Bar Harbor Bankshares (NYSE
American: BHB) reported second quarter 2018 GAAP earnings of
$8.5 million, or 55 cents per share, compared with $6.6 million, or
42 cents per share in the same quarter of 2017. Core earnings in
the second quarter 2018 totaled $8.7 million, or 56 cents per
share, up from $8.1 million, or 52 cents in the second quarter of
2017.
SECOND QUARTER FINANCIAL HIGHLIGHTS (comparisons are to
the second quarter 2017 unless otherwise noted):
- 9% annualized commercial loan
growth
- 9% increase in non-interest income
- 58.8% efficiency ratio (non-GAAP
measure)
- 1.00% core return on assets (non-GAAP
measure)
- 9.86% core return on equity (non-GAAP
measure)
- 9% annualized growth in tangible book
value per share, excluding security adjustments (non-GAAP
measure)
President and Chief Executive Officer, Curtis C. Simard stated,
“Our teams had a successful second quarter as they executed on our
strategies and delivered on financial performance. We diversified
revenue streams, grew loans under a uniformed brand and banking
franchise, adhered to our strong credit culture and maintained a
disciplined approach to expense management. As a result, core
return on assets improved to 1.00% on stronger core earnings
(non-GAAP measure), up 8% on a year-over-year basis. Non-interest
income grew by 9% year-over-year on higher customer activity and
fees from the build out of our derivatives platform. With the
additional talent we’ve hired and evolving needs of our customers,
we expanded our derivatives capabilities in the second quarter,
which contributed almost 3 cents of earnings per share. We expect
this to be a continuing source of non-interest income as we look
forward.”
“Our commercial teams continued to gain market share as we grew
commercial loans at an annualized rate of 9%. Our pipeline remains
robust going into the third quarter, especially in commercial and
industrial products.”
Mr. Simard went on to say, “In April, we officially unified the
Bar Harbor Bank & Trust brand throughout our footprint as we
now operate under one name. Our brand identity as a True Community
Bank is at the heart of who we are and has further strengthened us
as a result of this unification.”
“In the third quarter, we will convert our current Visa debit
card offering to Mastercard for all of our customers. The
introduction of this card will allow us to further enhance security
and fraud detection for customers to include EMV chips. In addition
to the issuance of new cards, a rewards program and instant
issuance capabilities will be rolled out at all of our branches and
customer driven Bar Harbor card controls will be provided though
mobile devices.”
Mr. Simard further stated, “One of the key elements in being a
True Community Bank is the donation of time, money and expertise to
those within our surrounding communities. In addition to the
countless volunteer hours that we have committed to our
communities, the Bank has already donated significantly this year
to worthy causes in the places we call home. We also rolled out an
employee incentive program to encourage charitable donations that
will provide meaningful support to non-profit businesses.”
Mr. Simard concluded, “Excluding security adjustments, we are
ahead of schedule on the earn-back of dilution to tangible book
value per share and anticipate to be at pre-acquisition levels by
year-end. We are proud of our key performance metrics and community
achievements and are looking forward to the second half of 2018, as
we build upon our current momentum and continue to enhance
shareholder value.”
RESULTS OF OPERATIONSGAAP earnings increased to $8.5
million, or 55 cents per share, in the second quarter of 2018 from
$6.6 million, or 42 cents per share, in the same period of 2017.
Core earnings were up 8% to $8.7 million, or 56 cents per share, in
the second quarter of 2018 compared to $8.1 million, or 52 cents
per share, in the second quarter of 2017. Core revenue totaled
$30.1 million and includes the benefit of higher non-interest
income from expanded customer activity fees and derivative income.
Interest income totaled $31.7 million, up 7% on a year-over-year
basis, and yields on loans and investments expanded eight basis
points in total. However, net interest margin in the second quarter
2018 decreased to 2.91% from 3.16% in the prior year due to higher
cost of funds driven by short-term interest rate hikes. The
Company’s loan to deposit ratio improved two basis points over the
prior year to 105 at the end of the second quarter. Given the
further flattening of the yield curve, the Company did extend
liability durations during the quarter in an effort to mitigate the
impact of future Federal Reserve tightening. The contribution from
tax-equivalency adjustments also declined over the prior year as a
result of the lower federal statutory tax rate. The second quarter
provision for loan losses was $770 thousand and exceeded net
charge-offs, which follows the positive trend in all quarterly
periods presented.
Non-interest expense decreased to $18.7 million in the second
quarter 2018 compared to $20.0 million in the second quarter of
2017. The decrease primarily relates to lower acquisition,
conversion and other expenses, totaling $214 thousand in 2018
compared to $2.5 million in 2017. Offsetting this, brand
consolidation costs also increased other expense in the second
quarter 2018 by $318 thousand.
The second quarter effective tax rate decreased to 19.9% in 2018
compared with 31.6% in the same quarter of 2017, primarily
reflecting a lower federal statutory tax rate. The effective tax
rate in 2017 also benefited from the acquisition and conversion
related costs.
FINANCIAL CONDITIONTotal assets were $3.5 billion at the
end of the second quarter 2018 increasing $30.1 million primarily
due to growth in the loan portfolio. Total loans increased $20.6
million in the second quarter with the majority of the growth
driven by commercial products lines. Non-accruing loans increased
$1.6 million during the quarter mostly due to the deterioration of
one specific residential relationship, which is expected to be
settled for the full carrying value of the obligation. Overall,
asset quality metrics remain strong with an allowance for credit
losses to total loans ratio of 0.53%. Excluding the impact of
securities fair value adjustments, earnings grew tangible book
value per share (non-GAAP measure) to $16.81 compared from $16.44
in the first of quarter of 2018.
BACKGROUNDBar 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
125 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 STATEMENTSCertain statements 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, 2017. 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 MEASURESThis 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 adjusted earnings can be of substantial importance to the
Company's results for any particular quarter or year. The Company's
non-GAAP adjusted 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 adjusted earnings
in evaluating operating trends, including components for adjusted
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 adjusted earnings per share based on
its measure of adjusted 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 adjusted earnings and adjusted 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, 2018 Mar
31,2018 Dec 31,2017
Sep 30,2017 Jun
30,2017 PER SHARE DATA Net earnings, diluted $
0.55 $ 0.50 $ 0.43 $ 0.56 $ 0.42 Core earnings, diluted (1) (2)
0.56 0.52 0.58 0.57 0.52 Total book value 22.97 22.78 22.96 22.90
22.53 Tangible book value (2) 16.00 15.78 15.94 15.84 15.44 Market
price at period end 30.29 27.72 27.01 31.36 30.82 Dividends 0.19
0.19 0.19 0.19 0.19
PERFORMANCE RATIOS (3) Return on
assets 0.97 % 0.90 % 0.75 % 0.99 % 0.76 % Core return on assets (1)
(2) 1.00 0.93 1.02 1.01 0.94 Return on equity 9.65 9.01 7.35 9.67
7.55 Core return on equity (1) (2) 9.86 9.31 9.97 9.90 9.32 Core
return on tangible equity (1) (2) 14.43 13.72 14.56 14.53 13.81 Net
interest margin, fully taxable equivalent (FTE) (2) (4) 2.91 2.97
3.04 3.06 3.16 Net interest margin (FTE), excluding purchased loan
accretion (2) (4) 2.80 2.85 2.93 2.93 3.02 Efficiency ratio (2)
58.83 60.44 53.02 53.53 54.57
GROWTH (Year-to-date,
annualized) (2) Total commercial loans 5.7 % 2.2 % 23.8 % 20.5
% 7.2 % Total loans — (3.4 ) 13.1 12.2 7.0 Total deposits 1.9 (1.8
) 14.4 10.6 2.3
FINANCIAL DATA (In millions) Total
assets $ 3,541 $ 3,511 $ 3,565 $ 3,476 $ 3,503 Total earning assets
(5) 3,250 3,235 3,244 3,183 3,138 Total investments 749 757 755 756
763 Total loans 2,485 2,464 2,486 2,429 2,377 Allowance for loan
losses 13 13 12 12 11 Total goodwill and intangible assets 108 108
108 109 109 Total deposits 2,375 2,341 2,352 2,275 2,213 Total
shareholders' equity 356 352 355 353 347 Net income 9 8 7 9 7 Core
income (1) (2) 9 8 9 9 8
ASSET QUALITY AND CONDITION
RATIOS Net charge-offs (current quarter annualized)/average
loans 0.06 % 0.07 % 0.04 % 0.01 % 0.03 % Allowance for loan
losses/total loans 0.53 0.51 0.50 0.49 0.48 Loans/deposits 105 105
106 107 107 Shareholders' equity to total assets 10.05 10.03 9.95
10.17 9.91 Tangible shareholders' equity to tangible assets
7.22 7.17 7.12
7.26 7.01
_____________________________________
(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 on sale of securities.
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 annualized and 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,
2018 Mar 31,2018 Dec 31,2017
Sep 30,2017 Jun 30,2017 Assets
Cash and due from banks $ 39,327 $ 35,088 $ 34,262 $ 31,223 $
28,112 Interest-bearing deposits with the Federal Reserve Bank
22,066 12,725 56,423 17,501 90,881
Total cash and cash equivalents 61,393 47,813 90,685 48,724
118,993 Securities available for sale, at fair value 710,147
718,559 717,242 718,459 718,364 Federal Home Loan Bank stock 38,712
38,105 38,105 37,107 44,168
Total securities 748,859 756,664 755,347 755,566 762,532 Commercial
real estate 838,546 824,721 826,746 793,572 738,584 Commercial and
industrial 400,293 387,205 379,423 357,072 350,002 Residential real
estate 1,127,895 1,132,977 1,155,682 1,152,628 1,160,832 Consumer
118,332 119,516 123,762 125,590 127,229
Total loans 2,485,066 2,464,419 2,485,613 2,428,862
2,376,647 Less: Allowance for loan losses (13,090 ) (12,679 )
(12,325 ) (11,950 ) (11,442 ) Net loans 2,471,976 2,451,740
2,473,288 2,416,912 2,365,205 Premises and equipment, net
48,038 48,464 47,708 48,309 48,590 Other real estate owned 129 216
122 122 122 Goodwill 100,085 100,085 100,085 100,255 100,255 Other
intangible assets 7,921 8,152 8,383 8,811 9,047 Cash surrender
value of bank-owned life insurance 58,811 58,433 57,997 57,613
57,233 Deferred tax asset, net 10,309 9,627 7,180 13,052 13,211
Other assets 33,534 29,793 24,389 26,368
28,223 Total assets $ 3,541,055 $ 3,510,987
$ 3,565,184 $ 3,475,732 $ 3,503,411
Liabilities and shareholders' equity Demand and other
non-interest bearing deposits $ 341,773 $ 342,192 $ 349,055 $
357,398 $ 332,339 NOW deposits 449,715 448,992 466,610 442,085
451,171 Savings deposits 350,339 361,591 364,799 373,118 360,306
Money market deposits 260,642 303,777 305,275 300,398 285,312 Time
deposits 972,252 884,848 866,346 802,110
783,876 Total deposits 2,374,721 2,341,400 2,352,085
2,275,109 2,213,004 Senior borrowings 735,924 742,198
786,688 775,582 872,021 Subordinated borrowings 43,003
43,018 43,033 43,048 43,063 Total
borrowings 778,927 785,216 829,721 818,630 915,084 Other
liabilities 31,444 32,214 28,737 28,534
28,201 Total liabilities 3,185,092 3,158,830 3,210,543
3,122,273 3,156,289 Total common shareholders' equity
355,963 352,157 354,641 353,459 347,122
Total liabilities and shareholders' equity $ 3,541,055
$ 3,510,987 $ 3,565,184 $ 3,475,732 $
3,503,411
Net shares outstanding
15,496 15,459
15,443 15,432 15,407
BAR HARBOR BANKSHARES CONSOLIDATED
LOAN & DEPOSIT ANALYSIS - UNAUDITED
LOAN
ANALYSIS
Annualized Growth % (in
thousands)
Jun 30,2018
Mar 31,2018
Dec 31,2017
Sep 30,2017
Jun 30,2017
QuarterEnd
Year toDate
Commercial real estate $ 838,546 $ 824,721 $ 826,746 $ 793,572 $
738,584 6.7 % 2.9 % Commercial and industrial 313,680
301,811 293,707 270,759 269,960 15.7
13.6 Total commercial loans 1,152,226 1,126,532
1,120,453 1,064,331 1,008,544 9.1 5.7 Residential real estate
1,127,895 1,132,977 1,155,682 1,152,628 1,160,832 (1.8 ) (4.8 )
Consumer 118,332 119,516 123,762 125,590 127,229 (4.0 ) (8.8 ) Tax
exempt and other 86,613 85,394 85,716 86,313
80,042 5.7 2.1 Total loans
$ 2,485,066 $ 2,464,419
$ 2,485,613 $ 2,428,862
$ 2,376,647 3.4 % — %
DEPOSIT
ANALYSIS
Annualized Growth % (in
thousands) Jun 30,2018 Mar 31,2018
Dec 31,2017 Sep 30,2017 Jun
30,2017
QuarterEnd
Year toDate
Demand $ 341,773 $ 342,192 $ 349,055 $ 357,398 $ 332,339 (0.5 )%
(4.2 )% NOW 449,715 448,992 466,610 442,085 451,171 0.6 (7.2 )
Savings 350,339 361,591 364,799 373,118 360,306 (12.4 ) (7.9 )
Money Market 260,642 303,777 305,275 300,398
285,312 (56.8 ) (29.2 ) Total non-maturity deposits
1,402,469 1,456,552 1,485,739 1,472,999 1,429,128 (14.9 ) (11.2 )
Total time deposits 972,252 884,848 866,346
802,110 783,876 39.5 24.4 Total
deposits $ 2,374,721 $ 2,341,400
$ 2,352,085 $ 2,275,109 $ 2,213,004
5.7 % 1.9 %
BAR HARBOR
BANKSHARES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Three
Months Ended June 30, Six Months Ended June 30, (in
thousands, except per share data) 2018 2017
2018 2017 Interest and dividend income Loans $
25,934 $ 24,226 $ 51,060 $ 45,420 Securities and other 5,784
5,439 11,435 10,430 Total interest and dividend
income 31,718 29,665 62,495 55,850
Interest expense Deposits
4,405 2,539 8,390 4,749 Borrowings 4,321 3,317 7,955
5,920 Total interest expense 8,726 5,856
16,345 10,669
Net interest income 22,992 23,809
46,150 45,181 Provision for loan losses 770 736 1,565
1,531 Net interest income after provision for loan losses
22,222 23,073 44,585 43,650
Non-interest
income Trust and investment management fee income 3,122 3,324
6,084 6,188 Insurance brokerage service income — 327 — 691 Customer
service fees 2,347 1,991 4,571 3,764 Bank-owned life insurance
income 377 386 823 785 Other income 1,275 530 1,881
1,076 Total non-interest income 7,121 6,558
13,359 12,504
Non-interest expense Salaries and
employee benefits 10,375 10,127 21,364 20,448 Occupancy and
equipment 2,925 2,829 5,998 5,495 Loss on sales of premises and
equipment, net — — — 95 Outside services 581 716 1,141 1,313
Professional services 360 489 793 929 Communication 304 290 484 658
Amortization of intangible assets 207 211 414 391 Acquisition,
conversion and other expenses 214 2,459 549 5,571 Other expenses
3,719 2,925 6,794 5,977 Total non-interest
expense 18,685 20,046 37,537 40,877
Income before income taxes 10,658 9,585 20,407 15,277 Income tax
expense 2,123 3,029 4,060 4,510
Net
income $ 8,535 $ 6,556 $
16,347 $ 10,767
Earnings per share:
Basic $ 0.55 $ 0.43 $ 1.06 $ 0.72 Diluted $ 0.55 $ 0.42 1.05 0.72
Weighted average shares outstanding: Basic 15,482
15,393 15,465 14,935 Diluted 15,571
15,506 15,560
15,049
BAR HARBOR BANKSHARES CONSOLIDATED
STATEMENTS OF INCOME (5 Quarter Trend) - UNAUDITED
(in thousands, except per share data) Jun 30,
2018 Mar 31,2018 Dec 31,2017
Sep 30,2017 Jun 30,2017 Interest and
dividend income Loans $ 25,934 $ 25,126 $ 24,895 $ 24,661 $
24,226 Securities and other 5,784 5,651 5,261
5,402 5,439 Total interest and dividend income 31,718 30,777
30,156 30,063 29,665
Interest expense Deposits 4,405 3,985
3,381 3,177 2,539 Borrowings 4,321 3,634 3,279
3,408 3,317 Total interest expense 8,726 7,619
6,660 6,585 5,856
Net interest income 22,992
23,158 23,496 23,478 23,809 Provision for loan losses 770
795 597 660 736 Net interest income after
provision for loan losses 22,222 22,363 22,899
22,818 23,073
Non-interest income Trust and
investment management fee income 3,122 2,962 3,042 3,040 3,324
Insurance brokerage service income — — 77 329 327 Customer service
fees 2,347 2,224 2,495 2,638 1,991 Gain on sales of securities, net
— — — 19 — Bank-owned life insurance income 377 446 374 380 386
Other income 1,275 606 530 554 530
Total non-interest income 7,121 6,238 6,518
6,960 6,558
Non-interest expense Salaries and
employee benefits 10,375 10,989 9,524 9,617 10,127 Occupancy and
equipment 2,925 3,073 2,866 2,700 2,829 Gain on sales of premises
and equipment,net — — — (1 ) — Outside services 581 560 780 907 716
Professional services 360 433 298 428 489 Communication 304 180 249
382 290 Amortization of intangible assets 207 207 209 212 211
Acquisition, conversion, and other expenses 214 335 (2,615 ) 346
2,459 Other expenses 3,719 3,075 2,952 2,995
2,925 Total non-interest expense 18,685 18,852
14,263 17,586 20,046 Income before income
taxes 10,658 9,749 15,154 12,192 9,585 Income tax expense 2,123
1,937 8,545 3,575 3,029
Net
income $ 8,535 $ 7,812 $
6,609 $ 8,617 $ 6,556
Earnings per share: Basic $ 0.55 $ 0.51 $ 0.43 $ 0.56 $ 0.43
Diluted $ 0.55 $ 0.50 $ 0.43 $ 0.56 $ 0.42
Weighted
average shares outstanding: Basic 15,482 15,448 15,437 15,420
15,393 Diluted 15,571 15,553
15,537 15,511
15,506
BAR HARBOR BANKSHARES
AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized)
- UNAUDITED
Quarters Ended Jun 30,
2018 Mar 31, 2018 Dec 31, 2017 Sep 30,
2017 Jun 30, 2017 Earning assets Commercial real
estate 4.48 % 4.41 % 4.30 % 4.28 % 4.24 % Commercial and industrial
4.69 4.41 4.77 4.84 4.77 Residential 3.88 3.87 3.78 3.79 3.83
Consumer 4.65 4.47 4.17 4.34 4.71
Total loans 4.25 4.16 4.12 4.13 4.14 Securities and other
3.18 3.16 3.06 3.13 3.19 Total
earning assets 3.99 % 3.92 % 3.87 % 3.89 % 3.91 %
Funding
liabilities NOW 0.37 % 0.34 % 0.31 % 0.32 % 0.25 % Savings 0.17
0.18 0.19 0.18 0.13 Money market 0.79 0.68 0.58 0.52 0.45 Time
deposits 1.51 1.39 1.19 1.13 1.01
Total interest bearing deposits 0.90 0.82 0.70 0.66 0.56
Borrowings 2.07 1.80 1.62 1.66 1.41
Total interest-bearing liabilities 1.25 % 1.11 % 0.97 % 0.96
% 0.85 %
Net interest spread 2.74 2.81 2.90 2.93 3.06
Net interest margin 2.91 2.97
3.04 3.06
3.16
BAR HARBOR BANKSHARES
AVERAGE BALANCES - UNAUDITED
Quarters Ended
(in thousands) Jun 30, 2018 Mar 31, 2018
Dec 31, 2017 Sep 30, 2017 Jun 30, 2017
Assets Commercial real estate $ 824,356 $ 819,531 $ 783,730
$ 764,770 $ 767,669 Commercial and industrial 396,471 380,029
362,881 353,194 322,147 Residential 1,126,714 1,147,010 1,161,865
1,158,069 1,159,714 Consumer 119,570 121,467 125,109
126,138 127,611 Total loans (1) 2,467,111
2,468,037 2,433,585 2,402,171 2,377,141 Securities and other (2)
767,886 765,328 753,282 754,450 761,546
Total earning assets 3,234,997 3,233,365 3,186,867 3,156,621
3,138,687 Cash and due from banks 50,869 53,151 65,145 49,169
87,332 Allowance for loan losses (13,107 ) (12,589 ) (12,202 )
(11,786 ) (11,292 ) Goodwill and other intangible assets 108,118
108,349 108,769 109,147 109,108 Other assets 131,522 129,525
144,359 149,394 110,129 Total assets $
3,512,399 $ 3,511,801 $ 3,492,938 $ 3,452,545
$ 3,433,964
Liabilities and shareholders'
equity NOW $ 441,645 $ 447,026 $ 449,669 $ 447,459 $ 440,452
Savings 351,712 362,508 368,714 368,443 362,899 Money market
288,169 305,105 308,071 292,110 275,687 Time deposits 872,149
857,796 799,348 793,489 732,188
Total interest bearing deposits 1,953,675 1,972,435 1,925,802
1,901,501 1,811,226 Borrowings 836,295 819,576
803,469 812,938 941,789 Total interest-bearing
liabilities 2,789,970 2,792,011 2,729,271 2,714,439 2,753,015
Non-interest-bearing demand deposits 339,374 339,349 376,066
354,470 320,503 Other liabilities 28,386 29,000
30,971 30,079 13,145 Total liabilities
3,157,730 3,160,360 3,136,308 3,098,988 3,086,663 Total
shareholders' equity 354,669 351,441 356,630 353,557 347,301
Total liabilities and
shareholders' equity $ 3,512,399
$ 3,511,801 $ 3,492,938 $
3,452,545 $ 3,433,964
_____________________________________
(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 30,2018
Mar 31,2018
Dec 31,2017
Sep 30,2017
Jun 30,2017
NON-PERFORMING ASSETS Non-accruing loans: Commercial real
estate $ 8,883 $ 8,422 $ 8,343 $ 2,467 $ 2,090 Commercial
installment 2,411 2,304 1,209 236 270 Residential real estate 9,945
8,548 4,266 3,619 2,783 Consumer installment 707 1,065
500 496 160 Total non-accruing loans
21,946 20,339 14,318 6,818 5,303 Other real estate owned 129
216 122 122 122 Total non-performing
assets $ 22,075 $ 20,555 $ 14,440 $ 6,940
$ 5,425 Total non-accruing loans/total loans
0.88 % 0.83 % 0.58 % 0.28 % 0.22 % Total non-performing
assets/total assets 0.62 0.59 0.41 0.20 0.15
PROVISION
AND ALLOWANCE FOR LOAN LOSSES Balance at beginning of period $
12,679 $ 12,325 $ 11,950 $ 11,442 $ 10,884 Charged-off loans (517 )
(461 ) (277 ) (297 ) (213 ) Recoveries on charged-off loans 158
20 55 145 35 Net loans
charged-off (359 ) (441 ) (222 ) (152 ) (178 ) Provision for loan
losses 770 795 597 660 736
Balance at end of period $ 13,090 $ 12,679 $ 12,325
$ 11,950 $ 11,442 Allowance for loan
losses/total loans 0.53 % 0.51 % 0.50 % 0.49 % 0.48 % Allowance for
loan losses/non-accruing loans 60 62 86 175 216
NET LOAN
CHARGE-OFFS Commercial real estate $ (92 ) $ (91 ) $ (92 ) $
(16 ) $ (6 ) Commercial installment (54 ) (140 ) 1 6 (138 )
Residential real estate (64 ) 1 — (79 ) (13 ) Consumer installment
(149 ) (211 ) (131 ) (63 ) (21 ) Total, net $ (359 ) $ (441 ) $
(222 ) $ (152 ) $ (178 ) Net charge-offs (QTD
annualized)/average loans 0.06 % 0.07 % 0.04 % 0.01 % 0.03 % Net
charge-offs (YTD annualized)/average loans 0.06 0.07 0.04 0.04 0.04
DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS 30-89
Days delinquent 0.14 % 0.24 % 0.37 % 0.35 % 0.55 % 90+ Days
delinquent and still accruing — — 0.02 0.01
— Total accruing delinquent loans 0.14 0.24 0.39 0.36
0.55 Non-accruing loans 0.88 0.83 0.58 0.28
0.22 Total delinquent and non-accruing loans
1.02 % 1.07 % 0.97 %
0.64 % 0.77 %
BAR HARBOR
BANKSHARES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND
SUPPLEMENTARY DATA- UNAUDITED At or for the
Quarters Ended (in thousands) Jun 30,
2018 Mar 31,2018
Dec 31,2017 Sep 30,2017
Jun 30,2017 Net income $ 8,535 $ 7,812
$ 6,609 $ 8,617 $ 6,556 Adj: Security Gains — — — (19 ) — Adj: Gain
on sale of fixed assets, net — — — (1 ) — Adj: Loss on other real
estate owned 23 — — — — Adj: Acquisition, conversion and other
expenses 214 335 (2,615 ) 346 2,459 Adj: Income taxes (1) (57 ) (81
) 982 (122 ) (924 ) Adj: Tax reform charge — —
3,988 — — Total core income (2) (A) $ 8,715
$ 8,066 $ 8,964 $ 8,821 $ 8,091
Net-interest income (B) $22,992 $23,158 $23,496 $23,478
$23,809 Plus: Non-interest income 7,121 6,238
6,518 6,960 6,558 Total Revenue 30,113 29,396
30,014 30,438 30,367 Adj: Net security gains — —
— (19 ) — Total core revenue (2) (C) $30,113
$29,396 $30,014 $30,419 $30,367 Total non-interest expense
18,685 18,852 14,263 17,586 20,046 Less: Gain on sale of fixed
assets, net — — — 1 — Less: Loss on other real estate owned (23 ) —
— — — Less: Acquisition, conversion and other expenses (214
) (335 ) 2,615 (346 ) (2,459 ) Core non-interest expense (2)
(D) $18,448 $18,517 $16,878 $17,241 $17,587
(in
millions) Total average earning assets (E) $ 3,235 $ 3,233 $
3,187 $ 3,157 $ 3,139 Total average assets (F) 3,512 3,512 3,493
3,453 3,434 Total average shareholders' equity (G) 355 351 357 354
347 Total average tangible shareholders' equity (2) (3) (H) 247 243
248 244 238 Total tangible shareholders' equity, period-end (2) (3)
(I) 248 244 246 244 238 Total tangible assets, period-end (2) (3)
(J) 3,433 3,403 3,457 3,367 3,394
(in thousands)
Total common shares outstanding, period-end (K) 15,496 15,459
15,443 15,432 15,407 Average diluted shares outstanding (L) 15,571
15,553 15,537 15,511 15,506 Core earnings per share, diluted
(2) (A/L) $ 0.56 $ 0.52 $ 0.58 $ 0.57 $ 0.52 Tangible book value
per share, period-end (2) (I/K) 16.00 15.78 15.94 15.84 15.44
Securities adjustment, net of tax (1) (M) (12,594) (10,237) 1,711
(1,155 ) (827 ) Tangible book value per share, excluding securities
adjustment (2) (I+M)/K 16.81 16.44 15.83 15.91 15.49 Total tangible
shareholders' equity/total tangible assets (2) (H/J) 7.22 7.17 7.12
7.26 7.01
Performance ratios GAAP return on assets
0.97 % 0.90 % 0.75 % 0.99 % 0.76 % Core return on assets (2) (A/F)
1.00 0.93 1.02 1.01 0.94 GAAP return on equity 9.65 9.01 7.35 9.67
7.55 Core return on equity (2) (A/G) 9.86 9.31 9.97 9.90 9.32 Core
return on tangible equity (2) (4) (A/I) 14.43 13.72 14.56 14.53
13.81 Efficiency ratio (2) (5) (D-O-Q)/(C+N) 58.83 60.44 53.02
53.53 54.57 Net interest margin (B+P)/E 2.91 2.97 3.04 3.06 3.16
Supplementary data (in thousands) Taxable equivalent
adjustment for efficiency ratio (N) $ 622 $ 645 $ 1,122 $ 1,107 $
1,185 Franchise taxes included in non-interest expense (O) 159 152
161 154 158 Tax equivalent adjustment for net interest margin (P)
502 503 897 878 936 Intangible amortization (Q) 207
207 209
212 211
_____________________________________
(1) Assumes a marginal tax rate of 24.15% in 2018 and 37.57% in
2017.(2) Non-GAAP financial measure.(3) Total tangible
shareholders' equity is computed by taking total shareholders'
equity less the intangible assets at period-end. Total
tangible assets is computed by taking total assets less the
intangible assets at period-end.(4) 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 24.15% in 2018 and 37.57% in 2017, by tangible
equity.(5) Efficiency ratio is computed by dividing total core
tangible non-interest expense by the sum of total net interest
income on a fully taxable equivalent basis and total core
non-interest income. The Company uses this non-GAAP measure to
provide important information about its operating efficiency.
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version on businesswire.com: https://www.businesswire.com/news/home/20180719005925/en/
Bar Harbor BanksharesJosephine Iannelli, 207-288-3314EVP, Chief
Financial Officer & Treasurer
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