Bar Harbor Bankshares Reports First Quarter Results; Declares Dividend

Rhea-AI Summary

Bar Harbor Bankshares (NYSE American: BHB) reported a net income of $9.1 million, or $0.60 per diluted share, for Q1 2022, down from $9.5 million, or $0.63 per share in Q1 2021. Core earnings also decreased from $0.68 to $0.62. Notable highlights include a 21% increase in annualized commercial loan growth and a net interest margin improvement to 2.95%. A dividend of $0.26 per share was declared, yielding 3.63% based on the stock's closing price. Total deposits stood at $3.0 billion, with 500 new accounts opened during the quarter.

Positive

• 21% annualized commercial loan growth.
• 2.95% net interest margin, up from 2.88%.
• 11% increase in fee-based revenue.
• 500 net new accounts opened, showing growth in customer base.

Negative

• Net income decreased from $9.5 million to $9.1 million year-over-year.
• Core earnings declined from $0.68 to $0.62 per diluted share.
• Tangible book value per share decreased by 5.7%.

BAR HARBOR, ME / ACCESSWIRE / April 21, 2022 / Bar Harbor Bankshares (NYSE American:BHB) reported first quarter 2022 net income of $9.1 million or $0.60 per diluted share compared to $9.5 million or $0.63 per diluted share in the same quarter of 2021. Paycheck Protection Program (PPP) accretion contributed $0.01 per share in the first quarter of 2022 compared to $0.07 in the same quarter of 2021. Core earnings per diluted share (non-GAAP) for the same periods were $0.62 and $0.68, which excludes one-time severance and contract negotiation costs.

FIRST QUARTER HIGHLIGHTS (ratios compared to the first quarter 2021)

• 1.00% return on assets or 1.02% on a core basis (non-GAAP)
• 21% annualized commercial loan growth
• 87% loan to deposit ratio
• 2.95% net interest margin, compared to 2.88%
• 11% increase in fee-based revenue
• 0.25% non-performing asset ratio to total assets, compared to 0.38%

President and Chief Executive Officer, Curtis C. Simard stated, "The Company had a strong start to the year as we effectively positioned ourselves to grow loans, expanded net interest margin, increased fee-based income, controlled expenses driving positive operating leverage for the quarter, and maintained our credit quality and solid capital levels. Commercial loan growth was very strong for the quarter, and may fluctuate based on timing of loan closings and payoffs. However, at 21% annualized, loan growth was a reflection of strong pipelines heading into the year that remain robust. The growth and pipelines are a healthy mix of real estate loans, commercial and industrial loans and increases in utilization rates to 30% on existing lines of credit. The lending activity during the quarter highlights the strength of our teams' experience and client relationships as we continue to navigate an uncertain economic and rate environment with dynamic variables that could shift in either direction. We have an enviable revenue stream, allowing for flexibility in any rate environment, and our lending customers carry leading profiles as we refuse to push out the risk curve. The asset sensitivity of our balance sheet positions us to expect to further benefit from any potential Fed rate hikes."

"We self-funded loans during the quarter by deploying excess cash as total deposit growth remained flat. Core deposit accounts grew 5% annualized in the quarter, which offset a strategic run-off in wholesale time deposits. We continue to see growth in our core deposits as we attract new customers and gain market share, as well as deepen our existing relationships, allowing for minimal reliance on wholesale borrowings. A total of 500 net new accounts were opened in the quarter."

"Moving to earnings, net interest margin (NIM) expanded to 2.95% for the first quarter 2022, up from 2.88% in the same quarter of 2021. Core NIM (non-GAAP) was 2.93% and 2.78% for the first quarters of 2022 and 2021, respectively and was 2.69% in the fourth quarter of 2021. Of the 24 basis point increase from the fourth quarter 16 basis points relates to the use of cash to fund loan growth and 8 basis points was the result of previously announced deleveraging strategies."

"Credit quality continues to be strong across our loan portfolio. The provision for loan losses this quarter reflects a build to the allowance on higher loan growth, balanced with improvements in non-accrual loans, delinquencies, specific reserves and beneficial shifts in product mix. Net recoveries on previously charged off loans were $95 thousand compared with net charge offs of $168 thousand in the first quarter of 2021."

Mr. Simard continued, "Compared with a year ago, fee-based revenue increased 11%, reflecting a deepening and expanding customer deposit base, growth in trust and investment management fees and higher treasury management fees. Our wealth management business continues to perform very well despite the broader market volatility. We continue to attract additional assets from customers, successfully retain transfer across generations, and win new business based on a high service level and risk based approach. Mortgage banking revenue was in line with expectations given the decline in refinancing activity and tighter gain on sale margins given excess capacity in the industry. Given the shift in the mortgage banking environment, we opportunistically managed our mortgage production between on balance sheet and for sale through our secondary market platform."

"Our tangible book value per share (non-GAAP) was $18.72 compared with $19.86 at year-end 2021 or a decrease of 5.7%, as a result of the mark-to-market adjustments in our securities portfolio given the rising rate environment. This dilution is temporary and reasonable given the relatively short duration risk of the securities portfolio. Excluding securities adjustments, tangible book value per share was up 7% on an annualized basis to $20.07 from $19.73 at year-end 2021."

Mr. Simard concluded, "Based on our performance, strong capital levels and the Board of Directors' confidence in our execution of our strategic priorities, we are pleased to announce an increase to our quarterly dividend of $0.02 per share to $0.26 per share, or a yield of 3.63%. In closing, we celebrated our 135^th anniversary in the first quarter and are proud to carry our Downeast Maine ideals to our more than 50 locations across all of northern New England."

DIVIDEND DECLARED

The Board of Directors voted to declare a cash dividend of $0.26 per share to shareholders of record at the close of business on May 17, 2022, payable on June 17, 2022. This dividend equates to a 3.63% annualized yield based on the $28.62 closing price of the Company's common stock at the end of the first quarter of 2022.

FINANCIAL CONDITION

Loans were $2.6 billion at the end of the first quarter. Excluding PPP loans, commercial loans increased $85.7 million primarily due to new loans with existing customers in the commercial leasing and hotel accommodation industries. Total residential loans increased $47.4 million from the end of the fourth quarter 2021, as we opted to put originations on the balance sheet instead of selling into the secondary market. While residential loans increased, origination volume was significantly down from quarterly periods in 2021 due to lower refinancing activity.

The allowance for credit losses was $23.2 million for the first quarter, compared to $22.7 million at the end of the fourth quarter 2021. A steadying economic forecast and disciplined approach to credit quality resulted in an allowance to total loans coverage ratio of 0.87% compared to 0.90% at the end of the fourth quarter 2021. The first quarter 2022 charged off loans resulted in a net recovery of $95 thousand compared to $144 thousand in the fourth quarter 2021. Non-accruing loans for the first quarter 2022 decreased to $9.2 million from $10.2 million at the end of the fourth quarter 2021. The ratio of accruing past due loans to total loans was 0.25% of total loans at the end of the first quarter 2022 from 0.32% at the end of the fourth quarter 2021.

Total deposits were $3.0 billion at the end of the first quarter 2022 and fourth quarter 2021. Core deposits grew $32.8 million, or 5% on an annualized basis, during the quarter as nearly 500 net new customer accounts were opened. The loan to deposit ratio was 87% compared to 83% at the end of the fourth quarter 2021, given the outsized loan growth this quarter. Time deposits decreased $33.6 million during the quarter primarily due to $22.0 million of wholesale deposits that matured in the first quarter. The remaining decrease is attributable to customers continuing to move funds to transactional accounts upon contractual maturity.

The Company's book value per share was $27.11 at March 31, 2022, compared with $28.27 at the end of the fourth quarter 2021. Tangible book value per share (non-GAAP measure) was $18.72 at the end of the first quarter 2022, compared to $19.86 at the end of the fourth quarter 2021. Other comprehensive income included unrealized loss on securities totaling $20.2 million in the first quarter 2022 compared to a gain of $2.0 million at the end of the fourth quarter 2021.

RESULTS OF OPERATIONS

Net income in the first quarter 2022 was $9.1 million, or $0.60 per diluted share, compared to $9.5 million, or $0.63 per diluted share, in the same quarter of 2021. Core earnings (non-GAAP) totaled $9.3 million or $0.62 per diluted share, compared to $10.2 million, or $0.68 per diluted share, in the same quarter of 2021. Non-core items (non-GAAP) reduced net income by $185 thousand in the first quarter 2022 and $684 thousand in the same period of 2021.

Net interest margin was 2.95% compared to 2.88% in the same period of 2021. Acceleration of PPP loan fee amortization due to forgiveness contributed two basis points to NIM in the first quarter 2022 and 10 basis point in the same period of 2021. Interest-bearing cash balances, held mostly at the Federal Reserve Bank, reduced NIM by 12 basis points in the first quarter 2022 and 15 basis points in the first quarter 2021. The yield on earning assets totaled 3.21% compared to 3.46% in the first quarter 2021. Excluding the impact of PPP and excess cash, the yield on earning assets totaled 3.32% and 3.55% for the same periods. The yield on loans was 3.54% in the first quarter 2022, and 3.85% in the first quarter of 2021. Excluding PPP loans the yield on loans was 3.51% in the first quarter of 2022 and 3.73% in the first quarter 2021. Costs of interest-bearing liabilities decreased to 0.35% from 0.72% in the first quarter 2021 due to lower deposit rates and reduced wholesale borrowings.

The provision for credit losses for the quarter was $377 thousand, compared to a recapture of $489 thousand in the first quarter of 2021. The provision in the first quarter 2022 is attributable to loan growth offset in part by improved credit quality metrics.

Non-interest income in the first quarter 2022 was $9.3 million, compared to $10.2 million in the same quarter of 2021. Customer service fees were $3.6 million in the first quarter compared to $3.0 million in the same period of 2021. The increase is due to nearly 500 net new accounts that were opened during the quarter and a higher volume of customer activity and transactions. Wealth management income grew to $3.8 million from $3.7 million in the first quarter of 2021 due to a 5% increase in assets under management. Mortgage banking income was $624 thousand, compared to $2.6 million in the same period of 2021 reflecting higher on balance sheet activity and lower residential loan originations.

Non-interest expense was $21.9 million in the first quarter 2022 from $22.5 million in the same quarter of 2021. Salaries and benefits expense decreased to $12.1 million compared to $12.2 million in the same quarter of 2021. A reduction of full-time equivalents to 495 from 538 in the first quarter of 2021 resulted in lower salary and benefit expense. However, that benefit was almost completely offset by less loan origination cost deferrals on lower residential loan volume as compared to the first quarter 2021. The efficiency ratio excluding the effects of PPP improved to 62.76%, down from 64.40% for the same respective periods. Non-core expenses (non-GAAP) in the first quarter 2021 totaled $250 thousand and consisted of a $75 thousand gain on the sale of premises and equipment as the Company continues to optimize its branch footprint as well as one time severance and contract negotiation costs. In the same quarter of 2021, non-core expenses (non-GAAP) totaled $897 million and included charges from early retirements and reductions in workforce programs.

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 135 years. Bar Harbor provides full-service community banking with office locations in all three Northern New England states of Maine, New Hampshire and Vermont. For more information, visit www.barharbor.bank.

FORWARD LOOKING STATEMENTS

Certain statements under the headings "FIRST QUARTER HIGHLIGHTS" and "RESULTS OF OPERATIONS" contained in this document, that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this earnings release the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions are intended to identify forward-looking statements, but these terms are not the exclusive means of identifying forward-looking statements. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including among other things, changes in general economic and business conditions, increased competitive pressures, changes in the interest rate environment, legislative and regulatory change, changes in the financial markets, and other risks and uncertainties disclosed from time to time in documents that the Company files with the Securities and Exchange Commission, including but not limited to those discussed in the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and any subsequently filed Quarterly Reports on Form 10-Q. Because of these and other uncertainties, the Company's actual results, performance or achievements, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, the Company's past results of operations do not necessarily indicate future results. You should not place undue reliance on any of the forward-looking statements, which speak only as of the dates on which they were made. The Company is not undertaking an obligation to update forward-looking statements, even though its situation may change in the future, except as required under federal securities law. The Company qualifies all of its forward-looking statements by these cautionary statements.

NON-GAAP FINANCIAL MEASURES

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

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

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

CONTACTS

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

TABLE
INDEX	CONSOLIDATED FINANCIAL SCHEDULES (UNAUDITED)
A	Selected Financial Highlights
B	Balance Sheets
C	Loan and Deposit Analysis
D	Statements of Income
E	Statements of Income (Five Quarter Trend)
F	Average Yields and Costs
G	Average Balances
H	Asset Quality Analysis
I-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
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
		2022				2021				2021				2021				2021
PER SHARE DATA
Net earnings, diluted		$	0.60			$	0.65			$	0.73			$	0.60			$	0.63
Core earnings, diluted (1)			0.62				0.68				0.73				0.63				0.68
Total book value			27.11				28.27				27.92				27.64				27.10
Tangible book value (1)			18.72				19.86				19.48				19.17				18.61
Market price at period end			28.62				28.93				28.05				28.62				29.42
Dividends			0.24				0.24				0.24				0.24				0.22
PERFORMANCE RATIOS (2)
Return on assets			1.00	%			1.02	%			1.16	%			0.97	%			1.03	%
Core return on assets (1)			1.02				1.07				1.16				1.01				1.11
Pre-tax, pre-provision return on assets			1.28				1.26				1.43				1.13				1.22
Core pre-tax, pre-provision return on assets (1)			1.31				1.33				1.43				1.18				1.32
Return on equity			8.89				9.16				10.38				8.77				9.45
Core return on equity (1)			9.07				9.60				10.39				9.14				10.14
Return on tangible equity			13.01				13.30				15.08				12.91				14.01
Core return on tangible equity (1)			13.27				13.93				15.09				13.45				15.01
Net interest margin, fully taxable equivalent (FTE) (1) (3)			2.95				2.79				3.02				2.74				2.88
Core net interest margin (1) (4)			2.93				2.69				2.75				2.67				2.78
Efficiency ratio (1)			62.40				60.74				59.18				63.45				61.95
FINANCIAL DATA (In millions)
Total assets		$	3,692			$	3,709			$	3,738			$	3,639			$	3,730
Total earning assets (5)			3,367				3,380				3,394				3,282				3,381
Total investments			611				626				556				636				641
Total loans			2,655				2,532				2,534				2,516				2,551
Allowance for credit losses			23				23				22				23				24
Total goodwill and intangible assets			126				126				126				127				127
Total deposits			3,048				3,049				3,007				2,822				2,912
Total shareholders' equity			407				424				418				414				405
Net income			9				10				11				9				9
Core earnings (1)			9				10				11				9				10
ASSET QUALITY AND CONDITION RATIOS
Net (recoveries) charge-offs (current quarter annualized)/average loans			(0.02	)%			-	%			0.03	%			0.01	%			0.03	%
Allowance for credit losses/total loans			0.87				0.90				0.89				0.91				0.93
Loans/deposits			87				83				84				89				88
Shareholders' equity to total assets			11.02				11.43				11.19				11.37				10.86
Tangible shareholders' equity to tangible assets			7.88				8.32				8.08				8.17				7.72

1. Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in table I-J for additional information.
2. All performance ratios are based on average balance sheet amounts, where applicable.
3. Fully taxable equivalent considers the impact of tax-advantaged investment securities and loans.
4. Core net interest margin excludes Paycheck Protection Program loans.
5. Earning assets includes non-accruing loans and interest-bearing deposits with other banks. Securities are valued at amortized cost.

BAR HARBOR BANKSHARES
CONSOLIDATED BALANCE SHEETS - UNAUDITED

		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(in thousands)		2022				2021				2021				2021				2021
Assets
Cash and due from banks		$	38,656			$	33,508			$	39,081			$	41,440			$	39,039
Interest-earning deposits with other banks			72,393				216,881				302,118				132,278				184,473
Total cash and cash equivalents			111,049				250,389				341,199				173,718				223,512
Securities available for sale			603,910				618,276				545,327				621,849				626,403
Federal Home Loan Bank stock			7,384				7,384				10,192				14,145				14,826
Total securities			611,294				625,660				555,519				635,994				641,229
Loans held for sale			2,843				5,523				7,505				7,942				10,148
Total loans			2,654,562				2,531,910				2,534,154				2,515,560				2,551,064
Less: Allowance for credit losses			(23,190	)			(22,718	)			(22,448	)			(22,815	)			(23,653	)
Net loans			2,631,372				2,509,192				2,511,706				2,492,745				2,527,411
Premises and equipment, net			48,891				49,382				50,070				51,119				52,253
Other real estate owned			-				-				-				-				-
Goodwill			119,477				119,477				119,477				119,477				119,477
Other intangible assets			6,500				6,733				6,966				7,198				7,431
Cash surrender value of bank-owned life insurance			79,861				79,020				79,380				78,886				78,388
Deferred tax asset, net			12,614				5,547				5,811				4,902				5,761
Other assets			68,169				58,310				60,712				67,064				64,479
Total assets		$	3,692,070			$	3,709,233			$	3,738,345			$	3,639,045			$	3,730,089
Liabilities and shareholders' equity
Demand and other non-interest bearing deposits		$	653,471			$	664,420			$	664,395			$	599,598			$	586,487
NOW deposits			918,768				940,631				888,021				802,681				761,817
Savings deposits			658,834				628,670				605,977				578,361				560,095
Money market deposits			424,750				389,291				379,651				371,075				365,507
Time deposits			391,940				425,532				469,221				470,758				638,436
Total deposits			3,047,763				3,048,544				3,007,265				2,822,473				2,912,342
Senior borrowings			118,538				118,400				190,267				279,991				292,210
Subordinated borrowings			60,165				60,124				60,083				60,042				60,003
Total borrowings			178,703				178,524				250,350				340,033				352,213
Other liabilities			58,605				58,018				62,295				62,779				60,354
Total liabilities			3,285,071				3,285,086				3,319,910				3,225,285				3,324,909
Total shareholders' equity			406,999				424,147				418,435				413,760				405,180
Total liabilities and shareholders' equity		$	3,692,070			$	3,709,233			$	3,738,345			$	3,639,045			$	3,730,089
Net shares outstanding			15,013				15,001				14,987				14,972				14,950

BAR HARBOR BANKSHARES
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED

LOAN ANALYSIS

																						Annualized
																						Growth %
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,				Quarter
(in thousands)		2022				2021				2021				2021				2021				End
Commercial real estate		$	1,289,968			$	1,210,580			$	1,170,372			$	1,135,857			$	1,118,669				26	%
Commercial and industrial			346,394				340,129				331,091				327,729				317,500				7
Paycheck Protection Program (PPP)			1,126				6,669				24,227				65,918				77,878				*
Total commercial loans			1,637,488				1,557,378				1,525,690				1,529,504				1,514,047				21
Total commercial loans, excluding PPP			1,636,362				1,550,709				1,501,463				1,463,586				1,436,169				22
Residential real estate			868,382				821,004				849,692				822,774				868,084				23
Consumer			96,876				98,949				100,933				103,589				106,835				(8	)
Tax exempt and other			51,816				54,579				57,839				59,693				62,098				(20	)
Total loans		$	2,654,562			$	2,531,910			$	2,534,154			$	2,515,560			$	2,551,064				19	%

DEPOSIT ANALYSIS

																						Annualized
																						Growth %
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,				Quarter
(in thousands)		2022				2022				2021				2021				2021				End
Demand		$	653,471			$	664,420			$	664,395			$	599,598			$	586,487				(7	)%
NOW			918,768				940,631				888,021				802,681				761,817				(9	)
Savings			658,834				628,670				605,977				578,361				560,095				19
Money market			424,750				389,291				379,651				371,075				365,507				36
Total non-maturity deposits			2,655,823				2,623,012				2,538,044				2,351,715				2,273,906				5
Total time deposits			391,940				425,532				469,221				470,758				638,436				(32	)
Total deposits		$	3,047,763			$	3,048,544			$	3,007,265			$	2,822,473			$	2,912,342				-	%

*Indicates ratios of 100% or greater.

BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

		Three Months Ended
		March 31,
(in thousands, except per share data)		2022				2021
Interest and dividend income
Loans		$	22,671			$	24,205
Securities and other			3,826				3,979
Total interest and dividend income			26,497				28,184
Interest expense
Deposits			1,189				2,951
Borrowings			1,010				1,811
Total interest expense			2,199				4,762
Net interest income			24,298				23,422
Provision for credit losses			377				(489	)
Net interest income after provision for credit losses			23,921				23,911
Non-interest income
Trust and investment management fee income			3,754				3,666
Customer service fees			3,616				2,970
Gain on sales of securities, net			9				-
Mortgage banking income			624				2,570
Bank-owned life insurance income			501				518
Customer derivative income			18				410
Other income			787				114
Total non-interest income			9,309				10,248
Non-interest expense
Salaries and employee benefits			12,147				12,176
Occupancy and equipment			4,423				4,328
(Gain) loss on sales of premises and equipment, net			(75	)			8
Outside services			340				432
Professional services			173				558
Communication			225				321
Marketing			263				290
Amortization of intangible assets			233				241
Loss on debt extinguishment			-				-
Acquisition, conversion and other expenses			325				889
Other expenses			3,832				3,248
Total non-interest expense			21,886				22,491
Income before income taxes			11,344				11,668
Income tax expense			2,232				2,188
Net income		$	9,112			$	9,480
Earnings per share:
Basic		$	0.61			$	0.63
Diluted			0.60				0.63
Weighted average shares outstanding:
Basic			15,011				14,934
Diluted			15,102				15,007

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

		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(in thousands, except per share data)		2022				2021				2021				2021				2021
Interest and dividend income
Loans		$	22,671			$	22,746			$	25,094			$	23,191			$	24,205
Securities and other			3,826				3,776				3,821				3,992				3,979
Total interest and dividend income			26,497				26,522				28,915				27,183				28,184
Interest expense
Deposits			1,189				1,434				1,555				2,603				2,951
Borrowings			1,010				1,273				1,778				1,826				1,811
Total interest expense			2,199				2,707				3,333				4,429				4,762
Net interest income			24,298				23,815				25,582				22,754				23,422
Provision for credit losses			377				126				(174	)			(765	)			(489	)
Net interest income after provision for credit losses			23,921				23,689				25,756				23,519				23,911
Non-interest income
Trust and investment management fee income			3,754				3,844				3,868				3,801				3,666
Customer service fees			3,616				3,470				3,515				3,257				2,970
Gain on sales of securities, net			9				890				1,930				50				-
Mortgage banking income			624				1,563				850				1,553				2,570
Bank-owned life insurance income			501				669				494				498				518
Customer derivative income			18				173				341				86				410
Other income			787				549				352				260				114
Total non-interest income			9,309				11,158				11,350				9,505				10,248
Non-interest expense
Salaries and employee benefits			12,147				11,842				11,743				11,356				12,176
Occupancy and equipment			4,423				4,105				4,029				3,894				4,328
(Gain) loss on sales of premises and equipment, net			(75	)			515				(146	)			1				8
Outside services			340				431				547				533				432
Professional services			173				556				491				151				558
Communication			225				205				188				198				321
Marketing			263				378				339				534				290
Amortization of intangible assets			233				233				233				233				241
Loss on debt extinguishment			-				1,083				1,768				-				-
Acquisition, conversion and other expenses			325				(92	)			318				552				889
Other expenses			3,832				3,665				3,862				4,272				3,248
Total non-interest expense			21,886				22,921				23,372				21,724				22,491
Income before income taxes			11,344				11,926				13,734				11,300				11,668
Income tax expense			2,232				2,160				2,706				2,275				2,188
Net income		$	9,112			$	9,766			$	11,028			$	9,025			$	9,480
Earnings per share:
Basic		$	0.61			$	0.65			$	0.74			$	0.60			$	0.63
Diluted			0.60				0.65				0.73				0.60				0.63
Weighted average shares outstanding:
Basic			15,011				14,993				14,983				14,965				14,934
Diluted			15,102				15,075				15,051				15,042				15,007

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

		Quarters Ended
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
		2022				2021				2021				2021				2021
Earning assets
Interest-earning deposits with other banks			0.16	%			0.16	%			0.15	%			0.09	%			0.09	%
Securities available for sale and FHLB stock			2.55				2.66				2.59				2.66				2.79
Loans:
Commercial real estate			3.50				3.40				3.53				3.54				3.68
Commercial and industrial			3.46				3.23				3.79				3.60				3.86
Paycheck protection program			26.49				26.25				23.28				5.56				8.12
Residential real estate			3.55				3.61				3.64				3.80				3.76
Consumer			3.51				3.49				3.78				3.44				3.56
Total loans			3.54				3.58				3.98				3.70				3.85
Total earning assets			3.21	%			3.10	%			3.41	%			3.26	%			3.46	%
Funding liabilities
Deposits:
NOW			0.14	%			0.14	%			0.13	%			0.12	%			0.14	%
Savings			0.09				0.08				0.08				0.10				0.13
Money market			0.12				0.12				0.12				0.12				0.14
Time deposits			0.62				0.77				0.88				1.37				1.44
Total interest-bearing deposits			0.20				0.24				0.27				0.45				0.51
Borrowings			2.29				2.17				2.11				2.12				2.16
Total interest-bearing liabilities			0.35	%			0.41	%			0.50	%			0.66	%			0.72	%
Net interest spread			2.86				2.69				2.91				2.60				2.74
Net interest margin			2.95				2.79				3.02				2.74				2.88
Core net interest margin (1)			2.93				2.69				2.75				2.67				2.78

1. Core net interest margin (Non-GAAP) excludes Paycheck Protection Program loans.

BAR HARBOR BANKSHARES
AVERAGE BALANCES - UNAUDITED

		Quarters Ended
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(in thousands)		2022				2021				2021				2021				2021
Assets
Interest-earning deposits with other banks (1)		$	140,383			$	325,260			$	284,429			$	228,825			$	176,728
Securities available for sale and FHLB stock (2)			629,811				578,323				610,381				635,978				613,459
Loans:
Commercial real estate			1,264,798				1,189,803				1,153,813				1,122,831				1,099,937
Commercial and industrial			393,759				386,156				391,191				378,634				377,176
Paycheck protection program			2,999				14,824				45,835				76,701				65,149
Residential real estate			856,252				844,872				824,686				850,119				916,633
Consumer			97,594				100,723				101,545				104,851				109,802
Total loans (3)			2,615,402				2,536,378				2,517,070				2,533,136				2,568,697
Total earning assets			3,385,596				3,439,961				3,411,880				3,397,939				3,358,884
Cash and due from banks			32,742				37,818				38,750				21,414				23,221
Allowance for credit losses			(23,256	)			(22,525	)			(22,607	)			(23,419	)			(24,822	)
Goodwill and other intangible assets			126,090				126,324				126,556				126,789				127,024
Other assets			190,846				200,097				209,509				223,362				232,475
Total assets		$	3,712,018			$	3,781,675			$	3,764,088			$	3,746,085			$	3,716,782
Liabilities and shareholders' equity
Deposits:
NOW		$	930,556			$	913,326			$	860,206			$	781,836			$	749,100
Savings			640,672				620,599				591,440				568,193				541,203
Money market			414,130				395,341				381,755				368,826				378,743
Time deposits			406,730				450,559				471,934				619,454				675,422
Total interest-bearing deposits			2,392,088				2,379,825				2,305,335				2,338,309				2,344,468
Borrowings			178,958				232,492				334,097				345,896				340,209
Total interest-bearing liabilities			2,571,046				2,612,317				2,639,432				2,684,205				2,684,677
Non-interest-bearing demand deposits			660,717				684,895				641,769				591,982				550,657
Other liabilities			64,619				61,480				61,436				57,227				74,778
Total liabilities			3,296,382				3,358,692				3,342,637				3,333,414				3,310,112
Total shareholders' equity			415,636				422,983				421,451				412,671				406,670
Total liabilities and shareholders' equity		$	3,712,018			$	3,781,675			$	3,764,088			$	3,746,085			$	3,716,782

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

BAR HARBOR BANKSHARES
ASSET QUALITY ANALYSIS - UNAUDITED

		At or for the Quarters Ended
		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(in thousands)		2022				2021				2021				2021				2021
NON-PERFORMING ASSETS
Non-accruing loans:
Commercial real estate		$	1,633			$	2,890			$	3,646			$	4,367			$	4,664
Commercial installment			905				1,056				1,163				1,370				1,534
Residential real estate			5,612				5,192				6,311				6,788				6,753
Consumer installment			1,063				1,053				1,087				1,054				1,118
Total non-accruing loans			9,213				10,191				12,207				13,579				14,069
Other real estate owned			-				-				-				-				-
Total non-performing assets		$	9,213			$	10,191			$	12,207			$	13,579			$	14,069
Total non-accruing loans/total loans			0.35	%			0.40	%			0.48	%			0.54	%			0.55	%
Total non-performing assets/total assets			0.25				0.27				0.33				0.37				0.38
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period		$	22,718			$	22,448			$	22,815			$	23,653			$	19,082
Impact of CECL adoption			-				-				-				-				5,228
Charged-off loans			(83	)			(154	)			(286	)			(239	)			(216	)
Recoveries on charged-off loans			178				298				93				166				48
Net loans charged-off			95				144				(193	)			(73	)			(168	)
Provision for credit losses			377				126				(174	)			(765	)			(489	)
Balance at end of period		$	23,190			$	22,718			$	22,448			$	22,815			$	23,653
Allowance for credit losses/total loans			0.87	%			0.90	%			0.89	%			0.91	%			0.93	%
Allowance for credit losses/non-accruing loans			252				223				184				168				168
NET LOAN (CHARGE-OFFS) RECOVERIES
Commercial real estate		$	54			$	216			$	(69	)		$	(105	)		$	(131	)
Commercial installment			25				53				(24	)			(7	)			1
Residential real estate			76				8				13				88				(28	)
Consumer installment			(60	)			(133	)			(113	)			(49	)			(10	)
Total, net		$	95			$	144			$	(193	)		$	(73	)		$	(168	)
Net (recoveries) charge-offs (QTD annualized)/average loans			(0.01	)%			(0.02	)%			0.03	%			0.01	%			0.03	%
Net (recoveries) charge-offs (YTD annualized)/average loans			(0.01	)			0.01				0.02				0.02				0.03
DELINQUENT AND NON-ACCRUING LOANS/ TOTAL LOANS
30-89 Days delinquent			0.22	%			0.31	%			0.09	%			0.13	%			0.43	%
90+ Days delinquent and still accruing			0.03				0.01				0.02				0.02				0.01
Total accruing delinquent loans			0.25				0.32				0.12				0.15				0.44
Non-accruing loans			0.35				0.40				0.48				0.54				0.55
Total delinquent and non-accruing loans			0.60	%			0.72	%			0.60	%			0.69	%			0.99	%

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

			At or for the Quarters Ended
			Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(in thousands)			2022				2021				2021				2021				2021
Net income			$	9,112			$	9,766			$	11,028			$	9,025			$	9,480
Non-core items:
(Gain) on sale of securities, net				(9	)			(890	)			(1,930	)			(50	)			-
(Gain) loss on sale of premises and equipment, net				(75	)			515				(146	)			1				8
(Gain) loss on other real estate owned				-				-				-				-				-
Loss on debt extinguishment				-				1,083				1,768				-				-
Acquisition, conversion and other expenses				325				(92	)			318				552				889
Income tax expense (1)				(56	)			(144	)			(2	)			(119	)			(213	)
Total non-core items				185				472				8				384				684
Core earnings (2)	(A)		$	9,297			$	10,238			$	11,036			$	9,409			$	10,164
Net interest income	(B)		$	24,298			$	23,815			$	25,582			$	22,754			$	23,422
Non-interest income				9,309				11,158				11,350				9,505				10,248
Total Revenue				33,607				34,973				36,932				32,259				33,670
(Gain) on sale of securities, net				(9	)			(890	)			(1,930	)			(50	)			-
Total core revenue (2)	(C)		$	33,598			$	34,083			$	35,002			$	32,209			$	33,670
Total non-interest expense				21,886				22,921				23,372				21,724				22,491
Non-core expenses:
Gain (loss) on sale of premises and equipment, net				75				(515	)			146				(1	)			(8	)
Gain (loss) on other real estate owned				-				-				-				-				-
Loss on debt extinguishment				-				(1,083	)			(1,768	)			-				-
Acquisition, conversion and other expenses				(325	)			92				(318	)			(552	)			(889	)
Total non-core expenses				(250	)			(1,506	)			(1,940	)			(553	)			(897	)
Core non-interest expense (2)	(D)		$	21,636			$	21,415			$	21,432			$	21,171			$	21,594
Total revenue				33,607				34,973				36,932				32,259				33,670
Total non-interest expense				21,886				22,921				23,372				21,724				22,491
Pre-tax, pre-provision net revenue			$	11,721			$	12,052			$	13,560			$	10,535			$	11,179
Core revenue (2)				33,598				34,083				35,002				32,209				33,670
Core non-interest expense (2)				21,636				21,415				21,432				21,171				21,594
Core pre-tax, pre-provision net revenue (2)	(U)		$	11,962			$	12,668			$	13,570			$	11,038			$	12,076
(in millions)
Average earning assets	(E)		$	3,386			$	3,440			$	3,412			$	3,398			$	3,359
Average paycheck protection program (PPP) loans	(R)			3				15				46				77				65
Average earning assets, excluding PPP loans	(S)			3,383				3,425				3,366				3,321				3,294
Average assets	(F)			3,712				3,764				3,764				3,746				3,717
Average shareholders' equity	(G)			416				423				421				413				407
Average tangible shareholders' equity (2) (3)	(H)			290				297				295				286				280
Tangible shareholders' equity, period-end (2) (3)	(I)			281				298				292				287				278
Tangible assets, period-end (2) (3)	(J)			3,566				3,583				3,612				3,512				3,603

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

						At or for the Quarters Ended
						Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
(in thousands)						2022				2021				2021				2021				2021
Common shares outstanding, period-end			(K)				15,013				15,001				14,987				14,972				14,950
Average diluted shares outstanding			(L)				15,102				15,075				15,051				15,042				15,007
Core earnings per share, diluted (2)			(A/L)			$	0.62			$	0.68			$	0.73			$	0.63			$	0.68
Tangible book value per share, period-end (2)			(I/K)				18.72				19.86				19.48				19.17				18.61
Securities adjustment, net of tax (1) (4)			(M)				(20,225	)			1,985				4,398				7,237				4,510
Tangible book value per share, excluding securities adjustment (2) (4)			(I+M)/K				20.07				19.73				19.19				18.69				18.31
Tangible shareholders' equity/total tangible assets (2)			(I/J)				7.88				8.32				8.08				8.17				7.72
Performance ratios (5)
GAAP return on assets							1.00	%			1.02	%			1.16	%			0.97	%			1.03	%
Core return on assets (2)			(A/F)				1.02				1.07				1.16				1.01				1.11
Pre-tax, pre-provision return on assets							1.28				1.26				1.43				1.13				1.22
Core pre-tax, pre-provision return on assets (2)			(U/F)				1.31				1.33				1.43				1.18				1.32
GAAP return on equity							8.89				9.16				10.38				8.77				9.45
Core return on equity (2)			(A/G)				9.07				9.60				10.39				9.14				10.14
Return on tangible equity							13.01				13.30				15.08				12.91				14.01
Core return on tangible equity (1) (2)			(A+Q)/H				13.27				13.93				15.09				13.45				15.01
Efficiency ratio (2) (6)		(D-O-Q)/(C+N)					62.40				60.74				59.18				63.45				61.95
Net interest margin			(B+P)/E				2.95				2.79				3.02				2.74				2.88
Core net interest margin (2) (7)			(B+P-T)/S				2.93				2.69				2.75				2.67				2.78
Supplementary data (in thousands)
Taxable equivalent adjustment for efficiency ratio			(N)			$	476			$	573			$	576			$	586			$	595
Franchise taxes included in non-interest expense			(O)				141				132				143				128				125
Tax equivalent adjustment for net interest margin			(P)				320				369				421				430				433
Intangible amortization			(Q)				233				233				233				233				241
Interest and fees on PPP loans			(T)				196				981				2,690				1,064				1,304

1. Assumes a marginal tax rate of 23.41% for the first quarter of 2022 and fourth quarter of 2021 and 23.71% for the first three quarters of 2021.
2. Non-GAAP financial measure.
3. Tangible shareholders' equity is computed by taking total shareholders' equity less the intangible assets at period-end. Tangible assets is computed by taking total assets less the intangible assets at period-end.
4. Securities adjustment, net of tax represents the total unrealized loss on available-for-sale securities recorded on the Company's consolidated balance sheets within total common shareholders' equity.
5. All performance ratios are based on average balance sheet amounts, where applicable.
6. Efficiency ratio is computed by dividing core non-interest expense net of franchise taxes and intangible amortization divided by core revenue on a fully taxable equivalent basis.
7. Core net interest margin excludes Paycheck Protection Program loans.

SOURCE: Bar Harbor Bank and Trust

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FAQ

What was Bar Harbor Bankshares' net income for Q1 2022?

Bar Harbor Bankshares reported a net income of $9.1 million for Q1 2022.

What is the dividend amount declared by BHB for shareholders?

Bar Harbor Bankshares declared a dividend of $0.26 per share.

When will the dividend for BHB be paid?

The dividend will be payable on June 17, 2022, to shareholders of record by May 17, 2022.

How did the net interest margin change for Bar Harbor Bankshares?

The net interest margin increased to 2.95% in Q1 2022, up from 2.88% in Q1 2021.

What is the annualized yield of the dividend declared by BHB?

The declared dividend equates to a 3.63% annualized yield based on the stock's closing price.