Northeast Bank (NBN) Q1 2025 earnings summary

Executive summary

• Net income reached $17.1 million, the highest in bank history outside of PPP loan sale quarters, with diluted EPS of $2.11 and ROE at 17.53%.

• Total assets grew to $3.94 billion, a 25.8% increase from June 30, 2024, driven by significant loan growth, especially in the National Lending Division.

• National Lending Division generated $859.8 million in loans, the second largest quarterly volume in bank history.

• SBA 7(a) loan originations rose to $82.4 million, with $63.1 million sold and $3.3 million gain on sale.

• Tangible book value per share increased to $47.80.

Financial highlights

• Net interest income before provision for credit losses was $39.0 million, up from $37.1 million year-over-year.

• National lending originations in the quarter totaled $126.9 million, all variable rate, with a weighted average floor rate of 8.19%.

• Purchased $733 million in loans and originated $209 million in the quarter, with purchased loan return at 8.84%.

• Noninterest income rose by $3.3 million, mainly from higher gains on SBA loan sales.

• Noninterest expense increased by $2.3 million, primarily from higher salaries and loan origination costs.

Outlook and guidance

• Management expects continued growth in national lending and SBA origination, supported by a strong pipeline and prudent risk management.

• At-the-market equity offering capacity remains at $23.1 million, with $462 million in loan capacity as of September 30, 2024.

• Effective tax rate expected to remain around 32%.

• Forward-looking statements caution on economic, regulatory, and market risks.