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- **Strong Q1 Financials**: Net income of $22.5 million, NIM of 4.59%, and EPS of $2.67 reflect solid performance despite SBA rule changes.
- **Loan Growth Momentum**: Purchased $152.7 million in loans and originated $134 million, with a record pipeline for future quarters.
- **SBA Recovery Potential**: Post-government reopening, SBA originations expected to rebound, supported by a new insured loan product.
- **Cost Management**: Professional fees increased temporarily, but the bank maintained strong capital ratios and disciplined expense control.
- **CFO Transition Smooth**: New CFO and controller positions filled with internal candidates, ensuring continuity and stability.

**【CEO Summary Section】**
- **Q1 2026 Financial Highlights**: Net income of $22.5 million, NIM of 4.59%, ROE of 17.64%, ROA of 2.13%, and EPS of $2.67. Tangible book value was $59.98 per share.
- **Loan Activity**: Purchased $152.7 million in loans (UPB) at an invested amount of $144.6 million, the second-largest purchase quarter in 3 years. Originations reached $134 million, with a robust pipeline for future growth.
- **SBA Performance**: Funded $42 million in SBA loans, sold $53 million, with gains declining to $4.1 million from $8.2 million due to SBA rule changes. The pipeline remains strong, but government shutdowns temporarily halted originations.
- **Asset Quality**: Purchased loan book increased by $31 million, while originated loans decreased by $39 million. Allowance for loan losses decreased due to purchase accounting.

**【CFO Financial Commentary】**
- **Financial Results**: Pre-provision net interest income of $48.2 million, down from $59.4 million in the prior quarter due to higher cash balances and transactional income variability. Provision for loan losses was a credit of $435,000.
- **Expense Management**: Professional fees increased due to temporary staff and legal expenses related to new products. The bank maintained strong capital ratios (Tier 1 leverage at 12.21%).
- **Tax Rate**: Effective tax rate decreased due to state law changes (Massachusetts and California) and one-time tax benefits from stock vesting. Future rate expected to stabilize at 31-32%.

**【Q&A Highlights】**
- **SBA Recovery**: Government shutdown delayed SBA originations, but activity ramped up in October. Post-reopening, the bank expects to resume sales and funding, with a new insured loan product generating $10 million in closes.
- **Lender Finance Risk**: Emphasized rigorous underwriting and monitoring for lender finance loans, with low LTVs and robust collateral checks. No material stress observed in the portfolio.
- **CFO Transition**: Richard Cohen's departure was amicable, with a strong bench (e.g., Santino Delmolino as new CFO) ensuring continuity.
- **Payoffs and Growth**: High payoffs ($122 million) in Q1 due to declining rates and strategic portfolio reduction. Pipeline for purchases and originations remains healthy, supporting future growth.

Northeast Bank (NBN) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NBN

NBN fundamentals

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