Northeast Bank Reports Fourth Quarter Results and Declares Dividend
Northeast Bank (NASDAQ: NBN) reported a net income of $10.3 million, or $1.35 per diluted share, for Q2 2022, a decline from $21.4 million in Q2 2021. For the fiscal year, net income dropped to $42.2 million, down from $71.5 million in the previous year. The decrease was primarily due to a significant $12.6 million reduction in gains from the sale of PPP loans. Notably, the National Lending Division achieved record originations of $172.9 million in Q2 and increased yield to 7.9%. The bank declared a $0.01 dividend payable on August 23, 2022.
- Record originations of $172.9 million in National Lending Division for Q2 2022.
- Net growth in originated portfolio increased by 45.0% year-over-year.
- Past due loans decreased to 0.53% of total loans, the lowest since July 2016.
- Return on average equity rose to 16.6% for Q2 2022.
- Net income fell by $11.1 million in Q2 2022 compared to Q2 2021.
- Total assets decreased by 27.2% year-over-year, from $2.17 billion to $1.58 billion.
- Deposits dropped by 30.9%, with demand deposits down 66.2%.
PORTLAND, Maine, July 25, 2022 (GLOBE NEWSWIRE) -- Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based full-service bank, today reported net income of
The Board of Directors declared a cash dividend of
Discussing results, Rick Wayne, Chief Executive Officer, said, “We closed our fiscal year with yet another impressive quarter. Our National Lending Division had a record quarter of originations, with
As of June 30, 2022, total assets were
- Cash and short-term investments decreased by
$838.4 million , or83.0% , primarily due to the timing of a large deposit account related to PPP loan payoff collections at June 30, 2021, which has decreased throughout the fiscal year. Cash and short-term investments may fluctuate significantly while PPP collections, including forgiveness amounts, continue, depending on the timing of receipts and remittances of cash amounts. - The following table highlights the changes in the loan portfolio for the three months and year ended June 30, 2022:
| Loan Portfolio Changes | |||||||||||||||||||||
| Three Months Ended June 30, 2022 | |||||||||||||||||||||
| June 30, 2022 Balance | March 31, 2022 Balance | Change ($) | Change (%) | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| National Lending Purchased | $ | 477,682 | $ | 479,824 | $ | (2,142) | ( | ||||||||||||||
| National Lending Originated | 759,229 | 680,568 | 78,661 | ||||||||||||||||||
| SBA National | 33,046 | 34,574 | (1,528) | ( | |||||||||||||||||
| Community Banking | 34,909 | 37,359 | (2,450) | ( | |||||||||||||||||
| Total | $ | 1,304,866 | $ | 1,232,325 | $ | 72,541 | |||||||||||||||
| Year Ended June 30, 2022 | |||||||||||||||||||||
| June 30, 2022 Balance | June 30, 2021 Balance | Change ($) | Change (%) | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||
| National Lending Purchased | $ | 477,682 | $ | 429,054 | $ | 48,628 | |||||||||||||||
| National Lending Originated | 759,229 | 523,535 | 235,694 | ||||||||||||||||||
| SBA National | 33,046 | 39,549 | (6,503) | ( | |||||||||||||||||
| Community Banking | 34,909 | 48,486 | (13,577) | ( | |||||||||||||||||
| Total | $ | 1,304,866 | $ | 1,040,624 | $ | 264,242 | |||||||||||||||
Loans generated by the Bank's National Lending Division for the quarter ended June 30, 2022 totaled
An overview of the Bank’s National Lending Division portfolio follows:
| National Lending Portfolio | |||||||||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Purchased | Originated | Total | Purchased | Originated | Total | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Loans purchased or originated during the period: | |||||||||||||||||||||||
| Unpaid principal balance | $ | 37,032 | $ | 172,851 | $ | 209,883 | $ | 35,456 | $ | 114,020 | $ | 149,476 | |||||||||||
| Net investment basis | 36,502 | 172,851 | 209,353 | 33,732 | 114,020 | 147,752 | |||||||||||||||||
| Loan returns during the period: | |||||||||||||||||||||||
| Yield | 9.25 | % | 7.03 | % | 7.91 | % | 8.99 | % | 6.58 | % | 7.68 | % | |||||||||||
| Total Return on Purchased Loans (1) | 9.25 | % | N/A | 9.25 | % | 8.99 | % | N/A | 8.99 | % | |||||||||||||
| Year Ended June 30, | |||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Purchased | Originated | Total | Purchased | Originated | Total | ||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Loans purchased or originated during the period: | |||||||||||||||||||||||
| Unpaid principal balance | $ | 199,523 | $ | 587,840 | $ | 787,363 | $ | 181,591 | $ | 308,862 | $ | 490,453 | |||||||||||
| Net investment basis | 187,914 | 587,840 | 775,754 | 169,489 | 308,862 | 478,351 | |||||||||||||||||
| Loan returns during the period: | |||||||||||||||||||||||
| Yield | 8.91 | % | 6.73 | % | 7.65 | % | 8.91 | % | 6.93 | % | 7.84 | % | |||||||||||
| Total Return on Purchased Loans (1) | 8.92 | % | N/A | 8.92 | % | 8.91 | % | N/A | 8.91 | % | |||||||||||||
| Total loans as of period end: | |||||||||||||||||||||||
| Unpaid principal balance | $ | 512,006 | $ | 759,229 | $ | 1,271,235 | $ | 466,059 | $ | 523,535 | $ | 989,594 | |||||||||||
| Net investment basis | 477,682 | 759,229 | 1,236,911 | 429,054 | 523,535 | 952,589 | |||||||||||||||||
(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.”
- Deposits decreased by
$574.7 million , or30.9% , from June 30, 2021. The decrease was attributable to decreases in demand deposits of$643.5 million , or66.2% and time deposits of$150.5 million , or54.2% , partially offset by an increase in savings and interest checking deposits of$260.2 million , or80.1% . 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 year ended June 30, 2022.
- Shareholders’ equity increased by
$15.9 million , or6.9% , from June 30, 2021, primarily due to net income of$42.2 million , partially offset by the repurchase of 821 thousand shares of common stock at a weighted average price per share of$34.09 , which resulted in a$28.0 million decrease to shareholders’ equity. Shareholders’ equity also increased by$1.9 million as a result of stock compensation expense recognized.
Net income decreased by
1. Net interest and dividend income before provision for loan losses increased by
- An increase in interest income earned on the National Lending Division’s purchased and originated portfolios of
$5.8 million , due to higher average balances and rates earned in both portfolios; - A decrease in deposit interest expense of
$356 thousand , due to lower interest rates and a shift in portfolio composition; - A decrease of
$282 thousand in interest expense due to the payoff of the subordinated debt; and - A decrease of
$98 thousand in interest expense due to advances taken from the PPPLF to fund PPP originations during the quarter ended June 30, 2021; partially offset by, - A decrease in PPP loan interest income of
$884 thousand , due to the significant decrease in PPP loans during the quarter ended June 30, 2022.
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, | |||||||||||||||||
| 2022 | 2021 | ||||||||||||||||
| Average | Interest | Average | Interest | ||||||||||||||
| Balance | Income | Yield | Balance | Income | Yield | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Community Banking | $ | 35,028 | $ | 451 | 5.16 | % | $ | 49,003 | $ | 585 | 4.79 | % | |||||
| SBA National | 33,788 | 522 | 6.20 | % | 41,331 | 606 | 5.88 | % | |||||||||
| National Lending: | |||||||||||||||||
| Originated | 720,101 | 12,622 | 7.03 | % | 501,646 | 8,229 | 6.58 | % | |||||||||
| Purchased | 474,393 | 10,937 | 9.25 | % | 424,102 | 9,507 | 8.99 | % | |||||||||
| Total National Lending | 1,194,494 | 23,559 | 7.91 | % | 925,748 | 17,736 | 7.68 | % | |||||||||
| Total excluding SBA PPP | $ | 1,263,310 | $ | 24,532 | 7.79 | % | $ | 1,016,082 | $ | 18,927 | 7.47 | % | |||||
| SBA PPP | $ | - | $ | - | 0.00 | % | $ | 172,787 | $ | 884 | 2.05 | % | |||||
| Total including SBA PPP | $ | 1,263,310 | $ | 24,532 | 7.79 | % | $ | 1,188,869 | $ | 19,811 | 6.68 | % | |||||
| Interest Income and Yield on Loans | |||||||||||||||||
| Year Ended June 30, | |||||||||||||||||
| 2022 | 2021 | ||||||||||||||||
| Average | Interest | Average | Interest | ||||||||||||||
| Balance | Income | Yield | Balance | Income | Yield | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Community Banking | $ | 41,009 | $ | 2,143 | $ | 56,711 | $ | 2,746 | |||||||||
| SBA National | 35,678 | 2,356 | 45,764 | 2,441 | |||||||||||||
| National Lending: | |||||||||||||||||
| Originated | 627,786 | 42,256 | 469,632 | 32,560 | |||||||||||||
| Purchased | 458,036 | 40,820 | 400,141 | 35,649 | |||||||||||||
| Total National Lending | 1,085,822 | 83,076 | 869,773 | 68,209 | |||||||||||||
| Total excluding SBA PPP | $ | 1,162,509 | $ | 87,575 | $ | 972,248 | $ | 73,396 | |||||||||
| SBA PPP | $ | 633 | $ | 17 | $ | 166,230 | $ | 3,522 | |||||||||
| Total including SBA PPP | $ | 1,163,142 | $ | 87,592 | $ | 1,138,478 | $ | 76,918 | |||||||||
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, 2021, transactional income increased by
| Total Return on Purchased Loans | |||||||||||
| Three Months Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Income | Return (1) | Income | Return (1) | ||||||||
| (Dollars in thousands) | |||||||||||
| Regularly scheduled interest and accretion | $ | 7,432 | 6.29 | % | $ | 7,070 | 6.69 | % | |||
| Transactional income: | |||||||||||
| Gain on real estate owned | - | 0.00 | % | - | 0.00 | % | |||||
| Accelerated accretion and loan fees | 3,505 | 2.96 | % | 2,437 | 2.30 | % | |||||
| Total transactional income | 3,505 | 2.96 | % | 2,437 | 2.30 | % | |||||
| Total | $ | 10,937 | 9.25 | % | $ | 9,507 | 8.99 | % | |||
| Year Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Income | Return (1) | Income | Return (1) | ||||||||
| (Dollars in thousands) | |||||||||||
| Regularly scheduled interest and accretion | $ | 28,811 | 6.29 | % | $ | 27,536 | 6.88 | % | |||
| Transactional income: | |||||||||||
| Gain on real estate owned | 31 | 0.01 | % | - | 0.00 | % | |||||
| Accelerated accretion and loan fees | 12,009 | 2.62 | % | 8,113 | 2.03 | % | |||||
| Total transactional income | 12,040 | 2.63 | % | 8,113 | 2.03 | % | |||||
| Total | $ | 40,851 | 8.92 | % | $ | 35,649 | 8.91 | % | |||
(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, 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. Noninterest income decreased by
- A decrease in gain on sale of PPP loans of
$12.6 million , due to the sale of PPP loans with a total principal balance of$671.4 million , which resulted in a net gain based on the recognition of net deferred fees in the quarter ended June 30, 2021 as compared to no sales in the quarter ended June 30, 2022; and - A decrease in correspondent fee income of
$3.0 million from the recognition of correspondent fees and related net servicing income. Correspondent income for the quarters ended June 30, 2022 and 2021 is comprised of the following components:
| Three Months Ended June 30, | |||||||
| 2022 | 2021 | ||||||
| (In thousands) | |||||||
| Correspondent Fee | $ | 1,067 | $ | 1,080 | |||
| Amortization of Purchased Accrued Interest | 1,451 | 972 | |||||
| Earned Net Servicing Interest | 1,168 | 4,602 | |||||
| Total | $ | 3,686 | $ | 6,654 | |||
In addition to the net servicing interest income, a summary of PPP loans purchased by The Loan Source, Inc. (“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 Q4 FY 22 | (1,067) | (1,451) | (2,518) | |||||||||
| Less amounts recognized in previous quarters | (7,342) | (7,883) | (15,225) | |||||||||
| Amount remaining to be recognized | $ | 496 | $ | 1,226 | $ | 1,722 | ||||||
| (1) - The Bank's share |
| (2) - Expected to be recognized into income over life of loans |
| (3) - Loan Source’s ending PPP loan balance was |
3. Noninterest expense increased by
- An increase in salaries and employee benefits expense of
$3.9 million , primarily due to a$2.0 million increase in incentive compensation, which, in the prior year was adjusted during the quarter ended March 31, 2021 due to the high level of PPP-related income generated in that quarter, and also a$1.5 million decrease in deferred salaries contra-expense related to PPP originations in the quarter ended June 30, 2021; and - An increase in other noninterest expense of
$142 thousand , primarily due to a$340 thousand increase in impairment on the SBA servicing asset and a$134 thousand increase in travel and meals and entertainment expense, partially offset by a one-time$338 thousand decrease in non-income tax expense that was reclassified out of other noninterest expense and into income tax expense; partially offset by, - A decrease in loan expense of
$608 thousand , due to a$267 thousand decrease in collection legal expense due to reimbursements, and a$269 thousand decrease in correspondent expense.
4. Income tax expense decreased by
As of June 30, 2022, nonperforming assets totaled
As of June 30, 2022, past due loans totaled
As of June 30, 2022, the Bank’s Tier 1 leverage capital ratio was
Investor Call Information
Rick Wayne, Chief Executive Officer, Jean-Pierre Lapointe, Chief Financial Officer, and Pat Dignan, Executive Vice President and Chief Credit 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 Tuesday, July 26th. Investors can access the call by dialing 866.374.5140 and entering the following PIN: 31924851#. 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, 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. 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, ongoing disruptions due to the COVID-19 pandemic; ongoing turbulence in the capital and debt markets; 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 changing political, business and economic conditions, including concerns about inflation, or legislative or regulatory initiatives; changes in interest rates and real estate values; increases in loan 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; 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; 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 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) | |||||
| June 30, 2022 | June 30, 2021 | ||||
| Assets | |||||
| Cash and due from banks | $ | 2,095 | $ | 2,850 | |
| Short-term investments | 169,984 | 1,007,641 | |||
| Total cash and cash equivalents | 172,079 | 1,010,491 | |||
| Available-for-sale debt securities, at fair value | 54,911 | 59,737 | |||
| Equity securities, at fair value | 6,798 | 7,230 | |||
| Total investment securities | 61,709 | 66,967 | |||
| Loans: | |||||
| Commercial real estate | 882,187 | 725,287 | |||
| Commercial and industrial | 352,729 | 257,604 | |||
| Residential real estate | 69,209 | 56,591 | |||
| Consumer | 741 | 1,142 | |||
| Total loans | 1,304,866 | 1,040,624 | |||
| Less: Allowance for loan losses | 5,028 | 7,313 | |||
| Loans, net | 1,299,838 | 1,033,311 | |||
| Premises and equipment, net | 9,606 | 11,271 | |||
| Real estate owned and other repossessed collateral, net | - | 1,639 | |||
| Federal Home Loan Bank stock, at cost | 1,610 | 1,209 | |||
| Loan servicing rights, net | 1,285 | 2,061 | |||
| Bank-owned life insurance | 17,922 | 17,498 | |||
| Other assets | 18,710 | 29,955 | |||
| Total assets | $ | 1,582,759 | $ | 2,174,402 | |
| Liabilities and Shareholders' Equity | |||||
| Deposits: | |||||
| Demand | $ | 329,007 | $ | 972,495 | |
| Savings and interest checking | 585,274 | 325,062 | |||
| Money market | 246,095 | 287,033 | |||
| Time | 127,317 | 277,840 | |||
| Total deposits | 1,287,693 | 1,862,430 | |||
| Federal Home Loan Bank advances | 15,000 | 15,000 | |||
| Subordinated debt | - | 15,050 | |||
| Lease liability | 4,451 | 6,061 | |||
| Other liabilities | 27,294 | 43,470 | |||
| Total liabilities | 1,334,438 | 1,942,011 | |||
| Commitments and contingencies | - | - | |||
| Shareholders' equity | |||||
| Preferred stock, | - | - | |||
| Voting common stock, | 7,442 | 8,151 | |||
| Non-voting common stock, | - | - | |||
| Additional paid-in capital | 38,749 | 64,420 | |||
| Retained earnings | 202,980 | 161,132 | |||
| Accumulated other comprehensive loss | (850) | (1,312) | |||
| Total shareholders' equity | 248,321 | 232,391 | |||
| Total liabilities and shareholders' equity | $ | 1,582,759 | $ | 2,174,402 | |
| NORTHEAST BANK | ||||||||||||||||
| STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (Dollars in thousands, except share and per share data) | ||||||||||||||||
| Three Months Ended June 30, | Year Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Interest and fees on loans | $ | 24,532 | $ | 19,811 | $ | 87,592 | $ | 76,918 | ||||||||
| Interest on available-for-sale securities | 81 | 113 | 316 | 754 | ||||||||||||
| Other interest and dividend income | 262 | 201 | 628 | 453 | ||||||||||||
| Total interest and dividend income | 24,875 | 20,125 | 88,536 | 78,125 | ||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 1,121 | 1,477 | 4,529 | 8,867 | ||||||||||||
| Federal Home Loan Bank advances | 115 | 139 | 493 | 535 | ||||||||||||
| Paycheck Protection Program Liquidity Facility | - | 98 | - | 400 | ||||||||||||
| Subordinated debt | - | 282 | - | 1,126 | ||||||||||||
| Obligation under capital lease agreements | 20 | 27 | 90 | 111 | ||||||||||||
| Total interest expense | 1,256 | 2,023 | 5,112 | 11,039 | ||||||||||||
| Net interest and dividend income before credit for loan losses | 23,619 | 18,102 | 83,424 | 67,086 | ||||||||||||
| Credit for loan losses | (879 | ) | (1,926 | ) | (2,462 | ) | (1,396 | ) | ||||||||
| Net interest and dividend income after credit for loan losses | 24,498 | 20,028 | 85,886 | 68,482 | ||||||||||||
| Noninterest income: | ||||||||||||||||
| Fees for other services to customers | 410 | 441 | 1,646 | 1,869 | ||||||||||||
| Gain on sales of PPP loans | - | 12,577 | 86 | 46,701 | ||||||||||||
| Gain on sales of residential loans held for sale | - | 1 | - | 107 | ||||||||||||
| Net unrealized gain (loss) on equity securities | (180 | ) | 10 | (511 | ) | (104 | ) | |||||||||
| Gain (loss) on real estate owned, other repossessed collateral and premises and equipment, net | 100 | (129 | ) | 155 | (473 | ) | ||||||||||
| Correspondent fee income | 3,686 | 6,654 | 22,528 | 23,452 | ||||||||||||
| Bank-owned life insurance income | 107 | 106 | 424 | 424 | ||||||||||||
| Other noninterest income (loss) | 21 | (10 | ) | 117 | 57 | |||||||||||
| Total noninterest income | 4,144 | 19,650 | 24,445 | 72,033 | ||||||||||||
| Noninterest expense: | ||||||||||||||||
| Salaries and employee benefits | 8,912 | 4,994 | 31,138 | 22,430 | ||||||||||||
| Occupancy and equipment expense | 891 | 912 | 3,558 | 3,825 | ||||||||||||
| Professional fees | 437 | 525 | 1,891 | 1,930 | ||||||||||||
| Data processing fees | 1,203 | 1,076 | 4,544 | 4,468 | ||||||||||||
| Marketing expense | 223 | 252 | 733 | 542 | ||||||||||||
| Loan acquisition and collection expense | 291 | 899 | 3,202 | 3,267 | ||||||||||||
| FDIC insurance premiums | 97 | 109 | 395 | 283 | ||||||||||||
| Other noninterest expense | 802 | 660 | 3,322 | 2,681 | ||||||||||||
| Total noninterest expense | 12,856 | 9,427 | 48,783 | 39,426 | ||||||||||||
| Income before income tax expense | 15,786 | 30,251 | 61,548 | 101,089 | ||||||||||||
| Income tax expense | 5,490 | 8,881 | 19,385 | 29,586 | ||||||||||||
| Net income | $ | 10,296 | $ | 21,370 | $ | 42,163 | $ | 71,503 | ||||||||
| Weighted-average shares outstanding: | ||||||||||||||||
| Basic | 7,506,465 | 8,318,689 | 7,806,626 | 8,275,577 | ||||||||||||
| Diluted | 7,617,933 | 8,397,897 | 7,902,610 | 8,360,355 | ||||||||||||
| Earnings per common share: | ||||||||||||||||
| Basic | $ | 1.37 | $ | 2.57 | $ | 5.40 | $ | 8.64 | ||||||||
| Diluted | 1.35 | 2.54 | 5.34 | 8.55 | ||||||||||||
| 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, | |||||||||||||||||
| 2022 | 2021 | ||||||||||||||||
| Interest | Average | Interest | Average | ||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||
| Assets: | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Investment securities | $ | 62,347 | $ | 81 | 0.52 | % | $ | 67,423 | $ | 113 | 0.67 | % | |||||
| Loans (1) (2) (3) | 1,263,310 | 24,532 | 7.79 | % | 1,188,869 | 19,811 | 6.68 | % | |||||||||
| Federal Home Loan Bank stock | 1,513 | 7 | 1.86 | % | 1,825 | 9 | 1.98 | % | |||||||||
| Short-term investments (4) | 168,059 | 255 | 0.61 | % | 561,813 | 192 | 0.14 | % | |||||||||
| Total interest-earning assets | 1,495,229 | 24,875 | 6.67 | % | 1,819,930 | 20,125 | 4.44 | % | |||||||||
| Cash and due from banks | 2,667 | 2,805 | |||||||||||||||
| Other non-interest earning assets | 45,742 | 60,923 | |||||||||||||||
| Total assets | $ | 1,543,638 | $ | 1,883,658 | |||||||||||||
| Liabilities & Shareholders’ Equity: | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| NOW accounts | $ | 410,628 | $ | 391 | 0.38 | % | $ | 238,462 | $ | 167 | 0.28 | % | |||||
| Money market accounts | 263,540 | 215 | 0.33 | % | 311,753 | 258 | 0.33 | % | |||||||||
| Savings accounts | 141,526 | 204 | 0.58 | % | 46,087 | 19 | 0.17 | % | |||||||||
| Time deposits | 119,235 | 311 | 1.05 | % | 289,705 | 1,033 | 1.43 | % | |||||||||
| Total interest-bearing deposits | 934,929 | 1,121 | 0.48 | % | 886,007 | 1,477 | 0.67 | % | |||||||||
| Federal Home Loan Bank advances | 15,000 | 115 | 3.08 | % | 27,348 | 139 | 2.04 | % | |||||||||
| PPPLF advances | - | - | 0.00 | % | 115,571 | 98 | 0.34 | % | |||||||||
| Subordinated debt | - | - | 0.00 | % | 15,035 | 282 | 7.52 | % | |||||||||
| Capital lease obligations | 4,615 | 20 | 1.74 | % | 6,202 | 27 | 1.75 | % | |||||||||
| Total interest-bearing liabilities | 954,544 | 1,256 | 0.53 | % | 1,050,163 | 2,023 | 0.77 | % | |||||||||
| Non-interest bearing liabilities: | |||||||||||||||||
| Demand deposits and escrow accounts | 326,690 | 573,724 | |||||||||||||||
| Other liabilities | 12,881 | 34,034 | |||||||||||||||
| Total liabilities | 1,294,115 | 1,657,921 | |||||||||||||||
| Shareholders' equity | 249,523 | 225,737 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,543,638 | $ | 1,883,658 | |||||||||||||
| Net interest income | $ | 23,619 | $ | 18,102 | |||||||||||||
| Interest rate spread | 6.14 | % | 3.67 | % | |||||||||||||
| Net interest margin (5) | 6.34 | % | 3.99 | % | |||||||||||||
| Cost of funds (6) | 0.39 | % | 0.51 | % | |||||||||||||
| (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) | |||||||||||||||||
| Year Ended June 30, | |||||||||||||||||
| 2022 | 2021 | ||||||||||||||||
| Interest | Average | Interest | Average | ||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||
| Assets: | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||
| Investment securities | $ | 64,560 | $ | 316 | 0.49 | % | $ | 69,762 | $ | 754 | 1.08 | % | |||||
| Loans (1) (2) (3) | 1,163,142 | 87,592 | 7.53 | % | 1,138,478 | 76,918 | 6.76 | % | |||||||||
| Federal Home Loan Bank stock | 1,306 | 26 | 1.99 | % | 1,750 | 61 | 3.49 | % | |||||||||
| Short-term investments (4) | 290,167 | 602 | 0.21 | % | 314,405 | 392 | 0.12 | % | |||||||||
| Total interest-earning assets | 1,519,175 | 88,536 | 5.83 | % | 1,524,395 | 78,125 | 5.12 | % | |||||||||
| Cash and due from banks | 2,681 | 2,728 | |||||||||||||||
| Other non-interest earning assets | 49,503 | 50,909 | |||||||||||||||
| Total assets | $ | 1,571,359 | $ | 1,578,032 | |||||||||||||
| Liabilities & Shareholders’ Equity: | |||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||
| NOW accounts | $ | 330,228 | $ | 960 | 0.29 | % | $ | 167,505 | $ | 495 | 0.30 | % | |||||
| Money market accounts | 265,116 | 806 | 0.30 | % | 312,537 | 1,517 | 0.49 | % | |||||||||
| Savings accounts | 110,145 | 565 | 0.51 | % | 39,844 | 57 | 0.14 | % | |||||||||
| Time deposits | 185,347 | 2,198 | 1.19 | % | 424,894 | 6,798 | 1.60 | % | |||||||||
| Total interest-bearing deposits | 890,836 | 4,529 | 0.51 | % | 944,780 | 8,867 | 0.94 | % | |||||||||
| Federal Home Loan Bank advances | 15,000 | 493 | 3.29 | % | 24,072 | 535 | 2.22 | % | |||||||||
| PPPLF advances | - | - | 0.00 | % | 114,341 | 400 | 0.35 | % | |||||||||
| Subordinated debt | - | - | 0.00 | % | 14,995 | 1,126 | 7.51 | % | |||||||||
| Capital lease obligations | 5,228 | 90 | 1.72 | % | 5,895 | 111 | 1.88 | % | |||||||||
| Total interest-bearing liabilities | 911,064 | 5,112 | 0.56 | % | 1,104,083 | 11,039 | 1.00 | % | |||||||||
| Non-interest bearing liabilities: | |||||||||||||||||
| Demand deposits and escrow accounts | 403,760 | 261,322 | |||||||||||||||
| Other liabilities | 14,167 | 21,643 | |||||||||||||||
| Total liabilities | 1,328,991 | 1,387,048 | |||||||||||||||
| Shareholders' equity | 242,368 | 190,984 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,571,359 | $ | 1,578,032 | |||||||||||||
| Net interest income | $ | 83,424 | $ | 67,086 | |||||||||||||
| Interest rate spread | 5.27 | % | 4.12 | % | |||||||||||||
| Net interest margin (5) | 5.49 | % | 4.40 | % | |||||||||||||
| Cost of funds (6) | 0.39 | % | 0.81 | % | |||||||||||||
| (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 | |||||||||||||||||||
| June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | |||||||||||||||
Net interest income | $ | 23,619 | $ | 20,952 | $ | 20,055 | $ | 18,799 | $ | 18,102 | |||||||||
| Credit for loan losses | (879 | ) | (287 | ) | (1,069 | ) | (226 | ) | (1,926 | ) | |||||||||
| Noninterest income | 4,144 | 5,408 | 6,493 | 8,399 | 19,650 | ||||||||||||||
| Noninterest expense | 12,856 | 11,401 | 11,187 | 13,338 | 9,427 | ||||||||||||||
| Net income | 10,296 | 10,587 | 11,403 | 9,877 | 21,370 | ||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||
| Basic | 7,506,465 | 7,687,737 | 7,952,938 | 8,132,131 | 8,318,689 | ||||||||||||||
| Diluted | 7,617,933 | 7,790,963 | 8,041,476 | 8,212,836 | 8,397,897 | ||||||||||||||
Earnings per common share: | |||||||||||||||||||
| Basic | $ | 1.37 | $ | 1.38 | $ | 1.43 | $ | 1.21 | $ | 2.57 | |||||||||
| Diluted | 1.35 | 1.36 | 1.42 | 1.20 | 2.54 | ||||||||||||||
| Dividends declared per common share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||
| Return on average assets | 2.68 | % | 2.79 | % | 2.86 | % | 2.41 | % | 4.55 | % | |||||||||
| Return on average equity | 16.55 | % | 17.57 | % | 18.77 | % | 16.70 | % | 37.97 | % | |||||||||
| Net interest rate spread (1) | 6.14 | % | 5.52 | % | 4.99 | % | 4.46 | % | 3.67 | % | |||||||||
| Net interest margin (2) | 6.34 | % | 5.71 | % | 5.24 | % | 4.74 | % | 3.99 | % | |||||||||
| Net interest margin, excluding PPP (non-GAAP) (3) | 6.34 | % | 5.71 | % | 5.24 | % | 4.75 | % | 4.55 | % | |||||||||
| Net interest margin, excluding PPP and collection account (non-GAAP) (4) | 7.07 | % | 6.72 | % | 6.44 | % | 6.00 | % | 5.56 | % | |||||||||
| Efficiency ratio (non-GAAP) (5) | 46.31 | % | 43.25 | % | 42.14 | % | 49.04 | % | 24.97 | % | |||||||||
| Noninterest expense to average total assets | 3.34 | % | 3.01 | % | 2.80 | % | 3.26 | % | 2.01 | % | |||||||||
| Average interest-earning assets to average interest-bearing liabilities | 156.64 | % | 167.20 | % | 168.71 | % | 174.98 | % | 173.30 | % | |||||||||
| As of: | |||||||||||||||||||
| June 30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | |||||||||||||||
| Nonperforming loans: | |||||||||||||||||||
| Originated portfolio: | |||||||||||||||||||
| Residential real estate | $ | 550 | $ | 621 | $ | 611 | $ | 619 | $ | 696 | |||||||||
| Commercial real estate | 5,031 | 6,608 | 7,963 | 6,644 | 5,756 | ||||||||||||||
| Commercial and industrial | 202 | 230 | 311 | 1,510 | 286 | ||||||||||||||
| Consumer | 11 | 12 | 20 | 39 | 43 | ||||||||||||||
| Total originated portfolio | 5,794 | 7,471 | 8,905 | 8,812 | 6,781 | ||||||||||||||
| Total purchased portfolio | 7,152 | 10,441 | 12,294 | 12,527 | 11,977 | ||||||||||||||
| Total nonperforming loans | 12,946 | 17,912 | 21,199 | 21,339 | 18,758 | ||||||||||||||
| Real estate owned and other repossessed collateral, net | - | - | 53 | 821 | 1,639 | ||||||||||||||
| Total nonperforming assets | $ | 12,946 | $ | 17,912 | $ | 21,252 | $ | 22,160 | $ | 20,397 | |||||||||
| Past due loans to total loans | 0.53 | % | 1.07 | % | 1.23 | % | 1.39 | % | 1.08 | % | |||||||||
| Nonperforming loans to total loans | 0.99 | % | 1.45 | % | 1.79 | % | 1.99 | % | 1.80 | % | |||||||||
| Nonperforming assets to total assets | 0.82 | % | 1.14 | % | 1.46 | % | 1.60 | % | 0.94 | % | |||||||||
| Allowance for loan losses to total loans | 0.39 | % | 0.47 | % | 0.51 | % | 0.67 | % | 0.70 | % | |||||||||
| Allowance for loan losses to nonperforming loans | 38.34 | % | 32.47 | % | 28.49 | % | 33.58 | % | 38.99 | % | |||||||||
| Commercial real estate loans to total capital (6) | 294.20 | % | 252.90 | % | 260.40 | % | 232.10 | % | 215.38 | % | |||||||||
| Net loans to core deposits (7) (10) | 100.94 | % | 97.19 | % | 102.53 | % | 98.96 | % | 55.71 | % | |||||||||
| Purchased loans to total loans, including held for sale | 36.61 | % | 38.94 | % | 41.02 | % | 40.22 | % | 41.23 | % | |||||||||
| Equity to total assets | 15.69 | % | 15.80 | % | 16.39 | % | 17.32 | % | 10.69 | % | |||||||||
| Common equity tier 1 capital ratio | 19.08 | % | 20.13 | % | 20.27 | % | 22.03 | % | 22.16 | % | |||||||||
| Total capital ratio | 19.47 | % | 20.60 | % | 20.79 | % | 22.69 | % | 24.29 | % | |||||||||
| Tier 1 leverage capital ratio | 16.13 | % | 16.17 | % | 15.19 | % | 14.83 | % | 13.63 | % | |||||||||
| Total shareholders’ equity | $ | 248,321 | $ | 247,469 | $ | 239,237 | $ | 239,508 | $ | 232,391 | |||||||||
| Less: Preferred stock | - | - | - | - | - | ||||||||||||||
| Common shareholders’ equity | 248,321 | 247,469 | 239,237 | 239,508 | 232,391 | ||||||||||||||
| Less: Intangible assets (8) | (1,285 | ) | (1,696 | ) | (1,645 | ) | (1,906 | ) | (2,061 | ) | |||||||||
| Tangible common shareholders' equity (non-GAAP) | $ | 247,036 | $ | 245,773 | $ | 237,592 | $ | 237,602 | $ | 230,330 | |||||||||
| Common shares outstanding | 7,442,103 | 7,727,312 | 7,815,566 | 8,172,776 | 8,150,480 | ||||||||||||||
| Book value per common share | $ | 33.37 | $ | 32.03 | $ | 30.61 | $ | 29.31 | $ | 28.51 | |||||||||
| Tangible book value per share (non-GAAP) (9) | 33.19 | 31.81 | 30.40 | 29.07 | 28.26 | ||||||||||||||
| (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 | |||||||||||||||||||
| (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 | |||||||||||||||||||
| (5) The efficiency ratio represents noninterest expense divided by the sum of net interest income (before the loan loss provision) 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 | |||||||||||||||||||
| (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 exclude PPP loans held for sale. | |||||||||||||||||||
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
FAQ
What were Northeast Bank's earnings for Q2 2022?
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