BAR HARBOR BANKSHARES - FORM 8-K - EX-99.1 - EXHIBIT 99.1 4-19-18

Attached files

file	filename
8-K - 8-K 4-19-18 - BAR HARBOR BANKSHARES	q12018bhb8-kearningsrelease.htm

Bar Harbor Bankshares Reports First Quarter Earnings

BAR HARBOR, MAINE - April 19, 2018 -- Bar Harbor Bankshares (NYSE American: BHB) reported first quarter 2018 GAAP earnings of $7.8 million, or 50 cents per share, compared with $4.2 million, or 29 cents per share in the same quarter of 2017. Core earnings in the first quarter 2018 totaled $8.1 million, or 52 cents per share, up 21% from $6.2 million, or 43 cents in the first quarter of 2017.

FIRST QUARTER FINANCIAL HIGHLIGHTS (comparisons are to the first quarter 2017 unless otherwise noted):


•	$29.4 million vs. $27.3 million in total revenue (non-GAAP measure)


•	8% increase in net interest income


•	11% annualized commercial and industrial loan growth


•	0.93% core return on assets (non-GAAP measure)


•	9.31% core return on equity (non-GAAP measure)

President and Chief Executive Officer, Curtis C. Simard stated, “Our teams hit the ground running and have delivered a strong start to this year. We achieved both our revenue and net income expectations for the first quarter of 2018. Total revenue increased 8% and core earnings per share is up 21% year-over-year as we expanded our market presence throughout Northern New England. This is just more proof that we continue to deliver on the commitments made over a year ago as we focus on profitable growth through the use of various revenue streams coupled with disciplined expense management. As we have communicated before, we will continue to hold firm our model of balancing growth and earnings.”

Mr. Simard went on to say, “We have much to be proud about the way our teams performed in the first quarter. While some loan closings were delayed during the first quarter, our loan pipelines remain robust. We opened over 3,200 new deposit accounts while our branch colleagues came together under new leadership, and our wealth management team continued to drive significant fee income. The first quarter also sparked a launch for many growth and strategic initiatives throughout the Company. We rolled out an expanded Treasury Management Services platform in January and we hired a new EVP of Human Resources, John Land, who



BHB - Bar Harbor Bankshares	Page 1	www.bhbt.com

will focus on the employee experience including total value compensation. We remain committed to our customers, employees and shareholders as we focus on being one of the most profitable banks in New England.”

Mr. Simard further stated, “We have built a strong retail and commercial bank franchise that understands the needs of our customers and is committed to providing solutions while preserving the culture in our communities. Our brand identity is prevalent in the markets we serve, and while the acquisition allowed for some name continuity, we’ve listened to our customers and their preference to consolidate the brand under one name. In recognition of the value proposition we represent, all of our Retail and Commercial business lines will begin operating under the Bar Harbor Bank & Trust name. The teams have expressed great enthusiasm about this milestone, which is expected to strengthen our brand and allow us to both streamline processes and deliver products more efficiently. We expect that the brand consolidation will be completed by the end of the second quarter 2018.”

Mr. Simard also stated “Similar to the brand consolidation, our teams in wealth management are working to migrate Bar Harbor Trust Services and Charter Trust onto a common operating platform. Fee income remains a focus of the Company and wealth management is a strong source of these revenue streams. The combined platform is expected to improve operational efficiencies and deepen customer relationships, allowing for further market penetration and cross-sell opportunities which are central themes to our sales objectives.”

Mr. Simard concluded, “2018 is about continuing to improve performance metrics while fine-tuning and consolidating the way we operate and conduct our business to realize our greatest potential as a true community bank.”

RESULTS OF OPERATIONS

GAAP earnings increased to $7.8 million, or 50 cents per share, in the first quarter of 2018 from $4.2 million, or 29 cents per share, in the same period of 2017, primarily as a result of the merger expenses reflected in the previous year. Core earnings were up 21% to $8.1 million, or 52 cents per share, in the first quarter of 2018 compared to $6.2 million, or 43 cents per share, in the first quarter of 2017. The increase in core earnings was driven by greater total revenue resulting from both the growth in earning assets and in yields. Interest income from earning assets increased to a record high for a quarter of $30.8 million with a yield of 3.92%. The decline in yield related to commercial and industrial loans was due to a lower tax-equivalency adjustment on tax exempt loans given the new 2018 Federal tax rate. Net interest income in 2018 increased 8% compared to 2017 despite higher funding costs. Net interest margin for the first quarter was 2.97%,



BHB - Bar Harbor Bankshares	Page 2	www.bhbt.com

which includes a 5 basis point reduction due to lower tax-equivalency adjustments. We continue to address margin compression and balance sheet rate sensitivity through variable rate loan originations and shifts in funding mix and term. This strategy results in short-term incremental costs, but secures the Company’s longer-term net interest margin goals and funding requirements. Tax savings related to the lower Federal rate in 2018 is solely reflected within income tax expense and represents an effective tax rate for the first quarter of 19.9%. The effective tax rate for the same quarter in 2017 benefited from the acquisition and conversion related costs.

Non-interest income was $6.2 million in the first quarter of 2018, as compared to $5.9 million in the same quarter of 2017. The increase is principally due to higher trust management and customer service fees, both related to a higher volume of customer transactions.

Non-interest expense decreased to $18.9 million in the first quarter 2018 compared to $20.8 million in the first quarter of 2017. The decrease is principally due to lower acquisition, conversion and other expenses, which totaled $335 thousand in 2018 compared to $3.1 million in 2017. Non-interest expenses are slightly elevated in the first quarter compared to the fourth quarter and in line with expectations given higher employer taxes and the additional increases in salary and employee benefits related to employment taxes. The efficiency ratio improved to 60% for the quarter compared to 61% in the first quarter of 2017. That improvement includes realized cost savings from the acquisition partially offset with higher salary and benefit expense due to seasonally higher employer payroll taxes and recent strategic new hires. We continue to focus on profitable growth with disciplined expense management which is evidenced in our profitability metrics for the quarter.

FINANCIAL CONDITION

Total assets declined $54.2 million during the first quarter in 2018 to $3.5 billion primarily as a result of decreases in loan balances and excess cash. Total loans decreased $21.2 million in the first quarter as certain significant loan closings were delayed into the second quarter. Excess cash was strategically used during the latter part of the first quarter to pay down higher cost borrowings. Non-accruing loans increased by $6.0 million during the quarter mostly due to the deterioration of one specific residential relationship, which is expected to be settled at the full carrying value of the obligation. Overall, asset quality metrics remain strong with an allowance for credit losses to total loans ratio of 0.51%. Total securities increased $1.3 million during the quarter, which reflects purchases of shorter duration investments offset by $10.7 million in fair value adjustments. Excluding the impact of securities fair value adjustments, strong earnings grew tangible book value per share (non-GAAP) to $16.33 compared from $16.13 at the end of 2017.



BHB - Bar Harbor Bankshares	Page 3	www.bhbt.com

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.



BHB - Bar Harbor Bankshares	Page 4	www.bhbt.com

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, which the Company believes provides important information about its operating efficiency, 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. Further detail regarding the computation of the Company's non-GAAP measures is provided in the footnotes to the reconciliation of non-GAAP financial measures to GAAP measures included beginning on page J in the accompanying financial tables.

###



BHB - Bar Harbor Bankshares	Page 5	www.bhbt.com

CONTACTS

Josephine Iannelli; EVP, Chief Financial Officer & Treasurer; (207) 288-3314

Kim Ilg, VP, Investor Relations; (603) 865-6085



TABLE INDEX	CONSOLIDATED FINANCIAL SCHEDULES (UNAUDITED)
A	Selected Financial Highlights
B	Footnotes to Selected Financial Highlights
C	Balance Sheets
D	Loan and Deposit Analysis
E	Statements of Income
F	Statements of Income (Five Quarter Trend)
G	Average Yields and Costs
H	Average Balances
I	Asset Quality Analysis
J	Reconciliation of Non-GAAP Financial Measures (Five Quarter Trend) and Supplementary Data



BHB - Bar Harbor Bankshares	Page 6	www.bhbt.com



BAR HARBOR BANKSHARES
SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED

	At or for the Quarters Ended
	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017
PER SHARE DATA
Net earnings, diluted	$	0.50		$	0.43		$	0.56		$	0.42		$	0.29
Core earnings, diluted^{(1) (2)}	0.52			0.58			0.57			0.52			0.43
Total book value	22.78			22.96			22.90			22.53			22.17
Tangible book value⁽²⁾	15.78			15.94			15.84			15.44			15.07
Market price at period end	27.72			27.01			31.36			30.82			33.08
Dividends	0.19			0.19			0.19			0.19			0.19

PERFORMANCE RATIOS⁽³⁾
Return on assets	0.90		%	0.75		%	0.99		%	0.76		%	0.50		%
Core return on assets^{(1) (2)}	0.93			1.02			1.01			0.94			0.74
Return on equity	9.01			7.35			9.67			7.55			5.34
Core return on equity^{(1) (2)}	9.31			9.97			9.90			9.32			7.88
Core return on tangible equity^{(1) (2)}	13.72			14.56			14.53			13.81			12.27
Net interest margin, fully taxable equivalent (FTE)⁽²⁾⁽⁴⁾	2.97			3.04			3.06			3.16			3.11
Net interest margin (FTE), excluding purchased loan accretion⁽²⁾⁽⁴⁾	2.85			2.93			2.93			3.02			3.01
Efficiency ratio⁽²⁾	60.44			53.02			53.53			54.57			61.21

GROWTH (Year-to-date, annualized)⁽²⁾
Total commercial loans	2.2		%	23.8		%	20.5		%	7.2		%	20.0		%
Total loans	(3.4		)	13.1			12.2			7.0			13.3
Total deposits	(1.8		)	14.4			10.6			2.3			(10.2		)

FINANCIAL DATA (In millions)
Total assets	$	3,511		$	3,565		$	3,476		$	3,503		$	3,427
Total earning assets	3,221			3,241			3,184			3,139			3,139
Total investments	757			755			756			763			767
Total loans	2,464			2,486			2,429			2,377			2,372
Allowance for loan losses	13			12			12			11			11
Total goodwill and intangible assets	108			108			109			109			109
Total deposits	2,341			2,352			2,275			2,213			2,174
Total shareholders' equity	352			355			353			347			341
Net income	8			7			9			7			4
Core income⁽²⁾	8			9			9			8			6

ASSET QUALITY AND CONDITION RATIOS
Net charge-offs (current quarter annualized)/average loans	0.07		%	0.04		%	0.01		%	0.03		%	0.06		%
Allowance for loan losses/total loans	0.51			0.50			0.49			0.48			0.46
Loans/deposits	105			106			107			107			109
Shareholders' equity to total assets	10.03			9.95			10.17			9.91			9.95
Tangible shareholders' equity to tangible assets	7.17			7.12			7.26			7.01			6.99

_____________________________________

(1) Core 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.



BAR HARBOR BANKSHARES
CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017
Assets
Cash and due from banks	$	35,088		$	34,262		$	31,223		$	28,112		$	29,245
Interest-bearing deposits with the Federal Reserve Bank	12,725			56,423			17,501			90,881			12,781
Total cash and cash equivalents	47,813			90,685			48,724			118,993			42,026
Securities available for sale, at fair value	718,559			717,242			718,459			718,364			724,224
Federal Home Loan Bank stock	38,105			38,105			37,107			44,168			42,404
Total securities	756,664			755,347			755,566			762,532			766,628
Commercial real estate	824,721			826,746			793,572			738,584			779,635
Commercial and industrial	387,205			379,423			357,072			350,002			309,995
Residential real estate	1,132,977			1,155,682			1,152,628			1,160,832			1,155,436
Consumer	119,516			123,762			125,590			127,229			127,370
Total loans	2,464,419			2,485,613			2,428,862			2,376,647			2,372,436
Less: Allowance for loan losses	(12,679		)	(12,325		)	(11,950		)	(11,442		)	(10,884		)
Net loans	2,451,740			2,473,288			2,416,912			2,365,205			2,361,552

Premises and equipment, net	48,464			47,708			48,309			48,590			45,581
Other real estate owned	216			122			122			122			363
Goodwill	100,085			100,085			100,255			100,255			99,901
Other intangible assets	8,152			8,383			8,811			9,047			9,282
Cash surrender value of bank-owned life insurance	58,433			57,997			57,613			57,233			56,627
Deferred tax asset, net	9,627			7,180			13,052			13,211			14,158
Other assets	29,793			24,389			26,368			28,223			31,365
Total assets	$	3,510,987		$	3,565,184		$	3,475,732		$	3,503,411		$	3,427,483

Liabilities and shareholders' equity
Demand and other non-interest bearing deposits	$	342,192		$	349,055		$	357,398		$	332,339		$	349,896
NOW deposits	448,992			466,610			442,085			451,171			242,876
Savings deposits	361,591			364,799			373,118			360,306			511,091
Money market deposits	303,777			305,275			300,398			285,312			349,491
Time deposits	884,848			866,346			802,110			783,876			720,899
Total deposits	2,341,400			2,352,085			2,275,109			2,213,004			2,174,253

Senior borrowings	742,198			786,688			775,582			872,021			842,150
Subordinated borrowings	43,018			43,033			43,048			43,063			43,078
Total borrowings	785,216			829,721			818,630			915,084			885,228

Other liabilities	32,214			28,737			28,534			28,201			26,954
Total liabilities	3,158,830			3,210,543			3,122,273			3,156,289			3,086,435

Total common shareholders' equity	352,157			354,641			353,459			347,122			341,048
Total liabilities and shareholders' equity	$	3,510,987		$	3,565,184		$	3,475,732		$	3,503,411		$	3,427,483

Net shares outstanding	15,459			15,443			15,432			15,407			15,385



BAR HARBOR BANKSHARES
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED

LOAN ANALYSIS

											Annualized Growth %
(in thousands)	March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017		March 31, 2018
Commercial real estate	$	824,721	$	826,746	$	793,572	$	738,584	$	779,635	(1.0	)%
Commercial and industrial	301,811		293,707		270,759		269,960		236,526		11.0
Total commercial loans	1,126,532		1,120,453		1,064,331		1,008,544		1,016,161		2.2
Residential real estate	1,132,977		1,155,682		1,152,628		1,160,832		1,155,436		(7.9	)
Consumer	119,516		123,762		125,590		127,229		127,370		(13.7	)
Tax exempt and other	85,394		85,716		86,313		80,042		73,469		(1.5	)
Total loans	$	2,464,419	$	2,485,613	$	2,428,862	$	2,376,647	$	2,372,436	(3.4	)%



DEPOSIT ANALYSIS

											Annualized Growth %
(in thousands)	March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017		March 31, 2018
Demand	$	342,192	$	349,055	$	357,398	$	332,339	$	349,896	(7.9	)%
NOW	448,992		466,610		442,085		451,171		242,876		(15.1	)
Savings	361,591		364,799		373,118		360,306		511,091		(3.5	)
Money Market	303,777		305,275		300,398		285,312		349,491		(2.0	)
Total non-maturity deposits	1,456,552		1,485,739		1,472,999		1,429,128		1,453,354		(7.9	)
Total time deposits	884,848		866,346		802,110		783,876		720,899		8.5
Total deposits	$	2,341,400	$	2,352,085	$	2,275,109	$	2,213,004	$	2,174,253	(1.8	)%



BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

	Three Months Ended March 31,
(in thousands, except per share data)	2018		2017
Interest and dividend income
Loans	$	25,126	$	21,194
Securities and other	5,651		4,991
Total interest and dividend income	30,777		26,185
Interest expense
Deposits	3,985		2,210
Borrowings	3,634		2,603
Total interest expense	7,619		4,813
Net interest income	23,158		21,372
Provision for loan losses	795		795
Net interest income after provision for loan losses	22,363		20,577
Non-interest income
Trust and investment management fee income	2,962		2,864
Insurance brokerage service income	—		364
Customer service fees	2,224		1,773
Bank-owned life insurance income	446		399
Other income	606		546
Total non-interest income	6,238		5,946
Non-interest expense
Salaries and employee benefits	10,989		10,321
Occupancy and equipment	3,073		2,666
Loss on sales of premises and equipment, net	—		95
Outside services	560		597
Professional services	433		440
Communication	180		368
Amortization of intangible assets	207		180
Acquisition, conversion and other expenses	335		3,112
Other expenses	3,075		3,052
Total non-interest expense	18,852		20,831

Income before income taxes	9,749		5,692
Income tax expense	1,937		1,481
Net income	$	7,812	$	4,211

Earnings per share:
Basic	$	0.51	$	0.29
Diluted	$	0.50	$	0.29

Weighted average shares outstanding:
Basic	15,448		14,471
Diluted	15,553		14,591



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

(in thousands, except per share data)	Mar 31, 2018		Dec 31, 2017			Sep 30, 2017			Jun 30, 2017		Mar 31, 2017
Interest and dividend income
Loans	$	25,126	$	24,895		$	24,661		$	24,226	$	21,194
Securities and other	5,651		5,261			5,402			5,439		4,991
Total interest and dividend income	30,777		30,156			30,063			29,665		26,185
Interest expense
Deposits	3,985		3,381			3,177			2,539		2,210
Borrowings	3,634		3,279			3,408			3,317		2,603
Total interest expense	7,619		6,660			6,585			5,856		4,813
Net interest income	23,158		23,496			23,478			23,809		21,372
Provision for loan losses	795		597			660			736		795
Net interest income after provision for loan losses	22,363		22,899			22,818			23,073		20,577
Non-interest income
Trust and investment management fee income	2,962		3,042			3,040			3,324		2,864
Insurance brokerage service income	—		77			329			327		364
Customer service fees	2,224		2,495			2,638			1,991		1,773
Gain on sales of securities, net	—		—			19			—		—
Bank-owned life insurance income	446		374			380			386		399
Other income	606		530			554			530		546
Total non-interest income	6,238		6,518			6,960			6,558		5,946
Non-interest expense
Salaries and employee benefits	10,989		9,524			9,617			10,127		10,321
Occupancy and equipment	3,073		3,060			2,894			3,013		2,666
Loss on sales of premises and equipment,net	—		—			(1		)	—		95
Outside services	560		780			907			716		597
Professional services	433		298			428			489		440
Communication	180		249			382			290		368
Amortization of intangible assets	207		209			212			211		180
Acquisition, conversion, and other expenses	335		(2,615		)	346			2,459		3,112
Other expenses	3,075		2,758			2,801			2,741		3,052
Total non-interest expense	18,852		14,263			17,586			20,046		20,831

Income before income taxes	9,749		15,154			12,192			9,585		5,692
Income tax expense	1,937		8,545			3,575			3,029		1,481
Net income	$	7,812	$	6,609		$	8,617		$	6,556	$	4,211

Earnings per share:
Basic	$	0.51	$	0.43		$	0.56		$	0.43	$	0.29
Diluted	$	0.50	$	0.43		$	0.56		$	0.42	$	0.29

Weighted average shares outstanding:
Basic	15,448		15,437			15,420			15,393		14,471
Diluted	15,553		15,537			15,511			15,506		14,591



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

	Quarters Ended
	Mar 31, 2018		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Mar 31, 2017
Earning assets
Commercial real estate	4.41	%	4.30	%	4.28	%	4.24	%	4.24	%
Commercial and industrial	4.41		4.77		4.84		4.77		4.73
Residential	3.87		3.78		3.79		3.83		3.74
Consumer	4.47		4.17		4.34		4.71		4.16
Total loans	4.16		4.12		4.13		4.14		4.00
Securities and other	3.16		3.06		3.13		3.19		3.01
Total earning assets	3.92	%	3.87	%	3.89	%	3.91	%	3.76	%

Funding liabilities
NOW	0.34	%	0.31	%	0.32	%	0.25	%	0.14	%
Savings	0.18		0.19		0.18		0.13		0.14
Money market	0.68		0.58		0.52		0.45		0.40
Time deposits	1.39		1.19		1.13		1.01		0.98
Total interest bearing deposits	0.82		0.70		0.66		0.56		0.52
Borrowings	1.80		1.62		1.66		1.41		1.25
Total interest-bearing liabilities	1.11	%	0.97	%	0.96	%	0.85	%	0.76	%

Net interest spread	2.81		2.90		2.93		3.06		3.00
Net interest margin	2.97		3.04		3.06		3.16		3.11



BAR HARBOR BANKSHARES
AVERAGE BALANCES - UNAUDITED

	Quarters Ended
(in thousands)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017
Assets
Commercial real estate	$	819,531		$	783,730		$	764,770		$	767,669		$	762,676
Commercial and industrial	380,029			362,881			353,194			322,147			293,903
Residential	1,147,010			1,161,865			1,158,069			1,159,714			1,161,911
Consumer	121,467			125,109			126,138			127,611			127,850
Total loans ⁽¹⁾	2,468,037			2,433,585			2,402,171			2,377,141			2,346,340
Securities and other⁽²⁾	765,328			753,282			754,450			761,546			746,653
Total earning assets	3,233,365			3,186,867			3,156,621			3,138,687			3,092,993
Cash and due from banks	53,151			65,145			49,169			87,332			25,556
Allowance for loan losses	(12,589		)	(12,202		)	(11,786		)	(11,292		)	(10,584		)
Goodwill and other intangible assets	108,349			108,769			109,147			109,108			109,261
Other assets	129,525			144,359			149,394			110,129			122,396
Total assets	$	3,511,801		$	3,492,938		$	3,452,545		$	3,433,964		$	3,339,622

Liabilities and shareholders' equity
NOW	$	447,026		$	449,669		$	447,459		$	440,452		$	456,967
Savings	362,508			368,714			368,443			362,899			340,555
Money market	305,105			308,071			292,110			275,687			334,225
Time deposits	857,796			799,348			793,489			732,188			666,267
Total interest bearing deposits	1,972,435			1,925,802			1,901,501			1,811,226			1,798,014
Borrowings	819,576			803,469			812,938			941,789			856,328
Total interest-bearing liabilities	2,792,011			2,729,271			2,714,439			2,753,015			2,654,342
Non-interest-bearing demand deposits	339,349			376,066			354,470			320,503			350,497
Other liabilities	29,000			30,971			30,079			13,145			19,334
Total liabilities	3,160,360			3,136,308			3,098,988			3,086,663			3,024,173

Total shareholders' equity	351,441			356,630			353,557			347,301			315,449

Total liabilities and shareholders' equity	$	3,511,801		$	3,492,938		$	3,452,545		$	3,433,964		$	3,339,622

_____________________________________


(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)	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017
NON-PERFORMING ASSETS
Non-accruing loans:
Commercial real estate	$	8,422		$	8,343		$	2,467		$	2,090		$	2,354
Commercial installment	2,304			1,209			236			270			451
Residential real estate	8,548			4,266			3,619			2,783			3,066
Consumer installment	1,065			500			496			160			160
Total non-accruing loans	20,339			14,318			6,818			5,303			6,031
Other real estate owned	216			122			122			122			363
Total non-performing assets	$	20,555		$	14,440		$	6,940		$	5,425		$	6,394

Total non-accruing loans/total loans	0.83		%	0.58		%	0.28		%	0.22		%	0.25		%
Total non-performing assets/total assets	0.59			0.41			0.20			0.15			0.19

PROVISION AND ALLOWANCE FOR LOAN LOSSES
Balance at beginning of period	$	12,325		$	11,950		$	11,442		$	10,884		$	10,419
Charged-off loans	(461		)	(277		)	(297		)	(213		)	(344		)
Recoveries on charged-off loans	20			55			145			35			14
Net loans charged-off	(441		)	(222		)	(152		)	(178		)	(330		)
Provision for loan losses	795			597			660			736			795
Balance at end of period	$	12,679		$	12,325		$	11,950		$	11,442		$	10,884

Allowance for loan losses/total loans	0.51		%	0.50		%	0.49		%	0.48		%	0.46		%
Allowance for loan losses/non-accruing loans	62			86			175			216			180

NET LOAN CHARGE-OFFS
Commercial real estate	$	(91	)	$	(92	)	$	(16	)	$	(6	)	$	(103	)
Commercial installment	(140		)	1			6			(138		)	(17		)
Residential real estate	1			—			(79		)	(13		)	(198		)
Consumer installment	(211		)	(131		)	(63		)	(21		)	(12		)
Total, net	$	(441	)	$	(222	)	$	(152	)	$	(178	)	$	(330	)

Net charge-offs (QTD annualized)/average loans	0.07		%	0.04		%	0.01		%	0.03		%	0.06		%
Net charge-offs (YTD annualized)/average loans	0.07			0.04			0.04			0.04			0.06

DELINQUENT AND NON-ACCRUING LOANS/TOTAL LOANS
30-89 Days delinquent	0.24		%	0.37		%	0.35		%	0.55		%	0.33		%
90+ Days delinquent and still accruing	—			0.02			0.01			—			—
Total accruing delinquent loans	0.24			0.39			0.36			0.55			0.33
Non-accruing loans	0.83			0.58			0.28			0.22			0.25
Total delinquent and non-accruing loans	1.07		%	0.97		%	0.64		%	0.77		%	0.58		%



BAR HARBOR BANKSHARES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA- UNAUDITED
		At or for the Quarters Ended
(in thousands)		Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017
Net income		$	7,812		$	6,609		$	8,617		$	6,556		$	4,211
Adj: Security Gains		—			—			(19		)	—			—
Adj: Loss on sale of fixed assets, net		—			—			(1		)	—			95
Adj: Acquisition, conversion and other expenses		335			(2,615		)	346			2,459			3,112
Adj: Income taxes ⁽¹⁾		(81		)	982			(122		)	(924		)	(1,205		)
Adj: Tax reform charge		—			3,988			—			—			—
Total core income ⁽²⁾	(A)	$	8,066		$	8,964		$	8,821		$	8,091		$	6,213

Net-interest income	(B)	$	23,158		$	23,496		$	23,478		$	23,809		$	21,372
Plus: Non-interest income		6,238			6,518			6,960			6,558			5,946
Total Revenue		29,396			30,014			30,438			30,367			27,318
Adj: Net security gains		—			—			(19		)	—			—
Total core revenue⁽²⁾	(C)	$	29,396		$	30,014		$	30,419		$	30,367		$	27,318

Total non-interest expense		18,852			14,263			17,586			20,046			20,831
Less: Loss on sale of fixed assets, net		—			—			1			—			(95		)
Less: Acquisition, conversion and other expenses		(335		)	2,615			(346		)	(2,459		)	(3,112		)
Core non-interest expense ⁽²⁾	(D)	$	18,517		$	16,878		$	17,241		$	17,587		$	17,624

(in millions)
Total average earning assets	(E)	$	3,233		$	3,187		$	3,157		$	3,139		$	3,093
Total average assets	(F)	3,512			3,493			3,453			3,434			3,340
Total average shareholders' equity	(G)	351			357			354			347			315
Total average tangible shareholders' equity^{(2) (3)}	(H)	243			248			244			238			206
Total tangible shareholders' equity, period-end ⁽²⁾⁽³⁾	(I)	244			246			244			238			232
Total tangible assets, period-end ^{(2) (3)}	(J)	3,403			3,457			3,367			3,394			3,318

(in thousands)
Total common shares outstanding, period-end	(K)	15,459			15,443			15,432			15,407			15,385
Average diluted shares outstanding	(L)	15,553			15,537			15,511			15,506			14,591

Core earnings per share, diluted	(A/L)	$	0.52		$	0.58		$	0.57		$	0.52		$	0.43
Tangible book value per share, period-end ⁽²⁾	(I/K)	15.78			15.94			15.84			15.44			15.07
Securities adjustment, net of tax	(M)	(8,526		)	(2,867		)	320			2,193			768
Tangible book value per share, excluding securities adjustment	(I+M)/K	16.33			16.13			15.82			15.29			15.02
Total tangible shareholders' equity/total tangible assets⁽²⁾	(H/J)	7.17			7.12			7.26			7.01			6.99

Performance ratios
GAAP return on assets		0.90		%	0.75		%	0.99		%	0.76		%	0.50		%
Core return on assets ⁽²⁾	(A/F)	0.93			1.02			1.01			0.94			0.74
GAAP return on equity		9.01			7.35			9.67			7.55			5.34
Core return on equity ⁽²⁾	(A/G)	9.31			9.97			9.90			9.32			7.88
Core return on tangible equity ^{(2) (4)}	(A/I)	13.72			14.56			14.53			13.81			12.27
Efficiency ratio ⁽²⁾⁽⁵⁾	(D-O-Q)/(C+N)	60.44			53.02			53.53			54.57			61.21
Net interest margin	(B+P)/E	2.97			3.04			3.06			3.16			3.11



Supplementary data (in thousands)
Taxable equivalent adjustment for efficiency ratio	(N)	$	645	$	1,122	$	1,107	$	1,185	$	977
Franchise taxes included in non-interest expense	(O)	152		161		154		158		126
Tax equivalent adjustment for net interest margin	(P)	503		897		878		936		754
Intangible amortization	(Q)	207		209		212		211		180

_____________________________________


(1)	Assumes a marginal tax rate of 24.15% in 2018 and 37.57% in 2017.


(2)	Non-GAAP financial measure.


(3)	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.


(4)	Adjusted 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 24.15% in 2018 and 37.57% in 2017, by tangible equity.


(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.

BAR HARBOR BANKSHARES - FORM 8-K - EX-99.1 - EXHIBIT 99.1 4-19-18 - April 19, 2018

Attached files

BAR HARBOR BANKSHARES Reports