| Previous Close | 19.04 |
| Open | 19.00 |
| Bid | 16.23 x 1100 |
| Ask | 19.61 x 1000 |
| Day's Range | 18.93 - 19.72 |
| 52 Week Range | 6.20 - 23.98 |
| Volume | 46,998 |
| Avg. Volume | 48,431 |
| Market Cap | 163.77M |
| Beta (5Y Monthly) | 1.72 |
| PE Ratio (TTM) | 7.71 |
| EPS (TTM) | 2.53 |
| Earnings Date | Jul. 30, 2020 |
| Forward Dividend & Yield | 0.04 (0.21%) |
| Ex-Dividend Date | May 06, 2020 |
| 1y Target Est | 23.00 |
- GlobeNewswire
Northeast Bank Reports Record Fourth Quarter Results and Declares Dividend
PORTLAND, Maine, July 29, 2020 (GLOBE NEWSWIRE) -- Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based full-service bank, today reported net income of $11.2 million, or $1.33 per diluted common share, for the quarter ended June 30, 2020, compared to a net loss of $603 thousand, or ($0.07) per diluted common share, for the quarter ended June 30, 2019. Net income for the year ended June 30, 2020 was $22.7 million, or $2.53 per diluted common share, compared to $13.9 million, or $1.52 per diluted common share, for the year ended June 30, 2019. Earnings were positively impacted in the quarter ended June 30, 2020 by the sale of $457.6 million in Paycheck Protection Program (“PPP”) loans to The Loan Source, Inc. (“Loan Source”) which resulted in a pre-tax net gain of $9.7 million, or approximately $6.7 million net of tax. The quarter and year ended June 30, 2019 included $6.0 million and $6.4 million of non-recurring expenses (after tax) related to the Bank’s corporate reorganization, respectively. Excluding these non-recurring expenses, the Bank recorded net operating earnings of $5.4 million, or $0.59 per diluted common share, for the quarter ended June 30, 2019 and $20.3 million, or $2.20 per diluted common share, for the year ended June 30, 2019. We refer to results excluding these non-recurring items as “net operating earnings.”The Board of Directors declared a cash dividend of $0.01 per share, payable on August 28, 2020, to shareholders of record as of August 14, 2020.Discussing results, Rick Wayne, Chief Executive Officer, said “We achieved record quarterly results, including diluted earnings per share of $1.33, a return on average equity of 28.4%, a return on average assets of 3.1%, and an efficiency ratio of 37.4%. Additionally, we achieved a quarterly net interest margin, excluding the effects of PPP, of 5.3%. We are proud of our participation in the Paycheck Protection Program, providing PPP loans to over 4,300 small businesses with tens of thousands of related jobs. We are excited for our correspondent banking relationship with Loan Source, in which we earn a correspondent fee when Loan Source purchases PPP loans and we subsequently share in net servicing income on such purchased PPP loans.” Mr. Wayne continued, “During the quarter, Loan Source purchased $1.3 billion of PPP loans, including $457.6 million of PPP loans from the Bank and approximately $815.3 million of PPP loans from lenders other than the Bank, which generated a correspondent fee for the Bank of $2.9 million. Subsequent to the quarter, Loan Source purchased an additional $1.6 billion of PPP loans, which generated an additional correspondent fee for the Bank of $5.6 million which will be recognized over the expected life of the loans. We will also receive one half of the net servicing income on the $2.9 billion PPP portfolio owned by Loan Source. To the extent Loan Source purchases additional PPP loans, the Bank will generate additional correspondent banking fees and receive its share of additional net servicing income.”As of June 30, 2020, total assets were $1.26 billion, an increase of $103.8 million, or 9.0%, from total assets of $1.15 billion as of June 30, 2019. The principal components of the changes in the balance sheet follow: 1. The following table highlights the changes in the loan portfolio for the three months and year ended June 30, 2020: Loan Portfolio Changes Three Months Ended June 30, 2020 June 30, 2020 Balance March 31, 2020 Balance Change ($) Change (%) (Dollars in thousands) LASG Purchased$386,624 $395,944 $(9,320) (2.35%) LASG Originated 467,612 512,964 (45,352) (8.84%) SBA 47,095 48,306 (1,211) (2.51%) Community Banking 70,271 76,706 (6,435) (8.39%) Total$971,602 $1,033,920 $(62,318) (6.03%) Year Ended June 30, 2020 June 30, 2020 Balance June 30, 2019 Balance Change ($) Change (%) (Dollars in thousands) LASG Purchased$386,624 $326,640 $59,984 18.36% LASG Originated 467,612 493,413 (25,801) (5.23%) SBA 47,095 63,053 (15,958) (25.31%) Community Banking 70,271 91,954 (21,683) (23.58%) Total$971,602 $975,060 $(3,458) (0.35%) Loans generated by the Bank's Loan Acquisition and Servicing Group ("LASG") for the quarter ended June 30, 2020 totaled $46.3 million, which consisted of $12.7 million of purchased loans, at an average price of 87.2% of unpaid principal balance, and $33.6 million of originated loans. Residential loan production sold in the secondary market totaled $2.1 million for the quarter.Additionally, the Bank originated $487.5 million of loans in connection with the PPP. The Bank subsequently sold PPP loans with a total principal balance of $457.6 million during the quarter ended June 30, 2020, recording a net gain of $9.7 million on the sale primarily resulting from the recognition of net deferred fees, offset by purchase price discounts. The remaining $29.9 million of PPP loans are classified as held for sale at June 30, 2020, offset by a valuation adjustment to reflect the fair value of the loans and unamortized net deferred fees.An overview of the Bank’s LASG portfolio follows: LASG Portfolio Three Months Ended June 30, 2020 2019 Purchased Originated Total LASG Purchased Originated Total LASG (Dollars in thousands) Loans purchased or originated during the period: Unpaid principal balance$ 14,611 $ 33,612 $ 48,223 $ 49,948 $ 51,830 $ 101,778 Net investment basis 12,744 33,612 46,356 47,107 51,830 98,937 Loan returns during the period: Yield 9.89% 7.13% 8.34% 12.27% 7.75% 9.53% Total Return on Purchased Loans (1) 9.89% 7.13% 8.34% 12.27% 7.75% 9.53% Year Ended June 30, 2020 2019 Purchased Originated Total LASG Purchased Originated Total LASG (Dollars in thousands) Loans purchased or originated during the period: Unpaid principal balance$ 182,588 $221,484 $ 404,072 $ 144,372 $271,179 $ 415,551 Net investment basis 171,262 221,484 392,746 135,848 271,179 407,027 Loan returns during the period: Yield 9.86% 7.43% 8.47% 10.38% 7.67% 8.80% Total Return on Purchased Loans (1) 9.97% 7.43% 8.51% 10.57% 7.67% 8.88% Total loans as of period end: Unpaid principal balance$421,659 $467,612 $ 889,271 $360,472 $493,413 $ 853,885 Net investment basis 386,624 467,612 854,236 326,640 493,413 820,053 (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 purchased loans held for sale, on an annualized basis. The total return on purchased loans does not include the effect of purchased loan charge-offs or recoveries during the period. Total return on purchased loans is considered a non-GAAP financial measure. See reconciliation in below table entitled “Total Return on Purchased Loans.” 1. Short-term investments increased by $86.4 million, or 158.8%, from June 30, 2019, primarily due to a $70.0 million increase in deposits. 2. Deposits increased by $70.0 million, or 7.4%, from June 30, 2019, attributable to increases in savings and interest-bearing checking accounts of $36.8 million, or 36.4%, money market accounts of $31.5 million, or 11.6%, and demand deposits of $26.0 million, or 37.8%, partially offset by a decrease in time deposits of $24.3 million, or 4.8%. 3. Shareholders’ equity increased by $11.2 million, or 7.3%, from June 30, 2019, primarily due to net income of $22.7 million, partially offset by the repurchase of 853,098 shares at a weighted average price per share of $13.45, which resulted in an $11.5 million reduction in shareholders’ equity.Net income increased by $11.8 million to $11.2 million for the quarter ended June 30, 2020, compared to a net loss of $603 thousand for the quarter ended June 30, 2019. Net operating earnings increased by $5.8 million to $11.2 million for the quarter ended June 30, 2020, compared to net operating earnings of $5.4 million for the quarter ended June 30, 2019. 1. Net interest and dividend income before provision for loan losses increased by $96 thousand to $17.4 million for the quarter ended June 30, 2020, compared to $17.3 million for the quarter ended June 30, 2019. The increase was primarily due to lower deposit rates, higher average loan balances, and decreased interest expense on subordinated debt from the redemption of trust preferred securities in May 2019, partially offset by increased interest expense in connection with the Bank’s participation in the Paycheck Protection Program Liquidity Facility (“PPPLF”) used to fund PPP originations during the quarter, and lower rates earned on loans and short-term investments.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, 2020 2019 Average Interest Average Interest Balance (1) Income Yield Balance (1) Income Yield (Dollars in thousands) Community Banking$74,059 $ 975 5.30% $99,007 $ 1,272 5.15% SBA National 48,191 642 5.36% 66,126 1,194 7.24% SBA PPP 223,804 1,561 2.81% - - 0.00% LASG: Originated 492,612 8,738 7.13% 482,213 9,317 7.75% Purchased 386,212 9,495 9.89% 313,515 9,588 12.27% Total LASG 878,824 18,233 8.34% 795,728 18,905 9.53% Total$ 1,224,878 $ 21,411 7.03% $960,861 $ 21,371 8.92% Year Ended June 30, 2020 2019 Average Interest Average Interest Balance (1) Income Yield Balance (1) Income Yield (Dollars in thousands) Community Banking$82,472 $ 4,470 5.42% $107,685 $ 5,590 5.19% SBA National 55,511 4,066 7.32% 70,016 5,285 7.55% SBA PPP 55,649 1,561 2.81% - - 0.00% LASG: Originated 479,054 35,572 7.43% 434,570 33,348 7.67% Purchased 356,958 35,201 9.86% 312,213 32,404 10.38% Total LASG 836,012 70,773 8.47% 746,783 65,752 8.80% Total$1,029,644 $ 80,870 7.85% $ 924,484 $ 76,627 8.29% (1) Includes loans held for sale. The components of total income on purchased loans are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the quarter ended June 30, 2019, transactional income for the quarter ended June 30, 2020 decreased by $986 thousand due to thinning discounts, while regularly scheduled interest and accretion increased by $893 thousand due to the increase in average balances. The total return on purchased loans for the quarter ended June 30, 2020 was 9.9%, a decrease from 12.3% for the quarter ended June 30, 2019. The following table details the total return on purchased loans: Total Return on Purchased Loans Three Months Ended June 30, 2020 2019 Income Return (1) Income Return (1) (Dollars in thousands) Regularly scheduled interest and accretion$6,892 7.18% $5,999 7.67% Transactional income: Gain on loan sales - 0.00% - 0.00% Gain on real estate owned - 0.00% - 0.00% Other noninterest income - 0.00% - 0.00% Accelerated accretion and loan fees 2,603 2.71% 3,589 4.60% Total transactional income 2,603 2.71% 3,589 4.60% Total$ 9,495 9.89% $ 9,588 12.27% Year Ended June 30, 2020 2019 Income Return (1) Income Return (1) (Dollars in thousands) Regularly scheduled interest and accretion$26,202 7.34% $23,849 7.64% Transactional income: Gain on loan sales - 0.00% 582 0.19% Gain on real estate owned 395 0.11% - 0.00% Other noninterest income - 0.00% - 0.00% Accelerated accretion and loan fees 8,999 2.52% 8,555 2.74% Total transactional income 9,394 2.63% 9,137 2.93% Total$ 35,596 9.97% $32,986 10.57% (1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales and gains on real estate owned recorded during the period divided by the average invested balance, which includes purchased 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 periods shown. Total return is considered a non-GAAP financial measure. 1. Provision for loan losses increased by $643 thousand for the quarter ended June 30, 2020, compared to the quarter ended June 30, 2019, primarily due to a $477 thousand increase in specific reserves as compared to a $231 thousand decrease in specific reserves in the quarter ended June 30, 2019. 2. Noninterest income increased by $8.7 million for the quarter ended June 30, 2020, compared to the quarter ended June 30, 2019, primarily due to the following: * An increase in gain on sale of PPP loans of $9.7 million, due to the sale of PPP loans with a total principal balance of $457.6 million, which resulted in a net gain based on the recognition of net deferred fees, offset by purchase price discounts in the quarter ended June 30, 2020; partially offset by, * A $337 thousand loss on assets held for sale, representing the fair value adjustment for PPP loans held for sale at June 30, 2020; * A $227 thousand decrease in gain on Small Business Administration (“SBA”) loan sales, as no segment loans (SBA loans other than PPP loans) were sold during the current quarter; * A $223 thousand increase in loss on real estate owned (“REO”), due to a write-down on an existing REO property during the quarter, as compared to two smaller write-downs on REO properties during the quarter ended June 30, 2019; and * A $188 thousand decrease in gain on sale of residential loans held for sale, due to lower volume sold as compared to the quarter ended June 30, 2019. 3. Noninterest expense decreased by $8.3 million for the quarter ended June 30, 2020 compared to the quarter ended June 30, 2019, primarily due to the following: * A decrease in reorganization expense of $8.3 million, as the prior year quarter included expenses related to the May 2019 corporate reorganization; and * A decrease in other noninterest expense of $495 thousand, primarily due to a $190 thousand recovery on SBA servicing assets, as compared to an $85 thousand impairment charge in the quarter ended June 30, 2019, and decreased travel expense; partially offset by, * An increase in salaries and employee benefits of $371 thousand, primarily due to increases in incentive compensation and regular compensation, partially offset by an increase in deferred salaries and a decrease in stock-based compensation; and * An increase in professional fees of $371 thousand, primarily due to increased legal fees associated with the correspondent relationship with Loan Source, as well as increased accounting and internal audit expense. 4. Income tax expense increased by $4.6 million to $4.8 million, or an effective tax rate of 30.4%, for the quarter ended June 30, 2020, compared to $276 thousand, or an effective tax rate of (84.4%), for the quarter ended June 30, 2019. The increase was primarily due to higher pre-tax income, which increased by $16.5 million during the quarter ended June 30, 2020 compared to the quarter ended June 30, 2019. Income tax expense and the effective tax rate for the quarter ended June 30, 2019 were affected by an income tax benefit of $2.3 million recorded in connection with the redemption of the trust preferred securities and the loss associated with the termination of related interest rate swaps and caps, in connection with the corporate reorganization in May 2019. Excluding the effects of the corporate reorganization, the effective tax rate for the quarter ended June 30, 2019 was 32.5%, as compared to 30.4% for the quarter ended June 30, 2020. The decrease was primarily related to a smaller year-end true-up adjustment related to state tax apportionment in the quarter ended June 30, 2020. As of June 30, 2020, nonperforming assets totaled $24.4 million, or 1.94% of total assets, as compared to $16.7 million, or 1.45% of total assets, as of June 30, 2019. The increase was primarily due to two LASG purchased loans totaling $1.9 million, one LASG originated loan totaling $2.7 million, and one SBA loan totaling $1.5 million that were placed on nonaccrual, and a $1.3 million increase in real estate owned, due to four properties transferred in, partially offset by two properties sold and write-downs during the year ended June 30, 2020.As of June 30, 2020, past due loans totaled $16.4 million, or 1.69% of total loans, as compared to past due loans totaling $14.6 million, or 1.50% of total loans as of June 30, 2019. The increase was primarily due to one LASG originated loan totaling $2.7 million and one SBA loan totaling $1.5 million becoming past due during the year ended June 30, 2020, partially offset by one LASG originated loan totaling $1.3 million and one Community Bank loan totaling $1.1 million that paid off during the year ended June 30, 2020.As of June 30, 2020, the Bank’s Tier 1 leverage capital ratio was 13.4%, compared to 12.9% at June 30, 2019, and the Total capital ratio was 19.6% at June 30, 2020, compared to 18.0% at June 30, 2019. Capital ratios were primarily affected by increased earnings.Investor Call Information Rick Wayne, Chief Executive Officer, Jean-Pierre Lapointe, Chief Financial Officer, and Pat Dignan, Executive Vice President and Chief Credit Officer, will host a conference call to discuss fourth quarter earnings and business outlook at 10:00 a.m. Eastern Time on Thursday, July 30th. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 2496196. The call will be available via live webcast, which can be viewed by accessing the Bank’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 Bank Northeast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We offer personal and business banking services to the Maine market via nine branches. Our Loan Acquisition and Servicing Group purchases and originates commercial loans on a nationwide basis. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found 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 net operating earnings, operating earnings per common share, operating return on average assets, operating return on average equity, operating efficiency ratio, operating noninterest expense to average total assets, tangible common shareholders’ equity, tangible book value per share, total return on purchased loans, efficiency ratio, and net interest margin excluding PPP. The Bank’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 the Bank 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 Bank’s control. The Bank’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, the negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; the length and extent of the economic contraction resulting from the COVID-19 pandemic; continued deterioration in employment levels, general business and economic conditions on a national basis and in the local markets in which the Bank operates, including changes which adversely affect borrowers’ ability to service and repay our loans; changes in customer behavior due to changing political, business and economic conditions or legislative or regulatory initiatives; turbulence in the capital and debt markets; changes in interest rates and real estate values; increases in loan defaults and charge-off rates; decreases 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; competitive pressures from other financial institutions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; the risk that the Bank may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Bank’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 Bank’s Annual Report on Form 10-K and updated by our Quarterly Reports on Form 10-Q and other filings submitted to the Federal Deposit Insurance Corporation. These statements speak only as of the date of this release and the Bank 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.NBN-FNORTHEAST BANK BALANCE SHEETS (Unaudited) (Dollars in thousands, except share and per share data) June 30, 2020 June 30, 2019 Assets Cash and due from banks$2,795 $2,482 Short-term investments 140,862 54,425 Total cash and cash equivalents 143,657 56,907 Available-for-sale debt securities, at fair value 64,918 75,774 Equity securities, at fair value 7,239 6,938 Total investment securities 72,157 82,712 Residential real estate loans held for sale 601 3,179 SBA loans held for sale 28,852 731 Total loans held for sale 29,453 3,910 Loans: Commercial real estate 679,537 668,496 Commercial and industrial 212,769 232,839 Residential real estate 77,722 71,218 Consumer 1,574 2,507 Total loans 971,602 975,060 Less: Allowance for loan losses 9,178 5,702 Loans, net 962,424 969,358 Premises and equipment, net 9,670 5,582 Real estate owned and other repossessed collateral, net 3,274 1,957 Federal Home Loan Bank stock, at cost 1,390 1,258 Intangible assets, net - 434 Loan servicing rights, net 2,113 2,851 Bank-owned life insurance 17,074 17,057 Other assets 16,423 11,832 Total assets$1,257,635 $1,153,858 Liabilities and Shareholders' Equity Deposits: Demand$94,749 $68,782 Savings and interest checking 137,824 101,061 Money market 302,343 270,835 Time 477,436 501,693 Total deposits 1,012,352 942,371 Federal Home Loan Bank advances 15,000 15,000 Paycheck Protection Program Liquidity Facility 12,440 - Subordinated debt 14,940 14,829 Lease liability 4,496 323 Other liabilities 33,668 27,755 Total liabilities 1,092,896 1,000,278 Commitments and contingencies - - Shareholders' equity Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at June 30, 2020 and 2019 - - Voting common stock, $1.00 par value, 25,000,000 shares authorized; 8,153,841 and 8,997,326 shares issued and outstanding at June 30, 2020 and 2019, respectively 8,154 8,997 Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 44,783 shares issued and outstanding at June 30, 2020 and 201945 45 Additional paid-in capital 68,302 78,095 Retained earnings 89,960 67,581 Accumulated other comprehensive loss (1,722) (1,138) Total shareholders' equity 164,739 153,580 Total liabilities and shareholders' equity$1,257,635 $1,153,858 NORTHEAST BANK STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except share and per share data) Three Months Ended June 30, Year Ended June 30, 2020 2019 2020 2019 Interest and dividend income: Interest and fees on loans$21,411 $21,371 $80,870 $76,627 Interest on available-for-sale securities 375 455 1,695 1,684 Other interest and dividend income 59 729 1,119 3,519 Total interest and dividend income 21,845 22,555 83,684 81,830 Interest expense: Deposits 3,858 4,656 16,583 16,768 Federal Home Loan Bank advances 120 120 689 479 Paycheck Protection Program Liquidity Facility 174 - 174 - Subordinated debt 282 486 1,126 2,238 Obligation under capital lease agreements 27 5 125 24 Total interest expense 4,461 5,267 18,697 19,509 Net interest and dividend income before provision for loan losses 17,384 17,288 64,987 62,321 Provision for loan losses 905 262 4,500 1,309 Net interest and dividend income after provision for loan losses 16,479 17,026 60,487 61,012 Noninterest income: Fees for other services to customers 477 529 1,619 1,769 Gain on sales of PPP loans 9,702 - 9,702 - Gain on sales of SBA loans - 227 793 2,588 Gain on sales of residential loans held for sale 37 225 600 611 Gain on sales of other loans - - - 582 Net unrealized gain on equity securities 46 76 148 151 Loss on real estate owned, other repossessed collateral and premises and equipment, net (263) (40) (15) (104) Bank-owned life insurance income 108 110 566 437 Loss on assets held for sale (337) - (337) - Correspondent fee income 20 - 20 - Other noninterest income 22 24 88 82 Total noninterest income 9,812 1,151 13,184 6,116 Noninterest expense: Salaries and employee benefits 6,704 6,333 24,976 23,323 Occupancy and equipment expense 922 958 3,588 3,650 Professional fees 608 246 1,783 1,402 Data processing fees 974 1,004 3,954 3,769 Marketing expense 98 166 337 580 Loan acquisition and collection expense 251 281 2,059 1,913 FDIC insurance premiums (credits) - 77 (15) 320 Intangible asset amortization 109 108 434 433 Reorganization expense - 8,334 - 8,695 Other noninterest expense 502 997 3,277 3,428 Total noninterest expense 10,168 18,504 40,393 47,513 Income (loss) before income tax expense 16,123 (327) 33,278 19,615 Income tax expense 4,904 276 10,541 5,731 Net income (loss)$11,219 $(603) $22,737 $13,884 Weighted-average shares outstanding: Basic 8,337,088 9,041,926 8,859,037 9,032,530 Diluted 8,405,665 9,041,926 8,991,428 9,156,233 Earnings (loss) per common share: Basic$1.35 $(0.07) $2.57 $1.54 Diluted 1.33 (0.07) 2.53 1.52 Cash dividends declared per common share$0.01 $0.01 $0.04 $0.04 NORTHEAST BANK AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (Unaudited) (Dollars in thousands) Three Months Ended June 30, 2020 2019 Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Assets: Interest-earning assets: Investment securities$ 73,100 $ 375 2.06% $ 83,372 $ 455 2.19% Loans (1) (2) (3) 1,224,878 21,411 7.03% 960,861 21,371 8.92% Federal Home Loan Bank stock 3,194 29 3.65% 1,258 20 6.38% Short-term investments (4) 126,499 30 0.10% 119,788 709 2.37% Total interest-earning assets 1,428,001 21,845 6.15% 1,165,279 22,555 7.76% Cash and due from banks 3,426 2,351 Other non-interest earning assets 37,222 32,864 Total assets$ 1,468,649 $ 1,200,494 Liabilities & Shareholders' Equity: Interest-bearing liabilities: NOW accounts$89,194 $ 124 0.56% $70,645 $ 63 0.36% Money market accounts 290,643 828 1.15% 279,307 1,124 1.61% Savings accounts 35,367 14 0.16% 35,697 14 0.16% Time deposits 518,094 2,892 2.25% 537,155 3,455 2.58% Total interest-bearing deposits 933,298 3,858 1.66% 922,804 4,656 2.02% Federal Home Loan Bank advances 49,615 120 0.97% 15,000 120 3.21% PPPLF 202,285 174 0.35% - - 0.00% Subordinated debt 14,925 282 7.60% 19,272 486 10.11% Lease obligations 4,616 27 2.35% 348 5 5.76% Total interest-bearing liabilities 1,204,739 4,461 1.49% 957,424 5,267 2.21% Non-interest bearing liabilities: Demand deposits and escrow accounts 95,062 80,538 Other liabilities 10,197 9,534 Total liabilities 1,309,998 1,047,496 Shareholders' equity 158,651 152,998 Total liabilities and shareholders' equity$ 1,468,649 $ 1,200,494 Net interest income $17,384 $17,288 Interest rate spread 4.66% 5.55% Net interest margin (5) 4.90% 5.95% (1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory 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 BANK AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (Unaudited) (Dollars in thousands) Year Ended June 30, 2020 2019 Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Assets: Interest-earning assets: Investment securities$78,656 $ 1,695 2.15% $85,232 $ 1,684 1.98% Loans (1) (2) (3) 1,029,644 80,870 7.85% 924,484 76,627 8.29% Federal Home Loan Bank stock 2,204 94 4.26% 1,475 95 6.44% Short-term investments (4) 94,586 1,025 1.08% 153,609 3,424 2.23% Total interest-earning assets 1,205,090 83,684 6.94% 1,164,800 81,830 7.03% Cash and due from banks 2,971 2,542 Other non-interest earning assets 38,363 30,968 Total assets$ 1,246,424 $ 1,198,310 Liabilities & Shareholders' Equity: Interest-bearing liabilities: NOW accounts$75,984 $364 0.48% $70,822 $246 0.35% Money market accounts 276,264 4,096 1.48% 344,631 5,383 1.56% Savings accounts 34,517 57 0.17% 35,619 56 0.16% Time deposits 496,531 12,066 2.43% 471,777 11,083 2.35% Total interest-bearing deposits 883,296 16,583 1.88% 922,849 16,768 1.82% Federal Home Loan Bank advances 34,918 689 1.97% 15,000 479 3.19% PPPLF 50,295 174 0.35% Subordinated debt 14,883 1,126 7.57% 22,885 2,238 9.78% Lease obligations 5,169 125 2.42% 455 24 5.27% Total interest-bearing liabilities 988,561 18,697 1.89% 961,189 19,509 2.03% Non-interest bearing liabilities: Demand deposits and escrow accounts 88,805 80,848 Other liabilities 9,097 8,814 Total liabilities 1,086,463 1,050,851 Shareholders' equity 159,961 147,459 Total liabilities and shareholders' equity$ 1,246,424 $ 1,198,310 Net interest income $ 64,987 $ 62,321 Interest rate spread 5.05% 5.00% Net interest margin (5) 5.39% 5.35% (1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory 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 BANK SELECTED FINANCIAL HIGHLIGHTS AND OTHER DATA (Unaudited) (Dollars in thousands, except share and per share data) Three Months Ended June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 Net interest income$ 17,384 $ 16,321 $ 15,545 $ 15,737 $ 17,288 Provision (credit) for loan losses 905 3,489 243 (136) 262 Noninterest income 9,812 860 1,337 1,176 1,151 Noninterest expense 10,168 10,081 9,789 10,354 18,504 Net income (loss) 11,219 1,875 4,867 4,776 (603) Weighted-average common shares outstanding: Basic 8,337,088 9,004,819 9,048,171 9,043,761 9,041,926 Diluted 8,405,665 9,128,651 9,223,137 9,211,874 9,041,926 Earnings (loss) per common share: Basic$ 1.35 $ 0.21 $ 0.54 $ 0.53 $ (0.07) Diluted 1.33 0.21 0.53 0.52 (0.07) Operating earnings per common share (5): Basic$ 1.35 $ 0.21 $ 0.54 $ 0.53 $ 0.60 Diluted 1.33 0.21 0.53 0.52 0.59 Dividends declared per common share$ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 Return (loss) on average assets 3.07% 0.61% 1.68% 1.68% (0.20%) Return (loss) on average equity 28.44% 4.57% 12.09% 12.18% (1.58%) Net interest rate spread (1) 4.66% 5.14% 5.19% 5.31% 5.55% Net interest margin (2) 4.90% 5.50% 5.59% 5.72% 5.95% Net interest margin, excluding PPP (3) 5.34% 5.50% 5.59% 5.72% 5.95% Efficiency ratio (non-GAAP) (4) 37.39% 58.68% 57.98% 61.22% 100.35% Noninterest expense to average total assets 2.78% 3.28% 3.38% 3.64% 6.18% Average interest-earning assets to average interest-bearing liabilities 118.53% 122.88% 123.50% 123.81% 121.71% Operating return on average assets (non-GAAP) (5) 3.07% 0.61% 1.68% 1.68% 1.81% Operating return on average equity (non-GAAP) (5) 28.44% 4.57% 12.09% 12.18% 14.18% Operating efficiency ratio (non-GAAP) (4) (5) 37.39% 58.68% 57.98% 61.22% 55.15% Operating noninterest expense to average total assets (non- GAAP) (5) 2.78% 3.28% 3.38% 3.64% 3.40% As of: June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 Nonperforming loans: Originated portfolio: Residential real estate$ 832 $ 1,187 $ 1,586 $ 1,515 $ 2,772 Commercial real estate 6,861 7,439 8,032 4,530 3,892 Commercial and industrial 2,058 2,226 622 87 1,284 Consumer 29 40 59 136 148 Total originated portfolio 9,780 10,892 10,299 6,268 8,096 Total purchased portfolio 11,325 13,485 8,489 7,834 6,671 Total nonperforming loans 21,105 24,377 18,788 14,102 14,767 Real estate owned and other repossessed collateral, net 3,274 3,110 2,505 1,936 1,957 Total nonperforming assets$ 24,379 $ 27,487 $ 21,293 $ 16,038 $ 16,724 Past due loans to total loans 1.69% 3.52% 2.84% 1.50% 1.50% Nonperforming loans to total loans 2.17% 2.36% 1.88% 1.51% 1.51% Nonperforming assets to total assets 1.94% 2.23% 1.76% 1.43% 1.45% Allowance for loan losses to total loans 0.94% 0.85% 0.54% 0.57% 0.58% Allowance for loan losses to nonperforming loans 43.49% 36.14% 28.77% 37.44% 38.61% Commercial real estate loans to total capital (6) 281.32% 304.40% 292.58% 262.92% 282.05% Net loans to core deposits (7) (10) 96.38% 102.04% 106.52% 102.59% 103.33% Purchased loans to total loans, including held for sale (10) 39.77% 38.28% 36.65% 35.50% 33.37% Equity to total assets 13.10% 12.95% 13.53% 14.08% 13.31% Common equity tier 1 capital ratio 17.13% 15.71% 16.48% 16.92% 15.89% Total capital ratio 19.61% 18.03% 18.52% 19.07% 18.01% Tier 1 leverage capital ratio 13.36% 13.04% 14.26% 14.06% 12.86% Total shareholders' equity$ 164,739 $ 159,525 $ 163,400 $ 158,101 $ 153,580 Less: Preferred stock - - - - - Common shareholders' equity 164,739 159,525 163,400 158,101 153,580 Less: Intangible assets (8) (2,113) (2,116) (2,641) (2,940) (3,285) Tangible common shareholders' equity (non-GAAP)$ 162,626 $ 157,409 $ 160,759 $ 155,161 $ 150,295 Common shares outstanding 8,198,624 8,633,772 9,052,013 9,038,912 9,042,109 Book value per common share$ 20.09 $ 18.48 $ 18.05 $ 17.49 $ 16.98 Tangible book value per share (non-GAAP) (9) 19.84 18.23 17.76 17.17 16.62 (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) Net interest margin excluding PPP removes the effects of the following: PPP loan interest income of $1.6 million and PPPLF interest expense of $174 thousand for both the three months and year ended June 30, 2020, as well as PPP loan average balances of $223.8 million and $55.6 million for the three months ended June 30, 2020 and the year ended June 30, 2020, respectively. (4) The efficiency ratio represents noninterest expense divided by the sum of net interest income (before the loan loss provision) plus noninterest income. (5) Operating earnings per common share, operating return on average assets, operating return on average equity, operating efficiency ratio, and operating noninterest expense to average total assets utilize net operating earnings (non-GAAP). Net operating earnings is calculated as net loss of $603 thousand, less non-recurring reorganization expense, net of tax, of $6.0 million, for net operating earnings of $5.4 million for the quarter ended June 30, 2019. (6) 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. (7) Core deposits include all non-maturity deposits and maturity deposits less than $250 thousand. Loans include loans held for sale. (8) Includes the core deposit intangible asset and loan servicing rights asset. (9) Tangible book value per share represents total shareholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding. (10) Net loans and total loans, including loans held for sale, exclude PPP loans held for sale. For More Information: Jean-Pierre Lapointe, Chief Financial Officer Northeast Bank, 27 Pearl Street, Portland, ME 04101 207.786.3245 ext. 3220 www.northeastbank.com
- GlobeNewswire
Northeast Bank Announces Dates for Fiscal 2020 Fourth Quarter Earnings Results and Conference Call
PORTLAND, Maine, July 24, 2020 (GLOBE NEWSWIRE) -- Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based full-service bank, announced today it will release its fiscal 2020 fourth quarter earnings results on Wednesday, July 29, 2020. Following the release, the Bank will host a conference call with a simultaneous webcast at 10:00 a.m. EDT on Thursday, July 30, 2020. The conference call will be hosted by Rick Wayne, President and Chief Executive Officer, JP Lapointe, Chief Financial Officer, and Pat Dignan, Executive Vice President and Chief Credit Officer. Investors can access the call by dialing 877.878.2762 and providing the following conference ID: 2496196. The call will be available via live webcast, which can be viewed by accessing the Bank’s website at www.northeastbank.com and clicking on the Investor Relations section. To listen to the webcast, attendees are encouraged to visit the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. Please note there is 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 BankNortheast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We offer personal and business banking services to the Maine market via nine branches. Our Loan Acquisition and Servicing Group purchases and originates commercial loans on a nationwide basis. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found at www.northeastbank.com.NBN-FFor More Information: Jean-Pierre Lapointe, Chief Financial Officer Northeast Bank 27 Pearl Street, Portland, ME 04101 207.786.3245 ext. 3220 www.northeastbank.com
- GlobeNewswire
Northeast Bank Announces Share Repurchase Program
PORTLAND, Maine, July 21, 2020 -- Northeast Bank (the “Bank”) (NASDAQ: NBN) announced today that its Board of Directors has approved a share repurchase program to purchase up.
