Bar Harbor Bankshares(US:BHB)2020-11-05 21:36Accounting Standards and Financial Reporting - The Company adopted ASU 2017-04 effective January 1, 2020, with no material impact on financial statements, and recognized no impairments to goodwill in Q3 2020 [29]. - The Company adopted ASU 2018-13 on January 1, 2020, which did not have a material impact on disclosures [29]. - The Company is required to adopt ASU 2018-14 by January 1, 2021, which is not expected to have a material impact on consolidated financial statements [31]. - The Company has not yet adopted ASU 2020-04, which provides temporary expedients for the transition from LIBOR to alternative reference rates, and is currently evaluating its contracts and hedging relationships [32]. Securities and Investments - Total securities available for sale amounted to $589.3 million with gross unrealized gains of $18.1 million and gross unrealized losses of $2.9 million as of September 30, 2020 [33]. - The fair value of US Government-sponsored enterprises securities was $235.2 million, with an amortized cost of $226.9 million, reflecting gross unrealized gains of $8.7 million and losses of $441, as of September 30, 2020 [33]. - The fair value of corporate bonds was $99.8 million, with an amortized cost of $99.8 million, reflecting gross unrealized gains of $1.7 million and losses of $1.7 million as of September 30, 2020 [33]. - The amortized cost of mortgage-backed securities was $339.6 million, with a fair value of $350.6 million as of September 30, 2020 [34]. - The total fair value of securities available for sale as of September 30, 2020, was $112,256,000, with gross unrealized losses totaling $2,852,000 [36]. - The company expects to recover its amortized cost basis on all securities in its available-for-sale portfolio [38]. Loan Portfolio and Credit Quality - Total loans as of September 30, 2020, amounted to $2,056.8 million, an increase from $1,835.2 million in the previous year [46]. - The loan portfolio includes segments such as commercial real estate, commercial and industrial, residential real estate, and consumer loans [45]. - Total commercial loans reached $1,293.5 million, with a significant portion being commercial real estate loans at $852.4 million [46]. - Past due loans over 90 days amounted to $3,239 thousand, with total past due loans at $5,082 thousand as of September 30, 2020 [48]. - The allowance for loan losses at the end of the period was $17.375 million, with specific reserves for loans individually evaluated totaling $632 thousand and collectively evaluated loans totaling $16.743 million [96]. - The provision for loan losses for the three months ended September 30, 2020, was $3.906 million, while charged-off loans totaled $1.699 million [96]. - The company has shown a consistent increase in total loans, reflecting growth in both commercial and residential sectors [46]. - The total balance of acquired loans was $651,845 million, with $193,237 million in commercial real estate [59]. Financial Performance - The net income for the three months ended September 30, 2020, was $8,402 thousand, an increase of 67.5% from $5,015 thousand in the same period of 2019 [140]. - The earnings per share (EPS) for the three months ended September 30, 2020, was $0.56, compared to $0.32 for the same period in 2019, representing a growth of 75.0% [140]. - The adjusted return on equity for the three months ended September 30, 2020, was 8.98%, up from 7.36% in the same period last year [211]. - The efficiency ratio improved to 59.47% for the three months ended September 30, 2020, compared to 65.02% in the prior year [211]. - Non-interest income increased by 32% compared to the same quarter last year [227]. Capital and Regulatory Compliance - The Company’s total capital to risk-weighted assets ratio was 13.32% as of September 30, 2020, above the regulatory minimum of 10.50% [132]. - Common equity tier 1 capital to risk-weighted assets was 10.29% as of September 30, 2020, exceeding the regulatory minimum of 7.00% [132]. - The Company met the conditions to be classified as "well-capitalized" under the relevant regulatory framework as of September 30, 2020 [133]. Derivatives and Hedging - The company employs derivative instruments to manage interest rate volatility, aiming to minimize fluctuations in earnings and cash flows [142]. - As of September 30, 2020, the total notional amount of cash flow hedges was $125,000 thousand, with a liability fair value of $(6,835) thousand [145]. - The total notional amount of economic hedges was $633,009 thousand, with a liability fair value of $(87) thousand [145]. - The company recognized a loss of $(5,231) thousand in other comprehensive income for cash flow hedges related to interest rate swaps on wholesale funding [149]. Customer Deposits and Borrowings - Total deposits grew by 12% year-to-date, amounting to $2.93 billion as of September 30, 2020 [213]. - Total time deposits decreased from $932.6 million on December 31, 2019, to $813.5 million on September 30, 2020, representing a decline of approximately 12.8% [129]. - Demand deposits increased by 32% year-to-date, totaling $515.06 million as of September 30, 2020 [213]. Trust Management and Revenue - Trust management fees increased to $3,256,000 for the three months ended September 30, 2020, compared to $2,737,000 in the same period of 2019, representing a growth of 19% [193]. - Total revenue from major products and service lines reached $6,418,000 for the three months ended September 30, 2020, compared to $5,566,000 in the same period of 2019, an increase of 15% [193]. Market and Asset Valuation - The Company reported total assets of $3.9 billion as of September 30, 2020 [209]. - The fair value of available-for-sale securities as of September 30, 2020, included $321,969 thousand in US Government-sponsored enterprises and $99,661 thousand in US Government agency securities [167]. - The total fair value of financial assets as of September 30, 2020, was $2,690,784,000, with net loans valued at $2,672,882,000 [187].