Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based
full-service bank, today reported net income of $11.4 million, or
$1.42 per diluted common share, for the quarter ended December 31,
2021, compared to net income of $8.2 million, or $0.98 per diluted
common share, for the quarter ended December 31, 2020. Net income
for the six months ended December 31, 2021 was $21.3 million, or
$2.63 per diluted common share, compared to $16.0 million, or $1.92
per diluted common share, for the six months ended December 31,
2020.
The Board of Directors declared a cash dividend of $0.01 per
share, payable on February 24, 2022, to shareholders of record as
of February 10, 2022.
“We reported strong results and net loan growth in our second
fiscal quarter,” said Rick Wayne, Chief Executive Officer. “Our
National Lending Division generated a record $260.5 million in
originations and purchases for the quarter, growing the National
Lending portfolio by $112.6 million, or 11.4%, over September 30,
2021, and $151.1 million, or 15.9%, over June 30, 2021. The
originated yield and purchased return for the quarter was 6.5% and
9.0%, respectively. We continued to benefit from our correspondent
arrangement with The Loan Source, Inc. and NEWITY (formerly ACAP
SME, LLC), generating $6.0 million of correspondent fee income
during the quarter. For the quarter, we earned $1.42 per diluted
common share, a return on average equity of 18.8%, a return on
average assets of 2.9% and repurchased 354 thousand shares at a
weighted average price of $33.94.”
As of December 31, 2021, total assets were $1.46 billion, a
decrease of $714.4 million, or 32.9%, from total assets of $2.17
billion as of June 30, 2021, primarily due to the $844.3 million,
or 83.6%, decrease in cash and short-term investments, as discussed
below. The principal components of the changes in the balance sheet
follow:
1. Cash and short-term investments decreased by $844.3
million, or 83.6%, from June 30, 2021, primarily due to the timing
of a large deposit account related to U.S. Small Business
Administration (“SBA”) Paycheck Protection Program (“PPP”) elevated
loan payoff collections at June 30, 2021. Cash and short-term
investments may fluctuate significantly while PPP collections,
including forgiveness amounts, continue, depending on the timing of
receipts and remittances of cash amounts.
2. The following table highlights the changes in the loan
portfolio for the three and six months ended December 31, 2021:
| |
Loan Portfolio Changes |
| |
Three Months Ended December 31, 2021 |
| |
December 31, 2021Balance |
|
September 30, 2021Balance |
|
Change ($) |
|
Change (%) |
| |
|
|
|
|
|
|
|
| |
(Dollars in thousands) |
|
National Lending Purchased |
$ |
484,513 |
|
|
$ |
432,083 |
|
|
$ |
52,430 |
|
|
12.13 |
% |
| National Lending
Originated |
|
619,223 |
|
|
|
559,080 |
|
|
|
60,143 |
|
|
10.76 |
% |
| SBA National |
|
35,682 |
|
|
|
38,482 |
|
|
|
(2,800 |
) |
|
(7.28 |
%) |
| Community Banking |
|
41,766 |
|
|
|
44,702 |
|
|
|
(2,936 |
) |
|
(6.57 |
%) |
| Total |
$ |
1,181,184 |
|
|
$ |
1,074,347 |
|
|
$ |
106,837 |
|
|
9.94 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Six Months Ended December 31, 2021 |
| |
December 31, 2021Balance |
|
June 30, 2021Balance |
|
Change ($) |
|
Change (%) |
| |
|
|
|
|
|
|
|
| |
(Dollars in thousands) |
| National Lending
Purchased |
$ |
484,513 |
|
|
$ |
429,054 |
|
|
$ |
55,459 |
|
|
12.93 |
% |
| National Lending
Originated |
|
619,223 |
|
|
|
523,535 |
|
|
|
95,688 |
|
|
18.28 |
% |
| SBA National |
|
35,682 |
|
|
|
39,549 |
|
|
|
(3,867 |
) |
|
(9.78 |
%) |
| Community Banking |
|
41,766 |
|
|
|
48,486 |
|
|
|
(6,720 |
) |
|
(13.86 |
%) |
| Total |
$ |
1,181,184 |
|
|
$ |
1,040,624 |
|
|
$ |
140,560 |
|
|
13.51 |
% |
Loans generated by the Bank's National Lending Division for the
quarter ended December 31, 2021 totaled $260.5 million, which
consisted of $92.1 million of purchased loans, at an average price
of 98.7% of unpaid principal balance, and $168.4 million of
originated loans.
An overview of the Bank’s National Lending
portfolio follows:
| |
National Lending Portfolio |
| |
Three Months Ended December 31, |
| |
2021 |
|
2020 |
| |
Purchased |
|
Originated |
|
Total |
|
Purchased |
|
Originated |
|
Total |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
(Dollars in thousands) |
| Loans purchased or originated
during the period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid principal balance |
$ |
93,379 |
|
|
$ |
168,398 |
|
|
$ |
261,777 |
|
|
$ |
97,759 |
|
|
$ |
84,607 |
|
|
$ |
182,366 |
|
|
Net investment basis |
|
92,136 |
|
|
|
168,398 |
|
|
|
260,534 |
|
|
|
91,284 |
|
|
|
84,607 |
|
|
|
175,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Returns on loan portfolio
during the period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield |
|
8.92 |
% |
|
|
6.48 |
% |
|
|
7.53 |
% |
|
|
9.06 |
% |
|
|
6.87 |
% |
|
|
7.89 |
% |
|
Total Return on Purchased Loans (1) |
|
8.96 |
% |
|
|
N/A |
|
|
|
8.96 |
% |
|
|
9.06 |
% |
|
|
6.87 |
% |
|
|
7.89 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Six Months Ended December 31, |
| |
2021 |
|
2020 |
| |
Purchased |
|
Originated |
|
Total |
|
Purchased |
|
Originated |
|
Total |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
(Dollars in thousands) |
| Loans purchased or originated
during the period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid principal balance |
$ |
130,413 |
|
|
$ |
262,884 |
|
|
$ |
393,297 |
|
|
$ |
103,588 |
|
|
$ |
125,515 |
|
|
$ |
229,103 |
|
|
Net investment basis |
|
127,492 |
|
|
|
262,884 |
|
|
|
390,376 |
|
|
|
95,862 |
|
|
|
125,515 |
|
|
|
221,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Returns on loan portfolio
during the period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield |
|
9.08 |
% |
|
|
6.43 |
% |
|
|
7.58 |
% |
|
|
9.08 |
% |
|
|
6.95 |
% |
|
|
7.93 |
% |
|
Total Return on Purchased Loans (1) |
|
9.07 |
% |
|
|
N/A |
|
|
|
9.07 |
% |
|
|
9.08 |
% |
|
|
6.95 |
% |
|
|
7.93 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total loans as of period
end: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid principal balance |
$ |
518,175 |
|
|
$ |
619,223 |
|
|
$ |
1,137,398 |
|
|
$ |
456,524 |
|
|
$ |
478,423 |
|
|
$ |
934,947 |
|
|
Net investment basis |
|
484,513 |
|
|
|
619,223 |
|
|
|
1,103,736 |
|
|
|
418,584 |
|
|
|
478,423 |
|
|
|
897,007 |
|
(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.”
3. Deposits decreased by $709.2 million, or 38.1%, from
June 30, 2021, attributable to decreases in demand deposits of
$655.9 million, or 67.5%, time deposits of $101.5 million, or
36.5%, and money market accounts of $29.4 million, or 10.3%,
partially offset by an increase in savings and interest-bearing
checking accounts of $77.6 million, or 23.9%. The primary reason
for the net decrease in deposits was due to timing of the receipt
of short-term customer funds related to PPP payoff collections
prior to June 30, 2021, which were subsequently used to pay down
NEWITY’s PPP Liquidity Facility (“PPPLF”) balance during the six
months ended December 31, 2021.
4. Shareholders’ equity increased by $6.8 million, or
3.0%, from June 30, 2021, primarily due to net income of $21.3
million and stock-based compensation of $480 thousand, partially
offset by the repurchase of 456 thousand shares of voting common
stock at a weighted average price per share of $33.04, which
resulted in a $15.1 million decrease in shareholders’ equity.
Net income increased by $3.2 million to $11.4 million for the
quarter ended December 31, 2021, compared to net income of $8.2
million for the quarter ended December 31, 2020.
1. Net interest and dividend income before provision for
loan losses increased by $4.7 million to $20.1 million for the
quarter ended December 31, 2021, compared to $15.4 million for the
quarter ended December 31, 2020. The increase was primarily due to
the following:
- An increase in interest income earned on loans of $3.1 million,
primarily due to an increase in interest income earned on the
National Lending Division’s originated and purchased portfolios,
due to higher average balances, partially offset by lower rates
earned on both portfolios;
- A decrease in deposit interest expense of $1.3 million,
primarily due to lower interest rates and a repositioning of the
Bank’s deposit portfolio; and
- A decrease in interest expense on subordinated debt of $282
thousand, as the Bank redeemed its $15.1 million subordinated debt
in full at par plus accrued interest on July 1, 2021; partially
offset by,
- A decrease of $117 thousand in interest income earned on
securities, due to lower rates earned and lower average
balances.
The following table summarizes interest income and related
yields recognized on the loan portfolios:
| |
Interest Income and Yield on Loans |
| |
Three Months Ended December 31, |
| |
2021 |
|
2020 |
| |
Average |
|
Interest |
|
|
|
Average |
|
Interest |
|
|
| |
Balance (1) |
|
Income |
|
Yield |
|
Balance (1) |
|
Income |
|
Yield |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
(Dollars in thousands) |
|
Community Banking |
$ |
42,728 |
|
|
$ |
556 |
|
|
5.16 |
% |
|
$ |
57,801 |
|
|
$ |
658 |
|
|
4.52 |
% |
| SBA National |
|
36,027 |
|
|
|
635 |
|
|
6.99 |
% |
|
|
48,953 |
|
|
|
616 |
|
|
4.99 |
% |
| SBA PPP |
|
628 |
|
|
|
2 |
|
|
1.26 |
% |
|
|
- |
|
|
|
- |
|
|
0.00 |
% |
| National
Lending: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated |
|
601,394 |
|
|
|
9,827 |
|
|
6.48 |
% |
|
|
450,698 |
|
|
|
7,801 |
|
|
6.87 |
% |
|
Purchased |
|
452,644 |
|
|
|
10,175 |
|
|
8.92 |
% |
|
|
395,692 |
|
|
|
9,033 |
|
|
9.06 |
% |
|
Total National Lending |
|
1,054,038 |
|
|
|
20,002 |
|
|
7.53 |
% |
|
|
846,390 |
|
|
|
16,834 |
|
|
7.89 |
% |
|
Total |
$ |
1,133,421 |
|
|
$ |
21,195 |
|
|
7.42 |
% |
|
$ |
953,144 |
|
|
$ |
18,108 |
|
|
7.54 |
% |
| |
|
| |
Six
Months Ended December 31, |
| |
2021 |
|
2020 |
| |
Average |
|
Interest |
|
|
|
Average |
|
Interest |
|
|
| |
Balance (1) |
|
Income |
|
Yield |
|
Balance (1) |
|
Income |
|
Yield |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
(Dollars in thousands) |
| Community
Banking |
$ |
43,383 |
|
|
$ |
1,131 |
|
|
5.17 |
% |
|
$ |
61,620 |
|
|
$ |
1,502 |
|
|
4.84 |
% |
| SBA National |
|
38,168 |
|
|
|
1,271 |
|
|
6.61 |
% |
|
|
48,444 |
|
|
|
1,171 |
|
|
4.80 |
% |
| SBA PPP |
|
1,006 |
|
|
|
13 |
|
|
2.56 |
% |
|
|
8,608 |
|
|
|
81 |
|
|
1.87 |
% |
| National
Lending: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Originated |
|
574,343 |
|
|
|
18,612 |
|
|
6.43 |
% |
|
|
451,721 |
|
|
|
15,830 |
|
|
6.95 |
% |
|
Purchased |
|
440,224 |
|
|
|
20,161 |
|
|
9.08 |
% |
|
|
384,946 |
|
|
|
17,629 |
|
|
9.08 |
% |
|
Total National Lending |
|
1,014,567 |
|
|
|
38,773 |
|
|
7.58 |
% |
|
|
836,667 |
|
|
|
33,459 |
|
|
7.93 |
% |
|
Total |
$ |
1,097,124 |
|
|
$ |
41,188 |
|
|
7.45 |
% |
|
$ |
955,339 |
|
|
$ |
36,213 |
|
|
7.52 |
% |
|
(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 December 31, 2020, regularly
scheduled interest and accretion for the quarter ended December 31,
2021 increased by $463 thousand due to the increase in average
balances and transactional income increased by $728 thousand. The
total return on purchased loans for the quarter ended December 31,
2021 was 9.0%, a decrease from 9.1% for the quarter ended December
31, 2020. The following table details the total return on purchased
loans:
| |
Total Return on Purchased Loans |
| |
Three Months Ended December 31, |
| |
2021 |
|
2020 |
| |
Income |
|
Return (1) |
|
Income |
|
Return (1) |
| |
|
|
|
|
|
|
|
| |
(Dollars in thousands) |
|
Regularly scheduled interest and accretion |
$ |
7,576 |
|
|
6.64 |
% |
|
$ |
7,113 |
|
7.13 |
% |
| Transactional income: |
|
|
|
|
|
|
|
|
|
|
|
Gain on real estate owned |
|
49 |
|
|
0.04 |
% |
|
|
- |
|
0.00 |
% |
|
Accelerated accretion and loan fees |
|
2,599 |
|
|
2.28 |
% |
|
|
1,920 |
|
1.93 |
% |
|
Total transactional income |
|
2,648 |
|
|
2.32 |
% |
|
|
1,920 |
|
1.93 |
% |
|
Total |
$ |
10,224 |
|
|
8.96 |
% |
|
$ |
9,033 |
|
9.06 |
% |
| |
|
| |
Six Months Ended December 31, |
| |
2021 |
|
2020 |
| |
Income |
|
Return (1) |
|
Income |
|
Return (1) |
| |
|
|
|
|
|
|
|
| |
(Dollars in thousands) |
| Regularly scheduled interest
and accretion |
$ |
14,557 |
|
|
6.56 |
% |
|
$ |
13,677 |
|
7.05 |
% |
| Transactional income: |
|
|
|
|
|
|
|
|
|
|
Loss on real estate owned |
|
(25 |
) |
|
(0.01 |
%) |
|
|
- |
|
0.00 |
% |
|
Accelerated accretion and loan fees |
|
5,604 |
|
|
2.52 |
% |
|
|
3,952 |
|
2.03 |
% |
|
Total transactional income |
|
5,579 |
|
|
2.51 |
% |
|
|
3,952 |
|
2.03 |
% |
|
Total |
$ |
20,136 |
|
|
9.07 |
% |
|
$ |
17,629 |
|
9.08 |
% |
(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 quarter. Total
return is considered a non-GAAP financial measure.
2. Provision (credit) for loan losses decreased by $1.4
million to a credit of $1.1 million for the quarter ended December
31, 2021, from a $365 thousand provision in the quarter ended
December 31, 2020. The decrease in the provision (credit) for loan
losses reflects decreases in certain qualitative factors during the
current quarter as a result of continued improvements relative to
the COVID-19 pandemic, as compared to increases in certain
qualitative factors during the quarter ended December 31, 2020 as a
result of impacts from the COVID-19 pandemic.
3. Noninterest income decreased by $4 thousand for the quarter
ended December 31, 2021, compared to the quarter ended December 31,
2020, primarily due to the following:
- An increase in gain on real estate owned (“REO”) of $260
thousand, due to the gain on sale of a REO property during the
current quarter, as compared to a large write-down on an existing
REO property and a net loss on the sale of two REO properties
during the quarter ended December 31, 2020; partially offset
by,
- A decrease in fees for other customers of $184 thousand, due to
lower commercial loan servicing fees due to SBA loan payoffs;
- An increase in unrealized loss on equity securities of $37
thousand; and
- A decrease in correspondent fee income of $41 thousand from the
recognition of correspondent fees and net servicing income.
Correspondent income for the quarters ended December 31, 2021 and
2020 is comprised of the following components:
| |
Three Months Ended December 31, |
| |
2021 |
|
2020 |
| |
|
|
|
| |
|
(In thousands) |
|
Correspondent Fee |
$ |
1,087 |
|
|
$ |
1,061 |
|
| Amortization of Purchased
Accrued Interest |
|
1,614 |
|
|
|
613 |
|
| Earned Net Servicing
Interest |
|
3,340 |
|
|
|
4,408 |
|
| Total |
$ |
6,041 |
|
|
$ |
6,082 |
|
| |
|
|
|
|
|
|
|
In addition to the net servicing interest income, a summary of
PPP loans purchased by Loan Source and related amounts that the
Bank will earn over the expected life of the loans is as
follows:
|
Quarter |
|
PPP Loans Purchased by Loan
Source(3) |
|
Correspondent Fee |
|
Purchased Accrued
Interest(1) |
|
Total(2) |
| |
|
|
|
|
|
|
|
|
|
(In thousands) |
|
Q4 FY 2020 |
|
$ |
1,272,900 |
|
|
$ |
2,891 |
|
|
$ |
688 |
|
|
$ |
3,579 |
|
|
Q1 FY 2021 |
|
|
2,112,100 |
|
|
|
5,348 |
|
|
|
2,804 |
|
|
|
8,152 |
|
|
Q2 FY 2021 |
|
|
1,333,500 |
|
|
|
495 |
|
|
|
3,766 |
|
|
|
4,261 |
|
|
Q3 FY 2021 |
|
|
2,141,900 |
|
|
|
- |
|
|
|
598 |
|
|
|
598 |
|
|
Q4 FY 2021 |
|
|
4,371,000 |
|
|
|
171 |
|
|
|
2,703 |
|
|
|
2,874 |
|
|
Q1 FY 2022 |
|
|
6,300 |
|
|
|
- |
|
|
|
1 |
|
|
|
1 |
|
|
Total |
|
$ |
11,237,700 |
|
|
$ |
8,905 |
|
|
$ |
10,560 |
|
|
$ |
19,465 |
|
|
Less amounts recognized in Q2 FY 22 |
|
|
|
(1,087 |
) |
|
|
(1,614 |
) |
|
|
(2,701 |
) |
|
Less amounts recognized in previous quarters |
|
|
|
(5,168 |
) |
|
|
(4,579 |
) |
|
|
(9,747 |
) |
|
Amount remaining to be recognized |
|
|
$ |
2,650 |
|
|
$ |
4,367 |
|
|
$ |
7,017 |
|
(1) - Northeast Bank's share(2) - Expected to be recognized into
income over life of loans(3) - Loan Source’s ending PPP loan
balance was $4.64 billion as of December 31, 2021
4. Noninterest expense increased by $759 thousand for the
quarter ended December 31, 2021 compared to the quarter ended
December 31, 2020, primarily due to the following:
- An increase in salaries and employee benefits expense of $1.4
million, primarily due to increases in regular employee
compensation, bonus, and stock compensation expense; and
- An increase in other noninterest expense of $42 thousand,
primarily due to increases in insurance expense, travel and meals
and entertainment expense, and correspondent banking fees during
the quarter ended December 31, 2021 compared to December 31, 2020;
partially offset by,
- A decrease in loan expense of $613 thousand, due to a decrease
in PPP and SBA 7(a) expenses of $424 thousand, and decreases in REO
and collection expense due to collection reimbursements during the
quarter ended December 31, 2021; and
- A decrease in occupancy and equipment expense of $183 thousand,
primarily due to the closure of an office location during the
quarter ended December 31, 2020.
5. Income tax expense increased by $2.1 million to $5.0
million, or an effective tax rate of 30.6%, for the quarter ended
December 31, 2021, compared to $2.9 million, or an effective tax
rate of 26.3%, for the quarter ended December 31, 2020. The
increase was primarily due to higher pre-tax income, which
increased by $5.3 million during the quarter ended December 31,
2021 compared to the quarter ended December 31, 2020. The increase
in effective tax rate was primarily due to $472 thousand of tax
benefits arising from the exercise of stock options during the
quarter ended December 31, 2020, as compared to only $44 thousand
of tax benefits in the quarter ended December 31, 2021.
As of December 31, 2021, nonperforming assets totaled $21.3
million, or 1.46% of total assets, as compared to $20.4 million, or
0.94% of total assets, as of June 30, 2021. The increase was
primarily due to five National Lending Division loans totaling $4.3
million that were placed on nonaccrual during the six months ended
December 31, 2021, partially offset by the sale of three REO
properties totaling $1.8 million, and paydowns of $1.4 million on
nonaccrual loans.
As of December 31, 2021, past due loans totaled $14.6 million,
or 1.23% of total loans, as compared to past due loans totaling
$11.3 million, or 1.08% of total loans as of June 30, 2021. The
increase was primarily due to three National Lending Division loans
totaling $4.3 million becoming past due during the six months ended
December 31, 2021, partially offset by two purchased loans totaling
$1.1 million that became current.
As of December 31, 2021, the Bank’s Tier 1 leverage capital
ratio was 15.2%, compared to 13.6% at June 30, 2021, and the Total
capital ratio was 20.8% at December 31, 2021, compared to 24.3% at
June 30, 2021. Capital ratios were primarily affected by increased
earnings and decreased assets, while the total capital ratio was
negatively impacted by the redemption of the subordinated debt on
July 1, 2021.
Investor Call InformationRick 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 second quarter
earnings and business outlook at 10:00 a.m. Eastern Time on
Thursday, January 27th.
Investors can access the call by dialing 800.773.2954 and entering
the following passcode: 50273456. 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 Portland, Maine. We
offer personal and business banking services to the Maine market
via eight branches. Our National Lending Division 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 MeasuresIn addition to
results presented in accordance with generally accepted accounting
principles (“GAAP”), this press release contains certain non-GAAP
financial measures, including tangible common shareholders’ equity,
tangible book value per share, total return on purchased loans,
efficiency ratio, net interest margin excluding PPP, and net
interest margin excluding PPP and collection account. 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. We may also make forward-looking statements in other
documents we file with the FDIC, in our annual reports to our
shareholders, in press releases and other written materials, and in
oral statements made by our officers, directors or employees. You
can identify forward-looking statements by the use of the words
“believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,”
“outlook,” “will,” “should,” and other expressions that predict or
indicate future events and trends and which do not relate to
historical matters. 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 ongoing
disruption due to 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; changes 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 political, business and
economic conditions or legislative or regulatory initiatives;
turbulence in the capital and debt markets; reductions in net
interest income resulting from interest rate volatility as well as
changes in the balances and mix of loans and deposits; changes in
interest rates and real estate values; changes in loan
collectability, increases in 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; changes in legislation or regulation and accounting
principles, policies and guidelines; 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; reputational risk relating to its participation in
the Paycheck Protection Program and other pandemic-related
legislative and regulatory initiatives and programs; 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 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-F
| |
| NORTHEAST
BANK |
| BALANCE
SHEETS |
| (Unaudited) |
| (Dollars in
thousands, except share and per share data) |
| |
December 31, 2021 |
|
June 30, 2021 |
|
Assets |
|
|
|
|
|
|
Cash and due from banks |
$ |
2,424 |
|
|
$ |
2,850 |
|
| Short-term investments |
|
163,785 |
|
|
|
1,007,641 |
|
|
Total cash and cash equivalents |
|
166,209 |
|
|
|
1,010,491 |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Available-for-sale debt
securities, at fair value |
|
57,323 |
|
|
|
59,737 |
|
| Equity securities, at fair
value |
|
7,194 |
|
|
|
7,230 |
|
|
Total investment securities |
|
64,517 |
|
|
|
66,967 |
|
| |
|
|
|
|
|
| Loans: |
|
|
|
|
|
|
Commercial real estate |
|
830,095 |
|
|
|
725,287 |
|
|
Commercial and industrial |
|
289,387 |
|
|
|
257,604 |
|
|
Residential real estate |
|
60,825 |
|
|
|
56,591 |
|
|
Consumer |
|
877 |
|
|
|
1,142 |
|
|
Total loans |
|
1,181,184 |
|
|
|
1,040,624 |
|
|
Less: Allowance for loan losses |
|
6,040 |
|
|
|
7,313 |
|
|
Loans, net |
|
1,175,144 |
|
|
|
1,033,311 |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Premises and equipment,
net |
|
9,977 |
|
|
|
11,271 |
|
| Real estate owned and other
repossessed collateral, net |
|
53 |
|
|
|
1,639 |
|
| Federal Home Loan Bank stock,
at cost |
|
1,279 |
|
|
|
1,209 |
|
| Loan servicing rights,
net |
|
1,645 |
|
|
|
2,061 |
|
| Bank-owned life insurance |
|
17,710 |
|
|
|
17,498 |
|
| Other assets |
|
23,421 |
|
|
|
29,955 |
|
|
Total assets |
$ |
1,459,955 |
|
|
$ |
2,174,402 |
|
| |
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
Demand |
$ |
316,556 |
|
|
$ |
972,495 |
|
|
Savings and interest checking |
|
402,689 |
|
|
|
325,062 |
|
|
Money market |
|
257,593 |
|
|
|
287,033 |
|
|
Time |
|
176,357 |
|
|
|
277,840 |
|
|
Total deposits |
|
1,153,195 |
|
|
|
1,862,430 |
|
| |
|
|
|
|
|
| Federal Home Loan Bank
advances |
|
15,000 |
|
|
|
15,000 |
|
| Subordinated debt |
|
- |
|
|
|
15,050 |
|
| Lease liability |
|
5,266 |
|
|
|
6,061 |
|
| Other liabilities |
|
47,257 |
|
|
|
43,470 |
|
|
Total liabilities |
|
1,220,718 |
|
|
|
1,942,011 |
|
| |
|
|
|
|
|
| Commitments and
contingencies |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Shareholders' equity |
|
|
|
|
|
| Preferred stock, $1.00 par
value, 1,000,000 shares authorized; no shares |
|
|
|
|
|
issued and outstanding at December 31, 2021 and June 30, 2021 |
|
- |
|
|
|
- |
|
| Voting common stock, $1.00 par
value, 25,000,000 shares authorized; |
|
|
|
|
|
|
7,815,566 and 8,150,480 shares issued and outstanding at |
|
|
|
|
|
December 31, 2021 and June 30, 2021, respectively |
|
7,816 |
|
|
|
8,151 |
|
| Non-voting common stock, $1.00
par value, 3,000,000 shares authorized; |
|
|
|
|
|
|
no shares issued and outstanding at December 31, 2021 and June 30,
2021 |
- |
|
|
- |
|
| Additional paid-in
capital |
|
50,440 |
|
|
|
64,420 |
|
| Retained earnings |
|
182,248 |
|
|
|
161,132 |
|
| Accumulated other
comprehensive loss |
|
(1,267 |
) |
|
|
(1,312 |
) |
|
Total shareholders' equity |
|
239,237 |
|
|
|
232,391 |
|
|
Total liabilities and shareholders' equity |
$ |
1,459,955 |
|
|
$ |
2,174,402 |
|
| |
|
|
|
|
|
|
|
| |
| NORTHEAST
BANK |
| STATEMENTS
OF INCOME |
| (Unaudited) |
| (Dollars in
thousands, except share and per share data) |
| |
Three Months Ended December 31, |
|
Six Months Ended December 31, |
| |
2021 |
|
2020 |
|
2021 |
|
2020 |
| Interest and dividend
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
$ |
21,195 |
|
|
$ |
18,108 |
|
|
$ |
41,188 |
|
|
$ |
36,213 |
|
|
Interest on available-for-sale securities |
|
76 |
|
|
|
193 |
|
|
|
170 |
|
|
|
483 |
|
|
Other interest and dividend income |
|
118 |
|
|
|
54 |
|
|
|
292 |
|
|
|
142 |
|
|
Total interest and dividend income |
|
21,389 |
|
|
|
18,355 |
|
|
|
41,650 |
|
|
|
36,838 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
1,184 |
|
|
|
2,529 |
|
|
|
2,492 |
|
|
|
5,587 |
|
|
Federal Home Loan Bank advances |
|
127 |
|
|
|
126 |
|
|
|
255 |
|
|
|
250 |
|
|
Paycheck Protection Program Liquidity Facility |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
Subordinated debt |
|
- |
|
|
|
282 |
|
|
|
- |
|
|
|
563 |
|
|
Obligation under capital lease agreements |
|
23 |
|
|
|
30 |
|
|
|
49 |
|
|
|
55 |
|
|
Total interest expense |
|
1,334 |
|
|
|
2,967 |
|
|
|
2,796 |
|
|
|
6,457 |
|
| Net interest and dividend
income before provision for loan losses |
|
20,055 |
|
|
|
15,388 |
|
|
|
38,854 |
|
|
|
30,381 |
|
| Provision (credit) for loan
losses |
|
(1,069 |
) |
|
|
365 |
|
|
|
(1,295 |
) |
|
|
742 |
|
| Net interest and dividend
income after provision for loan losses |
|
21,124 |
|
|
|
15,023 |
|
|
|
40,149 |
|
|
|
29,639 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Fees for other services to customers |
|
304 |
|
|
|
488 |
|
|
|
761 |
|
|
|
988 |
|
|
Gain on sales of PPP loans |
|
- |
|
|
|
4 |
|
|
|
86 |
|
|
|
1,114 |
|
|
Gain on sales of residential loans held for sale |
|
- |
|
|
|
19 |
|
|
|
- |
|
|
|
102 |
|
|
Net unrealized loss on equity securities |
|
(53 |
) |
|
|
(16 |
) |
|
|
(74 |
) |
|
|
(16 |
) |
|
Gain (loss) on real estate owned, other repossessed collateral and
premises and equipment, net |
|
73 |
|
|
|
(187 |
) |
|
|
(1 |
) |
|
|
(344 |
) |
|
Correspondent fee income |
|
6,041 |
|
|
|
6,082 |
|
|
|
13,872 |
|
|
|
10,829 |
|
|
Bank-owned life insurance income |
|
106 |
|
|
|
106 |
|
|
|
212 |
|
|
|
212 |
|
|
Other noninterest income |
|
22 |
|
|
|
1 |
|
|
|
36 |
|
|
|
28 |
|
|
Total noninterest income |
|
6,493 |
|
|
|
6,497 |
|
|
|
14,892 |
|
|
|
12,913 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
7,406 |
|
|
|
5,971 |
|
|
|
14,968 |
|
|
|
12,322 |
|
|
Occupancy and equipment expense |
|
864 |
|
|
|
1,047 |
|
|
|
1,752 |
|
|
|
1,974 |
|
|
Professional fees |
|
394 |
|
|
|
443 |
|
|
|
915 |
|
|
|
806 |
|
|
Data processing fees |
|
1,099 |
|
|
|
1,066 |
|
|
|
2,174 |
|
|
|
2,090 |
|
|
Marketing expense |
|
158 |
|
|
|
120 |
|
|
|
350 |
|
|
|
161 |
|
|
Loan acquisition and collection expense |
|
211 |
|
|
|
824 |
|
|
|
2,459 |
|
|
|
1,513 |
|
|
FDIC insurance expense |
|
120 |
|
|
|
64 |
|
|
|
200 |
|
|
|
112 |
|
|
Other noninterest expense |
|
935 |
|
|
|
893 |
|
|
|
1,708 |
|
|
|
1,383 |
|
|
Total noninterest expense |
|
11,187 |
|
|
|
10,428 |
|
|
|
24,526 |
|
|
|
20,361 |
|
| Income before income tax
expense |
|
16,430 |
|
|
|
11,092 |
|
|
|
30,515 |
|
|
|
22,191 |
|
| Income tax expense |
|
5,027 |
|
|
|
2,916 |
|
|
|
9,236 |
|
|
|
6,221 |
|
| Net income |
$ |
11,403 |
|
|
$ |
8,176 |
|
|
$ |
21,279 |
|
|
$ |
15,970 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
7,952,938 |
|
|
|
8,244,068 |
|
|
|
8,012,106 |
|
|
|
8,220,604 |
|
|
Diluted |
|
8,041,476 |
|
|
|
8,309,252 |
|
|
|
8,096,728 |
|
|
|
8,312,330 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.43 |
|
|
$ |
0.99 |
|
|
$ |
2.66 |
|
|
$ |
1.94 |
|
|
Diluted |
|
1.42 |
|
|
|
0.98 |
|
|
|
2.63 |
|
|
|
1.92 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash dividends declared per
common share |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
0.02 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| NORTHEAST
BANK |
| AVERAGE
BALANCE SHEETS AND ANNUALIZED YIELDS |
| (Unaudited) |
| (Dollars in
thousands) |
| |
Three Months Ended December 31, |
| |
2021 |
|
2020 |
| |
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| |
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| |
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
| Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
$ |
65,444 |
|
|
$ |
76 |
|
|
0.46 |
% |
|
$ |
70,409 |
|
|
$ |
193 |
|
|
1.09 |
% |
|
Loans (1) (2) (3) |
|
1,133,421 |
|
|
|
21,195 |
|
|
7.42 |
% |
|
|
953,144 |
|
|
|
18,108 |
|
|
7.54 |
% |
|
Federal Home Loan Bank stock |
|
1,222 |
|
|
|
6 |
|
|
1.95 |
% |
|
|
1,390 |
|
|
|
13 |
|
|
3.71 |
% |
|
Short-term investments (4) |
|
319,639 |
|
|
|
112 |
|
|
0.14 |
% |
|
|
143,272 |
|
|
|
41 |
|
|
0.11 |
% |
| Total interest-earning
assets |
|
1,519,726 |
|
|
|
21,389 |
|
|
5.58 |
% |
|
|
1,168,215 |
|
|
|
18,355 |
|
|
6.23 |
% |
| Cash and due from banks |
|
2,734 |
|
|
|
|
|
|
|
|
|
3,058 |
|
|
|
|
|
|
| Other non-interest earning
assets |
|
61,013 |
|
|
|
|
|
|
|
|
|
46,730 |
|
|
|
|
|
|
| Total assets |
$ |
1,583,473 |
|
|
|
|
|
|
|
|
$ |
1,218,003 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities &
Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
288,599 |
|
|
$ |
192 |
|
|
0.26 |
% |
|
$ |
128,337 |
|
|
$ |
113 |
|
|
0.35 |
% |
|
Money market accounts |
|
264,731 |
|
|
|
197 |
|
|
0.30 |
% |
|
|
310,074 |
|
|
|
377 |
|
|
0.48 |
% |
|
Savings accounts |
|
101,204 |
|
|
|
124 |
|
|
0.49 |
% |
|
|
37,301 |
|
|
|
12 |
|
|
0.13 |
% |
|
Time deposits |
|
225,801 |
|
|
|
671 |
|
|
1.18 |
% |
|
|
388,669 |
|
|
|
2,027 |
|
|
2.07 |
% |
| Total interest-bearing
deposits |
|
880,335 |
|
|
|
1,184 |
|
|
0.53 |
% |
|
|
864,381 |
|
|
|
2,529 |
|
|
1.16 |
% |
|
Federal Home Loan Bank advances |
|
15,000 |
|
|
|
127 |
|
|
3.36 |
% |
|
|
15,000 |
|
|
|
126 |
|
|
3.33 |
% |
|
Subordinated debt |
|
- |
|
|
|
- |
|
|
0.00 |
% |
|
|
14,981 |
|
|
|
282 |
|
|
7.47 |
% |
|
Lease liability |
|
5,446 |
|
|
|
23 |
|
|
1.68 |
% |
|
|
6,501 |
|
|
|
30 |
|
|
1.83 |
% |
| Total interest-bearing
liabilities |
|
900,781 |
|
|
|
1,334 |
|
|
0.59 |
% |
|
|
900,863 |
|
|
|
2,967 |
|
|
1.31 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand deposits and escrow
accounts |
|
427,550 |
|
|
|
|
|
|
|
|
|
123,413 |
|
|
|
|
|
|
| Other liabilities |
|
14,072 |
|
|
|
|
|
|
|
|
|
17,193 |
|
|
|
|
|
|
| Total liabilities |
|
1,342,403 |
|
|
|
|
|
|
|
|
|
1,041,469 |
|
|
|
|
|
|
| Shareholders' equity |
|
241,070 |
|
|
|
|
|
|
|
|
|
176,534 |
|
|
|
|
|
|
| Total liabilities and
shareholders' equity |
$ |
1,583,473 |
|
|
|
|
|
|
|
|
$ |
1,218,003 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
$ |
20,055 |
|
|
|
|
|
|
|
|
$ |
15,388 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest rate spread |
|
|
|
|
|
|
|
|
4.99 |
% |
|
|
|
|
|
|
|
|
4.92 |
% |
| Net interest margin (5) |
|
|
|
|
|
|
|
|
5.24 |
% |
|
|
|
|
|
|
|
|
5.23 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of funds (6) |
|
|
|
|
|
|
|
|
0.40 |
% |
|
|
|
|
|
|
|
|
1.31 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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. |
| (6) Cost of funds
is calculated as total interest expense divided by total
interest-bearing liabilities plus demand deposits and escrow
accounts. |
| |
| |
| NORTHEAST
BANK |
| AVERAGE
BALANCE SHEETS AND ANNUALIZED YIELDS |
|
(Unaudited) |
| (Dollars
in thousands) |
| |
Six Months Ended December 31, |
| |
2021 |
|
2020 |
| |
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| |
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| |
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
| Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
$ |
65,994 |
|
|
$ |
170 |
|
|
0.51 |
% |
|
$ |
71,275 |
|
|
$ |
483 |
|
|
1.34 |
% |
|
Loans (1) (2) (3) |
|
1,097,124 |
|
|
|
41,188 |
|
|
7.45 |
% |
|
|
955,339 |
|
|
|
36,213 |
|
|
7.52 |
% |
|
Federal Home Loan Bank stock |
|
1,216 |
|
|
|
13 |
|
|
2.12 |
% |
|
|
1,390 |
|
|
|
46 |
|
|
6.56 |
% |
|
Short-term investments (4) |
|
381,543 |
|
|
|
279 |
|
|
0.15 |
% |
|
|
156,440 |
|
|
|
96 |
|
|
0.12 |
% |
| Total interest-earning
assets |
|
1,545,877 |
|
|
|
41,650 |
|
|
5.34 |
% |
|
|
1,184,444 |
|
|
|
36,838 |
|
|
6.17 |
% |
| Cash and due from banks |
|
2,774 |
|
|
|
|
|
|
|
|
2,992 |
|
|
|
|
|
|
|
| Other non-interest earning
assets |
|
55,409 |
|
|
|
|
|
|
|
|
42,792 |
|
|
|
|
|
|
|
| Total assets |
$ |
1,604,060 |
|
|
|
|
|
|
|
$ |
1,230,228 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities &
Shareholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
279,316 |
|
|
$ |
367 |
|
|
0.26 |
% |
|
$ |
125,991 |
|
|
$ |
240 |
|
|
0.38 |
% |
|
Money market accounts |
|
270,318 |
|
|
|
399 |
|
|
0.29 |
% |
|
|
311,173 |
|
|
|
912 |
|
|
0.58 |
% |
|
Savings accounts |
|
86,432 |
|
|
|
193 |
|
|
0.44 |
% |
|
|
37,414 |
|
|
|
26 |
|
|
0.14 |
% |
|
Time deposits |
|
242,887 |
|
|
|
1,533 |
|
|
1.25 |
% |
|
|
412,248 |
|
|
|
4,409 |
|
|
2.12 |
% |
| Total interest-bearing
deposits |
|
878,953 |
|
|
|
2,492 |
|
|
0.56 |
% |
|
|
886,826 |
|
|
|
5,587 |
|
|
1.25 |
% |
|
Federal Home Loan Bank advances |
|
15,000 |
|
|
|
255 |
|
|
3.37 |
% |
|
|
15,000 |
|
|
|
250 |
|
|
3.31 |
% |
|
PPPLF advances |
|
- |
|
|
|
- |
|
|
0.00 |
% |
|
|
879 |
|
|
|
2 |
|
|
0.45 |
% |
|
Subordinated debt |
|
- |
|
|
|
- |
|
|
0.00 |
% |
|
|
14,967 |
|
|
|
563 |
|
|
7.46 |
% |
|
Capital lease obligations |
|
5,632 |
|
|
|
49 |
|
|
1.73 |
% |
|
|
5,404 |
|
|
|
55 |
|
|
2.02 |
% |
| Total interest-bearing
liabilities |
|
899,585 |
|
|
|
2,796 |
|
|
0.62 |
% |
|
|
923,076 |
|
|
|
6,457 |
|
|
1.39 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-interest bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand deposits and escrow
accounts |
|
449,500 |
|
|
|
|
|
|
|
|
117,857 |
|
|
|
|
|
|
|
| Other liabilities |
|
17,119 |
|
|
|
|
|
|
|
|
17,441 |
|
|
|
|
|
|
|
| Total liabilities |
|
1,366,204 |
|
|
|
|
|
|
|
|
1,058,374 |
|
|
|
|
|
|
|
| Shareholders' equity |
|
237,856 |
|
|
|
|
|
|
|
|
171,854 |
|
|
|
|
|
|
|
| Total liabilities and
shareholders' equity |
$ |
1,604,060 |
|
|
|
|
|
|
|
$ |
1,230,228 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
|
$ |
38,854 |
|
|
|
|
|
|
|
$ |
30,381 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest rate spread |
|
|
|
|
|
|
|
4.72 |
% |
|
|
|
|
|
|
|
|
4.78 |
% |
| Net interest margin (5) |
|
|
|
|
|
|
|
4.99 |
% |
|
|
|
|
|
|
|
|
5.09 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of funds (6) |
|
|
|
|
|
|
|
0.41 |
% |
|
|
|
|
|
|
|
|
1.23 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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. |
| (6) Cost of funds
is calculated as total interest expense divided by total
interest-bearing liabilities plus demand deposits and escrow
accounts. |
| |
| |
| NORTHEAST
BANK |
| SELECTED
FINANCIAL HIGHLIGHTS AND OTHER DATA |
| (Unaudited) |
| (Dollars in
thousands, except share and per share data) |
| |
Three Months Ended |
| |
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
Net interest income |
$ |
20,055 |
|
|
$ |
18,799 |
|
|
$ |
18,102 |
|
|
$ |
18,603 |
|
|
$ |
15,388 |
|
| Provision (credit)
for loan losses |
|
(1,069 |
) |
|
|
(226 |
) |
|
|
(1,926 |
) |
|
|
(211 |
) |
|
|
365 |
|
| Noninterest
income |
|
6,493 |
|
|
|
8,399 |
|
|
|
19,650 |
|
|
|
39,469 |
|
|
|
6,497 |
|
| Noninterest
expense |
|
11,187 |
|
|
|
13,338 |
|
|
|
9,427 |
|
|
|
9,636 |
|
|
|
10,428 |
|
| Net income |
|
11,403 |
|
|
|
9,877 |
|
|
|
21,370 |
|
|
|
34,162 |
|
|
|
8,176 |
|
| |
|
|
|
|
|
|
|
|
|
| Weighted-average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
7,952,938 |
|
|
|
8,132,131 |
|
|
|
8,318,689 |
|
|
|
8,344,797 |
|
|
|
8,244,068 |
|
|
Diluted |
|
8,041,476 |
|
|
|
8,212,836 |
|
|
|
8,397,897 |
|
|
|
8,421,247 |
|
|
|
8,309,252 |
|
| Earnings per
common share: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.43 |
|
|
$ |
1.21 |
|
|
$ |
2.57 |
|
|
$ |
4.09 |
|
|
$ |
0.99 |
|
|
Diluted |
|
1.42 |
|
|
|
1.20 |
|
|
|
2.54 |
|
|
|
4.06 |
|
|
|
0.98 |
|
| |
|
|
|
|
|
|
|
|
|
| Dividends declared
per common share |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.01 |
|
| |
|
|
|
|
|
|
|
|
|
| Return on average
assets |
|
2.86 |
% |
|
|
2.41 |
% |
|
|
4.55 |
% |
|
|
6.99 |
% |
|
|
2.66 |
% |
| Return on average
equity |
|
18.77 |
% |
|
|
16.70 |
% |
|
|
37.97 |
% |
|
|
71.06 |
% |
|
|
18.37 |
% |
| Net interest rate
spread (1) |
|
4.99 |
% |
|
|
4.46 |
% |
|
|
3.67 |
% |
|
|
3.79 |
% |
|
|
4.92 |
% |
| Net interest
margin (2) |
|
5.24 |
% |
|
|
4.74 |
% |
|
|
3.99 |
% |
|
|
3.93 |
% |
|
|
5.23 |
% |
| Net interest
margin, excluding PPP (Non-GAAP) (3) |
|
5.24 |
% |
|
|
4.75 |
% |
|
|
4.55 |
% |
|
|
4.64 |
% |
|
|
5.23 |
% |
| Net interest
margin, excluding PPP and collection account (Non-GAAP) (4) |
|
6.44 |
% |
|
|
6.00 |
% |
|
|
5.56 |
% |
|
|
5.06 |
% |
|
|
5.23 |
% |
| Efficiency ratio
(non-GAAP) (5) |
|
42.14 |
% |
|
|
49.04 |
% |
|
|
24.97 |
% |
|
|
16.59 |
% |
|
|
47.65 |
% |
| Noninterest
expense to average total assets |
|
2.80 |
% |
|
|
3.26 |
% |
|
|
2.01 |
% |
|
|
1.97 |
% |
|
|
3.40 |
% |
| Average
interest-earning assets to average interest-bearing
liabilities |
|
168.71 |
% |
|
|
174.98 |
% |
|
|
173.30 |
% |
|
|
125.53 |
% |
|
|
129.68 |
% |
| |
|
|
|
|
|
|
|
|
|
| |
As of: |
| |
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
| Nonperforming
loans: |
|
|
|
|
|
|
|
|
|
| Originated
portfolio: |
|
|
|
|
|
|
|
|
|
|
Residential real estate |
$ |
611 |
|
|
$ |
619 |
|
|
$ |
696 |
|
|
$ |
643 |
|
|
$ |
6,676 |
|
|
Commercial real estate |
|
7,963 |
|
|
|
6,644 |
|
|
|
5,756 |
|
|
|
4,790 |
|
|
|
8,329 |
|
|
Commercial and industrial |
|
311 |
|
|
|
1,510 |
|
|
|
286 |
|
|
|
1,408 |
|
|
|
1,978 |
|
|
Consumer |
|
20 |
|
|
|
39 |
|
|
|
43 |
|
|
|
23 |
|
|
|
30 |
|
| Total originated
portfolio |
|
8,905 |
|
|
|
8,812 |
|
|
|
6,781 |
|
|
|
6,864 |
|
|
|
17,013 |
|
| Total purchased
portfolio |
|
12,294 |
|
|
|
12,527 |
|
|
|
11,977 |
|
|
|
16,059 |
|
|
|
13,497 |
|
| Total
nonperforming loans |
|
21,199 |
|
|
|
21,339 |
|
|
|
18,758 |
|
|
|
22,923 |
|
|
|
30,510 |
|
| Real estate owned
and other repossessed collateral, net |
|
53 |
|
|
|
821 |
|
|
|
1,639 |
|
|
|
2,885 |
|
|
|
2,866 |
|
| Total
nonperforming assets |
$ |
21,252 |
|
|
$ |
22,160 |
|
|
$ |
20,397 |
|
|
$ |
25,808 |
|
|
$ |
33,376 |
|
| |
|
|
|
|
|
|
|
|
|
| Past due loans to
total loans |
|
1.23 |
% |
|
|
1.39 |
% |
|
|
1.08 |
% |
|
|
1.67 |
% |
|
|
2.31 |
% |
| Nonperforming loans
to total loans |
|
1.79 |
% |
|
|
1.99 |
% |
|
|
1.80 |
% |
|
|
2.29 |
% |
|
|
3.05 |
% |
| Nonperforming assets
to total assets |
|
1.46 |
% |
|
|
1.60 |
% |
|
|
0.94 |
% |
|
|
1.51 |
% |
|
|
2.70 |
% |
| Allowance for loan
losses to total loans |
|
0.51 |
% |
|
|
0.67 |
% |
|
|
0.70 |
% |
|
|
0.88 |
% |
|
|
0.99 |
% |
| Allowance for loan
losses to nonperforming loans |
|
28.49 |
% |
|
|
33.58 |
% |
|
|
38.99 |
% |
|
|
38.48 |
% |
|
|
32.53 |
% |
| |
|
|
|
|
|
|
|
|
|
| Commercial real
estate loans to total capital (6) |
|
260.40 |
% |
|
|
232.10 |
% |
|
|
215.38 |
% |
|
|
223.09 |
% |
|
|
251.00 |
% |
| Net loans to core
deposits (7) (10) |
|
102.53 |
% |
|
|
98.96 |
% |
|
|
55.71 |
% |
|
|
76.99 |
% |
|
|
101.86 |
% |
| Purchased loans to
total loans, including held for sale |
|
41.02 |
% |
|
|
40.22 |
% |
|
|
41.23 |
% |
|
|
43.22 |
% |
|
|
41.79 |
% |
| Equity to total
assets |
|
16.39 |
% |
|
|
17.32 |
% |
|
|
10.69 |
% |
|
|
12.65 |
% |
|
|
14.74 |
% |
| Common equity tier
1 capital ratio |
|
20.27 |
% |
|
|
22.03 |
% |
|
|
22.16 |
% |
|
|
21.07 |
% |
|
|
17.93 |
% |
| Total capital
ratio |
|
20.79 |
% |
|
|
22.69 |
% |
|
|
24.29 |
% |
|
|
23.39 |
% |
|
|
20.37 |
% |
| Tier 1 leverage
capital ratio |
|
15.19 |
% |
|
|
14.83 |
% |
|
|
13.63 |
% |
|
|
14.32 |
% |
|
|
15.07 |
% |
| |
|
|
|
|
|
|
|
|
|
| Total
shareholders' equity |
$ |
239,237 |
|
|
$ |
239,508 |
|
|
$ |
232,391 |
|
|
$ |
216,862 |
|
|
$ |
181,962 |
|
| Less: Preferred
stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Common
shareholders' equity |
|
239,237 |
|
|
|
239,508 |
|
|
|
232,391 |
|
|
|
216,862 |
|
|
|
181,962 |
|
| Less: Intangible
assets (8) |
|
(1,645 |
) |
|
|
(1,906 |
) |
|
|
(2,061 |
) |
|
|
(2,149 |
) |
|
|
(2,035 |
) |
| Tangible common
shareholders' equity (non-GAAP) |
$ |
237,592 |
|
|
$ |
237,602 |
|
|
$ |
230,330 |
|
|
$ |
214,713 |
|
|
$ |
179,927 |
|
| |
|
|
|
|
|
|
|
|
|
| Common shares
outstanding |
|
7,815,566 |
|
|
|
8,172,776 |
|
|
|
8,150,480 |
|
|
|
8,344,797 |
|
|
|
8,344,797 |
|
| Book value per
common share |
$ |
30.61 |
|
|
$ |
29.31 |
|
|
$ |
28.51 |
|
|
$ |
25.99 |
|
|
$ |
21.81 |
|
| Tangible book
value per share (non-GAAP) (9) |
|
30.40 |
|
|
|
29.07 |
|
|
|
28.26 |
|
|
|
25.73 |
|
|
|
21.56 |
|
| |
|
|
|
|
|
|
|
|
|
| (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 $2 thousand, $11 thousand, $884 thousand, $2.6
million, and $81 thousand, PPPLF interest expense of $0, $0, $98
thousand, $300 thousand, and $2 thousand, and brokered CD interest
expense of $0, $0, $0, $99 thousand, and $0, as well as PPP loan
average balances of $628 thousand, $1.4 million, $172.8 million,
$481.9 million, and $314 thousand, for the quarters ended December
31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and
December 31, 2020, respectively. |
| (4) Net interest
margin excluding PPP and collection account removes the PPP impact
above and removes the effects of the cash held by the Bank from the
correspondent’s collection account in short-term investments, which
had an average balance of $287.7 million, $334.3 million, $405.9
million, and $121.7 million and earned $73 thousand, $84 thousand,
$100 thousand, and $29 thousand in interest income for the quarters
ended December 31, 2021, September 30, 2021, June 30, 2021, and
March 31, 2021, respectively. |
| (5) The efficiency
ratio represents noninterest expense divided by the sum of net
interest income (before provision for loan losses) plus noninterest
income. |
| (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
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
OfficerNortheast Bank, 27 Pearl Street, Portland, ME 04101
207.786.3245 ext. 3220www.northeastbank.com
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