Northeast Bank (NASDAQ:NBN) Q4 2022 Earnings Conference Call July 26, 2022 10:00 AM ET

Company Participants

Rick Wayne - President and Chief Executive Officer

Jean-Pierre Lapointe - Chief Financial Officer

Pat Dignan - Executive Vice President and Chief Credit Officer

Conference Call Participants

Alexander Twerdahl - Piper Sandler

Operator

Welcome to the Northeast Bank Fourth Quarter Fiscal Year 2022 Earnings Call. My name is Jenny. I’ll be your operator for today’s call. 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, the conference is being recorded.

I will now turn the call over to Rick Wayne. You may begin.

Rick Wayne

Good morning and thank you all for joining us today. As mentioned, I am Rick Wayne, the Chief Executive Officer of Northeast Bank. And with me on the call are; JP Lapointe, our Chief Financial Officer; and Pat Dignan, our Chief Credit Officer and Executive Vice President. After my comments, JP, Pat and I will be happy to answer your questions.

Let me first turn to Page 3 of the Investor Deck that was uploaded on our website last night, and I want to comment on a few items listed on Page 3. First, the – for the quarter, we reported $10.3 million of net income or $1.35 per diluted share. Our return on equity was 16.55% and our return on assets was 2.68%. And a big driver of our income for the quarter were our National Lending loan volume and, in particular, the activity run, our originated loans.

For the quarter, we originated $172.9 million of loans and for the year, $587.8 million of loans, you know, that’s a record for us both quarter on the quarter and the – and for the year by a – for the year in particular, by a substantial amount. And I also want to point out on those loans that 93% or 94% of our originated loan – loans are variable tied to prime. And, of course, in a rising interest rate environment that is helpful to have variable rate loans.

I just want to comment on something about that, which was, I think requires some explanation. Because our yield on our loan book for the quarter, originated loans was 7%, and was 6.9% for the prior quarter. And so it only went up 10 basis points and one might wonder why and with loans that are tied to prime why they only went up 10 basis points, and I will answer that question for you. And that is that – and that we – our loans are structured so that if there’s a payoff before maturity, you know, each loan, we negotiate a minimum amount of interest that the borrower asked to pay. And we had more loans payoff early in the prior quarter than we did in this quarter.