Form 8-K NORTHEAST BANCORP /ME/ For: May 02

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):	May 2, 2016
Commission File No. 1-14588

NORTHEAST BANCORP

(Exact name of registrant as specified in its charter)

 

Maine	01-0425066
(State or other jurisdiction of incorporation)	(IRS Employer Identification Number)
500 Canal Street Lewiston, Maine	04240
(Address of principal executive offices)	(Zip Code)

 

Registrant’s telephone number, including area code: (207) 786-3245

 

Former name or former address, if changed since last Report: N/A

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

     |  |  Written communications pursuant to Rule 425 under the Securities Act

 

     |  |  Soliciting material pursuant to Rule 14a-12 under the Exchange Act

 

     |  |  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

 

     |  |  Pre-commencement to communications pursuant to Rule 13e-4(c) under the Exchange Act

 

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Item 2.02        Results of Operations and Financial Condition

 

On May 2, 2016, Northeast Bancorp, a Maine corporation (the "Company"), issued a press release announcing its earnings for the second quarter of fiscal 2016 and declaring the payment of a dividend. The full text of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information contained herein, including the exhibit attached hereto, is furnished pursuant to Item 2.02 of this Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, the information in this report (including the exhibits hereto) are not to be incorporated by reference into any of the Company's filings with the Securities and Exchange Commission, whether filed prior to or after the furnishing of these certificates, regardless of any general or specific incorporation language in such filing.

 

 

Item 9.01        Financial Statements and Exhibits

(c)                    Exhibits

 

 

Exhibit No.     Description

99.1                 Press Release dated May 2, 2016

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.

 

	NORTHEAST BANCORP
	By:	/s/ Brian Shaughnessy
	Name:    Brian Shaughnessy
	Title:      Chief Financial Officer and Treasurer

 

Date: May 2, 2016

 

 

EXHIBIT INDEX

 

Exhibit No.     Description

99.1                 Press Release dated May 2, 2016

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE       For More Information:
Brian Shaughnessy, CFO Northeast Bank, 500 Canal Street, Lewiston, ME 04240 207.786.3245 ext. 3220 www.northeastbank.com

 

Northeast Bancorp Reports Third Quarter Results, Declares Dividend

 

 

Lewiston, ME (May 2, 2016) ‒ Northeast Bancorp (“Northeast” or the “Company”) (NASDAQ: NBN), a Maine-based full-service financial services company and parent of Northeast Bank (the “Bank”), today reported net income of $1.8 million, or $0.19 per diluted common share, for the quarter ended March 31, 2016, compared to net income of $1.8 million, or $0.18 per diluted common share, for the quarter ended March 31, 2015. Net income for the nine months ended March 31, 2016 was $5.4 million, or $0.57 per diluted common share, compared to $5.0 million, or $0.50 per diluted common share, for the nine months ended March 31, 2015.

 

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

 

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

 

As of March 31, 2016, total assets were $922.7 million, an increase of $72.0 million, or 8.5%, compared to June 30, 2015. The principal components of the change in the balance sheet follow:

 

1.

The loan portfolio – excluding loans held for sale – has grown by $86.9 million, or 14.2%, compared to June 30, 2015, principally on the strength of $82.9 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”), net growth of $11.7 million in originations by the Bank’s Small Business Administration (“SBA”) National division and net growth of $7.5 million in commercial originations by the Bank’s Community Banking Division. This net growth was offset by a $15.2 million decrease in the Bank’s Community Banking Division residential and consumer loan portfolio.

 

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

 

As previously discussed in the Company’s SEC filings, the Company made certain commitments to the Board of Governors of the Federal Reserve System in connection with the merger of FHB Formation LLC with and into the Company in December 2010. The Company’s loan purchase and commercial real estate loan availability under these conditions follow:

 

Basis for Regulatory Condition		Condition		Availability at March 31, 2016
				(Dollars in millions)
Total Loans		Purchased loans may not exceed 40% of total loans		$	80.2
Regulatory Capital		Non-owner occupied commercial real estate loans may not exceed 300% of total capital		$	104.4

 

 

An overview of the Bank’s LASG portfolio follows:

 

		LASG Portfolio
		Three Months Ended March 31,
		2016																2015
		Purchased				Originated				Secured Loans to Broker-Dealers				Total LASG				Purchased				Originated				Secured Loans to  Broker-Dealers				Total LASG
		(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance		$	24,400			$	27,846			$	-			$	52,246			$	5,484			$	18,760			$	12,000			$	36,244
Net investment basis			21,934				27,846				-				49,780				5,063				18,697				12,000				35,760
Loan returns during the period:
Yield			9.88	%			5.83	%			0.50	%			7.15	%			12.87	%			5.67	%			0.46	%			9.37	%
Total Return (1)			9.88	%			5.82	%			0.50	%			7.15	%			13.60	%			5.67	%			0.46	%			9.81	%

  

			Nine Months Ended March 31,
			2016																2015
			Purchased				Originated				Secured Loans to Broker-Dealers				Total LASG				Purchased				Originated				Secured Loans to Broker-Dealers				Total LASG
		(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance		$	88,128			$	78,752			$	-			$	166,880			$	67,909			$	50,315			$	48,000			$	166,224
Net investment basis			81,245				78,752				-				159,997				57,896				50,236				48,000				156,132
Loan returns during the period:
Yield			11.54	%			5.75	%			0.50	%			7.97	%			12.97	%			6.91	%			0.47	%			10.12	%
Total Return (1)			11.57	%			5.74	%			0.50	%			7.98	%			13.36	%			7.40	%			0.47	%			10.48	%
Total loans as of period end:
Unpaid principal balance		$	266,223			$	170,085			$	60,000			$	496,308			$	234,672			$	92,542			$	60,000			$	387,214
Net investment basis			233,650				170,085				60,000				463,735				195,683				92,414				60,000				348,097

 

(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.

 

2.

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

 

3.

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

 

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

 

1.

Net interest and dividend income before provision for loan losses increased by $134 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015. The increase is primarily due to higher average loan volume in the purchased and originated loan portfolio.

 

The various components of transactional income are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the three and nine months ended March 31, 2015, transactional interest income decreased by $1.8 million in both periods. The following table summarizes interest income and related yields recognized on the loan portfolios:

 

		Interest Income and Yield on Loans
		Three Months Ended March 31,
		2016												2015
		Average				Interest								Average				Interest
		Balance (1)				Income				Yield				Balance (1)				Income				Yield
		(Dollars in thousands)
Community Banking Division		$	247,194			$	2,994				4.87%			$	232,369			$	2,823				4.93%
LASG:
Originated			159,976				2,317				5.83%				80,567				1,127				5.67%
Purchased			224,710				5,518				9.88%				208,487				6,614				12.87%
Secured Loans to Broker-Dealers			60,001				75				0.50%				48,551				55				0.46%
Total LASG			444,687				7,910				7.15%				337,605				7,796				9.37%
Total		$	691,881			$	10,904				6.34%			$	569,974			$	10,619				7.56%

 

 

 

		Nine Months Ended March 31,
		2016												2015
		Average				Interest								Average				Interest
		Balance (1)				Income				Yield				Balance (1)				Income				Yield
		(Dollars in thousands)
Community Banking Division		$	242,172			$	8,850				4.86%			$	236,584			$	8,782				4.94%
LASG:
Originated			138,760				5,991				5.75%				66,314				3,441				6.91%
Purchased			211,519				18,347				11.54%				206,747				20,125				12.97%
Secured Loans to Broker-Dealers			60,004				225				0.50%				39,054				139				0.47%
Total LASG			410,283				24,563				7.97%				312,115				23,705				10.12%
Total		$	652,455			$	33,413				6.82%			$	548,699			$	32,487				7.89%

 

(1) Includes loans held for sale.

 

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

 

		Total Return on Purchased Loans
		Three Months Ended March 31,
		2016								2015
		Income				Return (1)				Income				Return (1)
		(Dollars in thousands)
Regularly scheduled interest and accretion		$	4,606				8.25%			$	4,322				8.41%
Transactional income:
Gain on loan sales			-				0.00%				-				0.00%
Gain on sale of real estate owned			1				0.00%				379				0.73%
Other noninterest income			-				0.00%				-				0.00%
Accelerated accretion and loan fees			912				1.63%				2,292				4.46%
Total transactional income			913				1.63%				2,671				5.20%
Total		$	5,519				9.88%			$	6,993				13.60%

 

 

		Nine Months Ended March 31,
		2016								2015
		Income				Return (1)				Income				Return (1)
		(Dollars in thousands)
Regularly scheduled interest and accretion		$	12,615				7.94%			$	13,195				8.50%
Transactional income:
Gain on loan sales			-				0.00%				190				0.12%
Gain on sale of real estate owned			23				0.01%				419				0.27%
Other noninterest income			11				0.01%				-				0.00%
Accelerated accretion and loan fees			5,732				3.61%				6,930				4.47%
Total transactional income			5,766				3.63%				7,539				4.86%
Total		$	18,381				11.57%			$	20,734				13.36%

 

(1)

The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, gains on real estate owned and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.

 

 

2.

Noninterest income increased by $481 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015, principally due to an increase in gains realized on sale of portfolio loans. The recent quarter includes gains realized on sale of SBA loans of $1.2 million, compared to $425 thousand in the quarter ended March 31, 2015. The gain is offset by a decrease of $411 thousand in gains recognized on real estate owned and other repossessed collateral.

 

3.

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

 

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

 

At March 31, 2016, the Company’s Tier 1 Leverage Ratio was 13.6%, a decrease from 14.5% at June 30, 2015, and the Total Capital Ratio was 17.8%, a decrease from 20.1% at June 30, 2015. The decreases in the capital ratios resulted primarily from balance sheet growth and the effect of purchases under the Company’s share repurchase program in the current fiscal year.

 

 

Investor Call Information

Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Brian Shaughnessy, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss third quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, May 3, 2016. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 95521077. The call will be available via live webcast, which can be viewed by accessing the Company’s website at www.northeastbank.com and clicking on the About Us - Investor Relations section. To listen to the webcast, attendees are encouraged to visit the website at least fifteen minutes early to register, download and install any necessary audio software. Please note there will also be a slide presentation that will accompany the webcast. For those who cannot listen to the live broadcast, a replay will be available online for one year at www.northeastbank.com.

 

About Northeast Bancorp

Northeast Bancorp (NASDAQ: NBN) is the holding company for Northeast Bank, a full-service bank headquartered in Lewiston, Maine. We offer traditional banking services through the Community Banking Division, which operates ten full-service branches that serve customers located in western, central, and southern Maine. From our Maine and Boston locations, we also lend throughout the New England area. Our Loan Acquisition and Servicing Group (“LASG”) purchases and originates commercial loans on a nationwide basis. In addition, our SBA National division supports the needs of growing businesses nationally. ableBanking, a division of Northeast Bank, offers savings products to consumers online. Information regarding Northeast Bank can be found on its website at www.northeastbank.com.

 

Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity, and tangible book value per share. Northeast’s management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

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Forward-Looking Statements 

Statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although Northeast believes that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Company’s control. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in interest rates and real estate values; competitive pressures from other financial institutions; the effects of weakness in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers’ ability to service and repay our loans; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; changing government regulation; the risk that the Company may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Company’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K and updated by the Company’s Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. These statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

 

		March 31, 2016				June 30, 2015
Assets
Cash and due from banks		$	4,025			$	2,789
Short-term investments			87,427				87,061
Total cash and cash equivalents			91,452				89,850
Available-for-sale securities, at fair value			90,491				101,908
Residential real estate loans held for sale			3,475				7,093
SBA loans held for sale			1,880				1,942
Total loans held for sale			5,355				9,035
Loans
Commercial real estate			423,234				348,676
Residential real estate			119,327				132,669
Commercial and industrial			150,217				123,133
Consumer			6,292				7,659
Total loans			699,070				612,137
Less: Allowance for loan losses			2,223				1,926
Loans, net			696,847				610,211
Premises and equipment, net			8,101				8,253
Real estate owned and other possessed collateral, net			690				1,651
Federal Home Loan Bank stock, at cost			2,571				4,102
Intangible assets, net			1,840				2,209
Bank owned life insurance			15,612				15,276
Other assets			9,730				8,223
Total assets		$	922,689			$	850,718
Liabilities and Stockholders' Equity
Deposits
Demand		$	60,573			$	60,383
Savings and interest checking			104,802				100,134
Money market			234,142				168,527
Time			353,432				345,715
Total deposits			752,949				674,759
Federal Home Loan Bank advances			30,103				30,188
Wholesale repurchase agreements			-				10,037
Short-term borrowings			2,753				2,349
Junior subordinated debentures issued to affiliated trusts			8,771				8,626
Capital lease obligation			1,190				1,368
Other liabilities			12,397				10,664
Total liabilities			808,163				737,991
Commitments and contingencies			-				-
Stockholders' equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at March 31, 2016 and June 30, 2015			-				-
Voting common stock, $1.00 par value, 25,000,000 shares authorized; 8,103,190 and 8,575,144 shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively			8,103				8,575
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 1,227,683 and 1,012,739 shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively			1,228				1,013
Additional paid-in capital			82,983				85,506
Retained earnings			24,055				18,921
Accumulated other comprehensive loss			(1,843	)			(1,288	)
Total stockholders' equity			114,526				112,727
Total liabilities and stockholders' equity		$	922,689			$	850,718

 

  

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

 

		Three Months Ended March 31,								Nine Months Ended March 31,
		2016				2015				2016				2015
Interest and dividend income:
Interest and fees on loans		$	10,904			$	10,619			$	33,413			$	32,487
Interest on available-for-sale securities			236				222				700				697
Other interest and dividend income			119				72				295				218
Total interest and dividend income			11,259				10,913				34,408				33,402
Interest expense:
Deposits			1,566				1,271				4,356				3,681
Federal Home Loan Bank advances			255				257				774				845
Wholesale repurchase agreements			-				71				65				216
Short-term borrowings			5				5				19				21
Junior subordinated debentures issued to affiliated trusts			164				171				476				566
Obligation under capital lease agreements			15				18				49				56
Total interest expense			2,005				1,793				5,739				5,385
Net interest and dividend income before provision for loan losses			9,254				9,120				28,669				28,017
Provision for loan losses			236				44				1,301				477
Net interest and dividend income after provision for loan losses			9,018				9,076				27,368				27,540
Noninterest income:
Fees for other services to customers			428				303				1,264				1,089
Gain on sales of residential loans held for sale			335				355				1,292				1,384
Gain on sales of portfolio loans			1,205				425				2,558				950
(Loss) gain recognized on real estate owned and other repossessed collateral, net			(54	)			357				(127	)			303
Bank-owned life insurance income			112				110				336				329
Other noninterest income			9				4				39				23
Total noninterest income			2,035				1,554				5,362				4,078
Noninterest expense:
Salaries and employee benefits			4,846				4,316				13,956				13,586
Occupancy and equipment expense			1,327				1,278				3,937				3,662
Professional fees			348				386				1,042				1,153
Data processing fees			394				361				1,109				1,029
Marketing expense			64				54				200				203
Loan acquisition and collection expense			297				409				961				1,096
FDIC insurance premiums			125				137				354				371
Intangible asset amortization			108				128				369				460
Other noninterest expense			903				816				2,489				2,272
Total noninterest expense			8,412				7,885				24,417				23,832
Income before income tax expense			2,641				2,745				8,313				7,786
Income tax expense			832				993				2,892				2,810
Net income			1,809				1,752				5,421				4,976
Weighted-average shares outstanding:
Basic			9,456,198				9,833,033				9,526,302				10,049,983
Diluted			9,459,611				9,833,033				9,531,747				10,049,983
Earnings per common share:
Basic		$	0.19			$	0.18			$	0.57			$	0.50
Diluted			0.19				0.18				0.57				0.50
Cash dividends declared per common share		$	0.01			$	0.01			$	0.03			$	0.03

 

 

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands) 

		Three Months Ended March 31,
		2016												2015
						Interest				Average								Interest				Average
		Average				Income/				Yield/				Average				Income/				Yield/
		Balance				Expense				Rate				Balance				Expense				Rate
Assets:
Interest-earning assets:
Investment securities (1)		$	100,904			$	236				0.94%			$	107,010			$	222				0.84%
Loans (2) (3)			691,881				10,904				6.34%				569,974				10,619				7.56%
Federal Home Loan Bank stock			2,571				22				3.44%				4,102				18				1.78%
Short-term investments (4)			80,789				97				0.48%				90,722				54				0.24%
Total interest-earning assets			876,145				11,259				5.17%				771,808				10,913				5.73%
Cash and due from banks			3,841												2,919
Other non-interest earning assets			34,045												33,069
Total assets		$	914,031											$	807,796
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts		$	65,985			$	42				0.26%			$	62,317			$	39				0.25%
Money market accounts			223,835				491				0.88%				153,487				300				0.79%
Savings accounts			36,453				12				0.13%				34,140				11				0.13%
Time deposits			357,857				1,021				1.15%				328,633				921				1.14%
Total interest-bearing deposits			684,130				1,566				0.92%				578,577				1,271				0.89%
Short-term borrowings			2,136				5				0.94%				2,356				5				0.86%
Borrowed funds			30,117				255				3.41%				43,718				328				3.04%
Junior subordinated debentures			8,746				164				7.54%				8,553				171				8.11%
Capital lease obligations			1,211				15				4.98%				1,433				18				5.09%
Total interest-bearing liabilities			726,340				2,005				1.11%				634,637				1,793				1.15%
Non-interest bearing liabilities:
Demand deposits and escrow accounts			66,384												54,647
Other liabilities			6,429												7,083
Total liabilities			799,153												696,367
Stockholders' equity			114,878												111,429
Total liabilities and stockholders' equity		$	914,031											$	807,796
Net interest income						$	9,254											$	9,120
Interest rate spread											4.06%												4.58%
Net interest margin (5)											4.25%												4.79%

 

(1)  Interest income and yield are stated on a fully tax-equivalent basis using a 34% tax rate.

(2)  Includes loans held for sale.

(3)  Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.

(4)  Short term investments include FHLB overnight deposits and other interest-bearing deposits.

(5)  Net interest margin is calculated as net interest income divided by total interest-earning assets.

 

 

NORTHEAST BANCORP AND SUBSIDIARY 

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS 

(Unaudited) 

(Dollars in thousands)

		Nine Months Ended March 31,
		2016												2015
						Interest				Average								Interest				Average
		Average				Income/				Yield/				Average				Income/				Yield/
		Balance				Expense				Rate				Balance				Expense				Rate
Assets:
Interest-earning assets:
Investment securities (1)		$	102,890			$	700				0.91%			$	109,605			$	697				0.85%
Loans (2) (3)			652,455				33,413				6.82%				548,699				32,487				7.89%
Federal Home Loan Bank stock			3,089				90				3.88%				4,102				49				1.59%
Short-term investments (4)			84,258				205				0.32%				92,784				169				0.24%
Total interest-earning assets			842,692				34,408				5.43%				755,190				33,402				5.89%
Cash and due from banks			3,405												2,755
Other non-interest earning assets			35,345												33,241
Total assets		$	881,442											$	791,186
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts		$	67,078			$	130				0.26%			$	62,731			$	121				0.26%
Money market accounts			197,962				1,273				0.86%				122,165				665				0.73%
Savings accounts			36,027				36				0.13%				34,049				34				0.13%
Time deposits			347,847				2,917				1.12%				339,116				2,861				1.12%
Total interest-bearing deposits			648,914				4,356				0.89%				558,061				3,681				0.88%
Short-term borrowings			2,029				19				1.25%				2,852				21				0.98%
Borrowed funds			33,207				839				3.36%				47,455				1,061				2.98%
Junior subordinated debentures			8,698				476				7.28%				8,507				566				8.86%
Capital lease obligations			1,272				49				5.13%				1,481				56				5.04%
Total interest-bearing liabilities			694,120				5,739				1.10%				618,356				5,385				1.16%
Non-interest bearing liabilities:
Demand deposits and escrow accounts			66,619												54,339
Other liabilities			6,720												6,163
Total liabilities			767,459												678,858
Stockholders' equity			113,983												112,328
Total liabilities and stockholders' equity		$	881,442											$	791,186
Net interest income						$	28,669											$	28,017
Interest rate spread											4.33%												4.73%
Net interest margin (5)											4.53%												4.94%

 

(1)  Interest income and yield are stated on a fully tax-equivalent basis using a 34% tax rate.

(2)  Includes loans held for sale.

(3)  Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.

(4)  Short term investments include FHLB overnight deposits and other interest-bearing deposits.

(5)  Net interest margin is calculated as net interest income divided by total interest-earning assets.

 

NORTHEAST BANCORP AND SUBSIDIARY

SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA

(Unaudited)

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

		Three Months Ended:
		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Net interest income		$	9,254			$	10,172			$	9,241			$	9,350			$	9,120
Provision for loan losses			236				896				169				240				44
Noninterest income			2,035				1,624				1,705				3,067				1,554
Noninterest expense			8,412				8,196				7,810				8,827				7,885
Net income			1,809				1,744				1,867				2,165				1,752
Weighted average common shares outstanding:
Basic			9,456,198				9,559,369				9,562,812				9,773,228				9,833,033
Diluted			9,459,611				9,569,585				9,562,812				9,773,228				9,833,033
Earnings per common share:
Basic		$	0.19			$	0.18			$	0.20			$	0.22			$	0.18
Diluted			0.19				0.18				0.20				0.22				0.18
Dividends per common share			0.01				0.01				0.01				0.01				0.01
Return on average assets			0.80	%			0.80	%			0.86	%			1.04	%			0.88	%
Return on average equity			6.33	%			6.07	%			6.55	%			7.72	%			6.38	%
Net interest rate spread (1)			4.06	%			4.67	%			4.25	%			4.51	%			4.58	%
Net interest margin (2)			4.25	%			4.87	%			4.45	%			4.70	%			4.79	%
Efficiency ratio (3)			74.52	%			69.48	%			71.35	%			71.09	%			73.87	%
Noninterest expense to average total assets			3.70	%			3.75	%			3.59	%			4.22	%			3.96	%
Average interest-earning assets to average interest-bearing liabilities			120.62	%			122.48	%			121.63	%			120.90	%			121.89	%

 

		As of:
		March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015				March 31, 2015
Nonperforming loans:
Originated portfolio:
Residential real estate		$	3,566			$	3,263			$	3,165			$	3,021			$	3,163
Commercial real estate			602				399				529				994				1,201
Home equity			-				11				20				11				11
Commercial and industrial			2				2				2				2				-
Consumer			216				204				153				190				225
Total originated portfolio			4,386				3,879				3,869				4,218				4,600
Total purchased portfolio			4,364				2,221				6,939				6,532				5,850
Total nonperforming loans			8,750				6,100				10,808				10,750				10,450
Real estate owned and other possessed collateral, net			690				1,238				1,279				1,651				3,694
Total nonperforming assets		$	9,440			$	7,338			$	12,087			$	12,401			$	14,144
Past due loans to total loans			2.52	%			2.48	%			1.35	%			1.08	%			2.57	%
Nonperforming loans to total loans			1.25	%			0.90	%			1.73	%			1.76	%			1.80	%
Nonperforming assets to total assets			1.02	%			0.82	%			1.41	%			1.46	%			1.70	%
Allowance for loan losses to total loans			0.32	%			0.31	%			0.33	%			0.31	%			0.30	%
Allowance for loan losses to nonperforming loans			25.41	%			34.90	%			19.11	%			17.92	%			16.66	%
Commercial real estate loans to risk-based capital (4)			217.09	%			204.91	%			195.50	%			187.32	%			173.17	%
Net loans to core deposits (5)			93.48	%			94.37	%			91.04	%			91.85	%			89.04	%
Purchased loans to total loans, including held for sale			33.17	%			32.90	%			33.82	%			32.61	%			33.53	%
Equity to total assets			12.41	%			12.82	%			13.25	%			13.25	%			13.51	%
Common equity tier 1 capital ratio			17.46	%			18.11	%			19.69	%			19.82	%			20.90	%
Total capital ratio (6)			17.78	%			18.43	%			20.03	%			20.14	%			21.21	%
Tier 1 leverage capital ratio			13.57	%			14.31	%			14.23	%			14.49	%			14.96	%
Total stockholders' equity		$	114,526			$	114,613			$	113,704			$	112,727			$	112,487
Less: Preferred stock			-				-				-				-				-
Common stockholders' equity			114,526				114,613				113,704				112,727				112,487
Less: Intangible assets (7)			(3,469	)			(3,336	)			(3,388	)			(3,312	)			(2,338	)
Tangible common stockholders' equity (non-GAAP)		$	111,057			$	111,277			$	110,316			$	109,415			$	110,149
Common shares outstanding			9,330,873				9,519,729				9,592,329				9,587,883				9,819,609
Book value per common share		$	12.27			$	12.04			$	11.85			$	11.76			$	11.46
Tangible book value per share (non-GAAP) (8)			11.90				11.69				11.50				11.41				11.22

 

(1) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

(3) The efficiency ratio represents non-interest expense divided by the sum of net interest income (before the loan loss provision) plus non-interest income.

(4) For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans. 

(5) Core deposits include all non-maturity deposits and maturity deposits less than $250 thousand. Loans include loans held-for-sale.

(6) The Company’s adoption of Basel III went into effect as of March 31, 2015. The previous period ratios are the “Total Risk-Based Capital Ratio.”

(7) Includes the core deposit intangible asset, as well as the servicing rights asset which is included in other assets in the consolidated balance sheets.

(8) Tangible book value per share represents total stockholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.