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Northeast Bancorp Reports Revised First Quarter Results and Declares Dividend

/EIN News/ -- LEWISTON, Maine, Nov. 06, 2017 (GLOBE NEWSWIRE) -- **The press release dated October 24, 2017 has been amended to reflect the adoption of ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). For the quarter ended September 30, 2017, the adoption of ASU 2016-09 resulted in the recognition of an income tax benefit of $818 thousand, which increased net income to $4.6 million, and increased earnings per diluted common share by $0.08 to $0.50 per diluted common share. See “Explanatory Note” in Form 8-K/A filed on November 6, 2017 for further detail.

The amended release follows:

Northeast Bancorp Reports Revised First Quarter Results and Declares Dividend

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 revised net income of $4.6 million, or $0.50 per diluted common share, for the quarter ended September 30, 2017, compared to net income of $1.8 million, or $0.19 per diluted common share, for the quarter ended September 30, 2016.

On October 24, 2017, the Board of Directors declared a cash dividend of $0.01 per share, payable on November 20, 2017 to shareholders of record as of November 6, 2017.

“We began our fiscal year with a solid quarter,” said Richard Wayne, President and Chief Executive Officer. “Our earnings of $0.50 per diluted common share, compared to $0.19 per diluted share in the quarter ended September 30, 2016, were positively affected by transactional income from loan payoffs in the purchased portfolio and gains from the sale of SBA and residential loans. This helped us achieve a return on equity of 14.6%, compared to 6.1% in the quarter ended September 30, 2016, as well as a return on assets of 1.7% and an efficiency ratio of 57.1%.”

As of September 30, 2017, total assets were $1.0 billion, a decrease of $27.2 million, or 2.5%, from total assets of $1.1 billion as of June 30, 2017. The principal components of the change in the balance sheet follow:

  1. $74.4 million of loans were originated or acquired during the quarter ended September 30, 2017. Loans generated by the Bank's Loan Acquisition and Servicing Group ("LASG") totaled $44.5 million, which consisted of $3.7 million of purchased loans, at an average price of 84.6% of unpaid principal balance, and $40.8 million of originated loans. The Bank's Small Business Administration and United States Department of Agriculture ("SBA") Division closed $7.8 million of new loans during the quarter, of which $5.9 million were funded. In addition, the Company sold $9.1 million of the guaranteed portion of SBA loans in the secondary market, of which $3.1 million were originated in the current quarter and $6.0 million were originated or purchased in prior quarters. Residential loan production sold in the secondary market totaled $19.2 million for the quarter.

    In totality, the loan portfolio – excluding loans held for sale – has decreased by $19.6 million, or 2.5%, compared to June 30, 2017, primarily due to payoffs, pay-downs and sales in the portfolio, partially offset by originations.

    The following table highlights the changes in the loan portfolio for the three months ended September 30, 2017:
   
  Three Months Ended
September 30, 2017
   
Loan Portfolio Changes: (Dollars in thousands)
LASG originations and acquisitions $ 44,430  
SBA and USDA funded originations   5,913  
Community Banking Division originations   22,147  
SBA loan sales   (9,135 )
Residential loan sales   (19,153 )
Transfer to real estate owned   (1,214 )
Payoffs, pay-downs and amortization, net   (62,599 )
Net change $ (19,611 )
       

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, 2017
        (Dollars in millions)
Total Loans   Purchased loans may not exceed 40% of total loans   $ 126.5
Regulatory Capital   Non-owner occupied commercial real estate loans may not exceed 300% of total capital   $ 207.1
           

An overview of the Bank’s LASG portfolio follows:

   
  LASG Portfolio
  Three Months Ended September 30,
  2017   2016
  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 $ 4,318     $ 40,779     $ -   $ 45,097     $ 16,790     $ 42,002     $ -     $ 58,792  
Net investment basis   3,651       40,779       -     44,430       13,853       42,002       -       55,855  
                                                             
Loan returns during the period:                                                            
Yield (1)   12.28 %     6.35 %     -     8.85 %     10.40 %     5.88 %     0.50 %     7.58 %
Total Return (1) (2)   12.28 %     6.35 %     -     8.85 %     10.43 %     5.88 %     0.50 %     7.59 %
                                                             
                                                             
Total loans as of period end:                                                            
Unpaid principal balance $ 262,144     $ 340,756     $ -   $ 602,900     $ 269,462     $ 206,748     $ 48,000     $ 524,210  
Net investment basis   231,232       340,756       -     571,988       237,103       206,748       48,000       491,851  
                                                             
(1) Purchased loan balances include loans held for sale of $1.2 million and $789 thousand as of September 30, 2017 and 2016, respectively.
(2)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, which includes loans held for sale, on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter.
 
  1. Deposits decreased by $27.1 million, or 3.0%, from June 30, 2017, attributable primarily to a decrease in time deposits of $35.7 million, or 10.6%, partially offset by growth in non-maturity (demand, savings and interest checking, and money market) accounts, which increased by $8.6 million, or 1.6%.
     
  2. Shareholders’ equity increased by $3.9 million from June 30, 2017, primarily due to earnings of $4.6 million, partially offset by stock option exercises which decreased additional paid-in-capital by $917 thousand. Additionally, there was stock-based compensation of $220 thousand, a decrease in accumulated other comprehensive loss of $104 thousand and $87 thousand in dividends paid on common stock.

Net income increased by $2.8 million to $4.6 million for the quarter ended September 30, 2017, compared to $1.8 million for the quarter ended September 30, 2016.

  1. Net interest and dividend income before provision for loan losses increased by $3.5 million for the quarter ended September 30, 2017, compared to the quarter ended September 30, 2016. The increase is primarily due to higher transactional income on purchased loans and higher average balances in the total loan portfolio. This increase was partially offset by higher rates and higher average deposit balances.

    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,
  2017   2016
  Average   Interest       Average   Interest    
  Balance (1)   Income (2)   Yield   Balance (1)   Income (2)   Yield
  (Dollars in thousands)
Community Banking Division $ 150,178   $ 1,746   4.61 %   $ 205,765   $  2,401   4.63 %
SBA   53,527     941   6.97 %     31,148     519   6.61 %
LASG:                              
Originated   328,775     5,265   6.35 %      185,109      2,742   5.88 %
Purchased   240,136     7,431   12.28 %      231,999      6,081   10.40 %
Secured Loans to Broker-Dealers   -     -   0.00 %     48,000     60   0.50 %
Total LASG   568,911     12,696   8.85 %      465,108      8,883   7.58 %
Total $ 772,616   $ 15,383   7.90 %   $  702,021   $  11,803   6.67 %
                                   
(1) Includes loans held for sale.
(2) SBA interest income includes SBA fees of $48 thousand and $50 thousand for the quarters ended September 30, 2017 and 2016, respectively.
 

The 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, 2016, transactional income increased by $1.5 million. The total return on purchased loans for the three months ended September 30, 2017 was 12.28%. The increase over the prior comparable period was primarily due to higher average balances and transactional income in the three months ended September 30, 2017. The following table details the total return on purchased loans:

   
  Total Return on Purchased Loans
  Three Months Ended September 30,
  2017   2016
  Income   Return (1)   Income   Return (1)
  (Dollars in thousands)
Regularly scheduled interest and accretion $ 4,613   7.62 %   $ 4,754   8.13 %
Transactional income:                  
Gain on loan sales     -   0.00 %       -   0.00 %
Gain on sale of real estate owned   -   0.00 %        19   0.03 %
Other noninterest income      -   0.00 %        -   0.00 %
Accelerated accretion and loan fees     2,818   4.66 %       1,327   2.27 %
Total transactional income     2,818   4.66 %       1,346   2.30 %
Total $   7,431   12.28 %   $   6,100   10.43 %
                       
(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, which includes loans held for sale, on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter. Total return is considered a non-GAAP financial measure.
 
  1. Noninterest income increased by $150 thousand for the quarter ended September 30, 2017, compared to the quarter ended September 30, 2016, principally due to the following:
    • An increase in gain on sale of SBA loans of $276 thousand, due to a higher dollar amount sold in the quarter; and
    • An increase in fees for other services to customers of $118 thousand, due to higher loan servicing fees on SBA loans sold.
    • The increases in noninterest income were partially offset by a decrease in gain on sale of residential loans held for sale of $251 thousand, due to a lower volume sold in the quarter.

  2. Noninterest expense increased by $88 thousand for the quarter ended September 30, 2017, compared to the quarter ended September 30, 2016, primarily due to the following:
    • An increase in data processing fees of $183 thousand, primarily due to the outsourcing of data processing.
    • The increase in data processing fees was partially offset by a decrease in occupancy and equipment expense of $120 thousand, primarily due to lower computer equipment and software deprecation.
       
  3. Income tax expense increased by $602 thousand for the quarter ended September 30, 2017, compared to the quarter ended September 30, 2016, primarily due to the following:
    • An increase in income before income tax expense of $3.4 million, due primarily to the increase in net interest and dividend income before provision for loan losses of $3.5 million.
    • The increase in income before income tax expense was offset by an $818 thousand income tax benefit arising from the Company’s adoption of ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting in the current quarter, whereby the tax effects of exercised or vested awards are now treated as a discrete item in the reporting period in which they occur, and are recorded as an income tax benefit to the income statement.

As of September 30, 2017, nonperforming assets totaled $18.7 million, or 1.78% of total assets, as compared to $14.8 million, or 1.37% of total assets, as of June 30, 2017.

As of September 30, 2017, past due loans totaled $12.1 million, or 1.60% of total loans, as compared to $13.4 million, or 1.72% of total loans as of June 30, 2017.

As of September 30, 2017, the Company’s Tier 1 Leverage Ratio was 12.8%, compared to 12.8% at June 30, 2017, and the Total Capital Ratio was 20.0%, compared to 19.5% at June 30, 2017. The increase in the Total Capital Ratio resulted primarily from the net decrease in the loan portfolio, offset by earnings.

About Northeast Bancorp
Northeast Bancorp (NASDAQ:NBN) is the holding company for Northeast Bank, a full-service bank headquartered in Lewiston, Maine. We offer personal and business banking services to the Maine and New Hampshire markets via ten branches and two loan production offices. Our Loan Acquisition and Servicing Group (“LASG”) purchases and originates commercial loans on a nationwide basis and our SBA Division supports the needs of growing businesses nationally. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found at www.northeastbank.com.

Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures, including tangible common shareholders’ equity, tangible book value per share, total return, and efficiency ratio. 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; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; 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, 2017   June 30, 2017
Assets          
Cash and due from banks $ 3,528     $ 3,582  
Short-term investments   147,287       159,701  
Total cash and cash equivalents   150,815       163,283  
           
           
Available-for-sale securities, at fair value   94,508       96,693  
           
Residential real estate loans held for sale   7,106       4,508  
SBA loans held for sale   2,400       191  
Total loans held for sale   9,506       4,699  
           
           
Loans          
Commercial real estate   471,846       498,004  
Commercial and industrial   183,493       175,654  
Residential real estate   100,124       101,168  
Consumer   4,121       4,369  
Total loans   759,584       779,195  
Less: Allowance for loan losses   4,034       3,665  
Loans, net   755,550       775,530  
           
           
Premises and equipment, net   7,274       6,937  
Real estate owned and other repossessed collateral, net   2,040       826  
Federal Home Loan Bank stock, at cost   1,938       1,938  
Intangible assets, net   1,191       1,300  
Servicing rights, net   2,955       2,846  
Bank owned life insurance   16,291       16,179  
Other assets   7,569       6,643  
Total assets $ 1,049,637     $ 1,076,874  
           
Liabilities and Shareholders' Equity          
Deposits          
Demand $ 74,731     $ 69,827  
Savings and interest checking   105,691       108,417  
Money market   380,992       374,569  
Time   301,309       337,037  
Total deposits   862,723       889,850  
           
Federal Home Loan Bank advances   20,004       20,011  
Subordinated debt   23,705       23,620  
Capital lease obligation   808       873  
Other liabilities   15,685       19,723  
Total liabilities   922,925       954,077  
           
Commitments and contingencies   -       -  
           
           
Shareholders' equity          
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares        
issued and outstanding at September 30, 2017 and June 30, 2017   -       -  
Voting common stock, $1.00 par value, 25,000,000 shares authorized;          
7,899,159 and 7,840,460 shares issued and outstanding at        
September 30, 2017 and June 30, 2017, respectively   7,899       7,841  
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;          
991,194 shares issued and outstanding at both          
September 30, 2017 and June 30, 2017 991     991  
Additional paid-in capital   76,709       77,455  
Retained earnings   42,641       38,142  
Accumulated other comprehensive loss   (1,528 )     (1,632 )
Total shareholders' equity   126,712       122,797  
Total liabilities and shareholders' equity $ 1,049,637     $ 1,076,874  
               



   
NORTHEAST BANCORP AND SUBSIDIARY  
CONSOLIDATED STATEMENTS OF INCOME  
(Unaudited)  
(Dollars in thousands, except share and per share data)  
  Three Months Ended September 30,
  2017   2016  
Interest and dividend income:          
Interest and fees on loans $ 15,383   $ 11,803  
Interest on available-for-sale securities   266     239  
Other interest and dividend income   529     215  
Total interest and dividend income   16,178     12,257  
           
Interest expense:          
Deposits   2,176     1,754  
Federal Home Loan Bank advances   172     255  
Subordinated debt   508     459  
Obligation under capital lease agreements   11     14  
Total interest expense   2,867     2,482  
Net interest and dividend income before provision for loan losses   13,311     9,775  
Provision for loan losses   354     193  
Net interest and dividend income after provision for loan losses   12,957     9,582  
           
Noninterest income:          
Fees for other services to customers   526     408  
Gain on sales of residential loans held for sale   291     542  
Gain on sales of SBA loans   1,019     743  
Loss recognized on real estate owned and other repossessed collateral, net   -     (14 )
Bank owned life insurance income   112     114  
Other noninterest income   10     15  
Total noninterest income   1,958     1,808  
           
Noninterest expense:          
Salaries and employee benefits   5,254     5,314  
Occupancy and equipment expense   1,109     1,229  
Professional fees   442     496  
Data processing fees   604     421  
Marketing expense   87     87  
Loan acquisition and collection expense   365     227  
FDIC insurance premiums   80     124  
Intangible asset amortization   109     109  
Other noninterest expense   664     619  
Total noninterest expense   8,714     8,626  
Income before income tax expense   6,201     2,764  
Income tax expense   1,615     1,013  
Net income $ 4,586   $ 1,751  
           
           
Weighted-average shares outstanding:          
Basic   8,841,511     9,106,144  
Diluted   9,089,936     9,133,383  
           
Earnings per common share:          
Basic $ 0.52   $ 0.19  
Diluted   0.50     0.19  
             
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,
  2017   2016
      Interest   Average       Interest   Average
  Average   Income/   Yield/   Average   Income/   Yield/
  Balance   Expense   Rate   Balance   Expense   Rate
Assets:                              
Interest-earning assets:                              
Investment securities $ 95,827   $ 266   1.10 %   $ 94,899   $ 239   1.00 %
Loans (1) (2) (3)   772,616     15,393   7.90 %     702,021     11,821   6.68 %
Federal Home Loan Bank stock   1,938     20   4.09 %     2,408     23   3.79 %
Short-term investments (4)   160,354     509   1.26 %     154,392     192   0.49 %
Total interest-earning assets   1,030,735     16,188   6.23 %     953,720     12,275   5.11 %
Cash and due from banks   3,134               2,941          
Other non-interest earning assets   30,887               30,812          
Total assets $ 1,064,756             $ 987,473          
                               
Liabilities & Shareholders' Equity:                              
Interest-bearing liabilities:                              
NOW accounts $ 69,577   $ 51   0.29 %   $ 70,850   $ 51   0.29 %
Money market accounts   387,632     1,097   1.12 %     291,734     682   0.93 %
Savings accounts   37,033     13   0.14 %     35,769     12   0.13 %
Time deposits   312,485     1,015   1.29 %     336,271     1,009   1.19 %
Total interest-bearing deposits   806,727     2,176   1.07 %     734,624     1,754   0.95 %
Federal Home Loan Bank advances   20,007     172   3.41 %     30,061     255   3.37 %
Subordinated debt   23,661     508   8.52 %     23,360     459   7.80 %
Capital lease obligation   830     11   5.26 %     1,087     14   5.11 %
Total interest-bearing liabilities   851,225     2,867   1.34 %     789,132     2,482   1.25 %
                               
Non-interest bearing liabilities:                              
Demand deposits and escrow accounts   80,565               75,672          
Other liabilities   8,464               8,213          
Total liabilities   940,254               873,017          
Shareholders' equity   124,502               114,456          
Total liabilities and shareholders' equity $ 1,064,756             $ 987,473          
                               
Net interest income (5)       $ 13,321             $ 9,793    
                               
Interest rate spread             4.89 %               3.86 %
Net interest margin (6)             5.13 %               4.07 %
                               
(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) Includes tax exempt interest income of $10 thousand and $18 thousand for the three months ended September 30, 2017 and 2016, respectively.
(6) 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, 2017   June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016
Net interest income $ 13,311     $ 13,757     $ 12,459     $ 11,833     $ 9,775  
Provision for loan losses   354       389       384       628       193  
Noninterest income   1,958       2,890       2,308       2,690       1,808  
Noninterest expense   8,714       9,364       8,842       8,956       8,626  
Net income   4,586       4,027       3,461       3,100       1,751  
                   
Weighted-average common shares outstanding:                  
Basic   8,841,511       8,823,679       8,830,442       8,831,235       9,106,144  
Diluted   9,089,936       8,979,471       8,893,534       8,864,618       9,133,383  
Earnings per common share:                  
Basic $ 0.52     $ 0.46     $ 0.39     $ 0.35     $ 0.19  
Diluted   0.50       0.45       0.39       0.35       0.19  
Dividends per common share   0.01       0.01       0.01       0.01       0.01  
                   
Return on average assets   1.71 %     1.57 %     1.37 %     1.24 %     0.70 %
Return on average equity   14.61 %     13.34 %     12.03 %     10.92 %     6.07 %
Net interest rate spread (1)   4.89 %     5.32 %     4.90 %     4.72 %     3.86 %
Net interest margin (2)   5.13 %     5.55 %     5.11 %     4.94 %     4.07 %
Efficiency ratio (non-GAAP) (3)   57.07 %     56.25 %     59.88 %     61.67 %     74.47 %
Noninterest expense to average total assets   3.25 %     3.64 %     3.50 %     3.59 %     3.47 %
Average interest-earning assets to average interest-bearing liabilities   121.09 %     121.13 %     120.84 %     120.73 %     120.86 %
                   
  As of:
  September 30, 2017   June 30, 2017   March 31, 2017   December 31, 2016   September 30, 2016
Nonperforming loans:                  
Originated portfolio:                  
Residential real estate $ 3,667     $ 3,337     $ 3,265     $ 2,827     $ 3,273  
Commercial real estate   2,409       413       420       396       361  
Home equity   58       58       48       48       48  
Commercial and industrial   2,629       2,600       2,636       2,659       347  
Consumer   131       103       65       48       121  
Total originated portfolio   8,894       6,511       6,434       5,978       4,150  
Total purchased portfolio   7,758       7,452       8,388       4,219       4,773  
Total nonperforming loans   16,652       13,963       14,822       10,197       8,923  
Real estate owned and other repossessed collateral, net   2,040       826       3,761       3,145       3,774  
Total nonperforming assets $ 18,692     $ 14,789     $ 18,583     $ 13,342     $ 12,697  
                   
Past due loans to total loans   1.60 %     1.72 %     3.25 %     2.85 %     1.36 %
Nonperforming loans to total loans   2.19 %     1.79 %     2.00 %     1.33 %     1.24 %
Nonperforming assets to total assets   1.78 %     1.37 %     1.81 %     1.32 %     1.29 %
Allowance for loan losses to total loans   0.53 %     0.47 %     0.46 %     0.41 %     0.35 %
Allowance for loan losses to nonperforming loans   24.23 %     26.25 %     22.77 %     30.47 %     28.08 %
                   
Commercial real estate loans to risk-based capital (4)   166.15 %     181.23 %     181.83 %     197.11 %     179.96 %
Net loans to core deposits (5)   88.68 %     87.68 %     87.46 %     92.04 %     90.22 %
Purchased loans to total loans, including held for sale   30.11 %     31.43 %     31.87 %     32.91 %     32.54 %
Equity to total assets   12.07 %     11.40 %     11.55 %     11.35 %     11.32 %
Common equity tier 1 capital ratio   16.50 %     16.00 %     15.80 %     14.94 %     15.34 %
Total capital ratio   20.04 %     19.48 %     19.30 %     18.31 %     18.81 %
Tier 1 leverage capital ratio   12.77 %     12.81 %     12.46 %     12.60 %     12.25 %
                   
Total shareholders' equity $ 126,712     $ 122,797     $ 118,675     $ 114,942     $ 111,553  
Less: Preferred stock   -       -       -       -       -  
Common shareholders' equity   126,712       122,797       118,675       114,942       111,553  
Less: Intangible assets (6)   (4,146 )     (4,146 )     (3,898 )     (3,856 )     (3,797 )
Tangible common shareholders' equity (non-GAAP) $ 122,566     $ 118,651     $ 114,777     $ 111,086     $ 107,756  
                   
Common shares outstanding   8,890,353       8,831,654       8,815,279       8,831,235       8,831,235  
Book value per common share $ 14.25     $ 13.90     $ 13.46     $ 13.02     $ 12.63  
Tangible book value per share (non-GAAP) (7)   13.79       13.43       13.02       12.58       12.20  
                   
(1) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3) The efficiency ratio represents noninterest expense divided by the sum of net interest income (before the loan loss provision) plus noninterest income.
(4) For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans.
(5) Core deposits include all non-maturity deposits and maturity deposits less than $250 thousand. Loans include loans held for sale.
(6) Includes the core deposit intangible asset and servicing rights asset.
(7) Tangible book value per share represents total shareholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.
 

For More Information:
Brian Pinheiro, Interim Chief Financial Officer and Chief Risk Officer
Northeast Bank, 500 Canal Street, Lewiston, ME 04240
207.786.3245 ext. 3223
www.northeastbank.com