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Northeast Bank Reports Fourth Quarter Results and Declares Dividend

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Northeast Bank (NASDAQ: NBN) reported strong Q4 results for fiscal year 2024, with net income of $15.1 million, or $1.91 per diluted share, up from $12.1 million in Q4 2023. For the full year, net income reached $58.2 million, or $7.58 per diluted share, compared to $44.2 million in FY 2023. The bank's National Lending Division portfolio grew by 9.0% year-over-year, driven by $399.1 million in originations and $382.0 million in purchases. Total assets increased by 9.1% to $3.13 billion. The loan portfolio yield improved to 9.37% in Q4 2024, up from 8.71% in Q4 2023. Deposits grew by 20.8%, while FHLB advances decreased by 38.6%. The bank declared a cash dividend of $0.01 per share.

Northeast Bank (NASDAQ: NBN) ha riportato ottimi risultati per il quarto trimestre dell'anno fiscale 2024, con un utile netto di 15,1 milioni di dollari, ovvero 1,91 dollari per azione diluita, in aumento rispetto ai 12,1 milioni di dollari del quarto trimestre 2023. Per l'intero anno, l'utile netto ha raggiunto 58,2 milioni di dollari, o 7,58 dollari per azione diluita, rispetto ai 44,2 milioni di dollari dell'anno fiscale 2023. Il portafoglio della Divisione Nazionale di Prestiti della banca è cresciuto del 9,0% rispetto all'anno precedente, grazie a 399,1 milioni di dollari in origini e 382,0 milioni di dollari in acquisti. Gli attivi totali sono aumentati del 9,1% a 3,13 miliardi di dollari. Il rendimento del portafoglio prestiti è migliorato al 9,37% nel quarto trimestre 2024, rispetto all'8,71% nel quarto trimestre 2023. I depositi sono cresciuti del 20,8%, mentre gli anticipi FHLB sono diminuiti del 38,6%. La banca ha dichiarato un dividendo in contante di 0,01 dollari per azione.

Northeast Bank (NASDAQ: NBN) reportó sólidos resultados en el cuarto trimestre del ejercicio fiscal 2024, con ingresos netos de 15,1 millones de dólares, o 1,91 dólares por acción diluida, un aumento respecto a los 12,1 millones de dólares en el cuarto trimestre de 2023. Para el año completo, los ingresos netos alcanzaron 58,2 millones de dólares, o 7,58 dólares por acción diluida, en comparación con los 44,2 millones de dólares en el ejercicio fiscal 2023. La cartera de la División Nacional de Préstamos del banco creció un 9,0% interanual, impulsada por 399,1 millones de dólares en originaciones y 382,0 millones de dólares en compras. Los activos totales aumentaron un 9,1% a 3,13 mil millones de dólares. El rendimiento de la cartera de préstamos mejoró al 9,37% en el cuarto trimestre de 2024, frente al 8,71% en el cuarto trimestre de 2023. Los depósitos crecieron un 20,8%, mientras que los avances de FHLB disminuyeron un 38,6%. El banco declaró un dividendo en efectivo de 0,01 dólares por acción.

Northeast Bank (NASDAQ: NBN)은 2024 회계연도 4분기에 1510만 달러의 순이익, 즉 희석 주당 1.91 달러를 보고하며 양호한 실적을 발표했습니다. 이는 2023년 4분기의 1210만 달러에서 증가한 수치입니다. 연간 기준으로 순이익은 5820만 달러, 또는 희석 주당 7.58 달러에 도달하여 2023 회계연도의 4420만 달러와 비교되었습니다. 은행의 국가 대출 부문 포트폴리오는 9.0% 증가했으며, 이는 3억 9910만 달러의 대출 개시와 3억 820만 달러의 구매에 힘입은 것입니다. 총 자산은 9.1% 증가하여 31억 3000만 달러에 이릅니다. 2024년 4분기의 대출 포트폴리오 수익률은 9.37%로 개선되어 2023년 4분기의 8.71%에서 상승했습니다. 예금은 20.8% 증가했으며, FHLB 대출은 38.6% 감소했습니다. 은행은 주당 0.01 달러의 현금 배당금을 선언했습니다.

Northeast Bank (NASDAQ: NBN) a annoncé de bons résultats pour le quatrième trimestre de l'exercice fiscal 2024, avec un bénéfice net de 15,1 millions de dollars, soit 1,91 dollar par action diluée, en hausse par rapport à 12,1 millions de dollars au quatrième trimestre 2023. Pour l'année entière, le bénéfice net a atteint 58,2 millions de dollars, soit 7,58 dollars par action diluée, contre 44,2 millions de dollars pour l'exercice fiscal 2023. Le portefeuille de la Division Nationale de Prêts de la banque a crû de 9,0% d'une année sur l'autre, grâce à 399,1 millions de dollars en origines et 382,0 millions de dollars en achats. Les actifs totaux ont augmenté de 9,1% pour atteindre 3,13 milliards de dollars. Le rendement du portefeuille de prêts s'est amélioré à 9,37% au quatrième trimestre 2024, contre 8,71% au quatrième trimestre 2023. Les dépôts ont augmenté de 20,8%, tandis que les avances FHLB ont diminué de 38,6%. La banque a déclaré un dividende en espèces de 0,01 dollar par action.

Northeast Bank (NASDAQ: NBN) berichtete über starke Ergebnisse im vierten Quartal des Finanzjahres 2024, mit einem Nettoeinkommen von 15,1 Millionen Dollar, oder 1,91 Dollar pro verwässerter Aktie, was einem Anstieg von 12,1 Millionen Dollar im vierten Quartal 2023 entspricht. Für das gesamte Jahr erreichte das Nettoeinkommen 58,2 Millionen Dollar, oder 7,58 Dollar pro verwässerter Aktie, im Vergleich zu 44,2 Millionen Dollar im Finanzjahr 2023. Das Portfolio der National Lending Division der Bank wuchs im Jahresvergleich um 9,0%, unterstützt durch 399,1 Millionen Dollar an Neugeschäften und 382,0 Millionen Dollar an Käufen. Die Gesamtvermögen stiegen um 9,1% auf 3,13 Milliarden Dollar. Die Rendite des Kreditportfolios verbesserte sich im vierten Quartal 2024 auf 9,37%, gegenüber 8,71% im vierten Quartal 2023. Die Einlagen stiegen um 20,8%, während die FHLB-Vorschüsse um 38,6% zurückgingen. Die Bank erklärte eine Bardividende von 0,01 Dollar pro Aktie.

Positive
  • Net income increased to $15.1 million in Q4 2024, up from $12.1 million in Q4 2023
  • Full-year net income rose to $58.2 million in FY 2024, compared to $44.2 million in FY 2023
  • National Lending Division portfolio grew by 9.0% year-over-year
  • Total assets increased by 9.1% to $3.13 billion
  • Loan portfolio yield improved to 9.37% in Q4 2024, up from 8.71% in Q4 2023
  • Deposits grew by 20.8% year-over-year
Negative
  • Nonperforming assets increased to 0.90% of total assets, up from 0.55% in the previous year
  • Past due loans rose to 0.95% of total loans, compared to 0.52% in the previous year

Insights

Northeast Bank's Q4 fiscal 2024 results demonstrate strong performance and growth. The bank reported $15.1 million in net income, a 24.8% increase from the same quarter last year. Earnings per diluted share rose to $1.91, up from $1.61 in Q4 FY2023. This impressive growth is primarily driven by the National Lending Division's robust performance.

Key highlights include:

  • National Lending Division portfolio yield increased to 9.37% from 8.71% year-over-year
  • Total assets grew by 9.1% to $3.13 billion
  • Loan portfolio expanded by 9.55% year-over-year
  • Deposits increased by 20.8%, with significant growth in time deposits
  • Return on average equity of 16.6% and return on average assets of 2.0%

The bank's focus on its National Lending Division is paying off, with strong originations and purchases driving portfolio growth. The increase in interest income from loans and higher yields have more than offset the rise in deposit interest expenses, resulting in improved net interest income.

However, investors should note the increase in nonperforming assets to 0.90% of total assets, up from 0.55% last year. While this is still relatively low, it warrants monitoring in future quarters.

Overall, Northeast Bank's strong capital ratios, improved efficiency and solid loan growth position it well for continued success in the coming fiscal year.

Northeast Bank's Q4 results highlight its successful strategy in navigating the current banking environment. The bank's focus on its National Lending Division has proven effective, allowing it to capitalize on higher interest rates while maintaining a strong balance sheet.

The 15.43% year-over-year growth in purchased loans within the National Lending portfolio is particularly noteworthy. This approach allows the bank to acquire loans at a discount (89.4% of unpaid principal balance this quarter), potentially boosting returns. The total return on purchased loans increased to 9.47%, up from 8.12% last year, demonstrating the effectiveness of this strategy.

The bank's deposit growth is impressive, with a 20.8% increase year-over-year. However, the shift towards time deposits and brokered deposits could pressure margins if interest rates remain elevated. The decrease in FHLB advances by 38.6% is a positive move, reducing reliance on wholesale funding.

Northeast Bank's capital position has strengthened significantly, with the Tier 1 leverage ratio increasing to 12.3% from 10.4% last year. This provides a solid foundation for future growth and helps buffer against potential economic uncertainties.

The increase in nonperforming assets and past due loans is a point of concern, although still at manageable levels. The bank's adoption of the CECL methodology for credit loss provisioning should provide more forward-looking risk management.

In conclusion, Northeast Bank's performance demonstrates its ability to thrive in a challenging banking environment, but ongoing monitoring of credit quality and deposit costs will be important for sustained success.

PORTLAND, Maine, July 29, 2024 (GLOBE NEWSWIRE) -- Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based full-service bank, today reported net income of $15.1 million, or $1.91 per diluted common share, for the quarter ended June 30, 2024, compared to net income of $12.1 million, or $1.61 per diluted common share, for the quarter ended June 30, 2023. Net income for the year ended June 30, 2024 was $58.2 million, or $7.58 per diluted common share, compared to $44.2 million, or $5.96 per diluted common share, for the year ended June 30, 2023.

The Board of Directors declared a cash dividend of $0.01 per share, payable on August 23, 2024, to shareholders of record as of August 9, 2024.

“We reported strong results in our fourth fiscal quarter, supported by strong volume and yields in our National Lending Division,” said Rick Wayne, Chief Executive Officer. “Our National Lending Division portfolio earned a yield of 9.37% for the quarter ended June 30, 2024, as compared to 8.71% for the quarter ended June 30, 2023. For the year ended June 30, 2024, the National Lending Division portfolio increased by $222.1 million, or 9.0%, compared with June 30, 2023, driven by fiscal year-to-date originations of $399.1 million and purchases of $382.0 million.” Mr. Wayne continued, “For the quarter, we are reporting earnings of $1.91 per diluted common share, a return on average equity of 16.6%, and a return on average assets of 2.0%.”

As of June 30, 2024, total assets were $3.13 billion, an increase of $262.3 million, or 9.1%, from total assets of $2.87 billion as of June 30, 2023.

1.   The following table highlights the changes in the loan portfolio for the three months and year ended June 30, 2024:

 Loan Portfolio Changes
 Three Months Ended June 30, 2024
 June 30, 2024
Balance
 March 31, 2024
Balance
 Change ($) Change (%)
 (Dollars in thousands)
National Lending Purchased$1,708,551 $1,620,409 $88,142  5.44%
National Lending Originated 981,497  975,876  5,621  0.58%
SBA National 48,405  36,375  12,030  33.07%
Community Banking 22,704  24,121  (1,417) (5.87%)
Total$2,761,157 $2,656,781 $104,376  3.93%
             
 Year Ended June 30, 2024
 June 30, 2024
Balance
 June 30, 2023
Balance
 Change ($) Change (%)
 (Dollars in thousands)
National Lending Purchased$1,708,551 $1,480,119 $228,432  15.43%
National Lending Originated 981,497  987,832  (6,335) (0.64%)
SBA National 48,405  24,873  23,532  94.61%
Community Banking 22,704  27,536  (4,832) (17.55%)
Total$2,761,157 $2,520,360 $240,797  9.55%


Loans generated by the Bank's National Lending Division for the quarter ended June 30, 2024 totaled $257.8 million, which consisted of $143.6 million of purchased loans, at an average price of 89.4% of unpaid principal balance, and $114.3 million of originated loans.

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

 National Lending Portfolio
 Three Months Ended June 30,
 2024  2023 
 Purchased Originated Total Purchased Originated Total
 (Dollars in thousands)
Loans purchased or originated during the period:                 
Unpaid principal balance$160,627  $114,272  $274,899  $54,253  $84,171  $138,424 
Net investment basis 143,571   114,272   257,843   48,783   84,171   132,954 
                  
Loan returns during the period:                 
Yield 9.18%  9.68%  9.37%  8.12%  9.58%  8.71%
Total Return on Purchased Loans (1) 9.47%  N/A   9.47%  8.12%  N/A   8.12%
                  
 Year Ended June 30,
 2024  2023 
 Purchased Originated Total Purchased Originated Total
 (Dollars in thousands)
Loans purchased or originated during the period:                 
Unpaid principal balance$432,367  $399,149  $831,516  $1,314,783  $556,991  $1,871,774 
Net investment basis 382,047   399,149   781,196   1,143,786   556,991   1,700,777 
                  
Loan returns during the period:                 
Yield 9.01%  9.90%  9.34%  7.93%  8.84%  8.36%
Total Return on Purchased Loans (1) 9.11%  N/A   9.11%  7.93%  N/A   7.93%
                  
Total loans as of period end:                 
Unpaid principal balance$1,886,383  $981,497  $2,867,880  $1,667,947  $987,832  $2,655,779 
Net investment basis 1,708,551   981,497   2,690,048   1,480,119   987,832   2,467,951 
                  

(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains (losses) on real estate owned, release of allowance for credit losses on purchased loans, and other noninterest income recorded during the period divided by the average invested balance 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 $402.3 million, or 20.8%, from June 30, 2023. The increase was primarily attributable to increases in time deposits of $387.0 million, or 42.1%, and savings and interest checking deposits of $135.7 million, or 22.8%, partially offset by a decrease in money market deposits of $123.4 million, or 44.4%. The significant drivers in the change in time deposits were the increase in brokered time deposits, which increased by $240.6 million, and Community Banking Division time deposits, which increased by $187.9 million compared to June 30, 2023.

3.   Federal Home Loan Bank (“FHLB”) advances decreased by $217.4 million, or 38.6%, from June 30, 2023. The decrease was attributable to the Bank’s decision to pay down advances funded with brokered and other time deposits.

4.   Shareholders’ equity increased by $80.0 million, or 27.0%, from June 30, 2023, primarily due to net income of $58.2 million, the issuance of 342 thousand shares of voting common stock, which added $18.2 million to shareholders’ equity, stock-based compensation of $5.3 million, and other miscellaneous items that resulted in a net decrease of $1.8 million to shareholders’ equity.

Net income increased by $3.0 million to $15.1 million for the quarter ended June 30, 2024, compared to net income of $12.1 million for the quarter ended June 30, 2023.

1.   Net interest and dividend income before provision for credit losses increased by $3.8 million to $37.9 million for the quarter ended June 30, 2024, compared to $34.1 million for the quarter ended June 30, 2023. The increase was primarily due to the following:

  • An increase in interest income earned on loans of $8.1 million, primarily due to an increase in interest income earned on the National Lending Division’s purchased and originated portfolios, due to higher rates earned on both portfolios and higher average balances in the purchased portfolio;
  • An increase in interest income earned on short-term investments of $477 thousand, due to higher rates earned and higher average balances; and
  • A decrease in FHLB borrowings interest expense of $1.6 million, primarily due to lower average balances; partially offset by,
  • An increase in deposit interest expense of $6.5 million, primarily due to higher rates in interest-bearing deposits.

The following table summarizes interest income and related yields recognized on the loan portfolios:

 Interest Income and Yield on Loans
 Three Months Ended June 30,
 2024  2023 
 Average Interest   Average Interest  
 Balance Income Yield Balance Income Yield
 (Dollars in thousands)
Community Banking$23,511 $381 6.52% $28,071 $427 6.10%
SBA National 40,004  1,437 14.45%  25,706  705 11.00%
National Lending:               
Originated 963,946  23,204 9.68%  994,616  23,762 9.58%
Purchased 1,645,647  37,562 9.18%  1,461,164  29,584 8.12%
Total National Lending 2,609,593  60,766 9.37%  2,455,780  53,346 8.71%
Total$2,673,108 $62,584 9.42% $2,509,557  54,478 8.71%
                
  
 Year Ended June 30,
 2024  2023 
 Average Interest   Average Interest  
 Balance Income Yield Balance Income Yield
 (Dollars in thousands)
Community Banking$25,267 $1,622 6.42% $30,271 $1,915 6.33%
SBA National 32,581  4,270 13.11%  28,138  2,896 10.29%
National Lending:               
Originated 954,316  94,488 9.90%  922,438  81,534 8.84%
Purchased 1,580,485  142,342 9.01%  1,040,940  82,549 7.93%
Total National Lending 2,534,801  236,830 9.34%  1,963,378  164,083 8.36%
Total$2,592,649 $242,722 9.36% $2,021,787  168,894 8.35%
                

The components of total income on purchased loans are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the quarter ended June 30, 2023, transactional income decreased by $503 thousand for the quarter ended June 30, 2024, and regularly scheduled interest and accretion increased by $9.7 million primarily due to the increase in average balances. The total return on purchased loans for the quarter ended June 30, 2024 was 9.5%, an increase from 8.1% for the quarter ended June 30, 2023. The following table details the total return on purchased loans:

 Total Return on Purchased Loans
 Three Months Ended June 30,
 2024  2023 
 Income Return (1) Income Return (1)
 (Dollars in thousands)
Regularly scheduled interest and accretion$34,504 8.43% $24,821 6.81%
Transactional income:         
Release of allowance for credit losses on purchased loans 1,202 0.29%  - 0.00%
Accelerated accretion and loan fees 3,058 0.75%  4,763 1.31%
Total transactional income 4,260 1.04%  4,763 1.31%
Total$38,764 9.47% $29,584 8.12%
  
 Year Ended June 30,
 2024  2023 
 Income Return (1) Income Return (1)
 (Dollars in thousands)
Regularly scheduled interest and accretion$133,009 8.42% $69,788 6.70%
Transactional income:         
Release of allowance for credit losses on purchased loans 1,558 0.10%  - 0.00%
Accelerated accretion and loan fees 9,333 0.59%  12,761 1.23%
Total transactional income 10,891 0.69%  12,761 1.23%
Total$143,900 9.11% $82,549 7.93%

(1)   The total return on purchased loans represents scheduled accretion, accelerated accretion, and gains (losses) on real estate owned, and release of allowance for credit losses on purchased loans 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. Total return is considered a non-GAAP financial measure.

2.   Provision for credit losses increased by $94 thousand to a provision of $547 thousand for the quarter ended June 30, 2024, compared to a provision of $453 thousand in the quarter ended June 30, 2023. The provision for credit losses for the fourth quarter of fiscal year 2024 was reported using the Current Expected Credit Loss (“CECL”) methodology, whereas the fourth quarter of fiscal year 2023 provision for credit losses was reported using the incurred loss methodology.

3.   Noninterest income increased by $980 thousand for the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023, principally due to an increase in gain on sale of Small Business Administration (“SBA”) loans of $1.2 million, due to the sale of $26.8 million in SBA loans during the quarter ended June 30, 2024 as compared to the sale of $5.4 million during the quarter ended June 30, 2023.

4.   Noninterest expense increased by $718 thousand for the quarter ended June 30, 2024 compared to the quarter ended June 30, 2023, primarily due to the following:

  • An increase in salaries and employee benefits expense of $634 thousand, primarily due to increases in regular compensation expense and stock compensation expense; and
  • An increase in loan expense of $180 thousand primarily related to increased expenses in connection with the origination of SBA 7(a) loans; partially offset by,
  • A decrease of $195 thousand in deposit insurance expense.

5.   Income tax expense increased by $894 thousand to $7.3 million, or an effective tax rate of 32.4%, for the quarter ended June 30, 2024, compared to $6.4 million, or an effective tax rate of 34.5%, for the quarter ended June 30, 2023. The decrease in effective tax rate is primarily due to changes to state tax apportionment which decreased tax expense during the quarter ended June 30, 2024, as compared to updates to permanent differences which increased taxable income during the quarter ended June 30, 2023.

As of June 30, 2024, nonperforming assets totaled $28.3 million, or 0.90% of total assets, compared to $15.7 million, or 0.55% of total assets, as of June 30, 2023.

As of June 30, 2024, past due loans totaled $26.3 million, or 0.95% of total loans, compared to past due loans totaling $13.1 million, or 0.52% of total loans, as of June 30, 2023.

As of June 30, 2024, the Bank’s Tier 1 leverage capital ratio was 12.3%, compared to 10.4% at June 30, 2023, and the Total risk-based capital ratio was 14.8% at June 30, 2024, compared to 12.3% at June 30, 2023. Capital ratios increased primarily due to increased earnings and the Total risk-based capital ratio increased due to an increase in Tier 2 capital associated with the allowance for credit losses under CECL.

Investor Call Information
Rick Wayne, Chief Executive Officer, Richard Cohen, Chief Financial Officer, and Pat Dignan, Chief Operating Officer of Northeast Bank, will host a conference call to discuss fourth quarter earnings and business outlook at 10:00 a.m. Eastern Time on Thursday, August 1st. 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 credit 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)
 June 30, 2024 June 30, 2023 
Assets      
Cash and due from banks$2,711  $2,515  
Short-term investments 239,447   195,394  
Total cash and cash equivalents 242,158   197,909  
       
       
Available-for-sale debt securities, at fair value 48,978   53,403  
Equity securities, at fair value 7,013   6,771  
Total investment securities 55,991   60,174  
       
Loans:      
Commercial real estate 2,028,280   1,940,563  
Commercial and industrial 633,352   499,815  
Residential real estate 99,234   79,497  
Consumer 291   485  
Total loans 2,761,157   2,520,360  
Less: Allowance for credit losses 26,709   7,304  
Loans, net 2,734,448   2,513,056  
       
       
Premises and equipment, net 27,144   27,737  
Federal Home Loan Bank stock, at cost 15,751   24,644  
Loan servicing rights, net 984   1,530  
Bank-owned life insurance 18,830   18,364  
Other assets 36,897   26,524  
Total assets$3,132,203  $2,869,938  
       
Liabilities and Shareholders' Equity      
Deposits:      
Demand$146,727  $143,738  
Savings and interest checking 732,029   596,347  
Money market 154,504   277,939  
Time 1,306,203   919,183  
Total deposits 2,339,463   1,937,207  
       
Federal Home Loan Bank and other advances 345,190   562,615  
Lease liability 20,252   21,918  
Other liabilities 50,664   51,535  
Total liabilities 2,755,569   2,573,275  
       
Commitments and contingencies -   -  
       
       
Shareholders' equity      
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares     
issued and outstanding at June 30, 2024 and June 30, 2023 -   -  
Voting common stock, $1.00 par value, 25,000,000 shares authorized;      
8,127,690 and 7,668,650 shares issued and outstanding at     
June 30, 2024 and June 30, 2023, respectively 8,128   7,669  
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;      
No shares issued and outstanding at June 30, 2024 and June 30, 2023-  -  
Additional paid-in capital 64,762   42,840  
Retained earnings 303,927   246,872  
Accumulated other comprehensive loss (183)  (718) 
Total shareholders' equity 376,634   296,663  
Total liabilities and shareholders' equity$3,132,203  $2,869,938  


NORTHEAST BANK
STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
 Three Months Ended June 30, Year Ended June 30,
 2024  2023  2024  2023 
Interest and dividend income:           
Interest and fees on loans$62,584  $54,478  $242,722  $168,894 
Interest on available-for-sale securities 606   374   2,246   1,122 
Other interest and dividend income 3,377   2,900   12,918   7,155 
Total interest and dividend income 66,567   57,752   257,886   177,171 
            
Interest expense:           
Deposits 24,619   18,139   88,391   48,076 
Federal Home Loan Bank advances 3,785   5,430   20,032   10,225 
Obligation under capital lease agreements 228   28   891   74 
Total interest expense 28,632   23,597   109,314   58,375 
            
Net interest and dividend income before provision for loan losses 37,935   34,155   148,572   118,796 
Provision for credit losses 547   453   1,768   2,303 
Net interest and dividend income after provision for loan losses 37,388   33,702   146,804   116,493 
            
Noninterest income:           
Fees for other services to customers 466   448   1,684   1,589 
Gain on sales of SBA loans 1,459   278   3,296   576 
Net unrealized gain (loss) on equity securities (22)  (81)  (4)  (208)
Gain (loss) on real estate owned, other repossessed collateral
      and premises and equipment, net
 (20)  -   (29)  (73)
Correspondent fee income 39   114   222   2,534 
Gain on termination of interest rate swap -   -   -   96 
Bank-owned life insurance income 118   207   466   443 
Other noninterest income 52   146   245   301 
Total noninterest income 2,092   1,112   5,880   5,258 
            
Noninterest expense:           
Salaries and employee benefits 11,204   10,570   41,613   35,721 
Occupancy and equipment expense 995   1,100   4,272   4,214 
Professional fees 581   624   2,365   2,554 
Data processing fees 1,501   1,305   5,324   4,995 
Marketing expense 261   339   1,000   922 
Loan acquisition and collection expense 853   673   3,255   2,514 
FDIC insurance expense 345   540   1,262   1,224 
Other noninterest expense 1,339   1,210   5,477   4,392 
Total noninterest expense 17,079   16,361   64,568   56,536 
            
Income before income tax expense 22,401   18,453   88,116   65,215 
Income tax expense 7,261   6,367   29,885   21,028 
Net income$15,140  $12,086  $58,231  $44,187 
            
Weighted-average shares outstanding:           
Basic 7,765,868   7,459,074   7,573,217   7,345,253 
Diluted 7,910,692   7,523,508   7,679,007   7,413,932 
            
Earnings per common share:           
Basic$1.95  $1.62  $7.69  $6.02 
Diluted 1.91   1.61   7.58   5.96 
                
Cash dividends declared per common share$0.01  $0.01  $0.04  $0.04 


NORTHEAST BANK
AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
 Three Months Ended June 30,
 2024 2023
   Interest Average   Interest Average
 Average Income/ Yield/ Average Income/ Yield/
 Balance Expense Rate Balance Expense Rate
Assets:               
Interest-earning assets:               
Investment securities$59,752 $606 4.08% $60,584 $374 2.48%
Loans (1) (2) 2,673,108  62,584 9.42%  2,509,557  54,478 8.71%
Federal Home Loan Bank stock 15,756  369 9.42%  20,483  260 5.09%
Short-term investments (3) 224,498  3,008 5.39%  201,493  2,640 5.26%
Total interest-earning assets 2,973,114  66,567 9.01%  2,792,117  57,752 8.30%
Cash and due from banks 2,524       2,508     
Other non-interest earning assets 84,461       64,580     
Total assets$3,060,099      $2,859,205     
                
Liabilities & Shareholders' Equity:               
Interest-bearing liabilities:               
NOW accounts$545,965 $6,105 4.50% $567,746 $5,594 3.95%
Money market accounts 157,729  1,279 3.26%  252,560  1,785 2.83%
Savings accounts 163,940  1,395 3.42%  83,782  330 1.58%
Time deposits 1,267,122  15,840 5.03%  973,216  10,430 4.30%
Total interest-bearing deposits 2,134,756  24,619 4.64%  1,877,304  18,139 3.88%
Federal Home Loan Bank advances 347,726  3,785 4.38%  472,440  5,430 4.61%
Lease liability 20,533  228 4.47%  21,972  28 0.51%
Total interest-bearing liabilities 2,503,015  28,632 4.60%  2,371,716  23,597 3.99%
                
Non-interest bearing liabilities:               
Demand deposits and escrow accounts 162,251       173,668     
Other liabilities 27,230       23,095     
Total liabilities 2,692,496       2,568,479     
Shareholders' equity 367,603       290,726     
Total liabilities and shareholders' equity$3,060,099      $2,859,205     
                
Net interest income   $37,935      $34,155  
                
Interest rate spread      4.41%       4.31%
Net interest margin (4)      5.13%       4.91%
                
Cost of funds (5)      4.32%       3.72%
                
(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 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)
 Year Ended June 30,
 2024 2023
   Interest Average   Interest Average
 Average Income/ Yield/ Average Income/ Yield/
 Balance Expense Rate Balance Expense Rate
Assets:               
Interest-earning assets:               
Investment securities$59,983 $2,246 3.74% $60,760 $1,122 1.85%
Loans (1) (2) 2,592,649  242,722 9.36%  2,021,787  168,894 8.35%
Federal Home Loan Bank stock 19,257  1,700 8.83%  10,600  397 3.75%
Short-term investments (3) 209,285  11,218 5.36%  171,949  6,758 3.93%
Total interest-earning assets 2,881,174  257,886 8.95%  2,265,096  177,171 7.82%
Cash and due from banks 2,493       2,525     
Other non-interest earning assets 64,570       78,986     
Total assets$2,948,237      $2,346,607     
                
Liabilities & Shareholders' Equity:               
Interest-bearing liabilities:               
NOW accounts$517,134 $22,652 4.38% $539,022 $15,584 2.89%
Money market accounts 209,080  7,039 3.37%  250,152  4,368 1.75%
Savings accounts 129,455  3,999 3.09%  113,678  1,178 1.04%
Time deposits 1,112,548  54,701 4.92%  703,591  26,946 3.83%
Total interest-bearing deposits 1,968,217  88,391 4.49%  1,606,443  48,076 2.99%
Federal Home Loan Bank advances 434,388  20,032 4.61%  234,623  10,225 4.36%
Lease liability 21,165  891 4.21%  15,859  74 0.47%
Total interest-bearing liabilities 2,423,770  109,314 4.51%  1,856,925  58,375 3.14%
                
Non-interest bearing liabilities:               
Demand deposits and escrow accounts 165,789       208,287     
Other liabilities 25,092       13,337     
Total liabilities 2,614,651       2,078,549     
Shareholders' equity 333,586       268,058     
Total liabilities and shareholders' equity$2,948,237      $2,346,607     
                
Net interest income   $148,572      $118,796  
                
Interest rate spread      4.44%       4.68%
Net interest margin (4)      5.16%       5.24%
                
Cost of funds (5)      4.22%       2.83%
                
(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 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
 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023


Net interest income
$37,935  $36,512  $37,000  $37,124  $34,155 
Provision for credit losses 547   596   436   190   453 
Noninterest income 2,092   1,542   1,466   779   1,112 
Noninterest expense 17,079   16,429   15,669   15,389   16,361 
Net income 15,140   13,865   14,054   15,172   12,086 
          
Weighted-average common shares outstanding:         
Basic 7,765,868   7,509,320   7,505,109   7,479,837   7,459,074 
Diluted 7,910,692   7,595,124   7,590,913   7,554,315   7,523,508 


Earnings per common share:
         
Basic$1.95  $1.85  $1.87  $2.03  $1.62 
Diluted 1.91   1.83   1.85   2.01   1.61 
          
Dividends declared per common share$0.01  $0.01  $0.01  $0.01  $0.01 
          
Return on average assets 1.99%  1.87%  1.93%  2.12%  1.70%
Return on average equity 16.56%  16.45%  17.35%  19.73%  16.67%
Net interest rate spread (1) 4.41%  4.27%  4.49%  4.61%  4.31%
Net interest margin (2) 5.13%  5.01%  5.20%  5.30%  4.91%
Efficiency ratio (non-GAAP) (3) 42.67%  43.17%  40.73%  40.60%  46.39%
Noninterest expense to average total assets 2.24%  2.21%  2.15%  2.15%  2.30%
Average interest-earning assets to average                   
interest-bearing liabilities 118.78%  119.28%  118.52%  118.82%  117.73%
          
 As of:
 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023
Nonperforming loans:         
Originated portfolio:         
Residential real estate$2,502  $2,573  $2,582  $289  $280 
Commercial real estate 1,407   2,075   2,075   1,973   3,548 
Commercial and industrial 6,520   6,928   6,950   584   520 
Consumer -   -   -   -   - 
Total originated portfolio 10,429   11,576   11,607   2,846   4,348 
Total purchased portfolio 17,832   16,370   19,165   14,603   11,335 
Total nonperforming loans 28,261   27,946   30,772   17,449   15,683 
Real estate owned and other repossessed collateral, net -   -   -   -   - 
Total nonperforming assets$28,261  $27,946  $30,772  $17,449  $15,683 
          
Past due loans to total loans 0.95%  1.13%  1.22%  1.01%  0.52%
Nonperforming loans to total loans 1.02%  1.05%  1.18%  0.69%  0.62%
Nonperforming assets to total assets 0.90%  0.93%  1.04%  0.61%  0.55%
Allowance for credit losses to total loans 0.97%  0.98%  1.06%  1.00%  0.29%
Allowance for credit losses to nonperforming loans 94.51%  92.83%  89.67%  145.01%  46.57%
Net charge-offs (recoveries)$1,347  $2,225  $995  $1,536  $240 
Commercial real estate loans to total capital (4) 482.13%  509.08%  544.34%  546.91%  595.38%
Net loans to deposits 116.88%  118.15%  121.31%  127.24%  129.73%
Purchased loans to total loans 61.88%  60.99%  63.07%  59.98%  58.73%
Equity to total assets 12.02%  11.73%  11.03%  10.83%  10.34%
Common equity tier 1 capital ratio 13.84%  13.24%  12.63%  12.45%  12.03%
Total risk-based capital ratio 14.82%  14.22%  13.71%  13.46%  12.33%
Tier 1 leverage capital ratio 12.30%  11.79%  11.28%  10.95%  10.38%
          
Total shareholders’ equity$376,634  $351,913  $327,540  $311,569  $296,663 
Less: Preferred stock -   -   -   -   - 
Common shareholders’ equity 376,634   351,913   327,540   311,569   296,663 
Less: Intangible assets (5) -   -   -   -   - 
Tangible common shareholders' equity (non-GAAP)$376,634  $351,913  $327,540  $311,569  $296,663 
          
Common shares outstanding 8,127,690   7,977,690   7,804,052   7,796,691   7,668,650 
Book value per common share$46.34  $44.11  $41.97  $39.96  $38.69 
Tangible book value per share (non-GAAP) (6) 46.34   44.11   41.97   39.96   38.69 
          
(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 credit 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) Includes the loan servicing rights asset.
(6) 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:
Richard Cohen, Chief Financial Officer
Northeast Bank, 27 Pearl Street, Portland, Maine 04101
207.786.3245 ext. 3249
www.northeastbank.com


FAQ

What was Northeast Bank's (NBN) net income for Q4 2024?

Northeast Bank (NBN) reported net income of $15.1 million, or $1.91 per diluted share, for Q4 2024.

How much did Northeast Bank's (NBN) National Lending Division portfolio grow in FY 2024?

Northeast Bank's (NBN) National Lending Division portfolio grew by 9.0% in FY 2024 compared to the previous year.

What was the yield on Northeast Bank's (NBN) loan portfolio in Q4 2024?

The yield on Northeast Bank's (NBN) loan portfolio improved to 9.37% in Q4 2024, up from 8.71% in Q4 2023.

How much did Northeast Bank's (NBN) deposits grow in FY 2024?

Northeast Bank's (NBN) deposits grew by 20.8% in FY 2024 compared to the previous year.

What dividend did Northeast Bank (NBN) declare for Q4 2024?

Northeast Bank (NBN) declared a cash dividend of $0.01 per share for Q4 2024, payable on August 23, 2024.

Northeast Bank

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