net income

    1,744       1,867       2,165       1,752       1,580  
                                         

Weighted average common shares outstanding:

                                       

Basic

    9,559,369       9,562,812       9,773,228       9,833,033       10,132,349  

Diluted

    9,569,585       9,562,812       9,773,228       9,833,033       10,132,349  

Earnings per common share:

                                       

Basic

  $ 0.18     $ 0.20     $ 0.22     $ 0.18     $ 0.16  

Diluted

    0.18       0.20       0.22       0.18       0.16  

Dividends per common share

    0.01       0.01       0.01       0.01       0.01  
                                         

Return on average assets

    0.80 %     0.86 %     1.04 %     0.88 %     0.78 %

Return on average equity

    6.07 %     6.55 %     7.72 %     6.38 %     5.54 %

Net interest rate spread (1)

    4.67 %     4.25 %     4.51 %     4.58 %     4.65 %

Net interest margin (2)

    4.87 %     4.45 %     4.70 %     4.79 %     4.87 %

Efficiency ratio (3)

    69.48 %     71.35 %     71.09 %     73.87 %     76.05 %

Noninterest expense to average total assets

    3.75 %     3.59 %     4.22 %     3.96 %     4.05 %

Average interest-earning assets to average interest-bearing liabilities

    122.48 %     121.63 %     120.90 %     121.89 %     122.32 %

  

 
 

 

 

   

As of:

 
   

December 31, 2015

   

September 30, 2015

   

June 30, 2015

   

March 31, 2015

   

December 31, 2014

 

Nonperforming loans:

                                       

Originated portfolio:

                                       

Residential real estate

  $ 3,263     $ 3,165     $ 3,021     $ 3,163     $ 2,706  

Commercial real estate

    399       529       994       1,201       1,166  

Home equity

    11       20       11       11       11  

Commercial and industrial

    2       2       2       -       -  

Consumer

    204       153       190       225       237  

Total originated portfolio

    3,879       3,869       4,218       4,600       4,120  

Total purchased portfolio

    2,221       6,939       6,532       5,850       8,129  

Total nonperforming loans

    6,100       10,808       10,750       10,450       12,249  

Real estate owned and other possessed collateral, net

    1,238       1,279       1,651       3,694       2,058  

Total nonperforming assets

  $ 7,338     $ 12,087     $ 12,401     $ 14,144     $ 14,307  
                                         

Past due loans to total loans

    2.48 %     1.35 %     1.08 %     2.57 %     2.64 %

Nonperforming loans to total loans

    0.90 %     1.73 %     1.76 %     1.80 %     2.13 %

Nonperforming assets to total assets

    0.82 %     1.41 %     1.46 %     1.70 %     1.77 %

Allowance for loan losses to total loans

    0.31 %     0.33 %     0.31 %     0.30 %     0.29 %

Allowance for loan losses to nonperforming loans

    34.90 %     19.11 %     17.92 %     16.66 %     13.58 %
                                         

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

    204.91 %     195.50 %     187.32 %     173.17 %     190.05 %

Net loans to core deposits (5)

    94.37 %     91.04 %     91.85 %     89.04 %     91.79 %

Purchased loans to total loans, including held for sale

    32.90 %     33.82 %     32.61 %     33.53 %     37.97 %

Equity to total assets

    12.82 %     13.25 %     13.25 %     13.51 %     13.69 %

Common equity tier 1 capital ratio

    18.11 %     19.69 %     19.82 %     20.90 %     -  

Total capital ratio (6)

    18.43 %     20.03 %     20.14 %     21.21 %     21.44 %

Tier 1 leverage capital ratio

    14.31 %     14.23 %     14.49 %     14.96 %     14.81 %
                                       

Total stockholders' equity

  $ 114,613     $ 113,704     $ 112,727     $ 112,487     $ 110,923  

Less: Preferred stock

    -       -       -       -       -  

Common stockholders' equity

    114,613       113,704       112,727       112,487       110,923  

Less: Intangible assets (7)

    (3,336 )     (3,388 )     (3,312 )     (2,338 )     (2,467 )

Tangible common stockholders' equity (non-GAAP)

  $ 111,277     $ 110,316     $ 109,415     $ 110,149     $ 108,456  
                                         

Common shares outstanding

    9,519,729       9,592,329       9,587,883       9,819,609       9,846,387  

Book value per common share

  $ 12.04     $ 11.85     $ 11.76     $ 11.46     $ 11.27  

Tangible book value per share (non-GAAP) (8)

    11.69       11.50       11.41       11.22       11.01  

  

(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 non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans.

(5)

Core deposits include all non-maturity deposits and maturity deposits less than $250 thousand. Loans include loans held-for-sale.

(6) The Company’s adoption of Basel III went into effect as of March 31, 2015. The previous period ratios are the “Total Risk-Based Capital Ratio.”
(7) Includes the core deposit intangible asset, as well as the servicing rights asset which is included in other assets in the consolidated balance sheets.

(8)

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