Northeast Bank Reports Fourth Quarter Results and Declares Dividend.

PORTLAND, Maine: Northeast Bank (the "Bank") (NASDAQ: NBN), a Maine-based full-service bank, today reported net income of $12.1 million, or $1.61 per diluted common share, for the quarter ended June 30, 2023, compared to net income of $10.3 million, or $1.35 per diluted common share, for the quarter ended June 30, 2022. Net income for the year ended June 30, 2023 was $44.2 million, or $5.96 per diluted common share, compared to $42.2 million, or $5.34 per diluted common share, for the year ended June 30, 2022.

The Board of Directors declared a cash dividend of $0.01 per share, payable on August 23, 2023, to shareholders of record as of August 9, 2023.

Discussing results, Rick Wayne, Chief Executive Officer, said, "We closed our fiscal year with yet another strong quarter. The historic loan growth in our second fiscal quarter continued to prove beneficial, as National Lending Division interest income increased by $29.8 million to $53.3 million over the quarter ended June 30, 2022. Our National Lending Division finished the fiscal year with record purchases with $1.14 billion, including $48.8 million for the quarter. This resulted in net growth in our purchased portfolio of $1.00 billion, or 209.9%, compared with June 30, 2022. In addition to the growth in loan balances, our National Lending Division's combined yield increased to 8.7% for the quarter ended June 30, 2023, as compared to 7.9% for the quarter ended June 30, 2022. Asset quality remains strong, with non-performing assets of 0.55% of total assets, as compared to 0.82% of total assets at June 30, 2022." Mr. Wayne continued, "As a result of the increase in the average balances of our loan portfolio, we are reporting earnings of $1.61 per diluted common share, a return on average equity of 16.7%, and a return on average assets of 1.7% for the quarter."

As of June 30, 2023, total assets were $2.87 billion, an increase of $1.29 billion, or 81.3%, from total assets of $1.58 billion as of June 30, 2022.

The following table highlights the changes in the loan portfolio for the three months and year ended June 30, 2023:

Loan Portfolio Changes

June 30, 2023

Balance

March 31, 2023

Balance

Change ($)

Change (%)

(Dollars in thousands)

National Lending Purchased

$

1,480,119

$

1,460,598

$

19,521

1.34

%

National Lending Originated

987,832

994,707

(6,875

)

(0.69

%)

SBA National

24,873

25,537

(664

)

(2.60

%)

Community Banking

27,536

28,953

(1,417

)

(4.89

%)

Total

$

2,520,360

$

2,509,795

$

10,565

0.42

%

June 30, 2023

Balance

June 30, 2022

Balance

Change ($)

Change (%)

(Dollars in thousands)

National Lending Purchased

$

1,480,119

$

477,682

$

1,002,437

209.85

%

National Lending Originated

987,832

759,229

228,603

30.11

%

SBA National

24,873

33,046

(8,173

)

(24.73

%)

Community Banking

27,536

34,909

(7,373

)

(21.12

%)

Total

$

2,520,360

$

1,304,866

$

1,215,494

93.15

%

Loans generated by the Bank's National Lending Division for the quarter ended June 30, 2023 totaled $133.0 million, which consisted of $48.8 million of purchased loans, at an average price of 89.9% of unpaid principal balance, and $84.2 million of originated loans.

An overview of the Bank's National Lending Division portfolio follows:

National Lending Portfolio

Three Months Ended June 30,

2023

2022

Purchased

Originated

Total

Purchased

Originated

Total

(Dollars in thousands)

Loans purchased or originated during the period:

Unpaid principal balance

$

54,253

$

84,171

$

138,424

$

37,032

$

172,851

$

209,883

Net investment basis

48,783

84,171

132,954

36,502

172,851

209,353

Loan returns during the period:

Yield

8.12

%

9.58

%

8.71

%

9.25

%

7.03

%

7.91

%

Total Return on Purchased Loans (1)

8.12

%

N/A

8.12

%

9.25

%

N/A

9.25

%

Year Ended June 30,

2023

2022

Purchased

Originated

Total

Purchased

Originated

Total

(Dollars in thousands)

Loans purchased or originated during the period:

Unpaid principal balance

$

1,314,783

$

556,991

$

1,871,774

$

199,523

$

587,840

$

787,363

Net investment basis

1,143,786

556,991

1,700,777

187,914

587,840

775,754

Loan returns during the period:

Yield

7.93

%

8.84

%

8.36

%

8.91

%

6.73

%

7.65

%

Total Return on Purchased Loans (1)

7.93

%

N/A

7.93

%

8.92

%

N/A

8.92

%

Total loans as of period end:

Unpaid principal balance

$

1,667,947

$

987,832

$

2,655,779

$

512,006

$

759,229

$

1,271,235

Net investment basis

1,480,119

987,832

2,467,951

477,682

759,229

1,236,911

(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains on real estate owned and other noninterest income recorded during the period divided by the average invested balance, which includes purchased loans held for sale, 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."

Deposits increased by $649.5 million, or 50.4%, from June 30, 2022...