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]

Financial Data and Key Metrics Changes - The company reported a record net income of $22.4 million for the quarter, excluding significant income from the sale of PPP loans in Q3 2021 [11] - Base net interest income reached a record of $45.6 million for the quarter [12] - Tangible book value increased by $4.49 or 9% since September 30, with a total increase of $5.95 or 13% over the six-month period [12][13] - The loan capacity based on capital was $856 million at the end of December [14] Business Line Data and Key Metrics Changes - Loan volume for the quarter was $361 million, with $246 million in originations and $100.3 million in SBA loans originated [9][10] - The company originated 917 SBA loans with an average size of $110,000 and weighted average interest rates of 10.85% [29] - Purchase loans included 70 loans with gross balances of $14.8 million, purchased at a price of $14 million [26] Market Data and Key Metrics Changes - The average cost of deposits decreased to 4.15% from 4.34% in the prior quarter, benefiting from a rate-down environment [19] - On-balance sheet liquidity improved to $430 million, up from $379 million as of September [22] - Off-balance sheet capacity increased to over $1 billion, enhancing the ability to add loans [23] Company Strategy and Development Direction - The company aims to grow responsibly by leveraging its liquidity and capital to add quality assets at favorable rates [21] - There is optimism for loan purchasing in 2025, with a focus on both originations and purchases to maintain a balanced portfolio [28][80] - The company is actively monitoring market conditions and opportunities for larger loan purchases due to ongoing M&A activity in the industry [76][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the SBA lending business, noting a large pipeline and improved technology from their lending service provider [49][51] - The company is prepared for potential market disruptions and is optimistic about the volume of loan purchasing opportunities [79] - Management highlighted the importance of maintaining a healthy capital ratio while pursuing growth [24] Other Important Information - The ratio of non-performing loans to total loans declined to 84 basis points from 106 basis points [15] - Non-performing assets decreased from $37 million to $31 million, a reduction of about 16% [15][16] - The weighted average seasoning of the loan portfolio is 5.2 years, with 83% of purchased loans originated before 2021 [16] Q&A Session Summary Question: Impact of cash balances on net interest margin - Management indicated that cash balances are managed to ensure liquidity and do not directly impact net interest margin, which is driven by the composition of assets and liabilities [40][41] Question: Future volumes in the SBA business - Management is optimistic about growth in the SBA business, with a large pipeline and improved technology supporting continued volume increases [47][51] Question: Increase in FDIC costs - The increase in FDIC costs was primarily due to balance sheet growth [54] Question: Average price of shares issued - The average price for the 280,000 shares issued this quarter was $98.36 [58] Question: Outlook for expenses - Expected expenses for the upcoming quarters are projected to be between $18 million and $19 million [62] Question: Exposure to California wildfires - The company has around $1 billion in real estate in California, with no damage reported from wildfires, and all properties are insured [84][86]

| | Q2 FY25 | YTD FY25 | | --- | --- | --- | | Total Loan Volume | $361.1 million | $1.3 billion | | National Lending: | | | | | $14.0 million invested on $14.8 million of | $746.9 million invested on $822.5 million of | | Purchased Loans | UPB(1) | UPB(1) | | | (94.8% purchase price) | (90.8% purchase price) | | Originated Loans(2) | $246.4 million | $373.3 million | | Weighted Average Rate as of 12/31/2024(3) | 8.18% | 8.27% | | SBA Loans Originated | $100.3 million | $182.7 million | | SBA Loans Sold | $ ...

Core Insights - Northeast Bank reported a significant increase in net income for the quarter ended December 31, 2024, reaching $22.4 million, or $2.74 per diluted common share, compared to $14.1 million, or $1.85 per diluted common share for the same quarter in 2023 [1][8] - The bank's total assets grew to $4.08 billion, marking a 30.4% increase from $3.13 billion as of June 30, 2024 [3][21] - The bank's National Lending Division achieved record originations of $246.4 million during the quarter, contributing to a total originated and purchased volume of $260.4 million [3][4] Financial Performance - Net interest and dividend income before provision for credit losses increased by $11.5 million to $48.5 million for the quarter ended December 31, 2024, compared to $37.0 million for the same period in 2023 [8][9] - Noninterest income rose by $4.5 million, primarily driven by a $5.0 million increase in gains on the sale of SBA loans [11] - Noninterest expense increased by $3.4 million, attributed to higher salaries and employee benefits, loan expenses, and FDIC insurance expenses [12][16] Loan Portfolio and Capital - The loan portfolio saw substantial growth, with total loans increasing by 31.32% to $3.63 billion as of December 31, 2024, from $2.76 billion as of June 30, 2024 [4][21] - The bank's Tier 1 leverage capital ratio was reported at 11.2%, down from 12.3% at June 30, 2024, due to increased risk-weighted assets [14] - Deposits increased by $811.9 million, or 34.7%, primarily due to a significant rise in time deposits [6][7] Asset Quality - Nonperforming assets totaled $31.3 million, or 0.77% of total assets, a decrease from $28.3 million, or 0.90% of total assets, as of June 30, 2024 [13] - Past due loans amounted to $30.5 million, or 0.85% of total loans, compared to $26.3 million, or 0.95% of total loans, as of June 30, 2024 [13] Future Outlook - The bank has initiated an additional at-the-market offering of up to $75.0 million of its voting common stock to raise capital as needed [3] - A conference call is scheduled for February 7, 2025, to discuss the second quarter earnings and business outlook [15]

Core Viewpoint - Northeast Bank will release its fiscal 2025 second quarter earnings results on February 6, 2025, followed by a conference call on February 7, 2025, at 10:00 a.m. ET [1] Group 1: Earnings Release and Conference Call - The earnings results will be announced on February 6, 2025 [1] - A conference call will be held on February 7, 2025, hosted by key executives including the President and CEO, CFO, and COO [1] Group 2: Accessing the Conference Call - Participants can register for the conference call via a provided link and will receive dial-in details [2] - The call will be available through a live webcast on the Bank's website, with a slide presentation accompanying the session [2] - A replay of the conference call will be accessible online for one year [2] Group 3: Company Overview - Northeast Bank is a full-service bank based in Portland, Maine, offering personal and business banking services through seven branches [3] - The National Lending Division of Northeast Bank 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]

Core Viewpoint - Northeast Bank will release its fiscal 2025 second quarter earnings results on February 6, 2025, followed by a conference call on February 7, 2025, at 10:00 a.m. ET [1] Group 1: Earnings Release and Conference Call - The earnings results will be announced on February 6, 2025 [1] - A conference call will take place on February 7, 2025, hosted by key executives including the President and CEO, CFO, and COO [1] Group 2: Accessing the Conference Call - Participants can register for the conference call via a provided link and will receive dial-in details [2] - The call will be available through a live webcast on the Bank's website, with a slide presentation accompanying the session [2] - A replay of the conference call will be accessible online for one year [2] Group 3: Company Overview - Northeast Bank is a full-service bank based in Portland, Maine, offering personal and business banking services through seven branches [3] - The National Lending Division of Northeast Bank 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]

Company Overview - Northeast Bank (NASDAQ: NBN) is a small bank based in Portland, Maine, operating a network of seven branches [2] - The bank maintains a community banking business model while primarily focusing on serving the local market [2] Business Model - The main business model of Northeast Bank is centered around community banking, which emphasizes local market engagement [2] Research Focus - Independent banking research emphasizes financials, deep value, special situations, and financial arbitrage [3] - The approach is agnostic and apolitical, aiming to identify durable and uncorrelated cash flows that perform well in both inflationary and deflationary environments [3]

FY25 Q1 Investor Call October 30, 2024 Forward-Looking Statement Statements in this presentation that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although the Bank believes that these forward-looking statements are based on reasonable es ...