Oct 27, 2026 earnings call — Loan originations and purchase returns
Northeast Bank reported quarterly net income of $29 million.
Revenue $0.1B (est $0.1B) · EPS $3.42 (est $3.41)
Key quotes
"The total return on our purchased loans in the first quarter was 9.11% or $62 million, which includes $5.9 million of recovery on credit discount on loans we purchased."
"For the quarter, it was our fourth consecutive quarter of record originations in our National Lending business, $258.6 million."
"That's going to equate to somewhere around 15 basis points of increase in our cost of funds next quarter."
Analyst Q&A 2
loan payoffs and margin recovery
Q (Damon DelMonte · KBW): The analyst asked whether the pace of payoffs on purchased loans will slow and if that would let margins rebound toward prior levels. He also asked whether the insurance-recovery fee income will recur and about the outlook for loan growth.
A: Santino said he is hopeful paydowns slow but admitted it is hard to forecast and that rising rates should help. He said margin could rebound somewhat because recovering interest-rate marks at payoff can bump margin and the purchased portfolios have healthy yields. Rick said results are lumpy quarter-to-quarter and should be looked at on a yearly basis; Santino said the insurance recovery will occur in future quarters but nets to zero with the provision; Pat noted more direct loans have longer duration, which helps with payoffs.
"One is, depending on the rate mark that's on a given loan that prepays, you could see a bump in margin depending on any level of interest rate mark that we're able to recover at the time of payoff." — Santino Delmolino (CFO)
rising rates effect on purchases and costs
Q (Bader · Piper Sandler): They asked how higher rates and possible hikes could change purchase opportunities and transaction volume over the next 12 months. They also asked, if the bank could deploy 1.6 billion, how much extra expense that would create and what operating leverage that implies.
A: Pat said rising rates historically increase purchase opportunities because banks often do fixed-rate lending funded short and non-bank competitors face higher funding costs; he also said rising rates slow refinancing out of the portfolio. Rick said the bank has tremendous operating leverage and that the added operating cost to put on another 1.6 billion of loans would be very small versus the net interest income those loans would generate.
"I would expect the operating additional cost to do that, it won't be zero, but it's going to be very small to put on another 1.6 billion of loans." — Rick Wayne (CEO)