UPDATE – Northeast Bank Announces Sale of Paycheck Protection Program Loans
PORTLAND, Maine, March 04, 2021 (GLOBE NEWSWIRE) – Northeast Bank (the “Bank”) (NASDAQ: NBN), a full-service bank based in Maine, today announced that it has entered into a purchase agreement and Loan Sale Agreement (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 protection program. Small Business Administration (“SBA”) paychecks (“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 amortization of 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. dollars, in the current fiscal quarter on the sale of the $ 1.65 billion in PPP funded 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 of Loan Source in connection with Loan Source’s commitment 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 loan services for PPP loans promised by Loan Source. Under the Correspondent Agreement, the Bank receives correspondent commission income in the amount of 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 principal in PPP loans, 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 along with the remainder of the 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 arrangements to continue at the same pace as the previously closed PPP loan arrangements.
“At the end of the first round of the P3 program in August 2020, we, along with our loan service provider, ACAP, predicted that Congress would recognize the need and pass legislation to provide additional P3 funds,” said Rick Wayne. , President and CEO. “During the period from the end of the first round 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 for help us with our in-depth subscription process. These investments have paid off well. On February 28, 2021, the SBA announced that Northeast Bank was the eleventh-largest second-round PPP lender in dollar volume. Mr. Wayne continued, “We are proud to continue to help so many small businesses and employees across the country. “
About the northeast shore
Northeast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We provide personal and business banking services in the Maine market through nine branches. Our national lending division purchases and grants commercial loans nationally. ableBanking, a division of Northeast Bank, offers online savings products to consumers across the country. Information on the northeastern shore can be found at www.banquenordest.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 of 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 significant risks, uncertainties and other factors which are, in some cases, beyond the control of the Bank. The actual results of the Bank 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, business 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 levels of employment, general business and economic conditions nationally and in the local markets in which the Bank operates, including changes that negatively affect the ability of borrowers to service and repay our loans; changes in customer behavior due to changing political, business and economic conditions or legislative or regulatory initiatives; turmoil in capital and debt markets; changes in interest rates and real estate values; increasing defaults and write-off rates; decreases 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; change 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 be impaired; changes in the assumptions used to make these forward-looking statements; and other risks and uncertainties detailed in the Bank’s Annual Report on Form 10-K and updated through our Quarterly Reports on Form 10-Q and other documents submitted to the Federal Deposit Insurance Corporation. These statements speak only as of the date of this press release and the Bank assumes no 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