BAR HARBOR, Maine--(BUSINESS WIRE)--Bar Harbor Bankshares (NYSE American: BHB) reported record GAAP earnings in 2017 of $26.0 million, or $1.70 per share, compared with $14.9 million in 2016, or $1.63 per share. Core earnings in 2017 increased to $32.1 million, or $2.10 per share, from $13.9 million in 2016, or $1.52 per share. Earnings grew during 2017 due to business expansion, investments in talent and increased operational efficiencies.
Fourth quarter GAAP earnings were $6.6 million, or 43 cents per share. Core earnings totaled $9.0 million, or 58 cents per share. GAAP earnings included a $4.0 million income tax charge due to the revaluation of net deferred tax assets required by the Tax Cuts and Jobs Act of 2017 (“TCJA”). In addition, there was a net benefit of $2.6 million, which included the sale of the insurance subsidiary offset by other one-time charges.
FOURTH QUARTER FINANCIAL HIGHLIGHTS (comparisons are to prior quarter unless otherwise stated):
- 1.02% core return on assets (non-GAAP measure)
- 21% annualized commercial loan growth
- 13% annualized total deposit growth
- 53% efficiency ratio (non-GAAP measure)
- 9.97% core return on equity (non-GAAP measure)
President and Chief Executive Officer, Curtis C. Simard stated, “We delivered a strong finish to all of our key performance indicators within mere quarters of doubling our asset size and successfully completing a system conversion. Based on our momentum, we are well ahead of the earn back period from the acquisition and are poised to deliver another great year as we hold firm to our model of balancing growth and earnings.”
Mr. Simard went on to say, “Management continues to evolve as we attract seasoned, proven executives and senior managers to join our team. Earlier this week we announced a new EVP, Director of Retail Delivery, Marion Colombo, who will be joining the bank to lead our retail franchise.” Mr. Simard commented, “Simply put, retail branch activity is at the very heart of our business. Finding a long-term proven leader like Marion, who comes with over twenty-nine years of retail experience in many diverse markets, is a significant indication of our commitment to being a true community bank with a growing retail franchise.”
Excluding the impact of TCJA and other one-time adjustments, our fourth quarter performance peaked for the year with a return on assets of 1.02% and a return on equity of 9.97%. The tangible equity to tangible asset ratio (a non-GAAP measure) decreased to 7.12% at the end of the fourth quarter primarily due to the impact of the TCJA adjustment. We expect this reduction will be earned back from related tax savings within the first half of 2018 with opportunities for further expansion thereafter.
Mr. Simard further stated, “Our Commercial teams continue to penetrate their markets as is evidenced by another strong quarter of 21% loan growth led by commercial and industrial loans at 34%. Asset quality metrics remain strong while charge-offs are at historical lows. We also expanded our Treasury Management Services platform during the fourth quarter, which was rolled out in January 2018. Given the talent we have hired to manage this business and the enhanced capabilities, we expect this to be a significant contributor in 2018 in terms of both fee revenue and deposit gathering.”
Mr. Simard concluded, “As we enter 2018, we are positioned to continue with the momentum seen during the second half of 2017 while executing on our strategy to provide our customers with the best customer service. We remain committed to our communities and will seek opportunities to expand our branch model as a true community bank in 2018.”
RESULTS OF OPERATIONS
GAAP earnings decreased to $6.6
million in the fourth quarter from $8.6 million in the third quarter.
The decrease was primarily due to the TCJA charge offset by other
one-time adjustments including the sale of our insurance subsidiary.
Core earnings (a non-GAAP measure) increased to $9.0 million in the
fourth quarter compared to $8.8 million in the prior quarter. Yields on
loans decreased 1 basis point to 4.12% in the fourth quarter due to
lower purchased loan accretion as compared to the third quarter.
Excluding the impact of purchase loan accretion, loan yield expanded 2
basis points to 3.92% in the fourth quarter from 3.90% in the third
quarter. The loan yield benefited from a $29 million average balance
increase in fixed rate commercial real estate products. Security yields
decreased in the fourth quarter as a result of accelerated premium
amortization. The cost of interest-bearing deposits increased as a
result of both interest rate hikes and an extension in maturities as we
manage our overall interest rate risk. The Company’s overall cost of
funds remained relatively flat for the quarter as the 13% growth in
deposits offset more expensive alternative borrowing costs.
Total non-interest income was $6.5 million in the fourth quarter compared to $7.0 million in the prior quarter. The decrease is primarily due to seasonality effects on customer service fees and the curtailment of revenue with the sale of our insurance subsidiary in October 2017. As previously announced, the sale of the insurance subsidiary was part of a strategic decision to redeploy capital and management resources to core businesses. The sale had no significant impact to core net income as the contribution margin was neutral. Trust and management fee income during the fourth quarter remained flat with the third quarter. Overall, the unfavorable variability of transactional fees during 2017 was offset by the growth of assets under management to $445 million at the end of 2017 from $425 million at the end of 2016. Non-interest expense excluding acquisition, conversion and other one-time adjustments decreased $362 thousand in the fourth quarter compared to the linked quarter. The efficiency ratio was 53% for the quarter compared to 54% in the third quarter, which reflects further disciplined cost control.
FINANCIAL CONDITION
Total assets grew $89 million during the
fourth quarter to $3.6 billion driven by total loan growth of $57
million, or 9% on an annualized basis. The majority of the loan growth
was led by the commercial portfolio, which had an annualized growth rate
of 21%. Total loan growth was funded by growth in deposits, which
increased $77 million, or 13% on an annualized basis. Non-accruing loans
increased by $7.5 million during the quarter primarily due to the
deterioration of one specific commercial relationship, which is expected
to be settled at the full contractual obligation. Asset quality metrics
remain strong with charge-offs at historical lows and an allowance for
credit losses to total loans ratio of 0.50%. The Company's book value
per share increased to $22.96 from $22.90 in the third quarter while
tangible book value (a non-GAAP measure) increased to $15.94 from $15.84.
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 125 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.bhbt.com.
FORWARD LOOKING STATEMENTS
This document contains
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. There are several factors that could
cause actual results to differ significantly from expectations described
in the forward-looking statements. For a discussion of such factors,
please see the Company’s most recent reports on Forms 10-K and 10-Q
filed with the Securities and Exchange Commission and available on the
SEC’s website at www.sec.gov.
The Company does not undertake any obligation to update forward-looking
statements.
NON-GAAP FINANCIAL MEASURES
This document contains certain
non-GAAP financial measures in addition to results presented in
accordance with Generally Accepted Accounting Principles (“GAAP”). These
non-GAAP measures provide supplemental perspectives on operating
results, performance trends, and financial condition. They 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
included beginning on page J in the accompanying financial tables. In
all cases, it should be understood that non-GAAP per share measures do
not depict amounts that accrue directly to the benefit of shareholders.
The Company utilizes the non-GAAP measure of core earnings in evaluating operating trends, including components for core revenue and expense. These measures exclude items which the Company does not view as related to its normalized operations. These items include securities gains/losses, acquisition costs, restructuring costs, and systems conversion costs. Non-core adjustments are presented net of an adjustment for income tax expense. This adjustment is determined as the difference between the GAAP tax rate and the effective tax rate applicable to core income. The efficiency ratio is adjusted for non-core revenue and expense items and for tax preference items. The Company also calculates measures related to tangible equity, which adjust equity (and assets where applicable) to exclude intangible assets due to the importance of these measures to the investment community. Charges related to the acquisition of Lake Sunapee Bank Group consist primarily of severance and retention cost, systems conversion and integration costs, and professional fees. The Company’s disclosure of organic growth of loans in 2017 is also adjusted for the Lake Sunapee Bank Group acquisition.
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TABLE
INDEX |
CONSOLIDATED FINANCIAL SCHEDULES (UNAUDITED) | ||
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A |
Selected Financial Highlights |
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B |
Footnotes to Selected Financial Highlights |
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C |
Balance Sheets |
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D |
Loan and Deposit Analysis |
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E |
Statements of Income |
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F |
Statements of Income (Five Quarter Trend) |
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G |
Average Yields and Costs |
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H |
Average Balances |
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I |
Asset Quality Analysis |
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J |
Reconciliation of Non-GAAP Financial Measures (Five Quarter Trend) and Supplementary Data |
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| BAR HARBOR BANKSHARES | |||||||||||||||||||||||||
| SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED | |||||||||||||||||||||||||
| At or for the Quarters Ended (1)(3) | |||||||||||||||||||||||||
|
Dec 31, 2017 |
Sep 30, 2017 |
Jun 30, 2017 |
Mar 31, 2017 |
Dec 31, 2016 |
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| PER SHARE DATA | |||||||||||||||||||||||||
| Net earnings, diluted | $ | 0.43 | $ | 0.56 | $ | 0.42 | $ | 0.29 | $ | 0.28 | |||||||||||||||
| Core earnings, diluted (1) (2) | 0.58 | 0.57 | 0.52 | 0.43 | 0.41 | ||||||||||||||||||||
| Total book value | 22.96 | 22.90 | 22.53 | 22.17 | 17.19 | ||||||||||||||||||||
| Tangible book value (2) | 15.94 | 15.84 | 15.44 | 15.07 | 16.61 | ||||||||||||||||||||
| Market price at period end | 27.01 | 31.36 | 30.82 | 33.08 | 31.55 | ||||||||||||||||||||
| Dividends | 0.19 | 0.19 | 0.19 | 0.19 | 0.19 | ||||||||||||||||||||
| PERFORMANCE RATIOS | |||||||||||||||||||||||||
| Return on assets | 0.75 | % | 0.99 | % | 0.76 | % | 0.50 | % | 0.59 | % | |||||||||||||||
| Core return on assets (1) (2) | 1.02 | 1.01 | 0.94 | 0.74 | 0.87 | ||||||||||||||||||||
| Return on equity | 7.35 | 9.67 | 7.55 | 5.34 | 6.36 | ||||||||||||||||||||
| Core return on equity (1) (2) | 9.97 | 9.90 | 9.32 | 7.88 | 9.34 | ||||||||||||||||||||
| Core return on tangible equity (1) (2) | 14.53 | 14.51 | 13.78 | 12.24 | 9.66 | ||||||||||||||||||||
| Net interest margin, fully taxable equivalent (FTE) (4) | 3.04 | 3.06 | 3.16 | 3.11 | 2.89 | ||||||||||||||||||||
| Net interest margin (FTE), excluding purchased loan accretion (4) | 2.93 | 2.93 | 3.02 | 3.01 | 2.89 | ||||||||||||||||||||
| Efficiency ratio (2) | 53.09 | 53.59 | 54.64 | 61.62 | 59.24 | ||||||||||||||||||||
| GROWTH (Year-to-date, annualized) | |||||||||||||||||||||||||
| Total commercial loans (2) | 23.8 | % | 20.5 | % | 7.2 | % | 20.0 | % | 14.9 | % | |||||||||||||||
| Total loans (2) | 13.1 | 12.2 | 7.0 | 13.3 | 15.0 | ||||||||||||||||||||
| Total deposits (2) | 14.4 | 10.6 | 2.3 | (10.2 | ) | 6.5 | |||||||||||||||||||
| FINANCIAL DATA (In millions) | |||||||||||||||||||||||||
| Total assets | $ | 3,565 | $ | 3,476 | $ | 3,503 | $ | 3,427 | $ | 1,755 | |||||||||||||||
| Total earning assets | 3,241 | 3,184 | 3,139 | 3,139 | 1,683 | ||||||||||||||||||||
| Total investments | 755 | 756 | 763 | 767 | 554 | ||||||||||||||||||||
| Total loans | 2,486 | 2,429 | 2,377 | 2,372 | 1,129 | ||||||||||||||||||||
| Allowance for loan losses | 12 | 12 | 11 | 11 | 10 | ||||||||||||||||||||
| Total goodwill and intangible assets | 108 | 109 | 109 | 109 | 5 | ||||||||||||||||||||
| Total deposits | 2,352 | 2,275 | 2,213 | 2,174 | 1,050 | ||||||||||||||||||||
| Total shareholders' equity | 355 | 353 | 347 | 341 | 157 | ||||||||||||||||||||
| Net income | 7 | 9 | 7 | 4 | 3 | ||||||||||||||||||||
| Core income (2) | 9 | 9 | 8 | 6 | 4 | ||||||||||||||||||||
| ASSET QUALITY AND CONDITION RATIOS | |||||||||||||||||||||||||
| Net charge-offs (current quarter annualized)/average loans (5) | 0.04 | % | 0.01 | % | 0.03 | % | 0.06 | % | (0.03 | )% | |||||||||||||||
| Allowance for loan losses/total loans (5) | 0.50 | 0.49 | 0.48 | 0.46 | 0.92 | ||||||||||||||||||||
| Loans/deposits | 106 | 107 | 107 | 109 | 108 | ||||||||||||||||||||
| Shareholders' equity to total assets | 9.95 | 10.17 | 9.91 | 9.95 | 8.93 | ||||||||||||||||||||
| Tangible shareholders' equity to tangible assets (2) | 7.12 | 7.26 | 7.01 | 6.99 | 8.65 | ||||||||||||||||||||
(1) Adjusted measurements are non-GAAP financial measures that are
adjusted to exclude net non-operating charges primarily related to
acquisitions, and gain on sale of securities. Refer to the
Reconciliation of Non-GAAP Financial Measures in table J for additional
information.
(2) Non-GAAP financial measure.
(3) All
performance ratios are annualized and are based on average balance sheet
amounts, where applicable.
(4) Fully taxable equivalent considers
the impact of tax advantaged investment securities and loans.
(5)
Generally accepted accounting principles require that loans acquired in
a business combination be recorded at fair value, whereas loans from
business activities are recorded at cost. The fair value of loans
acquired in a business combination includes expected loan losses, and
there is no loan loss allowance recorded for these loans at the time of
acquisition. Accordingly, the ratio of the loan loss allowance to total
loans is reduced as a result of the existence of such loans, and this
measure is not directly comparable to prior periods. Similarly, net loan
charge-offs are normally reduced for loans acquired in a business
combination since these loans are recorded net of expected loan losses.
Therefore, the ratio of net loan charge-offs to average loans is reduced
as a result of the existence of such loans, and this measure is not
directly comparable to prior periods. Other institutions may have loans
acquired in a business combination, and therefore there may be no direct
comparability of these ratios between and among other institutions.
| BAR HARBOR BANKSHARES | |||||||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS - UNAUDITED | |||||||||||||||||||||||||
| (In thousands) | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Cash and due from banks | $ | 34,262 | $ | 31,223 | $ | 28,112 | $ | 29,245 | $ | 8,219 | |||||||||||||||
| Interest-bearing deposit with the Federal Reserve Bank | 56,423 | 17,501 | 90,881 | 12,781 | 220 | ||||||||||||||||||||
| Total cash and cash equivalents | 90,685 | 48,724 | 118,993 | 42,026 | 8,439 | ||||||||||||||||||||
| Securities available for sale, at fair value | 717,242 | 718,459 | 718,364 | 724,224 | 528,856 | ||||||||||||||||||||
| Federal Home Loan Bank stock | 38,105 | 37,107 | 44,168 | 42,404 | 25,331 | ||||||||||||||||||||
| Total securities | 755,347 | 755,566 | 762,532 | 766,628 | 554,187 | ||||||||||||||||||||
| Commercial real estate | 826,746 | 793,572 | 738,584 | 779,635 | 418,119 | ||||||||||||||||||||
| Commercial and industrial | 379,423 | 357,072 | 350,002 | 309,995 | 151,240 | ||||||||||||||||||||
| Residential real estate | 1,155,682 | 1,152,628 | 1,160,832 | 1,155,436 | 506,612 | ||||||||||||||||||||
| Consumer | 123,762 | 125,590 | 127,229 | 127,370 | 53,093 | ||||||||||||||||||||
| Total loans | 2,485,613 | 2,428,862 | 2,376,647 | 2,372,436 | 1,129,064 | ||||||||||||||||||||
| Less: Allowance for loan losses | (12,325 | ) | (11,950 | ) | (11,442 | ) | (10,884 | ) | (10,419 | ) | |||||||||||||||
| Net loans | 2,473,288 | 2,416,912 | 2,365,205 | 2,361,552 | 1,118,645 | ||||||||||||||||||||
| Premises and equipment, net | 47,708 | 48,309 | 48,590 | 45,581 | 23,419 | ||||||||||||||||||||
| Other real estate owned | 122 | 122 | 122 | 363 | 90 | ||||||||||||||||||||
| Goodwill | 100,085 | 100,255 | 100,255 | 99,901 | 4,935 | ||||||||||||||||||||
| Other intangible assets | 8,383 | 8,811 | 9,047 | 9,282 | 377 | ||||||||||||||||||||
| Cash surrender value of bank-owned life insurance | 57,997 | 57,613 | 57,233 | 56,627 | 24,450 | ||||||||||||||||||||
| Deferred tax asset, net | 7,180 | 13,052 | 13,211 | 14,158 | 5,990 | ||||||||||||||||||||
| Other assets | 24,389 | 26,368 | 28,223 | 31,365 | 14,817 | ||||||||||||||||||||
| Total assets | $ | 3,565,184 | $ | 3,475,732 | $ | 3,503,411 | $ | 3,427,483 | $ | 1,755,349 | |||||||||||||||
| Liabilities and shareholders' equity | |||||||||||||||||||||||||
| Demand and other non-interest bearing deposits | $ | 349,055 | $ | 357,398 | $ | 332,339 | $ | 349,896 | $ | 98,856 | |||||||||||||||
| NOW deposits | 466,610 | 442,085 | 451,171 | 242,876 | 175,150 | ||||||||||||||||||||
| Savings deposits | 364,799 | 373,118 | 360,306 | 511,091 | 77,623 | ||||||||||||||||||||
| Money market deposits | 305,275 | 300,398 | 285,312 | 349,491 | 282,234 | ||||||||||||||||||||
| Time deposits | 866,346 | 802,110 | 783,876 | 720,899 | 416,437 | ||||||||||||||||||||
| Total deposits | 2,352,085 | 2,275,109 | 2,213,004 | 2,174,253 | 1,050,300 | ||||||||||||||||||||
| Senior borrowings | 786,688 | 775,582 | 872,021 | 842,150 | 531,596 | ||||||||||||||||||||
| Subordinated borrowings | 43,033 | 43,048 | 43,063 | 43,078 | 5,000 | ||||||||||||||||||||
| Total borrowings | 829,721 | 818,630 | 915,084 | 885,228 | 536,596 | ||||||||||||||||||||
| Other liabilities | 28,737 | 28,534 | 28,201 | 26,954 | 11,713 | ||||||||||||||||||||
| Total liabilities | 3,210,543 | 3,122,273 | 3,156,289 | 3,086,435 | 1,598,609 | ||||||||||||||||||||
| Total common shareholders' equity | 354,641 | 353,459 | 347,122 | 341,048 | 156,740 | ||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,565,184 | $ | 3,475,732 | $ | 3,503,411 | $ | 3,427,483 | $ | 1,755,349 | |||||||||||||||
| Net shares outstanding (2) | 15,443 | 15,432 | 15,407 | 15,385 | 9,116 | ||||||||||||||||||||
(1) The Company completed the acquisition of Lake Sunapee Bank Group on
January 13, 2017.
(2) Adjusted for 3-for-2 stock-split completed in
March 2017.
| BAR HARBOR BANKSHARES | ||||||||||||||||||||||||||||||||||||||
| CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED | ||||||||||||||||||||||||||||||||||||||
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LOAN ANALYSIS |
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| Organic Annualized Growth % (1) December 31, 2017 | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Acquired Lake Sunapee Bank (2) | Dec 31, 2016 | Quarter End | Year to Date | ||||||||||||||||||||||||||||||
| Commercial real estate | $ | 826,746 | $ | 793,572 | $ | 738,584 | $ | 779,635 | $ | 345,586 | $ | 418,119 | 16.7 | % | 15.1 | % | ||||||||||||||||||||||
| Commercial and industrial | 293,707 | 270,759 | 269,960 | 236,526 | 89,259 | 135,564 | 33.9 | 50.8 | ||||||||||||||||||||||||||||||
| Total commercial loans | 1,120,453 | 1,064,331 | 1,008,544 | 1,016,161 | 434,845 | 553,683 | 21.1 | 23.8 | ||||||||||||||||||||||||||||||
| Residential real estate | 1,155,682 | 1,152,628 | 1,160,832 | 1,155,436 | 652,255 | 506,612 | 1.1 | (0.6 | ) | |||||||||||||||||||||||||||||
| Consumer | 123,762 | 125,590 | 127,229 | 127,370 | 76,489 | 53,093 | (5.8 | ) | (11.0 | ) | ||||||||||||||||||||||||||||
| Tax exempt and other | 85,716 | 86,313 | 80,042 | 73,469 | 44,611 | 15,676 | (2.8 | ) | 162.2 | |||||||||||||||||||||||||||||
| Total loans | $ | 2,485,613 | $ | 2,428,862 | $ | 2,376,647 | $ | 2,372,436 | $ | 1,208,200 | $ | 1,129,064 | 9.3 | % | 13.1 | % | ||||||||||||||||||||||
(1) Non-GAAP financial measure.
(2) Acquired Lake Sunapee Bank
loans are as of January 13, 2017.
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DEPOSIT ANALYSIS |
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| Organic Annualized Growth % (1) December 31, 2017 | ||||||||||||||||||||||||||||||||||||||
| (in thousands) | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Acquired Lake Sunapee Bank (2) | Dec 31, 2016 | Quarter End | Year to Date | ||||||||||||||||||||||||||||||
| Demand | $ | 349,055 | $ | 357,398 | $ | 332,339 | $ | 349,896 | $ | 248,051 | $ | 98,856 | (9.3 | )% | 2.2 | % | ||||||||||||||||||||||
| NOW | 466,610 | 442,085 | 451,171 | 242,876 | 39,999 | 175,150 | 22.2 | 143.6 | ||||||||||||||||||||||||||||||
| Money market | 305,275 | 300,398 | 285,312 | 349,491 | 103,142 | 282,234 | 6.5 | (28.4 | ) | |||||||||||||||||||||||||||||
| Savings | 364,799 | 373,118 | 360,306 | 511,091 | 467,735 | 77,623 | (8.9 | ) | (232.6 | ) | ||||||||||||||||||||||||||||
| Total non-maturity deposits | 1,485,739 | 1,472,999 | 1,429,128 | 1,453,354 | 858,927 | 633,863 | 3.5 | (1.1 | ) | |||||||||||||||||||||||||||||
| Total time deposits | 866,346 | 802,110 | 783,876 | 720,899 | 291,684 | 416,437 | 32.0 | 38.0 | ||||||||||||||||||||||||||||||
| Total deposits | $ | 2,352,085 | $ | 2,275,109 | $ | 2,213,004 | $ | 2,174,253 | $ | 1,150,611 | $ | 1,050,300 | 13.5 | % | 14.4 | % | ||||||||||||||||||||||
(1) Non-GAAP financial measure.
(2) Acquired Lake Sunapee Bank
deposits are as of January 13, 2017.
| BAR HARBOR BANKSHARES | |||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED | |||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||
| (In thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Interest and dividend income | |||||||||||||||||||
| Loans | $ | 24,895 | $ | 11,026 | $ | 94,976 | $ | 41,653 | |||||||||||
| Securities and other | 5,261 | 3,820 | 21,093 | 15,834 | |||||||||||||||
| Total interest and dividend income | 30,156 | 14,846 | 116,069 | 57,487 | |||||||||||||||
| Interest expense | |||||||||||||||||||
| Deposits | 3,381 | 1,768 | 11,307 | 6,699 | |||||||||||||||
| Borrowings | 3,279 | 1,421 | 12,607 | 5,414 | |||||||||||||||
| Total interest expense | 6,660 | 3,189 | 23,914 | 12,113 | |||||||||||||||
| Net interest income | 23,496 | 11,657 | 92,155 | 45,374 | |||||||||||||||
| Provision for loan losses | 597 | 225 | 2,788 | 979 | |||||||||||||||
| Net interest income after provision for loan losses | 22,899 | 11,432 | 89,367 | 44,395 | |||||||||||||||
| Non-interest income | |||||||||||||||||||
| Trust and investment management fee income | 3,042 | 951 | 12,270 | 3,829 | |||||||||||||||
| Insurance and brokerage service income | 77 | — | 1,097 | — | |||||||||||||||
| Customer service fees | 2,495 | 649 | 8,484 | 2,648 | |||||||||||||||
| Gain on sales of securities, net | — | 9 | 19 | 4,498 | |||||||||||||||
| Bank-owned life insurance income | 374 | 163 | 1,539 | 703 | |||||||||||||||
| Other income | 530 | 263 | 2,573 | 671 | |||||||||||||||
| Total non-interest income | 6,518 | 2,035 | 25,982 | 12,349 | |||||||||||||||
| Non-interest expense | |||||||||||||||||||
| Salaries and employee benefits | 9,524 | 5,127 | 39,589 | 19,775 | |||||||||||||||
| Occupancy and equipment | 3,060 | 1,144 | 11,633 | 4,610 | |||||||||||||||
| Loss on sales of premises and equipment, net | — | 32 | 94 | 248 | |||||||||||||||
| Outside services | 780 | 337 | 3,000 | 767 | |||||||||||||||
| Professional services | 298 | 405 | 1,655 | 1,489 | |||||||||||||||
| Communication | 249 | 94 | 1,289 | 586 | |||||||||||||||
| Amortization of intangible assets | 186 | 1 | 720 | 26 | |||||||||||||||
| Acquisition, conversion and other expenses | (2,615 | ) | 1,838 | 3,302 | 2,650 | ||||||||||||||
| Other expenses | 2,781 | 1,479 | 11,444 | 5,784 | |||||||||||||||
| Total non-interest expense | 14,263 | 10,457 | 72,726 | 35,935 | |||||||||||||||
| Income before income taxes | 15,154 | 3,010 | 42,623 | 20,809 | |||||||||||||||
| Income tax expense | 8,545 | 426 | 16,630 | 5,876 | |||||||||||||||
| Net income | $ | 6,609 | $ | 2,584 | $ | 25,993 | $ | 14,933 | |||||||||||
| Earnings per share: | |||||||||||||||||||
| Basic (1) | $ | 0.43 | $ | 0.28 | $ | 1.71 | $ | 1.65 | |||||||||||
| Diluted (1) | 0.43 | 0.28 | 1.70 | 1.63 | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||
| Basic (1) | 15,437 | 9,096 | 15,184 | 9,069 | |||||||||||||||
| Diluted (1) | 15,537 | 9,215 | 15,290 | 9,143 | |||||||||||||||
(1) Adjusted for 3-for-2 stock-split completed in March 2017.
| BAR HARBOR BANKSHARES | ||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (5 Quarter Trend) - UNAUDITED | ||||||||||||||||||||||||
| (In thousands, except per share data) |
Dec 31, 2017 |
Sep 30, 2017 |
Jun 30, 2017 |
Mar 31, 2017 |
Dec 31, 2016 |
|||||||||||||||||||
| Interest and dividend income | ||||||||||||||||||||||||
| Loans | $ | 24,895 | $ | 24,661 | $ | 24,226 | $ | 21,194 | $ | 11,026 | ||||||||||||||
| Securities and other | 5,261 | 5,402 | 5,439 | 4,991 | 3,820 | |||||||||||||||||||
| Total interest and dividend income | 30,156 | 30,063 | 29,665 | 26,185 | 14,846 | |||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||
| Deposits | 3,381 | 3,177 | 2,539 | 2,210 | 1,768 | |||||||||||||||||||
| Borrowings | 3,279 | 3,408 | 3,317 | 2,603 | 1,421 | |||||||||||||||||||
| Total interest expense | 6,660 | 6,585 | 5,856 | 4,813 | 3,189 | |||||||||||||||||||
| Net interest income | 23,496 | 23,478 | 23,809 | 21,372 | 11,657 | |||||||||||||||||||
| Provision for loan losses | 597 | 660 | 736 | 795 | 225 | |||||||||||||||||||
| Net interest income after provision for loan losses | 22,899 | 22,818 | 23,073 | 20,577 | 11,432 | |||||||||||||||||||
| Non-interest income | ||||||||||||||||||||||||
| Trust and investment management fee income | 3,042 | 3,040 | 3,324 | 2,864 | 951 | |||||||||||||||||||
| Insurance and brokerage service income | 77 | 329 | 327 | 364 | — | |||||||||||||||||||
| Customer service fees | 2,495 | 2,638 | 1,991 | 1,360 | 649 | |||||||||||||||||||
| Gain on sales of securities, net | — | 19 | — | — | 9 | |||||||||||||||||||
| Bank-owned life insurance income | 374 | 380 | 386 | 399 | 163 | |||||||||||||||||||
| Other income | 530 | 554 | 530 | 959 | 263 | |||||||||||||||||||
| Total non-interest income | 6,518 | 6,960 | 6,558 | 5,946 | 2,035 | |||||||||||||||||||
| Non-interest expense | ||||||||||||||||||||||||
| Salaries and employee benefits | 9,524 | 9,617 | 10,127 | 10,321 | 5,127 | |||||||||||||||||||
| Occupancy and equipment | 3,060 | 2,894 | 3,013 | 2,666 | 1,144 | |||||||||||||||||||
| Loss on sales of premises and equipment,net | — | (1 | ) | — | 95 | 32 | ||||||||||||||||||
| Outside services | 780 | 907 | 716 | 597 | 337 | |||||||||||||||||||
| Professional services | 298 | 428 | 489 | 440 | 405 | |||||||||||||||||||
| Communication | 249 | 382 | 290 | 368 | 94 | |||||||||||||||||||
| Amortization of intangible assets | 186 | 189 | 188 | 157 | 1 | |||||||||||||||||||
| Acquisition, conversion and other expenses | (2,615 | ) | 346 | 2,459 | 3,112 | 1,838 | ||||||||||||||||||
| Other expenses | 2,781 | 2,824 | 2,764 | 3,075 | 1,479 | |||||||||||||||||||
| Total non-interest expense | 14,263 | 17,586 | 20,046 | 20,831 | 10,457 | |||||||||||||||||||
| Income before income taxes | 15,154 | 12,192 | 9,585 | 5,692 | 3,010 | |||||||||||||||||||
| Income tax expense | 8,545 | 3,575 | 3,029 | 1,481 | 426 | |||||||||||||||||||
| Net income | $ | 6,609 | $ | 8,617 | $ | 6,556 | $ | 4,211 | $ | 2,584 | ||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||
| Basic (1) | $ | 0.43 | $ | 0.56 | $ | 0.43 | $ | 0.29 | $ | 0.28 | ||||||||||||||
| Diluted (1) | 0.43 | 0.56 | 0.42 | 0.29 | 0.28 | |||||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||
| Basic (1) | 15,437 | 15,420 | 15,393 | 14,471 | 9,096 | |||||||||||||||||||
| Diluted (1) | 15,537 | 15,511 | 15,506 | 14,591 | 9,215 | |||||||||||||||||||
(1) Adjusted for 3-for-2 stock split completed in March 2017.
| BAR HARBOR BANKSHARES | ||||||||||||||||||||
| AVERAGE YIELDS AND COSTS (Fully Taxable Equivalent - Annualized) - UNAUDITED | ||||||||||||||||||||
| Quarters Ended | ||||||||||||||||||||
|
Dec 31, 2017 |
Sep 30, 2017 |
Jun 30, 2017 |
Mar 31, 2017 |
Dec 31, 2016 |
||||||||||||||||
| Earning assets | ||||||||||||||||||||
| Loans | 4.12 | % | 4.13 | % | 4.14 | % | 4.00 | % | 3.94 | % | ||||||||||
| Securities and other | 3.06 | 3.13 | 3.19 | 3.01 | 3.01 | |||||||||||||||
| Total earning assets | 3.87 | % | 3.89 | % | 3.91 | % | 3.76 | % | 3.65 | % | ||||||||||
| Funding liabilities | ||||||||||||||||||||
| Interest bearing deposits | 0.70 | % | 0.66 | % | 0.56 | % | 0.52 | % | 0.76 | % | ||||||||||
| Borrowings | 1.62 | 1.66 | 1.41 | 1.25 | 1.05 | |||||||||||||||
| Total interest-bearing liabilities | 0.97 | % | 0.96 | % | 0.85 | % | 0.76 | % | 0.86 | % | ||||||||||
| Net interest spread | 2.90 | 2.93 | 3.06 | 3.00 | 2.79 | |||||||||||||||
| Net interest margin | 3.04 | 3.06 | 3.16 | 3.11 | 2.89 | |||||||||||||||
| BAR HARBOR BANKSHARES | |||||||||||||||||||||||||
| AVERAGE BALANCES - UNAUDITED | |||||||||||||||||||||||||
| Quarters Ended | |||||||||||||||||||||||||
| (In thousands) |
Dec 31, 2017 |
Sep 30, 2017 |
Jun 30, 2017 |
Mar 31, 2017 |
Dec 31, 2016 |
||||||||||||||||||||
| Assets | |||||||||||||||||||||||||
| Total loans (1) | $ | 2,433,585 | $ | 2,402,171 | $ | 2,377,141 | $ | 2,346,340 | $ | 1,119,065 | |||||||||||||||
| Securities and other (2) | 753,282 | 754,450 | 761,546 | 746,653 | 556,365 | ||||||||||||||||||||
| Total earning assets | 3,186,867 | 3,156,621 | 3,138,687 | 3,092,993 | 1,675,430 | ||||||||||||||||||||
| Cash and due from banks | 65,145 | 49,169 | 87,332 | 25,556 | 5,976 | ||||||||||||||||||||
| Allowance for loan losses | (12,202 | ) | (11,786 | ) | (11,292 | ) | (10,584 | ) | (10,336 | ) | |||||||||||||||
| Goodwill and other intangible assets | 108,769 | 109,147 | 109,108 | 109,261 | 5,324 | ||||||||||||||||||||
| Other assets | 144,359 | 149,394 | 110,129 | 122,396 | 71,807 | ||||||||||||||||||||
| Total assets | $ | 3,492,938 | $ | 3,452,545 | $ | 3,433,964 | $ | 3,339,622 | $ | 1,748,201 | |||||||||||||||
| Liabilities and shareholders' equity | |||||||||||||||||||||||||
| Total interest-bearing deposits | $ | 1,925,802 | $ | 1,901,501 | $ | 1,811,226 | $ | 1,798,014 | $ | 930,983 | |||||||||||||||
| Borrowings | 803,469 | 812,938 | 941,789 | 856,328 | 537,818 | ||||||||||||||||||||
| Total interest-bearing liabilities | 2,729,271 | 2,714,439 | 2,753,015 | 2,654,342 | 1,468,801 | ||||||||||||||||||||
| Non-interest-bearing demand deposits | 376,066 | 354,470 | 320,503 | 350,497 | 108,961 | ||||||||||||||||||||
| Other liabilities | 30,971 | 30,079 | 13,145 | 19,334 | 7,929 | ||||||||||||||||||||
| Total liabilities | 3,136,308 | 3,098,988 | 3,086,663 | 3,024,173 | 1,585,691 | ||||||||||||||||||||
| Total shareholders' equity | 356,630 | 353,557 | 347,301 | 315,449 | 162,510 | ||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,492,938 | $ | 3,452,545 | $ | 3,433,964 | $ | 3,339,622 | $ | 1,748,201 | |||||||||||||||
(1) Total loans include non-accruing loans.
(2) Average balances
for securities available-for-sale are based on amortized cost.
| BAR HARBOR BANKSHARES | |||||||||||||||||||||||||
| ASSET QUALITY ANALYSIS - UNAUDITED | |||||||||||||||||||||||||
| At or for the Quarters Ended | |||||||||||||||||||||||||
| (in thousands) |
Dec 31, 2017 |
Sep 30, 2017 |
Jun 30, 2017 |
Mar 31, 2017 |
Dec 31, 2016 |
||||||||||||||||||||
| NON-PERFORMING ASSETS | |||||||||||||||||||||||||
| Non-accruing loans: | |||||||||||||||||||||||||
| Commercial real estate | $ | 8,343 | $ | 2,467 | $ | 2,090 | $ | 2,354 | $ | 2,564 | |||||||||||||||
| Commercial installment | 1,209 | 236 | 270 | 451 | 315 | ||||||||||||||||||||
| Residential real estate | 4,266 | 3,619 | 2,783 | 3,066 | 3,419 | ||||||||||||||||||||
| Consumer installment | 500 | 496 | 160 | 160 | 198 | ||||||||||||||||||||
| Total non-accruing loans | 14,318 | 6,818 | 5,303 | 6,031 | 6,496 | ||||||||||||||||||||
| Other real estate owned | 122 | 122 | 122 | 363 | 90 | ||||||||||||||||||||
| Total non-performing assets | $ | 14,440 | $ | 6,940 | $ | 5,425 | $ | 6,394 | $ | 6,586 | |||||||||||||||
| Total non-accruing loans/total loans | 0.58 | % | 0.28 | % | 0.22 | % | 0.25 | % | 0.58 | % | |||||||||||||||
| Total non-performing assets/total assets | 0.41 | 0.20 | 0.15 | 0.19 | 0.38 | ||||||||||||||||||||
| PROVISION AND ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||||||
| Balance at beginning of period | $ | 11,950 | $ | 11,442 | $ | 10,884 | $ | 10,419 | $ | 10,103 | |||||||||||||||
| Charged-off loans | (277 | ) | (297 | ) | (213 | ) | (344 | ) | (28 | ) | |||||||||||||||
| Recoveries on charged-off loans | 55 | 145 | 35 | 14 | 119 | ||||||||||||||||||||
| Net loans charged-off | (222 | ) | (152 | ) | (178 | ) | (330 | ) | 91 | ||||||||||||||||
| Provision for loan losses | 597 | 660 | 736 | 795 | 225 | ||||||||||||||||||||
| Balance at end of period | $ | 12,325 | $ | 11,950 | $ | 11,442 | $ | 10,884 | $ | 10,419 | |||||||||||||||
| Allowance for loan losses/total loans | 0.50 | % | 0.49 | % | 0.48 | % | 0.46 | % | 0.92 | % | |||||||||||||||
| Allowance for loan losses/non-accruing loans | 86 | 175 | 216 | 180 | 160 | ||||||||||||||||||||
| NET LOAN CHARGE-OFFS | |||||||||||||||||||||||||
| Commercial real estate | $ | (92 | ) | $ | (16 | ) | $ | (6 | ) | $ | (103 | ) | $ | 5 | |||||||||||
| Commercial installment | 1 | 6 | (138 | ) | (17 | ) | 89 | ||||||||||||||||||
| Residential real estate | — | (79 | ) | (13 | ) | (198 | ) | 8 | |||||||||||||||||
| Consumer installment | (131 | ) | (63 | ) | (21 | ) | (12 | ) | (11 | ) | |||||||||||||||
| Total, net | $ | (222 | ) | $ | (152 | ) | $ | (178 | ) | $ | (330 | ) | $ | 91 | |||||||||||
| Net charge-offs (QTD annualized)/average loans | 0.04 | % | 0.01 | % | 0.03 | % | 0.06 | % | (0.03 | )% | |||||||||||||||
| Net charge-offs (YTD annualized)/average loans | 0.04 | 0.04 | 0.04 | 0.06 | (0.03 | ) | |||||||||||||||||||
| DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS | |||||||||||||||||||||||||
| 30-89 Days delinquent | 0.37 | % | 0.35 | % | 0.55 | % | 0.33 | % | 0.54 | % | |||||||||||||||
| 90+ Days delinquent and still accruing | 0.02 | 0.01 | — | — | — | ||||||||||||||||||||
| Total accruing delinquent loans | 0.39 | 0.36 | 0.55 | 0.33 | 0.54 | ||||||||||||||||||||
| Non-accruing loans | 0.58 | 0.28 | 0.22 | 0.25 | 0.58 | ||||||||||||||||||||
| Total delinquent and non-accruing loans | 0.97 | % | 0.64 | % | 0.77 | % | 0.58 | % | 1.12 | % | |||||||||||||||
| BAR HARBOR BANKSHARES | ||||||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED | ||||||||||||||||||||||||||
| At or for the Quarters Ended | ||||||||||||||||||||||||||
| (in thousands) |
Dec 31, 2017 |
Sep 30, 2017 |
Jun 30, 2017 |
Mar 31, 2017 |
Dec 31, 2016 |
|||||||||||||||||||||
| Net income | $ | 6,609 | $ | 8,617 | $ | 6,556 | $ | 4,211 | $ | 2,584 | ||||||||||||||||
| Adj: Security Gains | — | (19 | ) | — | — | (9 | ) | |||||||||||||||||||
| Adj: Loss on sale of fixed assets, net | — | (1 | ) | — | 95 | 32 | ||||||||||||||||||||
| Adj: Acquisition, conversion and other expenses | (2,615 | ) | 346 | 2,459 | 3,112 | 1,838 | ||||||||||||||||||||
| Adj: Income taxes (37.57% in 2017, 35.0% in 2016) | 982 | (122 | ) | (924 | ) | (1,205 | ) | (651 | ) | |||||||||||||||||
| Adj: Tax reform charge | 3,988 | — | — | — | — | |||||||||||||||||||||
| Total core income (4) | (A) | $ | 8,964 | $ | 8,821 | $ | 8,091 | $ | 6,213 | $ | 3,794 | |||||||||||||||
| Net-interest income | (B) | $ | 23,496 | $ | 23,478 | $ | 23,809 | $ | 21,372 | $ | 11,657 | |||||||||||||||
| Plus: Non-interest income | 6,518 | 6,960 | 6,558 | 5,946 | 2,035 | |||||||||||||||||||||
| Total Revenue | 30,014 | 30,438 | 30,367 | 27,318 | 13,692 | |||||||||||||||||||||
| Adj: Net security gains | — | (19 | ) | — | — | (9 | ) | |||||||||||||||||||
| Total core revenue (4) | (C) | $ | 30,014 | $ | 30,419 | $ | 30,367 | $ | 27,318 | $ | 13,683 | |||||||||||||||
| Total non-interest expense | $ | 14,263 | $ | 17,586 | $ | 20,046 | $ | 20,831 | $ | 10,457 | ||||||||||||||||
| Less: Acquisition expenses | 2,615 | (346 | ) | (2,459 | ) | (3,112 | ) | (1,838 | ) | |||||||||||||||||
| Core non-interest expense (4) | (D) | $ | 16,878 | $ | 17,240 | $ | 17,587 | $ | 17,719 | $ | 8,619 | |||||||||||||||
| (in millions) | ||||||||||||||||||||||||||
| Total average earning assets | (E) | $ | 3,187 | $ | 3,157 | $ | 3,139 | $ | 3,093 | $ | 1,675 | |||||||||||||||
| Total average assets | (F) | 3,493 | 3,453 | 3,434 | 3,340 | 1,748 | ||||||||||||||||||||
| Total average shareholders' equity | (G) | 357 | 354 | 347 | 315 | 163 | ||||||||||||||||||||
| Total average tangible shareholders' equity | (H) | 248 | 244 | 238 | 206 | 157 | ||||||||||||||||||||
| Total tangible shareholders' equity, period-end (1) | (I) | 246 | 244 | 238 | 232 | 152 | ||||||||||||||||||||
| Total tangible assets, period-end (1) | (J) | 3,457 | 3,367 | 3,394 | 3,318 | 1,750 | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Total common shares outstanding, period-end | (K) | 15,443 | 15,432 | 15,407 | 15,385 | 9,116 | ||||||||||||||||||||
| Average diluted shares outstanding | (L) | 15,537 | 15,511 | 15,506 | 14,591 | 9,215 | ||||||||||||||||||||
| Core earnings per share, diluted | (A/L) | $ | 0.58 | $ | 0.57 | $ | 0.52 | $ | 0.43 | $ | 0.41 | |||||||||||||||
| Tangible book value per share, period-end | (I/K) | 15.94 | 15.84 | 15.44 | 15.07 | 16.61 | ||||||||||||||||||||
| Total tangible shareholders' equity/total tangible assets | (H/J) | 7.12 | 7.26 | 7.01 | 6.99 | 8.65 | ||||||||||||||||||||
| Performance ratios (2) | ||||||||||||||||||||||||||
| GAAP return on assets | 0.75 | % | 0.99 | % | 0.76 | % | 0.50 | % | 0.59 | % | ||||||||||||||||
| Core return on assets (4) | (A/F) | 1.02 | 1.01 | 0.94 | 0.74 | 0.87 | ||||||||||||||||||||
| GAAP return on equity | 7.35 | 9.67 | 7.55 | 5.34 | 6.36 | |||||||||||||||||||||
| Core return on equity (4) | (A/G) | 9.97 | 9.90 | 9.32 | 7.88 | 9.34 | ||||||||||||||||||||
| Core return on tangible equity (3) (4) | (A/I) | 14.53 | 14.51 | 13.78 | 12.24 | 9.66 | ||||||||||||||||||||
| Efficiency ratio (4)(5) | (D-N-P)/(C+M) | 53.09 | 53.59 | 54.64 | 61.62 | 59.24 | ||||||||||||||||||||
| Net interest margin | (B+O)/E | 3.04 | 3.06 | 3.16 | 3.11 | 2.89 | ||||||||||||||||||||
| Supplementary data (in thousands) | ||||||||||||||||||||||||||
| Taxable equivalent adjustment for efficiency ratio | (M) | 1,122 | 1,107 | 1,185 | 977 | 538 | ||||||||||||||||||||
| Franchise taxes included in non-interest expense | (N) | 161 | 154 | 158 | 126 | 37 | ||||||||||||||||||||
| Tax equivalent adjustment for net interest margin | (O) | 897 | 878 | 936 | 754 | 182 | ||||||||||||||||||||
| Intangible amortization | (P) | 186 | 189 | 188 | 157 | 157 | ||||||||||||||||||||
(1) Total tangible shareholders' equity is computed by taking total
shareholders' equity less the intangible assets at period-end. Total
tangible assets is computed by taking total assets less the intangible
assets at period-end.
(2) Ratios are annualized and based on
average balance sheet amounts, where applicable. Quarterly data may not
sum to year-to-date data due to rounding.
(3) Core return on
tangible equity is computed by dividing the total core income adjusted
for the tax-effected amortization of intangible assets, assuming a
marginal rate of 37.57% in 2017 and 35.0% in 2016, by tangible equity.
(4)
Non-GAAP financial measure.
(5) Efficiency ratio is computed by
dividing total core tangible non-interest expense by the sum of total
net interest income on a fully taxable equivalent basis and total core
non-interest income. The Company uses this non-GAAP measure to provide
important information about its operating efficiency.
