Northeast Bancorp Q2 Earnings Call Highlights

Financial Performance - The bank reported net income of $20.7 million, or $2.47 per diluted share, for the quarter, with year-to-date net income at $43.3 million, or $5.14 per diluted share [1] - Return on average assets was 1.87% for the quarter and 2.0% year to date, while return on average equity was 15.6% for the quarter and 16.6% year to date [1] Asset and Loan Growth - Total assets ended the quarter at $4.95 billion, with loans at $4.4 billion, an increase from $3.7 billion as of September 30 [2] - The volume of loans added to the balance sheet was just under $900 million for the quarter, including $575 million of purchased commercial real estate loans and a record $252 million in originated loans at a weighted average rate of 7.6% [3][7] Net Interest Income and Margin - Net interest income was $48.8 million for the quarter and $97.0 million year to date, with a net interest margin of 4.49%, down from 4.59% in the previous quarter [6][8] - Management noted that approximately $1.25 billion of CDs maturing at a weighted average rate of 4.05% could support margin improvement going forward [6][7] SBA Program Impact - A government shutdown and changes to the SBA program reduced SBA-related gains by approximately $6 million, equating to about $0.50 of after-tax earnings per share [5][10] - SBA originations ran about $40 million in the quarter, with a projected run rate of ~$20 million per month [5][11] Credit Quality and Capital Position - Asset quality remained strong, with delinquencies and non-accruals relatively flat quarter over quarter; the allowance for credit losses increased from $46.7 million to $63.8 million [15] - The Tier 1 leverage ratio was 12.2%, and tangible book value ended the quarter at $62.65 per share, supporting just under $1 billion of loan capacity [16]