Northeast Bancorp (NBN, Financial) filed Quarterly Report for the period ended 2009-03-31.
NORTHEAST BANCORP (ME)is a savings and loan holding company whose primary assets is its subsidiary Northeast Bank F.S.B. the bank. The Bank's primary business consists of attracting savings deposits from the general public and applying those funds primarily to the origination and retention of first mortgage loans on residential real estate. Of the Bank's loan portfolio at June 30 1996 83% was invested in real estate loans(including residential construction and commercial mortgage loans) 8% incommercial loans and 9% in consumer loans. Northeast Bancorp has a market cap of $19.7 million; its shares were traded at around $8.5 with a P/E ratio of 18 and P/S ratio of 0.4. The dividend yield of Northeast Bancorp stocks is 4.2%. Northeast Bancorp had an annual average earning growth of 0.9% over the past 10 years.
The Company reported consolidated net income of $750,060, or $0.29 per diluted share, for the nine months ended March 31, 2009 compared to $1,505,162, or $0.63 per diluted share, for the nine months ended March 31, 2008, a decrease of $755,102, or 50%. Net interest and dividend income increased $1,933,987, or 18%, as a result of an increased net interest margin and increase in average earning assets. The provision for loan losses increased $985,260, or 150%, due to an increase in net credit losses. Noninterest income increased $316,167, or 4%, primarily from increased gains on sale of loans and insurance commission revenue. Noninterest expense increased $2,431,268, or 15%, from the full period impact of three insurance agencies acquired in the nine months ended March 31, 2008, group medical benefits expense, increase in FDIC insurance assessments, collection expenses and realized impairment expense on investment securities.
The provision for loan losses for the three months ended March 31, 2009 was $618,536, an increase of $330,911, or 115%, from $287,625 for the three months ended March 31, 2008. For the nine months ended March 31, 2009 and 2008, the provision for loans losses was $1,642,821 and $657,561, respectively, an increase of $985,260, or 150%. We have maintained our allowance for loan losses virtually flat to June 30, 2008 by recognizing a provision equal to net charge-offs. The provision was increased, due to the increase in net charge-offs, $661,537 for the three months ended March 31, 2009 compared to $287,625 for the same period in 2008 and $1,620,821 for the nine months ended March 31, 2009 compared to $657,561 for the same period in 2008 and increasing the allowance for loan losses compared to its June 30, 2008 balance to reflect increasing credit risk in the loan portfolio. For our internal analysis of the adequacy of the allowance, we considered the decrease in loans for the nine months ended March 31, 2009, the increase in net credit losses for the quarter and nine months ended March 31, 2009 compared to the same periods in the prior year, an increase in loan delinquency (4.59% at March 31, 2009 compared to 3.03% at June 30, 2008 and 3.90% at March 31, 2008) an increase in nonaccrual loans compared to June 30, 2008 of $974,000, to $8,677,000, and an increase in internal classified and criticized commercial and commercial real estate loans. Management deemed the allowance for loan losses adequate for the risk in the loan portfolio. See Financial Condition for a discussion of the Allowance for Loan Losses and the factors impacting the provision for loan losses. The allowance as a percentage of outstanding loans increased to 1.42% at March 31, 2009 compared to 1.35% at June 30, 2008 and virtually flat to 1.41% at March 31, 2008.
For the nine months ended March 31, 2009 and 2008, total noninterest income was $8,343,258 and $8,027,091, respectively, an increase of $316,167, or 4%. This increase was primarily due to insurance agency commissions which increased $518,705, or 13%, due to the full year impact of the Hartford, Spence & Matthews, and Hyler agencies acquired in the six months ended December 31, 2007. We also had an increase of $468,023, or 118%, on gains on the sale of loans as refinance activity increased the volume of residential real estate loans sold. Fees for other services to customers increased $27,876, or 3%, from better management of overdraft fees. These increases were partially offset by a decrease in net securities gains of $341,478 and a decrease in investment brokerage commission of $389,700, or 23%, due to lower sales volume.
Total noninterest expense for the three months ended March 31, 2009 was $6,169,926, an increase of $323,558, or 6%, from $5,846,368 for the three months ended March 31, 2008. Of this increase, $364,420 was from the Bank s operations other than insurance and was attributable to an increase of $120,173 for our self-insured group medical benefits plans due to higher claims, an increase of $139,669 for FDIC insurance accruals for the temporary increased deposit insurance coverage, and an increase of $164,969 in collections expense incurred on a higher volume of workout loans and net credit losses. The quarters ended March 31, 2009 and 2008 had a comparable number of insurance agency offices. The $40,862 offset to the balance of the $323,558 increase was due to lower occupancy, advertising, supplies, dues and subscription and other expenses associated with our insurance agency.
For the nine months ended March 31, 2009 and 2008, total noninterest expense was $18,400,089 and $15,968,821, respectively, an increase of $2,431,268, or 15%. The full year impact of the three insurance agencies acquired in the nine months ended March 31, 2008 accounted for $910,197 of this increase, which was comprised of a $739,138 increase in salaries and employee benefits, $42,956 increase in computer services, $131,847 increase in intangible asset amortization and $72,428 in other noninterest expense. The $1,521,071 balance of the $2,431,268 increase was related to bank operations other than insurance. Of this $1,521,071 increase, employee benefits expense increased $392,012 from increased claims in our self-insurance medical benefits plan and the employee bank-wide incentive plan. Occupancy expense increased $19,762 from increases in building depreciation, ground maintenance a
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NORTHEAST BANCORP (ME)is a savings and loan holding company whose primary assets is its subsidiary Northeast Bank F.S.B. the bank. The Bank's primary business consists of attracting savings deposits from the general public and applying those funds primarily to the origination and retention of first mortgage loans on residential real estate. Of the Bank's loan portfolio at June 30 1996 83% was invested in real estate loans(including residential construction and commercial mortgage loans) 8% incommercial loans and 9% in consumer loans. Northeast Bancorp has a market cap of $19.7 million; its shares were traded at around $8.5 with a P/E ratio of 18 and P/S ratio of 0.4. The dividend yield of Northeast Bancorp stocks is 4.2%. Northeast Bancorp had an annual average earning growth of 0.9% over the past 10 years.
Highlight of Business Operations:
The Company reported consolidated net income of $387,370, or $0.14 per diluted share, for the three months ended March 31, 2009 compared to $672,169, or $0.29 per diluted share, for the three months ended March 31, 2008, a decrease of $284,799, or 42%. Net interest and dividend income increased $828,277, or 24%, as a result of a net interest margin increase combined with increased earning assets. The provision for loan losses increased $330,911, or 115%, due to higher net credit losses. Noninterest income decreased $609,150, or 17%, primarily from decreased securities gains, investment brokerage commissions and insurance commissions. Noninterest expense increased $323,558, or 6%, primarily due to increased other noninterest expenses related to group medical benefits, FDIC insurance and collections expense.The Company reported consolidated net income of $750,060, or $0.29 per diluted share, for the nine months ended March 31, 2009 compared to $1,505,162, or $0.63 per diluted share, for the nine months ended March 31, 2008, a decrease of $755,102, or 50%. Net interest and dividend income increased $1,933,987, or 18%, as a result of an increased net interest margin and increase in average earning assets. The provision for loan losses increased $985,260, or 150%, due to an increase in net credit losses. Noninterest income increased $316,167, or 4%, primarily from increased gains on sale of loans and insurance commission revenue. Noninterest expense increased $2,431,268, or 15%, from the full period impact of three insurance agencies acquired in the nine months ended March 31, 2008, group medical benefits expense, increase in FDIC insurance assessments, collection expenses and realized impairment expense on investment securities.
The provision for loan losses for the three months ended March 31, 2009 was $618,536, an increase of $330,911, or 115%, from $287,625 for the three months ended March 31, 2008. For the nine months ended March 31, 2009 and 2008, the provision for loans losses was $1,642,821 and $657,561, respectively, an increase of $985,260, or 150%. We have maintained our allowance for loan losses virtually flat to June 30, 2008 by recognizing a provision equal to net charge-offs. The provision was increased, due to the increase in net charge-offs, $661,537 for the three months ended March 31, 2009 compared to $287,625 for the same period in 2008 and $1,620,821 for the nine months ended March 31, 2009 compared to $657,561 for the same period in 2008 and increasing the allowance for loan losses compared to its June 30, 2008 balance to reflect increasing credit risk in the loan portfolio. For our internal analysis of the adequacy of the allowance, we considered the decrease in loans for the nine months ended March 31, 2009, the increase in net credit losses for the quarter and nine months ended March 31, 2009 compared to the same periods in the prior year, an increase in loan delinquency (4.59% at March 31, 2009 compared to 3.03% at June 30, 2008 and 3.90% at March 31, 2008) an increase in nonaccrual loans compared to June 30, 2008 of $974,000, to $8,677,000, and an increase in internal classified and criticized commercial and commercial real estate loans. Management deemed the allowance for loan losses adequate for the risk in the loan portfolio. See Financial Condition for a discussion of the Allowance for Loan Losses and the factors impacting the provision for loan losses. The allowance as a percentage of outstanding loans increased to 1.42% at March 31, 2009 compared to 1.35% at June 30, 2008 and virtually flat to 1.41% at March 31, 2008.
For the nine months ended March 31, 2009 and 2008, total noninterest income was $8,343,258 and $8,027,091, respectively, an increase of $316,167, or 4%. This increase was primarily due to insurance agency commissions which increased $518,705, or 13%, due to the full year impact of the Hartford, Spence & Matthews, and Hyler agencies acquired in the six months ended December 31, 2007. We also had an increase of $468,023, or 118%, on gains on the sale of loans as refinance activity increased the volume of residential real estate loans sold. Fees for other services to customers increased $27,876, or 3%, from better management of overdraft fees. These increases were partially offset by a decrease in net securities gains of $341,478 and a decrease in investment brokerage commission of $389,700, or 23%, due to lower sales volume.
Total noninterest expense for the three months ended March 31, 2009 was $6,169,926, an increase of $323,558, or 6%, from $5,846,368 for the three months ended March 31, 2008. Of this increase, $364,420 was from the Bank s operations other than insurance and was attributable to an increase of $120,173 for our self-insured group medical benefits plans due to higher claims, an increase of $139,669 for FDIC insurance accruals for the temporary increased deposit insurance coverage, and an increase of $164,969 in collections expense incurred on a higher volume of workout loans and net credit losses. The quarters ended March 31, 2009 and 2008 had a comparable number of insurance agency offices. The $40,862 offset to the balance of the $323,558 increase was due to lower occupancy, advertising, supplies, dues and subscription and other expenses associated with our insurance agency.
For the nine months ended March 31, 2009 and 2008, total noninterest expense was $18,400,089 and $15,968,821, respectively, an increase of $2,431,268, or 15%. The full year impact of the three insurance agencies acquired in the nine months ended March 31, 2008 accounted for $910,197 of this increase, which was comprised of a $739,138 increase in salaries and employee benefits, $42,956 increase in computer services, $131,847 increase in intangible asset amortization and $72,428 in other noninterest expense. The $1,521,071 balance of the $2,431,268 increase was related to bank operations other than insurance. Of this $1,521,071 increase, employee benefits expense increased $392,012 from increased claims in our self-insurance medical benefits plan and the employee bank-wide incentive plan. Occupancy expense increased $19,762 from increases in building depreciation, ground maintenance a
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