NORTHEAST BANCORP /ME/ - FORM 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 3, 2011

Commission File No. 1-14588

NORTHEAST BANCORP

(Exact name of Registrant as specified in its Charter)


Maine		01-0425066
(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)

500 Canal Street Lewiston, Maine		04240
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (207) 786-3245

Former name or former address, if changed since last Report: N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

¨	Pre-commencement to communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 8.01.

Other Events.

On April 30, 2012, Northeast Bancorp (“Northeast” or the “Company”) (NASDAQ: NBN), a Maine-based full-service financial services company and parent of Northeast Bank (the “Bank”), reported net income of $168 thousand, or $0.02 per diluted common share, for the quarter ended March 31, 2012. For the nine months ended March 31, 2012, the Company earned net income of $1.1 million, or $0.23 per diluted common share.

The Board of Directors has declared a cash dividend of $0.09 per share, payable on May 29, 2012 to shareholders of record as of May 14, 2012.

Results for the three and nine months ended March 31, 2012 include net income from discontinued operations of $14 thousand and $1.1 million, respectively. As announced in the first quarter of fiscal year 2012, the assets of Northeast’s insurance agency division were acquired by local agencies in two separate transactions. The sale yielded a pre-tax gain of $1.6 million and increased the Company’s tangible capital by $8.4 million. At March 31, 2012, the Company’s tangible book value per share was $15.94, compared to $13.58 at June 30, 2011.

During the nine month period ended March 31, 2012, the Company purchased loans totaling $59.8 million, and has since purchased an additional $14.6 million in the month ended April 30, 2012. The total return realized on this portfolio, including transactional income, was 13.9% for the quarter and 15.2% for the nine months ended March 31, 2012.

Quarterly results included the following items of significance:

The Company’s net interest margin (“NIM”) was 3.44% for the quarter ended March 31, 2012. The Company’s NIM has benefited from growth in the Company’s purchased loan portfolio, which increased to $56.9 million at March 31, 2012 from $637 thousand at June 30, 2011. The yield on the purchased loan portfolio was 12.2% and 14.2% for the three and nine months ended March 31, 2012, respectively, compared to yields of 5.8% and 6.0% on the originated loan portfolio, respectively, for the same periods. The following summarizes interest income and related yields recognized on the Company’s purchased and originated loans.


	Interest Income and Yield on Loans
	Three Months Ended March 31, 2012							Nine Months Ended March 31, 2012
	Average Balance		Interest Income		Yield			Average Balance		Interest Income		Yield
	(Dollars in thousands)
Loans - originated	$	297,100	$	4,298		5.82	%	$	305,701	$	13,751		5.99	%
Loans - purchased		51,677		1,572		12.23	%		29,315		3,130		14.21	%

Total	$	348,777	$	5,870		6.77	%	$	335,016	$	16,881		6.71	%

The yield on purchased loans was increased by unscheduled loan payoffs during the three and nine month periods ended March 31, 2012, which resulted in immediate recognition of the prepaid loans’ discount in interest income. The Company also realized $219 thousand related to sales of purchased loans during the quarter ended March 31, 2012. The following table details the “total return” on purchased loans, based on regularly scheduled interest and accretion, accelerated accretion, and other income recognized upon unscheduled loan payoffs or sales.


	Total Return on Purchased Loans
	Three Months Ended					Nine Months Ended
	March 31, 2012					March 31, 2012
	Income		Return (1)			Income		Return (1)
	(Dollars in thousands)
Regularly scheduled interest and accretion	$	1,298		10.10	%	$	2,374		10.78	%
Transactional income:
Gains on loan sales		219		1.70	%		219		0.99	%
Accelerated accretion and fees recognized on loan payoffs		274		2.13	%		756		3.43	%

Total	$	1,791		13.94	%	$	3,349		15.20	%

(1)	The total return on purchased loan represents interest and noninterest income recorded during the period divided by the average purchased loan balance, on an annualized basis.

A net gain on sale of available-for-sale investment securities of $731 thousand.

Increased noninterest expenses, including staffing and infrastructure costs associated with the Company’s investment in its new loan purchasing and deposit initiatives, to provide for future growth. The quarter also included certain non-recurring expenses, including compensation costs aggregating $201 thousand, largely the result of terminating the Company’s self-insured employee benefits program and replacing it with a third-party insurance program. The Company also incurred $207 thousand in nonrecurring professional fees, principally consulting costs associated with new information technology initiatives and nonrecurring legal expense.

Total assets declined by $1.4 million or 0.2% to $595.0 million at March 31, 2012, compared to total assets of $596.4 million at June 30, 2011. The principal components of the change in the balance sheet during the nine months ended March 31, 2012 were as follows:

A $31.3 million, or 13.4%, decrease in cash and investments, principally as a result of growth in loans during the period. At quarter end, the Company continues to maintain a level of balance sheet liquidity that is intended, in part, for future purchases of commercial loans.

Loan growth of $35.9 million, or 11.6%, principally due to growth of $56.3 million in loans purchased by the Company’s Loan Acquisition and Servicing Group, offset in part by amortization and payoffs from the originated loan portfolio of $20.4 million;

A $4.6 million, or 3.7%, reduction in borrowed funds, resulting primarily from the $2.1 million repayment of insurance agency debt in connection with the sale of the Company’s insurance agency division assets;

A $2.6 million, or 0.7%, increase in deposits. The Bank’s new affinity deposit program, ableBanking, recently launched its pilot program, and at quarter end had raised $1.1 million of new deposits.

An $8.4 million, or 63.8%, decrease in intangible assets, resulting primarily from the sale of insurance agency division assets.

During the nine months ended March 31, 2012, nonperforming assets decreased by 22.8% to $6.1 million or 1.0% of total assets, from $7.9 million, or 1.3%, of total assets at June 30, 2011, and loans past due 30 days or more as a percentage of total loans decreased to 2.1% at March 31, 2012 from 2.4% at June 30, 2011.

At March 31, 2012, the Company’s Tier 1 leverage ratio was 11.9%, an increase from 10.4% at June 30, 2011 and the total risk-based capital ratio was 19.5%, an increase from 19.0% at June 30, 2011.

About Northeast Bancorp

Northeast Bancorp (NASDAQ: NBN) is the holding company for Northeast Bank, a full service bank headquartered in Lewiston, Maine. Northeast Bank derives its income from a combination of traditional banking services as well as from its Loan Acquisition and Servicing Group, which purchases performing commercial loans for the Bank’s portfolio. ableBanking, a division of Northeast Bank, which launched its pilot in the first quarter of calendar 2012, offers savings products to consumers online, through affinity partnerships with non-profit organizations. Northeast Bank operates ten full-service branches, four investment centers and three loan production offices that serve individuals and businesses located in western and south-central Maine and southern New Hampshire. Information regarding Northeast Bank can be found on its website at www.northeastbank.com.

On December 29, 2010, FHB Formation LLC (“FHB”) merged with and into Northeast, with Northeast as the surviving company. The Company applied the acquisition method of accounting, as described in Accounting Standards Codification 805, Business Combinations, to this transaction, which represents an acquisition by FHB of Northeast, with Northeast as the surviving company. As a result, the Company’s financial statements from the periods prior to the transaction date are not directly comparable to the financial statements for periods subsequent to the transaction date. To make this distinction, the Company has labeled balances and results of operations prior to the transaction date as “Predecessor Company” and balances and results of operations for periods subsequent to the transaction date as “Successor Company.” The lack of comparability arises from the assets and liabilities having new accounting bases as a result of recording them at their fair values as of the transaction date rather than at historical cost basis. To denote this lack of comparability, the Company has placed a heavy black line between the Successor Company and Predecessor Company columns in its consolidated financial statements and, where applicable, in this discussion.

Non-GAAP Financial Measure

In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this Report contains certain non-GAAP financial measures. Northeast’s management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

Statements in this Report 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 Northeast 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 Company’s control. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other factors, changes in interest rates and real estate values; competitive pressures from other financial institutions; the effects of a continuing deterioration in general economic conditions on a national basis or in the local markets in which the Company operates, including changes which adversely affect borrowers’ ability to service and repay our loans; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of loan loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; increasing government regulation, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; changes in the rules of participation for the Troubled Asset Relief Program Capital Purchase Program promulgated by the U.S. Department of the Treasury under the Emergency Economic Stabilization Act of 2008, which may be changed unilaterally and restrictively by legislative or regulatory actions; establishment of a consumer financial protection bureau with broad authority to implement new consumer protection regulations; the risk that we may not be successful in the implementation of our business strategy; the risk that intangibles recorded in the Company’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K and updated by the Company’s Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission. These statements speak only as of the date of this release and we do 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.

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except share and per share data)


	March 31, 2012			June 30, 2011
Assets
Cash and due from banks	$	2,609		$	3,227
Short-term investments		62,271			80,704

Total cash and cash equivalents		64,880			83,931

Available-for-sale securities, at fair value		136,730			148,962
Loans held for sale		6,354			5,176

Loans
Commercial real estate		164,060			117,761
Residential real estate		140,226			145,477
Construction		1,497			2,015
Commercial business		21,635			22,225
Consumer		18,359			22,435

Total loans		345,777			309,913
Less: Allowance for loan losses		748			437

Loans, net		345,029			309,476

Premises and equipment, net		8,918			8,271
Repossessed collateral, net		915			690
Accrued interest receivable		1,659			1,244
Federal Home Loan Bank stock, at cost		4,602			4,889
Federal Reserve Bank stock, at cost		871			871
Intangible assets, net		4,749			13,133
Bank owned life insurance		14,171			13,794
Other assets		6,074			5,956

Total assets	$	594,952		$	596,393

Liabilities and Stockholders’ Equity
Liabilities
Deposits
Demand	$	41,613		$	48,215
Savings and interest checking		88,860			89,804
Money market		45,589			48,695
Time deposits		227,673			214,404

Total deposits		403,735			401,118

Federal Home Loan Bank advances		43,567			43,922
Structured repurchase agreements		66,636			68,008
Short-term borrowings		1,836			2,515
Junior subordinated debentures issued to affiliated trusts		8,066			7,957
Capital lease obligation		1,953			2,075
Other borrowings		—			2,229
Other liabilities		4,289			3,615

Total liabilities		530,082			531,439

Commitments and contingencies

Stockholders’ equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; 4,227 shares issued and outstanding at March 31, 2012 and June 30, 2011; liquidation preference of $1,000 per share		4			4
Voting common stock, $1.00 par value, 13,500,000 shares authorized; 3,312,173 issued and outstanding at March 31, 2012 and June 30, 2011		3,312			3,312
Non-voting common stock, $1.00 par value, 1,500,000 shares authorized 195,351 issued and outstanding at March 31, 2012 and June 30, 2011		195			195
Warrants to purchase common stock		406			406
Additional paid-in capital		50,129			49,700
Unearned restricted stock		(136	)		(163	)
Retained earnings		11,601			11,726
Accumulated other comprehensive loss		(641	)		(226	)

Total stockholders’ equity		64,870			64,954

Total liabilities and stockholders’ equity	$	594,952		$	596,393

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except share and per share data)


	Successor Company (1)											Predecessor Company (2)
	Three Months Ended		Nine Months Ended			Three Months Ended			93 Days Ended			181 Days Ended
	March 31, 2012		March 31, 2012			March 31, 2011			March 31, 2011			December 28, 2010
Interest and dividend income:
Interest on loans	$	5,870	$	16,881		$	5,649		$	5,845		$	11,210
Interest and dividends on available-for-sale securities		422		1,602			910			954			3,111
Dividends on regulatory stock		15		48			12			13			18
Other interest and dividend income		45		128			33			34			39

Total interest and dividend income		6,352		18,659			6,604			6,846			14,378

Interest expense:
Deposits		875		2,548			774			816			2,796
Federal Home Loan Bank advances		256		772			284			299			918
Structured repurchase agreements		247		744			249			272			1,392
Short-term borrowings		7		15			60			67			376
Junior subordinated debentures issued to affiliated trusts		188		556			174			180			340
Obligation under capital lease agreements		25		76			26			28			55

Total interest expense		1,598		4,711			1,567			1,662			5,877

Net interest and dividend income before provision for loan losses		4,754		13,948			5,037			5,184			8,501
Provision for loan losses		100		634			49			49			912

Net interest and dividend income after provision for loan losses		4,654		13,314			4,988			5,135			7,589

Noninterest income:
Fees for other services to customers		326		1,036			310			323			698
Net securities gains		731		1,111			47			47			17
Gain on sales of loans held for sale		634		2,060			490			539			1,867
Gain (loss) on sales of portfolio loans		219		422			(195	)		(195	)		—
Investment commissions		720		2,111			709			734			1,174
Bank-owned life insurance income		124		377			126			131			250
Bargain purchase gain		—		—			296			15,216			—
Other noninterest income		13		120			144			152			225

Total noninterest income		2,767		7,237			1,927			16,947			4,231

Noninterest expense:
Salaries and employee benefits		4,093		11,539			3,958			4,097			4,949
Occupancy and equipment expense		970		2,735			773			795			1,352
Professional fees		539		1,231			374			383			509
Data processing fees		260		823			274			283			521
Marketing expense		142		487			216			220			230
FDIC insurance premiums		125		364			170			175			346
Intangible asset amortization		262		935			306			306			—
Merger expense		—		—			132			3,182			94
Other noninterest expense		861		2,668			893			997			1,454

Total noninterest expense		7,252		20,782			7,096			10,438			9,455

Income (loss) from continuing operations before income tax expense (benefit)		169		(231	)		(181	)		11,644			2,365
Income tax expense (benefit)		15		(209	)		(217	)		(233	)		698

Net income (loss) from continuing operations	$	154	$	(22	)	$	36		$	11,877		$	1,667

Discontinued operations:
Income from discontinued operations	$	—	$	186		$	184		$	176		$	94
Gain on sale of discontinued operations		22		1,551			—			—			105
Income tax expense		8		600			64			62			70

Net income from discontinued operations		14		1,137			120			114			129

Net income	$	168	$	1,115		$	156		$	11,991		$	1,796

Net income available to common stockholders	$	70	$	821		$	58		$	11,891		$	1,677

Weighted-average shares outstanding:
Basic		3,494,498		3,494,498			3,492,498			3,492,498			2,330,197
Diluted		3,512,273		3,494,498			3,559,873			3,560,278			2,354,385
Earnings per common share:
Basic:
Income (loss) from continuing operations	$	0.02	$	(0.09	)	$	(0.01	)	$	3.36		$	0.66
Income from discontinued operations		0.00		0.32			0.03			0.03			0.06

Net income	$	0.02	$	0.23		$	0.02		$	3.39		$	0.72

Diluted:
Income (loss) from continuing operations	$	0.02	$	(0.09	)	$	(0.01	)	$	3.30		$	0.66
Income from discontinued operations		0.00		0.32			0.03			0.03			0.05

Net income	$	0.02	$	0.23		$	0.02		$	3.33		$	0.71

(1)	“Successor Company” means Northeast Bancorp and its subsidiary after the closing of the merger with FHB Formation LLC on December 29, 2010.

(2)	“Predecessor Company” means Northeast Bancorp and its subsidiary prior to the closing of the merger with FHB Formation LLC on December 29, 2010.

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)


	Successor Company (1)
	Three Months Ended March 31, 2012							Nine Months Ended March 31, 2012
			Interest		Average					Interest		Average
	Average		Income/		Yield/			Average		Income/		Yield/
	Balance		Expense		Rate			Balance		Expense		Rate
Assets:
Interest-earning assets:
Investment securities (3)	$	132,681	$	422		1.28	%	$	139,834	$	1,602		1.52	%
Loans (4) (5)		348,777		5,870		6.77	%		335,016		16,881		6.71	%
Regulatory stock		5,697		15		1.06	%		5,740		48		1.11	%
Short-term investments (6)		67,887		45		0.27	%		71,243		128		0.24	%

Total interest-earning assets		555,042		6,352		4.60	%		551,833		18,659		4.50	%

Cash and due from banks		2,881							2,927
Other non-interest earning assets		35,651							37,143

Total assets	$	593,574						$	591,903

Liabilities & Stockholders’ Equity:
Interest-bearing liabilities:
NOW accounts	$	54,242	$	48		0.36	%	$	55,080	$	170		0.41	%
Money market accounts		43,602		38		0.35	%		44,613		130		0.39	%
Savings accounts		32,923		12		0.15	%		32,907		56		0.23	%
Time deposits		227,182		777		1.38	%		221,127		2,192		1.32	%

Total interest-bearing deposits		357,949		875		0.98	%		353,727		2,548		0.96	%
Short-term borrowings (7)		1,321		7		2.13	%		1,030		15		1.94	%
Borrowed funds		112,468		528		1.89	%		113,109		1,592		1.87	%
Junior subordinated debentures		8,047		188		9.40	%		8,009		556		9.24	%

Total interest-bearing liabilities		479,785		1,598		1.34	%		475,875		4,711		1.32	%

Interest-bearing liabilities of discontinued operations (8)		—							380

Non-interest bearing liabilities:
Demand deposits and escrow accounts		44,249							45,771
Other liabilities		3,972							4,267

Total liabilities		528,006							526,293
Stockholders’ equity		65,568							65,610

Total liabilities and stockholders’ equity	$	593,574						$	591,903

Net interest income			$	4,754						$	13,948


Interest rate spread						3.26	%						3.18	%
Net interest margin (9)						3.44	%						3.36	%

(1)	“Successor Company” means Northeast Bancorp and its subsidiary after the closing of the merger with FHB Formation LLC on December 29, 2010.

(2)	“Predecessor Company” means Northeast Bancorp and its subsidiary prior to the closing of the merger with FHB Formation LLC on December 29, 2010 .

(3)	Interest income and yield are stated on a fully tax-equivalent basis using a 30.84% tax rate.

(4)	Includes Loans held for sale.

(5)	Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.

(6)	Short term investments include FHLB overnight deposits and other interest-bearing deposits.

(7)	Short term borrowings include securities sold under repurchase agreements and sweep accounts.

(8)	The average balance of borrowings associated with discontinued operations has been excluded from interest expense, interest rate spread, and net interest margin.

(9)	Net interest margin is calculated as net interest income divided by total interest-earning assets.

NORTHEAST BANCORP AND SUBSIDIARY

CONSOLIDATED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(Unaudited)

(Dollars in thousands)


	Successor Company (1)							Predecessor Company (2)
	Three Months Ended March 31, 2011							181 Days Ended December 28, 2010
	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate
Assets:
Interest-earning assets:
Investment securities (3)	$	143,482	$	910		2.67	%	$	161,894	$	3,182		3.96	%
Loans (4) (5)		357,376		5,649		6.41	%		385,286		11,210		5.87	%
Regulatory stock		5,486		12		0.89	%		5,486		18		0.66	%
Short-term investments (6)		58,683		33		0.23	%		39,212		39		0.20	%

Total interest-earning assets		565,027		6,604		4.76	%		591,878		14,449		4.92	%

Cash and due from banks		3,423							3,340
Other non-interest earning assets		44,046							34,724

Total assets	$	612,496						$	629,942

Liabilities & Stockholders’ Equity:
Interest-bearing liabilities:
NOW accounts	$	55,994	$	79		0.57	%	$	53,780	$	183		0.69	%
Money market accounts		54,041		70		0.53	%		55,955		213		0.77	%
Savings accounts		35,638		34		0.39	%		38,303		99		0.52	%
Time deposits		198,172		591		1.21	%		196,318		2,301		2.36	%

Total interest-bearing deposits		343,845		774		0.91	%		344,356		2,796		1.64	%
Short-term borrowings (7)		34,822		60		0.70	%		53,873		376		1.41	%
Borrowed funds		117,152		559		1.94	%		117,688		2,365		4.05	%
Junior subordinated debentures		7,902		174		8.93	%		16,496		340		4.16	%

Total interest-bearing liabilities		503,721		1,567		1.26	%		532,413		5,877		2.23	%

Interest-bearing liabilities of discontinued operations (8)		2,134							2,462

Non-interest bearing liabilities:
Demand deposits and escrow accounts		37,379							37,941
Other liabilities		4,444							5,576

Total liabilities		547,678							578,392
Stockholders’ equity		64,818							51,550

Total liabilities and stockholders’ equity	$	612,496						$	629,942

Net interest income			$	5,037						$	8,572

Interest rate spread						3.50	%						2.69	%
Net interest margin (9)						3.62	%						2.92	%

(1)	“Successor Company” means Northeast Bancorp and its subsidiary after the closing of the merger with FHB Formation LLC on December 29, 2010.

(2)	“Predecessor Company” means Northeast Bancorp and its subsidiary prior to the closing of the merger with FHB Formation LLC on December 29, 2010.

(3)	Interest income and yield are stated on a fully tax-equivalent basis using a 30.84 % tax rate.

(4)	Includes Loans held for sale.

(5)	Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.

(6)	Short term investments include FHLB overnight deposits and other interest-bearing deposits.

(7)	Short term borrowings include securities sold under repurchase agreements and sweep accounts.

(8)	The average balance of borrowings associated with discontinued operations has been excluded from interest expense, interest rate spread, and net interest margin.

(9)	Net interest margin is calculated as net interest income divided by total interest-earning assets.

NORTHEAST BANCORP AND SUBSIDIARY

SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS AND OTHER DATA

(Unaudited)

(Dollars in thousands, except share and per share data)


	Successor Company (1)
	Three Months Ended March 31, 2012			Nine Months Ended March 31, 2012
Net interest income	$	4,754		$	13,948
Net income	$	168		$	1,115

Weighted average common shares outstanding:
Basic		3,494,498			3,494,498
Diluted		3,512,273			3,494,498
Earnings per common share:
Basic	$	0.02		$	0.23
Diluted	$	0.02		$	0.23
Dividends per common share	$	0.09		$	0.27

Return on average assets		0.11	%		0.25	%
Return on average equity		1.03	%		2.26	%
Net interest rate spread (2)		3.26	%		3.18	%
Net interest margin (3)		3.44	%		3.36	%
Efficiency ratio (4)		96.42	%		98.10	%
Noninterest expense to average total assets		4.91	%		4.67	%
Average interest-earning assets to average interest-bearing liabilities		115.69	%		115.96	%



	Successor Company (1)
	March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
Nonperforming loans:
Originated portfolio:
Residential real estate	$	3,067		$	3,264		$	2,733		$	2,195
Commercial real estate		442			1,998			2,797			3,601
Construction		0			0			121			121
Home equity		255			182			205			205
Commercial business		1,108			1,119			1,224			559
Consumer		309			329			356			527

		5,181			6,892			7,436			7,208
Purchased portfolio:
Residential real estate		0			0			0			0
Commercial real estate		0			0			0			0
Commercial business		0			0			0			0

		0			0			0			0

Total nonperforming loans		5,181			6,892			7,436			7,208
Repossessed collateral		915			837			463			690

Total nonperforming assets	$	6,096		$	7,729		$	7,899		$	7,898

Past due loans to total loans		2.06	%		2.29	%		2.20	%		2.41	%
Ratio of nonperforming loans to total loans		1.50	%		1.99	%		2.35	%		2.33	%
Ratio of nonperforming assets to total assets		1.02	%		1.30	%		1.35	%		1.32	%
Allowance for loan losses to total loans		0.22	%		0.21	%		0.22	%		0.14	%
Allowance for loan losses to nonperforming loans		14.44	%		10.69	%		9.55	%		6.06	%

Commercial real estate loans to risk-based capital (5)		238.25	%		236.88	%		194.08	%		200.53	%
Net loans to core deposits (6)		88.65	%		91.34	%		84.75	%		84.40	%
Purchased loans to total loans		16.16	%		14.83	%		3.90	%		0.21	%
Equity to total assets		10.90	%		11.08	%		11.27	%		10.89	%
Tier 1 leverage capital ratio		11.85	%		11.86	%		11.85	%		10.35	%
Total risk-based capital ratio		19.49	%		19.28	%		21.02	%		18.99	%

Total stockholders’ equity	$	64,870		$	65,900		$	66,188		$	64,954
Less: Preferred stock		(4,227	)		(4,227	)		(4,227	)		(4,227	)

Common stockholders’ equity		60,643			61,673			61,961			60,727
Less: Intangible assets		(4,749	)		(5,012	)		(5,348	)		(13,133	)

Tangible common stockholders’ equity	$	55,894		$	56,661		$	56,613		$	47,594

Book value per common share	$	17.29		$	17.58		$	17.66		$	17.33
Tangible book value per share (7)	$	15.94		$	16.15		$	16.14		$	13.58

(1)	“Successor Company” means Northeast Bancorp and its subsidiary after the closing of the merger with FHB Formation LLC on December 2 9, 2010.

(2)	The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(3)	The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

(4)	The efficiency ratio represents non-interest expense divided by the sum of net interest income (before the loan loss provision) plus non-interest income.

(5)	For purposes of calculating this ratio, commercial real estate includes all those loans defined as such by regulatory guidance, including all land development and construction loans.

(6)	Core deposits includes all non-maturity deposits and maturity deposits less than $2 50 thousand. Net loans includes loans held-for-sale.

(7)	Tangible book value per share represents total stockholders’ equity less the sum of preferred stock and intangible assets divided by common shares outstanding.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.


NORTHEAST BANCORP

By:		/s/ Claire S. Bean
Name:		Claire S. Bean
Title:		Chief Financial Officer

Date: May 3, 2012

NORTHEAST BANCORP /ME/ - FORM 8-K - May 3, 2012

NORTHEAST BANCORP /ME/ Reports