Bar Harbor Bankshares Reports a 30% Increase in Earnings.Business Editors BAR HARBOR Bar Harbor, town (1990 pop. 2,768), SE Maine, on Mount Desert Island and on Frenchman Bay; settled 1763, inc. 1796. It was a famed New England resort during the 19th cent. Bar Harbor is a port of entry, with ferry connections to Yarmouth, N.S., during the summer. , Maine--(BUSINESS WIRE)--July 30, 2003 Bar Harbor Bankshares (AMEX AMEX 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 ) President and Chief Executive Officer, Joseph M. Murphy, today announced net income of $1.41 million or 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 43 cents for the quarter ended June 30, 2003, compared with $1.13 million or 34 cents per diluted share for the same quarter last year, representing increases of 25% and 26%, respectively. For the six months ended June 30, 2003, total earnings amounted to $2.72 million, representing an increase of $626 thousand or 30%, and an increase of 21 cents per diluted share or 33%, compared with the same period last year. In making the announcement, Mr. Murphy said, "We are pleased with the continued improvement in the Company's performance, especially in light of historically low interest rates and a challenging economy. We have generated healthy loan growth during the first half of the year in both the commercial and consumer portfolios, the fruits of which will help drive earnings. The decline in interest rates during the quarter continued to fuel an unprecedented wave of loan refinancing activity, with year-to-date residential real estate loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. topping $63 million, following $117 million during all of 2002." Total assets ended the quarter at $556 million, or 8% higher than the same date in 2002. Total loans stood at $371 million, representing increases of $20 million or 6% compared with year-end, and $45 million, or 14%, compared with the same date last year. Year-over-year deposit growth amounted to $26 million or 9%, ending the current quarter at $317 million. For the quarter ended June 30, 2003, net interest income after the provision for loan losses amounted to $4.7 million compared with $4.4 million for the comparable quarter last year, representing an increase of $331 thousand, or 7%. The net interest margin, on a tax equivalent basis, amounted to 3.97% for the current quarter, representing a decline of six basis points from the prior quarter and a decline of seventeen basis points compared with the second quarter of last year. The continued growth in net interest income was principally attributed to a $43 million increase in average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin , compared with the same quarter in 2002. Interest rates continued to decline during the quarter, with the yield on the benchmark 10-year 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. note bottoming out at 3.07%, a 45-year low, on June 13. Over the ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. weeks this trend dramatically reversed course, with the yield on the 10-year Treasury note rising to 4.44% as of yesterday's close, representing an unprecedented 137 basis point turnaround. "Over the past several quarters, our asset sensitive balance sheet has put pressure on the net interest margin, as interest earning assets have been re-pricing at faster speeds than our funding costs," said Mr. Murphy. While our margin has been squeezed during this low rate environment, we have been vigilantly managing our exposure to rising rates over the longer term horizon and are positioned to benefit from an improving economy," he added. The Company's non-interest income amounted to $1.8 million for the quarter ended June 30, 2003, representing an increase of $225 thousand or 15%, compared with the same quarter in 2002. These results were principally attributed to increased gains on the sale of investment securities, and to a lesser extent a 7% increase in revenue at BTI BTI Beverage Testing Institute BTI Boyce Thompson Institute BTI British American Tobacco (stock symbol) BTI Boston Theological Institute Bti Bacillus Thuringiensis Israelensis BTI BioTechnology Institute BTI Binding Tariff Information Financial Group. For the six months ended June 30, 2003, non-interest income amounted to $3.6 million, representing an increase of 21% compared with the same period last year. Second quarter non-interest expense amounted to $4.6 million, representing an increase of 2% compared with the same quarter last year. For the six months ended June 30, 2003 total non-interest expense amounted to $9.3 million representing an increase of $617 thousand, or 7%, compared with the same period in 2002. The increase was principally attributed to a $436 thousand increase in salaries and employee benefit expenses, reflecting strategic additions to the Company's work-force, employee compensation increases, and increases in subsidized sub·si·dize tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es 1. To assist or support with a subsidy. 2. To secure the assistance of by granting a subsidy. employee health insurance and retirement benefits. Non-interest expenses at BTI Financial Group declined $282 thousand or 15% between periods, as measures were taken to align income opportunities more closely with operating costs operating costs npl → gastos mpl operacionales . At June 30, 2003 total 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. amounted to $2.5 million, or 0.66% of total loans, and the reserve for loan losses expressed as a percent of non-performing loans stood at 215%. During the first six months of 2003 the Company increased its allowance for loan losses by $301 thousand, or 6%, aided in part by the fact that recoveries on previously charged-off loans exceeded current period charge-offs. At quarter end, the allowance for loan losses amounted to 1.42% of total loans, compared with 1.39% at the same date last year. The allowance for loan losses is reviewed by management regularly and continues to be deemed adequate in relation to the loss exposure in the loan portfolio. The Company's capital position ended the quarter strong, with a capital-to-assets ratio of 9.7%, and exceeding 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. Bar Harbor Bankshares is the parent company of the wholly owned subsidiaries 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 Banking and Trust Company and BTI Financial Group. Bar Harbor Banking and Trust Company, founded in 1887, provides full service banking with ten locations throughout Down East Maine. BTI Financial Group subsidiaries include Bar Harbor Trust Services, a Maine chartered trust company; Block Capital Management, an SEC registered investment advisor Registered Investment Advisor (RIA) is a designation obtainable in the United States by an individual who has registered with the U.S. Securities and Exchange Commission or state regulatory agency (where the primary business is situated or multiple States in some cases) in ; and Dirigo Investments, Inc., a NASD NASD See: National Association of Securities Dealers NASD See National Association of Securities Dealers (NASD). registered broker dealer. BTI Financial Group offers a comprehensive array of private banking, financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against , brokerage, investment management and trust services to individuals, businesses, non-profit organizations A non-profit organization (abbreviated "NPO", also "non-profit" or "not-for-profit") is a legally constituted organization whose primary objective is to support or to actively engage in activities of public or private interest without any commercial or monetary profit purposes. and municipalities, while providing the highest level of customized personal service. 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. Forward-looking statements are subject to various factors which could cause actual results to differ materially from those statements. These factors include, but are not limited, to, changes in general economic conditions, interest rates, deposit flows, loan demand, competition, 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. A further description of these risks and uncertainties and other factors can be found in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2002, in the section captioned "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of 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)
Period End 2nd Quarter Average
Balance Sheet Data 6/30/2003 6/30/2002 2003 2002
Total Assets $555,727 $514,119 $549,214 $507,054
Total Loans 371,234 325,831 362,900 319,036
Reserve for possible loan
losses 5,276 4,537 5,261 4,481
Total Deposits 317,078 291,577 311,837 287,258
Borrowings 175,854 162,896 178,445 158,309
Shareholders' Equity 54,059 53,051 53,564 52,504
Three Months Ended Six Months Ended
Results Of Operations 6/30/2003 6/30/2002 6/30/2003 6/30/2002
Interest and dividend income $7,734 $7,924 $15,455 $15,810
Interest expense 2,837 3,208 5,678 6,356
Net interest income 4,897 4,716 9,777 9,454
Provision for possible loan
losses 150 300 300 600
Net interest income after
provision for loan losses 4,747 4,416 9,477 8,854
Noninterest income 1,776 1,551 3,580 2,969
Noninterest expense 4,559 4,480 9,294 8,677
Pre-Tax Income 1,964 1,487 3,763 3,146
Income Tax 552 360 1,047 809
Net income before accounting
change 1,412 1,127 2,716 2,337
Less: Accounting change net
of tax - - - (247)
Net income $1,412 $1,127 $2,716 $2,090
Earnings per share:
Basic before accounting
change $0.44 $0.35 $0.86 $0.72
Accounting change - - - (0.08)
Basic after accounting
change $0.44 $0.35 $0.86 $0.64
Diluted before
accounting change $0.43 $0.34 $0.84 $0.71
Accounting change - - - (0.08)
Diluted after accounting
change $0.43 $0.34 $0.84 $0.63
Dividends per share $0.19 $0.19 $0.38 $0.38
Return on Average Equity 10.57% 8.62% 10.20% 8.08%
Return on Average Assets 1.03% 0.89% 1.00% 0.84%
Capital to Assets, period end 9.73% 10.32%
Book Value per share,
period end $17.23 $16.50
Shares outstanding,
period end 3,137,066 3,215,891
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