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Northeast Bancorp Reports Second Quarter Results, Declares Dividend

LEWISTON, Maine, Feb. 01, 2016 (GLOBE NEWSWIRE) -- Northeast Bancorp (“Northeast” or the “Company”) (NASDAQ:NBN), a Maine-based full-service financial services company and parent of Northeast Bank (the “Bank”), today reported net income of $1.7 million, or $0.18 per diluted common share, for the quarter ended December 31, 2015, compared to net income of $1.6 million, or $0.16 per diluted common share, for the quarter ended December 31, 2014. Net income for the six months ended December 31, 2015 was $3.6 million, or $0.38 per diluted common share, compared to $3.2 million, or $0.32 per diluted common share, for the six months ended December 31, 2014.

The Board of Directors has declared a cash dividend of $0.01 per share, payable on February 29, 2016 to shareholders of record as of February 16, 2016.

“We are very pleased with the strong growth in our loan portfolio this quarter,” said Richard Wayne, President and Chief Executive Officer. “We generated loan volume of $120 million, including $75.4 million of loans produced by the Loan Acquisition and Servicing Group, $16.3 million of loans closed by the SBA National division, $23.4 million of residential mortgage loans originated, and $5.3 million originated in the community banking commercial division. Of the $75.4 million produced by LASG, $35.9 million were loans purchased at an average price of 89.3%. In addition to our loan growth, we were able to grow our non-maturity deposits by $21.5 million and achieve a net interest margin of 4.9%.”

As of December 31, 2015, total assets were $894.1 million, an increase of $43.4 million, or 5.1%, compared to June 30, 2015. The principal components of the change in the balance sheet follow:

1. The loan portfolio – excluding loans held for sale – grew by $67.3 million, or 11.0%, compared to June 30, 2015, principally on the strength of $60.9 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”), net growth of $13.2 million in originations by the Bank’s Small Business Administration (“SBA”) National division and net growth of $4.8 million in commercial originations by the Bank’s Community Banking Division. This net growth was offset by an $11.6 million decrease in the Bank’s Community Banking Division residential and consumer loan portfolio.

Loans generated by the LASG totaled $75.4 million for the quarter ended December 31, 2015. The growth in LASG loans consisted of $35.9 million of purchased loans, at an average price of 89.3% of unpaid principal balance, and $39.5 million of originated loans. SBA loans closed during the quarter totaled $16.3 million, of which $14.5 million were fully funded in the quarter. In addition, the Company sold $7.5 million of the guaranteed portion of SBA loans in the secondary market, of which $4.7 million were originated in the current quarter and $2.8 million were originated in the prior quarter. Residential loan production sold in the secondary market totaled $20.5 million for the quarter.

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


Basis for
Regulatory Condition
Condition Availability at December 31, 2015
(Dollars in millions)
Total Loans Purchased loans may not exceed 40% of total loans $81.3
Regulatory Capital Non-owner occupied commercial real estate loans may not exceed 300% of total capital $120.0

An overview of the Bank’s LASG portfolio follows:

LASG Portfolio
Three Months Ended December 31,
2015 2014
PurchasedOriginatedSecured Loans to Broker-DealersTotal LASG PurchasedOriginatedSecured Loans to Broker-DealersTotal LASG
(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance $40,145 $39,512 $- $79,657 $46,307 $28,579 $- $74,886
Net investment basis 35,855 39,512 - 75,367 39,667 28,579 - 68,246
Loan returns during the period:
Yield 12.74% 5.69% 0.50% 8.55% 13.27% 6.67% 0.46% 10.17%
Total Return (1) 12.74% 5.69% 0.50% 8.55% 13.72% 7.68% 0.46% 10.67%

Six Months Ended December 31,
2015 2014
PurchasedOriginatedSecured Loans to
Broker-Dealers
Total LASG PurchasedOriginatedSecured Loans to
Broker-Dealers
Total LASG
(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance $63,728 $50,907 $- $114,635 $62,425 $32,915 $36,000 $131,340
Net investment basis 59,311 50,907 - 110,218 52,834 32,915 36,000 121,749
Loan returns during the period:
Yield 12.41% 5.68% 0.50% 8.40% 13.02% 7.74% 0.49% 10.53%
Total Return (1) 12.43% 5.68% 0.50% 8.41% 13.24% 8.54% 0.49% 10.85%
Total loans as of period end:
Unpaid principal balance $258,049 $155,646 $60,000 $473,695 $262,445 $78,620 48,000 $389,065
Net investment basis 226,014 155,728 60,002 441,744 220,391 78,563 48,000 346,954
(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.


2. Deposits increased by $33.3 million, or 4.8% for the quarter, attributable primarily to growth in non-maturity accounts, which increased by $21.5 million, or 6.1%, as well as growth in time deposits, which increased $11.8 million, or 3.5%. For the six months ended December 31, 2015, deposits increased $52.0 million, or 7.7%, due to growth in non-maturity accounts of $44.5 million, or 13.5%, and growth in time deposits of $7.5 million, or 2.2%.

3. Stockholders’ equity increased by $1.9 million from June 30, 2015, due principally to earnings of $3.6 million, offset by $1.3 million in share repurchases (representing 125,100 shares). Additionally, there was an increase in stock-based compensation of $280 thousand, offset by a decrease in accumulated other comprehensive income of $484 thousand and $192 thousand in dividends paid on common stock.

Net income increased by $164 thousand to $1.7 million for the quarter ended December 31, 2015, compared to $1.6 million for the quarter ended December 31, 2014.

1. Net interest and dividend income before provision for loan losses increased by $746 thousand, or 7.9%, for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014. The increase is primarily due to higher loan volume and interest income in the originated loan portfolio.

The various components of transactional income are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the three and six months ended December 31, 2014, transactional interest income decreased by $1 thousand and increased by $182 thousand, respectively. The following table summarizes interest income and related yields recognized on the loan portfolios:


Interest Income and Yield on Loans
Three Months Ended December 31,
2015 2014
Average Interest Average Interest
Balance Income Yield Balance Income Yield
(Dollars in thousands)
Community Banking Division$240,507 $2,932 4.84% $236,127 $2,899 4.87%
LASG:
Originated 137,959 1,978 5.69% 59,863 1,007 6.67%
Purchased 209,605 6,734 12.74% 208,935 6,989 13.27%
Secured Loans to Broker-Dealers 60,004 75 0.50% 45,304 53 0.46%
Total LASG 407,568 8,787 8.55% 314,102 8,049 10.17%
Total$648,075 $11,719 7.17% $550,229 $10,948 7.89%
Six Months Ended December 31,
2015 2014
Average Interest Average Interest
Balance Income Yield Balance Income Yield
(Dollars in thousands)
Community Banking Division$239,689 $5,857 4.85% $238,646 $5,960 4.95%
LASG:
Originated 128,267 3,673 5.68% 59,277 2,314 7.74%
Purchased 204,995 12,829 12.41% 205,896 13,511 13.02%
Secured Loans to Broker-Dealers 60,006 150 0.50% 34,474 85 0.49%
Total LASG 393,268 16,652 8.40% 299,647 15,910 10.53%
Total$632,957 $22,509 7.05% $538,293 $21,870 8.06%


The yield on purchased loans for the quarter ended December 31, 2015 was 12.7% as compared to 13.3% in the quarter ended December 31, 2014. The portfolio’s base yield, represented by regularly scheduled interest and accretion, declined to 7.8% from 8.3%, and the effect of transactional interest income declined to 4.9% from 5.4%. The following table details the total return on purchased loans:


Total Return on Purchased Loans
Three Months Ended December 31,
2015 2014
Income Return (1) Income Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion$4,122 7.80% $4,376 8.31%
Transactional income:
Gain on loan sales - 0.00% 194 0.37%
Gain on sale of real estate owned - 0.00% 40 0.08%
Other noninterest income - 0.00% - 0.00%
Accelerated accretion and loan fees 2,612 4.94% 2,613 4.96%
Total transactional income 2,612 4.94% 2,847 5.41%
Total$6,734 12.74% $7,223 13.72%

Six Months Ended December 31,
2015 2014
Income Return (1) Income Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion$ 8,009 7.75% $8,873 8.55%
Transactional income:
Gain on loan sales - 0.00% 190 0.18%
Gain on sale of real estate owned 22 0.02% 40 0.04%
Other noninterest income (1) 0.00% - 0.00%
Accelerated accretion and loan fees 4,820 4.66% 4,638 4.47%
Total transactional income 4,841 4.68% 4,868 4.69%
Total$ 12,850 12.43% $13,741 13.24%
(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, gains on real estate owned and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.

2. Noninterest income increased by $254 thousand for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014, principally due to an increase in gains realized on sale of portfolio loans. The recent quarter includes gains realized on sale of SBA loans of $679 thousand, compared to $445 thousand in the quarter ended December 31, 2014.

3. Noninterest expense decreased by $14 thousand for the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014, principally due to the following:

- a decrease of $194 thousand in loan acquisition and collections expense related to lower collection expense on purchased loans;
- a decrease of $194 thousand in professional fees, primarily due to fees for temporary consulting services recognized in the three months ended December 31, 2014;
- an increase of $117 thousand in salaries and employee benefits primarily due to the accelerated vesting of the former Chief Operating Officer’s shares and an increase in headcount during the three months ended December 31, 2015; and
- an increase of $139 thousand in occupancy and equipment expense, due to increases in rent and IT-related equipment expense.


At December 31, 2015, nonperforming assets totaled $7.3 million, or 0.8% of total assets, as compared to $12.4 million, or 1.5% of total assets, at June 30, 2015.

At December 31, 2015, the Company’s Tier 1 Leverage Ratio was 14.3%, a decrease from 14.5% at June 30, 2015, and the Total Capital Ratio was 18.4%, a decrease from 20.1% at June 30, 2015. The slight decreases in the ratios resulted primarily from balance sheet growth and the effect of purchases under the Company’s share repurchase program in the current fiscal year.

Investor Call Information

Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Brian Shaughnessy, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss second quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, February 2, 2016. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 38686107. The call will be available via live webcast, which can be viewed by accessing the Company’s website at www.northeastbank.com and clicking on the About Us - Investor Relations section. To listen to the webcast, attendees are encouraged to visit the website at least fifteen minutes early to register, download and install any necessary audio software. Please note there will also be a slide presentation that will accompany the webcast. For those who cannot listen to the live broadcast, a replay will be available online for one year at www.northeastbank.com.

About Northeast Bancorp

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

Non-GAAP Financial Measures

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

Forward-Looking Statements

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

NBN-F


NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
December 31, 2015 June 30, 2015
Assets
Cash and due from banks $3,485 $2,789
Short-term investments 62,878 87,061
Total cash and cash equivalents 66,363 89,850
Available-for-sale securities, at fair value 104,339 101,908
Residential real estate loans held for sale 7,592 7,093
SBA loans held for sale - 1,942
Total loans held for sale 7,592 9,035
Loans
Commercial real estate 401,075 348,676
Residential real estate 122,427 132,669
Commercial and industrial 149,154 123,133
Consumer 6,780 7,659
Total loans 679,436 612,137
Less: Allowance for loan losses 2,129 1,926
Loans, net 677,307 610,211
Premises and equipment, net 8,461 8,253
Real estate owned and other possessed collateral, net 1,238 1,651
Federal Home Loan Bank stock, at cost 2,571 4,102
Intangible assets, net 1,947 2,209
Bank owned life insurance 15,499 15,276
Other assets 8,784 8,223
Total assets $894,101 $850,718
Liabilities and Stockholders' Equity
Deposits
Demand $64,087 $60,383
Savings and interest checking 101,117 100,134
Money market 208,324 168,527
Time 353,238 345,715
Total deposits 726,766 674,759
Federal Home Loan Bank advances 30,131 30,188
Wholesale repurchase agreements - 10,037
Short-term borrowings 2,426 2,349
Junior subordinated debentures issued to affiliated trusts 8,723 8,626
Capital lease obligation 1,252 1,368
Other liabilities 10,190 10,664
Total liabilities 779,488 737,991
Commitments and contingencies - -
Stockholders' equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at December 31, 2015 and June 30, 2015 - -
Voting common stock, $1.00 par value, 25,000,000 shares authorized; 8,490,619 and 8,575,144 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively 8,491 8,575
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 1,029,110 and 1,012,739 shares issued and outstanding at
December 31, 2015 and June 30, 2015, respectively
1,029 1,013
Additional paid-in capital 84,525 85,506
Retained earnings 22,340 18,921
Accumulated other comprehensive loss (1,772) (1,288)
Total stockholders' equity 114,613 112,727
Total liabilities and stockholders' equity $894,101 $850,718

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
Three Months Ended December 31, Six Months Ended December 31,
2015 2014 2015 2014
Interest and dividend income:
Interest and fees on loans $11,719 $10,948 $22,509 $21,870
Interest on available-for-sale securities 236 232 464 475
Other interest and dividend income 80 79 176 146
Total interest and dividend income 12,035 11,259 23,149 22,491


Interest expense:
Deposits 1,425 1,281 2,789 2,410
Federal Home Loan Bank advances 259 265 519 588
Wholesale repurchase agreements - 73 67 145
Short-term borrowings 5 7 13 16
Junior subordinated debentures issued to affiliated trusts 158 188 312 394
Obligation under capital lease agreements 16 19 33 38
Total interest expense 1,863 1,833 3,733 3,591
Net interest and dividend income before provision for loan losses 10,172 9,426 19,416 18,900
Provision for loan losses 896 113 1,065 433
Net interest and dividend income after provision for loan losses 9,276 9,313 18,351 18,467


Noninterest income:
Fees for other services to customers 428 392 836 786
Gain on sales of residential loans held for sale 398 447 957 1,029
Gain on sales of portfolio loans 679 445 1,354 525
Loss recognized on real estate owned and other repossessed collateral, net (14) (31) (74) (54)
Bank-owned life insurance income 112 110 224 219
Other noninterest income 21 7 29 19
Total noninterest income 1,624 1,370 3,326 2,524
Noninterest expense:
Salaries and employee benefits 4,854 4,737 9,110 9,270
Occupancy and equipment expense 1,320 1,181 2,610 2,384
Professional fees 264 458 694 766
Data processing fees 366 347 714 692
Marketing expense 66 80 136 148
Loan acquisition and collection expense 219 413 663 687
FDIC insurance premiums 116 110 229 234
Intangible asset amortization 131 166 262 331
Other noninterest expense 860 718 1,589 1,437
Total noninterest expense 8,196 8,210 16,007 15,949
Income before income tax expense 2,704 2,473 5,670 5,042
Income tax expense 960 893 2,059 1,818
Net income 1,744 1,580 3,611 3,224
Weighted-average shares outstanding:
Basic 9,559,369 10,132,349 9,560,913 10,155,598
Diluted 9,569,585 10,132,349 9,567,138 10,155,598


Earnings per common share:
Basic $0.18 $0.16 $0.38 $0.32
Diluted 0.18 0.16 0.38 0.32
Cash dividends declared per common share $0.01 $0.01 $0.02 $0.02

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
Three Months Ended December 31,
2015 2014
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Assets:
Interest-earning assets:
Investment securities (1)$105,502 $236 0.89% $109,498 $232 0.84%
Loans (2) (3) 648,075 11,719 7.17% 550,229 10,948 7.89%
Federal Home Loan Bank stock 2,588 34 5.21% 4,102 15 1.45%
Short-term investments (4) 72,299 46 0.25% 104,822 64 0.24%
Total interest-earning assets 828,464 12,035 5.76% 768,651 11,259 5.81%
Cash and due from banks 3,353 2,637
Other non-interest earning assets 35,558 32,500
Total assets$867,375 $803,788
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
NOW accounts$65,617 $42 0.25% $62,259 $40 0.25%
Money market accounts 199,766 429 0.85% 127,394 241 0.75%
Savings accounts 35,269 11 0.12% 33,648 12 0.14%
Time deposits 334,925 943 1.12% 348,118 988 1.13%
Total interest-bearing deposits 635,577 1,425 0.89% 571,419 1,281 0.89%
Short-term borrowings 2,002 5 0.99% 2,869 7 0.97%
Borrowed funds 30,145 275 3.62% 45,587 357 3.11%
Junior subordinated debentures 8,699 158 7.21% 8,508 188 8.77%
Total interest-bearing liabilities 676,423 1,863 1.09% 628,383 1,833 1.16%
Non-interest bearing liabilities:
Demand deposits and escrow accounts 69,464 55,131
Other liabilities 7,574 7,130
Total liabilities 753,461 690,644
Stockholders' equity 113,914 113,144
Total liabilities and stockholders' equity$867,375 $803,788
Net interest income $10,172 $9,426
Interest rate spread 4.67% 4.65%
Net interest margin (5) 4.87% 4.87%
(1) Interest income and yield are stated on a fully tax-equivalent basis using a 34% tax rate.
(2) Includes loans held for sale.
(3) Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4) Short term investments include FHLB overnight deposits and other interest-bearing deposits.
(5) Net interest margin is calculated as net interest income divided by total interest-earning assets.

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
Six Months Ended December 31,
2015 2014
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Assets:
Interest-earning assets:
Investment securities (1)$103,872 $ 464 0.89% $ 110,874 $ 475 0.85%
Loans (2) (3) 632,957 22,509 7.05% 538,293 21,870 8.06%
Federal Home Loan Bank stock 3,345 68 4.03% 4,102 31 1.50%
Short-term investments (4) 85,974 108 0.25% 93,792 115 0.24%
Total interest-earning assets 826,148 23,149 5.56% 747,061 22,491 5.97%
Cash and due from banks 3,190 2,674
Other non-interest earning assets 35,986 33,326
Total assets$ 865,324 $ 783,061
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
NOW accounts$67,617 $88 0.26% $ 62,934 $ 81 0.26%
Money market accounts 185,166 782 0.84% 106,844 365 0.68%
Savings accounts 35,816 23 0.13% 34,004 23 0.13%
Time deposits 342,896 1,896 1.10% 344,243 1,941 1.12%
Total interest-bearing deposits 631,495 2,789 0.88% 548,025 2,410 0.87%
Short-term borrowings 1,976 13 1.31% 3,095 16 1.03%
Borrowed funds 34,734 619 3.54% 49,283 771 3.10%
Junior subordinated debentures 8,674 312 7.14% 8,484 394 9.21%
Total interest-bearing liabilities 676,879 3,733 1.09% 608,887 3,591 1.17%
Non-interest bearing liabilities:
Demand deposits and escrow accounts 66,736 54,187
Other liabilities 8,170 7,220
Total liabilities 751,785 670,294
Stockholders' equity 113,539 112,767
Total liabilities and stockholders' equity$ 865,324 $ 783,061
Net interest income $ 19,416 $18,900
Interest rate spread 4.47% 4.80%
Net interest margin (5) 4.66% 5.02%
(1) Interest income and yield are stated on a fully tax-equivalent basis using a 34% tax rate.
(2) Includes loans held for sale.
(3) Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4) Short term investments include FHLB overnight deposits and other interest-bearing deposits.
(5) Net interest margin is calculated as net interest income divided by total interest-earning assets.


NORTHEAST BANCORP AND SUBSIDIARY
SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
Three Months Ended:
December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015 December 31, 2014
Net interest income$ 10,172 $9,241 $9,350 $9,120 $9,426
Provision for loan losses 896 169 240 44 113
Noninterest income 1,624 1,705 3,067 1,554 1,370
Noninterest expense 8,196 7,810 8,827 7,885 8,210
Net income 1,744 1,867 2,165 1,752 1,580
Weighted average common shares outstanding:
Basic 9,559,369 9,562,812 9,773,228 9,833,033 10,132,349
Diluted 9,569,585 9,562,812 9,773,228 9,833,033 10,132,349
Earnings per common share:
Basic$ 0.18 $0.20 $0.22 $0.18 $0.16
Diluted 0.18 0.20 0.22 0.18 0.16
Dividends per common share 0.01 0.01 0.01 0.01 0.01
Return on average assets 0.80% 0.86% 1.04% 0.88% 0.78%
Return on average equity 6.07% 6.55% 7.72% 6.38% 5.54%
Net interest rate spread (1) 4.67% 4.25% 4.51% 4.58% 4.65%
Net interest margin (2) 4.87% 4.45% 4.70% 4.79% 4.87%
Efficiency ratio (3) 69.48% 71.35% 71.09% 73.87% 76.05%
Noninterest expense to average total assets 3.75% 3.59% 4.22% 3.96% 4.05%
Average interest-earning assets to average interest-bearing liabilities 122.48% 121.63% 120.90% 121.89% 122.32%
As of:
December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015 December 31, 2014
Nonperforming loans:
Originated portfolio:
Residential real estate$ 3,263 $3,165 $3,021 $3,163 $2,706
Commercial real estate 399 529 994 1,201 1,166
Home equity 11 20 11 11 11
Commercial and industrial 2 2 2 - -
Consumer 204 153 190 225 237
Total originated portfolio 3,879 3,869 4,218 4,600 4,120
Total purchased portfolio 2,221 6,939 6,532 5,850 8,129
Total nonperforming loans 6,100 10,808 10,750 10,450 12,249
Real estate owned and other possessed collateral, net 1,238 1,279 1,651 3,694 2,058
Total nonperforming assets$ 7,338 $12,087 $12,401 $14,144 $14,307
Past due loans to total loans 2.48% 1.35% 1.08% 2.57% 2.64%
Nonperforming loans to total loans 0.90% 1.73% 1.76% 1.80% 2.13%
Nonperforming assets to total assets 0.82% 1.41% 1.46% 1.70% 1.77%
Allowance for loan losses to total loans 0.31% 0.33% 0.31% 0.30% 0.29%
Allowance for loan losses to nonperforming loans 34.90% 19.11% 17.92% 16.66% 13.58%
Commercial real estate loans to risk-based capital (4) 204.91% 195.50% 187.32% 173.17% 190.05%
Net loans to core deposits (5) 94.37% 91.04% 91.85% 89.04% 91.79%
Purchased loans to total loans, including held for sale 32.90% 33.82% 32.61% 33.53% 37.97%
Equity to total assets 12.82% 13.25% 13.25% 13.51% 13.69%
Common equity tier 1 capital ratio 18.11% 19.69% 19.82% 20.90% -
Total capital ratio (6) 18.43% 20.03% 20.14% 21.21% 21.44%
Tier 1 leverage capital ratio 14.31% 14.23% 14.49% 14.96% 14.81%
Total stockholders' equity$ 114,613 $113,704 $112,727 $112,487 $110,923
Less: Preferred stock - - - - -
Common stockholders' equity 114,613 113,704 112,727 112,487 110,923
Less: Intangible assets (7) (3,336) (3,388) (3,312) (2,338) (2,467)
Tangible common stockholders' equity (non-GAAP)$ 111,277 $110,316 $109,415 $110,149 $108,456
Common shares outstanding 9,519,729 9,592,329 9,587,883 9,819,609 9,846,387
Book value per common share$ 12.04 $11.85 $11.76 $11.46 $11.27
Tangible book value per share (non-GAAP) (8) 11.69 11.50 11.41 11.22 11.01

(1) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3) The efficiency ratio represents non-interest expense divided by the sum of net interest income (before the loan loss provision) plus non-interest income.
(4) For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans.
(5) Core deposits include all non-maturity deposits and maturity deposits less than $250 thousand. Loans include loans held-for-sale.
(6) The Company’s adoption of Basel III went into effect as of March 31, 2015. The previous period ratios are the “Total Risk-Based Capital Ratio.”
(7) Includes the core deposit intangible asset, as well as the servicing rights asset which is included in other assets in the consolidated balance sheets.
(8) Tangible book value per share represents total stockholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.


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

Source:Northeast Bancorp