Northeast Bank (NASDAQ:NBN) Q2 2023 Earnings Conference Call January 26, 2023 10:00 AM ET

Company Participants

Rick Wayne - President and CEO

JP Lapointe - SVP and CFO

Conference Call Participants

Alex Twerdahl - Piper Sandler

Operator

Welcome to the Northeast Bank Second Quarter FY 2023 Earnings Call. My name is Kevin, and I'll be your operator for today's call. This call is being recorded.

With us from the bank is Rick Wayne, President and Chief Executive Officer; JP Lapointe, Chief Financial Officer; and Pat Dignan, Executive Vice President and Chief Operating Officer.

Yesterday, an investor presentation was uploaded to the bank's website, which will be referenced in this morning's call. The presentation can be accessed at the Investor Relations section of northeastbank.com under the Events and Presentations. You may find it helpful to download this investor presentation and follow along during the call. Also, this call will be available for rebroadcast on the website for future use.

At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded.

Please note that this presentation contains forward-looking statements about Northeast Bank. Forward-looking statements are based upon current expectations of Northeast Bank's management and are subject to risks and uncertainties. Actual results may differ materially from those discussed in the forward-looking statements. Northeast Bank does not undertake any obligation to update any forward-looking statements.

I will now turn the call over to Rick Wayne. Mr. Wayne, you may begin.

Rick Wayne

Thank you. Good morning, I am Rick Wayne, and with me are JP Lapointe, our Chief Financial Officer; and Pat Dignan, our Executive Vice President and Chief Credit Officer. After our presentation, we would, of course, be happy to entertain any questions that you might have.

I want to refer to the slides in my comments, starting on Slide 3. The financial highlights for the quarter were net income of $11.3 million, earnings per share of $1.54, return on equity of 17.5%, return on assets of 2.1%. Of course, the big news, which was included in our earnings release the last quarter was that soon after September 30 in this quarter, we purchased loans with UPB of $1.15 billion at a price of $998.5 million, which was an 86.6% investment on the purchase price.

We also -- in the quarter, we originated $174 million of loans. The weighted average yield on the originations was 8.72%, and we earned 8.48% on the entire book. On the purchased loans, we had a return of 8.69% and when you look at all of this compared to the prior quarter, I would note that in the -- a year ago, we had $6 million of correspondent fee income and only $600,000 in the current quarter, which is great because we're looking for ways to grow our loan book and replace the correspondent fee income, which we've done well.