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GlobeNewswire (Europe)
349 Leser
Artikel bewerten:
(1)

Northeast Bank Reports Third Quarter Results and Declares Dividend

PORTLAND, Maine, April 24, 2023 (GLOBE NEWSWIRE) -- Northeast Bank (the "Bank") (NASDAQ: NBN), a Maine-based full-service bank, today reported net income of $12.5 million, or $1.69 per diluted common share, for the quarter ended March 31, 2023, compared to net income of $10.6 million, or $1.36 per diluted common share, for the quarter ended March 31, 2022. Net income for the nine months ended March 31, 2023 was $32.1 million, or $4.35 per diluted common share, compared to $31.9 million, or $3.98 per diluted common share, for the nine months ended March 31, 2022.

The Board of Directors declared a cash dividend of $0.01 per share, payable on May 19, 2023, to shareholders of record as of May 5, 2023.

"We reported strong results in our third fiscal quarter," said Rick Wayne, Chief Executive Officer. "As a result of the historic loan growth during our second fiscal quarter, we increased the National Lending Division's interest income by $29.1 million, or 140.2%, compared to the quarter ended March 31, 2022 and by $13.8 million, or 38.3%, compared with the quarter ended December 31, 2022. We successfully integrated $998.5 million in loans purchased during the second fiscal quarter into our existing loan portfolio and maintained careful underwriting standards. Utilizing our at-the-market stock offering plan, we issued 160 thousand shares of common stock during the quarter at a weighted average net proceeds per share of $42.78." Mr. Wayne continued, "As a result of this activity, we are reporting earnings of $1.69 per diluted common share, a return on average equity of 18.5%, and a return on average assets of 1.8% for the quarter."

As of March 31, 2023, total assets were $2.87 billion, an increase of $1.28 billion, or 81.1%, from total assets of $1.58 billion as of June 30, 2022.

1. The following table highlights the changes in the loan portfolio for the three and nine months ended March 31, 2023:

Loan Portfolio Changes
Three Months Ended March 31, 2023
March 31, 2023
Balance
December 31, 2022
Balance
Change ($) Change (%)
(Dollars in thousands)
National Lending Purchased$1,460,598 $1,483,567 $(22,969) (1.55%)
National Lending Originated 994,707 963,775 30,932 3.21%
SBA National 25,537 27,239 (1,702) (6.25%)
Community Banking 28,953 30,176 (1,223) (4.05%)
Total$2,509,795 $2,504,757 $5,038 0.20%
Nine Months Ended March 31, 2023
March 31, 2023
Balance
June 30, 2022
Balance
Change ($) Change (%)
(Dollars in thousands)
National Lending Purchased$1,460,598 $477,682 $982,916 205.77%
National Lending Originated 994,707 759,229 235,478 27.67%
SBA National 25,537 33,046 (7,509) (22.72%)
Community Banking 28,953 34,909 (5,956) (17.06%)
Total$2,509,795 $1,304,866 $1,204,929 92.34%

Loans generated by the Bank's National Lending Division for the quarter ended March 31, 2023 totaled $138.6 million, which consisted of $21.5 million of purchased loans, at an average price of 90.6% of unpaid principal balance, and $117.1 million of originated loans.

An overview of the Bank's National Lending Division portfolio follows:

National Lending Portfolio
Three Months Ended March 31,
2023 2022
Purchased Originated Total Purchased Originated Total
(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance$23,715 $117,108 $140,823 $32,079 $152,105 $184,184
Net investment basis 21,493 117,108 138,601 23,920 152,105 176,025
Loan returns during the period:
Yield 7.62% 9.23% 8.26% 8.25% 6.94% 7.50%
Total Return on Purchased Loans (1) 7.62% N/A 7.62% 8.30% N/A 8.30%
Nine Months Ended March 31,
2023 2022
Purchased Originated Total Purchased Originated Total
(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance$1,260,530 $472,820 $1,733,350 $162,492 $414,989 $577,481
Net investment basis 1,095,003 472,820 1,567,823 151,412 414,989 566,401
Loan returns during the period:
Yield 7.83% 8.57% 8.20% 8.80% 6.61% 7.55%
Total Return on Purchased Loans (1) 7.83% N/A 7.83% 8.80% N/A 8.80%
Total loans as of period end:
Unpaid principal balance$1,650,072 $994,707 $2,644,779 $516,972 $680,568 $1,197,540
Net investment basis 1,460,598 994,707 2,455,305 479,824 680,568 1,160,392
(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, 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."

2. Deposits increased by $841.2 million, or 65.3%, from June 30, 2022. The increase was attributable to increases in time deposits of $883.9 million, or 694.3%, and savings and interest checking deposits of $108.6 million, or 18.6%, partially offset by a decrease in demand deposits of $153.9 million, or 46.8%. The primary reason for the net increase in deposits was due to the increase in brokered time deposits, which increased to $744.1 million compared to none outstanding at June 30, 2022. The use of brokered time deposits is part of the Bank's strategy to fund the loan purchases in the short-term. The decrease in demand deposits was primarily due to a $165.0 million decrease in the Paycheck Protection Program ("PPP") Liquidity Facility ("PPPLF") balance during the nine months ended March 31, 2023 as the balance of PPP loans purchased by ACAP that remain outstanding has decreased significantly during this period.

3. Shareholders' equity increased by $35.6 million, or 14.3%, from June 30, 2022, primarily due to net income of $32.1 million, the issuance of 194 thousand shares of voting common stock, adding $8.0 million to shareholders' equity, and stock-based compensation of $2.6 million, partially offset by the repurchase of 136 thousand shares of voting common stock at a weighted average price per share of $37.99, which resulted in a $5.2 million decrease to shareholders' equity.

Net income increased by $1.9 million to $12.5 million for the quarter ended March 31, 2023, compared to net income of $10.6 million for the quarter ended March 31, 2022.

1. Net interest and dividend income before provision for loan losses increased by $11.2 million to $32.2 million for the quarter ended March 31, 2023, compared to $21.0 million for the quarter ended March 31, 2022. The increase was primarily due to the following:

  • An increase in interest income earned on loans of $29.2 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 in both portfolios and higher rates earned on the originated portfolio, partially offset by lower rates earned on the purchased portfolio; and
  • An increase in interest income earned on short-term investments of $1.8 million, primarily due to higher rates earned; partially offset by,
  • An increase in deposit interest expense of $16.3 million, due to higher interest rates and higher average balances in interest-bearing deposits; and
  • An increase in FHLB borrowings interest expense of $3.7 million, primarily due to higher 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 March 31,
2023 2022
Average Interest Average Interest
Balance Income Yield Balance Income Yield
(Dollars in thousands)
Community Banking$29,157 $436 6.06% $40,144 $550 5.56%
SBA National 28,288 851 12.20% 34,605 577 6.76%
SBA PPP - - 0.00% 462 3 3.05%
National Lending:
Originated 981,660 22,347 9.23% 643,707 11,021 6.94%
Purchased 1,463,242 27,475 7.62% 477,912 9,722 8.25%
Total National Lending 2,444,902 49,822 8.26% 1,121,619 20,743 7.50%
Total$2,502,347 $51,109 8.28% $1,196,830 $21,873 7.41%
Nine Months Ended March 31,
2023 2022
Average Interest Average Interest
Balance Income Yield Balance Income Yield
(Dollars in thousands)
Community Banking$31,002 $1,490 6.40% $42,995 $1,692 5.24%
SBA National 28,945 2,191 10.08% 36,322 1,835 6.73%
SBA PPP - - 0.00% 827 17 2.74%
National Lending:
Originated 898,467 57,770 8.57% 597,127 29,634 6.61%
Purchased 901,377 52,965 7.83% 452,603 29,883 8.80%
Total National Lending 1,799,844 110,735 8.20% 1,049,730 59,517 7.55%
Total$1,859,791 $114,416 8.20% $1,129,874 $63,061 7.43%

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 March 31, 2022, transactional income increased by $583 thousand for the quarter ended March 31, 2023, and regularly scheduled interest and accretion increased by $17.1 million due to the increase in average balances. The total return on purchased loans for the quarter ended March 31, 2023 was 7.6%, a decrease from 8.3% for the quarter ended March 31, 2022. The following table details the total return on purchased loans:

Total Return on Purchased Loans
Three Months Ended March 31,
2023 2022
Income Return (1) Income Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion$24,280 6.73% $7,166 6.08%
Transactional income:
Gain on real estate owned - 0.00% 56 0.05%
Accelerated accretion and loan fees 3,195 0.89% 2,556 2.17%
Total transactional income 3,195 0.89% 2,612 2.22%
Total$27,475 7.62% $9,778 8.30%
Nine Months Ended March 31,
2023 2022
Income Return (1) Income Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion$44,968 6.65% $21,379 6.29%
Transactional income:
Gain on real estate owned - 0.00% 31 0.00%
Accelerated accretion and loan fees 7,997 1.18% 8,504 2.51%
Total transactional income 7,997 1.18% 8,535 2.51%
Total$52,965 7.83% $29,914 8.80%
(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, 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 during the period. Total return is considered a non-GAAP financial measure.

2. Noninterest income decreased by $4.2 million for the quarter ended March 31, 2023, compared to the quarter ended March 31, 2022, principally due to the following:

  • A decrease in correspondent fee income of $4.6 million from the recognition of correspondent fees and net servicing income. Correspondent income for the quarters ended March 31, 2023 and 2022 is comprised of the following components:
Three Months Ended March 31,
2023 2022
(In thousands)
Correspondent Fee$9 $1,087
Amortization of Purchased Accrued Interest 165 1,690
Earned Net Servicing Interest 153 2,193
Total$327 $4,970

The Bank has $317 thousand of unamortized correspondent fee and purchased accrued interest remaining at March 31, 2023. The decrease in correspondent fee income was partially offset by:

  • A decrease in unrealized loss on equity securities of $338 thousand; and
  • An increase in gain on sale of SBA loans of $228 thousand, due to the sale of $3.7 million in SBA loans during the quarter ended March 31, 2023.

3. Noninterest expense increased by $2.4 million for the quarter ended March 31, 2023 compared to the quarter ended March 31, 2022, primarily due to the following:

  • An increase in salaries and employee benefits expense of $1.2 million, primarily due to increases in regular employee compensation and stock compensation expense;
  • An increase in professional fees of $411 thousand, primarily due to increased legal expense;
  • An increase in deposit insurance expense of $345 thousand, primarily due to the increase in average assets and decrease in Tier 1 leverage ratio, which increased the Bank's assessment rate; and
  • An increase in data processing fees of $202 thousand, primarily due to increases in IT hardware and software expense, IT professional implementation expense, and IT outsourced processing expense.

4. Income tax expense increased by $1.7 million to $6.4 million, or an effective tax rate of 33.8%, for the quarter ended March 31, 2023, compared to $4.7 million, or an effective tax rate of 30.6%, for the quarter ended March 31, 2022. The increase in income tax expense is due to the increase in pre-tax income. The increase in the effective tax rate from March 31, 2022 is primarily due to changes in state tax apportionment and changes to permanent tax differences.

As of March 31, 2023, nonperforming assets totaled $14.5 million, or 0.51% of total assets, compared to $12.9 million, or 0.82% of total assets, as of June 30, 2022. The increase was primarily due to six National Lending loans totaling $4.3 million that were placed on nonaccrual status, partially offset by two National Lending loans totaling $2.5 million that paid off during the nine months ended March 31, 2023.

As of March 31, 2023, past due loans totaled $17.5 million, or 0.70% of total loans, compared to past due loans totaling $7.0 million, or 0.53% of total loans, as of June 30, 2022. The increase was primarily due to 74 National Lending loans totaling $12.6 million that became past due, partially offset by the payoff of one National Lending purchased loan totaling $1.0 million during the nine months ended March 31, 2023.

As of March 31, 2023, the Bank's Tier 1 leverage capital ratio was 10.1%, compared to 16.1% at June 30, 2022, and the Total capital ratio was 11.9% at March 31, 2023, compared to 19.5% at June 30, 2022. Capital ratios decreased from an increase in assets, primarily loans, partially offset by increased earnings.

Investor Call Information
Rick Wayne, Chief Executive Officer, Jean-Pierre Lapointe, Chief Financial Officer, and Pat Dignan, Executive Vice President and Chief Operating Officer, will host a conference call to discuss third quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, April 25th. To access the conference call by phone, please go to this link (Phone Registration), and you will be provided with dial in details. The call will be available via live webcast, which can be viewed by accessing the Bank's website at www.northeastbank.com and clicking on the About Us - Investor Relations section. To listen to the webcast, attendees are encouraged to visit the website at least fifteen minutes early to register, download and install any necessary audio software. Please note there will also be a slide presentation that will accompany the webcast. For those who cannot listen to the live broadcast, a replay will be available online for one year at www.northeastbank.com.

About Northeast Bank
Northeast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We offer personal and business banking services to the Maine market via seven 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 Measures
In addition to results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures, including tangible common shareholders' equity, tangible book value per share, 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. We may also make forward-looking statements in other documents we file with the Federal Deposit Insurance Corporation (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, changes in 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 loans; changes in customer behavior due to political, business and economic conditions, including inflation and concerns about liquidity; 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 and 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; cybersecurity incidents, fraud, natural disasters, and future pandemics; the risk that the Bank may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Bank's financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Bank's Annual Report on Form 10-K and updated by our Quarterly Reports on Form 10-Q and other filings submitted to the FDIC. 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)
March 31, 2023 June 30, 2022
Assets
Cash and due from banks$2,002 $2,095
Short-term investments 214,569 169,984
Total cash and cash equivalents 216,571 172,079
Available-for-sale debt securities, at fair value 53,792 54,911
Equity securities, at fair value 6,797 6,798
Total securities 60,589 61,709
Loans:
Commercial real estate 1,929,908 882,187
Commercial and industrial 498,878 352,729
Residential real estate 80,443 69,209
Consumer 566 741
Total loans 2,509,795 1,304,866
Less: Allowance for loan losses 7,092 5,028
Loans, net 2,502,703 1,299,838
Premises and equipment, net 26,967 9,606
Federal Home Loan Bank stock, at cost 16,290 1,610
Loan servicing rights, net 1,651 1,285
Bank-owned life insurance 18,250 17,922
Other assets 23,458 18,710
Total assets$2,866,479 $1,582,759
Liabilities and Shareholders' Equity
Deposits:
Demand$175,154 $329,007
Savings and interest checking 693,849 585,274
Money market 248,617 246,095
Time 1,011,256 127,317
Total deposits 2,128,876 1,287,693
Federal Home Loan Bank advances 388,591 15,000
Lease liability 20,730 4,451
Other liabilities 44,413 27,294
Total liabilities 2,582,610 1,334,438
Commitments and contingencies - -
Shareholders' equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares
issued and outstanding at March 31, 2023 and June 30, 2022 - -
Voting common stock, $1.00 par value, 25,000,000 shares authorized;
7,668,650 and 7,442,103 shares issued and outstanding at
March 31, 2023 and June 30, 2022, respectively 7,669 7,442
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;
No shares issued and outstanding at March 31, 2023 and June 30, 2022- -
Additional paid-in capital 41,967 38,749
Retained earnings 234,861 202,980
Accumulated other comprehensive loss (628) (850)
Total shareholders' equity 283,869 248,321
Total liabilities and shareholders' equity$2,866,479 $1,582,759


NORTHEAST BANK
STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
Three Months Ended March 31, Nine Months Ended March 31,
2023 2022 2023 2022
Interest and dividend income:
Interest and fees on loans $51,109 $21,873 $114,416 $63,061
Interest on available-for-sale securities 329 65 748 235
Other interest and dividend income 1,916 73 4,255 365
Total interest and dividend income 53,354 22,011 119,419 63,661
Interest expense:
Deposits 17,240 916 29,937 3,408
Federal Home Loan Bank advances 3,862 122 4,795 377
Obligation under capital lease agreements 13 21 46 70
Total interest expense 21,115 1,059 34,778 3,855
Net interest and dividend income before provision for loan losses 32,239 20,952 84,641 59,806
Provision (credit) for loan losses 676 (287) 1,851 (1,582)
Net interest and dividend income after provision for loan losses 31,563 21,239 82,790 61,388
Noninterest income:
Fees for other services to customers 372 476 1,142 1,236
Gain on sales of SBA loans 228 - 299 -
Gain on sales of PPP loans - - - 86
Net unrealized gain (loss) on equity securities 80 (258) (127) (332)
Gain (loss) on real estate owned, other repossessed collateral and premises and equipment, net - 56 (73) 55
Correspondent fee income 327 4,970 2,327 18,842
Gain on termination of interest rate swap - - 96 -
Bank-owned life insurance income 110 105 329 317
Other noninterest income 71 59 154 97
Total noninterest income 1,188 5,408 4,147 20,301
Noninterest expense:
Salaries and employee benefits 8,434 7,258 25,149 22,226
Occupancy and equipment expense 1,061 916 3,113 2,667
Professional fees 951 540 1,931 1,455
Data processing fees 1,369 1,167 3,690 3,341
Marketing expense 187 160 583 511
Loan acquisition and collection expense 451 452 1,841 2,911
FDIC insurance premiums 443 98 684 298
Other noninterest expense 940 810 3,183 2,518
Total noninterest expense 13,836 11,401 40,174 35,927
Income before income tax expense 18,915 15,246 46,763 45,762
Income tax expense 6,398 4,659 14,661 13,895
Net income $12,517 $10,587 $32,102 $31,867
Weighted-average shares outstanding:
Basic 7,352,447 7,687,737 7,307,142 7,907,398
Diluted 7,413,812 7,790,963 7,377,236 7,998,221
Earnings per common share:
Basic $1.70 $1.38 $4.39 $4.03
Diluted 1.69 1.36 4.35 3.98
Cash dividends declared per common share $0.01 $0.01 $0.03 $0.03

NORTHEAST BANK
AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
Three Months Ended March 31,
2023 2022
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Assets:
Interest-earning assets:
Securities$60,315 $329 2.21% $63,865 $65 0.41%
Loans (1) (2) 2,502,347 51,109 8.28% 1,196,830 21,873 7.41%
Federal Home Loan Bank stock 13,958 76 2.21% 1,280 6 1.90%
Short-term investments (3) 174,431 1,840 4.28% 226,820 67 0.12%
Total interest-earning assets 2,751,051 53,354 7.87% 1,488,795 22,011 6.00%
Cash and due from banks 2,565 2,504
Other non-interest earning assets 67,861 46,022
Total assets$2,821,477 $1,537,321
Liabilities & Shareholders' Equity:
Interest-bearing liabilities:
NOW accounts$543,050 $4,820 3.60% $353,019 $202 0.23%
Money market accounts 253,542 1,372 2.19% 256,074 192 0.30%
Savings accounts 108,102 281 1.05% 126,902 167 0.53%
Time deposits 1,077,242 10,767 4.05% 134,558 355 1.07%
Total interest-bearing deposits 1,981,936 17,240 3.53% 870,553 916 0.43%
Federal Home Loan Bank advances 324,696 3,862 4.82% 15,000 122 3.30%
Capital lease obligations 20,789 13 0.25% 5,022 21 1.70%
Total interest-bearing liabilities 2,327,421 21,115 3.68% 890,575 1,059 0.48%
Noninterest-bearing liabilities:
Demand deposits and escrow accounts 201,354 388,171
Other liabilities 18,786 14,220
Total liabilities 2,547,561 1,292,966
Shareholders' equity 273,916 244,355
Total liabilities and shareholders' equity$2,821,477 $1,537,321
Net interest income $32,239 $20,952
Interest rate spread 4.19% 5.52%
Net interest margin (4) 4.75% 5.71%
Cost of funds (5) 3.39
%
0.34
%
(1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory tax rate.
(2) Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(3) Short-term investments include Federal Reserve and FHLB overnight deposits and other interest-bearing deposits.
(4) Net interest margin is calculated as net interest income divided by total interest-earning assets.
(5) 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)
Nine Months Ended March 31,
2023 2022
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Assets:
Interest-earning assets:
Securities$60,818 $748 1.64% $65,295 $235 0.48%
Loans (1) (2) 1,859,791 114,416 8.20% 1,129,874 63,061 7.43%
Federal Home Loan Bank stock 7,317 137 2.49% 1,237 19 2.05%
Short-term investments (3) 162,136 4,118 3.38% 330,722 346 0.14%
Total interest-earning assets 2,090,062 119,419 7.61% 1,527,128 63,661 5.55%
Cash and due from banks 2,531 2,686
Other non-interest earning assets 85,970 50,751
Total assets$2,178,563 $1,580,565
Liabilities & Shareholders' Equity:
Interest-bearing liabilities:
NOW accounts$529,482 $9,990 2.51% $303,525 $569 0.25%
Money market accounts 249,353 2,583 1.38% 265,639 591 0.30%
Savings accounts 123,607 848 0.91% 99,725 361 0.48%
Time deposits 614,044 16,516 3.58% 207,304 1,887 1.21%
Total interest-bearing deposits 1,516,486 29,937 2.63% 876,193 3,408 0.52%
Federal Home Loan Bank advances 155,639 4,795 4.10% 15,000 377 3.35%
Capital lease obligations 13,829 46 0.44% 5,431 70 1.72%
Total interest-bearing liabilities 1,685,954 34,778 2.75% 896,624 3,855 0.57%
Noninterest-bearing liabilities:
Demand deposits and escrow accounts 219,785 429,354
Other liabilities 12,294 14,596
Total liabilities 1,918,033 1,340,574
Shareholders' equity 260,530 239,991
Total liabilities and shareholders' equity$2,178,563 $1,580,565
Net interest income $84,641 $59,806
Interest rate spread 4.86% 4.98%
Net interest margin (4) 5.39% 5.22%
Cost of funds (5)
2.43
%
0.39
%
(1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory tax rate.
(2) Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(3) Short-term investments include Federal Reserve and FHLB overnight deposits and other interest-bearing deposits.
(4) Net interest margin is calculated as net interest income divided by total interest-earning assets.
(5) 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
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
March 31, 2022
Net interest income$32,239 $28,752 $23,649 $23,619 $20,952
Provision (credit) for loan losses 676 325 850 (879) (287)
Noninterest income 1,188 1,301 1,659 4,144 5,408
Noninterest expense 13,836 13,704 12,634 12,856 11,401
Net income 12,517 11,298 8,287 10,296 10,587
Weighted-average common shares outstanding:
Basic 7,352,447 7,256,281 7,312,291 7,506,465 7,687,737
Diluted 7,413,812 7,323,402 7,394,089 7,617,933 7,790,963
Earnings per common share:
Basic$1.70 $1.56 $1.13 $1.37 $1.38
Diluted 1.69 1.54 1.12 1.35 1.36
Dividends declared per common share$0.01 $0.01 $0.01 $0.01 $0.01
Return on average assets 1.80% 2.13% 2.03% 2.68% 2.79%
Return on average equity 18.53% 17.48% 13.07% 16.55% 17.57%
Net interest rate spread (1) 4.19% 5.42% 5.61% 6.14% 5.52%
Net interest margin (2) 4.75% 5.82% 5.96% 6.34% 5.71%
Efficiency ratio (non-GAAP) (3) 41.39% 45.60% 49.92% 46.31% 43.25%
Noninterest expense to average total assets 1.99% 2.58% 3.09% 3.34% 3.01%
Average interest-earning assets to average interest-bearing liabilities 118.20% 119.28% 142.88% 156.64% 167.20%
As of:
March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022
Nonperforming loans:
Originated portfolio:
Residential real estate$379 $448 $520 $550 $621
Commercial real estate 3,355 3,297 3,528 5,031 6,608
Commercial and industrial 561 631 452 202 230
Consumer - 8 8 11 12
Total originated portfolio 4,295 4,384 4,508 5,794 7,471
Total purchased portfolio 10,227 8,515 9,089 7,152 10,441
Total nonperforming loans 14,522 12,899 13,597 12,946 17,912
Real estate owned and other repossessed collateral, net - - 90 - -
Total nonperforming assets$14,522 $12,899 $13,687 $12,946 $17,912
Past due loans to total loans 0.70% 0.74% 0.97% 0.53% 1.07%
Nonperforming loans to total loans 0.58% 0.51% 0.93% 0.99% 1.45%
Nonperforming assets to total assets 0.51% 0.46% 0.79% 0.82% 1.14%
Allowance for loan losses to total loans 0.28% 0.26% 0.40% 0.39% 0.47%
Allowance for loan losses to nonperforming loans 48.84% 49.70% 43.38% 38.34% 32.47%
Commercial real estate loans to total capital (4) 614.90% 661.48% 328.35% 294.20% 252.90%
Net loans to deposits (5) 117.56% 113.74% 109.78% 100.94% 97.19%
Purchased loans to total loans (6) 58.20% 59.23% 32.62% 36.61% 38.94%
Equity to total assets 9.90% 9.38% 14.47% 15.69% 15.80%
Common equity tier 1 capital ratio 11.59% 10.84% 17.36% 19.08% 20.13%
Total capital ratio 11.89% 11.11% 17.77% 19.47% 20.60%
Tier 1 leverage capital ratio 10.06% 12.53% 15.59% 16.13% 16.17%
Total shareholders' equity$283,869 $263,427 $252,163 $248,321 $247,469
Less: Preferred stock - - - - -
Common shareholders' equity 283,869 263,427 252,163 248,321 247,469
Less: Intangible assets (7) - - (1,141) (1,285) (1,696)
Tangible common shareholders' equity (non-GAAP)$283,869 $263,427 $251,022 $247,036 $245,773
Common shares outstanding 7,668,650 7,511,044 7,477,158 7,442,103 7,727,312
Book value per common share$37.02 $35.07 $33.72 $33.37 $32.03
Tangible book value per share (non-GAAP) (8) 37.02 35.07 33.57 33.19 31.81
(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) 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) During the quarter ended June 30, 2022, the Bank changed its internal policy limit to calculate based on deposits, not core deposits (non-maturity deposits and maturity deposits less than $250 thousand). Ratios as of March 31, 2022 reflect loans to core deposits.
Beginning with the quarter ended December 31, 2022 and going forward, the Bank removed this internal policy limit (previously 125%).
(6) Beginning with the quarter ended December 31, 2022 and going forward, the Bank removed this internal policy limit (previously 60%).
(7) Includes the loan servicing rights asset. Beginning with the quarter ended December 31, 2022 and going forward, the Bank no longer excludes the loan servicing rights asset from tangible common shareholders' equity.
(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 Officer
Northeast Bank, 27 Pearl Street, Portland, ME 04101
207.786.3245 ext. 3220
www.northeastbank.com


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