Northeast Bank (NBN) Q4 2024 earnings summary

Executive summary

• Q4 FY24 net income was $15.1 million ($1.91/diluted share), up from $12.1 million ($1.61) year-over-year; full-year net income was $58.2 million ($7.58), with ROE of 17.46% for the year and 16.56% for the quarter.

• Total loan portfolio grew to $2.76 billion as of June 30, 2024, with national lending purchased loans comprising $1.71 billion and originated loans $414 million.

• Total deposits increased 21% year-over-year to $2.34 billion, with a cost of deposits at 4.26% at quarter-end.

• Strong results driven by volume and yields in the National Lending Division, with portfolio yield at 9.37% for Q4 FY24, up from 8.71% year-over-year.

• Tangible book value per share was $46.34 at quarter-end.

Financial highlights

• Q4 FY24 net interest margin was 5.13%, and purchased loan return was 9.47%; overall loan book yield for the quarter was 9.55%.

• Loan originations were $114 million for the quarter and $399.1 million for the year; national lending purchase loans for the quarter totaled $160.6 million UPB at an 89.4% purchase price.

• Allowance for credit losses stood at $26.7 million, or 0.97% of total loans, as of June 30, 2024.

• Noninterest income for Q4 FY24 was $2.1 million, up from $1.1 million, mainly due to higher SBA loan sales.

• Efficiency ratio improved to 42.7% from 46.4% year-over-year as revenue growth outpaced operating expenses.

Outlook and guidance

• Management is optimistic about future loan purchase opportunities, citing a strong pipeline and increased market activity.

• Expectation of continued strength in purchase loan activity in the next quarter, with ongoing focus on high-quality, higher-yielding assets.

• National Lending originations for Q4 FY24 were 100% variable rate, with a weighted average floor rate of 7.23%.

• The At-the-Market (ATM) equity offering was extended until November 2024.

• Forward-looking statements caution on economic, regulatory, and market risks that could impact future results.