Bar Harbor Bankshares Reports a 37% Increase in Quarterly Earnings Per Share.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)--April 29, 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 $1.3 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 41 cents for the quarter ended March 31, 2003, compared with $963 thousand, or 30 cents per diluted share for the first quarter of last year. Included in prior year earnings was a one time after tax adjustment of $247 thousand, resulting from the Company's adoption of a new accounting standard, SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ". In making the announcement, Murphy said, "We are pleased with the continued improvement in the Company's earnings trend as we launch into 2003, especially in light of challenging economic conditions. Our loan pipeline is holding strong, and we continue to remain selective, to emphasize conservative lending practices, and to foster enduring customer relationships." Total assets ended the quarter at $541 million, or 8.5% higher than the same date in 2002. Led by strong consumer real estate lending, total loans at March 31, 2003 stood at $352 million, representing an increase of $41 million, or 13.2%, compared with the same date last year. Deposit growth between periods amounted to 7.6%, ending the current quarter at $310 million. For the quarter ended March 31, 2003, net interest income amounted to $4.9 million compared with $4.7 million for the comparable quarter last year, representing an increase of $142 thousand, or 3.0%. Included in first quarter 2003 and 2002 net interest income was $397 thousand and $374 thousand of tax-exempt income Tax-exempt income Dividends and interest not subject to federal and, in some cases, state and local income taxes. from certain investments and loans, resulting in a reduction in the Company's tax expense of $170 thousand and $150 thousand, respectively. The net interest margin, on a tax equivalent basis, amounted to 4.03% during the current quarter, compared with 4.25% during the first quarter of 2002. "Our net interest margin continues to be pressured by the prolonged, historically low interest rate environment, causing sharp yield declines on the Company's variable rate 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 and accelerated prepayment speeds Prepayment speed Also called speed, the estimated rate at which mortgagors pay off their loans ahead of schedule, critical in assessing the value of mortgage pass-through securities. on fixed rate earning assets," said Murphy. "We have implemented a number of strategies to ensure a reasonably stable margin in a continued low rate environment, while vigilantly managing our exposure to rising rates over the longer term horizon," he added. The continued growth in net interest income was principally attributed to increases in total earning assets which averaged $508 million during the quarter ended March 31, 2003, compared with $466 million during the same period in 2002. The Company's non-interest income amounted to $1.8 million for the quarter ended March 31, 2003, representing an increase of $352 thousand, or 24.8%, compared with the same period in 2002. These results were principally attributed to increased gains on the sale of investment securities, offset in part by declining 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, as fees generated from the market value of assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. and retail brokerage transactions have been impacted by declines in the stock market, geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. uncertainties, and a continued industry slowdown in retail investor Retail Investor Individual investors who buy and sell securities for their personal account, and not for another company or organization. Notes: Retail investors buy in much smaller quantities than larger institutional investors. activities. Total non-interest expense amounted to $4.7 million for the quarter ended March 31, 2003, representing an increase of $504 thousand, or 12.0%, compared with the same period in 2002. Salaries and employee benefits increased $294 thousand between periods, 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 deferred compensation. At March 31, 2003 total non-performing loans amounted to $1.5 million, or 0.44% of total loans, and the reserve for loan losses expressed as a percent of non-performing loans stood at 337%. "While these ratios reflect favorably on the credit quality of the Company's loan portfolio, we are cognizant of softening economic conditions overall and a weakening in certain industry segments in particular and are managing credit risk accordingly," said Murphy. "We review the allowance for loan losses regularly and believe that it is adequate under current market conditions," he added. The Company's capital position ended the quarter strong, with a capital to assets ratio of 9.9%, and was well above regulatory requirements 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 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. 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)
1st Quarter
Period End Average
Balance Sheet Data 3/31/03 3/31/02 2003 2002
Total Assets $540,722 $498,309 $541,319 $497,750
Total Loans 352,167 310,959 350,273 305,187
Reserve for possible loan
losses 5,213 4,376 5,081 4,265
Total Deposits 309,814 287,930 306,454 284,863
Borrowings 169,276 152,857 169,895 150,327
Shareholders' Equity 53,499 52,292 53,728 52,322
Three Months Ended Three Months Ended
Results Of Operations 3/31/03 3/31/02 3/31/03 3/31/02
Interest and dividend income $7,721 $7,886 $7,721 $7,886
Interest expense 2,841 3,148 2,841 3,148
Net interest income 4,880 4,738 4,880 4,738
Provision for possible loan
losses 150 300 150 300
Net interest income after
provision for loan losses 4,730 4,438 4,730 4,438
Noninterest income 1,770 1,418 1,770 1,418
Noninterest expense 4,701 4,197 4,701 4,197
Pre-Tax Income 1,799 1,659 1,799 1,659
Income Tax 495 449 495 449
Net income before accounting
change 1,304 1,210 1,304 1,210
Less: Accounting change net of
tax - (247) - (247)
Net income $1,304 $963 $1,304 $963
Earnings per share:
Basic before accounting
change $0.41 $0.37 $0.41 $0.37
Accounting change - (0.07) - (0.07)
Basic after accounting change $0.41 $0.30 $0.41 $0.30
Diluted before accounting
change $0.41 $0.37 $0.41 $0.37
Accounting change - (0.07) - (0.07)
Diluted after accounting
change $0.41 $0.30 $0.41 $0.30
Dividends per share $0.19 $0.19 $0.19 $0.19
Return on Average Equity 9.84% 7.46% 9.84% 7.46%
Return on Average Assets 0.98% 0.78% 0.98% 0.78%
Capital to Assets, period end 9.89% 10.49%
Book Value per share, period
end $16.91 $16.11
Shares outstanding, period end 3,163,176 3,245,770
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