Bar Harbor Bankshares (NYSE
American: BHB or the “Company”) reported second quarter 2019
net income of $6.1 million, or $0.39 diluted earnings per share.
Net income in the second quarter of 2018 totaled $8.5 million or
$0.55 diluted earnings per share. Core earnings (non-GAAP measure)
in the second quarter 2019 totaled $6.3 million or $0.41 diluted
earnings per share and $8.7 million or $0.56 diluted earnings per
share in the same period of 2018.
SECOND QUARTER FINANCIAL HIGHLIGHTS
- 8% annualized growth in total loans, led by 24% in commercial
loans
- 14% annualized growth in demand deposits
- 5% growth in non-interest income, compared to second quarter
2018
- 0.62% non-accruing loans to total loans
- 10% annualized growth in book value per share
President and Chief Executive Officer, Curtis C. Simard stated,
“Our financial performance in the second quarter was centered on
growth in loans, deposits and non-interest income. We grew
non-interest bearing demand deposits at a strong double-digit rate
as the retail delivery team continues to focus on lasting customer
relationships and lower cost non-maturity deposits. Loan growth was
led by a surge in the commercial loan pipeline across all regions
and specifically in the Portland area as our Loan Production Office
is fully-up and running. We are concentrating on more tightly
structured opportunities with proven borrowers to ensure that we
hold true to our risk management discipline at all points of the
economic cycle and regardless of competitive fervor.”
Mr. Simard further stated, “Last week we announced our branch
acquisition in central Maine, which will be immediately accretive
to earnings and reduce our loan to deposit ratio allowing for
future growth through core funding. As we look forward, we are
focused on revenue growth through relationship profitability as the
Company continues to grow into the infrastructure that has now been
put into place. That said, we will be executing on expense
efficiencies in the third quarter, which will include relationship
and product profitability, organizational opportunities and review
of our branch network. This review is a function of our commitment
to a balance between growth and earnings as the Company delivers on
our long-term goals.”
Mr. Simard concluded, “The path to meeting our objectives
includes an emphasis on fee based businesses. Our Wealth Management
teams, which include Bar Harbor Trust Services, Charter Trust, and
Bar Harbor Financial Services, are critical to this goal and will
be further enhanced by Wealth Management business that is included
with our recently announced branch acquisition. We are pleased to
have hired Jason Edgar as the President of Wealth Management who
will lead the teams as one collective business. Jason has strong
roots in New England and has been a proven leader in the Wealth
Management space for over 20 years. He will be instrumental in
further enhancing revenue growth as we explore existing and future
prospects, and strive to achieve full potential within this
business.”
DIVIDEND DECLARED The Board of Directors voted to declare
a cash dividend of $0.22 per share to shareholders of record at the
close of business on August 13, 2019, payable on September 13,
2019. This dividend equates to a 3.3% annualized yield based on the
$26.59 closing price of the Company’s common stock at the end of
the second quarter of 2019.
FINANCIAL CONDITION Total assets increased in the second
quarter by $58.4 million, or 6% annualized, to $3.7 billion. Loan
balances in the second quarter 2019 were up $51.3 million from the
first quarter or 8% annualized. Loan growth was led by commercial
real estate and commercial and industrial loans, which grew during
the second quarter at annualized rates of 29% and 9%, respectively.
Our loan to deposit ratio increased to 104% in the second quarter
2019 from 102% in the first quarter 2019 given the robust loan
growth.
The second quarter 2019 allowance for loan losses to total loans
ratio remains strong at 0.57% with a coverage ratio to non-accruing
loans at 91%, up from 84% as of the first quarter. Non-accruing
loans decreased $644 thousand in the second quarter 2019 due to
favorable settlements of several relationships approximating the
carrying values of the loans. The ratio of non-accruing loans to
total loans decreased to 0.62% from 0.66% at the end of the first
quarter 2019.
The Company’s book value per share was $25.13 at the end of the
second quarter 2019 compared to $24.54 the end of the first quarter
2019, representing a 10% annualized growth rate. Tangible book
value per share (non-GAAP measure) was $18.23 at the end of the
second quarter 2019 compared to $17.63 at the end of the first
quarter 2019. In the second quarter, lower long-term rates
continued to have a positive impact on the fair value adjustment in
the securities portfolio. The fair value adjustment net of tax was
a gain of $5.5 million in the second quarter 2019 compared to a
loss of $1.8 million in the first quarter 2019.
RESULTS OF OPERATIONS Net income in the second quarter
2019 was $6.1 million, or $0.39 per share, compared to $8.5
million, or $0.55 per share, in the same quarter of 2018. Interest
and dividend income was up 7% to $33.8 million as quarterly yields
on earning assets expanded 14 basis points on a year-over-year
basis to 4.13%. Net interest margin in the second quarter 2019
decreased to 2.65% from 2.91% in the same period of 2018. The
decrease reflects the impact of higher short-term interest rates
and the flattening of the yield curve in 2019.
The second quarter 2019 provision for loan losses decreased to
$562 thousand from $770 thousand in the same quarter 2018. We
continue to have a positive quarterly trend in both recoveries and
charged-off loans. The net charged-off loans to average loans ratio
is at a zero annualized rate for the second quarter 2019. Asset
quality continues to be strong with non-accruing loans to total
loans at 0.62% in the second quarter 2019, down from 0.88% in the
same quarter of 2018.
Non-interest income in the second quarter 2019 increased 5% to
$7.5 million from $7.1 million in the same quarter in 2018. The
increase was driven by greater customer service fees on higher
transaction volume, an increase in customer derivative income due
to commercial loan growth and an increase in bank-owned life
insurance income given additional investments.
Non-interest expense increased to $20.9 million in the second
quarter 2019 from $18.7 million in the prior year. The increase in
salary and employee benefits is due to several strategic hires
along with an increase in full-time equivalents to 474 from 451 in
2018. The increase in full-time equivalents is primarily related to
new locations that were previously announced. Occupancy and
equipment expense is also higher in 2019 compared to 2018 due to
the new locations placed in service during the fourth quarter of
2018 and renovations to the Newport, New Hampshire branch in the
spring of 2019.
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.bhbt.com.
FORWARD LOOKING STATEMENTS Certain statements under the
heading "SECOND QUARTER FINANCIAL HIGHLIGHTS" 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, 2018. 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 securities
gains/losses, 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.
TABLE INDEX
CONSOLIDATED FINANCIAL SCHEDULES
(UNAUDITED)
A
Selected Financial
Highlights
B
Footnotes to
Selected Financial Highlights
C
Balance
Sheets
D
Loan and Deposit
Analysis
E
Statements of
Income
F
Statements of Income
(Five Quarter Trend)
G
Average Yields and
Costs
H
Average
Balances
I
Asset Quality
Analysis
J
Reconciliation 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, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
PER SHARE DATA
Net earnings, diluted
$
0.39
$
0.47
$
0.49
$
0.58
$
0.55
Core earnings, diluted (1) (2)
0.41
0.47
0.59
0.58
0.56
Total book value
25.13
24.54
23.87
23.06
22.97
Tangible book value (2)
18.23
17.63
16.94
16.11
16.00
Market price at period end
26.59
25.87
22.43
28.72
30.29
Dividends
0.22
0.20
0.20
0.20
0.20
PERFORMANCE RATIOS (3)
Return on assets
0.67
%
0.83
%
0.85
%
1.01
%
0.97
%
Core return on assets (1) (2)
0.70
0.83
1.03
1.01
1.00
Return on equity
6.33
7.83
8.31
9.92
9.65
Core return on equity (1) (2)
6.57
7.83
10.01
9.98
9.86
Core return on tangible equity (1) (2)
9.30
11.19
14.46
14.52
14.43
Net interest margin, fully taxable
equivalent (FTE) (2) (4)
2.65
2.77
2.78
2.81
2.91
Net interest margin (FTE), excluding
purchased loan accretion (2) (4)
2.56
2.67
2.70
2.71
2.80
Efficiency ratio (2)
68.48
63.94
59.91
57.88
58.83
GROWTH (Year-to-date, annualized)
(2)
Total commercial loans
10.1
%
(3.3
)%
1.4
%
2.8
%
5.7
%
Total loans
7.1
5.9
0.2
(0.1
)
—
Total deposits
(0.1
)
(2.8
)
5.6
2.2
1.9
FINANCIAL DATA (In millions)
Total assets
$
3,688
$
3,629
$
3,608
$
3,561
$
3,541
Total earning assets (2) (5)
3,355
3,312
3,263
3,253
3,250
Total investments
784
782
761
747
749
Total loans
2,578
2,527
2,490
2,484
2,485
Allowance for loan losses
15
14
14
13
13
Total goodwill and intangible assets
107
107
108
108
108
Total deposits
2,481
2,466
2,483
2,390
2,375
Total shareholders' equity
391
381
371
358
356
Net income
6
7
8
9
9
Core income (1) (2)
6
7
9
9
9
ASSET QUALITY AND CONDITION
RATIOS
Net charge-offs (current quarter
annualized)/average loans
—
%
0.03
%
0.03
%
0.04
%
0.06
%
Allowance for loan losses/total loans
0.57
0.55
0.56
0.54
0.53
Loans/deposits
104
102
100
104
105
Shareholders' equity to total assets
10.59
10.50
10.27
10.04
10.05
Tangible shareholders' equity to tangible
assets
7.92
7.77
7.51
7.24
7.22
(1) Core measurements are non-GAAP
financial measures that are adjusted to exclude net non-operating
charges primarily related to acquisitions, system conversions and
gain or loss on sale of securities 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) Earning assets includes non-accruing
loans and securities are valued at amortized cost.
BAR HARBOR BANKSHARES
CONSOLIDATED BALANCE SHEETS -
UNAUDITED
(in thousands)
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Assets
Cash and due from banks
$
42,657
$
37,504
$
35,208
$
53,154
$
39,327
Interest-bearing deposits with the Federal
Reserve Bank
17,203
16,599
63,546
19,420
22,066
Total cash and cash equivalents
59,860
54,103
98,754
72,574
61,393
Securities available for sale, at fair
value
748,560
747,235
725,837
712,658
710,147
Federal Home Loan Bank stock
35,220
35,107
35,659
34,154
38,712
Total securities
783,780
782,342
761,496
746,812
748,859
Commercial real estate
881,479
821,567
826,699
840,018
838,546
Commercial and industrial
416,725
409,937
404,870
385,814
400,293
Residential real estate
1,167,759
1,184,053
1,144,698
1,140,519
1,127,895
Consumer
112,275
111,402
113,960
117,239
118,332
Total loans
2,578,238
2,526,959
2,490,227
2,483,590
2,485,066
Less: Allowance for loan losses
(14,572
)
(13,997
)
(13,866
)
(13,487
)
(13,090
)
Net loans
2,563,666
2,512,962
2,476,361
2,470,103
2,471,976
Premises and equipment, net
50,230
49,661
48,804
47,621
48,038
Other real estate owned
2,351
2,351
2,351
68
129
Goodwill
100,085
100,085
100,085
100,085
100,085
Other intangible assets
7,072
7,266
7,459
7,690
7,921
Cash surrender value of bank-owned life
insurance
74,871
74,352
73,810
73,316
58,811
Deferred tax asset, net
5,649
7,632
9,514
11,527
10,309
Other assets
40,071
38,441
29,853
31,196
33,534
Total assets
$
3,687,635
$
3,629,195
$
3,608,487
$
3,560,992
$
3,541,055
Liabilities and shareholders'
equity
Demand and other non-interest bearing
deposits
$
354,125
$
342,030
$
370,889
$
372,358
$
341,773
NOW deposits
472,576
470,277
484,717
471,326
449,715
Savings deposits
352,657
346,813
358,888
354,908
350,339
Money market deposits
305,506
349,833
335,951
254,142
260,642
Time deposits
996,512
956,818
932,793
937,615
972,252
Total deposits
2,481,376
2,465,771
2,483,238
2,390,349
2,374,721
Senior borrowings
733,084
703,283
680,823
739,224
735,924
Subordinated borrowings
42,943
42,958
42,973
42,988
43,003
Total borrowings
776,027
746,241
723,796
782,212
778,927
Other liabilities
39,670
36,160
30,874
30,746
31,444
Total liabilities
3,297,073
3,248,172
3,237,908
3,203,307
3,185,092
Total shareholders' equity
390,562
381,023
370,579
357,685
355,963
Total liabilities and shareholders'
equity
$
3,687,635
$
3,629,195
$
3,608,487
$
3,560,992
$
3,541,055
Net shares outstanding
15,544
15,524
15,523
15,509
15,496
BAR HARBOR BANKSHARES
CONSOLIDATED LOAN &
DEPOSIT ANALYSIS - UNAUDITED
LOAN
ANALYSIS
June 30, 2019 Annualized
Growth %
(in thousands)
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Quarter End
Year to Date
Commercial real estate
$
881,479
$
821,567
$
826,699
$
840,018
$
838,546
29.2
%
13.3
%
Commercial and industrial
312,029
305,185
309,544
303,984
313,680
9.0
1.6
Total commercial loans
1,193,508
1,126,752
1,136,243
1,144,002
1,152,226
23.7
10.1
Residential real estate
1,167,759
1,184,053
1,144,698
1,140,519
1,127,895
(5.5
)
4.0
Consumer
112,275
111,402
113,960
117,239
118,332
3.1
(3.0
)
Tax exempt
104,696
104,752
95,326
81,830
86,613
(0.2
)
19.7
Total loans
$
2,578,238
$
2,526,959
$
2,490,227
$
2,483,590
$
2,485,066
8.1
%
7.1
%
DEPOSIT
ANALYSIS
June 30, 2019 Annualized
Growth %
(in thousands)
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Quarter End
Year to Date
Demand
$
354,125
$
342,030
$
370,889
$
372,358
$
341,773
14.1
%
(9.0
)%
NOW
472,576
470,277
484,717
471,326
449,715
2.0
(5.0
)
Savings
352,657
346,813
358,888
354,908
350,339
6.7
(3.5
)
Money Market
305,506
349,833
335,951
254,142
260,642
(50.7
)
(18.1
)
Total non-maturity deposits
1,484,864
1,508,953
1,550,445
1,452,734
1,402,469
(6.4
)
(8.5
)
Total time deposits
996,512
956,818
932,793
937,615
972,252
16.6
13.7
Total deposits
$
2,481,376
$
2,465,771
$
2,483,238
$
2,390,349
$
2,374,721
2.5
%
(0.1
)%
BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF
INCOME - UNAUDITED
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except per share
data)
2019
2018
2019
2018
Interest and dividend income
Loans
$
27,660
$
25,934
$
54,524
$
51,060
Securities and other
6,125
5,784
12,488
11,435
Total interest and dividend income
33,785
31,718
67,012
62,495
Interest expense
Deposits
6,886
4,405
13,193
8,390
Borrowings
5,403
4,321
10,558
7,955
Total interest expense
12,289
8,726
23,751
16,345
Net interest income
21,496
22,992
43,261
46,150
Provision for loan losses
562
770
886
1,565
Net interest income after provision for
loan losses
20,934
22,222
42,375
44,585
Non-interest income
Trust and investment management fee
income
3,066
3,122
5,823
6,084
Customer service fees
2,618
2,347
4,783
4,571
Bank-owned life insurance income
519
377
1,061
823
Customer derivative income
696
545
725
545
Other income
554
730
1,228
1,336
Total non-interest income
7,453
7,121
13,620
13,359
Non-interest expense
Salaries and employee benefits
11,685
10,375
22,204
21,364
Occupancy and equipment
3,300
2,925
6,686
5,998
Loss on sales of premises and equipment,
net
21
—
21
—
Outside services
443
581
854
1,141
Professional services
570
360
1,114
793
Communication
283
304
518
484
Marketing
511
588
806
914
Amortization of intangible assets
207
207
414
414
Acquisition, conversion and other
expenses
280
214
280
549
Other expenses
3,606
3,131
6,633
5,880
Total non-interest expense
20,906
18,685
39,530
37,537
Income before income taxes
7,481
10,658
16,465
20,407
Income tax expense
1,364
2,123
3,067
4,060
Net income
$
6,117
$
8,535
$
13,398
$
16,347
Earnings per share:
Basic
$
0.39
$
0.55
$
0.86
$
1.06
Diluted
$
0.39
$
0.55
0.86
1.05
Weighted average shares
outstanding:
Basic
15,538
15,482
15,531
15,465
Diluted
15,586
15,571
15,582
15,560
BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF
INCOME (5 Quarter Trend) - UNAUDITED
(in thousands, except per share
data)
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Interest and dividend income
Loans
$
27,660
$
26,864
$
26,743
$
26,212
$
25,934
Securities and other
6,125
6,363
6,029
5,972
5,784
Total interest and dividend income
33,785
33,227
32,772
32,184
31,718
Interest expense
Deposits
6,886
6,307
5,653
5,478
4,405
Borrowings
5,403
5,155
4,855
4,237
4,321
Total interest expense
12,289
11,462
10,508
9,715
8,726
Net interest income
21,496
21,765
22,264
22,469
22,992
Provision for loan losses
562
324
572
643
770
Net interest income after provision for
loan losses
20,934
21,441
21,692
21,826
22,222
Non-interest income
Trust and investment management fee
income
3,066
2,757
2,949
2,952
3,122
Customer service fees
2,618
2,165
2,477
2,490
2,347
Loss on sales of securities, net
—
—
(924
)
—
—
Bank-owned life insurance income
519
542
493
505
377
Customer derivative income
696
29
315
—
545
Other income
554
674
2,140
1,179
730
Total non-interest income
7,453
6,167
7,450
7,126
7,121
Non-interest expense
Salaries and employee benefits
11,685
10,519
9,269
10,331
10,375
Occupancy and equipment
3,300
3,386
3,022
3,366
2,925
Loss on sales of premises and equipment,
net
21
—
—
—
—
Outside services
443
411
811
456
581
Professional services
570
544
458
223
360
Communication
283
235
103
217
304
Marketing
511
295
536
293
588
Amortization of intangible assets
207
207
207
207
207
Acquisition, conversion, and other
expenses
280
—
1,109
70
214
Other expenses
3,606
3,027
4,581
2,743
3,131
Total non-interest expense
20,906
18,624
20,096
17,906
18,685
Income before income taxes
7,481
8,984
9,046
11,046
10,658
Income tax expense
1,364
1,703
1,426
2,076
2,123
Net income
$
6,117
$
7,281
$
7,620
$
8,970
$
8,535
Earnings per share:
Basic
$
0.39
$
0.47
$
0.49
$
0.58
$
0.55
Diluted
$
0.39
$
0.47
$
0.49
$
0.58
$
0.55
Weighted average shares
outstanding:
Basic
15,538
15,523
15,516
15,503
15,482
Diluted
15,586
15,587
15,574
15,580
15,571
BAR HARBOR BANKSHARES
AVERAGE YIELDS AND COSTS
(Fully Taxable Equivalent - Annualized) - UNAUDITED
Quarters Ended
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Earning assets
Commercial real estate
4.74
%
4.78
%
4.71
%
4.57
%
4.48
%
Commercial and industrial
4.75
4.79
4.61
4.59
4.69
Residential
3.93
3.94
3.83
3.83
3.88
Consumer
5.21
5.25
5.07
4.85
4.65
Total loans
4.39
4.42
4.31
4.25
4.25
Securities and other
3.29
3.47
3.28
3.21
3.18
Total earning assets
4.13
%
4.19
%
4.07
%
4.00
%
3.99
%
Funding liabilities
NOW
0.49
%
0.51
%
0.50
%
0.43
%
0.37
%
Savings
0.21
0.19
0.18
0.17
0.17
Money market
1.44
1.38
0.93
0.76
0.79
Time deposits
2.11
2.00
1.85
1.78
1.51
Total interest bearing deposits
1.32
1.25
1.12
1.06
0.90
Borrowings
2.74
2.74
2.53
2.26
2.07
Total interest-bearing liabilities
1.71
%
1.66
%
1.50
%
1.38
%
1.25
%
Net interest spread
2.42
2.53
2.57
2.62
2.74
Net interest margin
2.65
2.77
2.78
2.81
2.91
BAR HARBOR BANKSHARES
AVERAGE BALANCES -
UNAUDITED
Quarters Ended
(in thousands)
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Assets
Commercial real estate
$
846,921
$
825,596
$
836,813
$
837,058
$
824,356
Commercial and industrial
416,000
405,107
393,396
388,831
396,471
Residential
1,176,583
1,143,862
1,137,493
1,120,336
1,126,714
Consumer
111,641
113,060
114,960
117,735
119,570
Total loans (1)
2,551,145
2,487,625
2,482,662
2,463,960
2,467,111
Securities and other (2)
779,072
777,458
762,901
773,562
767,886
Total earning assets
3,330,217
3,265,083
3,245,563
3,237,522
3,234,997
Cash and due from banks
52,728
50,298
68,904
63,272
50,869
Allowance for loan losses
(14,459
)
(14,119
)
(13,922
)
(13,463
)
(13,107
)
Goodwill and other intangible assets
107,252
107,446
107,657
107,887
108,118
Other assets
170,340
152,332
138,074
137,466
131,522
Total assets
$
3,646,078
$
3,561,040
$
3,546,276
$
3,532,684
$
3,512,399
Liabilities and shareholders'
equity
NOW
$
459,572
$
468,392
$
475,449
$
461,875
$
441,645
Savings
352,733
346,707
346,905
356,834
351,712
Money market
338,095
335,882
272,612
259,738
288,169
Time deposits
935,616
894,160
914,674
964,108
872,149
Total interest bearing deposits
2,086,016
2,045,141
2,009,640
2,042,555
1,953,675
Borrowings
789,953
761,885
761,781
744,632
836,295
Total interest-bearing liabilities
2,875,969
2,807,026
2,771,421
2,787,187
2,789,970
Non-interest-bearing demand deposits
349,322
351,362
384,636
357,856
339,374
Other liabilities
33,160
25,520
26,569
28,943
28,386
Total liabilities
3,258,451
3,183,908
3,182,626
3,173,986
3,157,730
Total shareholders' equity
387,627
377,132
363,650
358,698
354,669
Total liabilities and shareholders'
equity
$
3,646,078
$
3,561,040
$
3,546,276
$
3,532,684
$
3,512,399
(1) Total loans include non-accruing
loans.
(2) Average balances for securities
available-for-sale are based on amortized cost.
BAR HARBOR BANKSHARES
ASSET QUALITY ANALYSIS -
UNAUDITED
At or for the Quarters
Ended
(in thousands)
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
NON-PERFORMING ASSETS
Non-accruing loans:
Commercial real estate
$
7,048
$
7,516
$
8,156
$
8,348
$
8,883
Commercial installment
2,081
2,192
2,331
2,303
2,411
Residential real estate
5,965
6,326
7,211
10,396
9,945
Consumer installment
861
565
537
727
707
Total non-accruing loans
15,955
16,599
18,235
21,774
21,946
Other real estate owned
2,351
2,351
2,351
68
129
Total non-performing assets
$
18,306
$
18,950
$
20,586
$
21,842
$
22,075
Total non-accruing loans/total loans
0.62
%
0.66
%
0.73
%
0.88
%
0.88
%
Total non-performing assets/total
assets
0.50
0.52
0.57
0.61
0.62
PROVISION AND ALLOWANCE FOR LOAN
LOSSES
Balance at beginning of period
$
13,997
$
13,866
$
13,487
$
13,090
$
12,679
Charged-off loans
(104
)
(231
)
(631
)
(298
)
(517
)
Recoveries on charged-off loans
117
38
438
52
158
Net loans charged-off
13
(193
)
(193
)
(246
)
(359
)
Provision for loan losses
562
324
572
643
770
Balance at end of period
$
14,572
$
13,997
$
13,866
$
13,487
$
13,090
Allowance for loan losses/total loans
0.57
%
0.55
%
0.56
%
0.54
%
0.53
%
Allowance for loan losses/non-accruing
loans
91
84
76
62
60
NET LOAN CHARGE-OFFS
Commercial real estate
$
114
$
(41
)
$
(25
)
$
(27
)
$
(92
)
Commercial installment
(12
)
(15
)
53
(53
)
(54
)
Residential real estate
(65
)
(86
)
(31
)
(123
)
(64
)
Consumer installment
(24
)
(51
)
(190
)
(43
)
(149
)
Total, net
$
13
$
(193
)
$
(193
)
$
(246
)
$
(359
)
Net charge-offs (QTD annualized)/average
loans
—
%
0.03
%
0.03
%
0.04
%
0.06
%
Net charge-offs (YTD annualized)/average
loans
0.01
0.03
0.05
0.06
0.06
DELINQUENT AND NON-ACCRUING LOANS/TOTAL
LOANS
30-89 Days delinquent
0.29
%
0.21
%
0.38
%
0.17
%
0.14
%
90+ Days delinquent and still accruing
—
—
0.01
—
—
Total accruing delinquent loans
0.29
0.21
0.39
0.17
0.14
Non-accruing loans
0.62
0.66
0.73
0.88
0.88
Total delinquent and non-accruing
loans
0.91
%
0.87
%
1.12
%
1.05
%
1.02
%
BAR HARBOR BANKSHARES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED
At or for the Quarters
Ended
(in thousands)
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Net income
$
6,117
$
7,281
$
7,620
$
8,970
$
8,535
Plus (less):
Loss on sale of securities, net
—
—
924
—
—
Loss on sale of premises and equipment,
net
21
—
—
—
—
Loss (gain) on other real estate owned
—
—
5
(8
)
23
Acquisition, conversion and other
expenses
280
—
1,109
70
214
Income tax expense (1)
(72
)
—
(485
)
(12
)
(57
)
Total core earnings (2)
(A)
$
6,346
$
7,281
$
9,173
$
9,020
$
8,715
Net-interest income
(B)
$
21,496
$
21,765
$
22,264
$
22,469
$
22,992
Plus: Non-interest income
7,453
6,167
7,450
7,126
7,121
Total Revenue
28,949
27,932
29,714
29,595
30,113
Plus: Loss on sale of securities, net
—
—
924
—
—
Total core revenue (2)
(C)
$
28,949
$
27,932
$
30,638
$
29,595
$
30,113
Total non-interest expense
20,906
18,624
20,096
17,906
18,685
Less: Loss on sale of premises and
equipment, net
(21
)
—
—
—
—
Less: (Loss) gain on other real estate
owned
—
—
(5
)
8
(23
)
Less: Acquisition, conversion and other
expenses
(280
)
—
(1,109
)
(70
)
(214
)
Core non-interest expense (2)
(D)
$
20,605
$
18,624
$
18,982
$
17,844
$
18,448
(in millions)
Total average earning assets
(E)
$
3,330
$
3,265
$
3,246
$
3,238
$
3,235
Total average assets
(F)
3,646
3,561
3,546
3,533
3,512
Total average shareholders' equity
(G)
388
377
364
359
355
Total average tangible shareholders'
equity (2) (3)
(H)
280
270
256
251
247
Total tangible shareholders' equity,
period-end (2) (3)
(I)
283
274
263
250
248
Total tangible assets, period-end (2)
(3)
(J)
3,580
3,522
3,501
3,453
3,433
(in thousands)
Total common shares outstanding,
period-end
(K)
15,544
15,524
15,523
15,509
15,496
Weighted average diluted shares
outstanding
(L)
15,586
15,587
15,574
15,580
15,571
Core earnings per share, diluted (2)
(A/L)
$
0.41
$
0.47
$
0.59
$
0.58
$
0.56
Tangible book value per share, period-end
(2)
(I/K)
18.23
17.63
16.94
16.11
16.00
Securities adjustment, net of tax (1)
(4)
(M)
5,550
(1,842
)
(8,663
)
(17,152
)
(12,594
)
Tangible book value per share, excluding
securities adjustment (2)
(I+M)/K
17.88
17.75
17.50
17.22
16.81
Total tangible shareholders' equity/total
tangible assets (2)
(I/J)
7.92
7.77
7.51
7.24
7.22
Performance ratios
GAAP return on assets
0.67
%
0.83
%
0.85
%
1.01
%
0.97
%
Core return on assets (2)
(A/F)
0.70
0.83
1.03
1.01
1.00
GAAP return on equity
6.33
7.83
8.31
9.92
9.65
Core return on equity (2)
(A/G)
6.57
7.83
10.01
9.98
9.86
Core return on tangible equity (2) (5)
(A+Q)/H
9.30
11.19
14.46
14.52
14.43
Efficiency ratio (2) (6)
(D-O-Q)/(C+N)
68.48
63.94
59.91
57.88
58.83
Net interest margin
(B+P)/E
2.65
2.77
2.78
2.81
2.91
Supplementary data (in
thousands)
Taxable equivalent adjustment for
efficiency ratio
(N)
$
676
$
684
$
633
$
654
$
622
Franchise taxes included in non-interest
expense
(O)
111
120
39
129
159
Tax equivalent adjustment for net interest
margin
(P)
514
515
488
493
502
Intangible amortization
(Q)
207
207
207
207
207
(1) Assumes a marginal tax rate of 23.78%
in 2019. A marginal tax rate of 24.15% was used in the first and
second quarter of 2018 and 23.78% was used in the third and fourth
quarter of 2018.
(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) Adjusted return on tangible equity is
computed by dividing the total core income adjusted for the
tax-effected amortization of intangible assets, assuming a marginal
rate of 23.78% in 2019, 24.15% in the first and second quarter of
2018 and 23.78% in the third and fourth quarter of 2018, by
tangible equity.
(6) Efficiency ratio is computed by
dividing adjusted non-interest expense by the sum of net interest
income on a fully taxable equivalent basis and adjusted
non-interest income.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190718005821/en/
Josephine Iannelli; EVP, Chief Financial Officer &
Treasurer; (207) 288-3314
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