Northeast Bancorp Reports First Quarter Results and Declares Dividend

Lewiston, Maine, UNITED STATES


LEWISTON, Maine, Oct. 24, 2017 (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 $3.8 million, or $0.42 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.

The Board of Directors has also 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 $0.42 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 12.0%, compared to 6.1% in the quarter ended September 30, 2016, as well as a return on assets of 1.4% 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 $   204.6
      

An overview of the Bank’s LASG portfolio follows:

 LASG Portfolio
 Three Months Ended September 30,
 20172016
   Purchased  Originated Secured Loans to  
 Broker-Dealers
 Total LASGPurchasedOriginatedSecured 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 $3.1 million from June 30, 2017, primarily due to earnings of $3.8 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 $2.0 million to $3.8 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.

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 12.7%, compared to 12.8% at June 30, 2017, and the Total Capital Ratio was 19.9%, 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.

Investor Call Information
Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Brian Pinheiro, Interim Chief Financial Officer and Chief Risk 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 Wednesday, October 25th. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 5098769. 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 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 16,503   19,723 
  Total liabilities 923,743   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 41,823   38,142 
Accumulated other comprehensive loss (1,528)  (1,632)
  Total shareholders' equity 125,894   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 2,433  1,013  
Net income3,768 $1,751  
       
       
Weighted-average shares outstanding:      
 Basic 8,841,511  9,106,144  
 Diluted 9,048,970  9,133,383  

Earnings per common share:
      
 Basic$0.43 $0.19  
 Diluted 0.42  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 8,473       8,213     
Total liabilities 940,263       873,017     
Shareholders' equity 124,493         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 3,768   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 9,048,970   8,979,471   8,893,534   8,864,618   9,133,383 
Earnings per common share:         
 Basic$   0.43  $   0.46  $   0.39  $   0.35  $   0.19 
 Diluted   0.42     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 1.40%  1.57%  1.37%  1.24%  0.70%
Return on average equity 12.01%  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) 167.03%  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 11.99%  11.40%  11.55%  11.35%  11.32%
Common equity tier 1 capital ratio 16.40%  16.00%  15.80%  14.94%  15.34%
Total capital ratio 19.93%  19.48%  19.30%  18.31%  18.81%
Tier 1 leverage capital ratio 12.70%  12.81%  12.46%  12.60%  12.25%
          
Total shareholders' equity$  125,894  $  122,797  $   118,675  $   114,942  $   111,553 
Less: Preferred stock    -      -      -      -      - 
Common shareholders' equity    125,894      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)$  121,748  $   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$   14.16  $   13.90  $   13.46  $   13.02  $   12.63 
Tangible book value per share (non-GAAP) (7)    13.69      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