- Northeast Bank (NASDAQ:NBN) entered into a loan purchase and sale agreement with The Loan Source to sell $457.6M of loans originated by the bank, through June 11, 2020, in connection with the Small Business Administration’s Paycheck Protection Program (PPP).
- The bank plans to continue the origination and sale until the PPP is closed. From lenders other than the bank, Loan Source has purchased ~$815.3M of PPP loans.
- Post the amortization of the earlier unamortized PPP loan origination fees, the bank would be in receipt of a pre-tax gain of ~$9.8M in the current quarter thereby enhancing liquidity.
- NBN will receive correspondent fees of ~$2.9M, spread over a period of ~2 years, and will receive 50% of the net servicing income earned over time on such loans.