Northeast Bancorp (NBN) AI Stock Analysis

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Northeast Bancorp

(NASDAQ:NBN)

75Outperform

Northeast Bancorp is performing well with strong financial metrics, particularly in profitability and cash flow generation. The recent earnings call presented significant achievements and improvements in asset quality and liquidity. While technical indicators suggest caution, the stock offers a reasonable valuation and a solid dividend yield, making it a potentially attractive opportunity for investors.

Northeast Bancorp (NBN) vs. S&P 500 (SPY)

Market Cap

$721.02M

Dividend Yield0.05%

Average Volume (3M)45.23K

Price to Earnings (P/E)10.5

Beta (1Y)0.90

Revenue Growth23.69%

EPS Growth21.19%

CountryUS

Employees194

SectorFinancial

Sector Strength76

IndustryBanks - Regional

Share Statistics

EPS (TTM)8.59

Shares Outstanding7,977,690

10 Day Avg. Volume45,060

30 Day Avg. Volume45,227

Financial Highlights & Ratios

PEG Ratio0.50

Price to Book (P/B)N/A

Price to Sales (P/S)6.78

Price to Cash Flow (P/CF)14.30

P/FCF Ratio10.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$109.50

Price Target Upside21.16% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Northeast Bancorp Business Overview & Revenue Model

Company DescriptionNortheast 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.

How the Company Makes MoneyNortheast Bancorp makes money through the interest earned on loans and advances, which is a primary revenue stream. The company provides commercial loans, small business loans, and consumer loans, charging interest rates that constitute a significant portion of its income. Additionally, Northeast Bancorp generates revenue from service charges on deposit accounts, asset management fees, and other financial services. The bank also engages in the purchase and sale of loans, which can contribute to its earnings. Strategic partnerships with financial institutions and service providers enhance its product offerings and can influence revenue growth.

Northeast Bancorp Financial Statement Overview

Summary

Northeast Bancorp exhibits a strong financial position with robust profitability and cash flow generation. The company effectively manages costs and maintains a healthy balance between leveraging debt and equity. However, slight fluctuations in operational costs and moderate reliance on liabilities present potential risks.

Income Statement

Positive

Northeast Bancorp has demonstrated strong income statement performance. The TTM Gross Profit Margin is impressive, indicating efficient cost management. The Net Profit Margin is robust, supported by steady revenue growth. However, there was a slight decline in EBIT Margin, suggesting increased operational costs in recent periods.

Balance Sheet

Positive

The balance sheet reflects a solid equity position with a reasonable Debt-to-Equity Ratio, indicating manageable leverage. The Return on Equity shows healthy profitability from shareholders' investments. However, the Equity Ratio suggests moderate reliance on liabilities, which could pose risk if market conditions change.

Cash Flow

Very Positive

Cash flow analysis reveals strong Free Cash Flow growth, with consistent Operating Cash Flow surpassing Net Income, indicating good cash-generating ability. The Free Cash Flow to Net Income ratio is favorable, highlighting efficient capital expenditure management.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
228.97M	263.77M	121.54M	104.67M	135.85M	76.11M
	Gross Profit
292.89M	263.77M	121.54M	104.67M	135.85M	76.11M
	EBIT
69.06M	89.38M	65.22M	66.66M	101.09M	33.28M
	EBITDA
69.91M	91.18M	68.43M	64.15M	103.69M	36.23M
	Net Income Common Stockholders
68.55M	58.23M	44.19M	42.16M	71.50M	22.74M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.05M	242.16M	251.31M	226.99M	1.07B	208.57M
	Total Assets
611.97M	3.13B	2.87B	1.58B	2.17B	1.26B
	Total Debt
178.35M	365.44M	584.53M	19.45M	36.11M	46.88M
	Net Debt
169.30M	123.28M	386.62M	-152.63M	-974.38M	-96.78M
	Total Liabilities
561.87M	2.76B	2.57B	1.33B	36.11M	1.09B
	Stockholders Equity
50.10M	376.63M	296.66M	248.32M	232.39M	164.74M
Cash Flow		Free Cash Flow
13.42M	111.00K	57.64M	29.44M	7.08M	15.15M
	Operating Cash Flow
14.30M	2.56M	60.11M	30.50M	8.34M	16.31M
	Investing Cash Flow
-896.60M	-158.25M	-1.23B	-248.95M	27.46M	1.50M
	Financing Cash Flow
1.02B	199.94M	1.20B	-619.96M	831.03M	68.94M

Northeast Bancorp Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price90.38

Price Trends

50DMA

93.54

Negative

100DMA

95.75

Negative

200DMA

86.03

Positive

Market Momentum

MACD

-1.56

Negative

RSI

52.46

Neutral

STOCH

80.82

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NBN, the sentiment is Neutral. The current price of 90.38 is above the 20-day moving average (MA) of 87.94, below the 50-day MA of 93.54, and above the 200-day MA of 86.03, indicating a neutral trend. The MACD of -1.56 indicates Negative momentum. The RSI at 52.46 is Neutral, neither overbought nor oversold. The STOCH value of 80.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NBN.

Northeast Bancorp Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HBT	78 Outperform	$735.11M	10.27	13.88%	3.49%	8.55%	9.52%
FCBC	76 Outperform	$728.49M	14.20	10.02%	3.17%	6.25%	5.16%
NBN	75 Outperform	$721.02M	10.53	17.77%	0.05%	23.69%	21.19%
OSBC	72 Outperform	$686.97M	8.16	13.66%	1.50%	4.19%	-7.40%
MCBS	68 Neutral	$698.83M	10.68	16.05%	3.19%	8.80%	30.31%
CPF	67 Neutral	$708.54M	13.29	10.25%	4.15%	6.13%	-9.06%
Sector *	63 Neutral	$12.07B	9.35	8.15%	79.57%	12.85%	-5.13%

* Financial Sector Average

Performance Comparison

NBN

Northeast Bancorp

90.38

37.92

72.28%

CPF

Central Pacific Financial

26.13

6.95

36.24%

FCBC

First Community Bancshares

39.75

8.54

27.36%

OSBC

Old Second Bancorp

15.25

0.94

6.57%

MCBS

MetroCity Bankshares

28.41

4.79

20.28%

HBT

HBT Financial

23.50

5.20

28.42%

Northeast Bancorp Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -15.00% | Next Earnings Date: Apr 28, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong performance with record achievements in loan origination, SBA loans, and net income, alongside improvements in asset quality and liquidity. However, there were challenges with increased FDIC costs and lumpy purchase loan volumes.

Highlights

Record Loan Origination

Northeast Bank originated $246 million in loans this quarter, marking a record high in loan origination.

Record SBA Loan Origination

The bank originated $100.3 million in SBA loans, with $64.5 million sold, generating a gain of $5.6 million.

Record Net Income

Net income reached $22.4 million, making it a record quarter for earnings, excluding the impact of PPP loan sales in fiscal 2021.

Increase in Tangible Book Value

Tangible book value increased by $4.49 or 9% since September 30, and by $5.95 or 13% over the six-month period.

Improved Asset Quality

The ratio of non-performing loans to total loans decreased from 106 basis points to 84 basis points.

Improved Liquidity Position

On-balance sheet liquidity improved to $430 million, and off-balance sheet capacity exceeded $1 billion.

Lowlights

Increased FDIC Costs

There was a large uptick in FDIC costs this quarter, primarily driven by the growth of the balance sheet.

Lumpy Purchase Loan Volume

Loan purchase volumes were below average this quarter due to several sizable portfolios being pulled or delayed by sellers.

Company Guidance

During Northeast Bank's second quarter fiscal year 2025 earnings call, the bank reported record-breaking performance across several key metrics. They achieved $361 million in loan volume, with $246 million in originations and $100.3 million in SBA loans, of which $64.5 million were sold for a gain of $5.6 million. The bank also reported a record net income of $22.4 million and base net interest income of $45.6 million for the quarter. Tangible book value increased by 9% since the previous quarter, and their loan capacity stood at $856 million. Asset quality improved with a reduction in non-performing loans and assets. Additionally, the bank's liquidity position strengthened to $430 million on-balance sheet liquidity, with over $1 billion off-balance sheet capacity. The bank's leverage and total capital ratios were healthy at 11.2% and 13.9%, respectively, facilitating significant growth potential.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.