Bar Harbor Bankshares Reports Second Quarter Results; Declares Dividend
Back to Newsroom
Mentioned in this Article

Bar Harbor Bankshares Reports Second Quarter Results; Declares Dividend

Wednesday, July 21, 2021 4:50 PM
Share this article now
Topic:
Earnings
Bar Harbor Bank and Trust

BAR HARBOR, ME / ACCESSWIRE / July 21, 2021 / Bar Harbor Bankshares (NYSE American:BHB) reported second quarter 2021 net income of $9.0 million or $0.60 per share from $8.5 million or $0.55 per share in the same quarter of 2020, an increase of 9% in earnings per share. Core earnings (non-GAAP) were $9.4 million, or $0.63 per share, compared to $8.6 million, or $0.56 per share for the same periods. Non-core items (non-GAAP) reduced net income in the second quarter 2021 by $384 thousand, or $0.02 per share.

SECOND QUARTER FINANCIAL HIGHLIGHTS (compared to the second quarter 2020, unless otherwise noted)

  • 9% growth in earnings per share, 13% growth in core earnings (non-GAAP)
  • 0.97% return on assets; 1.01% core return on assets (non-GAAP)
  • 8% annualized total commercial loan growth, excluding PPP loans
  • 14% annualized increase in core deposits
  • 13% increase in fee income
  • Exceptional credit quality

President and Chief Executive Officer, Curtis C. Simard stated, "We had another quarter of double-digit core earnings growth and core return on assets of over 1.00%. Profitability increased on higher fee income driven from growth in core deposits and assets under management (AUM). Customer service income returned to pre-pandemic levels suggesting a potentially meaningful recovery in regional activity, augmented by a lift from our previously announced fee strategies implemented at the start of this year. The 8% annualized growth in commercial loans during the quarter, excluding PPP, reflects our commitment to meeting the needs of our existing customers and developing new relationships as we navigate past PPP activities. Our Wealth Management business continues to be a significant contributor to total non-interest income while our Retail and Commercial loan teams continue to generate new core deposit accounts, especially in DDA categories. More than 1,000 new banking relationships were created in the second quarter, highlighting both existing customer retention efforts and new customer initiatives. With the increase in mortgage rates late in the first quarter, we chose to opportunistically add balances to the balance sheet which helped stem the attrition. However, a focus on IRR management remains top of mind."

Mr. Simard continued, "We continued to organically grow our capital levels expanding tangible equity to tangible assets (non-GAAP) to 8.23%, while maintaining exceptional credit quality. All credit metrics remain strong and further improved in the quarter, primarily marked by lower past dues, minimal net charge-offs and improved coverage ratios. Overall, we continue to see favorable migration in risk ratings across most loan categories. Loan modification concessions made during the pandemic have essentially all resumed normal repayment schedules as of the end of the quarter."

Mr. Simard stated, "As we think about net interest margin (NIM) quarter over quarter, the second quarter had substantially less PPP fee acceleration and was further impacted by the excess cash on hand. Of note, $105 million of wholesale deposits matured on the last day of the quarter which will benefit our cost of funds going forward. We are starting to see a leveling off of NIM, excluding non-recurring items, as reliance on wholesale borrowings continues to be reduced and DDA growth continues. Given our overall asset sensitive balance sheet position and a more core-funded profile, we are well positioned for when rates start to move back up. Excluding the effects of one-time items, our second quarter NIM was 2.95% compared with the same adjusted metric of 2.86% in the first quarter 2021."

Mr. Simard commented, "In the first quarter, we announced the initiation of a comprehensive review of our non-interest expenses which included an annual reduction to salary and benefits of more than $3.0 million, along with additional cost savings associated with vendor contracts and process efficiencies. While some savings have been immediately realized in our second quarter run-rates, others will be phased in depending on contract timelines. As we continue to resume business-as-usual activities, we are also rolling out cost containment initiatives to absorb any potential increases associated with pandemic-delayed expenses. Lastly, we evaluate profitability at each branch within our footprint, at least annually, taking into consideration the unique geography of Northern New England and our customer needs."

Mr. Simard concluded, "As we move into the second half of the year, we are encouraged by an improving economic outlook and better operating conditions. Our collective resilience has prepared and positioned us to move forward with the same resolve that has sustained us throughout the pandemic. We have a unique complementary footprint that is enabling us to utilize all earnings levers that align with our model and strategy. We look forward to continuing to serve our customers and communities in the way they are accustomed to."

DIVIDEND DECLARED  
The Board of Directors voted to declare a cash dividend of $0.24 per share to shareholders of record at the close of business on August 17, 2021, payable on September 17, 2021. This dividend equates to a 3.35% annualized yield based on the $28.62 closing price of the Company's common stock at the end of the second quarter of 2021.

FINANCIAL CONDITION  
Total assets were $3.6 billion at the end of the second quarter as the Company leveraged excess cash liquidity to reduce maturing brokered deposits of $104.7 million during the quarter. Loans decreased $35.5 million during the quarter, or 6% on an annualized basis, primarily due to PPP loan forgiveness and prepayments on residential loans.

During the quarter we developed 76 new commercial relationships, resulting in commercial real estate loan growth of 6% on an annualized basis and commercial and industrial loan growth 13% on an annualized basis, exclusive of PPP loans. PPP loan balances totaled $65.9 million at quarter-end, consisting of $62.7 million of 2021 originations and $3.2 million from 2020. Unearned deferred fee balances on PPP loans totaled $3.7 million at the end of the quarter. These balances are expected to be realized through early 2022. COVID loan modifications totaled $19.0 million, down from $43.0 million at the end of the first quarter 2021, as 97% of modified loans have resumed normal payment schedules. Total residential loans decreased $47.5 million, which includes $84.0 million of originations, $56.0 million of sales in the secondary market and $75.5 million of prepayments/amortization. Total originations during the quarter included $51.0 million that was sold on the secondary market and $33.0 million that was recorded on the balance sheet.

The allowance for credit losses decreased to $22.8 million during the second quarter due to stronger economic forecasts, offset by changes in overall loan mix. Net charge offs totaled $73 thousand, or less than 0.01% of the total loan portfolio, and non-accruing loans decreased to $13.6 million, or 0.54% of the total loans. The ratio of past due loans to total loans improved to 0.15% of total loans at June 30, 2021, decreasing from 0.44% in the first quarter of 2021. Commercial past due loans totaled $1.9 million at quarter end, which is the lowest level since 2016 when the portfolio was approximately 36% of its current size.

Total deposits decreased $90.0 million to $2.8 billion during the quarter, due to lower time deposits, offset by significant growth in core deposits. Core deposits increased $77.8 million, or 14% on an annualized basis, during the quarter. Over 1,000 new customer relationships were added in the quarter. Time deposits decreased $167.7 million during the quarter, primarily due to $104.7 million of brokered deposits not being replaced upon maturity due to excess liquidity. Retail time deposits decreased $63.0 million as customers moved funds to transactional accounts upon contractual maturity.

The Company's book value per share was $27.76 at June 30, 2021, compared with $27.13 at the end of the first quarter 2021. Tangible book value per share (non-GAAP measure) was $19.30 at the end of the second quarter 2021, compared to $18.64 at the end of the first quarter 2021, equating to an annualized growth rate of 14%. Other comprehensive income included unrealized gains on securities totaling $7.2 million in the second quarter 2021 compared to $4.5 million at the end of the first quarter 2021.

RESULTS OF OPERATIONS  
Net income in the second quarter 2021 was $9.0 million, or $0.60 per share, compared to $8.5 million, or $0.55 per share, in the same quarter of 2020. Net income benefited from higher fee income and a credit provision recapture in the quarter. Core earnings totaled $9.4 million or $0.63 per share, compared to $8.6 million, or $0.56 per share, in the same quarter of 2020. Non-core items (non-GAAP) reduced net income by $384 thousand and $119 thousand in second quarters of 2021 and 2020, respectively.

Net interest margin equaled 2.74% compared to 2.93% in the same period of 2020. PPP loans contributed 7 basis points to NIM during the quarter as the majority of the remaining 2020 originations were forgiven. Accretion on PPP loans originated in 2021 are not expected to materially affect NIM until loans are forgiven starting in the third quarter 2021. Interest-bearing cash balances, held mostly at the Federal Reserve Bank, reduced NIM by 19 basis points. The yield on earning assets totaled 3.26% compared to 3.73% in the second quarter 2020. Excluding the impact of PPP and excess cash, the yield on earning assets totaled 3.44% and 3.98% for the same periods. Costs of funds decreased to 0.66% from 0.96% in the second quarter 2020 due to lower deposit rates and reductions to wholesale funding afforded by significant growth in core deposits. Brokered deposits that matured during second quarter carried 9 basis points of the total funding cost.

The provision for credit losses for the quarter was a benefit of $765 thousand, compared to an expense of $1.4 million in the second quarter of 2020. The provision recapture in the second quarter 2021 is attributable to improving economic forecasts and strong credit quality, offset by shifts in our loan mix.

Non-interest income in the second quarter 2021 equaled $9.5 million, compared to $9.7 million in the same quarter of 2020. Non-interest income, excluding gain on sales of securities, increased 13% on higher customer service fees, wealth management income, and gains on loan sales. Wealth management income increased 20% over the same quarter of 2020 as assets under management increased to $2.4 billion or 12% compared to the same period of 2020. Customer service fees increased $818 thousand compared to the second quarter of 2020 as customer activity and transactions now exceed pre-pandemic levels. Mortgage banking activities continue to contribute a significant amount of fee income, increasing to $1.6 million, compared to $1.1 million in the same period of 2020.

Non-interest expense improved to $21.7 million in the second quarter 2021 from $22.3 million in the same quarter of 2020. Salaries and benefits expense decreased 5% due to implementing workforce reduction programs at the beginning of the second quarter. Non-core expenses (non-GAAP) in the second quarter 2021 totaled $553 thousand and were mostly one-time reduction in workforce. In the same quarter of 2020 non-core expenses (non-GAAP) totaled $1.5 million and included costs to consolidate our wealth management systems and a loss on debt extinguishment.

BACKGROUND  
Bar Harbor Bankshares (NYSE American: BHB) is the parent company of its wholly-owned subsidiary, Bar Harbor Bank & Trust. Founded in 1887, Bar Harbor Bank & Trust is a true community bank serving the financial needs of its clients for over 130 years. Bar Harbor provides full-service community banking with office locations in all three Northern New England states of Maine, New Hampshire and Vermont. For more information, visit www.barharbor.bank .

FORWARD-LOOKING STATEMENTS  
Certain statements under the headings "SECOND QUARTER FINANCIAL HIGHLIGHTS", "FINANCIAL CONDITION" and "RESULTS OF OPERATIONS" contained in this document, that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this earnings release the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions are intended to identify forward-looking statements, but these terms are not the exclusive means of identifying forward-looking statements. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including among other things, changes in general economic and business conditions, increased competitive pressures, changes in the interest rate environment, legislative and regulatory change, changes in the financial markets, and other risks and uncertainties disclosed from time to time in documents that the Company files with the Securities and Exchange Commission, including but not limited to those discussed in the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and any subsequently filed Quarterly Reports on Form 10-Q. Because of these and other uncertainties, the Company's actual results, performance or achievements, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, the Company's past results of operations do not necessarily indicate future results. You should not place undue reliance on any of the forward-looking statements, which speak only as of the dates on which they were made. The Company is not undertaking an obligation to update forward-looking statements, even though its situation may change in the future, except as required under federal securities law. The Company qualifies all of its forward-looking statements by these cautionary statements.

NON-GAAP FINANCIAL MEASURES  
This document contains certain non-GAAP financial measures in addition to results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is provided below. In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP core earnings can be of substantial importance to the Company's results for any particular quarter or year. The Company's non-GAAP core earnings information set forth is not necessarily comparable to non- GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company's GAAP financial information.

The Company utilizes the non-GAAP measure of core earnings in evaluating operating trends, including components for core revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations, including gains/losses on securities, premises, equipment and other real estate owned, acquisition costs, restructuring costs, legal settlements, and systems conversion costs. Non-GAAP adjustments are presented net of an adjustment for income tax expense.

The Company also calculates core earnings per share based on its measure of core earnings. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company's performance. Management also believes that the computation of non-GAAP core earnings and core earnings per share may facilitate the comparison of the Company to other companies in the financial services industry. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.

CONTACTS  
Josephine Iannelli; EVP
Chief Financial Officer & Treasurer
(207) 288-3314

  
TABLE 
INDEXCONSOLIDATED FINANCIAL SCHEDULES (UNAUDITED)
  
ASelected Financial Highlights
BFootnotes to Selected Financial Highlights
CBalance Sheets
DLoan and Deposit Analysis
EStatements of Income
FStatements of Income (Five Quarter Trend)
GAverage Yields and Costs
HAverage Balances
IAsset Quality Analysis
JReconciliation of Non-GAAP Financial Measures (Five Quarter Trend) and Supplementary Data
  

BAR HARBOR BANKSHARES

SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED

 
 At or for the Quarters Ended 
 
 Jun 30,  Mar 31,  Dec 31,  Sep 30,  Jun 30, 
 
 2021  2021  2020  2020  2020 
PER SHARE DATA
 
 
  
 
  
 
  
 
  
 
 
Net earnings, diluted
 $0.60  $0.63  $0.58  $0.56  $0.55 
Core earnings, diluted (1) (2)
  0.63   0.68   0.62   0.61   0.56 
Total book value
  27.76   27.13   27.58   27.09   26.56 
Tangible book value (2)
  19.30   18.64   19.05   18.56   18.18 
Market price at period end
  28.62   29.42   22.59   20.55   22.39 
Dividends
  0.24   0.22   0.22   0.22   0.22 
 
                    
PERFORMANCE RATIOS (3)
                    
Return on assets
  0.97%  1.03%  0.92%  0.88%  0.90%
Core return on assets (1) (2)
  1.01   1.11   0.98   0.96   0.91 
Pre-tax, pre-provision return on assets
  1.13   1.22   1.30   1.29   1.27 
Core pre-tax, pre-provision return on assets (1) (2)
  1.18   1.32   1.38   1.39   1.29 
Return on equity
  8.76   9.45   8.39   8.22   8.40 
Core return on equity (1) (2)
  9.13   10.13   8.95   8.98   8.52 
Return on tangible equity
  12.88   14.01   12.45   12.24   12.55 
Core return on tangible equity (1) (2)
  13.42   15.00   13.27   13.36   12.72 
Net interest margin, fully taxable equivalent (FTE) (2) (4)
  2.74   2.88   3.02   2.90   2.93 
Core net interest margin (1) (2) (5)
  2.67   2.78   2.79   2.89   2.92 
Efficiency ratio (2)
  63.45   61.95   61.98   59.47   60.67 
 
                    
ORGANIC GROWTH (Year-to-date, annualized) (2)
                    
Total commercial loans
  9%  14%  17%  27%  33%
Total loans
  (4)  (2)  (3)  3   5 
Total deposits
  (6)  1   8   12   (0) 
 
                    
FINANCIAL DATA (In millions) 
                    
Total assets
 $3,640  $3,730  $3,726  $3,860  $3,780 
Total earning assets (6)
  3,274   3,371   3,360   3,496   3,414 
Total investments
  636   641   599   619   662 
Total loans
  2,516   2,551   2,563   2,685   2,706 
Allowance for credit losses
  23   24   19   18   17 
Total goodwill and intangible assets
  127   127   127   127   128 
Total deposits
  2,822   2,912   2,906   2,935   2,695 
Total shareholders' equity
  416   406   411   404   404 
Net income
  9   9   9   8   8 
Core earnings (1) (2)
  9   10   9   9   9 
 
                    
ASSET QUALITY AND CONDITION RATIOS
                     
Net charge-offs (current quarter annualized)/average loans
  0.01%  0.03%  0.03%  0.06%  0.02%
Allowance for credit losses/total loans
  0.91   0.93   0.74   0.67   0.61 
Loans/deposits
  89   88   88   91   100 
Shareholders' equity to total assets
  11.42   10.87   11.04   10.48   10.69 
Tangible shareholders' equity to tangible assets
  8.23   7.73   7.90   7.42   7.57 

(1) Core measurements are non-GAAP financial measures adjusted to exclude net non-operating charges primarily related to acquisitions, restructurings, system conversions, loss on debt extinguishment and gain or loss on sale of securities, other real estate owned and premises and equipment. Refer to the Reconciliation of Non-GAAP Financial Measures in table J for additional information.
(2) Non-GAAP financial measure.
(3) All performance ratios are based on average balance sheet amounts, where applicable.
(4) Fully taxable equivalent considers the impact of tax-advantaged investment securities and loans.
(5) Core net interest margin excludes Paycheck Protection Program loans.
(6) Earning assets includes non-accruing loans and interest-bearing deposits with other banks. Securities are valued at amortized cost.

BAR HARBOR BANKSHARES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

 
 Jun 30,  Mar 31,  Dec 31,  Sep 30,  Jun 30, 
(in thousands)
 2021  2021  2020  2020  2020 
Assets
 
 
  
 
  
 
  
 
  
 
 
Cash and due from banks
 $41,440  $39,039  $27,566  $22,722  $24,430 
Interest-bearing deposits with other banks
  132,278   184,473   198,441   192,935   46,243 
Total cash and cash equivalents
  173,718   223,512   226,007   215,657   70,673 
 
                    
Securities available for sale
  621,849   626,403   585,046   604,529   641,574 
Federal Home Loan Bank stock
  14,145   14,826   14,036   13,975   20,265 
Total securities
  635,994   641,229   599,082   618,504   661,839 
 
                    
Loans held for sale
  7,942   10,148   23,988   23,721   22,979 
 
                    
Total loans
  2,515,560   2,551,064   2,562,885   2,684,970   2,706,438 
Less: Allowance for credit losses
  (22,815)  (23,653)  (19,082)  (17,907)  (16,509)
Net loans
  2,492,745   2,527,411   2,543,803   2,667,063   2,689,929 
 
                    
Premises and equipment, net
  51,119   52,253   52,458   51,424   50,464 
Other real estate owned
  -   -   -   1,983   2,318 
Goodwill
  119,477   119,477   119,477   119,477   119,477 
Other intangible assets
  7,198   7,431   7,670   7,913   8,155 
Cash surrender value of bank-owned life insurance
  78,886   78,388   77,870   77,388   76,896 
Deferred tax asset, net
  4,349   5,639   1,745   2,180   2,451 
Other assets
  68,247   64,742   73,662   74,400   75,084 
Total assets
 $3,639,675  $3,730,230  $3,725,762  $3,859,710  $3,780,265 
 
                    
Liabilities and shareholders' equity
                    
Demand and other non-interest bearing deposits
 $599,598  $586,487  $544,636  $515,064  $504,325 
NOW deposits
  802,681   761,817   738,849   706,048   642,908 
Savings deposits
  578,361   560,095   521,638   511,938   466,668 
Money market deposits
  371,075   365,507   402,731   388,356   402,835 
Time deposits
  470,758   638,436   698,361   813,509   678,126 
Total deposits
  2,822,473   2,912,342   2,906,215   2,934,915   2,694,862 
 
                    
Senior borrowings
  279,991   292,210   276,062   385,472   546,863 
Subordinated borrowings
  60,042   60,003   59,961   59,920   59,879 
Total borrowings
  340,033   352,213   336,023   445,392   606,742 
 
                    
Other liabilities
  61,597   60,094   72,183   74,958   74,487 
Total liabilities
  3,224,103   3,324,649   3,314,421   3,455,265   3,376,091 
 
                    
Total common shareholders' equity
  415,572   405,581   411,341   404,445   404,174 
Total liabilities and shareholders' equity
 $3,639,675  $3,730,230  $3,725,762  $3,859,710  $3,780,265 
 
                    
Net shares outstanding
  14,972   14,950   14,916   14,929   15,214 
                     

BAR HARBOR BANKSHARES

CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED

LOAN ANALYSIS 

 
 

 
  

 
  

 
  

 
  

 
  Annualized  
Growth %
 
 Jun 30,  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Quarter  Year to
(in thousands)
 2021  2021  2020  2020  2020  End  Date
Commercial real estate
 $1,135,857  $1,118,669  $1,084,381  $1,045,635  $982,070   6%  9%
Commercial and industrial
  327,729   317,500   323,864   324,647   340,898   13   2 
Paycheck Protection Program (PPP)
  65,918   77,878   53,774   131,537   131,626   (61)  45 
Total commercial loans
  1,529,504   1,514,047   1,462,019   1,501,819   1,454,594   4   9 
Total commercial loans, excluding PPP
  1,463,586   1,436,169   1,408,245   1,370,282   1,322,968   8   8 
 
                            
Residential real estate
  822,774   868,084   923,891   997,485   1,060,729   (21)  (22)
Consumer
  103,589   106,835   113,544   119,340   124,197   (12)  (18)
Tax exempt and other
  59,693   62,098   63,431   66,326   66,918   (15)  (12)
Total loans
 $2,515,560  $2,551,064  $2,562,885  $2,684,970  $2,706,438   (6)%  (4)%
 
                            

DEPOSIT ANALYSIS 

 
 
 
  
 
  
 
  
 
  
 
  Annualized  
Growth %
 
 Jun 30,  Mar 31,  Dec 31,  Sep 30,  Jun 30,  Quarter  Year to
(in thousands)
 2021  2021  2020  2020  2020  End  Date
Demand
 $599,598  $586,487  $544,636  $515,064  $504,325   9%  20%
NOW
  802,681   761,817   738,849   706,048   642,908   21   17 
Savings
  578,361   560,095   521,638   511,938   466,668   13   22 
Money market
  371,075   365,507   402,731   388,356   402,835   6   (16)
Total non-maturity deposits
  2,351,715   2,273,906   2,207,854   2,121,406   2,016,736   14   13 
Total time deposits
  470,758   638,436   698,361   813,509   678,126   *   (65)
Total deposits
 $2,822,473  $2,912,342  $2,906,215  $2,934,915  $2,694,862   (12)%  (6)%

*Indicates ratios of 100% or greater.

BAR HARBOR BANKSHARES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

 
 Three Months Ended  Six Months Ended 
 
 June 30,  June 30, 
(in thousands, except per share data)
 2021  2020  2021  2020 
Interest and dividend income
 
 
  
 
  
 
  
 
 
Loans
 $23,191  $26,493  $47,396  $54,480 
Securities and other
  3,992   4,942   7,971   10,449 
Total interest and dividend income
  27,183   31,435   55,367   64,929 
Interest expense
                
Deposits
  2,603   4,548   5,554   10,568 
Borrowings
  1,826   2,297   3,637   5,208 
Total interest expense
  4,429   6,845   9,191   15,776 
Net interest income
  22,754   24,590   46,176   49,153 
Provision for credit losses
  (765)  1,354   (1,254)  2,465 
Net interest income after provision for credit losses
  23,519   23,236   47,430   46,688 
Non-interest income
                
Trust and investment management fee income
  3,801   3,159   7,467   6,528 
Customer service fees
  3,257   2,439   6,227   5,551 
Gain on sales of securities, net
  50   1,351   50   1,486 
Mortgage banking income
  1,553   1,124   4,123   1,581 
Bank-owned life insurance income
  498   496   1,016   1,033 
Customer derivative income
  86   513   496   1,101 
Other income
  260   628   374   851 
Total non-interest income
  9,505   9,710   19,753   18,131 
Non-interest expense
                
Salaries and employee benefits
  11,356   11,909   23,532   23,793 
Occupancy and equipment
  3,894   3,860   8,222   8,280 
Loss (gain) on sales of premises and equipment, net
  1   (2)  9   90 
Outside services
  533   442   965   976 
Professional services
  151   337   709   1,009 
Communication
  198   194   519   483 
Marketing
  534   282   824   670 
Amortization of intangible assets
  233   256   474   512 
Loss on debt extinguishment
  -   1,351   -   1,351 
Acquisition, conversion and other expenses
  552   158   1,441   261 
Other expenses
  4,272   3,479   7,520   7,200 
Total non-interest expense
  21,724   22,266   44,215   44,625 
Income before income taxes
  11,300   10,680   22,968   20,194 
Income tax expense
  2,275   2,199   4,463   3,992 
Net income
 $9,025  $8,481  $18,505  $16,202 
 
                
Earnings per share:
                
Basic
 $0.60  $0.55  $1.24  $1.05 
Diluted
  0.60   0.55   1.23   1.04 
 
                
Weighted average shares outstanding:
                
Basic
  14,965   15,424   14,950   15,500 
Diluted
  15,042   15,441   15,026   15,523 
                 

BAR HARBOR BANKSHARES

CONSOLIDATED STATEMENTS OF INCOME (5 Quarter Trend) - UNAUDITED

 
 Jun 30,  Mar 31,  Dec 31,  Sep 30,  Jun 30, 
(in thousands, except per share data)
 2021  2021  2020  2020  2020 
Interest and dividend income
 
 
  
 
  
 
  
 
  
 
 
Loans
 $23,191  $24,205  $26,687  $25,918  $26,493 
Securities and other
  3,992   3,979   4,013   4,557   4,942 
Total interest and dividend income
  27,183   28,184   30,700   30,475   31,435 
Interest expense
                    
Deposits
  2,603   2,951   3,606   3,869   4,548 
Borrowings
  1,826   1,811   1,732   1,941   2,297 
Total interest expense
  4,429   4,762   5,338   5,810   6,845 
Net interest income
  22,754   23,422   25,362   24,665   24,590 
Provision for credit losses
  (765)  (489)  1,360   1,800   1,354 
Net interest income after provision for credit losses
  23,519   23,911   24,002   22,865   23,236 
Non-interest income
                    
Trust and investment management fee income
  3,801   3,666   3,318   3,532   3,159 
Customer service fees
  3,257   2,970   2,890   2,886   2,439 
Gain on sales of securities, net
  50   -   3,959   -   1,351 
Mortgage banking income
  1,553   2,570   2,654   2,649   1,124 
Bank-owned life insurance income
  498   518   482   492   496 
Customer derivative income
  86   410   1,086   316   513 
Other income
  260   114   334   227   628 
Total non-interest income
  9,505   10,248   14,723   10,102   9,710 
Non-interest expense
                    
Salaries and employee benefits
  11,356   12,176   13,318   11,809   11,909 
Occupancy and equipment
  3,894   4,328   4,192   4,279   3,860 
Loss (gain) on sales of premises and equipment, net
  1   8   (122)  -   (2)
Outside services
  533   432   571   438   442 
Professional services
  151   558   572   479   337 
Communication
  198   321   194   215   194 
Marketing
  534   290   415   300   282 
Amortization of intangible assets
  233   241   256   256   256 
Loss on debt extinguishment
  -   -   -   -   1,351 
Acquisition, conversion and other expenses
  552   889   4,849   691   158 
Other expenses
  4,272   3,248   3,571   3,952   3,479 
Total non-interest expense
  21,724   22,491   27,816   22,419   22,266 
Income before income taxes
  11,300   11,668   10,909   10,548   10,680 
Income tax expense
  2,275   2,188   2,269   2,146   2,199 
Net income
 $9,025  $9,480  $8,640  $8,402  $8,481 
 
                    
Earnings per share:
                    
Basic
 $0.60  $0.63  $0.58  $0.56  $0.55 
Diluted
  0.60   0.63   0.58   0.56   0.55 
 
                    
Weighted average shares outstanding:
                    
Basic
  14,965   14,934   14,909   15,079   15,424 
Diluted
  15,042   15,007   14,952   15,103   15,441 
                     

BAR HARBOR BANKSHARES

AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED

 
 Quarters Ended 
 
 Jun 30,  Mar 31,  Dec 31,  Sep 30,  Jun 30, 
 
 2021  2021  2020  2020  2020 
Earning assets
 
 
  
 
  
 
  
 
  
 
 
Interest-bearing deposits with other banks (1)
  0.09%  0.09%  0.11%  0.09%  0.08%
Securities available for sale and FHLB stock
  2.66   2.79   2.97   3.04   3.26 
Loans: 
                    
Commercial real estate
  3.54   3.68   3.74   3.81   4.11 
Commercial and industrial
  3.60   3.86   3.92   4.39   4.13 
Paycheck protection program
  5.56   8.12   11.56   3.18   3.34 
Residential real estate
  3.80   3.76   3.74   3.71   3.81 
Consumer
  3.44   3.56   3.65   3.42   3.81 
Total loans
  3.70   3.85   4.03   3.81   3.94 
Total earning assets
  3.26%  3.46%  3.65%  3.57%  3.73%
 
                    
Funding liabilities
                    
Deposits: 
                    
NOW
  0.12%  0.14%  0.15%  0.14%  0.14%
Savings
  0.10   0.13   0.13   0.13   0.15 
Money market
  0.12   0.14   0.14   0.16   0.40 
Time deposits
  1.37   1.44   1.64   1.69   1.94 
Total interest-bearing deposits
  0.45   0.51   0.61   0.66   0.81 
Borrowings
  2.12   2.16   1.83   1.60   1.51 
Total interest-bearing liabilities
  0.66%  0.72%  0.77%  0.82%  0.96%
 
                    
Net interest spread
  2.60   2.74   2.88   2.75   2.77 
Net interest margin (1)
  2.74   2.88   3.02   2.90   2.93 
Core net interest margin (2)
  2.67   2.78   2.79   2.89   2.92 

(1) Income from interest-bearing deposits with other banks has been separated from securities and restated for prior periods to conform to the current period presentation.
(2) Core net interest margin excludes Paycheck Protection Program loans.

BAR HARBOR BANKSHARES

AVERAGE BALANCES - UNAUDITED

 
 Quarters Ended
 
 Jun 30,  Mar 31,  Dec 31,  Sep 30,  Jun 30, 
(in thousands)
 2021  2021  2020  2020  2020 
Assets
 
 
  
 
  
 
  
 
  
 
 
Interest-bearing deposits with other banks (1)
 $228,825  $176,728  $176,747  $92,066  $71,067 
Securities available for sale and FHLB stock (2)
  635,978   613,459   563,118   627,162   648,185 
Loans: 
                    
Commercial real estate
  1,122,831   1,099,937   1,059,574   1,012,194   952,264 
Commercial and industrial
  378,634   377,176   386,201   399,734   417,620 
Paycheck protection program
  76,701   65,149   91,109   131,605   104,740 
Residential real estate
  850,119   916,633   995,173   1,060,084   1,117,608 
Consumer
  104,851   109,802   115,876   121,248   126,413 
Total loans (3)
  2,533,136   2,568,697   2,647,933   2,724,865   2,718,645 
Total earning assets
  3,397,939   3,358,884   3,387,798   3,444,093   3,437,897 
Cash and due from banks
  21,414   23,221   22,473   36,521   43,165 
Allowance for credit losses
  (23,419)  (24,822)  (18,690)  (17,028)  (15,678)
Goodwill and other intangible assets
  126,789   127,024   127,264   127,508   127,751 
Other assets
  223,369   232,477   237,424   223,316   213,986 
Total assets
 $3,746,092  $3,716,784  $3,756,269  $3,814,410  $3,807,121 
 
                    
Liabilities and shareholders' equity
                    
Deposits: 
                    
NOW
 $781,836  $749,100  $713,464  $677,706  $611,860 
Savings
  568,193   541,203   516,266   488,508   450,621 
Money market
  368,826   378,743   399,543   396,351   411,232 
Time deposits
  619,454   675,422   734,523   777,424   776,042 
Total interest-bearing deposits
  2,338,309   2,344,468   2,363,796   2,339,989   2,249,755 
Borrowings
  345,896   340,209   376,437   481,687   612,538 
Total interest-bearing liabilities
  2,684,205   2,684,677   2,740,233   2,821,676   2,862,293 
Non-interest-bearing demand deposits
  591,982   550,657   535,402   507,844   472,688 
Other liabilities
  56,630   74,646   71,119   78,072   66,302 
Total liabilities
  3,332,817   3,309,980   3,346,754   3,407,592   3,401,283 
Total shareholders' equity
  413,275   406,804   409,515   406,818   405,838 
Total liabilities and shareholders' equity
 $3,746,092  $3,716,784  $3,756,269  $3,814,410  $3,807,121 

(1) Total average interest-bearing deposits with other banks is net of Federal Reserve daily cash letter.
(2) Average balances for securities available-for-sale are based on amortized cost.
(3) Total average loans include non-accruing loans and loans held for sale.

BAR HARBOR BANKSHARES

ASSET QUALITY ANALYSIS - UNAUDITED

 
 At or for the Quarters Ended
 
 Jun 30,  Mar 31,  Dec 31,  Sep 30,  Jun 30,
(in thousands)
 2021  2021  2020  2020  2020
NON-PERFORMING ASSETS
 
 
  
 
  
 
  
 
  
 
 
Non-accruing loans:
 
 
  
 
  
 
  
 
  
 
 
Commercial real estate
 $4,367  $4,664  $4,251  $4,714  $3,981 
Commercial installment
  1,370   1,534   1,466   1,820   1,790 
Residential real estate
  6,788   6,753   5,729   7,154   7,194 
Consumer installment
  1,054   1,118   742   720   1,023 
Total non-accruing loans
  13,579   14,069   12,188   14,408   13,988 
Other real estate owned
  -   -   -   1,983   2,318 
Total non-performing assets
 $13,579  $14,069  $12,188  $16,391  $16,306 
 
                    
Total non-accruing loans/total loans
  0.54%  0.55%  0.48%  0.54%  0.52%
Total non-performing assets/total assets
  0.37   0.38   0.33   0.42   0.43 
 
                    
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
                    
Balance at beginning of period
 $23,653  $19,082  $17,907  $16,509  $15,297 
Impact of CECL adoption
  -   5,228   -   -   - 
Charged-off loans
  (239)  (216)  (297)  (439)  (220)
Recoveries on charged-off loans
  166   48   112   37   78 
Net loans charged-off
  (73)  (168)  (185)  (402)  (142)
Provision for credit losses
  (765)  (489)  1,360   1,800   1,354 
Balance at end of period
 $22,815  $23,653  $19,082  $17,907  $16,509 
 
                    
Allowance for credit losses/total loans
  0.91%  0.93%  0.74%  0.66%  0.60%
Allowance for credit losses/non-accruing loans
  168   168   157   124   118 
 
                    
NET LOAN CHARGE-OFFS
                    
Commercial real estate
 $(105) $(131) $63  $(252) $71 
Commercial installment
  (7)  1   (228)  (10)  (155)
Residential real estate
  88   (28)  (21)  1   (20)
Consumer installment
  (49)  (10)  1   (141)  (38)
Total, net
 $(73) $(168) $(185) $(402) $(142)
 
                    
Net charge-offs (QTD annualized)/average loans
  0.01%  0.03%  0.03%  0.06%  0.02%
Net charge-offs (YTD annualized)/average loans
  0.02   0.03   0.07   0.08   0.10 
 
                    
DELINQUENT AND NON-ACCRUING LOANS/ TOTAL LOANS
                    
30-89 Days delinquent
  0.13%  0.43%  0.58%  0.16%  0.28%
90+ Days delinquent and still accruing
  0.02   0.01   -   0.08   0.04 
Total accruing delinquent loans
  0.15   0.44   0.58   0.24   0.32 
Non-accruing loans
  0.54   0.55   0.48   0.54   0.52 
Total delinquent and non-accruing loans
  0.69%  0.99%  1.06%  0.78%  0.84%
                     

BAR HARBOR BANKSHARES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED


 

 
 At or for the Quarters Ended
(in thousands)

 
 Jun 30,  
2021
  Mar 31,  
2021
  Dec 31,  
2020
  Sep 30,  
2020
  Jun 30,  
2020
Net income
 $9,025  $9,480  $8,640  $8,402  $8,481 
Non-core items:
                    
(Gain) on sale of securities, net
  (50)  -   (3,959)  -   (1,351)
Loss (gain) on sale of premises and equipment, net
  1   8   (122)  -   (2)
(Gain) loss on other real estate owned
  -   -   (11)  335   - 
Loss on debt extinguishment
  -   -   -   -   1,351 
Acquisition, conversion and other expenses
  552   889   4,849   691   158 
Income tax expense (1)
  (119)  (213)  (179)  (245)  (37)
Total non-core items
  384   684   578   781   119 
Core earnings (2)
 
(A)$9,409  $10,164  $9,218  $9,183  $8,600 

 

 
                    
Net interest income
(B)$22,754  $23,422  $25,362  $24,665  $24,590 
Non-interest income
  9,505   10,248   14,723   10,102   9,710 
Total Revenue

 
  32,259   33,670   40,085   34,767   34,300 
(Gain) on sale of securities, net
  (50)  -   (3,959)  -   (1,351)
Total core revenue (2)
 
(C)$32,209  $33,670  $36,126  $34,767  $32,949 

 

 
                    
Total non-interest expense

 
  21,724   22,491   27,816   22,419   22,266 
Non-core expenses:

 
                    
(Loss) gain on sale of premises and equipment, net
  (1)  (8)  122   -   2 
Gain (loss) on other real estate owned
  -   -   11   (335)  - 
Loss on debt extinguishment
  -   -   -   -   (1,351)
Acquisition, conversion and other expenses
  (552)  (889)  (4,849)  (691)  (158)
Total non-core expenses
  (553)  (897)  (4,716)  (1,026)  (1,507)
Core non-interest expense (2)
(D)$21,171  $21,594  $23,100  $21,393  $20,759 

 

 
                    
Total revenue
  32,259   33,670   40,085   34,767   34,300 
Total non-interest expense
  21,724   22,491   27,816   22,419   22,266 
Pre-tax, pre-provision net revenue
 $10,535  $11,179  $12,269  $12,348  $12,034 

 

 
                    
Core revenue

 
  32,209   33,670   36,126   34,767   32,949 
Core non-interest expense
  21,171   21,594   23,100   21,393   20,759 
Core pre-tax, pre-provision net revenue
(U)$11,038  $12,076  $13,026  $13,374  $12,190 

 

 
                    
(in millions)

 
                    
Average earning assets
(E)$3,398  $3,359  $3,388  $3,444  $3,438 
Average paycheck protection program (PPP) loans
(R) 77   65   91   132   105 
Average earning assets, excluding PPP loans
(S) 3,321   3,294   3,297   3,312   3,333 
Average assets
(F) 3,746   3,717   3,756   3,814   3,807 
Average shareholders' equity
(G) 413   407   410   407   406 
Average tangible shareholders' equity (2) (3)
(H) 287   280   282   279   278 
Tangible shareholders' equity, period-end (2) (3)
(I) 289   279   284   277   277 
Tangible assets, period-end (2) (3)
(J) 3,513   3,603   3,598   3,732   3,653 

 

 
                    

BAR HARBOR BANKSHARES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED


 
    At or for the Quarters Ended
(in thousands)
    Jun 30,  
2021
  Mar 31,  
2021
  Dec 31,  
2020
  Sep 30,  
2020
  Jun 30,  
2020
Common shares outstanding, period-end
 (K)   14,972   14,950   14,916   14,929   15,214 
Average diluted shares outstanding
 (L)   15,042   15,007   14,952   15,103   15,441 

 
                       
Core earnings per share, diluted (2)
 (A/L)  $0.63  $0.68  $0.62  $0.61  $0.56 
Tangible book value per share, period-end (2)
 (I/K)   19.30   18.64   19.05   18.56   18.18 
Securities adjustment, net of tax (1) (4)
 (M)   7,237   4,510   10,023   11,681   11,412 
Tangible book value per share, excluding securities adjustment (2) (4)
 (I+M)/K   18.81   18.34   18.38   17.78   17.43 
Tangible shareholders' equity/total tangible assets (2)
 (I/J)   8.22   7.73   7.90   7.42   7.57 

 
                       
Performance ratios (5)
                       
GAAP return on assets
     0.97%  1.03%  0.92%  0.88%  0.90%
Core return on assets (2)
 (A/F)   1.01   1.11   0.98   0.96   0.91 
Pre-tax, pre-provision return on assets
     1.13   1.22   1.30   1.29   1.27 
Core pre-tax, pre-provision return on assets (2)
 (U/F)   1.18   1.32   1.38   1.39   1.29 
GAAP return on equity
     8.76   9.45   8.39   8.22   8.40 
Core return on equity (2)
 (A/G)   9.13   10.13   8.95   8.98   8.52 
Return on tangible equity
     12.88   14.01   12.45   12.24   12.55 
Core return on tangible equity (1) (2)
 (A+Q)/H   13.42   15.00   13.27   13.36   12.72 
Efficiency ratio (2) (6)
 (D-O-Q) /(C+N) 63.45   61.95   61.98   59.47   60.67 
Net interest margin
 (B+P)/E   2.74   2.88   3.02   2.90   3.04 
Core net interest margin (2) (7)
 (B+P-T)/S  2.67   2.78   2.79   2.89   2.92 

 
                       
Supplementary data (in thousands)
                       
Taxable equivalent adjustment for efficiency ratio
 (N)  $586  $595  $542  $570  $646 
Franchise taxes included in non-interest expense
 (O)   128   125   117   121   120 
Tax equivalent adjustment for net interest margin
 (P)   430   433   396   416   490 
Intangible amortization
 (Q)   233   241   256   256   256 
Interest and fees on PPP loans
 (T)   1,064   1,304   2,648   1,052   869 

(1) Assumes a marginal tax rate of 23.71% in the first and second quarter of 2021 and fourth quarter of 2020 and 23.87% for the first three quarters of 2020.
(2) Non-GAAP financial measure.
(3) Tangible shareholders' equity is computed by taking total shareholders' equity less the intangible assets at period-end. Tangible assets is computed by taking total assets less the intangible assets at period-end.
(4) Securities adjustment, net of tax represents the total unrealized loss on available-for-sale securities recorded on the Company's consolidated balance sheets within total common shareholders' equity.
(5) All performance ratios are based on average balance sheet amounts, where applicable.
(6) Efficiency ratio is computed by dividing core non-interest expense net of franchise taxes and intangible amortization divided by core revenue on a fully taxable equivalent basis.
(7) Core net interest margin excludes Paycheck Protection Program loans.

SOURCE: Bar Harbor Bank and Trust

Back to Newsroom
Copyright 2021 © ACCESSWIRE. All rights reserved. Privacy Policy  |   Terms and Conditions