Bar Harbor Bankshares (NYSE MKT: BHB) (the “Company”) the parent
company of Bar Harbor Bank & Trust (the “Bank”), today
announced record net income of $3.9 million for the first quarter
of 2015, representing an increase of $94 thousand, or 2.5%,
compared with the first quarter of 2014. The Company also reported
diluted earnings per share of $0.64 for the quarter, unchanged
compared with the first quarter of 2014. The Company’s annualized
return on average shareholders’ equity amounted to 10.57% for the
quarter, compared with 12.06% in the first quarter of 2014. The
Company’s first quarter return on average assets amounted to 1.06%,
compared with 1.11% in the first quarter of 2014.
In making the announcement, the Company’s President and Chief
Executive Officer, Curtis C. Simard, commented, “We are pleased to
have carried our 2014 momentum forward into 2015 with the
announcement of our best quarterly earnings on record. Our first
quarter performance featured meaningful commercial loan growth,
with the portfolio up $27.2 million, or 6.0%, compared with year
end 2014. We also generated a $439 thousand, or 4.2%, increase in
net interest income compared with the first quarter of 2014. This
increase was attributed to average earning asset growth of $82.2
million, or 6.1%, compared with the first quarter of last year.
While appropriately investing in our people, products, and
processes, our continued focus on the overall management of our
operating expenses was also evident, with a first quarter
efficiency ratio of 55.3%.”
Mr. Simard continued, “By committing to deliberate organic
growth in the regions we call home, we are also pleased to report
that the credit quality of our loan portfolio remained relatively
stable during the first quarter. Total non-performing loans were
unchanged from year-end 2014, while delinquent loans and other
potential problem loans combined posted a meaningful decline. With
respect to loan loss experience, we are pleased to report net
recoveries on previously charged off loans of $14 thousand during
the quarter, compared with net loan charge-offs of $210 thousand in
the first quarter of last year.”
In concluding, Mr. Simard added, “Competition remains brisk,
however, our brand remains well received and we continue to focus
on improving our sales culture and the customer experience. We
believe our efforts to balance growth and earnings are evident in
our performance measures and continue to deliver value for our
shareholders including our recently announced sixteenth consecutive
quarterly cash dividend increase.”
Balance Sheet Highlights
Assets: Led by growth in the loan and securities
portfolios, total assets surpassed $1.5 billion at quarter end, up
$48.9 million, or 3.3%, compared with December 31, 2014.
Loans: Total loans ended the quarter at $939.8 million,
representing an increase of $20.7 million, or 2.3%, compared with
December 31, 2014. At quarter-end, the Bank’s commercial loan
portfolio stood at $483.0 million, representing an increase of
$27.2 million, or 6.0%, compared with year-end 2014. Consumer
loans, which principally consist of residential real estate
mortgages, ended the quarter at $440.2 million, representing a
decline of $6.4 million or 1.4% compared with year-end 2014. Loans
originated and closed by the Bank during the first quarter were
more than offset by loan re-financings and scheduled principal
amortization from the existing residential real estate
portfolio.
Credit Quality: The overall credit quality of the Bank’s
loan portfolio remained relatively stable during the first quarter.
At quarter end, total non-performing loans stood at $12.3 million,
unchanged compared with December 31, 2014. Other delinquent and
potential problem loans declined $1.2 million, or 7.2%, compared
with year-end 2014.
For the three months ended March 31, 2015, the Bank recorded a
provision for loan losses of $495 thousand, compared with $457
thousand in the first quarter of 2014. At quarter end, the Bank’s
allowance for loan losses stood at $9.5 million, up from $9.0
million at December 31, 2014. The allowance for loan losses
expressed as a percentage of total loans ended the first quarter at
1.01%, up from 0.98% at year-end 2014.
Securities: Total securities ended the first quarter at
$484.9 million, representing an increase of $14.4 million or 3.1%,
compared with December 31, 2014. Securities purchased during the
quarter were comprised of mortgage-backed securities issued and
guaranteed by U.S. Government agencies and sponsored-enterprises
and, to a lesser extent, municipal securities issued by states and
political subdivisions thereof.
Deposits: Historically, the banking business in the
Bank’s market area has been seasonal, with lower deposits in the
winter through late spring and higher deposits in summer and
autumn. The timing and extent of these seasonal swings have varied
from year-to-year and have generally impacted the Bank’s
transactional deposit accounts.
Total deposits ended the first quarter at $864.9 million, up
$6.9 million, or 0.8%, compared with December 31, 2014. Demand
deposits and NOW accounts experience a combined seasonal decline of
$15.9 million, while savings and money market accounts were up $6.0
million, or 2.4%. Total time deposits were up $16.8 million, or
4.4%. The increase in time deposits was principally attributed to
brokered deposits obtained from the national market, which were
utilized to replace seasonal deposit outflows and help fund earning
asset growth.
Capital: At March 31, 2015, the Company and the Bank
continued to exceed applicable regulatory requirements for
“well-capitalized” financial institutions. Under the capital
adequacy guidelines administered by the Bank’s principal
regulators, “well-capitalized” institutions are those with Common
Equity Tier I, Tier I leverage, Tier I Risk-based, and Total
Risk-based ratios of at least 6.5%, 5%, 8% and 10%, respectively.
At March 31, 2015, the Company’s Tier I Leverage, Tier I
Risk-based, and Total Risk-based capital ratios were 14.98%, 9.26%,
14.98% and 16.57%, respectively.
Shareholder Dividends: The Company paid a regular cash
dividend of 24.5 cents per share of common stock in the first
quarter of 2015, representing an increase of 1.0 cents or 4.3%
compared with the prior quarter and an increase of 2.83 cents, or
13.1%, compared with the first quarter of 2014.
In addition, the Company's Board of Directors recently declared
a regular second quarter cash dividend of 25.0 cents per share of
common stock, representing an increase of 2.7 cents, or 12.0%,
compared with the second quarter of 2014. Based on the March 31,
2015 price of BHB’s common stock of $32.55 per share, the dividend
yield amounted to 3.07%.
Results of Operations
Net Interest Income: For the three months ended March 31,
2015, net interest income on a tax-equivalent basis totaled $11.5
million, representing an increase of $418 thousand, or 3.8%,
compared with the first quarter of 2014. The increase in the net
interest income compared with the first quarter of 2014 was
principally attributed to average earning asset growth of $82.2
million or 6.1%, as the net interest margin declined seven basis
points to 3.27%. The decline in the net interest margin was
attributed to an eleven basis point decline in the weighted average
earning asset yield, partially offset by a three basis point
decline in the weighted average cost of interest bearing
liabilities. Earning asset yields continued to be impacted by
still-historically low interest rates as well as competitive
pricing pressures for quality loans.
Non-interest Income: For the three months ended March 31,
2015, total non-interest income amounted to $2.3 million,
representing an increase of $226 thousand or 10.7% compared with
the first quarter of 2014. The increase in non-interest income was
principally attributed to a $222 thousand or 55.9% increase in
realized security gains, reflecting the Bank’s strategy of lowering
the duration of the securities portfolio and its overall interest
rate risk profile, while simultaneously generating earnings.
Trust and other financial services fees declined $27 thousand,
or 2.8%, compared with first quarter of 2014, largely reflecting
lower levels of fee income from retail brokerage activities. Debit
card income increased $22 thousand, or 6.4%, compared with the
first quarter of 2014, reflecting continued growth of the Bank’s
retail deposit base and continued success with a program that
offers rewards for certain debit card transactions. Other income
increased $37 thousand, or 20.9%, compared with the first quarter
of 2014, reflecting the Bank’s purchase of Bank Owned Life
Insurance during the current quarter.
Non-interest Expense: For the three months ended March
31, 2015, total non-interest expense amounted to $7.3 million,
representing an increase of $487 thousand, or 7.1%, compared with
the first quarter of 2014. The increase in non-interest expense was
principally attributed to a $436 thousand or 11.1% increase in
salaries and employee benefits compared with the first quarter of
2014. The increase in salaries and employee benefits were
attributed to a variety of factors including normal increases in
base salaries, higher levels of employee health insurance, higher
levels of employee incentive compensation, as well as increases in
staffing levels and strategic changes in staffing mix.
About Bar Harbor Bankshares
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 fifteen branch office locations serving downeast, midcoast and
central Maine.
Safe Harbor Statement: This earnings release contains
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, as amended. You can identify these
forward-looking statements by the use of words like “strategy,”
“anticipates” “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. For more information about these risks and
uncertainties and other factors, please see the Company’s Annual
Report on Form 10-K, as updated by the Company’s Quarterly Reports
on Form 10-Q and other filings on file with the SEC. All of these
factors should be carefully reviewed, and readers should not place
undue reliance on these forward-looking statements. 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 1st Quarter Average Balance
Sheet Data 3/31/2015 12/31/2014
2015 2014 Total assets $
1,508,203 $ 1,459,320 $ 1,486,805 $ 1,381,670 Total securities
484,902 470,525 464,419 467,812 Total loans 939,759 919,024 933,708
851,281 Allowance for loan losses 9,478 8,969 9,169 8,611 Total
deposits 864,938 858,049 856,338 870,581 Total borrowings 486,604
447,020 474,286 376,873 Shareholders' equity 150,093 146,287
148,970 127,344
Three Months Ended Results Of
Operations 3/31/2015 3/31/2014 Interest
and dividend income $ 13,533 $ 13,041 Interest expense 2,535 2,482
Net interest income 10,998 10,559 Provision for loan losses 495 457
Net interest income after provision for loan losses 10,503 10,102
Non-interest income 2,342 2,116 Non-interest expense
7,333 6,846 Income before income taxes 5,512
5,372 Income taxes 1,631 1,585
Net income $ 3,881 $ 3,787
At or for
the Three Months Ended Share and Per Common Share Data
March 31, 2015 2014 Period-end shares
outstanding 5,959,377 5,916,329 Basic average shares outstanding
5,953,538 5,911,698 Diluted average shares outstanding 6,033,257
5,952,527 Basic earnings per share $ 0.65 $ 0.64 Diluted
earnings per share $ 0.64 $ 0.64 Cash dividends $ 0.2450 $
0.2167 Book value $ 25.19 $ 21.93 Tangible book value $ 24.27 $
20.99
Selected Financial Ratios Return on
Average Assets 1.06 % 1.11 % Return on Average Equity 10.57 % 12.06
% Tax-equivalent Net Interest Margin 3.27 % 3.34 % Efficiency Ratio
(1) 55.3 % 53.4 %
At or for
the
Three Months Ended
At or for the Year Ended
March 31, December 31, 2015
2014 2014 Asset Quality Net
(recoveries) charge-offs to average loans (0.01 %) 0.10 % 0.15 %
Allowance for loan losses to total loans 1.01 % 1.01 % 0.98 %
Allowance for loan losses to non-performing loans 77.1 % 93.6 %
73.0 % Non-performing loans to total loans 1.31 % 1.07 % 1.34 %
Non-performing assets to total assets 0.84 % 0.78 % 0.88 %
Capital Ratios Common equity tier 1 capital 14.98 %
n/a n/a Tier 1 leverage capital 9.26 % 9.19 % 9.30 % Tier 1
risk-based capital 14.98 % 15.17 % 15.60 % Total risk-based capital
16.57 % 16.83 % 17.24 % Tangible equity to total assets 9.59 % 8.84
% 9.65 % Tangible common equity (2) 9.62 % 8.88 % 9.68 %
Use of non-GAAP Financial Measures
Certain information in this press release contains financial
information determined by methods other than in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). Management uses these “non-GAAP” measures in its
analysis of the Company’s performance and believes these non-GAAP
financial measures provide a greater understanding of ongoing
operations and enhance comparability of results with prior periods
as well as demonstrating the effects of significant gains and
charges in the current period. The Company believes that a
meaningful analysis of its financial performance requires an
understanding of the factors underlying that performance.
Management believes that investors may use these non-GAAP financial
measures to analyze financial performance without the impact of
unusual items that may obscure trends in the Company’s underlying
performance. These disclosures should not be viewed as a substitute
for operating results determined in accordance with GAAP, nor are
they necessarily comparable to non-GAAP performance measures that
may be presented by other companies.
(1) In certain places in this press release
net interest income and the net interest margin is calculated and
discussed on a fully tax-equivalent basis. Specifically included in
interest income was tax-exempt interest income from certain
investment securities and loans. An amount equal to the tax benefit
derived from this tax-exempt income has been added back to the
interest income total, which increased net interest income
accordingly. Management believes the disclosure of tax-equivalent
net interest income information improves the clarity of financial
analysis, and is particularly useful to investors in understanding
and evaluating the changes and trends in the Company’s results of
operations. Other financial institutions commonly present net
interest income on a tax-equivalent basis. This adjustment is
considered helpful in the comparison of one financial institution’s
net interest income to that of another institution, as each will
have a different proportion of tax-exempt interest from its earning
assets. Moreover, net interest income is a component of a second
financial measure commonly used by financial institutions, net
interest margin, which is the ratio of net interest income to
average earning assets. For purposes of this measure as well, other
financial institutions generally use tax-equivalent net interest
income to provide a better basis of comparison from institution to
institution. The Company follows these practices.
(2) The Company presents its efficiency ratio
using non-GAAP information. The GAAP efficiency ratio is computed
by dividing non-interest expense by the sum of tax-equivalent net
interest income and non-interest income. The non-GAAP efficiency
ratio presented in this press release is computed by dividing
non-interest expense by the sum of tax-equivalent net interest
income and non-interest income other than net securities gains and
OTTI, and other significant non-recurring expenses.
(3) The Company presents certain information
based upon tangible common equity instead of total shareholders’
equity in accordance with GAAP. The difference between these two
measures is the Company’s intangible assets, specifically goodwill
and core deposit intangibles from prior acquisitions. Management,
banking regulators and many stock analysts use the tangible common
equity ratio, the tangible equity to total assets ratio and the
tangible book value per common share in conjunction with more
traditional bank capital ratios to, among other things, compare the
capital adequacy of banking organizations with significant amounts
of goodwill or other intangible assets, typically stemming from the
use of the purchase accounting method in accounting for mergers and
acquisitions. The tangible common equity ratio is computed by
dividing the total common shareholders' equity, less goodwill and
other intangible assets, by total assets, less goodwill and other
intangible assets. The tangible equity to total assets ratio is
computed by dividing total shareholders' equity, less goodwill and
other intangible assets, by total assets at period end. The
tangible book value ratio is computed by dividing total
shareholders’ equity, less goodwill and other intangible assets, by
period end total outstanding shares of common stock.
For more information contact:Bar Harbor
BanksharesGerald Shencavitz, 207-288-3314EVP and
Chief Financial Officer
Bar Harbor Bankshares (AMEX:BHB)
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