Northeast Bank Reports Fourth Quarter Results and Declares Dividend
PORTLAND, Maine, July 28, 2025 (GLOBE NEWSWIRE) -- Northeast Bank (the "Bank") (NASDAQ:NBN), a Maine-based bank, today reported net income of $25.2 million, or $3.00 per diluted common share, for the quarter ended June 30, 2025, compared to net income of $15.1 million, or $1.91 per diluted common share, for the quarter ended June 30, 2024. Net income for the year ended June 30, 2025 was $83.4 million, or $10.08 per diluted common share, compared to $58.2 million, or $7.58 per diluted common share, for the year ended June 30, 2024.
The Board of Directors declared a cash dividend of $0.01 per share, payable on October 9, 2025, to shareholders of record as of September 25, 2025.
"I am pleased to report a very strong quarter," said Rick Wayne, Chief Executive Officer. "Excluding a single quarter in which we had substantial gains from the sale of PPP loans, the June 30, 2025 quarter generated record earnings primarily attributable to record net interest income. We are reporting earnings of $3.00 per diluted common share, a return on average equity of 20.7%, and a return on average assets of 2.4%. Lending activity remained strong with total quarterly originations and purchases of $365.6 million. Originations and purchases for the year ending June 30, 2025 was $2.08 billion. At June 30, 2025, the loan portfolio, including loans held for sale, totaled $3.79 billion, representing an increase of $1.03 billion, or 37.3%, over June 30, 2024."
As of June 30, 2025, total assets were $4.28 billion, an increase of $1.15 billion, or 36.6%, from total assets of $3.13 billion as of June 30, 2024.
1. The following table highlights the changes in the loan portfolio, including loans held for sale, for the year ended June 30, 2025:
Loan Portfolio Changes
June 30, 2025
June 30, 2024
Change ($)
Change (%)
(Dollars in thousands)
National Lending Purchased
$
2,375,157
$
1,708,551
$
666,606
39.02
%
National Lending Originated
1,251,768
981,497
270,271
27.54
%
SBA National
144,974
48,405
96,569
199.50
%
Community Banking
18,258
22,704
(4,446
)
(19.58
%)
Total
$
3,790,157
$
2,761,157
$
1,029,000
37.27
%
Loans generated by the Bank's National Lending Division for the quarter ended June 30, 2025 totaled $258.3 million, which consisted of $41.7 million of purchased loans at an average price of 93.8% of unpaid principal balance, and $216.6 million of originated loans. Loans generated by the Bank's SBA Division for the quarter ended June 30, 2025 totaled $107.3 million.
An overview of the Bank's National Lending Division portfolio follows:
National Lending Portfolio
Three Months Ended June 30,
2025
2024
Purchased
Originated
Total
Purchased
Originated
Total
(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance
$
44,419
$
216,631
$
261,050
$
160,627
$
114,272
$
274,899
Initial net investment basis (1)
41,680
216,631
258,311
143,571
114,272
257,843
Loan returns during the period:
Yield
8.52
%
9.95
%
8.99
%
9.18
%
9.68
%
9.37
%
Total Return on Purchased Loans (2)
8.76
%
N/A
8.76
%
9.47
%
N/A
9.47
%
Year Ended June 30,
2025
2024
Purchased
Originated
Total
Purchased
Originated
Total
(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance
$
946,112
$
807,923
$
1,754,035
$
432,367
$
399,149
$
831,516
Initial net investment basis (1)
863,165
807,923
1,671,088
382,047
399,149
781,196
Loan returns during the period:
Yield
8.62
%
9.27
%
8.90
%
9.01
%
9.90
%
9.34
%
Total Return on Purchased Loans (2)
8.71
%
N/A
8.71
%
9.11
%
N/A
9.11
%
Total loans as of period end:
Unpaid principal balance
$
2,554,266
$
1,251,768
$
3,806,034
$
1,886,383
$
981,497
$
2,867,880
Net investment basis
2,375,157
1,251,768
3,626,925
1,708,551
981,497
2,690,048
(1) Initial net investment basis on purchased loans is the initial amortized cost basis net of initial allowance for credit losses (credit mark).(2) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains (losses) on real estate owned, release of allowance for credit losses on purchased loans, and other noninterest income recorded during the period divided by the average invested balance on an annualized basis. The total return on purchased loans does not include the effect of purchased loan charge-offs or recoveries during the period. Total return on purchased loans is considered a non-GAAP financial measure. See reconciliation in below table entitled "Total Return on Purchased Loans."
2. Deposits increased by $1.04 billion, or 44.3%, from June 30, 2024. The increase was primarily attributable to increases in time deposits of $937.4 million, or a 71.8% increase compared with the prior year. The significant drivers in the change in time deposits were the increase in brokered time deposits, which increased by $752.7 million, and Community Banking Division time deposits, which increased by $156.2 million compared to June 30, 2024.
3. Federal Home Loan Bank ("FHLB") advances decreased by $25.0 million, or 7.2%, from June 30, 2024. The decrease was attributable to maturities on outstanding advances and net paydowns on amortizing advances.
4. Shareholders' equity increased by $117.7 million, or 31.2%, from June 30, 2024, primarily due to net income of $83.4 million and $31.3 million of net proceeds on shares issued in connection with the Bank's at-the-market ("ATM") offering.
Net income increased by $6.5 million to $25.2 million for the quarter ended June 30, 2025, compared to net income of $18.7 million for the quarter ended March 31, 2025.
1. Net interest and dividend income before provision for credit losses increased by $8.0 million to $53.9 million for the quarter ended June 30, 2025, compared to $46.0 million for the quarter ended March 31, 2025. The increase was primarily due to the following:
An increase in interest income earned on loans of $8.1 million, primarily due to the resolution of a significant nonaccrual National Lending Division originated loan and higher transactional income in the National Lending Division purchased portfolio; and
An increase in interest income earned on short-term investments of $0.8 million, due to higher average balances, partially offset by lower rates earned; partially offset by,
An increase in deposit interest expense of $1.4 million, primarily due to higher average balances, partially offset by lower rates on interest-bearing deposits.
The following table summarizes interest income and related yields recognized on the loan portfolios:
Interest Income and Yield on Loans
Three Months Ended June 30,
2025
2024
Average Balance (1)
InterestIncome
Yield
Average Balance (1)
InterestIncome
Yield
(Dollars in thousands)
Community Banking
$
19,378
$
321
6.64
%
$
23,511
$
381
6.52
%
SBA National
147,628
3,621
9.84
%
40,004
1,437
14.45
%
National Lending:
Originated
1,176,989
29,183
9.95
%
963,946
23,204
9.68
%
Purchased
2,422,781
51,476
8.52
%
1,645,647
37,562
9.18
%
Total National Lending
3,599,770
80,659
8.99
%
2,609,593
60,766
9.37
%
Total
$
3,766,776
$
84,601
9.01
%
$
2,673,108
$
62,584
9.42
%
Year Ended June 30,
2025
2024
Average Balance (1)
InterestIncome
Yield
Average Balance (1)
InterestIncome
Yield
(Dollars in thousands)
Community Banking
$
20,843
$
1,409
6.76
%
$
25,267
$
1,622
6.42
%
SBA National
103,525
11,766
11.37
%
32,581
4,270
13.11
%
National Lending:
Originated
1,083,654
100,479
9.27
%
954,316
94,488
9.90
%
Purchased
2,242,832
193,307
8.62
%
1,580,485
142,342
9.01
%
Total National Lending
3,326,486
293,786
8.83
%
2,534,801
236,830
9.34
%
Total
$
3,450,854
$
306,961
8.90
%
$
2,592,649
$
242,722
9.36
%
(1) Includes loans held for sale.
The components of total income on purchased loans are set forth in the table below entitled "Total Return on Purchased Loans." When compared to the quarter ended June 30, 2024, transactional income increased by $0.9 million for the quarter ended June 30, 2025, and regularly scheduled interest and accretion increased by $13.2 million primarily due to the increase in average balances. The total return on purchased loans for the quarter ended June 30, 2025 was 8.8%, a decrease from 9.5% for the quarter ended June 30, 2024. The following table details the total return on purchased loans:
Total Return on Purchased Loans
Three Months Ended June 30,
2025
2024
Income
Return (1)
Income
Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion
$
47,707
7.90
%
$
34,504
8.43
%
Transactional income:
Release of allowance for credit losses on purchased loans
1,404
0.23
%
1,202
0.29
%
Accelerated accretion and loan fees
3,768
0.62
%
3,058
0.75
%
Total transactional income
5,172
0.86
%
4,260
1.04
%
Total
$
52,879
8.76
%
$
38,764
9.47
%
Year Ended June 30,
2025
2024
Income
Return (1)
Income
Return (1)
(Dollars in thousands)
Regularly scheduled interest and accretion
$
183,762
8.19
%
$
133,009
8.42
%
Transactional income:
Release of allowance for credit losses on purchased loans
2,138
0.10
%
1,558
0.10
%
Accelerated accretion and loan fees
9,545
0.43
%
9,333
0.59
%
Total transactional income
11,683
0.52
%
10,891
0.69
%
Total
$
195,445
8.71
%
$
143,900
9.11
%
(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, and gains (losses) on real estate owned, and release of allowance for credit losses on purchased loans recorded during the period divided by the average invested balance on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter. Total return is considered a non-GAAP financial measure.
2. Provision for credit losses increased by $2.9 million to $3.5 million for the quarter ended June 30, 2025, compared to $547 thousand in the quarter ended June 30, 2024. The increase was primarily related to loan growth and increased reserves on the unguaranteed portion of the SBA portfolio.
3. Noninterest income increased by $6.7 million for the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024, primarily due to an increase in gain on sale of SBA loans of $6.8 million, due to the sale of $107.6 million in SBA loans during the quarter ended June 30, 2025 as compared to the sale of $26.8 million during the quarter ended June 30, 2024.
4. Noninterest expense increased by $4.4 million for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024, primarily due to the following:
An increase in salaries and employee benefits expense of $1.8 million, primarily due to increases in regular stock and incentive compensation expense;
An increase in loan expense of $2.1 million primarily related to increased expenses in connection with the origination of SBA 7(a) loans; and
An increase in Federal Deposit Insurance Corporation ("FDIC") insurance expense of $266 thousand, due to the growth of the Bank's asset size and an increased assessment rate.
5. Income tax expense increased by $5.3 million to $12.5 million, or an effective tax rate of 33.2%, for the quarter ended June 30, 2025, compared to $7.3 million, or an effective tax rate of 32.4%, for the quarter ended June 30, 2024. The increase in effective tax rate is primarily due to changes in income apportionment for state taxes.
As of June 30, 2025, nonperforming assets totaled $35.6 million, or 0.8% of total assets, compared to $28.3 million, or 0.9% of total assets, as of June 30, 2024.
As of June 30, 2025, past due loans totaled $30.1 million, or 0.8% of total loans, compared to past due loans totaling $26.3 million, or 1.0% of total loans, as of June 30, 2024.
As of June 30, 2025, the Bank's Tier 1 leverage capital ratio was 11.6%, compared to 12.3% at June 30, 2024, and the Total risk-based capital ratio was 14.7% at June 30, 2025, compared to 14.8% at June 30, 2024. Capital ratios decreased primarily due to the increase in risk-weighted assets and average assets from significant loan growth during the year ended June 30, 2025, partially offset by increased retained earnings and additional capital raised under the Bank's ATM offering.
Investor Call InformationRick Wayne, Chief Executive Officer, Richard Cohen, Chief Financial Officer, and Pat Dignan, Chief Operating Officer and Chief Credit Officer of Northeast Bank, will host a conference call to discuss fourth quarter earnings and business outlook at 1:00 p.m. Eastern Time on Tuesday, July 29th. To access the conference call by phone, please go to this link (Phone Registration), and you will be provided with dial in details. The call will be available via live webcast, which can be viewed by accessing the Bank'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 BankNortheast Bank (NASDAQ:NBN) is a bank headquartered in Portland, Maine. We offer personal and business banking services to the Maine market via seven branches. Our National Lending Division purchases and originates commercial loans on a nationwide basis. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found at www.northeastbank.com.
Non-GAAP Financial MeasuresIn addition to results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures, including tangible common shareholders' equity, tangible book value per share, total return on purchased loans, and efficiency ratio. The Bank's management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Forward-Looking StatementsStatements 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. We may also make forward-looking statements in other documents we file with the FDIC, in our annual reports to our shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "outlook," "will," "should," and other expressions that predict or indicate future events and trends and which do not relate to historical matters. Although the Bank 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, contingencies, 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 Bank's control. The Bank's actual results could differ materially from those expressed or implied by such the forward-looking statements as a result of, among other factors, changes in interest rates and real estate values; changes in employment levels, general business and economic conditions on a national basis and in the local markets in which the Bank operates; changes in customer behavior due to changing business and economic conditions (including the impact of actual or threatened tariffs imposed by the U.S. and foreign governments, inflation and concerns about liquidity) or legislative or regulatory initiatives; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; turbulence in the capital and debt markets; competitive pressures from other financial institutions; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of credit loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; changes in legislation and regulation under the new U.S. presidential administration; operational risks including, but not limited to, cybersecurity, fraud, natural disasters, climate change and future pandemics; the risk that the Bank may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Bank'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 Bank's Annual Report on Form 10-K, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A for the year ended June 30, 2024 as updated in the Bank's Quarterly Reports on Form 10-Q and other filings submitted to the FDIC. These statements speak only as of the date of this release and the Bank does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.
NBN-F
NORTHEAST BANK
BALANCE SHEETS
(Dollars in thousands, except share and per share data)
June 30, 2025
June 30, 2024
(unaudited)
(audited)
Assets
Cash and due from banks
$
2,908
$
2,711
Short-term investments
410,711
239,447
Total cash and cash equivalents
413,619
242,158
Available-for-sale debt securities, at fair value
15,308
48,978
Equity securities, at fair value
7,396
7,013
Total securities
22,704
55,991
SBA loans held for sale
33,768
14,506
Loans:
Commercial real estate
2,733,794
2,028,280
Commercial and industrial
903,278
618,846
Residential real estate
119,158
99,234
