nbn20160727_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):

July 27, 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 July 27, 2016, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the fourth 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 July 27, 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: July 27, 2016

  

 

 
 

 

 

EXHIBIT INDEX

 

Exhibit No.     Description

99.1          Press Release dated July 27, 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 Fourth Quarter Results, Declares Dividend

 

 

Lewiston, ME (July 27, 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 $2.2 million, or $0.24 per diluted common share, for the quarter ended June 30, 2016, compared to net income of $2.2 million, or $0.22 per diluted common share, for the quarter ended June 30, 2015. Net income for the year ended June 30, 2016 was $7.6 million, or $0.80 per diluted common share, compared to $7.1 million, or $0.72 per diluted common share, for the year ended June 30, 2015.

 

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on August 24, 2016 to shareholders of record as of August 10, 2016.

 

“We closed the year with a strong quarter,” said Richard Wayne, President and Chief Executive Officer. “For the quarter, we achieved earnings of $0.24 per share driven by solid SBA gains on sale and purchased loan transactional income. In addition to earnings growth, we generated loan volume of $96.6 million, including $50.6 million of loans produced by the Loan Acquisition and Servicing Group, $17.4 million of SBA loans and $28.6 million of residential and commercial loans produced by the Community Bank. The growth of our balance sheet and earnings, coupled with the issuance of $15.05 million of subordinated notes in June, compliments our growth strategy and positions us well for the future.”

 

As of June 30, 2016, total assets were $986.2 million, an increase of $135.4 million, or 15.9%, 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 $80.3 million, or 13.1%, compared to June 30, 2015, principally on the strength of $81.8 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”), net growth of $15.5 million in originations by the Bank’s Small Business Administration (“SBA”) National Division and net growth of $3.9 million in commercial originations by the Bank’s Community Banking Division. This net growth was offset by a pay down of one secured loan to a broker-dealer for $12.0 million in the LASG portfolio and a $20.9 million decrease in the Bank’s Community Banking Division residential and consumer loan portfolio.

     
    Loans generated by the LASG totaled $50.6 million for the quarter ended June 30, 2016. The growth in LASG loans consisted of $18.8 million of purchased loans, at an average price of 91.1% of unpaid principal balance, and $31.8 million of originated loans. SBA loans closed during the quarter totaled $17.4 million, of which $16.1 million were fully funded in the quarter. In addition, the Company sold $14.2 million of the guaranteed portion of SBA and United States Department of Agriculture (“USDA”) loans in the secondary market, of which $9.4 million were originated in the current quarter and $4.8 million were originated in prior quarters. Residential loan production sold in the secondary market totaled $19.9 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 June 30, 2016

 
       

(Dollars in millions)

 

Total Loans

 

Purchased loans may not exceed 40% of total loans

  $ 67.1  

Regulatory Capital

 

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

  $ 180.0  

  

An overview of the Bank’s LASG portfolio follows:

  

   

LASG Portfolio

 
   

Three Months Ended June 30,

 
   

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

  $ 20,588     $ 31,826     $ -     $ 52,414     $ 25,785     $ 29,193     $ -     $ 54,978  

Net investment basis

    18,754       31,826       -       50,580       24,758       29,193       -       53,951  
                                                                 

Loan returns during the period:

                                                               

Yield (1)

    10.88 %     6.98 %     0.51 %     8.19 %     13.11 %     5.56 %     0.49 %     8.79 %

Total Return (1) (2)

    10.88 %     6.98 %     0.51 %     8.19 %     13.39 %     5.56 %     0.49 %     9.00 %

 

 

   

Year Ended June 30,

 
   

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

  $ 108,716     $ 110,578     $ -     $ 219,294     $ 93,694     $ 82,502     $ 48,000     $ 224,196  

Net investment basis

    99,999       110,578       -       210,577       82,654       82,502       48,000       213,156  
                                                                 

Loan returns during the period:

                                                               

Yield (1)

    11.37 %     6.11 %     0.50 %     8.03 %     13.00 %     6.44 %     0.47 %     9.73 %

Total Return (1) (2)

    11.38 %     6.10 %     0.50 %     8.04 %     13.33 %     6.75 %     0.47 %     10.02 %
                                                                 

Total loans as of period end:

                                                               

Unpaid principal balance

  $ 271,268     $ 174,918     $ 48,000     $ 494,186     $ 239,933     $ 118,416     $ 60,000     $ 418,349  

Net investment basis

    239,709       174,918       48,000       462,627       202,592       118,416       60,000       381,008  

 

(1) The yield and total return on LASG originated loans includes $385 thousand of fees related to one loan in the quarter ended June 30, 2016.

(2) 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 $47.5 million, or 6.3% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $49.8 million, or 12.5%. For the year ended June 30, 2016, deposits increased $125.7 million, or 18.6%, primarily due to growth in non-maturity accounts of $120.3 million, or 36.6%, and growth in time deposits of $5.4 million, or 1.6%.

 

 

3.

Stockholders’ equity increased by $3.9 million from June 30, 2015, due principally to earnings of $7.6 million, offset by $3.4 million in share repurchases (representing 322,900 shares). Additionally, there was an increase in stock-based compensation of $613 thousand, offset by a decrease in accumulated other comprehensive income of $618 thousand and $380 thousand in dividends paid on common stock.

 

 

 
 

 

 

Net income increased by $34 thousand to $2.2 million for the quarter ended June 30, 2016, compared to $2.2 million for the quarter ended June 30, 2015.

 

 

1.

Net interest and dividend income before provision for loan losses increased by $1.4 million for the quarter ended June 30, 2016, compared to the quarter ended June 30, 2015. The increase is primarily due to higher average balances in the total 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 months and year ended June 30, 2015, transactional income decreased by $906 thousand and $2.6 million, respectively. The following table summarizes interest income and related yields recognized on the loan portfolios:

  

   

Interest Income and Yield on Loans

 
   

Three Months Ended June 30,

 
   

2016

   

2015

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income (2)

   

Yield

   

Balance (1)

   

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking

  $ 212,625     $ 2,589       4.90 %   $ 228,558     $ 2,839       4.98 %

SBA

    30,599       490       6.44 %     8,860       126       5.70 %

LASG:

                                               

Originated

    172,678       2,996       6.98 %     106,963       1,483       5.56 %

Purchased

    232,610       6,294       10.88 %     195,016       6,375       13.11 %

Secured Loans to Broker-Dealers

    54,001       68       0.51 %     60,003       73       0.49 %

Total LASG

    459,289       9,358       8.19 %     361,982       7,931       8.79 %

Total

  $ 702,513     $ 12,437       7.12 %   $ 599,400     $ 10,896       7.29 %

 

   

Year Ended June 30,

 
   

2016

   

2015

 
   

Average

   

Interest

           

Average

   

Interest

         
   

Balance (1)

   

Income (2)

   

Yield

   

Balance (1)

   

Income

   

Yield

 
   

(Dollars in thousands)

 

Community Banking

  $ 218,649     $ 10,483       4.79 %   $ 233,506     $ 11,599       4.97 %

SBA

    23,786       1,448       6.09 %     2,622       148       5.64 %

LASG:

                                               

Originated

    147,193       8,987       6.11 %     76,448       4,924       6.44 %

Purchased

    216,763       24,638       11.37 %     203,822       26,500       13.00 %

Secured Loans to Broker-Dealers

    58,511       293       0.50 %     44,942       212       0.47 %

Total LASG

    422,467       33,918       8.03 %     325,212       31,636       9.73 %

Total

  $ 664,902     $ 45,849       6.90 %   $ 561,340     $ 43,383       7.73 %

 

(1)Includes loans held for sale.

(2)SBA interest income includes SBA fees of $21 thousand and $33 thousand for the quarter and year ended June 30, 2016, respectively.

 

 

 
 

 

 

The yield on purchased loans for the quarter ended June 30, 2016 was 10.9% as compared to 13.4% in the quarter ended June 30, 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 June 30,

 
   

2016

   

2015

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 4,770       8.25 %   $ 4,132       8.43 %

Transactional income:

                               

Gain on loan sales

    -       0.00 %     -       0.00 %

Gain on sale of real estate owned

    -       0.00 %     188       0.38 %

Other noninterest income

    1       0.00 %     -       0.00 %

Accelerated accretion and loan fees

    1,524       2.63 %     2,243       4.58 %

Total transactional income

    1,525       2.63 %     2,431       4.96 %

Total

  $ 6,295       10.88 %   $ 6,563       13.39 %

 

   

Year Ended June 30,

 
   

2016

   

2015

 
   

Income

   

Return (1)

   

Income

   

Return (1)

 
   

(Dollars in thousands)

 

Regularly scheduled interest and accretion

  $ 17,382       8.02 %   $ 17,327       8.48 %

Transactional income:

                               

Gain on loan sales

    -       0.00 %     190       0.09 %

Gain on sale of real estate owned

    23       0.01 %     607       0.30 %

Other noninterest income (loss)

    12       0.00 %     (69 )     -0.03 %

Accelerated accretion and loan fees

    7,256       3.35 %     9,173       4.49 %

Total transactional income

    7,291       3.36 %     9,901       4.85 %

Total

  $ 24,673       11.38 %   $ 27,228       13.33 %

 

 

(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 decreased by $656 thousand for the quarter ended June 30, 2016, compared to the quarter ended June 30, 2015, principally due to a decrease in gains realized on sale of portfolio loans. The recent quarter includes gains realized on sale of SBA and USDA loans of $1.6 million, compared to $1.9 million in the quarter ended June 30, 2015. Additionally, there was a decrease of $251 thousand in gain recognized on real estate owned and other repossessed collateral.

 

 

3.

Noninterest expense increased by $569 thousand for the quarter ended June 30, 2016, compared to the quarter ended June 30, 2015, primarily due to an increase in salaries and employee benefits of $306 thousand, largely attributable to higher employee headcount.

 

At June 30, 2016, nonperforming assets totaled $9.5 million, or 0.96% of total assets, as compared to $12.4 million, or 1.46% of total assets, at June 30, 2015.

 

At June 30, 2016, the Company’s Tier 1 Leverage Ratio was 13.3%, compared to 14.5% at June 30, 2015, and the Total Capital Ratio was 20.4%, an increase from 20.1% at June 30, 2015. The increase resulted primarily from the issuance of $15.05 million of subordinated notes which qualify as Tier 2 Capital, offset by 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 fourth quarter earnings and business outlook at 10:00 a.m. Eastern Time on Thursday, July 28th. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 49101566. 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)

 

   

June 30, 2016

   

June 30, 2015

 

Assets

               

Cash and due from banks

  $ 2,459     $ 2,789  

Short-term investments

    148,698       87,061  

Total cash and cash equivalents

    151,157       89,850  
                 

Available-for-sale securities, at fair value

    100,572       101,908  
                 

Residential real estate loans held for sale

    6,449       7,093  

SBA loans held for sale

    1,070       1,942  

Total loans held for sale

    7,519       9,035  
                 

Loans

               

Commercial real estate

    426,568       348,676  

Residential real estate

    113,962       132,669  

Commercial and industrial

    145,956       123,133  

Consumer

    5,950       7,659  

Total loans

    692,436       612,137  

Less: Allowance for loan losses

    2,350       1,926  

Loans, net

    690,086       610,211  
                 

Premises and equipment, net

    7,801       8,253  

Real estate owned and other possessed collateral, net

    1,652       1,651  

Federal Home Loan Bank stock, at cost

    2,408       4,102  

Intangible assets, net

    1,732       2,209  

Bank owned life insurance

    15,725       15,276  

Other assets

    7,501       8,223  

Total assets

  $ 986,153     $ 850,718  
                 

Liabilities and Stockholders' Equity

               

Deposits

               

Demand

  $ 66,686     $ 60,383  

Savings and interest checking

    107,218       100,134  

Money market

    275,437       168,527  

Time

    351,091       345,715  

Total deposits

    800,432       674,759  
                 

Federal Home Loan Bank advances

    30,075       30,188  

Wholesale repurchase agreements

    -       10,037  

Short-term borrowings

    -       2,349  

Junior subordinated debentures issued to affiliated trusts

    23,331       8,626  

Capital lease obligation

    1,128       1,368  

Other liabilities

    14,596       10,664  

Total liabilities

    869,562       737,991  
                 

Commitments and contingencies

    -       -  
                 

Stockholders' equity

               

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

    -       -  

Voting common stock, $1.00 par value, 25,000,000 shares authorized; 8,089,790 and 8,575,144 shares issued and outstanding at June 30, 2016 and June 30, 2015, respectively

    8,089       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 June 30, 2016 and June 30, 2015, respectively

    1,228       1,013  

Additional paid-in capital

    83,020       85,506  

Retained earnings

    26,160       18,921  

Accumulated other comprehensive loss

    (1,906 )     (1,288 )

Total stockholders' equity

    116,591       112,727  

Total liabilities and stockholders' equity

  $ 986,153     $ 850,718  

 

 
 

 

  

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

   

Three Months Ended June 30,

   

Year Ended June 30,

 
   

2016

   

2015

   

2016

   

2015

 

Interest and dividend income:

                               

Interest and fees on loans

  $ 12,437     $ 10,896     $ 45,849     $ 43,383  

Interest on available-for-sale securities

    230       215       930       913  

Other interest and dividend income

    161       74       456       292  

Total interest and dividend income

    12,828       11,185       47,235       44,588  
                                 

Interest expense:

                               

Deposits

    1,671       1,329       6,027       5,010  

Federal Home Loan Bank advances

    253       256       1,027       1,101  

Wholesale repurchase agreements

    -       72       67       288  

Short-term borrowings

    1       8       20       29  

Junior subordinated debentures issued to affiliated trusts

    175       152       651       718  

Obligation under capital lease agreements

    15       18       63       74  

Total interest expense

    2,115       1,835       7,855       7,220  
                                 

Net interest and dividend income before provision for loan losses

    10,713       9,350       39,380       37,368  

Provision for loan losses

    317       240       1,618       717  

Net interest and dividend income after provision for loan losses

    10,396       9,110       37,762       36,651  
                                 

Noninterest income:

                               

Fees for other services to customers

    393       406       1,657       1,494  

Gain on sales of residential loans held for sale

    392       493       1,684       1,877  

Gain on sales of portfolio loans

    1,620       1,926       4,178       2,821  

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

    (127 )     124       (255 )     428  

Bank-owned life insurance income

    113       111       449       440  

Other noninterest income

    20       7       60       29  

Total noninterest income

    2,411       3,067       7,773       7,089  
                                 

Noninterest expense:

                               

Salaries and employee benefits

    5,592       5,286       19,548       18,817  

Occupancy and equipment expense

    1,291       1,277       5,227       4,939  

Professional fees

    421       505       1,463       1,658  

Data processing fees

    379       325       1,487       1,355  

Marketing expense

    85       41       285       244  

Loan acquisition and collection expense

    407       362       1,368       1,458  

FDIC insurance premiums

    135       133       489       504  

Intangible asset amortization

    108       129       477       589  

Other noninterest expense

    978       769       3,468       3,040  

Total noninterest expense

    9,396       8,827       33,812       32,604  
                                 

Income before income tax expense

    3,411       3,350       11,723       11,136  

Income tax expense

    1,212       1,185       4,104       3,995  

Net income

  $ 2,199     $ 2,165     $ 7,619     $ 7,141  
                                 

Weighted-average shares outstanding:

                               

Basic

    9,319,522       9,773,228       9,474,999       9,980,733  

Diluted

    9,342,439       9,773,228       9,484,635       9,980,733  

Earnings per common share:

                               
                                 

Basic

  $ 0.24     $ 0.22     $ 0.80     $ 0.72  

Diluted

    0.24       0.22       0.80       0.72  

Cash dividends declared per common share

  $ 0.01     $ 0.01     $ 0.04     $ 0.04  

 

 
 

 

  

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)

 

   

Three Months Ended June 30,

 
   

2016

   

2015

 
   

Average

Balance

   

Interest

Income/

Expense

   

Average

Yield/

Rate

   

Average

Balance

   

Interest

Income/

Expense

   

Average

Yield/

Rate

 

Assets:

                                               
Interest-earning assets:                                                

Investment securities

  $ 93,289     $ 230       0.99 %   $ 103,988     $ 215       0.83 %

Loans (1) (2) (3)

    702,513       12,455       7.13 %     599,400       10,914       7.30 %

Federal Home Loan Bank stock

    2,570       23       3.60 %     4,102       18       1.76 %

Short-term investments (4)

    113,636       138       0.49 %     91,060       56       0.25 %

Total interest-earning assets

    912,008       12,846       5.67 %     798,550       11,203       5.63 %

Cash and due from banks

    4,171                       2,553                  

Other non-interest earning assets

    36,411                       36,334                  

Total assets

  $ 952,590                     $ 837,437                  

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

Interest-bearing deposits:

                                               

NOW accounts

  $ 72,012     $ 51       0.28 %   $ 64,533     $ 41       0.25 %

Money market accounts

    254,833       573       0.90 %     166,690       336       0.81 %

Savings accounts

    36,167       12       0.13 %     35,835       12       0.13 %

Time deposits

    356,418       1,035       1.17 %     342,849       940       1.10 %

Total interest-bearing deposits

    719,430       1,671       0.93 %     609,907       1,329       0.87 %

Short-term borrowings

    441       1       0.91 %     1,754       8       1.83 %

Borrowed funds

    30,089       253       3.38 %     40,259       328       3.27 %

Junior subordinated debentures

    8,954       175       7.86 %     8,602       152       7.09 %

Capital lease obligations

    1,149       15       5.25 %     1,384       18       5.22 %

Total interest-bearing liabilities

    760,063       2,115       1.12 %     661,906       1,835       1.11 %

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    68,314                       56,754                  

Other liabilities

    8,863                       6,251                  

Total liabilities

    837,240                       724,911                  

Stockholders' equity

    115,350                       112,526                  

Total liabilities and stockholders' equity

  $ 952,590                     $ 837,437                  

Net interest income

          $ 10,731                     $ 9,368          

Interest rate spread

                    4.55 %                     4.52 %

Net interest margin (5)

                    4.73 %                     4.71 %

 

(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.

 

 
 

 

 

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)

 

   

Year Ended June 30,

 
   

2016

   

2015

 
           

Interest

   

Average

           

Interest

   

Average

 
   

Average

   

Income/

   

Yield/

   

Average

   

Income/

   

Yield/

 
   

Balance

   

Expense

   

Rate

   

Balance

   

Expense

   

Rate

 

Assets:

                                               

Interest-earning assets:

                                               

Investment securities

  $ 100,503     $ 930       0.93 %   $ 108,204     $ 913       0.84 %

Loans (1) (2) (3)

    664,902       45,921       6.91 %     561,340       43,456       7.74 %

Federal Home Loan Bank stock

    2,960       113       3.82 %     4,102       67       1.63 %

Short-term investments (4)

    91,563       343       0.37 %     92,354       225       0.24 %

Total interest-earning assets

    859,928       47,307       5.50 %     766,000       44,661       5.83 %

Cash and due from banks

    3,596                       2,704                  

Other non-interest earning assets

    35,607                       33,741                  

Total assets

  $ 899,131                     $ 802,445                  
                                                 

Liabilities & Stockholders' Equity:

                                               

Interest-bearing liabilities:

                                               

Interest-bearing deposits:

                                               

NOW accounts

  $ 68,304     $ 182       0.27 %   $ 63,181     $ 162       0.26 %

Money market accounts

    212,102       1,845       0.87 %     133,266       1,002       0.75 %

Savings accounts

    36,062       48       0.13 %     34,495       46       0.13 %

Time deposits

    349,978       3,952       1.13 %     340,046       3,800       1.12 %

Total interest-bearing deposits

    666,446       6,027       0.90 %     570,988       5,010       0.88 %

Short-term borrowings

    1,634       20       1.22 %     2,578       29       1.12 %

Borrowed funds

    32,432       1,094       3.37 %     45,661       1,389       3.04 %

Junior subordinated debentures

    8,762       651       7.43 %     8,531       718       8.42 %

Capital lease obligations

    1,242       63       5.07 %     1,457       74       5.08 %

Total interest-bearing liabilities

    710,516       7,855       1.11 %     629,215       7,220       1.15 %
                                                 

Non-interest bearing liabilities:

                                               

Demand deposits and escrow accounts

    67,041                       54,940                  

Other liabilities

    7,252                       5,913                  

Total liabilities

    784,809                       690,068                  

Stockholders' equity

    114,322                       112,377                  

Total liabilities and stockholders' equity

  $ 899,131                     $ 802,445                  
                                                 

Net interest income

          $ 39,452                     $ 37,441          
                                                 

Interest rate spread

                    4.39 %                     4.68 %

Net interest margin (5)

                    4.59 %                     4.89 %

 

(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:

 
   

June 30, 2016

   

March 31, 2016

   

December 31, 2015

   

September 30, 2015

   

June 30, 2015

 

Net interest income

  $ 10,713     $ 9,254     $ 10,172     $ 9,241     $ 9,350  

Provision for loan losses

    317       236       896       169       240  

Noninterest income

    2,411       2,035       1,624       1,705       3,067  

Noninterest expense

    9,396       8,412       8,196       7,810       8,827  

Net income

    2,199       1,809       1,744       1,867       2,165  
                                         

Weighted average common shares outstanding:

                                       

Basic

    9,319,522       9,456,198       9,559,369       9,562,812       9,773,228  

Diluted

    9,342,439       9,459,611       9,569,585       9,562,812       9,773,228  

Earnings per common share:

                                       

Basic

  $ 0.24     $ 0.19     $ 0.18     $ 0.20     $ 0.22  

Diluted

    0.24       0.19       0.18       0.20       0.22  

Dividends per common share

    0.01       0.01       0.01       0.01       0.01  
                                         

Return on average assets

    0.93 %     0.80 %     0.80 %     0.86 %     1.04 %

Return on average equity

    7.67 %     6.33 %     6.07 %     6.55 %     7.72 %

Net interest rate spread (1)

    4.55 %     4.06 %     4.67 %     4.25 %     4.51 %

Net interest margin (2)

    4.73 %     4.25 %     4.87 %     4.45 %     4.70 %

Efficiency ratio (3)

    71.59 %     74.52 %     69.48 %     71.35 %     71.09 %

Noninterest expense to average total assets

    3.97 %     3.70 %     3.75 %     3.59 %     4.22 %

Average interest-earning assets to average interest-bearing liabilities

    119.99 %     120.62 %     122.48 %     121.63 %     120.90 %

 

 

 
 

 

 

   

As of:

 
   

June 30, 2016

   

March 31, 2016

   

December 31, 2015

   

September 30, 2015

   

June 30, 2015

 

Nonperforming loans:

                                       

Originated portfolio:

                                       

Residential real estate

  $ 2,613     $ 3,566     $ 3,263     $ 3,165     $ 3,021  

Commercial real estate

    474       602       399       529       994  

Home equity

    48       -       11       20       11  

Commercial and industrial

    17       2       2       2       2  

Consumer

    163       216       204       153       190  

Total originated portfolio

    3,315       4,386       3,879       3,869       4,218  

Total purchased portfolio

    4,512       4,364       2,221       6,939       6,532  

Total nonperforming loans

    7,827       8,750       6,100       10,808       10,750  

Real estate owned and other possessed collateral, net

    1,652       690       1,238       1,279       1,651  

Total nonperforming assets

  $ 9,479     $ 9,440     $ 7,338     $ 12,087     $ 12,401  
                                         

Past due loans to total loans

    1.00 %     2.52 %     2.48 %     1.35 %     1.08 %

Nonperforming loans to total loans

    1.13 %     1.25 %     0.90 %     1.73 %     1.76 %

Nonperforming assets to total assets

    0.96 %     1.02 %     0.82 %     1.41 %     1.46 %

Allowance for loan losses to total loans

    0.34 %     0.32 %     0.31 %     0.33 %     0.31 %

Allowance for loan losses to nonperforming loans

    30.02 %     25.41 %     34.90 %     19.11 %     17.92 %
                                         

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

    174.12 %     217.09 %     204.91 %     195.50 %     187.32 %

Net loans to core deposits (5)

    87.15 %     93.48 %     94.37 %     91.04 %     91.85 %

Purchased loans to total loans, including held for sale

    34.25 %     33.17 %     32.90 %     33.82 %     32.61 %

Equity to total assets

    11.82 %     12.41 %     12.82 %     13.25 %     13.25 %

Common equity tier 1 capital ratio

    17.97 %     17.46 %     18.11 %     19.69 %     19.82 %

Total capital ratio (6)

    20.39 %     17.78 %     18.43 %     20.03 %     20.14 %

Tier 1 leverage capital ratio

    13.27 %     13.57 %     14.31 %     14.23 %     14.49 %
                                         

Total stockholders' equity

  $ 116,591     $ 114,526     $ 114,613     $ 113,704     $ 112,727  

Less: Preferred stock

    -       -       -       -       -  

Common stockholders' equity

    116,591       114,526       114,613       113,704       112,727  

Less: Intangible assets (7)

    (3,503 )     (3,469 )     (3,336 )     (3,388 )     (3,312 )

Tangible common stockholders' equity (non-GAAP)

  $ 113,088     $ 111,057     $ 111,277     $ 110,316     $ 109,415  
                                         

Common shares outstanding

    9,317,473       9,330,873       9,519,729       9,592,329       9,587,883  

Book value per common share

  $ 12.51     $ 12.27     $ 12.04     $ 11.85     $ 11.76  

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

    12.14       11.90       11.69       11.50       11.41  

 

(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.