Northeast Bank(US:NBN)2020-10-31 18:56Financial Data and Key Metrics Changes - The company reported earnings of $7.8 million, or $0.94 per diluted share, with a return on equity of 18.5% and a return on assets of 2.49% [6] - Loan volume for the quarter was just under $76 million, including $23 million of triple key loans originated [7] - The net interest margin was 4.95%, and 5% excluding Triple P [7] - The allowance for loan losses increased from $5.3 million (57 basis points) to $9.5 million (1.02% of total loans) year-over-year [29] Business Line Data and Key Metrics Changes - The company originated $40.9 million in loans in its national lending group, with $4.6 million in purchased loans [7][15] - Correspondent fee income was $4.7 million, contributing to a total revenue increase of 20% year-over-year [34] - The deferment program provided $136.2 million in total deferments, with only $26.8 million still deferred at the end of September [12][13] Market Data and Key Metrics Changes - The company purchased $2.1 billion in loans for the quarter, bringing the total to $3.4 billion [8] - The average cost of deposits decreased from 1.84% to 1.19% year-over-year [32] - The company has $188 million of CDs maturing over the next two quarters, with a weighted average rate of 2.21% [32] Company Strategy and Development Direction - The company aims to increase its share of purchased loans over the next couple of years, with $80 million of purchased loans already under contract in October [20][51] - The management emphasized a conservative approach to lending, particularly in the current economic environment [16] - The company is focused on maintaining strong asset quality metrics, with non-performing assets remaining consistent [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's performance while working remotely and noted that the operational health of the company remains strong [5] - The management anticipates a significant volume of loans coming to market, with expectations of increased competition [51] - The company is prepared for potential economic volatility due to external factors such as the pandemic and upcoming elections [72] Other Important Information - The company has not engaged in stock buybacks during the last quarter but has a remaining capacity of 646,000 shares for buyback [69] - The management noted that the PPP loan program is expected to continue until December 31, 2020, depending on regulatory extensions [61] Q&A Session Summary Question: Clarification on loan source fees accounting - Management explained that correspondent fees and purchased accrued interest are recognized over approximately two years, depending on loan payoffs [41][43] Question: Update on the purchased loan market - Management indicated that while there is competition, they expect to see an increase in purchased loans on their balance sheet over the next couple of years [51][52] Question: Status of the PPP loan program - Management confirmed that the program is extended until December 31, 2020, and there is ongoing activity in the loan market [61][63]