NBN Northeast Bank

Northeast Bancorp (NASDAQ: NBN), a Maine-based full-service financial services company and parent of Northeast Bank (www.northeastbank.com), today reported operating results for its fiscal second quarter ended December 31, 2010. Results include the effect of the accounting treatment for the merger of Northeast Bancorp (“Northeast” or the “Company”) and FHB Formation LLC (“FHB”), which was consummated on December 29, 2010. This transaction, in which FHB was merged with and into Northeast, contributed approximately $16.2 million of new capital to the Company.

“With the successful completion of the merger and integration with management between Northeast and FHB, we look forward to building upon Northeast’s solid community banking franchise,” said Richard Wayne, President and Chief Executive Officer of Northeast Bancorp. “In the coming months, we plan to introduce two new business lines: a Loan Acquisition and Servicing Group and an Affinity Deposit Program, which will create new jobs in Maine and offer new savings products for customers.”

The Board of Directors has declared a cash dividend of $0.09 per share, payable on February 28, 2011 to shareholders of record as of February 14, 2011.

FY 2011 Second Quarter Results

Accounting Treatment

We have applied the acquisition method of accounting, as described in ASC 805 “Business Combinations” (previously SFAS 141R), to the merger of FHB with and into Northeast, a transaction that represents an acquisition by FHB of Northeast, with Northeast as the surviving company. As such, our consolidated financial statements prior to the closing of the merger reflect the historical accounting basis in our assets and liabilities and are labeled “Predecessor Company,” while our records after the merger are labeled “Successor Company” and reflect the new fair values of our assets and liabilities in our financial statements, in accordance with acquisition accounting. This is presented in our consolidated financial statements by a vertical black line that appears between the columns entitled Predecessor Company and Successor Company on the statements and relevant notes. The black line indicates that the amounts shown for the periods before and after the merger are not comparable.

Management, however, continues to measure the Company’s performance against comparable prior periods. In making this comparison of our FY 2011 results to prior periods, we have presented our FY 2011 results as the addition of the Predecessor Company and Successor Company periods. We have also excluded the effect of significant one-time items associated with the merger (a bargain purchase gain of $14.9 million and transaction costs totaling $3.1 million). We believe that this presentation provides the most meaningful information about our results of operations. This approach is not consistent with GAAP, may yield results that are not strictly comparable on a period-to-period basis, and may not reflect the actual results we would have achieved.

The application of acquisition accounting involves the comparison of the purchase price to the fair value of the net assets of the acquiree. In the case of the merger of FHB with and into Northeast, the estimated fair values of the net assets are greater than the purchase price. This produces a bargain purchase gain, which is reported by the Company in income. The bargain purchase gain reflected in these financial statements represents an estimate. While some of the asset and liability fair valuations as of the acquisition date are complete, others are based on our best estimates, and are subject to change once final valuations are determined.

Three Months Ended December 31, 2010

For the quarter ended December 31, 2010, excluding the effect of non-recurring merger-related items, the Company earned net income of $823,000, and net income available to common shareholders of $762,000, or $0.32 per diluted share, an increase of 29% compared to earned net income of $649,000 and net income available to common shareholders of $589,000, or $0.25 per diluted share, for the same period in FY 2010.

The principal factors contributing to the change in quarterly net income between the two periods are:

1. A $589,000, or 19.4%, increase in non-interest income:

a. Gains earned on sales of residential mortgage loans increased by $610,000 to $968,000, compared to $358,000 in the same period of FY 2010. Increased revenues resulted from growth in residential lending capacity over the last twelve months and a surge in mortgage refinance activity.

b. The Company realized a $105,000 gain in the second quarter of FY 2011 as a result of the sale of a small insurance agency in Jackman, Maine.

2. A $241,000, or 5.4%, decrease in net interest income. Although average earning assets increased by 4.1% compared to the same period in FY 2010, the mix is more heavily weighted toward lower-yielding short-term investments, which have increased by $42.4 million on average. Average loan balances for the FY 2011 second quarter declined by $14.2 million compared to the same period in FY 2010, primarily as a result of pay-downs in the Company’s portfolio of indirect consumer loans. This change in asset mix, and the effect of loan yields tightening relative to funding costs, led to a narrowing of the Company’s net interest margin, which declined by 29 basis points to 2.86%, when compared to the second quarter of FY 2010.

Non-performing loans (exclusive of any fair value adjustment associated with acquisition accounting) declined 11.3% over the past twelve months to $8.7 million at December 31, 2010 from $9.8 million at December 31, 2009. The quarterly provision for loan losses remained unchanged, at $453,000, when compared to the quarter ended December 31, 2009.

Total assets as of December 31, 2010 were $644.8 million, an increase of approximately 3.6%, or $22.2 million, compared to total assets of $622.6 million at the close of FY 2010. As a result of the merger with FHB, the Company’s capital ratios have increased: the tier 1 leverage ratio increased to 9.6% compared to 8.4% at the close of FY 2010 and the total risk-based capital ratio increased to 15.6% from 14.1% at the close of FY 2010.

In the next several months, the Company intends to make investments in its two new business lines, the Loan Acquisition and Servicing Group and the Affinity Deposit Program, and expects that operating expenses associated with those efforts will decrease Company earnings.

About Northeast Bancorp

Northeast Bancorp (NASDAQ: NBN) is the holding company for Northeast Bank, a full service community bank headquartered in Lewiston, Maine. Northeast Bank, together with its wholly owned subsidiary Northeast Bank Insurance Group, Inc., derives its income from a combination of traditional banking services and non-traditional financial products and services, including insurance and investments. Northeast Bank operates ten traditional bank branches, ten insurance offices, three investment centers and three loan production office that serve seven counties in Maine and two in New Hampshire. Information regarding Northeast Bank can be found on its website at www.northeastbank.com or by contacting 1-800-284-5989.

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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; competitive pressures from other financial institutions; the effects of a continuing deterioration 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; increasing government regulation, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; the risk that goodwill and 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 we do 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.

IMPORTANT NOTE: Securities and Advisory Services offered through Commonwealth Financial Network, Member FINRA, SIPC, and a Registered Investment Advisor. Securities are not FDIC insured, not bank obligations or otherwise bank guaranteed and may lose value. Northeast Financial is located at 202 Rte. 1, Suite 206, Falmouth, ME 04105

NORTHEAST BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands)           Successor       Predecessor Company Company December 31, June 30, 2010 2010 (Unaudited)       (Audited) Assets Cash and due from banks $ 3,398 $ 7,019 Interest-bearing deposits   68,784           13,416 Total cash and cash equivalents 72,182 20,435   Available-for-sale securities, at fair value 153,521 164,188 Loans held-for-sale 8,195 14,254   Loans receivable Residential real estate 152,730 155,613 Commercial real estate 116,796 121,175 Construction 9,254 5,525 Commercial business 25,324 30,214 Consumer   57,129           69,782 Total loans, gross 361,233 382,309 Less allowance for loan losses   -           5,806 Loans, net 361,233 376,503   Premises and equipment, net 8,013 7,997 Acquired assets, net 965 1,292 Accrued interest receivable 1,878 2,081 Federal Home Loan Bank stock, at cost 4,889 4,889 Federal Reserve Bank stock, at cost 597 597 Intangible assets 13,739 11,371 Bank owned life insurance 13,540 13,286 Other assets   6,068           5,714   Total assets $ 644,820         $ 622,607   Liabilities and Stockholders' Equity Liabilities: Deposits Demand $ 37,849 $ 35,266 Savings and interest checking 94,702 89,024 Money market 56,795 55,556 Brokered time deposits 4,890 4,883 Certificates of deposit   186,130           199,468 Total deposits 380,366 384,197   Federal Home Loan Bank advances 52,244 50,500 Structured repurchase agreements 68,877 65,000 Short-term borrowings 62,034 46,168 Junior subordinated debentures issued to affiliated trusts 7,889 16,496 Capital lease obligation 2,154 2,231 Other borrowings 2,134 2,630 Other liabilities   4,147           4,479 Total liabilities   579,845           571,701   Commitments and contingent liabilities   Stockholders' equity

Preferred stock, $1.00 par value, 1,000,000 shares authorized; 4,227 shares issued and outstanding at December 31, 2010 and June 30, 2010 liquidation preference of $1,000 per share

4 4

Voting common stock, at stated value, 13,500,000 shares authorized; 3,310,173 and 2,332,832 shares issued and outstanding at December 31, 2010 and June 30, 2010, respectively

3,310 2,324

Non-voting common stock, at stated value, 1,500,000 shares authorized; 195,351 and 0 shares issued and outstanding at December 31, 2010 and June 30, 2010, respectively

195 - Warrants 313 133 Additional paid-in capital 49,311 6,761 Unearned restricted stock award (181 ) - Retained earnings 11,835 37,338 Accumulated other comprehensive income   188           4,346 Total stockholders' equity   64,975           50,906   Total liabilities and stockholders' equity $ 644,820         $ 622,607   NORTHEAST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except share and per share data)                           Successor Predecessor Company Company 3 Days 89 Days 181 Days Three Months Six Months Ended Ended Ended Ended Ended December 31, December 28, December 28, December 31, December 31, 2010 2010     2010     2009     2009 Interest and dividend income: Interest on loans $ 196 $ 5,468 $ 11,210 $ 6,033 $ 12,075 Taxable interest on available-for-sale securities 41 1,310 2,854 1,725 3,437 Tax-exempt interest on available-for-sale securities 4 113 231 119 235 Dividends on available-for-sale securities - 16 26 20 27 Dividends on Federal Home Loan Bank and Federal Reserve Bank stock - 9 18 9 18 Other interest and dividend income   1     28       39       2       8 Total interest and dividend income   242     6,944       14,378       7,908       15,800   Interest expense: Deposits 42 1,273 2,796 1,771 3,825 Federal Home Loan Bank advances 15 451 918 476 880 Structured repurchase agreements 23 685 1,392 708 1,479 Short-term borrowings 6 205 376 178 321 Junior subordinated debentures issued to affiliated trusts 6 167 340 200 405 Obligation under capital lease agreements 1 27 55 29 60 Other borrowings   1     36       75       57       113 Total interest expense   94     2,844       5,952       3,419       7,083   Net interest and dividend income before provision for loan losses 148 4,100 8,426 4,489 8,717   Provision for loan losses   -     453       912       453       876 Net interest and dividend income after provision for loan losses   148     3,647       7,514       4,036       7,841   Noninterest income: Fees for other services to customers 14 331 698 401 766 Net securities gains - 5 17 15 43 Gain on sales of loans 49 919 1,867 358 567 Investment commissions 25 625 1,174 535 988 Insurance commissions 37 1,221 2,661 1,379 2,964 BOLI income 4 123 250 126 251 Bargain purchase gain 14,921 - - - - Other income   7     258       330       215       218 Total noninterest income   15,057     3,482       6,997       3,029       5,797   Noninterest expense: Salaries and employee benefits 167 3,319 6,670 3,523 6,924 Occupancy and equipment expense 28 774 1,556 869 1,659 Professional fees 10 248 527 237 585 Data processing fees 10 322 618 306 627 Intangible assets amortization 6 168 344 186 372 Merger expense 3,050 23 94 - - Other   117     1,100       2,138       1,122       2,001 Total noninterest expense   3,388     5,954       11,947       6,243       12,168   Income before income tax expense 11,817 1,175 2,564 822 1,470 Income tax (benefit) expense   (18 )   339       768       173       325   Net income $ 11,835   $ 836     $ 1,796     $ 649     $ 1,145                       Net income available to common stockholders $ 11,833   $ 777     $ 1,677     $ 589     $ 1,023     Weighted-average shares outstanding Basic 3,492,498 2,331,332 2,330,197 2,321,528 2,321,430 Diluted 3,588,756 2,358,647 2,354,385 2,324,073 2,324,024 Earnings per common share: Basic $ 3.38 $ 0.33 $ 0.72 $ 0.25 $ 0.44 Diluted $ 3.29 $ 0.33 $ 0.71 $ 0.25 $ 0.44   Reconciliation table - non-GAAP Financial Information Net income $ 11,835 $ 836 $ 1,796 $ 649 $ 1,145 Non-interest income components Less - bargain purchase gain (14,921 ) - - - - Non-interest expense components Add - merger expense   3,050     23       94       -       - Net operating results $ (36 ) $ 859     $ 1,890     $ 649     $ 1,145   NORTHEAST BANCORP AND SUBSIDIARY COMBINED INCOME STATEMENTS (Unaudited) (Dollars in thousands)                   The Combined Income Statement is a non-GAAP financial measure. For purposes of presenting a comparison of our FY 2011 results to prior periods, we have presented our FY 2011 results as the mathematical addition of the Predecessor Company and Successor Company periods in the accompanying financial tables. We believe that this presentation provides the most meaningful information about our results of operations. This approach is not consistent with GAAP, may yield results that are not strictly comparable on a period-to-period basis, and may not reflect the actual results we would have achieved.         GAAP-Based Operating Results: Non-GAAP Financial Successor Predecessor Measure: Company Company Combined Total For the Period For the Period For the three For the three December 29, 2010 to October 1, 2010 to months ended months ended Dec. 31, 2010 Dec. 28, 2010 Dec. 31, 2010 Dec. 31, 2009   Interest income $ 242 $ 6,944 $ 7,186 $ 7,908 Interest expense   94     2,844   2,938     3,419 Net interest income 148 4,100 4,248 4,489 Provision for loan losses   -     453   453     453 Net interest income after provision for loan losses 148 3,647 3,795 4,036   Net securities gains - 5 5 15 Bargain purchase gain 14,921 - 14,921 - Other noninterest income   136     3,477   3,613     3,014 Total noninterest income 15,057 3,482 18,539 3,029   Salaries and employee benefits 167 3,319 3,486 3,523 Intangible assets amortization 6 168 174 186 Merger Expense 3,050 23 3,073 - Other noninterest expense   165     2,444   2,609     2,534 Total noninterest expense   3,388     5,954   9,342     6,243   Income before income tax expense 11,817 1,175 12,992 822 Income tax (benefit) expense   (18 )   339   321     173 Net income $ 11,835   $ 836 $ 12,671   $ 649         Net income available to common stockholders $ 11,833   $ 777 $ 12,610   $ 589   Net income 11,835 836 12,671 649 Less - bargain purchase gain (14,921 ) - (14,921 ) - Add - merger expense   3,050     23   3,073     - Net income excluding bargain purchase gain and merger expense $ (36 ) $ 859 $ 823   $ 649   GAAP-Based Operating Results: Non-GAAP Financial Successor Predecessor Measure: Company Company Combined Total For the Period For the Period For the six For the six December 29, 2010 to July 1, 2010 to months ended months ended Dec. 31, 2010 Dec. 28, 2010 December 31, 2010   Dec. 31, 2009   Interest income $ 242 $ 14,378 $ 14,620 $ 15,800 Interest expense   94     5,952   6,046     7,083 Net interest income 148 8,426 8,574 8,717 Provision for loan losses   -     912   912     876 Net interest income after provision for loan losses 148 7,514 7,662 7,841   Net securities gains - 17 17 43 Bargain purchase gain 14,921 - 14,921 - Other noninterest income   136     6,980   7,116     5,754 Total noninterest income 15,057 6,997 22,054 5,797   Salaries and employee benefits 167 6,670 6,837 6,924 Intangible assets amortization 6 344 350 372 Merger expense 3,050 94 3,144 - Other noninterest expense   165     4,839   5,004     4,872 Total noninterest expense   3,388     11,947   15,335     12,168   Income before income tax expense 11,817 2,564 14,381 1,470 Income tax (benefit) expense   (18 )   768   750     325 Net income $ 11,835   $ 1,796 $ 13,631   $ 1,145         Net income available to common stockholders $ 11,833   $ 1,677 $ 13,510   $ 1,023   Net income 11,835 1,796 13,631 1,145 Less - bargain purchase gain (14,921 ) - (14,921 ) - Add - merger expense   3,050     94   3,144     - Net income excluding bargain purchase gain and merger expense $ (36 ) $ 1,890 $ 1,854   $ 1,145                               NORTHEAST BANCORP AND SUBSIDIARY CONSOLIDATED AVERAGE BALANCES AND ANNUALIZED YIELDS (Unaudited) (Dollars in thousands) Three months ended December 31, 2010 2009   Average Average Average Yield/ Average Yield/ Balance Q-T-D Inc.   Rate (1)   Balance Q-T-D Inc.   Rate Assets:   Interest earning-assets: Securities $ 160,128 $ 1,484 3.81 % $ 164,584 $ 1,864 4.62 % Loans (2)(3) 380,733 5,664 5.90 % 394,976 6,033 6.06 % Bank Regulatory Stock 5,486 9 0.66 % 5,486 9 0.66 % Short-term investments (4)   50,030   29 0.23 %   7,619   2 0.11 % Total interest-earning assets   596,377   7,186 4.82 %   572,665   7,908 5.52 %   Total non-interest earning assets 37,461 40,483     Total assets $ 633,838 $ 613,148     Liabilities & Net Worth:   Interest-bearing liabilities: Now $ 55,226 $ 88 0.63 % $ 48,396 $ 96 0.79 % Money Market 55,669 91 0.65 % 42,820 134 1.24 % Savings 38,192 43 0.45 % 28,554 43 0.60 % Time   190,656   1,093 2.27 %   221,082   1,498 2.69 % Total interest-bearing deposits 339,743 1,315 1.54 % 340,852 1,771 2.06 % Short-term borrowings (5) 61,403 211 1.36 % 45,706 178 1.54 % Borrowed funds 120,135 1,238 4.09 % 122,438 1,270 4.12 % Junior Subordinated Debentures   16,277   173 4.21 %   16,496   200 4.81 % Total interest-earning liabilities   537,558   2,937 2.17 %   525,492   3,419 2.58 %   Total non-interest bearing liabilities: Demand deposits and escrow accounts 39,214 35,039 Other liabilities   5,010   2,920   Total liabilities   581,782   563,451   Stockholders' equity   52,056   49,697 Total liabilities and stockholders' equity $ 633,838 $ 613,148   Net interest income $ 4,249 $ 4,489   Interest rate spread 2.65 % 2.94 % Net yield on interest earning assets (6) 2.86 % 3.15 %     (1)

The yield/rate information does not give effect to the fair value adjustments recorded on December 29, 2010. Yields are stated on a fully tax-equivalent basis using a 30.84% tax rate.

(2)

Non-accruing loans are included in the computation of average balances, but unpaid interest on nonperforming loans has not been included for purposes of determining interest income.

(3) Includes Loans Held-for-Sale. (4) Short term investments include FHLB overnight deposits and other interest-bearing deposits. (5) Short-term borrowings include securities sold under repurchase agreements and sweep accounts. (6) The net yield on interest-earning assets is net interest income divided by total interest-earning assets.                               NORTHEAST BANCORP AND SUBSIDIARY CONSOLIDATED AVERAGE BALANCES AND ANNUALIZED YIELDS (Unaudited) (Dollars in thousands) Six months ended December 31, 2010 2009   Average Average Average Yield/ Average Yield/ Balance Y-T-D Inc.   Rate (1)   Balance Y-T-D Inc.   Rate Assets:   Interest earning-assets: Securities $ 161,767 $ 3,156 4.00 % $ 160,212 $ 3,699 4.71 % Loans (2)(3) 385,047 11,406 5.88 % 394,427 12,075 6.07 % Bank Regulatory Stock 5,486 18 0.66 % 5,486 18 0.66 % Short-term investments (4)   39,692   40 0.20 %   8,096   8 0.20 % Total interest-earning assets   591,992   14,620 4.93 %   568,221   15,800 5.55 %   Total non-interest earning assets 38,229 40,330     Total assets $ 630,221 $ 608,551     Liabilities & Net Worth:   Interest-bearing liabilities: Now $ 53,842 $ 187 0.69 % $ 47,152 $ 180 0.76 % Money Market 55,962 215 0.76 % 41,203 259 1.25 % Savings 38,281 100 0.52 % 24,774 62 0.50 % Time   196,228   2,336 2.36 %   232,681   3,324 2.83 % Total interest-bearing deposits 344,313 2,838 1.63 % 345,810 3,825 2.19 % Short-term borrowings (5) 54,015 382 1.40 % 47,161 321 1.35 % Borrowed funds 120,237 2,480 4.09 % 112,024 2,878 5.10 % Junior Subordinated Debentures   16,356   346 4.19 %   16,496   59 0.71 % Total interest-earning liabilities   534,921   6,046 2.24 %   521,491   7,083 2.69 %   Total non-interest bearing liabilities: Demand deposits and escrow accounts 37,944 34,995 Other liabilities   5,559   3,243   Total liabilities   578,424   559,729   Stockholders' equity   51,797   48,822 Total liabilities and stockholders' equity $ 630,221 $ 608,551   Net interest income $ 8,574 $ 8,717   Interest rate spread 2.69 % 2.86 % Net yield on interest earning assets (5) 2.91 % 3.08 %   0 (1)

The yield/rate information does not give effect to the fair value adjustments recorded on December 29, 2010. Yields are stated on a fully tax-equivalent basis using a 30.84% tax rate.

(2)

Non-accruing loans are included in the computation of average balances, but unpaid interest on nonperforming loans has not been included for purposes of determining interest income.

(3) Includes Loans Held-for-Sale. (4) Short term investments include FHLB overnight deposits and other interest-bearing deposits. (5) Short-term borrowings include securities sold under repurchase agreements and sweep accounts. (6) The net yield on interest-earning assets is 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)                         Successor Predecessor Company Company 3 Days 89 Days 181 Days Three Months Six Months Ended Ended Ended Ended Ended December 31, December 28, December 28, December 31, December 31, 2010 2010     2010     2009     2009 Financial Highlights: Net interest income $ 148 $ 4,100 $ 8,426 $ 4,489 $ 8,717 Net income $ 11,835 $ 836 $ 1,796 $ 649 $ 1,145 Weighted average shares outstanding: Basic 3,492,498 2,331,332 2,330,197 2,321,528 2,321,430 Diluted 3,588,756 2,358,647 2,354,385 2,324,073 2,324,024 Earnings per share: Basic $ 3.38 $ 0.33 $ 0.72 $ 0.25 $ 0.44 Diluted $ 3.29 $ 0.33 $ 0.71 $ 0.25 $ 0.44 Stockholders' equity - end of period $ 64,975 $ 50,327 $ 49,951 Book value per share - end of period $ 17.27 $ 19.76 $ 19.47 Tangible book value per share - end of period $ 13.35 $ 15.05 $ 14.18   Ratios and Other Information: Return on average assets 223.20 % 0.53 % 0.57 % 0.42 % 0.37 % Return on average equity 2183.67 % 6.48 % 6.94 % 5.18 % 4.65 % Net interest rate spread (1) 2.65 % 2.69 % 2.93 % 2.86 % Net interest margin (2) 2.86 % 2.91 % 3.14 % 3.08 % Efficiency ratio (3) 22 % 79 % 77 % 83 % 84 % Non-interest expense to average total assets 63.90 % 3.87 % 3.83 % 4.04 % 3.97 % Average interest-earning assets to average interest-bearing liabilities 110.45 % 110.93 % 110.66 % 108.98 % 108.96 %   At period end: Non-performing assets to total assets 1.53 % 2.15 % Non-performing loans to total loans 2.36 % 3.14 % Allowance for loan losses to total loans 1.62 % 1.50 %   Equity to total assets 10.08 % 8.01 % 8.08 % Tier 1 leverage capital ratio 9.57 % 8.28 % Total risk-based capital ratio 15.62 % 13.51 %   Number of full service branches 10 11 Number of insurance agency offices 10 13 Number of investment and mortgage loan origination offices 6 5  

(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.