Bar Harbor Bankshares Reports Record Fourth Quarter Revenues

BAR HARBOR, MAINE / ACCESSWIRE / January 28, 2020 / Bar Harbor Bankshares (NYSE American: BHB) reported fourth quarter 2019 net income of $4.2 million, or $0.27 per share, compared to $5.0 million, or $0.32 per share, in the prior quarter and $7.6 million or $0.49 per share in the fourth quarter of 2018. The non-GAAP measure of core earnings in the fourth quarter 2019 increased 20% to $8.8 million, or $0.56 per share, from $7.3 million, or $0.47 per share in the prior quarter and decreased from $9.2 million, or $0.59 per share in the fourth quarter of 2018. On October 25, 2019, the Company completed the previously announced acquisition of eight branches within Central Maine and closed five branches effective December 31, 2019, as part of its strategic review. During the quarter the Company recorded non-core charges totaling $0.29 per share after-tax, primarily related to the one-time costs associated with the acquisition and balance sheet optimization initiatives that were part of the strategic review.

FOURTH QUARTER FINANCIAL HIGHLIGHTS (compared to prior quarter, unless otherwise noted):

98% loan to deposit ratio, improved from 103%
6% increase in total revenue to $31.9 million
20 basis point expansion in net interest margin to 2.95%
0.44% non-performing loans to total loans, down from 0.65%
Called higher cost subordinated debt and replaced with upsized issuance

President and Chief Executive Officer, Curtis C. Simard stated, "We finished the year with what I can only classify as judicious and efficient execution on all fronts. This includes repositioning the Company's balance sheet, expanding our footprint within Central Maine and affirming our profitability strategies. Our strong performance and the recalibration of the balance sheet increased core return on assets to 0.96% for the quarter. In the fourth quarter, we achieved record revenues from higher interest and fee income, as well as lower cost of funds resulting from the expansion of our franchise."

Mr. Simard continued, "We completed several initiatives in the fourth quarter that reduced our cost of funds while improving interest rate risk and overall capital positions. Following the completion of the Central Maine branch acquisition, the Company used the net deposit proceeds to extinguish approximately $140 million of higher cost FHLB borrowings. Shortly thereafter, given the change in our balance sheet profile and funding needs, we terminated $90 million in interest rate caps related to rolling three-month FHLB borrowings. The losses from the caps were reclassified from other comprehensive income to earnings, with no further dilution to equity. We also completed a $40 million subordinated debt issuance which replaced $22 million of higher cost subordinated notes called earlier in the quarter. The offering was more than two times oversubscribed, driven by one of the most effective executions for 2019, and presented an opportunity to upsize the deal. It's this level of interest in our Company and belief in our long-term strategy that will allow us to continue building franchise value for our shareholders."

Mr. Simard went on to say, "Our loan origination teams continue to adhere to our disciplined underwriting practices and selectively pursue those opportunities that are accretive to our profitability metrics. This resulted in originations that kept relative pace with loan payoffs as we remixed the balance sheet and curtailed growth in lower yielding assets. In addition we exited certain non-performing loans further improving our non-performing loans to total loans to 0.44%. Implementation of all of these strategies, along with additional investment remixes that started in the third quarter resulted in net interest margin expanding 20 basis points in the fourth quarter, despite the current rate environment."

Mr. Simard concluded, "Our efforts these past few quarters have positioned us well for 2020 and will move us towards our stated goals of higher quality earnings and capital growth with continued focus on our customers and relationships which are driving current momentum."

FINANCIAL CONDITION

Total assets increased in the fourth quarter 2019 by $56.7 million to $3.7 billion primarily due to loans, goodwill and other intangible assets recorded from the branch acquisition. Securities available for sale declined $12.4 million as the Company both de-levered and remixed the investment portfolio as part of the strategic review. Loans in the fourth quarter grew by $63.8 million as acquired balances of $100.8 million were recorded and principally offset by run-off in jumbo residential loans of $14.2 million and two commercial relationships of $17.2 million that paid-off during the quarter. Mortgage growth on-balance sheet was curtailed as the secondary market platform was leveraged for fee income given the current rate environment. Non-maturity deposits increased by $172.2 million in the quarter including acquired balances, net of any year-end seasonal dips in demand deposit balances. Cash proceeds received from the acquisition were used to pay off approximately $140.0 million of higher cost FHLB borrowings during the quarter. Longer term subordinated borrowings increased by $17.0 million as existing notes at higher rates were called and opportunistically replaced with an upsized $40.0 million private placement issued in November 2019. The loan to deposit ratio improved to 98% in the fourth quarter 2019 compared to 103% in the prior quarter as a result of the branch acquisition.

Non-accruing loans in the fourth quarter 2019 decreased $5.1 million primarily due to one commercial real estate relationship that was settled with a $530 thousand recovery. The settlement also contributed to the improvement of the non-performing loans to total loans ratio to 0.44% from 0.65% in the prior quarter. The increase in 30-day past due accounts for the quarter is attributable to the payment schedules and calendar dates.

The Company's book value per share was $25.48 at year-end 2019 compared with $25.37 at the end of the third quarter 2019 and $23.87 at year-end 2018. Tangible book value per share was $17.30 compared to $18.49 at the end of the third quarter and $16.94 at year-end 2018, with the decrease during the quarter reflecting the goodwill and intangibles recorded from the branch acquisition. Excluding the impact from the acquisition, tangible book value per share increased to $18.62; an increase of 10% annualized from the third quarter 2019 and for the year.

RESULTS OF OPERATIONS

Net income in the fourth quarter 2019 was $4.2 million, or $0.27 per share, compared to $5.0 million, or $0.32 per share, in the prior quarter and $7.6 million, or $0.49 per share in the fourth quarter 2018. The non-GAAP measure of core earnings in the fourth quarter 2019 was $8.8 million or $0.56 per share, up 20% from $7.3 million or $0.47 per share in the previous quarter and down from $9.2 million or $0.59 per share in the fourth quarter 2018. Results in the fourth quarter included operations from the branch acquisition as of the October 25, 2019 effective date. Total revenue comprising of net interest income and total non-interest income increased to $31.9 million in the fourth quarter 2019 as compared to $30.1 million in the previous quarter and $29.7 million in the fourth quarter of 2018. Net interest income grew $1.7 million during the quarter primarily as a result of leveraging the low cost of deposits acquired to repay higher cost of funds. Net interest margin in the fourth quarter 2019 expanded 20 basis points due to the strategic initiatives previously discussed. Execution of these strategies improved cost of borrowings by 32 basis points on a quarter-over-quarter basis.

Non-interest income was $7.8 million compared to $7.6 million for the third quarter 2019 and $7.4 million in the fourth quarter of 2018. The increase in the quarter was driven by trust and investment management fee income and customer services fees associated from the branch acquisition.

Non-interest expense increased to $26.8 million in the fourth quarter 2019 from $23.4 million in the prior quarter and $20.1 million in the fourth quarter of 2018. The increase in the quarter is primarily a result of a $700 thousand increase in occupancy costs related to the acquired properties and other costs associated with the acquisition and strategic review. The $3.2 million loss associated with the termination of the interest rate caps was reclassified from shareholders' equity and included in acquisition, conversion and other expenses. The prior quarter included $2.2 million of branch optimization costs.

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 heading "FOURTH 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 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
INDEX

CONSOLIDATED FINANCIAL SCHEDULES (UNAUDITED)

Selected Financial Highlights

Footnotes to Selected Financial Highlights

Balance Sheets

Loan and Deposit Analysis

Statements of Income

Statements of Income (Five Quarter Trend)

Average Yields and Costs

Average Balances

Asset Quality Analysis

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

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

PER SHARE DATA

Net earnings, diluted

0.27

0.32

0.39

0.47

0.49

Core earnings, diluted (1) (2)

0.56

0.47

0.41

0.47

0.59

Total book value

25.48

25.37

25.13

24.54

23.87

Tangible book value (2)

17.30

18.49

18.23

17.63

16.94

Market price at period end

25.39

24.93

26.59

25.87

22.43

Dividends

0.22

0.20

PERFORMANCE RATIOS (3)

Return on assets

0.46

0.55

0.67

0.83

0.85

Core return on assets (1) (2)

0.96

0.80

0.70

0.83

1.03

Return on equity

4.21

5.04

6.33

7.83

8.31

Core return on equity (1) (2)

8.81

7.36

6.57

7.83

10.01

Core return on tangible equity (1) (2)

12.66

10.31

9.30

11.19

14.46

Net interest margin, fully taxable equivalent (FTE) (2) (4)

2.95

2.75

2.65

2.77

2.78

Net interest margin (FTE), excluding purchased loan accretion (2) (4)

2.88

2.65

2.56

2.67

2.70

Efficiency ratio (2)

62.56

65.02

68.48

63.94

59.91

ORGANIC GROWTH (Year-to-date, annualized) (2) (6)

Total commercial loans

6.0

10.5

10.1

(3.3

1.4

Total loans

2.0

4.7

7.1

5.9

0.2

Total deposits

(1.8

)

0.6

(0.1

)

(2.8

)

5.6

FINANCIAL DATA (In millions)

Total assets

3,669

3,612

3,688

3,629

3,608

Total earning assets (5)

3,336

3,270

3,355

3,312

3,263

Total investments

684

703

784

782

761

Total loans

2,641

2,577

2,578

2,527

2,490

Allowance for loan losses

Total goodwill and intangible assets

127

107

108

Total deposits

2,696

2,494

2,481

2,466

2,483

Total shareholders' equity

396

394

391

381

371

Net income

Core earnings (1) (2)

ASSET QUALITY AND CONDITION RATIOS

Net charge-offs (current quarter annualized)/average loans

0.08

0.02

–

0.03

Allowance for loan losses/total loans

0.58

0.60

0.57

0.55

0.56

Loans/deposits

103

104

102

100

Shareholders' equity to total assets

10.80

10.92

10.59

10.50

10.27

Tangible shareholders' equity to tangible assets

7.60

8.20

7.92

7.77

7.51

_________________

(1) Core measurements are non-GAAP financial measures that are adjusted to exclude net non-operating charges primarily related to acquisitions, restructurings, system conversions, loss on debt extinguishment and gain or loss on sale of securities 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.
(6) Assets acquired from eight branches purchased from People's United Bank, National Association as of October 25, 2019, were excluded from calculation.

BAR HARBOR BANKSHARES

CONSOLIDATED BALANCE SHEETS – UNAUDITED

(in thousands)

Dec 31, 2019

Sep 30, 2019

Jun 30, 2019

Mar 31, 2019

Dec 31, 2018

Assets

Cash and due from banks

37,261

50,032

42,657

37,504

35,208

Interest-bearing deposits with the Federal Reserve Bank

19,649

21,561

17,203

16,599

63,546

Total cash and cash equivalents

56,910

71,593

59,860

54,103

98,754

Securities available for sale, at fair value

663,230

675,675

748,560

747,235

725,837

Federal Home Loan Bank stock

20,679

27,469

35,220

35,107

35,659

Total securities

683,909

703,144

783,780

782,342

761,496

Commercial real estate

930,661

923,773

881,479

821,567

826,699

Commercial and industrial

423,291

402,706

416,725

409,937

404,870

Residential real estate

1,151,857

1,143,452

1,167,759

1,184,053

1,144,698

Consumer

135,283

107,375

112,275

111,402

113,960

Total loans

2,641,092

2,577,306

2,578,238

2,526,959

2,490,227

Less: Allowance for loan losses

(15,353

)

(15,353

)

(14,572

)

(13,997

)

(13,866

)

Net loans

2,625,739

2,561,953

2,563,666

2,512,962

2,476,361

Premises and equipment, net

51,205

47,644

50,230

49,661

48,804

Other real estate owned

2,236

2,455

2,351

Goodwill

118,649

100,085

Other intangible assets

8,641

6,879

7,072

7,266

7,459

Cash surrender value of bank-owned life insurance

75,863

75,368

74,871

74,352

73,810

Deferred tax asset, net

3,865

4,988

5,649

7,632

9,514

Other assets

42,111

38,365

40,071

38,441

29,853

Total assets

3,669,128

3,612,474

3,687,635

3,629,195

3,608,487

Liabilities and shareholders' equity

Demand and other non-interest bearing deposits

414,534

380,707

354,125

342,030

370,889

NOW deposits

575,809

490,315

472,576

470,277

484,717

Savings deposits

388,683

360,570

352,657

346,813

358,888

Money market deposits

384,090

359,328

305,506

349,833

335,951

Time deposits

932,635

902,665

996,512

956,818

932,793

Total deposits

2,695,751

2,493,585

2,481,376

2,465,771

2,483,238

Senior borrowings

471,396

641,819

733,084

703,283

680,823

Subordinated borrowings

59,920

42,928

42,943

42,958

42,973

Total borrowings

531,316

684,747

776,027

746,241

723,796

Other liabilities

45,654

39,683

39,670

36,160

30,874

Total liabilities

3,272,721

3,218,015

3,297,073

3,248,172

3,237,908

Total common shareholders' equity

396,407

394,459

390,562

381,023

370,579

Total liabilities and shareholders' equity

3,669,128

3,612,474

3,687,635

3,629,195

3,608,487

Net shares outstanding

15,558

15,549

15,544

15,524

15,523

BAR HARBOR BANKSHARES

CONSOLIDATED LOAN & DEPOSIT ANALYSIS – UNAUDITED

LOAN ANALYSIS

Organic Annualized Growth %

(in thousands)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Acquired(1)

Quarter End

Year to Date

Commercial real estate

930,661

923,773

881,479

821,567

826,699

25,054

(7.9

9.5

Commercial and industrial

318,988

301,590

312,029

305,185

309,544

19,739

(3.1

)

(3.3

)

Total commercial loans

1,249,649

1,225,363

1,193,508

1,126,752

1,136,243

44,793

(6.7

)

6.0

Residential real estate

1,151,857

1,143,452

1,167,759

1,184,053

1,144,698

23,716

(5.4

)

(1.4

)

Consumer

135,283

107,375

112,275

111,402

113,960

29,530

(6.0

)

(7.2

)

Tax exempt and other

104,303

101,116

104,696

104,752

95,326

2,753

1.7

6.5

Total loans

2,641,092

2,577,306

2,578,238

2,526,959

2,490,227

100,792

(5.7

2.0

(1) Acquired loans from eight branches purchased from People's United Bank, National Association as of October 25, 2019.

DEPOSIT ANALYSIS

Organic Annualized Growth %

(in thousands)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Acquired(1)

Quarter End

Year to Date

Demand

414,534

380,707

354,125

342,030

370,889

51,933

(19.0

(2.2

NOW

575,809

490,315

472,576

470,277

484,717

85,980

(0.4

)

1.1

Savings

388,683

360,570

352,657

346,813

358,888

25,841

2.5

1.1

Money market

384,090

359,328

305,506

349,833

335,951

26,399

(1.8

)

6.5

Total non-maturity deposits

1,763,116

1,590,920

1,484,864

1,508,953

1,550,445

190,153

(4.5

)

1.5

Total time deposits

932,635

902,665

996,512

956,818

932,793

68,240

(17.0

)

(7.3

)

Total deposits

2,695,751

2,493,585

2,481,376

2,465,771

2,483,238

258,393

(9.0

(1.8

(1) Acquired deposits from eight branches purchased from People's United Bank, National Association as of October 25, 2019.

BAR HARBOR BANKSHARES

CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED

Three Months Ended
December 31,

Twelve Months Ended
December 31,

(in thousands, except per share data)

2019

2018

2019

2018

Interest and dividend income

Loans

28,361

26,743

111,042

104,015

Securities and other

5,756

6,029

24,349

23,436

Total interest and dividend income

34,117

32,772

135,391

127,451

Interest expense

Deposits

6,698

5,653

27,034

19,521

Borrowings

3,315

4,855

18,547

17,047

Total interest expense

10,013

10,508

45,581

36,568

Net interest income

24,104

22,264

89,810

90,883

Provision for loan losses

538

572

2,317

2,780

Net interest income after provision for loan losses

23,566

21,692

87,493

88,103

Non-interest income

Trust and investment management fee income

3,227

2,949

12,063

11,985

Customer service fees

2,791

2,477

10,127

9,538

Gain (loss) on sales of securities, net

(924

)

237

(924

)

Bank-owned life insurance income

495

493

2,053

1,821

Customer derivative income

475

315

2,028

860

Other income

738

2,140

2,561

4,655

Total non-interest income

7,806

7,450

29,069

27,935

Non-interest expense

Salaries and employee benefits

11,432

9,269

45,000

40,964

Occupancy and equipment

4,113

3,022

14,214

12,386

(Loss) gain on sales of premises and equipment, net

)

–

Outside services

540

811

1,818

2,408

Professional services

370

458

2,191

1,474

Communication

114

103

821

804

Marketing

453

536

1,872

1,743

Amortization of intangible assets

240

207

861

828

Loss on debt extinguishment

1,096

–

1,096

–

Acquisition, conversion and other expenses

4,998

1,109

8,317

1,728

Other expenses

3,450

4,581

13,525

13,204

Total non-interest expense

26,803

20,096

89,733

75,539

Income before income taxes

4,569

9,046

26,829

40,499

Income tax expense

362

1,426

4,209

7,562

Net income

4,207

7,620

22,620

32,937

Earnings per share:

Basic

0.27

0.49

1.46

2.13

Diluted

0.27

0.49

1.45

2.12

Weighted average shares outstanding:

Basic

15,554

15,516

15,541

15,488

Diluted

15,602

15,574

15,587

15,564

BAR HARBOR BANKSHARES

CONSOLIDATED STATEMENTS OF INCOME (5 Quarter Trend) – UNAUDITED

(in thousands, except per share data)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Interest and dividend income

Loans

28,361

28,157

27,660

26,864

26,743

Securities and other

5,756

6,105

6,125

6,363

6,029

Total interest and dividend income

34,117

34,262

33,785

33,227

32,772

Interest expense

Deposits

6,698

7,143

6,886

6,307

5,653

Borrowings

3,315

4,674

5,403

5,155

4,855

Total interest expense

10,013

11,817

12,289

11,462

10,508

Net interest income

24,104

22,445

21,496

21,765

22,264

Provision for loan losses

538

893

562

324

572

Net interest income after provision for loan losses

23,566

21,552

20,934

21,441

21,692

Non-interest income

Trust and investment management fee income

3,227

3,013

3,066

2,757

2,949

Customer service fees

2,791

2,553

2,618

2,165

2,477

Gain (loss) on sales of securities, net

157

–

(924

)

Bank-owned life insurance income

495

497

519

542

493

Customer derivative income

475

828

696

315

Other income

738

595

554

674

2,140

Total non-interest income

7,806

7,643

7,453

6,167

7,450

Non-interest expense

Salaries and employee benefits

11,432

11,364

11,685

10,519

9,269

Occupancy and equipment

4,113

3,415

3,300

3,386

3,022

(Loss) gain on sales of premises and equipment, net

)

–

Outside services

540

424

443

411

811

Professional services

370

707

570

544

458

Communication

114

189

283

235

103

Marketing

453

613

511

295

536

Amortization of intangible assets

240

207

Loss on debt extinguishment

1,096

–

Acquisition, conversion and other expenses

4,998

3,039

280

–

1,109

Other expenses

3,450

3,442

3,606

3,027

4,581

Total non-interest expense

26,803

23,400

20,906

18,624

20,096

Income before income taxes

4,569

5,795

7,481

8,984

9,046

Income tax expense

362

780

1,364

1,703

1,426

Net income

4,207

5,015

6,117

7,281

7,620

Earnings per share:

Basic

0.27

0.32

0.39

0.47

0.49

Diluted

0.27

0.32

0.39

0.47

0.49

Weighted average shares outstanding:

Basic

15,554

15,547

15,538

15,523

15,516

Diluted

15,602

15,581

15,586

15,587

15,574

BAR HARBOR BANKSHARES

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

Quarters Ended

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Earning assets

Commercial real estate

4.69

4.74

4.78

4.71

Commercial and industrial

4.58

4.78

4.75

4.79

4.61

Residential

3.89

3.88

3.93

3.94

3.83

Consumer

4.84

5.13

5.21

5.25

5.07

Total loans

4.33

4.38

4.39

4.42

4.31

Securities and other

3.49

3.44

3.29

3.47

3.28

Total earning assets

4.15

4.17

4.13

4.19

4.07

Funding liabilities

NOW

0.44

0.51

0.49

0.51

0.50

Savings

0.20

0.21

0.19

0.18

Money market

1.17

1.37

1.44

1.38

0.93

Time deposits

2.06

2.16

2.11

2.00

1.85

Total interest-bearing deposits

1.19

1.33

1.32

1.25

1.12

Borrowings

2.30

2.62

2.74

2.53

Total interest-bearing liabilities

1.42

1.65

1.71

1.66

1.50

Net interest spread

2.74

2.52

2.42

2.53

2.57

Net interest margin

2.95

2.75

2.65

2.77

2.78

BAR HARBOR BANKSHARES

AVERAGE BALANCES – UNAUDITED

Quarters Ended

(in thousands)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Assets

Commercial real estate

928,445

900,568

846,921

825,596

836,813

Commercial and industrial

412,595

410,453

416,000

405,107

393,396

Residential real estate

1,156,215

1,154,552

1,176,583

1,143,862

1,137,493

Consumer

127,425

109,562

111,641

113,060

114,960

Total loans (1)

2,624,680

2,575,135

2,551,145

2,487,625

2,482,662

Securities and other (2)

683,939

732,925

779,072

777,458

762,901

Total earning assets

3,308,619

3,308,060

3,330,217

3,265,083

3,245,563

Cash and due from banks

67,642

62,999

52,728

50,298

68,904

Allowance for loan losses

(15,657

)

(14,965

)

(14,459

)

(14,119

)

(13,922

)

Goodwill and other intangible assets

114,537

107,058

107,252

107,446

107,657

Other assets

179,512

178,804

170,340

152,332

138,074

Total assets

3,654,653

3,641,956

3,646,078

3,561,040

3,546,276

Liabilities and shareholders' equity

NOW

551,335

487,506

459,572

468,392

475,449

Savings

378,997

359,242

352,733

346,707

346,905

Money market

379,361

338,013

338,095

335,882

272,612

Time deposits

918,528

947,949

935,616

894,160

914,674

Total interest bearing deposits

2,228,221

2,132,710

2,086,016

2,045,141

2,009,640

Borrowings

571,936

708,222

789,953

761,885

761,781

Total interest-bearing liabilities

2,800,157

2,840,932

2,875,969

2,807,026

2,771,421

Non-interest-bearing demand deposits

418,324

368,100

349,322

351,362

384,636

Other liabilities

40,136

37,975

33,107

25,520

26,569

Total liabilities

3,258,617

3,247,007

3,258,398

3,183,908

3,182,626

Total shareholders' equity

396,036

394,949

387,680

377,132

363,650

Total liabilities and shareholders' equity

3,654,653

3,641,956

3,646,078

3,561,040

3,546,276

_____________________________________

Total loans include non-accruing loans.
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)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

NON-PERFORMING ASSETS

Non-accruing loans:

Commercial real estate

3,489

8,519

7,048

7,516

8,156

Commercial installment

1,836

2,077

2,081

2,192

2,331

Residential real estate

5,335

5,340

5,965

6,326

7,210

Consumer installment

890

743

861

565

538

Total non-accruing loans

11,550

16,679

15,955

16,599

18,235

Other real estate owned

2,236

2,455

2,351

Total non-performing assets

13,786

19,134

18,306

18,950

20,586

Total non-accruing loans/total loans

0.44

0.65

0.62

0.66

0.73

Total non-performing assets/total assets

0.38

0.53

0.50

0.52

0.57

PROVISION AND ALLOWANCE FOR LOAN LOSSES

Balance at beginning of period

15,353

14,572

13,997

13,866

13,487

Charged-off loans

(603

)

(215

)

(104

)

(231

)

(631

)

Recoveries on charged-off loans

103

117

438

Net loans charged-off

(538

)

(112

)

(193

)

(193

)

Provision for loan losses

538

893

562

324

572

Balance at end of period

15,353

14,572

13,997

13,866

Allowance for loan losses/total loans

0.58

0.60

0.57

0.55

0.56

Allowance for loan losses/non-accruing loans

133

NET LOAN CHARGE-OFFS

Commercial real estate

(92

)

114

(41

)

(25

)

Commercial installment

(331

)

(12

)

(15

)

Residential real estate

(16

)

(124

)

(65

)

(86

)

(31

)

Consumer installment

(99

)

(51

)

(24

)

(51

)

(190

)

Total, net

(538

)

(112

)

(193

)

(193

)

Net charge-offs (QTD annualized)/average loans

0.08

0.02

0.03

Net charge-offs (YTD annualized)/average loans

0.03

0.02

0.01

0.03

0.05

DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS

30-89 Days delinquent

0.74

0.18

0.29

0.21

0.38

90+ Days delinquent and still accruing

0.01

0.03

–

0.01

Total accruing delinquent loans

0.75

0.21

0.29

0.21

0.39

Non-accruing loans

0.44

0.65

0.62

0.66

0.73

Total delinquent and non-accruing loans

1.19

0.86

0.91

0.87

1.12

BAR HARBOR BANKSHARES

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

At or for the Quarters Ended

(in thousands)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Net income

4,207

5,015

6,117

7,281

7,620

Plus (less):

(Gain) loss on sale of securities, net

(80

)

(157

)

–

924

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

)

–

Loss on other real estate owned

146

–

Loss on debt extinguishment

1,096

–

Acquisition, restructuring and other expenses

4,998

3,039

280

–

1,109

Income tax expense (1)

(1,440

)

(720

)

(72

)

–

(485

)

Total core earnings (2)

(A)

8,798

7,323

6,346

7,281

9,173

Net interest income

(B)

24,104

22,445

21,496

21,765

22,264

Plus: Non-interest income

7,806

7,643

7,453

6,167

7,450

Total Revenue

31,910

30,088

28,949

27,932

29,714

Adj: (Gain) loss on sale of securities, net

(80

)

(157

)

–

924

Total core revenue (2)

(C)

31,830

29,931

28,949

27,932

30,638

Total non-interest expense

26,803

23,400

20,906

18,624

20,096

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

–

(21

)

–

Less: Loss on other real estate owned

(20

)

(146

)

–

)

Less: Loss on debt extinguishment

(1,096

)

–

Less: Acquisition, conversion and other expenses

(4,998

)

(3,039

)

(280

)

–

(1,109

)

Core non-interest expense (2)

(D)

20,692

20,215

20,605

18,624

18,982

(in millions)

Total average earning assets

(E)

3,309

3,308

3,330

3,265

3,246

Total average assets

(F)

3,655

3,642

3,646

3,561

3,546

Total average shareholders' equity

(G)

396

395

388

377

364

Total average tangible shareholders' equity (2) (3)

(H)

281

288

280

270

256

Total tangible shareholders' equity, period-end (2) (3)

(I)

269

287

283

274

263

Total tangible assets, period-end (2) (3)

(J)

3,542

3,506

3,580

3,522

3,501

(in thousands)

Total common shares outstanding, period-end

(K)

15,558

15,549

15,544

15,524

15,523

Average diluted shares outstanding

(L)

15,602

15,581

15,586

15,587

15,574

Core earnings per share, diluted (2)

(A/L)

0.56

0.47

0.41

0.47

0.59

Tangible book value per share, period-end (2)

(I/K)

17.30

18.49

18.23

17.63

16.94

Securities adjustment, net of tax (1) (4)

(M)

5,549

8,002

5,550

(1,842

)

(8,663

)

Tangible book value per share, excluding securities adjustment (2)

(I+M)/K

16.94

17.98

17.88

17.75

17.50

Total tangible shareholders' equity/total tangible assets (2)

(I/J)

7.60

8.20

7.92

7.77

7.51

Performance ratios (5)

GAAP return on assets

0.46

0.55

0.67

0.83

0.85

Core return on assets (2)

(A/F)

0.96

0.80

0.70

0.83

1.03

GAAP return on equity

4.21

5.04

6.33

7.83

8.31

Core return on equity (2)

(A/G)

8.81

7.36

6.57

7.83

10.01

Core return on tangible equity (2) (6)

(A+Q)/H

12.66

10.31

9.30

11.19

14.46

Efficiency ratio (2) (7)

(D-O-Q)/(C+N)

62.56

65.02

68.48

63.94

59.91

Net interest margin

(B+P)/E

2.95

2.75

2.65

2.77

2.78

Supplementary data (in thousands)

Taxable equivalent adjustment for efficiency ratio

(N)

674

658

676

684

633

Franchise taxes included in non-interest expense

(O)

119

111

120

Tax equivalent adjustment for net interest margin

(P)

516

503

514

515

488

Intangible amortization

(Q)

240

207

_________________

(1) Assumes a marginal tax rate of 23.78% in the first three quarters of 2019 and 23.87% in the fourth quarter 2019. A marginal tax rate of 23.78% was used in the 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) All performance ratios are based on average balance sheet amounts, where applicable.
(6) 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 the first three quarters of 2019 and 23.87% in the fourth quarter 2019 and 23.78% in the fourth quarter of 2018, by tangible equity.
(7) 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.

SOURCE: Bar Harbor Bankshares

ReleaseID: 574395

Go Top