Northeast Bancorp CEO Interview: Jim Delamater

• On 2:20 pm EDT, Tuesday October 6, 2009

67 WALL STREET, New York - October 6, 2009 - The Wall Street Transcript has just published its Northeast and Mid-Atlantic Regional Banks Report offering a timely review of the sector to serious investors and industry executives. This 130 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Residential Mortgage Situation -- Regional Banks Mergers and Acquisitions Timing Strategy -- Commercial Mortgage Portfolio Decay -- Timing Of Commercial Mortgage Portfolio Bad Debt Write Offs-- FDIC Hit List For Bank Closings -- Mutual Holding Company Structure -- Interest Rate Scenarios -- Banking Pricing Power -- Expensive Bank Valuations -- Tangible Book As Guide For Bank Stock Pricing -- Distressed Sales Of Community and Regional Banks -- TARP Program -- Attitude Of Institutional Investors Towards Resurgence in Community Banking -- Unique Business Models -- Regional Bank Boards Looking For Exit

Companies include: BB and T (BBT); Colonial (CNB); First Niagara (FNFG); PNC (PNC); National City (NCC-PA); Harleysville National (HNBC); Citizens First Bancorp (CTZN); Regions Financial (RF); Bank of America (BAC); SunTrust Banks (STI); Pinnacle Financial (PNFP); Northwest Bancorp Inc. (NWSB); Beneficial (BNCL); Investor Savings Bancorp (ISBC); Territorial Bancorp (TBNK); FNB Bancorp (FNBG.OB); National Penn (NPBC); Trustco Bank (TRST); KeyBank (KEY); M and T Bank (MTB); New York Community Bancorp (NYB); Bank of New York Mellon (BK); Wells Fargo and Company (WFC); JPMorgan Chase and Co. (JPM); Wachovia (WB); Harleysville Savings Bank (HARL); SVB Financial (SIVB); Signature Bank (SBNY); Provident Bank (PBKS); Valley National Bank (VLY); Community Bank System (CBU); NBT Bankcorp (NBTB); Fulton (FULT); Citibank ©; Allied Irish (AIB); Bank of Hawaii (BOH); First Horizon Bank (FHN); Comerica (CMA); Synovus (SNV); Zions (ZION); South Financial Group (TSFG); Bancorp (TBBK); Legg Mason (LM); IBERIABANK Corp. (IBKC); Wilmington Trust (WL); S and T Bancorp (STBA); PHH (PHH); Goldman Sachs (GS); Citigroup ©; U.S. Bancorp (USB); Fifth Third Bancorp (FITB); KeyCorp (KEY); Lehman Brothers; Colonial; Washington Mutual; TD Banknorth (TD), Lakeland (LBAI), Westfield Financial, Inc. (WFD), United Financial Bancorp, Inc. (UBNK), Chicopee Bancorp, Inc. (CBNK)

In the following brief excerpt from the 130 page, Jim Delamater, CEO of Northeast Bancorp, discusses the outlook for the sector and for investors.

Jim Delamater has served as the leader of Northeast Bank, Northeast Bancorp and all related companies since 1981. During Mr. Delamater's tenure, the company has grown from one community bank with $18 million in assets, 10 employees and limited services to a corporation with assets of over $588 million - as of December 31, 2007 - more than 230 employees and 25 retail business outlets. In addition to being a board member of Northeast Bancorp and its subsidiaries, Mr. Delamater sits on two corporate boards, Syris Scientific and Oxford Networks. He also serves on the MEREDA board of directors and is a past Chairman of both the Maine Bankers Association and the Maine Association of Community Bankers. Mr. Delamater is also a published author, releasing The Great American Mismatch. Born in Lewiston, Mr. Delamater graduated from Oxford Hills High School and received a nomination to the U.S. Air Force Academy from the State of Maine. He served in the U.S. Air Force and later attended the University of South Carolina and University of Southern Maine. Mr. Delamater resides in Oxford with his wife, Jean, and has two grown sons, Christopher and Matthew, and two grandsons, Ayden and Brady.

TWST: Let's start off with a general overview and a summary of Northeast Bancorp.

Mr. Delamater: Our company has been around a long time; we've been in existence since 1872. I joined the company in 1981 as President and CEO. And throughout that time, we've grown to approximately $600 million. We serve western, southern, central and coastal Maine, and some of southern New Hampshire from 24 locations. We specialize in the delivery of all financial products and services using the community bank model.

TWST: What is the financial snapshot, the balance sheet, P&L and asset levels of the company? Are there any areas of particular strength or any areas that should be improved?

Mr. Delamater: The best way I can answer that is to share with you that about five years ago, we made what we felt was a very significant decision. We sat down, evaluated the marketplace and determined that we didn't like what we were seeing, we didn't like the low or non-existent underwriting standards in the credit markets, and we didn't like the pricing. We felt the market was being overheated by a secondary market that was delivering unrealistic loan products. So we told our shareholders that we were determined to make earnings secondary and to make the quality of our balance sheet primary. As a result, we focused on doing things like developing a higher level of income diversity, and hiring and developing a world-class risk management team so we could properly evaluate credit risks and interest rate risks. We are very proud of the results of this effort. Throughout the past several years, it was difficult to watch peers announce record earnings when we were convinced that those earnings did not represent the kind of quality that we felt was important. So we sat back and basically delivered flat earnings for a period of time while we were developing these other lines of business and strengthening our balance sheet. As part of this effort, we re-evaluated every significant credit in our company. We didn't play in the subprime sandbox and avoided changing our underwriting standards. So the results we think have proven to be very good. Our balance sheet is in good shape. Our loan loss reserves are deemed to be adequate. We believe credit risk is well managed as well as interest rate risks. The key to me is that we've developed a high level of non-interest income. In fact, we are amongst the leaders in the nation of banks under $1 billion in the development of non-interest income with over 40% of our revenue coming from non-interest income.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 130 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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