Northeast Bank · NASDAQ:NBN
Northeast Bank — Q2 FY2024 Earnings Presentation
25 slides from Northeast Bank's earnings presentation, Jan 31, 2024
Slide 1: FY24 Q2 Investor Call
FY24 Q2 Investor Call January 31, 2024
Slide 2: Forward-Looking Statement
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 th
Slide 3: Financial Highlights
Financial Highlights Q2 FY24 YTD FY24 Total Loan Volume $263.4 million $393.6 million National Lending: $186.1 million invested on $208.0 million of $238.5 million invested on $271.7 million of Purchased Loans UPB(1) UPB(1) (89.5% purchase price) (87.8% purchase price) Originated Loans(2) $63.5 mill
Slide 4: Loan Portfolio Summary
Loan Portfolio Summary Loan Portfolio # of Loans Total Balance Average Balance WA LTV Dollars in thousands National Lending Division Purchased Loans (1) 3,475 $1,646,756 $474 46%(4) Direct Originated Loans (2) 102 475,053 4,657 55% Lender Finance Loans (2) 93 435,159 4,679 44% SBA and USDA Loans (3)
Slide 5: National Lending Portfolio Roll Forward
National Lending Portfolio Roll Forward: Trailing Three Months $3,000 $186.1 $55.8 $2,474.6 $63.5 $111.5 $2,556.9 $2,500 $2,000 Millions $1,500 $1,000 $500 $0 Balance at 9/30/23 Originations Originated Run-off Purchases Purchased Run-Off Balance at (1) (1) 12/31/2023 (1) Run-off includes scheduled a
Slide 6: National Lending Activity By Trailing Quarters
National Lending Activity By Trailing 5 Quarters $1,200 $998.5 $1,000 $800 Millions $600 $400 $174.0 $186.1 $200 $117.1 $84.2 $48.8 $52.3$68.0 $63.5 $21.5 $0 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Purchased Originated 6
Slide 7: National Lending Loan Portfolio Statistics as of December 31, 2023
National Lending Loan Portfolio Statistics as of December 31, 2023 (1) Investment Size $15+ Million 15% $0-$2 Million 31% $10-15 Million 8% Collateral State (44 States) All Other States $6-$10 Million OR 1% 18% 16% $2-$6 Million TX 3% 30% WA 3% Collateral Type NJ 5% NY 34% Retail(2) Lender 17% Finan
Slide 8: Asset Quality Metrics
Asset Quality Metrics NPAs & NPLs Classified Commercial Loans(1) 1.50% $30.0 $27.0 1.18% 1.04% $25.0 0.99% 1.00% 0.82% $20.0 $16.0 Millions 0.69% $14.7 0.62% 0.61% $15.0 0.55% $11.9 0.50% $10.0 $5.0 0.00% $0.0 6/30/22 6/30/23 9/30/23 12/31/23 6/30/22 6/30/23 9/30/23 12/31/23 NPAs/Assets NPLs/Loans A
Slide 9: Nonperforming Assets Turnover – Quarter ended December 31, 2023
Nonperforming Assets Turnover – Quarter ended December 31, 2023 Nonperforming FMV of REO Total Notes Loans Collateral (1) (Dollars in Thousands) September 30, 2023 Balance: $17,449 $0 $17,449 NPL Additions: Cash collateral account holding proceeds from sale of seventeen multifamily properties #1 10,
Slide 10: Allowance Allocation
Allowance Allocation Total Loan ALL / Total ALL / Total Total ALL / Total Total Reserves Total Reserves Balances at Loans at Loans at Reserves at Loans at Loan Segment at December at September December 31, December 31, September 30, December December 31, 31, 2023 30, 2023 2023 2023 2023 31, 2022 202
Slide 11: National Lending Portfolio by Collateral Type
National Lending Portfolio by Collateral Type Total National Collateral Type Direct Originated Lender Finance Purchased Lending Dollars in thousands Balance WA LTV (1) Balance WA LTV (1) Balance WA LTV (2) Balance WA LTV 1-4 Family $24,712 59% $17,235 41% $4,154 41% $46,100 51% Hospitality 112,311 5
Slide 12: National Lending Portfolio — Weighted Average LTV By Bucket
National Lending Portfolio — Weighted Average LTV By Bucket WA LTV National Lending Portfolio <40% 40-49% 50-59% 60-69% 70-79% >=80% Total Dollars in thousands Direct Originated Loans (1) $65,090 $94,291 $146,268 $86,768 $59,911 $22,725 $475,053 Lender Finance Loans (1) 176,071 99,100 84,401 56,685
Slide 13: National Lending Purchased Portfolio — Further Analysis
National Lending Purchased Portfolio — Further Analysis Portfolio Origination Year Dollars in thousands Pre-2013 2013-2018 2019 and later Total Current Basis $263,509 $799,596 $583,651 $1,646,756 # of Loans 827 2,087 562 3,476 % of Portfolio 16% 49% 35% 100% Original Principal Balance $615,079 $1,29
Slide 14: National Lending Originated Portfolio — Interest Reserve Analysis
National Lending Originated Portfolio — Interest Reserve Analysis Lender Finance % with Interest WA Dollars in thousands Balance Interest Reserve WA Advance WA LTV(2) Reserves Duration Rate(1) Total Lender Finance Loans $435,159 61% 44% Lender Finance Loans with Interest 379,851 87% 5.3 Months Reser
Slide 15: Quarterly Cost of Deposits
Quarterly Cost of Deposits 4.5% 4.23% 4.16% 4.0% 3.91% 3.59% 3.5% 3.23% 3.0% 2.5% 2.28% 2.0% Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Average Cost of Deposits by Quarter Cost of Deposits as of Quarter-end 15
Slide 16: Deposit Portfolio Changes
Deposit Portfolio Changes By Channels December 31, 2023 December 31, 2022 Net Change Dollars in thousands Balance WAR Mix Balance WAR Mix Balance % WAR Community Banking Banking Centers $778,478 3.25% 37% $562,755 0.86% 25% $215,723 38% 2.39% Government Banking 339,681 4.86% 16% 263,196 3.50% 12% 76
Slide 17: Deposit Portfolio and Interest Analysis
Deposit Portfolio and Interest Analysis 17
Slide 18: Deposit Mix By Trailing Quarter Ends
Deposit Mix By Trailing 5 Quarter Ends $2,600 Total Total Total Total Total $2,400 $2,235 $2,129 $1,937 $1,967 $2,129 $2,200 $1,078 $2,000 $1,011 $1,084 $919 $988 $1,800 $1,600 $1,400 Millions $1,200 $363 $339 $1,000 $353 $356 $354 $800 $794 $779 $600 $692 $625 $662 $400 $200 $0 Q2 FY23 Q3 FY23 Q4 F
Slide 19: Revenue and Noninterest Expense for Trailing Quarters
Revenue and Noninterest Expense for Trailing 5 Quarters $45 $40 $38.5 $35 $37.9 $35.3 $30 $33.4 $25 $30.1 Millions $20 $15 $16.4 $15.4 $15.7 $13.7 $13.8 $10 $5 $0 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Total Revenue(1) Noninterest Expense (1) Total Revenue includes net interest income before credit
Slide 20: Loan Performance & Average Loan Balance
Loan Performance & Average Loan Balance For Trailing 5 Quarters Loan Performance Average Loan Balance for Trailing 5 Quarters 10.5% 9.98% 9.80% 9.52% $3,000 Total Total Total Total Total 9.22% $1,723 $2,502 $2,509 $2,503 $2,544 9.0% 8.69% 9.04% 9.21% $2,500 8.48% $1,048 $1,014 $993 $1,039 7.5% 8.12%
Slide 21: Purchased Loan Investment Basis and Discount By Trailing Quarters
Purchased Loan Investment Basis and Discount By Trailing 5 Quarters Total UPB Total UPB Total UPB Total UPB Total UPB $1,673.2 $1,650.1 $1,667.9 $1,693.6 $1,831.2 $2,000 $1,800 $184.4 $23.3 $23.0 $22.9 $1,600 $166.3 $177.2 $166.5 $164.9 $1,400 $1,200 $1,000 Millions $800 $1,646.8 $1,483.6 $1,460.6 $
Slide 22: National Lending Portfolio — Q2 FY24 Return Summary
National Lending Portfolio — Q2 FY24 Return Summary(¹) Purchased Originated Total Regularly Scheduled Interest 8.57% 9.80% 9.04% & Accretion Accelerated Accretion, Interest, & Fees Recognized 0.64% 0.01% 0.40% on Loan Payoffs Total 9.21% 9.81% 9.44% (1) The total return on purchased loans represents
Slide 23: Loan Mix As of Trailing Quarter Ends
Loan Mix As of Trailing 5 Quarter Ends $3,000 Total Total Total Total Total $2,800 $2,505 $2,510 $2,520 $2,528 $2,611 $2,600 $2,400 $2,200 $2,000 $1,800 $1,484 $1,461 $1,480 $1,516 $1,647 $1,600 Millions $1,400 $1,200 $1,000 $800 $600 $995 (1) $964 $988 $958 $910 $400 $200 $0 $57 $54 $52 $54 $54 Q2
Slide 24: Net Income for Trailing Quarters
Net Income for Trailing 5 Quarters $16,000 $15,172 (1) $14,054 $14,000 $12,517 $12,086 $12,000 $11,298 $10,000 Thousands $8,000 $6,000 $4,000 $2,000 $0 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 (1) Net of a deferred tax asset write-down of $957 thousand due to a change in Massachusetts tax law regardi
Slide 25: Key Components of Income For Trailing Quarters
Key Components of Income For Trailing 5 Quarters Net Interest Income Noninterest Income Before Credit Loss Provision Total Total Total Total Total $1,301 $1,188 $1,112 $779 $1,466 $52 $1,400 $1,200 $570 $327 $207 $1,000 $618 Thousands $800 $228 $278 $92 $35 $600 $251 $844 $400 $648 $633 $627 $200 $4