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Bar Harbor Bankshares Reports Third Quarter Results; Declares Dividend

Thursday, October 21, 2021 4:35 PM
Bar Harbor Bank and Trust
Topic:
Earnings

BAR HARBOR, ME / ACCESSWIRE / October 21, 2021 / Bar Harbor Bankshares (NYSE American:BHB) reported third quarter 2021 net income of $11.0 million or $0.73 per diluted share, up from $8.4 million or $0.56 per diluted share in the same quarter of 2020. Core earnings (non-GAAP) were also $11.0 million or $0.73 per diluted share in the third quarter of 2021, compared to $9.2 million, or $0.61 per share for the same period of 2020.

THIRD QUARTER HIGHLIGHTS (ratios compared to the third quarter 2020)

  • 1.16% return on assets, for both GAAP and non-GAAP measures
  • 10% annualized commercial loan growth, excluding Paycheck Protection Program (PPP) loans
  • 32% annualized core deposit growth
  • 3.02% net interest margin (NIM) compared to 2.90%
  • 15% increase in fee income, excluding mortgage banking income and security gains
  • Bar Harbor Bank & Trust named as America's Best Bank in Maine by Newsweek Magazine

President and Chief Executive Officer, Curtis C. Simard stated, "Core earnings per share (non-GAAP) in the third quarter 2021 grew 20% over the same quarter of 2020. Our core return on assets in the third quarter was 1.16% compared to 0.96% in the third quarter of 2020, evidencing continued execution of our strategies that balance growth with earnings. This is indicative of the strength in our core businesses and the results of the strategic initiatives we have been undertaking. The momentum we've seen in each area affords us flexibility with diverse revenue streams to support our operations, even in uncertain economic environments."

"While fee income and efficiency improvements contributed to greater core profitability, the quarterly results also benefited from a 13 basis point expansion in the margin to 2.99% compared with 2.86% in the second quarter 2021 on a normalized basis (excluding PPP and excess cash effects). This improvement is a direct result of increased core funding as we gain market share and reduce our reliance on wholesale borrowings. As of September 30, 2021, our wholesale borrowings as a percentage of funding was 9%, down from 23% in the prior year."

Mr. Simard stated, "Our commercial teams continue to deliver strong commercial loan growth despite the competitive landscape in our footprint. The majority of the commercial real estate loan growth this quarter came from new multi-family residential and light industrial & manufacturing relationships with proven operators. Risk management remains at the forefront of all that we do. We saw yields bottoming out on residential loans this quarter and were able to increase contractual rates at times. Given the overall interest rate risk position of our balance sheet and this recent rate increase, we strategically directed more of our residential mortgage production on balance sheet versus selling it in the secondary market."

"We also executed another delever and security remix strategy during the third quarter, prepaying $89 million of FHLB borrowings and selling $44 million of credit sensitive municipal and corporate bonds. The additional purchase of securities was completed subsequent to quarter end, earlier in October. This transaction is expected to expand the NIM by 12 basis points and will be accretive to earnings by $0.02 on a quarterly basis."

Mr. Simard commented, "We continue to build long term shareholder value while providing a favorable dividend rate relative to community banking. The Company's return on equity for the third quarter rose to 10.38% from 8.25% in the same quarter of 2020. A clear path to equity preservation is strong credit quality. We remain committed to our underwriting standards evidenced by further improvement in past-due accounts, non-accruals and a near zero net-charge-off ratio."

Mr. Simard concluded, "While our financial results for the quarter and our overall performance thus far in the year speak to the soundness of our strategy, we are thrilled to be named by Newsweek Magazine as one of "America's Best Banks." Best Bank winners were selected from over 2,500 financial institutions and assessed on more than 30 separate factors including the overall health of the bank, customer service performance and features, digital and branch presence, account and loan options, interest rate offerings, and fees.This award acknowledges that our strategy is resonating with customers. I am proud of our employees and congratulate them on earning this great award."

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 November 17, 2021, payable on December 17, 2021. This dividend equates to a 3.42% annualized yield based on the $28.05 closing price of the Company's common stock at the end of the third quarter of 2021.

FINANCIAL CONDITION

Total assets were $3.7 billion at the end of the third quarter. Bar Harbor Bankshares (the "Company") executed a balance sheet delever and security remix strategy where $89.0 million of Federal Home Loan Bank advances were prepaid and $43.5 million of securities were sold to reduce credit risk exposure while generating gains. The replenishment of those securities is expected to be fulfilled early in the fourth quarter 2021.

Loans were $2.5 billion at the end of the third quarter reflecting growth of $18.6 million or 3% on an annualized basis. Excluding PPP loans, commercial loans increased $38.0 million led by two new relationships totaling $21.2 million as well as the deepening of existing commercial relationships. PPP loan balances totaled $24.2 million at quarter-end, consisting of $24.1 million of 2021 originations and $145 thousand from 2020. Unearned deferred fees on PPP loans totaled $1.2 million at the end of the quarter and are expected to be mostly recognized by year-end 2021. COVID loan modifications totaled $4.7 million, down from $19.0 million at the end of the second quarter 2021. Total residential loans increased $26.9 million from the end of the second quarter 2021, which primarily included $39.0 million of originations that were strategically put on the balance sheet when rates were higher in the quarter.

The allowance for credit losses was $22.4 million for the third quarter. As economic forecasts continue to improve the Company maintains its disciplined approach to credit quality with an allowance to total loans coverage ratio of 0.89%. Net charge-offs totaled $193 thousand, or 0.03% of the total loan portfolio, and non-accruing loans decreased to $12.2 million from $13.6 million at the end of the second quarter 2021. The ratio of accruing past due loans to total loans improved to 0.12% of total loans from 0.15% at the end of the second quarter 2021 and 0.58% at year-end 2020.

Total deposits increased $184.8 million to $3.0 billion during the quarter, due to significant core deposit growth. Core deposits grew $186.3 million, or 32% on an annualized basis, during the quarter as over 800 new customer accounts were opened. As a result the loan to deposit ratio improved to 84% from 89% at the end of the second quarter 2021. Time deposits decreased $1.5 million during the quarter as customers continue to move funds to transactional accounts upon contractual maturity.

The Company's book value per share was $27.92 at September 30, 2021, compared with $27.64 at the end of the second quarter 2021. Tangible book value per share (non-GAAP measure) was $19.48 at the end of the third quarter 2021, compared to $19.17 at the end of the second quarter 2021, an annualized growth rate of 6%. Other comprehensive income included unrealized gains on securities totaling $4.4 million in the third quarter 2021 compared to $7.2 million at the end of the second quarter 2021.

RESULTS OF OPERATIONS

Net income in the third quarter 2021 was $11.0 million, or $0.73 per share, compared to $8.4 million, or $0.56 per share, in the same quarter of 2020. Net income improved on higher fee income and fees from PPP loans in the quarter. PPP loan fees contributed $0.13 to earnings per share in the third quarter of 2021 and $0.06 in the same period of 2020. Core earnings (non-GAAP) totaled $11.0 million or $0.73 per share, compared to $9.2 million, or $0.61 per share, in the same quarter of 2020. Non-core items (non-GAAP) netted to an insignificant amount in the third quarter 2021 and reduced net income by $781 thousand in the same period of 2020.

Net interest margin was 3.02% compared to 2.90% in the same period of 2020. Acceleration of PPP loan fee amortization due to forgiveness contributed 28 basis points to NIM in the third quarter 2021 and 1 basis point in the same period of 2020. Interest-bearing cash balances, held mostly at the Federal Reserve Bank, reduced NIM by 26 basis points in the quarter and 8 basis points in the third quarter 2020. The yield on earning assets totaled 3.41% compared to 3.57% in the third quarter 2020. Excluding the impact of PPP and excess cash, the yield on earning assets totaled 3.42% and 3.67% for the same periods. The yield on loans was 3.98% in the third quarter 2021, 3.70% in the second quarter 2021 and 3.81% in the third quarter of 2020. Excluding PPP loans the yield on loans was 3.62% in the third quarter of 2021, 3.64% in the second quarter of 2021 and 3.83% in the third quarter 2020. Costs of funds decreased to 0.50% from 0.82% in the third quarter 2020 due to lower deposit rates and reduced wholesale borrowings.

The provision for credit losses for the quarter was a benefit of $174 thousand, compared to an expense of $1.8 million in the third quarter of 2020. The provision recapture in the third quarter 2021 is attributable to continued strong credit quality and improving economic forecasts.

Non-interest income in the third quarter 2021 was $11.4 million, compared to $10.1 million in the same quarter of 2020. The increase was due to higher customer service fees, wealth management income, and a gain on securities sales. Customer service fees were $3.5 million in the third quarter compared to $2.9 million in the same period of 2020. The increase is due to over 800 new accounts that were opened during the quarter and a higher volume of customer activity and transactions. Wealth management income increased 10% over the same quarter of 2020 to $3.9 million with assets under management of $2.4 billion compared to $2.1 billion in the same period of 2020. The Company sold securities resulting in a $1.9 million gain as part of the aforementioned remix strategy. Mortgage banking activities contributed $850 thousand, compared to $2.6 million in the same period of 2020. The Company took advantage of volatility in the yield curve in the third quarter and put residential mortgages on the balance sheet when rates were higher and sold loans in the secondary market when rates were low.

Non-interest expense was $23.4 million in the third quarter 2021 from $22.4 million in the same quarter of 2020. Salaries and benefits expense decreased to $11.7 million compared to $11.8 million in the same quarter of 2020, reflecting full-time equivalents of 428 compared to 457 in the third quarter of 2020. Non-core expenses (non-GAAP) in the third quarter 2021 totaled $1.9 million and were mostly made up of the $1.8 million prepayment penalty on debt extinguishment. In the same quarter of 2020 non-core expenses (non-GAAP) totaled $1.0 million and included costs to consolidate our wealth management systems. The efficiency ratio for the third quarter was 59.18% compared to 59.47% in the same period of 2020. Excluding the effects of PPP the efficiency ratio was 63.35% and 61.30% for the same respective periods.

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 "THIRD QUARTER 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
BBalance Sheets
CLoan and Deposit Analysis
DStatements of Income
EStatements of Income (Five Quarter Trend)
FAverage Yields and Costs
GAverage Balances
HAsset Quality Analysis
IReconciliation of Non-GAAP Financial Measures (Five Quarter Trend) and Supplementary Data

BAR HARBOR BANKSHARES
SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED

At or for the Quarters Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
2021 2021 2021 2020 2020
PER SHARE DATA





Net earnings, diluted
$0.73 $0.60 $0.63 $0.58 $0.56
Core earnings, diluted (1)
0.73 0.63 0.68 0.62 0.61
Total book value (6)
27.92 27.64 27.10 27.29 26.74
Tangible book value (1) (6)
19.48 19.17 18.61 18.77 18.21
Market price at period end
28.05 28.62 29.42 22.59 20.55
Dividends
0.24 0.24 0.22 0.22 0.22
PERFORMANCE RATIOS (2)
Return on assets
1.16% 0.97% 1.03% 0.92% 0.88%
Core return on assets (1)
1.16 1.01 1.11 0.98 0.96
Pre-tax, pre-provision return on assets
1.43 1.13 1.22 1.30 1.29
Core pre-tax, pre-provision return on assets (1)
1.43 1.18 1.32 1.38 1.39
Return on equity (6)
10.38 8.77 9.45 8.42 8.25
Core return on equity (1) (6)
10.39 9.14 10.14 8.99 9.02
Return on tangible equity (6)
15.08 12.91 14.01 12.52 12.32
Core return on tangible equity (1) (6)
15.09 13.45 15.01 13.33 13.44
Net interest margin, fully taxable equivalent (FTE) (1) (3)
3.02 2.74 2.88 3.02 2.90
Core net interest margin (1) (4)
2.75 2.67 2.78 2.79 2.89
Efficiency ratio (1)
59.18 63.45 61.95 61.98 59.47
FINANCIAL DATA (In millions)
Total assets (6)
$3,738 $3,639 $3,730 $3,724 $3,861
Total earning assets (5)
3,394 3,282 3,381 3,371 3,505
Total investments
556 636 641 599 619
Total loans
2,534 2,516 2,551 2,563 2,685
Allowance for credit losses
22 23 24 19 18
Total goodwill and intangible assets
126 127 127 127 127
Total deposits
3,007 2,822 2,912 2,906 2,935
Total shareholders' equity (6)
418 414 405 407 399
Net income
11 9 9 9 8
Core earnings (1)
11 9 10 9 9
ASSET QUALITY AND CONDITION RATIOS
Net charge-offs (current quarter annualized)/average loans
0.03% 0.01% 0.03% 0.03% 0.06%
Allowance for credit losses/total loans
0.89 0.91 0.93 0.74 0.67
Loans/deposits
84 89 88 88 91
Shareholders' equity to total assets (6)
11.19 11.37 10.86 10.93 10.34
Tangible shareholders' equity to tangible assets (6)
8.08 8.17 7.72 7.78 7.27
  1. Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in table I for additional information.
  2. All performance ratios are based on average balance sheet amounts, where applicable.
  3. Fully taxable equivalent considers the impact of tax-advantaged investment securities and loans.
  4. Core net interest margin excludes Paycheck Protection Program loans.
  5. Earning assets includes non-accruing loans and interest-bearing deposits with other banks. Securities are valued at amortized cost.
  6. Prior quarters have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.


BAR HARBOR BANKSHARES
CONSOLIDATED BALANCE SHEETS - UNAUDITED

Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
(in thousands)
2021 2021 2021 2020 2020
Assets
Cash and due from banks
$39,081 $41,440 $39,039 $27,566 $22,722
Interest-bearing deposits with other banks
302,118 132,278 184,473 198,441 192,935
Total cash and cash equivalents
341,199 173,718 223,512 226,007 215,657
Securities available for sale
545,327 621,849 626,403 585,046 604,529
Federal Home Loan Bank stock
10,192 14,145 14,826 14,036 13,975
Total securities
555,519 635,994 641,229 599,082 618,504
Loans held for sale
7,505 7,942 10,148 23,988 23,721
Total loans
2,534,154 2,515,560 2,551,064 2,562,885 2,684,970
Less: Allowance for credit losses
(22,448) (22,815) (23,653) (19,082) (17,907)
Net loans
2,511,706 2,492,745 2,527,411 2,543,803 2,667,063
Premises and equipment, net
50,070 51,119 52,253 52,458 51,424
Other real estate owned
- - - - 1,983
Goodwill
119,477 119,477 119,477 119,477 119,477
Other intangible assets
6,966 7,198 7,431 7,670 7,913
Cash surrender value of bank-owned life insurance
79,380 78,886 78,388 77,870 77,388
Deferred tax asset, net (1)
5,811 4,902 5,761 3,047 3,797
Other assets (1)
60,712 67,064 64,479 70,873 74,400
Total assets (1)
$3,738,345 $3,639,045 $3,730,089 $3,724,275 $3,861,327
Liabilities and shareholders' equity
Demand and other non-interest bearing deposits
$664,395 $599,598 $586,487 $544,636 $515,064
NOW deposits
888,021 802,681 761,817 738,849 706,048
Savings deposits
605,977 578,361 560,095 521,638 511,938
Money market deposits
379,651 371,075 365,507 402,731 388,356
Time deposits
469,221 470,758 638,436 698,361 813,509
Total deposits
3,007,265 2,822,473 2,912,342 2,906,215 2,934,915
Senior borrowings
190,267 279,991 292,210 276,062 385,472
Subordinated borrowings
60,083 60,042 60,003 59,961 59,920
Total borrowings
250,350 340,033 352,213 336,023 445,392
Other liabilities (1)
62,295 62,779 60,354 74,972 81,849
Total liabilities (1)
3,319,910 3,225,285 3,324,909 3,317,210 3,462,156
Total shareholders' equity (1)
418,435 413,760 405,180 407,065 399,171
Total liabilities and shareholders' equity (1)
$3,738,345 $3,639,045 $3,730,089 $3,724,275 $3,861,327
Net shares outstanding
14,987 14,972 14,950 14,916 14,929
  1. Prior quarters have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

BAR HARBOR BANKSHARES
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED

LOAN ANALYSIS

Annualized
Growth %
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Quarter Year to
(in thousands)
2021 2021 2021 2020 2020 End Date
Commercial real estate
$1,170,372 $1,135,857 $1,118,669 $1,084,381 $1,045,635 12% 11%
Commercial and industrial
331,091 327,729 317,500 323,864 324,647 4 3
Paycheck Protection Program (PPP)
24,227 65,918 77,878 53,774 131,537 * (74)
Total commercial loans
1,525,690 1,529,504 1,514,047 1,462,019 1,501,819 (1) 6
Total commercial loans, excluding PPP
1,501,463 1,463,586 1,436,169 1,408,245 1,370,282 10 9
Residential real estate
849,692 822,774 868,084 923,891 997,485 13 (11)
Consumer
100,933 103,589 106,835 113,544 119,340 (10) (15)
Tax exempt and other
57,839 59,693 62,098 63,431 66,326 (12) (12)
Total loans
$2,534,154 $2,515,560 $2,551,064 $2,562,885 $2,684,970 3% (1)%

DEPOSIT ANALYSIS

Annualized
Growth %

Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Quarter Year to
(in thousands)
2021 2021 2021 2020 2020 End Date
Demand
$664,395 $599,598 $586,487 $544,636 $515,064 43% 29%
NOW
888,021 802,681 761,817 738,849 706,048 43 27
Savings
605,977 578,361 560,095 521,638 511,938 19 22
Money market
379,651 371,075 365,507 402,731 388,356 9 (8)
Total non-maturity deposits
2,538,044 2,351,715 2,273,906 2,207,854 2,121,406 32 20
Total time deposits
469,221 470,758 638,436 698,361 813,509 (1) (44)
Total deposits
$3,007,265 $2,822,473 $2,912,342 $2,906,215 $2,934,915 26% 5%

*Indicates ratios of 100% or greater.

BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands, except per share data)
2021 2020 2021 2020
Interest and dividend income
Loans
$25,094 $25,918 $72,490 $80,398
Securities and other
3,821 4,557 11,792 15,006
Total interest and dividend income
28,915 30,475 84,282 95,404
Interest expense
Deposits
1,555 3,869 7,109 14,437
Borrowings
1,778 1,941 5,415 7,149
Total interest expense
3,333 5,810 12,524 21,586
Net interest income
25,582 24,665 71,758 73,818
Provision for credit losses
(174) 1,800 (1,428) 4,265
Net interest income after provision for credit losses
25,756 22,865 73,186 69,553
Non-interest income
Trust and investment management fee income
3,868 3,532 11,335 10,060
Customer service fees
3,515 2,886 9,742 8,437
Gain on sales of securities, net
1,930 - 1,980 1,486
Mortgage banking income
850 2,649 4,973 4,230
Bank-owned life insurance income
494 492 1,510 1,525
Customer derivative income
341 316 837 1,417
Other income
352 227 726 1,078
Total non-interest income
11,350 10,102 31,103 28,233
Non-interest expense
Salaries and employee benefits
11,743 11,809 35,275 35,602
Occupancy and equipment
4,029 4,279 12,251 12,559
(Gain) loss on sales of premises and equipment, net
(146) - (137) 90
Outside services
547 438 1,512 1,414
Professional services
491 479 1,200 1,488
Communication
188 215 707 698
Marketing
339 300 1,163 970
Amortization of intangible assets
233 256 707 768
Loss on debt extinguishment
1,768 - 1,768 1,351
Acquisition, conversion and other expenses
318 691 1,759 952
Other expenses
3,862 3,952 11,382 11,152
Total non-interest expense
23,372 22,419 67,587 67,044
Income before income taxes
13,734 10,548 36,702 30,742
Income tax expense
2,706 2,146 7,169 6,138
Net income
$11,028 $8,402 $29,533 $24,604
Earnings per share:
Basic
$0.74 $0.56 $1.97 $1.60
Diluted
0.73 0.56 1.96 1.60
Weighted average shares outstanding:
Basic
14,983 15,079 14,961 15,359
Diluted
15,051 15,103 15,035 15,382

BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME (5 Quarter Trend) - UNAUDITED

Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
(in thousands, except per share data)
2021 2021 2021 2020 2020
Interest and dividend income
Loans
$25,094 $23,191 $24,205 $26,687 $25,918
Securities and other
3,821 3,992 3,979 4,013 4,557
Total interest and dividend income
28,915 27,183 28,184 30,700 30,475
Interest expense
Deposits
1,555 2,603 2,951 3,606 3,869
Borrowings
1,778 1,826 1,811 1,732 1,941
Total interest expense
3,333 4,429 4,762 5,338 5,810
Net interest income
25,582 22,754 23,422 25,362 24,665
Provision for credit losses
(174) (765) (489) 1,360 1,800
Net interest income after provision for credit losses
25,756 23,519 23,911 24,002 22,865
Non-interest income
Trust and investment management fee income
3,868 3,801 3,666 3,318 3,532
Customer service fees
3,515 3,257 2,970 2,890 2,886
Gain on sales of securities, net
1,930 50 - 3,959 -
Mortgage banking income
850 1,553 2,570 2,654 2,649
Bank-owned life insurance income
494 498 518 482 492
Customer derivative income
341 86 410 1,086 316
Other income
352 260 114 334 227
Total non-interest income
11,350 9,505 10,248 14,723 10,102
Non-interest expense
Salaries and employee benefits
11,743 11,356 12,176 13,318 11,809
Occupancy and equipment
4,029 3,894 4,328 4,192 4,279
Loss (gain) on sales of premises and equipment, net
(146) 1 8 (122) -
Outside services
547 533 432 571 438
Professional services
491 151 558 572 479
Communication
188 198 321 194 215
Marketing
339 534 290 415 300
Amortization of intangible assets
233 233 241 256 256
Loss on debt extinguishment
1,768 - - - -
Acquisition, conversion and other expenses
318 552 889 4,849 691
Other expenses
3,862 4,272 3,248 3,571 3,952
Total non-interest expense
23,372 21,724 22,491 27,816 22,419
Income before income taxes
13,734 11,300 11,668 10,909 10,548
Income tax expense
2,706 2,275 2,188 2,269 2,146
Net income
$11,028 $9,025 $9,480 $8,640 $8,402
Earnings per share:
Basic
$0.74 $0.60 $0.63 $0.58 $0.56
Diluted
0.73 0.60 0.63 0.58 0.56
Weighted average shares outstanding:
Basic
14,983 14,965 14,934 14,909 15,079
Diluted
15,051 15,042 15,007 14,952 15,103

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

Quarters Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
2021 2021 2021 2020 2020
Earning assets
Interest-bearing deposits with other banks (1)
0.15% 0.09% 0.09% 0.11% 0.09%
Securities available for sale and FHLB stock
2.59 2.66 2.79 2.97 3.04
Loans:
Commercial real estate
3.53 3.54 3.68 3.74 3.81
Commercial and industrial
3.79 3.60 3.86 3.92 4.39
Paycheck protection program
23.28 5.56 8.12 11.56 3.18
Residential real estate
3.64 3.80 3.76 3.74 3.71
Consumer
3.78 3.44 3.56 3.65 3.42
Total loans
3.98 3.70 3.85 4.03 3.81
Total earning assets
3.41% 3.26% 3.46% 3.65% 3.57%
Funding liabilities
Deposits:
NOW
0.13% 0.12% 0.14% 0.15% 0.14%
Savings
0.08 0.10 0.13 0.13 0.13
Money market
0.12 0.12 0.14 0.14 0.16
Time deposits
0.88 1.37 1.44 1.64 1.69
Total interest-bearing deposits
0.27 0.45 0.51 0.61 0.66
Borrowings
2.11 2.12 2.16 1.83 1.60
Total interest-bearing liabilities
0.50% 0.66% 0.72% 0.77% 0.82%
Net interest spread
2.91 2.60 2.74 2.88 2.75
Net interest margin (1)
3.02 2.74 2.88 3.02 2.90
Core net interest margin (2)
2.75 2.67 2.78 2.79 2.89
  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.

CHECK HERE CHECK HERE

BAR HARBOR BANKSHARES
AVERAGE BALANCES - UNAUDITED

Quarters Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
(in thousands)
2021 2021 2021 2020 2020
Assets
Interest-bearing deposits with other banks (1)
$284,429 $228,825 $176,728 $176,747 $92,066
Securities available for sale and FHLB stock (2)
610,381 635,978 613,459 563,118 627,162
Loans:
Commercial real estate
1,153,813 1,122,831 1,099,937 1,059,574 1,012,194
Commercial and industrial
391,191 378,634 377,176 386,201 399,734
Paycheck protection program
45,835 76,701 65,149 91,109 131,605
Residential real estate
824,686 850,119 916,633 995,173 1,060,084
Consumer
101,545 104,851 109,802 115,876 121,248
Total loans (3)
2,517,070 2,533,136 2,568,697 2,647,933 2,724,865
Total earning assets
3,411,880 3,397,939 3,358,884 3,387,798 3,444,093
Cash and due from banks
38,750 21,414 23,221 22,473 36,521
Allowance for credit losses
(22,607) (23,419) (24,822) (18,690) (17,028)
Goodwill and other intangible assets
126,556 126,789 127,024 127,264 127,508
Other assets (4)
209,509 223,362 232,475 237,414 223,334
Total assets (4)
$3,764,088 $3,746,085 $3,716,782 $3,756,259 $3,814,428
Liabilities and shareholders' equity
Deposits:
NOW
$860,206 $781,836 $749,100 $713,464 $677,706
Savings
591,440 568,193 541,203 516,266 488,508
Money market
381,755 368,826 378,743 399,543 396,351
Time deposits
471,934 619,454 675,422 734,523 777,424
Total interest-bearing deposits
2,305,335 2,338,309 2,344,468 2,363,796 2,339,989
Borrowings
334,097 345,896 340,209 376,437 481,687
Total interest-bearing liabilities
2,639,432 2,684,205 2,684,677 2,740,233 2,821,676
Non-interest-bearing demand deposits
641,769 591,982 550,657 535,402 507,844
Other liabilities (4)
61,436 57,227 74,778 72,534 79,848
Total liabilities (4)
3,342,637 3,333,414 3,310,112 3,348,169 3,409,368
Total shareholders' equity (4)
421,451 412,671 406,670 408,090 405,060
Total liabilities and shareholders' equity (4)
$3,764,088 $3,746,085 $3,716,782 $3,756,259 $3,814,428
  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.
  4. Prior quarters have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

BAR HARBOR BANKSHARES
ASSET QUALITY ANALYSIS - UNAUDTED

At or for the Quarters Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
(in thousands)
2021 2021 2021 2020 2020
NON-PERFORMING ASSETS
Non-accruing loans:
Commercial real estate
$3,646 $4,367 $4,664 $4,251 $4,714
Commercial installment
1,163 1,370 1,534 1,466 1,820
Residential real estate
6,311 6,788 6,753 5,729 7,154
Consumer installment
1,087 1,054 1,118 742 720
Total non-accruing loans
12,207 13,579 14,069 12,188 14,408
Other real estate owned
- - - - 1,983
Total non-performing assets
$12,207 $13,579 $14,069 $12,188 $16,391
Total non-accruing loans/total loans
0.48% 0.54% 0.55% 0.48% 0.54%
Total non-performing assets/total assets
0.33 0.37 0.38 0.33 0.42
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period
$22,815 $23,653 $19,082 $17,907 $16,509
Impact of CECL adoption
- - 5,228 - -
Charged-off loans
(286) (239) (216) (297) (439)
Recoveries on charged-off loans
93 166 48 112 37
Net loans charged-off
(193) (73) (168) (185) (402)
Provision for credit losses
(174) (765) (489) 1,360 1,800
Balance at end of period
$22,448 $22,815 $23,653 $19,082 $17,907
Allowance for credit losses/total loans
0.89% 0.91% 0.93% 0.74% 0.66%
Allowance for credit losses/non-accruing loans
184 168 168 157 124
NET LOAN CHARGE-OFFS
Commercial real estate
$(69) $(105) $(131) $63 $(252)
Commercial installment
(24) (7) 1 (228) (10)
Residential real estate
13 88 (28) (21) 1
Consumer installment
(113) (49) (10) 1 (141)
Total, net
$(193) $(73) $(168) $(185) $(402)
Net charge-offs (QTD annualized)/average loans
0.03% 0.01% 0.03% 0.03% 0.06%
Net charge-offs (YTD annualized)/average loans
0.02 0.02 0.03 0.07 0.08
DELINQUENT AND NON-ACCRUING LOANS/ TOTAL LOANS
30-89 Days delinquent
0.09% 0.13% 0.43% 0.58% 0.16%
90+ Days delinquent and still accruing
0.02 0.02 0.01 - 0.08
Total accruing delinquent loans
0.12 0.15 0.44 0.58 0.24
Non-accruing loans
0.48 0.54 0.55 0.48 0.54
Total delinquent and non-accruing loans
0.60% 0.69% 0.99% 1.06% 0.78%

BAR HARBOR BANKSHARES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED

At or for the Quarters Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
(in thousands)
2021 2021 2021 2020 2020
Net income

$11,028 $9,025 $9,480 $8,640 $8,402
Non-core items:

(Gain) on sale of securities, net

(1,930) (50) - (3,959) -
(Gain) loss on sale of premises and equipment, net

(146) 1 8 (122) -
(Gain) loss on other real estate owned

- - - (11) 335
Loss on debt extinguishment

1,768 - - - -
Acquisition, conversion and other expenses

318 552 889 4,849 691
Income tax expense (1)

(2) (119) (213) (179) (245)
Total non-core items

8 384 684 578 781
Core earnings (2)
(A)
$11,036 $9,409 $10,164 $9,218 $9,183


Net interest income
(B)
$25,582 $22,754 $23,422 $25,362 $24,665
Non-interest income

11,350 9,505 10,248 14,723 10,102
Total Revenue

36,932 32,259 33,670 40,085 34,767
(Gain) on sale of securities, net

(1,930) (50) - (3,959) -
Total core revenue (2)
(C)
$35,002 $32,209 $33,670 $36,126 $34,767


Total non-interest expense

23,372 21,724 22,491 27,816 22,419
Non-core expenses:

Gain (loss) on sale of premises and equipment, net

146 (1) (8) 122 -
Gain (loss) on other real estate owned

- - - 11 (335)
Loss on debt extinguishment

(1,768) - - - -
Acquisition, conversion and other expenses

(318) (552) (889) (4,849) (691)
Total non-core expenses

(1,940) (553) (897) (4,716) (1,026)
Core non-interest expense (2)
(D)
$21,432 $21,171 $21,594 $23,100 $21,393


Total revenue

36,932 32,259 33,670 40,085 34,767
Total non-interest expense

23,372 21,724 22,491 27,816 22,419
Pre-tax, pre-provision net revenue

$13,560 $10,535 $11,179 $12,269 $12,348


Core revenue (2)

35,002 32,209 33,670 36,126 34,767
Core non-interest expense (2)

21,432 21,171 21,594 23,100 21,393
Core pre-tax, pre-provision net revenue (2)
(U)
$13,570 $11,038 $12,076 $13,026 $13,374


(in millions)

Average earning assets
(E)
$3,412 $3,398 $3,359 $3,388 $3,444
Average paycheck protection program (PPP) loans
(R)
46 77 65 91 132
Average earning assets, excluding PPP loans
(S)
3,366 3,321 3,294 3,297 3,312
Average assets
(F)
3,764 3,746 3,717 3,756 3,814
Average shareholders' equity (8)
(G)
421 413 407 408 405
Average tangible shareholders' equity (2) (3) (8)
(H)
295 286 280 281 278
Tangible shareholders' equity, period-end (2) (3) (8)
(I)
292 287 278 280 272
Tangible assets, period-end (2) (3) (8)
(J)
3,612 3,512 3,603 3,597 3,734


BAR HARBOR BANKSHARES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED


At or for the Quarters Ended
Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
(in thousands)
2021 2021 2021 2020 2020
Common shares outstanding, period-end
(K)
14,987 14,972 14,950 14,916 14,929
Average diluted shares outstanding
(L)
15,051 15,042 15,007 14,952 15,103
Core earnings per share, diluted (2)
(A/L)
$0.73 $0.63 $0.68 $0.62 $0.61
Tangible book value per share, period-end (2) (8)
(I/K)
19.48 19.17 18.61 18.77 18.21
Securities adjustment, net of tax (1) (4)
(M)
4,398 7,237 4,510 10,023 11,681
Tangible book value per share, excluding securities adjustment (2) (4) (8)
(I+M)/K
19.19 18.69 18.31 18.09 17.42
Tangible shareholders' equity/total tangible assets (2) (8)
(I/J)
8.08 8.17 7.72 7.78 7.28
Performance ratios (5)
GAAP return on assets
1.16% 0.97% 1.03% 0.92% 0.88%
Core return on assets (2)
(A/F)
1.16 1.01 1.11 0.98 0.96
Pre-tax, pre-provision return on assets
1.43 1.13 1.22 1.30 1.29
Core pre-tax, pre-provision return on assets (2)
(U/F)
1.43 1.18 1.32 1.38 1.39
GAAP return on equity (8)
10.38 8.77 9.45 8.42 8.25
Core return on equity (2) (8)
(A/G)
10.39 9.14 10.14 8.99 9.02
Return on tangible equity (8)
15.08 12.91 14.01 12.52 12.32
Core return on tangible equity (1) (2) (8)
(A+Q)/H
15.09 13.45 15.01 13.33 13.44
Efficiency ratio (2) (6)
(D-O-Q)/(C+N)
59.18 63.45 61.95 61.98 59.47
Net interest margin
(B+P)/E
3.02 2.74 2.88 3.02 2.90
Core net interest margin (2) (7)
(B+P-T)/S
2.75 2.67 2.78 2.79 2.89
Supplementary data (in thousands)
Taxable equivalent adjustment for efficiency ratio
(N)
$576 $586 $595 $542 $570
Franchise taxes included in non-interest expense
(O)
143 128 125 117 121
Tax equivalent adjustment for net interest margin
(P)
421 430 433 396 416
Intangible amortization
(Q)
233 233 241 256 256
Interest and fees on PPP loans
(T)
2,690 1,064 1,304 2,648 1,052
  1. Assumes a marginal tax rate of 23.71% for 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.
  8. Prior quarters have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

SOURCE : Bar Harbor Bankshares

Topic:
Earnings
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