Bar Harbor Bankshares Reports Third Quarter Results; Declares Dividend

Rhea-AI Summary

Bar Harbor Bankshares (NYSE American: BHB) reported a significant increase in net income for Q3 2021, reaching $11 million or $0.73 per diluted share, up from $8.4 million or $0.56 per share in Q3 2020. Core earnings also rose to $11 million, reflecting a 20% growth year-over-year. Highlights include a 10% annualized growth in commercial loans and 32% in core deposits. The bank declared a cash dividend of $0.24 per share, payable on December 17, 2021, yielding 3.42%. Total assets reached $3.7 billion, with improving credit quality metrics, indicating strong financial health and operational resilience.

Positive

• Net income increased to $11.0 million, up from $8.4 million YoY.
• Core earnings per share rose by 20% to $0.73.
• 10% annualized growth in commercial loans, excluding PPP loans.
• 32% annualized core deposit growth, adding over 800 new accounts.
• Declared cash dividend of $0.24 per share, yielding 3.42%.

Negative

• Total non-interest expense rose to $23.4 million from $22.4 million YoY.

BAR HARBOR, ME / ACCESSWIRE / October 21, 2021 / Bar Harbor Bankshares (NYSE American:BHB) reported third quarter 2021 net income of $11.0 million or $0.73 per diluted share, up from $8.4 million or $0.56 per diluted share in the same quarter of 2020. Core earnings (non-GAAP) were also $11.0 million or $0.73 per diluted share in the third quarter of 2021, compared to $9.2 million, or $0.61 per share for the same period of 2020.

THIRD QUARTER HIGHLIGHTS (ratios compared to the third quarter 2020)

• 1.16% return on assets, for both GAAP and non-GAAP measures
• 10% annualized commercial loan growth, excluding Paycheck Protection Program (PPP) loans
• 32% annualized core deposit growth
• 3.02% net interest margin (NIM) compared to 2.90%
• 15% increase in fee income, excluding mortgage banking income and security gains
• Bar Harbor Bank & Trust named as America's Best Bank in Maine by Newsweek Magazine

President and Chief Executive Officer, Curtis C. Simard stated, "Core earnings per share (non-GAAP) in the third quarter 2021 grew 20% over the same quarter of 2020. Our core return on assets in the third quarter was 1.16% compared to 0.96% in the third quarter of 2020, evidencing continued execution of our strategies that balance growth with earnings. This is indicative of the strength in our core businesses and the results of the strategic initiatives we have been undertaking. The momentum we've seen in each area affords us flexibility with diverse revenue streams to support our operations, even in uncertain economic environments."

"While fee income and efficiency improvements contributed to greater core profitability, the quarterly results also benefited from a 13 basis point expansion in the margin to 2.99% compared with 2.86% in the second quarter 2021 on a normalized basis (excluding PPP and excess cash effects). This improvement is a direct result of increased core funding as we gain market share and reduce our reliance on wholesale borrowings. As of September 30, 2021, our wholesale borrowings as a percentage of funding was 9%, down from 23% in the prior year."

Mr. Simard stated, "Our commercial teams continue to deliver strong commercial loan growth despite the competitive landscape in our footprint. The majority of the commercial real estate loan growth this quarter came from new multi-family residential and light industrial & manufacturing relationships with proven operators. Risk management remains at the forefront of all that we do. We saw yields bottoming out on residential loans this quarter and were able to increase contractual rates at times. Given the overall interest rate risk position of our balance sheet and this recent rate increase, we strategically directed more of our residential mortgage production on balance sheet versus selling it in the secondary market."

"We also executed another delever and security remix strategy during the third quarter, prepaying $89 million of FHLB borrowings and selling $44 million of credit sensitive municipal and corporate bonds. The additional purchase of securities was completed subsequent to quarter end, earlier in October. This transaction is expected to expand the NIM by 12 basis points and will be accretive to earnings by $0.02 on a quarterly basis."

Mr. Simard commented, "We continue to build long term shareholder value while providing a favorable dividend rate relative to community banking. The Company's return on equity for the third quarter rose to 10.38% from 8.25% in the same quarter of 2020. A clear path to equity preservation is strong credit quality. We remain committed to our underwriting standards evidenced by further improvement in past-due accounts, non-accruals and a near zero net-charge-off ratio."

Mr. Simard concluded, "While our financial results for the quarter and our overall performance thus far in the year speak to the soundness of our strategy, we are thrilled to be named by Newsweek Magazine as one of "America's Best Banks." Best Bank winners were selected from over 2,500 financial institutions and assessed on more than 30 separate factors including the overall health of the bank, customer service performance and features, digital and branch presence, account and loan options, interest rate offerings, and fees.This award acknowledges that our strategy is resonating with customers. I am proud of our employees and congratulate them on earning this great award."

DIVIDEND DECLARED

The Board of Directors voted to declare a cash dividend of $0.24 per share to shareholders of record at the close of business on November 17, 2021, payable on December 17, 2021. This dividend equates to a 3.42% annualized yield based on the $28.05 closing price of the Company's common stock at the end of the third quarter of 2021.

FINANCIAL CONDITION

Total assets were $3.7 billion at the end of the third quarter. Bar Harbor Bankshares (the "Company") executed a balance sheet delever and security remix strategy where $89.0 million of Federal Home Loan Bank advances were prepaid and $43.5 million of securities were sold to reduce credit risk exposure while generating gains. The replenishment of those securities is expected to be fulfilled early in the fourth quarter 2021.

Loans were $2.5 billion at the end of the third quarter reflecting growth of $18.6 million or 3% on an annualized basis. Excluding PPP loans, commercial loans increased $38.0 million led by two new relationships totaling $21.2 million as well as the deepening of existing commercial relationships. PPP loan balances totaled $24.2 million at quarter-end, consisting of $24.1 million of 2021 originations and $145 thousand from 2020. Unearned deferred fees on PPP loans totaled $1.2 million at the end of the quarter and are expected to be mostly recognized by year-end 2021. COVID loan modifications totaled $4.7 million, down from $19.0 million at the end of the second quarter 2021. Total residential loans increased $26.9 million from the end of the second quarter 2021, which primarily included $39.0 million of originations that were strategically put on the balance sheet when rates were higher in the quarter.

The allowance for credit losses was $22.4 million for the third quarter. As economic forecasts continue to improve the Company maintains its disciplined approach to credit quality with an allowance to total loans coverage ratio of 0.89%. Net charge-offs totaled $193 thousand, or 0.03% of the total loan portfolio, and non-accruing loans decreased to $12.2 million from $13.6 million at the end of the second quarter 2021. The ratio of accruing past due loans to total loans improved to 0.12% of total loans from 0.15% at the end of the second quarter 2021 and 0.58% at year-end 2020.

Total deposits increased $184.8 million to $3.0 billion during the quarter, due to significant core deposit growth. Core deposits grew $186.3 million, or 32% on an annualized basis, during the quarter as over 800 new customer accounts were opened. As a result the loan to deposit ratio improved to 84% from 89% at the end of the second quarter 2021. Time deposits decreased $1.5 million during the quarter as customers continue to move funds to transactional accounts upon contractual maturity.

The Company's book value per share was $27.92 at September 30, 2021, compared with $27.64 at the end of the second quarter 2021. Tangible book value per share (non-GAAP measure) was $19.48 at the end of the third quarter 2021, compared to $19.17 at the end of the second quarter 2021, an annualized growth rate of 6%. Other comprehensive income included unrealized gains on securities totaling $4.4 million in the third quarter 2021 compared to $7.2 million at the end of the second quarter 2021.

RESULTS OF OPERATIONS

Net income in the third quarter 2021 was $11.0 million, or $0.73 per share, compared to $8.4 million, or $0.56 per share, in the same quarter of 2020. Net income improved on higher fee income and fees from PPP loans in the quarter. PPP loan fees contributed $0.13 to earnings per share in the third quarter of 2021 and $0.06 in the same period of 2020. Core earnings (non-GAAP) totaled $11.0 million or $0.73 per share, compared to $9.2 million, or $0.61 per share, in the same quarter of 2020. Non-core items (non-GAAP) netted to an insignificant amount in the third quarter 2021 and reduced net income by $781 thousand in the same period of 2020.

Net interest margin was 3.02% compared to 2.90% in the same period of 2020. Acceleration of PPP loan fee amortization due to forgiveness contributed 28 basis points to NIM in the third quarter 2021 and 1 basis point in the same period of 2020. Interest-bearing cash balances, held mostly at the Federal Reserve Bank, reduced NIM by 26 basis points in the quarter and 8 basis points in the third quarter 2020. The yield on earning assets totaled 3.41% compared to 3.57% in the third quarter 2020. Excluding the impact of PPP and excess cash, the yield on earning assets totaled 3.42% and 3.67% for the same periods. The yield on loans was 3.98% in the third quarter 2021, 3.70% in the second quarter 2021 and 3.81% in the third quarter of 2020. Excluding PPP loans the yield on loans was 3.62% in the third quarter of 2021, 3.64% in the second quarter of 2021 and 3.83% in the third quarter 2020. Costs of funds decreased to 0.50% from 0.82% in the third quarter 2020 due to lower deposit rates and reduced wholesale borrowings.

The provision for credit losses for the quarter was a benefit of $174 thousand, compared to an expense of $1.8 million in the third quarter of 2020. The provision recapture in the third quarter 2021 is attributable to continued strong credit quality and improving economic forecasts.

Non-interest income in the third quarter 2021 was $11.4 million, compared to $10.1 million in the same quarter of 2020. The increase was due to higher customer service fees, wealth management income, and a gain on securities sales. Customer service fees were $3.5 million in the third quarter compared to $2.9 million in the same period of 2020. The increase is due to over 800 new accounts that were opened during the quarter and a higher volume of customer activity and transactions. Wealth management income increased 10% over the same quarter of 2020 to $3.9 million with assets under management of $2.4 billion compared to $2.1 billion in the same period of 2020. The Company sold securities resulting in a $1.9 million gain as part of the aforementioned remix strategy. Mortgage banking activities contributed $850 thousand, compared to $2.6 million in the same period of 2020. The Company took advantage of volatility in the yield curve in the third quarter and put residential mortgages on the balance sheet when rates were higher and sold loans in the secondary market when rates were low.

Non-interest expense was $23.4 million in the third quarter 2021 from $22.4 million in the same quarter of 2020. Salaries and benefits expense decreased to $11.7 million compared to $11.8 million in the same quarter of 2020, reflecting full-time equivalents of 428 compared to 457 in the third quarter of 2020. Non-core expenses (non-GAAP) in the third quarter 2021 totaled $1.9 million and were mostly made up of the $1.8 million prepayment penalty on debt extinguishment. In the same quarter of 2020 non-core expenses (non-GAAP) totaled $1.0 million and included costs to consolidate our wealth management systems. The efficiency ratio for the third quarter was 59.18% compared to 59.47% in the same period of 2020. Excluding the effects of PPP the efficiency ratio was 63.35% and 61.30% for the same respective periods.

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 headings "THIRD QUARTER HIGHLIGHTS", "FINANCIAL CONDITION" 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, 2020 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	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
		Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,
		2021				2021				2021				2020				2020
PER SHARE DATA
Net earnings, diluted		$	0.73			$	0.60			$	0.63			$	0.58			$	0.56
Core earnings, diluted (1)			0.73				0.63				0.68				0.62				0.61
Total book value (6)			27.92				27.64				27.10				27.29				26.74
Tangible book value (1) (6)			19.48				19.17				18.61				18.77				18.21
Market price at period end			28.05				28.62				29.42				22.59				20.55
Dividends			0.24				0.24				0.22				0.22				0.22
PERFORMANCE RATIOS (2)
Return on assets			1.16	%			0.97	%			1.03	%			0.92	%			0.88	%
Core return on assets (1)			1.16				1.01				1.11				0.98				0.96
Pre-tax, pre-provision return on assets			1.43				1.13				1.22				1.30				1.29
Core pre-tax, pre-provision return on assets (1)			1.43				1.18				1.32				1.38				1.39
Return on equity (6)			10.38				8.77				9.45				8.42				8.25
Core return on equity (1) (6)			10.39				9.14				10.14				8.99				9.02
Return on tangible equity (6)			15.08				12.91				14.01				12.52				12.32
Core return on tangible equity (1) (6)			15.09				13.45				15.01				13.33				13.44
Net interest margin, fully taxable equivalent (FTE) (1) (3)			3.02				2.74				2.88				3.02				2.90
Core net interest margin (1) (4)			2.75				2.67				2.78				2.79				2.89
Efficiency ratio (1)			59.18				63.45				61.95				61.98				59.47
FINANCIAL DATA (In millions)
Total assets (6)		$	3,738			$	3,639			$	3,730			$	3,724			$	3,861
Total earning assets (5)			3,394				3,282				3,381				3,371				3,505
Total investments			556				636				641				599				619
Total loans			2,534				2,516				2,551				2,563				2,685
Allowance for credit losses			22				23				24				19				18
Total goodwill and intangible assets			126				127				127				127				127
Total deposits			3,007				2,822				2,912				2,906				2,935
Total shareholders' equity (6)			418				414				405				407				399
Net income			11				9				9				9				8
Core earnings (1)			11				9				10				9				9
ASSET QUALITY AND CONDITION RATIOS
Net charge-offs (current quarter annualized)/average loans			0.03	%			0.01	%			0.03	%			0.03	%			0.06	%
Allowance for credit losses/total loans			0.89				0.91				0.93				0.74				0.67
Loans/deposits			84				89				88				88				91
Shareholders' equity to total assets (6)			11.19				11.37				10.86				10.93				10.34
Tangible shareholders' equity to tangible assets (6)			8.08				8.17				7.72				7.78				7.27

1. Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in table I 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.
6. Prior quarters have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

BAR HARBOR BANKSHARES
CONSOLIDATED BALANCE SHEETS - UNAUDITED

		Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,
(in thousands)		2021				2021				2021				2020				2020
Assets
Cash and due from banks		$	39,081			$	41,440			$	39,039			$	27,566			$	22,722
Interest-bearing deposits with other banks			302,118				132,278				184,473				198,441				192,935
Total cash and cash equivalents			341,199				173,718				223,512				226,007				215,657
Securities available for sale			545,327				621,849				626,403				585,046				604,529
Federal Home Loan Bank stock			10,192				14,145				14,826				14,036				13,975
Total securities			555,519				635,994				641,229				599,082				618,504
Loans held for sale			7,505				7,942				10,148				23,988				23,721
Total loans			2,534,154				2,515,560				2,551,064				2,562,885				2,684,970
Less: Allowance for credit losses			(22,448	)			(22,815	)			(23,653	)			(19,082	)			(17,907	)
Net loans			2,511,706				2,492,745				2,527,411				2,543,803				2,667,063
Premises and equipment, net			50,070				51,119				52,253				52,458				51,424
Other real estate owned			-				-				-				-				1,983
Goodwill			119,477				119,477				119,477				119,477				119,477
Other intangible assets			6,966				7,198				7,431				7,670				7,913
Cash surrender value of bank-owned life insurance			79,380				78,886				78,388				77,870				77,388
Deferred tax asset, net (1)			5,811				4,902				5,761				3,047				3,797
Other assets (1)			60,712				67,064				64,479				70,873				74,400
Total assets (1)		$	3,738,345			$	3,639,045			$	3,730,089			$	3,724,275			$	3,861,327
Liabilities and shareholders' equity
Demand and other non-interest bearing deposits		$	664,395			$	599,598			$	586,487			$	544,636			$	515,064
NOW deposits			888,021				802,681				761,817				738,849				706,048
Savings deposits			605,977				578,361				560,095				521,638				511,938
Money market deposits			379,651				371,075				365,507				402,731				388,356
Time deposits			469,221				470,758				638,436				698,361				813,509
Total deposits			3,007,265				2,822,473				2,912,342				2,906,215				2,934,915
Senior borrowings			190,267				279,991				292,210				276,062				385,472
Subordinated borrowings			60,083				60,042				60,003				59,961				59,920
Total borrowings			250,350				340,033				352,213				336,023				445,392
Other liabilities (1)			62,295				62,779				60,354				74,972				81,849
Total liabilities (1)			3,319,910				3,225,285				3,324,909				3,317,210				3,462,156
Total shareholders' equity (1)			418,435				413,760				405,180				407,065				399,171
Total liabilities and shareholders' equity (1)		$	3,738,345			$	3,639,045			$	3,730,089			$	3,724,275			$	3,861,327
Net shares outstanding			14,987				14,972				14,950				14,916				14,929

1. Prior quarters have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

BAR HARBOR BANKSHARES
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED

LOAN ANALYSIS

																						Annualized
																						Growth %
		Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,				Quarter				Year to
(in thousands)		2021				2021				2021				2020				2020				End				Date
Commercial real estate		$	1,170,372			$	1,135,857			$	1,118,669			$	1,084,381			$	1,045,635				12	%			11	%
Commercial and industrial			331,091				327,729				317,500				323,864				324,647				4				3
Paycheck Protection Program (PPP)			24,227				65,918				77,878				53,774				131,537				*				(74	)
Total commercial loans			1,525,690				1,529,504				1,514,047				1,462,019				1,501,819				(1	)			6
Total commercial loans, excluding PPP			1,501,463				1,463,586				1,436,169				1,408,245				1,370,282				10				9
Residential real estate			849,692				822,774				868,084				923,891				997,485				13				(11	)
Consumer			100,933				103,589				106,835				113,544				119,340				(10	)			(15	)
Tax exempt and other			57,839				59,693				62,098				63,431				66,326				(12	)			(12	)
Total loans		$	2,534,154			$	2,515,560			$	2,551,064			$	2,562,885			$	2,684,970				3	%			(1	)%

DEPOSIT ANALYSIS

																						Annualized
																						Growth %
		Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,				Quarter				Year to
(in thousands)		2021				2021				2021				2020				2020				End				Date
Demand		$	664,395			$	599,598			$	586,487			$	544,636			$	515,064				43	%			29	%
NOW			888,021				802,681				761,817				738,849				706,048				43				27
Savings			605,977				578,361				560,095				521,638				511,938				19				22
Money market			379,651				371,075				365,507				402,731				388,356				9				(8	)
Total non-maturity deposits			2,538,044				2,351,715				2,273,906				2,207,854				2,121,406				32				20
Total time deposits			469,221				470,758				638,436				698,361				813,509				(1	)			(44	)
Total deposits		$	3,007,265			$	2,822,473			$	2,912,342			$	2,906,215			$	2,934,915				26	%			5	%

*Indicates ratios of 100% or greater.

BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in thousands, except per share data)		2021				2020				2021				2020
Interest and dividend income
Loans		$	25,094			$	25,918			$	72,490			$	80,398
Securities and other			3,821				4,557				11,792				15,006
Total interest and dividend income			28,915				30,475				84,282				95,404
Interest expense
Deposits			1,555				3,869				7,109				14,437
Borrowings			1,778				1,941				5,415				7,149
Total interest expense			3,333				5,810				12,524				21,586
Net interest income			25,582				24,665				71,758				73,818
Provision for credit losses			(174	)			1,800				(1,428	)			4,265
Net interest income after provision for credit losses			25,756				22,865				73,186				69,553
Non-interest income
Trust and investment management fee income			3,868				3,532				11,335				10,060
Customer service fees			3,515				2,886				9,742				8,437
Gain on sales of securities, net			1,930				-				1,980				1,486
Mortgage banking income			850				2,649				4,973				4,230
Bank-owned life insurance income			494				492				1,510				1,525
Customer derivative income			341				316				837				1,417
Other income			352				227				726				1,078
Total non-interest income			11,350				10,102				31,103				28,233
Non-interest expense
Salaries and employee benefits			11,743				11,809				35,275				35,602
Occupancy and equipment			4,029				4,279				12,251				12,559
(Gain) loss on sales of premises and equipment, net			(146	)			-				(137	)			90
Outside services			547				438				1,512				1,414
Professional services			491				479				1,200				1,488
Communication			188				215				707				698
Marketing			339				300				1,163				970
Amortization of intangible assets			233				256				707				768
Loss on debt extinguishment			1,768				-				1,768				1,351
Acquisition, conversion and other expenses			318				691				1,759				952
Other expenses			3,862				3,952				11,382				11,152
Total non-interest expense			23,372				22,419				67,587				67,044
Income before income taxes			13,734				10,548				36,702				30,742
Income tax expense			2,706				2,146				7,169				6,138
Net income		$	11,028			$	8,402			$	29,533			$	24,604
Earnings per share:
Basic		$	0.74			$	0.56			$	1.97			$	1.60
Diluted			0.73				0.56				1.96				1.60
Weighted average shares outstanding:
Basic			14,983				15,079				14,961				15,359
Diluted			15,051				15,103				15,035				15,382

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

		Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,
(in thousands, except per share data)		2021				2021				2021				2020				2020
Interest and dividend income
Loans		$	25,094			$	23,191			$	24,205			$	26,687			$	25,918
Securities and other			3,821				3,992				3,979				4,013				4,557
Total interest and dividend income			28,915				27,183				28,184				30,700				30,475
Interest expense
Deposits			1,555				2,603				2,951				3,606				3,869
Borrowings			1,778				1,826				1,811				1,732				1,941
Total interest expense			3,333				4,429				4,762				5,338				5,810
Net interest income			25,582				22,754				23,422				25,362				24,665
Provision for credit losses			(174	)			(765	)			(489	)			1,360				1,800
Net interest income after provision for credit losses			25,756				23,519				23,911				24,002				22,865
Non-interest income
Trust and investment management fee income			3,868				3,801				3,666				3,318				3,532
Customer service fees			3,515				3,257				2,970				2,890				2,886
Gain on sales of securities, net			1,930				50				-				3,959				-
Mortgage banking income			850				1,553				2,570				2,654				2,649
Bank-owned life insurance income			494				498				518				482				492
Customer derivative income			341				86				410				1,086				316
Other income			352				260				114				334				227
Total non-interest income			11,350				9,505				10,248				14,723				10,102
Non-interest expense
Salaries and employee benefits			11,743				11,356				12,176				13,318				11,809
Occupancy and equipment			4,029				3,894				4,328				4,192				4,279
Loss (gain) on sales of premises and equipment, net			(146	)			1				8				(122	)			-
Outside services			547				533				432				571				438
Professional services			491				151				558				572				479
Communication			188				198				321				194				215
Marketing			339				534				290				415				300
Amortization of intangible assets			233				233				241				256				256
Loss on debt extinguishment			1,768				-				-				-				-
Acquisition, conversion and other expenses			318				552				889				4,849				691
Other expenses			3,862				4,272				3,248				3,571				3,952
Total non-interest expense			23,372				21,724				22,491				27,816				22,419
Income before income taxes			13,734				11,300				11,668				10,909				10,548
Income tax expense			2,706				2,275				2,188				2,269				2,146
Net income		$	11,028			$	9,025			$	9,480			$	8,640			$	8,402
Earnings per share:
Basic		$	0.74			$	0.60			$	0.63			$	0.58			$	0.56
Diluted			0.73				0.60				0.63				0.58				0.56
Weighted average shares outstanding:
Basic			14,983				14,965				14,934				14,909				15,079
Diluted			15,051				15,042				15,007				14,952				15,103

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

		Quarters Ended
		Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,
		2021				2021				2021				2020				2020
Earning assets
Interest-bearing deposits with other banks (1)			0.15	%			0.09	%			0.09	%			0.11	%			0.09	%
Securities available for sale and FHLB stock			2.59				2.66				2.79				2.97				3.04
Loans:
Commercial real estate			3.53				3.54				3.68				3.74				3.81
Commercial and industrial			3.79				3.60				3.86				3.92				4.39
Paycheck protection program			23.28				5.56				8.12				11.56				3.18
Residential real estate			3.64				3.80				3.76				3.74				3.71
Consumer			3.78				3.44				3.56				3.65				3.42
Total loans			3.98				3.70				3.85				4.03				3.81
Total earning assets			3.41	%			3.26	%			3.46	%			3.65	%			3.57	%
Funding liabilities
Deposits:
NOW			0.13	%			0.12	%			0.14	%			0.15	%			0.14	%
Savings			0.08				0.10				0.13				0.13				0.13
Money market			0.12				0.12				0.14				0.14				0.16
Time deposits			0.88				1.37				1.44				1.64				1.69
Total interest-bearing deposits			0.27				0.45				0.51				0.61				0.66
Borrowings			2.11				2.12				2.16				1.83				1.60
Total interest-bearing liabilities			0.50	%			0.66	%			0.72	%			0.77	%			0.82	%
Net interest spread			2.91				2.60				2.74				2.88				2.75
Net interest margin (1)			3.02				2.74				2.88				3.02				2.90
Core net interest margin (2)			2.75				2.67				2.78				2.79				2.89

1. Income from interest-bearing deposits with other banks has been separated from securities and restated for prior periods to conform to the current period presentation.
2. Core net interest margin excludes Paycheck Protection Program loans.

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BAR HARBOR BANKSHARES
AVERAGE BALANCES - UNAUDITED

		Quarters Ended
		Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,
(in thousands)		2021				2021				2021				2020				2020
Assets
Interest-bearing deposits with other banks (1)		$	284,429			$	228,825			$	176,728			$	176,747			$	92,066
Securities available for sale and FHLB stock (2)			610,381				635,978				613,459				563,118				627,162
Loans:
Commercial real estate			1,153,813				1,122,831				1,099,937				1,059,574				1,012,194
Commercial and industrial			391,191				378,634				377,176				386,201				399,734
Paycheck protection program			45,835				76,701				65,149				91,109				131,605
Residential real estate			824,686				850,119				916,633				995,173				1,060,084
Consumer			101,545				104,851				109,802				115,876				121,248
Total loans (3)			2,517,070				2,533,136				2,568,697				2,647,933				2,724,865
Total earning assets			3,411,880				3,397,939				3,358,884				3,387,798				3,444,093
Cash and due from banks			38,750				21,414				23,221				22,473				36,521
Allowance for credit losses			(22,607	)			(23,419	)			(24,822	)			(18,690	)			(17,028	)
Goodwill and other intangible assets			126,556				126,789				127,024				127,264				127,508
Other assets (4)			209,509				223,362				232,475				237,414				223,334
Total assets (4)		$	3,764,088			$	3,746,085			$	3,716,782			$	3,756,259			$	3,814,428
Liabilities and shareholders' equity
Deposits:
NOW		$	860,206			$	781,836			$	749,100			$	713,464			$	677,706
Savings			591,440				568,193				541,203				516,266				488,508
Money market			381,755				368,826				378,743				399,543				396,351
Time deposits			471,934				619,454				675,422				734,523				777,424
Total interest-bearing deposits			2,305,335				2,338,309				2,344,468				2,363,796				2,339,989
Borrowings			334,097				345,896				340,209				376,437				481,687
Total interest-bearing liabilities			2,639,432				2,684,205				2,684,677				2,740,233				2,821,676
Non-interest-bearing demand deposits			641,769				591,982				550,657				535,402				507,844
Other liabilities (4)			61,436				57,227				74,778				72,534				79,848
Total liabilities (4)			3,342,637				3,333,414				3,310,112				3,348,169				3,409,368
Total shareholders' equity (4)			421,451				412,671				406,670				408,090				405,060
Total liabilities and shareholders' equity (4)		$	3,764,088			$	3,746,085			$	3,716,782			$	3,756,259			$	3,814,428

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.
4. Prior quarters have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

BAR HARBOR BANKSHARES
ASSET QUALITY ANALYSIS - UNAUDTED

		At or for the Quarters Ended
		Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,
(in thousands)		2021				2021				2021				2020				2020
NON-PERFORMING ASSETS
Non-accruing loans:
Commercial real estate		$	3,646			$	4,367			$	4,664			$	4,251			$	4,714
Commercial installment			1,163				1,370				1,534				1,466				1,820
Residential real estate			6,311				6,788				6,753				5,729				7,154
Consumer installment			1,087				1,054				1,118				742				720
Total non-accruing loans			12,207				13,579				14,069				12,188				14,408
Other real estate owned			-				-				-				-				1,983
Total non-performing assets		$	12,207			$	13,579			$	14,069			$	12,188			$	16,391
Total non-accruing loans/total loans			0.48	%			0.54	%			0.55	%			0.48	%			0.54	%
Total non-performing assets/total assets			0.33				0.37				0.38				0.33				0.42
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period		$	22,815			$	23,653			$	19,082			$	17,907			$	16,509
Impact of CECL adoption			-				-				5,228				-				-
Charged-off loans			(286	)			(239	)			(216	)			(297	)			(439	)
Recoveries on charged-off loans			93				166				48				112				37
Net loans charged-off			(193	)			(73	)			(168	)			(185	)			(402	)
Provision for credit losses			(174	)			(765	)			(489	)			1,360				1,800
Balance at end of period		$	22,448			$	22,815			$	23,653			$	19,082			$	17,907
Allowance for credit losses/total loans			0.89	%			0.91	%			0.93	%			0.74	%			0.66	%
Allowance for credit losses/non-accruing loans			184				168				168				157				124
NET LOAN CHARGE-OFFS
Commercial real estate		$	(69	)		$	(105	)		$	(131	)		$	63			$	(252	)
Commercial installment			(24	)			(7	)			1				(228	)			(10	)
Residential real estate			13				88				(28	)			(21	)			1
Consumer installment			(113	)			(49	)			(10	)			1				(141	)
Total, net		$	(193	)		$	(73	)		$	(168	)		$	(185	)		$	(402	)
Net charge-offs (QTD annualized)/average loans			0.03	%			0.01	%			0.03	%			0.03	%			0.06	%
Net charge-offs (YTD annualized)/average loans			0.02				0.02				0.03				0.07				0.08
DELINQUENT AND NON-ACCRUING LOANS/ TOTAL LOANS
30-89 Days delinquent			0.09	%			0.13	%			0.43	%			0.58	%			0.16	%
90+ Days delinquent and still accruing			0.02				0.02				0.01				-				0.08
Total accruing delinquent loans			0.12				0.15				0.44				0.58				0.24
Non-accruing loans			0.48				0.54				0.55				0.48				0.54
Total delinquent and non-accruing loans			0.60	%			0.69	%			0.99	%			1.06	%			0.78	%

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

			At or for the Quarters Ended
			Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,
(in thousands)			2021				2021				2021				2020				2020
Net income			$	11,028			$	9,025			$	9,480			$	8,640			$	8,402
Non-core items:
(Gain) on sale of securities, net				(1,930	)			(50	)			-				(3,959	)			-
(Gain) loss on sale of premises and equipment, net				(146	)			1				8				(122	)			-
(Gain) loss on other real estate owned				-				-				-				(11	)			335
Loss on debt extinguishment				1,768				-				-				-				-
Acquisition, conversion and other expenses				318				552				889				4,849				691
Income tax expense (1)				(2	)			(119	)			(213	)			(179	)			(245	)
Total non-core items				8				384				684				578				781
Core earnings (2)	(A)		$	11,036			$	9,409			$	10,164			$	9,218			$	9,183
Net interest income	(B)		$	25,582			$	22,754			$	23,422			$	25,362			$	24,665
Non-interest income				11,350				9,505				10,248				14,723				10,102
Total Revenue				36,932				32,259				33,670				40,085				34,767
(Gain) on sale of securities, net				(1,930	)			(50	)			-				(3,959	)			-
Total core revenue (2)	(C)		$	35,002			$	32,209			$	33,670			$	36,126			$	34,767
Total non-interest expense				23,372				21,724				22,491				27,816				22,419
Non-core expenses:
Gain (loss) on sale of premises and equipment, net				146				(1	)			(8	)			122				-
Gain (loss) on other real estate owned				-				-				-				11				(335	)
Loss on debt extinguishment				(1,768	)			-				-				-				-
Acquisition, conversion and other expenses				(318	)			(552	)			(889	)			(4,849	)			(691	)
Total non-core expenses				(1,940	)			(553	)			(897	)			(4,716	)			(1,026	)
Core non-interest expense (2)	(D)		$	21,432			$	21,171			$	21,594			$	23,100			$	21,393
Total revenue				36,932				32,259				33,670				40,085				34,767
Total non-interest expense				23,372				21,724				22,491				27,816				22,419
Pre-tax, pre-provision net revenue			$	13,560			$	10,535			$	11,179			$	12,269			$	12,348
Core revenue (2)				35,002				32,209				33,670				36,126				34,767
Core non-interest expense (2)				21,432				21,171				21,594				23,100				21,393
Core pre-tax, pre-provision net revenue (2)	(U)		$	13,570			$	11,038			$	12,076			$	13,026			$	13,374
(in millions)
Average earning assets	(E)		$	3,412			$	3,398			$	3,359			$	3,388			$	3,444
Average paycheck protection program (PPP) loans	(R)			46				77				65				91				132
Average earning assets, excluding PPP loans	(S)			3,366				3,321				3,294				3,297				3,312
Average assets	(F)			3,764				3,746				3,717				3,756				3,814
Average shareholders' equity (8)	(G)			421				413				407				408				405
Average tangible shareholders' equity (2) (3) (8)	(H)			295				286				280				281				278
Tangible shareholders' equity, period-end (2) (3) (8)	(I)			292				287				278				280				272
Tangible assets, period-end (2) (3) (8)	(J)			3,612				3,512				3,603				3,597				3,734

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

			At or for the Quarters Ended
			Sep 30,				Jun 30,				Mar 31,				Dec 31,				Sep 30,
(in thousands)			2021				2021				2021				2020				2020
Common shares outstanding, period-end	(K)			14,987				14,972				14,950				14,916				14,929
Average diluted shares outstanding	(L)			15,051				15,042				15,007				14,952				15,103
Core earnings per share, diluted (2)	(A/L)		$	0.73			$	0.63			$	0.68			$	0.62			$	0.61
Tangible book value per share, period-end (2) (8)	(I/K)			19.48				19.17				18.61				18.77				18.21
Securities adjustment, net of tax (1) (4)	(M)			4,398				7,237				4,510				10,023				11,681
Tangible book value per share, excluding securities adjustment (2) (4) (8)	(I+M)/K			19.19				18.69				18.31				18.09				17.42
Tangible shareholders' equity/total tangible assets (2) (8)	(I/J)			8.08				8.17				7.72				7.78				7.28
Performance ratios (5)
GAAP return on assets				1.16	%			0.97	%			1.03	%			0.92	%			0.88	%
Core return on assets (2)	(A/F)			1.16				1.01				1.11				0.98				0.96
Pre-tax, pre-provision return on assets				1.43				1.13				1.22				1.30				1.29
Core pre-tax, pre-provision return on assets (2)	(U/F)			1.43				1.18				1.32				1.38				1.39
GAAP return on equity (8)				10.38				8.77				9.45				8.42				8.25
Core return on equity (2) (8)	(A/G)			10.39				9.14				10.14				8.99				9.02
Return on tangible equity (8)				15.08				12.91				14.01				12.52				12.32
Core return on tangible equity (1) (2) (8)	(A+Q)/H			15.09				13.45				15.01				13.33				13.44
Efficiency ratio (2) (6)	(D-O-Q)/(C+N)			59.18				63.45				61.95				61.98				59.47
Net interest margin	(B+P)/E			3.02				2.74				2.88				3.02				2.90
Core net interest margin (2) (7)	(B+P-T)/S			2.75				2.67				2.78				2.79				2.89
Supplementary data (in thousands)
Taxable equivalent adjustment for efficiency ratio	(N)		$	576			$	586			$	595			$	542			$	570
Franchise taxes included in non-interest expense	(O)			143				128				125				117				121
Tax equivalent adjustment for net interest margin	(P)			421				430				433				396				416
Intangible amortization	(Q)			233				233				241				256				256
Interest and fees on PPP loans	(T)			2,690				1,064				1,304				2,648				1,052

1. Assumes a marginal tax rate of 23.71% for 2021 and fourth quarter of 2020 and 23.87% for the first three quarters of 2020.
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.
8. Prior quarters have been revised for derivatives that were incorrectly presented as assets instead of liabilities and related equity effects net of tax.

SOURCE : Bar Harbor Bankshares

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https://www.accesswire.com/669090/Bar-Harbor-Bankshares-Reports-Third-Quarter-Results-Declares-Dividend

FAQ

What were the Q3 2021 earnings for Bar Harbor Bankshares (BHB)?

Bar Harbor Bankshares reported Q3 2021 net income of $11 million, or $0.73 per diluted share.

What is the dividend amount declared by BHB for December 2021?

The declared cash dividend is $0.24 per share, payable on December 17, 2021.

How much did core deposits grow for BHB in Q3 2021?

Core deposits grew by 32% on an annualized basis during Q3 2021.

What was the return on assets for Bar Harbor Bankshares (BHB) in Q3 2021?

The return on assets was reported at 1.16% for Q3 2021.

How does BHB's Q3 2021 net interest margin compare to the previous year?

The net interest margin improved to 3.02% in Q3 2021, up from 2.90% in Q3 2020.