Bar Harbor Bankshares Reports Second Quarter Results; Declares Dividend

Rhea-AI Summary

Bar Harbor Bankshares (NYSE American: BHB) announced a net income of $10.5 million or $0.70 per diluted share for Q2 2022, up from $9.0 million or $0.60 per diluted share in Q2 2021. The bank reported a 1.14% return on assets and 11% annualized loan growth, with a 3.19% net interest margin. Core deposits grew 9% annually. The efficiency ratio improved to 59%, and non-performing assets decreased to 0.21% of total assets. A cash dividend of $0.26 per share was declared, yielding over 4%. The company also initiated a stock repurchase plan for 5% of shares.

Positive

• 17% increase in net income per diluted share.
• 11% annualized growth in loans.
• 9% annualized growth in core deposits.
• Improved efficiency ratio to 59%.
• Non-performing assets reduced to 0.21%.

Negative

• Wealth management assets under management decreased by 9%.
• Net non-interest income fell to $9.0 million from $9.5 million YoY.

BAR HARBOR, ME / ACCESSWIRE / July 21, 2022 / Bar Harbor Bankshares (NYSE American:BHB) reported second quarter 2022 net income of $10.5 million or $0.70 per diluted share compared to $9.0 million or $0.60 per diluted share in the same quarter of 2021. Earnings per share in the prior year quarter included a $0.05 benefit from Paycheck Protection Program (PPP) loans offset by $0.03 of non-core items (non-GAAP).

SECOND QUARTER HIGHLIGHTS (ratios compared to the second quarter 2021)

• 1.14% return on assets, compared to 0.97%
• 11% annualized loan growth
• 9% annualized core deposit growth
• 3.19% net interest margin, compared to 2.74%
• 59% efficiency ratio, compared to 63%
• 0.21% non-performing asset ratio to total assets, compared to 0.37%

President and Chief Executive Officer, Curtis C. Simard stated, "Our performance in the second quarter continues to reflect all the hard work everyone is doing across our Company. We increased net income per diluted share by 17%, which improved all of our performance metrics even without any benefit from PPP accretion. We delivered loan growth across all product offerings; Commercial loans, excluding PPP, grew 14% on annualized basis, driven both by existing and new customer growth. This strong loan growth in the first half of the year, along with rising rates, drove meaningful growth in net interest income and expansion in net interest margin. The quarter was also highlighted by solid, positive operating leverage which improved our efficiency ratio."

"Wealth management income remained strong during the quarter. Assets under management decreased 9%, which is manageable compared to the 16% decline in the S&P 500 index for the same period. Net customer cash inflows were strong in the quarter. We completed the consolidation of our wealth platforms under the Bar Harbor Wealth Management brand during the quarter which delivers a simplified, comprehensive offering across our footprint. We've invested in continuous improvements in our financial planning capabilities, reflecting our deep, long-term care for our customers and their families."

"Asset quality continues to remain strong as total nonperforming assets improved by $1.3 million to 0.21% of total assets and net charge-offs were essentially zero during the quarter. As the economic environment continues to evolve, we believe that our disciplined strategy to responsibly grow business lines where we possess specialized sector and underwriting expertise has resulted in almost no losses for the quarter. We remain committed to those relationships with proven operators. This has allowed us to maintain a superior credit risk profile in our commercial banking business."

Mr. Simard further stated, "As we continue to grow profitably, we remain steadfast in our commitment to return capital to our shareholders. Last month, our Board of Directors authorized a stock repurchase plan for up to 5% of our common shares, which represents approximately 751,000 shares. No repurchases were made in the second quarter and we will continue to be opportunistic taking into consideration market conditions, including interest rate volatility and potential loan and risk-weighted asset growth. We grew tangible book value 6% excluding unrealized security losses, which are considered temporary in nature. And as of the June 30, 2022 stock price, our dividend yield is now over 4%. Given our already strong capital ratios and our organic growth rate, we continue to be well-positioned as we look to future growth."

Mr. Simard concluded, "Our customers and communities have noticed our success as we further establish ourselves as the go-to banking institution in Northern New England. With that in mind, I am excited to share that in addition to being named one of America's Best Banks by Newsweek for 2022, we were recently recognized as one of America's Best Banks by Forbes Magazine. This type of recognition from such a renowned publication does not come easily. It is a testament to our teams' hard work every day. Looking forward into the second half of 2022, there are macroeconomic factors that remain uncertain. We believe having a strong balance sheet, robust pipelines, a sound mix of fee-based businesses, and a focus on expense management as we execute against our strategies will provide the foundation for continued success."

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 August 16, 2022 payable on September 16, 2022. This dividend equates to a 4.02% annualized yield based on the $25.86 closing price of the Company's common stock at the end of the second quarter of 2022.

FINANCIAL CONDITION

Loans were $2.7 billion at the end of the second quarter. Excluding PPP loans, commercial loans increased $55.8 million from the end of the first quarter 2022 and included over 70 new customer relationships. Total residential loans increased $8.3 million from the end of the first quarter 2022, and included $18.3 million of originations on the balance sheet offset by prepayments and amortization.

The allowance for credit losses was $23.8 million for the second quarter, compared to $23.2 million at the end of the first quarter 2022. A steadying economic forecast and disciplined approach to credit quality resulted in an allowance to total loans coverage ratio of 0.87% consistent with the end of the first quarter. The second quarter 2022 charged off loans resulted in a net recovery of $32 thousand compared to $95 thousand in the first quarter. Non-accruing loans for the second quarter 2022 decreased to $7.9 million from $9.2 million at the end of the first quarter. The ratio of accruing past due loans to total loans was 0.12% of total loans at the end of the second quarter from 0.25% at the end of the first quarter.

Total deposits were $3.1 billion at the end of the second quarter 2022 compared to $3.0 billion at the end of the first quarter. Core deposits grew $60.8 million, or 9% on an annualized basis, during the quarter as nearly 840 net new customer accounts were opened. The loan to deposit ratio was 89% compared to 87% at the end of the first quarter 2022, the increase was due to outsized loan growth. Time deposits decreased $30.0 million during the quarter attributable to customers continuing to move funds to transactional accounts upon contractual maturity.

The Company's book value per share was $26.19 at June 30, 2022, compared with $27.11 at the end of the first quarter. Tangible book value per share (non-GAAP measure) was $17.83 at the end of the second quarter 2022, compared to $18.72 at the end of the first quarter. Other comprehensive income included unrealized loss on securities totaling $38.3 million in the second quarter 2022 compared to $20.2 million at the end of the first quarter.

RESULTS OF OPERATIONS

Net income in the second quarter 2022 was $10.5 million, or $0.70 per diluted share, compared to $9.0 million, or $0.60 per diluted share, in the same quarter of 2021. Core earnings (non-GAAP) totaled $10.5 million or $0.70 per diluted share, compared to $9.4 million, or $0.63 per diluted share, in the same quarter of 2021. PPP income was $27 thousand compared to $1.1 million in the second quarter 2021.

Net interest margin was 3.19% compared to 2.74% in the same period of 2021. Acceleration of PPP loan fee amortization due to forgiveness contributed 7 basis points in the second quarter 2021. Interest-bearing cash balances, held mostly at the Federal Reserve Bank, reduced NIM by 5 basis points in the second quarter 2022 and 19 basis points in the second quarter 2021. The yield on earning assets totaled 3.46% compared to 3.26% in the second quarter 2021. Excluding the impact of PPP and excess cash, the yield on earning assets totaled 3.51% and 3.44% for the same periods. The yield on loans was 3.71% in the second quarter 2022, and 3.70% in the second quarter of 2021. Excluding PPP loans the yield on loans was 3.71% in the second quarter of 2022 and 3.64% in the second quarter 2021. Costs of interest-bearing liabilities decreased to 0.36% from 0.66% in the second quarter 2021 due to lower deposit rates and less wholesale borrowings.

The provision for credit losses for the quarter was $534 thousand, compared to a recapture of $765 thousand in the second quarter of 2021. The provision in the second quarter 2022 is attributable to loan growth offset in part by continued improvement in credit quality metrics.

Non-interest income in the second quarter 2022 was $9.0 million, compared to $9.5 million in the same quarter of 2021. Customer service fees were $3.7 million in the second quarter compared to $3.3 million in the same period of 2021. The increase included over 800 net new accounts that were opened during the quarter and a higher volume of customer activity and transactions. Wealth management income was $3.8 million in the second quarter of 2022 and the second quarter of 2021 on strong cash inflows offset by market volatility effects on assets under management. Mortgage banking income was $488 thousand, compared to $1.5 million in the same period of 2021 reflecting higher on balance sheet activity and lower residential loan originations.

Non-interest expense was $21.7 million in the second quarter 2022 and the same quarter of 2021 reflecting consistent and stable costs across most categories. The efficiency ratio in the second quarter 2022 was 59.25%, down from 63.45% in the second quarter 2021. Non-core expenses (non-GAAP) in the second quarter 2022 consisted of a $10 thousand loss on the sale of premises and equipment. In the same quarter of 2021, non-core expenses (non-GAAP) totaled $553 thousand were mostly a one-time reduction in workforce.

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 "SECOND 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)
	SELECTEDFINANCIALHIGHLIGHTSUNAUDITED_350
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
		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
		2022				2022				2021				2021				2021
PER SHARE DATA
Net earnings, diluted		$	0.70			$	0.60			$	0.65			$	0.73			$	0.60
Core earnings, diluted (1)			0.70				0.62				0.68				0.73				0.63
Total book value			26.19				27.11				28.27				27.92				27.64
Tangible book value (1)			17.83				18.72				19.86				19.48				19.17
Market price at period end			25.86				28.62				28.93				28.05				28.62
Dividends			0.26				0.24				0.24				0.24				0.24
PERFORMANCE RATIOS (2)
Return on assets			1.14	%			1.00	%			1.02	%			1.16	%			0.97	%
Core return on assets (1)			1.14				1.02				1.07				1.16				1.01
Pre-tax, pre-provision return on assets			1.50				1.28				1.26				1.43				1.13
Core pre-tax, pre-provision return on assets (1)			1.50				1.31				1.33				1.43				1.18
Return on equity			10.58				8.89				9.16				10.38				8.77
Core return on equity (1)			10.59				9.07				9.60				10.39				9.14
Return on tangible equity			15.74				13.01				13.30				15.08				12.91
Core return on tangible equity (1)			15.76				13.27				13.93				15.09				13.45
Net interest margin, fully taxable equivalent (FTE) (1) (3)			3.19				2.95				2.79				3.02				2.74
Core net interest margin (1) (4)			3.19				2.93				2.69				2.75				2.67
Efficiency ratio (1)			59.25				62.40				60.74				59.18				63.45
FINANCIAL DATA (In millions)
Total assets		$	3,712			$	3,692			$	3,709			$	3,738			$	3,639
Total earning assets (5)			3,399				3,367				3,380				3,394				3,282
Total investments			593				611				626				556				636
Total loans			2,727				2,655				2,532				2,534				2,516
Allowance for credit losses			24				23				23				22				23
Total goodwill and intangible assets			126				126				126				126				127
Total deposits			3,079				3,048				3,049				3,007				2,822
Total shareholders' equity			394				407				424				418				414
Net income			11				9				10				11				9
Core earnings (1)			11				9				10				11				9
ASSET QUALITY AND CONDITION RATIOS
Net (recoveries) charge-offs (current quarter annualized)/average loans			(0.01	)%			(0.01	)%			-	%			0.03	%			0.01	%
Allowance for credit losses/total loans			0.87				0.87				0.90				0.89				0.91
Loans/deposits			89				87				83				84				89
Shareholders' equity to total assets			10.60				11.02				11.43				11.19				11.37
Tangible shareholders' equity to tangible assets			7.47				7.88				8.32				8.08				8.17

(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

		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
(in thousands)		2022				2022				2021				2021				2021
Assets
Cash and due from banks		$	40,834			$	38,656			$	33,508			$	39,081			$	41,440
Interest-earning deposits with other banks			26,282				72,393				216,881				302,118				132,278
Total cash and cash equivalents			67,116				111,049				250,389				341,199				173,718
Securities available for sale			586,142				603,910				618,276				545,327				621,849
Federal Home Loan Bank stock			6,572				7,384				7,384				10,192				14,145
Total securities			592,714				611,294				625,660				555,519				635,994
Loans held for sale			3,539				2,843				5,523				7,505				7,942
Total loans			2,727,274				2,654,562				2,531,910				2,534,154				2,515,560
Less: Allowance for credit losses			(23,756	)			(23,190	)			(22,718	)			(22,448	)			(22,815	)
Net loans			2,703,518				2,631,372				2,509,192				2,511,706				2,492,745
Premises and equipment, net			48,350				48,891				49,382				50,070				51,119
Other real estate owned			-				-				-				-				-
Goodwill			119,477				119,477				119,477				119,477				119,477
Other intangible assets			6,267				6,500				6,733				6,966				7,198
Cash surrender value of bank-owned life insurance			80,262				79,861				79,020				79,380				78,886
Deferred tax asset, net			18,405				12,614				5,547				5,811				4,902
Other assets			72,596				68,169				58,310				60,712				67,064
Total assets		$	3,712,244			$	3,692,070			$	3,709,233			$	3,738,345			$	3,639,045
Liabilities and shareholders' equity
Demand and other non-interest bearing deposits		$	670,268			$	653,471			$	664,420			$	664,395			$	599,598
NOW deposits			883,239				918,768				940,631				888,021				802,681
Savings deposits			663,676				658,834				628,670				605,977				578,361
Money market deposits			499,456				424,750				389,291				379,651				371,075
Time deposits			361,906				391,940				425,532				469,221				470,758
Total deposits			3,078,545				3,047,763				3,048,544				3,007,265				2,822,473
Senior borrowings			117,347				118,538				118,400				190,267				279,991
Subordinated borrowings			60,206				60,165				60,124				60,083				60,042
Total borrowings			177,553				178,703				178,524				250,350				340,033
Other liabilities			62,549				58,605				58,018				62,295				62,779
Total liabilities			3,318,647				3,285,071				3,285,086				3,319,910				3,225,285
Total shareholders' equity			393,597				406,999				424,147				418,435				413,760
Total liabilities and shareholders' equity		$	3,712,244			$	3,692,070			$	3,709,233			$	3,738,345			$	3,639,045
Net shares outstanding			15,026				15,013				15,001				14,987				14,972

BAR HARBOR BANKSHARES
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED

LOAN ANALYSIS

																						Annualized
																						Growth %
(in thousands)		Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Quarter to Date				Year to Date
Commercial real estate		$	1,331,860			$	1,289,968			$	1,210,580			$	1,170,372			$	1,135,857				13	%			20	%
Commercial and industrial			360,304				346,394				340,129				331,091				327,729				16				12
Paycheck Protection Program (PPP)			170				1,126				6,669				24,227				65,918				*				*
Total commercial loans			1,692,334				1,637,488				1,557,378				1,525,690				1,529,504				13				17
Total commercial loans, excluding PPP			1,692,164				1,636,362				1,550,709				1,501,463				1,463,586				14				18
Residential real estate			876,644				868,382				821,004				849,692				822,774				4				14
Consumer			100,816				96,876				98,949				100,933				103,589				16				4
Tax exempt and other			57,480				51,816				54,579				57,839				59,693				44				11
Total loans		$	2,727,274			$	2,654,562			$	2,531,910			$	2,534,154			$	2,515,560				11	%			15	%

DEPOSIT ANALYSIS

																						Annualized
																						Growth %
(in thousands)		Jun 30, 2022				Mar 31, 2022				Dec 31, 2021				Sep 30, 2021				Jun 30, 2021				Quarter to Date				Year to Date
Demand		$	670,268			$	653,471			$	664,420			$	664,395			$	599,598				10	%			2	%
NOW			883,239				918,768				940,631				888,021				802,681				(15	)			(12	)
Savings			663,676				658,834				628,670				605,977				578,361				3				11
Money market			499,456				424,750				389,291				379,651				371,075				70				57
Total non-maturity deposits			2,716,639				2,655,823				2,623,012				2,538,044				2,351,715				9				7
Total time deposits			361,906				391,940				425,532				469,221				470,758				(31	)			(30	)
Total deposits		$	3,078,545			$	3,047,763			$	3,048,544			$	3,007,265			$	2,822,473				4	%			2	%

*Indicates ratios of 100% or greater.

BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

		Three Months Ended								Six Months Ended
		June 30,								June 30,
(in thousands, except per share data)		2022				2021				2022				2021
Interest and dividend income
Loans		$	24,581			$	23,191			$	47,252			$	47,396
Securities and other			4,207				3,992				8,033				7,971
Total interest and dividend income			28,788				27,183				55,285				55,367
Interest expense
Deposits			1,195				2,603				2,384				5,554
Borrowings			1,074				1,826				2,084				3,637
Total interest expense			2,269				4,429				4,468				9,191
Net interest income			26,519				22,754				50,817				46,176
Provision for credit losses			534				(765	)			911				(1,254	)
Net interest income after provision for credit losses			25,985				23,519				49,906				47,430
Non-interest income
Trust and investment management fee income			3,829				3,801				7,583				7,467
Customer service fees			3,656				3,257				7,272				6,227
Gain on sales of securities, net			-				50				9				50
Mortgage banking income			488				1,553				1,112				4,123
Bank-owned life insurance income			504				498				1,005				1,016
Customer derivative income			137				86				155				496
Other income			347				260				1,134				374
Total non-interest income			8,961				9,505				18,270				19,753
Non-interest expense
Salaries and employee benefits			11,368				11,356				23,515				23,532
Occupancy and equipment			4,373				3,894				8,796				8,222
Loss (gain) on sales of premises and equipment, net			10				1				(65	)			9
Outside services			410				533				750				965
Professional services			528				151				701				709
Communication			188				198				413				519
Marketing			369				534				632				824
Amortization of intangible assets			233				233				466				474
Loss on debt extinguishment			-				-				-				-
Acquisition, conversion and other expenses			-				552				325				1,441
Other expenses			4,221				4,272				8,053				7,520
Total non-interest expense			21,700				21,724				43,586				44,215
Income before income taxes			13,246				11,300				24,590				22,968
Income tax expense			2,743				2,275				4,975				4,463
Net income		$	10,503			$	9,025			$	19,615			$	18,505
Earnings per share:
Basic		$	0.70			$	0.60			$	1.31			$	1.24
Diluted			0.70				0.60				1.30				1.23
Weighted average shares outstanding:
Basic			15,018				14,965				15,014				14,950
Diluted			15,077				15,042				15,094				15,026

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

		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
(in thousands, except per share data)		2022				2022				2021				2021				2021
Interest and dividend income
Loans		$	24,581			$	22,671			$	22,746			$	25,094			$	23,191
Securities and other			4,207				3,826				3,776				3,821				3,992
Total interest and dividend income			28,788				26,497				26,522				28,915				27,183
Interest expense
Deposits			1,195				1,189				1,434				1,555				2,603
Borrowings			1,074				1,010				1,273				1,778				1,826
Total interest expense			2,269				2,199				2,707				3,333				4,429
Net interest income			26,519				24,298				23,815				25,582				22,754
Provision for credit losses			534				377				126				(174	)			(765	)
Net interest income after provision for credit losses			25,985				23,921				23,689				25,756				23,519
Non-interest income
Trust and investment management fee income			3,829				3,754				3,844				3,868				3,801
Customer service fees			3,656				3,616				3,470				3,515				3,257
Gain on sales of securities, net			-				9				890				1,930				50
Mortgage banking income			488				624				1,563				850				1,553
Bank-owned life insurance income			504				501				669				494				498
Customer derivative income			137				18				173				341				86
Other income			347				787				549				352				260
Total non-interest income			8,961				9,309				11,158				11,350				9,505
Non-interest expense
Salaries and employee benefits			11,368				12,147				11,842				11,743				11,356
Occupancy and equipment			4,373				4,423				4,105				4,029				3,894
Loss (gain) on sales of premises and equipment, net			10				(75	)			515				(146	)			1
Outside services			410				340				431				547				533
Professional services			528				173				556				491				151
Communication			188				225				205				188				198
Marketing			369				263				378				339				534
Amortization of intangible assets			233				233				233				233				233
Loss on debt extinguishment			-				-				1,083				1,768				-
Acquisition, conversion and other expenses			-				325				(92	)			318				552
Other expenses			4,221				3,832				3,665				3,862				4,272
Total non-interest expense			21,700				21,886				22,921				23,372				21,724
Income before income taxes			13,246				11,344				11,926				13,734				11,300
Income tax expense			2,743				2,232				2,160				2,706				2,275
Net income		$	10,503			$	9,112			$	9,766			$	11,028			$	9,025
Earnings per share:
Basic		$	0.70			$	0.61			$	0.65			$	0.74			$	0.60
Diluted			0.70				0.60				0.65				0.73				0.60
Weighted average shares outstanding:
Basic			15,018				15,011				14,993				14,983				14,965
Diluted			15,077				15,102				15,075				15,051				15,042

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

		Quarters Ended
		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
		2022				2022				2021				2021				2021
Earning assets
Interest-earning deposits with other banks			0.80	%			0.16	%			0.16	%			0.15	%			0.09	%
Securities available for sale and FHLB stock			2.69				2.55				2.66				2.59				2.66
Loans:
Commercial real estate			3.82				3.50				3.40				3.53				3.54
Commercial and industrial			3.67				3.46				3.23				3.79				3.60
Paycheck protection program			13.99				26.49				26.25				23.28				5.56
Residential real estate			3.55				3.55				3.61				3.64				3.80
Consumer			3.82				3.51				3.49				3.78				3.44
Total loans			3.71				3.54				3.58				3.98				3.70
Total earning assets			3.46	%			3.21	%			3.10	%			3.41	%			3.26	%
Funding liabilities
Deposits:
NOW			0.14	%			0.14	%			0.14	%			0.13	%			0.12	%
Savings			0.08				0.09				0.08				0.08				0.10
Money market			0.19				0.12				0.12				0.12				0.12
Time deposits			0.58				0.62				0.77				0.88				1.37
Total interest-bearing deposits			0.20				0.20				0.24				0.27				0.45
Borrowings			2.41				2.29				2.17				2.11				2.12
Total interest-bearing liabilities			0.36	%			0.35	%			0.41	%			0.50	%			0.66	%
Net interest spread			3.10				2.86				2.69				2.91				2.60
Net interest margin			3.19				2.95				2.79				3.02				2.74
Core net interest margin (1)			3.19				2.93				2.69				2.75				2.67

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

BAR HARBOR BANKSHARES
AVERAGE BALANCES - UNAUDITED

		Quarters Ended
		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
(in thousands)		2022				2022				2021				2021				2021
Assets
Interest-earning deposits with other banks (1)		$	63,317			$	140,383			$	325,260			$	284,429			$	228,825
Securities available for sale and FHLB stock (2)			637,881				629,811				578,323				610,381				635,978
Loans:
Commercial real estate			1,296,162				1,264,798				1,189,803				1,153,813				1,122,831
Commercial and industrial			412,518				393,759				386,156				391,191				378,634
Paycheck protection program			788				2,999				14,824				45,835				76,701
Residential real estate			863,172				856,252				844,872				824,686				850,119
Consumer			98,588				97,594				100,723				101,545				104,851
Total loans (3)			2,671,228				2,615,402				2,536,378				2,517,070				2,533,136
Total earning assets			3,372,426				3,385,596				3,439,961				3,411,880				3,397,939
Cash and due from banks			35,051				32,742				37,818				38,750				21,414
Allowance for credit losses			(23,228	)			(23,256	)			(22,525	)			(22,607	)			(23,419	)
Goodwill and other intangible assets			126,090				126,090				126,324				126,556				126,789
Other assets			174,880				190,846				200,097				209,509				223,362
Total assets		$	3,685,219			$	3,712,018			$	3,781,675			$	3,764,088			$	3,746,085
Liabilities and shareholders' equity
Deposits:
NOW		$	893,239			$	930,556			$	913,326			$	860,206			$	781,836
Savings			657,047				640,672				620,599				591,440				568,193
Money market			457,088				414,130				395,341				381,755				368,826
Time deposits			375,782				406,730				450,559				471,934				619,454
Total interest-bearing deposits			2,383,156				2,392,088				2,379,825				2,305,335				2,338,309
Borrowings			178,519				178,958				232,492				334,097				345,896
Total interest-bearing liabilities			2,561,675				2,571,046				2,612,317				2,639,432				2,684,205
Non-interest-bearing demand deposits			661,412				660,717				684,895				641,769				591,982
Other liabilities			63,912				64,619				61,480				61,436				57,227
Total liabilities			3,286,999				3,296,382				3,358,692				3,342,637				3,333,414
Total shareholders' equity			398,220				415,636				422,983				421,451				412,671
Total liabilities and shareholders' equity		$	3,685,219			$	3,712,018			$	3,781,675			$	3,764,088			$	3,746,085

(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
		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
(in thousands)		2022				2022				2021				2021				2021
NON-PERFORMING ASSETS
Non-accruing loans:
Commercial real estate		$	1,483			$	1,633			$	2,890			$	3,646			$	4,367
Commercial installment			632				905				1,056				1,163				1,370
Residential real estate			4,882				5,612				5,192				6,311				6,788
Consumer installment			881				1,063				1,053				1,087				1,054
Total non-accruing loans			7,878				9,213				10,191				12,207				13,579
Other real estate owned			-				-				-				-				-
Total non-performing assets		$	7,878			$	9,213			$	10,191			$	12,207			$	13,579
Total non-accruing loans/total loans			0.29	%			0.35	%			0.40	%			0.48	%			0.54	%
Total non-performing assets/total assets			0.21				0.25				0.27				0.33				0.37
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period		$	23,190			$	22,718			$	22,448			$	22,815			$	23,653
Charged-off loans			(62	)			(83	)			(154	)			(286	)			(239	)
Recoveries on charged-off loans			94				178				298				93				166
Net loans charged-off			32				95				144				(193	)			(73	)
Provision for credit losses			534				377				126				(174	)			(765	)
Balance at end of period		$	23,756			$	23,190			$	22,718			$	22,448			$	22,815
Allowance for credit losses/total loans			0.87	%			0.87	%			0.90	%			0.89	%			0.91	%
Allowance for credit losses/non-accruing loans			300				252				223				184				168
NET LOAN (CHARGE-OFFS) RECOVERIES
Commercial real estate		$	59			$	54			$	216			$	(69	)		$	(105	)
Commercial installment			12				25				53				(24	)			(7	)
Residential real estate			6				76				8				13				88
Consumer installment			(45	)			(60	)			(133	)			(113	)			(49	)
Total, net		$	32			$	95			$	144			$	(193	)		$	(73	)
Net (recoveries) charge-offs (QTD annualized)/average loans			-	%			(0.01	)%			(0.02	)%			0.03	%			0.01	%
Net (recoveries) charge-offs (YTD annualized)/average loans			(0.01	)			(0.01	)			0.01				0.02				0.02
DELINQUENT AND NON-ACCRUING LOANS/ TOTAL LOANS
30-89 Days delinquent			0.09	%			0.22	%			0.31	%			0.09	%			0.13	%
90+ Days delinquent and still accruing			0.03				0.03				0.01				0.02				0.02
Total accruing delinquent loans			0.12				0.25				0.32				0.12				0.15
Non-accruing loans			0.29				0.35				0.40				0.48				0.54
Total delinquent and non-accruing loans			0.41	%			0.60	%			0.72	%			0.60	%			0.69	%

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

				At or for the Quarters Ended
				Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
(in thousands)				2022				2022				2021				2021				2021
Net income				$	10,503			$	9,112			$	9,766			$	11,028			$	9,025
Non-core items:
Gain on sale of securities, net					-				(9	)			(890	)			(1,930	)			(50	)
Loss (gain) on sale of premises and equipment, net					10				(75	)			515				(146	)			1
Loss on debt extinguishment					-				-				1,083				1,768				-
Acquisition, conversion and other expenses					-				325				(92	)			318				552
Income tax expense (1)					(2	)			(56	)			(144	)			(2	)			(119	)
Total non-core items					8				185				472				8				384
Core earnings (2)	(A)			$	10,511			$	9,297			$	10,238			$	11,036			$	9,409
Net interest income	(B)			$	26,519			$	24,298			$	23,815			$	25,582			$	22,754
Non-interest income					8,961				9,309				11,158				11,350				9,505
Total Revenue					35,480				33,607				34,973				36,932				32,259
Gain on sale of securities, net					-				(9	)			(890	)			(1,930	)			(50	)
Total core revenue (2)	(C)			$	35,480			$	33,598			$	34,083			$	35,002			$	32,209
Total non-interest expense					21,700				21,886				22,921				23,372				21,724
Non-core expenses:
(Loss) gain on sale of premises and equipment, net					(10	)			75				(515	)			146				(1	)
Loss on debt extinguishment					-				-				(1,083	)			(1,768	)			-
Acquisition, conversion and other expenses					-				(325	)			92				(318	)			(552	)
Total non-core expenses					(10	)			(250	)			(1,506	)			(1,940	)			(553	)
Core non-interest expense (2)	(D)			$	21,690			$	21,636			$	21,415			$	21,432			$	21,171
Total revenue					35,480				33,607				34,973				36,932				32,259
Total non-interest expense					21,700				21,886				22,921				23,372				21,724
Pre-tax, pre-provision net revenue				$	13,780			$	11,721			$	12,052			$	13,560			$	10,535
Core revenue (2)					35,480				33,598				34,083				35,002				32,209
Core non-interest expense (2)					21,690				21,636				21,415				21,432				21,171
Core pre-tax, pre-provision net revenue (2)	(U)			$	13,790			$	11,962			$	12,668			$	13,570			$	11,038
(in millions)
Average earning assets	(E)			$	3,372			$	3,386			$	3,440			$	3,412			$	3,398
Average paycheck protection program (PPP) loans	(R)				1				3				15				46				77
Average earning assets, excluding PPP loans	(S)				3,371				3,383				3,425				3,366				3,321
Average assets	(F)				3,685				3,712				3,764				3,764				3,746
Average shareholders' equity	(G)				398				416				423				421				413
Average tangible shareholders' equity (2) (3)	(H)				272				290				297				295				286
Tangible shareholders' equity, period-end (2) (3)	(I)				268				281				298				292				287
Tangible assets, period-end (2) (3)	(J)				3,587				3,566				3,583				3,612				3,512

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

				At or for the Quarters Ended
				Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
(in thousands)				2022				2022				2021				2021				2021
Common shares outstanding, period-end	(K)				15,018				15,013				15,001				14,987				14,972
Average diluted shares outstanding	(L)				15,077				15,102				15,075				15,051				15,042
Core earnings per share, diluted (2)	(A/L)			$	0.70			$	0.62			$	0.68			$	0.73			$	0.63
Tangible book value per share, period-end (2)	(I/K)				17.83				18.72				19.86				19.48				19.17
Securities adjustment, net of tax (1) (4)	(M)				(38,304	)			(20,225	)			1,985				4,398				7,237
Tangible book value per share, excluding securities adjustment (2) (4)	(I+M)/K				20.38				20.07				19.73				19.19				18.69
Tangible shareholders' equity/total tangible assets (2)	(I/J)				7.47				7.88				8.32				8.08				8.17
Performance ratios (5)
GAAP return on assets					1.14	%			1.00	%			1.02	%			1.16	%			0.97	%
Core return on assets (2)	(A/F)				1.14				1.02				1.07				1.16				1.01
Pre-tax, pre-provision return on assets					1.50				1.28				1.26				1.43				1.13
Core pre-tax, pre-provision return on assets (2)	(U/F)				1.50				1.31				1.33				1.43				1.18
GAAP return on equity					10.58				8.89				9.16				10.38				8.77
Core return on equity (2)	(A/G)				10.59				9.07				9.60				10.39				9.14
Return on tangible equity					15.74				13.01				13.30				15.08				12.91
Core return on tangible equity (1) (2)	(A+Q)/H				15.76				13.27				13.93				15.09				13.45
Efficiency ratio (2) (6)	(D-O-Q)/(C+N)				59.25				62.40				60.74				59.18				63.45
Net interest margin	(B+P)/E				3.19				2.95				2.79				3.02				2.74
Core net interest margin (2) (7)	(B+P-T)/S				3.19				2.93				2.69				2.75				2.67
Supplementary data (in thousands)
Taxable equivalent adjustment for efficiency ratio	(N)			$	491			$	476			$	573			$	576			$	586
Franchise taxes included in non-interest expense	(O)				144				141				132				143				128
Tax equivalent adjustment for net interest margin	(P)				334				320				369				421				430
Intangible amortization	(Q)				233				233				233				233				233
Interest and fees on PPP loans	(T)				27				196				981				2,690				1,064

(1) Assumes a marginal tax rate of 23.41% for the first and second 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

View source version on accesswire.com:
https://www.accesswire.com/709307/Bar-Harbor-Bankshares-Reports-Second-Quarter-Results-Declares-Dividend

FAQ

What were Bar Harbor Bankshares' earnings for Q2 2022?

Bar Harbor Bankshares reported a net income of $10.5 million, or $0.70 per diluted share for Q2 2022.

What is the dividend declared by Bar Harbor Bankshares?

A cash dividend of $0.26 per share was declared, payable on September 16, 2022.

How did Bar Harbor Bankshares perform in terms of loan growth?

The company reported an 11% annualized loan growth in the second quarter.

What is the current net interest margin for Bar Harbor Bankshares?

The net interest margin for Q2 2022 was 3.19%.

What stock repurchase plan has Bar Harbor Bankshares implemented?

The Board authorized a stock repurchase plan for up to 5% of its common shares.