Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based
full-service financial institution, today reported a net loss of
$603 thousand, or ($0.07) per diluted common share, for the quarter
ended June 30, 2019, compared to net income of $4.3 million, or
$0.48 per diluted common share, for the quarter ended June 30,
2018. Net income for the year ended June 30, 2019 was $13.9
million, or $1.52 per diluted common share, compared to $16.2
million, or $1.77 per diluted common share, for the year ended June
30, 2018.
The current quarter and year-end results included $6.0 million
and $6.4 million, respectively, of non-recurring expenses (after
tax) related to the Bank’s recently completed corporate
reorganization. Excluding these non-recurring expenses, the Bank
recorded net operating earnings (non-GAAP) 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.”
Reported net income, non-recurring expenses, and net operating
earnings for the quarters and years ended June 30, 2019 and 2018,
respectively, are set forth below:
|
|
|
Reconciliation of Net Income (Loss) Available to Common
Shareholders (GAAP) to Net Operating Earnings (non-GAAP)1 |
|
Three Months Ended June 30, |
|
Year Ended June 30, |
|
2019 |
|
|
2018 |
|
2019 |
|
2018 |
|
|
|
(Dollars in thousands, except share and per share data) |
Net income (loss) (GAAP) |
$ |
(603 |
) |
|
$ |
4,344 |
|
$ |
13,884 |
|
$ |
16,166 |
Items excluded from net operating earnings, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
Write-off of fair value adjustment on trust preferred |
|
|
|
|
|
|
|
|
|
|
|
securities |
|
5,057 |
|
|
|
- |
|
|
5,057 |
|
|
- |
Termination of interest rate swaps and caps |
|
793 |
|
|
|
- |
|
|
793 |
|
|
- |
Related legal and professional fees |
|
162 |
|
|
|
- |
|
|
523 |
|
|
- |
Total after-tax items |
|
6,012 |
|
|
|
- |
|
|
6,373 |
|
|
- |
Net operating earnings
(non-GAAP) |
$ |
5,409 |
|
|
$ |
4,344 |
|
$ |
20,257 |
|
$ |
16,166 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding -diluted |
|
9,041,926 |
|
|
|
9,116,157 |
|
|
9,156,233 |
|
|
9,129,152 |
|
|
|
|
|
|
|
|
|
|
|
|
Reported diluted earnings
(loss) per share (GAAP) |
$ |
(0.07 |
) |
|
$ |
0.48 |
|
$ |
1.52 |
|
$ |
1.77 |
Items excluded from net operating earnings2 |
|
0.66 |
|
|
|
- |
|
|
0.68 |
|
|
- |
Net operating earnings per
share (non-GAAP) -diluted2 |
$ |
0.59 |
|
|
$ |
0.48 |
|
$ |
2.20 |
|
$ |
1.77 |
|
|
|
|
|
|
|
|
|
|
|
|
1 Management
believes operating earnings, which exclude non-recurring items
related to the corporate reorganization, provide a more meaningful
representation of the Bank's performance.2 The calculation of net
operating earnings per share (non-GAAP) -diluted includes dilutive
shares of 171,054 and 166,466 for the three months and year ended
June 30, 2019, since net operating earnings are in a net income
position for the three months ended June 30, 2019. |
|
The Board of Directors declared a cash dividend of $0.01 per
share, payable on August 30, 2019, to shareholders of record as of
August 16, 2019.
“The growing value of our streamlined business strategy is
reflected in this year’s results, in which we achieved 19.1% growth
in our LASG portfolio, and 11.8% growth in our total loan
portfolio,” said Richard Wayne, Chief Executive Officer. “For the
fourth quarter, our Loan Acquisition and Servicing Group originated
$51.8 million of loans and purchased loans with a recorded
investment of $47.1 million. Removing the effects of the corporate
reorganization, which we consider to be non-recurring, our
quarterly activity helped us achieve net operating earnings per
share of $0.59, an operating return on average equity of 14.2%, an
operating return on average assets of 1.8%, and an operating
efficiency ratio of 55.2%.”
As of June 30, 2019, total assets were $1.2 billion, a decrease
of $4.1 million, or 0.4%, from total assets of $1.2 billion as of
June 30, 2018. The principal components of the changes in the
balance sheet follow:
- The following table highlights the changes in the loan
portfolio for the three months and year ended June 30, 2019:
|
|
|
|
June 30, 2019Balance |
|
March 31, 2019 Balance |
|
Change ($) |
|
Change (%) |
|
|
|
(Dollars in thousands) |
LASG Purchased |
$ |
326,640 |
|
$ |
320,326 |
|
$ |
6,314 |
|
|
1.97 |
% |
LASG Originated |
|
493,413 |
|
|
478,020 |
|
|
15,393 |
|
|
3.22 |
% |
SBA |
|
63,053 |
|
|
63,653 |
|
|
(600 |
) |
|
(0.94 |
%) |
Community Banking |
|
91,954 |
|
|
99,654 |
|
|
(7,700 |
) |
|
(7.73 |
%) |
Total |
$ |
975,060 |
|
$ |
961,653 |
|
$ |
13,407 |
|
|
1.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019Balance |
|
March 31, 2019 Balance |
|
Change ($) |
|
Change (%) |
|
|
|
(Dollars in
thousands) |
LASG Purchased |
$ |
326,640 |
|
$ |
290,972 |
|
$ |
35,668 |
|
|
12.26 |
% |
LASG Originated |
|
493,413 |
|
|
397,363 |
|
|
96,050 |
|
|
24.17 |
% |
SBA |
|
63,053 |
|
|
60,156 |
|
|
2,897 |
|
|
4.82 |
% |
Community Banking |
|
91,954 |
|
|
123,311 |
|
|
(31,357 |
) |
|
(25.43 |
%) |
Total |
$ |
975,060 |
|
$ |
871,802 |
|
$ |
103,258 |
|
|
11.84 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans generated by the Bank's Loan Acquisition and Servicing
Group ("LASG") for the quarter ended June 30, 2019 totaled $98.9
million, which consisted of $47.1 million of purchased loans, at an
average price of 94.3% of unpaid principal balance, and $51.8
million of originated loans. The Bank's Small Business
Administration ("SBA") Division closed $8.1 million of new loans
during the quarter ended June 30, 2019, of which $7.7 million was
funded. In addition, the Bank sold $6.6 million of the guaranteed
portion of SBA loans in the secondary market, of which $1.2 million
were originated in the current quarter and $5.4 million were
originated in prior quarters. Residential loan production sold in
the secondary market totaled $12.5 million for the quarter.
An overview of the Bank’s LASG portfolio
follows:
|
LASG Portfolio |
|
Three Months Ended June 30, |
|
2019 |
|
|
2018 |
|
|
Purchased |
|
Originated |
|
Total LASG |
|
Purchased |
|
Originated |
|
Total LASG |
|
|
|
(Dollars in thousands) |
Loans purchased or originated
during the period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid principal balance |
$ |
49,948 |
|
|
$ |
51,830 |
|
|
$ |
101,778 |
|
|
$ |
56,233 |
|
|
$ |
66,588 |
|
|
$ |
122,821 |
|
Net investment basis |
|
47,107 |
|
|
|
51,830 |
|
|
|
98,937 |
|
|
|
52,637 |
|
|
|
66,588 |
|
|
|
119,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan returns during the
period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield |
|
12.27 |
% |
|
|
7.75 |
% |
|
|
9.53 |
% |
|
|
10.87 |
% |
|
|
7.45 |
% |
|
|
8.83 |
% |
Total Return on Purchased Loans (1) |
|
12.27 |
% |
|
|
7.75 |
% |
|
|
9.53 |
% |
|
|
11.49 |
% |
|
|
7.45 |
% |
|
|
9.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30, |
|
2019 |
|
|
2018 |
|
|
Purchased |
|
Originated |
|
Total LASG |
|
Purchased |
|
Originated |
|
Total LASG |
|
|
|
(Dollars in thousands) |
Loans purchased or originated
during the period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid principal balance |
$ |
144,372 |
|
|
$ |
271,179 |
|
|
$ |
415,551 |
|
|
$ |
137,249 |
|
|
$ |
224,546 |
|
|
$ |
361,795 |
|
Net investment basis |
|
135,848 |
|
|
|
271,179 |
|
|
|
407,027 |
|
|
|
124,111 |
|
|
|
224,546 |
|
|
|
348,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan returns during the
period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield |
|
10.38 |
% |
|
|
7.67 |
% |
|
|
8.80 |
% |
|
|
11.35 |
% |
|
|
6.80 |
% |
|
|
8.66 |
% |
Total Return on Purchased Loans (1) |
|
10.57 |
% |
|
|
7.67 |
% |
|
|
8.88 |
% |
|
|
11.73 |
% |
|
|
6.80 |
% |
|
|
8.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans as of period
end: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid principal balance |
$ |
360,472 |
|
|
$ |
493,413 |
|
|
$ |
853,885 |
|
|
$ |
326,855 |
|
|
$ |
397,363 |
|
|
$ |
724,218 |
|
Net investment basis |
|
326,640 |
|
|
|
493,413 |
|
|
|
820,053 |
|
|
|
290,972 |
|
|
|
397,363 |
|
|
|
688,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.” |
- Short-term investments decreased by $99.1 million, or
64.5%, from June 30, 2018, primarily due to the payoff of trust
preferred securities and the corporate reorganization, which allows
the Bank to carry lower levels of excess cash due to the release of
previous funding commitments made to the Board of Governors of the
Federal Reserve System. The Bank reinvested the short-term
investments into funding loan growth.
- Deposits decreased by $12.6 million, or 1.3%, from June 30,
2018, attributable primarily to decreases in money market accounts
of $150.1 million, or 35.7%, and savings and checking accounts of
$8.6 million, or 7.8%, partially offset by an increase in time
deposits of $149.5 million, or 42.5%.
- Subordinated debt decreased by $9.1 million, or 38.1%, from
June 30, 2018, primarily attributable to the redemption of trust
preferred securities held by Northeast Bancorp immediately prior to
the corporate reorganization.
- Shareholders’ equity increased by $15.2 million, or 11.0%, from
June 30, 2018, primarily due to net income of $13.9 million for the
year, as well as $1.4 million of stock-based compensation for the
year.
Net income decreased by $4.9 million to a $603 thousand net loss
for the quarter ended June 30, 2019, compared to net income of $4.3
million for the quarter ended June 30, 2018. Net operating earnings
increased by $1.1 million to $5.4 million for the quarter ended
June 30, 2019, compared to net operating earnings of $4.3 million
for the quarter ended June 30, 2018.
- Net interest and dividend income before provision for loan
losses increased by $2.9 million to $17.3 million for the quarter
ended June 30, 2019, compared to $14.4 million for the quarter
ended June 30, 2018. The increase was primarily due to higher
transactional income in the purchased portfolio, and higher average
balances and yields in the loan portfolio. These increases were
partially offset by higher funding costs and higher average deposit
balances.
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, |
|
2019 |
|
|
2018 |
|
|
Average |
|
Interest |
|
|
|
Average |
|
Interest |
|
|
|
Balance (1) |
|
Income |
|
Yield |
|
Balance (1) |
|
Income |
|
Yield |
|
|
|
(Dollars in thousands) |
Community Banking |
$ |
99,007 |
|
$ |
1,272 |
|
5.15 |
% |
|
$ |
128,296 |
|
$ |
1,630 |
|
5.10 |
% |
SBA |
|
66,126 |
|
|
1,194 |
|
7.24 |
% |
|
|
56,088 |
|
|
1,116 |
|
7.98 |
% |
LASG: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated |
|
482,213 |
|
|
9,317 |
|
7.75 |
% |
|
|
381,783 |
|
|
7,088 |
|
7.45 |
% |
Purchased |
|
313,515 |
|
|
9,588 |
|
12.27 |
% |
|
|
259,119 |
|
|
7,021 |
|
10.87 |
% |
Total LASG |
|
795,728 |
|
|
18,905 |
|
9.53 |
% |
|
|
640,902 |
|
|
14,109 |
|
8.83 |
% |
Total |
$ |
960,861 |
|
$ |
21,371 |
|
8.92 |
% |
|
$ |
825,286 |
|
$ |
16,855 |
|
8.19 |
% |
|
|
|
|
|
Year Ended June 30, |
|
2019 |
|
|
2018 |
|
|
Average |
|
Interest |
|
|
|
Average |
|
Interest |
|
|
|
Balance (1) |
|
Income |
|
Yield |
|
Balance (1) |
|
Income |
|
Yield |
|
|
|
(Dollars in thousands) |
Community
Banking |
$ |
107,685 |
|
$ |
5,590 |
|
5.19 |
% |
|
$ |
139,239 |
|
$ |
6,871 |
|
4.93 |
% |
SBA |
|
70,016 |
|
|
5,285 |
|
7.55 |
% |
|
|
53,030 |
|
|
3,888 |
|
7.33 |
% |
LASG: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated |
|
434,570 |
|
|
33,348 |
|
7.67 |
% |
|
|
350,427 |
|
|
23,834 |
|
6.80 |
% |
Purchased |
|
312,213 |
|
|
32,404 |
|
10.38 |
% |
|
|
242,652 |
|
|
27,553 |
|
11.35 |
% |
Total LASG |
|
746,783 |
|
|
65,752 |
|
8.80 |
% |
|
|
593,079 |
|
|
51,387 |
|
8.66 |
% |
Total |
$ |
924,484 |
|
$ |
76,627 |
|
8.29 |
% |
|
$ |
785,348 |
|
$ |
62,146 |
|
7.91 |
% |
|
|
(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, 2018, transactional
income for the quarter ended June 30, 2019 increased by $1.2
million, while regularly scheduled interest and accretion increased
by $956 thousand due to the increase in average balances. The total
return on purchased loans for the quarter ended June 30,
2019 was 12.3%. When compared to the year ended June 30, 2018,
transactional income for the year ended June 30, 2019 decreased by
$582 thousand, while regularly scheduled interest and accretion
increased by $5.1 million due to the increase in average balances.
Total return for the year ended June 30, 2019 was 10.6%. The
following table details the total return on purchased loans:
|
Total Return on Purchased Loans |
|
Three Months Ended June 30, |
|
2019 |
|
|
2018 |
|
|
Income |
|
Return (1) |
|
Income |
|
Return (1) |
|
|
|
(Dollars in thousands) |
Regularly scheduled interest and accretion |
$ |
5,999 |
|
7.67 |
% |
|
$ |
5,043 |
|
7.81 |
% |
Transactional income: |
|
|
|
|
|
|
|
|
|
Gain on loan sales |
|
- |
|
0.00 |
% |
|
|
402 |
|
0.62 |
% |
Gain on sale of real estate owned |
|
- |
|
0.00 |
% |
|
|
- |
|
0.00 |
% |
Other noninterest income |
|
- |
|
0.00 |
% |
|
|
- |
|
0.00 |
% |
Accelerated accretion and loan fees |
|
3,589 |
|
4.60 |
% |
|
|
1,978 |
|
3.06 |
% |
Total transactional income |
|
3,589 |
|
4.60 |
% |
|
|
2,380 |
|
3.68 |
% |
Total |
$ |
9,588 |
|
12.27 |
% |
|
$ |
7,423 |
|
11.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30, |
|
2019 |
|
|
2018 |
|
|
Income |
|
Return (1) |
|
Income |
|
Return (1) |
|
|
|
(Dollars in thousands) |
Regularly scheduled interest and accretion |
$ |
23,849 |
|
7.64 |
% |
|
$ |
18,752 |
|
7.73 |
% |
Transactional income: |
|
|
|
|
|
|
|
|
|
Gain on loan sales |
|
582 |
|
0.19 |
% |
|
|
918 |
|
0.38 |
% |
Gain on sale of real estate owned |
|
- |
|
0.00 |
% |
|
|
- |
|
0.00 |
% |
Other noninterest income |
|
- |
|
0.00 |
% |
|
|
- |
|
0.00 |
% |
Accelerated accretion and loan fees |
|
8,555 |
|
2.74 |
% |
|
|
8,801 |
|
3.62 |
% |
Total transactional income |
|
9,137 |
|
2.93 |
% |
|
|
9,719 |
|
4.00 |
% |
Total |
$ |
32,986 |
|
10.57 |
% |
|
$ |
28,471 |
|
11.73 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(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
does not include the effect of purchased loan charge-offs or
recoveries in the quarter. Total return is considered a non-GAAP
financial measure. |
|
2. Noninterest income decreased by $808 thousand for the quarter
ended June 30, 2019, compared to the quarter ended June 30, 2018,
principally due to the following:
- A decrease in gain on sale of SBA loans of $806 thousand, due
to lower volume of SBA loans sold in the quarter; and
- A decrease in gain on sale of other loans of $402 thousand, due
to no loans sold in the current quarter as compared to the sale of
two LASG purchased loans in the quarter ended June 30, 2018;
partially offset by,
- An increase in fees for other services to customers of $143
thousand, due to higher commercial loan servicing fees; and
- A decrease in loss recognized on real estate owned and other
repossessed collateral of $98 thousand.
3. Noninterest expense increased by $9.0 million for the quarter
ended June 30, 2019 compared to the quarter ended June 30, 2018,
primarily due to the following:
- An increase in pre-tax reorganization expense of $8.3 million,
which included the write-off of the fair value mark on trust
preferred securities of $7.1 million, the loss associated with the
termination of related interest rate swaps and caps of $1.1 million
and the related legal and other professional costs of $183
thousand;
- An increase in salaries and employee benefits of $524 thousand,
primarily due to an increase in incentive compensation; and
- An increase in data processing fees of $403 thousand, primarily
due to increased IT outsourcing costs; partially offset by,
- A decrease in professional fees of $212 thousand, primarily due
to a decrease in accounting and audit, legal, and other
professional fees for the quarter, unrelated to the corporate
reorganization; and
- A decrease in occupancy and equipment of $208 thousand,
primarily due to a decrease in equipment repairs and maintenance
expense.
4. Income tax expense decreased by $2.0 million to $276
thousand, for the quarter ended June 30, 2019, compared to $2.3
million for the quarter ended June 30, 2018. The decrease in
expense was primarily due to the following:
- 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; offset by,
- A decrease in excess tax benefits recognized in the current
period of $110 thousand.Excluding the effects of the corporate
reorganization, the effective tax rate for the quarter ended June
30, 2019 was 32.5%, compared to the effective tax rate for the
quarter ended June 30, 2018 of 34.5%. The decrease was related to
the decrease in the statutory federal income tax rate for the year
ended June 30, 2019 compared to the statutory federal income tax
rate for the year ended June 30, 2018, offset by changes in state
apportionment and permanent items.
As of June 30, 2019, nonperforming assets totaled $16.7 million,
or 1.45% of total assets, as compared to $14.2 million, or 1.23% of
total assets, as of June 30, 2018. The increase was primarily due
to the addition of an originated relationship of $1.0 million,
which was placed on nonaccrual during the quarter ended June 30,
2019.
As of June 30, 2019, past due loans totaled $14.6 million, or
1.50% of total loans, as compared to past due loans totaling $7.7
million, or 0.89% of total loans as of June 30, 2018. The increase
was primarily due to four originated relationships totaling $4.4
million and four purchased loan relationships totaling $1.8 million
that were past due as of June 30, 2019.
As of June 30, 2019, the Bank’s Tier 1 leverage capital ratio
was 12.9%, compared to 13.9% at June 30, 2018, and the Total
capital ratio was 18.0% at June 30, 2019, as compared to 18.6% at
June 30, 2018. Capital ratios were affected by the capital used in
the corporate reorganization to redeem the trust preferred debt and
the termination of related interest rate swaps and caps , as well
as the assumption of the subordinated debt from the Company to the
Bank, offset by earnings for the year.
Investor Call InformationRichard Wayne, Chief
Executive Officer of Northeast Bank, and Jean-Pierre Lapointe,
Chief Financial Officer of Northeast Bank, will host a
conference call to discuss fourth quarter earnings and
business outlook at 10:00 a.m. Eastern Time on Wednesday, July
31st. Investors can access the call by dialing
877.878.2762 and entering the following passcode: 8699267. 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 BankNortheast Bank (NASDAQ:
NBN) is a full-service bank headquartered in Lewiston, Maine. We
offer personal and business banking services to the Maine market
via ten branches. Our Loan Acquisition and Servicing Group
purchases and originates commercial loans on a nationwide basis and
our SBA Division supports the needs of growing businesses
nationally. 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 MeasuresIn 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 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, and efficiency ratio. 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, 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
Bank 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; operational risks including, but
not limited to, cybersecurity, fraud and natural disasters; 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 Securities and Exchange Commission
by Northeast Bancorp prior to completion of the corporate
reorganization and submitted to the Federal Deposit Insurance
Corporation by the Bank after completion of the corporate
reorganization. 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-F
NORTHEAST
BANK |
BALANCE
SHEETS |
(Unaudited) |
(Dollars in
thousands, except share and per share data) |
|
June 30, 2019 |
|
June 30, 2018 |
Assets |
|
|
|
|
|
Cash and due from banks |
$ |
2,482 |
|
|
$ |
3,889 |
|
Short-term investments |
|
54,425 |
|
|
|
153,513 |
|
Total cash and cash equivalents |
|
56,907 |
|
|
|
157,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities,
at fair value |
|
75,774 |
|
|
|
81,068 |
|
Equity securities, at fair
value |
|
6,938 |
|
|
|
6,619 |
|
Total investment securities |
|
82,712 |
|
|
|
87,687 |
|
|
|
|
|
|
|
Residential real estate loans
held for sale |
|
3,179 |
|
|
|
3,405 |
|
SBA loans held for sale |
|
731 |
|
|
|
3,750 |
|
Total loans held for sale |
|
3,910 |
|
|
|
7,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
|
|
|
|
Commercial real estate |
|
668,496 |
|
|
|
579,450 |
|
Commercial and industrial |
|
232,839 |
|
|
|
188,852 |
|
Residential real estate |
|
71,218 |
|
|
|
100,256 |
|
Consumer |
|
2,507 |
|
|
|
3,244 |
|
Total loans |
|
975,060 |
|
|
|
871,802 |
|
Less: Allowance for loan losses |
|
5,702 |
|
|
|
4,807 |
|
Loans, net |
|
969,358 |
|
|
|
866,995 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and equipment,
net |
|
5,582 |
|
|
|
6,591 |
|
Real estate owned and other
repossessed collateral, net |
|
1,957 |
|
|
|
2,233 |
|
Federal Home Loan Bank stock,
at cost |
|
1,258 |
|
|
|
1,652 |
|
Intangible assets, net |
|
434 |
|
|
|
867 |
|
Loan servicing rights,
net |
|
2,851 |
|
|
|
2,970 |
|
Bank-owned life insurance |
|
17,057 |
|
|
|
16,620 |
|
Other assets |
|
11,832 |
|
|
|
7,564 |
|
Total assets |
$ |
1,153,858 |
|
|
$ |
1,157,736 |
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
Deposits |
|
|
|
|
|
Demand |
$ |
68,782 |
|
|
$ |
72,272 |
|
Savings and interest checking |
|
101,061 |
|
|
|
109,637 |
|
Money market |
|
270,835 |
|
|
|
420,886 |
|
Time |
|
501,693 |
|
|
|
352,145 |
|
Total deposits |
|
942,371 |
|
|
|
954,940 |
|
|
|
|
|
|
|
Federal Home Loan Bank
advances |
|
15,000 |
|
|
|
15,000 |
|
Subordinated debt |
|
14,829 |
|
|
|
23,958 |
|
Capital lease obligation |
|
323 |
|
|
|
605 |
|
Other liabilities |
|
27,755 |
|
|
|
24,803 |
|
Total liabilities |
|
1,000,278 |
|
|
|
1,019,306 |
|
|
|
|
|
|
|
Commitments and
contingencies |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
Preferred stock, $1.00 par
value, 1,000,000 shares authorized; no shares |
|
|
|
|
issued and outstanding
at June 30, 2019 and 2018 |
|
- |
|
|
|
- |
|
Voting common stock, $1.00 par
value, 25,000,000 shares authorized; |
|
|
|
|
|
8,997,326 and 8,056,527 shares issued and outstanding at |
|
|
|
|
June 30, 2019 and 2018,
respectively |
|
8,997 |
|
|
|
8,057 |
|
Non-voting common stock, $1.00
par value, 3,000,000 shares authorized; |
|
|
|
|
|
44,783 and
882,314 shares issued and outstanding at June 30, 2019
and 2018, respectively |
45 |
|
|
882 |
|
Additional paid-in
capital |
|
78,095 |
|
|
|
77,016 |
|
Retained earnings |
|
67,581 |
|
|
|
54,236 |
|
Accumulated other
comprehensive loss |
|
(1,138 |
) |
|
|
(1,761 |
) |
Total shareholders' equity |
|
153,580 |
|
|
|
138,430 |
|
Total liabilities and shareholders' equity |
$ |
1,153,858 |
|
|
$ |
1,157,736 |
|
|
NORTHEAST
BANK |
STATEMENTS OF OPERATIONS |
(Unaudited) |
(Dollars in
thousands, except share and per share data) |
|
Three Months Ended June 30, |
|
Year Ended June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Interest and
dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
$ |
21,371 |
|
|
$ |
16,855 |
|
|
$ |
76,627 |
|
|
$ |
62,146 |
|
|
Interest on available-for-sale securities |
455 |
|
|
|
298 |
|
|
|
1,684 |
|
|
|
1,111 |
|
|
Other interest and dividend income |
|
729 |
|
|
|
819 |
|
|
|
3,519 |
|
|
|
2,636 |
|
|
Total interest and dividend income |
|
22,555 |
|
|
|
17,972 |
|
|
|
81,830 |
|
|
|
65,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
Deposits |
|
4,656 |
|
|
|
2,896 |
|
|
|
16,768 |
|
|
|
9,897 |
|
|
Federal Home Loan Bank advances |
120 |
|
|
|
109 |
|
|
|
479 |
|
|
|
547 |
|
|
Subordinated debt |
486 |
|
|
|
552 |
|
|
|
2,238 |
|
|
|
2,102 |
|
|
Obligation under capital lease agreements |
|
5 |
|
|
|
7 |
|
|
|
24 |
|
|
|
38 |
|
|
Total interest expense |
|
5,267 |
|
|
|
3,564 |
|
|
|
19,509 |
|
|
|
12,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest and
dividend income before provision for loan losses |
17,288 |
|
|
|
14,408 |
|
|
|
62,321 |
|
|
|
53,309 |
|
|
Provision for loan losses |
|
262 |
|
|
|
254 |
|
|
|
1,309 |
|
|
|
1,410 |
|
|
Net interest and dividend
income after provision for loan losses |
|
17,026 |
|
|
|
14,154 |
|
|
|
61,012 |
|
|
|
51,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
Fees for other services to customers |
529 |
|
|
|
386 |
|
|
|
1,769 |
|
|
|
1,822 |
|
|
Gain on sales of SBA loans |
227 |
|
|
|
1,033 |
|
|
|
2,588 |
|
|
|
2,955 |
|
|
Gain on sales of residential loans held for sale |
225 |
|
|
|
159 |
|
|
|
611 |
|
|
|
931 |
|
|
Gain on sales of other loans |
- |
|
|
|
402 |
|
|
|
582 |
|
|
|
918 |
|
|
Net unrealized gain on equity securities |
76 |
|
|
|
- |
|
|
|
151 |
|
|
|
- |
|
|
Loss on real estate owned, other repossessed collateral and
premises and equipment, net |
|
(40 |
|
|
|
(138 |
|
|
|
(104 |
|
|
|
(123 |
|
|
and premises and equipment, net |
) |
) |
) |
) |
Bank-owned life insurance income |
110 |
|
|
|
109 |
|
|
|
437 |
|
|
|
441 |
|
|
Other noninterest income |
|
24 |
|
|
|
8 |
|
|
|
82 |
|
|
|
84 |
|
|
Total noninterest income |
|
1,151 |
|
|
|
1,959 |
|
|
|
6,116 |
|
|
|
7,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
6,333 |
|
|
|
5,809 |
|
|
|
23,323 |
|
|
|
21,565 |
|
|
Occupancy and equipment expense |
958 |
|
|
|
1,166 |
|
|
|
3,650 |
|
|
|
4,585 |
|
|
Professional fees |
246 |
|
|
|
458 |
|
|
|
1,402 |
|
|
|
1,749 |
|
|
Data processing fees |
1,004 |
|
|
|
601 |
|
|
|
3,769 |
|
|
|
2,447 |
|
|
Marketing expense |
166 |
|
|
|
143 |
|
|
|
580 |
|
|
|
472 |
|
|
Loan acquisition and collection expense |
281 |
|
|
|
356 |
|
|
|
1,913 |
|
|
|
1,354 |
|
|
FDIC insurance premiums |
77 |
|
|
|
80 |
|
|
|
320 |
|
|
|
317 |
|
|
Intangible asset amortization |
108 |
|
|
|
108 |
|
|
|
433 |
|
|
|
433 |
|
|
Reorganization expense |
8,334 |
|
|
|
- |
|
|
|
8,695 |
|
|
|
- |
|
|
Other noninterest expense |
|
997 |
|
|
|
757 |
|
|
|
3,428 |
|
|
|
2,808 |
|
|
Total noninterest expense |
|
18,504 |
|
|
|
9,478 |
|
|
|
47,513 |
|
|
|
35,730 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income tax expense |
(327 |
) |
|
|
6,635 |
|
|
|
19,615 |
|
|
|
23,197 |
|
|
Income tax expense |
|
276 |
|
|
|
2,291 |
|
|
|
5,731 |
|
|
|
7,031 |
|
|
Net income (loss) |
$ |
(603 |
) |
|
$ |
4,344 |
|
|
$ |
13,884 |
|
|
$ |
16,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding: |
|
|
|
|
Basic |
|
9,041,926 |
|
|
|
8,934,038 |
|
|
|
9,032,530 |
|
|
|
8,906,710 |
|
|
Diluted |
|
9,041,926 |
|
|
|
9,116,157 |
|
|
|
9,156,233 |
|
|
|
9,129,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common
share: |
|
|
|
|
|
|
Basic |
$ |
(0.07 |
) |
|
$ |
0.49 |
|
|
$ |
1.54 |
|
|
$ |
1.81 |
|
|
Diluted |
|
(0.07 |
) |
|
0.48 |
|
|
|
1.52 |
|
|
|
1.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
2019 |
|
|
2018 |
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
$ |
83,372 |
|
$ |
455 |
|
2.19 |
% |
|
$ |
88,933 |
|
$ |
298 |
|
1.34 |
% |
Loans (1) (2) (3) |
|
960,861 |
|
|
21,371 |
|
8.92 |
% |
|
|
825,286 |
|
|
16,855 |
|
8.19 |
% |
Federal Home Loan Bank stock |
|
1,258 |
|
|
20 |
|
6.38 |
% |
|
|
1,655 |
|
|
24 |
|
5.82 |
% |
Short-term investments (4) |
|
119,788 |
|
|
709 |
|
2.37 |
% |
|
|
178,244 |
|
|
795 |
|
1.79 |
% |
Total interest-earning
assets |
|
1,165,279 |
|
|
22,555 |
|
7.76 |
% |
|
|
1,094,118 |
|
|
17,972 |
|
6.59 |
% |
Cash and due from banks |
|
2,351 |
|
|
|
|
|
|
|
2,611 |
|
|
|
|
|
Other non-interest earning
assets |
|
32,864 |
|
|
|
|
|
|
|
30,430 |
|
|
|
|
|
Total assets |
$ |
1,200,494 |
|
|
|
|
|
|
$ |
1,127,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
70,645 |
|
$ |
63 |
|
0.36 |
% |
|
$ |
73,357 |
|
$ |
59 |
|
0.32 |
% |
Money market accounts |
|
279,307 |
|
|
1,124 |
|
1.61 |
% |
|
|
447,775 |
|
|
1,580 |
|
1.42 |
% |
Savings accounts |
|
35,697 |
|
|
14 |
|
0.16 |
% |
|
|
37,799 |
|
|
14 |
|
0.15 |
% |
Time deposits |
|
537,155 |
|
|
3,455 |
|
2.58 |
% |
|
|
309,362 |
|
|
1,243 |
|
1.61 |
% |
Total interest-bearing
deposits |
|
922,804 |
|
|
4,656 |
|
2.02 |
% |
|
|
868,293 |
|
|
2,896 |
|
1.34 |
% |
Federal Home Loan Bank advances |
|
15,000 |
|
|
120 |
|
3.21 |
% |
|
|
15,000 |
|
|
109 |
|
2.91 |
% |
Subordinated debt |
|
19,272 |
|
|
486 |
|
10.11 |
% |
|
|
23,915 |
|
|
552 |
|
9.26 |
% |
Capital lease obligations |
|
348 |
|
|
5 |
|
5.76 |
% |
|
|
629 |
|
|
7 |
|
4.46 |
% |
Total interest-bearing
liabilities |
|
957,424 |
|
|
5,267 |
|
2.21 |
% |
|
|
907,837 |
|
|
3,564 |
|
1.57 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and escrow
accounts |
|
80,538 |
|
|
|
|
|
|
|
76,368 |
|
|
|
|
|
Other liabilities |
|
9,534 |
|
|
|
|
|
|
|
8,654 |
|
|
|
|
|
Total liabilities |
|
1,047,496 |
|
|
|
|
|
|
|
992,859 |
|
|
|
|
|
Shareholders' equity |
|
152,998 |
|
|
|
|
|
|
|
134,300 |
|
|
|
|
|
Total liabilities and
shareholders' equity |
$ |
1,200,494 |
|
|
|
|
|
|
$ |
1,127,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
17,288 |
|
|
|
|
|
|
$ |
14,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
|
|
|
|
5.55 |
% |
|
|
|
|
|
|
|
5.02 |
% |
Net interest margin (5) |
|
|
|
|
|
|
5.95 |
% |
|
|
|
|
|
|
|
5.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, |
|
2019 |
|
|
2018 |
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
$ |
85,232 |
|
$ |
1,684 |
|
1.98 |
% |
|
$ |
92,599 |
|
$ |
1,111 |
|
1.20 |
% |
Loans (1) (2) (3) |
|
924,484 |
|
|
76,627 |
|
8.29 |
% |
|
|
785,348 |
|
|
62,156 |
|
7.91 |
% |
Federal Home Loan Bank stock |
|
1,475 |
|
|
95 |
|
6.44 |
% |
|
|
1,803 |
|
|
89 |
|
4.94 |
% |
Short-term investments (4) |
|
153,609 |
|
|
3,424 |
|
2.23 |
% |
|
|
171,360 |
|
|
2,547 |
|
1.49 |
% |
Total interest-earning
assets |
|
1,164,800 |
|
|
81,830 |
|
7.03 |
% |
|
|
1,051,110 |
|
|
65,903 |
|
6.27 |
% |
Cash and due from banks |
|
2,542 |
|
|
|
|
|
|
|
2,889 |
|
|
|
|
|
Other non-interest earning
assets |
|
30,968 |
|
|
|
|
|
|
|
31,550 |
|
|
|
|
|
Total assets |
$ |
1,198,310 |
|
|
|
|
|
|
$ |
1,085,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities &
Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
70,822 |
|
$ |
246 |
|
0.35 |
% |
|
$ |
70,486 |
|
$ |
210 |
|
0.30 |
% |
Money market accounts |
|
344,631 |
|
|
5,383 |
|
1.56 |
% |
|
|
407,680 |
|
|
5,145 |
|
1.26 |
% |
Savings accounts |
|
35,619 |
|
|
56 |
|
0.16 |
% |
|
|
37,514 |
|
|
57 |
|
0.15 |
% |
Time deposits |
|
471,777 |
|
|
11,083 |
|
2.35 |
% |
|
|
311,544 |
|
|
4,485 |
|
1.44 |
% |
Total interest-bearing
deposits |
|
922,849 |
|
|
16,768 |
|
1.82 |
% |
|
|
827,224 |
|
|
9,897 |
|
1.20 |
% |
Federal Home Loan Bank advances |
|
15,000 |
|
|
479 |
|
3.19 |
% |
|
|
16,947 |
|
|
547 |
|
3.23 |
% |
Subordinated debt |
|
22,885 |
|
|
2,238 |
|
9.78 |
% |
|
|
23,787 |
|
|
2,102 |
|
8.84 |
% |
Capital lease obligations |
|
455 |
|
|
24 |
|
5.27 |
% |
|
|
730 |
|
|
38 |
|
5.21 |
% |
Total interest-bearing
liabilities |
|
961,189 |
|
|
19,509 |
|
2.03 |
% |
|
|
868,688 |
|
|
12,584 |
|
1.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits and escrow
accounts |
|
80,848 |
|
|
|
|
|
|
|
79,767 |
|
|
|
|
|
Other liabilities |
|
8,814 |
|
|
|
|
|
|
|
7,472 |
|
|
|
|
|
Total liabilities |
|
1,050,851 |
|
|
|
|
|
|
|
955,927 |
|
|
|
|
|
Shareholders' equity |
|
147,459 |
|
|
|
|
|
|
|
129,622 |
|
|
|
|
|
Total liabilities and
shareholders' equity |
$ |
1,198,310 |
|
|
|
|
|
|
$ |
1,085,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income (5) |
|
|
|
$ |
62,321 |
|
|
|
|
|
|
$ |
53,319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
|
|
|
|
|
|
5.00 |
% |
|
|
|
|
|
|
|
4.82 |
% |
Net interest margin (6) |
|
|
|
|
|
|
5.35 |
% |
|
|
|
|
|
|
|
5.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
Includes tax-exempt interest income of $10 thousand for the year
ended June 30, 2018. |
(6) 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, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
June 30, 2018 |
|
$ |
17,288 |
|
|
$ |
15,033 |
|
|
$ |
15,643 |
|
|
$ |
14,359 |
|
|
$ |
14,408 |
|
Net interest income |
Provision for loan losses |
|
262 |
|
|
|
414 |
|
|
|
101 |
|
|
|
532 |
|
|
|
254 |
|
Noninterest income |
|
1,151 |
|
|
|
1,866 |
|
|
|
1,545 |
|
|
|
1,554 |
|
|
|
1,959 |
|
Noninterest expense |
|
18,504 |
|
|
|
9,752 |
|
|
|
9,903 |
|
|
|
9,355 |
|
|
|
9,478 |
|
Net income (loss) |
|
(603 |
) |
|
|
4,828 |
|
|
|
5,125 |
|
|
|
4,534 |
|
|
|
4,344 |
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
9,041,926 |
|
|
|
9,044,230 |
|
|
|
9,048,397 |
|
|
|
8,995,925 |
|
|
|
8,934,038 |
|
Diluted |
|
9,041,926 |
|
|
|
9,198,077 |
|
|
|
9,201,557 |
|
|
|
9,183,729 |
|
|
|
9,116,157 |
|
Earnings (loss) per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.07 |
) |
|
$ |
0.53 |
|
|
$ |
0.57 |
|
|
$ |
0.50 |
|
|
$ |
0.49 |
|
Diluted |
|
(0.07 |
) |
|
|
0.52 |
|
|
|
0.56 |
|
|
|
0.49 |
|
|
|
0.48 |
|
|
|
|
|
|
|
|
|
|
|
Operating earnings per common
share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.60 |
|
|
$ |
0.53 |
|
|
$ |
0.57 |
|
|
$ |
0.50 |
|
|
$ |
0.49 |
|
Diluted |
|
0.59 |
|
|
|
0.52 |
|
|
|
0.56 |
|
|
|
0.49 |
|
|
|
0.48 |
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common
share |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
|
Return (loss) on average
assets |
|
(0.20 |
%) |
|
|
1.63 |
% |
|
|
1.70 |
% |
|
|
1.51 |
% |
|
|
1.55 |
% |
Return (loss) on average
equity |
|
(1.58 |
%) |
|
|
13.00 |
% |
|
|
13.94 |
% |
|
|
12.81 |
% |
|
|
12.97 |
% |
Net interest rate spread
(1) |
|
5.55 |
% |
|
|
4.81 |
% |
|
|
5.00 |
% |
|
|
4.61 |
% |
|
|
5.02 |
% |
Net interest margin (2) |
|
5.95 |
% |
|
|
5.20 |
% |
|
|
5.33 |
% |
|
|
4.93 |
% |
|
|
5.28 |
% |
Efficiency ratio (non-GAAP)
(3) |
|
100.35 |
% |
|
|
57.71 |
% |
|
|
57.62 |
% |
|
|
58.79 |
% |
|
|
57.91 |
% |
Noninterest expense to average
total assets |
|
6.18 |
% |
|
|
3.29 |
% |
|
|
3.28 |
% |
|
|
3.12 |
% |
|
|
3.37 |
% |
Average interest-earning
assets to average |
|
121.71 |
% |
|
|
121.65 |
% |
|
|
120.67 |
% |
|
|
120.72 |
% |
|
|
120.52 |
% |
interest-bearing
liabilities |
|
|
|
|
|
|
|
|
|
|
Operating return on average
assets (non-GAAP) (4) |
|
1.81 |
% |
|
|
1.63 |
% |
|
|
1.70 |
% |
|
|
1.51 |
% |
|
|
1.55 |
% |
Operating return on average
equity (non-GAAP) (4) |
|
14.18 |
% |
|
|
13.00 |
% |
|
|
13.94 |
% |
|
|
12.81 |
% |
|
|
12.97 |
% |
Operating efficiency ratio
(non-GAAP) (3) (4) |
|
55.15 |
% |
|
|
57.71 |
% |
|
|
57.62 |
% |
|
|
58.79 |
% |
|
|
57.91 |
% |
Operating noninterest expense
to average total assets (non-GAAP) (4) |
|
3.40 |
% |
|
|
3.29 |
% |
|
|
3.28 |
% |
|
|
3.12 |
% |
|
|
3.37 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of: |
|
June 30, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
June 30, 2018 |
Nonperforming loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated portfolio: |
|
|
|
|
|
|
|
|
|
Residential real estate |
$ |
2,772 |
|
|
$ |
2,317 |
|
|
$ |
2,595 |
|
|
$ |
2,784 |
|
|
$ |
3,212 |
|
Commercial real estate |
|
3,892 |
|
|
|
3,336 |
|
|
|
2,764 |
|
|
|
1,703 |
|
|
|
1,499 |
|
Commercial and industrial |
|
1,284 |
|
|
|
1,495 |
|
|
|
1,420 |
|
|
|
1,454 |
|
|
|
1,368 |
|
Consumer |
|
148 |
|
|
|
236 |
|
|
|
216 |
|
|
|
185 |
|
|
|
134 |
|
Total originated
portfolio |
|
8,096 |
|
|
|
7,384 |
|
|
|
6,995 |
|
|
|
6,126 |
|
|
|
6,213 |
|
Total purchased portfolio |
|
6,671 |
|
|
|
5,366 |
|
|
|
5,351 |
|
|
|
5,375 |
|
|
|
5,745 |
|
Total nonperforming loans |
|
14,767 |
|
|
|
12,750 |
|
|
|
12,346 |
|
|
|
11,501 |
|
|
|
11,958 |
|
Real estate owned and other
repossessed collateral, net |
|
1,957 |
|
|
|
2,014 |
|
|
|
1,463 |
|
|
|
1,549 |
|
|
|
2,233 |
|
Total nonperforming
assets |
$ |
16,724 |
|
|
$ |
14,764 |
|
|
$ |
13,809 |
|
|
$ |
13,050 |
|
|
$ |
14,191 |
|
|
|
|
|
|
|
|
|
|
|
Past due loans to total
loans |
|
1.50 |
% |
|
|
2.16 |
% |
|
|
1.95 |
% |
|
|
1.09 |
% |
|
|
0.89 |
% |
Nonperforming loans to total
loans |
|
1.51 |
% |
|
|
1.33 |
% |
|
|
1.32 |
% |
|
|
1.30 |
% |
|
|
1.37 |
% |
Nonperforming assets to total
assets |
|
1.45 |
% |
|
|
1.20 |
% |
|
|
1.16 |
% |
|
|
1.08 |
% |
|
|
1.23 |
% |
Allowance for loan losses to
total loans |
|
0.58 |
% |
|
|
0.59 |
% |
|
|
0.57 |
% |
|
|
0.60 |
% |
|
|
0.55 |
% |
Allowance for loan losses to
nonperforming loans |
|
38.61 |
% |
|
|
44.38 |
% |
|
|
42.99 |
% |
|
|
45.98 |
% |
|
|
40.20 |
% |
|
|
|
|
|
|
|
|
|
|
Commercial real estate loans
to total capital (5) |
|
282.05 |
% |
|
|
251.02 |
% |
|
|
242.38 |
% |
|
|
230.48 |
% |
|
|
200.74 |
% |
Net loans to core deposits
(6) |
|
103.33 |
% |
|
|
94.19 |
% |
|
|
94.84 |
% |
|
|
87.17 |
% |
|
|
91.54 |
% |
Purchased loans to total
loans, including held for sale |
|
33.37 |
% |
|
|
33.27 |
% |
|
|
35.17 |
% |
|
|
33.75 |
% |
|
|
33.10 |
% |
Equity to total assets |
|
13.31 |
% |
|
|
12.44 |
% |
|
|
12.44 |
% |
|
|
11.81 |
% |
|
|
11.96 |
% |
Common equity tier 1 capital
ratio |
|
15.89 |
% |
|
|
16.23 |
% |
|
|
16.04 |
% |
|
|
16.50 |
% |
|
|
16.02 |
% |
Total capital ratio |
|
18.01 |
% |
|
|
19.33 |
% |
|
|
19.15 |
% |
|
|
19.81 |
% |
|
|
19.28 |
% |
Tier 1 leverage capital
ratio |
|
12.86 |
% |
|
|
13.58 |
% |
|
|
13.20 |
% |
|
|
12.83 |
% |
|
|
13.12 |
% |
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity |
$ |
153,580 |
|
|
$ |
153,188 |
|
|
$ |
148,491 |
|
|
$ |
143,391 |
|
|
$ |
138,430 |
|
Less: Preferred stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Common shareholders'
equity |
|
153,580 |
|
|
|
153,188 |
|
|
|
148,491 |
|
|
|
143,391 |
|
|
|
138,430 |
|
Less: Intangible assets
(7) |
|
(3,285 |
) |
|
|
(3,485 |
) |
|
|
(3,583 |
) |
|
|
(3,768 |
) |
|
|
(3,837 |
) |
Tangible common shareholders'
equity (non-GAAP) |
$ |
150,295 |
|
|
$ |
149,703 |
|
|
$ |
144,908 |
|
|
$ |
139,623 |
|
|
$ |
134,593 |
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
9,042,109 |
|
|
|
9,041,868 |
|
|
|
9,048,863 |
|
|
|
9,047,390 |
|
|
|
8,938,841 |
|
Book value per common
share |
$ |
16.98 |
|
|
$ |
16.94 |
|
|
$ |
16.41 |
|
|
$ |
15.85 |
|
|
$ |
15.49 |
|
Tangible book value per share
(non-GAAP) (8) |
|
16.62 |
|
|
|
16.56 |
|
|
|
16.01 |
|
|
|
15.43 |
|
|
|
15.06 |
|
(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 noninterest expense divided by the
sum of net interest income (before the loan loss provision) plus
noninterest income.(4) 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), calculated on page 1 of the earnings
release.(5) 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. (6) Core deposits include all
non-maturity deposits and maturity deposits less than $250
thousand. Loans include loans held for sale.(7) Includes the core
deposit intangible asset and loan servicing rights asset.(8)
Tangible book value per share represents total shareholders' equity
less the sum of preferred stock and intangible assets divided by
common shares outstanding.
For More Information:Jean-Pierre Lapointe,
Chief Financial OfficerNortheast Bank, 500 Canal Street, Lewiston,
ME 04240 207.786.3245 ext. 3220www.northeastbank.com
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