Bar Harbor Bankshares Reports Third Quarter 2023 Results; Declares Dividend

BAR HARBOR, ME / ACCESSWIRE / October 17, 2023 / Bar Harbor Bankshares (NYSE American:BHB) (the "Company") reported third quarter 2023 net income of $11.1 million or $0.73 per diluted share compared to $11.4 million or $0.76 per diluted share in the same quarter of 2022.

THIRD QUARTER 2023 HIGHLIGHTS (all comparisons to the third quarter 2022, unless otherwise noted)

• 1.11% return on assets, 10.72% return on equity
• 10% annualized increase in non-interest bearing deposits
• 4.90% yield on earning assets, compared to 3.84%
• 59% efficiency ratio, compared to 58%
• 0.17% non-performing assets ratio to total assets

Bar Harbor Bankshares' President and Chief Executive Officer, Curtis C. Simard, stated, "We delivered another solid quarter, underscoring our commitment to generating consistent, sustainable long-term performance. Net interest income was $29.2 million, up from $28.8 million in the prior quarter as excess cash was used to pay down higher funding costs. Our net interest margin remains well above our peer group as we saw minimal compression of four basis points from the prior quarter. We continue to actively manage both sides of the balance sheet identifying the right risk-adjusted rate of return on earning assets, emphasizing selective growth in high-quality loan relationships and controlling deposit costs on an individual basis. Our retail strategy has proven to be successful as we continue to gain market share within our footprint, evidenced by both the opening of more than 1,700 new customer accounts and higher balances within most categories of non-maturity deposits. Our third quarter cumulative deposit beta for the current rate cycle is 27%, well below our direct competition in our footprint and the national average for our asset size."

Mr. Simard went on to say, "We continuously monitor and quarterly stress test our commercial loan portfolio, and our credit trends remain strong as expected. Non-performing assets remain at 17 basis points of total assets while net charge-offs to average loans remain at zero. We expanded the allowance for credit losses coverage ratio in the quarter by three basis points, primarily due to an increase in specific reserves on one non-accruing commercial loan, which is expected to be settled in the fourth quarter 2023. Our fee-based revenue remains a significant portion of total income and continues to be steady given both the diversity of sources and the significant size of assets under management in our wealth management business. Total assets under management remained flat at $2.3 billion despite the greater than 3% decline for the stock and bond markets in the quarter. We continue to diligently manage non-interest expenses which also contributed to maintaining our efficiency ratio this quarter despite the economic inflationary pressures."

Mr. Simard concluded, "As a company we have an ability to execute our business strategies even amid volatile quarters in the banking sector. Our commitment to delivering consistent total shareholder returns is steadfast as we've seen throughout 2023 thus far. Given the strength of our balance sheet and our teams, we remain well poised to weather any rate environment."

DIVIDEND DECLARED

The Company's Board of Directors voted to declare a cash dividend of $0.28 per share to shareholders of record at the close of business on November 16, 2023 payable on December 15, 2023. This dividend equates to a 4.74% annualized yield based on the $23.63 closing share price of the Company's common stock on September 29, 2023, the last trading day of the third quarter 2023.

FINANCIAL CONDITION (September 30, 2023 compared to June 30, 2023)

Total assets were $4.0 billion at the end of the third and second quarters of 2023, primarily due to relatively flat loan growth and lower security balances as interest rates continued to rise during the quarter.

Total loans were $3.0 billion at the end of both the third and second quarters 2023. Commercial and industrial ("C&I") loans increased $2.9 million comprised of $22.3 million of originations and $19.4 million of payoff activity. Commercial real estate loans decreased $2.9 million during the third quarter 2023, which included new originations of $19.5 million, draw-downs of $12.2 million and payoffs totaling $34.6 million. Residential loans decreased by $11.0 million compared to the second quarter 2023, due to lower demand for prevailing mortgage rates. Consumer loans dropped by $1.9 million from the second quarter 2023 due to run-off of balances associated with the repricing of home equity lines of credit.

Securities available for sale decreased to $509.5 million at the end of third quarter 2023, from $538.2 million in the second quarter 2023 as proceeds from amortization and prepayments were used to fund loans. The book yield from securities steadily increased over the past year primarily due to a repricing of variable rates, acceleration of discounts due to prepayments, and a run-off of lower coupon fixed-rate securities. Unrealized losses on securities totaled $86.5 million at the end of the third quarter 2023 versus $71.9 million at the end of the second quarter 2023 reflecting continued increases in market rates.​

The allowance for credit losses ("ACL") was $28.0 million at the end of the third quarter 2023, compared to $27.4 million at the end of the second quarter 2023. The ratio of allowance for credit losses to total loans increased to 0.94% from 0.91% primarily due to an increase in specific reserves on one non-accrual C&I loan. While total non-accruing loans during the third quarter 2023 increased to $6.8 million from $6.7 million, we continue to see improvement in the commercial categories as we continue to work-out those loans.

Total deposits were $3.1 billion at the end of both the third and second quarters 2023, which improved the loan to deposit ratio to 95% from 97%, respectively. We opened 1,740 non-maturity accounts with new customers with an average balance of $12 thousand during the third quarter 2023. Demand and other non-interest bearing deposits, NOW and money market accounts increased $43.8 million largely driven by non-personal institutional inflows associated with seasonality during the third quarter of 2023. Savings deposits decreased $16.5 million evenly throughout the third quarter 2023 as personal accounts shifted into higher yielding certificate of deposit accounts ("CDs"). Brokered CDs decreased slightly by $778 thousand and totaled $201.9 million at the end of the third quarter 2023. Additionally, excess cash generated from operations was used to pay-down $91.9 million of Federal Home Loan Bank borrowings.

The Company's book value per share was $26.67 as of September 30, 2023, compared with $26.09 as of December 31, 2022. Unrealized losses on securities, net of taxes, reduced book value per share by $4.39 and $3.66 at the end of those respective periods. Tangible book value per share (non-GAAP measure) was $18.45 at the end of the third quarter 2023, compared to $17.78 at the end of the fourth quarter 2022.

RESULTS OF OPERATIONS (September 30, 2023 compared to September 30, 2022 quarterly comparison)

Net income in the third quarter 2023 was $11.1 million, or $0.73 per diluted share, versus $11.4 million, or $0.76 per diluted share, in the same quarter of 2022. Net interest income along with non-interest income and expense was relatively consistent in both periods. The benefit from a lower provision for loan credit losses was offset by a higher provision for income taxes due to one-time charges.

Net interest margin was 3.18% compared to 3.47% in the third quarter of 2022. The decrease was primarily driven by yield expansion on earning assets offset by a higher cost of funds. The yield on loans expanded to 5.11% in the third quarter 2023, up from 4.04% in the same quarter of 2022. Costs of interest-bearing liabilities increased to 2.19% from 0.48% in the third quarter 2022 as our costs continue to drift upwards from subsequent rate hikes. We also experienced a shift in deposit composition from non-maturity deposits to certificates of deposits, and had a heavier reliance on whole-sale borrowings in the third quarter 2023 as compared with the prior year quarter of 2022.

The provision for credit losses for the third quarter 2023 was $673 thousand, compared to $1.3 million in the same quarter of 2022. Current year quarter expense primarily reflects an increase in specific reserves on one loan, while expense in the prior year quarter was principally driven by outsized loan growth. We believe our overall credit performance continues to be strong and net charge-offs were near zero.

Non-interest income was $8.8 million in the third quarter 2023 and 2022. Customer service fees grew to $3.9 million during the third quarter 2023 from $3.8 million in the same quarter of 2022 on a higher number of transactional accounts. Wealth management income was $3.5 million in both periods as higher inflows of cash since 2022 were offset by lower security valuations in 2023.

Non-interest expense was $23.0 million in the third quarter 2023 and 2022. Salary and benefit expense was up 6% over the prior year quarter principally due to annual merit increases and lower expense deferral on decreased loan production. Other expense in the third quarter 2022 included one-time charges of $635 thousand related to the write-off of a few stale-dated reconciling items.

The effective tax rate in the third quarter 2023 was 22.4%, compared to 20.6% in the same quarter of 2022. One-time charges due to an audit settlement with the State of New Hampshire and 2022 return to provision adjustments totaled $268 thousand. Excluding one-time charges, our effective tax rate in the third quarter 2023 was consistent with the prior year quarter.

BACKGROUND

Bar Harbor Bankshares (NYSE American:BHB) is the parent company of its wholly-owned subsidiary, Bar Harbor Bank & Trust. Founded in 1887, Bar Harbor Bank & Trust is a true community bank serving the financial needs of its clients for over 135 years. Bar Harbor Bank & Trust provides full-service community banking with office locations in all three Northern New England states of Maine, New Hampshire and Vermont. For more information, visit www.barharbor.bank.

FORWARD-LOOKING STATEMENTS

All statements, other than statements of historical fact, included in this release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believe," "anticipate," "expect," "may," "will," "assume," "should," "predict," "could," "would," "intend," "targets," "estimates," "projects," "plans," and "potential," and other similar words and expressions of the future, are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking, including statements relating to Company's retail strategy, our credit trends, the timing of a settlement of a specified non-accrual commercial credit, our overall credit performance, and the Company's plans, objectives, and intentions. All forward-looking statements are subject to risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to differ materially from any results, performance, or achievements expressed or implied by such forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (1) deterioration in the financial performance and/or condition of borrowers of Bar Harbor Bank & Trust (the "Bank"), including as a result of the negative impact of inflationary pressures on our customers and their businesses resulting in significant increases in credit losses and provisions for those losses; (2) the possibility that our asset quality could decline or that we experience greater loan losses than anticipated; (3) increased levels of other real estate owned, primarily as a result of foreclosures; (4) the impact of liquidity needs on our results of operations and financial condition; (5) competition from financial institutions and other financial service providers; (6) the effect of interest rate increases on the cost of deposits; (7) unanticipated weakness in loan demand or loan pricing; (8) adverse conditions in the national or local economies including in our markets throughout Northern New England; (9) changes in consumer spending, borrowing and saving habits; (10) the effects of new outbreaks of COVID-19, including actions taken by governmental officials to curb the spread of the virus, and the resulting impact on general economic and financial market conditions and on the Company's and our customers' business, results of operations, asset quality and financial condition; (11) the effects of civil unrest, international hostilities or other geopolitical events, including the war in Ukraine and recent hostilities in the Middle East; (12) inflation, interest rate, market, and monetary fluctuations; (13) lack of strategic growth opportunities or our failure to execute on available opportunities; (14) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits; (15) our ability to effectively manage problem credits; (16) our ability to successfully implement efficiency initiatives on time and with the results projected; (17) our ability to successfully develop and market new products and technology; (18) the impact of negative developments in the financial industry and United States and global capital and credit markets; (19) our ability to retain executive officers and key employees and their customer and community relationships; (20) our ability to adapt to technological changes; (21) risks associated with litigation, including reputational and financial risks and the applicability of insurance coverage; (22) our ability to implement new technology effectively; (23) the vulnerability of the Bank's computer and information technology systems and networks, and the systems and networks of third parties with whom the Company or the Bank contract, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss, and other security breaches and interruptions; (24) changes in the reliability of our vendors, internal control systems or information systems; (25) ongoing competition in the labor markets and increased employee turnover; (26) the potential impact of climate change; (27) the impact of pandemics, epidemics or any other health-related crisis; (28) our ability to comply with various governmental and regulatory requirements applicable to financial institutions; (29) changes in state and federal laws, rules, regulations, or policies applicable to banks or bank or financial holding companies, including regulatory or legislative developments; (30) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System; (31) adverse impacts (including costs, fines, reputational harm, or other negative effects) from current or future litigation, regulatory examinations, or other legal and/or regulatory actions; and (32) general competitive, economic, political, and market conditions, including economic conditions in the local markets where we operate. Additional factors which could affect the forward-looking statements can be found in the Company's annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed with the Securities and Exchange Commission (the "SEC") and available on the SEC's website at http://www.sec.gov. The Company believes the forward-looking statements contained herein are reasonable; however, many of such risks, uncertainties, and other factors are beyond the Company's ability to control or predict and undue reliance should not be placed on any forward-looking statements, which are based on current expectations and speak only as of the date that they are made. Therefore, the Company can give no assurance that its future results will be as estimated. The Company does not intend to, and disclaims any obligation to, update or revise any forward-looking statement.

NON-GAAP FINANCIAL MEASURES

This document contains certain non-GAAP financial measures in addition to results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. Because non-GAAP financial measures presented in this document are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies. A reconciliation of non-GAAP financial measures to GAAP measures is provided below. In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP core earnings can be of substantial importance to the Company's results for any particular quarter or year. The Company's non-GAAP core earnings information set forth is not necessarily comparable to non-GAAP information, which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company's GAAP financial information.

The Company utilizes the non-GAAP measure of core earnings in evaluating operating trends, including components for core revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations, including gains/losses on securities, premises, equipment and other real estate owned, acquisition costs, restructuring costs, legal settlements, and systems conversion costs. Non-GAAP adjustments are presented net of an adjustment for income tax expense.

The Company also calculates core earnings per share based on its measure of core earnings. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company's performance. Management also believes that the computation of non-GAAP core earnings and core earnings per share may facilitate the comparison of the Company to other companies in the financial services industry. The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.

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CONTACTS

Josephine Iannelli; EVP, Chief Financial Officer & Treasurer; [phone]

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

BAR HARBOR BANKSHARES
SELECTED FINANCIAL HIGHLIGHTS - UNAUDITED

		At or for the Quarters Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
		2023			2023			2023			2022			2022
PER SHARE DATA
Net earnings, diluted		$	0.73		$	0.71		$	0.86		$	0.83		$	0.76
Core earnings, diluted (1)			0.73			0.71			0.86			0.83			0.76
Total book value			26.67			27.12			27.00			26.09			25.22
Tangible book value (1)			18.45			18.88			18.74			17.78			16.89
Market price at period end			23.63			24.64			26.45			32.04			26.52
Dividends			0.28			0.28			0.26			0.26			0.26
PERFORMANCE RATIOS (2)
Return on assets			1.11	%		1.10	%		1.36	%		1.30	%		1.20	%
Core return on assets (1)			1.11			1.09			1.36			1.30			1.20
Pre-tax, pre-provision return on assets			1.49			1.47			1.81			1.72			1.65
Core pre-tax, pre-provision return on assets (1)			1.49			1.46			1.81			1.72			1.65
Return on equity			10.72			10.49			12.96			12.73			11.55
Core return on equity (1)			10.72			10.42			12.94			12.72			11.54
Return on tangible equity			15.65			15.28			18.97			19.03			17.25
Core return on tangible equity (1)			15.65			15.19			18.94			19.02			17.24
Net interest margin, fully taxable equivalent (1) (3)			3.18			3.22			3.54			3.76			3.47
Efficiency ratio (1)			58.59			60.25			54.72			58.19			57.67
FINANCIAL DATA (In millions)
Total assets		$	3,984		$	4,029		$	3,928		$	3,910		$	3,840
Total earning assets (4)			3,687			3,716			3,628			3,601			3,525
Total investments			524			556			573			574			566
Total loans			2,993			3,007			2,944			2,903			2,850
Allowance for credit losses			28			27			27			26			25
Total goodwill and intangible assets			125			125			125			125			126
Total deposits			3,140			3,090			3,054			3,043			3,136
Total shareholders' equity			404			411			408			393			380
Net income			11			11			13			13			11
Core earnings (1)			11			11			13			13			11
ASSET QUALITY AND CONDITION RATIOS
Net charge-offs (recoveries) (5) /average loans			-	%		-	%		0.01	%		(0.02)	%		0.01	%
Allowance for credit losses/total loans			0.94			0.91			0.90			0.89			0.88
Loans/deposits			95			97			96			95			91
Shareholders' equity to total assets			10.15			10.20			10.40			10.06			9.89
Tangible shareholders' equity to tangible assets			7.25			7.32			7.45			7.09			6.85

1. Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in tables I-J for additional information.
2. All performance ratios are based on average balance sheet amounts, where applicable.
3. Fully taxable equivalent considers the impact of tax-advantaged investment securities and loans.
4. Earning assets includes non-accruing loans and interest-bearing deposits with other banks. Securities are valued at amortized cost.
5. Current quarter annualized.

BAR HARBOR BANKSHARES
CONSOLIDATED BALANCE SHEETS - UNAUDITED

		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(in thousands)		2023			2023			2023			2022			2022
Assets
Cash and due from banks		$	41,210		$	46,532		$	37,769		$	39,933		$	50,760
Interest-earning deposits with other banks			81,606			77,253			44,933			52,362			31,305
Total cash and cash equivalents			122,816			123,785			82,702			92,295			82,065
Securities available for sale			509,453			538,178			557,040			559,516			556,752
Federal Home Loan Bank stock			14,834			17,784			15,718			14,893			9,035
Total securities			524,287			555,962			572,758			574,409			565,787
Loans held for sale			2,016			3,669			463			-			982
Total loans			2,992,791			3,007,480			2,944,005			2,902,690			2,850,364
Less: Allowance for credit losses			(28,011	)		(27,362	)		(26,607	)		(25,860	)		(25,018	)
Net loans			2,964,780			2,980,118			2,917,398			2,876,830			2,825,346
Premises and equipment, net			47,790			47,412			47,549			47,622			48,010
Other real estate owned			-			-			-			-			-
Goodwill			119,477			119,477			119,477			119,477			119,477
Other intangible assets			5,102			5,335			5,568			5,801			6,034
Cash surrender value of bank-owned life insurance			79,469			78,967			78,436			81,197			80,758
Deferred tax asset, net			28,328			24,181			22,858			24,443			25,288
Other assets			89,876			89,641			81,269			87,729			86,499
Total assets		$	3,983,941		$	4,028,547		$	3,928,478		$	3,909,803		$	3,840,246
Liabilities and shareholders' equity
Demand and other non-interest bearing deposits		$	618,421		$	602,667		$	636,710		$	676,350		$	700,218
NOW deposits			929,481			911,488			908,483			900,730			918,822
Savings deposits			572,271			588,769			628,798			664,514			669,317
Money market deposits			361,839			351,762			475,577			478,398			513,075
Time deposits			658,482			635,559			404,246			323,439			334,248
Total deposits			3,140,494			3,090,245			3,053,814			3,043,431			3,135,680
Senior borrowings			307,070			398,972			338,244			333,957			188,757
Subordinated borrowings			60,422			60,371			60,330			60,289			60,248
Total borrowings			367,492			459,343			398,574			394,246			249,005
Other liabilities			71,747			68,243			67,680			78,676			75,596
Total liabilities			3,579,733			3,617,831			3,520,068			3,516,353			3,460,281
Total shareholders' equity			404,208			410,716			408,410			393,450			379,965
Total liabilities and shareholders' equity		$	3,983,941		$	4,028,547		$	3,928,478		$	3,909,803		$	3,840,246
Net shares outstanding			15,156			15,144			15,124			15,083			15,066

BAR HARBOR BANKSHARES
CONSOLIDATED LOAN & DEPOSIT ANALYSIS - UNAUDITED

LOAN ANALYSIS

																	Annualized
																	Growth %
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Quarter			Year
(in thousands)		2023			2023			2023			2022			2022			to Date			to Date
Commercial real estate		$	1,548,835		$	1,551,748		$	1,519,219		$	1,495,452		$	1,421,962			(1)	%		5	%
Commercial and industrial			391,347			388,430			364,315			352,735			376,624			3			15
Total commercial loans			1,940,182			1,940,178			1,883,534			1,848,187			1,798,586			-			7
Residential real estate			896,757			907,741			906,059			898,192			896,618			(5)			-
Consumer			95,160			96,947			98,616			100,855			100,822			(7)			(8	)
Tax exempt and other			60,692			62,614			55,796			55,456			54,338			(12)			13
Total loans		$	2,992,791		$	3,007,480		$	2,944,005		$	2,902,690		$	2,850,364			(2)	%		4	%

DEPOSIT ANALYSIS

																	Annualized
																	Growth %
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Quarter			Year
(in thousands)		2023			2023			2023			2022			2022			to Date			to Date
Demand		$	618,421		$	602,667		$	636,710		$	676,350		$	700,218			10	%		(11)	%
NOW			929,481			911,488			908,483			900,730			918,822			8			4
Savings			572,271			588,769			628,798			664,514			669,317			(11	)		(19	)
Money market			361,839			351,762			475,577			478,398			513,075			11			(33	)
Total non-maturity deposits			2,482,012			2,454,686			2,649,568			2,719,992			2,801,432			4			(12	)
Total time deposits			658,482			635,559			404,246			323,439			334,248			14			*
Total deposits		$	3,140,494		$	3,090,245		$	3,053,814		$	3,043,431		$	3,135,680			7	%		4	%

*Indicates ratio greater than 100%

BAR HARBOR BANKSHARES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in thousands, except per share data)		2023				2022				2023				2022
Interest and dividend income
Loans		$	38,412			$	27,940			$	109,889			$	75,192
Securities and other			6,723				5,145				18,478				13,178
Total interest and dividend income			45,135				33,085				128,367				88,370
Interest expense
Deposits			11,415				1,801				25,270				4,185
Borrowings			4,534				1,374				14,215				3,458
Total interest expense			15,949				3,175				39,485				7,643
Net interest income			29,186				29,910				88,882				80,727
Provision for credit losses			673				1,306				2,221				2,217
Net interest income after provision for credit losses			28,513				28,604				86,661				78,510
Non-interest income
Trust and investment management fee income			3,522				3,548				10,882				11,131
Customer service fees			3,926				3,836				11,377				11,108
Gain on sales of securities, net			-				44				34				53
Mortgage banking income			415				315				1,072				1,427
Bank-owned life insurance income			515				496				2,166				1,501
Customer derivative income			43				58				258				213
Other income			394				526				1,190				1,660
Total non-interest income			8,815				8,823				26,979				27,093
Non-interest expense
Salaries and employee benefits			13,011				12,242				39,005				35,757
Occupancy and equipment			4,469				4,458				13,275				13,254
Gain on sales of premises and equipment, net			-				-				(99	)			(65	)
Outside services			376				393				1,156				1,143
Professional services			436				421				1,217				1,122
Communication			170				204				507				617
Marketing			326				518				1,211				1,150
Amortization of intangible assets			233				233				699				699
Acquisition, conversion and other expenses			-				31				20				356
Provision for unfunded commitments			45				(26	)			(85	)			345
Other expenses			3,950				4,558				12,206				12,240
Total non-interest expense			23,016				23,032				69,112				66,618
Income before income taxes			14,312				14,395				44,528				38,985
Income tax expense			3,208				2,965				9,621				7,940
Net income		$	11,104			$	11,430			$	34,907			$	31,045
Earnings per share:
Basic		$	0.73			$	0.76			$	2.31			$	2.07
Diluted			0.73				0.76				2.30				2.06
Weighted average shares outstanding:
Basic			15,155				15,058				15,135				15,029
Diluted			15,196				15,113				15,189				15,100

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

		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(in thousands, except per share data)		2023			2023			2023			2022			2022
Interest and dividend income
Loans		$	38,412		$	36,917		$	34,560		$	32,605		$	27,940
Securities and other			6,723			5,964			5,791			5,551			5,145
Total interest and dividend income			45,135			42,881			40,351			38,156			33,085
Interest expense
Deposits			11,415			8,590			5,265			3,159			1,801
Borrowings			4,534			5,501			4,180			2,043			1,374
Total interest expense			15,949			14,091			9,445			5,202			3,175
Net interest income			29,186			28,790			30,906			32,954			29,910
Provision for credit losses			673			750			798			687			1,306
Net interest income after provision for credit losses			28,513			28,040			30,108			32,267			28,604
Non-interest income
Trust and investment management fee income			3,522			3,805			3,555			3,442			3,548
Customer service fees			3,926			3,774			3,677			3,683			3,836
Gain on sales of securities, net			-			-			34			-			44
Mortgage banking income			415			378			279			153			315
Bank-owned life insurance income			515			503			1,148			499			496
Customer derivative income			43			83			132			97			58
Other income			394			437			359			354			526
Total non-interest income			8,815			8,980			9,184			8,228			8,823
Non-interest expense
Salaries and employee benefits			13,011			13,223			12,771			12,900			12,242
Occupancy and equipment			4,469			4,392			4,414			4,321			4,458
(Gain) loss on sales of premises and equipment, net			-			(86	)		(13	)		75			-
Outside services			376			424			356			435			393
Professional services			436			355			426			490			421
Communication			170			175			162			263			204
Marketing			326			476			409			411			518
Amortization of intangible assets			233			233			233			233			233
Acquisition, conversion and other expenses			-			-			20			(90	)		31
Provision for unfunded commitments			45			45			(175	)		1,413			(26	)
Other expenses			3,950			4,155			4,101			4,184			4,558
Total non-interest expense			23,016			23,392			22,704			24,635			23,032
Income before income taxes			14,312			13,628			16,588			15,860			14,395
Income tax expense			3,208			2,837			3,576			3,348			2,965
Net income		$	11,104		$	10,791		$	13,012		$	12,512		$	11,430
Earnings per share:
Basic		$	0.73		$	0.71		$	0.86		$	0.83		$	0.76
Diluted			0.73			0.71			0.86			0.83			0.76
Weighted average shares outstanding:
Basic			15,155			15,139			15,110			15,073			15,058
Diluted			15,196			15,180			15,190			15,147			15,113

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

		Quarters Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
		2023			2023			2023			2022			2022
Earning assets
Interest-earning deposits with other banks			5.02	%		5.59	%		4.28	%		4.00	%		2.13	%
Securities available for sale and FHLB stock			3.87			3.71			3.66			3.40			3.12
Loans:
Commercial real estate			5.34			5.21			5.08			4.81			4.26
Commercial and industrial			6.56			6.42			5.89			5.43			4.46
Residential real estate			3.84			3.76			3.71			3.63			3.45
Consumer			6.88			6.67			6.37			5.79			4.55
Total loans			5.11			4.99			4.82			4.56			4.04
Total earning assets			4.90	%		4.77	%		4.61	%		4.35	%		3.84	%
Funding liabilities
Deposits:
NOW			1.11	%		0.94	%		0.51	%		0.22	%		0.16	%
Savings			0.42			0.37			0.30			0.16			0.08
Money market			2.55			2.52			2.14			1.42			0.65
Time deposits			3.65			2.82			1.34			0.69			0.55
Total interest-bearing deposits			1.81			1.45			0.91			0.52			0.30
Borrowings			4.59			4.73			4.25			3.23			2.69
Total interest-bearing liabilities			2.19	%		1.99	%		1.39	%		0.78	%		0.48	%
Net interest spread			2.71			2.78			3.22			3.57			3.36
Net interest margin, fully taxable equivalent (1)			3.18			3.22			3.54			3.76			3.47

(1) Non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures in tables I-J for additional information.

BAR HARBOR BANKSHARES
AVERAGE BALANCES - UNAUDITED

		Quarters Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(in thousands)		2023			2023			2023			2022			2022
Assets
Interest-earning deposits with other banks (1)		$	70,499		$	21,440		$	19,819		$	26,360		$	59,556
Securities available for sale and FHLB stock (2)			620,851			636,088			643,523			641,787			642,475
Loans:
Commercial real estate			1,550,188			1,536,035			1,505,681			1,447,384			1,351,599
Commercial and industrial			439,915			434,384			413,921			403,304			422,057
Residential real estate			909,296			911,788			902,348			897,637			882,158
Consumer			96,362			97,518			100,124			100,182			101,175
Total loans (3)			2,995,761			2,979,725			2,922,074			2,848,507			2,756,989
Total earning assets			3,687,111			3,637,253			3,585,416			3,516,654			3,459,020
Cash and due from banks			36,713			32,067			31,556			36,891			40,330
Allowance for credit losses			(27,473	)		(26,932	)		(25,971	)		(25,497	)		(24,061	)
Goodwill and other intangible assets			124,926			124,926			125,158			125,391			125,626
Other assets			162,801			163,388			168,773			164,749			171,394
Total assets		$	3,984,078		$	3,930,702		$	3,884,932		$	3,818,188		$	3,772,309
Liabilities and shareholders' equity
Deposits:
NOW		$	915,072		$	885,091		$	883,134		$	899,388		$	905,668
Savings			579,090			602,724			646,291			664,016			668,255
Money market			358,742			423,013			481,951			501,564			491,683
Time deposits			645,285			468,188			342,994			334,297			349,787
Total interest-bearing deposits			2,498,189			2,379,016			2,354,370			2,399,265			2,415,393
Borrowings			391,976			466,402			398,837			251,263			202,296
Total interest-bearing liabilities			2,890,165			2,845,418			2,753,207			2,650,528			2,617,689
Non-interest-bearing demand deposits			610,644			608,180			651,885			703,471			690,134
Other liabilities			72,409			64,346			72,693			74,276			71,934
Total liabilities			3,573,218			3,517,944			3,477,785			3,428,275			3,379,757
Total shareholders' equity			410,860			412,758			407,147			389,913			392,552
Total liabilities and shareholders' equity		$	3,984,078		$	3,930,702		$	3,884,932		$	3,818,188		$	3,772,309

(1) Total average interest-bearing deposits with other banks is net of Federal Reserve daily cash letter.
(2) Average balances for securities available-for-sale are based on amortized cost.
(3) Total average loans include non-accruing loans and loans held for sale.

BAR HARBOR BANKSHARES
ASSET QUALITY ANALYSIS - UNAUDITED

		At or for the Quarters Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(in thousands)		2023			2023			2023			2022			2022
NON-PERFORMING ASSETS
Non-accruing loans:
Commercial real estate		$	867		$	909		$	1,163		$	1,222		$	1,587
Commercial and industrial			1,595			1,814			1,917			264			348
Residential real estate			3,673			3,415			3,830			4,151			4,858
Consumer			635			565			886			911			981
Total non-accruing loans			6,770			6,703			7,796			6,548			7,774
Other real estate owned			-			-			-			-			-
Total non-performing assets		$	6,770		$	6,703		$	7,796		$	6,548		$	7,774
Total non-accruing loans/total loans			0.23	%		0.22	%		0.26	%		0.23	%		0.27	%
Total non-performing assets/total assets			0.17			0.17			0.20			0.17			0.20
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
Balance at beginning of period		$	27,362		$	26,607		$	25,860		$	25,018		$	23,756
Charged-off loans			(74	)		(199	)		(68	)		(136	)		(85	)
Recoveries on charged-off loans			50			204			17			291			41
Net loans (charged-off) recovered			(24	)		5			(51	)		155			(44	)
Provision for credit losses			673			750			798			687			1,306
Balance at end of period		$	28,011		$	27,362		$	26,607		$	25,860		$	25,018
Allowance for credit losses/total loans			0.94	%		0.91	%		0.90	%		0.89	%		0.88	%
Allowance for credit losses/non-accruing loans			414			408			341			395			322
NET LOAN (CHARGE-OFFS) RECOVERIES
Commercial real estate		$	-		$	(72	)	$	3		$	-		$	7
Commercial and industrial			34			139			2			285			12
Residential real estate			13			3			4			(56	)		(5	)
Consumer			(71	)		(65	)		(60	)		(74	)		(58	)
Total, net		$	(24	)	$	5		$	(51	)	$	155		$	(44	)
Net (recoveries) charge-offs (QTD annualized)/average loans			-	%		-	%		0.01	%		(0.02)	%		0.01	%
Net (recoveries) charge-offs (YTD annualized)/average loans			0.01			-			0.01			(0.01	)		-
DELINQUENT AND NON-ACCRUING LOANS/ TOTAL LOANS
30-89 Days delinquent			0.13	%		0.09	%		0.26	%		0.08	%		0.09	%
90+ Days delinquent and still accruing			0.03			0.02			-			0.01			0.01
Total accruing delinquent loans			0.16			0.11			0.26			0.09			0.10
Non-accruing loans			0.23			0.22			0.26			0.23			0.27
Total delinquent and non-accruing loans			0.39	%		0.33	%		0.52	%		0.32	%		0.37	%

BAR HARBOR BANKSHARES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED

			At or for the Quarters Ended
			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(in thousands)			2023			2023			2023			2022			2022
Net income			$	11,104		$	10,791		$	13,012		$	12,512		$	11,430
Non-core items:
Gain on sale of securities, net				-			-			(34	)		-			(44	)
(Gain) loss on sale of premises and equipment, net				-			(86	)		(13	)		75			-
Acquisition, conversion and other expenses				-			-			20			(90	)		31
Income tax expense (1)				-			20			6			4			3
Total non-core items				-			(66	)		(21	)		(11	)		(10	)
Core earnings (2)	(A)		$	11,104		$	10,725		$	12,991		$	12,501		$	11,420
Net interest income	(B)		$	29,186		$	28,790		$	30,906		$	32,954		$	29,910
Non-interest income				8,815			8,980			9,184			8,228			8,823
Total revenue				38,001			37,770			40,090			41,182			38,733
Gain on sale of securities, net				-			-			(34	)		-			(44	)
Total core revenue (2)	(C)		$	38,001		$	37,770		$	40,056		$	41,182		$	38,689
Total non-interest expense				23,016			23,392			22,704			24,635			23,032
Non-core expenses:
Gain (loss) on sale of premises and equipment, net				-			86			13			(75	)		-
Acquisition, conversion and other expenses				-			-			(20	)		90			(31	)
Total non-core expenses				-			86			(7	)		15			(31	)
Core non-interest expense (2)	(D)		$	23,016		$	23,478		$	22,697		$	24,650		$	23,001
Total revenue				38,001			37,770			40,090			41,182			38,733
Total non-interest expense				23,016			23,392			22,704			24,635			23,032
Pre-tax, pre-provision net revenue			$	14,985		$	14,378		$	17,386		$	16,547		$	15,701
Core revenue(2)				38,001			37,770			40,056			41,182			38,689
Core non-interest expense(2)				23,016			23,478			22,697			24,650			23,001
Core pre-tax, pre-provision net revenue(2)	(U)		$	14,985		$	14,292		$	17,359		$	16,532		$	15,688
(in millions)
Average earning assets	(E)		$	3,687		$	3,637		$	3,585		$	3,517		$	3,459
Average assets	(F)			3,984			3,931			3,885			3,818			3,772
Average shareholders' equity	(G)			411			413			407			390			393
Average tangible shareholders' equity (2) (3)	(H)			286			288			282			265			267
Tangible shareholders' equity, period-end (2) (3)	(I)			280			286			283			268			254
Tangible assets, period-end (2) (3)	(J)			3,859			3,904			3,803			3,785			3,715

BAR HARBOR BANKSHARES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND SUPPLEMENTARY DATA - UNAUDITED

				At or for the Quarters Ended
				Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(in thousands)				2023			2023			2023			2022			2022
Common shares outstanding, period-end		(K)			15,156			15,144			15,124			15,083			15,066
Average diluted shares outstanding		(L)			15,196			15,180			15,190			15,147			15,113
Core earnings per share, diluted (2)		(A/L)		$	0.73		$	0.71		$	0.86		$	0.83		$	0.76
Tangible book value per share, period-end (2)		(I/K)			18.45			18.88			18.74			17.78			16.89
Securities adjustment, net of tax (1) (4)		(M)			(66,530	)		(55,307	)		(50,646	)		(55,246	)		(58,715	)
Tangible book value per share, excluding securities adjustment (2) (4)		(I+M)/K			22.84			22.53			22.08			21.44			20.79
Tangible shareholders' equity/total tangible assets (2)		(I/J)			7.25			7.32			7.45			7.09			6.85
Performance ratios (5)
GAAP return on assets					1.11	%		1.10	%		1.36	%		1.30	%		1.20	%
Core return on assets (2)		(A/F)			1.11			1.09			1.36			1.30			1.20
Pre-tax, pre-provision return on assets					1.49			1.47			1.81			1.72			1.65
Core pre-tax, pre-provision return on assets (2)		(U/F)			1.49			1.46			1.81			1.72			1.65
GAAP return on equity					10.72			10.49			12.96			12.73			11.55
Core return on equity (2)		(A/G)			10.72			10.42			12.94			12.72			11.54
Return on tangible equity					15.65			15.28			18.97			19.03			17.25
Core return on tangible equity (1) (2)		(A+Q)/H			15.65			15.19			18.94			19.02			17.24
Efficiency ratio (2) (6)		(D-O-Q)/(C+N)			58.59			60.25			54.72			58.19			57.67
Net interest margin, fully taxable equivalent (2)		(B+P)/E			3.18			3.22			3.54			3.76			3.47
Supplementary data (in thousands)
Taxable equivalent adjustment for efficiency ratio		(N)		$	565		$	539		$	727		$	520		$	533
Franchise taxes included in non-interest expense		(O)			186			163			148			149			149
Tax equivalent adjustment for net interest margin		(P)			405			382			368			365			379
Intangible amortization		(Q)			233			233			233			233			233

(1) Assumes a marginal tax rate of 23.80% in the first three quarters of 2023, 23.53% in the fourth quarter of 2022 and 23.41% for the previous quarters.
(2) Non-GAAP financial measure.
(3) Tangible shareholders' equity is computed by taking total shareholders' equity less the intangible assets at period-end. Tangible assets is computed by taking total assets less the intangible assets at period-end.
(4) Securities adjustment, net of tax represents the total unrealized loss on available-for-sale securities recorded on the Company's consolidated balance sheets within total common shareholders' equity.
(5) All performance ratios are based on average balance sheet amounts, where applicable.
(6) Efficiency ratio is computed by dividing core non-interest expense net of franchise taxes and intangible amortization divided by core revenue on a fully taxable equivalent basis.

SOURCE: Bar Harbor Bank and Trust

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The Bar Harbor Bankshares Stock at the time of publication of the news with a raise of +2,21 % to 23,10EUR on Lang & Schwarz stock exchange (17. Oktober 2023, 22:30 Uhr).