Core Insights - BAD BEAT Investing, led by Quad 7 Capital, has been providing investment opportunities for nearly 12 years, focusing on both long and short trades [1] - The team is recognized for their February 2020 recommendation to sell everything and go short, maintaining an average position of 95% long and 5% short since May 2020 [1] - The investment strategy emphasizes short- and medium-term investments, income generation, special situations, and momentum trades [1] Group 1 - The company comprises a team of 7 analysts with diverse expertise in business, policy, economics, mathematics, game theory, and sciences [1] - BAD BEAT Investing aims to educate investors to become proficient traders through a comprehensive playbook, providing in-depth research with clear entry and exit targets [1] - The firm has a proven track record of success in their investment strategies [1] Group 2 - Benefits of BAD BEAT Investing include understanding market dynamics, executing well-researched trade ideas weekly, and access to multiple chat rooms [2] - Subscribers receive daily summaries of key analyst upgrades and downgrades, along with learning opportunities in basic options trading and extensive trading tools [2]

Financial Data and Key Metrics Changes - Net income for the quarter was $25,200,000, a record excluding one-time sales of PPP loans [5] - Total revenue for the quarter was $62,700,000, also a record when excluding PPP loan gains [10] - Net interest margin was strong at 5.1%, with a return on equity of 20.73% and return on assets at 2.38% [8][9] - Earnings per share were $3.06 basic and $3 fully diluted [8] - The allowance for credit losses over gross loans increased to 1.28% from 1.23% in the previous quarter [9] Business Line Data and Key Metrics Changes - The loan portfolio grew by 36% overall, with purchased loans up 40%, originated loans up 27%, and SBA loans up over 200% [12] - For the quarter, $362,600,000 in total loan originations and purchases were recorded, with $216,600,000 in originated loans [5][6] - SBA loan originations for the quarter were $107,300,000, totaling $408,500,000 for the year [7][14] Market Data and Key Metrics Changes - The company noted increased competition in the purchased loan market, with more capital and cheaper leverage available [13] - The SBA tightened eligibility requirements, which is expected to temporarily reduce loan volumes by up to 50% in the coming quarters [14] Company Strategy and Development Direction - The company plans to remain active but disciplined in the purchased loan market, focusing on opportunities while managing competition [13] - There is an emphasis on expanding into new verticals and adjusting marketing efforts to attract suitable borrowers in the SBA segment [25] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the challenges posed by new SBA regulations and the overall market environment [25] - The company believes that New York City will continue to be a strong multifamily market, providing future opportunities despite potential rent control impacts [16] Other Important Information - The company is investing in new technologies and automation to drive efficiency gains, with a significant hire in the role of chief of innovation [44] - The effective tax rate is expected to stabilize between 33% to 34% going forward [37] Q&A Session Summary Question: When do you expect SBA volumes to snap back after the decline? - Management indicated it is hard to predict exactly, but they believe they will climb back as they adjust to new processes and market conditions [23][24] Question: How does the current pool of loans for purchase compare to last quarter? - There is a lot of activity in the market, with optimism about the volume and competition for larger transactions [27][30] Question: How much transactional income impacted the net interest margin this quarter? - Transactional income was $4,094,000, which contributed significantly to the margin [31][32] Question: Will there be any offset on the expense side as SBA volumes decrease? - A significant portion of costs is variable, so expenses would decrease with lower volumes, although some fixed costs would remain [41][42] Question: Are there any new technology investments planned? - The company is planning major investments in technology and workflow AI to enhance efficiency [44]

Financial Performance - Net income for Q4 FY25 was $25215 million, and year-to-date net income reached $834 million[4] - Net interest margin stood at 510% for Q4 FY25 and 482% year-to-date[4] - Return on equity was 2073% and return on assets was 238% for Q4 FY25[4] - Basic earnings per share (EPS) for Q4 FY25 were $306 ($300 diluted), and year-to-date EPS were $1031 ($1008 diluted)[4] Loan Portfolio - Total loan volume for Q4 FY25 was $3626 million, with a year-to-date volume of $21 billion[4] - National Lending invested $417 million on $444 million of UPB in Q4 FY25, and $8632 million on $9461 million of UPB year-to-date[4] - SBA loans originated in Q4 FY25 amounted to $1043 million, with $1076 million sold, resulting in a gain on sale of $82 million[4] - Purchased loans constitute the largest portion of the National Lending portfolio, with a total balance of $2375157 million and an average LTV of 50%[7] Deposit Portfolio - The grand total of deposits reached $3375600 million as of June 30, 2025, with a weighted average rate (WAR) of 373%[48] - Brokered deposits make up 47% of the deposit mix, totaling $1595857 million with a WAR of 411%[48]

Company Announcement - Northeast Bank will host a conference call with a simultaneous webcast on July 29, 2025, to discuss its fiscal 2025 fourth quarter earnings [1] - The earnings results will be released on July 28, 2025, as previously announced [2] Access Information - To access the conference call by phone, attendees must register through a provided link to receive dial-in details [3] - The call will also be available via a live webcast on the Bank's website, with a slide presentation accompanying the broadcast [3] - A replay of the webcast will be available online for one year for those unable to listen live [3] Company Overview - Northeast Bank is headquartered in Portland, Maine, and offers personal and business banking services through seven branches [4] - The Bank's National Lending Division engages in purchasing and originating commercial loans nationwide [4] - ableBanking, a division of Northeast Bank, provides online savings products to consumers across the country [4]

Core Viewpoint - Northeast Bank is set to release its fiscal 2025 fourth quarter earnings results on July 28, 2025, followed by a conference call on July 31, 2025, at 10:00 a.m. ET [1] Group 1 - The conference call will be hosted by key executives including Rick Wayne (President and CEO), Richard Cohen (CFO), and Pat Dignan (COO) [1] - The call will be accessible via phone registration and a live webcast on the Bank's website [2] - A slide presentation will accompany the webcast, and a replay will be available online for one year [2] Group 2 - Northeast Bank is headquartered in Portland, Maine, and offers personal and business banking services through seven branches [3] - The Bank's National Lending Division engages in purchasing and originating commercial loans nationwide [3] - ableBanking, a division of Northeast Bank, provides online savings products to consumers across the country [3]

Group 1 - Northeast Bank (NASDAQ: NBN) has faced challenges in recent months, leading to a reaffirmation of its status as a 'hold' candidate [1] - The company previously had a bullish outlook, indicating potential for recovery or growth in the future [1] Group 2 - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and growth prospects [1] - Subscribers benefit from a model account with over 50 stocks, detailed cash flow analyses of exploration and production firms, and live sector discussions [2]

Financial Data and Key Metrics Changes - The company reported a loan volume of $414 million for the quarter, with $74.6 million in purchased loans and $218 million in originated loans, marking the second-best quarter for commercial real estate loan originations [5] - Net income was $18.7 million, which is $4.8 million higher than the same quarter last year but $3.7 million lower than the linked quarter [5][6] - Return on equity (ROE) was 16.47% and return on assets (ROA) was 1.86%, with tangible book value growing to $54.84 [6] - Net interest income decreased by $2.5 million from the linked quarter, primarily due to less accelerated income from loan payoffs and a shorter quarter [6][8] - Non-interest income increased to $6.6 million, up $700,000 from the linked quarter, mainly due to gains from the SBA business [8] Business Line Data and Key Metrics Changes - The SBA volume reached $121.3 million, up from approximately $100 million in the linked quarter, indicating significant growth in this segment [5][15] - The number of SBA loans originated increased from 330 to 1,069 year-over-year, showcasing substantial growth in loan units [12] - The company purchased 52 loans with gross balances of $79 million, with a purchase price of $75 million, reflecting ongoing activity in the purchase loan segment [16] Market Data and Key Metrics Changes - The company noted a cautious optimism in the real estate markets, with some investors on the sidelines while others view real estate as a good inflation hedge [19] - The SBA business is expected to face some delays in loan closings due to new documentation and collateral requirements, but long-term growth prospects remain strong [15][51] Company Strategy and Development Direction - The company aims to build its SBA business as an annuity, with a focus on long-term growth despite short-term regulatory changes [11][15] - Management expressed confidence in their ability to source quality loans and assess risks, emphasizing a patient investment approach [19] - The company is exploring new small business loan products and refining technology to enhance efficiency in the SBA segment [51][55] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of recent rate cuts on loan yields, particularly in the SBA portfolio, and indicated plans to implement risk-based pricing [27][24] - The company is optimistic about the pipeline for future loan origination, although external economic factors may introduce uncertainty [31][32] - Management highlighted the importance of maintaining liquidity and balance sheet capacity for future opportunities [58][60] Other Important Information - The tax rate increased to 36.7% compared to 33% in the prior quarter, influenced by changes in state tax laws [9][10] - The company has approximately $870 million in balance sheet capacity for loan pool purchases, which could increase with earnings or stock sales [45][49] Q&A Session Summary Question: What is the outlook for loan yields, particularly on the SBA side? - Management noted that SBA loans are currently priced at prime plus 2.75% and are considering risk-based pricing to address yield changes [24][25] Question: Was the increase in expenses a catch-up on comp accruals? - Management confirmed that the $1 million in incentive compensation was a catch-up for the third quarter, with expectations for similar accruals in the fourth quarter [29][30] Question: How does the pipeline look for loan growth? - Management indicated a full pipeline and expressed cautious optimism about origination volume, while acknowledging potential economic uncertainties [31][32] Question: What is the company's balance sheet capacity for loan pool purchases? - The company has a capacity of $870 million for loan pool purchases, which could increase with earnings [45][49] Question: How should we think about the long-term growth of the SBA business? - Management is very positive about the SBA business, expecting growth despite potential short-term delays due to regulatory changes [51][52]

Financial Data and Key Metrics Changes - The company reported a loan volume of $414 million for the quarter, with $74.6 million in purchased loans and $218 million in originated loans, marking the second-best quarter for commercial real estate loan originations [5][6] - Net income was $18.7 million, which is $4.8 million higher than the same quarter last year but $3.7 million lower than the linked quarter [5][6] - Return on equity (ROE) was 16.47% and return on assets (ROA) was 1.86%, with tangible book value growing to $54.84 [6][10] - Net interest income decreased by $2.5 million from the linked quarter, primarily due to less accelerated income from loan payoffs and a shorter quarter [6][9] Business Line Data and Key Metrics Changes - The SBA volume increased to $121.3 million from approximately $100 million in the linked quarter, with a significant rise in the number of loans originated [5][16] - The company originated 1,069 SBA loans in the quarter, up from 330 loans a year ago, indicating substantial growth in the SBA business [13][14] - Non-interest income was $6.6 million, $700,000 higher than the linked quarter, mainly due to SBA gains [9] Market Data and Key Metrics Changes - The company noted a cautious optimism in the real estate markets, with some investors on the sidelines while others view real estate as a good inflation hedge [20] - The SBA has revised regulations, which may impact the speed of loan closures but is viewed positively from a credit perspective [16][20] Company Strategy and Development Direction - The company aims to build its SBA business as an annuity and is optimistic about future growth despite regulatory changes that may slow down the immediate ramp-up [12][53] - The company is focused on maintaining a strong pipeline and is prepared to take advantage of market opportunities, especially in uncertain economic conditions [20][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of the core business despite a decrease in income compared to the linked quarter, attributing it to non-recurring items [12] - The company is patient in its investment approach and is confident in its ability to source good loans while assessing risks effectively [20] Other Important Information - The tax rate increased to 36.7% from 33% in the prior quarter due to recurring charges and adjustments related to state tax liabilities [10][11] - The company has a balance sheet capacity for loan pool purchases of $870 million, which could increase as more income is earned [48][51] Q&A Session Summary Question: What is the outlook for loan yields, particularly on the SBA side? - Management noted that all SBA loans are currently priced at prime plus 2.75% and will consider risk-based pricing for smaller loans [25][26] Question: Was this quarter a catch-up on comp accruals, and what should be expected going forward? - The comp was partly a catch-up, with expectations for similar levels in the upcoming quarters [30][31] Question: How is the pipeline looking for loan growth? - The pipeline remains strong, but there are uncertainties in the economy that could impact origination volume [32][33] Question: What is the reason for the increase in the discount paid on purchases this quarter? - The discount is influenced by interest rate dynamics and should not be interpreted as a shift in market conditions [34][35] Question: What is the long-term outlook for the SBA business? - Management is very positive about the SBA program's growth potential, despite a potential short-term decline due to regulatory changes [52][54]

Financial Data and Key Metrics Changes - The company reported a loan volume of $414 million for the quarter, with $74.6 million in purchased loans and $218 million in originated loans, marking the second-best quarter for commercial real estate loan originations [5][6] - Net income was $18.7 million, which is $4.8 million higher than the same quarter last year but $3.7 million lower than the linked quarter [5][6] - Return on equity (ROE) was 16.47% and return on assets (ROA) was 1.86%, with tangible book value growing to $54.84 [6][10] - Net interest income decreased by $2.5 million from the linked quarter, primarily due to less accelerated income from loan payoffs and a shorter quarter [6][8] Business Line Data and Key Metrics Changes - The SBA loan volume increased to $121.3 million from approximately $100 million in the linked quarter, with a significant rise in the number of loans originated from 330 to 1,069 [5][12][13] - Non-interest income rose to $6.6 million, primarily due to gains from the SBA business [8] - Non-interest expenses included $1 million in cash incentive compensation, which was not present in the linked quarter [9] Market Data and Key Metrics Changes - The company noted a cautious optimism in the real estate markets, with some investors on the sidelines while others view real estate as a good inflation hedge [19] - The SBA business is expected to face some delays in loan closings due to new documentation and collateral requirements, but long-term growth is anticipated [15][48] Company Strategy and Development Direction - The company aims to build its SBA business as an annuity and has seen substantial growth in this area, indicating a strong market demand [11][48] - The management is optimistic about future growth in the SBA sector despite short-term challenges due to regulatory changes [15][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to source good loans and assess risk, emphasizing a patient investment approach [19] - The company is prepared to take advantage of opportunities that may arise from current market uncertainties [19] Other Important Information - The tax rate increased to 36.7% from 33% in the prior quarter, influenced by changes in Massachusetts tax law and adjustments in state tax liabilities [9][10] - The company has approximately $870 million in balance sheet capacity for loan pool purchases, which could increase with earnings or stock sales [45][46] Q&A Session Summary Question: Regarding loan yields and outlook for the SBA portfolio - Management acknowledged a drop in SBA loan yields due to recent rate cuts and indicated plans to implement risk-based pricing [22][24][28] Question: On expenses and future expectations - The increase in expenses was partly a catch-up on compensation accruals, with expectations for similar levels in the upcoming quarters [29][30] Question: Loan growth outlook and pipeline strength - The company reported a strong pipeline and expressed cautious optimism about origination volumes despite economic uncertainties [31][32] Question: Discount on loan purchases and market dynamics - Management clarified that the discount on loan purchases is influenced by interest rates and should not be interpreted as a shift in market dynamics [33][34] Question: Long-term outlook for the SBA business - Management is bullish about the SBA program's long-term growth potential, despite potential short-term delays due to regulatory changes [47][50]

Core Points - Northeast Bank will release its fiscal 2025 third quarter earnings results on April 29, 2025 [1] - A conference call will be held on April 30, 2025, at 10:00 a.m. ET, hosted by key executives [1] - The conference call will be accessible via phone and live webcast, with a slide presentation accompanying the webcast [2] Company Overview - Northeast Bank is headquartered in Portland, Maine, and offers personal and business banking services through seven branches [3] - The bank's National Lending Division engages in purchasing and originating commercial loans nationwide [3] - ableBanking, a division of Northeast Bank, provides online savings products to consumers across the country [3]