Second Quarter 2020 Earnings Presentation
July 28, 2020
Company Overview (NYSE American: BHB)
Financial Highlights
Market Data1
Stock Price | $20.75 | ||
Market Cap (MM's) | $316 | ||
Price / LTM Core EPS | 9.93x | ||
Price / Tangible Book Value (Non GAAP) | 114% | ||
Dividend Yield | 4.24% | ||
Balance Sheet (MM) | |||
Total Assets | $3,780 | ||
Cash and Securities | $733 | ||
Net Loans3 | $2,713 | ||
Total Deposits | $2,695 | ||
Total Equity | $404 | ||
YTD Performance Ratios and Profitability | |||
Core Return on Average Assets | 0.87% | ||
Core Return on Average Equity | 8.12% | ||
Net Interest Margin | 3.02% | ||
Efficiency Ratio | 62.74% | ||
Core Net Income (000's) | $16,390 | ||
Capital Ratios2 | |||
Tang. Common Equity / Tang. Assets | 7.57% | ||
Tier 1 Leverage Ratio | 8.25% | ||
Common Equity Tier 1 Risk‐ Based Capital Ratio | 10.61% | ||
Tier 1 Risk‐ Based Capital Ratio | 11.42% | ||
Total Risk‐Based Capital Ratio | 13.61% |
Asset and Income Generation
Total Assets (MM's)
$3,780
$3,688 | $3,669 | $3,677 |
$3,612 |
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q23 |
Core Net Income (000's) | ||||
$8,798 | $7,790 | $8,600 | ||
$7,323 | ||||
$6,346 | ||||
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 |
All financial data as of June 30, 2020 except 1Market Data, which is as of July 22, 2020 and 2Capital ratios which are as of March 31, 2020 3Assets and loans include a net $127.0 MM in Paycheck Protection Program (PPP) loans
2
Second Quarter 2020 ‐ Highlights
- 18% annualized commercial loan growth for Q2 2020, CRE at 14% and C&I at 30%, excluding PPP (Paycheck Protection Program)
- 32% annualized growth in non‐maturity deposits for Q2 2020, excluding balances related to PPP loans
- 11% QTD annualized growth in tangible book value per share
- 3.00% NIM in Q2 2020 vs 2.66% in Q2 2019
- 0.96% cost of funds in Q2 2020 vs 1.71% in Q2 2019 and 1.28% for Q1 2020
- 12% Y‐O‐Y growth in non‐interest income on higher mortgage banking income, excluding any security gains on sale
- Net charge‐offs continue to be near historic lows; past due accounts down to 0.32% from 0.75% Q4 2019
- Strong liquidity position through multiple channels
- Capital ratios quickly building since branch acquisition in Q4 2019
Note: Assets and loans include a net $127.0 MM in Paycheck Protection Program (PPP) loans
Note: See appendix for GAAP reconciliation
3
Strategic Objectives
We strive to be one of the most profitable banks in New England; to provide exceptional service to the
people, businesses and communities we serve; and create a corporate culture that develops and
rewards existing employees and attracts outside talent.
To be one of the most profitable banks headquartered in New England
Focus on the core bank: core commercial banking business, core funding, core earnings
Increase sources of fee income via Trust, Treasury Management and Mortgage Banking
Continued commitment to an exceptional risk management culture
Strategically fill‐in and expand our New England footprint
Maintain a strong capital base that supports growth opportunities
4
Management Team
Executive | Background | ||
Curtis C. Simard | • Joined as President and CEO of Bar Harbor Bankshares and Bar Harbor Bank & Trust in June 2013 | ||
President and CEO | • Served as Managing Director of Corporate Banking for TD Bank and various management positions at Citizens | ||
Financial Group | |||
Josephine Iannelli | •Joined Bar Harbor Bankshares and Bar Harbor Bank & Trust in October 2016 as Executive Vice President, Chief | ||
Financial Officer and Treasurer | |||
EVP, Chief Financial Officer and Treasurer | •Served as Senior Executive VP, Chief Financial Officer and Treasurer of Berkshire Hills Bancorp in Pittsfield, | ||
Massachusetts and various management positions at PNC Financial Services Group | |||
Richard B. Maltz | •Serves as Bar Harbor Bankshares Executive Vice President, Chief Risk Officer since September 2014, and Chief | ||
Operating Officer since September 2016 | |||
EVP, Chief Operating Officer | •Served as Executive Vice President and Chief Risk Officer of Bangor Savings Bank | ||
•Serves as Executive Vice President and Chief Lending Officer since 2018 and joined Bar Harbor Bank & Trust in | |||
John Mercier | 2017 | ||
EVP, Chief Lending Officer | •Veteran in retail, small business, regional banking, middle market, and large national corporate markets with | ||
over 30 years of experience | |||
Marion Colombo | •Executive Vice President, Director of Retail Delivery of Bar Harbor Bank & Trust since 2018 | ||
EVP, Director of Retail Delivery | •25 years in retail banking, most recently serving as Market President‐Retail at TD Bank | ||
Jennifer Svenson | •Serves as SVP, Chief Human Resources Officer | ||
SVP, Human Resources | •Most recently served as VP, US Human Resources of Ironshore, Boston MA | ||
Jason P. Edgar | •Serves as President of Bar Harbor Trust Services and Charter Trust Company | ||
President Bar Harbor Trust Services & | •Most recently served as SVP, Director of Wealth Management of Berkshire Bank, Boston MA | ||
Charter Trust Company | |||
5
Company History
Acquisition of | Further Expansion | Continue to | ||||||||||||||||||||
Lake Sunapee | John Mercier | into Southern NH | opportunistically | |||||||||||||||||||
Bank group - | hired to run | position | Balance Sheet | |||||||||||||||||||
Ba r Harbor Trust | Acquired Border | expansion into NH | commercial | Executed on branch | ||||||||||||||||||
Rick Maltz hired | and VT markets | Marion Colombo | ||||||||||||||||||||
Established in Bar | Trust Company | banking in NH and | hired as EVP, | optimization study, | ||||||||||||||||||
Harbor, Maine | as Chief Operating | VT | Director of Retail | balance sheet | ||||||||||||||||||
Officer | Delivery | strategies, and issued | ||||||||||||||||||||
sub‐debt1 | ||||||||||||||||||||||
1887 | 1984 | 2012 | 2013 | 2014 | 2016 | 2017 | 2018 | 2019 | 2020 |
Announced | ||||||||||||||||||||
sale of | Branch acquisition ‐ | |||||||||||||||||||
insurance | strengthening presence | |||||||||||||||||||
Established Bar | ||||||||||||||||||||
Josephine Iannelli | business | in Central ME | ||||||||||||||||||
Harbor | hired as Chief | |||||||||||||||||||
Bankshares as a | Curtis Simard | |||||||||||||||||||
Financial Officer | ||||||||||||||||||||
holding company | hired as President | Upgraded | Expansion of treasury | Consolidated and | ||||||||||||||||
core operating | management services and | |||||||||||||||||||
& CEO | updated core | |||||||||||||||||||
systems | customer derivatives | |||||||||||||||||||
operating platform for | ||||||||||||||||||||
platform | ||||||||||||||||||||
both Trust Companies | ||||||||||||||||||||
1 Part of the Balance Sheet Optimization Strategies executed in 2019 was the refinancing of existing Bar Harbor Bank & Trust debt. Bar Harbor Bank & Trust issued subordinated sub debt to replace these borrowings. Bar Harbor Bank & Trust issued their subordinated debt at a 4.625% coupon, the lowest rate to date for similarly rated issuers and debt structures
(source: Piper‐Sandler & Company).. The deal was oversubscribed which resulted in a larger issuance than the replacement debt at a net comparable cost. | 6 |
Markets we Serve: Deposit Market Share
Maine
Rank | Financial Institution Name | Total | Total Deposits | Market | ||
Branches | (000's) | Share | ||||
1 | Toronto‐Dominion Bank | 42 | $3,867,684 | 10.1% | ||
2 | Camden National Corporation | 58 | $3,581,756 | 9.4% | ||
3 | Bangor Bancorp, MHC | 59 | $3,488,716 | 9.1% | ||
4 | KeyCorp | 42 | $2,833,196 | 7.4% | ||
5 | Bank of America Corporation | 12 | $1,916,030 | 5.0% | ||
6 | Bar Harbor Bankshares | 22 | $1,740,670 | 4.6% | ||
Total Market | 644 | $38,202,867 | 100% | |||
New Hampshire
Rank | Financial Institution Name | Total | Total Deposits | Market | ||
Branches | (000's) | Share | ||||
1 | Toronto‐Dominion Bank | 58 | $7,643,433 | 18.2% | ||
2 | Citizens Financial Group, Inc. | 54 | $7,497,873 | 17.8% | ||
3 | Bank of America Corporation | 21 | $4,739,798 | 11.3% | ||
4 | Service Credit Union | 36 | $3,021,021 | 7.2% | ||
5 | New Hampshire Mutual Bancorp | 27 | $1,837,624 | 4.4% | ||
13 | Bar Harbor Bankshares | 20 | $737,255 | 1.8% | ||
Total Market | 508 | $42,022,082 | 100% | |||
Vermont
Rank | Financial Institution Name | Total | Total Deposits | Market | ||
Branches | (000's) | Share | ||||
1 | People's United Financial, Inc. | 38 | $3,867,684 | 18.6% | ||
2 | Toronto‐Dominion Bank | 24 | $3,581,756 | 15.0% | ||
3 | Community Bank System, Inc. | 31 | $3,488,716 | 6.7% | ||
4 | New England Federal Credit Union | 7 | $2,833,196 | 6.4% | ||
5 | KeyCorp | 11 | $1,916,030 | 5.0% | ||
19 | Bar Harbor Bankshares | 11 | $258,806 | 1.5% | ||
Total Market | 303 | $17,475,574 | 100% |
Source: SNL / S&P Market Intelligence
7
Profitability Metrics
Core ROAA | Core ROAE | ||||||
0.96% | 8.81% | 8.52% | |||||
0.91% | 7.36% | 7.71% | |||||
0.80% | 0.86% | ||||||
6.57% |
0.70%
2019Q2 2019Q3 2019Q4 2020Q1 2020Q22019Q2 2019Q3 2019Q4 2020Q1 2020Q2
Net Interest Margin | Efficiency Ratio | |||
3.06% | 68.48% | |||
3.00% | ||||
2.95% | ||||
65.02% | 64.82% |
2.75% | 62.56% | |
2.65% | 60.67% | |
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | 2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 |
8
Strengthening of the Balance Sheet
Liquidity
- Increased balance sheet liquidity reflecting significant wholesale borrowing capacity (FHLB and Brokered CD Market) as well as restructured investment portfolio
- Continue to maintain and test external lines of credit with FHLB, Federal Reserve Bank, and other correspondent banks
Capital
- Well capitalized, reflecting the refinancing and upsizing of subordinated debt in Q4 2019
- Judicious capital and balance sheet management as evidenced by the strategic shift in residential mortgage lending
- Consistent and strong earnings as well as conservative interest rate risk exposures
Interest Rate Risk (IRR) Positioning & Management
- Interest rate risk metrics are largely neutral to expected near‐term exposures
- Active liability expense management (deposit betas) relative to market benchmarks
9
Focus on Non‐Interest Income Growth
- Optimized existing sources and executed against new initiatives to create other sources
- Substantial growth and diversification of non‐interest income YTD compared to Q2 2019 YTD
- Wealth Management and Financial Services
- Bar Harbor Financial Services
- Two wholly owned subsidiaries, Charter Trust and Bar Harbor Trust services offering trust management services
- $2.04B AUM
- Total Revenue of $6.53 MM in 2020 H1 vs. $5.82 MM 2019 H1
- Expansion of Mortgage Banking platform and secondary market sales channels. Mortgage Banking income for 2020 H1 totaled $1.58 MM vs. $642 thousand for 2019 H1.
- Cash Management and Treasury Services
- Customer Derivative Offerings
23.9%
$13.6 MM
4%
5%
8%
5%
35%
43%
27.6% | Total Non‐Interest Income as a | ||||
percentage of Total Core Revenue | |||||
20,000.0 | 20,000.0 | ||||
$18.1 MM Total Non‐Interest Income | |||||
Other Income | |||||
4% | 18,000.0 | 18,000.0 | |||
Customer Derivative Fees | |||||
6% | |||||
($1.1 MM H1 2020 vs $725k 2019 H1) | |||||
6% | 16,000.0 | 16,000.0 | |||
BOLI Income | |||||
8% | |||||
Gain on Sale of Securities1 | |||||
14,000.0 | 14,000.0 | ||||
9% | Mortgage Banking Income | ||||
($1.6 MM H1 2020 vs $642k 2019 H1) | |||||
12,000.0 | 12,000.0 | ||||
31% | 10,000.0 | 10,000.0 | |||
Customer Service | |||||
Fee Income | |||||
8,000.0 | 8,000.0 | ||||
6,000.0 | 6,000.0 | ||||
Trust & Investment Management Fee | |||||
4,000.0 | 4,000.0 | ||||
36% | Income | ||||
($6.5 MM H1 2020 vs $5.8 MM 2019 H1) | |||||
2,000.0 | 2,000.0 | ||||
0.0 | 0.0 |
2019 H1 | 2020 H1 |
1Gain on Sale of Securities was part of a larger balance sheet strategy that allowed the Bank to take advantage of opportunities in capital markets
10
Deposit Portfolio Overview
Deposits in Millions ($)
$2,481 | $2,494 | $2,696 | $2,651 | $2,695 | Total Deposits | ||
14% | 15% | 15% | 2,500.0 | ||||
Money Market | |||||||
12% | 2,500.0 | ||||||
14% | 14% | ||||||
14% | 14% | 16% | 17% | Savings2,000.0 | 2,000.0 | ||
14% | 15% | 15% | 15% | 19% | Demand1,500.0 | 1,500.0 | |
19% | 20% | 21% | 22% | 1,000.0 | |||
24% | 1,000.0 | ||||||
NOW | |||||||
40% | 36% | 35% | 32% | 25% | 500.0 | 500.0 | |
Time Deposits | |||||||
0.0 | 0.0 | ||||||
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | |||
- Total deposits of $2.70 billion as of June 30, 2020 representing Year‐over‐Year deposit growth of 8.6%; 32% annualized growth in total non‐maturity deposits, excluding balances related to PPP loans
- Continued focus on growing NOW, Demand and other non‐Time Deposits which improved our Cost of Interest‐Bearing Deposits for Q2 2020 to 0.81%, down from 1.32% from Q2 2019
- Loans / Deposits of 101%
11
Loan Portfolio Overview
- Total loans of $2.73 billion as of June 30, 2020 representing a 5.86% Y‐o‐Y increase, with C&I increasing by 51.4% Y‐o‐Y
- Excluding PPP loans, total loans increased 0.9% Y‐o‐Y with C&I loans increasing 10.7%
- Yield on loans of 3.94% for the quarter ended June 30, 2020, and 4.04% excluding PPP loans
Tax exempt and other 4.1% / $104.7 | Tax exempt and other 2.5% / $66.9 |
Consumer | Consumer |
4.4% / $112.3 | 4.6% / $124.2 |
CRE 34.2% / | CRE 36.0% / |
$881.5 | |
$982.1 | |
Residential | |
Residential | |
45.3% / $1167.8 | |
39.7% / | |
$1083.7 | |
C&I 12.1% / | C&I 17.3% / |
$312.0 | |
2019 Q2 | $472.5 |
2020 Q2 |
12
PPP, COVID Modified Loans & Loan Provisions
Paycheck Protection Program Loans (PPP)
- 1900 originations with a total principal balance of $131.5 MM and unearned fees of $5.3 MM
- Average loan size of $70K, 1,722 loans =< $150K totaling $51.2 MM (39%) and 4 loans >= $2.0 MM totaling $10.2 MM (8%)
- $600K of fee accretion included in the Q2 2020, accelerated accretion expected in the second half of 2020 into 2021
- $66 MM estimated PPP funds remain in BHB deposit accounts as of Q2 2020
COVID Modified Loans
- 786 total modified loans with a principal amount of approximately $400 MM within Q2 2020
- Modifications were mostly temporary principal deferrals with normal interest accruals
- Total accrued interest as of Q2 2020 was $2.4 MM
- 20% of the total principal balance resumed a normal payment schedule prior to quarter end
Allowance for Loan Losses ($ Millions)
$9 | 2020 Q2 | |
Allowance for | ||
$8 | Estate | Loan Losses by |
Portfolio Segment | ||
$7 | Real | |
$6 | Commercial | |
$5 |
$4 | Residential R/E Mortgages | Comm Const/Land Dev | |||||
$3 | C&I | Home Equity Loans | Consumer Loans | ||||
$2 | Agricultural | Tax Exempt | |||||
$1 | |||||||
$‐ | |||||||
13
Focused on Credit Quality
Total balance of all delinquent loans
• During Q2 2020, in response to COVID‐19, Management performed a |
stress test of the commercial portfolio analyzing potentially |
of delinquent loans by category1
$25.0 MM
1.7%
0.8%
0.7%
$14.5 MM
1.3%
0.4%
25,000.0
20,000.0
15,000.0
10,000.0
vulnerable NAICS codes, in addition to the normal migration analysis. |
The following segments of the commercial loan portfolio were |
identified for stress testing: |
‒ Hospitality loans with current Loan‐to‐Value (LTV) in excess of |
65% |
‒ All loans in the Bank's top 50 relationships |
‒ All loans $1 MM or greater with risk ratings of special mention |
or higher |
• ALLL / Loan coverage ratio improved to 0.63% (excluding PPP loans) |
Percentage balance
0.5%
1.2%
5,000.0
0.6%
0.0
2019Q4 2020Q2
- Management applied economic and individual loan factors to the allowance
- Largest industry concentration outside of real estate is Hospitality
- $287 MM in exposure2 as of Q2 2020, roughly 17.0% of commercial loans
‒ Current weighted average Loan‐to‐Value is below 60.0% | |||||
Residential R/E Mortgages | C&I | ||||
Commerical Real Estate | Home Equity Loans |
1Remaining loan categories include commercial construction / land development, Agricultural and Consumer, for a total of 0.50% as of Q2 2020, down from 0.81% of balances in | |
those categories during Q4 2019 | 14 |
2Exposure includes available credit & derivative exposure |
Asset Quality
NCOs / Avg. Loans | NPAs / Assets1 | |||||||||||||||||||||||
0.50% | 1.20% | |||||||||||||||||||||||
0.40% | ||||||||||||||||||||||||
1.00% | ||||||||||||||||||||||||
0.30% | 0.53% | 0.80% | ||||||||||||||||||||||
0.18% | 0.50% | 0.43% | 0.60% | |||||||||||||||||||||
0.20% | 0.38% | 0.33% | ||||||||||||||||||||||
0.40% | ||||||||||||||||||||||||
0.08% | 0.10% | |||||||||||||||||||||||
0.20% | ||||||||||||||||||||||||
0.03% | 0.02% | 0.02% | ||||||||||||||||||||||
0.00% | 0.00% | |||||||||||||||||||||||
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | 2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | |||||||||||||||
Reserves / Loans2 | NPLs / Loans3 | |||||||||||||||||||||||
1.20% | 1.20% | |||||||||||||||||||||||
1.00% | 1.00% | |||||||||||||||||||||||
0.57% | 0.60% | 0.58% | 0.58% | 0.60% | 0.80% | 0.62% | 0.65% | 0.80% | ||||||||||||||||
0.60% | 0.51% | 0.60% | ||||||||||||||||||||||
0.44% | 0.38% | |||||||||||||||||||||||
0.40% | 0.40% | |||||||||||||||||||||||
0.20% | 0.20% | |||||||||||||||||||||||
0.00% | 0.00% | |||||||||||||||||||||||
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | ||||||||||||||||||||
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | ||||||||||||||||||||
1NPAs/Assets excluding PPP loans is 0.45% for Q2 2020, 2Reserves / Loans excluding PPP loans is 0.63% for Q2 2020, 3NPLs/Loans excluding PPP loans is 0.54% for Q2 2020
15
Well Capitalized Institution
14%
12%
10%
8%
6%
4%
2%
0%
Tier 1 Leverage Ratio | Common Equity Tier 1 | Tier 1 | Risk Based Capital | TCE / TA | ||||
11.6% | 12.4% | 13.9% | 11.6% | 12.5% | 14.0% | 10.6% | 11.4% | 13.6% | 10.6% | 11.4% | 13.6% | |||
8.6% | 7.9% | 8.7% | 8.2% | 8.1% | 7.6% | 8.3% | 7.8% |
2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 |
Source: Company filings, calculated at holding company level.
16
Investment Considerations
- Focused on building franchise value
- Deep and talented management team
- Team, platform and strategy in place to generate efficient growth
- Profitable and efficient business model
- Clear vision to grow core loan/deposit business
- Development and expansion of non‐interest income revenue
- Proven ability to grow organically and via acquisitions
- Disciplined credit quality and a conservative risk management culture
- Consistent dividend payments to shareholders with an attractive yield
17
Legal Disclaimer
Forward Looking Statements
This presentation contains "forward‐looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward‐looking statements can be identified by words such as "believes," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may," "plans," "estimates," and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward‐looking statements include, but are not limited to: (i) projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; (ii) statements of plans, objectives, and expectations of the Company or its management or Board of Directors; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward‐looking statements are based on the Company's current expectations and assumptions regarding its business, the economy, and other future conditions. Because forward‐looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. The Company's actual results may differ materially from those contemplated by the forward‐looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. For more information about factors, such as the ongoing COVID ‐19 pandemic and the governmental and other responses thereto, that could cause actual results to differ from those discussed in the forward‐looking statements please refer to the information disclosed under "Forward‐Looking Statements", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in the Company's public filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10‐K and Quarterly Reports on Form 10‐Q. Any forward‐looking statement made by the Company in this presentation speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward‐looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law.
Non‐GAAP Financial Measures
This presentation contains both financial measures based on accounting principles generally accepted in the United States ("GAAP") and non‐GAAP based financial measures, which are used where management believes them to be helpful in understanding the Company's results of operations or financial position. Reconciliations of these non‐GAAP financial measures, to the most comparable GAAP measures are included in this presentation under "Non‐GAAP to GAAP Reconciliations" and in the Company's earnings release available in the Investor Relations portion of the Company's website at www.barharbor.bank. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non‐GAAP performance measures that may be presented by other companies.
18
Appendix
Historical Financial Performance
Dollar values in thousands, except per share | For the Year Ended, | For the Quarter Ended, | |||||||||
amounts or otherwise noted | 2016Y | 2017Y | 2018Y | 2019Y | 2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | ||
Balance Sheet | |||||||||||
Total Assets | $1,755 | $3,565 | $3,608 | $3,669 | $3,688 | $3,612 | $3,669 | $3,677 | $3,780 | ||
Net Loans | 1,119 | 2,473 | 2,476 | 2,626 | 2,564 | 2,562 | 2,626 | 2,620 | 2,713 | ||
Total Deposits | 1,050 | 2,352 | 2,483 | 2,696 | 2,481 | 2,494 | 2,696 | 2,651 | 2,695 | ||
Capital | |||||||||||
Total Equity1 | $157 | $355 | $371 | $396 | $391 | $394 | $396 | $404 | $404 | ||
Tang. Common Equity / Tang. Assets1 | 8.65% | 7.12% | 7.51% | 7.60% | 7.92% | 8.20% | 7.60% | 7.77% | N/A | ||
Tier 1 Leverage Ratio1 | 8.94% | 8.10% | 8.53% | 8.13% | 8.57% | 8.65% | 8.13% | 8.25% | N/A | ||
Total Risk‐Based Capital Ratio1 | 16.52% | 13.73% | 14.23% | 13.61% | 13.93% | 14.01% | 13.61% | 13.61% | N/A | ||
Earnings & Profitability | |||||||||||
Net Income | $14.9 | $26.0 | $32.9 | $22.6 | $6.1 | $5.0 | $4.2 | $7.7 | $8.5 | ||
Core ROAA | 0.83% | 0.93% | 0.99% | 0.82% | 0.70% | 0.80% | 0.96% | 0.86% | 0.91% | ||
Core ROAE | 8.57% | 9.15% | 9.79% | 7.65% | 6.57% | 7.36% | 8.81% | 7.71% | 8.52% | ||
Net Interest Margin | 2.96% | 3.10% | 2.87% | 2.78% | 2.65% | 2.75% | 2.95% | 3.06% | 3.00% | ||
Efficiency Ratio | 58.90% | 55.44% | 59.27% | 64.95% | 86.48% | 65.02% | 62.56% | 64.82% | 60.67% | ||
Asset Quality | |||||||||||
NPLs / Loans | 0.58% | 0.58% | 0.73% | 0.44% | 0.62% | 0.65% | 0.44% | 0.38% | 0.51% | ||
NPAs / Assets | 0.38% | 0.41% | 0.57% | 0.38% | 0.50% | 0.53% | 0.38% | 0.33% | 0.43% | ||
Reserves / Loans | 0.92% | 0.50% | 0.56% | 0.58% | 0.57% | 0.60% | 0.58% | 0.58% | 0.60% | ||
NCOs / Average Loans | 0.00% | 0.04% | 0.05% | 0.08% | 0.03% | 0.02% | 0.08% | 0.18% | 0.02% | ||
Yield and Cost | |||||||||||
Yield on Earning Assets | 3.72% | 3.86% | 4.00% | 4.16% | 4.13% | 4.17% | 4.15% | 4.14% | 3.81% | ||
Cost of Interest Bearing Deposits | 0.75% | 0.60% | 0.98% | 1.27% | 1.32% | 1.33% | 1.19% | 1.08% | 0.81% | ||
Cost of Total Interest Bearing Liabilities | 0.86% | 0.87% | 1.31% | 1.61% | 1.71% | 1.65% | 1.42% | 1.28% | 0.96% | ||
Market Information (7/23/2020) | |||||||||||
Current Stock Price | $20.75 | Price / BV | 78% | ||||||||
52 Week High | $26.59 | Price / TBV | 114% | ||||||||
52 Week Low | $13.77 | Price / LTM EPS | 9.93x | ||||||||
Market Capitalization | $315.7 | Dividend Yield | 4.24% | ||||||||
Source: Company filings
20
Non‐GAAP to GAAP Reconciliations
Dollar values in thousands, except per share | 2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | YTD 2020 | ||||||||||||
amounts or otherwise noted | ||||||||||||||||||
GAAP net income | 6,117 | 5,015 | 4,207 | 7,721 | 8,481 | |||||||||||||
16,202 | ||||||||||||||||||
Plus (less): | ||||||||||||||||||
Gain sale of securities, net | ‐ | (157) | (80) | (135) | (1,351) | (1,486) | ||||||||||||
(Gain) loss on sale of fixed assets, net | 21 | ‐ | (3) | 92 | (2) | 90 | ||||||||||||
Loss on other real estate owned | ‐ | 146 | 20 | 31 | ‐ | 31 | ||||||||||||
Loss on debt extinguishment | ‐ | ‐ | 1,096 | ‐ | 1,351 | 1,351 | ||||||||||||
Acquisition, restructuring and other expenses | 280 | 3,039 | 4,998 | 103 | 158 | 261 | ||||||||||||
Income tax expense1 | (72) | (720) | (1,440) | (22) | (37) | (59) | ||||||||||||
Total core earnings2 | (A) | $ | 6,346 | $ | 7,323 | $ | 8,798 | $ | 7,790 | $ | 8,600 | $ | 16,390 | |||||
Net‐interest income | (B) | $21,496 | $22,445 | $24,104 | $24,563 | $24,590 | $49,153 | |||||||||||
Plus: Non‐interest income | 7,453 | 7,643 | 7,806 | 8,421 | 9,710 | 18,131 | ||||||||||||
Total Revenue | 28,949 | 30,088 | 31,910 | 32,984 | 34,300 | 67,284 | ||||||||||||
Plus: Gain on sale of securities, net | ‐ | (157) | (80) | (135) | (1,351) | (1,486) | ||||||||||||
Total core revenue2 | (C) | $28,949 | $29,931 | $31,830 | $32,849 | $32,949 | $65,798 | |||||||||||
Total non‐interest expense | 20,906 | 23,400 | 26,803 | 22,359 | 22,266 | 44,625 | ||||||||||||
Less: Gain (loss) on sale of premises and equipment, net | (21) | ‐ | 3 | (92) | 2 | (90) | ||||||||||||
Less: Loss on other real estate owned | ‐ | (146) | (20) | (31) | ‐ | (31) | ||||||||||||
Less: Loss on debt extinguishment | ‐ | ‐ | (1,096) | ‐ | (1,351) | (1,351) | ||||||||||||
Less: Acquisition, restructuring and other expenses | (280) | (3,039) | (4,998) | (103) | (158) | (261) | ||||||||||||
Core non‐interest expense2 | (D) | $20,605 | $20,215 | $20,689 | $22,133 | $20,759 | $42,892 |
1Assumes a marginal tax rate of 23.78% in 2019. A marginal tax rate of 23.87% was used in the first and second quarter of 2020. | ||
2 | Non‐GAAP financial measure. | 21 |
3 | 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. | |
Non‐GAAP to GAAP Reconciliations (continued)
Dollar values in thousands, except per share | 2019Q2 | 2019Q3 | 2019Q4 | 2020Q1 | 2020Q2 | YTD 2020 | |||
amounts or otherwise noted | |||||||||
Averages | |||||||||
Total average earning assets | (E) | $3,330 | $3,308 | $3,309 | $3,303 | $3,367 | $3,339 | ||
Total average assets | (F) | 3,646 | 3,642 | 3,655 | 3,662 | 3,807 | 3,786 | ||
Total average shareholders equity | (G) | 388 | 395 | 396 | 406 | 406 | 406 | ||
Performance ratios | |||||||||
GAAP return on assets | 0.67% | 0.55% | 0.46% | 0.85% | 0.90% | 0.86% | |||
GAAP return on equity | 6.33% | 5.04% | 4.21% | 7.64% | 8.40% | 8.02% | |||
Core return on equity2 | (A/G) | 6.57% | 7.36% | 8.81% | 7.71% | 8.52% | 8.12% | ||
Efficiency ratio2,3 | (D‐O‐Q)/(C+N) | 68.48% | 64.99% | 62.79% | 64.82% | 60.67% | 62.74% | ||
Net interest margin | (B+P)/E | 2.65% | 2.75% | 2.95% | 3.06% | 3.00% | 3.02% | ||
Supplementary Data | |||||||||
Taxable equivalent adjustment for efficiency ratio | (N) | $676 | $658 | $674 | $719 | $646 | $1,365 | ||
Franchise taxes included in non‐interest expense | (O) | 111 | 119 | 119 | 119 | 120 | 239 | ||
Tax equivalent adjustment for net interest margin | (P) | 514 | 503 | 516 | 551 | 490 | 1,041 | ||
Intangible amortization | (Q) | 207 | 207 | 240 | 256 | 256 | 512 |
1Assumes a marginal tax rate of 23.78% in 2019. A marginal tax rate of 23.87% was used in the first and second quarter of 2020. | ||
2 | Non‐GAAP financial measure. | 22 |
3 | 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. | |
Interest Rate Risk Analysis
On a quarterly basis, the company measures and reports NII and EVE at risk to isolate the change in income and value related solely to interest‐earning assets and interest‐bearing liabilities. The analysis below shows the impact of instantaneous parallel shifts in the market yield curve for a period of one year while EVE shows a liquidation calculation over the same shifts in the curve.
NII Impact | EVE Impact |
8.0% | 8.0 | |||
6.0% | 7.0 | |||
6.0 | ||||
4.0% | ||||
5.0 | ||||
2.0% | 4.0 | |||
0.0% | 3.0 | |||
2.0 | ||||
‐2.0% | ||||
1.0 | ||||
‐4.0% | ‐ | |||
‐6.0% | (1.0) | |||
(2.0) | ||||
‐8.0% | ||||
(3.0) | ||||
‐10.0% | (4.0) | |||
‐100BP | +100BP | +200BP | +300BP | +400BP |
% Change NII | $ Change NII | |
15.0% | 30.0 | |||
10.0% | 20.0 | |||
5.0% | 10.0 | |||
‐ | ||||
0.0% | ||||
(10.0) | ||||
‐5.0% | ||||
(20.0) | ||||
‐10.0% | (30.0) | |||
‐15.0% | (40.0) | |||
(50.0) | ||||
‐20.0% | ||||
(60.0) | ||||
‐25.0% | ||||
(70.0) | ||||
‐30.0% | (80.0) | |||
‐100BP | +100BP | +200BP | +300BP | +400BP |
% Change EVE | $ Change EVE |
Interest Rate Risk to Earnings (NII) | Interest Rate Risk to Capital (EVE) | ||||
Change in | June 30, 2020 | Change in | June 30, 2020 | ||
$ Change | |||||
Interest Rates | $ Change NII | % Change | Interest Rates | EVE | % Change |
(basis points) | (millions) | NII | (basis points) | (millions) | EVE |
+400BP | 6.7 | 6.7% | +400BP | (29.9) | ‐10.0% |
+300BP | 5.7 | 5.7% | +300BP | (6.0) | ‐2.0% |
+200BP | 4.2 | 4.2% | +200BP | 17.4 | 5.8% |
+100BP | 2.4 | 2.4% | +100BP | 24.5 | 8.2% |
‐100BP | (0.8) | ‐0.8% | ‐100BP | (69.1) | ‐23.1% |
NII and EVE Impact is based on June 30, 2020 available data.
23
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Disclaimer
Bar Harbor Bankshares Inc. published this content on 28 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2020 10:55:06 UTC