BAR HARBOR, ME / ACCESSWIRE / April 18, 2024 / Bar Harbor Bankshares (NYSE American:BHB) (the "Company") reported first quarter 2024 GAAP and core (Non-GAAP) net income of $10.1 million or $0.66 per diluted share compared to $13.0 million or $0.86 per diluted share in the same quarter of 2023.
FIRST QUARTER 2024 HIGHLIGHTS
• Return on assets of 1.03%
• Commercial loan growth of 7% annualized
• Net interest margin of 3.14%
• Non-accruing loans to total loans ratio of 0.23%
Bar Harbor Bankshares' President and Chief Executive Officer, Curtis C. Simard, stated, "We are pleased to announce our financial results for the first quarter, as we deliver stable earnings which are in line with expectations. We continue to see yield expansion across all earning asset classes. Our liquidity and capital levels remain robust, and our credit metrics are strong with nominal charge-offs. Despite an uncertain economic environment, our performance in the first quarter reflects the strength of our balance sheet and our teams as we execute on our strategy to grow profitably while continuing to conservatively sustain the level of our allowance for credit losses. Our Bar Harbor Wealth Management division combined with our brokerage services crossed a milestone as assets under management grew above $3.0 billion. The Company continues to build long-term shareholder value which has once again enabled us to increase our dividend per share for the seventh straight year by 7% over last year's dividend amount, and approve our annual resolution for a stock buyback program of up to 5% of the total outstanding shares."
DIVIDEND DECLARED AND STOCK REPURCHASE PLAN APPROVED
The Board of Directors of the Company (the "Board") voted to declare a cash dividend of $0.30 per share to shareholders at the close of business on May 16, 2024 payable on June 14, 2024. This dividend equates to a 4.53% annualized yield based on the $26.48 closing share price of the Company's common stock on March 28, 2024, the last trading day of the first quarter 2024. Additionally, the Board authorized the repurchase of up to 5% of the Company's outstanding common stock, representing approximately 761,000 shares as of March 31, 2024 under a share repurchase plan (the "Plan"). The Plan is authorized to last no longer than twelve months.
FINANCIAL CONDITION (March 31, 2024 compared to December 31, 2023)
Total assets were $4.0 billion at the end of both the first quarter of 2024 and the fourth quarter of 2023, primarily due to loan growth offset by lower cash and security balances during the quarter.
Total cash and cash equivalents were $76.2 million, compared to $94.8 million at year-end 2023. Interest-earning cash held with other banks totaled $45.3 million compared to $52.6 million at year-end 2023 and yielded 5.88% and 6.42%, respectively.
Total loans grew 2%, on an annualized basis and remained at $3 billion at the end of both the first quarter 2024 and fourth quarter 2023. Commercial loans grew by $35.1 million or 7% annualized primarily driven by $22.7 million or 6% increase in commercial real estate and $12.4 million or 12% increase in commercial and industrial growth. Residential loans decreased by $16.7 million or 8% compared to the fourth quarter 2023, primarily due to continued lower demand for prevailing mortgage rates and sales into the secondary market. Tax exempt loans decreased by $4.7 million or 31% driven by payoffs within the first quarter of 2024.
Securities decreased to $527.6 million compared to $534.6 million at year-end 2023 driven by $485 thousand in net amortization, and $7.8 million of amortizing securities pay-downs offset by security purchases of $4.8 million. Fair value adjustments decreased the security portfolio by $64.9 million at quarter-end compared to $62.4 million at year-end. The year to date weighted average yield of the securities portfolio was 4.02% compared to 3.85% at year-end primarily due to a run-off of lower coupon fixed-rate securities. As of quarter-end and year-end, our securities portfolio had an average life of nine years with an effective duration of five years and all securities remain classified as available for sale to provide flexibility in asset funding and other opportunities as they arise.
The allowance for credit losses remained flat at $28.4 million at the end of the first quarter 2024 compared to the end of the fourth quarter 2023. Our allowance for credit losses continues to be driven by a combination of portfolio loan growth, nominal credit movement and general macroeconomic trends. Non-accruing loans increased during the first quarter 2024 to $6.9 million from $5.5 million in the fourth quarter 2023, but declined on a year-over-year basis. Charge-offs and specific reserves on non-accruing loans remain nominal, with these non-accruing relationships supported by relatively strong collateral values.
Total deposits remained at $3.1 billion at the end of the first quarter 2024 and the end of fourth quarter 2023. The $58.4 million decrease in interest bearing demand deposits and the $25.2 million decrease in non-interest bearing demand deposits in the first quarter 2024 were offset by an increase in time deposits of $76.9 million primarily due to remix in higher yielding deposit categories as customers are anticipating rates to decrease and are maximizing their own returns. Brokered certificate of deposit accounts ("CDs") increased by $55 million, and senior borrowings remained relatively flat at $269.4 million in the first quarter 2024 compared to $271.0 million at the end of the fourth quarter 2023.
The Company's book value per share was $28.64 as of March 31, 2024 compared to $28.48 as of December 31, 2023. Unrealized losses on securities, net of taxes, reduced book value per share by $3.26 and $3.14 at the end of those respective periods. Tangible book value per share (non-GAAP measure) was $20.48 at the end of the first quarter 2024, compared to $20.28 at the end of the fourth quarter 2023.
RESULTS OF OPERATIONS (March 31, 2024 compared to March 31, 2023)
Net interest margin was 3.14% compared to 3.54% in the first quarter 2023. The decrease was primarily driven by a higher cost of funds offset by rising asset yields in the first quarter of 2024. The yield on loans grew 49 basis points to 5.31% in the first quarter 2024, up from 4.82% in the same quarter of 2023. Costs of interest-bearing liabilities increased to 2.48% from 1.39% in the first quarter 2023 showing evolution of the market pricing amongst interest-bearing demand deposits, money market accounts and time deposits as customers are seeking out more competitive rates. We continue to experience a shift in deposit composition from non-maturity deposits to CDs. Cost of borrowing decreased $944 thousand or 22.5% in the first quarter of 2024 compared to the first quarter of 2023 driven by wholesale borrowings in the first quarter 2024 decreased $68.8 million to $269.4 million from $338.2 million in the same quarter of 2023.
Total interest and dividend income increased by $5.4 million or 13.4% to $45.8 million compared to $40.4 million in the first quarter 2023 primarily driven by the repricing of adjustable loans and originations of higher fixed rate loans within the commercial portfolio. The yield on commercial real estate loans grew 39 basis points to 5.47% at the end of the first quarter 2024 from 5.08% in the first quarter of 2023. Commercial and industrial yield grew 79 basis points to yield 6.68% at the end of the first quarter 2024 compared to 5.89% at the end of the first quarter 2023. Increases in yields were driven by the current rate environment.
The provision for credit losses was $289 thousand compared to $798 thousand in the first quarter of 2023 as net charge-offs to total loans continue to remain nominal. Credit quality continues to be strong as non-accruing loans to total loans declined 3 basis points to 0.23% at the end of the first quarter 2024 compared to 0.26% in the first quarter 2023. Total delinquent and non-accruing loans to total loans declined 15 basis points from 0.52% at the end of the first quarter 2023 to 0.37% in the first quarter 2024.
Non-interest income was $8.6 million in the first quarter 2024 compared to $9.2 million in the same quarter 2023 primarily driven by elevated BOLI income of $622 thousand related to one-time death benefits, and customer derivative income $132 thousand at the end of the first quarter 2023. Wealth management income grew 3% to $3.7 million compared to $3.6 million in the first quarter in 2023.
Non-interest expense was $23.7 million in the first quarter 2024 compared to $22.7 million in the first quarter 2023 driven by salary and benefits, marketing and other expenses. Salary and benefit expenses increased 4% or $477 thousand from the comparative quarter driven by cost of living increases in the first quarter 2024. Marketing expenses increased to $567 thousand compared to $409 thousand in the first quarter of 2023. Other expenses increased to $4.4 million from $4.1 million in the first quarter of 2023 primarily due to increases in assessments, software expenses, and debit card replacement costs in the first quarter of 2024.
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 Bank & Trust 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
All statements, other than statements of historical fact, included in this release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this release the words "believe," "anticipate," "expect," "may," "will," "assume," "should," "predict," "could," "would," "intend," "targets," "estimates," "projects," "plans," and "potential," and other similar words and expressions of the future, are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking, including statements relating to Company's balance sheet management, our credit trends, our overall credit performance, and the Company's strategic plans, objectives, and intentions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to differ materially from any results, performance, or achievements expressed or implied by such forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (1) deterioration in the financial performance and/or condition of borrowers of Bar Harbor Bank & Trust (the "Bank"), including as a result of the negative impact of inflationary pressures on our customers and their businesses resulting in significant increases in credit losses and provisions for those losses; (2) the possibility that our asset quality could decline or that we experience greater loan losses than anticipated; (3) increased levels of other real estate owned, primarily as a result of foreclosures; (4) the impact of liquidity needs on our results of operations and financial condition; (5) competition from financial institutions and other financial service providers; (6) the effect of interest rate increases on the cost of deposits; (7) unanticipated weakness in loan demand or loan pricing; (8) adverse conditions in the national or local economies including in our markets throughout Northern New England; (9) changes in consumer spending, borrowing and saving habits; (10) the emergence and effects related to a future pandemic, epidemic or outbreak of an infectious disease, including actions taken by governmental officials to curb the spread of such an infectious disease, and the resulting impact on general economic and financial market conditions and on the Company's and our customers' business, results of operations, asset quality and financial condition; (11) the effects of civil unrest, international hostilities or other geopolitical events, including the war in Ukraine and recent hostilities in the Middle East; (12) lack of strategic growth opportunities or our failure to execute on available opportunities; (13) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits; (14) our ability to effectively manage problem credits; (15) our ability to successfully implement efficiency initiatives on time and with the results projected; (16) our ability to successfully develop and market new products and implement technology effectively; (17) the impact of negative developments in the financial industry and United States and global capital and credit markets; (18) our ability to retain executive officers and key employees and their customer and community relationships; (19) our ability to adapt to technological changes; (20) risks associated with litigation, including reputational and financial risks and the applicability of insurance coverage; (21) the vulnerability of the Bank's computer and information technology systems and networks, and the systems and networks of third parties with whom the Company or the Bank contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss, and other security breaches and interruptions; (22) changes in the reliability of our vendors, internal control systems or information systems; (23) ongoing competition in the labor markets and increased employee turnover; (24) the potential impact of climate change; (25) our ability to comply with various governmental and regulatory requirements applicable to financial institutions; (26) changes in state and federal laws, rules, regulations, or policies applicable to banks or bank or financial holding companies, including regulatory or legislative developments; (27) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; (28) adverse impacts (including costs, fines, reputational harm, or other negative effects) from current or future litigation, regulatory examinations, or other legal and/or regulatory actions; and (29) general competitive, economic, political, and market conditions, including economic conditions in the local markets where we operate. Additional factors which could affect the forward-looking statements can be found in the Company's annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed with the Securities and Exchange Commission (the "SEC") and available on the SEC's website at http://www.sec.gov . The Company believes the forward-looking statements contained herein are reasonable; however, many of such risks, uncertainties, and other factors are beyond the Company's ability to control or predict and undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. Therefore, the Company can give no assurance that its future results will be as estimated. The Company does not intend to, and disclaims any obligation to, update or revise any forward-looking statement.
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. Because non-GAAP financial measures presented in this document are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies. 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. 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, 2024 2023 2023 2023 2023 PER SHARE DATA Net earnings, diluted $ 0.66 $ 0.65 $ 0.73 $ 0.71 $ 0.86 Core earnings, diluted (1) 0.66 0.68 0.73 0.71 0.86 Total book value 28.64 28.48 26.67 27.12 27.00 Tangible book value (1) 20.48 20.28 18.45 18.88 18.74 Market price at period end 26.48 29.36 23.63 24.64 26.45 Dividends 0.28 0.28 0.28 0.28 0.26 PERFORMANCE RATIOS (2) Return on assets 1.03 % 1.00 % 1.11 % 1.10 % 1.36 % Core return on assets (1) 1.03 1.04 1.11 1.09 1.36 Pre-tax, pre-provision return on assets 1.32 1.34 1.49 1.47 1.81 Core pre-tax, pre-provision return on assets (1) 1.32 1.39 1.49 1.46 1.81 Return on equity 9.31 9.43 10.72 10.49 12.96 Core return on equity (1) 9.32 9.82 10.72 10.42 12.94 Return on tangible equity 13.25 13.65 15.65 15.28 18.97 Core return on tangible equity (1) 13.26 14.21 15.65 15.19 18.94 Net interest margin, fully taxable equivalent (1) (3) 3.14 3.17 3.18 3.22 3.54 Efficiency ratio (1) 62.91 61.38 58.59 60.25 54.72 FINANCIAL DATA (In millions) Total assets $ 3,959 $ 3,971 $ 3,984 $ 4,029 $ 3,928 Total earning assets (4) 3,663 3,664 3,687 3,716 3,628 Total investments 538 547 524 556 573 Total loans 3,012 2,999 2,993 3,007 2,944 Allowance for credit losses 28 28 28 27 27 Total goodwill and intangible assets 124 124 125 125 125 Total deposits 3,127 3,141 3,140 3,090 3,054 Total shareholders' equity 436 432 404 411 408 Net income 10 10 11 11 13 Core earnings (1) 10 10 11 11 13 ASSET QUALITY AND CONDITION RATIOS Net charge-offs (recoveries) (5) /average loans 0.01 % 0.07 % - % - % 0.01 % Allowance for credit losses/total loans 0.94 0.94 0.94 0.91 0.90 Loans/deposits 96 95 95 97 96 Shareholders' equity to total assets 11.01 10.88 10.15 10.20 10.40 Tangible shareholders' equity to tangible assets 8.13 8.00 7.25 7.32 7.45 Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in tables I-J for additional information. All performance ratios are based on average balance sheet amounts, where applicable. Fully taxable equivalent considers the impact of tax-advantaged investment securities and loans. Earning assets includes non-accruing loans and interest-bearing deposits with other banks. Securities are valued at amortized cost. Current quarter annualized. BAR HARBOR BANKSHARES CONSOLIDATED BALANCE SHEETS - UNAUDITED Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, (in thousands) 2024 2023 2023 2023 2023 Assets Cash and due from banks $ 30,770 $ 42,221 $ 41,210 $ 46,532 $ 37,769 Interest-earning deposits with other banks 45,449 52,621 81,606 77,253 44,933 Total cash and cash equivalents 76,219 94,842 122,816 123,785 82,702 Securities available for sale 527,603 534,574 509,453 538,178 557,040 Federal Home Loan Bank stock 9,960 12,788 14,834 17,784 15,718 Total securities 537,563 547,362 524,287 555,962 572,758 Loans held for sale 3,137 2,189 2,016 3,669 463 Total loans 3,011,672 2,999,049 2,992,791 3,007,480 2,944,005 Less: Allowance for credit losses (28,355 ) (28,142 ) (28,011 ) (27,362 ) (26,607 ) Net loans 2,983,317 2,970,907 2,964,780 2,980,118 2,917,398 Premises and equipment, net 47,849 48,287 47,790 47,412 47,549 Other real estate owned - - - - - Goodwill 119,477 119,477 119,477 119,477 119,477 Other intangible assets 4,637 4,869 5,102 5,335 5,568 Cash surrender value of bank-owned life insurance 80,642 80,037 79,469 78,967 78,436 Deferred tax asset, net 23,849 22,979 28,328 24,181 22,858 Other assets 82,285 79,936 89,876 89,641 81,269 Total assets $ 3,958,975 $ 3,970,885 $ 3,983,941 $ 4,028,547 $ 3,928,478 Liabilities and shareholders' equity Demand and other non-interest bearing deposits $ 544,495 $ 569,714 $ 618,421 $ 602,667 $ 636,710 Interest-bearing demand deposits 888,591 946,978 929,481 911,488 908,483 Savings deposits 551,493 553,963 572,271 588,769 628,798 Money market deposits 365,289 370,242 361,839 351,762 475,577 Time deposits 777,208 700,260 658,482 635,559 404,246 Total deposits 3,127,076 3,141,157 3,140,494 3,090,245 3,053,814 Senior borrowings 269,437 271,044 307,070 398,972 338,244 Subordinated borrowings 60,501 60,461 60,422 60,371 60,330 Total borrowings 329,938 331,505 367,492 459,343 398,574 Other liabilities 66,247 66,164 71,747 68,243 67,680 Total liabilities 3,523,261 3,538,826 3,579,733 3,617,831 3,520,068 Total shareholders' equity 435,714 432,059 404,208 410,716 408,410 Total liabilities and shareholders' equity $ 3,958,975 $ 3,970,885 $ 3,983,941 $ 4,028,547 $ 3,928,478 Net shares outstanding 15,212 15,172 15,156 15,144 15,124 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) 2024 2023 2023 2023 2023 to Date Commercial real estate $ 1,574,802 $ 1,552,061 $ 1,548,835 $ 1,551,748 $ 1,519,219 6 % Commercial and industrial 412,567 400,169 391,347 388,430 364,315 12 Total commercial loans 1,987,369 1,952,230 1,940,182 1,940,178 1,883,534 7 Residential real estate 873,213 889,904 896,757 907,741 906,059 (8 ) Consumer 95,838 97,001 95,160 96,947 98,616 (5 ) Tax exempt and other 55,252 59,914 60,692 62,614 55,796 (31 ) Total loans $ 3,011,672 $ 2,999,049 $ 2,992,791 $ 3,007,480 $ 2,944,005 2 % DEPOSIT ANALYSIS Annualized Growth % Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Quarter (in thousands) 2024 2023 2023 2023 2023 to Date Demand $ 544,495 $ 569,714 $ 618,421 $ 602,667 $ 636,710 (18 )% Interest-bearing demand deposits 888,591 946,978 929,481 911,488 908,483 (25 ) Savings 551,493 553,963 572,271 588,769 628,798 (2 ) Money market 365,289 370,242 361,839 351,762 475,577 (5 ) Total non-maturity deposits 2,349,868 2,440,897 2,482,012 2,454,686 2,649,568 (15 ) Total time deposits 777,208 700,260 658,482 635,559 404,246 44 Total deposits $ 3,127,076 $ 3,141,157 $ 3,140,494 $ 3,090,245 $ 3,053,814 (2 )% BAR HARBOR BANKSHARES CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED Three Months Ended March 31, (in thousands, except per share data) 2024 2023 Interest and dividend income Loans $ 39,470 $ 34,560 Securities and other 6,353 5,791 Total interest and dividend income 45,823 40,351 Interest expense Deposits 14,532 5,265 Borrowings 3,236 4,180 Total interest expense 17,768 9,445 Net interest income 28,055 30,906 Provision for credit losses 289 798 Net interest income after provision for credit losses 27,766 30,108 Non-interest income Trust and investment management fee income 3,670 3,555 Customer service fees 3,710 3,677 Gain on sales of securities, net - 34 Mortgage banking income 257 279 Bank-owned life insurance income 561 1,148 Customer derivative income - 132 Other income 388 359 Total non-interest income 8,586 9,184 Non-interest expense Salaries and employee benefits 13,248 12,771 Occupancy and equipment 4,473 4,414 Gain on sales of premises and equipment, net (15 ) (13 ) Outside services 338 356 Professional services 400 426 Communication 189 162 Marketing 567 409 Amortization of intangible assets 233 233 Acquisition, conversion and other expenses 20 20 Provision for unfunded commitments (185 ) (175 ) Other expenses 4,420 4,101 Total non-interest expense 23,688 22,704 Income before income taxes 12,664 16,588 Income tax expense 2,569 3,576 Net income $ 10,095 $ 13,012 Earnings per share: Basic $ 0.66 $ 0.86 Diluted 0.66 0.86 Weighted average shares outstanding: Basic 15,198 15,110 Diluted 15,270 15,190 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) 2024 2023 2023 2023 2023 Interest and dividend income Loans $ 39,470 $ 39,531 $ 38,412 $ 36,917 $ 34,560 Securities and other 6,353 6,284 6,723 5,964 5,791 Total interest and dividend income 45,823 45,815 45,135 42,881 40,351 Interest expense Deposits 14,532 12,962 11,415 8,590 5,265 Borrowings 3,236 4,060 4,534 5,501 4,180 Total interest expense 17,768 17,022 15,949 14,091 9,445 Net interest income 28,055 28,793 29,186 28,790 30,906 Provision for credit losses 289 687 673 750 798 Net interest income after provision for credit losses 27,766 28,106 28,513 28,040 30,108 Non-interest income Trust and investment management fee income 3,670 3,401 3,522 3,805 3,555 Customer service fees 3,710 3,791 3,926 3,774 3,677 Gain on sales of securities, net - - - - 34 Mortgage banking income 257 515 415 378 279 Bank-owned life insurance income 561 533 515 503 1,148 Customer derivative income - 151 43 83 132 Other income 388 459 394 437 359 Total non-interest income 8,586 8,850 8,815 8,980 9,184 Non-interest expense Salaries and employee benefits 13,248 13,511 13,011 13,223 12,771 Occupancy and equipment 4,473 4,309 4,469 4,392 4,414 (Gain) loss on sales of premises and equipment, net (15 ) 281 - (86 ) (13 ) Outside services 338 515 376 424 356 Professional services 400 369 436 355 426 Communication 189 190 170 175 162 Marketing 567 485 326 476 409 Amortization of intangible assets 233 233 233 233 233 Acquisition, conversion and other expenses 20 263 - - 20 Provision for unfunded commitments (185 ) - 45 45 (175 ) Other expenses 4,420 4,211 3,950 4,155 4,101 Total non-interest expense 23,688 24,367 23,016 23,392 22,704 Income before income taxes 12,664 12,589 14,312 13,628 16,588 Income tax expense 2,569 2,644 3,208 2,837 3,576 Net income $ 10,095 $ 9,945 $ 11,104 $ 10,791 $ 13,012 Earnings per share: Basic $ 0.66 $ 0.66 $ 0.73 $ 0.71 $ 0.86 Diluted 0.66 0.65 0.73 0.71 0.86 Weighted average shares outstanding: Basic 15,198 15,164 15,155 15,139 15,110 Diluted 15,270 15,221 15,196 15,180 15,190 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, 2024 2023 2023 2023 2023 Earning assets Interest-earning deposits with other banks 5.88 % 6.42 % 5.02 % 5.59 % 4.28 % Securities available for sale and FHLB stock 4.02 3.85 3.87 3.71 3.66 Loans: Commercial real estate 5.47 5.46 5.34 5.21 5.08 Commercial and industrial 6.68 6.66 6.56 6.42 5.89 Residential real estate 4.09 3.94 3.84 3.76 3.71 Consumer 7.22 7.14 6.88 6.67 6.37 Total loans 5.31 5.24 5.11 4.99 4.82 Total earning assets 5.10 % 5.02 % 4.90 % 4.77 % 4.61 % Funding liabilities Deposits: Interest-bearing demand deposits 1.34 % 1.33 % 1.11 % 0.94 % 0.51 % Savings 0.63 0.48 0.42 0.37 0.30 Money market 3.07 2.80 2.55 2.52 2.14 Time deposits 4.18 3.93 3.65 2.82 1.34 Total interest-bearing deposits 2.26 2.05 1.81 1.45 0.91 Borrowings 4.35 4.64 4.59 4.73 4.25 Total interest-bearing liabilities 2.48 % 2.37 % 2.19 % 1.99 % 1.39 % Net interest spread 2.62 2.65 2.71 2.78 3.22 Net interest margin, fully taxable equivalent (1) 3.14 3.17 3.18 3.22 3.54 Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in tables I-J for additional information. BAR HARBOR BANKSHARES AVERAGE BALANCES - UNAUDITED Quarters Ended Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, (in thousands) 2024 2023 2023 2023 2023 Assets Interest-earning deposits with other banks (1) $ 36,608 $ 36,794 $ 70,499 $ 21,440 $ 19,819 Securities available for sale and FHLB stock (2) 604,658 608,793 620,851 636,088 643,523 Loans: Commercial real estate 1,558,506 1,554,961 1,550,188 1,536,035 1,505,681 Commercial and industrial 464,762 457,642 439,915 434,384 413,921 Residential real estate 884,767 898,147 909,296 911,788 902,348 Consumer 96,163 95,193 96,362 97,518 100,124 Total loans (3) 3,004,198 3,005,943 2,995,761 2,979,725 2,922,074 Total earning assets 3,645,464 3,651,530 3,687,111 3,637,253 3,585,416 Cash and due from banks 29,900 34,741 36,713 32,067 31,556 Allowance for credit losses (28,122 ) (28,057 ) (27,473 ) (26,932 ) (25,971 ) Goodwill and other intangible assets 124,225 124,459 124,926 124,926 125,158 Other assets 166,538 157,159 162,801 163,388 168,773 Total assets $ 3,938,005 $ 3,939,832 $ 3,984,078 $ 3,930,702 $ 3,884,932 Liabilities and shareholders' equity Deposits: Interest-bearing demand deposits $ 899,349 $ 916,314 $ 915,072 $ 885,091 $ 883,134 Savings 552,231 552,932 579,090 602,724 646,291 Money market 390,720 365,142 358,742 423,013 481,951 Time deposits 738,683 670,628 645,285 468,188 342,994 Total interest-bearing deposits 2,580,983 2,505,016 2,498,189 2,379,016 2,354,370 Borrowings 298,918 347,459 391,976 466,402 398,837 Total interest-bearing liabilities 2,879,901 2,852,475 2,890,165 2,845,418 2,753,207 Non-interest-bearing demand deposits 554,816 604,638 610,644 608,180 651,885 Other liabilities 67,327 64,092 72,409 64,346 72,693 Total liabilities 3,502,044 3,521,205 3,573,218 3,517,944 3,477,785 Total shareholders' equity 435,961 418,627 410,860 412,758 407,147 Total liabilities and shareholders' equity $ 3,938,005 $ 3,939,832 $ 3,984,078 $ 3,930,702 $ 3,884,932 Total average interest-bearing deposits with other banks is net of Federal Reserve daily cash letter. Average balances for securities available-for-sale are based on amortized cost. 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) 2024 2023 2023 2023 2023 NON-PERFORMING ASSETS Non-accruing loans: Commercial real estate $ 578 $ 610 $ 867 $ 909 $ 1,163 Commercial and industrial 1,152 363 1,595 1,814 1,917 Residential real estate 4,169 3,742 3,673 3,415 3,830 Consumer 971 813 635 565 886 Total non-accruing loans 6,870 5,528 6,770 6,703 7,796 Other real estate owned - - - - - Total non-performing assets $ 6,870 $ 5,528 $ 6,770 $ 6,703 $ 7,796 Total non-accruing loans/total loans 0.23 % 0.18 % 0.23 % 0.22 % 0.26 % Total non-performing assets/total assets 0.17 0.14 0.17 0.17 0.20 PROVISION AND ALLOWANCE FOR CREDIT LOSSES Balance at beginning of period $ 28,142 $ 28,011 $ 27,362 $ 26,607 $ 25,860 Charged-off loans (113 ) (632 ) (74 ) (199 ) (68 ) Recoveries on charged-off loans 37 76 50 204 17 Net loans (charged-off) recovered (76 ) (556 ) (24 ) 5 (51 ) Provision for credit losses 289 687 673 750 798 Balance at end of period $ 28,355 $ 28,142 $ 28,011 $ 27,362 $ 26,607 Allowance for credit losses/total loans 0.94 % 0.94 % 0.94 % 0.91 % 0.90 % Allowance for credit losses/non-accruing loans 413 509 414 408 341 NET LOAN (CHARGE-OFFS) RECOVERIES Commercial real estate $ (3 ) $ - $ - $ (72 ) $ 3 Commercial and industrial (64 ) (479 ) 34 139 2 Residential real estate 5 3 13 3 4 Consumer (14 ) (80 ) (71 ) (65 ) (60 ) Total, net $ (76 ) $ (556 ) $ (24 ) $ 5 $ (51 ) Net charge-offs (recoveries) (QTD annualized)/average loans 0.01 % 0.07 % - % - % 0.01 % Net charge-offs (recoveries) (YTD annualized)/average loans 0.01 0.02 0.01 - 0.01 DELINQUENT AND NON-ACCRUING LOANS/ TOTAL LOANS 30-89 Days delinquent 0.14 % 0.11 % 0.13 % 0.09 % 0.26 % 90+ Days delinquent and still accruing - 0.01 0.03 0.02 - Total accruing delinquent loans 0.14 0.12 0.16 0.11 0.26 Non-accruing loans 0.23 0.18 0.23 0.22 0.26 Total delinquent and non-accruing loans 0.37 % 0.30 % 0.39 % 0.33 % 0.52 % 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) 2024 2023 2023 2023 2023 Net income $ 10,095 $ 9,945 $ 11,104 $ 10,791 $ 13,012 Non-core items: Gain on sale of securities, net - - - - (34 ) (Gain) loss on sale of premises and equipment, net (15 ) 281 - (86 ) (13 ) Acquisition, conversion and other expenses 20 263 - - 20 Income tax expense (1) (1 ) (131 ) - 20 6 Total non-core items 4 413 - (66 ) (21 ) Core earnings (2) (A) $ 10,099 $ 10,358 $ 11,104 $ 10,725 $ 12,991 Net interest income (B) $ 28,055 $ 28,793 $ 29,186 $ 28,790 $ 30,906 Non-interest income 8,586 8,850 8,815 8,980 9,184 Total revenue 36,641 37,643 38,001 37,770 40,090 Gain on sale of securities, net - - - - (34 ) Total core revenue (2) (C) $ 36,641 $ 37,643 $ 38,001 $ 37,770 $ 40,056 Total non-interest expense 23,688 24,367 23,016 23,392 22,704 Non-core expenses: Gain (loss) on sale of premises and equipment, net 15 (281 ) - 86 13 Acquisition, conversion and other expenses (20 ) (263 ) - - (20 ) Total non-core expenses (5 ) (544 ) - 86 (7 ) Core non-interest expense (2) (D) $ 23,683 $ 23,823 $ 23,016 $ 23,478 $ 22,697 Total revenue 36,641 37,643 38,001 37,770 40,090 Total non-interest expense 23,688 24,367 23,016 23,392 22,704 Pre-tax, pre-provision net revenue $ 12,953 $ 13,276 $ 14,985 $ 14,378 $ 17,386 Core revenue (2) 36,641 37,643 38,001 37,770 40,056 Core non-interest expense (2) 23,683 23,823 23,016 23,478 22,697 Core pre-tax, pre-provision net revenue (2) (U) $ 12,958 $ 13,820 $ 14,985 $ 14,292 $ 17,359 (in millions) Average earning assets (E) $ 3,645 $ 3,652 $ 3,687 $ 3,637 $ 3,585 Average assets (F) 3,938 3,940 3,984 3,931 3,885 Average shareholders' equity (G) 436 419 411 413 407 Average tangible shareholders' equity (2) (3) (H) 312 294 286 288 282 Tangible shareholders' equity, period-end (2) (3) (I) 312 308 280 286 283 Tangible assets, period-end (2) (3) (J) 3,835 3,847 3,859 3,904 3,803 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) 2024 2023 2023 2023 2023 Common shares outstanding, period-end (K) 15,212 15,172 15,156 15,144 15,124 Average diluted shares outstanding (L) 15,270 15,221 15,196 15,180 15,190 Core earnings per share, diluted (2) (A/L) $ 0.66 $ 0.68 $ 0.73 $ 0.71 $ 0.86 Tangible book value per share, period-end (2) (I/K) 20.48 20.28 18.45 18.88 18.74 Securities adjustment, net of tax (1) (4) (M) (49,633 ) (47,649 ) (66,530 ) (55,307 ) (50,646 ) Tangible book value per share, excluding securities adjustment (2) (4) (I+M)/K 23.75 23.42 22.84 22.53 22.08 Tangible shareholders' equity/total tangible assets (2) (I/J) 8.13 8.00 7.25 7.32 7.45 Performance ratios (5) GAAP return on assets 1.03 % 1.00 % 1.11 % 1.10 % 1.36 % Core return on assets (2) (A/F) 1.03 1.04 1.11 1.09 1.36 Pre-tax, pre-provision return on assets 1.32 1.34 1.49 1.47 1.81 Core pre-tax, pre-provision return on assets (2) (U/F) 1.32 1.39 1.49 1.46 1.81 GAAP return on equity 9.31 9.43 10.72 10.49 12.96 Core return on equity (2) (A/G) 9.32 9.82 10.72 10.42 12.94 Return on tangible equity 13.25 13.65 15.65 15.28 18.97 Core return on tangible equity (1) (2) (A+Q)/H 13.26 14.21 15.65 15.19 18.94 Efficiency ratio (2) (6) (D-O-Q)/(C+N) 62.91 61.38 58.59 60.25 54.72 Net interest margin, fully taxable equivalent (2) (B+P)/E 3.14 3.17 3.18 3.22 3.54 Supplementary data (in thousands) Taxable equivalent adjustment for efficiency ratio (N) $ 523 $ 561 $ 565 $ 539 $ 727 Franchise taxes included in non-interest expense (O) 70 141 186 163 148 Tax equivalent adjustment for net interest margin (P) 388 395 405 382 368 Intangible amortization (Q) 233 233 233 233 233 Assumes a marginal tax rate of 24.01% in the first quarter 2024 and the fourth quarter 2023, and 23.80% in the first three quarters of 2023. Non-GAAP financial measure. 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. 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. All performance ratios are based on average balance sheet amounts, where applicable. 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. SOURCE: Bar Harbor Bank and Trust View the original press release on accesswire.com
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