Northeast Bancorp Reports Third Quarter Results, Declares Dividend

LEWISTON, Maine, May 02, 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 $1.8 million, or $0.19 per diluted common share, for the quarter ended March 31, 2016, compared to net income of $1.8 million, or $0.18 per diluted common share, for the quarter ended March 31, 2015. Net income for the nine months ended March 31, 2016 was $5.4 million, or $0.57 per diluted common share, compared to $5.0 million, or $0.50 per diluted common share, for the nine months ended March 31, 2015.

The Board of Directors has also declared a cash dividend of $0.01 per share, payable on May 27, 2016 to shareholders of record as of May 13, 2016.

“Our strong growth in fiscal year 2016 continued in the third quarter,” said Richard Wayne, President and Chief Executive Officer. “We generated loan volume of $84.4 million, including $49.8 million of loans produced by the Loan Acquisition and Servicing Group, $10.4 million of loans closed by the SBA National division, $15.9 million of residential mortgage loans originated, and $8.3 million originated in the community banking commercial division. We sold $11.9 million in SBA loans for a gain of $1.2 million in the quarter. And, in our continuing effort to improve returns for shareholders, we repurchased 184 thousand shares at an average price of $10.22.”

As of March 31, 2016, total assets were $922.7 million, an increase of $72.0 million, or 8.5%, 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 – has grown by $86.9 million, or 14.2%, compared to June 30, 2015, principally on the strength of $82.9 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”), net growth of $11.7 million in originations by the Bank’s Small Business Administration (“SBA”) National division and net growth of $7.5 million in commercial originations by the Bank’s Community Banking Division. This net growth was offset by a $15.2 million decrease in the Bank’s Community Banking Division residential and consumer loan portfolio.

Loans generated by the LASG totaled $49.8 million for the quarter ended March 31, 2016. The growth in LASG loans consisted of $21.9 million of purchased loans, at an average price of 89.9% of unpaid principal balance, and $27.8 million of originated loans. SBA loans closed during the quarter totaled $10.4 million, of which $10.3 million were fully funded in the quarter. In addition, the Company sold $11.9 million of the guaranteed portion of SBA loans in the secondary market, of which $4.9 million were originated in the current quarter and $7.0 million were originated in prior quarters. Residential loan production sold in the secondary market totaled $19.7 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 March 31, 2016
(Dollars in millions)
Total Loans Purchased loans may not exceed 40% of total loans $ 80.2
Regulatory Capital Non-owner occupied commercial real estate loans may not exceed 300% of total capital $ 104.4

An overview of the Bank’s LASG portfolio follows:

LASG Portfolio
Three Months Ended March 31,
2016 2015
Purchased Originated Secured 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$ 24,400 $ 27,846 $ - $ 52,246 $ 5,484 $ 18,760 $ 12,000 $ 36,244
Net investment basis 21,934 27,846 - 49,780 5,063 18,697 12,000 35,760
Loan returns during the period:
Yield 9.88% 5.83% 0.50% 7.15% 12.87% 5.67% 0.46% 9.37%
Total Return (1) 9.88% 5.82% 0.50% 7.15% 13.60% 5.67% 0.46% 9.81%


Nine Months Ended March 31,
2016 2015
Purchased Originated Secured 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$ 88,128 $ 78,752 $ - $ 166,880 $ 67,909 $ 50,315 $ 48,000 $ 166,224
Net investment basis 81,245 78,752 - 159,997 57,896 50,236 48,000 156,132
Loan returns during the period:
Yield 11.54% 5.75% 0.50% 7.97% 12.97% 6.91% 0.47% 10.12%
Total Return (1) 11.57% 5.74% 0.50% 7.98% 13.36% 7.40% 0.47% 10.48%
Total loans as of period end:
Unpaid principal balance$ 266,223 $ 170,085 $ 60,000 $ 496,308 $ 234,672 $ 92,542 $ 60,000 $ 387,214
Net investment basis 233,650 170,085 60,000 463,735 195,683 92,414 60,000 348,097


(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 $26.2 million, or 3.6% for the quarter, attributable primarily to growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $26.0 million, or 7.0%. For the nine months ended March 31, 2016, deposits increased $78.2 million, or 11.6%, primarily due to growth in money market non-maturity accounts of $70.5 million, or 21.4%, and growth in time deposits of $7.7 million, or 2.2%.

3. Stockholders’ equity increased by $1.8 million from June 30, 2015, due principally to earnings of $5.4 million, offset by $3.2 million in share repurchases (representing 309,500 shares). Additionally, there was an increase in stock-based compensation of $445 thousand, offset by a decrease in accumulated other comprehensive income of $555 thousand and $287 thousand in dividends paid on common stock.

Net income increased by $57 thousand to $1.8 million for the quarter ended March 31, 2016, compared to $1.8 million for the quarter ended March 31, 2015.

1. Net interest and dividend income before provision for loan losses increased by $134 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015. The increase is primarily due to higher average loan volume in the purchased and 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 nine months ended March 31, 2015, transactional interest income decreased by $1.8 million in both periods. The following table summarizes interest income and related yields recognized on the loan portfolios:

Interest Income and Yield on Loans
Three Months Ended March 31,
2016 2015
Average Interest Average Interest
Balance (1) Income Yield Balance (1) Income Yield
(Dollars in thousands)
Community Banking Division$247,194 $ 2,994 4.87% $ 232,369 $ 2,823 4.93%
LASG:
Originated 159,976 2,317 5.83% 80,567 1,127 5.67%
Purchased 224,710 5,518 9.88% 208,487 6,614 12.87%
Secured Loans to Broker-Dealers 60,001 75 0.50% 48,551 55 0.46%
Total LASG 444,687 7,910 7.15% 337,605 7,796 9.37%
Total$ 691,881 $ 10,904 6.34% $ 569,974 $ 10,619 7.56%
Nine Months Ended March 31,
2016 2015
Average Interest Average Interest
Balance (1) Income Yield Balance (1) Income Yield
(Dollars in thousands)
Community Banking Division$ 242,172 $ 8,850 4.86% $ 236,584 $ 8,782 4.94%
LASG:
Originated 138,760 5,991 5.75% 66,314 3,441 6.91%
Purchased 211,519 18,347 11.54% 206,747 20,125 12.97%
Secured Loans to Broker-Dealers 60,004 225 0.50% 39,054 139 0.47%
Total LASG 410,283 24,563 7.97% 312,115 23,705 10.12%
Total$ 652,455 $ 33,413 6.82% $ 548,699 $ 32,487 7.89%
(1) Includes loans held for sale.

The yield on purchased loans for the quarter ended March 31, 2016 was 9.9% as compared to 13.6% in the quarter ended March 31, 2015, due to lower transactional income in the quarter. The following table details the total return on purchased loans:

Total Return on Purchased Loans
Three Months Ended March 31,
2016 2015
Income Return (1) Income Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion$4,606 8.25% $ 4,322 8.41%
Transactional income:
Gain on loan sales - 0.00% - 0.00%
Gain on sale of real estate owned 1 0.00% 379 0.73%
Other noninterest income - 0.00% - 0.00%
Accelerated accretion and loan fees 912 1.63% 2,292 4.46%
Total transactional income 913 1.63% 2,671 5.20%
Total$ 5,519 9.88% $ 6,993 13.60%


Nine Months Ended March 31,
2016 2015
Income Return (1) Income Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion$12,615 7.94% $ 13,195 8.50%
Transactional income:
Gain on loan sales - 0.00% 190 0.12%
Gain on sale of real estate owned 23 0.01% 419 0.27%
Other noninterest income 11 0.01% - 0.00%
Accelerated accretion and loan fees 5,732 3.61% 6,930 4.47%
Total transactional income 5,766 3.63% 7,539 4.86%
Total$ 18,381 11.57% $ 20,734 13.36%


(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 $481 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015, 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 $1.2 million, compared to $425 thousand in the quarter ended March 31, 2015. The gain is offset by a decrease of $411 thousand in gains recognized on real estate owned and other repossessed collateral.

3. Noninterest expense increased by $527 thousand for the quarter ended March 31, 2016, compared to the quarter ended March 31, 2015, primarily due to an increase in salaries and employee benefits of $530 thousand, due to increased employee headcount.

At March 31, 2016, nonperforming assets totaled $9.4 million, or 1.0% of total assets, as compared to $12.4 million, or 1.5% of total assets, at June 30, 2015.

At March 31, 2016, the Company’s Tier 1 Leverage Ratio was 13.6%, a decrease from 14.5% at June 30, 2015, and the Total Capital Ratio was 17.8%, a decrease from 20.1% at June 30, 2015. The decreases in the capital 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 third quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, May 3, 2016. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 95521077. 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)
March 31, 2016 June 30, 2015
Assets
Cash and due from banks$ 4,025 $ 2,789
Short-term investments 87,427 87,061
Total cash and cash equivalents 91,452 89,850
Available-for-sale securities, at fair value 90,491 101,908
Residential real estate loans held for sale 3,475 7,093
SBA loans held for sale 1,880 1,942
Total loans held for sale 5,355 9,035
Loans
Commercial real estate 423,234 348,676
Residential real estate 119,327 132,669
Commercial and industrial 150,217 123,133
Consumer 6,292 7,659
Total loans 699,070 612,137
Less: Allowance for loan losses 2,223 1,926
Loans, net 696,847 610,211
Premises and equipment, net 8,101 8,253
Real estate owned and other possessed collateral, net 690 1,651
Federal Home Loan Bank stock, at cost 2,571 4,102
Intangible assets, net 1,840 2,209
Bank owned life insurance 15,612 15,276
Other assets 9,730 8,223
Total assets$ 922,689 $ 850,718
Liabilities and Stockholders' Equity
Deposits
Demand$ 60,573 $ 60,383
Savings and interest checking 104,802 100,134
Money market 234,142 168,527
Time 353,432 345,715
Total deposits 752,949 674,759
Federal Home Loan Bank advances 30,103 30,188
Wholesale repurchase agreements - 10,037
Short-term borrowings 2,753 2,349
Junior subordinated debentures issued to affiliated trusts 8,771 8,626
Capital lease obligation 1,190 1,368
Other liabilities 12,397 10,664
Total liabilities 808,163 737,991
Commitments and contingencies - -
Stockholders' equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares
issued and outstanding at March 31, 2016 and June 30, 2015 - -
Voting common stock, $1.00 par value, 25,000,000 shares authorized;
8,103,190 and 8,575,144 shares issued and outstanding at
March 31, 2016 and June 30, 2015, respectively 8,103 8,575
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;
1,227,683 and 1,012,739 shares issued and outstanding at
March 31, 2016 and June 30, 2015, respectively
1,228 1,013
Additional paid-in capital 82,983 85,506
Retained earnings 24,055 18,921
Accumulated other comprehensive loss (1,843) (1,288)
Total stockholders' equity 114,526 112,727
Total liabilities and stockholders' equity$ 922,689 $ 850,718



NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
Three Months Ended March 31, Nine Months Ended March 31,
2016 2015 2016 2015
Interest and dividend income:
Interest and fees on loans$ 10,904 $10,619 $ 33,413 $32,487
Interest on available-for-sale securities 236 222 700 697
Other interest and dividend income 119 72 295 218
Total interest and dividend income 11,259 10,913 34,408 33,402
Interest expense:
Deposits 1,566 1,271 4,356 3,681
Federal Home Loan Bank advances 255 257 774 845
Wholesale repurchase agreements - 71 65 216
Short-term borrowings 5 5 19 21
Junior subordinated debentures issued to affiliated trusts 164 171 476 566
Obligation under capital lease agreements 15 18 49 56
Total interest expense 2,005 1,793 5,739 5,385
Net interest and dividend income before provision for loan losses 9,254 9,120 28,669 28,017
Provision for loan losses 236 44 1,301 477
Net interest and dividend income after provision for loan losses 9,018 9,076 27,368 27,540
Noninterest income:
Fees for other services to customers 428 303 1,264 1,089
Gain on sales of residential loans held for sale 335 355 1,292 1,384
Gain on sales of portfolio loans 1,205 425 2,558 950
(Loss) gain recognized on real estate owned and other repossessed collateral, net (54) 357 (127) 303
Bank-owned life insurance income 112 110 336 329
Other noninterest income 9 4 39 23
Total noninterest income 2,035 1,554 5,362 4,078
Noninterest expense:
Salaries and employee benefits 4,846 4,316 13,956 13,586
Occupancy and equipment expense 1,327 1,278 3,937 3,662
Professional fees 348 386 1,042 1,153
Data processing fees 394 361 1,109 1,029
Marketing expense 64 54 200 203
Loan acquisition and collection expense 297 409 961 1,096
FDIC insurance premiums 125 137 354 371
Intangible asset amortization 108 128 369 460
Other noninterest expense 903 816 2,489 2,272
Total noninterest expense 8,412 7,885 24,417 23,832
Income before income tax expense 2,641 2,745 8,313 7,786
Income tax expense 832 993 2,892 2,810
Net income 1,809 1,752 5,421 4,976
Weighted-average shares outstanding:
Basic 9,456,198 9,833,033 9,526,302 10,049,983
Diluted 9,459,611 9,833,033 9,531,747 10,049,983
Earnings per common share:
Basic$ 0.19 $0.18 $ 0.57 $0.50
Diluted 0.19 0.18 0.57 0.50
Cash dividends declared per common share$ 0.01 $0.01 $ 0.03 $0.03


NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
Three Months Ended March 31,
2016 2015
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Assets:
Interest-earning assets:
Investment securities (1)$100,904 $ 236 0.94% $ 107,010 $ 222 0.84%
Loans (2) (3) 691,881 10,904 6.34% 569,974 10,619 7.56%
Federal Home Loan Bank stock 2,571 22 3.44% 4,102 18 1.78%
Short-term investments (4) 80,789 97 0.48% 90,722 54 0.24%
Total interest-earning assets 876,145 11,259 5.17% 771,808 10,913 5.73%
Cash and due from banks 3,841 2,919
Other non-interest earning assets 34,045 33,069
Total assets$ 914,031 $ 807,796
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts$65,985 $ 42 0.26% $ 62,317 $ 39 0.25%
Money market accounts 223,835 491 0.88% 153,487 300 0.79%
Savings accounts 36,453 12 0.13% 34,140 11 0.13%
Time deposits 357,857 1,021 1.15% 328,633 921 1.14%
Total interest-bearing deposits 684,130 1,566 0.92% 578,577 1,271 0.89%
Short-term borrowings 2,136 5 0.94% 2,356 5 0.86%
Borrowed funds 30,117 255 3.41% 43,718 328 3.04%
Junior subordinated debentures 8,746 164 7.54% 8,553 171 8.11%
Capital lease obligations 1,211 15 4.98% 1,433 18 5.09%
Total interest-bearing liabilities 726,340 2,005 1.11% 634,637 1,793 1.15%
Non-interest bearing liabilities:
Demand deposits and escrow accounts 66,384 54,647
Other liabilities 6,429 7,083
Total liabilities 799,153 696,367
Stockholders' equity 114,878 111,429
Total liabilities and stockholders' equity$ 914,031 $ 807,796
Net interest income $9,254 $9,120
Interest rate spread 4.06% 4.58%
Net interest margin (5) 4.25% 4.79%
(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)
Nine Months Ended March 31,
2016 2015
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Assets:
Interest-earning assets:
Investment securities (1)$102,890 $ 700 0.91% $ 109,605 $ 697 0.85%
Loans (2) (3) 652,455 33,413 6.82% 548,699 32,487 7.89%
Federal Home Loan Bank stock 3,089 90 3.88% 4,102 49 1.59%
Short-term investments (4) 84,258 205 0.32% 92,784 169 0.24%
Total interest-earning assets 842,692 34,408 5.43% 755,190 33,402 5.89%
Cash and due from banks 3,405 2,755
Other non-interest earning assets 35,345 33,241
Total assets$ 881,442 $ 791,186
Liabilities & Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts$67,078 $130 0.26% $ 62,731 $ 121 0.26%
Money market accounts 197,962 1,273 0.86% 122,165 665 0.73%
Savings accounts 36,027 36 0.13% 34,049 34 0.13%
Time deposits 347,847 2,917 1.12% 339,116 2,861 1.12%
Total interest-bearing deposits 648,914 4,356 0.89% 558,061 3,681 0.88%
Short-term borrowings 2,029 19 1.25% 2,852 21 0.98%
Borrowed funds 33,207 839 3.36% 47,455 1,061 2.98%
Junior subordinated debentures 8,698 476 7.28% 8,507 566 8.86%
Capital lease obligations 1,272 49 5.13% 1,481 56 5.04%
Total interest-bearing liabilities 694,120 5,739 1.10% 618,356 5,385 1.16%
Non-interest bearing liabilities:
Demand deposits and escrow accounts 66,619 54,339
Other liabilities 6,720 6,163
Total liabilities 767,459 678,858
Stockholders' equity 113,983 112,328
Total liabilities and stockholders' equity$ 881,442 $ 791,186
Net interest income $ 28,669 $28,017
Interest rate spread 4.33% 4.73%
Net interest margin (5) 4.53% 4.94%
(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:
March 31, 2016 December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015
Net interest income$ 9,254 $ 10,172 $ 9,241 $ 9,350 $ 9,120
Provision for loan losses 236 896 169 240 44
Noninterest income 2,035 1,624 1,705 3,067 1,554
Noninterest expense 8,412 8,196 7,810 8,827 7,885
Net income 1,809 1,744 1,867 2,165 1,752
Weighted average common shares outstanding:
Basic 9,456,198 9,559,369 9,562,812 9,773,228 9,833,033
Diluted 9,459,611 9,569,585 9,562,812 9,773,228 9,833,033
Earnings per common share:
Basic$ 0.19 $ 0.18 $ 0.20 $ 0.22 $ 0.18
Diluted 0.19 0.18 0.20 0.22 0.18
Dividends per common share 0.01 0.01 0.01 0.01 0.01
Return on average assets 0.80% 0.80% 0.86% 1.04% 0.88%
Return on average equity 6.33% 6.07% 6.55% 7.72% 6.38%
Net interest rate spread (1) 4.06% 4.67% 4.25% 4.51% 4.58%
Net interest margin (2) 4.25% 4.87% 4.45% 4.70% 4.79%
Efficiency ratio (3) 74.52% 69.48% 71.35% 71.09% 73.87%
Noninterest expense to average total assets 3.70% 3.75% 3.59% 4.22% 3.96%
Average interest-earning assets to average interest-bearing liabilities 120.62% 122.48% 121.63% 120.90% 121.89%
As of:
March 31, 2016 December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015
Nonperforming loans:
Originated portfolio:
Residential real estate$ 3,566 $ 3,263 $ 3,165 $ 3,021 $ 3,163
Commercial real estate 602 399 529 994 1,201
Home equity - 11 20 11 11
Commercial and industrial 2 2 2 2 -
Consumer 216 204 153 190 225
Total originated portfolio 4,386 3,879 3,869 4,218 4,600
Total purchased portfolio 4,364 2,221 6,939 6,532 5,850
Total nonperforming loans 8,750 6,100 10,808 10,750 10,450
Real estate owned and other possessed collateral, net 690 1,238 1,279 1,651 3,694
Total nonperforming assets$ 9,440 $ 7,338 $ 12,087 $ 12,401 $ 14,144
Past due loans to total loans 2.52% 2.48% 1.35% 1.08% 2.57%
Nonperforming loans to total loans 1.25% 0.90% 1.73% 1.76% 1.80%
Nonperforming assets to total assets 1.02% 0.82% 1.41% 1.46% 1.70%
Allowance for loan losses to total loans 0.32% 0.31% 0.33% 0.31% 0.30%
Allowance for loan losses to nonperforming loans 25.41% 34.90% 19.11% 17.92% 16.66%
Commercial real estate loans to risk-based capital (4) 217.09% 204.91% 195.50% 187.32% 173.17%
Net loans to core deposits (5) 93.48% 94.37% 91.04% 91.85% 89.04%
Purchased loans to total loans, including held for sale 33.17% 32.90% 33.82% 32.61% 33.53%
Equity to total assets 12.41% 12.82% 13.25% 13.25% 13.51%
Common equity tier 1 capital ratio 17.46% 18.11% 19.69% 19.82% 20.90%
Total capital ratio (6) 17.78% 18.43% 20.03% 20.14% 21.21%
Tier 1 leverage capital ratio 13.57% 14.31% 14.23% 14.49% 14.96%
Total stockholders' equity$ 114,526 $ 114,613 $ 113,704 $ 112,727 $ 112,487
Less: Preferred stock - - - - -
Common stockholders' equity 114,526 114,613 113,704 112,727 112,487
Less: Intangible assets (7) (3,469) (3,336) (3,388) (3,312) (2,338)
Tangible common stockholders' equity (non-GAAP)$ 111,057 $ 111,277 $ 110,316 $ 109,415 $ 110,149
Common shares outstanding 9,330,873 9,519,729 9,592,329 9,587,883 9,819,609
Book value per common share$ 12.27 $ 12.04 $ 11.85 $ 11.76 $ 11.46
Tangible book value per share (non-GAAP) (8) 11.90 11.69 11.50 11.41 11.22
(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