Northeast Bank (NBN) Q3 2025 earnings summary

Executive summary

• Net income for Q3 2025 was $18.7 million, up $4.8 million year-over-year, driven by strong loan and deposit growth, higher net interest and noninterest income, and robust SBA loan sales.

• Total assets reached $4.23 billion, a 35% increase from June 30, 2024, with the total loan portfolio at $3.80 billion, up 37.7%, and national lending as the primary driver.

• SBA 7(a) program originations rose to $121.3 million in Q3, up from $29.0 million a year ago, with SBA loan sales reaching $73.6 million.

• Board declared a $0.01/share dividend, payable May 27, 2025.

• The bank remains focused on national loan origination and purchase, SBA lending, and deposit growth through both branch and online channels.

Financial highlights

• Net interest and dividend income before provision for credit losses was $46.0 million for the quarter, up $9.5 million year-over-year.

• Noninterest income rose by $5.1 million, mainly from a $5.0 million increase in gain on sale of SBA loans, with a total of $6.6 million in SBA gains.

• Noninterest expense increased by $3.7 million, primarily from higher salaries, loan origination costs, FDIC insurance, and a $1.3 million catch-up in incentive compensation.

• Provision for credit losses increased to $2.9 million from $596,000 year-over-year, reflecting loan growth and higher reserves on SBA loans.

• Net interest margin was 4.62%; net interest rate spread was 3.96% for Q3 2025.

Outlook and guidance

• Management expects continued focus on national lending and deposit growth, with risk management and capital adequacy as priorities.

• Loan origination pipeline remains strong, though future volumes may be affected by economic uncertainty and market conditions.

• SBA business expected to continue growing, though recent regulatory changes may temporarily slow origination volume.

• Margin expected to normalize in the next quarter, with a target around 4.80%.

• Additional $75 million At-the-Market (ATM) offering approved after completing initial $50 million ATM in Q2 FY25.