Northeast Bank (NBN): Business Model Canvas [Dec-2025 Updated]

You're digging into how a regional player scales without losing its footing, and frankly, Northeast Bank's Business Model Canvas is a masterclass in hybrid finance. They are running a high-growth national lending operation-acquiring $2.08 billion in commercial loans in FY2025-while funding it with a stable base of local Maine deposits and a competitive national online savings platform. With a loan portfolio hitting $3.79 billion and total revenue reaching $204.1 million for the fiscal year 2025, their strategy is clearly generating results. Keep reading below to see the precise structure, from their key partnerships funding loan purchases to the dual customer relationships driving their 11.6% Tier 1 leverage ratio.

Northeast Bank (NBN) - Canvas Business Model: Key Partnerships

You're looking at how Northeast Bank (NBN) structures its external relationships to drive its nationwide lending and funding strategy. These partnerships are key to scaling the balance sheet beyond local deposits.

Newity LLC for small balance SBA 7(a) loan servicing

The arrangement with Newity LLC directly impacts the gain on sale of Small Business Administration (SBA) loans. For the quarter ended September 30, 2025, the gain on sale of SBA loans increased by $807 thousand compared to the same period last year, which the Bank attributed to a change in the cost structure of this arrangement. During that same quarter, Northeast Bank reported sales of $58.4 million in SBA loans, down from $63.1 million in sales for the quarter ended September 30, 2024. Originated SBA loans for the quarter ending September 30, 2025, totaled $42.0 million.

Banks, insurance companies, and investment funds for loan purchases

Northeast Bank actively partners with other institutions to acquire existing loan assets, which fuels its National Lending Division growth. This is a core part of their dual-pronged approach alongside originating new loans. Here's a look at the recent activity in purchased loans:

• Purchased loans in the quarter ended September 30, 2025, totaled $144.6 million.
• These purchased loans were acquired at an average price of 94.7% of unpaid principal balance as of September 30, 2025.
• Total loan volume (purchased and originated) for the quarter ended September 30, 2025, was $278.4 million.
• For comparison, total loan volume for the quarter ended June 30, 2025, was $365.6 million, which included $41.7 million in purchased loans.

The relationship with buyers of these loans-banks, insurance companies, and investment funds-is critical for monetizing the purchased loan portfolio. The total loan portfolio, including loans held for sale, stood at $3.79 billion as of June 30, 2025.

Federal Home Loan Bank (FHLB) for wholesale funding advances

The Federal Home Loan Bank (FHLB) serves as a wholesale funding source, which the Bank has indicated it relies on to fund loan purchases. As of September 30, 2025, Federal Home Loan Bank (FHLB) advances decreased by $3.4 million, which represents a 1.1% reduction from June 30, 2025. This decrease was due to maturities on outstanding advances and net paydowns on amortizing advances. This contrasts with the period ending June 30, 2024, when FHLB advances had decreased by $25.0 million, or 7.2%, from the prior year period.

Advisors and brokers who source commercial loan acquisitions

While specific dollar amounts tied to third-party sourcing fees aren't itemized in the latest reports, the activity of the Loan Acquisition and Servicing Group nationwide is substantial. The overall loan portfolio growth reflects successful sourcing, whether direct or via brokers and advisors. The overall loan portfolio, including loans held for sale, grew by 37.3% year-over-year to $3.79 billion as of June 30, 2025. For the fiscal year ending June 30, 2025, total loan originations and purchases reached $2.08 billion.

Northeast Bank (NBN) - Canvas Business Model: Key Activities

You're mapping out the core engine of Northeast Bank (NBN), and the Key Activities section is where the rubber meets the road. This is what the bank actually does day-to-day to deliver value across its dual focus: national lending and Maine community banking. Honestly, it's a balancing act between high-volume national origination and localized service.

The primary driver for the National Lending Division is the acquisition and origination of commercial loans across the country. For the fiscal year ending June 30, 2025, this activity resulted in total originations and purchases of $2.08 billion. This scale is significant, supporting the management of a substantial asset base. As of June 30, 2025, Northeast Bank was managing a total loan portfolio, which included loans held for sale, amounting to $3.79 billion.

A specialized, high-margin activity within the lending segment involves the Small Business Administration (SBA) loan program. Northeast Bank actively sells the guaranteed portions of these SBA loans to generate noninterest income. For the year ended June 30, 2025, the Gain on sales of SBA loans contributed $23,159 thousand to noninterest income. This is a key component of their fee income strategy.

The bank maintains a distinct, localized operation through its Community Banking group, which is focused squarely on Maine. This involves providing the traditional suite of personal and business banking services. Here's a quick look at the scale of their physical presence supporting these local activities:

• Providing personal banking products like checking and savings accounts.
• Offering business banking products and cash management options.
• Operating through seven branches across Maine.

Furthermore, the digital arm, ableBanking, is a critical activity that supports the bank's national reach for deposits. This division operates a fully online deposit platform, serving consumers nationwide. This allows Northeast Bank to compete for deposits outside its immediate geographic footprint without the overhead of physical locations for that specific product line. The ability to efficiently operate this nationwide digital platform is a core activity enabling the growth of their overall funding base.

To give you a clearer picture of how the lending portfolio is segmented, even with the national focus, here are the portfolio balances as of September 30, 2025, which shows the relative size of the Community Banking segment, though this is post-FY2025 close:

Northeast Bank (NBN) - Canvas Business Model: Key Resources

You're looking at the core assets Northeast Bank (NBN) relies on to execute its strategy. These aren't just line items on a balance sheet; they are the engine for their specialized lending focus.

The bank maintains a strong capital position, which is a fundamental resource. As of June 30, 2025, the Tier 1 leverage ratio stood at 11.6%. This level of capital provides the necessary buffer and capacity for growth initiatives.

The sheer scale of the balance sheet supports its operations. Northeast Bank reported total assets of $4.28 billion as of June 30, 2025. This asset base underpins its lending activities across both its community banking footprint and its national lending division.

The proprietary expertise in acquiring discounted commercial loans is a key intangible resource, evidenced by the consistent activity of the National Lending Division. This division actively sources and purchases loans, often at a discount to par value, which is central to their value proposition and net interest margin generation. For instance, in the quarter ended June 30, 2025, the division purchased $41.7 million of loans at an average price of 93.8% of unpaid principal balance. The focus on this activity continues, as shown by the subsequent quarter's activity.

Here's a quick look at the recent loan purchasing activity that demonstrates this specialized resource in action:

The bank's overall loan portfolio, which includes loans held for sale, reached $3.79 billion as of June 30, 2025. This portfolio is managed by experienced asset management professionals dedicated to maximizing the return on these purchased assets.

The tangible and intangible resources supporting Northeast Bank (NBN) can be categorized as follows:

• Financial Capital: Tier 1 leverage ratio of 11.6% (June 30, 2025).
• Balance Sheet Size: Total assets of $4.28 billion (June 30, 2025).
• Specialized Talent: Asset management professionals focused on purchased loans.
• Acquisition Capability: Proprietary expertise driving National Lending Division purchases, such as $144.6 million in the quarter ended September 30, 2025.
• Digital Infrastructure: Mobile banking platform supporting 127,000 active users (as of Q4 2023 data).

Finance: draft 13-week cash view by Friday.

Northeast Bank (NBN) - Canvas Business Model: Value Propositions

High-yield, discounted commercial loan portfolio for investors

Competitive, high-rate online savings products via ableBanking

• High-Yield Savings Account APY: 2.50% APY for balances of $0.01 - $249,999.99; 3.00% APY for balances of $250,000.00 and over.
• High-Yield Savings Account Minimum Opening Deposit: $2,500.
• High-Yield Savings Account New Money Requirement: 50% of opening deposit.
• PROPEL Preferred Savings APY: 3.00% APY (requires PROPEL Premier Checking; defaults to 0.05% APY otherwise).

You can lock in guaranteed returns on Certificates of Deposit (CDs) as of late 2025.

Full-service personal and business banking for the Maine market

Northeast Bank maintains a physical presence with seven branches in Maine.

• Total Deposits as of March 31, 2025: $3.30 billion.
• Cost of Deposits for Q3 FY25: 3.92%.
• Quarter-end Cost of Deposits for Q3 FY25: 3.77%.
• Total Assets as of June 30, 2025: $4.28 billion.

Specialized financing for small businesses through the SBA program

The SBA Division is a significant driver of volume and gains.

Northeast Bank (NBN) - Canvas Business Model: Customer Relationships

You're looking at how Northeast Bank (NBN) connects with its different customer groups. It's a dual approach, really: high-touch for the local Maine market and specialized, high-volume for the national lending side, all while keeping shareholders informed.

Personal, relationship-based service through seven Maine branches

For its core Community Banking segment, Northeast Bank maintains a physical presence focused entirely within Maine. This is where the personal, relationship-based service happens. You can still walk into one of their seven full-service banking centers across the state for your personal and business banking needs. These centers serve as the anchor for local deposit gathering and relationship banking.

• Offer personal and business banking services within Maine.
• The bank has seven physical banking centers in Maine.
• Customers can book in-person meetings using an easy online tool.

Digital, self-service model for ableBanking customers nationwide

The digital relationship is handled by ableBanking, which targets consumers across the entire nation with online savings products. This is pure self-service, designed for customers prioritizing yield over branch access. As of November 18, 2025, they were advertising competitive rates, like a 3.50% ANNUAL PERCENTAGE YIELD (APY) on their 6 Month CD, which requires a $5,000 minimum deposit of new money. That's a clear value proposition for the non-local saver.

• ableBanking offers online savings products nationwide.
• Advertised CD rates as of November 18, 2025, included 3.50% APY for a 6 Month CD.
• The minimum deposit to open advertised CD terms was $5,000.

Specialized relationship management for national commercial borrowers

The National Lending Division manages relationships with commercial borrowers across the United States, focusing on loan acquisitions and originations. This isn't about walk-in service; it's about specialized expertise and execution speed for large transactions. The total loan portfolio, which includes these national assets, stood at $3.79 billion as of June 30, 2025. Their structure supports significant deal sizes.

Here's a quick look at the scale and structure for these national commercial relationships as of mid-2025:

Direct engagement with shareholders via annual meetings and investor calls

Northeast Bank keeps its investors engaged through scheduled, formal communication channels. You definitely want to mark your calendar for these events. The 2025 Annual Meeting of Shareholders was set for 12:00 p.m. Eastern Time on Tuesday, November 18, 2025. For the fiscal year reporting, the Fourth Quarter FY2025 Earnings Call was scheduled for July 31, 2025, and the subsequent First Quarter FY2026 Earnings Call was scheduled for October 29, 2025. To be eligible to vote at the Annual Meeting, shareholders needed to be on record as of April 1, 2025, when there were 13,155,496 shares of common stock outstanding. That's how they manage the relationship with the owners of the bank.

• 2025 Annual Meeting of Shareholders date: November 18, 2025.
• Record date for 2025 Annual Meeting voting eligibility: April 1, 2025.
• Shares of common stock outstanding on record date: 13,155,496.
• Q4 FY2025 Earnings Call date: July 31, 2025.

Northeast Bank (NBN) - Canvas Business Model: Channels

You're looking at how Northeast Bank (NBN) gets its value proposition to its customers, which is a mix of local physical presence and national digital/lending reach. It's defintely a dual-pronged approach.

Seven physical branch locations serving the Maine market

Northeast Bank offers personal and business banking services within the Maine market through a network of seven full-service banking centers. These locations serve as the primary physical touchpoint for the Community Banking segment in Maine.

• Auburn Banking Center
• Augusta Banking Center
• Bethel Banking Center
• Brunswick Banking Center
• Poland Banking Center
• Portland Banking Center
• South Paris Banking Center

National Lending Division's network for loan sourcing and sales

The National Lending Division (NLD) operates on a nationwide basis, sourcing and originating commercial loans, which is a key channel for asset generation outside of Maine. For the quarter ended September 30, 2025, the NLD generated $278.4 million in total volume from originations and purchases.

Here's a breakdown of the NLD activity for the quarter ending September 30, 2025:

The NLD portfolio balances as of September 30, 2025, show significant scale:

The NLD also actively sells loans; for the quarter ended September 30, 2025, there were sales of $58.4 million in SBA loans.

ableBanking, the direct-to-consumer online deposit platform

ableBanking serves as the national channel for obtaining core deposits, specifically offering online savings products to consumers across the country. While specific Q3 2025 deposit figures for ableBanking aren't explicitly broken out from the total, we know that total deposits for Northeast Bank decreased by $125.2 million (or 3.7%) from June 30, 2025, to September 30, 2025. However, Community Banking Division time deposits did increase by $38.0 million compared to June 30, 2025. The last reported specific figure for ableBanking money market and time deposits was $29.6 million as of June 30, 2023.

Digital banking and mobile applications for account access

Customers access their funds and manage accounts through a suite of digital tools. These services are available to both retail and commercial clients.

• Telephone banking
• Online banking and bill payment
• Mobile banking
• Remote deposit capture services

These digital tools complement the physical branch network for the Maine market and are the sole channel for ableBanking customers nationwide.

Finance: draft 13-week cash view by Friday.

Northeast Bank (NBN) - Canvas Business Model: Customer Segments

You're looking at the core groups Northeast Bank (NBN) serves across its Maine footprint and its national lending/deposit platforms. It's a dual strategy: local relationship banking plus specialized national lending and funding.

Retail and small business customers in the Maine community

Northeast Bank serves its home market through a physical presence designed for local engagement.

• Headquartered in Portland, Maine.
• Offers personal and business banking services via seven branches in the Maine market.

Nationwide commercial real estate and business borrowers

This segment is driven by the National Lending Division, which focuses on purchasing and originating commercial loans across the USA. The total loan portfolio, including loans held for sale, stood at $3.79 billion as of June 30, 2025.

Consumers nationwide seeking high-yield online savings accounts

The ableBanking division targets consumers nationally with online savings products. Total deposits for the bank surged by 44.3%, an increase of $1.04 billion as of June 30, 2025.

• High-Yield Savings APY for balances of $0.01 - $249,999.99: 2.50% APY.
• High-Yield Savings APY for balances of $250,000.00 and over: 3.00% APY.
• Minimum opening deposit for High-Yield Savings: $2,500.

The funding mix shows a reliance on these deposits, though brokered time deposits saw a recent dip. As of September 30, 2025, brokered time deposits decreased by $125.2 million compared to the prior year. Still, Community Banking Division time deposits increased by $38.0 million compared to June 30, 2025.

Small businesses utilizing the national SBA loan program

The SBA Division is a significant national origination channel. The bank reported over 3,000 approved SBA 7(a) loans in FY 2025.

The SBA National portfolio balance decreased to $128,347 thousand as of September 30, 2025, down from $144,974 thousand on June 30, 2025. This followed management's anticipation of a temporary dip in volume, potentially as much as 50% in the following quarter due to tightened eligibility rules.

Northeast Bank (NBN) - Canvas Business Model: Cost Structure

The Cost Structure for Northeast Bank (NBN) is heavily influenced by the cost of funding its significant asset growth and the expenses associated with its lending operations, particularly the National Lending Division.

Interest expense on deposits is a primary cost driver, reflecting the bank's successful, yet costly, funding strategy. Deposits, which are a key source of funding, saw a substantial increase, growing by 44.3% in FY2025. This growth in the funding base directly translates to higher interest paid to depositors.

Noninterest expenses represent the operational backbone costs. The outline suggests that General and Administrative costs are the largest operating expense component, reported at $61.3 million (TTM FY2025). To put this in context, Northeast Bank's Total Noninterest Expense for the trailing twelve months ended in September 2025 was reported as $72.0 Mil.

The bank must also account for potential credit deterioration, reflected in the Provision for Credit Losses (PCL). This provision increased to $3.5 million in Q4 2025 (the quarter ended June 30, 2025), up from $547 thousand in the same quarter of the prior year. This signals a more conservative stance on asset quality given the rapid loan portfolio expansion.

Compensation and benefits are a significant, variable cost tied to business volume, especially for the teams driving the bank's growth. Specific components of this expense show clear upward pressure:

• Salaries and employee benefits expense increased by $1.8 million for the quarter ended June 30, 2025, compared to the prior year, driven by regular stock and incentive compensation.
• For the quarter ended December 31, 2024, salaries and employee benefits expense increased by $1.4 million year-over-year.
• For the quarter ended March 31, 2025, salaries and employee benefits expense increased by $1.7 million year-over-year.

The following table breaks down key noninterest expense movements related to lending and operations for the quarter ended June 30, 2025, compared to the prior year's same quarter:

The cost structure is clearly weighted toward funding the balance sheet and compensating the personnel executing the high-volume National Lending and SBA origination strategies. Finance: draft 13-week cash view by Friday.

Northeast Bank (NBN) - Canvas Business Model: Revenue Streams

You're looking at how Northeast Bank (NBN) actually brings in the money, which is key for any financial institution. For NBN, the revenue streams are heavily weighted toward traditional banking activities, but with a very successful, specialized national lending component driving much of the recent growth.

Net Interest Income from the loan portfolio, the primary driver

The core of Northeast Bank (NBN)'s revenue is the spread between what it earns on its assets (loans) and what it pays on its liabilities (deposits and borrowings). This is Net Interest Income (NII), and it's the engine room. The bank has been aggressive in growing its loan book, which ended the fiscal year 2025 with a total portfolio of $3.79 billion as of June 30, 2025. The total loan originations and purchases for the entire fiscal year 2025 reached $2.1 billion. This volume growth is what keeps the NII stream robust, even as the Net Interest Margin (NIM) saw some compression, moving to 4.89% for the full fiscal year 2025, down from 5.16% in FY 2024. However, for the fourth quarter of 2025, the NIM was reported at a strong 5.1%, helped by transactional income.

The revenue breakdown for the fourth quarter of 2025 gives you a snapshot of this reliance:

Noninterest income from gains on sale of SBA loans, generating $6.8 million in Q4 2025

This is where Northeast Bank (NBN) shows its specialized revenue stream within its National Lending Division. The bank actively sells the guaranteed portions of its Small Business Administration (SBA) loans into the secondary market, turning loan volume into immediate, non-interest income. For the fourth quarter of fiscal year 2025, this activity generated a specific gain of $6.8 million on the sale of $107.6 million in SBA loans. This strategy effectively monetizes the origination pipeline, providing a boost to overall earnings and capital, separate from the interest earned on loans held on the balance sheet.

Accretion of discount on purchased loans, boosting yield

When Northeast Bank (NBN) purchases existing loans, it often acquires them at a discount to their unpaid principal balance (UPB). This discount represents future income that is recognized over the life of the loan, which is the accretion of discount. This process, which includes both scheduled and accelerated accretion, is a key part of the yield earned on the purchased loan portfolio. While I don't have the exact dollar figure for the total accretion for the full year 2025, this mechanism is explicitly included in the calculation for the Total Return on Purchased Loans, which is a critical metric for the National Lending Division's performance.

You can see the components that make up the total return on these purchased assets:

• Scheduled accretion.
• Accelerated accretion.
• Gains (losses) on real estate owned.
• Release of allowance for credit losses on purchased loans.

Total annual revenue of $204.1 million for the fiscal year 2025

Putting it all together, the combined effect of the core lending business and the specialized noninterest income streams resulted in a significant top-line performance. For the full fiscal year ending June 30, 2025, Northeast Bank (NBN) reported total annual revenue of $204.1 million. This represented growth of 34% from the fiscal year 2024 revenue of $0.17 Billion USD.

Here's a quick look at the annual revenue trend:

• Fiscal Year 2025 Total Revenue: $204.1 million.
• Fiscal Year 2024 Total Revenue: $0.17 Billion USD.
• Growth Rate (FY2025 vs FY2024): +34%.

Finance: draft 13-week cash view by Friday.