Bar Harbor Bankshares Reports Second Quarter 2005 Earnings.BAR HARBOR, Maine Bar Harbor, Maine, may refer to:
See: American Stock Exchange :BHB BHB Bar Harbor, ME, USA (Airport Code) BHB Bachelor of Human Biology BHB Black Hat Briefing (conference) BHB Bald Headed Bastard BHB Block History Buffer ) the parent company of Bar Harbor Bank & Trust (the "Bank"), today announced net income of $1.7 million for the quarter ended June 30, 2005 or fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of 54 cents, compared with $803 thousand or fully diluted earnings per share of 25 cents for the second quarter of 2004, representing increases of 112% and 116%, respectively. For the six-months ended June 30, 2005, net income amounted to $2.9 million or fully diluted earnings per share of 92 cents, compared with $2.2 million or fully diluted earnings per share of 70 cents during the same period in 2004, representing increases of 30% and 31%, respectively. In making the announcement, President and Chief Executive Officer, Joseph M. Murphy commented, "Looking back at the first half of 2005 we are pleased with the continued strengthening of the Company's performance, the highlights of which included strong loan growth, a sustained trend of solid credit quality, double-digit increases in non-interest income and net-interest income, a meaningful improvement in our net interest margin, relatively modest increases in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , and higher returns for our shareholders." Mr. Murphy added, "Looking forward, one of our more pressing challenges will be gathering higher levels of core deposits to support continued earning asset Earning asset An asset that generates income, e.g., income from rental property. growth. Competition from banks and non-banks has become more aggressive, as savers and investors seek higher returns in an atmosphere of rising short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. and a flattening
The flattening, ellipticity, or oblateness of an oblate spheroid is the "squashing" of the spheroid's pole, down towards its equator. U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. yield curve. During the second quarter, the Bank launched several new deposit products which we believe are highly competitive and designed to satisfy the changing expectations of both individual and business customers." Financial Condition Total loans ended the second quarter at $485 million, representing an increase of $36 million or 8% compared with December 31, 2004, and an increase of $68 million or 16% compared with the same date last year. Business lending activity continued to drive the overall growth in the Bank's loan portfolio, representing two-thirds of the increase when comparing June 30, 2005 with the same date in 2004. Lending activity has been particularly strong in Knox County There are nine counties named Knox County in the United States, all apparently named after Henry Knox:
Bangor is a city in and the county seat of Penobscot County, MaineGR6, United States. It is the major commercial center for eastern and northern Maine. For U.S. , two new markets being served by the Bank since early 2004. The Bank's non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. remained at low levels during the second quarter, representing $816 thousand or 0.17% of total loans at June 30, 2005. The Bank's loan loss experience showed an improvement during the first six months of 2005, with net charge-offs amounting to only $129 thousand, compared with $467 thousand during the same period in 2004. During the six-months ended June 30, 2005, the Bank recorded a provision for loan losses of $25 thousand, compared with $120 thousand during the same period in 2004, reflecting a sustained trend of strong credit quality and the resolution of certain legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. between borrowers engaged in the Maine wild blueberry blueberry, plant of the large genus Vaccinium, widely distributed shrubs (occasionally small trees) of the family Ericaceae (heath family), usually found on acid soil. They are often confused with the related huckleberry. processing industry and their growers. Investment securities totaled $150 million at June 30, 2005, representing a decline of $27 million or 15% compared with December 31, 2004, and a decline of $54 million or 27% compared with the same date in 2004. Over the past twelve months, cash flows from the securities portfolio were redeployed to help support the funding of exceptionally strong loan growth, which typically generates a higher yielding earning asset base. The Bank has also exercised restraint with respect to adding securities to the balance sheet during a period of still historically low market yields, a flattening U.S. Treasury yield curve, and management's expectation of higher yields in the near future. Total deposits ended the second quarter at $408 million, representing an increase of $10 million or 2% compared with December 31, 2004, and an increase of $31 million or 8% compared with the same date last year. Deposit growth was principally attributed to certificates of deposit obtained from the national market, as the Bank modified its funding and liquidity strategies, providing more balance between borrowed and brokered funds. At June 30, 2005, total borrowings amounted to $209 million compared with $237 million at the same date last year, representing a decline of $28 million or 12%. The Company continued to exceed regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. for well-capitalized institutions, ending the current quarter with a Tier I Capital Ratio of 7.78%. Results of Operations For the three and six-months ended June 30, 2005, net interest income amounted to $5.4 million and $10.7 million compared with $4.8 million and $9.6 million during the same periods in 2004, representing increases of $526 thousand and $1.0 million, or 11% for each period, respectively. The increases in net interest income during the three and six-months ended June 30, 2005 were principally attributed to average earning asset growth of $25.4 million and $43.7 million, and further bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. by 17 and 10 basis point improvements in the tax-equivalent net interest margins compared with the same periods in 2004, respectively. Total non-interest income amounted to $2.0 million and $3.1 million for the three and six-months ended June 30, 2005, representing increases of $1.1 million and $404 thousand, or 141% and 15%, compared with the same periods in 2004, respectively. During the three and six-months ended June 30, 2004, the Bank recorded net losses of $598 thousand and $103 thousand related to mark-to-market adjustments for unrealized depreciation on interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. agreements, net of cash flows received from counter-parties to those agreements. In the third quarter of 2004, these interest rate swap agreements were designated as cash flow hedges A cash flow hedge is a hedge of the exposure to the variability of cash flow that
Total non-interest expenses amounted to $4.9 million and $9.6 million for the three and six-months ended June 30, 2005, representing increases of $245 thousand and $431 thousand, or 5%, compared with the same periods in 2004, respectively. The increases in non-interest expenses were principally attributed to salaries and employee benefit expenses, which included previously reported severance costs recorded during the first quarter of 2005, as well as overall increases in the level of employee compensation, including incentive compensation. Bar Harbor Bankshares is the parent company of its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Bar Harbor Bank & Trust. Bar Harbor Bank & Trust, founded in 1887, provides full service community banking with eleven branch office locations serving Down East and Mid Coast Maine. This earnings release may contain certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. with respect to the financial condition, results of operations and business of the Company for which the Company claims the protection of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provided by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. You can identify these forward-looking statements by the use of words like "strategy," "expects," "plans," "believes," "will," "estimates," "intends," "projects," "goals," "targets," and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. Forward-looking statements include, but are not limited to, those made in connection with estimates with respect to the future results of operation, financial condition, and the business of the Company which are subject to change based on the impact of various factors that could cause actual results to differ materially from those projected or suggested due to certain risks and uncertainties. These risks and uncertainties include, but are not limited to, changes in general economic conditions, interest rates, deposit flows, loan demand, competition, internal controls, legislation or regulation and accounting principles, policies or guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. , as well as other economic, competitive, governmental, regulatory and accounting and technological factors affecting the Company's operations. The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments.
Bar Harbor Bankshares
Selected Financial Information
(dollars in thousands except per share data)
(unaudited)
Period End 2nd Quarter Average
Balance Sheet Data 6/30/2005 6/30/2004 2005 2004
Total assets $679,160 $671,110 $674,584 $650,745
Total investment securities 149,816 203,962 154,657 188,665
Total loans 484,665 416,940 472,594 411,454
Allowance for loan losses 4,725 4,931 4,788 5,196
Total deposits 407,960 376,488 402,347 372,064
Borrowings 208,993 236,651 207,939 216,700
Shareholders' equity 56,223 52,299 56,310 54,747
Three Months Ended Six Months Ended
Results Of Operations 6/30/2005 6/30/2004 6/30/2005 6/30/2004
Interest and dividend income $8,945 $7,664 $17,486 $15,187
Interest expense 3,595 2,840 6,825 5,548
Net interest income 5,350 4,824 10,661 9,639
Provision for loan losses 25 30 25 120
Net interest income after
provision for loan losses 5,325 4,794 10,636 9,519
Noninterest income 1,953 811 3,056 2,652
Noninterest expense 4,865 4,620 9,648 9,217
Pre-tax income 2,413 985 4,044 2,954
Income tax 713 182 1,131 715
Net income $1,700 $803 $2,913 $2,239
Earnings per share:
Basic $0.55 $0.26 $0.94 $0.72
Diluted $0.54 $0.25 $0.92 $0.70
Dividends per share $0.21 $0.20 $0.42 $0.40
Return on Average Equity(1) 12.11% 5.90% 10.45% 7.59%
Return on Average Assets 1.01% 0.50% 0.88% 0.72%
Tier 1 Leverage Capital Ratio 7.78% 7.76%
As of June 30: 2005 2004
Book value per share $18.27 $16.85
Tangible book value per share $17.25 $15.83
Shares outstanding 3,076,916 3,104,015
(1) Prior period Return on Average Equity percentages have been
increased due to revised average equity balances in those
respective periods.
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