nbn20160502_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):

May 2, 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 May 2, 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 May 2, 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: May 2, 2016

 

 
 

 

 

EXHIBIT INDEX

 

Exhibit No.     Description

99.1                 Press Release dated May 2, 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 Third Quarter Results, Declares Dividend

 

 

Lewiston, ME (May 2, 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 $1.8 million, or $0.19 per diluted common share, for the quarter ended March 31, 2016, compared to net income of $1.8 million, or $0.18 per diluted common share, for the quarter ended March 31, 2015. Net income for the nine months ended March 31, 2016 was $5.4 million, or $0.57 per diluted common share, compared to $5.0 million, or $0.50 per diluted common share, for the nine months ended March 31, 2015.

 

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on May 27, 2016 to shareholders of record as of May 13, 2016.

 

“Our strong growth in fiscal year 2016 continued in the third quarter,” said Richard Wayne, President and Chief Executive Officer. “We generated loan volume of $84.4 million, including $49.8 million of loans produced by the Loan Acquisition and Servicing Group, $10.4 million of loans closed by the SBA National division, $15.9 million of residential mortgage loans originated, and $8.3 million originated in the community banking commercial division. We sold $11.9 million in SBA loans for a gain of $1.2 million in the quarter. And, in our continuing effort to improve returns for shareholders, we repurchased 184 thousand shares at an average price of $10.22.”

 

As of March 31, 2016, total assets were $922.7 million, an increase of $72.0 million, or 8.5%, 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 – has grown by $86.9 million, or 14.2%, compared to June 30, 2015, principally on the strength of $82.9 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”), net growth of $11.7 million in originations by the Bank’s Small Business Administration (“SBA”) National division and net growth of $7.5 million in commercial originations by the Bank’s Community Banking Division. This net growth was offset by a $15.2 million decrease in the Bank’s Community Banking Division residential and consumer loan portfolio.

 

Loans generated by the LASG totaled $49.8 million for the quarter ended March 31, 2016. The growth in LASG loans consisted of $21.9 million of purchased loans, at an average price of 89.9% of unpaid principal balance, and $27.8 million of originated loans. SBA loans closed during the quarter totaled $10.4 million, of which $10.3 million were fully funded in the quarter. In addition, the Company sold $11.9 million of the guaranteed portion of SBA loans in the secondary market, of which $4.9 million were originated in the current quarter and $7.0 million were originated in prior quarters. Residential loan production sold in the secondary market totaled $19.7 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 March 31, 2016

       

(Dollars in millions)

Total Loans

 

Purchased loans may not exceed 40% of total loans

 

$

                80.2

Regulatory Capital

 

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

 

$

               104.4

 

 

An overview of the Bank’s LASG portfolio follows:

 

    LASG Portfolio  
    Three Months Ended March 31,  
    2016     2015  
    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

  $ 24,400     $ 27,846     $ -     $ 52,246     $ 5,484     $ 18,760     $ 12,000     $ 36,244  

Net investment basis

    21,934       27,846       -       49,780       5,063       18,697       12,000       35,760  

Loan returns during the period:

                                                               

Yield

    9.88 %     5.83 %     0.50 %     7.15 %     12.87 %     5.67 %     0.46 %     9.37 %

Total Return (1)

    9.88 %     5.82 %     0.50 %     7.15 %     13.60 %     5.67 %     0.46 %     9.81 %

  

      Nine Months Ended March 31,   
      2016       2015  
      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

  $ 88,128     $ 78,752     $ -     $ 166,880     $ 67,909     $ 50,315     $ 48,000     $ 166,224  

Net investment basis

    81,245       78,752       -       159,997       57,896       50,236       48,000       156,132  

Loan returns during the period:

                                                               

Yield

    11.54 %     5.75 %     0.50 %     7.97 %     12.97 %     6.91 %     0.47 %     10.12 %

Total Return (1)

    11.57 %     5.74 %     0.50 %     7.98 %     13.36 %     7.40 %     0.47 %     10.48 %
                                                                 
                                                                 

Total loans as of period end:

                                                               

Unpaid principal balance

  $ 266,223     $ 170,085     $ 60,000     $ 496,308     $ 234,672     $ 92,542     $ 60,000     $ 387,214  

Net investment basis

    233,650       170,085       60,000       463,735       195,683       92,414       60,000       348,097  

 

(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 $26.2 million, or 3.6% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $26.0 million, or 7.0%. For the nine months ended March 31, 2016, deposits increased $78.2 million, or 11.6%, primarily due to growth in money market non-maturity accounts of $70.5 million, or 21.4%, and growth in time deposits of $7.7 million, or 2.2%.

 

 

3.

Stockholders’ equity increased by $1.8 million from June 30, 2015, due principally to earnings of $5.4 million, offset by $3.2 million in share repurchases (representing 309,500 shares). Additionally, there was an increase in stock-based compensation of $445 thousand, offset by a decrease in accumulated other comprehensive income of $555 thousand and $287 thousand in dividends paid on common stock.

 
 

 

 

Net income increased by $57 thousand to $1.8 million for the quarter ended March 31, 2016, compared to $1.8 million for the quarter ended March 31, 2015.

 

 

1.

Net interest and dividend income before provision for loan losses increased by $134 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015. The increase is primarily due to higher average loan volume in the purchased and 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 nine months ended March 31, 2015, transactional interest income decreased by $1.8 million in both periods. The following table summarizes interest income and related yields recognized on the loan portfolios:

 

   

Interest Income and Yield on Loans

 
   

Three Months Ended March 31,

 
   

2016

   

2015

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income

   

Yield

   

Balance (1)

   

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking Division

  $ 247,194     $ 2,994       4.87%     $ 232,369     $ 2,823       4.93%  

LASG:

                                               

Originated

    159,976       2,317       5.83%       80,567       1,127       5.67%  

Purchased

    224,710       5,518       9.88%       208,487       6,614       12.87%  

Secured Loans to Broker-Dealers

    60,001       75       0.50%       48,551       55       0.46%  

Total LASG

    444,687       7,910       7.15%       337,605       7,796       9.37%  

Total

  $ 691,881     $ 10,904       6.34%     $ 569,974     $ 10,619       7.56%  

 

 

 

   

Nine Months Ended March 31,

 
   

2016

   

2015

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income

   

Yield

   

Balance (1)

   

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking Division

  $ 242,172     $ 8,850       4.86%     $ 236,584     $ 8,782       4.94%  

LASG:

                                               

Originated

    138,760       5,991       5.75%       66,314       3,441       6.91%  

Purchased

    211,519       18,347       11.54%       206,747       20,125       12.97%  

Secured Loans to Broker-Dealers

    60,004       225       0.50%       39,054       139       0.47%  

Total LASG

    410,283       24,563       7.97%       312,115       23,705       10.12%  

Total

  $ 652,455     $ 33,413       6.82%     $ 548,699     $ 32,487       7.89%  

 

(1) Includes loans held for sale.

 


The yield on purchased loans for the quarter ended March 31, 2016 was 9.9% as compared to 13.6% in the quarter ended March 31, 2015, due to lower transactional income in the quarter. The following table details the total return on purchased loans:

 

   

Total Return on Purchased Loans

 
   

Three Months Ended March 31,

 
   

2016

   

2015

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 4,606       8.25%     $ 4,322       8.41%  

Transactional income:

                               

Gain on loan sales

    -       0.00%       -       0.00%  

Gain on sale of real estate owned

    1       0.00%       379       0.73%  

Other noninterest income

    -       0.00%       -       0.00%  

Accelerated accretion and loan fees

    912       1.63%       2,292       4.46%  

Total transactional income

    913       1.63%       2,671       5.20%  

Total

  $ 5,519       9.88%     $ 6,993       13.60%  

 

 
 

 

 

   

Nine Months Ended March 31,

 
   

2016

   

2015

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 12,615       7.94%     $ 13,195       8.50%  

Transactional income:

                               

Gain on loan sales

    -       0.00%       190       0.12%  

Gain on sale of real estate owned

    23       0.01%       419       0.27%  

Other noninterest income

    11       0.01%       -       0.00%  

Accelerated accretion and loan fees

    5,732       3.61%       6,930       4.47%  

Total transactional income

    5,766       3.63%       7,539       4.86%  

Total

  $ 18,381       11.57%     $ 20,734       13.36%  

 

 

(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 $481 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015, 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 $1.2 million, compared to $425 thousand in the quarter ended March 31, 2015. The gain is offset by a decrease of $411 thousand in gains recognized on real estate owned and other repossessed collateral.

 

 

3.

Noninterest expense increased by $527 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015, primarily due to an increase in salaries and employee benefits of $530 thousand, due to increased employee headcount.

 

At March 31, 2016, nonperforming assets totaled $9.4 million, or 1.0% of total assets, as compared to $12.4 million, or 1.5% of total assets, at June 30, 2015.

 

At March 31, 2016, the Company’s Tier 1 Leverage Ratio was 13.6%, a decrease from 14.5% at June 30, 2015, and the Total Capital Ratio was 17.8%, a decrease from 20.1% at June 30, 2015. The decreases in the capital 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 third quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, May 3, 2016. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 95521077. 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)

 

   

March 31, 2016

   

June 30, 2015

 

Assets

               

Cash and due from banks

  $ 4,025     $ 2,789  

Short-term investments

    87,427       87,061  

Total cash and cash equivalents

    91,452       89,850  

Available-for-sale securities, at fair value

    90,491       101,908  
                 

Residential real estate loans held for sale

    3,475       7,093  

SBA loans held for sale

    1,880       1,942  

Total loans held for sale

    5,355       9,035  
                 

Loans

               

Commercial real estate

    423,234       348,676  

Residential real estate

    119,327       132,669  

Commercial and industrial

    150,217       123,133  

Consumer

    6,292       7,659  

Total loans

    699,070       612,137  

Less: Allowance for loan losses

    2,223       1,926  

Loans, net

    696,847       610,211  
                 

Premises and equipment, net

    8,101       8,253  

Real estate owned and other possessed collateral, net

    690       1,651  

Federal Home Loan Bank stock, at cost

    2,571       4,102  

Intangible assets, net

    1,840       2,209  

Bank owned life insurance

    15,612       15,276  

Other assets

    9,730       8,223  

Total assets

  $ 922,689     $ 850,718  

Liabilities and Stockholders' Equity

               

Deposits

               

Demand

  $ 60,573     $ 60,383  

Savings and interest checking

    104,802       100,134  

Money market

    234,142       168,527  

Time

    353,432       345,715  

Total deposits

    752,949       674,759  

Federal Home Loan Bank advances

    30,103       30,188  

Wholesale repurchase agreements

    -       10,037  

Short-term borrowings

    2,753       2,349  

Junior subordinated debentures issued to affiliated trusts

    8,771       8,626  

Capital lease obligation

    1,190       1,368  

Other liabilities

    12,397       10,664  

Total liabilities

    808,163       737,991  
                 

Commitments and contingencies

    -       -  
                 

Stockholders' equity

               

Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at March 31, 2016 and June 30, 2015

    -       -  

Voting common stock, $1.00 par value, 25,000,000 shares authorized; 8,103,190 and 8,575,144 shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively

    8,103       8,575  

Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 1,227,683 and 1,012,739 shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively

    1,228       1,013  

Additional paid-in capital

    82,983       85,506  

Retained earnings

    24,055       18,921  

Accumulated other comprehensive loss

    (1,843 )     (1,288 )

Total stockholders' equity

    114,526       112,727  

Total liabilities and stockholders' equity

  $ 922,689     $ 850,718  

 

 
 

 

  

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

   

Three Months Ended March 31,

   

Nine Months Ended March 31,

 
   

2016

   

2015

   

2016

   

2015

 

Interest and dividend income:

                               

Interest and fees on loans

  $ 10,904     $ 10,619     $ 33,413     $ 32,487  

Interest on available-for-sale securities

    236       222       700       697  

Other interest and dividend income

    119       72       295       218  

Total interest and dividend income

    11,259       10,913       34,408       33,402  

Interest expense:

                               

Deposits

    1,566       1,271       4,356       3,681  

Federal Home Loan Bank advances

    255       257       774       845  

Wholesale repurchase agreements

    -       71       65       216  

Short-term borrowings

    5       5       19       21  

Junior subordinated debentures issued to affiliated trusts

    164       171       476       566  

Obligation under capital lease agreements

    15       18       49       56  

Total interest expense

    2,005       1,793       5,739       5,385  
                                 

Net interest and dividend income before provision for loan losses

    9,254       9,120       28,669       28,017  

Provision for loan losses

    236       44       1,301       477  

Net interest and dividend income after provision for loan losses

    9,018       9,076       27,368       27,540  
                                 

Noninterest income:

                               

Fees for other services to customers

    428       303       1,264       1,089  

Gain on sales of residential loans held for sale

    335       355       1,292       1,384  

Gain on sales of portfolio loans

    1,205       425       2,558       950  

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

    (54 )     357       (127 )     303  

Bank-owned life insurance income

    112       110       336       329  

Other noninterest income

    9       4       39       23  

Total noninterest income

    2,035       1,554       5,362       4,078  
                                 

Noninterest expense:

                               

Salaries and employee benefits

    4,846       4,316       13,956       13,586  

Occupancy and equipment expense

    1,327       1,278       3,937       3,662  

Professional fees

    348       386       1,042       1,153  

Data processing fees

    394       361       1,109       1,029  

Marketing expense

    64       54       200       203  

Loan acquisition and collection expense

    297       409       961       1,096  

FDIC insurance premiums

    125       137       354       371  

Intangible asset amortization

    108       128       369       460  

Other noninterest expense

    903       816       2,489       2,272  

Total noninterest expense

    8,412       7,885       24,417       23,832  
                                 

Income before income tax expense

    2,641       2,745       8,313       7,786  

Income tax expense

    832       993       2,892       2,810  

Net income

    1,809       1,752       5,421       4,976  
                                 

Weighted-average shares outstanding:

                               

Basic

    9,456,198       9,833,033       9,526,302       10,049,983  

Diluted

    9,459,611       9,833,033       9,531,747       10,049,983  
                                 
Earnings per common share:                                

Basic

  $ 0.19     $ 0.18     $ 0.57     $ 0.50  

Diluted

    0.19       0.18       0.57       0.50  
                                 

Cash dividends declared per common share

  $ 0.01     $ 0.01     $ 0.03     $ 0.03  

 

 
 

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands) 

   

Three Months Ended March 31,

 
   

2016

   

2015

 
           

Interest

   

Average

           

Interest

   

Average

 
   

Average

   

Income/

   

Yield/

   

Average

   

Income/

   

Yield/

 
   

Balance

   

Expense

   

Rate

   

Balance

   

Expense

   

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities (1)

  $ 100,904     $ 236       0.94%     $ 107,010     $ 222       0.84%  

Loans (2) (3)

    691,881       10,904       6.34%       569,974       10,619       7.56%  

Federal Home Loan Bank stock

    2,571       22       3.44%       4,102       18       1.78%  

Short-term investments (4)

    80,789       97       0.48%       90,722       54       0.24%  

Total interest-earning assets

    876,145       11,259       5.17%       771,808       10,913       5.73%  

Cash and due from banks

    3,841                       2,919                  

Other non-interest earning assets

    34,045                       33,069                  

Total assets

  $ 914,031                     $ 807,796                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

Interest-bearing deposits:

                                               

NOW accounts

  $ 65,985     $ 42       0.26%     $ 62,317     $ 39       0.25%  

Money market accounts

    223,835       491       0.88%       153,487       300       0.79%  

Savings accounts

    36,453       12       0.13%       34,140       11       0.13%  

Time deposits

    357,857       1,021       1.15%       328,633       921       1.14%  

Total interest-bearing deposits

    684,130       1,566       0.92%       578,577       1,271       0.89%  

Short-term borrowings

    2,136       5       0.94%       2,356       5       0.86%  

Borrowed funds

    30,117       255       3.41%       43,718       328       3.04%  

Junior subordinated debentures

    8,746       164       7.54%       8,553       171       8.11%  

Capital lease obligations

    1,211       15       4.98%       1,433       18       5.09%  

Total interest-bearing liabilities

    726,340       2,005       1.11%       634,637       1,793       1.15%  
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    66,384                       54,647                  

Other liabilities

    6,429                       7,083                  

Total liabilities

    799,153                       696,367                  

Stockholders' equity

    114,878                       111,429                  

Total liabilities and stockholders' equity

  $ 914,031                     $ 807,796                  
                                                 

Net interest income

          $ 9,254                     $ 9,120          
                                                 

Interest rate spread

                    4.06%                       4.58%  

Net interest margin (5)

                    4.25%                       4.79%  

 

(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)

   

Nine Months Ended March 31,

 
   

2016

   

2015

 
           

Interest

   

Average

           

Interest

   

Average

 
   

Average

   

Income/

   

Yield/

   

Average

   

Income/

   

Yield/

 
   

Balance

   

Expense

   

Rate

   

Balance

   

Expense

   

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities (1)

  $ 102,890     $ 700       0.91%     $ 109,605     $ 697       0.85%  

Loans (2) (3)

    652,455       33,413       6.82%       548,699       32,487       7.89%  

Federal Home Loan Bank stock

    3,089       90       3.88%       4,102       49       1.59%  

Short-term investments (4)

    84,258       205       0.32%       92,784       169       0.24%  

Total interest-earning assets

    842,692       34,408       5.43%       755,190       33,402       5.89%  

Cash and due from banks

    3,405                       2,755                  

Other non-interest earning assets

    35,345                       33,241                  

Total assets

  $ 881,442                     $ 791,186                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

Interest-bearing deposits:

                                               

NOW accounts

  $ 67,078     $ 130       0.26%     $ 62,731     $ 121       0.26%  

Money market accounts

    197,962       1,273       0.86%       122,165       665       0.73%  

Savings accounts

    36,027       36       0.13%       34,049       34       0.13%  

Time deposits

    347,847       2,917       1.12%       339,116       2,861       1.12%  

Total interest-bearing deposits

    648,914       4,356       0.89%       558,061       3,681       0.88%  

Short-term borrowings

    2,029       19       1.25%       2,852       21       0.98%  

Borrowed funds

    33,207       839       3.36%       47,455       1,061       2.98%  

Junior subordinated debentures

    8,698       476       7.28%       8,507       566       8.86%  

Capital lease obligations

    1,272       49       5.13%       1,481       56       5.04%  

Total interest-bearing liabilities

    694,120       5,739       1.10%       618,356       5,385       1.16%  
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    66,619                       54,339                  

Other liabilities

    6,720                       6,163                  

Total liabilities

    767,459                       678,858                  

Stockholders' equity

    113,983                       112,328                  

Total liabilities and stockholders' equity

  $ 881,442                     $ 791,186                  
                                                 

Net interest income

          $ 28,669                     $ 28,017          
                                                 

Interest rate spread

                    4.33%                       4.73%  

Net interest margin (5)

                    4.53%                       4.94%  

 

(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:

 
   

March 31, 2016

   

December 31, 2015

   

September 30, 2015

   

June 30, 2015

   

March 31, 2015

 

Net interest income

  $ 9,254     $ 10,172     $ 9,241     $ 9,350     $ 9,120  

Provision for loan losses

    236       896       169       240       44  

Noninterest income

    2,035       1,624       1,705       3,067       1,554  

Noninterest expense

    8,412       8,196       7,810       8,827       7,885  

Net income

    1,809       1,744       1,867       2,165       1,752  
                                         

Weighted average common shares outstanding:

                                       

Basic

    9,456,198       9,559,369       9,562,812       9,773,228       9,833,033  

Diluted

    9,459,611       9,569,585       9,562,812       9,773,228       9,833,033  

Earnings per common share:

                                       

Basic

  $ 0.19     $ 0.18     $ 0.20     $ 0.22     $ 0.18  

Diluted

    0.19       0.18       0.20       0.22       0.18  

Dividends per common share

    0.01       0.01       0.01       0.01       0.01  
                                         

Return on average assets

    0.80 %     0.80 %     0.86 %     1.04 %     0.88 %

Return on average equity

    6.33 %     6.07 %     6.55 %     7.72 %     6.38 %

Net interest rate spread (1)

    4.06 %     4.67 %     4.25 %     4.51 %     4.58 %

Net interest margin (2)

    4.25 %     4.87 %     4.45 %     4.70 %     4.79 %

Efficiency ratio (3)

    74.52 %     69.48 %     71.35 %     71.09 %     73.87 %

Noninterest expense to average total assets

    3.70 %     3.75 %     3.59 %     4.22 %     3.96 %

Average interest-earning assets to average interest-bearing liabilities

    120.62 %     122.48 %     121.63 %     120.90 %     121.89 %

 

   

As of:

 
   

March 31, 2016

   

December 31, 2015

   

September 30, 2015

   

June 30, 2015

   

March 31, 2015

 

Nonperforming loans:

                                       

Originated portfolio:

                                       

Residential real estate

  $ 3,566     $ 3,263     $ 3,165     $ 3,021     $ 3,163  

Commercial real estate

    602       399       529       994       1,201  

Home equity

    -       11       20       11       11  

Commercial and industrial

    2       2       2       2       -  

Consumer

    216       204       153       190       225  

Total originated portfolio

    4,386       3,879       3,869       4,218       4,600  

Total purchased portfolio

    4,364       2,221       6,939       6,532       5,850  

Total nonperforming loans

    8,750       6,100       10,808       10,750       10,450  

Real estate owned and other possessed collateral, net

    690       1,238       1,279       1,651       3,694  

Total nonperforming assets

  $ 9,440     $ 7,338     $ 12,087     $ 12,401     $ 14,144  
                                         

Past due loans to total loans

    2.52 %     2.48 %     1.35 %     1.08 %     2.57 %

Nonperforming loans to total loans

    1.25 %     0.90 %     1.73 %     1.76 %     1.80 %

Nonperforming assets to total assets

    1.02 %     0.82 %     1.41 %     1.46 %     1.70 %

Allowance for loan losses to total loans

    0.32 %     0.31 %     0.33 %     0.31 %     0.30 %

Allowance for loan losses to nonperforming loans

    25.41 %     34.90 %     19.11 %     17.92 %     16.66 %
                                         

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

    217.09 %     204.91 %     195.50 %     187.32 %     173.17 %

Net loans to core deposits (5)

    93.48 %     94.37 %     91.04 %     91.85 %     89.04 %

Purchased loans to total loans, including held for sale

    33.17 %     32.90 %     33.82 %     32.61 %     33.53 %

Equity to total assets

    12.41 %     12.82 %     13.25 %     13.25 %     13.51 %

Common equity tier 1 capital ratio

    17.46 %     18.11 %     19.69 %     19.82 %     20.90 %

Total capital ratio (6)

    17.78 %     18.43 %     20.03 %     20.14 %     21.21 %

Tier 1 leverage capital ratio

    13.57 %     14.31 %     14.23 %     14.49 %     14.96 %
                                         

Total stockholders' equity

  $ 114,526     $ 114,613     $ 113,704     $ 112,727     $ 112,487  

Less: Preferred stock

    -       -       -       -       -  

Common stockholders' equity

    114,526       114,613       113,704       112,727       112,487  

Less: Intangible assets (7)

    (3,469 )     (3,336 )     (3,388 )     (3,312 )     (2,338 )

Tangible common stockholders' equity (non-GAAP)

  $ 111,057     $ 111,277     $ 110,316     $ 109,415     $ 110,149  
                                         

Common shares outstanding

    9,330,873       9,519,729       9,592,329       9,587,883       9,819,609  

Book value per common share

  $ 12.27     $ 12.04     $ 11.85     $ 11.76     $ 11.46  

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

    11.90       11.69       11.50       11.41       11.22  
 
 

 

 

(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.