FY 2022 Q2
Investor Call
January 27, 2022
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 the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although the Bank believes that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Bank's control. The Bank's actual results could differ materially from those projected in the forward-looking statements as a result of, among
other factors, the ongoing disruption due to the COVID-19 pandemic and measures taken to contain its spread on our employees,
customers, business operations, credit quality, financial position, liquidity and results of operations; changes in employment levels, general business and economic conditions on a national basis and in the local markets in which the Bank operates, including changes which adversely affect borrowers' ability to service and repay our loans; changes in customer behavior due to political, business and economic conditions or legislative or regulatory initiatives; turbulence in the capital and debt markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balances and mix of loans and deposits; changes in interest rates and real estate values; changes in loan collectability, increases in defaults and charge-off rates;
decreases in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating increased
borrowing to fund loans and investments; changing government regulation; competitive pressures from other financial institutions; changes in legislation or regulation and accounting principles, policies and guidelines; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; the risk that the Bank may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Bank's financial statements will become impaired; reputational risk relating to its participation in the Paycheck Protection Program and other pandemic- related legislative and regulatory initiatives and programs; changes in assumptions used in making such forward-looking
statements; and the other risks and uncertainties detailed in the Bank's Annual Report on Form 10-K and updated by Quarterly
Reports on Form 10-Q and other filings submitted to the Federal Deposit Insurance Corporation. These statements speak only as of the date of this release and the Bank does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.
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Financial Highlights
Q2 FY22 | YTD FY22 | ||
Total Loan Volume | $260.6 million | $397.0 million | |
National Lending: | |||
$92.1 million invested on $93.4 million of UPB | (1) | $127.5 million invested on $130.4 million of | |
Purchased Loans | UPB(1) | ||
(98.7% purchase price) | (97.8% purchase price) | ||
Originated Loans(2) | $168.4 million | $262.9 million | |
Weighted Average Rate as of 12/31/2021(3) | 5.86% | 5.86% | |
Correspondent Fee Income | $6.0 million | $13.9 million | |
Average Cost of Deposits | 0.36% | 0.38% | |
Net Interest Margin | 5.24% | 4.99% | |
Net Interest Margin excluding PPP and Collection | 6.44% | 6.22% | |
Account(4) | |||
Purchased Loan Return(5) | 8.96% | 9.07% | |
Share Repurchases(6) | 353,590 at $33.94 | 455,901 at $33.04 | |
Net Income | $11.4 million | $21.3 million | |
EPS (Diluted) | $1.42 | $2.63 | |
Return on Equity | 18.77% | 17.75% | |
Return on Assets | 2.86% | 2.63% | |
- Unpaid principal balance.
- National Lending originations during Q2 and YTD FY22 were 92% and 90% variable rate, respectively, all of which were Prime-rate based.
- Q2 and YTD FY22 National Lending originations had a weighted average floor rate of 5.86% and 5.87%, respectively.
- NIM excluding PPP and Collection Account for Q2 and YTD FY22 excludes PPP loan interest income of $2 thousand and $13 thousand, respectively, and interest income on short-term investments of $73 thousand and $157 thousand, respectively, average PPP loan balances of $628 thousand and $1.0 million, respectively, and average short-term investments balance related to PPP collection account of $287.7 million
and $311.0 million, respectively.
(5) Purchased loan return for Q2 and YTD FY22 included $2.6 million and $5.6 million of transactional income, respectively. | 3 |
(6) From the inception of the repurchase program, the Bank has purchased 3,473,316 shares at $14.99. | |
Q2 FY'22 Correspondent Fee Income Summary
Income Summary | |||||
Income Source | Amount Recognized | ||||
Dollars in thousands | |||||
Correspondent Fee | $1,087 | ||||
Amortization of Purchased Accrued Interest | 1,614 | ||||
Earned Net Servicing Interest | 3,340 | ||||
Total Correspondent Fee Income | $6,041 | ||||
Correspondent Fee Summary | |||||
PPP Loans Purchased by | Purchased Accrued | (2) | |||
Quarter | Loan Source | Correspondent Fee | Interest(1) | Total | |
Dollars in thousands | |||||
Q4 FY 2020 | $1,272,900 | $2,891 | $688 | $3,579 | |
Q1 FY 2021 | 2,112,100 | 5,348 | 2,804 | 8,152 | |
Q2 FY 2021 | 1,333,500 | 495 | 3,766 | 4,261 | |
Q3 FY 2021 | 2,141,900 | 0 | 598 | 598 | |
Q4 FY 2021 | 4,371,000 | 171 | 2,703 | 2,874 | |
Q1 FY 2022 | 6,300 | 0 | 1 | 1 | |
Q2 FY 2022 | 0 | 0 | 0 | 0 | |
Total | $11,237,700(3) | $8,905 | $10,560 | $19,465 | |
Less amounts recognized in Q2 FY | N/A | 1,087 | 1,614 | 2,701 | |
2022 | |||||
Income Recognized - To Date | N/A | $5,168 | $4,579 | $9,747 | |
Remainder to be Recognized | N/A | $2,650 | $4,367 | $7,017 |
- Northeast Bank's share
(2) | Expected to be recognized into income over approximate life of loans | 4 |
(3) | Loan Source's ending PPP loan balance was $4.64 billion as of December 31, 2021. | |
Correspondent Activity Summary
Correspondent Activity by Round
Round 1 | Round 2 | Total | |
In thousands | |||
$ Purchased | $5,086,941 | $6,150,759 | $11,237,700 |
$ Paid off/Forgiven | (4,731,124) | (1,867,778) | (6,598,902) |
$ Remaining | $355,816 | $4,282,982 | $4,638,798 |
% Remaining | 7% | 70% | 41% |
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Northeast Bank published this content on 27 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2022 22:08:25 UTC.