Bar Harbor Bankshares (AMEX:BHB) the parent company of Bar Harbor
Bank & Trust (the �Bank�), today announced net income of $2.0
million for the quarter ended September 30, 2006 or fully diluted
earnings per share of $0.63, compared with $1.8 million or fully
diluted earnings per share of $0.58 for the third quarter of 2005,
representing increases of $142 thousand and $0.05, or 8% and 9%,
respectively. The increase in third quarter 2006 earnings was
principally attributed to a $319 thousand increase in realized
gains on the sale of securities, compared with the same quarter in
2005. For the nine months ended September 30, 2006, net income
amounted to $5.2 million or fully diluted earnings per share of
$1.65, compared with $4.7 million or fully diluted earnings per
share of $1.49 for the same period in 2005, representing increases
of $438 thousand and $0.16, or 9% and 11%, respectively. The
year-to-date earnings growth was principally attributed to a $305
thousand or 6% increase in non-interest income, a $283 thousand or
2% decline in non-interest expense and, to a lesser extent, a $155
thousand or 1% increase in net interest income. Realized gains on
the sale of securities were up $87 thousand, or 15%, compared with
the same period last year. In making the announcement, President
and Chief Executive Officer, Joseph M. Murphy commented, �As we
enter the last quarter of 2006, we are delighted to report a
double-digit increase in year-to-date earnings per share. As a
consequence of the sustained flat-to-inverted U.S. Treasury yield
curve and the declining net interest margins being experienced by
us and by the banking industry in general, we have not been able to
rely as much on net interest income as the primary driver of
earnings growth. Instead, operating expense declines and increases
in non-interest income have become the key contributors supporting
our year-to-date earnings increase compared with the first nine
months of last year.� In concluding, Mr. Murphy added, �We are
pleased with the Bank�s relatively strong deposit growth, the
sustained growth of the commercial loan portfolio and continued
strong credit quality.� Financial Condition Loans: Total loans
ended the third quarter at $547 million, representing increases of
$33 million and $54 million compared with December 31 and September
30, 2005, or 6% and 11%, respectively. Commercial loans continued
to drive the overall growth of the Bank�s loan portfolio, posting
increases of $20 million and $35 million compared with December 31
and September 30, 2005, or 10% and 18%, respectively. Credit
Quality: The Bank�s non-performing loans remained at low levels at
quarter-end, representing $745 thousand or 0.14% of total loans,
compared with $868 thousand and $652 thousand, or 0.17% and 0.13%
of total loans at December 31 and September 30, 2005, respectively.
For the nine months ended September 30, 2006 the Bank recorded a
provision for loan losses of $124 thousand, compared with $50
thousand during the same period in 2005. Investment Securities:
Investment securities totaled $198 million at September 30, 2006,
representing increases of $15 million and $38 million, or 8% and
24%, compared with December 31 and September 30, 2005,
respectively. Market yields showed meaningful improvement during
the first six months of 2006, during which time the Bank increased
its securities portfolio to help generate higher levels of net
interest income. Deposits: Total deposits ended the third quarter
at $514 million, representing increases of $69 million and $78
million, or 15% and 18% compared with December 31 and September 30,
2005, respectively. Deposit growth was supplemented with
certificates of deposit obtained in the national market, as the
Bank�s earning asset growth continued to outpace retail deposit
growth. At September 30, 2006, retail deposits totaled $428
million, representing increases of $43 million and $44 million, or
11%, compared with December 31 and September 30, 2005,
respectively. Management attributes the Bank�s deposit growth, in
large part, to the successful introduction of a new variable rate
money market account in January 2006. In addition, during the later
part of 2005, the Bank launched several new demand deposit
accounts, including free business and personal checking accounts,
which it believes are highly competitive. At quarter-end, demand
deposits were up 15% and 6%, compared with December 31 and
September 30, 2005, respectively. Borrowings: Total borrowings
amounted to $215 million at September 30, 2006, representing a
decrease of $25 million or 10% compared with December 31, 2005 and
an increase $11 million or 5%, compared with September 30, 2005.
The decline in borrowings from December 31, 2005 levels principally
reflects the seasonality of the Bank�s retail deposit base, which
has historically shown lower deposits in the winter and spring and
higher deposits in summer and autumn. Capital: Bar Harbor
Bankshares continued to exceed regulatory requirements for
well-capitalized institutions, ending the third quarter of 2006
with a Tier I Capital Ratio of 7.15%. Results of Operations Net
Interest Income: For the three and nine months ended September 30,
2006, net interest income on a tax equivalent basis amounted to
$5.7 million and $16.9 million, representing increases of $88
thousand and $200 thousand, or 2% and 1% compared with the same
periods last year, respectively. The increases in net interest
income were principally attributed to average earning asset growth,
as the tax-equivalent net interest margin declined 44 and 46 basis
points compared with the three and nine months ended September 30,
2005, respectively. As is widely the situation throughout the
banking industry, the decline in the net interest margin was
largely attributed to the steady increases in short-term interest
rates and a flat-to-inverted U.S. Treasury yield curve, the impact
of which has caused the Bank�s funding costs to increase at a
faster pace than the yield on its earning asset portfolios.
Non-interest Income: For the three and nine months ended September
30, 2006, total non-interest income amounted to $2.2 million and
$5.3 million, representing increases of $232 thousand and $305
thousand, or 12% and 6% compared with the same periods last year,
respectively. Realized gains on the sale of securities contributed
heavily to third quarter results, posting an increase of $319
thousand compared with the same quarter last year. On a
year-to-date basis, realized securities gains were up $87 thousand
or 15%, compared with the same period last year. The increases in
non-interest income during the three and nine months ended
September 30, 2006 compared with the same periods last year were
also attributed to increases in service charges on deposit accounts
and trust and financial services fees. Non-interest income also
includes a $150 thousand gain on the sale of Bank owned real
estate, recorded during the first quarter of 2006. Non-interest
Expense: For the three and nine months ended September 30, 2006,
total non-interest expense amounted to $4.9 million and $14.2
million, representing an increase of $30 thousand or 1% and a
decline of $283 thousand or 2%, compared with the same periods in
2005, respectively. The decline in non-interest expense during the
nine months ended September 30, 2006 compared with the same period
last year was principally attributed to a $344 thousand or 5%
decline in salaries and employee benefits, which was achieved
through a variety of factors including: lower levels of employee
health insurance contributions due to favorable claims experience;
certain employee severance costs recorded in the first quarter of
2005; changes to employee insurance programs; changes in overall
staffing levels and mix; and lower levels of incentive
compensation. The Company�s non-interest expense also reflects the
January 1, 2006 adoption of Statement of Financial Accounting
Standards 123(Revised), �Accounting for Share-Based Payments�,
which mandated the expensing of stock options and other equity
awards. For the nine months ended September 30, 2006, the Company
recognized $109 thousand of share-based compensation in salaries
and employee benefits expense. Bar Harbor Bankshares is the parent
company of its wholly owned subsidiary, Bar Harbor Bank &
Trust. Bar Harbor Bank & Trust, founded in 1887, provides full
service community banking with twelve branch office locations
serving Down East and Mid Coast Maine. This earnings release may
contain certain forward-looking statements with respect to the
financial condition, results of operations and business of Bar
Harbor Bankshares (the �Company�) for which the Company claims the
protection of the safe harbor provided by the Private Securities
Litigation Reform Act of 1995. You can identify these
forward-looking statements by the use of words like �strategy,�
�expects,� �plans,� �believes,� �will,� �estimates,� �intends,�
�projects,� �goals,� �targets,� and other words of similar meaning.
You can also identify them by the fact that they do not relate
strictly to historical or current facts. Forward-looking statements
include, but are not limited to, those made in connection with
estimates with respect to the future results of operation,
financial condition, and the business of the Company which are
subject to change based on the impact of various factors that could
cause actual results to differ materially from those projected or
suggested due to certain risks and uncertainties. These risks and
uncertainties include, but are not limited to, changes in general
economic conditions, interest rates, deposit flows, loan demand,
internal controls, legislation or regulation and accounting
principles, policies or guidelines, as well as other economic,
competitive, governmental, regulatory and accounting and
technological factors affecting the Company�s operations. The
Company assumes no obligation to update any forward-looking
statements as a result of new information or future events or
developments. Bar Harbor Bankshares Selected Financial Information
(dollars in thousands except per share data) (unaudited) Period End
3rd Quarter Average Balance Sheet Data 09/30/2006� 09/30/2005�
2006� 2005� � Total assets $795,048� $702,708� $802,044� $694,579�
Total investment securities 197,884� 159,687� 207,441� 155,554�
Total loans 547,487� 493,854� 545,092� 491,171� Allowance for loan
losses 4,593� 4,725� 4,539� 4,730� Total deposits 514,381� 436,605�
497,885� 426,397� Borrowings 215,178� 204,054� 241,206� 205,918�
Shareholders' equity 59,004� 56,360� 56,640� 56,105� � Three Months
Ended Nine Months Ended Results Of Operations 09/30/2006�
09/30/2005� 09/30/2006� 09/30/2005� � Interest and dividend income
$ 12,080� $ 9,486� $ 34,098� $ 26,972� Interest expense 6,532�
3,999� 17,795� 10,824� Net interest income 5,548� 5,487� 16,303�
16,148� Provision for loan losses 81� 25� 124� 50� Net interest
income after provision for loan losses 5,467� 5,462� 16,179�
16,098� � Non-interest income 2,199� 1,967� 5,328� 5,023�
Non-interest expense 4,857� 4,827� 14,192� 14,475� � Pre-tax income
2,809� 2,602� 7,315� 6,646� Income tax 845� 780� 2,142� 1,911� �
Net income $ 1,964� $ 1,822� $ 5,173� $ 4,735� � Earnings per
share: Basic $ 0.64� $ 0.59� $ 1.70� $ 1.54� Diluted $ 0.63� $
0.58� $ 1.65� $ 1.49� � Dividends per share $ 0.230� $ 0.210� $
0.675� $ 0.630� � Return on Average Equity 13.76% 12.88% 12.26%
11.27% Return on Average Assets 0.97% 1.04% 0.88% 0.93% � � As of
September 30: 2006� 2005� � Tier 1 Leverage Capital Ratio 7.15%
7.76% Book value per share $ 19.36� $ 18.37� Tangible book value
per share $ 18.32� $ 17.34� Shares outstanding 3,047,983�
3,068,848� Bar Harbor Bankshares (AMEX:BHB) the parent company of
Bar Harbor Bank & Trust (the "Bank"), today announced net
income of $2.0 million for the quarter ended September 30, 2006 or
fully diluted earnings per share of $0.63, compared with $1.8
million or fully diluted earnings per share of $0.58 for the third
quarter of 2005, representing increases of $142 thousand and $0.05,
or 8% and 9%, respectively. The increase in third quarter 2006
earnings was principally attributed to a $319 thousand increase in
realized gains on the sale of securities, compared with the same
quarter in 2005. For the nine months ended September 30, 2006, net
income amounted to $5.2 million or fully diluted earnings per share
of $1.65, compared with $4.7 million or fully diluted earnings per
share of $1.49 for the same period in 2005, representing increases
of $438 thousand and $0.16, or 9% and 11%, respectively. The
year-to-date earnings growth was principally attributed to a $305
thousand or 6% increase in non-interest income, a $283 thousand or
2% decline in non-interest expense and, to a lesser extent, a $155
thousand or 1% increase in net interest income. Realized gains on
the sale of securities were up $87 thousand, or 15%, compared with
the same period last year. In making the announcement, President
and Chief Executive Officer, Joseph M. Murphy commented, "As we
enter the last quarter of 2006, we are delighted to report a
double-digit increase in year-to-date earnings per share. As a
consequence of the sustained flat-to-inverted U.S. Treasury yield
curve and the declining net interest margins being experienced by
us and by the banking industry in general, we have not been able to
rely as much on net interest income as the primary driver of
earnings growth. Instead, operating expense declines and increases
in non-interest income have become the key contributors supporting
our year-to-date earnings increase compared with the first nine
months of last year." In concluding, Mr. Murphy added, "We are
pleased with the Bank's relatively strong deposit growth, the
sustained growth of the commercial loan portfolio and continued
strong credit quality." Financial Condition Loans: Total loans
ended the third quarter at $547 million, representing increases of
$33 million and $54 million compared with December 31 and September
30, 2005, or 6% and 11%, respectively. Commercial loans continued
to drive the overall growth of the Bank's loan portfolio, posting
increases of $20 million and $35 million compared with December 31
and September 30, 2005, or 10% and 18%, respectively. Credit
Quality: The Bank's non-performing loans remained at low levels at
quarter-end, representing $745 thousand or 0.14% of total loans,
compared with $868 thousand and $652 thousand, or 0.17% and 0.13%
of total loans at December 31 and September 30, 2005, respectively.
For the nine months ended September 30, 2006 the Bank recorded a
provision for loan losses of $124 thousand, compared with $50
thousand during the same period in 2005. Investment Securities:
Investment securities totaled $198 million at September 30, 2006,
representing increases of $15 million and $38 million, or 8% and
24%, compared with December 31 and September 30, 2005,
respectively. Market yields showed meaningful improvement during
the first six months of 2006, during which time the Bank increased
its securities portfolio to help generate higher levels of net
interest income. Deposits: Total deposits ended the third quarter
at $514 million, representing increases of $69 million and $78
million, or 15% and 18% compared with December 31 and September 30,
2005, respectively. Deposit growth was supplemented with
certificates of deposit obtained in the national market, as the
Bank's earning asset growth continued to outpace retail deposit
growth. At September 30, 2006, retail deposits totaled $428
million, representing increases of $43 million and $44 million, or
11%, compared with December 31 and September 30, 2005,
respectively. Management attributes the Bank's deposit growth, in
large part, to the successful introduction of a new variable rate
money market account in January 2006. In addition, during the later
part of 2005, the Bank launched several new demand deposit
accounts, including free business and personal checking accounts,
which it believes are highly competitive. At quarter-end, demand
deposits were up 15% and 6%, compared with December 31 and
September 30, 2005, respectively. Borrowings: Total borrowings
amounted to $215 million at September 30, 2006, representing a
decrease of $25 million or 10% compared with December 31, 2005 and
an increase $11 million or 5%, compared with September 30, 2005.
The decline in borrowings from December 31, 2005 levels principally
reflects the seasonality of the Bank's retail deposit base, which
has historically shown lower deposits in the winter and spring and
higher deposits in summer and autumn. Capital: Bar Harbor
Bankshares continued to exceed regulatory requirements for
well-capitalized institutions, ending the third quarter of 2006
with a Tier I Capital Ratio of 7.15%. Results of Operations Net
Interest Income: For the three and nine months ended September 30,
2006, net interest income on a tax equivalent basis amounted to
$5.7 million and $16.9 million, representing increases of $88
thousand and $200 thousand, or 2% and 1% compared with the same
periods last year, respectively. The increases in net interest
income were principally attributed to average earning asset growth,
as the tax-equivalent net interest margin declined 44 and 46 basis
points compared with the three and nine months ended September 30,
2005, respectively. As is widely the situation throughout the
banking industry, the decline in the net interest margin was
largely attributed to the steady increases in short-term interest
rates and a flat-to-inverted U.S. Treasury yield curve, the impact
of which has caused the Bank's funding costs to increase at a
faster pace than the yield on its earning asset portfolios.
Non-interest Income: For the three and nine months ended September
30, 2006, total non-interest income amounted to $2.2 million and
$5.3 million, representing increases of $232 thousand and $305
thousand, or 12% and 6% compared with the same periods last year,
respectively. Realized gains on the sale of securities contributed
heavily to third quarter results, posting an increase of $319
thousand compared with the same quarter last year. On a
year-to-date basis, realized securities gains were up $87 thousand
or 15%, compared with the same period last year. The increases in
non-interest income during the three and nine months ended
September 30, 2006 compared with the same periods last year were
also attributed to increases in service charges on deposit accounts
and trust and financial services fees. Non-interest income also
includes a $150 thousand gain on the sale of Bank owned real
estate, recorded during the first quarter of 2006. Non-interest
Expense: For the three and nine months ended September 30, 2006,
total non-interest expense amounted to $4.9 million and $14.2
million, representing an increase of $30 thousand or 1% and a
decline of $283 thousand or 2%, compared with the same periods in
2005, respectively. The decline in non-interest expense during the
nine months ended September 30, 2006 compared with the same period
last year was principally attributed to a $344 thousand or 5%
decline in salaries and employee benefits, which was achieved
through a variety of factors including: lower levels of employee
health insurance contributions due to favorable claims experience;
certain employee severance costs recorded in the first quarter of
2005; changes to employee insurance programs; changes in overall
staffing levels and mix; and lower levels of incentive
compensation. The Company's non-interest expense also reflects the
January 1, 2006 adoption of Statement of Financial Accounting
Standards 123(Revised), "Accounting for Share-Based Payments",
which mandated the expensing of stock options and other equity
awards. For the nine months ended September 30, 2006, the Company
recognized $109 thousand of share-based compensation in salaries
and employee benefits expense. Bar Harbor Bankshares is the parent
company of its wholly owned subsidiary, Bar Harbor Bank &
Trust. Bar Harbor Bank & Trust, founded in 1887, provides full
service community banking with twelve branch office locations
serving Down East and Mid Coast Maine. This earnings release may
contain certain forward-looking statements with respect to the
financial condition, results of operations and business of Bar
Harbor Bankshares (the "Company") for which the Company claims the
protection of the safe harbor provided by the Private Securities
Litigation Reform Act of 1995. You can identify these
forward-looking statements by the use of words like "strategy,"
"expects," "plans," "believes," "will," "estimates," "intends,"
"projects," "goals," "targets," and other words of similar meaning.
You can also identify them by the fact that they do not relate
strictly to historical or current facts. Forward-looking statements
include, but are not limited to, those made in connection with
estimates with respect to the future results of operation,
financial condition, and the business of the Company which are
subject to change based on the impact of various factors that could
cause actual results to differ materially from those projected or
suggested due to certain risks and uncertainties. These risks and
uncertainties include, but are not limited to, changes in general
economic conditions, interest rates, deposit flows, loan demand,
internal controls, legislation or regulation and accounting
principles, policies or guidelines, as well as other economic,
competitive, governmental, regulatory and accounting and
technological factors affecting the Company's operations. The
Company assumes no obligation to update any forward-looking
statements as a result of new information or future events or
developments. -0- *T Bar Harbor Bankshares Selected Financial
Information (dollars in thousands except per share data)
(unaudited) Period End 3rd Quarter Average Balance Sheet Data
09/30/2006 09/30/2005 2006 2005 Total assets $795,048 $702,708
$802,044 $694,579 Total investment securities 197,884 159,687
207,441 155,554 Total loans 547,487 493,854 545,092 491,171
Allowance for loan losses 4,593 4,725 4,539 4,730 Total deposits
514,381 436,605 497,885 426,397 Borrowings 215,178 204,054 241,206
205,918 Shareholders' equity 59,004 56,360 56,640 56,105 *T -0- *T
Three Months Ended Nine Months Ended Results Of Operations
09/30/2006 09/30/2005 09/30/2006 09/30/2005 Interest and dividend
income $12,080 $9,486 $34,098 $26,972 Interest expense 6,532 3,999
17,795 10,824 Net interest income 5,548 5,487 16,303 16,148
Provision for loan losses 81 25 124 50 Net interest income after
provision for loan losses 5,467 5,462 16,179 16,098 Non-interest
income 2,199 1,967 5,328 5,023 Non-interest expense 4,857 4,827
14,192 14,475 Pre-tax income 2,809 2,602 7,315 6,646 Income tax 845
780 2,142 1,911 Net income $1,964 $1,822 $5,173 $4,735 Earnings per
share: Basic $0.64 $0.59 $1.70 $1.54 Diluted $0.63 $0.58 $1.65
$1.49 Dividends per share $0.230 $0.210 $0.675 $0.630 Return on
Average Equity 13.76% 12.88% 12.26% 11.27% Return on Average Assets
0.97% 1.04% 0.88% 0.93% As of September 30: 2006 2005 Tier 1
Leverage Capital Ratio 7.15% 7.76% Book value per share $19.36
$18.37 Tangible book value per share $18.32 $17.34 Shares
outstanding 3,047,983 3,068,848 *T
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