PORTLAND, Maine, March 4, 2021 (GLOBE NEWSWIRE) – Northeast Bank (the “Bank”) (NASDAQ: NBN), a full-service bank based in Maine, today announced that it has entered into an agreement to Loan Purchase and Sale (the “Loan Sale Agreement”) with The Loan Source, Inc. (“Loan Source”) to sell to Loan Source all loans issued by the Bank under the current cycle of the loan program. Small Business Administration (“SBA”) paycheck protection (“PPP”). From January 11, 2021 to February 26, 2021, the Bank had received SBA approval for $ 1.84 billion in PPP loans, of which $ 1.65 billion was financed. After amortizing previously unamortized PPP loan origination costs and other costs, the Bank expects to realize a pre-tax gain of approximately $ 26.0 million, or an after-tax gain of approximately 18.2 million. million dollars, in the current fiscal quarter on the sale of $ 1.65 billion. PPP financed loans.
In accordance with the Correspondent Agreement previously disclosed by the Bank (“Correspondent Agreement”) with Loan Source and ACAP SME, LLC (“ACAP”), the Bank will continue to act as correspondent for Loan Source in connection with Loan Source’s pledge of PPP loans to the Federal Reserve Bank of Minneapolis, under the Paycheck Protection Program (“PPPLF”) liquidity facility and ACAP will continue to act as a provider of loan services for PPP loans promised by Loan Source. Under the correspondent agreement, the Bank receives correspondent fees of up to 50% of the net management income earned on loans pledged by Loan Source. Until February 26, 2021, Loan Source had purchased $ 4.72 billion in PPP loan principal, which will increase from the $ 1.65 billion to be purchased from the Bank and any additional PPP loans sold to Loan Source, as shown above.
The Bank continues to provide PPP loans, which it will sell to Loan Source as well as the remaining PPP loans approved and not financed by the SBA under the terms of the loan sale agreement until the closing of the PPPLF. However, the Bank does not expect the volume of PPP loan initiations to continue at the same pace as previously closed PPP loan initiations.
“At the end of the first round of the PPP program in August 2020, we, along with our lending service provider ACAP, expected Congress to recognize the need and enact legislation to provide additional PPP funds,” said Rick Wayne, President and CEO. “During the period from the end of the first cycle until the adoption of the Law on Economic Aid on December 27, 2020, we made significant investments in marketing to generate more leads and technologies to to help us with our in-depth subscription process. These investments have paid off well. On February 28, 2021, the SBA reported that Northeast Bank was the eleventh largest PPP Round 2 lender by dollar volume. Mr. Wayne continued, “We are proud to continue to help so many small businesses and employees across the country.”
About Northeast Bank
Northeast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We provide personal and commercial banking services to the Maine market through nine branches. Our national loan division purchases and grants commercial loans nationally. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information about Northeast Bank can be found at www.northeastbank.com.
Statements in this press release 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 as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although the Bank believes that these forward-looking statements are based on reasonable estimates and assumptions, they do not constitute guarantees 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, as they are subject to risks, uncertainties and other important factors which, in some cases, are beyond the control of the Bank. The Bank’s actual results could differ materially from those projected in the forward-looking statements due, among other factors, to the negative impacts and disruptions of the COVID-19 pandemic and the measures taken to contain its spread to our employees, customers and our activities. operations, credit quality, financial condition, liquidity and results of operations; the duration and extent of the economic contraction resulting from the COVID-19 pandemic; the continued deterioration in employment levels, general business and economic conditions nationally and in the local markets in which the Bank operates, including changes that affect the ability of borrowers to service and to repay our loans; changes in customer behavior as a result of changing political, business and economic conditions or legislative or regulatory initiatives; turbulence in the capital and debt markets; changes in interest rates and real estate values; increasing defaults and write-off rates; decrease in the value of securities and other assets, adequacy of loan loss reserves or levels of deposits requiring increased borrowing to finance loans and investments; changes in government regulations; competitive pressures from other financial institutions; operational risks, including, but not limited to cybersecurity incidents, fraud, natural disasters and future pandemics; the risk that the Bank will fail to implement its business strategy; the risk that intangible assets recorded in the Bank’s financial statements will depreciate; changes in assumptions used to make such forward-looking statements; and other risks and uncertainties detailed in the Bank’s Annual Report on Form 10-K and updated by our Quarterly Reports on Form 10-Q and other documents submitted to the Federal Deposit Insurance Corporation. These statements are only valid as of the date of this press release and the Bank does 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 unforeseen events. .
For more information:
Jean-Pierre Lapointe, Chief Financial Officer
Northeast Bank, 27 Pearl Street, Portland, ME 04101
207.786.3245 ext. 3220