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1. Company Snapshot

1.a. Company Description

Northeast Bank provides banking services to individual and corporate customers in Maine.The company's deposit products include demand deposit, NOW, money market, savings, certificate of deposit, and individual retirement accounts, as well as checking accounts.Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, such as term loans, lines of credit and equipment, and receivables financing; consumer loans comprising mobile home and overdraft, and deposit-secured loans; and small business administration loans.


In addition, the company offers telephone banking, online banking and bill payment, mobile banking, cash management, and remote deposit capture services, as well as debit and credit card, ATM, electronic transfer, and check services.It operates a network of nine branches in Western, Central, and Southern Maine.Northeast Bank was founded in 1872 and is headquartered in Portland, Maine.

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1.b. Last Insights on NBN

Northeast Bancorp's recent performance was positively driven by a significant increase in loan purchase volume, with approximately $525 million in commercial real estate loans purchased or agreed upon since September 30, 2025. The company's Q1 2026 earnings call highlighted net income of $22.5 million, or $2.67 per diluted common share, exceeding prior year's $17.1 million. Institutional investors, including American Century Companies Inc. and Geode Capital Management LLC, have also shown confidence by increasing their stakes. A dividend declaration further underscores the company's stability.

1.c. Company Highlights

2. Northeast Bank's Q1 FY2026 Earnings: A Strong Quarter Despite SBA Headwinds

Northeast Bank reported a robust Q1 FY2026, with net income of $22.5 million, driven by a net interest margin (NIM) of 4.59% and diluted earnings per share of $2.67, slightly below estimates of $2.68. The bank's return on equity stood at 17.64%, while return on assets was 2.13%. The bank's tangible book value was $59.98 per share. Pre-provision net interest income was $48.2 million, down from $59.4 million in the prior quarter, mainly due to a decrease in transactional income from loan payoffs.

Publication Date: Nov -21

📋 Highlights
  • Strong Financial Performance:: Q1 FY2026 net income reached $22.5 million with a net interest margin (NIM) of 4.59%, ROE of 17.64%, and ROA of 2.13%.
  • Loan Growth Momentum:: Loan purchases totaled $152.7 million (UPB) and $134 million in originations, supported by a robust pipeline and disciplined credit underwriting.
  • SBA Business Impact:: SBA loan gains fell to $4.1 million (vs. $8.2 million prior quarter) due to government shutdown delays, but the bank anticipates recovery post-reopening.
  • Capital Strength:: Tier 1 leverage ratio stood at 12.21%, with tangible book value near $60/share and a $435,000 credit to the provision for loan losses.
  • CFO Transition & Margin Outlook:: CFO Richard Cohen departs, succeeded by Santino Delmolino; $207 million in purchased loan discounts could impact future margins unpredictably.

Loan Purchases and Originations

The bank demonstrated strong loan purchasing activity, with $152.7 million in unpaid principal balance (UPB) and $144.6 million in invested amount. Originations were $134 million, with a robust pipeline in place. However, the SBA business was impacted by rule changes, resulting in $42 million in fundings and $53 million in loan sales, with a gain of $4.1 million, down from $8.2 million in the previous quarter. As Richard Cohen, the outgoing CFO, noted, "We expect the SBA business to ramp up once the government reopens, but the timing is uncertain."

Asset Quality and Capital Position

Asset quality remained strong, with a flat loan book and a decrease in the allowance for loan losses. The bank's capital position is robust, with Tier 1 leverage at 12.21% and a tangible book value of nearly $60 per share. The bank's "trust but verify" approach to lender financing, as described by Patrick, has contributed to its strong asset quality.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) ratio of approximately 1.37, the bank's valuation appears reasonable. Analysts estimate revenue growth at 9.2% for next year. The bank's NIM was strong at 4.6%, and the effective tax rate for the rest of the year is expected to be around 31% to 32%. The bank's leadership change, with Santino Delmolino succeeding Richard Cohen as CFO, is expected to be seamless, given the bank's deep bench.

3. NewsRoom

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Northeast Bancorp Q2 Earnings Call Highlights

Jan -28

Source: defenseworld.net

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Northeast Bank (NBN) Q2 2026 Earnings Call Transcript

Jan -27

Source: seekingalpha.com

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Northeast Bank Reports Second Quarter Results and Declares Dividend

Jan -26

Source: globenewswire.com

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Northeast Bank's Surge Doesn't Necessitate A Downgrade

Jan -23

Source: seekingalpha.com

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Northeast Bank Announces Dates for Fiscal 2026 Second Quarter Earnings Results and Conference Call

Jan -22

Source: globenewswire.com

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Landmark Bancorp (NASDAQ:LARK) & Northeast Bancorp (NASDAQ:NBN) Head to Head Contrast

Dec -28

Source: defenseworld.net

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Head to Head Review: Northeast Bancorp (NASDAQ:NBN) vs. Waterstone Financial (NASDAQ:WSBF)

Dec -27

Source: defenseworld.net

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Critical Analysis: Northeast Bancorp (NASDAQ:NBN) vs. Suruga Bank (OTCMKTS:SUGBY)

Dec -26

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.93%)

6. Segments

Banking and Related Activities

Expected Growth: 5.93%

Northeast Bank's 5.93% growth in Banking and Related Activities is driven by increasing demand for commercial loans, strategic expansion into new markets, and improved operational efficiency. Additionally, the bank's focus on digital transformation and customer-centric approach have contributed to the growth. Furthermore, a favorable interest rate environment and a strong risk management framework have also supported the bank's growth momentum.

7. Detailed Products

Personal Checking

A checking account designed for individuals, offering convenient banking services and online access.

Business Checking

A checking account designed for businesses, offering cash management tools and online banking services.

Mortgage Loans

A range of mortgage loan options for homebuyers and homeowners, including fixed-rate and adjustable-rate loans.

Home Equity Loans

A loan that allows homeowners to borrow against the equity in their home, with fixed or variable rates.

Credit Cards

A range of credit card options with rewards, cashback, and low interest rates.

Online Banking

A secure online platform for managing accounts, paying bills, and transferring funds.

Mobile Banking

A mobile app for banking on-the-go, with deposit, transfer, and payment capabilities.

Commercial Loans

A range of loan options for businesses, including term loans, lines of credit, and construction loans.

Treasury Management

A suite of cash management services for businesses, including account reconciliation and wire transfers.

8. Northeast Bank's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Northeast Bank is moderate due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is high due to the ease of switching banks and the availability of online comparison tools.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the bank's strong relationships with its suppliers and the lack of alternative suppliers.

Threat Of New Entrants

The threat of new entrants is moderate due to the regulatory barriers to entry and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the banking industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 66.33%
Debt Cost 9.73%
Equity Weight 33.67%
Equity Cost 9.73%
WACC 9.73%
Leverage 197.04%

11. Quality Control: Northeast Bank passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
SB Financial Group

A-Score: 5.9/10

Value: 8.1

Growth: 3.9

Quality: 7.1

Yield: 6.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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NBT Bancorp

A-Score: 5.8/10

Value: 6.2

Growth: 5.0

Quality: 7.6

Yield: 6.0

Momentum: 2.0

Volatility: 8.0

1-Year Total Return ->

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Lake Shore Bancorp

A-Score: 5.8/10

Value: 5.3

Growth: 4.1

Quality: 7.0

Yield: 5.0

Momentum: 9.5

Volatility: 3.7

1-Year Total Return ->

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Sound Financial Bancorp

A-Score: 5.4/10

Value: 6.0

Growth: 3.9

Quality: 6.9

Yield: 4.0

Momentum: 1.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Northeast Bank

A-Score: 5.2/10

Value: 6.2

Growth: 8.8

Quality: 7.4

Yield: 0.0

Momentum: 3.0

Volatility: 6.0

1-Year Total Return ->

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First Bancshares

A-Score: 5.1/10

Value: 4.9

Growth: 4.8

Quality: 6.9

Yield: 3.0

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

124.37$

Current Price

124.37$

Potential

-0.00%

Expected Cash-Flows