Northeast Bank(US:NBN)2026-01-27 17:00Financial Data and Key Metrics Changes - The company reported net income of $20.7 million for the quarter, with diluted earnings per share of $2.47, down from previous quarters [9][13] - Return on average assets was 1.87% for the quarter and 2% year to date, while return on average equity was 15.6% for the quarter and 16.6% year to date [13] - Net interest margin (NIM) was 4.49%, down from 4.59% in the linked quarter, resulting in net interest income of $48.8 million for the quarter [14][15] Business Line Data and Key Metrics Changes - The company originated $252 million in loans during the quarter, marking a record for the bank, with a weighted average rate of origination of 7.6% [8][20] - SBA loan originations totaled $39.8 million, with $25 million sold for a gain of $2.1 million [9][16] - The small business insured loan product saw originations of $70.6 million during the quarter [9][22] Market Data and Key Metrics Changes - Total assets ended the quarter at $4.95 billion, with loans at $4.4 billion, up from $3.7 billion as of September 30 [13][14] - The company experienced a 40.3% deposit growth over a three-year period in its seven branches in Maine [5] Company Strategy and Development Direction - The company aims to grow its deposit base in Maine, which is generally less expensive and stickier than brokered deposits [31] - The current pipeline for loan origination is robust, with expectations of significant opportunities in the coming quarters, particularly in commercial real estate and small business lending [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the SBA activity was impacted by a government shutdown, but noted a positive trajectory in December and expectations for increased loan originations moving forward [16][22] - The company anticipates a higher loan book in subsequent quarters, which should lead to increased net interest income [11][12] Other Important Information - The allowance for credit losses increased from $46.7 million to $63.8 million during the quarter, reflecting the purchase loan activity [17] - Non-interest expense decreased to $20.8 million, attributed to lower professional fees and reduced loan acquisition costs [18] Q&A Session Summary Question: Did the company buy back stock in the fourth quarter? - The company did not buy back any stock; the decrease in share count was due to stock compensation activity [28] Question: Will net interest margin see a lift going forward? - Management indicated that a lift in net interest margin is expected due to downward liability repricing [30] Question: How does the company view its funding mix as it grows? - The company plans to continue using brokered deposits while also focusing on growing deposits in Maine [31] Question: What percentage of purchase loans does the company typically retain at maturity? - The company did not have the exact number but aims to retain many loans, especially when rates are higher [34] Question: Will there be a catch-up in SBA gain on sale income next quarter? - The company expects an increase in SBA loan volume and anticipates that gain on sale percentages will remain around 8%-9% [42][47] Question: How does the company see the growth of the insured small business product? - The company believes the run rate for the insured small business product is sustainable, with significant demand [48]