Northeast Bank Reports First Quarter Results and Declares Dividend – GlobeNewswire

29October 2020

PORTLAND, Maine, Oct. 29, 2020(WORLD NEWSWIRE)– Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based full-service bank, today reported earnings of $7.8 million, or $0.94 per watered down common share, for the quarter ended September 30, 2020, compared to net income of $4.8 million, or $0.52 per diluted common share, for the quarter ended September 30, 2019.The Board of Directors stated a cash dividend of $0.01 per share, payable on November 24, 2020, to investors of record as of November 10, 2020.Talking about outcomes, Rick Wayne, Chief Executive Officer, stated, “We began the brand-new fiscal year with a very strong very first quarter. We earned $0.94 per diluted common share, a return usually equity of 18.5%, a return usually possessions of 2.5% and a performance ratio of 46.4%. Our revenues considerably taken advantage of our reporter plan with The Loan Source, Inc. (“Loan Source”) and ACAP SME, LLC (“ACAP”). For the quarter, we acknowledged $4.7 million of correspondent charge earnings in connection with $3.4 billion of Paycheck Protection Program (“PPP”) loans acquired by Loan Source through September 30, 2020. Subsequent to quarter end, Loan Source acquired an additional $613.8 countless PPP loans for an overall of $4.0 billion acquired PPP loans.”Mr. Wayne continued, “We are likewise pleased with the efficiency of loans under deferment. Out of the $136.2 million of three-month principal and interest deferments, only $26.8 million were on deferment at quarter end and all of the $44.7 million of six-month interest-only deferments were current at quarter end.”As of September 30, 2020, total assets were $1.26 billion, a decrease of $855 thousand, or 0.1%, from overall assets of $1.26 billion as of June 30, 2020. The primary parts of the changes in the balance sheet follow:1.The following table highlights the changes in the loan portfolio for the three months ended September 30, 2020:Loans produced by the Bank’s National Financing Division for the quarter ended September 30, 2020 totaled $45.5 million, which included $4.6 million of bought loans, at an average cost of 78.6% of overdue primary balance, and $40.9 countless stemmed loans.Additionally, the Bank came from $23.1 countless PPP loans in the very first quarter. The Bank sold PPP loans with a total principal balance of $53.7 million during the quarter ended September 30, 2020, taping a net gain of $1.1 million on the sales mainly resulting from the recognition of net delayed costs, partially balanced out by purchase price discounts.A summary of the Bank’s National Lending portfolio follows:2. Short-term financial investments increased by $59.6 million, or 42.3%, from June 30, 2020, mainly due to a$67.6 million decrease in loans(including loans held for sale ).3. Other assets increased by$4.0 million, or 24.2%, from June 30, 2020, primarily due to a$3.9 million receivable recorded for net maintenance earnings associated with the Bank’s reporter plan with Loan Source and ACAP, underwhich the Bank gets 50%of the net servicing earnings earned over time on loans bought by Loan Source.4. Deposits increased by$ 5.3 million, or 0.5 %, from June 30, 2020, attributable to boosts in need deposits of$39.2 million, or 41.3%, cost savings and interest-bearing bank account of $27.5 million, or 19.9%, and money market accounts of$9.2 million, or 3.1%, partially balanced out by a reduction in time deposits of$70.5 million, or 14.8 %. The primary factor for the net increase in deposits was due to timing of receipt of short-term client funds which were consequently withdrawn after the end of the quarter.5. Shareholders’ equity increased by $7.8 million, or 4.7%, from June 30, 2020, mostly due to net income of $7.8 million.Net income increased by $ 3.0 million to $7.8 million for the quarter ended September 30, 2020, compared to earnings of $4.8 million for the quarter ended September 30, 2019.1. Net interest and dividend earnings before arrangement for loan losses reduced by$ 744 thousand to$15.0 million for the quarter ended September 30, 2020, compared to$15.7 million for the quarter ended September 30, 2019. The decrease was primarily due to lower rates made on loans andshort-term financial investments, partly balanced out by reduced interest cost on deposits.The following table summarizes interest earnings and related yields recognized on the loan portfolios: The parts ofoverall earnings on bought loans are set forth in the table listed below entitled “Total Return on Purchased Loans.” When compared to the quarter ended September 30, 2019, regularly arranged interest and accretion for the quarter ended September 30, 2020 increased by$510 thousand due to the increase in average balances and transactional earnings increased by $46 thousand. The overall return on purchasedloans for the quarter ended September 30, 2020 was 9.1 %, a decrease from 9.7%for the quarter ended September30, 2019. The following table information the overall return on purchased loans: 2. Arrangement (credit)for loan losses increased by$513 thousand to$ 377 thousand for the quarter ended September 30, 2020, from a$136 thousand credit in the quarter ended September 30, 2019. The boost in the arrangement for loan losses shows increases in certain qualitative elements during the present quarter as an outcome of ongoing effects from the COVID-19 pandemic, partly offset by a reduction in loan balances during the quarter. There were no considerable modifications in qualitative elements throughout the quarter ended September 30, 2019.3. Noninterest earnings increased by$5.2 million for the quarter ended September 30, 2020, compared
to the quarter ended September 30, 2019, mainly due to the following: A boost in reporter fee earnings of$ 4.7 million from the recognition of correspondent costs and net servicing earnings as an outcome of the correspondent arrangement participated in with Loan Source during the quarter ended June 30, 2020. The reporter plan offers the Bank to make a correspondent fee when Loan Source purchases PPP loans and the Bank subsequently shares in net maintenance earnings on such purchased PPP loans. Correspondent income for the quarter is comprised of the followingparts: A summary of PPP loans purchased by Loan Source and associated quantities that the Bank will make over the anticipated life of the loans is as follows: An increase in gain on sale of PPP loans of$1.1 million, due to the sale of$53.7 countless PPP loans, which led to a net gain based upon the recognition of net postponed fees, partially balanced out by purchase price discount rates in the quarter ended September 30, 2020; partially offset by, A$252 thousand reduction in gain on Small company Administration(” SBA “)loan sales, as no SBA nationwide loans were sold during the existing quarter; A $155 thousand boost in losses on realty owned(” REO”), due to a write-down on an existing REO residential or commercial property during the quarter, as compared to very little write-downs on REO homes during the quarter ended September 30, 2019; A$ 135 thousand decline in bank-owned life insurance coverage earnings due to a gain from death benefit proceeds recognized in the quarter ended September 30, 2019, as compared to no gain recognized during the current quarter; and A$130 thousand decrease in gain on sale of domestic loans held for sale due to lower volume sold as compared to the quarter ended September 30, 2019.4. Noninterest expense decreased by$421 thousand for the quarter ended September 30, 2020 compared to the quarter ended September 30, 2019, mainly due to the following: A decrease in other noninterest expenditure of$408thousand, mostly due to a$128 thousand healing on SBA servicing possessions in the quarter ended September 30, 2020, as compared to a$74 thousand impairment charge in the quarter ended September 30, 2019, and a$167 thousand reduction in travel and meals and entertainment cost during the existing quarter; and A decrease in amortization of intangible properties of$ 109 thousand as the core deposit intangible ended up being completely amortized throughout the quarter ended June 30, 2020.5. Income tax expense increased by $1.4 million to $3.3 million, or an efficient tax rate of 29.8%, for the quarter ended September 30, 2020, compared to$1.9 million, or a reliable tax rate of 28.7 %, for the quarter ended September 30, 2019. The boost was primarily due to higherpre-tax earnings, which increased by$4.4 million throughout the quarter ended September 30, 2020 compared to the quarter ended September 30, 2019. As of September 30, 2020,
past due loans amounted to$18.9 million, or 2.03%of overall loans, as compared to unpaid loans amounting to $16.4 million, or 1.69 %of overall loans as of June 30, 2020. The increase was mostly due to thirteen National Loaning bought loans amounting to$3.7 million ending up being overdue during the quarter ended September 30, 2020, partly balanced out by one National Loaning acquired loan totaling$1.0 million that was moved to REO during the quarter ended September 30, 2020. As of September 30, 2020, the Bank’s Tier 1 utilize capital ratio was 14.0 %, compared to 13.4%at June 30, 2020, and the Overall capital ratio was 21.2%at September 30, 2020, compared to 19.6%at June 30, 2020. Capital ratios were mostly impacted by increased revenues and reduced assets.Investor Call Details Rick Wayne, Ceo, Jean-Pierre Lapointe, Chief Financial Officer, and Pat Dignan, Executive Vice President and Chief Credit Officer, will host a conference call to discuss f irst quarter profits and service outlook at 10:00 a.m. Eastern Time on Friday, October 30 th. Financiers can access the call by dialing 800.773.2954 and getting in the following passcode: 49981729. The call will be offered through live webcast, which can be viewed by accessing the Bank’s site at and clicking the About United States -Financier Relations section. To listen to the webcast, attendees are encouraged tovisit the site at least fifteen minutes early to sign up, download and install any needed audio software application. Please note there will likewise be a slide presentation that will accompany the webcast. For those who can not listen to the live broadcast, a replay will be offered online for one year at About Northeast Ban k Northeast Bank( NASDAQ: NBN )is a full-service bank headquartered in Portland, Maine. We offer personal and organization banking services to the Maine market by means of nine branches. Our National Loaning Department purchases and stems business loans on a nationwide basis. ableBanking, a division of Northeast Bank, offers online cost savings items to consumers across the country. Information regarding Northeast Bank can be discovered at Non-GAAP Financial Step s In addition to outcomes presented in accordance with usually acceptedaccounting concepts(“GAAP”),
this news release contains specific non-GAAP monetary procedures, consisting of tangible common shareholders’equity, concrete book value per share, total return on bought loans, efficiency ratio, and net interest margin omitting PPP. The Bank‘s management thinks that the supplemental non-GAAP details is used by regulators and market experts to examine a business’s monetary condition and therefore, such information is useful tofinanciers. These disclosures must not be considered as an alternative to financial results figured out in accordance with GAAP, nor are they always equivalent to non-GAAP performance steps that may be presented by other companies. Due to the fact that non-GAAP financial steps are not standardized, it might not be possible to compare these financial steps with other companies’non-GAAP financial steps having the very same or similar names.Forward-Looking Statements Declarations in this press release that are not historical realities are positive statements within the meaning of Section 27A of the Securities Act of 1933, as changed, and Area 21E of the Securities Exchange Act of 1934, as amended, and are planned to be covered by the safe harbor arrangements of the Private Securities Litigation Reform Act of 1995. Although the Bank believes that these positive declarations are
based upon sensible price quotes and assumptions, they are not guarantees of future efficiency and go through recognized and unidentified dangers, unpredictabilities, and other factors. You should not put excessive dependence on our forward-looking statements. You should exercise caution in interpreting and relying on positive statements due to the fact that they go through substantial dangers, uncertainties and other factors which are, in some cases, beyond the Bank’s control. The Bank’s actual outcomes could differ materially from those predicted in the forward-looking declarations as an outcome of, to name a few factors, the negative effects and interruptions of the COVID-19 pandemic and procedures required to include its spread on our employees, clients, organization operations, credit quality, monetary position, liquidity and outcomes of operations; the length and degree ofthe economic contraction resulting from the COVID-19 pandemic; continued wear and tear in work levels, basic company and economic conditions on a national basis and in the regional markets in which the Bank operates, consisting of modifications which adversely affect customers’capability to service and repay our loans; changes in customer behavior due to changing political, organization and financial conditions or legislative or regulative efforts; turbulence in the capital and debt markets; modifications in rate of interest and property worths; boosts in loan defaults and charge-off rates; declines in the worth of securities and other possessions, adequacy of loan loss reserves, or deposit levels requiring increased borrowing to fund loans and investments; altering government regulation; competitive pressures from other financial institutions; operational threats including, however not restricted to, cybersecurity incidents, fraud, natural disasters and future pandemics; the danger that the Bank might not be successful in the execution of its service method; the threat that intangibles recorded in the Bank’s monetary statements willbecome impaired; modifications in assumptions utilized in making such forward-looking statements; and the other risks and unpredictabilities detailed in the Bank’s Annual Report on Kind 10-K and upgraded by our Quarterly Reports on Type 10-Q and other filings sent to the Federal Deposit Insurance Coverage Corporation. These declarations speak only since the date of this release and the Bank does not carry out any responsibility to update or modify any of these forward-looking declarations to reflect events or situations taking place after the date of this communication or to show the occurrence of unexpected events.NBN-F For More Information: Jean-Pierre Lapointe, Chief Financial Officer Northeast Bank, 27 Pearl Street, Portland, ME 04101 207.786.3245 ext. 3220 Source:

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