UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 21, 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 |
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 October 26, 2016, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the first quarter of fiscal 2017 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 8.01 |
Other Events |
Also on October 21, 2016, the Company announced that its Board of Directors has authorized the Company to amend the existing stock repurchase program to purchase an additional 500,000 shares of its common stock, representing 5.7% of the Company’s outstanding common shares or approximately $5.5 million based on the Company’s closing price on October 25, 2016. Such purchases will be made in open market or in privately negotiated transactions from time to time and in such amounts as market conditions warrant. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The stock repurchase program may be suspended or terminated at any time without prior notice, and will expire on October 21, 2018.
|
Item 9.01 |
Financial Statements and Exhibits |
|
(c) |
Exhibits |
|
Exhibit No. |
Description |
|
99.1 |
Press Release dated October 26, 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: October 26, 2016
EXHIBIT INDEX
|
Exhibit No. |
Description |
|
99.1 |
Press Release dated October 26, 2016 |
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 First Quarter Results, Announces Increase in Stock Repurchase Program and Declares Dividend
Lewiston, ME (October 26, 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 September 30, 2016, compared to net income of $1.9 million, or $0.20 per diluted common share, for the quarter ended September 30, 2015.
The Board of Directors has voted to amend the existing stock repurchase program to authorize the Company to purchase an additional 500,000 shares of its common stock, representing 5.7% of the Company’s outstanding common shares or approximately $5.5 million based on the Company’s closing price on October 25, 2016. Under the existing program, implemented in April 2014, the Company has purchased 1,970,000 shares through October 25, 2016 and zero shares remain available for repurchase under the program on that date, prior to the 500,000 share increase in the repurchase plan. The amended stock repurchase program will expire on October 21, 2018.
The Board of Directors has also declared a cash dividend of $0.01 per share, payable on November 18, 2016 to shareholders of record as of November 4, 2016.
“In the quarter, we produced $99.2 million of new loan volume,” said Richard Wayne, President and Chief Executive Officer. “Our Loan Acquisition and Servicing Group produced $55.9 million of loans, our SBA Division closed $15.2 million of loans, residential loan sales in the secondary market were strong at $25.0 million, and we achieved net growth of $34.4 million in non-maturity deposits. In addition, we repurchased 645,238 shares at an average price of $10.75.” Mr. Wayne continued, “We believe that our stock repurchase program provides meaningful value to our shareholders, and accordingly, the Board has approved the addition of 500,000 shares to our stock repurchase program.”
As of September 30, 2016, total assets were $985.6 million, consistent with total assets of $986.2 as of June 30, 2016. The principal components of the change in the balance sheet follow:
|
1. |
The loan portfolio – excluding loans held for sale – has grown by $29.0 million, or 4.2%, compared to June 30, 2016, principally on the strength of $28.5 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”) and net growth of $5.1 million in originations by the Bank’s Small Business Administration and United States Department of Agriculture (“SBA”) Division. This net growth was offset by a $4.6 million decrease in the Bank’s Community Banking Division loan portfolio. |
Loans generated by the LASG totaled $55.9 million for the quarter ended September 30, 2016. The growth in LASG loans consisted of $13.9 million of purchased loans, at an average price of 82.5% of unpaid principal balance, and $42.0 million of originated loans. SBA loans closed during the quarter totaled $15.2 million, of which $13.3 million were fully funded in the quarter. In addition, the Company sold $7.4 million of the guaranteed portion of SBA loans in the secondary market, of which $6.3 million were originated in the current quarter and $1.1 million were originated in prior quarters. Residential loan production sold in the secondary market totaled $25.0 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 September 30, 2016 | |||
|
(Dollars in millions) | |||||
|
Total Loans |
Purchased loans may not exceed 40% of total loans |
$ |
90.6 | ||
|
Regulatory Capital |
Non-owner occupied commercial real estate loans may not exceed 300% of total capital |
$ |
165.8 | ||
An overview of the Bank’s LASG portfolio follows:
|
LASG Portfolio |
||||||||||||||||||||||||||||||||
|
Three Months Ended September 30, |
||||||||||||||||||||||||||||||||
|
2016 |
2015 | |||||||||||||||||||||||||||||||
|
Purchased (1) |
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 |
$ | 16,790 | $ | 42,002 | $ | - | $ | 58,792 | $ | 23,583 | $ | 10,941 | $ | - | $ | 34,524 | ||||||||||||||||
|
Net investment basis |
13,853 | 42,002 | - | 55,855 | 23,458 | 10,941 | - | 34,399 | ||||||||||||||||||||||||
|
Loan returns during the period: |
||||||||||||||||||||||||||||||||
|
Yield |
10.40 | % | 5.88 | % | 0.50 | % | 7.58 | % | 12.07 | % | 5.67 | % | 0.50 | % | 8.23 | % | ||||||||||||||||
|
Total Return (2) |
10.43 | % | 5.88 | % | 0.50 | % | 7.59 | % | 12.11 | % | 5.67 | % | 0.50 | % | 8.26 | % | ||||||||||||||||
| Total loans as of period end: | ||||||||||||||||||||||||||||||||
|
Unpaid principal balance |
$ | 269,462 | $ | 206,748 | $ | 48,000 | $ | 524,210 | $ | 249,229 | $ | 119,732 | $ | 60,000 | $ | 428,961 | ||||||||||||||||
|
Net investment basis |
237,103 | 206,748 | 48,000 | 491,851 | 214,199 | 119,732 | 60,000 | 393,931 | ||||||||||||||||||||||||
|
(1) Purchased loan balances include loans held for sale of $789 thousand. (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, which includes loans held for sale, 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 $5.0 million, or 0.6% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $34.4 million, or 7.6%, offset by a decrease in time deposits of $29.4 million, or 8.4%. |
|
3. |
Shareholders’ equity decreased by $5.0 million from June 30, 2016, primarily due to the $6.9 million in share repurchases (representing 645,238 shares) in the quarter, offset by earnings of $1.8 million. Additionally, there was stock-based compensation of $202 thousand, a decrease in accumulated other comprehensive loss of $45 thousand and $93 thousand in dividends paid on common stock. |
Net income decreased by $116 thousand to $1.8 million for the quarter ended September 30, 2016, compared to $1.9 million for the quarter ended September 30, 2015.
|
1. |
Net interest and dividend income before provision for loan losses increased by $534 thousand for the quarter ended September 30, 2016, compared to the quarter ended September 30, 2015. The increase is primarily due to higher average balances in the total loan portfolio, offset by higher average deposit balances and the effect of the issuance of the subordinated debt. |
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 ended September 30, 2015, transactional income decreased by $884 thousand. The following table summarizes interest income and related yields recognized on the loan portfolios:
|
Interest Income and Yield on Loans |
||||||||||||||||||||||||
|
Three Months Ended September 30, |
||||||||||||||||||||||||
|
2016 |
2015 |
|||||||||||||||||||||||
|
Average |
Interest |
Average |
Interest |
|||||||||||||||||||||
|
Balance (1) |
Income (2) |
Yield |
Balance (1) |
Income (2) |
Yield |
|||||||||||||||||||
|
(Dollars in thousands) |
||||||||||||||||||||||||
|
Community Banking |
$ | 205,765 | $ | 2,401 | 4.63 | % | $ | 225,151 | $ | 2,707 | 4.77 | % | ||||||||||||
|
SBA |
31,148 | 519 | 6.61 | % | 13,722 | 217 | 6.27 | % | ||||||||||||||||
|
LASG: |
||||||||||||||||||||||||
|
Originated |
185,109 | 2,742 | 5.88 | % | 118,574 | 1,696 | 5.67 | % | ||||||||||||||||
|
Purchased |
231,999 | 6,081 | 10.40 | % | 200,385 | 6,095 | 12.07 | % | ||||||||||||||||
|
Secured Loans to Broker-Dealers |
48,000 | 60 | 0.50 | % | 60,007 | 75 | 0.50 | % | ||||||||||||||||
|
Total LASG |
465,108 | 8,883 | 7.58 | % | 378,966 | 7,866 | 8.23 | % | ||||||||||||||||
|
Total |
$ | 702,021 | $ | 11,803 | 6.67 | % | $ | 617,839 | $ | 10,790 | 6.93 | % | ||||||||||||
|
|
(1) |
Includes loans held for sale. |
|
|
(2) |
SBA interest income includes fees of $50 thousand and $13 thousand for the quarters ended September 30, 2016 and 2015, respectively. |
The yield on purchased loans for the quarter ended September 30, 2016 was 10.4% as compared to 12.1% in the quarter ended September 30, 2015, primarily 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 September 30, |
||||||||||||||||
|
2016 |
2015 |
|||||||||||||||
|
Income |
Return (1) |
Income |
Return (1) |
|||||||||||||
|
(Dollars in thousands) |
||||||||||||||||
|
Regularly scheduled interest and accretion |
$ | 4,754 | 8.13 | % | $ | 3,887 | 7.70 | % | ||||||||
|
Transactional income: |
||||||||||||||||
|
Gain on loan sales |
- | 0.00 | % | - | 0.00 | % | ||||||||||
|
Gain on sale of real estate owned |
19 | 0.03 | % | 22 | 0.04 | % | ||||||||||
|
Other noninterest income |
- | 0.00 | % | - | 0.00 | % | ||||||||||
|
Accelerated accretion and loan fees |
1,327 | 2.27 | % | 2,208 | 4.37 | % | ||||||||||
|
Total transactional income |
1,346 | 2.30 | % | 2,230 | 4.41 | % | ||||||||||
|
Total |
$ | 6,100 | 10.43 | % | $ | 6,117 | 12.11 | % | ||||||||
|
(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, which includes loans held for sale, 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 $103 thousand for the quarter ended September 30, 2016, compared to the quarter ended September 30, 2015, principally due to an increase in gains realized on sale of SBA loans of $68 thousand. |
|
3. |
Noninterest expense increased by $816 thousand for the quarter ended September 30, 2016, compared to the quarter ended September 30, 2015, primarily due to an increase in salaries and employee benefits of $1.1 million, largely attributable to higher employee headcount and increased incentive compensation. |
At September 30, 2016, nonperforming assets totaled $12.7 million, or 1.29% of total assets, as compared to $9.5 million, or 0.96% of total assets, at June 30, 2016.
At September 30, 2016, the Company’s Tier 1 Leverage Ratio was 12.3%, compared to 13.3% at June 30, 2016, and the Total Capital Ratio was 18.8%, a decrease from 20.4% at June 30, 2016. The decrease resulted primarily from loan growth and the effect of purchases under the Company’s share repurchase program.
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 first quarter earnings and business outlook at 10:00 a.m. Eastern Time on Thursday, October 27th. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 5193909. 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 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 shareholders’ equity, tangible book value per share, and total return. 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)
|
September 30, 2016 |
June 30, 2016 |
|||||||
|
Assets |
||||||||
|
Cash and due from banks |
$ | 3,574 | $ | 2,459 | ||||
|
Short-term investments |
122,675 | 148,698 | ||||||
|
Total cash and cash equivalents |
126,249 | 151,157 | ||||||
|
Available-for-sale securities, at fair value |
94,583 | 100,572 | ||||||
|
Residential real estate loans held for sale |
4,623 | 6,449 | ||||||
|
SBA loans held for sale |
2,630 | 1,070 | ||||||
|
Total loans held for sale |
7,253 | 7,519 | ||||||
|
Loans |
||||||||
|
Commercial real estate |
449,537 | 426,568 | ||||||
|
Residential real estate |
110,223 | 113,962 | ||||||
|
Commercial and industrial |
156,110 | 145,956 | ||||||
|
Consumer |
5,548 | 5,950 | ||||||
|
Total loans |
721,418 | 692,436 | ||||||
|
Less: Allowance for loan losses |
2,506 | 2,350 | ||||||
|
Loans, net |
718,912 | 690,086 | ||||||
|
Premises and equipment, net |
7,452 | 7,801 | ||||||
|
Real estate owned and other repossessed collateral, net |
3,774 | 1,652 | ||||||
|
Federal Home Loan Bank stock, at cost |
2,408 | 2,408 | ||||||
|
Intangible assets, net |
1,623 | 1,732 | ||||||
|
Bank owned life insurance |
15,839 | 15,725 | ||||||
|
Other assets |
7,475 | 7,501 | ||||||
|
Total assets |
$ | 985,568 | $ | 986,153 | ||||
|
Liabilities and Shareholders' Equity |
||||||||
| Liabilities | ||||||||
|
Deposits |
||||||||
|
Demand |
$ | 74,249 | $ | 66,686 | ||||
|
Savings and interest checking |
107,365 | 107,218 | ||||||
|
Money market |
302,079 | 275,437 | ||||||
|
Time |
321,716 | 351,091 | ||||||
|
Total deposits |
805,409 | 800,432 | ||||||
|
Federal Home Loan Bank advances |
30,046 | 30,075 | ||||||
|
Subordinated debt |
23,393 | 23,331 | ||||||
|
Capital lease obligation |
1,066 | 1,128 | ||||||
|
Other liabilities |
14,101 | 14,596 | ||||||
|
Total liabilities |
874,015 | 869,562 | ||||||
|
Commitments and contingencies |
- | - | ||||||
|
Shareholders' equity |
||||||||
|
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at September 30, 2016 and June 30, 2016 |
- | - | ||||||
|
Voting common stock, $1.00 par value, 25,000,000 shares authorized; 7,487,552 and 8,089,790 shares issued and outstanding at September 30, 2016 and June 30, 2016, respectively |
7,487 | 8,089 | ||||||
|
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 1,343,683 and 1,227,683 shares issued and outstanding at September 30, 2016 and June 30, 2016, respectively |
1,344 | 1,228 | ||||||
|
Additional paid-in capital |
76,765 | 83,020 | ||||||
|
Retained earnings |
27,818 | 26,160 | ||||||
|
Accumulated other comprehensive loss |
(1,861 | ) | (1,906 | ) | ||||
|
Total shareholders' equity |
111,553 | 116,591 | ||||||
|
Total liabilities and shareholders' equity |
$ | 985,568 | $ | 986,153 | ||||
NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
|
Three Months Ended September 30, |
||||||||
|
2016 |
2015 |
|||||||
|
Interest and dividend income: |
||||||||
|
Interest and fees on loans |
$ | 11,803 | $ | 10,790 | ||||
|
Interest on available-for-sale securities |
239 | 228 | ||||||
|
Other interest and dividend income |
215 | 95 | ||||||
|
Total interest and dividend income |
12,257 | 11,113 | ||||||
|
Interest expense: |
||||||||
|
Deposits |
1,754 | 1,365 | ||||||
|
Federal Home Loan Bank advances |
255 | 260 | ||||||
|
Wholesale repurchase agreements |
- | 67 | ||||||
|
Short-term borrowings |
- | 9 | ||||||
|
Subordinated debt |
459 | 154 | ||||||
|
Obligation under capital lease agreements |
14 | 17 | ||||||
|
Total interest expense |
2,482 | 1,872 | ||||||
|
Net interest and dividend income before provision for loan losses |
9,775 | 9,241 | ||||||
|
Provision for loan losses |
193 | 169 | ||||||
|
Net interest and dividend income after provision for loan losses |
9,582 | 9,072 | ||||||
|
Noninterest income: |
||||||||
|
Fees for other services to customers |
408 | 408 | ||||||
|
Gain on sales of residential loans held for sale |
542 | 560 | ||||||
|
Gain on sales of SBA loans |
743 | 675 | ||||||
|
Loss recognized on real estate owned and other repossessed collateral, net |
(14 | ) | (59 | ) | ||||
|
Bank-owned life insurance income |
114 | 112 | ||||||
|
Other noninterest income |
15 | 9 | ||||||
|
Total noninterest income |
1,808 | 1,705 | ||||||
|
Noninterest expense: |
||||||||
|
Salaries and employee benefits |
5,314 | 4,256 | ||||||
|
Occupancy and equipment expense |
1,229 | 1,290 | ||||||
|
Professional fees |
496 | 430 | ||||||
|
Data processing fees |
421 | 349 | ||||||
|
Marketing expense |
87 | 70 | ||||||
|
Loan acquisition and collection expense |
227 | 451 | ||||||
|
FDIC insurance premiums |
124 | 114 | ||||||
|
Intangible asset amortization |
109 | 131 | ||||||
|
Other noninterest expense |
619 | 719 | ||||||
|
Total noninterest expense |
8,626 | 7,810 | ||||||
|
Income before income tax expense |
2,764 | 2,967 | ||||||
|
Income tax expense |
1,013 | 1,100 | ||||||
|
Net income |
$ | 1,751 | $ | 1,867 | ||||
|
Weighted-average shares outstanding: |
||||||||
|
Basic |
9,106,144 | 9,562,812 | ||||||
|
Diluted |
9,133,383 | 9,562,812 | ||||||
|
Earnings per common share: |
||||||||
|
Basic |
$ | 0.19 | $ | 0.20 | ||||
|
Diluted |
0.19 | 0.20 | ||||||
|
Cash dividends declared per common share |
$ | 0.01 | $ | 0.01 | ||||
NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
|
Three Months Ended September 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 |
$ | 94,899 | $ | 239 | 1.00% | $ | 102,241 | $ | 228 | 0.88% | ||||||||||||||
|
Loans (1) (2) (3) |
702,021 | 11,821 | 6.68% | 617,839 | 10,808 | 6.94% | ||||||||||||||||||
|
Federal Home Loan Bank stock |
2,408 | 23 | 3.79% | 4,102 | 34 | 3.29% | ||||||||||||||||||
|
Short-term investments (4) |
154,392 | 192 | 0.49% | 99,649 | 61 | 0.24% | ||||||||||||||||||
|
Total interest-earning assets |
953,720 | 12,275 | 5.11% | 823,831 | 11,131 | 5.36% | ||||||||||||||||||
|
Cash and due from banks |
2,941 | 3,026 | ||||||||||||||||||||||
|
Other non-interest earning assets |
30,812 | 36,420 | ||||||||||||||||||||||
|
Total assets |
$ | 987,473 | $ | 863,277 | ||||||||||||||||||||
|
Liabilities & Stockholders' Equity: |
||||||||||||||||||||||||
|
Interest-bearing liabilities: |
||||||||||||||||||||||||
|
Interest-bearing deposits: |
||||||||||||||||||||||||
|
NOW accounts |
$ | 70,850 | $ | 51 | 0.29% | $ | 69,619 | $ | 46 | 0.26% | ||||||||||||||
|
Money market accounts |
291,734 | 682 | 0.93% | 170,566 | 353 | 0.82% | ||||||||||||||||||
|
Savings accounts |
35,769 | 12 | 0.13% | 36,360 | 12 | 0.13% | ||||||||||||||||||
|
Time deposits |
336,271 | 1,009 | 1.19% | 350,867 | 954 | 1.08% | ||||||||||||||||||
|
Total interest-bearing deposits |
734,624 | 1,754 | 0.95% | 627,412 | 1,365 | 0.86% | ||||||||||||||||||
|
Short-term borrowings |
- | - | 0.00% | 1,950 | 9 | 1.83% | ||||||||||||||||||
|
Borrowed funds |
30,061 | 255 | 3.37% | 39,324 | 327 | 3.30% | ||||||||||||||||||
|
Subordinated debt |
23,360 | 459 | 7.80% | 8,650 | 154 | 7.06% | ||||||||||||||||||
|
Capital lease obligations |
1,087 | 14 | 5.11% | 1,332 | 17 | 5.06% | ||||||||||||||||||
|
Total interest-bearing liabilities |
789,132 | 2,482 | 1.25% | 678,668 | 1,872 | 1.09% | ||||||||||||||||||
|
Non-interest bearing liabilities: |
||||||||||||||||||||||||
|
Demand deposits and escrow accounts |
75,672 | 64,008 | ||||||||||||||||||||||
|
Other liabilities |
8,213 | 7,431 | ||||||||||||||||||||||
|
Total liabilities |
873,017 | 750,107 | ||||||||||||||||||||||
|
Stockholders' equity |
114,456 | 113,170 | ||||||||||||||||||||||
|
Total liabilities and stockholders' equity |
$ | 987,473 | $ | 863,277 | ||||||||||||||||||||
|
Net interest income |
$ | 9,793 | $ | 9,259 | ||||||||||||||||||||
|
Interest rate spread |
3.86% | 4.27% | ||||||||||||||||||||||
|
Net interest margin (5) |
4.07% | 4.46% | ||||||||||||||||||||||
|
(1) |
Interest income and yield are stated on a fully tax-equivalent basis using a 34% tax rate. |
|
(2) |
Includes loans held for sale. |
|
(3) |
Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income. |
|
(4) |
Short term investments include FHLB overnight deposits and other interest-bearing deposits. |
|
(5) |
Net interest margin is calculated as net interest income divided by total interest-earning assets. |
NORTHEAST BANCORP AND SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
|
Three Months Ended: |
||||||||||||||||||||
|
September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
||||||||||||||||
|
Net interest income |
$ | 9,775 | $ | 10,713 | $ | 9,254 | $ | 10,172 | $ | 9,241 | ||||||||||
|
Provision for loan losses |
193 | 317 | 236 | 896 | 169 | |||||||||||||||
|
Noninterest income |
1,808 | 2,411 | 2,035 | 1,624 | 1,705 | |||||||||||||||
|
Noninterest expense |
8,626 | 9,396 | 8,412 | 8,196 | 7,810 | |||||||||||||||
|
Net income |
1,751 | 2,199 | 1,809 | 1,744 | 1,867 | |||||||||||||||
|
Weighted average common shares outstanding: |
||||||||||||||||||||
|
Basic |
9,106,144 | 9,319,522 | 9,456,198 | 9,559,369 | 9,562,812 | |||||||||||||||
|
Diluted |
9,133,383 | 9,342,439 | 9,459,611 | 9,569,585 | 9,562,812 | |||||||||||||||
|
Earnings per common share: |
||||||||||||||||||||
|
Basic |
$ | 0.19 | $ | 0.24 | $ | 0.19 | $ | 0.18 | $ | 0.20 | ||||||||||
|
Diluted |
0.19 | 0.24 | 0.19 | 0.18 | 0.20 | |||||||||||||||
|
Dividends per common share |
0.01 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||||||
|
Return on average assets |
0.70 | % | 0.93 | % | 0.80 | % | 0.80 | % | 0.86 | % | ||||||||||
|
Return on average equity |
6.07 | % | 7.67 | % | 6.33 | % | 6.07 | % | 6.55 | % | ||||||||||
|
Net interest rate spread (1) |
3.86 | % | 4.55 | % | 4.06 | % | 4.67 | % | 4.27 | % | ||||||||||
|
Net interest margin (2) |
4.07 | % | 4.73 | % | 4.25 | % | 4.87 | % | 4.46 | % | ||||||||||
|
Efficiency ratio (3) |
74.47 | % | 71.59 | % | 74.52 | % | 69.48 | % | 71.35 | % | ||||||||||
|
Noninterest expense to average total assets |
3.47 | % | 3.97 | % | 3.70 | % | 3.75 | % | 3.59 | % | ||||||||||
|
Average interest-earning assets to average interest-bearing liabilities |
120.86 | % | 119.99 | % | 120.62 | % | 122.48 | % | 121.39 | % | ||||||||||
|
As of: |
||||||||||||||||||||
|
September 30, 2016 |
June 30, 2016 |
March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
||||||||||||||||
|
Nonperforming loans: |
||||||||||||||||||||
|
Originated portfolio: |
||||||||||||||||||||
|
Residential real estate |
$ | 3,273 | $ | 2,613 | $ | 3,566 | $ | 3,263 | $ | 3,165 | ||||||||||
|
Commercial real estate |
361 | 474 | 602 | 399 | 529 | |||||||||||||||
|
Home equity |
48 | 48 | - | 11 | 20 | |||||||||||||||
|
Commercial and industrial |
347 | 17 | 2 | 2 | 2 | |||||||||||||||
|
Consumer |
121 | 163 | 216 | 204 | 153 | |||||||||||||||
|
Total originated portfolio |
4,150 | 3,315 | 4,386 | 3,879 | 3,869 | |||||||||||||||
|
Total purchased portfolio |
4,773 | 4,512 | 4,364 | 2,221 | 6,939 | |||||||||||||||
|
Total nonperforming loans |
8,923 | 7,827 | 8,750 | 6,100 | 10,808 | |||||||||||||||
|
Real estate owned and other possessed collateral, net |
3,774 | 1,652 | 690 | 1,238 | 1,279 | |||||||||||||||
|
Total nonperforming assets |
$ | 12,697 | $ | 9,479 | $ | 9,440 | $ | 7,338 | $ | 12,087 | ||||||||||
|
Past due loans to total loans |
1.36 | % | 1.00 | % | 2.52 | % | 2.48 | % | 1.35 | % | ||||||||||
|
Nonperforming loans to total loans |
1.24 | % | 1.13 | % | 1.25 | % | 0.90 | % | 1.73 | % | ||||||||||
|
Nonperforming assets to total assets |
1.29 | % | 0.96 | % | 1.02 | % | 0.82 | % | 1.41 | % | ||||||||||
|
Allowance for loan losses to total loans |
0.35 | % | 0.34 | % | 0.32 | % | 0.31 | % | 0.33 | % | ||||||||||
|
Allowance for loan losses to nonperforming loans |
28.08 | % | 30.02 | % | 25.41 | % | 34.90 | % | 19.11 | % | ||||||||||
|
Commercial real estate loans to risk-based capital (4) |
179.96 | % | 174.12 | % | 217.09 | % | 204.91 | % | 195.50 | % | ||||||||||
|
Net loans to core deposits (5) |
90.22 | % | 87.15 | % | 93.48 | % | 94.37 | % | 91.04 | % | ||||||||||
|
Purchased loans to total loans, including held for sale |
32.54 | % | 34.25 | % | 33.17 | % | 32.90 | % | 33.82 | % | ||||||||||
|
Equity to total assets |
11.32 | % | 11.82 | % | 12.41 | % | 12.82 | % | 13.25 | % | ||||||||||
|
Common equity tier 1 capital ratio |
15.34 | % | 17.97 | % | 17.46 | % | 18.11 | % | 19.69 | % | ||||||||||
|
Total capital ratio |
18.81 | % | 20.39 | % | 17.78 | % | 18.43 | % | 20.03 | % | ||||||||||
|
Tier 1 leverage capital ratio |
12.25 | % | 13.27 | % | 13.57 | % | 14.31 | % | 14.23 | % | ||||||||||
|
Total shareholders' equity |
$ | 111,553 | $ | 116,591 | $ | 114,526 | $ | 114,613 | $ | 113,704 | ||||||||||
|
Less: Preferred stock |
- | - | - | - | - | |||||||||||||||
|
Common shareholders' equity |
111,553 | 116,591 | 114,526 | 114,613 | 113,704 | |||||||||||||||
|
Less: Intangible assets (6) |
(3,797 | ) | (3,503 | ) | (3,469 | ) | (3,336 | ) | (3,388 | ) | ||||||||||
|
Tangible common shareholders' equity (non-GAAP) |
$ | 107,756 | $ | 113,088 | $ | 111,057 | $ | 111,277 | $ | 110,316 | ||||||||||
|
Common shares outstanding |
8,831,235 | 9,317,473 | 9,330,873 | 9,519,729 | 9,592,329 | |||||||||||||||
|
Book value per common share |
$ | 12.63 | $ | 12.51 | $ | 12.27 | $ | 12.04 | $ | 11.85 | ||||||||||
|
Tangible book value per share (non-GAAP) (7) |
12.20 | 12.14 | 11.90 | 11.69 | 11.50 | |||||||||||||||
|
(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) Includes the core deposit intangible asset, as well as the servicing rights asset which is included in other assets in the consolidated balance sheets. |
|
(7) |
Tangible book value per share represents total shareholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding. |