NBN Northeast Bank

Northeast Bancorp (“Northeast” or the “Company”) (NASDAQ: NBN), a Maine-based full-service financial services company and parent of Northeast Bank (the “Bank”), today reported net income of $1.5 million for the quarter ended December 31, 2012, compared to $418 thousand for the quarter ended December 31, 2011. Net income for the six months ended December 31, 2012 was $2.6 million, compared to $947 thousand for the six months ended December 31, 2011. Net income for the six months ended December 31, 2011 included $1.1 million from discontinued operations.

Net income available to common stockholders was $1.3 million, or $0.12 per diluted common share, for the quarter ended December 31, 2012, compared $320 thousand, or $0.09 per diluted common share, for the quarter ended December 31, 2011. Net income available to common stockholders for the six months ended December 31, 2012 was $2.2 million, or $0.21 per diluted common share, compared to $751 thousand, or $0.21 per diluted common share, for the six months ended December 31, 2011. Weighted average shares outstanding increased to 10.4 million in each of the current year periods from 3.5 million in 2011 as a result of the Company’s public offering of common stock in May 2012.

During the quarter ended December 31, 2012, the Company redeemed, at par value, all shares of preferred stock issued to the U.S. Department of the Treasury (the “UST”) under the Troubled Asset Relief Program (“TARP”). The Company also repurchased the warrant for 67,958 shares of common stock issued to the UST in connection with TARP for $95 thousand during the quarter ended December 31, 2012. The Company recorded $258 thousand of preferred stock dividends and discount accretion, or $0.025 per share, as a reduction of net income available to common shareholders related to the TARP preferred stock in the quarter ended December 31, 2012. Of the $258 thousand reduction, approximately $194 thousand was accelerated accretion of a previously recorded fair value adjustment.

The Board of Directors has declared a cash dividend of $0.09 per share, payable on February 26, 2013 to shareholders of record as of February 12, 2013.

“Our results this quarter reflect real progress in executing our business strategy, with net income increasing to $1.5 million,” said Richard Wayne, Chief Executive Officer. “Our purchased commercial loan portfolio continues to grow, with superior returns that drove our net interest margin to 4.28% for the quarter. Within our Community Banking division, the residential lending group had another strong quarter. Deposits in our new online affinity deposit program, ableBanking, more than doubled over the previous quarter, with net growth of $28 million.”

At December 31, 2012, total assets were $704.7 million, an increase of $35.5 million, or 5.3%, compared to June 30, 2012. The principal components of the year to date change in the balance sheet were as follows:

1.

     

The loan portfolio grew by $36.3 million, or 10.2%, principally due to net growth of $49.3 million in the purchased loan portfolio and $10.9 million of commercial loans originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”), offset in part by net amortization and payoffs of $23.8 million in the Community Banking Division loan portfolio.

          In the current quarter, the LASG purchased loans totaling $32.9 million, growing the purchased loan portfolio on a net basis to $133.7 million at quarter end. Additionally, the LASG originated $4.0 million in commercial loans, increasing its originated loan portfolio to $15.9 million at quarter end. An overview of the LASG portfolio follows:       LASG Portfolio Overview Three Months Ended December 31, 2012     Six Months Ended December 31, 2012 Purchased   Originated   Total LASG   Purchased   Originated   Total LASG (Dollars in thousands) Purchased or originated during the period:           Unpaid principal balance $ 47,295 $ 4,026 $ 51,321 $ 89,568 $ 12,825 $ 102,393 Net investment basis 32,864 4,026 36,890 64,213 12,825 77,038   Totals as of period end: Unpaid principal balance $ 172,030 $ 15,937 $ 187,967 Net investment basis 133,724 15,945 149,669   Returns during the period: Yield 13.34 % 9.72 % 12.96 % 14.09 % 9.65 % 13.64 % Total Return (1) 15.95 % 9.72 % 15.30 % 16.53 % 9.65 % 15.83 %   (1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.  

2.

     

Deposits increased by $79.3 million, or 18.8%, due to a $38.7 million increase in deposits raised through ableBanking, the Bank’s online affinity deposit platform, and $40.6 million raised through the Community Banking Division’s branch network and deposit listing service referr

als.  

3.

Borrowed funds decreased by $40.3 million, or 33.9%, as a result of the repayment of structured repurchased agreements.

 

4.

Stockholders’ equity decreased by $4.2 million, or 3.5%, primarily due to the redemption of TARP preferred stock and warrants totaling $4.3 million.

Net income increased by $1.1 million to $1.5 million for the quarter ended December 31, 2012, compared to $418 thousand for the quarter ended December 31, 2011. Operating results for the quarter included the following items of significance:

1.       Net interest income increased by $2.1 million, or 43.6%, to $7.1 million for the quarter compared to the quarter ended December 31, 2011, primarily due to growth in the purchased loan portfolio. This result is evident in the net interest margin, which increased to 4.28% for the quarter ended December 31, 2012, compared to 3.53% for the quarter ended December 31, 2011, and 3.80% for the quarter ended September 30, 2012. The following table summarizes interest income and related yields recognized on the loan portfolios.      

Interest Income and Yield on Loans

Three Months Ended December 31,   Six Months Ended December 31, 2012   2011 2012   2011 Average   Interest   Average   Interest   Average   Interest   Average   Interest   Balance Income Yield Balance Income Yield Balance Income Yield Balance Income Yield (Dollars in thousands) Community Banking Division $ 257,837 $ 3,988 6.14 % $ 306,141 $ 4,544 5.89 % $ 264,298 $ 7,920 5.94 % $ 307,788 $ 9,448 6.09 % LASG: Originated 13,631 334 9.72 % 3,030 76 9.95 % 11,412 555 9.65 % 2,160 109 10.01 % Purchased   117,365   3,945 13.34 %   31,001   1,254 16.05 %   100,420   7,133 14.09 %   18,262   1,454 15.79 % Total LASG   130,996   4,279 12.96 %   34,031   1,330 15.51 %   111,832   7,688 13.64 %   20,422   1,563 15.18 % Total $ 388,833 $ 8,267 8.44 % $ 340,172 $ 5,874 6.85 % $ 376,130 $ 15,608 8.23 % $ 328,210 $ 11,011 6.66 %  

The yield on purchased loans was increased by unscheduled loan payoffs, which resulted in immediate recognition of the prepaid loans’ discount in interest income. The following table details the “total return” on purchased loans, which includes transactional income of $1.9 million for the quarter and $3.7 million for the six months ended December 31, 2012.

    Total Return on Purchased Loans Three Months Ended December 31,     Six Months Ended December 31, 2012     2011 2012     2011 Income     Return (1)   Income     Return (1)   Income     Return (1)   Income     Return (1) (Dollars in thousands) Regularly scheduled interest and accretion $ 2,859 9.57 % $ 772 9.88 % $ 4,770 9.32 % $ 972 10.56 % Transactional income: Gains on loan sales 817 2.74 % - 0.00 % 817 1.60 % - 0.00 % Gain on sale of real estate owned - 0.00 % - 0.00 % 473 0.92 % - 0.00 % Other noninterest income - 0.00 % - 0.00 % 36 0.07 % - 0.00 % Accelerated accretion and loan fees 1,086 3.64 %   482 6.17 %   2,363 4.62 %   482 5.24 % Total transactional income   1,903 6.37 %   482 6.17 %   3,689 7.21 %   482 5.24 % Total $ 4,762 15.95 % $ 1,254 16.05 % $ 8,459 16.53 % $ 1,454 15.79 %   (1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on asset sales, and other noninterest income recorded during the period divided by the average invested balance, on an annualized basis.   2.       Net gains realized on the sale of residential mortgage loans in the secondary market were $914 thousand for the quarter, an increase of $144 thousand, or 18.7%, compared to the quarter ended December 31, 2011.   3. Net gains on the sale of portfolio loans of $998 thousand for the quarter increased by $795 thousand compared to the quarter ended December 31, 2011. Current quarter results include an $817 thousand gain on the sale of a purchased loan.   4. Bank-owned life insurance income totaled $358 thousand for the quarter, an increase of $232 thousand compared to the quarter ended December 31, 2011, the result of life insurance death benefits received.   5. No securities gains were realized during the quarter ended December 31, 2012, as compared to gains of $433 thousand realized for the quarter ended December 31, 2011.   6. Noninterest expense increased by $1.3 million for the current quarter, compared to the quarter ended December 31, 2011, principally due to the following:

• An increase of $684 thousand in employee compensation, due mainly to increases in staffing and in the cost of employee benefits programs. Full-time equivalent employees increased by 14 over the past year, as the Company has added staff to several operational areas and the LASG. Benefits costs have increased as a result of the replacement of the Company’s self-insured benefits program by a third-party insurance program in the third quarter of fiscal 2012.
• An increase of $231 thousand in occupancy and equipment expense, principally due to increased rent associated with the relocation of the Company’s office in Boston, MA, and depreciation of investments in new technology, principally those associated with ableBanking.
• An increase of $191 thousand in loan acquisition and collection expense, principally due to an increase in the size of the LASG portfolio, which has grown to $149.7 million from $54.5 million at December 31, 2011.

At December 31, 2012, nonperforming assets were $9.8 million, or 1.4% of total assets, an increase of $2.9 million from $6.9 million, or 1.0%, of total assets at June 30, 2012.

At December 31, 2012, the Company’s Tier 1 leverage ratio was 17.4%, a decrease from 19.9% at June 30, 2012, and the total risk-based capital ratio was 29.4%, a decrease from 33.3% at June 30, 2012.

Investor Call Information

Richard Wayne, Chief Executive Officer of Northeast Bancorp, and Claire Bean, Chief Financial Officer of Northeast Bancorp, will host a conference call to discuss second quarter earnings and business outlook at 11:00 a.m. Eastern Time on Friday, February 1, 2013. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 94345898. 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. Northeast Bank offers traditional banking services through its Community Banking Division, which operates ten full-service branches, some with investment centers, and five loan production offices that serve individuals and businesses located in western and south-central Maine, southern New Hampshire and southeastern Massachusetts. Northeast Bank’s Loan Acquisition and Servicing Group purchases and originates commercial loans for the Bank’s portfolio. ableBanking, a division of Northeast Bank, offers savings products to consumers online. Information regarding Northeast Bank can be found on its website at www.northeastbank.com.

Non-GAAP Financial Measure

In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures, including tangible common stockholders’ equity and tangible book value per share. 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.

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 continuing 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; increasing government regulation; the risk that the Company may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Company’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K and updated by the Company’s Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. These statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.

IMPORTANT NOTE: Securities and Advisory Services offered through Commonwealth Financial Network, Member FINRA, SIPC, and a Registered Investment Adviser. Securities are not FDIC insured, not bank obligations or otherwise bank guaranteed and may lose value. Northeast Financial is located at 77 Middle Street, Portland, ME 04101.

NBN-F

NORTHEAST BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS           (Unaudited) (Dollars in thousands, except share and per share data) December 31, 2012 June 30, 2012 Assets Cash and due from banks $ 3,284 $ 2,538 Short-term investments   124,328     125,736   Total cash and cash equivalents 127,612 128,274   Available-for-sale securities, at fair value 133,363 133,264 Loans held for sale 8,262 9,882   Loans Commercial real estate 232,541 180,735 Residential real estate 127,973 137,571 Construction 42 1,187 Commercial business 17,134 19,612 Consumer   14,893     17,149   Total loans 392,583 356,254 Less: Allowance for loan losses   875     824   Loans, net 391,708 355,430   Premises and equipment, net 10,434 9,205 Repossessed collateral, net 2,633 834 Accrued interest receivable 2,068 1,840 Federal Home Loan Bank stock, at cost 4,602 4,602 Federal Reserve Bank stock, at cost 871 871 Intangible assets, net 3,957 4,487 Bank owned life insurance 14,148 14,295 Other assets   5,052     6,212   Total assets $ 704,710   $ 669,196     Liabilities and Stockholders' Equity Liabilities Deposits Demand $ 48,136 $ 45,323 Savings and interest checking 86,231 90,204 Money market 58,351 45,024 Time deposits   308,800     241,637   Total deposits 501,518 422,188   Federal Home Loan Bank advances 43,213 43,450 Structured repurchase agreements 25,637 66,183 Short-term borrowings 1,570 1,209 Junior subordinated debentures issued to affiliated trusts 8,186 8,106 Capital lease obligation 1,827 1,911 Other liabilities   7,828     7,010   Total liabilities   589,779     550,057     Commitments and contingencies - -   Stockholders' equity

Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares  issued and outstanding at December 31, 2012; 4,227 shares issued and  outstanding at June 30, 2012; liquidation preference of $1,000 per share

0 4

Voting common stock, $1.00 par value, 25,000,000 and 13,500,000 shares  authorized at December 31, 2012 and June 30, 2012, respectively;  9,467,372 and 9,307,127 issued and outstanding at December 31, 2012 and  June 30, 2012, respectively

9,467 9,307

Non-voting common stock, $1.00 par value, 3,000,000 and 1,500,000  shares authorized at December 31, 2012 and June 30, 2012, respectively;  916,069 and 1,076,314 issued and outstanding at December 31, 2012 and  June 30, 2012, respectively

916 1,076 Warrants to purchase common stock 0 406 Additional paid-in capital 92,570 96,080 Unearned restricted stock (109 ) (127 ) Retained earnings 12,534 12,235 Accumulated other comprehensive (loss) income   (447 )   158   Total stockholders' equity   114,931     119,139   Total liabilities and stockholders' equity $ 704,710   $ 669,196       NORTHEAST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except share and per share data)       Three Months Ended December 31,     Six Months Ended December 31, 2012     2011 2012     2011 Interest and dividend income: Interest on loans $ 8,267 $ 5,874 $ 15,608 $ 11,011 Interest on available-for-sale securities 348 541 695 1,180 Other interest and dividend income   109   57   198   116   Total interest and dividend income   8,724   6,472   16,501   12,307     Interest expense: Deposits 1,028 836 2,006 1,673 Federal Home Loan Bank advances 259 258 518 516 Structured repurchase agreements 161 249 380 497 Short-term borrowings 5 3 11 8 Junior subordinated debentures issued to affiliated trusts 191 185 384 368 Obligation under capital lease agreements   23   25   47   51   Total interest expense   1,667   1,556   3,346   3,113     Net interest and dividend income before provision for loan losses 7,057 4,916 13,155 9,194 Provision for loan losses   247   134   475   534   Net interest and dividend income after provision for loan losses   6,810   4,782   12,680   8,660     Noninterest income: Fees for other services to customers 462 370 772 710 Net securities gains 0 433 792 380 Gain on sales of loans held for sale 914 770 1,670 1,426 Gain on sales of portfolio loans 998 203 998 203 Gain recognized on repossessed collateral, net 0 73 451 50 Investment commissions 799 704 1,474 1,391 Bank-owned life insurance income 358 126 481 253 Other noninterest income   13   13   56   57   Total noninterest income   3,544   2,692   6,694   4,470     Noninterest expense: Salaries and employee benefits 4,413 3,729 8,470 7,446 Occupancy and equipment expense 1,147 916 2,225 1,765 Professional fees 399 277 822 692 Data processing fees 284 289 552 563 Marketing expense 252 254 439 345 Loan acquisition and collection expense 479 288 933 570 FDIC insurance premiums 122 122 239 239 Intangible asset amortization 265 337 530 673 Other noninterest expense   771   665   1,425   1,237   Total noninterest expense   8,132   6,877   15,635   13,530     Income (loss) from continuing operations before income tax expense (benefit) 2,222 597 3,739 (400 ) Income tax expense (benefit)   705   179   1,189   (224 ) Net income (loss) from continuing operations $ 1,517 $ 418 $ 2,550 $ (176 )   Discontinued operations: Income from discontinued operations $ 0 $ 0 $ 0 $ 186 Gain on sale of discontinued operations 0 0 0 1,529 Income tax expense   0   0   0   592   Net income from discontinued operations $ 0 $ 0 $ 0 $ 1,123     Net income $ 1,517 $ 418 $ 2,550 $ 947     Net income available to common stockholders $ 1,259 $ 320 $ 2,195 $ 751     Weighted-average shares outstanding: Basic 10,383,441 3,494,498 10,383,441 3,494,498 Diluted 10,383,441 3,511,994 10,383,441 3,494,498 Earnings per common share: Basic: Income (loss) from continuing operations $ 0.12 $ 0.09 $ 0.21 $ (0.11 ) Income from discontinued operations   0.00   0.00   0.00   0.32   Net income $ 0.12 $ 0.09 $ 0.21 $ 0.21   Diluted: Income (loss) from continuing operations $ 0.12 $ 0.09 $ 0.21 $ (0.11 ) Income from discontinued operations   0.00   0.00   0.00   0.32   Net income $ 0.12 $ 0.09 $ 0.21 $ 0.21   Cash dividends declared per common share $ 0.09 $ 0.09 $ 0.18 $ 0.18   NORTHEAST BANCORP AND SUBSIDIARY CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (Unaudited) (Dollars in thousands)     Three Months Ended December 31, 2012     2011     Interest     Average     Interest     Average Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate (Dollars in thousands) Assets: Interest-earning assets: Investment securities (1) $ 135,663 $ 348 1.02 % $ 139,051 $ 541 1.54 % Loans (2) (3) 388,833 8,267 8.44 % 340,172 5,874 6.85 % Regulatory stock 5,473 32 2.32 % 5,761 21 1.45 % Short-term investments (4)   123,850   77 0.25 %   67,455   36 0.21 % Total interest-earning assets   653,819   8,724 5.29 %   552,439   6,472 4.65 % Cash and due from banks 2,922 2,981 Other non-interest earning assets   38,253   37,122 Total assets $ 694,994 $ 592,542   Liabilities & Stockholders' Equity: Interest-bearing liabilities: NOW accounts $ 54,733 $ 37 0.27 % $ 54,806 $ 54 0.39 % Money market accounts 52,558 66 0.50 % 44,247 42 0.38 % Savings accounts 31,100 11 0.14 % 32,360 18 0.22 % Time deposits   294,640   914 1.23 %   220,670   722 1.30 % Total interest-bearing deposits 433,031 1,028 0.94 % 352,083 836 0.94 % Short-term borrowings 1,063 5 1.87 % 631 3 1.89 % Borrowed funds 78,782 443 2.23 % 113,100 532 1.87 % Junior subordinated debentures   8,165   191 9.28 %   8,009   185 9.16 % Total interest-bearing liabilities   521,041   1,667 1.27 %   473,823   1,556 1.30 %   Interest-bearing liabilities of

discontinued operations (5)

0 0   Non-interest bearing liabilities: Demand deposits and escrow accounts 52,297 47,290 Other liabilities   4,717   5,723 Total liabilities 578,055 526,836 Stockholders' equity   116,939   65,706 Total liabilities and stockholders' equity $ 694,994 $ 592,542   Net interest income $ 7,057 $ 4,916   Interest rate spread 4.02 % 3.35 % Net interest margin (6) 4.28 % 3.53 %  

(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)

The effect of interest-bearing liabilities associated with discontinued operations has been excluded from the calculation of average rates paid, interest rate spread, and net interest margin.

(6)

Net interest margin is calculated as net interest income divided by total interest-earning assets.

    NORTHEAST BANCORP AND SUBSIDIARY CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS (Unaudited) (Dollars in thousands)       Six Months Ended December 31, 2012     2011     Interest     Average     Interest     Average Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate (Dollars in thousands) Assets: Interest-earning assets: Investment securities (1) $ 133,730 $ 695 1.03 % $ 143,372 $ 1,180 1.63 % Loans (2) (3) 376,130 15,608 8.23 % 328,210 11,011 6.66 % Regulatory stock 5,473 38 1.38 % 5,761 33 1.14 % Short-term investments (4)   129,997   160 0.24 %   72,903   83 0.23 % Total interest-earning assets   645,330   16,501 5.07 %   550,246   12,307 4.44 % Cash and due from banks 3,049 2,950 Other non-interest earning assets   37,973   37,965 Total assets $ 686,352 $ 591,161   Liabilities & Stockholders' Equity: Interest-bearing liabilities: NOW accounts $ 55,664 $ 79 0.28 % $ 55,494 $ 123 0.44 % Money market accounts 49,954 119 0.47 % 45,114 92 0.40 % Savings accounts 31,223 22 0.14 % 32,899 44 0.27 % Time deposits   276,308   1,786 1.28 %   218,133   1,414 1.29 % Total interest-bearing deposits 413,149 2,006 0.96 % 351,640 1,673 0.94 % Short-term borrowings 1,157 11 1.89 % 886 8 1.79 % Borrowed funds 89,484 945 2.09 % 113,423 1,064 1.86 % Junior subordinated debentures   8,144   384 9.35 %   7,990   368 9.14 % Total interest-bearing liabilities   511,934   3,346 1.30 %   473,939   3,113 1.30 %   Interest-bearing liabilities of

discontinued operations (5)

0 570   Non-interest bearing liabilities: Demand deposits and escrow accounts 51,056 46,524 Other liabilities   5,471   4,498 Total liabilities 568,461 525,531 Stockholders' equity   117,891   65,630 Total liabilities and stockholders' equity $ 686,352 $ 591,161   Net interest income $ 13,155 $ 9,194   Interest rate spread 3.78 % 3.14 % Net interest margin (6) 4.04 % 3.31 %  

(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)

The effect of interest-bearing liabilities associated with discontinued operations has been excluded from the calculation of average rates paid, interest rate spread, and net interest margin.

(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 December 31, 2012     September 30, 2012     June 30, 2012     March 31, 2012     December 31, 2011 Net interest income $ 7,057 $ 6,098 $ 6,749 $ 4,754 $ 4,916 Provision for loan losses 247 228 312 100 134 Noninterest income 3,544 3,150 2,464 2,767 2,692 Noninterest expense 8,132 7,502 7,473 7,252 6,877 Net income from discontinued operations 0 0 10 14 0 Net income 1,517 1,034 1,048 168 418   Weighted average common shares outstanding: Basic 10,383,441 10,383,441 6,605,465 3,494,498 3,494,498 Diluted 10,383,441 10,383,441 6,607,171 3,512,273 3,512,273 Earnings per common share: Basic $ 0.12 $ 0.09 $ 0.14 $ 0.02 $ 0.09 Diluted 0.12 0.09 0.14 0.02 0.09 Dividends per common share 0.09 0.09 0.09 0.09 0.09   Return on average assets 0.87 % 0.61 % 0.68 % 0.11 % 0.28 % Return on average equity 5.15 % 3.45 % 4.74 % 1.03 % 2.52 % Net interest rate spread (1) 4.02 % 3.52 % 4.41 % 3.26 % 3.35 % Net interest margin (2) 4.28 % 3.80 % 4.63 % 3.44 % 3.53 % Efficiency ratio (3) 76.71 % 81.12 % 81.11 % 96.42 % 90.39 % Noninterest expense to average total assets 4.64 % 4.39 % 4.82 % 4.91 % 4.60 % Average interest-earning assets to average

interest-bearing liabilities

125.48 % 126.65 % 120.51 % 115.69 % 116.59 %   As of Nonperforming loans: December 31, 2012 September 30, 2012 June 30, 2012 March 31, 2012 December 31, 2011 Originated portfolio: Residential real estate $ 3,512 $ 3,184 $ 3,090 $ 3,067 $ 3,264 Commercial real estate 624 626 417 442 1,998 Construction 0 0 0 0 0 Home equity 620 289 220 255 182 Commercial business 123 133 1,008 1,108 1,119 Consumer   166     181     324     309     329   5,045 4,413 5,059 5,181 6,892 Purchased portfolio: Residential real estate 0 0 0 0 0 Commercial real estate 2,144 667 1,055 0 0 Commercial business   0     0     0     0     0     2,144     667     1,055     0     0   Total nonperforming loans 7,189 5,080 6,114 5,181 6,892 Repossessed collateral   2,633     2,645     834     915     837   Total nonperforming assets $ 9,822   $ 7,725   $ 6,948   $ 6,096   $ 7,729     Past due loans to total loans 2.52 % 1.65 % 1.95 % 2.06 % 2.29 % Nonperforming loans to total loans 1.83 % 1.35 % 1.72 % 1.50 % 1.99 % Nonperforming assets to total assets 1.39 % 1.15 % 1.04 % 1.02 % 1.30 % Allowance for loan losses to total loans 0.22 % 0.18 % 0.23 % 0.22 % 0.21 % Allowance for loan losses to nonperforming loans 12.17 % 13.15 % 13.48 % 14.44 % 10.69 %   Commercial real estate loans to risk-based capital (4) 193.74 % 167.62 % 148.28 % 238.25 % 236.88 % Net loans to core deposits (5) 81.01 % 86.69 % 88.29 % 88.65 % 91.34 % Purchased loans to total loans, including held for sale 33.36 % 27.68 % 23.07 % 16.16 % 14.83 % Equity to total assets 16.31 % 17.72 % 17.83 % 10.90 % 11.08 % Tier 1 leverage capital ratio 17.44 % 18.37 % 19.91 % 11.85 % 11.86 % Total risk-based capital ratio 29.35 % 31.32 % 33.34 % 19.49 % 19.28 %   Total stockholders' equity $ 114,931 $ 118,857 $ 119,139 $ 64,870 $ 65,900 Less: Preferred stock   0     (4,227 )   (4,227 )   (4,227 )   (4,227 ) Common stockholders' equity 114,931 114,630 114,912 60,643 61,673 Less: Intangible assets   (3,957 )   (4,222 )   (4,487 )   (4,749 )   (5,012 ) Tangible common stockholders' equity (non-GAAP) $ 110,974   $ 110,408   $ 110,425   $ 55,894   $ 56,661     Common shares outstanding 10,383,441 10,383,441 10,383,441 3,507,524 3,507,524 Book value per common share $ 11.07 $ 11.04 $ 11.07 $ 17.29 $ 17.58 Tangible book value per share (non-GAAP) (6) $ 10.69 $ 10.63 $ 10.63 $ 15.94 $ 16.15    

(1)

 

The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(2)

The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

(3)

The efficiency ratio represents non-interest expense divided by the sum of net interest income (before the loan loss provision) plus non-interest income.

(4)

For purposes of calculating this ratio, commercial real estate includes all those 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. Net loans include loans held-for-sale.

(6)

Tangible book value per share represents total stockholders' equity less the sum of preferred stock and intangible assets divided by common shares outstanding.