Attached files
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| 8-K - 8-K - NORTHEAST BANCORP /ME/ | a14-4746_18k.htm |
Exhibit 99.1
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FOR IMMEDIATE RELEASE |
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For More Information: Claire S. Bean, CFO & COO |
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Northeast Bancorp Reports Second Quarter Results, Declares Dividend
Lewiston, ME (January 30, 2014) – 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 available to common shareholders of $1.4 million, or $0.13 per diluted common share, for the quarter ended December 31, 2013, compared to net income available to common shareholders of $1.3 million, or $0.12 per diluted common share, for the quarter ended December 31, 2012. Net income available to common shareholders for the six months ended December 31, 2013 was $1.7 million, compared to $2.2 million for the six months ended December 31, 2012.
The Board of Directors has declared a cash dividend of $0.09 per share, payable on February 26, 2014 to shareholders of record as of February 12, 2014.
“Leveraging our capital and operational infrastructure remains our top priority,” said Richard Wayne, President and Chief Executive Officer of Northeast. “To that end, we have grown our loan portfolio by $66 million or 15% for our fiscal year to date, primarily as a result of growth in our LASG loan portfolio. The effect of steady loan growth, coupled with an increase in transactional income this quarter, increased our net interest margin to 5.16%. Looking forward, we are very excited that Jeanne Hulit, Acting Administrator of the SBA, will be joining us as President of our Community Banking Division. Jeanne’s commercial banking and managerial experience is a significant complement to our team, as we continue to execute on our growth strategy.”
At December 31, 2013, total assets were $732.6 million, an increase of $62.0 million, or 9.2%, compared to June 30, 2013. The principal components of the quarterly changes in the balance sheet follow:
1. The loan portfolio grew by $66.3 million, or 15.2%, compared to June 30, 2013, principally due to net growth of $50.6 million in commercial loans purchased or originated by the Bank’s Loan Acquisition and Servicing Group (“LASG”) and $15.7 million of net growth in loans originated by the Bank’s Community Banking Division. As has been discussed in the Company’s prior SEC filings, the Company made certain commitments to the Board of Governors of the Federal Reserve System in connection with the merger of FHB Formation LLC with and into the Company in December 2010. The Company’s loan purchase capacity under these conditions follows.
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Basis for |
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Condition |
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Purchased Loan Capacity at |
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(Dollars in millions) |
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Total Loans |
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Purchased loans may not exceed 40% of total loans |
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$ |
43.3 |
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Regulatory Capital |
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Commercial real estate loans may not exceed 300% of total risk-based capital |
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$ |
159.3 |
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An overview of the Bank’s LASG portfolio follows.
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Three Months Ended December 31, |
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2013 |
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2012 |
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Purchased |
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Originated |
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Total LASG |
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Purchased |
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Originated |
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Total LASG |
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(Dollars in thousands) |
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Loans purchased or originated during the period: |
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Unpaid principal balance |
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$ |
15,663 |
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$ |
17,138 |
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$ |
32,801 |
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$ |
47,295 |
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$ |
4,026 |
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$ |
51,321 |
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Net investment basis |
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13,619 |
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17,138 |
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30,757 |
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32,864 |
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4,026 |
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36,890 |
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Loan returns during the period: |
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Yield |
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13.82 |
% |
5.14 |
% |
11.38 |
% |
13.34 |
% |
9.72 |
% |
12.96 |
% | ||||||
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Total Return (1) |
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13.76 |
% |
5.14 |
% |
11.35 |
% |
15.95 |
% |
9.72 |
% |
15.30 |
% | ||||||
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Six Months Ended December 31, |
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2013 |
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2012 |
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Purchased |
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Originated |
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Total LASG |
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Purchased |
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Originated |
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Total LASG |
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(Dollars in thousands) |
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Loans purchased or originated during the period: |
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Unpaid principal balance |
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$ |
33,994 |
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$ |
43,564 |
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$ |
77,558 |
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$ |
89,568 |
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$ |
12,825 |
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$ |
102,393 |
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Net investment basis |
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29,967 |
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43,564 |
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73,531 |
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64,213 |
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12,825 |
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77,038 |
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Loan returns during the period: |
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Yield |
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12.00 |
% |
5.37 |
% |
10.35 |
% |
14.09 |
% |
9.65 |
% |
13.64 |
% | ||||||
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Total Return (1) |
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12.20 |
% |
5.37 |
% |
10.51 |
% |
16.53 |
% |
9.65 |
% |
15.83 |
% | ||||||
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Total loans as of period end: |
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Unpaid principal balance |
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$ |
212,767 |
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$ |
78,828 |
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$ |
291,595 |
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$ |
172,030 |
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$ |
15,937 |
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$ |
187,967 |
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Net investment basis |
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177,435 |
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78,868 |
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256,303 |
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133,724 |
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15,945 |
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149,669 |
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(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 and borrowings increased by $51.9 million and $6.6 million, respectively, from June 30, 2013. Growth in each was tied to the Company’s strategy for funding its loan growth, which includes a component of duration-matched funding for growth in longer-term assets such as residential mortgages.
Net income from continuing operations decreased by $51 thousand to $1.4 million for the quarter ended December 31, 2013, compared to $1.5 million for the quarter ended December 31, 2012. Income for the quarter ended December 31, 2012 included $235 thousand of nonrecurring income relating to life insurance death benefits. Operating results for the current quarter included the following additional items of significance:
1. Net interest income increased by $2.0 million, or 27.8%, to $9.0 million for the quarter ended December 31, 2013 compared to the quarter ended December 31, 2012, primarily due to growth in the LASG loan portfolio. This result is evident in the net interest margin, which increased to 5.16% for the quarter ended December 31, 2013, compared to 4.28% for the quarter ended December 31, 2012. The following table summarizes interest income and related yields recognized on the loan portfolios.
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Interest Income and Yield on Loans |
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Three Months Ended December 31, |
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2013 |
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2012 |
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Average |
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Interest |
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Average |
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Interest |
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Balance |
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Income |
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Yield |
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Balance |
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Income |
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Yield |
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(Dollars in thousands) |
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Community Banking Division |
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$ |
247,057 |
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$ |
3,284 |
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5.27 |
% |
$ |
257,837 |
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$ |
3,988 |
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6.14 |
% |
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LASG: |
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Originated |
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68,449 |
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886 |
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5.14 |
% |
13,631 |
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334 |
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9.72 |
% | ||||
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Purchased |
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175,469 |
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6,112 |
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13.82 |
% |
117,365 |
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3,945 |
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13.34 |
% | ||||
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Total LASG |
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243,918 |
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6,998 |
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11.38 |
% |
130,996 |
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4,279 |
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12.96 |
% | ||||
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Total |
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$ |
490,975 |
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$ |
10,282 |
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8.31 |
% |
$ |
388,833 |
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$ |
8,267 |
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8.44 |
% |
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Six Months Ended December 31, |
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2013 |
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2012 |
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Average |
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Interest |
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Average |
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Interest |
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Balance |
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Income |
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Yield |
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Balance |
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Income |
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Yield |
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(Dollars in thousands) |
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Community Banking Division |
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$ |
244,880 |
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$ |
6,626 |
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5.37 |
% |
$ |
264,298 |
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$ |
7,920 |
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5.94 |
% |
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LASG: |
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Originated |
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57,828 |
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1,566 |
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5.37 |
% |
11,412 |
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555 |
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9.65 |
% | ||||
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Purchased |
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174,318 |
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10,547 |
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12.00 |
% |
100,420 |
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7,133 |
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14.09 |
% | ||||
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Total LASG |
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232,146 |
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12,113 |
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10.35 |
% |
111,832 |
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7,688 |
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13.64 |
% | ||||
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Total |
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$ |
477,026 |
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$ |
18,739 |
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7.79 |
% |
$ |
376,130 |
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$ |
15,608 |
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8.23 |
% |
The yield on purchased loans in each period shown 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 $2.1 million for the quarter ended December 31, 2013, an increase of $206 thousand from the quarter ended December 31, 2012. The following table summarizes the total return recognized on the purchased loan portfolio.
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Total Return on Purchased Loans |
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Three Months Ended December 31, |
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2013 |
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2012 |
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Income |
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Return (1) |
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Income |
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Return (1) |
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(Dollars in thousands) |
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Regularly scheduled interest and accretion |
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$ |
4,014 |
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9.02 |
% |
$ |
2,859 |
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9.57 |
% |
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Transactional income: |
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Gains on loan sales |
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11 |
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0.02 |
% |
817 |
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2.74 |
% | ||
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Gain on sale of real estate owned |
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— |
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0.00 |
% |
— |
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0.00 |
% | ||
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Other noninterest income |
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— |
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0.00 |
% |
— |
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0.00 |
% | ||
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Accelerated accretion and loan fees |
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2,098 |
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4.72 |
% |
1,086 |
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3.64 |
% | ||
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Total transactional income |
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2,109 |
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4.74 |
% |
1,903 |
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6.37 |
% | ||
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Total |
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$ |
6,123 |
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13.76 |
% |
$ |
4,762 |
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15.95 |
% |
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Six Months Ended December 31, |
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2013 |
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2012 |
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Income |
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Return (1) |
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Income |
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Return (1) |
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(Dollars in thousands) |
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Regularly scheduled interest and accretion |
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$ |
7,753 |
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8.78 |
% |
$ |
4,770 |
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9.32 |
% |
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Transactional income: |
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Gains on loan sales |
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227 |
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0.26 |
% |
817 |
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1.60 |
% | ||
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Gain on sale of real estate owned |
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— |
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0.00 |
% |
473 |
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0.92 |
% | ||
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Other noninterest income |
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— |
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0.00 |
% |
36 |
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0.07 |
% | ||
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Accelerated accretion and loan fees |
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2,794 |
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3.16 |
% |
2,363 |
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4.62 |
% | ||
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Total transactional income |
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3,021 |
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3.42 |
% |
3,689 |
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7.21 |
% | ||
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Total |
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$ |
10,774 |
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12.20 |
% |
$ |
8,459 |
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16.53 |
% |
(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. Noninterest income decreased by $1.9 million for the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012, principally due to the following:
· A decrease of $573 thousand in gain on sales of loans held for sale a volume-related difference that was principally the result of a significant increase in the proportion of residential mortgages held in portfolio.
· A decrease of $985 thousand in gain on sales of portfolio loans. In the quarter ended December 31, 2012, the Company recognized $817 thousand on the sale of a purchased loan.
· A decrease of $242 thousand in bank-owned life insurance income. In the quarter ended December 31, 2012, the Company received $235 thousand in life insurance death benefits.
3. Noninterest expense increased by $197 thousand for the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012, principally due to the following:
· An increase of $410 thousand in salaries and employee benefits, principally due to increased incentive compensation and increases in the cost of employee medical insurance benefits.
· An increase of $207 thousand in occupancy and equipment expense, principally due to the relocation of the Company’s Boston office in the second quarter of fiscal 2013.
· A decrease of $144 thousand in marketing expense, principally due to a reduction in deposit marketing in fiscal 2014.
· A decrease of $189 thousand in loan acquisition and collection expenses, principally due to a decreased level of loan purchases in the quarter ended December 31, 2013 when compared to the quarter ended December 31, 2012.
At December 31, 2013, nonperforming assets totaled $9.4 million, or 1.3% of total assets, as compared to $7.0 million, or 1.0% of total assets at June 30, 2013. The increase in nonperforming assets during the six months ended December 31, 2013 was mainly comprised of three purchased loan relationships.
At December 31, 2013, the Company’s Tier 1 leverage ratio was 16.7%, a decrease from 17.8% at June 30, 2013, and the total risk-based capital ratio was 24.6%, a decrease from 27.5% at June 30, 2013.
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, January 31, 2014. Investors can access the call by dialing 877.878.2762 and entering the following passcode: 50583197. 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 and seven 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, tangible book value per share, and net operating earnings. 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.
NORTHEAST BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
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December 31, 2013 |
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June 30, 2013 |
| ||
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Assets |
|
|
|
|
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Cash and due from banks |
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$ |
2,948 |
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$ |
3,238 |
|
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Short-term investments |
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60,479 |
|
62,696 |
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Total cash and cash equivalents |
|
63,427 |
|
65,934 |
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Available-for-sale securities, at fair value |
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114,717 |
|
121,597 |
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Loans held for sale |
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6,826 |
|
8,594 |
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Loans |
|
|
|
|
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Commercial real estate |
|
292,802 |
|
264,448 |
| ||
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Residential real estate |
|
153,486 |
|
127,829 |
| ||
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Construction |
|
— |
|
42 |
| ||
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Commercial and industrial |
|
43,699 |
|
29,720 |
| ||
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Consumer |
|
11,722 |
|
13,337 |
| ||
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Total loans |
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501,709 |
|
435,376 |
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Less: Allowance for loan losses |
|
1,350 |
|
1,143 |
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Loans, net |
|
500,359 |
|
434,233 |
| ||
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Premises and equipment, net |
|
9,624 |
|
10,075 |
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Real estate owned and other possessed collateral, net |
|
3,211 |
|
2,134 |
| ||
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Federal Home Loan Bank and Federal Reserve Bank stock, at cost |
|
5,721 |
|
5,721 |
| ||
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Intangible assets, net |
|
3,124 |
|
3,544 |
| ||
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Bank owned life insurance |
|
14,619 |
|
14,385 |
| ||
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Other assets |
|
10,997 |
|
4,422 |
| ||
|
Total assets |
|
$ |
732,625 |
|
$ |
670,639 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
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Deposits |
|
|
|
|
| ||
|
Demand |
|
$ |
47,015 |
|
$ |
46,425 |
|
|
Savings and interest checking |
|
93,394 |
|
90,970 |
| ||
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Money market |
|
88,156 |
|
84,416 |
| ||
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Time |
|
307,957 |
|
262,812 |
| ||
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Total deposits |
|
536,522 |
|
484,623 |
| ||
|
Federal Home Loan Bank advances |
|
42,931 |
|
28,040 |
| ||
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Wholesale repurchase agreements |
|
15,290 |
|
25,397 |
| ||
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Short-term borrowings |
|
2,468 |
|
625 |
| ||
|
Junior subordinated debentures issued to affiliated trusts |
|
8,352 |
|
8,268 |
| ||
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Capital lease obligation |
|
1,650 |
|
1,739 |
| ||
|
Other liabilities |
|
11,029 |
|
8,145 |
| ||
|
Total liabilities |
|
618,242 |
|
556,837 |
| ||
|
Commitments and contingencies |
|
— |
|
— |
| ||
|
Stockholders’ equity |
|
|
|
|
| ||
|
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares issued and outstanding at December 31, 2013 and June 30, 2013 |
|
— |
|
— |
| ||
|
Voting common stock, $1.00 par value, 25,000,000 shares authorized; 9,551,531 and 9,565,680 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively |
|
9,552 |
|
9,566 |
| ||
|
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized; 880,963 shares issued and outstanding at December 31, 2013 and June 30, 2013 |
|
881 |
|
881 |
| ||
|
Additional paid-in capital |
|
93,230 |
|
92,745 |
| ||
|
Retained earnings |
|
12,358 |
|
12,524 |
| ||
|
Accumulated other comprehensive loss |
|
(1,638 |
) |
(1,914 |
) | ||
|
Total stockholders’ equity |
|
114,383 |
|
113,802 |
| ||
|
Total liabilities and stockholders’ equity |
|
$ |
732,625 |
|
$ |
670,639 |
|
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, |
| ||||||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
| ||||
|
Interest and dividend income: |
|
|
|
|
|
|
|
|
| ||||
|
Interest on loans |
|
$ |
10,282 |
|
$ |
8,267 |
|
$ |
18,739 |
|
$ |
15,608 |
|
|
Interest on available-for-sale securities |
|
262 |
|
348 |
|
544 |
|
695 |
| ||||
|
Other interest and dividend income |
|
96 |
|
109 |
|
147 |
|
198 |
| ||||
|
Total interest and dividend income |
|
10,640 |
|
8,724 |
|
19,430 |
|
16,501 |
| ||||
|
Interest expense: |
|
|
|
|
|
|
|
|
| ||||
|
Deposits |
|
979 |
|
1,028 |
|
2,026 |
|
2,006 |
| ||||
|
Federal Home Loan Bank advances |
|
327 |
|
259 |
|
651 |
|
518 |
| ||||
|
Wholesale repurchase agreements |
|
98 |
|
161 |
|
192 |
|
380 |
| ||||
|
Short-term borrowings |
|
6 |
|
5 |
|
11 |
|
11 |
| ||||
|
Junior subordinated debentures issued to affiliated trusts |
|
192 |
|
191 |
|
385 |
|
384 |
| ||||
|
Obligation under capital lease agreements |
|
21 |
|
23 |
|
43 |
|
47 |
| ||||
|
Total interest expense |
|
1,623 |
|
1,667 |
|
3,308 |
|
3,346 |
| ||||
|
Net interest and dividend income before provision for loan losses |
|
9,017 |
|
7,057 |
|
16,122 |
|
13,155 |
| ||||
|
Provision for loan losses |
|
151 |
|
247 |
|
227 |
|
475 |
| ||||
|
Net interest and dividend income after provision for loan losses |
|
8,866 |
|
6,810 |
|
15,895 |
|
12,680 |
| ||||
|
Noninterest income: |
|
|
|
|
|
|
|
|
| ||||
|
Fees for other services to customers |
|
421 |
|
462 |
|
861 |
|
772 |
| ||||
|
Net securities gains |
|
— |
|
— |
|
— |
|
792 |
| ||||
|
Gain on sales of loans held for sale |
|
341 |
|
914 |
|
880 |
|
1,670 |
| ||||
|
Gain on sales of portfolio loans |
|
13 |
|
998 |
|
230 |
|
998 |
| ||||
|
(Loss) gain recognized on real estate owned and other repossessed collateral, net |
|
(77 |
) |
— |
|
(115 |
) |
451 |
| ||||
|
Bank-owned life insurance income |
|
116 |
|
358 |
|
234 |
|
481 |
| ||||
|
Other noninterest income |
|
21 |
|
13 |
|
34 |
|
56 |
| ||||
|
Total noninterest income |
|
835 |
|
2,745 |
|
2,124 |
|
5,220 |
| ||||
|
Noninterest expense: |
|
|
|
|
|
|
|
|
| ||||
|
Salaries and employee benefits |
|
4,253 |
|
3,843 |
|
8,885 |
|
7,483 |
| ||||
|
Occupancy and equipment expense |
|
1,311 |
|
1,104 |
|
2,625 |
|
2,123 |
| ||||
|
Professional fees |
|
323 |
|
399 |
|
749 |
|
822 |
| ||||
|
Data processing fees |
|
256 |
|
220 |
|
513 |
|
432 |
| ||||
|
Marketing expense |
|
103 |
|
247 |
|
139 |
|
429 |
| ||||
|
Loan acquisition and collection expense |
|
290 |
|
479 |
|
763 |
|
933 |
| ||||
|
FDIC insurance premiums |
|
117 |
|
122 |
|
227 |
|
239 |
| ||||
|
Intangible asset amortization |
|
210 |
|
265 |
|
420 |
|
530 |
| ||||
|
Legal settlement recovery |
|
— |
|
— |
|
(250 |
) |
— |
| ||||
|
Other noninterest expense |
|
751 |
|
738 |
|
1,395 |
|
1,368 |
| ||||
|
Total noninterest expense |
|
7,614 |
|
7,417 |
|
15,466 |
|
14,359 |
| ||||
|
Income from continuing operations before income tax expense |
|
2,087 |
|
2,138 |
|
2,553 |
|
3,541 |
| ||||
|
Income tax expense |
|
676 |
|
676 |
|
832 |
|
1,121 |
| ||||
|
Net income from continuing operations |
|
1,411 |
|
1,462 |
|
1,721 |
|
2,420 |
| ||||
|
Income from discontinued operations before tax (benefit) expense |
|
(27 |
) |
84 |
|
(12 |
) |
198 |
| ||||
|
Income tax (benefit) expense |
|
(9 |
) |
29 |
|
(4 |
) |
68 |
| ||||
|
Net (loss) income from discontinued operations |
|
(18 |
) |
55 |
|
(8 |
) |
130 |
| ||||
|
Net income |
|
$ |
1,393 |
|
$ |
1,517 |
|
$ |
1,713 |
|
$ |
2,550 |
|
|
Net income available to common stockholders |
|
$ |
1,393 |
|
$ |
1,259 |
|
$ |
1,713 |
|
$ |
2,195 |
|
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
10,432,833 |
|
10,383,441 |
|
10,436,673 |
|
10,383,441 |
| ||||
|
Diluted |
|
10,432,833 |
|
10,383,441 |
|
10,436,673 |
|
10,383,441 |
| ||||
|
Earnings per common share: |
|
|
|
|
|
|
|
|
| ||||
|
Basic: |
|
|
|
|
|
|
|
|
| ||||
|
Income from continuing operations |
|
$ |
0.13 |
|
$ |
0.11 |
|
$ |
0.16 |
|
$ |
0.20 |
|
|
Income from discontinued operations |
|
— |
|
0.01 |
|
— |
|
0.01 |
| ||||
|
Net Income |
|
$ |
0.13 |
|
$ |
0.12 |
|
$ |
0.16 |
|
$ |
0.21 |
|
|
Diluted: |
|
|
|
|
|
|
|
|
| ||||
|
Income from continuing operations |
|
$ |
0.13 |
|
$ |
0.11 |
|
$ |
0.16 |
|
$ |
0.20 |
|
|
Income from discontinued operations |
|
— |
|
0.01 |
|
— |
|
0.01 |
| ||||
|
Net Income |
|
$ |
0.13 |
|
$ |
0.12 |
|
$ |
0.16 |
|
$ |
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, |
| ||||||||||||||
|
|
|
2013 |
|
2012 |
| ||||||||||||
|
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| ||||
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| ||||
|
|
|
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
| ||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Investment securities (1) |
|
$ |
116,888 |
|
$ |
262 |
|
0.89 |
% |
$ |
135,663 |
|
$ |
348 |
|
1.02 |
% |
|
Loans (2) (3) |
|
490,975 |
|
10,282 |
|
8.31 |
% |
388,833 |
|
8,267 |
|
8.44 |
% | ||||
|
Regulatory stock |
|
5,721 |
|
48 |
|
3.33 |
% |
5,473 |
|
32 |
|
2.32 |
% | ||||
|
Short-term investments (4) |
|
79,049 |
|
48 |
|
0.24 |
% |
123,850 |
|
77 |
|
0.25 |
% | ||||
|
Total interest-earning assets |
|
692,633 |
|
10,640 |
|
6.09 |
% |
653,819 |
|
8,724 |
|
5.29 |
% | ||||
|
Cash and due from banks |
|
3,053 |
|
|
|
|
|
2,922 |
|
|
|
|
| ||||
|
Other non-interest earning assets |
|
36,222 |
|
|
|
|
|
38,253 |
|
|
|
|
| ||||
|
Total assets |
|
$ |
731,908 |
|
|
|
|
|
$ |
694,994 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Liabilities & Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
NOW accounts |
|
$ |
58,987 |
|
$ |
40 |
|
0.27 |
% |
$ |
54,733 |
|
$ |
37 |
|
0.27 |
% |
|
Money market accounts |
|
86,245 |
|
114 |
|
0.52 |
% |
52,558 |
|
66 |
|
0.50 |
% | ||||
|
Savings accounts |
|
33,540 |
|
12 |
|
0.14 |
% |
31,100 |
|
11 |
|
0.14 |
% | ||||
|
Time deposits |
|
309,790 |
|
813 |
|
1.04 |
% |
294,640 |
|
914 |
|
1.23 |
% | ||||
|
Total interest-bearing deposits |
|
488,562 |
|
979 |
|
0.80 |
% |
433,031 |
|
1,028 |
|
0.94 |
% | ||||
|
Short-term borrowings |
|
2,397 |
|
6 |
|
0.99 |
% |
1,063 |
|
5 |
|
1.87 |
% | ||||
|
Borrowed funds |
|
59,941 |
|
446 |
|
2.95 |
% |
78,782 |
|
443 |
|
2.23 |
% | ||||
|
Junior subordinated debentures |
|
8,331 |
|
192 |
|
9.14 |
% |
8,165 |
|
191 |
|
9.28 |
% | ||||
|
Total interest-bearing liabilities |
|
559,231 |
|
1,623 |
|
1.15 |
% |
521,041 |
|
1,667 |
|
1.27 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Non-interest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Demand deposits and escrow accounts |
|
53,184 |
|
|
|
|
|
52,297 |
|
|
|
|
| ||||
|
Other liabilities |
|
5,677 |
|
|
|
|
|
4,717 |
|
|
|
|
| ||||
|
Total liabilities |
|
618,092 |
|
|
|
|
|
578,055 |
|
|
|
|
| ||||
|
Stockholders’ equity |
|
113,816 |
|
|
|
|
|
116,939 |
|
|
|
|
| ||||
|
Total liabilities and stockholders’ equity |
|
$ |
731,908 |
|
|
|
|
|
$ |
694,994 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net interest income |
|
|
|
$ |
9,017 |
|
|
|
|
|
$ |
7,057 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest rate spread |
|
|
|
|
|
4.94 |
% |
|
|
|
|
4.02 |
% | ||||
|
Net interest margin (5) |
|
|
|
|
|
5.16 |
% |
|
|
|
|
4.28 |
% | ||||
(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) 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, |
| ||||||||||||||
|
|
|
2013 |
|
2012 |
| ||||||||||||
|
|
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
| ||||
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
| ||||
|
|
|
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
| ||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Investment securities (1) |
|
$ |
118,093 |
|
$ |
544 |
|
0.91 |
% |
$ |
133,730 |
|
$ |
695 |
|
1.03 |
% |
|
Loans (2) (3) |
|
477,026 |
|
18,739 |
|
7.79 |
% |
376,130 |
|
15,608 |
|
8.23 |
% | ||||
|
Regulatory stock |
|
5,721 |
|
52 |
|
1.80 |
% |
5,473 |
|
38 |
|
1.38 |
% | ||||
|
Short-term investments (4) |
|
78,228 |
|
95 |
|
0.24 |
% |
129,997 |
|
160 |
|
0.24 |
% | ||||
|
Total interest-earning assets |
|
679,068 |
|
19,430 |
|
5.68 |
% |
645,330 |
|
16,501 |
|
5.07 |
% | ||||
|
Cash and due from banks |
|
3,045 |
|
|
|
|
|
3,049 |
|
|
|
|
| ||||
|
Other non-interest earning assets |
|
35,117 |
|
|
|
|
|
37,973 |
|
|
|
|
| ||||
|
Total assets |
|
$ |
717,230 |
|
|
|
|
|
$ |
686,352 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Liabilities & Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
NOW accounts |
|
$ |
59,055 |
|
$ |
80 |
|
0.27 |
% |
$ |
55,664 |
|
$ |
79 |
|
0.28 |
% |
|
Money market accounts |
|
85,967 |
|
226 |
|
0.52 |
% |
49,954 |
|
119 |
|
0.47 |
% | ||||
|
Savings accounts |
|
33,733 |
|
24 |
|
0.14 |
% |
31,223 |
|
22 |
|
0.14 |
% | ||||
|
Time deposits |
|
297,090 |
|
1,696 |
|
1.13 |
% |
276,308 |
|
1,786 |
|
1.28 |
% | ||||
|
Total interest-bearing deposits |
|
475,845 |
|
2,026 |
|
0.84 |
% |
413,149 |
|
2,006 |
|
0.96 |
% | ||||
|
Short-term borrowings |
|
2,337 |
|
11 |
|
0.93 |
% |
1,157 |
|
11 |
|
1.89 |
% | ||||
|
Borrowed funds |
|
59,964 |
|
886 |
|
2.93 |
% |
89,484 |
|
945 |
|
2.09 |
% | ||||
|
Junior subordinated debentures |
|
8,309 |
|
385 |
|
9.19 |
% |
8,144 |
|
384 |
|
9.35 |
% | ||||
|
Total interest-bearing liabilities |
|
546,455 |
|
3,308 |
|
1.20 |
% |
511,934 |
|
3,346 |
|
1.30 |
% | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Non-interest bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Demand deposits and escrow accounts |
|
51,788 |
|
|
|
|
|
51,056 |
|
|
|
|
| ||||
|
Other liabilities |
|
5,619 |
|
|
|
|
|
5,471 |
|
|
|
|
| ||||
|
Total liabilities |
|
603,862 |
|
|
|
|
|
568,461 |
|
|
|
|
| ||||
|
Stockholders’ equity |
|
113,368 |
|
|
|
|
|
117,891 |
|
|
|
|
| ||||
|
Total liabilities and stockholders’ equity |
|
$ |
717,230 |
|
|
|
|
|
$ |
686,352 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net interest income |
|
|
|
$ |
16,122 |
|
|
|
|
|
$ |
13,155 |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest rate spread |
|
|
|
|
|
4.48 |
% |
|
|
|
|
3.78 |
% | ||||
|
Net interest margin (5) |
|
|
|
|
|
4.71 |
% |
|
|
|
|
4.04 |
% | ||||
(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) 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, 2013 |
|
September 30, 2013 |
|
June 30, 2013 |
|
March 31, 2013 |
|
December 31, 2012 |
| |||||
|
Net interest income |
|
$ |
9,017 |
|
$ |
7,107 |
|
$ |
8,539 |
|
$ |
8,253 |
|
$ |
7,057 |
|
|
Provision for loan losses |
|
151 |
|
77 |
|
301 |
|
346 |
|
247 |
| |||||
|
Noninterest income |
|
835 |
|
1,288 |
|
1,443 |
|
2,643 |
|
2,745 |
| |||||
|
Noninterest expense |
|
7,614 |
|
7,852 |
|
9,467 |
|
8,128 |
|
7,417 |
| |||||
|
Net income from continuing operations |
|
1,411 |
|
310 |
|
247 |
|
1,630 |
|
1,462 |
| |||||
|
Net income |
|
1,393 |
|
320 |
|
205 |
|
1,666 |
|
1,517 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic |
|
10,432,833 |
|
10,440,513 |
|
10,446,643 |
|
10,425,576 |
|
10,383,441 |
| |||||
|
Diluted |
|
10,432,833 |
|
10,440,513 |
|
10,446,643 |
|
10,425,576 |
|
10,383,441 |
| |||||
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic |
|
$ |
0.13 |
|
$ |
0.03 |
|
$ |
0.02 |
|
$ |
0.16 |
|
$ |
0.12 |
|
|
Diluted |
|
0.13 |
|
0.03 |
|
0.02 |
|
0.16 |
|
0.12 |
| |||||
|
Dividends per common share |
|
0.09 |
|
0.09 |
|
0.09 |
|
0.09 |
|
0.09 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Return on average assets |
|
0.76 |
% |
0.18 |
% |
0.12 |
% |
0.97 |
% |
0.87 |
% | |||||
|
Return on average equity |
|
4.86 |
% |
1.12 |
% |
0.71 |
% |
5.85 |
% |
5.15 |
% | |||||
|
Net interest rate spread (1) |
|
4.94 |
% |
3.99 |
% |
5.07 |
% |
4.82 |
% |
4.02 |
% | |||||
|
Net interest margin (2) |
|
5.16 |
% |
4.24 |
% |
5.32 |
% |
5.07 |
% |
4.28 |
% | |||||
|
Efficiency ratio (3) |
|
77.28 |
% |
93.53 |
% |
94.84 |
% |
74.60 |
% |
75.67 |
% | |||||
|
Noninterest expense to average total assets |
|
4.13 |
% |
4.43 |
% |
5.56 |
% |
4.71 |
% |
4.23 |
% | |||||
|
Average interest-earning assets to average interest-bearing liabilities |
|
123.85 |
% |
124.70 |
% |
125.27 |
% |
124.53 |
% |
125.48 |
% | |||||
|
|
|
As of: |
| |||||||||||||
|
|
|
December 31, 2013 |
|
September 30, 2013 |
|
June 30, 2013 |
|
March 31, 2013 |
|
December 31, 2012 |
| |||||
|
Nonperforming loans: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Originated portfolio: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Residential real estate |
|
$ |
1,895 |
|
$ |
1,945 |
|
$ |
2,346 |
|
$ |
2,296 |
|
$ |
3,512 |
|
|
Commercial real estate |
|
487 |
|
471 |
|
473 |
|
631 |
|
624 |
| |||||
|
Home equity |
|
204 |
|
229 |
|
334 |
|
405 |
|
620 |
| |||||
|
Commercial business |
|
61 |
|
62 |
|
110 |
|
103 |
|
123 |
| |||||
|
Consumer |
|
259 |
|
259 |
|
136 |
|
258 |
|
166 |
| |||||
|
Total originated portfolio |
|
2,906 |
|
2,966 |
|
3,399 |
|
3,693 |
|
5,045 |
| |||||
|
Total purchased portfolio |
|
3,245 |
|
2,553 |
|
1,457 |
|
1,700 |
|
2,144 |
| |||||
|
Total nonperforming loans |
|
6,151 |
|
5,519 |
|
4,856 |
|
5,393 |
|
7,189 |
| |||||
|
Real estate owned and other possessed collateral, net |
|
3,211 |
|
3,413 |
|
2,134 |
|
2,038 |
|
2,633 |
| |||||
|
Total nonperforming assets |
|
$ |
9,362 |
|
$ |
8,932 |
|
$ |
6,990 |
|
$ |
7,431 |
|
$ |
9,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Past due loans to total loans |
|
1.57 |
% |
1.38 |
% |
1.68 |
% |
2.00 |
% |
2.52 |
% | |||||
|
Nonperforming loans to total loans |
|
1.23 |
% |
1.14 |
% |
1.12 |
% |
1.42 |
% |
1.83 |
% | |||||
|
Nonperforming assets to total assets |
|
1.28 |
% |
1.23 |
% |
1.04 |
% |
1.06 |
% |
1.39 |
% | |||||
|
Allowance for loan losses to total loans |
|
0.27 |
% |
0.25 |
% |
0.26 |
% |
0.27 |
% |
0.22 |
% | |||||
|
Allowance for loan losses to nonperforming loans |
|
21.95 |
% |
22.18 |
% |
23.54 |
% |
19.15 |
% |
12.17 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Commercial real estate loans to risk-based capital (4) |
|
170.69 |
% |
171.30 |
% |
159.07 |
% |
184.40 |
% |
193.74 |
% | |||||
|
Net loans to core deposits (5) |
|
95.10 |
% |
93.04 |
% |
92.94 |
% |
77.72 |
% |
81.01 |
% | |||||
|
Purchased loans to total loans, including held for sale |
|
34.89 |
% |
36.29 |
% |
37.57 |
% |
33.63 |
% |
33.36 |
% | |||||
|
Equity to total assets |
|
15.61 |
% |
15.70 |
% |
16.97 |
% |
16.54 |
% |
16.31 |
% | |||||
|
Tier 1 leverage capital ratio |
|
16.66 |
% |
17.23 |
% |
17.78 |
% |
17.41 |
% |
17.44 |
% | |||||
|
Total risk-based capital ratio |
|
24.61 |
% |
25.63 |
% |
27.54 |
% |
30.71 |
% |
29.35 |
% | |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total stockholders’ equity |
|
$ |
114,383 |
|
$ |
113,846 |
|
$ |
113,802 |
|
$ |
115,737 |
|
$ |
114,931 |
|
|
Less: Preferred stock |
|
— |
|
— |
|
— |
|
— |
|
— |
| |||||
|
Common stockholders’ equity |
|
114,383 |
|
113,846 |
|
113,802 |
|
115,737 |
|
114,931 |
| |||||
|
Less: Intangible assets |
|
(3,124 |
) |
(3,334 |
) |
(3,544 |
) |
(3,751 |
) |
(3,957 |
) | |||||
|
Tangible common stockholders’ equity (non-GAAP) |
|
$ |
111,259 |
|
$ |
110,512 |
|
$ |
110,258 |
|
$ |
111,986 |
|
$ |
110,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Common shares outstanding |
|
10,432,494 |
|
10,433,550 |
|
10,446,643 |
|
10,446,643 |
|
10,383,441 |
| |||||
|
Book value per common share |
|
$ |
10.96 |
|
$ |
10.91 |
|
$ |
10.89 |
|
$ |
11.08 |
|
$ |
11.07 |
|
|
Tangible book value per share (non-GAAP) (6) |
|
10.66 |
|
10.59 |
|
10.55 |
|
10.72 |
|
10.69 |
| |||||
|
|
|
Reconciliation of Net Income Available to Common Shareholders (GAAP) to Net Operating Earnings (non-GAAP) (7) |
| |||||||||||||
|
|
|
Three Months Ended: |
| |||||||||||||
|
|
|
December 31, 2013 |
|
September 30, 2013 |
|
June 30, 2013 |
|
March 31, 2013 |
|
December 31, 2012 |
| |||||
|
Net income available to common shareholders (GAAP) |
|
$ |
1,393 |
|
$ |
320 |
|
$ |
205 |
|
$ |
1,666 |
|
$ |
1,259 |
|
|
Items excluded from operating earnings, net of tax: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Discontinued operations |
|
18 |
|
(10 |
) |
42 |
|
(36 |
) |
(55 |
) | |||||
|
Income from life insurance death benefits |
|
— |
|
— |
|
— |
|
— |
|
(235 |
) | |||||
|
Severance expense |
|
— |
|
366 |
|
203 |
|
— |
|
— |
| |||||
|
Legal settlement expense and related professional fees |
|
— |
|
(165 |
) |
671 |
|
— |
|
— |
| |||||
|
Total after-tax items |
|
18 |
|
191 |
|
916 |
|
(36 |
) |
(320 |
) | |||||
|
Net operating earnings (non-GAAP) |
|
$ |
1,411 |
|
$ |
511 |
|
$ |
1,121 |
|
$ |
1,630 |
|
$ |
969 |
|
|
Net operating earnings per share - basic (non-GAAP) |
|
$ |
0.14 |
|
$ |
0.05 |
|
$ |
0.11 |
|
$ |
0.16 |
|
$ |
0.09 |
|
(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. 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.
(7) Management believes operating earnings, which exclude non-core items, provide a more meaningful representation of the Company’s performance.