Q4 2024 Northeast Bank Earnings Call

August 1, 2024

Welcome to the Northeast Bank fourth quarter fiscal year 2024 earnings call.

Operator: My name is Stephen, and I will be your operator for today's call. This call is being recorded.

Steven: My name is Steven and I will be your operator for today's call. This call is being recorded.

Operator: With us today from the bank is Rick Wayne, President and Chief Executive Officer; Richard Cohen, Chief Financial Officer; and Pat Dignan, Executive Vice President and Chief Operating Officer. Prior to the call, an investor presentation was uploaded to the bank's website, which we will reference in this morning's call. The presentation can be accessed in the Investor Relations section of northeastbank.com under Events and Presentations. You may find it helpful to download this investor presentation and follow along during the call. Also, this call will be available for rebroadcast on the website for future use. At this time, all participants are in a listen-only mode.

Speaker Change: With us today from the bank is Rick Wayne, President and Chief Executive Officer, Richard Cohen, Chief Financial Officer, and Pat Dignan, Executive Vice President and Chief Operating Officer.

Prior to the call, an investor presentation was uploaded to the bank's website, which we will reference in this morning's call. The presentation can be accessed at the Investor Relations section of northeastbank.com under Events and Presentations.

You may find it helpful to download this investor presentation and follow along during the call. Also this call will be available for rebroadcast on the website for future use.

Operator: Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star 1-1 on your touchtone phone. As a reminder, the conference is being recorded. Please note that this presentation contains four financial statements about Northeast Bank. Forward-looking statements are based upon the current expectations of Northeast Banks management and are subject to risks and uncertainty. The actual results may differ materially from those discussed in the forward-looking statements. Northeast Bank does not undertake any obligation to update any forward-looking statement.

Speaker Change: At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star 11 on your touchtone phone. As a reminder, the conference is being recorded.

Speaker Change: Please note that this presentation contains forward-looking statements about Northeast Bank. Forward-looking statements are based upon the current expectations of Northeast Bank's management and are subject to risks and uncertainties.

Speaker Change: Actual results may differ materially from those discussed in the forward-looking statements. Northeast Bank does not undertake any obligation to update any forward-looking statements. I'll now turn the call over to Rick Wayne. Mr. Wayne, you may begin.

Operator: I'll now turn the call over to Rick Wayne. Mr. Wayne, you may begin. Thank you. Good morning, everyone.

Richard Wayne: Thank you for joining us on the call. During the call, I'm going to first give you some, go over some highlights for the quarter and the year, our view of what the year has looked like. After I finish my comment... Richard Cohen is going to talk about funding and our ATM, and then Pat is going to talk about loan activity and share some thoughts on what we see in the market. And then, as you've just heard, we'd be happy to answer any questions.

Rick Wayne: Thank you.

Rick Wayne: Good morning, everyone. Thank you for joining us on the call.

Rick Wayne: During the call, I'm going to first give some, go over some highlights.

Rick Wayne: for the quarter and the year, our view of what the years look like. After I finish my comments...

Rick Wayne: Richard Cohen is going to talk about funding and our ATM.

Rick Wayne: and then Pat is going to talk about loan activity and share some thoughts on what we see in the market. And then as you've just heard, we'd be happy to answer any.

Richard Wayne: First, just some thoughts on the quarter and the year. We think it was a really strong year and a strong quarter. Almost all the metrics one would look at our loan volume were very strong. Our margins, our NIM, were very strong. Asset quality held up really well. And, of course, our return on equity at 17.46% for the year is impressive, as is the ROA at just a little bit under 2%, 199 for the quarter and 198 for the year.

Speaker Change: questions. Now first just some thoughts on the on the quarter in the year. We think was really strong year.

Pat Dignan: and a strong quarter. Almost in all the metrics one would look at, our loan volume was very strong.

Pat Dignan: Our margins, our NIM was very strong. Asset quality held up really well.

Rick Wayne: and of course,

Rick Wayne: our return on equity.

Richard Wayne: Let me just highlight a few things there. I'm now referring to page three, with respect to our national lending, the purchased loans were $160.6 million of UPB at a purchase price of 89.4% for an investment of $143.6 million, and for the year, $382 million, invested with UPV of $432.4 million at an 88.4 percent purchase price.

Rick Wayne: for the year. Let me just highlight a few things there. I'm now referring to page 3.

Rick Wayne: With respect to our national lending the

Rick Wayne: invested with UPB of 432.4 million at an 88.4% purchase price.

Richard Wayne: On the origination side, we originated $114 million for the quarter and a shade under $400 million for the year at $399.1 million. I want to just talk for a second about rates and move to page 22 in the slide deck, which takes a look at what we earned in interest rates in the quarter. And this is a slide that shows what is both regularly scheduled interest and then, plus normal accretion, plus accelerated accretion and fees, first starting with the purchase loans. The regularly scheduled interest in accretion was $843, and we picked up another 104 basis points from accelerated accretion, for a total of 9.47% on the purchase loan.

Rick Wayne: On the origination side.

Rick Wayne: which takes a look at what we earned in the rates in the quarter.

Richard Wayne: And on the originated loan, the regularly scheduled interest, not accretion on that was 9.65% and three basis points for fees. So overall, we earned on our loan book for the quarter 9.55%, which is we think an excellent number generating a NIM for the quarter of 5.13 percent, which is consistent with what we did during the year, which was 5.1 and six percent. Richard will talk about the ATM. As I mentioned, we earned $15.1 million in the quarter and 58.2 million for the year, which is pretty even income each quarter.

Rick Wayne: and on the originated loan.

Rick Wayne: for the

Rick Wayne: Richard will talk about the ATM, as I mentioned. We earned in the quarter $15.1 million.

Richard Wayne: One of the prior quarters was a little bit lower as a result of some incentive comp that we accrued earlier than we normally do. And as we discussed on the last call, we earned on a per share basis, fully diluted $1.91 for the quarter and $7.58 for the year. I did mention the ROA. The ROA was $16,506 for the quarter and $17,406 for the year.

Richard Wayne: You know, interestingly, if we take a look at the first... And that's a result of the differences. I should say as a difference, because we have a lot more capital now, for the quarter, we earn $15.2 million in the first quarter, and this quarter we're at $15.1 million, so virtually the same amount of money, but our capital was $312 million in the first quarter, and now it's $377 million. And so with the same dollars on more capital, I would just remind those that have been investing with us for a while that this excess capital sounds reminiscent of all the capital that we had after the Triple P, and of course, we got questions about how we were going to deploy it, and we wound up buying a billion dollars a quarter, a million dollars of loans, in the fourth calendar quarter of 2022.

Speaker Change: I would just remind those that have been investing with us for a while

Richard Wayne: I'm not predicting that we're going to do that, but Pat and I will touch on this a little bit more. We are of the view that there are a lot of opportunities to purchase loans without overpromising, of course. They're binary transactions. You win, or you don't win.

Richard Wayne: And so we'll see what happens, but we are optimistic about what we see in the marketplace, and also in the highlights section, you can see that our tangible book is $46.34. I do want to comment on asset quality as well. Our asset quality remains strong, which I think is particularly impressive in light of that virtually all of our loans are commercial real estate loans, which have been under some level of concern, you know, kind of across the board; you read about it in the paper almost every day.

Richard Wayne: You know, in our case, we have relatively low loans of values, you know, in the very low 50% range. And that has... been very good for us. Then I just want to find a page on

Speaker Change: And that has been very good for us. I just want to find a page on the...

Richard Wayne: That's a quality at the back, Becca, you have one and the other one. This is real life, we're doing this so I can... Sorry for the page flipping as I'm getting there. But I will. Well, rather than taking note of, taking a lot of your time here, Well, I now have it.

Speaker Change: That's the quality at the back. Becca, do you have the...

Richard Wayne: Thanks, Rebecca. You can see that on page nine, the nonperforming assets, we still get a fair number of resolutions. We started the quarter with $28 million, and three million dollars of nonperforming assets were resolved. And then we added four point six million. So they come and they go. And that's what you would expect, you know, from our purchase loan book. And so, you know, those numbers remain strong for us. With that, I would ask Richard to follow.

Speaker Change: million, so they come and they go and that's what you would expect.

Richard Cohen: Great. Thanks very much, Rick. Pat's going to pick up the section on the loan, so I'm going to focus primarily on the deposit side. In terms of the 2024 financial year, our deposits increased by $402 million.

Richard Cohen: That is an increase to $2.34 billion from its previous level of $1.94 billion. The most significant trend on the deposit side is our deliberate substitution of borrowings for increasing our brokered CDs. I referred to this on our previous call, and we continue to do so. So for the financial year, our brokered CDs are up by $241 million to a level of $871 million, whereas our borrowings are down $217 million to a level of $345 million.

Speaker Change: The most significant trend on the deposit side is our deliberate substitution.

Speaker Change: So for the financial year, our brokerage CDs are up by $241 million.

Richard Cohen: The reason that we're doing that, to reiterate, is we want to increase our capacity for off-balance sheet funding. Our community bank, to close the picture on the deposit side, is up $219 million to a level of $1.4 billion. Taking a look at the cost of our funding, you can refer to slide 15, which refers to the quarterly cost. It shows you the rates for each of the quarters historically, as well as the current spot rate.

Speaker Change: It shows you the rates for each of the quarters historically, as well as the current spot rate.

Richard Cohen: I think what's worth pointing out over there is that the cost of deposits, as you will have seen, rose steadily from the 2023 financial year right through to the end of 2024. What's noteworthy though is that the spot interest rate at the end of our financial year decreased to 4.26% from its average for the fourth quarter of 4.36. That's an indication, of course, that rates are coming down, and I'll speak about that next. We're very careful to focus on our interest rate risk in the banking book.

Richard Cohen: We continually monitor and manage that to make sure we're not excessively exposed to rates going up or down. We get a lot of questions about what will happen in a rates down environment, and the answer that we give is that we are likely to benefit from a decrease in interest rates. There are a few reasons for that.

Richard Cohen: The first one is that we have certain flaws in our originated loans. Secondly, of course, our deposits will reprice and therefore reduce the cost of funding. In other words, you'll see us move in the opposite direction to that indicated in slide 15. And then, finally, there's a prepay benefit. As rates go up, prepayments may increase.

Speaker Change: The first one is that we have certain flaws on our originated loans.

Speaker Change: Secondly, of course, our deposits will reprice and therefore reduce the cost of funding.

Richard Cohen: If that does happen, that will accrue to income, and Rick has referred to some of the uplift we get in terms of our revenue from that perspective. Having said all of that, we do not deliberately position ourselves to take excessive exposure in either direction because we're conscious that rates cannot perfectly be predicted.

Richard Cohen: I also refer you to slide 19, which you may find interesting. That speaks about revenue and non-interest expense. I think what's most noteworthy about that, if you look at the chart, is it's a very useful visual way to see that our revenue is growing faster than our operating expenses. Expressing that differently, you would have seen that we regularly report our efficiency ratio, and you would have noticed a trend on that, which is for that to improve over time.

Speaker Change: I think what's most noteworthy about that, if you look at the charts...

Speaker Change: is it's a very useful, visual way to see that our revenue is growing faster than our operating expenses. Expressing that differently, you will have seen that we regularly report our efficiency ratio and you will have noticed a trend on that, which is for that to improve over time.

Richard Cohen: I'm going to turn quickly to the ATM. As I mentioned in the previous quarter, the ATM is where we sell shares in the open market, and we do so in order to raise additional capital so as to increase our common equity tier one. The reason we do that is, as Pat will refer to, we see opportunities in the market, and we see the ATM as one of the tools that we can use to raise capital to allow us to take advantage of those opportunities without putting undue stress on our capital. Speaking quickly of the ATM, The ATM, when we initially commenced it, we had a $50 million capacity. $27 million of that has been utilized to date in both the current and prior financial years.

Speaker Change: Speaking quickly of the ATM.

Pat Dignan: We therefore have $23 million left in the ATM, and I will speak about the activity in the fourth quarter. We sold 150,000 shares at an average of $55.13 on a net basis per share, which added 8.3 million dollars to our capital for the quarter. Speaking quickly about the year, the ATM for the year added 29 cents per share to our tangible book value. Let me hand over to Pat Dignan.

Speaker Change: To speak about the activity in the fourth quarter, we sold 150,000 shares at an average of $55.13 on a net basis per share. That added $8.3 million to our capital for the quarter.

Speaker Change: Speaking quickly about the year, the ATM for the year added 29 cents per share to our tangible book value.

Pat Dignan: Thanks, Richard. There's not really a lot new this quarter compared to the last quarter, except that there's a continued increase in real estate transactions, which provides more confidence on the investor side, and also on the purchase side. Banks have had the opportunity to write down some of their loans, and what we've seen is a real uptick in purchase loan opportunities. We think that the next quarter will be strong on the purchase side, just in the general market. Office and multifamily continue to be a concern.

Speaker Change: Thanks, Richard.

Speaker Change: and also on the purchase side, banks have had the opportunity to write down some of their loans and what we've seen is a real uptick in purchase loan opportunities.

Pat Dignan: Beyond that, we keep an eye on expenses and, Again, more of the same. We think there's a lot of opportunity, and we expect to be positioned well for it. Pat, do you want to comment for a little bit on the increase in originated loans in this quarter over some of the preceding ones, what you're seeing, aside from more activity, but just looking at the numbers on ours? We've been very successful on the lender finance side. It's been We've increased the number of groups that we have we transact with and.

Speaker Change: Beyond that, we keep an eye on expenses and

Speaker Change: Again, more of the same. We think there's a lot of opportunity and we expect to be positioned well for it.

Speaker Change: Pat, do you want to comment for a little bit on the increase in the originated loans?

Pat Dignan: There's been a growing trend, for multiple reasons, a lot of migration toward non-bank lenders, and we benefited from that. All the number of transactions and the number of counterparties, we've been able to really boost that business. I just want to describe that business for a second. Thank you, Pat.

Pat Dignan: for multiple reasons, a lot of migration toward non-bank lenders, and we benefited from that increasing

Richard Wayne: The event There are some callers on that have not been investors for a while and may not know exactly what that business means in our case because there are lots of ways people talk about portfolio finance or lender finance. We have a significant number of groups that are non-bank lenders that we leverage their lending by providing financing to them. They're typically structured as guidance lines, meaning that every advance that they want to lend money to their borrowers secured by commercial real estate, we underwrite at the same time, just as if we were going to make the loan.

Pat Dignan: Describe that for a second, in the event there are some...

Speaker Change: We have a significant number of groups that are non-bank lenders.

Speaker Change: that we leverage their lending by providing financing to them. They're typically structured as guidance lines.

Speaker Change: where meaning that every advance that they want to lend money to their borrowers secured by commercial real estate, we underwrite at the same time, just as if we were going to make the loan.

Richard Wayne: It's been a really strong part of our business. So, because you have a couple layers of protection in the capital stack, if you have the original property owner that borrows money from the non-bank lender, you know, maybe with 30% equity and borrowing 70% from the non-bank lender, we then would lend, and if we wanted to advance on that loan, we might advance. 70% or so to the non-bank lender so that our loan, 70 times 70, is 49% against the underlying commercial real estate loan.

Speaker Change: So because you have a couple layers of protection in the capital stack

Speaker Change: you know, maybe with 30% equity and borrowing 70% from the non-bank lender, we then would lend, and if we wanted to advance on that loan, we might advance

Richard Wayne: They're structured typically as bankruptcy remote entities with all of the loans cross-collateralized, all of the advances, to be clear, cross-collateralized, and cross-defaulted, with the highest default rate permitted under law. In the case of New York, it's 24%.

Speaker Change: with all of the loans, cross-collateralized, all of the advances, to be clear, cross-collateralized, cross-defaulted.

Richard Wayne: Our borrowers are experienced and very capable in the area of lending, even if the underlying borrower may be great at making widgets, so to speak, proverbial widgets, but they may not be as sharp in the financial area. But we have that party between us. You know, to date, we have done a lot of it. We have not lost one penny of principal on it. And it's a business line we like very much. Last quarter, out of the origination volume, 90% of those loans were portfolio finance loans.

Speaker Change: 24%.

Speaker Change: But they may not be as sharp in the financial area, but we have that party in between us.

Speaker Change: You know, today we have done a lot of it. We have not lost one penny of principle on it. And it's a business line we like very much. Last quarter, out of the origination volume,

Richard Wayne: You know, as Pat mentioned, we're looking to expand that business with more groups. And our borrowers are... you know, very comfortable with us as their lender, and so we like that. I just wanted to expand on that in case someone is not as familiar with it. Another point is that business with the LTVs is generally lower, and in the environment we've been in in the last year with fewer real estate transactions and a little more subjectivity with respect to real estate valuations, we've not been quite as competitive on the direct side, but as this new normal sets in and there are more and more real estate trades, I feel we will That's right.

Speaker Change: and our borrowers are...

Speaker Change: No.

Speaker Change: And so we like that. I just wanted to expand on that in case someone is not as familiar with it. Another point is on that business with the LTVs are generally lower and in the environment we've been in in the last year with fewer real estate transactions and a little more subjectivity with respect to real estate valuations, we've been

Speaker Change: Not quite as competitive on the direct side, but as the new normal sets in and there's more and more real estate trades, I feel we'll be, in addition to growing this business, also be more competitive on the direct side.

Speaker Change: funding space. That's right. I just want to amplify another point Pat made on the purchase loan and the pipeline.

Richard Wayne: I just want to amplify another point Pat made on the purchase loan and the pipeline. You've heard the forward-looking statement, so I promise I won't read it to you again. But there seems to be a lot of transactions, a lot of dollar transactions in the market now of the kind of assets that we like to buy, meaning performing loans, secured by Cash Flow and Collateral generally in liquid markets.

Speaker Change: And we have one of the things, of course, when you have a cell or execution.

Speaker Change: You know, we've been at this at a very long time.

Speaker Change: Capital Crossing Bank, and we have...

Richard Wayne: And then I would just point out, as Pat did, or just make sure it's clear, it doesn't mean we're going to win anything, you know, the transactions you win or you lose. But of course, seeing a lot of activity there is much better than not seeing it.

Speaker Change: keep you informed around that as we have these calls. I think that's all that we have in our presentation and I would ask if there are any questions.

Richard Wayne: And so we will keep you informed about that as we have these calls. I think that's all that we have in our presentation. And I would ask if there are any questions out there. I would point out that our former analyst, Alex Twerdahl at Piper Sandler, who really understood our bank and, you know, was typically the ones asking questions, has left Piper Sandler, and they have temporarily suspended coverage of us until they can find a replacement for him, which is not, I think they did that with all of the banks and companies that Alex covered. It was not personal. It feels personal, but it wasn't.

Speaker Change: out there.

Speaker Change: I would point out that our former analyst, Alex Gerdahl at Piper Sandler.

Speaker Change: you know, and typically the ones asking questions has left Piper Sandler and temporarily they have suspended.

Speaker Change: covered. It was not personal to what feels personal but it wasn't. So we may not have as active questions but I will see anyone have anything that they would like to ask us?

Operator: So we may not have as many active questions, but I will see if anyone has anything that they would like to ask us? Yeah, we'll go ahead and begin the question and answer session. If you have a question, please press star one one on your touchtone phone. If you wish to be removed from the queue, please press star 1 1 again. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers.

Speaker Change: If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers.

Operator: Again, if you have a question, please press star 1-1 on your touchtone phone. David Minkoff, this is a perfect time for you to join in. All right, please stand by for the Q&A roster to be compiled. We'll give it one more moment.

Speaker Change: Once again, if you have a question, please press star 1 1 on your touchtone phone

Speaker Change: Alright, please stand by for the Q&A roster to be compiled.

Speaker Change: We'll give it one more moment.

Operator: Okay, it appears there are no questions at this time. I would now like to turn the call back over to Rick Wayne for closing remarks. Well, there are two ways to take the lack of questions. I'm going to go with the most positive outlook and say that we did such a good job explaining what we're doing that we have answered any questions you might have. There might be another way to think about it, but I'm not going there.

Speaker Change: Well, there's two ways to take the lack of questions. I'm going to go with the most positive outlook that we did such a good job.

Speaker Change: explaining what we're doing that we have answered any questions you might have.

Richard Wayne: But all of you that listened and all of you that will listen to the call on our website, we thank you for your interest, continued support, and look forward to talking to you again after the end of the following quarter. And with that, I wish you all a happy weekend soon and a really enjoyable summer. Thank you. We did actually have it. It looks like we did have someone pop into the queue there.

Speaker Change: There might be another way to think about it, but I'm not going there.

Speaker Change: with all of you that listened and all of you that will listen to the call.

Speaker Change: on our website. We thank you for your interest, continued support.

Operator: So I'll go ahead and promote him, and we will take that question. One moment, please. Can you hear me?

Operator: Yes. Our question comes from David Minkoff, DCM Asset Management. Please go ahead. Yes, I think we were cut off before. Can you hear me now? Yes, we can, David. Good morning.

Speaker Change: One moment, please.

Speaker Change: Can you hear me? Our question comes from David Minkoff, DCM Asset Management. Please go ahead. Yes, I think we were cut off before. Can you hear me now?

David Minkoff: Great to hear from you. Congratulations to you, Richard, and Pat on another great quarter. So I do have one question. But before I ask the question, I've got to say that Rick, you and your team have done a phenomenal job with this company. You know, I was with this company; I stumbled across it by accident ten years ago, about a month after you went public. And so I've listened to 40 conference calls, and I haven't missed a single one.

David Minkoff: But before I ask the question, I've got to say that, Rick, you and your team have done a phenomenal job with this company.

Speaker Change: You know, I was with this company, I stumbled across it by accident, actually, ten years ago, about a month after you went public.

David Minkoff: You know, you deliver these consistent, beautiful results quarter after quarter, and when you think about it, this is basically a seven-branch bank located in Maine that nobody's ever heard of, with the help of some loan acquisition and servicing, and you've delivered phenomenal results time and time again. Now, to put this in perspective, in 2020, when COVID hits. Stock got knocked down from 24 in 2019, down to 6 in 2020 due to COVID and everything else that had gotten hit along with it. I mean, it was almost an act of God type of situation.

Speaker Change: This is basically a seven-branch bank located in Maine that nobody's ever heard of.

David Minkoff: with the help of some loan acquisition and servicing.

Speaker Change: And you've delivered phenomenal results time and time again. Now, to put this in perspective, in 2020, when COVID hit,

Speaker Change: The stock got knocked down from 24 in 2019 down to 6.

Speaker Change: in 2020 due to COVID and as well as everything else that had gotten hit along with it. I mean, it was almost an act of God type of situation.

David Minkoff: So. The results from them, you've engineered the stock going from a low of six in COVID in March 2020 to 72 today. Let's call that a 12-bagger, and Wall Street. The stock is up from the low of COVID by 1,200 percent. 1,200 percent in four short years. This is totally miraculous. And you come out quarter after quarter, and I've listened to 40 of them. I haven't

Speaker Change: So...

Speaker Change: The results from then, you've engineered...

Speaker Change: We call that a 12-bagger in Wall Street. The stock is up from the low of COVID. 1,200 percent. 1,200 percent in four short years. This is totally miraculous.

Speaker Change: And you come out quarter after quarter, and I've listened to 40 of them. I haven't missed a one.

David Minkoff: You come out in a humble manner, giving us the results, no attitude, no arrogance, almost apologetic for these stupendous numbers quarter after quarter. Now, I'll remember three, seven years ago, six years ago, when your base earnings were $2 a share. You would come out with, let's say, 50 cents for the quarter and caution us to not annualize those numbers because the quarter-to-quarter numbers could be choppy, and uh... you know not to take uh... not to assume that you have another fifty cent quarter. Well, I've been looking for this for forty quarters, and I haven't seen one disappointment yet, with a down quarter or something that caused any

Speaker Change: giving us the results. No attitude. No arrogance.

Speaker Change: almost apologetic for these stupendous numbers quarter after quarter. Now, I'll remember three, seven years ago, six years ago, when your base earnings were $2 a share. You would come out with, let's say, 50 cents for the quarter and caution us.

Speaker Change: to not annualize those numbers because the quarter-to-quarter numbers could be choppy.

Speaker Change: and, you know, not to take, not to assume that you're going to have another 50 cent quarter. Well, I'm listening to this for 40 quarters, and I haven't seen one disappointment yet, you know, with a down quarter or something that caused any aggravation.

David Minkoff: If there were a Wall Street... Hall of Fame, I would nominate you for that, for entrance into that organization, along with Jamie Dimon, who's done a good job, of course, with J.P. Morgan, but with the proviso that Jamie Dimon takes his marching orders from you. So, that's my comment. You called on me to ask a question, and I've given a long dissertation. I hope you don't need two pillows for your head tonight, but if you do, you deserve it.

Speaker Change: So, that's my comment. You called on me to ask a question and I've given a long dissertation. I hope you don't need two pillows for your head tonight, but if you do, you deserve it.

David Minkoff: Here's the question. Can I ask the question now? What are you going to do for an encore?

Speaker Change: Here's the question. Can I ask the question now?

Speaker Change: What are you going to do for an Encore?

Richard Wayne: That's the question. Well, you know, we think the best thing we can do with our capital, of course, is to be able to leverage it with high quality, higher yielding assets. That's what we would hope and expect to do. We have a lot of capital now and a lot of loan capacity left. That's why I made the reference earlier to Triple P when we had, you know, roughly a billion dollars of loan capacity and patient investors. They were patient, but they wanted to know what we were going to do because we had, you know, doubled our capital, and sort of definitionally, your ROE would go down when you have that much capital.

Speaker Change: That's the question.

Speaker Change: Well, you know, we...

Speaker Change: You know, the best thing we can do with our capital, of course, is to be able to leverage it with high quality, you know, higher yielding assets.

Speaker Change: hope and expect to do.

Speaker Change: We have a lot of capital now and a lot of loan capacity left. That's why I made the reference earlier to Triple P when we had.

Speaker Change: Patient investors, they were patient, but they wanted to know what we were going to do because we, you know, doubled our capital and sort of definitionally your ROE would go down when you have that much capital.

Richard Wayne: And, you know, with the excess capital, we're hoping that we can leverage it with the kind of loans that we like, but, of course, we aren't going to be careless or reckless or put loans on the balance sheet just to have a lower loan book. And we would hope we would be able to do that.

Richard Wayne: I would point out, I know you know this, David, but for others that may not know that when, you know, we have excess capital over, you know, some number of years, we return it to shareholders in the, in the period of around years, maybe 13 through 16, roughly. We bought back roughly half of the stock in the, not a half, a third of the stock in the bank for an average price of somewhere 17 or $18, and on the other hand we've recently been selling stock at a number that I'm not talking about this quarter we don't have anything to say about what we might do in the current quarter but in the previous quarter as Richard mentioned we bought back sold stock rather at you know fifty dollars so you know in terms of the and Encore as you say that would be one thing and and and I would also point out I think most of you know we were unsuccessful in this but we tend to be opportunistic when things present themselves we made it a lot of money with Triple P which was not so we were not even in a related we didn't have a even a related product I should say but we wound up originating three billion of that and purchasing another eight billion and making 65 basis points along with Nuity which was a partner of ours in that activity and then we also when there was an opportunity we bid on buying Signature Bank and also what was previously Boston Private Bank part of Silicon Valley Bank unfortunately we didn't win those but so we looked for and those are not predictable those kinds of opportunities but we like to pay attention and if something makes sense to look at it finally I think I really need to make a point and ask you to confirm this David when I called your name, It was not because I had any idea. We haven't spoken for a while that you were going to. And I appreciate your really kind words. I really do.

David Minkoff: Unlike the pay attention and if something makes sense to look at it finally, I think I really need to make a point and ask you to confirm this David what I call your name.

David Minkoff: It was not because I had any idea we haven't spoken for a while that you were going to and I appreciate you're really kind words.

David Minkoff: I really do.

Richard Wayne: And it's not just me, of course; it's a big team we have here that delivers these consistently good results. But this was not preplanned. It sounds like I call on David, and then he gives me a compliment. I didn't know that was coming. I thought we hadn't spoken in probably a year or so, but I am on the conference calls every quarter. But you're right; I have no questions.

Speaker Change: Not just me of course, it's a.

David Minkoff: A big team we have here that delivers these consistently.

Speaker Change: Good results, but this wasn't a preplanned it sounds like Paul and David and then.

Speaker Change: It gives me a compliment I didn't know that was something that we.

Speaker Change: We haven't spoken yet.

Speaker Change: So, but I am on the conference calls every quarter, but youre right I have no questions Alan.

David Minkoff: Alex asks great questions every quarter, and kudos to him for his good coverage of the company. Not only that, you know, a quarter ago when the stock was in the mid-50s, he had a price target. He raised his price target to 72. So he wasn't surprised to see this.

Speaker Change: Alex.

Speaker Change: Great questions every quarter and kudos to him for his good coverage of the company and not only that.

Alan: A quarter ago, when the stock was in the mid fifties.

Speaker Change: He brings his price target to 72, so he wasn't a surprise to see that that was a great call on his part so you surround yourself and the company.

David Minkoff: That was a great call on his part. So you surround yourself in the company, and your analysts are just high-quality people that are just getting the job done. And I, you know, I just, I don't know why I've been doing this for 40 years, trying to find, you know, finding good companies to invest in. And I can count on one hand the number of companies that have done as well as you have in 40 years. So, you know, I'm on conference calls all the time. But I've never had a discussion like this. I usually ask the question that's pertinent, and that's all.

Speaker Change: And your analyst with just high quality people that are just getting the job done.

Speaker Change: I don't know what I'm doing this for 40 years trying to final finding good companies to invest in.

Speaker Change: And I can count on one hand.

Speaker Change: <unk> companies that have done.

Speaker Change: Good as you have in 40 years, but im doing this so.

Speaker Change: I got on the call I'm on conference calls all the time I've never had a discussion like this I usually ask the question that is pertinent and Thats, all but I've never said this about any company, but it really has to be called out and I'm thinking theres. Some I felt the need to verbalize, it and Im sure <unk>.

David Minkoff: But I've never said this about any company, but it really has to be called out. And I'm thinking this, and I felt the need to verbalize it. And I'm sure, speaking for everyone else on this call, uh, you know, there's nobody that could possibly have a loss in this company, whether you paid $8 a share or $68 a share. The stock hit a new high, an all-time high yesterday. So you're talking to everybody. That's a happy camper on this call.

Speaker Change: For everyone else on this call.

Speaker Change: There is nobody that could possibly have a loss in this company, whether you paid $8 a share.

Speaker Change: Or $68 a share the stock hit a new all time high yesterday, so youre talking to everybody. That's a happy camper on this call. It's just phenomenal.

David Minkoff: It's just phenomenal. You know, it's really remarkable and deserves to be called that. The words that I'm using aren't strong enough. I don't know how to end. I look for a manager like you; I look for companies that are managed by people like you that are qualified, no attitude, just deliver good results and in a transparent way. It's just a pleasure to have worked with you for 10 years; that's all I can tell you. I have had no aggravation with this company and its actions in 10 years.

Speaker Change: <unk>.

Speaker Change: Yes.

Speaker Change: It's really remarkable and deserves to be call. It yes.

Speaker Change: Towards that I'm using arent strong enough I don't know.

Speaker Change: Yes look I look for a manager like you too.

Speaker Change: For companies that are managed by.

Speaker Change: People like you that are qualified no attitude.

Speaker Change: Just deliver the good results in.

Speaker Change: Just in a transparent way, it's just it's just a pleasure to have <unk>.

Speaker Change: With for 10 years. So that's all I can tell you I know I'm going to answer with this company.

Speaker Change: Actions in 10 years.

David Minkoff: And one other kind of aside here; when I turn on my screen every day, I have my stocks that I own in different columns; the banks are in one column, the industrials are another, drugs are another, and high tech is in another. The high tech may consist of Amazon, Nvidia, Microsoft, Meta, and Apple. After this conference call, I'm going to remove Northeast Bank, NBN, from the banking column and put it in the high-tech column with Meta and NVIDIA and Amazon, where it belongs. So it has some decent competition, so that's all I can tell you. You know, it competes with those groups.

Speaker Change: One other kind of aside when I turn on my screen every day I have my stocks, but I own in different columns banks are in one column and industrials are another drugs or another in high tech or an another the high Tech may consist of Amazon.

Speaker Change: Microsoft Meta Apple.

Speaker Change: After this conference call I am going to remove northeast bank Nbn from the banking column and put it in the high Tech column with the Meda.

Speaker Change: Amazon where it belongs.

Speaker Change: Has some decent competition so.

Speaker Change: That's all I can tell you.

Speaker Change: It competes with those groups I mean, I'm, almost thinking youre going to discover the cure for cancer or something.

David Minkoff: I mean, I'm almost thinking you're going to discover the cure for cancer or something, you know. It's just, you know, I don't know what to say. You know, it's just really something to behold, and it's a pleasure to have made your acquaintance. For ten years, I just lucked out, I guess, by getting involved here. I don't know what else to say. Keep up the good work. Thank you. Thank you very much, David. Those are really kind comments.

Speaker Change: Alright.

Speaker Change: Yes.

Speaker Change: I'll have to say.

Speaker Change: Really.

Speaker Change: <unk> holds I know, it's a pleasure to have made your claims.

Speaker Change: For 10 years, I, just lucked out I guess.

Speaker Change: Again involve yourself.

Speaker Change: I would also say keep up the good morning, David.

Speaker Change: Thank you. Thank you very much David those are really kind of comments.

Richard Wayne: And I will you know, all the people work in the bank and listen to this. I'm sure we'll appreciate you. And it's not just me.

Speaker Change: All the people who work in the bank that listen to this I'm sure will appreciate.

Speaker Change: And if you're.

Richard Wayne: It's a great thing. Let me just say thank you. Do anyone else have any compliments?

Speaker Change: Single Omni, it's not just me it's a great thing let me just.

Richard Wayne: No, I mean, any questions? Before David was disconnected, I had to thank you all, and I won't repeat that again to you, but have a good weekend, everybody, and thank you very much. I think Operator Worrell said, "All right. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect. Goodbye.

Speaker Change: Thank you David anyone else have any complement I mean any question.

Speaker Change: Yeah.

Speaker Change: [laughter].

Speaker Change: Yes.

Speaker Change: Before when David was the disconnect that I had.

Speaker Change: Thank you all and I won't repeat that against you but.

Speaker Change: Have a good weekend, everybody and thank you very much.

Speaker Change: I think operator, we're all set.

Operator: Alright, Thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.

Speaker Change: Goodbye.

Operator: ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? [inaudible] Welcome to the Northeast Bank fourth quarter fiscal year 2024 earnings call. My name is Stephen and I will be your operator for today's call. This call is being recorded.

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Operator: With us today from the bank is Rick Wayne, President and Chief Executive Officer; Richard Cohen, Chief Financial Officer; and Pat Dignan, Executive Vice President and Chief Operating Officer. Prior to the call, an investor presentation was uploaded to the bank's website, which we will reference in this morning's call. The presentation can be accessed in the investor relations section of northeastbank.com under events and presentations. You may find it helpful to download this investor presentation and follow along during the call. Also, this call will be available for rebroadcast on the website for future use. At this time, all participants are in a listen-only mode.

Speaker Change: Welcome to the northeast Bank fourth quarter fiscal year 2024 earnings call.

Speaker Change: Name is Steven and I will be your operator for today's call. This call is being recorded.

Speaker Change: With us today from the Bank is Rick Wayne, President and Chief Executive Executive Officer.

Speaker Change: Richard Cohen, Chief Financial Officer.

Speaker Change: Pat Dignan exit executive Vice President and Chief operating Officer.

Speaker Change: Prior to the call an investor presentation was uploaded to the bank's website, which we will reference in this morning's call.

Speaker Change: The presentation can be accessed at the Investor Relations section of northeast Bank Dot com under events and presentations.

Speaker Change: You may find it helpful to download to download this investor presentation and follow along during the call.

Speaker Change: Also this call will be available for rebroadcast on the website for future use.

Speaker Change: At this time all participants are in a listen only mode. Later, we will conduct a question and answer session. During the question and answer session. If you have a question. Please press star one on your Touchtone phone.

Operator: Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star 11 on your touchtone phone. As a reminder, the conference is being recorded. Please note that this presentation contains four financial statements about Northeast Bank. Forward-looking statements are based upon the current expectations of Northeast Banks management and are subject to risks and uncertainty. The actual results may differ materially from those discussed in the forward-looking statements. Northeast Bank does not undertake any obligation to update any forward-looking statement.

Speaker Change: As a reminder, the conference is being recorded.

Speaker Change: Please note that this presentation contains forward looking statements about northeast bank forward looking statements are based upon the current expectations of northeast Bank's management and are subject to risks and uncertainties.

Speaker Change: Actual results may differ materially from those discussed in the forward looking statements northeast Bank does not undertake any obligation to update any forward looking statements.

Operator: I'll now turn the call over to Rick Wayne. Mr. Wayne, you may begin. Thank you. Good morning, everyone.

Speaker Change: I will now turn the call over to Rick Wayne Mr. Wang you may begin.

Rick Wayne: Thank you.

Rick Wayne: Good morning, everyone. Thank you for joining us on the call.

Rick Wayne: During the call I'm going to first Gabe.

Speaker Change: Some go over some highlights.

Speaker Change: For the quarter and the year.

Rick Wayne: Our view of.

Speaker Change: The year has looked like.

Rick Wayne: After I finish my comments.

Richard Wayne: Richard Cohen is going to talk about funding and our ATM, and then Pat is going to talk about loan activity and share some thoughts on what we see in the market. And then, as you've just heard, we'd be happy to answer any questions. First, just some thoughts on the quarter and the year. We think it was a really strong year and a strong quarter.

Rick Wayne: Richard Cohen is going to talk about funding and.

Richard Cohen: Our ATM.

Rick Wayne: And.

Rick Wayne: And then Pat is going to talk about loan activity and share some thoughts on.

Pat Dignan: On what we see in the market.

Rick Wayne: And then.

Speaker Change: You've just heard we'd be happy to answer any questions.

Rick Wayne: Questions.

Speaker Change: First just some thoughts on the on the quarter and the year, we think it was really strong year.

Rick Wayne: And a strong quarter.

Richard Wayne: Almost in all the metrics one would look at, our loan volume was very strong. Our margins; our NIM was very strong. Asset quality held up really well. And, of course, our return on equity at 17.46% for the year is impressive, as is the ROA at just a little bit under 2%, 199 for the quarter and 198 for the year. Let me just highlight a few things there. I'm now referring to page three, with respect to our national lending, Purchase loans were $160.6 million of UPB at a purchase price of 89.4% for an investment of $143.6 million, and for the year, $382 million, invested with UPB of $432.4 million at an 88.4% rate. Purchase price

Rick Wayne: The almost in all of the metrics one way to look at our loan volume was very strong.

Rick Wayne: Our our margins our NIM was very strong asset quality.

Rick Wayne: Held up really well.

Rick Wayne: And of course our.

Rick Wayne: Return on equity.

Rick Wayne: At seven teen four 6% for the year.

Speaker Change: As impressive as the ROA yet.

Rick Wayne: Just a little bit under 2% 199 for the quarter and 198.

Rick Wayne: For the year.

Rick Wayne: Just highlight a few things there.

Rick Wayne: Referring to page three.

Rick Wayne: With respect to our national.

Rick Wayne: Lending.

Rick Wayne: <unk>.

Rick Wayne: Purchased loans were.

Rick Wayne: $166 million of <unk>.

Rick Wayne: At a purchase price of 89, 4% for an investment of 143.6.

Rick Wayne: Million.

Rick Wayne: And for the year $382 million.

Rick Wayne: Invested with <unk>.

Rick Wayne: <unk> $432 4 million.

Rick Wayne: At an 88, 4%.

Richard Wayne: On the origination side, we originated $114 million for the quarter and a shade under $400 million for the year at $399.1 million. Then, I want to just talk for a second about rates and move to page 22 in the slide deck, which takes a look at what we earned in rates in the quarter. And this is a slide that shows what is both regularly scheduled interest and then plus normal accretion, plus accelerated accretion, and fees. First, starting with the purchase loan.

Rick Wayne: <unk> price.

Rick Wayne: On the origination side.

Rick Wayne: We originated in the quarter of $114 million.

Rick Wayne: For the quarter.

Rick Wayne: In the shade under $400 million for.

Rick Wayne: For the year at $399.1 million.

Rick Wayne: The.

Speaker Change: I wanted to just talk for a second about rates and move to page 22 in the slide deck.

Rick Wayne: Which takes a look at what we earned in the rates in the quarter.

Rick Wayne: And this is a slide that shows what is both regularly scheduled interest.

Rick Wayne: And then.

Rick Wayne: Plus accrued normal accretion plus accelerated accretion accretion and fees.

Richard Wayne: The regularly scheduled interest in accretion was $843, and we picked up another 104 basis points from accelerated accretion for a total of 9.47% on the purchase loan. And on the originated loan, the regularly scheduled interest, not accretion, on that was 9.65% and three basis points for fees. So overall, we earned on our loan book for the quarter 9.55%, which is we think an excellent number generating a NIM for the quarter of 5.13 percent, which is consistent with what we did during the year, which was 5.1 and six percent.

Rick Wayne: First starting with the purchased loans.

Rick Wayne: The regularly scheduled interest and accretion was 843 and we picked up another 104 basis points from accelerated accretion.

Rick Wayne: For a total of 947% on the purchase loans.

Rick Wayne: And on the originated alone.

Rick Wayne: The regularly scheduled interest.

Rick Wayne: Not accretion on that was 965%.

Rick Wayne: And three basis points for fees. So overall, we earned on our.

Rick Wayne: Our loan book for the quarter nine.

Rick Wayne: <unk>, 955%.

Rick Wayne: Which is we think an excellent number.

Rick Wayne: Generating a NIM.

Rick Wayne: For the.

Rick Wayne: Quarter.

Rick Wayne: Five 3%, which is consistent with what we did in the during the year, which was 516.

Richard Wayne: Richard will talk about the ATM. As I mentioned, we earned $15.1 million in the quarter and 58.2 million for the year, which is pretty even income each quarter. One of the prior quarters was a little bit lower as a result of some incentive comp that we accrued earlier than we normally do. And as we discussed at the last call, we earned, on a per share basis, fully diluted $1.91 for the quarter and $7.58 cents for the year. I did mention the ROA. The ROA was 16.56 for the quarter and 17.46 for the year.

Rick Wayne: 6%.

Rick Wayne: Richard will talk about the ATM as I mentioned.

Richard Cohen: We earned in the quarter of $15 $1 million.

Richard Cohen: And $58 2 million for the year, which is pretty even income each quarter one of the prior quarters. It was a little bit lower as a result of some.

Richard Cohen: Incentive comp that we accrued earlier than we normally do and we discussed at the last call.

Richard Cohen: Earned on.

Richard Cohen: Per share basis fully diluted of $1 91 for the quarter and seven.

Richard Cohen: $7 58.

Rick Wayne: Since for the year.

Rick Wayne: I did mention the ROA and ROE was 16, 5% to six for the quarter.

Rick Wayne: 17, four six for the year.

Richard Wayne: You know, interestingly, if we take a look at the first, And that's a result that differences. I should say the difference is because we have a lot more capital now, for the quarter, we earn 15.2 million dollars, in the first quarter and this quarter we're in 15.1 million so virtually the same amount of money but our capital was 312 million in the first quarter and now it's 377 million and so with same dollars on more capital I would just remind those that have been investing with us for a while this excess capital sounds reminiscent of all the capital that we had after the triple p and of course we got questions about how we were going to deploy it and we wound up buying a billion dollars a quarter a million dollars of loans, in the fourth calendar quarter of 2022.

Rick Wayne: Interestingly.

Speaker Change: If we take a look at the first.

Rick Wayne: And Thats, a result that differences I should add a difference because we have a lot more capital now.

Speaker Change: Sure.

Speaker Change: For the quarter, we earned $15.2 million.

Speaker Change: In the first quarter and this quarter, we earned $15 1 million so virtually the same amount of money, but our capital.

Rick Wayne: <unk> was $312 million in the first quarter and now it's $377 million.

Rick Wayne: And so with the same dollars on more capital.

Rick Wayne: I would just remind those that have been investing with us for a while.

Rick Wayne: Excess capital sounds reminiscent of all the capital that we had after the Triple T and of course, we got questions about how we were going to deploy it and we wound up.

Rick Wayne: Buying a $1 billion a quarter million dollars of loans.

Rick Wayne: The fourth calendar quarter of.

Rick Wayne: 2022.

Richard Wayne: I'm not predicting that we're going to do that, but I am, and Pat will touch on this a little bit more. We are of the view that there are a lot of opportunities to purchase loans. Without over-promising, of course, they're binary transactions. You win, or you don't win.

Rick Wayne: I'm not predicting that we're going to do that.

Rick Wayne: But.

Rick Wayne: Pat will touch on this a little bit more.

Pat Dignan: The view there are a lot of opportunities to purchase loans.

Pat Dignan: And.

Pat Dignan: Without over promising of course, they are binary transactions you win or you don't win.

Richard Wayne: And so we'll see what happens, but we are optimistic about what we see in the marketplace. And also, in the highlights section, you can see that our tangible book is $46.34. I do want to comment on asset quality as well. Our asset quality remains strong, which I think is, was particularly impressive in light of that, you know, virtually all of our loans are commercial real estate loans, which have been under some level of concern, kind of across the board; you read about it in the paper almost every day.

Pat Dignan: And so we'll see what happens, but we are optimistic about what we see in the marketplace.

Rick Wayne: And.

Rick Wayne: And also in the highlight section you can see that our tangible book.

Rick Wayne: Is $46.34.

Rick Wayne: I do want to comment on asset quality as well.

Rick Wayne: Our asset quality.

Rick Wayne: <unk> strong.

Rick Wayne: Which I think is.

Rick Wayne: Particularly.

Rick Wayne: Impressive.

Rick Wayne: <unk> of that virtually all of our loans are commercial real estate loans, which have been on.

Rick Wayne: There are.

Rick Wayne: Some level of.

Rick Wayne: Concern or kind of across the board you read about it in the paper almost everyday.

Richard Wayne: You know, in our case, we have relatively low loans of values, you know, in the very low 50% range. And that has been very good for us. Then I just want to find a page on

Rick Wayne: In our case, we have relatively low loan to values.

Rick Wayne: Very low 50% range and that has.

Rick Wayne: Been very good for us.

Rick Wayne: The.

Speaker Change: Just wanted to find the page.

Richard Wayne: That's the quality at the back, Becca, you have the one and the other one. This is real life; we're doing this so I can. Sorry for the page flipping as I'm getting there. But I will.

Rick Wayne: Asset quality at the bank.

Rick Wayne: Yes.

Speaker Change: The other one.

Speaker Change: This is real live we're doing this.

Rick Wayne: No.

Rick Wayne: Alright page slipping is that we're getting there.

Rick Wayne: I will.

Rick Wayne: Yeah.

Richard Wayne: Thanks. Well, rather than taking note of, taking a lot of your time here, I now have it.

Rick Wayne: Yes.

Rick Wayne: We're rather than taking.

Rick Wayne: Taking a lot of your.

Rick Wayne: Well I now have a things to bad debt you can see.

Richard Wayne: Thanks, Rebecca. You can see that on page nine, the non-performing assets, we still get a fair number of resolutions. We started the quarter with $28 million, and $3 million of non-performing assets were resolved.

Rick Wayne: See that.

Speaker Change: On page nine.

Rick Wayne: Nonperforming assets, we still get.

Rick Wayne: A fair number of resolutions we started.

Rick Wayne: <unk> with $28 million and $3 million of.

Rick Wayne: Nonperforming assets were resolved.

Rick Wayne: And then we added four six.

Richard Wayne: And then we added $4.6 million. So they come and they go. And that's what you would expect, you know, from our purchase loan book. And so, you know, those numbers remain strong for us. With that, I would ask Richard to follow.

Rick Wayne: So they come and they go and Thats, where you would expect.

Rick Wayne: From our purchase loan book and so.

Rick Wayne: Those numbers remain to be strong for us.

Rick Wayne: With that I would ask Richard to.

Richard Cohen: Well, great. Thanks, very much Rick that's going to pick up the section on the loans, so I'm going to focus primarily on the deposit side.

Speaker Change: In terms of the 2024 financial year on deposits increased $402 million.

Speaker Change: That is an increase up to $234 billion from its previous level of 194 billion.

Rick Wayne: The most significant trends on the deposit side as our deliberate substitution.

Rick Wayne: Between borrowings and increasing our brokered Cds are referred to this on our previous call and we continue to do so so for the financial year, our brokered Cds are up by $241 million to a level of $871 million.

Richard Cohen: Whereas our borrowings are down $217 million.

Rick Wayne: To a level of $345 million. The reason that we're doing that to reiterate is we want to increase our capacity for off balance sheet funding.

Speaker Change: Our community bank to close off the picture on the deposit side the community Bank is up $219 million.

Rick Wayne: To a level of $1 $4 billion.

Rick Wayne: Taking a look at the cost of our funding you can refer to slide 15, which refers to the quarterly cost. It shows you the rates for each of the quarters historically as well as the current spot rates I think it's worth pointing out over there is that the cost of deposits you will have seen rising steadily from the 2023 financial year.

Rick Wayne: Right through to the end of 2020 for what's noteworthy though is that the spot interest rates at the end of our financial year decreased to $4 two 6% from its average for the fourth quarter of $4. Three six thats an indication of course that rates are coming down and I'll speak about that mix.

Rick Wayne: We are very careful to focus on our interest rate risk in the banking book, we continue to monitor and manage that to make sure we're not excessively exposed to rates going up or down.

Richard Cohen: We continually monitor and manage that to make sure we're not excessively exposed to rates going up or down. We get a lot of questions about what will happen in a rates-down environment, and the answer that we give is that we are likely to benefit from a decrease in interest rates. There are a few reasons for that.

Speaker Change: We get a lot of questions about what will happen in a rates down environment and the answer that we give is that we are likely to benefit from a decrease in interest rates.

Speaker Change: There are a few reasons for that.

Speaker Change: The first one is that we have certain floors on our originated loans.

Rick Wayne: It can be of course, our deposits will reprice and therefore reduce the cost of funding in other words, you will see us move in the opposite direction to that indicated in slide 15, and then finally as a prepaid benefits as rates Scott prepayments may increase if that does happen that will accrete through income and Rick has referred to some of the uplift we get.

Rick Wayne: In terms of our revenue from that perspective.

Speaker Change: Having said all of that we do not deliberately positioned ourselves to take excessive exposure in either direction. Because we are conscious that rates cannot be predicted.

Speaker Change: I refer you also to slide 19, which you may find interesting that speaks about revenue and noninterest expense I think what's most noteworthy about that if you look at the chart.

Richard Cohen: Is it is a very useful visual way to see that our revenue is growing faster than our operating expenses.

Speaker Change: Britain that differently you would have seen that we regularly report our efficiency ratio and you will have noticed a trend on that which is for that to improve over time.

Richard Cohen: I'm going to turn quickly to the ATM, you recall. And as I mentioned in the previous quarter, the ATM is where we sell shares in the open market. And we do so in order to raise additional capital so as to increase our common equity tier one. The reason we do that is, as Pat will refer to, we see opportunities in the market, and we see the ATM as one of the tools that we can use to raise capital to allow us to take advantage of those opportunities without putting undue stress on our capital adequacy. Speaking quickly of the ATM. The ACM, when we initially commenced it, we had a $50 million capacity. $27 million of that has been utilized to date in both the current and prior financial years.

Speaker Change: I am going to turn quickly to the ATM youll recall and as I mentioned in the previous quarter. The ATM is where we sell shares in the open market and we do so in order to raise additional capital so as to increase our common equity tier one.

Speaker Change: The reason, we do that is as tech will referred to we see opportunities in the market and we see the ATM as one of the tools that we can use to raise capital to allow us to take advantage of those opportunities without putting undue stress on our capital adequacy.

Speaker Change: Speaking quickly of the ATM.

Speaker Change: The ATM when we initially.

Speaker Change: <unk>, we had a $50 million capacity <unk>.

Speaker Change: $27 million of that has been utilized to date in both the current and prior financial years, we therefore have $23 million left in the ATM.

Richard Cohen: We therefore have $23 million left in the ATM, and I can speak about the activity in the fourth quarter. We sold 150,000 shares at an average of $55.13 on a net basis per share, which added 8.3 million dollars to our capital for the quarter. Speaking quickly about the year, the ATM for the year added 29 cents per share to our tangible book value. Now, I will hand over to Patrick. Thanks, Richard. There's not really a lot new this quarter over last quarter, except that there's a continued increase in real estate transactions, which provides more confidence on the investor side, and also on the purchase side, banks that have had the opportunity to write down some of their loans, and what we've seen is a real uptick in purchase loan opportunities. We think that the next quarter will be strong on the purchase side. Um, just in the general market, office and multifamily continue to be a concern.

Speaker Change: To speak about the activity in the fourth quarter, we sold 150000 shares at an average of $55.13 on a net basis per share that added $8 $3 million to our capital for the quarter.

Speaker Change: Speaking quickly about the year the ATM for the year added <unk> 29 per share tangible book value.

Speaker Change: Let me hand over to <unk>. Thanks.

Speaker Change: Thanks Richard.

Speaker Change: It's not really a lot new this quarter over last quarter, except that there.

Speaker Change: There is a continued increase in real estate transactions, which provides more confidence on the industrial side.

Speaker Change: And also.

Speaker Change: On the purchase side banks have had the opportunity to write down some of their loans and what we've seen is a real uptick in purchase loan opportunities.

Speaker Change: <unk>.

Speaker Change: We think that next quarter will be strong on the purchase side.

Speaker Change: Just in the general market office and multifamily community.

Speaker Change: Darren.

Darren: Beyond that we keep an eye on expenses.

Darren: And.

Darren: Again more of the same.

Speaker Change: We think theres a lot of opportunity and we expect to be positioned well for it.

Speaker Change: How do you want to comment for a little bit on the increase in the originated loans.

Speaker Change: In this quarter over some of the preceding ones, where youre seeing aside from more activity, but just looking at the numbers.

Speaker Change: We've been very successful on the lender finance side, it's been we've increased the number of groups that.

Speaker Change: We have we transact with and.

Speaker Change: There is going to.

Speaker Change: Our growing.

Speaker Change: For multiple reasons, a lot of migration toward non bank lenders and we benefit from that.

Speaker Change: Increasing.

Speaker Change: The number of transactions of a number of Counterparties is unable to really boost that.

Speaker Change: I just wanted to just describe that business for US I think you Pat described that for a second in the event. There are some callers on that or have not been investors for a while and may not know exactly what that business means in our case, because there's lots of ways people talk about portfolio finance our lender.

Richard Wayne: In the event there are some callers on that have not been investors for a while and may not know exactly what that business means in our case, because there are lots of ways people talk about portfolio finance or lender finance. We have a significant number of groups that are non-bank lenders that we leverage their lending by providing financing to them. They're typically structured as guidance lines, meaning that every advance that they want to lend money to their borrowers secured by commercial real estate, we underwrite at the same time, just as if we were going to make the loan.

Speaker Change: Finance.

Speaker Change: We have.

Speaker Change: Significant number of groups that are non bank lenders.

Speaker Change: That we leverage their lending by providing.

Speaker Change: Financing to them, they're typically.

Speaker Change: Ruptured as guidance lines, where meaning that every advance that they want to lend money to their borrowers secured by commercial real estate. We underwrite at the same time. This is if we were going to make the loan.

Speaker Change: It's been there.

Richard Wayne: It's been a really strong part of our business. So, because you have a couple layers of protection in the capital stack, if you have the original property owner that borrows money from the non-bank lender, you know, maybe with 30% equity and borrowing 70% from the non-bank lender, we then would lend, and if we wanted to advance on that loan, we might advance. 70% or so to the non-bank lender, so that our loan, 70 times 70, is 49% against the underlying commercial real estate loan.

Speaker Change: So really strong part of our business.

Speaker Change: No.

Speaker Change: Because you have couple of layers of protection in the capital stack.

Speaker Change: The original property owner that borrows money from the non bank lender.

Speaker Change: Maybe with 30% equity and borrow 70% from the non bank lender. We then would land if we wanted to advance on that loan in mine advance, 70% or so that the non bank lender. So that our alone 70 times 70 is 49% against the underlying.

Speaker Change: Commercial real estate loan there is structured typically in bankruptcy remote entities.

Speaker Change: With all of the loans Cross collateralized all of these advances to be clear cross collateralized Cross defaulted.

Speaker Change: With the highest default rate permitted under the law in the case of New York its 24%.

Speaker Change: Our borrowers.

Speaker Change: Sure.

Speaker Change: Variance.

Speaker Change: And very capable in the area of lending even if the underlying borrower may.

Speaker Change: <unk> be great at making widgets, so to speak proverbial widgets.

Speaker Change: But they may not be as sharp in the financial area, but we have that party in between us.

Speaker Change: To date.

Speaker Change: We have done a lot of it we have not lost one penny.

Speaker Change: Principal on it and it's a business line, we liked very much last quarter out of the origination volume.

Speaker Change: 90% of those loans were portfolio finance loans.

Richard Wayne: You know, as Pat mentioned, we're looking to expand that business with more groups, and our borrowers are, you know, very comfortable with us as their lender, and so we like that. I just wanted to expand on that in case someone was not as familiar with it. Another point is that business with the LTVs is generally lower, and in the environment we've been in in the last year with fewer real estate transactions and a little more subjectivity with respect to real estate valuations, we've not been quite as competitive on the direct side, but as the new normal sets in and there are more and more real estate trades, I feel we will, in addition to growing this business, also be more competitive in the direct lending space That's right.

Speaker Change: As Pat mentioned, we're looking to expand that business with more groups.

Speaker Change: And.

Speaker Change: And our borrowers are.

Speaker Change: So very comfortable with us as lender and so we like that I just wanted to expand on that in case someone is not as familiar with it another pointed on that business as the Ltvs are generally lower and in the environment. We've been in the last year with fewer real estate transactions.

Speaker Change: Little more subjectivity with respect to real estate valuations, we've been not quite as competitive on the direct side, but as these.

Speaker Change: As the new normal sets in and Theres more and more real estate trades I feel will be.

Speaker Change: In addition to growing this business also be more competitive on the direct lending space.

Speaker Change: I just wanted to amplify another point that made on the purchased loan in the pipeline.

Speaker Change: You've heard the forward looking statements.

Speaker Change: Is that more weighted deal again.

Speaker Change: But there seems to be a lot.

Speaker Change: Of transact a lot of the dollar transactions in the market now.

Speaker Change: The kind of assets that we like to buy.

Speaker Change: Meaning performing loans.

Speaker Change: Secured by cash flow and collateral generally.

Speaker Change: In liquid markets.

Richard Wayne: And we have one of the things, of course, when you have a seller, execution risk is an issue that they care about a lot when they want to sell. They want to make sure they have a counterparty that's going to perform. You know, we've been at this at a very long time, you know, 14 years at Northeast Bank and, 18 years before that at Capital Crossing Bank and we have developed and I say humbly earned that reputation in doing that and we're seeing a lot now and then I would just point out as Pat did or just just make sure it's clear that doesn't mean we're going to win anything you know the transactions you win or you lose but of course seeing a lot of activity there is much better than not seeing it and so we will keep you informed around that as we have these calls.

Speaker Change: And we have one of the things are of course, when you have a seller execution risk as an issue for that they care about a lot when they wanted to sell they want to make sure they have.

Speaker Change: Hunter part of it is going to perform we've been at this a very long time.

Speaker Change: 14 years at northeast Bank.

Speaker Change: 18 years before that.

Speaker Change: Capital crossing bank and we have.

Speaker Change: Develop and humbly.

Speaker Change: Earned that reputation and <unk>.

Speaker Change: Doing that and we're seeing a lot now.

Speaker Change: And then I will.

Speaker Change: Just point out is that data.

Speaker Change: Just make sure it's clear that doesn't mean, we're going to win anything.

Richard Wayne: Transactions, you win or you lose but of course seeing a lot of activity there is much better than not seeing it and so.

Speaker Change: So we will.

Speaker Change: Keep you informed around that as we have these calls.

Richard Wayne: I think that's all that we have in our presentation. And I would ask if there are any questions out there. I would point out that our former analyst, Alice Twerdahl at Piper Sandler, who really understood our bank and was typically the ones asking questions, has left Piper Sandler, and they have temporarily suspended coverage of us until they can find a replacement for him, which is not, I think they did that with all of the banks and companies that Alice covered. It was not personal. It feels personal, but it wasn't.

Speaker Change: I think that's all that we have in our presentation.

Speaker Change: And I would ask if there are any questions.

Speaker Change: Out there.

Speaker Change: I would point out that.

Speaker Change: Our former analysts dialysis <unk> at Piper Sandler who was really understood our bank.

Speaker Change: And with typically the ones asking questions as well.

Speaker Change: Piper Sandler temporarily they have suspended.

Speaker Change: Coverage of less until they can find a replacement for him which is not I think that with all of the banks that.

Speaker Change: And companies that Alex.

Speaker Change: It was not personal.

Richard Wayne: Feels personal but it wasn't.

Speaker Change: So we may not have.

Speaker Change: As active questions but.

Speaker Change: We will see anyone have anything that would they would like to ask us.

Operator: So we may not have as many active questions, but I will see. Anyone have anything that they would like to ask us? Yeah, we'll go ahead and begin the question and answer session. If you have a question, please press star one one on your touchtone phone. If you wish to be removed from the queue, please press star 1 1 again. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers.

Speaker Change: Yes, I won't go ahead and begin the question and answer session. If you have a question. Please press star one on your Touchtone phone.

Speaker Change: If you wish to be removed from the queue. Please press star one again.

Speaker Change: If you are using a speakerphone you may need to pick up the handset first before pressing the numbers.

Operator: Again, if you have a question, please press star 1-1 on your touchtone phone. David Minkoff, this is the perfect time for you to join in. All right, please stand by for the Q&A roster to be compiled. We'll give it one more moment.

Speaker Change: Once again, if you have a question. Please press star one on your Touchtone phone.

Speaker Change: Yes.

Speaker Change: David Minkoff. This is a perfect time for you to join in.

Speaker Change: Alright, please stand by for the Q&A roster to be compiled.

Speaker Change: We will give it one more moment.

Richard Wayne: Okay, it appears there are no questions at this time. I would now like to turn the call back over to Rick Wayne for closing remarks. Well, there are two ways to take the lack of questions. I'm going to go with the most positive outlook and say that we did such a good job explaining what we're doing that we have answered any questions you might have. There might be another way to think about it, but I'm not going there.

Speaker Change: Okay. It appears there are no questions at this time, our now I would like to turn the call back over to Rick Wayne for closing remarks.

Rick Wayne: Well theres two ways to take the lack of questions I'm going to go with the most positive outlook that we did such a good job.

Speaker Change: Explaining what we're doing that we have answered any questions you might have it might be another way to think about it but I'm not going there.

Speaker Change: All of you that listened and all that will listen to the call.

Richard Wayne: On our website, we thank you for your interest.

Speaker Change: Can you support.

Richard Wayne: And look forward to.

Richard Wayne: Talking to you again.

Richard Wayne: After the end of the.

Speaker Change: Following quarter and with that I wish you all a.

Richard Wayne: Happy weekend soon and it really enjoyable summer. Thank you we did actually have it looks like we.

Speaker Change: We did have someone pop into the queue. There. So I'll go ahead and.

Operator: So I'll go ahead and promote him, and we will take that question. One moment, please. Can you hear me?

Operator: Promote him and we will take that question.

Speaker Change: One moment please.

Speaker Change: Can you hear me.

Operator: Yes. Our question comes from David Minkoff, DCM Asset Management. Please go ahead. Yes, I think we were cut off before. Can you hear me now? Yes, we can, David. Good morning.

Operator: Our question comes from David Minkoff, DCM asset management. Please go ahead, yes.

David Minkoff: Yes I was.

David Minkoff: Classic we were cut off before can you hear me now.

Operator: Yes, we can David good morning, great.

David Minkoff: Great. Great. Congratulations to you, Richard, and Pat on another great quarter. So I do have one question.

David Minkoff: Congratulations to you Richard and Pat on another great quarter. So I don't have one question.

Speaker Change: I asked the question I've got to say.

David Minkoff: But before I ask the question, I've got to say that Rick, you and your team have done a phenomenal job with this company. You know, I was with this company; I stumbled across it by accident, actually, ten years ago, about a month after you went public. And so I've listened to 40 conference calls, and I haven't missed a single one. You know, you deliver these consistent, beautiful results quarter after quarter, and when you think about it, this is basically a seven-branch bank located in Maine that nobody's ever heard of, with the help of some loan acquisition and servicing, and you've delivered phenomenal results time and time again.

David Minkoff: Greg you view and your team have done a phenomenal job with this company.

Speaker Change: I was with this company I stumbled across it.

By accident actually 10 years ago about a month after you went public.

David Minkoff: So I have listened to 40 conference calls and I Havent missed one.

Speaker Change: And.

David Minkoff: You deliver these consistent.

David Minkoff: Beautiful results quarter after quarter, and when you think about it.

David Minkoff: This is basically a seven branch bank located in Maine.

Speaker Change: Nobody's ever heard of.

David Minkoff: With the help of some loan acquisition and servicing.

David Minkoff: And you've delivered phenomenal results time and time again now to put this in perspective.

David Minkoff: Now, to put this in perspective, in... 2020, when COVID hit. Stock got knocked down from 24 in 2019, down to 6 in 2020 due to COVID and everything else that had gotten hit along with it. I mean, it was almost an act of God type of situation.

David Minkoff: In two.

David Minkoff: 2020, when Covid hit.

David Minkoff: The stock got knocked down from 24 2019 down to six and.

Speaker Change: In 2020, due to Covid and I was wrong.

David Minkoff: It is everything else that had gotten hit along with it I mean, there was some active type of situation.

David Minkoff: So, The results from then, you've engineered the stock going from a low of six in COVID in March 2020 to 72 today. We call that a 12-bagger on Wall Street; the stock is up from the low of COVID by 1,200%, 1,200%, in four short years. This is totally miraculous, uh... and you come out quarter after quarter. I've listened to forty of them; I haven't missed a single one. You come out in a humble manner, giving us the results, no attitude, no arrogance, almost apologetic for these stupendous numbers, quarter after quarter.

David Minkoff: So.

David Minkoff: The results from then you've engineered.

Speaker Change: Going from a low of six in Covid in March 2020 to 72 today, we call that a <unk> Vega.

Speaker Change: And Wall Street.

David Minkoff: Stock is up from the low of Covid, 1200% 12, 100% in four short years. This is totally miraculous.

Juan: And you come out quarter after quarter that I've listened to 40 of them happened Mr. Juan.

David Minkoff: And.

Speaker Change: When you come out.

David Minkoff: Humble.

David Minkoff: Manner.

David Minkoff: Giving us the results no attitude.

David Minkoff: Arrogance.

Speaker Change: Almost apologetic for these stupendous numbers quarter after quarter now I'll remember three seven years ago six years ago on your base earnings were $2 a share.

David Minkoff: I'll remember three, seven years ago, six years ago, when your base earnings were $2.00 a share. You would come out with, let's say, 50 cents for the quarter and caution us to not annualize those numbers because the quarter-to-quarter numbers could be choppy, and uh... you know not to take uh... not to assume that you have another fifty cent quarter. Well, I've been looking for this for forty quarters, and I haven't seen one disappointment yet, with a down quarter or something that caused any

David Minkoff: Would come out with let's say 50 cents for the quarter and caution us.

David Minkoff: Annualize those numbers because quarter to quarter numbers could be choppy.

David Minkoff: And not to take not to assume that youre going to have another 15 quarter lift.

David Minkoff: Listening to this for 40 quarters.

David Minkoff: I haven't seen one disappointment yet.

David Minkoff: With a down quarter or something that caused any aggravation.

Speaker Change: I would if there were a wall street.

David Minkoff: Hall of Fame I would nominate you for that.

David Minkoff: Entrance into that organization, along with JMP Diamond Who's done a good job of course with J P. Morgan.

David Minkoff: With the proviso.

David Minkoff: Jamie Diamond takes us marching orders from you.

David Minkoff: So that's my comment. You called on me to ask a question, and I gave you a long dissertation. I hope you don't need two pillows for your head tonight, but if you do, you deserve it. Here's the question. Can I ask the question now? What are you going to do for an encore?

David Minkoff: So.

David Minkoff: Okay.

David Minkoff: Yes.

David Minkoff: My comment you called on me to ask a question given a long dissertation I hope you don't need to pillar III Tonight, but if you do.

David Minkoff: Deserved.

David Minkoff: Here's the question can I ask the question now.

David Minkoff: Okay.

David Minkoff: What are you going to do for an encore.

Speaker Change: That's the question.

Richard Wayne: That's the question. Well, you know, we think the best thing we can do with our capital, of course, is to be able to leverage it with high-quality, higher-yielding assets. That's what we would..., hope and expect to do. We have a lot of capital now and a lot of loan capacity left. That's why I made the reference earlier to Triple P when we had, you know, roughly a billion dollars of loan capacity and patient investors. They were patient, but they wanted to know what we were going to do because we doubled our capital, and sort of definitionally, your ROE would close down when you have that much capital.

David Minkoff: Well.

David Minkoff: Yes.

Richard Wayne: The best thing, we can do with our capital of course.

Richard Wayne: As to be able to leverage it with <unk>.

Richard Wayne: High quality.

Richard Wayne: Higher yielding assets.

Richard Wayne: That's what we would.

Richard Wayne: Hope and expect to do.

Richard Wayne: We have a lot of capital now and a lot of loan capacity left that's why I made the reference earlier to Triple P. When we add in a.

Richard Wayne: Roughly $1 billion of loan capacity in patient investors they were patient, but they wanted to know what we were going to still be firstly.

Richard Wayne: Doubled our capital and sort of definition of your ROE goes down when yet that much capital.

Richard Wayne: Alright.

Richard Wayne: With the excess capital we are hoping that we can.

Richard Wayne: And, you know, with the excess capital, we're hoping that we can leverage it with the kind of loans that we like, but, of course, we are not going to be careless or reckless or put loans on the balance sheet just to have a lower loan book.

Richard Wayne: Leverage it with the kind of loans that we like but of course not.

Richard Wayne: We're going to be careless, a reckless or put loans on the balance sheet just to have a lower loan book and we would hope we would be able to do that.

Richard Wayne: And we would hope we would be able to do that. So I would point out, I know you know this, David, but for others that may not know that when, you know, we have excess capital over, you know, some number of years, we return it to shareholders in the, in the period of around years, maybe 13 through 16, roughly, we bought back roughly half of the stock in the, not a half, a third of the stock in the bank for an average price of somewhere 17 or $18, and on the other hand we've recently been selling stock at a number that I'm not talking about this quarter we don't have anything to say about what we might do in the current quarter but in the previous quarter as Richard mentioned we bought back sold stock rather at you know $50 so you know in terms of the an encore as you say that would be one thing and and and I would also point out I think most of you know we were unsuccessful in this but we tend to be opportunistic when things present themselves we made it a lot of money with Triple P which was not so we were not even in a related we didn't have a even a related product I should say but we wound up originating three billion of that and purchasing another eight billion and making 65 basis points along with Nuity which was a partner of ours in that activity and then we also when there was an opportunity we bid on buying Signature Bank and also what was previously Boston Private Bank part of Silicon Valley Bank unfortunately we didn't win those but so we look for and those are not predictable those kinds of opportunities but we like to pay attention and if something makes sense to look at it finally I think I really need to make a point and ask you to confirm this David when I called your name, It was not because I had any idea.

Richard Wayne: I'd point out I know you know this David but.

Richard Wayne: For others that may not know the headwind.

Richard Wayne: Excess capital over some number of years, we return it.

Richard Wayne: Shareholders in the in the period of around years, maybe 13 through 16 roughly.

Richard Wayne: Bought back roughly half of the stock in the latter half a third of the stock in the bank.

Richard Wayne: For an average price of somewhere 17 or $18.

Richard Wayne: And.

Richard Wayne: On the other hand, we've recently been selling stock at a number that I thought about this quarter. We don't have anything to say about what we might do in the current quarter.

Richard Wayne: But in the previous quarter as Richard mentioned, we bought back.

Richard Wayne: So stock rather than $50.

Richard Wayne: So.

Richard Wayne: In terms of.

Richard Wayne: The.

David Minkoff: An encore as you say.

Richard Wayne: That would be one thing and I would also play out I think most of you know we were unsuccessful in this but we tend to be.

Richard Wayne: Opportunistic when things present themselves, we made it a lot of money with Triple P, which does not so we were not even in a related.

Richard Wayne: We didn't have a even a related product I should say, but we wound up originating.

Richard Wayne: $3 billion of that and purchasing another $8 billion in making 65 basis points along with.

Richard Wayne: Liberty.

David Minkoff: It was.

Richard Wayne: Alright.

Richard Wayne: Ours in that activity.

Richard Wayne: And then we also when there was an opportunity we bid on.

Richard Wayne: Signature Bank and also what was.

Richard Wayne: Previously Boston private bank part of Silicon Valley Bank.

Richard Wayne: Unfortunately, we didn't win those.

Richard Wayne: But so we look for and those are not predictable those kinds of opportunities, but we.

Richard Wayne: I'd like to pay attention and if something makes sense to look at it finally, I think I really need to make a point and ask you to confirm this David what I call your name.

Richard Wayne: We haven't spoken for a while, as you were going to, and I appreciate your really kind words. I really do. And it's not just me, of course; it's a big team we have here that delivers these consistently good results. But this was not preplanned.

David Minkoff: Not because I had any idea we haven't spoken for a while that you were going to and I appreciate you're really kind words.

Richard Wayne: I really do and it's not just me of course, it's a big team we have here that delivers.

Richard Wayne: <unk> consistently.

David Minkoff: Good results.

Richard Wayne: It sounds like I call on David, and then he gives me a compliment. I didn't know that was coming. I thought we hadn't spoken in probably a year or so, but I am on the conference calls every quarter. But you're right; I have no questions. Alex asks great questions every quarter, and kudos to him for his good coverage of the company. Not only that, you know, a quarter ago when the stock was in the mid-50s, he had a price. He raised his price target to $ 72.

Speaker Change: This wasn't a preplanned it sounds like Paul and David and then.

Richard Wayne: It gives me a compliment I didn't know that was something that we.

Speaker Change: We haven't spoken with Rob Hey, there is no, but I am on the conference calls every quarter, but youre right I have no questions Alex.

Richard Wayne: Ask great questions every quarter and kudos to him for his good coverage of the company and not only that.

Richard Wayne: A quarter ago, when the stock was in the mid fifties.

Speaker Change: He brings his price target to 72, so he wasn't a surprise to see that that was a great call on his part so you surround yourself and the company.

David Minkoff: So he wasn't surprised to see this. That was a great call on his part. So you surround yourself in the company, and your analysts with just high-quality people that are just getting the job done. And I, you know, I just, I don't know why I've been doing this for 40 years, trying to find, you know, good companies to invest in. And I can count on one hand the number of companies that have done as well as you have in 40 years.

David Minkoff: And your analyst with just high quality people that are just getting the job done.

David Minkoff: Al.

David Minkoff: I don't know what I'm doing this for 40 years trying to final finding good companies to invest in.

David Minkoff: And I can count on one hand.

David Minkoff: Number of companies that have done.

David Minkoff: As good as you have in <unk>.

David Minkoff: 40 years that I'm doing this so I got it.

David Minkoff: So, you know, I get on the phone, I'm on conference calls all the time, and I've never had a discussion like this. I usually ask the question that's pertinent, and that's all, but I've never said this about any company, but it really has to be called out.

Speaker Change: Im on conference calls all the time I've never had a discussion like this I usually ask the question that is pertinent and Thats all I've never said this about any company, but it really has to be called out.

David Minkoff: And I'm thinking this, and I felt the need to verbalize it. And I'm sure, speaking for everyone else on this call, you know, there's nobody that could possibly have a loss in this company, whether you paid $8 a share or $68 a share. The stock hit a new high, an all-time high yesterday, so you're talking to everybody. That's a happy camper on this call.

David Minkoff: I think in this one I felt the need to verbalize, it and I'm sure.

David Minkoff: I'm speaking for everyone else on this call.

David Minkoff: There is nobody that could possibly have a loss in this company, whether you paid $8 a share or $68 a share the stock hit a new all time high yesterday, so youre talking to everybody. That's a happy camper on this call. It's just phenomenal.

David Minkoff: It's just phenomenal. It's really remarkable and deserves to be called that. The words that I'm using aren't strong enough. I don't know how to end. I look for a manager like you; I look for companies that are managed by people like you that are qualified, no attitude, just deliver good results and in a transparent way. It's just a pleasure to have worked with you for 10 years; that's all I can tell you. I have had no aggravation with this company and its actions in 10 years.

David Minkoff: Yes.

David Minkoff: It's really remarkable and deserves to be called the <unk>.

David Minkoff: Words that I'm using arent strong enough I don't know.

David Minkoff: Yes look I look for a manager like you too.

David Minkoff: Companies that are managed by <unk>.

David Minkoff: People like you that to qualify no attitude.

David Minkoff: Just deliver the good results in.

David Minkoff: And just in a transparent way, it's just it's just a pleasure to have them.

Speaker Change: With for 10 years Thats, all I can tell you I know youre welcome. Thanks.

David Minkoff: So with this company.

David Minkoff: Actions in 10 years.

David Minkoff: And one other kind of aside here; when I turn on my screen every day, I have my stocks that I own in different columns; the banks are in one column, the industrials are another, drugs are another, and high tech is in another. The high tech may consist of Amazon, Nvidia, Microsoft, Meta, and Apple. After this conference call, I'm going to remove Northeast Bank, NBN, from the banking column and put it in the high-tech column with Meta and NVIDIA and Amazon where it belongs. So it has some decent competition. So that's all I can tell you. You know, it competes with those groups.

David Minkoff: One other kind of aside when I turn on my screen everyday.

David Minkoff: I have my stocks that I own and different columns banks are in one column and industrials are another drugs or another in high Tech I mean, another the high Tech may consist of Amazon.

Speaker Change: Microsoft matter Apple.

David Minkoff: After this conference call I am going to remove northeast bank Nbn from the banking column and put it in the high Tech column with the Meda.

David Minkoff: And Amazon, where it belongs so it has some decent competition so.

David Minkoff: That's all I can tell you.

David Minkoff: I mean, I'm almost thinking you're going to discover the cure for cancer or something, you know, or it's just, you know, I don't know what to say. You know, it's just really something to behold, and it's a pleasure to have made your acquaintance for 10 years. I just lucked out, I guess, by getting involved here.

Speaker Change: It competes with those groups I mean, I'm, almost thinking youre going to discover the cure for cancer or something.

David Minkoff: Alright.

David Minkoff: Yes.

David Minkoff: I don't know what to say.

David Minkoff: Really.

Speaker Change: <unk> holds I know, it's a pleasure to have made your claims.

David Minkoff: For 10 years, I, just lucked out I guess.

Speaker Change: Again involve yourself.

Richard Wayne: I don't know what else to say, keep up the good work. Thank you. Thank you very much, David. Those are really kind comments. And I will, you know, all the people working at the bank that listen to this, I'm sure will appreciate you. And it's not just me. It's not just me.

David Minkoff: I would also say keep up the good morning, David.

Richard Wayne: Thank you. Thank you very much David those are really kind of comments.

Richard Wayne: All the people working to bank listened as I'm sure will appreciate.

Richard Wayne: And if you single out it's not just me it's Greg let.

Speaker Change: Let me just.

Richard Wayne: It's a great thing. Let me just say thank you, David. Anyone else have any compliments? No, I mean, any questions?

Speaker Change: Thank you David anyone else have any complement I mean any questions.

Richard Wayne: Yes.

Richard Wayne: Yeah.

Richard Wayne: Before David was disconnected, I had to thank you all, and I won't repeat that again to you, but have a good weekend, everybody, and thank you very much. I think Operator World said, All right. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.

Richard Wayne: Yes.

Richard Wayne: Before when David was that disconnect that I had.

Richard Wayne: Thank you all and I won't repeat that again.

Richard Wayne: Have a good weekend, everybody and thank you very much.

Speaker Change: I think operator, we're all set.

Richard Wayne: Alright, Thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.

Q4 2024 Northeast Bank Earnings Call

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