Northeast Bancorp Reports First Quarter Results, Declares Dividend

LEWISTON, Maine, Oct. 26, 2015 (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 $1.9 million, or $0.20 per diluted common share, for the quarter ended September 30, 2015, compared to net income of $1.6 million, or $0.16 per diluted common share, for the quarter ended September 30, 2014.

The Board of Directors has declared a cash dividend of $0.01 per share, payable on November 20, 2015 to shareholders of record as of November 6, 2015.

“In the quarter we originated $79 million of new loans, achieved a net interest margin of 4.5% and held operating expenses in check,” said Richard Wayne, President and Chief Executive Officer. “Our Loan Acquisition and Servicing Group produced $34 million of new loans, residential loan sales in the secondary market were strong at $29 million, our SBA National division closed $11 million of new loans and we grew non-maturity deposits by $23 million. Asset quality remained strong, with non-performing assets at 1.4% of total assets.”

At September 30, 2015, total assets were $858.2 million, an increase of $7.5 million, or 0.9%, 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 $13.7 million, or 2.2%, compared to June 30, 2015, principally on the strength of $13.0 million of net growth in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”) and net growth of $4.1 million in commercial originations by the Bank’s Community Banking Division. This net growth was offset by a $5.8 million decrease in the Bank’s Community Banking Division residential and consumer loan portfolio.

Loans generated by the LASG totaled $34.4 million for the quarter ended September 30, 2015. The growth in LASG loans consisted of $23.5 million of purchased loans, at an average price of 99.5%, and $10.9 million of originated loans. Small Business Administration (“SBA”) loans closed during the quarter totaled $10.6 million, of which $7.3 million were funded and $5.5 million were sold in the secondary market. Residential and consumer loan production sold in the secondary market totaled $28.9 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 September 30, 2015
        (Dollars in millions)
Total Loans   Purchased loans may not exceed 40% of total loans   $   65.3
Regulatory Capital   Non-owner occupied commercial real estate loans may not exceed 300% of total risk-based capital   $   130.5
           

An overview of the Bank’s LASG portfolio follows:

  LASG Portfolio  
  Three Months Ended September 30,  
  2015   2014  
     Purchased   Originated  Secured Loans to 
 Broker-Dealers
 Total LASG   Purchased Originated Secured Loans to Broker-Dealers Total LASG  
  (Dollars in thousands)  
Loans purchased or originated during the period:                                    
Unpaid principal balance $   23,583   $   10,941   $     –    $     34,524     $     16,117   $    16,358   $   24,000   $    56,475    
Net investment basis      23,458        10,944              34,402          13,167       16,353       24,000       53,520    
                                     
Loan returns during the period:  
Yield     12.07 %     5.67 %     0.50 %     8.23 %       12.76 %     9.88 %     0.42 %     10.93 %  
Total Return (1)     12.11 %     5.67 %     0.50 %     8.26 %       12.75 %     10.53 %     0.42 %     11.05 %  
 
                                                                 
Total loans as of period end:                                                  
Unpaid principal balance $   249,229   $  119,732   $  60,000   $   428,961     $ 244,910   $ 60,534   $   48,000   $   353,444    
Net investment basis $   214,199   $  119,670   $  60,005   $   393,874     $ 205,928   $ 60,497   $   48,000   $   314,425    
 
   
(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.  
 

2. Deposits increased by $18.7 million, or 2.8% for the quarter, attributable primarily to growth in non-maturity accounts, which increased by $23.0 million, or 7.0%, for the quarter ended September 30, 2015, offset by a decrease of $4.3 million in time deposits.

3. Stockholders’ equity increased by $977 thousand for the quarter, due principally to earnings of $1.9 million, offset by $548 thousand in share repurchases (representing 52,500 shares), a decrease in accumulated other comprehensive income of $231 thousand and $95 thousand in dividends paid on common stock.

Net income increased by $220 thousand to $1.9 million for the quarter ended September 30, 2015, compared to $1.6 million for the quarter ended September 30, 2014.

1. Net interest and dividend income before provision for loan losses decreased by $230 thousand, or 2.4%, for the quarter ended September 30, 2015, compared to the quarter ended September 30, 2014. The decrease is primarily due to lower interest income in the purchased loan portfolio, mainly due to a decline in yield to 12.1% in the current quarter from 12.8% earned in the quarter ended September 30, 2014.

The various components of transactional income are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the three months ended September 30, 2014, transactional interest income increased by $183 thousand. The following table summarizes interest income and related yields recognized on the loan portfolios:

  Interest Income and Yield on Loans
  Three Months Ended September 30,
  2015   2014
  Average   Interest       Average   Interest    
  Balance   Income   Yield   Balance   Income   Yield
                                       
  (Dollars in thousands)
Community Banking Division $  238,873   $    2,924     4.86 %   $  241,165   $   3,062     5.04 %
LASG:                              
Originated    118,574        1,696     5.67 %       52,430       1,306   9.88%(1)
Purchased    200,385        6,095     12.07 %      202,856       6,522     12.76 %
Secured Loans to Broker-Dealers   60,007     75     0.50 %     29,905     32     0.42 %
Total LASG    378,966        7,866     8.23 %      285,191       7,860     10.93 %
Total $  617,839   $  10,790     6.93 %   $  526,356   $  10,922     8.23 %
 

(1) The yield for LASG originated loans included $335 thousand of loan fees in the quarter ended September 30, 2014, compared to $1 thousand of loan fees in the quarter ended September 30, 2015. The yield for LASG originated loans, excluding loan fees, was 7.35% in the quarter ended September 30, 2014.

As noted earlier, the yield on purchased loans for the quarter ended September 30, 2015 decreased to 12.1% from 12.8% in the quarter ended September 30, 2014. The portfolio’s base yield, represented by regularly scheduled interest and accretion, declined to 7.7% from 8.8%, and was offset in part by the effect of increased transactional interest income, which grew to $2.2 million from $2.0 million in the quarter ended September 30, 2014. The following table details the total return on purchased loans:

  Total Return on Purchased Loans
  Three Months Ended September 30,
  2015   2014
  Income   Return (1)   Income   Return (1)
                               
  (Dollars in thousands)
Regularly scheduled interest and accretion $ 3,887     7.70 %   $     4,497       8.80 %
Transactional income:                  
Gain (loss) on loan sales       0.00 %       (4 )     -0.01 %
Gain on sale of real estate owned      22     0.04 %             0.00 %
Other noninterest income       0.00 %             0.00 %
Accelerated accretion and loan fees     2,208     4.37 %         2,025       3.96 %
Total transactional income     2,230     4.41 %         2,021       3.95 %
Total $   6,117     12.11 %   $     6,518       12.75 %
 

(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.

2. Noninterest income increased by $551 thousand for the quarter ended September 30, 2015, compared to the quarter ended September 30, 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 $675 thousand, compared to an $80 thousand gain on sale of commercial loans in the quarter ended September 30, 2014.

3. Noninterest expense increased by $100 thousand for the quarter ended September 30, 2015, compared to the quarter ended September 30, 2014, principally due to the following:

  • An increase of $177 thousand in loan acquisition and collections expense related to the collections of two loans;
  • An increase of $122 thousand in professional fees related to IT consulting;
  • An increase of $88 thousand in occupancy and equipment expense, due to increases in rent and IT-related equipment expense; and
  • A decrease of $277 thousand in salaries and employee benefits, principally due to the current quarter benefit recognized upon the forfeiture of stock awards and a decrease in incentive compensation.  This decrease is partially offset by an increase in employee head count.

At September 30, 2015, nonperforming assets totaled $12.1 million, or 1.4% of total assets, as compared to $12.4 million, or 1.5% of total assets, at June 30, 2015.

At September 30, 2015, the Company’s Tier 1 Leverage Ratio was 14.2%, a decrease from 14.5% at June 30, 2015, and the Total Capital Ratio was 20.0%, 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 quarter ended September 30, 2015.

Investor Call Information 
Richard Wayne, Chief Executive Officer of Northeast Bancorp, Claire Bean, Chief Operating Officer of Northeast Bancorp, and Brian Shaughnessy, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss first quarter earnings and business outlook at 10:00 a.m. Eastern Time on Tuesday, October 27, 2015. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 64428342. 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 Small Business Lending 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, tangible book value per share, and net operating earnings. 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)
  September 30, 2015   June 30, 2015
Assets          
Cash and due from banks $     2,979     $     2,789  
Short-term investments       83,234           87,061  
Total cash and cash equivalents       86,213           89,850  
Available-for-sale securities, at fair value       101,344           101,908  
           
Residential real estate loans held for sale     5,366         7,093  
SBA loans held for sale     2,170         1,942  
Total loans held for sale       7,536           9,035  
           
           
Loans          
Commercial real estate       363,600           348,676  
Residential real estate       128,264           132,669  
Commercial and industrial       126,734           123,133  
Consumer       7,244           7,659  
Total loans       625,842           612,137  
Less: Allowance for loan losses       2,065           1,926  
Loans, net       623,777           610,211  
           
           
Premises and equipment, net       8,460           8,253  
Real estate owned and other possessed collateral, net       1,279           1,651  
Federal Home Loan Bank stock, at cost       4,102           4,102  
Intangible assets, net       2,078           2,209  
Bank owned life insurance       15,387           15,276  
Other assets       8,073           8,223  
Total assets $     858,249     $     850,718  
           
Liabilities and Stockholders’ Equity          
Deposits          
Demand $     62,687     $     60,383  
Savings and interest checking       106,679           100,134  
Money market       182,690           168,527  
Time       341,422           345,715  
Total deposits       693,478           674,759  
           
Federal Home Loan Bank advances       30,159           30,188  
Wholesale repurchase agreements       –           10,037  
Short-term borrowings       2,479           2,349  
Junior subordinated debentures issued to affiliated trusts       8,674           8,626  
Capital lease obligation       1,312           1,368  
Other liabilities       8,443           10,664  
Total liabilities       744,545           737,991  
Commitments and contingencies              
           
           
Stockholders’ equity          
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares        
issued and outstanding at September 30, 2015 and June 30, 2015              
Voting common stock, $1.00 par value, 25,000,000 shares authorized;          
8,569,612 and 8,575,144 shares issued and outstanding at        
September 30, 2015 and June 30, 2015, respectively       8,570            8,575  
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;          
1,022,717 and 1,012,739 shares issued and outstanding at
September 30, 2015 and June 30, 2015, respectively
       1,023         1,013  
Additional paid-in capital       84,937           85,506  
Retained earnings       20,693           18,921  
Accumulated other comprehensive loss        (1,519 )          (1,288 )
Total stockholders’ equity       113,704           112,727  
Total liabilities and stockholders’ equity $     858,249     $     850,718  
 

  NORTHEAST BANCORP AND SUBSIDIARY
  CONSOLIDATED STATEMENTS OF INCOME
  (Unaudited)
  (Dollars in thousands, except share and per share data)
    Three Months Ended September 30,    
    2015   2014    
  Interest and dividend income:              
  Interest and fees on loans $   10,790     $   10,922      
  Interest on available-for-sale securities     228         244      
  Other interest and dividend income     95         66      
  Total interest and dividend income     11,113         11,232      
                 
  Interest expense:              
  Deposits     1,365         1,130      
  Federal Home Loan Bank advances     260         323      
  Wholesale repurchase agreements     67         73      
  Short-term borrowings     9         9      
  Junior subordinated debentures issued to affiliated trusts     154         206      
  Obligation under capital lease agreements     17         20      
  Total interest expense     1,872         1,761      
  Net interest and dividend income before provision for loan losses     9,241         9,471      
  Provision for loan losses     169         320      
  Net interest and dividend income after provision for loan losses     9,072         9,151      
                 
  Noninterest income:              
  Fees for other services to customers     408         394      
  Gain on sales of residential loans held for sale     560           584        
  Gain on sales of portfolio loans     675         80      
  Loss recognized on real estate owned and other repossessed collateral, net     (59 )          (23 )    
  Bank-owned life insurance income     112         109      
  Other noninterest income     9         10      
  Total noninterest income     1,705         1,154      
                 
  Noninterest expense:              
  Salaries and employee benefits     4,256         4,533      
  Occupancy and equipment expense     1,290         1,202      
  Professional fees     430         308      
  Data processing fees     349         345      
  Marketing expense     70         69      
  Loan acquisition and collection expense     451         274      
  FDIC insurance premiums     114         124      
  Intangible asset amortization     131         166      
  Other noninterest expense     719         689      
  Total noninterest expense     7,810         7,710      
                 
  Income before income tax expense     2,967         2,595      
  Income tax expense     1,100         948      
  Net income $   1,867     $   1,647      
                 
                 
  Weighted average shares outstanding during the period:              
  Basic     9,562,812         10,180,038      
  Diluted     9,562,812         10,180,038      
                 
  Earnings per common share:              
  Basic  $  0.20    $  0.16    
  Diluted   0.20     0.16    
                 
  Cash dividends declared per common share $ 0.01   $ 0.01    
                 

NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
  Three Months Ended September 30,
  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) $    102,241   $   228     0.88 %   $    112,250   $   244     0.86 %
Loans (2) (3)      617,839      10,790     6.93 %        526,356        10,922     8.23 %
Regulatory stock      4,102       34     3.29 %        4,102       15     1.45 %
Short-term investments (4)      99,649       61     0.24 %        82,762       51     0.24 %
Total interest-earning assets      823,831      11,113     5.35 %        725,470        11,232     6.14 %
Cash and due from banks      3,026                  2,712          
Other non-interest earning assets      36,420                  34,736          
Total assets $    863,277             $    762,918          
                               
Liabilities & Stockholders’ Equity:                              
Interest-bearing liabilities:                              
NOW accounts $    69,619   $   46     0.26 %   $    63,608   $   41     0.26 %
Money market accounts      170,566       353     0.82 %        86,294       110     0.51 %
Savings accounts      36,360       12     0.13 %        34,361       11     0.13 %
Time deposits      350,867       954     1.08 %        340,368       968     1.13 %
Total interest-bearing deposits      627,412        1,365     0.86 %        524,631       1,130     0.85 %
Short-term borrowings      1,950       9     1.83 %        3,320       9     1.08 %
Borrowed funds      39,324       344     3.47 %        52,979       416     3.12 %
Junior subordinated debentures      8,650       154     7.06 %        8,461       206     9.66 %
Total interest-bearing liabilities      677,336        1,872     1.10 %        589,391        1,761     1.19 %
                               
Non-interest bearing liabilities:                              
Demand deposits and escrow accounts      64,008                  53,245          
Other liabilities      8,763                  7,891          
Total liabilities      750,107                  650,527          
Stockholders’ equity      113,170                  112,391          
Total liabilities and stockholders’ equity $    863,277             $    762,918          
                               
Net interest income       $    9,241             $ 9,471    
                               
Interest rate spread               4.25 %                 4.95 %
Net interest margin (5)               4.45 %                 5.18 %
                               
(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:
  September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014   September 30, 2014
Net interest income $    9,241     $    9,350     $    9,120     $    9,426     $    9,471  
Provision for loan losses     169         240         44         113         320  
Noninterest income      1,705          3,067          1,554          1,370          1,154  
Noninterest expense      7,810          8,827          7,885          8,210         7,710  
Net income      1,867          2,165          1,752          1,580         1,647  
                   
Weighted average common shares outstanding:                  
Basic   9,562,812       9,773,228       9,833,033       10,132,349       10,180,038  
Diluted   9,562,812       9,773,228       9,833,033       10,132,349       10,180,038  
Earnings per common share:                  
Basic $   0.20     $   0.22     $   0.18     $   0.16     $    0.16  
Diluted     0.20         0.22         0.18         0.16         0.16  
Dividends per common share      0.01          0.01          0.01          0.01         0.01  
                   
Return on average assets   0.86 %     1.04 %     0.88 %     0.78 %     0.85 %
Return on average equity   6.55 %     7.72 %     6.38 %     5.54 %     5.80 %
Net interest rate spread (1)   4.25 %     4.51 %     4.58 %     4.65 %     4.95 %
Net interest margin (2)   4.45 %     4.70 %     4.79 %     4.87 %     5.18 %
Efficiency ratio (3)   71.35 %     71.09 %     73.87 %     76.05 %     72.56 %
Noninterest expense to average total assets   3.59 %     4.22 %     3.96 %     4.05 %     4.02 %
Average interest-earning assets to average interest-bearing liabilities   121.63 %     120.90 %     121.89 %     122.32 %     123.09 %
                   
  As of:
  September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014   September 30, 2014
Nonperforming loans:                  
Originated portfolio:                  
Residential real estate $    3,165     $    3,021     $    3,163     $    2,706     $   2,110  
Commercial real estate      529          994          1,201          1,166          716  
Home equity     20         11         11         11         28  
Commercial and industrial   2        2         –         –          –  
Consumer     153         190         225         237          145  
Total originated portfolio      3,869          4,218          4,600          4,120          2,999  
Total purchased portfolio      6,939          6,532          5,850          8,129          4,287  
Total nonperforming loans      10,808          10,750          10,450          12,249          7,286  
Real estate owned and other possessed collateral, net     1,279         1,651         3,694         2,058          2,115  
Total nonperforming assets $   12,087     $   12,401     $   14,144     $   14,307     $    9,401  
                   
Past due loans to total loans   1.35 %     1.08 %     2.57 %     2.64 %     1.40 %
Nonperforming loans to total loans   1.73 %     1.76 %     1.80 %     2.13 %     1.34 %
Nonperforming assets to total assets   1.41 %     1.46 %     1.70 %     1.77 %     1.20 %
Allowance for loan losses to total loans   0.33 %     0.31 %     0.30 %     0.29 %     0.28 %
Allowance for loan losses to nonperforming loans   19.11 %     17.92 %     16.66 %     13.58 %     21.12 %
                   
Commercial real estate loans to risk-based capital (4)   196.62 %     188.49 %     173.17 %     190.05 %     167.57 %
Net loans to core deposits (5)   91.04 %     91.85 %     89.04 %     91.79 %     92.80 %
Purchased loans to total loans, including held for sale   33.82 %     32.61 %     33.53 %     37.97 %     37.38 %
Equity to total assets   13.25 %     13.25 %     13.51 %     13.69 %     14.48 %
Common equity tier 1 capital ratio   19.69 %     19.82 %     20.90 %            
Total capital ratio (6)   20.03 %     20.14 %     21.21 %     21.44 %     22.97 %
Tier 1 leverage capital ratio   14.23 %     14.49 %     14.96 %     14.81 %     15.89 %
                   
Total stockholders’ equity $    113,704     $    112,727     $    112,487     $    110,923     $    113,242  
Less: Preferred stock     –         –         –         –         –  
Common stockholders’ equity      113,704          112,727          112,487          110,923         113,242  
Less: Intangible assets     (3,388 )       (3,312 )       (2,338 )       (2,467 )        (2,632 )
Tangible common stockholders’ equity (non-GAAP) $    110,316     $    109,415     $    110,149     $    108,456     $   110,610  
                   
Common shares outstanding   9,592,329       9,587,883       9,819,609       9,846,387       10,248,034  
Book value per common share $ 11.85     $ 11.76     $ 11.46     $ 11.27     $ 11.05  
Tangible book value per share (non-GAAP) (7)   11.50       11.41       11.22       11.01       10.79  
                   
  Reconciliation of Net Income (GAAP) to Net Operating Earnings (non-GAAP)
  Three Months Ended:
  September 30, 2015   June 30, 2015   March 31, 2015   December 31, 2014   September 30, 2014
Net income (GAAP) $   1,867     $   2,165     $   1,752     $   1,580     $    1,647  
Items excluded from operating earnings, net of tax:                  
Severance expense      –          –          8          36          52  
Net operating earnings (non-GAAP) $    1,867     $    2,165     $    1,760     $    1,616     $    1,699  
Net operating earnings per share – basic (non-GAAP) $    0.20     $    0.22     $    0.18     $    0.16     $    0.17  
                   
(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) Tangible book value per share represents total stockholders’ equity less the sum of preferred stock and intangible assets divided by common shares outstanding.
 

 

CONTACT: For More Information:

Claire S. Bean, COO
Northeast Bank, 500 Canal Street, Lewiston, ME 04240
207.786.3245 ext. 3202
www.northeastbank.com