Northeast Bank NBN Q2 2025 Earnings Transcript

Financial Performance - The company achieved a record net interest income of $45.6 million for the quarter, with tangible book value increasing by $4.49 or 9% since September 30 [1] - Net income reached $22.4 million, marking a record quarter for earnings when excluding significant income from the sale of PPP loans in Q3 of fiscal 2021 [2] - Loan volume for the quarter was $361 million, including $14 million invested in purchase loans, with total originations amounting to $246 million [3] Loan Activity - The company originated $100.3 million in SBA loans, with $64.5 million sold, generating a gain of $5.6 million [2] - The average size of SBA loans closed was $110,000, with a weighted average interest rate of 10.85% [17] - In the national real estate lending program, the company closed $246 million in loans, with an average balance of $8.2 million and a weighted average loan-to-value (LTV) of just over 50% [18] Asset Quality - The ratio of non-performing loans to total loans decreased to 84 basis points from 106 basis points in the previous quarter [7] - Non-performing assets declined from $37 million to $31 million, a reduction of approximately 16% [7] Liquidity and Capital - On-balance sheet liquidity improved to $430 million, up from $379 million as of September [12] - The company's leverage ratio was 11.2% and total capital ratio was 13.9% at the end of the quarter, indicating a healthy capital position [13] Market Outlook - The company remains optimistic about the loan purchasing market, with a significant volume of opportunities expected in 2025 [16][38] - There is a large pipeline for SBA lending, with expectations for continued growth due to improved technology and marketing efforts from their lending service provider, NEWITY [18][27]