Northeast Bancorp (NBN) AI Stock Analysis

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Northeast Bancorp

(NASDAQ:NBN)

Rating:73Outperform

Price Target:

$95.00

▲( 14.46% Upside)

Northeast Bancorp is performing well financially with strong income and cash flow management, despite some challenges noted in the latest earnings call, such as reduced interest income and higher tax rates. The technical analysis indicates caution due to slightly bearish signals. The stock is attractively valued with a reasonable P/E ratio and a solid dividend yield, appealing to both growth and income investors.

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

Market Cap

$662.15M

Dividend Yield0.05%

Average Volume (3M)36.80K

Price to Earnings (P/E)9.2

Beta (1Y)0.77

Revenue Growth26.40%

EPS Growth24.62%

CountryUS

Employees194

SectorFinancial

Sector Strength81

IndustryBanks - Regional

Share Statistics

EPS (TTM)2.23

Shares Outstanding7,977,690

10 Day Avg. Volume35,237

30 Day Avg. Volume36,799

Financial Highlights & Ratios

PEG Ratio1.98

Price to Book (P/B)1.49

Price to Sales (P/S)0.00

P/FCF Ratio50.30

Enterprise Value/Market Cap1.62

Enterprise Value/Revenue1.29

Enterprise Value/Gross Profit3.66

Enterprise Value/Ebitda3.14

Forecast

1Y Price Target

$106.50

Price Target Upside28.31% 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 overall financial position with solid profitability, efficient cost management, and robust cash flow generation. The company maintains a healthy balance between leveraging debt and equity. Potential risks include reliance on liabilities and slight fluctuations in operational costs.

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	151.20M	121.54M	104.67M	135.85M	76.11M
	Gross Profit
292.89M	151.20M	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
205.15M	291.04M	251.31M	226.99M	1.07B	208.57M
	Total Assets
3.00B	3.13B	2.87B	1.58B	2.17B	1.26B
	Total Debt
372.03M	365.44M	584.53M	19.45M	36.11M	46.88M
	Net Debt
166.88M	123.28M	386.62M	-152.63M	-974.38M	-96.78M
	Total Liabilities
2.65B	2.76B	2.57B	1.33B	36.11M	1.09B
	Stockholders Equity
351.91M	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

Negative

Last Price83.00

Price Trends

50DMA

87.83

Negative

100DMA

93.23

Negative

200DMA

88.09

Negative

Market Momentum

MACD

-1.06

Positive

RSI

40.35

Neutral

STOCH

12.96

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NBN, the sentiment is Negative. The current price of 83 is below the 20-day moving average (MA) of 85.53, below the 50-day MA of 87.83, and below the 200-day MA of 88.09, indicating a bearish trend. The MACD of -1.06 indicates Positive momentum. The RSI at 40.35 is Neutral, neither overbought nor oversold. The STOCH value of 12.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NBN.

Northeast Bancorp Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OSBC	80 Outperform	$744.33M	9.01	12.98%	1.38%	2.27%	-6.70%
HBT	78 Outperform	$774.79M	10.31	14.24%	3.23%	6.98%	5.97%
FCBC	75 Outperform	$689.31M	13.72	10.08%	3.19%	2.49%	4.48%
MCBS	74 Outperform	$707.94M	10.80	16.05%	3.17%	8.74%	30.39%
NBN	73 Outperform	$662.15M	9.24	17.91%	0.05%	26.40%	24.62%
CPF	69 Neutral	$739.14M	12.79	10.94%	3.93%	4.38%	4.94%
Sector *	64 Neutral	$12.66B	9.79	7.67%	17015.07%	12.23%	-6.06%

* Financial Sector Average

Performance Comparison

NBN

Northeast Bancorp

83.00

23.62

39.78%

CPF

Central Pacific Financial

26.71

6.85

34.49%

FCBC

First Community Bancshares

37.71

5.62

17.51%

OSBC

Old Second Bancorp

16.52

2.32

16.34%

MCBS

MetroCity Bankshares

27.87

3.61

14.88%

HBT

HBT Financial

23.87

4.96

26.23%

Northeast Bancorp Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q3-2025)

% Change Since: -7.77%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong loan origination and significant growth in SBA loan volume, along with a year-over-year increase in net income. However, there were challenges such as a decrease in net interest income, increased tax rates, and reduced loan yields. These challenges slightly offset the positive achievements.

Q3-2025 Updates

Positive Updates

Strong Loan Volume

Achieved $414 million in loan volume, with $218 million in originated loans marking the second-best quarter for commercial real estate loan originations.

SBA Loan Growth

SBA loan volume increased to $121.3 million from about $100 million in the linked quarter, with 1,069 loans originated, making them one of the highest SBA lenders by units.

Net Income Increase Year-over-Year

Net income of $18.7 million, $4.8 million higher than the same quarter a year ago.

Tangible Book Value Growth

Tangible book value increased to $54.84.

Negative Updates

Decrease in Net Interest Income

Net interest income down $2.5 million from the linked quarter, partly due to less accelerated income from loan payoffs and a shorter quarter by two days.

Increased Tax Rate

Tax rate increased to 36.7% from 33% in the previous quarter due to non-recurring tax expenses.

Reduced Loan Yields

SBA portfolio yield decreased significantly from 11.6% to 9.93%, primarily due to rate cuts.

Company Guidance

During the Northeast Bank Third Quarter Fiscal Year 2025 earnings call, several key financial metrics were highlighted, reflecting a strong quarter despite a decrease in net income compared to the previous linked quarter. The bank reported a loan volume of $414 million, comprising $74.6 million in purchased loans, $218 million in originated loans, and $121.3 million in SBA loans, marking substantial growth in the SBA segment. The net income stood at $18.7 million, which was $4.8 million higher than the same quarter last year but $3.7 million lower than the linked quarter. Return on equity (ROE) was 16.47%, and return on assets (ROA) was 1.86%, while the tangible book value reached $54.84. Notably, net interest income declined by $2.5 million due to less accelerated income from loan payoffs and a shorter quarter. Non-interest income increased by $700,000 to $6.6 million, primarily due to gains in the SBA sector. An uptick in the effective tax rate to 36.7% from 33% in the previous quarter was noted, attributed to the non-recurring tax expenses, including a $400,000 charge due to changes in Massachusetts tax law. The bank's provision for loan losses increased, with a significant portion attributable to the SBA segment. Overall, the results were underpinned by strong lending activity and a robust SBA loan origination pipeline, positioning the bank for continued growth.

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.